As an investor goes about looking for a small cap mining company, they may want to consider a company that is exploring for an operation in certain parts of the world. To start with a slightly more obscure base metal, one might consider Nickel. This base metal is perhaps one of the more rare base metals found in only a few places around the world. Canada holds the largest such site located in the eastern portion of the country where a meteor is thought to have hit the earth. This is not the only site but a solid place to begin as Canada is widely considered the mining standard for grading, regulation and, from an overall perspective, the base-line for all things mining.
If gold and silver are of interest, an investor would look to the western United States and Mexico, with Peru not to be ignored. Interestingly enough China has found large deposits of silver as well. The note in this sense, however, is that one must recognize that one base metal often finds a second or third along with the larger concentration.
In this respect, one might consider Canadian Royalties (TSX: CZZ) as an option. Last quarter reporting found a certain amount of expenditure dragging down results but for a good reason. The company has apparently discovered a sizable vein within the Ragland mining district of Northern Quebec. This vein is reported to contain minable quantities of nickel, cobalt, gold, platinum and palladium.
It should also be noted that this particular find has been taken note of by a very large Chinese mining concern with an unsolicited offer to buy the company. In of itself this aspect might just be thought of as a solid business venture, while in practice it is not. Chinese companies very rarely make unsolicited company offers but rather tend to get to know the company and its management first. This company, Jien Canada Mining Ltd., wants Canada Royalties which might indicate value and a worthwhile look.
As this example demonstrates, it should also be noted that although a company may be based in one country, its operations may well be in another. On the gold front, Great Western Mining (GER: GWM) is an example. An Irish company working uranium, gold and other precious metals along the Nevada Excelsior Mountains, Great Western appears to have discovered extensive deposits of base metals and is in the early phases of extraction. In this sense “early” is a relative term but it nonetheless appears that the company is well along in necessary infrastructure, testing and permits.
Base metal investing can never be considered a totally safe bet for investing as exploration is just that, exploration. If, however, a find can be proven and product taken out of the ground economically, quite a bit of profit can be made.
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