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In times of economic uncertainty many investors naturally flock to safe havens, but not all gold investments are created equal.
In times of economic uncertainty many investors naturally flock to safe haven assets, with gold typically drawing the most attention. But not all gold investments are created equal, as Mercenary Geologist Mickey Fulp explained.
That’s especially true when it comes to junior mining stocks, which can be particularly challenging to select. But the decision could become easier, he said, if the TSXV would get more selective about the companies that it allows to list.
“We need to kill the zombie miners,” said Fulp during an interview at the Prospectors & Developers Association of Canada (PDAC) convention, held recently in Toronto.
He continued, “445 companies have negative working capital and have for a long time — an average length being about four years — and they continue to be listed despite the fact that they’re only lifestyle companies mining the stock market.”
Fulp gave a presentation at PDAC on salvaging the TSXV. He thinks another change the exchange needs to implement is the reinstatement of the tick test.
The Save Canadian Mining Initiative, spearheaded by Terry Lynch of Chilean Metals (TSXV:CMX,OTC Pink:CMETF) and supported by veteran investors including Eric Sprott, is calling for the reimplementation of the securities trading rule, which prevented predatory short selling.
“Terry seems confident that we should have the uptick rule reinstated within the year, which would kill the naked algorithmic short sellers which have destroyed the market,” he said.
Getting big banks to ease off is the final step Fulp proposed for restoring Canada’s junior market.
“They (big banks) bullied the brokers, they’ve taken the incentive out of brokers to make commissions on sales, they’ve restricted their ability to market venture capital companies to the average investor by making them all wealth asset managers where you pay a fee,” he said.
“A lot of brokers would like to be able to recommend juniors and put people into private placements and take commissions on their sales again.”
To hear more from Fulp regarding the gold/silver ratio and about navigating the market amid turmoil, watch the video above. You can also click here for our full PDAC playlist.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Chilean Metals is a client of the Investing News Network. This article is not paid-for content.
The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
