Brokerage firms continue to focus on juniors with cash

Brokerage firms continue to focus on juniors with cash

By VultureAlert.com

We continue to receive lists of TSX Venture mining juniors compiled by brokerage firms that rank juniors by their cash position. Many of these lists show that companies are trading at massive discounts to cash. The list received from Haywood Securities on November 18th had a unique spin to their report. They included a column showing the estimated number of a years a junior could survice without going back to the market to raise capital. This is a very key piece of information as many juniors that are cashed-up and trading at a discount have significant burn rates to factor in.

The number one company on their list ranked based on discount to cash was Asian Mineral Resources (TSXV: ASN). Their market cap at the time of calculation was $2.46M and their cash on hand was $21.95M!!! However, if you dig into their business you'll find that most of that cash is already spoken for and they can sustain themselves for 0.86 years before having to go back to the market for cash.

Compare this with Linear Gold (TSX: LRR) who have about the same amount of cash but have a far higher market cap of $18.28M and far better sustainability of 8.83 years based on their estimated burn rate.

Where would you put your money? Kind of a no brainer, go with the company that can survive or sustain themselves until we see things improve. 

Our next alert that we're sending our subscribers is on a company that has a very low burn rate and is trading at 25% of its cash value! They have very experienced management and trade with good volume. Join VultureAlert.com to find out what stock this is!

Right now, the Venture Exchange is full of great investment opportunities, do you know how to find them or what to look for?

Thanks,

VultureAlert.com