This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Small-Cap Miner Is Bullish on Mexico

NEW YORK ( TheStreet) -- As gold prices stay above $1,000 an ounce, small-cap miners like Paramount Gold and Silver (PZG) could be big winners.

I recently talked with Paramount Gold CEO Christopher Crupi about development of the company's San Miguel mine in Mexico and the miner's prospects.

Mining is a risky business. It can take as much as 10 years for a junior to start extracting metal, during which the company might have to undergo a series of equity offerings and asset sales to raise capital.

Mining stocks typically offer a 3 to 1 leverage to gold's spot price. The popular physically backed gold ETF, SPDR Gold Shares (GLD), is averaging a year-to-date return of 27.12% while the Market Vectors Junior Gold Miners ETF (GDX), a basket of large-cap miners, has a year-to-date return of 37.28%. Small-cap mining stocks could offer even more leverage.

Junior miners typically have a market cap of under $1.5 billion. They are also primarily in the exploration or developmental stage of production. As above ground gold supply tightens and investment demand grows, gold prices will keep rising, providing big opportunities for investors who can gamble with the juniors.

TheStreet: When do you expect to actually pull metal out of the ground?

Crupi: The project would be on schedule for three years from now. And we'd be looking for a partner to [help] do that. We're an exploration group so there are ample partners in Mexico looking for [our] type of project.

Do you have names?

You know pretty much all the major silver and gold producers that are in Mexico and many of them that are Canadian. And no, I can't [reveal their names]. We've signed confidentiality [agreements] with many of them so I wouldn't be able to tell you who they are.

Many other small-cap miners are hoping for the same thing, either a partnering or a buyout. But there are really only six major large-cap mining companies that have the resources to do that. So why does your company measure better than others?

Well first of all, there are actually dozens of them, but the thing is that Mexico has become the jurisdiction of choice. [During] the recent financial crisis in '08, '09 there was a lot of pullout [from] Mexico in the junior space so the few juniors that are left and who have actually raised money to develop [mines] to the next stage are the ones who are looking fairly bright.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
GLD $118.36 0.00%
GDX $18.84 0.00%
GDXJ $24.91 0.00%
PZG $1.14 0.00%
AAPL $93.99 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs