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
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