Feneck laid out and discussed five points investors should consider when evaluating a junior mining company in order of importance: management, project, jurisdiction, share structure and management ownership.
On the topic of jurisdiction, Feneck said he is paying close attention to several silver companies in Mexico that have open-pit projects but are awaiting permits.
Some of the companies awaiting government approvals are Silver Tiger (TSXV:SLVR,OTCQX:SLVTF), Sonoro Gold (TSXV:SGO,OTCQB:SMOFF) and Discovery Silver (TSXV:DSV,OTCQX:DSVSF).
“All three of those are waiting on the new person in charge, (President) Sheinbaum, to give them direction in October as to how things are going to roll going forward,” Feneck said. ‘So the stock prices of these companies have been very depressed as a result of investors waiting.’
While the outcome is still unknown, his firm performed due diligence by reaching out to the companies to get their thoughts on the situation and their backup plans.
The conversation later turned to knowing when to enter and how much to invest in new plays.
“My process is different than just about everyone that I’ve talked to in that we admit that we can’t get it correct all the time on the entry point … Therefore, we buy (into a given stock) six to 10 times over a given year, usually,” he said.
These purchases are typically in the US$5,000 range as opposed to US$50,000 because he doesn’t want to move the stock too much upon entry and he wants those that follow him to be able to enter as well.
Watch the interview above for more from Feneck, including other stocks that stand out to him and which strategies he uses to know when it’s time to sell.
Interview by Charlotte McLeod. Article by Georgia Williams.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.