From Pilot Gold’s continued drilling success at its TV Tower Project to GoldQuest’s discovery in the Dominican Republic, 2012 was host to a few bright anomalies in the junior mining sector. While the TSX was flat for the year and the Venture lost -20%, a select few juniors managed to buck the trend and provide shareholders with solid gains for the year.
As always, past performance is in no way an indication of future results. The fact is, after such strong performances last year it’s going to take an impressive 2013 year for these juniors to repeat the success they enjoyed in 2012.
Here are a few of 2012’s top performing junior mining stocks that have what it takes to replicate similar gains in 2013:
Pilot Gold (TSX: PLG)
Current price: $2.13
52-week range: $0.81-$2.14
52-week performance: +65%
Market cap: $182 million
Shares outstanding: 85 million
Avg. daily volume: 19,000
Pilot Gold conducted aggressive drill programs across multiple fronts in 2012 and shareholders enjoyed a 65% move higher in the stock price. This came even after a rough slide that pushed the stock down to a 52-week low of $0.81 in June. Despite this the company completed a $37.5 million bought deal financing in late October, proving that quality projects are still getting funded.
In Turkey, the company is earning a 60% interest in the TV Tower Project. Recent drill results from TV Tower include 11.63 g/t gold over 32.5 meters and 193 g/t gold over 12 meters. Since becoming the project operator in June 2012, Pilot Gold began and is currently completing a 16,000 meter drill program.
Pilot also released results of a preliminary economic assessment (PEA) completed on the Halilaga Porphyry Project in Turkey during the year. Halilaga is a 40/60 joint venture with Teck Resources. The PEA gave the project a pre-tax net present value of $675 million. The project is now being moved towards permitting.
Pilot also began to ramp up exploration at the Kinsley Mountain property in Nevada. The company is earning a 65% interest in the past producing, sediment-hosted gold system and is aiming to develop a large district-play across a seven kilometer mineralized trend.
With a strong cash position heading into 2013, 50,000 meters of combined drilling in progress and a management team with a proven history of success, Pilot Gold is as well positioned as any junior to enjoy another strong year of gains in 2013.
Sandstorm Gold (TSX: SSL)
Current price: $11.70
52-week range: $5.95-$14.99
52-week performance: +105%
Market cap: $1.06 billion
Shares outstanding: 86 million
Avg. daily volume: 347,000
There was a lot of buzz around Sandstorm in 2012 thanks to its streaming business model. At the helm is Nolan Watson, former CFO of Silver Wheaton (TSX: SSW), who has grown the company to include eight streaming royalty agreements and three net smelter royalties. Sandstorm enters 2013 with a market cap above $1 billion. Shareholder enjoyed returns of over 100% in 2012.
The company reported record revenues in Q3 2012 of $15 million and expects to grow gold stream agreements to 60,000 ounces annually by 2015. Shares of the company also began trading on the NYSE.
Sandstorm is able to lock in the price it pays for future production at mines by providing companies with cash up front. To date the company reports average cash cost per ounce of gold is $408, creating a cash operating margin of over $1,200 per ounce.
There is no doubt that the streaming royalty business model is gaining popularity with investors. Much like junior prospect generators a few years ago, an abundance of capital inflow is expected to bias towards royalty streamers in 2013. Sandstorm is well-positioned to be the main beneficiary of that capital thanks to its high profile.
The key to continued success at Sandstorm is growth. With over $150 million in treasury, Watson has made his intentions clear that 2013 will be another active year for Sandstorm.
Corvus Gold (TSX: KOR)
Current price: $1.75
52-week range: $0.51-$1.83
52-week performance: +212%
Market cap: $93 million
Shares outstanding: 56 million
Avg. daily volume: 28,000
Returning a gain of almost 200% to shareholders over the course of 2012, Corvus Gold was one of the top percentage performing junior miners of 2012. Spearheaded by multiple news announcements, including a new discovery in Quebec and a favorable PEA at its flagship project in Nevada, Corvus many investors are beginning to take notice of the junior explorer who could soon be a junior producer.
The company is rapidly progressing its 100% owned North Bullfrog Project in Nevada and could commence production in late 2014. The company is attempting to position North Bullfrog as a near-term producer to generate cash flow to eventually develop a bulk-tonnage operation.
Corvus also announced positive results from its joint-venture partner at the Terra Project in Alaska in December. Highlights included a 23-ton bulk surface sample that produced 75 ounces of gold. Corvus has optioned the property to WestMountain Gold Inc. and plans to retain a 20% interest in the project as well as a net smelter royalty.
Corvus also revealed in late 2012 that grass roots efforts at its newly acquired Gerfaut Project in Quebec had uncovered a new copper-gold system. While still in its infancy, follow up drilling in 2013 could lead to impressive drill intercepts and act as a catalyst for further share price appreciation.
Collectively, Corvus has a strong portfolio of assets in politically secure jurisdictions that include potential for discovery, development and production in the coming years.
Reservoir Minerals (TSX.V: RMC)
Current price: $2.41
52-week range: $0.35-$3.83
52-week performance: +402%
Market cap: $100 million
Shares outstanding: 42 million
Avg. daily volume: 21,000
Focused on the mineral potential of Serbia, Reservoir Minerals enjoyed a very strong 2012 in which its share price quadrupled thanks to ongoing success at its flagship Timok Project. The company is built around the prospect generator model, which focuses on making new discoveries while utilizing the operating and financial backing of joint-venture partners.
In August Freeport McMoRan (NYSE: FCX) agreed to fully fund exploration at Timok up until completion of a bankable feasibility study in exchange for a 75% interest. Drill highlights since that announcement have included 160 meters of 10.16% CuEq and 266 meters of 1.23% CuEq. Freeport will be looking to define a large porphyry deposit with bulk tonnage potential over the next few years.
Reservoir has also optioned a high-grade, past producing gold mine in Serbia to Orogen Gold Ltd. (AIM: ORE). Orogen can acquire a 75% interest in the Deli Jovan Project by incurring $3.5 million in expenditures before June 2014. Orogen is focused on developing an ore body of 500,000 ounces of more of gold that can be fast tracked to production.
With well-funded joint venture partners operating and developing its two main assets in Serbia, Reservoir has begun actively exploring greenstone belts in West Africa and acquired two gold prospects in which it has agreed to fund $4 million in exploration costs over the next decade.
Reservoir has shown that the prospect generator model is alive and well. With major joint venture partners and the ability to stay focused on grass root discoveries, the company could continue to outperform peers in 2013.
GoldQuest Mining (TSX.V: GQC)
Current price: $0.65
52-week range: $0.04-$2.03
52-week performance: +767%
Market cap: $94 million
Shares outstanding: 144 million
Avg. daily volume: 41,000
While well off its highs of $2.03 per share in September, GoldQuest Mining still returned a 700% gain to shareholders in 2012. Trading at a low of only $0.04 per share in May, the stock capitulated higher over summer months thanks to impressive drill intercepts at its 100% owned Romero Gold Project in the Dominican Republic.
Investors initially took notice when the company announced in May that it had assayed 231 meters of 2.4 g/t gold and 0.44% copper. This was followed up by a July news release that revealed a second hole just to the north had intercepted 159 meters of 4.5 g/t gold and 1% copper. Additionally, the company announced in August a third hole had assayed 7.88 g/t gold and 1.43% copper over 234 meters.
Needless to say, the stock experienced a roller coaster ride that saw shares trade as high as $2.03 for a short period in late September before trading all the way back down to below $0.40 in December. The stock has since re-gained some momentum and closed out the year at $0.65.
GoldQuest used the momentum to close a $15 million bought private placement in August and now has four drill rigs turning at Romero, which remains open at depth and along strike. This coming year could be another strong one if the company can continue to expand mineralization. GoldQuest has proven that there are still opportunities for investors to reap big gains from big discoveries.