The Microcap Speculator submits: We have major markets breaking down, inflation and deficits picking up, numerous shocks to our economy, and a looming replacement at the head of the Federal Reserve. With all this uncertainty, it is time to take a look at the miners. There are plenty of good microcap mining companies. The first one I want to look at is Taseko Mines (ticker: TGB).
Most of the mining companies I will explore produce gold, silver, or a combination of the two. Taseko is a bit different. It mines copper and molybdenum. To the right is a monthly chart of copper from 2002-present, showing copper's huge and persistent rise. Copper shows no signs of weakening, although there is a bear case worth reviewing. Molybdenum has also made a similar move over the past five years.
Taseko has a market cap of around $115 million at today's prices. The company's mines are in British Columbia, Canada. That means that Taseko, unlike many mining companies, faces virtually no political risk. Last quarter it earned over $10 million, versus a loss in the prior year quarter. It has grown revenues and decreased administrative costs. Taseko forecasts similar operating numbers for the coming quarter.
Technically, I would prefer to buy TGB closer to its short-term breakout just above $1 (I bought my shares at $1.04 fwiw), or on a break of recent resistance around $1.20. Still, in my opinion, the risk/reward is reasonable and a substantial move up is likely.
DISCLOSURE: I am long TGB. Not a recommendation to buy or sell any security. For informational and educational purposes only.