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My Name Is Brian Larsen ,I Am An Expert Technical Advisor At Rain Communication My Work Is To Solve The Queries Of Investors.
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  • Top Junior Mining Companies 0 comments
    Nov 21, 2012 8:09 AM

    Resource nationalism is becoming a growing problem for many top junior mining companies. I have shared what I believe are some insights below for safe investing in top junior mining companies in a volatile world.

    Resource nationalism hits the silver mining sector in the most dramatic way. Large scale projects like the ones in Argentina and Peru are being affected yet sales are nowhere on the horizon and it's largely due to the actions of the governments where these projects are located. Venezuela has been on the same path of resource nationalism for the longest time. These decisions are politically based and greatly reduce the value of junior silver mining stocks. In addition, these decisions have a pragmatic element in that if you nationalize an operating mine, the implications in the international trade circles are further reaching and more negative. It could lead to some trade sanctions by other countries and so on.

    Any new money from Top Junior Mining Companies will likely be diverted away as they turn around and nationalize the exploration projects.The underlying theme here is that perhaps it's advisable to avoid jurisdictions mentioned above. Their actions demonstrate that your money is at greater risk investing in top junior mining companies in that region.

    The key thing is that some monster projects located in risky jurisdictions are not coming on-line and future silver supplies are going to be affected. Silver supply growth may not be there a few years from now. Right now the supply is growing about 3% a year, but I don't see a lot of big projects coming on-line.

    Over time resource nationalism is going to result in a significant rise in silver prices. Although, it's quite possible that eventually silver could return to its historic 15:1 silver to gold ratio, but that is unlikely until the end of this decade. Cycles can change and this is not an exact science, the recent global economic downturn has thrown many predictions out the window.

    Some junior silver mining stocks and exploration companies are generating significant cash flow as silver prices hover around $32/ounce. One producer First Majestic Silver Corp. (NYSE:AG). Has grown throughout the cycle to become a very significant player. It soon may become a major in the sector, certainly a growth company. It has been very aggressive in building the company, expanded and has a very healthy pipeline of projects to grow the companies' production.

    It's always a good time to buy silver, buying silver when you have the excess cash, junior silver mining stocks in top junior mining companies,are always a good play.

    Disclosure: I am long GOOG, JUNR.

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