We’re in Stock Pickers Market, TSX Venture Could Trade Sideways for Six Months
The TSX Venture Composite Index is likely to trade sideways for the next six months. For NIA this is the perfect opportunity for us because we do real research and enjoy separating companies that are “promotional plays” like Blackrock Silver (TSXV: BRC) with zero chance of development from companies that have a 99%+ chance of being developed like Viva Gold (TSXV: VAU). Despite the market valuing BRC at a 10x higher market cap than VAU, we can promise you… nobody is ever going to acquire BRC for anywhere near the current valuation but for a company like Kinross Gold (KGC) it makes all the sense in the world for them to pay a triple digit premium to acquire Viva Gold (TSXV: VAU) as soon as possible and they’d be getting a great bargain!
We don’t think the TSX Venture’s lows from 2023 will ever be seen again, but it has been up for so many months in a row that there is likely to be resistance around the 2021 highs. Ultimately, it will breakout to well above the 2021 highs, but not immediately. It will no longer be possible to blindly throw a dart at high-risk gold stocks and make money in 2026. But for people who learn how to research companies and determine which projects are likely to advance in the future… we will see money coming out of “promotional plays” like Blackrock Silver (TSXV: BRC) and going into real gold companies like Viva Gold (TSXV: VAU).
Kinross Gold’s Round Mountain Phase W (the last major open-pit layback) is finishing in 2025, creating a near-term production dip. Phase S (next pit) and Phase X (underground) will sustain output later in the decade, but both involve transitional risk, capital intensity, and grade variability. Gold Hill provides additional longevity but is smaller and later-stage.
Kinross needs Viva Gold’s Tonopah as a satellite deposit to keep Round Mountain going. They’re in the same district… with Viva’s Tonopah a short 20-minute drive from Round Mountain. When you see Viva become very silent in recent months post PEA only issuing a press release for stock options (so management can cash in on a future buyout) it should be obvious to anyone with common sense what is going to happen. We could be completely wrong about it being imminent but at some point, it will almost definitely happen, and we definitely don’t see any downside risk for Viva. It was one of the only gold stocks not to dip in recent weeks, which tells us it is about to make a very significant move higher between now and year-end regardless of if a deal happens one month from now, three months from now, six months from now, or a year from now.
It is a lot easier for us to say Viva Gold (TSXV: VAU), Lahontan Gold (TSXV: LG), and First Mining Gold (TSX: FF) will all be trading significantly higher one year from now than it is for us to say the price of gold will be significantly higher. Although the odds are high of gold hitting $6,500 per oz in the years ahead, even if gold were to correct as low as $2,700 per oz, these stocks are likely to rise big anyway because everything else in the market is so overvalued. These are among the only undervalued stocks in the market!
Obviously, we also like high-grade gold plays like Total Metals (TSXV: TT). After closing on $9.1M+ in funding yesterday Total’s acquisition of High Lake and West Hawk Lake should close imminently and there’s a four-month holding period on the newly issued shares!
For silver, there is going to be a production shortage in the years ahead… because Minaurum Gold (TSXV: MGG) is the only fully permitted new high-grade silver discovery in all of Mexico the world’s #1 largest silver producing jurisdiction!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. NIA’s President has purchased 100,000 shares of VAU and may buy more shares or sell his shares at any time. NIA’s President has purchased 200,000 shares of LG in the open market and intends to buy more shares. NIA has received compensation from LG of US$30,000 cash for a three-month marketing contract. NIA has received compensation from FF of US$50,000 cash for a six-month marketing contract. NIA has received compensation from TT of US$100,000 cash for a twelve-month marketing contract. NIA has received US$30,000 cash from MGG for a three-month marketing contract and previously received US$30,000 for a prior contract. This message is meant for informational and educational purposes only.
