originally published Wednesday, March 13, 2019

All Gold & Silver Stocks

Because of British Columbia’s harsh Winters, the mining companies operating in the Golden Triangle tend to do most of their drilling in the Summer, so investor excitement associated with the prospect of them making discoveries builds up to a crescendo in mid to late Summer before abating in the Fall and Winter. This has especially been the case with Aben Resources and Golden Ridge Resources, which is the subject of a separate parallel article. By this time last year we had figured out this annual cycle in both these stocks and bought both of them and then watched as they duly did their Summer spike, selling half of our holdings right at the top, and dumping the rest, still at a profit a little later. In retrospect we should have sold the lot at the top, but that’s easy to say now.

You can see this annual cycle clearly on the 4-year chart for Aben shown below, and also where we bought it last Spring and sold half of our holding for a good profit very near to the top. Also shown is where we bought it back in November at 12.5 cents when we figured that, after a severe drop, it was either at or near to its low for cycle. Such has proven to be the case, for although it dropped further in December it was not by much, so we are up over 50% already on this trade, and with another drilling season spike probably in the works there seems little reason to sell it until the spike occurs. Another such spike would see the price more than double even from the current price, and if gold should break out above $1400 into the bargain we could really see some fireworks.

On the latest 6-month chart you can where we bought it back, after a high volume gap down in the middle of November, figuring that it was either at the bottom for its annual cycle, or close to it. In the event it dropped a little lower to bottom late in December, touching an intraday low at 11 cents. The severe losses of late last year damaged sentiment of course, and it has taken it months to recover, and after floundering around during January and February marking out a base pattern it has tentatively started to advance again. Having picked itself up off the floor it is gradually pulling itself together and has arrived at an important juncture here, because if it can succeed in breaking above the resistance shown, which seems to be happening today after it was highlighted in yesterday’s Market Notebook update, and also above its 200-day moving average it will mark an important technical milestone that should lead to significant upside acceleration as it moves towards its Summer.

Of course there are no 100% guarantees in this business. The CEO might “meet the press” one day and say “Due to operational difficulties there will be no drilling this year.”, however, since that would be like shooting yourself in the foot, it is assigned a very low probability.

The conclusion is that Aben Resources appears to be shaping up for another Summer spike, which could be bigger this year if gold breaks above $1400, and so we stay long our earlier purchase and it is rated a speculative buy again here. Even if it should react back in coming weeks, say to 14 cents, as has happened in previous years ahead of a spike, it will not abort this scenario.

Aben Resources website

Aben Resources Ltd, ABN.V, ABNAF on OTC, closed at C$0.195, $0.148 on 13th March 19.

Posted at 8.45 pm EDT on 13th March 19.

The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stockmarket analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.