Mickey Fulp, the Mercenary Geologist, says that 2012 will be a big year for gold, silver, mining companies, and commodities, including energy. Mickey knows from whence he speaks. He’s been a professional freelance geologist for decades. When it comes to picking junior miners on the fast track, Mickey has a simple method of assessing their prospects. He goes to resource shows around the world, sits down with senior managers and asks the tough questions–and this is exactly what is needed. Mickey amusingly quotes Mark Twain’s 100 plus year take on mining companies, “A mine is a hole in the ground with a liar standing next to it.” Those words are truer today than ever before. Most new mining ventures, just like most startups end in failure. The key is picking the 10-15% that have the management expertise, ore quality, and proper capital structure.
While this sounds difficult, Mickey has been doing it forever. The other factor is buying low. Many junior miners will double and then lose 50 percent within the course of a year. So if you purchase the right company at the right time, this is a sure fire prescription for profits. Then after the company doubles, simply sell half and take your money off the table. What could be simpler?