Is It Too Late to Buy Gold Stocks?

Is It Too Late to Buy Gold Stocks?

Editor’s note: With gold and gold stocks rallying right now, you may be asking yourself one simple question… “Is it too late?”

To answer this, we turn to our gold stock guru, Louis James. If you’re hesitant about entering the gold market today, this essay is a must-read…


Deep under a mountain, but so high up in the Andes that I could barely breathe, I found one of the best money-making opportunities I’ve seen in my entire career.

I was in an old mine tunnel. The ore was massive sulfides of lead and zinc, with high grades of silver. These sulfides sparkle brightly in your miner’s lamp, like chandeliers. Usually, you see a narrow vein with a little of this stuff sprinkled in it. You look up to see it in the ceiling of the tunnel, or slashing a wall.

Not this time. The entire tunnel—a good four meters wide by four meters tall—was blasted through a zone of massive sulfides so thick, it all sparkled in my lamp. The walls, the ceiling, the floor, everything. It was like walking through a field of stars.

On the old mine posts, I could see the assay numbers left behind by the old-timers: 9% lead-zinc, 12%, 15%—with hundreds of grams per tonne of silver. The rock had more than $500 in contained metals in some places.

I asked the mine geologist (who was my guide) how anyone could leave so much value behind. He told me that the old-timers were only interested in the highest-grade core of the deposit, which ran to more than a kilo of silver per tonne.

The speculation was that not only could these high-grade (by modern standards) remnants be mined, but that more bonanza-grade silver and gold could be found as well.

That potential was made very real to me when we returned to the surface. I could see that the rock alteration visible on the mountain above the vein was repeated up and down the valley, showing the location of other veins. Many had been worked in colonial times—the mine has a history that goes back more than 400 years—but there were plenty more to explore.

The vein is called Animas. It’s part of the Caylloma mine camp in Peru. The company is called Fortuna Silver Mines (FSM, FVI.TO). At the time, it was an exploration company that had just bought the mine with its 7.0 million ounces of silver in historical mine reserves for $7.55 million. Experts were skeptical that a little explorer like Fortuna had what it took to put Callyoma back into production and make money.

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