| For more than forty years, I have been investing in | | | | What is of absolute importance here is the fact that |
| microcap stocks. I currently have about ninety | | | | Copper Ridge Explorations has shown the repeated |
| positions in microcap stocks. Almost all of these | | | | ability to post annual highs in the teens and often in |
| investments are in a subset of the microcap universe. | | | | the 20's. The only thing that is required for a |
| This subset is an offshoot of penny stocks. It is the | | | | "reversion to the mean" to occur is for the current |
| strange and unknown world of penny mining stocks. | | | | stock market panic to abate and the stock should |
| It is also hands down the most profitable and as | | | | revert to the mean. |
| strange as it might seem to you the safest sector in | | | | Since I am a hard assets guy let's see what we are |
| the penny stock category. And I have the battle | | | | getting for 2 cents a share. Copper Ridge |
| scars to prove it, reaching back more than forty | | | | Explorations has a nice stable of ten properties. Most |
| years. | | | | of the properties have been optioned out to other |
| Allow me to introduce you into the strange and | | | | parties. If any of these parties get lucky,there could |
| wondrous world of penny mining stocks. | | | | be a nice payday for both parties. |
| For the price of a night on the town you can be a | | | | Since I am not a geologist I never concern myself |
| player. | | | | with ore bodies unless they rank in the category of |
| Their greatest attraction of course is their proven | | | | proven & probable reserves. It is seldom the |
| ability to earn enormous profits on a chump-change | | | | case in penny mining stocks for there to be proven |
| investment. In my investing, I refuse to accept a | | | | reserves. |
| profit of less than 300% on my penny stock | | | | What I do concern myself with are "location plays" |
| investments and five and ten baggers are | | | | and acreage size for obvious reasons. My ideal is |
| common.let's see how I play the game. First, I | | | | mining claims that are adjacent to a producing mine |
| eliminate the fly-by-night and the pump and dump | | | | or the ownership of an ex-producer. |
| frauds by only buying stocks that are listed on the | | | | To me their most intriguing property is their Copper |
| Toronto Stock Exchange and the junior venture | | | | Ace property of 31,000 acres which is adjacent to |
| exchange. Then I insist that they have been listed on | | | | the important producing Gibraltar Copper Mine. Of |
| the exchanges for a minimum of five years. This | | | | lesser importance is the Lucky Joe copper and gold |
| eliminates virtually all the scams. It is a rare scam that | | | | prospect with 22,000 acres and the Yukon Olympic |
| is in existence for more than five years. And | | | | copper and gold prospect with 14,800 acres or a |
| contrary to our popular belief,our northern cousins in | | | | total acreage of 67,800 acres. To be conservative I |
| recent years have done an excellent job of | | | | throw out all the other mining claims and give them a |
| protecting investors from scams. | | | | zero value. |
| Compare this with the typical pink sheet penny stock | | | | If you divide the total market capitalization of $1.8 |
| that does not have to meet any exchange | | | | million by 67,800 acres you arrive at a value of |
| requirements at all. And that all too often prove to | | | | $26.55 per acre. Not too shabby is it. |
| be little better than vapor stocks when compared to | | | | Now because I am psychic I know what you are |
| the hard asset penny mining stocks with true wealth | | | | thinking. You are thinking that all this is very |
| in the ground potential. | | | | impressive but it is clear to you that any corporation |
| I have always believed in making my points with a | | | | that is selling at 2 cents a share must have an |
| sledgehammer. Currently the cheapest stock that I | | | | outstanding chance of going bankrupt. Not the least |
| own is a little jewel called Copper Ridge Explorations. | | | | of the virtues of penny mining stocks is that they |
| It is currently selling at about 2 cents a share. Now | | | | have virtually no chance of going bankrupt even if |
| before you go nuts and stampede for the nearest | | | | they are selling at a penny. At least 90% of all penny |
| exit maybe you should know why I own the stock. | | | | mining stocks are dormant, they are not generating |
| It is listed on the Toronto Venture Exchange and | | | | an income stream and therefore cannot qualify for a |
| was Incorporated in 1983. This pretty well eliminates | | | | loan. The only way they can raise capital is to issue |
| the-fly-by-night and the pump and dump schemes. | | | | stock. The only exception to this is penny stocks |
| Next, I look at the total float or the amount of | | | | which have an operational mine. Which is very rare. |
| outstanding issued stock, which is about 79 million | | | | Now let's take a look at book value. The book value |
| shares. This is higher than I like. I prefer less than 50 | | | | of the stock is 7 cents a share yet the stock is |
| million shares. Multiply that amount times 2 cents and | | | | selling at 2 cents a share. For purposes of illustration |
| you come up with a total market value or | | | | lets compare this amount with General Electric which |
| capitalization of about $1.8 million. | | | | is currently selling for $12.18 a share and has a book |
| Contemplate this figure. It means that you can buy | | | | value of $10.00 a share. According to its most recent |
| the whole company, lock, stock and barrel for almost | | | | annual report Copper Ridge Explorations had a |
| nothing. A ridiculously small amount of buying power | | | | working capital of $1,391,773 this is very close to the |
| can send this stock to the moon. Three investors | | | | market valuation of $1.8 million. Divide that amount by |
| each buying say $10,000 worth of stock on the | | | | 79 million shares and my calculator rounds it off to 2 |
| same day could easily send this stock into orbit. | | | | cents. Working capital is cash on hand or cash in the |
| I then take a careful look at the 52 week high and | | | | till nearly equals the market value of the stock. |
| low for the stock. Remember the only way to make | | | | There you have it. I have 1/4 of 1% of my |
| money on a speculation is for the stock to fluctuate. | | | | investment capital invested in Copper Ridge |
| The 52 week low for the stock is about a half a | | | | Explorations. In the weeks to come it is my intention |
| cent a share. The high is 14 cents. The stock moves. | | | | to introduce the reader to the blood-splattered |
| Another test passed. | | | | battleground where I choose to hang out. I have |
| In my investing I place tremendous importance in the | | | | chosen this battleground because in more than four |
| stock's trading range and in the concept of "reversion | | | | decades of searching I have never found an arena |
| to the mean." | | | | where the risk- reward ratio is greater than it is for |
| Let us now examine the stock's annual high and low | | | | penny mining stocks. It is my strong conviction that |
| since the year 2000 (2000 .11-.41) (2001 .03-.16) (2002 | | | | the world is entering a great age of inflation. The |
| .03-.12) (2003 .05-.27) (2004 .07-.33) (2005 .06-.21) | | | | greatest inflation hedge is natural resources. Wealth in |
| (2006 .07-.25) (2007 .10-.23) (2008 .005-.14). | | | | the ground will make you rich. |