Gaining Exposure To The Junior Gold Mining Sector
Sunday, October 6, 2019 at 09:20PM
Silver Prices

Introduction

The precious metals sector offers a number of vehicles in which we can participate in our quest to generate a profit. A junior mining company that gets it right can produce spectacular returns in terms of a capital gain which is many multiples of its stock price. However, if misfortune strikes then there exists the possibility for it to disappear due to bankruptcy. In order to separate the wheat from the chaff we need to do a lot of work in terms of research, stock comparisons, stock performance, financial statements, guidance, milestone achievements, management, geo-political stability, etc.

This sort of time and effort is difficult for many investors and so a fund offering to spread your cash over a number of companies is appealing and they do attract cash in a big way. As per usual the devil is in the detail, so we still need to understand exactly what a particular fund consists of such as which companies are included or excluded, the spread of cash between those companies, the amount of cash on hand, operating expenses, taxation, etc.

Today we will take a brief look at one of these funds, an ETF for Junior Mining Companies called VanEck Vectors Gold Miners ETF (NYSEARCA: GDXJ) We start by taking a quick look at some of components that make up this fund and we can see that the top three investments are companies that have market capitalization's in the billions of dollars and account for 16.83% of total assets and are as follows:

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Another rate cut in the US this month will hurt the Dollar and boost gold prices accordingly...

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