These are pretty good times to go scavage-hunting for good stocks that have crashed mostly because of fear. GoldSource would be one such example. In 2008 GXS were looking for diamonds in Saskatchewan and happened to find a lot of coal instead. The stock rocketeered up to $20 and then as everybody started freaking out in the autumn, the stock fell back to about $1 and is now trading at about $2.50.

Other coal-miners/prospectors dropped heavily as well. But the fear that nobody would be wanting to buy coal seems pretty overdone - just recently the contracts for 2009 were signed and the price for the highest valued coal are at about $130/tonne. According to GXS management, their discoveries are of a high quality coal, perhaps not the best kind but from what I've understood it's among the better types of deposits.

The property of GXS's find is estimated to hold 500M-1B tonnes of coal, at least. The company has accumulated other properties in what they perceive to potentially be a coal trendline going from Saskatchewan into Manitoba. The drill-results in so far this year have confirmed the continuity of the deposit and I expect that more of these positive results will be coming in and resulting in further appreciation for the GXS-stock.

In 2008 the company took in $18M in a private placement and I think they should have a lot of that money still with them. They have no debt and the mcap today is at about CDN$50M. Let's say there really is 1B tonnes of coal in the property (called Border), and assuming a lower coal price at, say $50/tonne, that means that the in-ground coal would be worth $50B, which is obviously a lot compared to the mcap. A large North American coal-mining company would probably be very interested in purchasing 1B tonnes of coal for $50M, or why not $500M? Mining large coal-deposits isn't generally that expensive and this property would probably have a real good profit-margin - even at much lower prices.

In conclusion, I really doubt that buying this stock would not make you money. The only fear really should be in the overall economy, but that fear is only short-term - coal is a very inexpensive source of energy and there is technology to clean up emissions from it. The demand for coal isn't likely to go away any time soon; the price might drop but I don't think it could drop so much that a large high-quality coal-deposit in North America would become worthless.

I do get a little tired sometimes of all the focus on precious metals and energy that we have these days. So, I decided to write about one of these tiny tech-companies that very much resemble junior-miners in that they too can have a big break-through and make you lots of money in short order. What's great about tiny tech-stocks is that you know what it is your buying; so it just becomes a game of figuring out just how viable is their product.

Cymat has a fairly easy to understand tech: Aluminum Foam. Actually the product that they're selling is aluminum foam, but the technology that makes them unique is how they actually make the stuff.

The use for aluminum foam is pretty straightforward; it's a very low-density inexpensive material that has a strong shock or pressure resistance. This makes the material very good for use in particularly the military (road-side bombs, mines) and the auto industry (light, shock resistant and stabilizing).

Metal foams have been around since the 1940's, so it's not a new innovation. Since I'm no expert I can't judge if theirs is the best way to make it, but according to Cymat management, what makes their tech really different from similar producers is that they can mold the foam into basically any shape and size they want, which has been difficult in the past.

Cymat has a manufacturing plant in Toronto, Canada. So far Cymat has made a few deliveries, mostly for novelty use in architecture. They have delivered prototype orders to the autoparts-manufacturer Georg Fisher and they will be getting a 10% royalty if GF choose to use it. They also have prototype testing on-going in the Canadian and US military, which management optimistically expects future orders from.

The numbers right now are: No debt, ~$1M cash, mcap ~$10M. I beleive that pretty much all that needs to be said has been said. Cymat management is sounding very optimistic and from the recent testing in the auto and military sections it looks possible that they might receive real orders that would start giving them some real revenue. But buying this stock remains a very big gamble; there seems to have been an almost infinite supply of these sorts of small tech companies that have had one product that hey've been trying to sell, and although they've received lots of prototype orders, they've never quite made it all the way. I cannot honestly judge how good their tech is. Even if their tech isn't all that spectacular they could still get lucky. My final judgment would have to be: buy a very small amount of shares if you like to gamble.

(Note: I wanted to mention that I put up a 'Leave suggestions' page on the top menu, where you can leave suggestions of companies for me to write about. I put it up because it's hard to find interesting stuff to write about sometimes, and also it's an opportunity for readers to partake more in the blog.)

As I stated in my post on PGM's, one of the things that has been pushing down prices for PGM's is the assumption that electric cars will become more common and therefore demand of catalysts (along with PGM's) will decrease. This assumption seems justified since all major auto-manufacturers have been presenting new electric-driven models lately.

The type of electric cars that will probably be most viable are the ones with plug-in and a combustion engine recharging system, like the Chevy Volt. I assume this because it allows an easy switch between gasoline/oil and electric power generation as prices fluctuate. Therefore I also doubt the long-term potential of great depreciation of oil-prices, but neither do I see any real potential for greater appreciation.

Because of the rise of the electric car some have called out for a great rally in lithium. Lithium is the chemical element with the highest electrical potential of all the ions, and therefore makes for the best ion-/rechargable batteries. Only last week the junior-explorer TNR Gold Corp. announced some new acquisitions of lithium-properties, whereas they had previously only focused on the common precious and base metals. The TNR-stock rallied because of these news.

But there are a few problems in the belief that lithium will appreciate perhaps somewhat like uranium did. First, lithium is the 20th most common element in the earth, and secondly, batteries can be recycled. For these simple reasons I wouldn't buy into a lithium hype, but it is very possible that there could be a quick surge in the price before the new paradigm sets in.

So, if not lithium, then what are we supposed to investment in? Well, the PGM prices have almost crashed completely on the basis that the demand for catalysts will go down. But, if a lot of people want to buy these Chevy Volt type of cars (I know I do) then the catalyst demand could actually go up, because that's a lot of new cars to be made, and they all come with combustion engines.

Then there's the actual batteries. There are a few real good battery manufacturers out there like EnerSys or the Korean supplier of GM's batteries, LG Chem. Companies like these will be the new greatest auto-suppliers in the coming years, and should make some good profits from it.

I know that I myself have been wanting an electric car for a long time and I know a lot of other people who have been saying the same thing; actually I've never heard anyone say that they wouldn't want an electric car. I think that there will be a strong demand for these cars as they start coming out and people feel more willing to spend money again. Based on the potential for investment-demand (and the trouble in South Africa) for PGM's as well as a renewed demand for catalysts and the overall strong growth that's coming for the batteries-business, I see this as a really great investment opportunity.

I'd say that the best places to invest would probably be in PGM ETF's and some good looking battery manufacturers. I doubt that these investments would make you a lot of money in the coming year or so, but in the long term there should be a fairly comfortable appreciation - just like watching paint dry, as someone once said.

When I wrote about Dorato Resources I noticed that FNV had a royalty deal with them over a part of their claims; the deal is worth 1-2% of net smelter profit (depending on gold price) and basically for getting this deal FNV has to partake in a lot of equity financings.

The main reason that I choose to write about FNV here is because the company simply represents a great investment if you want to safely invest in gold, PGM's, gas and oil. FNV's whole business-strategy is to acquire royalties on (mainly) gold and PGM-mines (also base-metals to a small degree), as well as gas and oil-wells. Today they have a huge collection of operations and they are constantly picking up royalty money and using a lot of that money to invest in great prospectors like Dorato.

If you are afraid of investing in gold-funds, individual gold-miners and you don't particularly like the idea of having to buy physical gold, then I beleive a company like FNV would be the best choice. Their 2008 results are coming out on March 26 and I think they'll see a ~$40-45M net profit. Their total net assets were valued at $1.57bn in the third quarter (I assume it's gone down a bit by now). The mcap is about $2.5bn today.

On a profit/mcap ratio it's not looking too cheap and the shares have gone up by ~100% since november. The high price may well be related to the large holdings they do have, and the great decisions that management has made in the past when picking out projects to support. As time goes by they'll inevitably see higher and higher amounts of royalty-money coming in and I guess they'll keep investing in great looking companies like Dorato.

I wouldn't personally buy into this company today, but if the SP comes down from 30 today to perhaps 20 then I'd be willing to buy, as this represents a great opportunity to safely collect income from a large number of miners and energy-companies and at the same time get a holding in a lot of very promising projects. If you want to see a list of all their investments they have a very easy-to-use website.

I include this map from Dorato to further show you in just what a great location their concessions are:

Among the junior exploration companies out there, it's hard to find one that looks like it's going to make it through the credit crisis winter alive. Dorato is however one of those few that looks very likely to pull through.

They're part of the Cardero Group which has a great track-record and so far they don't seem to have had a lot of trouble raising money. The company is focused on the highly prospective Cordillera del Condor gold district (located between Ecuador and Peru) on the Peruvian side, and as some may remember, this is the same district where Aurelian Resources made their huge discovery on the Ecuadorian side. Dorato has claims of about 800 square kilometers and has so far made a bunch of very early-stage discoveries. The district has a lot of placer mining, as well.

The concessions of Dorato have seen very little exploration because of previous political problems in the region as well as a now partly removed natural reserve status. The purchases of the concessions require about $9.2M in payments and an issuance of 10.15M shares, which would give Dorato a 100% interest.

Dorato today has an mcap of ~CDN$17M (0.50/share). And by judging from the last financial statement they have perhaps $1-3M cash and basically no debt. There is an ongoing private placement of $5M, which I judge very likely to succeed based on the great prospects of the company.

If one is well acquainted with the work of Aurelian Resources then you already know just how interesting the Cordillera del Condor district really is. The Aurelian discovery was about +15M Oz of an average ~7g/t gold. There are a number of other very good (mostly recent) discoveries on the Ecuadorian side, and as I already mentioned, the Peruvian side has seen very little exploration.

The results that Dorato has produced so far are indeed impressive; if you want the whole story of the geological settings, I suggest you go to their website and read it; I will only present the just recently released (and most interesting) sampling results from the Taricori zone. This zone has shown average grades of 11g/t gold and 131g/t silver (from 168 samples) in vein material. Further results from sampling in the area is incoming. The Taricori zone is located just 1km from the Jerusalem deposit in Ecuador (probably containing over 1.3M Oz gold) which is considered to be just a continuation of the Taricori discoveries - which is based partly on the old small-scale mining but mostly on the magnetic mapping of the area which shows some large anomalies - these anomalies will hopefully be strengthened by the coming sample-results.

Dorato has some extremely promising projects and I would be very suprised if they don't end up finding at least one world class deposit like the one Aurelian Resources found. In comparison with other junior exploration companies, Dorato's CDN$17M mcap does not look too pricey considering the remarkable concessions they've been able to acquire. Although things are looking extremely good, there have been many cases in the past where a junior explorer has had great prospects and failed miserably ... but I would still maintain that this is an extraordinary situation and I think it's reflected in the share-price; no other juniors that I know of come even close to a similar valutation. Investing in junior explorers is the riskiest of risky businesses - but the most rewarding if you nail it.

This press-release covers a lot of exploration results that I haven't.