Norra Metals Corp V.NORA.H

RE: RE: paas needs la preciosa

[flymar]

At the suggestion of my good friend Jim Sinclair, I have prepared a chart detailing the ratio of the price of GDX compared to the price of GDXJ.

The GDX does contain some smaller cap miners but it also mainly includes the large cap mining outfits.
The GDXJ on the other hand, is comprised entirely of medium cap and small cap miners.
Over 60% of the stocks that make up the GDXJ are Canadian firms. Nearly 14% are US headquartered with 13.31% being Australian. The remaining are from various countries around the globe.
While not a perfect representation, it is a useful tool for charting the underperformance ( in general) of the small and medium cap miners compared to the larger cap miners.

Note the steep decline in the line that began in the summer of last year which lasted throughout the remainder of 2010. Only towards the end of last year did the juniors recover a bit of ground but the best they could do was to retrace a small portion of their losses against the large cap miners by moving higher but since January they have gone nowhere against the large caps.
It seems to me that the hedge funds are selectively targeting some of the small and mid tier mining firms to go after with their short side of the spread trade that they have been employing. Perhaps they feel that due to their sheer size and financial firepower, they can overwhelm any buying coming into the smaller firms and thus create an effective put option against their long metals positions. I am not sure but either way, the chart reveals the reason for the frustration among many who own quality junior and mid cap mining whose share prices seem stuck in the mud even as the gold and silver markets continue soaring higher..
It is just mindboggling to see how undervalued many of the shares are when compared to the metals. While many have moved strongly higher, a large number of them continue to lag and are not reflecting the kind of price movements that we would expect to normally see with the bullion making either all time highs in price or 30+ year highs.

I edited this from PAA bullboard.

Games again this am. We were at bid/ask 2.75 and a 250 lot ask was just filed for 2.70. I guess if you own the shares you can sell them for what you want but with silver back down a little maybe a few will be scared out of their shares.

regards flymar