Commodities today are grossly undervalued. Key metrics show that the sector is cheaper right now than they were in 2000, prior to the start of the last major bull market in commodities. In fact, on a historical basis, the mining industry is trading at its lowest recorded valuation of the past century*.
Palisades Goldcorp offers investors a vehicle through which they can gain exposure to the most leveraged segment of any commodities bull market – the junior resource equities. A confluence of factors makes this the perfect time to deploy capital into junior resource companies. Global stock markets have finally cracked. Meanwhile, gold, silver, and other commodities have shown resilience in this environment, signaling a sea change. This move in commodities has propelled major mining companies up over 40% in the past twelve months. Yet, the Toronto Venture Exchange, where a large percentage of the world’s junior resource equities are listed, is trading at ten-year lows.
The key point is this – investors have an opportunity to purchase shares in high-quality junior resource companies at extremely cheap valuations, right as the next great commodities boom begins.
*Based on analyzing the sector’s cyclically adjusted price to earnings ratio (CAPE)
The Toronto Venture Exchange is a well-known proxy for the junior resource sector. The index has been in a decade’s long lull, which was further exacerbated by the precipitous decline in March of this year.