Barkerville Gold: Sprott lent them money?!?!

Barkerville Gold “Mines” (BGM) is the poster child for everything that is wrong with the junior mining sector.  Insiders are overpaid, G&A costs are excessive, and they issue inflated technical reports.  The stock is currently halted as their latest technical report was massively inflated.  The halt was a little late but at least regulators did something for once.  The technical report claimed that Barkerville had a Bre-X sized deposit in the tens of millions of ounces and that it had the geological potential for 65-90 million ounces.  That would correspond to the largest gold deposit ever found by man.  Apparently Barkerville still has credibility.

Sprott Resource (SCP.TO) – Trading below NAV but I’m not buying it

Sprott Resource Corp is somewhat similar to a publicly-traded closed-end fund.  It is a vehicle for generating asset management fees for Sprott Inc. (SII.TO).  SCP is currently buying back its shares as they are trading at a ~21% discount to NAV.  Normally I like situations where undervalued companies are buying back their shares.  However, I’ve been learning (the hard way) that management matters.  While SCP’s management is not the worst in the business, I am not enthusiastic about it.