In a metals bull market gold typically goes up the fastest first, with the big cap mining stocks going up with it. Then silver and other precious metals, such as a palladium and platinum, breakout and outperform gold.

We are now seeing that happen right before our eyes.

As that typically happens, though, historically small cap mining stocks also come alive.

That is now happening too, as you can see from the CDNX Canadian venture composite index, which is dominated by small cap mining stocks.

Small cap mining stocks are shares of companies that are not producing metals. They either have properties that they are planning to put into production, can be put into production with more money, or are exploring with drilling to prove that they are feasible to be put into production, making them much more speculative.

They typically have market caps less than $25 million, with most exploration companies reaching market caps of around $25 million during a bull run. Most now are well below that number, because they are only now starting to move, creating an opportunity in this space.

-Mike

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