R.I.P. Canadian Penny, Long Live Canadian Penny Stocks
COMMENTARY – ProspectingJournal.com – You’ve picked them up off the ground because they were lucky. You’ve left them in a dish at the counter because they were dead weight in your pocket. The days of the penny are to be coming to an end, as the Senate finance committee has officially announced the fate of the mildly controversial one-cent piece. It was 152 years old.
R.I.P. Penny (1858 – 2010)
In circulation since 1858, the penny has taken a long journey from popular small trading tool to the captive victim of hoarders. And prior to 1996, the penny itself may have had some hoarding value, as that was the last year that the penny was comprised of mostly copper, ranging in purity from 95-98%. The melted value ranged up to 5x its face value (for earlier mintage, although rarity would probably make the coin worth more unharmed). Most of the pennies over the last hundred years are worth between 2￠ and 3￠ in copper alone. But otherwise, the penny has brought only sentimental value for the last few decades.
The move comes with some changes in terms of speeding up the process at the checkout counter, if only for the time being. Australia and New Zealand have already bid farewell to the tiny near worthless pocket filler, with the Kiwis taking out their five-cent piece as well. Thus, next on the hit list could be the beloved beaver-faced nickel (which for many years was comprised of 99.9% nickel, a melt value of $0.16 per piece).
Whether you’re a fan of the penny or not, the days of its trade value are numbered and a march to the bank with ceramic slotted-pigs is nigh. The opportunity for Superman 3 villains with their salami slicing methods of penny shaving will change and shift onto higher round-ups. With the demise of the coin, it is yet to be seen if this will change the nickname for micro cap equities… the even more beloved Penny Stock.
Perhaps the citizens of Canada would’ve been more inclined to accumulate the penny if it in turn could be turned immediately into a penny stock which could gain value instead of lose it. This is the death of the penny, but definitely not the death of the penny stock. Some of our favourite penny stocks we’re watching these days are:
Playfair Mining Ltd. [PLY – TSX.V]
Well balanced with interests in all types of metals including copper, silver, rare earth, tungsten and molybdenum, Playfair is well priced for its positions. At $0.18, obviously PLY has room to grow, and the announcement of drilling to commence on its intriguing Seal Lake Copper-Silver project yesterday didn’t hurt. Whether this will still be a penny stock at this time next year is yet to be seen, but the results from the drilling are eagerly anticipated at the present time.
Marifil Mines Ltd. [MFM – TSX.V]
Holding an impressive portfolio of more than 20 precious and base metal mines, Marifil announced today that its acquired six claims containing 47,150 hectares of highly prospective potash bearing lands. Balancing itself out with its gold and silver properties, Marifil seems to be taking full advantage of the favourable business conditions in Argentina along with a management team that seems to be in the right place at the right time when “cateos” (land claims) of interest open up. At $0.155, there’s still a lot of room to gain, and the idea of MFM balancing its precious metals with a mineral of interest in potash is inviting to say the least.
Cream Minerals Ltd. [CMA – TSX.V]
Cream has had a busy, if not flattering, fourth quarter this year, scurrying away from two deals that would’ve seen the company turnover its Nuevo Milenio silver-gold project in beautiful Nayarit, Mexico. First came the unsuccessful and unsolicited attempt by Endeavour Silver [EDR – TSX] to takeover Cream shares after a previously friendly negotiation had been initiated. Next came another bid from Minco Silver [MSV – TSX] on the heels of the Endeavour move, only to have Cream allow the offer to expire upon the announcement of a $5 million bought deal private placement of its own. The bigger fish have noticed something of interest in the Nuevo Milenio project, and at the end of the day, the property is still 100% owned by CMA, and now it has some money to play with under the Mexican sun. At $0.24, the price may look affordable right now, but remember that it wasn’t long ago (October) that it was trading at $0.08, so the initial surge may have already happened, but a longer story could see this be the breakthrough period to allow the Cream to rise to the top.
G. Joel Chury
Editor in Chief
DISCLOSURE: No fee has been paid for the production and distribution of this article and as such should be viewed in the context of a commentary. The author does not currently hold any shares of the companies referred to within the article.