Canaccord Adams: The Worst for Junior Mining 選s Likely Behind Us'

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Canaccord Adams metals analysts suggest that it may be time to accumulate small cap/mining exploration stocks that offer good value. - Dorothy Kosich

Although the small-cap mining sector "has just been through its worst, most precipitous decline in modern history," metals analysts at Canaccord Adams say they believe "the worst is likely behind us." Nevertheless, they noted a sustainable recovery in the junior mining sector will depend "upon the perception that an overall recovery in global demand for metals in imminent."

However, that turnaround will "likely depend on the efficacy of the government stimulus packages being implemented around the globe," they added.

"The year 2008 has shattered investor confidence, and market valuations reflect risk-averse investor sentiment," the analysts advised. "We believe that, to achieve a sustainable rally in the junior mining sector in 2009, investors must regain confidence in broader equity markets. "

Junior mining companies with strong balance sheets "are more likely to survive prolonged sector weakness, which gives an investor an opportunity to benefit when the rebound in junior mining equities occurs," the analysts suggested.

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