Flagging small Canadian miners hope for a boost from medical pot
By Nicole Mordant
VANCOUVER, March 27 (Reuters) - Looking for ways to boost their flagging fortunes, a handful of tiny Canadian mining exploration companies are considering swapping their hard hats and shovels for bongs and baggies.
In the past couple of months, nearly a dozen of these so-called junior miners, hard hit by a downturn in the mining industry, have announced they might branch out into Canada's budding medical marijuana industry.
The announcements from Satori Resources Inc, which owns a moribund gold project in Manitoba, and Victory Ventures Inc, which has staked mineral claims in British Columbia, have propelled these rock-bottom penny stocks updward.
The buzz is being created by new Canadian rules that are due to take effect on April 1 that allow cannabis for medical use to be cultivated commercially by licensed growers. Until now, the medical marijuana industry has consisted mostly of small-scale home-grown operations.
Most of the miners' plans to enter the legal pot industry are at the investigative stage, leading to questions about whether they will actually make the move, or are just looking for a pop in share prices that have been pummeled by weak metal prices and a financing freeze.
Canada's junior mining industry has a history of seeking to ride the coattails of major investment fads, evident in the stampede from mining into technology during the 1990s tech boom and then back to mining once the bubble burst.
Those looking at the pot business "are generally juniors that have projects that are no longer viable," said Mickey Fulp, publisher of MercenaryGeologist.com, a junior resource industry newsletter.
"They all probably have good intentions, but the good intentions are to boost their stock prices and get something going outside of the exploration and mining sector," he said. Continued...