Junior Mining & Tax Loss Selling
Newsletter writer Stewart Thomson addresses the question: Should junior mining stock investors engage in tax-loss selling?
Tax loss selling... Should investors engage in it? Well, first of all, if they live in Monaco or the Cayman Islands (or America a long time ago), the answer is no, because there are no capital gains taxes to pay. What about jurisdictions where aggressive governments demand such taxes from investors?
Interestingly, more goes into tax loss selling than simple math; emotions are a factor, and there are "wash sale" rules. A U.S. investor can't dump item A late in the year and then immediately buy it back.
Also, if they wait the minimum wash sale time (30 days before and after a sale to repurchase the same/similar security), the situation may appear to have changed (but hasn't), and the investor doesn't buy it back.
Most important of all are market cycles. In the case of junior mining stocks in the current environment, an investor could save pennies on taxes and then miss numerous ten or 20-baggers because they become too afraid to rebuy their stocks after dumping them.
Here's a key chart that should help put tax loss selling for 2025 and 2026 (and decades to come) in perspective:
Many investors have worked hard to accumulate key CDNX miners in this massive base pattern. The pattern involved a lot of time.
To sell them at a loss, here at the neckline zone of what is arguably the greatest base pattern in the history of markets ... seems foolhardy at best.
My suggestion for tax loss enthusiasts is to confine most of their selling to the crypto market, where many projects look hopeless.
The time for significant tax loss selling in the precious and base metals sectors is over.
Naked shorting and other nefarious schemes dominated the market in the years 2013-2019. They haven't completely disappeared, but their intensity has decreased significantly.
There were still some decent tax selling years from 2019 to 2025 for select CDNX and US OTC miners, but now investors need to have a winning mindset. In 2026 nutshell:
Losing is out and winning is in!
Rather than trying to offset gains with losses on stocks that are likely set to surge higher, my suggestion is for investors to sell a modest 30% of multi-bagger winners like Santacruz Silver Mining Ltd. (SCZ:TSX.V; SCZMF:OTC; 1SZ:FSE).
The bottom line: If an investor accumulated this stock in the base pattern zone, does it really matter if they book a 50-bagger now or only get a 30-bagger after taxes are paid? Further, did any investor really predict whether there would be 10-bagger, 30-bagger, or 50-bagger gains?
The gains are mindboggling, and the risk of missing out on another massive gainer by dumping a supposed "loser" seems pointless, especially given the massive bull pattern in play on the CDNX weekly chart.
Here's a look at a supposed tax loss selling candidate, Golden Lake Exploration Inc. (GLM:CSE; GOLXF:OTCQB):
It's down, but note the breakout out of the massive bull wedge base. This is a time not to sell supposed losers, but to accumulate them, using partial profits from multi-bagger winners.
Another tax loss selling opportunity like the 2013-2019 (and arguably 2013-2024) period likely won't happen again for a long time.
Junior miners are set for decades of outperformance against, quite frankly, everything!
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Important Disclosures:
Stewart Thomson: I, or members of my immediate household or family, own securities of: GDX. My company has a financial relationship with: None. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.For additional disclosures, please click here.
Stewart Thomson Disclosures
Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualified investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is: 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:
Are You Prepared?