The past year has not been great — generally speaking — for mining stocks.

Just look at the chart below — it’s an index comprised some of the biggest names in the precious metals and mining space. The index has fallen off a cliff in 2014 — down nearly 16% this year.
 

Most investors cringe when they look at a chart like this. But many of the savvy industry experts I know in Canada love seeing these big drops, especially when we’re nearing the end of the calendar year.

You see, I’ve worked in the mining and energy sectors for more than a decade, traveling as far as Russia, Chile and Madagascar to inspect natural resource projects. But these days, I call Canada home. And, as editor of StreetAuthority’s premium advisory, Scarcity & Real Wealth, my job is to provide readers with investment opportunities they won’t find from analysts who sit at a desk all day.

#-ad_banner-#And I’m excited when I see a chart like this for one simple reason. It has to do with a “quirk” in the way the Canadian tax system works — a quirk that lets watchful investors buy good resource stocks at double-digit discounts within short windows in the latter months of underperforming years.

Having traveled to remote regions with several of Canada’s wealthiest investors, I’ve watched insiders profit from it repeatedly over the past 10 years.

Today, I want to show you how you can use the same “quirk” to buy stocks in the United States at big discounts for a double-digit gain opportunity in a matter of weeks.

The Center of the Mining Universe
Canadian stock markets are the biggest source of capital in the world for mining companies. Mining companies listed in Canada raise billions in equity every quarter to pursue their exploration, development and production projects.

Most North American mining firms have a listing on the Canadian TSX or TSX-V exchanges. Many also have cross-listings on American exchanges such as the NYSE or the over-the-counter market. Once a company is listed on both exchanges, the share prices north and south of the border tend to move more or less in tandem (except for a small difference representing the exchange rate between the Canadian and U.S. dollars).

In short, what happens in Canadian markets affects the share prices of most of the mining companies I look at for my Scarcity & Real Wealth portfolio.

That’s critical to recognize, because there are some unique patterns that happen in Canadian trading, especially during down years.

To see what I mean, take a look at this chart.
 

You can clearly see how the TSX Venture Index (TSX-V) fell from January 2011 until mid-December, when this “quirk” suddenly kicked in. From that point to the end of January 2012, the index gained roughly 200 points.

And just to prove to you that this isn’t a one-time anomaly, I’ll note that the mining-heavy TSX-V stock exchange has seen four such years over the past 15-year period. Those are 2012, 2011, 2008 and 2007. All four of these years saw a notable dip in the index during the second to third week of December, followed by a quick rebound in the weeks that followed.

To give you an idea of the effect this Canadian tax “quirk” had on individual mining stocks, take a look at this chart of Thompson Creek Metals (NYSE: TC)…

It wasn’t just this company, either. Several other companies returned double-digit, market-beating gains during the key time period too.

Now, the ideal circumstances to take advantage of this opportunity appear to be unfolding again. This doesn’t always happen. Some years, market conditions don’t align as well. So there’s no guarantee it will be available next year. Or the year after that.

But it’s smart to consider keeping some cash available for Canadian miners going into December. If and when notable weakness presents, you have the opportunity to buy on the cheap and position yourself for a quick gain on the rebound. And remember, many of these mining firms are listed in Canada AND the U.S. — and thankfully, regular American investors can take advantage of this quirk by simply buying shares on normal American stock exchanges.

It’s a formula that’s reliably made a lot of money for industry insiders — had you known about this quirk just one year ago, you could have made 33%… 46%… even 50% gains in a month. One year, it even made 139% in a month for investors who bought Northern Graphite Corp (OTC: NGPHF) during the “quirk” period.

I’ll keep my Scarcity & Real Wealth subscribers alerted to any such opportunities I see in the coming months. But for those who don’t subscribe to my premium advisory, I’ve put together a detailed report that explains more about this Canadian tax “quirk” and how it could lead to gains of 29% or more by February of next year — but only if you take action by December 10. To read the report, click here.