With commodity prices on an upswing, many investors have turned their attention to companies that produce and explore for minerals. These include Canadian gold stocks, especially in light of gold’s recent rise to over $1,030 U.S. an ounce.

(In the current Stock Pickers Digest, we take a close look at a junior gold explorer we’ve recommended in the past. It has a presence in one of the world’s most productive gold-producing regions. What’s more, it’s up 72.2% for us since early this year. Read on for further details.)

Look beyond gold prices when investing in junior exploration firms

A number of junior exploration firms, including some Canadian gold stocks, have seen their shares climb recently, even though they have yet to establish a history of production or cash flow. That has pushed up interest in even the most speculative juniors — and brought promoters out of the woodwork.

However, when you think about investing in a company with no record of production or cash flow, it pays to remember that it’s far easier to create an intriguing investment opportunity than a successful business.

Mind you, both tasks take some ingenuity. Both call for an injection of capital and various professional services. However, all businesses start out as investments.

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But few investments, particularly junior miners, turn into profitable businesses. It’s particularly crucial to keep this in mind if you are thinking about investing in junior Canadian gold stocks or a hot penny mining area.

Miranda Gold: A gold explorer with a knack for finding partners

In the current Stock Pickers Digest, our newsletter that focuses on more aggressive investments, we update our advice on junior gold explorer Miranda Gold (symbol MAD on Toronto).

Miranda mainly explores for gold in the Cortez Trend and Battle Mountain-Eureka regions of Nevada, which are two of the world’s most productive gold belts. The Canadian gold stock’s 13 properties in these areas are in various stages of production.

We’ve assigned Miranda our lowest Successful Investor rating of Start-up. That means that it has no cash flow, and hasn’t yet found a significant deposit. But Miranda lowers risk by taking part in a number of joint ventures.

These are crucial for junior-exploration firms, as they give them a way to fund further exploration on properties where they have already discovered minerals. The agreements also let juniors retain an interest in the properties without taking on debt or resorting to dilutive share issues.

Miranda has signed joint ventures with a number of other gold firms, including Montezuma Mines and NuLegacy Gold. Not all of these joint ventures will result in significant gold finds, but we think they present intriguing possibilities, nonetheless.

In the latest Stock Pickers Digest, we take a look at Miranda’s cash reserves to see if it has the funds to continue tapping into the potential of its Nevada properties. If so, its long-term prospects could be very bright, indeed.

You can get our latest buy/sell/hold advice on Miranda and other junior-exploration stocks in the current issue of Stock Pickers Digest. Click here to learn how you can get one month free when you subscribe today.