Should you be chasing the precious metals higher
Rick joins Cory this morning to cover the continued higher moves in gold and declines in the US dollar. We also relate the move in gold to the more impressive move in gold stocks.
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PLATINUM UP…………….BIG………..$900…..
904……..holding up real good…………………
Yeah but… last time Gold was in the 1150-1200 range Platinum was 1365
Unfortunately I know this 🙁
That is why you should stock up now……….. 🙂
We did get pretty close to the 2008 low of about 820, looks about time to bounce.
What I think will be interesting is Docs doldrums.
Yes, buy high and sell higher. I bought NUGT at 23 and 24 and sold at 27. My latest positions were bought at 29 and 31 with an average of $30.02. Price is at $37+ right now. Stop in at $35.02.
no conviction on anything Rick. Seems you’re gun shy with direction on gold, or markets which you feel will eventually be down.
Is Shad there? Do you know why Ur-Energy has been dropping lately (in TSX, the most due to currency value)
It seems like many uranium and energy stocks……. the drop in oil has affected them
URE (URG) has been increasing due to their good result. it is weak only for a week or so.
See the press release I posted below Dragonite that explains why it had the sudden drop.
Hi Dragonite,
Yes it was because of the flow through financing they did at $.50 a share. URG was actually outperforming its peers on a percentage basis, but after that announcement the share-price dropped down to near $.50 and has bounced back some since then. It was unfortunate because it was really on a tear until they announced this financing.
Here’s what you need to know out of their press release:
Ur-Energy Announces Bought Deal Financing
DateWednesday, January 27, 2016
Littleton, Colorado (PR Newswire – January 27, 2016) Ur-Energy Inc. (NYSE MKT:URG, TSX:URE) (the “Company” or “Ur-Energy”) is pleased to announce that it has entered into an agreement with a syndicate of investment dealers led by Cantor Fitzgerald Canada Corporation and including Raymond James Ltd. and Dundee Securities Ltd. (the “Underwriters”), which have agreed to purchase, on a bought-deal basis, 12,000,000 common shares of Ur-Energy at a purchase price of US$0.50 per common share, for aggregate gross proceeds to the Company in the amount of US$6 million. In addition, Ur-Energy has agreed to grant the Underwriters an over-allotment option exercisable at any time, in whole or in part, for a period of 30 days following the closing of the offering, to purchase up to 1,800,000 additional common shares at the issue price for gross proceeds of up to US$900,000.
http://www.ur-energy.com/2016-news-releases/2016/1/27/ur-energy-announces-bought-deal-financing.html
Thanks Excelsior. I saw it the other day but I did not put them together. Unfortunately it is a potential risk of smaller miners. At least it is positive major securities houses like Dundee and Raymond James willing to participate in the financing. It looks like the space of uranium miners are getting very limited. I am going to get a small small position just in case. Thanks again.
Yes, Ur-Energy is one of my bigger Uranium positions (so that drop down on the financing news cost me thousands in the short-term, but I’m not concerned in the longer term). It usually has more torque than most of the miners to the upside and downside. They are using this financing to expand their operations to maximize the coming rebound in Uranium prices and supply crunch projected for 207-2018.
I am still very constructive on Energy Fuels, Denison, Uranium Energy Corp, Uranium Resources, Fission, NexGen, and I’ve been nibbling at Paladin. I plan on taking positions in Fission 3.0, Toro Energy, Kivaliq Energy, Canalaska, UEX, Centrus Energy, and Anfield Resources, and that will likely be the majority of my Uranium horde.
I follow about 50 companies, and there are definitely other Uranium explorers that I am watching, but those are my picks at present.
Thanks for the list. My concentration is more in Canadian Athabasca basin.
Then Fission, NexGen, and Canalaska would be good picks, as well as Cameco.
Mostly Cameco, Denison, uex and some Paladin
Yes, I meant to throw Denison on that list after Cameco, but got distracted. It is odd because Denison used to have many US mines, assets, etc…. but they sold all their US assets to Energy Fuels to focus on Canada and the Athabasca basin. This is also why they tried to merge with Fission at the end of last year.
As for Paladin, their mines are not in the Athabasca (mostly Africa, Australia, US):
Paladin Energy Ltd develops and operates uranium mines in Africa. The company operates through Exploration, Namibia, and Malawi segments. Its flagship project is the Langer Heinrich mine located in the Namib Naukluft Desert in Namibia. The company serves utilities and other entities primarily located in the United States, Australia, China, Taiwan, and the United Kingdom.
Out of curiosity, what are your thoughts on UEX corp? I’ve owned them in the past, and feel that they had a few road blocks the last few years, but may have come out of all that and be poised for a great share price growth on a percentage basis.
I mentioned above I was considering taking a position in them in 2016, but am still on the fence.
Also, if you have not looked at Fission 3.0 (the spin-off exploration team that made all the discoveries for Fission), it is looking very interesting. They have a very interesting strategy of targeting “shallow” deposits that are more economical around the rim of the Athabasca basis. Apparently it is shallow at the rim of the basin and very deep (and more expensive to mine) in the middle of the Athabasca.
It seems like Fission 3.0 could make the next big discovery.
I bought Paladin a while ago to put some money in Australia and africa related asset. When u price is over 70, Paladin will make money. It is the first u stock I bought after I sold all in 2007. I lost money on it. My first purchase is around $3. I added some last year. I may have to write it off but I usually wait many years to give up. As for uex, what I like is its quality reserve and partial ownership by cameco. It is not in production so burn rate is low. I feel it can last. I have been adding a few thousand shares a year. I am tired of following it closely unlike you. I like saskatween because of the rich of grade and friendly government. Another of my little one is JET metals. I traded it a few times and broke even. It is one of those grandich picks. I have given up the remaining shares due to its geographic location.I feel the smaller miners are all down so much because investors truly capitulated. It is only sector which captures no interest.
Anyone like Nippon Dragon (NIP.V)??
They have a market cap of around C$8M and have been trading between 0.04 and 0.14 over the past few months…… We’re at 0.80 five years ago and C$7.00 twelve years ago.
Don’t know their cash/debt position. Can’t be great though…
They make a big thing about their “thermal fragmentation mining system” although they’ve held the patents on this since 2002.
I like the name 🙂
Don’t know if I like the company… any views ?
I don’t know much about NIP.V, mining based in Australia, seems to be profitable.I calculate a P/E of 10.1 on recent past earnings.
Gross Margin: 54.50%
EBIT Margin: 600.00%
EBITDA Margin: 638.30%
Pre-Tax Profit Margin: N/A
Profit Margin (Cont. Op): N/A
Profit Margin (Total Op): N/A
Management Effectiveness LTM 5 Yr Avg
Return on Equity -31.33% -1,466.33%
Return on Capital -27.72% N/A
Return on Assets 5.75% -66.52%
Assets
Asset Turnover: 0.00
Inventory Turnover: N/A
Receivable Turnover: 1.20
Valuation Measures
P/E Ratio: 10.10
Price to Sales: 83.89
Price to Book: 138.14
Price to Tangible Book: 138.14
Price to Cash Flow: N/A
Whoa… that’s very thorough! Thanks CFS.
According to Yahoo Finance, cash at the end of last quarter was just $84,000 while debt was $3.8M.
I don’t know what happened last October but the chart looks promising.
Thanks Matthew. That’s not a lot of cash is it :/
Many analysts have been touting the new mining technology that Nippon Dragon has pioneered. David Morgan thinks it may change the entire industry. We’ll see…
Most people only are looking at their exploration and have missed the fact that they have an entirely new mining method.
Yeah. But with only 84 grand in the bank and a pile of debt they may not be able to hold on to those patents.
A very real going concern for sure. I just wanted to mention that technology, as it may enable them to finance things differently. I don’t own any shares personally, but just it was worth mentioning.
Here is the brief presentation on their Thermal Fragmentation technique.
http://www.nippondragon.com/images/PDF-Documents/Thermal%20Fragmentation%20Demonstration.pdf
The HUI is worth 50% more SPX in less than 3 months…
Hope the miners recover their huge lost ground.
They will.
Agnicol Eagle is very strong for quite a long period. Not sure what is behind it.
Wow, 60% since the August low is quite a move for a large cap. I don’t follow AEM anymore but I know the management is very good.
I still have but it is quite volatile. I will sell half (200) in the next few days if it gets to 50 cdn$. I am afraid the manipulators using Chinese new year to raid the market. I will buy it back if the price drops in the summer. Otherwise I have another half.
In case you missed it, ths interview is worth listening to:
http://kingworldnews.com/peter-boockvar/
Thanks! Good one.
Just listened to this. Really good!
Why do I think gold prices will still see a final bullish phase? It’s simple. Gold futures have not gone into backwardation like so many other commodities during the boom. In fact, you’ll want to verify the futures chain on any commodity especially on the lows in oil, which is going through multiple capitulations.
And by backwardation, I mean the near futures price goes higher than the entire futures chain in a chronic fashion.
The value, by far, will be the gold miners:
http://quotes.ino.com/charting/index.html?s=NYMEX_GC.G16_M21.E&v=d12&t=l&a=0&w=1
The miners are definitely where it’s at. Only a very superficial observation could cause one to conclude that 2011 was the major secular top for gold. It was a wimpy move compared to what’s ahead.
Personally I would favour a more gradual development than a very high volatility price change like you get in Silver. A huge mania will merely come crashing down, destroying a decade of price development. I’m thinking, however that the price development in gold is more like a WAVE ONE extension rather than a WAVE FIVE extension, where all of the large price moves came in the first wave. The last wave is meant to be the smallest, so the value is in the miners.
Considering that the current period has more in common with the 1940s than the late 1970s when it comes to the interest rate cycle, I bet you’re right (and I hope so). Nevertheless, the move that ended in 2011 was likely a warm-up in the grand scheme of things. I mean relative to the dollar, of course, as gold is at a multi-decade high in real terms right now.
A soaring gold price could also be negative due to the risk that many more conservative investors would shun the miners altogether if the metal itself was doing very well.
Investors have been for the most part because the gains were solid in the first two waves. But should miners have built out their foundations and now begin to yield a dividend, then investors will be obliged to change their perspective.
Impressive yen action this week:
The Yen made a drastic move down earlier due to BOJ announcements, but it eventually wanted to keep up with it’s buddies Gold and Long term treasuries, (magnified by the USD dropping).
http://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=6&dy=0&id=p42224555259
Dragonite says:
Agnico Eagle is very strong for quite a long period. Not sure what is behind it.””””
Very simple it’s going to smash earnings in days.
OK
the hesitancy on gold now is very much like the fear in the broad market in late ’08/early ’09…. most can not picture a trend change once a trend is in place.
hence why the train for the gold mining stocks and physical metals will leave the station as empty of passengers as possible. You could have the gold mining ETF almost double off the low before anybody realizes it. Yes, there will be a consolidation at some point, but if it works off the short term overbought situation by going more sideways, than down, it will take courage for those on the sidelines to buy it.
If you’ve transitioned to a bull, on the second leg higher the people on the sidelines have truly missed it and often times can not bring themselves to chase it. They are then boxed out. The way to avoid that is to have a partial position on NOW, that you leave in place for the bull move. If it then weakens you can add to the position.
Great thoughts Eric. Well said.
Be proud Rick! I banked 12 and 20% on NUGT this week!
Gold looking good……………