David Erfle - Gold Market Commentary – Tue 27 Mar, 2018

Comments On The Balmoral Resource and Insider Buying In The Sector

David Erfle, Editor of The Junior miner Junky, shares his thoughts on resource estimate out of Balmoral Resources today. No denying it has disappointing the market. We also discuss the drop in the metals due to options expiration day. There are positive signs as we enter the end of Q1 that makes David think a pop is coming.

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Comments:
  1. On March 27, 2018 at 11:24 am,
    Excelsior says:

    Yes, many were disappointed with the maiden resource estimate.

    ** This illustrates once again the importance of fundamental newsflow on Jr miners (not just TA). Substantive breaking news can definitely move the needle on the share price in a major way that most weren’t projecting.

    _________________________________________________________________

    @CriticalInvestor – “Quite the disappointment after so many delays, Balmoral maiden resource estimate was expected in my view to be significant (2Moz or more) $BAR”

    http://www.balmoralresources.com/news/balmoral-releases-initial-resource-estimate-for-martiniere-gold-system-detour-gold-trend-project-quebec

    @Vaughan – “Certain not as much metal as was being predicted in the $BAR channel @CriticalInvestor. ”

    ____________________________________________________________________

    @burgundy – “when the president says to expect 1.5 to 2mm oz and they come up with this what do you think is going to happen. what a joke.”

    @burgundy – “time to become a nickel company again…pathetic”

    • On March 27, 2018 at 11:25 am,
      Excelsior says:

      Some countering opinions on Balmoral (BAR) (BALMF) are also worth considering though, that the market’s expectations weren’t in alignment with the company guidance. This contributor over a ceo.ca made some really good points today:

      @Balmoral2010 – “It’s exactly in line with what was expected. This is only the initial RE at 300 meters.The only disappointment is the minds of those that don’t understand and didn’t take the time to call management.Share price may fall because retail guys who don’t understand will dump.” 1 about 5 hours ago

      @Balmoral2010 – “Some guy on another board was posting figures of up to 4 million when which was crazy based on initial RE at 300 meters.They will be adding to this in the end it probably will be about 2 million at Martinere.”

      @Balmoral2010 – “It may even get up to that crazy 4 million but it requires a lot more drilling at deeper levels. I just surprised at what people were expecting. Many kept asking for a resource estimate how many took the time to ask about what exactly it was going to entail?” – about 4 hours ago

      @Balmoral2010 – “I also like the cut off at 2g/t.”

      https://ceo.ca/bar?c60ee29b8315

      • On March 27, 2018 at 11:26 am,
        Excelsior says:

        All things considered, (new low made on the same day the company releases the maiden resource) and knowing the market usually over-reacts and skittish investors bail at the first sign of other doing so……. BAR actually looks like an interesting value proposition here.

        Both a nice Gold asset and a second Nickel asset, and a really cheap valuation at this point. I went ahead and grabbed some share here…. playing for the short-term bounce and then I plan to hold a few shares back for the long haul after that. 😮

        • On March 27, 2018 at 12:09 pm,
          Excelsior says:

          Balmoral already seemed really undervalued when their Gold & Nickel/Copper/Cobalt/PGM assets were taken into account, along with the rest of their pipeline of projects. I’ve been following them for years, and have been stalking them for a good entry since early 2017.

          However, to get a 37% off sale today as the market pitched a fit about what was actually a pretty good Maiden resource of 591,000 ounces on their Gold Martiniere project — that did not meeting unrealistic market expectations was really a gift for contrarian opportunists.

  2. On March 27, 2018 at 11:34 am,
    Silverdollar says:

    Great discussion Cory. David is on board with quite a few others, looking for a good pop in PMs in the near future.
    Sounds good. Now………..if Kansas can beat Nova….going to be a great way to close the quarter! Need Michigan on the other 1/2. Looking for Spanky & Doc to help on that one.

    • On March 27, 2018 at 2:02 pm,
      Cory says:

      I need Kansas to win to keep me alive on my bracket as well… Unfortunately the UNC defeat really hurt 🙁

  3. On March 27, 2018 at 11:37 am,
    Scott says:

    Hi Cory, Quick question Balmoral had a resource of 591,000 indicated and 53,000 thousand inferred(not great and a market cap of 31 million as of this posting)
    Maple gold”s last estimate had an indicated of 479,000 and an inferred of 2,579,000 thousand……yet Maple Golds market cap is just a touch higher @ 32.26 million as of this post.In your opinion is Maple Gold way undervalued or am I just crazy?

    • On March 27, 2018 at 11:58 am,
      Excelsior says:

      Both Balmoral and Maple Gold appear to be undervalued, but be careful comparing them on just those 2 Gold resources, as they a bit apples and oranges when you get into their total asset base.

      *Keep in mind that (BAR) Balmoral also has their Nickel asset Grasset (which is how the company got launched in the first place), so it actually deserves the higher market cap and is undervalued even in relation to Maple Gold. Nickel and Copper and Cobalt are back in demand, and this asset should make up a large chunk of their valuation, but it isn’t getting any real value at present.

      Detour Trend Project, Quebec – Hosts Grasset:

      Nickel-Copper-Cobalt- Platinum-Palladium Deposit

      Initial Resource Estimate* – 3.5 mT @ 1.56% Ni, 0.17% Cu, 0.03% Co, 0.34 g/t Pt and 0.84 g/t Pd; open to depth for further expansion

      http://www.balmoralresources.com/projects/grasset/introduction

      • On March 27, 2018 at 12:03 pm,
        Excelsior says:

        In addition the pipeline of other exploration and development projects that Balmoral has is far more robust than what Maple Gold has in their portfolio. These can always feed further expansion, be sold while retaining a NSR, or JV’d with other companies to develop further. These aren’t factored at all into their current valuation either.

        http://www.balmoralresources.com/projects/martiniere/introduction

        • On March 27, 2018 at 12:04 pm,
          Excelsior says:

          That linked jumped to the Martiniere gold project, but you’ll see Grasset and these other projects listed below to click on:

          Fenelon
          Jeremie
          Hwy 810
          Detour East
          Harri
          East Doigt
          Northshore

    • On March 27, 2018 at 1:59 pm,
      Cory says:

      Good comment Scott! I hold shares in Maple Gold but that’s because I think it is undervalued. It is a lower grade resource but with almost 5X more ounces much more interesting to me.. and I think your right much more undervalued.

      Ex is correct in pointing out the Nickel asset. If the nickel market starts to move that will become valuable in itself.

      I still think Balmoral could turn out to be a very Company but it now has some very disappointed shareholders.

  4. On March 27, 2018 at 12:29 pm,
    Scott says:

    Thanks Excelsior

    • On March 27, 2018 at 1:07 pm,
      Excelsior says:

      Glad to share ideas, and I do agree with you that Maple Gold is undervalued at present and they are doing good work. It looks quite attractive here.

      My only point with Balmoral is that it isn’t getting properly valued for it’s large base metals exploration/development project Grasset or the other pipeline of PM and base metals projects, much less the Martiniere Gold project.

      It’s actually a great time to be reviewing all these companies over the next few months before the masses and institution investors start wading in later in the year and into next year.

      Cheers and may your investing be prosperous !

      • On March 27, 2018 at 2:01 pm,
        Cory says:

        Great comments Ex! I don’t comment that enough to you but trust me I think it everyday 😉

        • On March 27, 2018 at 3:38 pm,
          Excelsior says:

          Thanks Cory. Right back atcha sir! Keep up the great work.

  5. On March 27, 2018 at 12:32 pm,
    Paul L says:

    Another market crash coming now. I took profits in xop yesterday and dumped my big BP position today at 40.50 with some big profits as oil breakout looked like it was going to fail and it has now dropped below 65. Vix could head to the 40 to 50 area eventually. Dollar may start a new rally.
    Nasdaq bubble burst should bring down the whole market.

  6. On March 27, 2018 at 2:34 pm,
    Scott says:

    Thanks Cory,Just a waiting game with Maple Gold!!

  7. On March 27, 2018 at 3:46 pm,
    David Erfle says:

    Check out the Maple 5 year warrants which are publicly traded and tightly held. MGM.WT trading at C$0.20c and refusing to correct along with the stock. Full disclosure: I hold 150,000 MGM.WT. The Balmoral Grasset Deposit is very good. The Martiniere Project has a very good chance of being at least 2M oz. Unfortunately, IMO the company has a long road to hoe in gaining back the respect of the market and will most likely under-perform until the assays from the 2018 drilling campaign are released during the second half of the year. GLTAL.

    • On March 27, 2018 at 5:05 pm,
      Excelsior says:

      David – Good heads up on the Maple warrants. The insights today on Balmoral and macro picture for gold and the miners are much appreciated. Ever Upward!

      • On March 28, 2018 at 6:38 am,
        David Erfle says:

        You are a wealth of info on this board and much appreciated as well!

  8. On March 27, 2018 at 5:21 pm,
    GuruJ says:

    I held a large position in BAR.TO in 2016, but after waiting for Wagner to publish a RE after promising and promising year after year, conference after conference, my BS detector shot into the red zone. I sold out at C$0.82 with profits and have never even considered BAR again since 2016. The CEO is not a straight shooter, he’s a BS artist and the shareholders are paying for their misguided trust in him now. Also, I was flabbergasted when David Erfle began to publicly endorse and promote the company. It made no sense to openly tout a gold explorer without a RE unless you already had a massive position built up in it. Just wondering how many people got burned following David Erfle’s “advice” on this one. Very disappointing.

    • On March 27, 2018 at 7:10 pm,
      Excelsior says:

      Interesting feedback GuruJ. I don’t know much about the management team, but it sounds like a word of caution is in order. It is always a drag when companies don’t hit their milestones in a timely fashion, or don’t keep with their guidance; however, it is quite common in the mining sector to hit big stalls, roadblocks, funding issues, and other challenges. Exploring and Mining is a really tough business.

      As for anyone “touting a gold explorer without an RE”…. the reality is that many exploration stocks in any commodity don’t have an official resource estimate yet, if they are grassroots or greenfield operations. In fact many have old historical estimates that are not NI 43-101 compliant and that is the goal of an exploration company to prove up reserves and release an official Resource Estimate and then to expand it from there.

      > For Gold Explorers the target is to get to 1-2 million so I can understand why some aren’t jazzed about the initial 591,000 ounce deposit from BAR after such a long wait, but it should also be taken into account that they have drilled and delineated other areas with higher grade gold that were not included in this “maiden” RE. Bottom line – It will be growing and most following the story can see 1-2 Million ounces as quite doable. When? well that remains to be seen….

      Once a company starts putting more meat on the bones with a discovery and takes it to the level where they produce an economic study like a PEA, PFS, or FS (while working on permitting & metallurgy), then they graduate up to a Developer [development stage company, and less of an Explorer]. This is often where Major or larger Mid-tier will scoop them up because there are defined metrics around the resource and economics that they can justify in the takeover price.

      Personally, I had followed Balmoral a few years back when their primary value driver was the Grasset Nickel/Copper/PGM story, but at that time Base Metals weren’t doing very hot, and there wasn’t the EV or Energy Storage narratives, making Nickel or even their Cobalt more attractive like it is now. In today’s marketplace that story should be getting more traction than it is, but the company has been mostly focused on Gold the last few years.

      I took a speculative punt on it today by grabbing a small position into the carnage for a swing trade, as it was already really depressed before losing another 1/3 of the valuation in today’s trading. It may end up just being a trade for me, or I may leave behind a small core position to track the company as they make more progress on both deposits, and decide what they are doing with some of the other exploration projects in their portfolio.

      Cheers!

    • On March 28, 2018 at 6:35 am,
      David Erfle says:

      I too did well with this stock in the 2016 run-up and just now gave some of it back to Mr. Market. This is all part of the game which you are well aware. The reason I got back in was the possibility of a very good maiden resource estimate and the valuation was compelling at C$0.40c. The Grassett deposit was also a nice kicker. However, I believe the company dropped the ball by not including all of the recent drilling. Very good explanation by Ex below on why this project and company still has merit. You pay your money and take your chances with explorco’s and they all cannot pan out and if they did, I would be tying this from my own Greek Island. I am sure you have plenty of stories about exploreco’s you have been burned on and this is one of mine. You can’t win em all!

      • On March 28, 2018 at 7:56 am,
        Excelsior says:

        +1 Good comments David. Yes, this is why it is good to have a diversified basket of explorers, developers, and even a few producers to mitigate the risks in the mining sector.

        Balmoral still has plenty of potential, and once the dust settles from this initial resource estimate, and more exploration results are accumulated, then future updates to this resource estimate will get it closer and closer to an attractive project for a larger company to acquire. Cheers!

  9. On March 28, 2018 at 8:31 am,
    Buzz says:

    Ditto. Bought BALMF down here.