John Kaiser Exclusive – Wed 3 Oct, 2018

Comparing Bubbles In Resources Sectors To The Current Bubbles

A couple weeks ago John Kaiser and I chatted about the cannabis sector and how it was pulling investors away from junior resource companies. We continue our discussion but this time focusing on the potential size of bubbles. Since the resource sector is a well established sector there are metrics to value assets. When it comes to some of these new industries it can be impossible to put a reliable metric on it. We believe a resource bull market is coming but it might not be the parabolic rise that we have seen in cannabis and the dot com.

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Featuring:
John KaiserCory Fleck
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Comments:
  1. On October 3, 2018 at 1:49 pm,
    OOTB Jerry says:
    • On October 3, 2018 at 1:51 pm,
      OOTB Jerry says:

      May as well smoke a joint…….

  2. On October 3, 2018 at 1:51 pm,
    Dick Tracy says:

    Nobody is posting, some of the commentary from the regular analyst’s is Ho Hum. They need to spice up this site by interviewing more controversial people like Bob M and maybe even Gerald Celente. The same old, same old, won’t cut it for too long. People want to be entertained as well as informed and if you can’t do both, well you figure it out. DT

    • On October 3, 2018 at 8:01 pm,
      Excelsior says:

      Personally I enjoy most of the guests speakers from economists, to newsletter writers, technical traders, company officers, and armchair investors that come onto the KER.

      Most of the resource markets are just rather boring lately, with the exception of certain explorers or the cannabis stock bubble, so I thought John’s commentary hit the mark well today.

      • On October 3, 2018 at 8:47 pm,
        Wolfster says:

        Cannabis shock bubble???….only overvalued short term with some still trading at fair valuation with good upside but longer term I think some are underestimating the potential of cannabis. I’ve been enjoying the ride

        • On October 5, 2018 at 9:14 am,
          Excelsior says:

          Rockshield actually looks undervalued compared to the rest of the pot stocks:
          _____________________________________________________________________

          Rockshield Capital Provides Investment Portfolio Update
          @newswire on September 24, 2018

          “Over the past several months our core holdings have steadily progressed achieving key developments and milestones resulting in considerable share price appreciation. Our four largest holdings, The Green Organic Dutchman (TGOD), Helius Medical Technologies (HSM), Plus Products (PLUS) and Cognetivity (CGN) along with our $2.1MM cash position account for 87% of our total $14.5M net asset value (as at Sept 21, 2018). The current share price of Rockshield Capital (RKS) represents as 46% discount to our net asset value, representing a misalignment with the underlying value of the holdings.”

          https://ceo.ca/@newswire/rockshield-capital-provides-investment-portfolio-update

      • On October 3, 2018 at 8:48 pm,
        Excelsior says:

        This podcast covers a few of the names John Kaiser threw out in the editorial today, like Royal Nickel and Great Bear. White Gold is another that had a big discovery lately and did a moon shot. Sokoman Iron, Aben Resources, and Harvest Gold also had spikes up this year.

        ________________________________________________________

        @stateside Stateside Report Podcast – October 3, 2018 –

        http://www.statesidereport.com

        “In this 97th episode of the Stateside Report Podcast we take a look back at the week in gold, silver, the base metals and the stocks then discuss the key press releases of the week from companies including Harvest Gold $HVG, White Metal Resources $WHM, Kutcho Copper $KC, Aben Resources $ABN, Denison Mines $DML, Nevada Exploration $NGE, Royal Nickel $RNX, White Gold Corp $WGO, Contango Ore $CORE, Great Bear Resources $GBR, Radius Gold $RDU, Aton Resources $AAN, Wallbridge Mining $WM, Sokoman Iron $SIC and Westhaven Ventures $WHN. We talk gold, silver, lead, zinc, nickel, lithium, uranium, copper and oil.”

    • On October 4, 2018 at 9:25 am,
      Cory댊 says:

      Hey DT, sorry you feel the commentary has been Ho Hum recently. Chartster and Ex are right though there is not much to discuss that is all that exciting in the resource sector. In our gusts defense most of them have been spot on about the boring metals markets, yields, and even energy and uranium.

      I promise you we will not go down the road of predicting $5,000 or even $50,000 gold and world economic collapse just to be more entertaining. I think there are plenty of other sites that will give you that misinformation 😉

      If you have some topics you would like to hear us discuss please email me at Fleck@kereport.com and I will be happy to get those discussed.

  3. On October 3, 2018 at 4:41 pm,
    Chartster says:

    DT,
    I don’t think the market commentary is ho hum. It’s that gold was at 1200 five years ago, just like it is now. And the political commentary is very close to main stream news.

    When gold turns north, this site will have some “zing”. There are many quality analysts that give opinion on this site.

    Asset based investing is still, King. And that’s what this site is all about.

    • On October 3, 2018 at 8:04 pm,
      Excelsior says:

      Agreed Chartster. There really isn’t much to say about Gold, Silver, Platinum, Zinc, Lead, Copper, Nickel, etc for the last few months.

      Personally I expected a bit more energy to the Gold bounce out of the mid-August bottom and into seasonally strong September, but everything has been rather muted. The stronger US Dollar throughout the summer kept most commodities in check.

      This too shall pass…..

      • On October 3, 2018 at 8:15 pm,
        Excelsior says:

        Gold’s Safe-Haven Appeal Remains Healthy – Reuters GFMS

        Neils Christensen – Wednesday October 03, 2018

        http://www.kitco.com/news/2018-10-03/Gold-s-Safe-Haven-Appeal-Remains-Healthy-Reuters-GFMS.html

      • On October 4, 2018 at 6:40 am,
        Chartster says:

        This too shall pass*, no doubt about it.
        Cooper, uranium and zinc look great right now. Gold might be depressed a while longer. I think the corporate bond and government bond flush is about to begin. That should move large funds into commodities.

        The junk bonds have had 9 lives in the last 3 years. Maybe this 10th time rollover is the charm. We will see.

  4. On October 3, 2018 at 5:48 pm,
    b says:

    Yup, as soon as the mob thinks gold is the way to get rich quick the place will have lots of posting.

    I wonder if anyone here is “ahead of the crowd”? or, in way too long, guess it depends on your perspective.

    • On October 4, 2018 at 5:04 pm,
      Ozibatla says:

      Agreed. When the PMs are in favour again (whenever that may be), many of the fear mongerers and melodramatics will come out of the woodwork and preach all sorts of entertaining mistruths.

  5. On October 3, 2018 at 8:00 pm,
    Buzz says:

    LODE had a good day

    • On October 3, 2018 at 8:08 pm,
      Excelsior says:

      Yes, I have a small position in LODE and was surprised at the move higher today, but I expect over the next year or two it has much higher to rise. It is just one of dozens of small producers/developers that has been forgotten in the dustbin of apathetic metals markets….. They just received a nice award this week though.

      __________________________________________

      (LODE) Comstock Mining Receives National Sustainable Mineral Development Award; BLM Recognizes the Exceptional Reclamation of the Historic Silver Hill Mine Shaft

      @nasdaq on October 1, 2018

      https://ceo.ca/@nasdaq/comstock-mining-receives-national-sustainable-mineral

  6. On October 4, 2018 at 5:20 am,
    Charles says:

    Ex – what are your thoughts on USAS picking up Pershing Gold? Seems they must have gotten a fairly decent price since the stock did not move much despite the 35% premium paid and dilution.

    • On October 4, 2018 at 10:01 am,
      Matthew says:

      Fwiw, I think the deal is fine but this guy at Seeking Alpha thinks Pershing could be worthless:
      https://seekingalpha.com/article/4209598-americas-silver-pershing-gold-acquisition-worth?dr=1

      • On October 5, 2018 at 8:03 am,
        Excelsior says:

        Pershing Merger Was An Opportunity That Couldn’t Be Missed – Americas Silver

        Neils Christensen – Monday October 01, 2018

        “Simply put, this is a great project from our perspective,” he said. “There are very few oxide heap-leach, open-pit mines with low capital intensity available today,” he said. “Whether the gold price is good or bad, the rationnale to own this mine is there.”

        Blasutti said that unfortunately, in the current market conditions, single-project companies like Pershing Gold, face significant development risks when trying to bring a project online. However, he added that Americas Silver will be able to leverage its current production and cash flow to overcome potential development risks.

        “We are building a $28 million capital project on the top of a $160 million company,” he said. “I think it could take us less than a year to get this project up and running in one of the best jurisdictions in the world.”

        Blasutti explained that the project’s low capital costs means the company will see a strong return on its investment even if prices remain at current levels.

        “Even with acquisition costs and after building the mine, we still expect to see a return of more than 15% and that is just something you don’t see in this business,” he said. “We think this project will be able to fund itself.”

        http://www.kitco.com/news/2018-10-01/Pershing-Merger-Was-An-Opportunity-That-Couldn-t-Be-Missed-Americas-Silver.html

    • On October 5, 2018 at 7:46 am,
      Excelsior says:

      Hi Charles, I believe it was definitely a good pickup for America Silver, and Pershing Gold is an interesting development stage company that consolidated its land in Nevada from Victoria Gold & Newmont years ago, and did all the right things to move the project from an initial resource estimate, to PEA, to metallurgical testing, then a PFS and more drilling, and finally a Feasibility Study that outlines their economics. While I don’t like the 5% discount rate and feel they should have used 7-8% , the low economic risk and cost imputs in of one of the best mining jurisdictions (Nevada) are fairly well understood by the industry now, so maybe that is why they went with 5%. USAS is also a solid operator of mines, and may be able to further optimize things. They got a great development project, in a Tier 1 jurisdiction, for pennies on the dollar in such a depressed market, so it was a good transaction.

      __________________________________________________________

      PERSHING GOLD ANNOUNCES POSITIVE FEASIBILITY STUDY FOR RELIEF CANYON
      5/30/2018

      “Highlights from the FS include a pre-tax net present value (“NPV”) of $154 million, a pre-tax internal rate of return (“IRR”) of 91% and pre-tax Net Cash Flow of $204 million. The NPV, IRR and Net Cash Flow figures assume pre-tax economics using $1,290 per ounce (“/oz”) of gold (“Au”), $16.75/oz of silver (“Ag”) and a 5% discount rate.

      “The Feasibility Study validates the previous technical work we have done at Relief Canyon, confirming it to be a low CAPEX, low cost, high IRR project,” stated Stephen D. Alfers, Pershing Gold’s Chairman and CEO. “Pershing Gold thanks MDA, Kappes Cassidy, Jorgensen Engineering, and their staff for their high quality work in assisting with the development of this Feasibility Study,” stated Alfers.

      http://www.pershinggold.com/file/Index?KeyFile=393692201

  7. On October 4, 2018 at 10:21 am,
    Charles says:

    Thx for the article. Hopefully with better management the Relief mine will be put back in operation in the next 9 months and the exploration upside will expand the mine life. If the mine is not put back in operation by then either the Gold market has gotten worse from here or they bought a dud.

    • On October 5, 2018 at 7:49 am,
      Excelsior says:

      As mentioned above, Americas Silver Corp are solid mine operators, and Pershing Gold already did all the heavy lifting in consolidating the land, defining the resource, testing the metallurgical recovery rates, and doing most of the capital raises and work to develop the project. Now USAS can take things to the next level in one of the best mining jurisdictions on the planet – Nevada.

      • On October 5, 2018 at 8:15 am,
        Excelsior says:

        Whether it takes 9 months or 12 months for USAS to get Relief Canyon mine into production, it will be worth the candle and they have the skill sets and experience to make that happen.

        It is far from a dud, and the only dud, and GoldPanda’s grief with Pershing was the dilution seen, as he would have preferred they put it into production and feed the exploration with organic growth. I don’t disagree with him on the dilution Pershing shareholders suffered, but they did the right thing by advancing it from resource estimate, to PEA, to PFS, FS and continuing to do definition drilling and improve the starter resources. Whether or not Pershing was a hot mess, is irrelevant at this point, because Americas Silver can capitalize on that work and infrastructure in place, and then just move things forward (even if Gold stays at todays prices…. which I don’t believe it will stay at $1200) That was the other thing, looking at Gold price as stuck at $1200 and Silver at today’s prices is a fallacy in that Seeking Alpha article, and the Feasibility Study at $1290 Gold and $16.75 Silver about a year out sounds very reasonable.