Hour 1 – Why Being Selective While Investing Is Important For Metals and Stock Investors

KE Report – Hour 1

It was another slower week for markets where news drove US stocks and at the tail end of the week PMs drifted higher. In the first hour of the show we spend a couple segments with Jeff Christian discussing metals, get an update from Osisko Metals, and talk defensive investment strategies with Mike Larson.

Please keep in touch by emailing me at Fleck@kereport.com. I love hearing form all of you about companies and guest you would like to see on the show. I reach out to everyone who you recommend.

  • Segment 1 & 2 – Jeff Christian, Managing Partner at CPM Group joins me for the first segments. We initially discuss where he sees the gold price moving this year and the main drivers. In the second segment we dive into the metals stocks and look to where the opportunities are after the consolidation of majors.
  • Segment 3 – Osisko Metals released drill results from both the Pine Point and Key Anacon Projects in the past two weeks. Jeff Hussey, President and CEO of Osisko Metals outlines how the Company is the “Only junior in the Americas with a pit constrained inferred resource of 5.5billion pounds of lead and zinc”.
  • Segment 4 – Mike Larson, Editor of the Safe Money Report shares his continued strategy of playing defensive sectors. Over the past year if you were in these sectors you actually outperformed the high flying stocks.

Exclusive Company Updates This Week


Jeff Christian – Segment 1 & 2
Jeff Hussey – Osisko Metals – Segment 3
Mike Larson – Segment 4

Comments:
  1. On February 9, 2019 at 10:18 am,
    Matthew says:

    The UST 10 year yield will fall further and that will support gold.
    http://schrts.co/RCaCIFSc

  2. On February 9, 2019 at 10:19 am,
    Matthew says:

    The gold:oil chart is extremely positive for the gold miners…
    http://schrts.co/kTawcJhH

  3. On February 9, 2019 at 11:05 am,
    Excelsior says:

    The currently not so “Precious” Silver to soon be more than just “Precious”

    February 7, 2019

    “Silver is looking to regain its “precious status” this year as all major signs are pointing to a bullish outlook, according to the Hightower Report.”

    “The elements working in favor of silver this year include increasing investment demand, declining supply, boost from other rallying precious metals, and outside market forces, the analysts from Hightower Report wrote.”

    “Lower production in 2019 is likely because of the low average price of $15.00 from 2018 has put pressure on miners that are reliant on silver-only production,” the analysts wrote. “Industrial usage accounts for more than 50% of total silver demand, so the ebb and flow of the global economy should continue to be a major force in determining prices.”

    “Also, a rally in gold and palladium, as well as a retreat in the U.S. dollar, are all giving silver a boost, as metals react to a more dovish Federal Reserve.”

    “Historically, gold has been the most influential force for silver, and it looks like it will be in a position to lead silver higher over the next few quarters,” the Hightower Report said. “Even the dollar could become a positive force for metals, as it looks ready to turn lower after its 11% rally in 2018.”

    https://www.commoditytrademantra.com/silver-trading-news/the-currently-not-so-precious-silver-to-soon-be-more-than-just-precious/

    • On February 9, 2019 at 11:08 am,
      Excelsior says:

      As surely as the Sun does, Gold too will rise Again

      “After seven disappointing years – in US dollars at least – it is hard to shake off some scepticism. That said, gold is showing vigour in no less than 72 currencies where it is at or close to an all-time high.”

      “The excellent news is that gold is seeing strong buying from the highest quality, glacial if you like, and perhaps less apparent sectors – that is Central Bank buying and from institutional investors. The official sector is acquiring gold at the fastest rate since 1971 when the gold standard ended. Not only is the tonnage impressive, it is also the number of participants involved which suggests this may have legs to run. It begs the question what can they see, that others have not.”

      https://www.commoditytrademantra.com/gold-trading-news/as-surely-as-the-sun-does-gold-too-will-rise-again/

  4. On February 9, 2019 at 1:29 pm,
    Chartster says:

    The next week or two should tell the story with copper. If it closes above 2.90 next week, things are looking good…

  5. On February 9, 2019 at 2:41 pm,
    Excelsior says:

    Uranium price recovery tipped to maintain momentum as supply dries up globally

    By SightlineU3O8 – February 7, 2019

    “According a presentation given by panel moderator Jonathan Guy, research director at Numis Securities, Numis is predicting a long-term uranium contract price of $60 per pound ($/lb) and a spot price of $50/lb, but the firm also pointed out that the “price rebound is likely to be more acute however, market tends to be shock catalyst driven.”

    “The uranium spot price currently sits around $29/lb to which level it has risen gradually over the past year from around $20/lb. That appears to have been largely the result of production cuts implemented by major uranium producers Kazatomprom and Cameco in 2017.”

    “According to Numis, the short-term market is still oversupplied and key short-term drivers will be further actions by Kazatomprom; Japanese nuclear power station restarts and aggressive Chinese contracting behavior.”

    Numis commented that the “long-term fundamentals remain positive and a key driver of price shift will be a return to contracting on the part of energy utilities.”

    https://sightlineu3o8.com/2019/02/uranium-price-recovery-tipped-to-maintain-momentum-as-supply-dries-up-globally/

  6. On February 9, 2019 at 4:10 pm,
    jb says:

    Heres a few tickers I am watching, some making a short term breakout above previous resistance or trend line , some maybe getting ready to do so. — arngf axu ccj ffmgf aumn gldlf gpl hmy hoc.l wpm bvn sbgl ssrm

    • On February 9, 2019 at 5:15 pm,
      Excelsior says:

      jb – Great list there.

      I also currently hold Argonaut, Alexco, and have considered Golden Minerals. I used to own great panther in the last bull market and swing-traded it some during the pops and drops of the bear market from 2011-2015. There are other Silver Jrs I like better now but it looks like a good value proposition here, and if Silver gets dragged up with Gold later in the year then it should do well along with Hochschild on your list.

      As for Harmony, Wheaton Precious Metals, SSR Mining, and Sibanye, they are solid Mid-tier to almost Majors at this point, so they’ll do well in a PM mining surge.

      I’m not as fond personally of the GoldMining or First Mining Finance vehicles as they are more optionality plays, but they are widely followed and should have good liquidity when the worm turns. I’m more a fan of the royalty model out of the Prospect Generator and have like the moves in Maverix, Metalla, Golden Valley, EMX royalites, etc… lately.

      As for Uranium, Cameco has done well lately, but really many of the Uranium stocks have had good recent pops and there has been lots more volume over the last 2 years. I don’t hold Cameco but have Energy Fuels, Ur-Energy, Uranium Energy Corp, Denison, Nexgen, Anfield Energy, and wish I would have jumped back into Centrus before its recent move higher.

      Ever Upward!

  7. On February 9, 2019 at 4:44 pm,
    jb says:

    forgot to mention kntnf and some others, too busy with girls softball 🙂

  8. On February 9, 2019 at 8:18 pm,
    Excelsior says:

    Gold Continues to Show Strength and Price Resilience

    February 8, 2019 – Gary Wagner #TechnicalAnalysis #Charts #VIDEO

    https://thegoldforecast.com/video/gold-continues-show-strength-and-price-resilience

    • On February 9, 2019 at 8:20 pm,
      Excelsior says:

      Ira Epstein’s Metals #Video (2/8/2019)

      Technical Analysis, Gold, Silver, Copper, Platinum

      https://www.youtube.com/watch?v=zs_k0uxI_ds

    • On February 9, 2019 at 8:51 pm,
      Excelsior says:

      FED CRUMPLES – and SEALS THE DOLLAR’S FATE…

      Clive Maund – Friday, February 01, 2019

      https://www.clivemaund.com/article.php?id=4905

      • On February 10, 2019 at 10:17 am,
        Excelsior says:

        Gab @TraderGab

        “#Gold #SPX Many gold bears are thinking that stock markets have to crash before gold can rally. There are some time when gold and stock markets can rally together. And gold always starts first. Gold is already smelling the first rate cut and large QE to prop up treasuries and SM.”

        https://twitter.com/TraderGab/status/1093884836174069760

        • On February 10, 2019 at 11:09 am,
          Excelsior says:

          Gold Still Has Relative Strength Advantage Over Stocks

          Feb. 8, 2019 – Clif Droke

          “Gold’s currency component is being tested by the latest rally in the U.S. dollar index, yet its “fear factor” is still very much intact. That much was made clear by the events on Thursday’s trading session as a revival of U.S.-China trade war worries kept gold’s price near its recent high in spite of a stronger dollar. In today’s report, we’ll look at a scenario in which gold remains range-bound near its 6-month highs while the dollar rallies, due partly to its relative strength advantage over stocks.”

          “Although the dollar was higher on Thursday, gold remained buoyant and was virtually unchanged in the latest session. The reason for gold’s resistance to its weakening currency component was the stock market volatility spike created by the revival of trade-related worries. While holdings of the SPDR Gold Trust ETF (GLD) fell for a fourth consecutive day on Thursday, the April gold futures price remained stable at $1,309. This kept the gold price above its 15-day moving average, its nearest trend line of any consequence, thus keeping its near-term (1-4 week) uptrend intact.”

          https://seekingalpha.com/article/4239503-gold-still-relative-strength-advantage-stocks

  9. On February 10, 2019 at 6:42 am,
    Wolfster says:

    Saw you mention gzz Ex which has definitely perked up a little…still not trading enough to accumulate more easily…really interested what rzz does regarding perhaps a dividend in the future and how everything plays out in the end…some of the other gzz royalties are reporting good drill results too…like the Metalla more and more all the time and Emx is definitely the cream of the crop

    • On February 10, 2019 at 7:53 am,
      Excelsior says:

      Good thoughts Wolfster. Yes, GZZ Golden Valley has perked up a bit lately, and yest some of their other royalties and JVs (like Sirios, Bonterra, Alexandria, etc…) have had good work going on.

      Have you ever taken a look at Maverix (MMX)? That has been a fun ride over the last 2 years as well.

      https://www.maverixmetals.com/assets/overview/

      I wonder if Maverix & Metalla may get gobbled up by one of the larger royalties/streaming companies down the road? They also could do a merger of equals and become a new force in the space like Osisko or Sandstorm.

      • On February 10, 2019 at 9:24 am,
        Wolfster says:

        I was slow and missed the boat on Maverix if memory serves me correct. Believe they were on the cse when I first started looking into them. Had them on my watchlist and got caught watching…..yes I think consolidation in the royalties will be happening in the next couple of years

        • On February 10, 2019 at 9:42 am,
          Excelsior says:

          Altius, Anglo Pacific, Sailfish, Ely, and Riverside are a few other good royalty companies.

          • On February 10, 2019 at 10:07 am,
            Wolfster says:
          • On February 10, 2019 at 10:24 am,
            Excelsior says:

            Yeah, I’m not sure which one he means as there are about 40 of them. It sounds like he believes one of the big tech companies may buy one of them (Apple, Amazon, etc…), which must be to lock down a supply chain of something useful for them.

            Regardless of which ever one he’s promoting, there are plenty of them with interesting royalties in their basket of assets, but I’d like to see a bit more consolidation in the space to roll them up under just a dozen or so companies.

          • On February 10, 2019 at 11:54 am,
            Wolfster says:

            I’d like the consolidation so maybe the dividend yields get to the 3-5% range…would like a nicer return while I what for growth returns as gravy.

          • On February 10, 2019 at 12:45 pm,
            Excelsior says:

            That would be great and would make them longer term value plays like Franco Nevada and Royal Gold.

          • On February 10, 2019 at 1:35 pm,
            Matthew says:

            FNV and RGLD aren’t value plays in my book unless you’re comparing them to certain high-flying conventional stocks. They’re good and relatively safe companies that should continue to do well but they aren’t bargains.

            If you do think gold is going to have a good year and big gains are your goal, this is one of the worst times to favor the royalty companies over the juniors. The business model will always give a lot less leverage than its riskier counterparts when the metals are rising. For example, IPT went up 7 times as much as FNV in 2016 and is a buy versus FNV right now.
            IPT:FNV weekly:
            http://schrts.co/eJSsRWWU

          • On February 10, 2019 at 5:27 pm,
            Excelsior says:

            What I meant was that if some of the smaller royalty companies like Maverix, Metalla, Ely Gold, Golden Valley, Abitibi, Sailfish, Anglo Pacific, Altius, Riverside, etc.. combined that they’d turn into a larger value play with dividends, like Franco Nevada and Royal Gold have been for the last decade.

            The royalty & streaming model is solid, more predictable, and ends up being a great longer term value play.

            I wasn’t advising people get into the Jr royalties over the Jr miners, or comparing them. I was simply discussing their longer term stable growth as attractive.

          • On February 10, 2019 at 5:36 pm,
            Excelsior says:

            Over the longer term for the last decade Franco has far outperformed Impact.

            In the shorter duration… of course one would expect a torqued up Jr producer like Impact to outperform a slow and steady climber like Franco, but look at this chart from 2008 to present and it’s clear which one weathered the financial storms better.

            https://www.stockcharts.com/freecharts/perf.php?FNV.TO,IPT.V&p=6&O=011000

          • On February 10, 2019 at 6:07 pm,
            Excelsior says:

            I do agree that during a bull move and strong impulse leg up, that the smaller Jr miners with more leverage to rising prices will provide the largest gains.

          • On February 10, 2019 at 6:52 pm,
            Matthew says:

            Re: “Over the longer term for the last decade Franco has far outperformed Impact.”

            Geez, Ex, talk about here nor there! Of course it did. That’s how it works. And IPT returned more in 6 months (2016) than FNV did in 10 years. (In the 2.5 years following the 2008 low, IPT went 18x while FNV went up 5x.)

            The juniors aren’t for everyone but neither are those royalty companies. All that safety and greatness has a price. I bet Marin and/or friends need to trim their holdings so they can buy more juniors.

            Of course, those who don’t know how to sell are definitely better off with good royalty plays.

          • On February 10, 2019 at 7:24 pm,
            Excelsior says:

            Yes, the royalty companies are more buy and hold investments where the Jr Miners are more for trading in and out of them to capture the leverage when its on the upside and to avoid the pullback leverage to the downside.

            There is a place for both in one’s portfolio. One can take trading profits from a successful swing trade and drop it into a royalty/streaming company with a dividend deep storage. A certain percentage of one’s portfolio is fine for speculating, but having some that is invested for the longer term appreciation is fine as well.

          • On February 10, 2019 at 9:15 pm,
            Matthew says:

            Yes, there is a laundry list of reasons why the royalty/streamers are the best and lowest risk companies in the sector. The problem is that the safe cash cows do not provide nearly as much leverage as a low margin miner when the metals really move. It’s that simple.

            The last time I bought FNV it was trading under $30 and I had call options to go with my shares. I have no position now.

          • On February 11, 2019 at 3:18 am,
            Excelsior says:

            Agreed on all points. Where I believe there may be more a middle ground of safety and leverage are with the Jr Royalty companies like Maverix, Metallla, EMX, Golden Valley, Abitibi, Altius, Anglo Pacific, Sailfish, Ely Gold, Riverside, Millrock, Transition, Midland, Globex, etc…

            If we start seeing more consolidation in the royalty space or with Prospect Generators with a handful of royalties in their portfolios then there may be takeover premiums as well as a bit of leverage to rising metals prices. Over time they may become the new Sandstorm and Osisko type companies that are more in the mid-tier royalty position moving into this next part of the cycle.

  10. On February 10, 2019 at 7:50 am,
    Ebolan says:
  11. On February 10, 2019 at 8:01 am,
    Dick Tracy says:

    From The Northern Miner, Lithium and Uranium snapshot of juniors on the move.
    https://www.northernminer.com/news/lithium-uranium-snapshot-eight-energized-juniors-on-the-move/1003803715/

  12. On February 10, 2019 at 8:52 am,
    Markedtofuture says:

    Abra CEO Intends to Create “WhatsApp” Styled Platform for Crypto-Fiat Currency

    Abra is a platform that supports investing in 30 cryptocurrencies and 50 fiat currencies, spread over 155 countries. Now, a new announcement shows that Abra is crossing new boundaries as their platform will allow users to apply Bitcoin to investments in traditional stocks and ETFs.

    Overall, this move could make it possible for Abra to evolve into a global crypto bank, according to CEO Bill Barhydt. In a statement to Cheddar, Barhydt said,

    “Consumers in Mexico, India, China, Southeast Asia [and] parts of Europe are completely shut out of Western investing. There are 100,000 investment accounts in all of Mexico for tens of millions of people. This makes no sense. Our mission is to democratize financial services and we’ve figured out how to do that using this cool crypto blockchain based technology … it works in 155 countries because we don’t have to be some SEC-brokered dealer because of the way this technology works.”

    The hope that Abra would be able to achieve this goal has been frequently expressed by Barhydt, allowing users to be their own custodians of money in any type of asset they hold. The program allows for investing, transferring, and even credit between parties, while traditional banking systems still lack the borderless nature that cryptocurrency has achieved.

    Most of the roadblocks have come up against have to do with the changing regulatory requirements between markets.

    Right now, Abra’s user interface is designed as a smart contract platform that offers the option to lock in Bitcoin to the value of the asset chosen by the user, rather than just tokenizing an asset. As such, Abra does not require a license, because it doesn’t act as a holder of customer funds in any sense.

    “From the consumer’s perspective they can basically invest in SPDRs, ETFs, Apple, Alphabet, Facebook, without actually having to understand the complexity, without actually having to go through the process of buying the security,” Barhydt said.

    Consumers have to start with at least $5 on investment, and the user gets a free pass on fees for the whole of 2019.

    Right now, the big concern is whether customers can handle essentially being in charge of being their own banks. One major hurdle being dealt with in the crypto industry is the QuadrigaCX case, in which the founder passed away with all of his passkeys and cold wallets encrypted, leaving customers in the cold while Canadian courts attempt to fix the situation.

    Barhydt, however, is confident that customers can handle the responsibility for themselves through the Abra opportunity. He said,

    “We believe consumers are ready to effectively take their smartphone and have a WhatsApp for money. That’s really our vision: a single smartphone app globally that allows any consumer to do myriad financial services from investing to credit, getting access to instant loans, global money transfer. Our mission is to make that app available to billions of users.” He added, “We’re on a mission to keep rolling out financial services until we really have that Whats App for money.”

    https://bitcoinexchangeguide.com/abra-ceo-intends-to-create-whatsapp-styled-platform-for-crypto-fiat-currency/

  13. On February 10, 2019 at 9:34 am,
    Matthew says:

    Oil doesn’t look great but I don’t think it has huge downside either. A falling dollar will help it but not as much as it will help gold…
    http://schrts.co/wqPFQwdd

    • On February 10, 2019 at 5:02 pm,
      Bonzo Barzini says:

      Matthew, FNV and RGLD may not be huge bargains now, but I bought them@26 and 27 bucks and am not selling as I would have to pay big capital gains taxes, and I think they will go much higher when gold is at 3K or 5K. WPM looks like the better buy now.
      Mark Spitz of Indiana U. turns 69 today. I wonder if the tips I gave him on the butterfly helped him win 7 golds in Munich, each in world record time?

      • On February 10, 2019 at 9:19 pm,
        Matthew says:

        Bonzo, they will definitely go much higher and they won’t need 3K gold.

        Interesting about you and Spitz!

        • On February 11, 2019 at 6:57 am,
          Bonzo Barzini says:

          I was kidding about Spitz. There were 30000 students at Indiana and I never crossed paths with Spitz, Jane Pauley, or Kevin Kline when we were all there. I was a grad student and had little contact with the undergrads.

          • On February 11, 2019 at 7:52 am,
            Matthew says:

            You got me! 😮
            Who has time for undergrads anyway? 😎

          • On February 11, 2019 at 10:18 am,
            OOTB Jerry says:

            Ha, Ha….I did he dated my old girl friend……

          • On February 11, 2019 at 10:29 am,
            Matthew says:

            Jerry with that Corvette of yours, I would have thought you’d have a young girlfriend. 😜😉

          • On February 11, 2019 at 1:28 pm,
            OOTB Jerry says:

            🙂

  14. On February 11, 2019 at 3:52 am,
    Excelsior says:

    Falco Holds the First Meeting of Its Community Consultation Committee

    by @nasdaq on February 8, 2019

    Luc Lessard, President and CEO, comments: “We are impressed with the quality and enthusiasm of the people making up this Committee. The members are well known in their respective fields and represent municipal, environmental, scientific, sociocultural, socioeconomic, educational and governmental interests.”

    He added: “We were particularly pleased during our first meeting to observe first hand the keen interest of these stakeholders for the Horne 5 Project. We will surely benefit from their experience in listening to the concerns of people in the area and we look forward to working together to improve the Horne 5 Project.”

    https://ceo.ca/@nasdaq/falco-holds-the-first-meeting-of-its-community-consultation

  15. On February 11, 2019 at 3:56 am,
    Excelsior says:

    Golden Queen Mining Enters Into Share Purchase Agreement

    by @newswire on February 8, 2019

    Paul Blythe, Chairman of the Special Committee of Golden Queen, stated, “While the operations at the Soledad Mountain Project have seen slight improvements in recent months, the looming debt repayments, lack of free cash flow generation by the mine to service these debts and additional near term cash call requirements, have led the Special Committee to form the view that, in the absence of a superior alternative, the Transaction is in the best interest of Golden Queen shareholders. The Transaction provides minority shareholders with the opportunity to participate in the future of Golden Queen as it assesses future opportunities with its substantial treasury and clean balance sheet rather than go through the uncertainty and significant costs of a lengthy insolvency process.”

    https://ceo.ca/@newswire/golden-queen-mining-enters-into-share-purchase-agreement

  16. On February 11, 2019 at 4:42 am,
    Excelsior says:

    Time for a Breakout in Gold?

    by @TheDailyGold on February 7, 2019

    https://ceo.ca/@thedailygold/time-for-a-breakout-in-gold