Weekend Show – Sat 16 Feb, 2019

Hour 1 – Inflation, US Markets Continue To Rise, and De-Risking Metals Stocks

On this weekend’s show I am joined by a great guest list including Jesse Felder, Rick Bensignor, and Byron King. We get a couple different takes on where the US markets are heading this year after the best January in 30 years. However what’s really interesting is across the board generalist investors are starting to warm up to gold.

Please keep in touch by emailing me at Fleck@kereport.com. I love hearing from all you regarding companies and guests you would like to see on the show.

This week’s segments are longer than normal as we are covering a lot of different topics. Please let me know what you all think.

  • Segment 1 and 2 – Jesse Felder, Founder of The Felder Report joins me for a discussion on the recent inflation data, where profit margins are compared to historical levels, and where he sees opportunity this year.
  • Segment 3 – Byron King looks into the metals stocks and outlines the importance of de-risking a project in a slow metals stock environment. This includes a discussion on jurisdiction and the importance of in-fill drilling.
  • Segment 4 – Rick Bensignor, Founder of Bensignor Investment Strategies focuses on some indicators that are pointing to a more risk on attitude from investors. Could the December bottom in markets be a global bottom?

Exclusive Company Updates This Week 


Jesse Felder
Byron King
Rick Bensignor

Featuring:
Jesse FelderRick BensignorByron King

Comments:
  1. On February 16, 2019 at 4:05 am,
    Ebolan says:

    Inflation is just another form of taxation. Taxation is theft.

    • On February 16, 2019 at 7:57 am,
      Ebolan says:

      Then of course there’s financial repression. They steal even more from the savers as real interest rates are negative forcing people to take excessive risk just to keep their savings from becoming worthless.

      It is a completely corrupt system.

      • On February 16, 2019 at 8:04 am,
        OOTB Jerry says:

        Ebo……..the sheeple are never going to win in the corruption, that exist presently.
        A wake up call for those that think that anything is going to change, under the existing taxation system are delusional.
        Theft by design…….Fed course 101……Fake Fed. and collection agency.

  2. On February 16, 2019 at 6:33 am,
    Chartster says:

    I think the USD just topped and it should start going down from here. I also think commodities are going to start a long term bull. The setup is in the here-and-now.
    The next week or two will confirm this (I think?)

    The big banks (GS and JPM et al) and the FANGS are about to get clipped hard.

    Looks like a big change in the narrative right now…

    The PMs are the hardest call right now, but I still think there will be a washout this spring.

    • On February 16, 2019 at 8:43 am,
      Excelsior says:

      Gundlach: Last year’s market selloff was just a ‘taste of things to come’

      Julia La RocheReporter ,Yahoo Finance • February 16, 2019

      Late last year, the S&P 500 (^GSPC) tumbled 20% from its Oct. 3 intraday high to its Dec. 24 intraday. And despite the market’s sharp 17% rally from those lows, Bond king Jeffrey Gundlach says we’re in a bear market and that we could see new lows.

      “A bear market has nothing to do with this 20% arbitrary thing,” Gundlach, the CEO of $121 billion DoubleLine Capital, told Yahoo Finance in an exclusive interview. “It has to do with something crazy happening first, and then the crazy thing gives it up. And yet more traditional things continue to march on. But one by one they give it up.”

      That crazy thing: bitcoin.

      “Bitcoin going from zero to 20,000 in a straight line,” Gundlach said. “It was crazy.”

      “You knew it was crazy, because other things started to happen that we’re truly insane,” he added. “There was a thing called Crypto Kitties. It wasn’t a crypto currency. It was a collectible, but it had the word ‘crypto’ in it. They were each unique, but there were cartoon drawings of cats. There was actually a moment where one sold for over $100,000. Of course, they’re worth zero today.”

      “That is a sign.”

      https://finance.yahoo.com/news/gundlach-last-years-market-selloff-was-just-a-taste-of-things-to-come-133019690.html

      • On February 16, 2019 at 10:03 am,
        Excelsior says:

        JPMorgan Just Killed the Bitcoin Dream

        By Ben Walsh – Feb. 14, 2019

        “Blockchain and Bitcoin were, of course, initially supposed to allow individuals to send each other cash without any state or company standing in their way.”

        “But that dream is now effectively dead, and blockchain is now fully into its boring phase. The latest and most telling evidence of this arrived this morning, when JPMorgan (JPM) said it had developed and tested a prototype of a digital coin.”

        https://www.barrons.com/articles/jpmorgan-chases-digital-coin-plan-just-killed-the-bitcoin-dream-51550160197

        • On February 16, 2019 at 5:45 pm,
          Markedtofuture says:

          Argentina Settles Export Deal With Paraguay Using Bitcoin

          Argentina has settled an export deal with Paraguay in Bitcoin (BTC), Cointelegraph en Español reported on Thursday, Feb. 14.

          In a reported first for both countries, Paraguay has bought pesticides and fumigation products worth $7,100 from Argentina, using cryptocurrency to settle the deal. The purchase was paid for in BTC and then converted into Argentine peso to settle accounts with the exporter of the agricultural chemicals.

          https://www.zerohedge.com/news/2019-02-16/argentina-settles-export-deal-paraguay-using-bitcoin

          • On February 17, 2019 at 4:57 pm,
            Excelsior says:

            The next Bitcoin? Crypto millionaires backing this controversial commodity
            SPECIAL REPORT

            By Micky News – February 17, 2019

            “Many believe the Bitcoin bull market that peaked in 2017 was a once-in-a-lifetime phenomenon. But an undercurrent of crypto millionaires, influencers and traders are beginning to turn to a relatively unloved and controversial commodity they believe is on the cusp of an explosive bull market. One that could be bigger than Bitcoin.”

            “Bitcoin and Uranium are worlds apart, so it might come as surprise to discover that Bitcoin millionaires are getting excited about the volatile uranium sector.”

            “But perhaps it’s the volatility attracting the Bitcoin bulls to Uranium.”

            “Since the 1940’s uranium prices have cycled through three explosive bull markets.”

            https://micky.com.au/the-next-bitcoin-crypto-millionaires-backing-this-controversial-commodity/

    • On February 17, 2019 at 2:40 am,
      Excelsior says:

      Gundlach: Facebook is a ‘diabolical data collection monster’

      JP Mangalindan •February 16, 2019

      https://finance.yahoo.com/news/jeffrey-gundlach-facebook-diabolical-data-collection-monster-225256609.html

      • On February 17, 2019 at 11:55 am,
        Charles says:

        Great article Ex. Just confirms what everyone on this board has thought about Facebook for a long time.

        • On February 17, 2019 at 1:08 pm,
          Excelsior says:

          Agreed. I’ve never had a Facebook account as I saw the writing on the wall once it was launched.

      • On February 17, 2019 at 2:24 pm,
        Charles says:

        Agreed. After I saw the movie Facebook, I wanted nothing to do with Mark Zuckerberg or his Company.

  3. On February 16, 2019 at 7:40 am,
    Anders from Copenhagen says:

    Hi Cory.
    Great show. Thank you for all your efforts!
    Regarding your uploads to iTunes: Is it on purpose that you only upload one segment and not upload the entire show? You have done it that way the last several weeks.
    Best Regards, Anders

  4. On February 16, 2019 at 8:36 am,
    Silverdollar says:

    Cory: Thanks for bringing us some more comments from Jesse. He’s a pleasure to listen to and without a doubt one of the jewels you share with your audience. He seems to have good ability to see things few others do. That’s a valuable trait and one that will pay in the long run. I always feel better about my positions after listening to his comments.
    FWIW, these comments from Peter Hug might be of interest to some of your listeners: https://www.kitco.com/news/video/show/Kitco-News/2275/2019-02-15/Why-Peter-Hug-Is-Sticking-To-His-Bullish-Call-On-Gold#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DKitco-News

  5. On February 16, 2019 at 9:05 am,
    Matthew says:

    IPT:ZJG weekly:
    http://schrts.co/WGgPkbcj
    (IPT looks better than the gold stocks.)

    • On February 18, 2019 at 7:44 am,
      spanky says:

      IPT looks good, but I have my doubts about its ability to get through 40 cents until May based on the weekly Ichimoku cloud. We’ll see.

  6. On February 16, 2019 at 9:08 am,
    Matthew says:

    SILJ is heading to $10+…
    http://schrts.co/szXutTbS

  7. On February 16, 2019 at 9:10 am,
    Matthew says:

    It took two weeks but it looks like the bulls have won the battle for one-year downtrend breakout…
    http://schrts.co/PDHSsKyI

  8. On February 16, 2019 at 9:18 am,
    Matthew says:

    AG looks great:
    http://schrts.co/JTBmgwFs

  9. On February 16, 2019 at 9:32 am,
    Matthew says:

    SILJ:SLV has closed the week above the 30 week MA for the first time in seven months and is up 16% in the last three weeks…
    http://schrts.co/PvPAxYMs

    • On February 17, 2019 at 2:27 pm,
      Charles says:

      To infinite and beyond! Just kidding. I know as soon as I say that a top will form!

      • On February 17, 2019 at 5:23 pm,
        Big Al says:

        All markets have tops Charles. That is why they are called :markets”.

        • On February 18, 2019 at 5:48 am,
          Charles says:

          Agreed Al. In some respects it would be nice if they always went up in some respects, but that would eliminate the challenge and make things a lot more boring for all of us. You and Cory run a great blog and give us little guys a fighting chance against the machines. I don’t know if you get around to any of the conferences. I have never been to one but it would be great to meet you and Cory sometime. Cheers!

  10. On February 16, 2019 at 9:38 am,
    Excelsior says:

    @Goldfinger –

    “$GDX bull flag breakout to end the week. Money flow and Relative Strength indicate good odds this move will have legs – breakout targets $23+ early next week.” — Goldfinger

    http://cdn.ceo.ca/1e6ebf4-GDX_Daily_2.15.2019_002.png

    • On February 16, 2019 at 9:51 am,
      Excelsior says:

      CEO.ca Weekly Wrap – 2/16/2019

      by @Goldfinger on February 16, 2019

      “Canadian small cap investors have a reason to smile this 3–day market weekend after the TSX-V put in place, what appears to be, a higher low (relative to the January low)”

      “Junior gold miners finished the week strong with rallies on both Thursday and Friday, closing at the high for the week. Meanwhile, cannabis stocks also finished the week strong with a 4-session winning streak.”

      “The junior gold explorers/developers and mid-tiers producers, which comprise the GDXJ exchange-traded fund, have had an especially strong start to 2019, rising more than 9% since the beginning of the year and breaking above a long-term downtrend line in the process:”

      https://ceo.ca/@goldfinger/ceoca-weekly-wrap-2162019

    • On February 16, 2019 at 9:51 am,
      Matthew says:

      That breakout is what I had been expecting and it happened just as I started to doubt myself.
      http://schrts.co/eUbcDjky

      • On February 16, 2019 at 9:55 am,
        Excelsior says:

        Yes, good call Matthew. It’s nice to see things a bit peppier in the miners lately.

  11. On February 16, 2019 at 9:48 am,
    Matthew says:

    IPT is up 74% since bottoming in November and the bulls are very clearly in control…
    http://schrts.co/tzXwXTeP

    • On February 16, 2019 at 9:56 am,
      Excelsior says:

      +74

  12. On February 16, 2019 at 9:53 am,
    jb says:

    I like the forming IHS on $wtic daily chart and the weekly candle on OIH.

    https://stockcharts.com/h-sc/ui?s=%24WTIC&p=D&yr=1&mn=6&dy=0&id=p3611528134c&listNum=5&a=646560507

  13. On February 16, 2019 at 9:55 am,
    Matthew says:

    One bullish picture:
    http://schrts.co/VdtvAtKs

  14. On February 16, 2019 at 9:59 am,
    jb says:
    • On February 16, 2019 at 10:05 am,
      Matthew says:

      That’s a massive bull hammer!

  15. On February 16, 2019 at 12:54 pm,
    Charles says:

    Great show with great guests. Thanks Cory and Al.

  16. On February 16, 2019 at 2:23 pm,
    Silverdollar says:
  17. On February 16, 2019 at 2:30 pm,
    Wolfster says:
  18. On February 16, 2019 at 3:25 pm,
    Excelsior says:

    (AXU) (AXR) Alexco Extends Draw Down Availability Period On US$15 Million Credit Facility
    February 14, 2019

    Clynt Nauman, Alexco CEO and Chairman commented, “With the extension of the draw down availability period of the Credit Facility, we are simply maintaining this back-stop and financing alternative while waiting for final permitting for the Bermingham deposit to be completed – currently anticipated at the end of Q2-2019. We remain on target to announce the results of our pre-feasibility study before the end of Q1 and continue to target a production decision in the first half of 2019 subject to market conditions.”

    https://www.alexcoresource.com/news/2019/alexco-extends-draw-down-availability-period-on-us-15-million-credit-facility/

    • On February 16, 2019 at 3:38 pm,
      Excelsior says:

      (AXU) (AXR) Alexco Resources expecting busy 2019 with Pre Feasibility Study planned for end of Q1

      Proactive Investors Stocktube – Jan 20, 2019 #VIDEO Interview

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

      • On February 16, 2019 at 3:42 pm,
        Excelsior says:

        The Silver Lining of the Golden Triangle – Dolly Varden Silver Corp. (DV) (DOLLF)

        Cambridge House International – January 2019 – Ben Whiting is the VP of Exploration

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

        • On February 16, 2019 at 3:46 pm,
          Excelsior says:

          Telling the Story of Silver – Q&A with Peter Spina & Keith Neumeyer
          Cambridge House International – January 2019

          “Updates on First Majestic First Majestic Silver Corp (AG) (FR), the comparison to Gold, and understanding the vast applications of Silver with Peter Spina and Keith Neumeyer.”

          https://www.youtube.com/watch?v=4IQ2Xzx-3z0

          • On February 16, 2019 at 3:48 pm,
            Excelsior says:

            What’s Driving Silver Demand?
            > Panel with David Morgan, Endeavour Silver & New Pacific Metals

            “David Morgan, publisher of The Morgan Report, hosts silver Bradford Cooke, Founder and CEO of Endeavour Silver Corp. & Gordon Neal, president of New Pacific Metals Corp.”

            https://www.youtube.com/watch?v=0HvF0daxLHQ

          • On February 16, 2019 at 3:51 pm,
            Excelsior says:

            Two Producing Mines, Two Countries – Avino Silver & Gold Mines Ltd. (ASM)
            Cambridge House International – January 2019

            “Jennifer North is the Manager of Investor Relations at Avino Silver & Gold Mines Ltd (ASM: TSX). The company operates two silver mines in Mexico with a gold project under development in British Columbia.”

            https://www.youtube.com/watch?v=5c4D_6kLNg8&t=1s

  19. On February 16, 2019 at 4:03 pm,
    Excelsior says:

    How to Invest in Gold: An Overview – Nick Hodge

    Cambridge House International – January 2019

    https://www.youtube.com/watch?v=0uroHXCSaD8

    • On February 16, 2019 at 4:05 pm,
      Excelsior says:

      A conversation with Peter Schiff & Roy Sebag

      Cambridge House International – January 2019

      “Peter Schiff (advisor to Gold Money Inc.) and Roy Sebag (Menē) talk about different opportunities to invest in Gold.”

      https://www.youtube.com/watch?v=10l0mGFiC6w

      • On February 16, 2019 at 4:06 pm,
        Excelsior says:

        Consequences for Gold of QE and Tightening – Adrian Day

        Cambridge House International – January 2019

        “Adrian Day is a British-born writer and money manager who has made a name for himself searching out unusual opportunities around the world.”

        https://www.youtube.com/watch?v=9hrigEuYDgA

        • On February 16, 2019 at 4:10 pm,
          Excelsior says:

          Enhanced Precious Metals Allocation Strategies and Market Drivers – Chris Blasi

          Cambridge House International – January 2019

          https://www.youtube.com/watch?v=6xy512AioKM

          • On February 16, 2019 at 4:20 pm,
            Excelsior says:

            Capitalist Exploits – Royalties & Streaming Panel with Jamie Keech
            Cambridge House International – January 2019

            J(amie Keech, founder of Ivaldi Venture Capital Ltd., hosts Nolan Watson, President & CEO of (SAND) (SSL) Sandstorm Gold Ltd., Dan O’Flaherty, CEO of (MMX) (MACIF) Maverix Metals Inc., and Gary Brown, CFO of (WPM) Wheaton Precious Metals Corp to discuss the growing trend of Royalties and Streaming. ”

            https://www.youtube.com/watch?v=PiHoXRotF04&t=4s

  20. On February 16, 2019 at 4:12 pm,
    Excelsior says:

    Key Commodities & Investment Opportunities to Watch in 2019 – Sid Rajeev

    https://www.youtube.com/watch?v=xI62v8PkETc

  21. On February 16, 2019 at 4:17 pm,
    Excelsior says:

    The End of a 7 Year Bear Market? – Uranium Exploration Panel with Mike Alkin

    https://www.youtube.com/watch?v=Lm_qPyc419U

    • On February 16, 2019 at 4:22 pm,
      Excelsior says:

      #1 Uranium Producer in the World, and Newest Vanadium Producer in the World – Energy Fuels Inc. (UUUU) (EFR)

      https://www.youtube.com/watch?v=4tkcZZWCm4A

      • On February 16, 2019 at 4:23 pm,
        Excelsior says:

        Uranium Exploration, Development, and Production – Denison Mines Corp. (DNN) (DML)

        https://www.youtube.com/watch?v=aQ-408txGA8

        • On February 16, 2019 at 4:25 pm,
          Excelsior says:

          2019 Uranium Forecast with UEC, Ur-Energy, Denison & Fission Uranium

          https://www.youtube.com/watch?v=Hp3exw4JOBo&t=5s

        • On February 16, 2019 at 4:27 pm,
          Excelsior says:

          2019: The Year for Uranium – Jeff Klenda

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

          • On February 16, 2019 at 4:27 pm,
            Excelsior says:

            Uranium: The Fundamentals Have Turned with Catalysts Galore – Mike Alkin

            https://www.youtube.com/watch?v=5rX3swtKpbw

          • On February 17, 2019 at 12:34 pm,
            Excelsior says:

            The Real Reason They Hate Nuclear Is Because It Means We Don’t Need Renewables

            Michael Shellenberger – Feb 14, 2019 – Forbes

            “After all, the two greatest successes when it comes to nuclear energy are Sweden and France, two nations held up by democratic socialists for decades as models of the kind of societies they want.”

            “It is only nuclear energy, not solar and wind, that has radically and rapidly decarbonized energy supplies while increasing wages and growing societal wealth.”

            “And it is only nuclear that has, by powering high-speed trains everywhere from France to Japan to China, decarbonized transportation, which is the source of about one-third of the emissions humankind creates.”

            “For many people the answer is obvious: ignorance. Few people know that nuclear is the safest source of electricity. Or that low levels of radiation are harmless.”

            “In reality, solar farms require hundreds of times more land, an order of magnitude more mining for materials, and create hundreds of times more waste, than do nuclear plants.”

            “And wind farms kill hundreds of thousands of threatened and endangered birds, may make the hoary bat go extinct, and kill more people than nuclear plants.”

            “But because of our positive feelings toward sunlight, water and wind, which we view as more natural than uranium, many people unconsciously assume renewables are better for the environment. ”

            “The problem posed by the existence of nuclear energy was that it proved we didn’t need to radically reorganize society to solve environmental problems. We just needed to build nuclear plants instead of coal-burning ones.”

            “Just contrast Germany and France. Germany has done much of what the Green New Deal calls for. By 2025 it will have spent $580 billion on renewables and related accoutrement, while shutting down its nuclear plants.”

            “All that German will have gotten for its “energy transition” is a 50% increase in electricity prices, flat emissions, and an electricity supply that is 10 times more carbon-intensive than France’s.”

            “France, by contrast, just built nuclear plants.”

            https://www.forbes.com/sites/michaelshellenberger/2019/02/14/the-real-reason-they-hate-nuclear-is-because-it-means-we-dont-need-renewables/amp/

      • On February 16, 2019 at 4:36 pm,
        Excelsior says:

        What’s Different about Vanadium’s Price Spike Today? – Vanadium Investment Panel with Mickey Fulp

        Cambridge House International – January 2019

        “Vanadium Investment Panel with Mark Charlmers, CEO of Energy Fuels Inc., Paul Cowley, CEO of First Vanadium Corp., George Glasier, CEO of Western Uranium & Vanadium Corp., and Gerald Panneton, CEO of Prophecy Development Corp – moderated by Mickey Fulp”

        https://www.youtube.com/watch?v=SEsx6wPCQiM

  22. On February 17, 2019 at 7:39 am,
    Markedtofuture says:

    Fincial Reset on deck…

    After JPMorgan Hypes Up Blockchain-Based JPM Coin, The Bank’s Mobile App And Website Experiences Nation-Wide Outage In US

    https://bitcoinexchangeguide.com/after-jpmorgan-hypes-up-blockchain-based-jpm-coin-the-banks-mobile-app-and-website-experiences-nation-wide-outage-in-us/

  23. On February 17, 2019 at 7:46 am,
    Markedtofuture says:
  24. On February 17, 2019 at 1:13 pm,
    Excelsior says:

    Gold Stocks are Following This Historical Template

    February 17, 2019 Jordan Roy-Byrne CMT, MFTA

    “The template for a recovery from a mega bear market is as follows.”

    “Following the bear market low, a sharp rally begins that lasts only six to twelve months. Then the market endures a significant correction that lasts a minimum of 18 months and ends with a breakdown to new lows (which ends up being a false move).”

    “Then the major wave higher begins.”

    https://thedailygold.com/gold-stocks-are-following-this-historical-template/

  25. On February 17, 2019 at 3:01 pm,
    Wolfster says:

    Hey Ex
    Spending some time reading through the agnico report. Sure you will find all the relative info yourself but I found this exciting about 2020 2021
    At Canadian Malartic (in which Agnico Eagle has 50% ownership), there is a slight increase in guidance for 2019 and 2020 compared to the Previous Guidance. Gold production in 2020 and 2021 is expected to increase primarily due to the mining of higher grades in the Barnat pit.

    Also them looking at expanding exploration further east to the Sladen and Sheridan zones which are also 3% rzz royalty zones. Just some of the future potential to go along with the Odyssey

    • On February 17, 2019 at 3:27 pm,
      Excelsior says:

      Yes, RZZ has 3% NSR on Barnat as well to compliment 3% Odyssey + East Malartic.

      Let the good times roll…..

      https://www.abitibiroyalties.com/assets/canadianmalarticmine/

      • On February 17, 2019 at 3:29 pm,
        Excelsior says:

        Over time these Near-Mine Net Smelter Royalties adjacent to Agnico Eagle’s La Ronde Mine and Lapa Mine might end up being quite a boon as well.

        https://www.abitibiroyalties.com/assets/nearmineroyalties/

        • On February 17, 2019 at 3:34 pm,
          Excelsior says:

          The 44.7% ownership stake that (GZZ) (GLVMF) Golden Valley Mines has in (RZZ) Abitibi Royalties is still very much underappreciated, especially considering all the other resource pies that GZZ has their fingers in.

          http://cdn.ceo.ca/1e6jrq2-Golden%20Valley%20Assets.JPG

          • On February 17, 2019 at 3:41 pm,
            Excelsior says:

            This was a good panel on the Royalties and streaming business model from the VRIC. I’ve done very well in MMX Maverix over the last 2 years. I also still like good ole’ Sandstorm SAND with Nolan at the helm – very sharp guy.

            ________________________________________________________________

            Capitalist Exploits – Royalties & Streaming Panel with Jamie Keech
            Cambridge House International – January 2019

            J(amie Keech, founder of Ivaldi Venture Capital Ltd., hosts Nolan Watson, President & CEO of (SAND) (SSL) Sandstorm Gold Ltd., Dan O’Flaherty, CEO of (MMX) (MACIF) Maverix Metals Inc., and Gary Brown, CFO of (WPM) Wheaton Precious Metals Corp to discuss the growing trend of Royalties and Streaming. ”

            https://www.youtube.com/watch?v=PiHoXRotF04&t=4s

          • On February 18, 2019 at 9:16 am,
            Charles says:

            GZZ is my next purchase Ex. It looked overbought the last time I looked, but I’m wondering if it might just keep going. I’m wondering if I should just jump in as it sounds like you think even at these levels it is very underappreciated. Let me know your thoughts.

          • On February 18, 2019 at 10:48 am,
            Wolfster says:

            Here’s a great summary on things I found on ceo

            @onlyonewayout MJG Capital Article
            Golden Valley Mines (TSXV: GZZ)
            Golden Valley remains a compelling deep value opportunity with the company valued at a substantial discount to its cash and marketable securities.
            The majority of the value inherent in GZZ comes from company’s 44.7% equity stake in Abitibi Royalties (TSXV: RZZ). Abitibi Royalties is a well-managed junior royalty company which owns a 3% NSR on the eastern portion of the Canadian Malartic mine. The Canadian Malartic Mine, operated by Agnico Eagle and Yamana Gold, is no small-scale operation. In fact, production from the mine supports the largest gold mill ever built in Canada. (Agnico Eagle will be announcing its year end results on February 15th and will most likely provide a comprehensive update on operations at the Canadian Malartic.)
            There have been a couple positive developments for Abitibi Royalties over the past half year. In late October, the company announced opportunistic acquisitions of a 1.5% NSR on the Midway Project and a 15% NPI on the Radium Property from third parties. Both of these are located within the Malartic complex and further increase the company’s royalty exposure to this world-class operation.
            More recently, on January 16th the company reported “that production commenced at the end of
            Q4-2018 in the area covered by the Company’s 3% net smelter royalty (“NSR”) at the Canadian Malartic Mine”. This is referring specifically to the Jeffrey Zone, and production from the Barnat Extension zone will follow in late 2019 or early 2020. The first royalty payment from this new source of production was received in January, and Abitibi Royalties is expecting cash flow of C$4.0-4.5m in 2019 – a 33% increase over last year.
            There was minor setback however. On December 24th, RZZ announced that despite environmental approval from Quebec regulators “additional conditions will be required to complete the Odyssey Project approval process for a potential operation, beginning with an update of the economic studies for the project”. This means that development of an exploration ramp (to provide access to underground drilling and the collection of a bulk sample) to the shallower portions of Odyssey South and East Malartic will be delayed into 2019. It was previously anticipated for ground to be broken on the exploration ramp as soon as Q4 2018. Abitibi Royalties holds a 3% NSR on both the Odyssey South and East Malartic zones. Golden Valley’s equity stake in Abitibi Royalties is worth roughly C$69m at RZZ’s current share price of C$12.12. This compares favorably to Golden Valley’s current fully diluted market capitalization of
            C$49m. It is worth nothing that the Abitibi Royalty share price has hit an all-time high in each of the past three weeks. Meanwhile the Golden Valley share price is still 21% off its recent high of C$0.43 reached in January 2017.
            Finally, Golden Valley Mines has three active partner-funded joint ventures. Cumulatively, these agreements stipulate for C$11m in expenditures over the next three years. The first is with Alexandria Minerals, who have the right to earn an 80% interest in Golden Valley’s Centremaque property. While Alexandria has yet to report assays from the final five holes drilled at Centremaque in the winter 2018 program, it seems that Alexandria likes what it’s seeing. In a December 6th news release, Alexandria announced that “planning is underway for a 2500m drill program at its Centremaque property”. The second of these partner-funded JVs is with Battery Minerals Resources, who have the option to earn an 80% interest in Golden Valley’s Island 27 property by spending C$5m over 4 years. In August, BMR completed a full drill program of 10 holes at Island 27. Assays are still pending.
            The third of these agreements is with Bonterra, who recently earned an 85% interest in Golden Valley’s Lac Barry by spending C$2m over a 3-year period. In late 2017, Bonterra discovered the Temica Gold Zone at Lac Barry after drilling 2.7m of 4.7 g/t Au and 44.6 g/t Ag. It is expected that Bonterra will return to Temica for a follow up drill program in 2019 – now that the merger with Metanor has been completed. Golden Valley has a free carried interest to production for its 15% stake in the project as well as a 3% NSR (with 1% of the NSR subject to a buyback for C$1m). I’ve provided below the Golden Valley catalysts that can be expected over the next two years. I’ve also included some milestones pertinent to Abitibi Royalties and its NSR exposure to the Canadian Malartic Mine, given the relevance to GZZ shareholders. • Abitibi Royalties announces 3-year production schedule for its Canadian Malartic royalties by end Q1 2019
            •Drill results (10 holes) from Battery Minerals @ Island 27 by end Q1 2019
            •Maiden Resource from Sirios @ Cheechoo by end Q2 2019
            •Drill results (2500m) from Alexandria Minerals @ Centremaque by end Q2 2019
            •Drill results from Bonterra @ Lac Barry’s Temica Gold Zone by end 2019
            •Drill results from Val-d’Or Mining @ Oregon, Magoma, and/or Ducros Sill prospects by end 2019
            •Canadian Malartic Group breaks ground on exploration ramp to access Odyssey South and East Malartic zones by end 2019
            •1-2 new partner-funded option agreements announced by end 2019
            •Abitibi Royalties announces first production @ Norrie, Odyssey & East Malartic by end 2020Golden Valley of course has additional equity stakes beyond its C$69m position in RZZ. At current share prices, Golden Valley’s equity stakes in Val-d’Or Mining (TSXV: VZZ), International Prospect Ventures
            (TSXV: IZZ) and Sirios Resources (TSXV: SOI) are worth another C$2.5m combined. Each of these companies have catalysts to look forward to in 2019. Val-d’Or Mining is currently conducting ground exploration programs and will look to drill its Oregon, Magoma, and/or Ducros Sill prospects later this year. International Prospect Ventures has recently secured all of its Pilbara tenement titles and will be advancing work programs this year. And Sirios Resources has announced that a maiden resource estimate will be completed by mid-2019 at its Cheechoo Gold Project. (Remember that Golden Valley also owns a sliding scale 2.5-4% NSR on Cheechoo, in addition to the small equity stake in Sirios.)
            The Golden Valley share price needs to rise roughly 40% before the company achieves a positive enterprise value. Given the company’s three active partner-funded joint ventures and the 2.5-4% sliding NSR at Cheechoo, there is no reason why this shouldn’t be the case.
            In fact, one could also argue that Golden Valley deserves a takeout premium given the 7% position established by Osisko Royalties in early 2018. Abitibi Royalties is a prime takeout candidate for a larger royalty player given its substantial exposure to the world-class Canadian Malartic operation. Any suitor for Abitibi Royalties would have to enter through the front door by buying Golden Valley first. I’m thrilled to have been able to increase our exposure to GZZ, while lowering our cost basis, in the second half of 2018.

          • On February 18, 2019 at 7:27 pm,
            Charles says:

            Thanks Wolfster. Very good info. I bought a bit of RZZ and it has done well. GZZ seems like a natural extension.

          • On February 18, 2019 at 8:22 pm,
            Excelsior says:

            Hi Charles. Yes, relative to it’s asset base and even relative to RZZ’s valuation, I’m happy to keep acquiring GZZ as a slow and steady value builder, but it isn’t going to surge as much as a Jr miner with more torque. Royalty companies in my portfolio are for gradual appreciation and deep storage with funds that I don’t want to speculate in as risky of companies with.

            For clarity I do not expect Golden Valley to go ripping higher as a 5-10 bagger over the next 12 months, but I do see a solid 3-4 bagger over the next few years, with much less risk that a Jr with only a few deposits or mines to pull them forward.

            When the Malartic royalties start kicking in and possibly the near-mine royalties by AEM’s other 2 mines, then more investors will wake up to RZZ, and then analysts may awaken to GZZ’s nearly 45% stake in RZZ and notice the undervaluation. Both have room to get re-rated and move higher when the money starts rolling in quarter after quarter….

          • On February 19, 2019 at 6:46 am,
            Wolfster says:

            Abitibi gave a nice summary today on their royalties

            https://www.abitibiroyalties.com/news/2019/february19/

    • On February 17, 2019 at 3:50 pm,
      Excelsior says:

      Another Royalty company I’ve been averaging into lately is (FISH) Sailfish Royalty Corp. I had a position in it when it was spun out from Marlin Gold, before their merger with Golden Reign to form Mako Mining, but I sold it at that time. However, coming back around and revisiting it recently, after it pulled back a great deal and looking at their royalty package, I’m impressed and starting to dump in a few funds here and there….

      _____________________________________________________

      (FISH) (SROYF) Sailfish Royalties Corp have royalties on 4 projects from:

      – Endeavour Silver (El Compas Mine) ramping up into production over the next year

      – Kootenay Silver (La Cigarra) – Large Silver development project destined to get built

      – Mako Mining [merger of Golden Reign w/ Marlin Mining] (San Albino Gold stream) – should be quite a big mine in Nicaragua

      – Eldorado Gold Corp (Tocantinzinho Gold project) – projected 10 year mine life and they’re still exploring and expanding it further.

      https://www.sailfishroyalty.com/stream-royalties.html

      • On February 18, 2019 at 11:45 am,
        Wolfster says:

        Volumes almost nonexistent on sailfish but 2 well advanced projects certainly make it interesting. Early stage royalty compared to others we have discussed

        • On February 18, 2019 at 8:15 pm,
          Excelsior says:

          Yes, it is much smaller than some of the other royalty companies, but Endeavour Silver’s El Compas mine is in production and ramping up to nameplate commercial production this year.

          Also when Golden Reign bought out Marlin Gold (to form Mako) , they got a producing mine that will be bringing in revenues to help them build San Albino.

          Eldorado Gold’s Tocantinzinho project and Kootenay Silvers La Cigara project are further off, but they are have found enough resources to both be legitimate mines.

          There is a 5th property the Gavilanes project that Marlin bought off Santacruz Silver, is also going to be optioned out to another company where Sailfish is going to retain a Net Smelter Royalty on it.

          Right now most investors are unaware of FISH, so the volumes are very thin and the only way to play it is to grab a little here and there and build the position over time.

  26. On February 17, 2019 at 8:34 pm,
    Excelsior says:

    Why Peter Hug Is Sticking To His Bullish Call On Gold

    Feb 15, 2019 – Peter Hug Global Trading Director, Kitco Metals #VIDEO

    “A weaker dollar may be the key to higher gold prices this year,” said Peter Hug, Global Trading Director for Kitco Metals.

    “We continue to believe that the Fed is going to reluctant to raise rates this year. If anything, they may even lower rates,” Hug told Kitco News.

    https://www.kitco.com/news/video/show/Kitco-News/2275/2019-02-15/Why-Peter-Hug-Is-Sticking-To-His-Bullish-Call-On-Gold#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DKitco-News