Jordan Roy-Byrne - Technical Commentary on the Metals – Wed 20 Nov, 2019

What to look at when selecting juniors to invest in for a run in 2020

Just last week Jordan announced he was buying a couple junior gold stocks. We discuss why now he is putting money at play and what characteristics he is looking for in the companies he is investing in. Overall this recent pullback has been very constructive for the sector. Even if the PMs move sideways to the end of the year it sets up for a move higher in 2020.

Click here to visit Jordan’s site – The Daily Gold.

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Comments:
  1. On November 20, 2019 at 3:48 pm,
    Excelsior says:

    (MUX) McEwen prices public offering, stock tumbles to 52-week low

    Jackson Chen | November 20, 2019

    https://www.mining.com/mcewen-prices-public-offering-stock-tumbles-to-52-week-low/

    • On November 20, 2019 at 3:49 pm,
      Excelsior says:

      It is interesting indeed that Rob McEwen has been so vocally against the evil #streaming companies for hurting shareholders and future margins, but then $MUX goes and does a terrible financing like this, way below market value in the bottom throws of the corrective move in PMs, further diluting existing shareholders and blowing out the share count even more. (WTF?)

      Rob – the time to do the capital raise was this summer in the midst of higher prices in this sector; not during a pullback to new lows. You raise into strength, and preserve into weakness….. not the other way around.

      Maybe a streaming deal would have been far less dilutive than a distressed deal like this…S.M.H.

      • On November 20, 2019 at 5:22 pm,
        cfs says:

        Ex, It almost sounds like McEwen is going to slow track everything, and has raised carrying costs to wait until after metal prices have very significantly increased. Doesn’t it?

        • On November 20, 2019 at 6:01 pm,
          Excelsior says:

          Yes, because they forecasted a slowdown in production in 2020 to focus on more drilling & exploration, but that sure sounds more like desperation for higher metals prices to improve their economics. Maybe they’ll hit big on exploration, but it is clear their actual mining business is not going as planned or they wouldn’t be hemorrhaging money so fast.

          MUx just raised $25 million about 8-9 months ago and they already burned through that in an environment where the metals prices are up significantly in 2019 compared to prior years and now they are coming back to the well for more money again. What the hell would they have done if Gold had stayed in the $1100-$1200 range instead of $1450-$1550 this year?

          There have been a lot of pissed off investors in (GBR) Great Bear for the last month or two that didn’t like all the selling from McEwen Mining and from Rob. Eric Coffin kept going on about the money problems McEwen Mining was having to make payroll and cover G&A expenses, but I dismissed those attacks somewhat as shareholders upset that both MUX and Rob were booking solid profits before it corrected.

          A good point that a number of investor made is that the professional thing to have done would’ve been to do a share cross with another big buyer, rather than hit the open market with all the shares, which drove the GBR shareprice down. Some felt he was just being ugly about things by selling in the open market. Now it appears there was just desperation.

          After looking at this capital raise today, and the terrible terms, and the dilution to investors, I sold some a big portion of my MUX shares in disgust (and at a small loss) and lost some respect for Rob and their strategy business strategy in 2019.

          I’ve always been a fan of MUX and Rob, and still am, but I’m tired of getting hosed by dilution and capital raises from companies bleeding to death by not containing their costs, not getting the mining sequence right, and continually ripping off long term shareholders to raise and raise and raise. For goodness sake, they are like our politicians that keep raising the debt ceiling over and over again, or like a kid with a credit card that keeps maxing it out and asking for a higher limit to go further and further into debt.

          There are no shortage of other Gold Mid-tiers to invest in that are not making bad decisions and aren’t exposed to Argentina, so I’ll use MUX as a tax loss, and buy into another company that raises when things are good, doesn’t dilute at bottoms, and have mines that are making money at current prices.

          • On November 20, 2019 at 6:23 pm,
            Excelsior says:

            Here are some interesting related comments on ceo.ca:

            @GTA – “mcewen-mining-announces-proposed-public-offering” related to MUX … looks like trying to raise more cash …burned through 25m raised last public offer in March…. ties in with mux selling gbr shares”
            _______________
            @HRA-Coffin – “Will be curious to see if McEwen gives a reason or tries to spin this. He doesn’t have to, obviously. For me at least, the reason is pretty clear. $MUX ran into cash flow issues and had to sell. That all but guarantees there is no hope of MUX succeeding in a takeover offer down the road which I think McEwen always viewed as his preferred end game. McEwen won’t be pleased about that and may be hoping to hold the price down. I don’t think it would help MUX in terms of making an offer more likely to succeed at a later date. Quite the opposite. I need to do the math to see how much he needs to sell to get below 10%. He’ll do at least that, so he doesn’t have to file with SEDI. I don’t think it’s a lot more though. He’s got to be getting close to that now, with warrants included. $GBR”
            – Nov 3rd – Eric Coffin

            @HRA-Coffin – “Couple of nice drill holes for MUX. Unfortunately, they also raised cost guidance for Black Fox and Gold Bar at the same time. Wouldn’t count on MUX not needed more cash going forward. No longer a Great Bear issue though as MUX is out of stock. $GBR”
            – Nov 4th – Eric Coffin

            @HRA-Coffin – I was serious, it’s (fireside chat) really cancelled. I think the way McEwen is selling is bizarre and I really do think this is as much about him recognizing MUX would have no chance with a takeover bid now as anything. Not nice, but what can you do? $GBR”
            – Nov 7 – Eric Coffin

            @HRA-Coffin – “I wonder if they’re going to offer some of that to McEwen? I understand he’s got some capital gains to cover off… (yeah, that’s sarcasm) $GBR”
            – Nov 7 – Eric Coffin

            @HRA-Coffin – “I don’t think they would have had a lot of trouble crossing McEwen out @tommy, if he was willing to go that route rather than hitting bids. I wouldn’t bee too nice to him. I think he’s got reasons to sell that have nothing to do with $GBR anyway, and I don’t think $GBR is the only thing he’s selling. It’s just the one everyone knows about.”
            – Nov 7 – Eric Coffin

            @HRA-Coffin – “LOL I think I can pretty much GUARANTEE you Rob won’t be getting offered this financing. Management has to approve subscription forms. Got a feeling they wouldn’t sign one with that name on it right now.”
            – Nov 7 – Eric Coffin

            @HRA-Coffin – “I’ve heard rumours – unconfirmed I hasten to add – that MUX is soliciting for a large placement. If that’s true, its likely McEwen would be buying at least enough to maintain his interest because that’s how he rolls. If the rumours are true he’d be writing a pretty large cheque ($20 million+) even for a guy with his bank account. That would explain some of his recent activity. I’ve heard that $GBR isn’t the only thing he’s selling, but it’s the only one that until recently he had to file SEDI reports on when he sold.”

            @HRA-Coffin – “Personally, and I stress this is my opinion only – I think MUX was selling because they had a cash crunch because Gold Bar was late and over budget and they, literally, had to make payroll. That left McEwen in a sticky positon. One, he may need to raise cash for the rumoured MUX financing (he owns 25% of MUX and I’d expect him to at least maintain that position). Two, I think a potential takeover of $GBR by MUX was always in the back of McEwan’s mind. The MUX selling pretty much killed that. I think MUX would have to offer way more than it could afford to get $GBR now as many Great Bear shareholders would vote against a MUX takeover. I know I would. Knowing all that and, if the rumours are true, wanting to raise cash for a coming MUX financing McEwen chose to take profits on $GBR. I know they were trying to organize crosses to make it easier for McEwen to sell which he apparently didn’t take them up on. That brings up the possibility that Three, McEwen is pissed off his idea of eventually taking over $GBR is a non-starter so he’s, in effect, throwing a tantrum. Silly? Yes. Out of the realm of possibility? Not from what I’ve heard.”
            – Nov 19 – Eric Coffin
            ________________________________________

            @Herringcho – “Looks like Mr Coffin was dead on about mux raising money. Good call.”

            “Looks like McEwen is selling shares in a golden gold mine to dump the money into holes in the ground.”

            “So mux’s money problems have given a lot of investors a chance to buy into GBR at a lower SP than they would have if those shares weren’t hitting the market. As they say — one persons loss is another persons gain. I’m pretty sure I wouldn’t have gotten some of those cheaper shares if RM wasn’t selling. So thank you RM. ”

            @cincocinco – “mux taking a pretty big haircut on their financing terms and a full warrant for five years. seems like the company didnt have much leverage in this raise. lesson, take the money when you can – before you need to. ”

            @RealMoney – “I do believe rob has no choice to sell all his gbr to save mux and cibc anonymous is the one he used”

            @NabtaPlayaEgypt – “Interesting. McEwen needing the now revealed 50 million in this manner clearly denotes a major cash crunch scenario is likely being experienced across all projects.”

            @FugoEcaz – “I feel that management has undervalued the offering by about 26% based on a 21 day-weighted average… so I expect price to keep dropping”

  2. On November 20, 2019 at 6:42 pm,
    David says:

    Excelsior:
    Strong message follows! It needed to be said.

    • On November 21, 2019 at 10:55 am,
      Excelsior says:

      Thanks David. Wild times!

  3. On November 20, 2019 at 7:21 pm,
    cfs says:
  4. On November 20, 2019 at 7:46 pm,
    buzz says:

    So, LODE closed the deal, you naysaying shankz

    • On November 21, 2019 at 10:29 am,
      Excelsior says:

      I saw that they closed the trsnsaction with Tonagold, and always believed they would, but was anticipating a bit more of a market response. I only have a small allocation to LODE, but would expect things to start trending higher as their debt levels keep coming down.

      Their CEO stated recently he felt that a pressure price was due to Market disbelief that the deal would happen. Now they just need more visibility that they have a stake in the old mine and NSR, and they have other properties and are way better funded.

  5. On November 21, 2019 at 7:14 am,
    Bonzo Barzini says:

    I is regusted at this MUX dilution. Maybe MUX has found a huge gold discovery in Canada or Nevada and Rob is driving the the price of shares lower so he can buy more at a low price before going public with the new motherlode?

    • On November 21, 2019 at 10:30 am,
      Excelsior says:

      I is regusted as well Bonzo. 🙂