Ira Epstein’s Metals #Video

Jan 10, 2020 – #TechnicalAnalysis #Chart Gold, Silver, Copper, Platinum

https://www.youtube.com/watch?v=j0Deb1AqSq0

(PGE) (PGEZF) Group Ten Metals – Corporate Presentation:

Grade. Scale. Location. Infrastructure – Platreef-Style, Bulk Tonnage PGE-Ni-Cu Project – Stillwater District, USA

https://grouptenmetals.com/site/assets/files/3631/2019-1-09_groupten_short_presentation_final.pdf

Thanks CFS, Nigel

Nice Doc! I’m looking forward to what you and Eric do with JAG moving forward.

It should be a very constructive year with the price of gold higher than in years past, and with their plan to get back to around 100,000 ounces of gold production this year.

I’ve just started a position in the Mid-tier Aussie company Resolute Mining (RSG.AX) (RMGGF) that is doing 100K ounces of Gold production per quarter. It seems to be doing all the right things and is incredibly well run, but hasn’t gotten much love from the marketplace.

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(RSG.AX) (RMGGF)Resolute Mining – December Quarter Production Update
8 January 2020

• Gold production of 105,293oz for December 2019 Quarter (up 2,092oz on September 2019 Quarter)
• FY19 gold production of 384,731oz relative to guidance of 400,000oz (for the 12 months to 31 December)
• Syama sulphide roaster successfully repaired in December; operating at nameplate capacity
• Syama autonomous fleet fully commissioned and 400,000 tonnes of high grade underground ore stockpiled
• Mako delivers another exceptional production result with 42,997oz of gold poured for December 2019 Quarter
• Stage 1 of the Ravenswood Expansion Project completed
• Cash, bullion and listed investments as at 31 December 2019 of A$181 million

https://clients3.weblink.com.au/pdf/RSG/02191383.pdf

HI Thomas. Those are some good questions to consider for Resolute Mining (RSG.AX) (RMGGF).

Resolute is one of the premier larger operators in West Africa & Australia, and they have 9 mines in 4 countries and have been at it for 2 decades.

Many North American investors are reserved about going into African miners (which is why they trade at a discount to their Canadian & US peers), but West Africa has dozens of producers, developers, and explorers operating successfully. I’ve personally been investing in West Africa miners since (TGM) True Gold Mining with Mark O’Dea’s Oxygen Group successful takeover by (EDV) Endeavour Mining [one of biggest miners in West Africa]. I also had a nice success there in 2016 with (GPHYF) Gryphon Mineral’s takeover by (TGZ) Teranga Gold [another great mid-tier producer in West Africa], and in 2017 when (AVK) Avnel Gold was taken over by (EDV) Endeavour once again. Currently I hold shares in (ROXG) Roxgold, (ORE) Orezone, (HUM.L) Hummingbird, and (SWA) Sarama Resources, beyond my new holdings in Resolute Mining once again. I’ve held shares in Resolute off and on for the last few years.
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Regardless, initially Resolute started with their Australia mines (and also had stakes in a few Aussie gold miners like Northern Star), and expanded into Tanzania (a much more challenging African jurisdiction) and earned their stripes.

Over time Resolute got more interested in the vast Gold opportunities in West Africa (like most African Gold producers not relegated to South Africa) — adding in their assets in Ghana, and then in 2003 eventually the Syama Gold mine in Mali (which they picked up from Randgold).

Sayama is now a world class asset, and they are deploying cutting-edge self-driving vehicles and greatly reduced their workforce there, minimizing the labor risks, but harnessing technological efficiencies.

So after operating in Mali for 17 years, through all kinds of political cycles, they’ve become entrenched in the community as a viable company and partner, and are in the lower part Southwest part of Mali, where most of the conflict is up around the Northeast boarder of the country. That isn’t to say there isn’t risk in West Africa in any of the jurisdictions, but simply that they are very experienced operators there and have stood the test of time.

Over the years Resolute has also expanded into Senegal, which is a great jurisdiction and is getting a lot of interest lately from Gold miners.

This graphic does a good job showing their 4 main areas of operations at present:

http://cdn.ceo.ca/1f1mg3j-Resolute%20Mining%20Operations.JPG

As for the insiders, I don’t really know their exact ownership, but keep in mind this is $1 Billion producer, and not a $10 Million explorer, so it would be unusual to see management with 5-10% of the companies shares.

Here is a nice slide showing their 10 Ten Investment firms though:

http://cdn.ceo.ca/1f1mhfo-Resolute%20Mining%20Stock%20Information.JPG

In addition, I expect Resolute to acquire a few more companies in 2020 or 2021 to grow through acquisition, and here are a few of the key strategic stakes they have in Jr Explorers & Developers in Africa:

http://cdn.ceo.ca/1f1mhkb-Resolute%20Mining%20Strategic%20Investment%20Partners.JPG

Attached here is the Resolute Mining Corporate presentation from November.

They dedicate pages 7 – 16 just for Syama and what they are doing there using technology and autonomous vehicles and is the kind of model I’d expect more miners to embrace over time. Really great strategy, implementation, and execution.

https://clients3.weblink.com.au/pdf/RSG/02177375.pdf

Thinking back on the Gryphon takeover by Teranga a few years back, I was pretty jazzed about the company that Teranga (TGZ) would grow into, and haven’t been disappointed. They are another very well run Mid-tier Producer in West Africa, and with the exploration work they are doing at Golden Hill, I hope they eventually get bold and acquire my (SWA) Sarama Resources position, which is one of the Jr explorers that has languished in my portfolio.

Teranga has the growth profile to add another mine at Golden Hill, and the lands Sarama has all around it make a takeover of SWA by TGZ a real potential.

I still really like Sarama’s land position, and like that they have their South Houndé Project back to 100% ownership, from Acacia Mining, now that Barrick is divesting non-core assets and reigning in the wackiness of Acacias issues. This took away the big road block to acquiring Sarama, because that whole deposit was going to be stuck in no mans land with Acacia as they worked out their insane tax issues with the Tanzanian government. Now they are free from that whole quicksand, and can shop SWA around to companies like Teranga, Semafo, Resolute, Roxgold, or Endeavour mining to get at that project and Bondi, and other exploration projects unencumbered.

In addition, Sarama’s JV partner at a few different projects, Savary Gold (SCA), was acquired last year by Semafo (SMF) another solid mid-tier producer operating in West Africa. For a while (SWA) Savary moved higher in sympathy on the takeover news of (SCA) by (SMF), but it is back in the “forgotten” bin for most investors.

Check out how strategic the lands are that (SWA) Sarama has in relation to Teranga, Roxgold, Semafo, and Endeavour mining:

https://saramaresources.ca/wp-content/uploads/2018/05/sarama_south-hounde_project_location_map.jpg

Developing Burkina Faso’s next gold district. – (SWA) (SRMMF) Sarama Resources:

“Located approximately 350km southwest of Ouagadougou, Sarama’s 100% owned South Houndé Project is situated in the prolific Houndé Belt, which is home to three operating mines including Semafo’s Mana Gold Mine, Roxgold’s Yaramoko Gold Mine and Endeavour Mining’s Houndé Gold Mine.”

“The belt is highly prospective and remains relatively underexplored, demonstrated by recent exciting discoveries at Teranga Gold’s Golden Hill Project and Endeavour Mining’s Kari Pump Deposit.”

“The South Houndé Project has an Inferred Mineral Resource of 2.1 Moz(1) at 1.5 g/t (43 Mt at 1.5 g/t Au at a 0.3-2.2 g/t cut-off) and contains a high-grade component of 1.5 Moz Au at 2.1 g/t (at a 1.2 g/t cut-off). The mineral resource includes 0.6 Moz Au of oxide and transition material and oxide heap leach investigations achieved 87% gold recovery in column leach test work.”

https://saramaresources.ca/portfolio-posts/south-hounde-project/

Ex, thanks for all your great info

I also had Endeavour via True Gold. That’s why I also like Leagold. I sold my Endeavour shares because of the risks with Burkina Faso. I think Mali is risky too. Ghana and Senegal are probably the best you can get in West Africa.

I like to see management buying shares in the open market. Leagold and Equinox are probably the best examples (Guistra and Beaty). Have not found any info about Insider transactions in Resolute. Not sure If there is a site for ASX stocks to research this.

Sure Thomas. Glad to share ideas. Yeah, the risk profile for Burkina Faso is up in certain parts, but most of the mining action from Roxgold, Endeavour, Semafo, and Teranga has been relatively safe in the part of the country they operate in. Yes Ghana and Senegal are pretty safe as is Ivory Coast.

As for the insider buying, I agree it is a good signal to the marketplace, but I haven’t found a good SEDI like site for Aussie Miners, and the amount shown by insiders is unknown on a few financial sites like Yahoo or Bloomberg.

Yes the Leagold and Equinox merger is a solid rollup and the insider buying from Frank and Ross are encouraging. EQX is going to morph into a real powerhouse producer over the next 2 years.

This is you after the deep state clones your brain and sends you to the sanctuary. LOL! Dt
200111155929-diego-tortoise-2-exlarge-169

haha! That’s how I feel already DT. Man you know how inspire someone! 😮

🐢🐢🐢🐢🐢

Ex:
Excellent analysis. It will interesting to see how the unrepresented Juniors do against the Indexes. Managed money will probably go for Indexes at first as they have considered miners as “no mans land” for so many years. Managed money also wants to treat miners as anything other than functional operating businesses with profit/loss business plans. Maybe this time the investment world will figure out that the dysfunction is not with miners but the brokerage system itself. Great comments and I vote for your insight being accurate in the months to come.

David, the best “real” juniors performed twice as well as SILJ or better in 2016. SilverCrest has to be the best performing example by far.
Some of the problems with the smallest ones are a lack of liquidity and a lack of assets in the ground or even real exploration prospects. So the more speculative ones would easily underperform SILJ. So even if someone did manage to throw such an ETF together, I’m not at all sure it would be superior and it really could be very inferior.
The time to launch one would be near a bubble or “mania” top since that’s when the greatest demand for such speculative stuff appears (as in any sector). While everyone is dreaming of the next lottery ticket, the launching of such an ETF would push our individual picks much higher AND give us something to short once silver becomes exhausted. Such an ETF would crater with leverage to SILJ following a major top.

Thanks David. I agree managed money and new generalist investors will likely go for the ETFs first, and that makes sense. GDX, GDXJ, SIL, and SILJ still did great in 2016, or in the Q1 rallies in 2017, 2018, 2019 or in the big summer rally last year.

As mentioned, some of the larger producers like First Majestic, Coeur, and Pan American may pull along their averages, as will some of the Mid-tiers like Silvercorp, Americas Gold & Silver, and Fortuna or the Gold companies like Yamana & McEwen. It just seems like those would be a better fit for SIL as the larger miners, and not SILJ as the supposed “Junior Miners”

However, imagine if they weighted higher or included in the first place the Jr Producers like Santacruz, Impact, GoGold, Excellon, Silver Bear, etc…, or had bigger allocations to developers like Silvercrest, Alexco, Kootenay, Bear Creek, (or allocations at all) to Discovery Metals, Silver One, Southern Silver, Bayhorse, Aurcana, Metallic Minerals, etc

There are a number of Silver Mid-tier Producers, Smaller Silver producers, and Advanced #Developers, that had reasonable liquidity and were up 50%-250% during the surge last year (like Silvercorp, Americas Gold & Silver, Santacruz, GoGold, Excellon, Impact, Silver one, Southern Silver, Alexco, Bear Creek, Discovery Metals, Vizsla, Aftermath Silver, Defiance, Kootenay, etc…) that were under-represented or not represented that outperformed the index.

Personally, I have a position in First Majestic, and have held Coeur in the past, so I have no problem holding a position in the higher torque big boy producers alongside a basket of curated picks in the Jrs (as that is where most of the SIL and SILJ performance came from anyway). I’d rather pick 1-3 of the better movers in the larger to mid-tier producers than get bogged down with most of them.

I just don’t have much interest in having exposure to some Silver companies like are slower to rise in previous rallies like Fresnillo, Hochschild, SSR Mining, Pan American, Hecla, Fortuna, etc… because I’d rather have the higher torque smaller to mid-size Producers in those slots. The nice performance in SILJ isn’t coming from those larger laggards anyway.

Going into 2019, my biggest position was in the highest margin Silver producer on the planet (SVM) Silvercorp, and it was the top performing medium to large producer last year at 160% gains on the year (yet farther down their weighing in their index and far outperforming SILJ). My largest 2019 position in a smaller producer was in (SCZ) Santacruz up 250% at one point last year as the top performing producer period [not even included in SILJ but crushing it’s returns 5:1]. On that summer surge higher, I did trim some of the position back in early August
and moved more funds over to (IPT) later in the year to position for 2020, and am pair trading those 2 as far as allocations at present.

On the developer side, I also had bigger stakes in (AXU) Alexco, (DSV) Discovery Metals, (KTN) Kootenay which were up 120-150%+ last year, far outperforming the index, and DSV isn’t even in the index. (BHS) doubled at one point on the news of their trial mining and success with the oresorters, but sold off later in the year, but I expect it to break out in 2020.

Bottom line, there were fundamental reasons why all those companies outperformed and got the investor money last year, so for anyone doing the homework, none of those were a surprise and should have been selected more heavily than the indexes.

The same could be said for the moves in (SIL.TO) Silvercrest [which I don’t hold any longer) for their epic exploration results at a developing Tier 1 asset, which is the reason behind their amazing share-price out-performance. Even SilverOne, [which I don’t own at this time] outperformed most of the pack for fundamental reasons, but once again, it wasn’t even included in SILJ, and it was plenty liquid to do so.

Overall 2019 was incredibly lucrative in the Silver miners, but I believe it will pale in comparison to the moves higher we see in these miners in 2020 and 2021.

Good luck to all the Silver wingnuts in 2020!

To the mainstream investor, SILJ is very much an ETF of juniors:
Investopedia:
A small cap is generally a company with a market capitalization of between $300 million and $2 billion.
— — —

The reason I am less critical of SILJ than GDX”J” is that there are much fewer good silver juniors to choose from than gold juniors. In addition, even silver “seniors” (most big ones really aren’t very big) offer junior-like leverage right now due to the economics of most projects with silver at these multi-year lows so why take huge risks on the tiny explorers at this stage? If this bull is the big one that many of us think it is, we will have years to play the riskier ones in the future when silver is high enough that our Impacts and Alexcos lose leverage and discovery and very low grade prospects are where it’s at.

Unlike gold, silver is extremely cheap on an inflation-adjusted basis so it needs to do some catching up before there’ll be a ton of speculative interest in the sector. While it does catch up, companies with production and/or assets in the ground are very likely to perform the best.

Companies like Kootenay will really come into their own at $20+ silver.

Matthew – That’s a good point in comparing the Gold miners to the Silver miners, and I agree GDX”J” is far worse and hardly has any of the higher torque Juniors, and is mostly larger to mid-tier companies.

I guess to most generalist investors or funds SILJ is still “junior” enough for them, but the bigger companies are 1 Billion – 6 Billion, so compared to many Jr miners in the $5 Million to $300 Million range they are large in comparison. They’ll offer good leverage because there are so few when money piles in, but yes I agree the smaller companies like Kootenay with a 74 Million market cap will have more room to run.

For me there’s no clear market cap cutoff where a junior becomes a mid tier. For example, a $500M producer that operates in one district and has only one producing mine has the risk profile of a junior whereas a smaller more diversified miner might have the risk profile of a much larger company. Remember when Osisko hit $5B as an explorer about ten years ago? It definitely did not have the risk profile of the average senior but was priced like one.
If I thought that the bull market would establish itself very convincingly to the average onlooker sooner than most expect, I might buy a pile of $5-$10M mcap companies on the gamble that they will rise 5-10 times for virtually no good reason. There was a lot of that last time and established sub-$30M companies became harder to come by.
Studies have shown that smaller caps tend to outperform, all else being equal.

Yes agreed. I usually prefer a Mid-tier to be based on having 2 or 3 operating mines, and want to see a certain level of production from them on an annual basis, more so than a specific market cap…. but once they’ve achieved that they usually have a $300 M – $1 B market cap. I agree that the smaller market cap companies will move more in wild bull market, and believe we’ll see that later in 2020 or maybe in 2021. I like having a few mid-tier or even the occasional larger producer mixed in during earlier parts of a large intermediate or major move when the generalist money starts coming back into the sector, and then moving further down the food chain in the smaller market cap Jrs as things pick up the pace. For now I have a nice blend of producers, developers and explorers, but have been more heavily weighted to the Mid-tiers and smaller producers and the most advanced Developers, and will likely decrease some of that over time and increase the early stage developers and explorers later in the cycle.

It happens Wolfster. That is funny on the name and your friend.

If VZLA truly is the next Silvercrest, then the first few rounds of drilling will confirm or dispel this notion, and if they are the real deal, then I’ll start averaging in as there will be plenty of time to take the escalator higher, just like Silvercrest has run for years now. I truly hope they do hit paydirt as this sector needs some real discovery news and excitement and just a few big wins get many more eyeballs watching and speculating in this tiny sector.

Ever Upward!

This is a bit better map of the projects Bonterra (BTR) has at Urban-Barry and Gladiator, near (OSK) Osisko Mining’s Windfall Lake area play.

It is obvious why Kirkland Lake has strategic stakes in both companies, and doesn’t hurt that Eric Sprott saw the value in the Bachelor Mill 2 years back when it was with Metanor (prior to Bonterra acquiring them for next to nothing). Osisko also acquired Beaufield to further consolidate that area. Kirkland Lake may get the last laugh on that whole area though.

http://cdn.ceo.ca/1f1n2c1-Bonterra%20Projects%20at%20Urban%20Barry%20Gladiator%20near%20Windfall%20Lake.JPG

That’s good information David. I haven’t really dissected the royalties that Ely has yet, but if they have one with Wallbridge, that could end up being very significant, as it really looks like they are onto something, in harmony with Balmoral, and Detour Gold.

It’s definitely in the cue, but my plan is to get at least a position in Metalla in place and add to Maverix before any other royalties. Maybe I’ll move Ely up ahead of EMX for the the one after that though. Thanks again!

Vizsla: As I mentioned about the US market maker being somewhat squirrely, US current Ask is US $1.25 and bid $.43. I guess he is in the bathroom or something. In the meantime, Canada has passed its daily average volume and is green. CEO working on it.

Yeah, that’s quite a spread. Sometimes the US-based OTC markets can have wild arbitrages, as you mentioned.

Thanks David and Doc for unpacking more about the share count, the below market warrants, the successes with animal testing, and the promise of this Phase 2 human testing. I thought that point that when re-entering diseased animals that “the initial treatment had a “memory” and self cured,” was a strong point as well. Lasers in healing are very appealing and there is much that can be done with focused light, so it is an intriguing line of research. It sounds like it is worth taking another look at.

Doc:
Thanks for some Professional words from someone who speaks Theralase’s language. I understand cancer free but glioblastoma leaves me wondering if I missed that day in Spanish Class. Thanks for confirming things still appear to be on track.