Hour 1 – Filtering through misinformation for metals investors
It was a bit calmer this week for the markets. However COVID-19 continues to spread and the hope of us being able to get back to the way life was at the beginning of the year has been pushed back even further. Economic data is shattering records to the downside with no end is sight.
On the first hour we try to make sense of the world we are living in from an economic and financial standpoint.
Please keep in touch by emailing me at Fleck@kereport.com. I hope you all have a good weekend and manage to do something to distract yourself from all this negative news.
- Segment 1 – Trader Vic kicks off the first hour by sharing his outlook on the virus that has shutdown most of the world and the fallout that will come from everyone staying at home.
- Segment 2 – Jeff Christian joins me to an extended discussion on the internal workings of the metals markets. We focus on three main points that need to be understood by investors as to what will drive price int he near and long term.
- Segment 3 – Joe Mazumdar shares the types of companies he is investing in currently and if he sees the M&A picking up anytime soon.
- Segment 4 – We get an update from GR Silver Mining (TSX.V:GPLY & OTCQB:GLYXF) regarding the deal with First Majestic to acquire the Plomosas Silver Project. Marcio Fonseca, President and CEO takes us through he deal and the work the Company is planning moving forward.
Exclusive Company updates and interviews this week
- Novo Resources – Full Corporate update and answers to your questions
- Silver Viper Minerals – General Work Update and More High Grade Drill Results Expanding The El Rubi Zone
- Skeena Resources – Updates on the recent financing, drill program status, and the Barrick back in option
I really enjoyed Segment 3 with Joe Mazumdar, and you guys discussed Mergers and Acquisitions in the Gold sector. I agree with him that right now the conditions are good for smaller Jr teams to concede to the larger companies if they want an escape hatch, but there have still been acquisitions going on even recently:
1) Osprey (OS) merged with MegumaGold (NSAU)
2) Excellon (EXN) acquired Otis Gold (OOO)
3) As he pointed out the big news is Endeavour Mining (EDV) taking over Semafo (SMF).
That last one with Endeavour and Semafo consolidates West Africa even further under the juggernaut Endeavour Mining, and they are now going to be a very large Mid-Tier and pushing towards becoming a Major that can produce over a million ounces of Gold down the road. There has been a lot of speculation about who Endeavour would acquire next, and most thought Semafo may be looking to acquire companies, but now 2 of the larger players in that area are 1.
That leaves Teranga, B2Gold, Perseus, and Resolute Mining, that may make a move on some of the smaller producers in West Africa, like Hummingbird, Avesoro, Roxgold, and Asanko, or the larger development projects like Orezone, West African Resources, and Cardinal resources.
I also have been recently increasing my stake in (SWA) Sarama Resources while nobody is much paying attention, because they have JVs with Semafo (after SMF took over SCA Savary Gold last year), and Sarama (SWA) has projects all around Teranga’s (TGZ) Golden Hill project in Burkina Faso. I believe one of these companies will come in and scoop up Sarama soon.
As for (ROXG) Roxgold, I still own them as competent producers, and they are now moving their 2nd project from development towards production, so that is encouraging.
B2Gold has been quiet, but I could see them merging with one of these other producers, or going on the hunt and grabbing some of the development projects later this year. Same thing with Perseus.
West Africa is still a vibrant area for Gold miners, and while many shrug it off, they are still blazing right along, and I’ve had some of my better trades and takeovers in West Africa.
Since you also covered (ORE) (ORZCF) Orezone as one of the larger development projects, I thought I’d provide an update, as some of the info Joe shared is a bit more dated, and they’ve reanalyzed their mine plan and economic studies now.
There is no mistake about it, Orezone is one of the better development projects available on the market now (with about 10 Million ounces of Gold, and not 1-3 million like most developers), and I’ve been steadily growing my position in it over time. They’ll either take it into production, or someone will buy them out, but their mine is getting built this cycle.
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(ORE) (ORZCF) Orezone Gold Corp – March 2020 #CorporatePresentation
Fully permitted, shovel-ready project • Ready to go in a rising gold market
• ~85% of Phase 1 RAP construction completed
>> Excellent location with ~10Moz resources within 15km of Bomboré
• Neighboring mine in construction and commissioning phase is ahead of schedule
> Supportive and knowledgeable shareholder base • RCF is a 19.99% shareholder – exercised their full pro-rata right in the Jan. 2020 financing
>Team that knows construction, operations and successful M&A transactions:
• Viceroy, Dalradian, Elgin, Canico, Pretium, Nevsun, and Claude
> Recent financing provides confidence to debt lenders that equity capital is available
> Currently at an attractive entry point in the life cycle of a single asset development company
(SWA) (SRMMF) Sarama Resources – #CorporatePresentation
West African Gold Developer (all around Semafo, Teranga, Roxgold, and B2Gold projects).
(ROXG) (ROGFF) Roxgold Inc – March 2020 #CorporatePresentation
West African Gold Producer and Developer
That recent financing involved warrants that are good til 2023 exercisable at.80…..they trade as well on venture. Good way to play it if you’re very confident gold will go higher
That’s meant to be a reply to orezone……and obviously the biggest risk to this play is location. Burkina Faso had been quite stable in the past but more recently has seen an increase of violence by militants mostly in the north but is starting to see minor attacks in the west and southern regions as well
Thanks Wolfster. Good tip on the 2023 warrants for Orezone.
Yes, Burkina Faso has had issues up on the northern border, but this isn’t where all those mines are, as they are all in the middle to south of the country, but still a risk factor. Honestly, I’m getting thwarted more recently by long permitting times in Canada & the US, and the Coronavirus closures in Peru, Argentina, Mexico, Canada, and the US, more so than fighting in West African countries. There are risks everywhere, and one has to decide which ones are worth taking. For me Orezone is 10 million gold ounce deposit, that spend the last 3 years reworking it’s economic studies, doing more exploration, and improving their mining strategy, and it is one of a dozen or so mines I believe will get built this cycle.
Ex. I’m confused about the deposit size. Maybe I’m misreading the presentation but when I read it they state there are 10M ounces in the area. They themselves have 1.6M to be mined over 13 yrs.
That’s correct. Sorry about that – I misread it as well and stand corrected. The !0 million ounces near deposit, but they only have 1.6 Million ounces at this point. Maybe they can expand it closer to the 10 over time. (lol)
Regardless, they have an economic deposit that will head into production this cycle, and someone it going to get it there, so there is a big opportunity for it to get rerated higher as it moves into it’s “Golden Runway” phase of the mining lifecycle.
Thanks for clarifying Ex. It’s definitely still a buy. Screaming buy if they do find 10M.
Another good Gold & Silver development project that has the defined resources in the ground (and growing), a sizable economic deposit, and yes, they are cashed up is Sabina Gold & Silver.
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Cash is King – Sabina Gold & Silver (SBB) (SGSVF)
by @AndrewNelson on 3 Apr 2020
“Sabina Gold & Silver Corp. (TSX: SBB) led by CEO Bruce McLeod is a well financed gold developer with CAD$26.2M in cash and a 7.2Moz gold deposit in Nunavut, Canada that is fully permitted. The company owns the Back River gold project which is one of the highest grade open pit gold projects in the world at 6.2 g/t gold. As a gold investor, if Sabina wasn’t on your radar, it should be now as it’s trading at a fraction of it’s net asset value (it’s a bargain). ”
https://ceo.ca/@andrewnelson/cash-is-king-sabina-gold-silver-tsx-sbb
Gold Bugs Finally See Their Predictions of Doom Coming True
Bloomberg •April 3, 2020
“We have written more than 3,000 pages of research about gold and mining stocks in the last 14 years and it is pleasing to see that many of our theories have come true,” said Ronald-Peter Stoeferle, managing partner at Incrementum AG, a Liechtenstein-based investment and asset-management company.
“We’re seeing lots of interest because we’ve been pounding the table for gold as a portfolio stabilizer, it’s a defender of your portfolio and gold did its job really perfectly.”
Eddie van der Walt, Ranjeetha Pakiam and Jan-Patrick Barnert ,Bloomberg
https://finance.yahoo.com/news/gold-bugs-finally-see-predictions-220000590.html
SEVERE RECESSION MAY CAUSE ADDITIONAL PAIN FOR STOCK MARKET INVESTORS
April 3, 2020
LATEST READ FROM HEAT MAPS, BONDS, AND GOLD
COVID-19 has profound impact on U.S. jobs which declined over 700,000
April 3, 2020 – Gary Wagner #TechnicalAnalysis #Chart #VIDEO
https://www.youtube.com/watch?time_continue=3&v=fGKikYeNlMQ&feature=emb_logo
Ira Epstein’s Metals Video (4/3/2020)
#TechnicalAnalysis #Chart #Gold #Silver #Copper #Platinum
Gold & Stk Mkt: Key Candlestick Action
Morris Hubbartt – April 3, 2020 – Super Force #PreciousMetals #Technical Analysis #Video
I think Gary Wagner has it exactly right. Gold is probably going higher next week.
More importantly, I think the miners are going higher…
https://stockcharts.com/h-sc/ui?s=%24HUI&p=D&yr=0&mn=8&dy=0&id=p62281113468
Gary Wagner is a sharp technician, and I agree that the miners may surprise some folks as they start catching up to moves that gold has made over the last year.
SOMEBODY check the Future contracts for JUNE………..they are at 130,000
what is the story, I posted for some Ideas……..several days ago……THANKS.
Silver and Sanity
by: Gary Christenson
“Silver is real money, not a debt-based fiat currency that will eventually fail. Silver bullion production requires capital and effort to mine and refine. We use it for solar panels, iPhones, cruise missiles and thousands of other items. Silver is monetary sanity.”
Im not sure about silver being money.
A currency has to be accepted by people to work.
Mark Dice showed us that americans dont really want it.
Knowing its value or not they just didnt want it.
Its also a “niche” market, general population doesnt hold any, how can they use it?
Also people like cryptos, they have access to them where as they cant get their hands on silver.
Just thinking.
My guess is the american gov will create another currency should the dollar become valueless.
A crypto.
Was it John Laws second currency in France that imploded in about 6 months? (I dont recall exactly)
Same thing could happen in the states, the crypto would be the rhyme to paper.
Yeah I remember those Mark Dice videos where people chose a candy bar over the 1 ounce silver coin, but that misses the point.
Silver is still money and store of value, but not necessarily a currency. The point is store one’s wealth in Gold and Silver, and then covert to their respective fiat currency for buying goods.
The whole argument that you can’t go into a gas station and fill up you car and buy a bag of doritos isn’t the point. You sell small amounts of Silver or Gold back to bullion dealers, for cash periodically to buy things with, but by keeping wealth locked up in gold and silver, it is protected from Central Bank madness, Trillions of dollars of debt, and the ebbs and flows of the main currency markets.
I understand EX.
My thinking was about an accepted currency.
People choose their currency, even if they are led to it.
If trading for a currency and then using that is the option of PMs, the same thing could be said for many things.
Dont get me wrong, I own the metals I just have a hard time visualizing silver as currency.
Just my guess but I can see a crypto becoming dominant before PMs.
Just to mention, Mark Dice wasnt the only one.
There was a fellow in NY trying to prove the goldbugs were nuts by trying to get someone to accept silver.
Long story short he ended up trading an once for 3 hot dogs from a street vendor.
Silver selling for $30 about then.
He felt that effort showed the actual value of silver onces.
Other than trading for fiat with dealers.
Yes, as far as an accepted currency by the masses, then Gold and Silver aren’t accepted unless it is bullion bank or coin shop. However, Silver is money and has been for thousands of years.
It is a store of value, portable, and evenly divisible which meets the criteria.
I just did a quick search for Money online and this is the first thing that came up, and Silver satisfies these requirements.
• 1.Money – “a current medium of exchange in the form of coins and banknotes; coins and banknotes collectively:”
• ▪sums of money:”a statement of all moneys paid into and out of the account”
• ▪the assets, property, and resources owned by someone or something; wealth▪financial gain
• ▪payment for work; wages
Silver is in coin forms, is wealth asset, and technically could be a payment for work.
It would work better to use the new digital exchange cards or a Gold/Silver crypto that can be used like a debit card for converting to the local currency.
Bottom line, the masses of wealth can be stored in Gold & Silver for the ages, or just for a period of uncertainty, but then need to be converted back into local fiat at the prevailing price that day to be able to buy things with fiat.
While other items like real estate, collectibles, Art, a crate of whiskey could all store value as well, they are not nearly as liquid at Gold & Silver, nor do they have the history as money. While it is not a popular opinion to have I think this is one of the advantages of the digital gold and silver like GLD and SLV because they generally track the metals, are backed by metal, and can very easily be converted back into fiat currency in one’s trading platform.
Now in a much more dramatic scenario where there is no more power grid (like an EMP) or no more internet (very unlikely), or if one is in a country like Venezuela going through a hyper-inflation event, THEN having the physical form of Gold/Silver would still preserve purchasing power and be mobile if leaving a country or trading.
Most people like to jump to that end-game of an anti-utopian mad-max scenario, but that is far more unlikely, and if that plays out then people are already screwed, and food and clean water (and toilet paper) become the commodities of value.
However, if there is just an economic collapse, or a deteriorating economic situation, like we currently find ourselves in, then digital Gold & Silver are just fine, and at any point, they can be quickly liquidated and converted to fiat, making them a good store of value and money.
Everything your saying is true, no argument from me.
My point, metal wont work, nobody has any. Same as gold, nobody has any.
How are john and fred going to conduct business with no silver?
Why would John accept it when he doesnt know if anyone else would?
Why wouldnt john say “go sell it and pay me in fiat”?
Especially in the states, I was just informed on another blog the american dollar will never hyper inflate as it was designed not to.
These are the people that will decide what is used.
Chris spoke of regional or local currencies, personally I see that as more likely.
If you sell your metal to a dealer for currency, what are you conducting business in?
Just my opinion, I cant see silver becoming a dominant currency, to be honest I still think people would prefer pot to silver.
Lets hope we dont find out any time soon.
Yeah I agree that Silver won’t become a dominant form of currency, and mentioned above that it really isn’t a currency, but it is money and a very liquid store of wealth that can be converted into fiat currency. I don’t expect most to transact in Silver, but the wise will store wealth in it versus saving at 0% to negative rates.
PRECIOUS METALS ARE ABOUT TO RESET LIKE IN 2008 – GOLD BUGS, BUCKLE UP!
TheTechnicalTraders – Chris Vermeulen – April 4, 2020
“Silver Bugs are loving the setup right now because they know the pattern that sets up in the Metals market when a crisis hits. First, Gold begins to rally faster than Silver and the Gold to Silver ratio spikes higher. Then, once the shock-wave of the market crisis subsides, the metals begin a fairly usual price advance where both Gold and Silver advance – in unequal forms. This is when the real fun for Gold & Silver Bugs begins.”
“Get ready for some incredible price moves in the metals markets and congrats to all the Gold and Silver bugs out there. Our analysis says our patience and accumulation of physical metals will soon pay off in a big way.”
Some interesting news in the Royalty space today. EMX Royalty Corp scooped up some more royalties from struggling Revelo today, and the consolidation in this tiny sector continues.
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Revelo Signs Definitive Agreement for the Sale of its Generative NSR Royalty Portfolio for Proceeds of US$1.5 million
@newsfile on 20 Mar 2020
“The original agreement with EMX (see news release dated January 20, 2020) was to sell a total of 20 NSR royalty interests for a cash total of US$1.5 million. Masglas America Corporation SpA subsequently exercised its right of first refusal to purchase two of the royalties under the same terms and conditions as those offered by EMX. Consequently, EMX has now purchased 18 royalty interests for a cash total of US$1,162,000 and Masglas has purchased 2 royalty interests for a cash total of US$338,000.”
https://ceo.ca/@newsfile/revelo-signs-definitive-agreement-for-the-sale-of-its
I’d like to see the small/mid-size royalty companies like Altius, Maverix, Metalla, EMX, Sailfish, Golden Valley, Abitibi Royalties, go around and pick off all the remaining tiny micro-cap royalty plays left like Ely Gold, Coral gold, Tranisition metals, Millrock, Riverside Resources, Globex, etc… and consolidate the space into half dozen Mid-tiers.
Then it will be up to the larger companies like Franco Nevada, Royal Gold, Wheaton PM, Sandstorm, and Osisko Gold Royalties to gobble up the mid-tiers in one last further consolidation phase.
There’s always a bigger fish…
I like that idea too Ex. as I have been moving into some of the smaller royalty plays and plan to do so more in the future.
Hi Charles, yes I’ve been adding to my Maverix position during the recent weakness over the last month, and still have a solid cost basis in Golden Valley Mines, and Sailfish Royalties. The other 3 I’d like to acquire are Metalla, EMX Royalties, and Altius.
There are a few folks that have mentioned I should look closer at Ely Gold too.
Ely is next on my list. I own Metalla, and Golden Valley. I have also bought some osisko Royalty which is larger, but really hasn’t participated in the upside since December like some of the other mid tier royalty companies. It seems pretty cheap here.
Yeah, I’ve noticed that Osisko Gold Royalties has not behaved like Sandstorm or Wheaton PM, or Royal Gold or Franco as one of the larger companies. I’m not really sure why not, as they have a solid package of NSRs. It may be that they bought back one of their incubators (BGM) Barkerville the end of last year, and some weren’t thrilled about that, but it is no different than when Sandstorm bought back Mariana for their Hot Maden project back in 2018. People doubted the strategy then but have come around to it over time.
The stock has gotten hit to hard for the Barkerville deal. If there is one royalty company I would want to acquire a failing asset to turn around it would be the Osisko guys. It might take some time, but my view is it’s going to work out just fine.
I agree with you there Charles, and Sean and team are about as sharp as it gets. I don’t think the market fully understands the Barkerville deal yet, but that was my point with Sandstorm and their Mariana deal. It has ended up working out splendidly for them. I’m actually hoping Osisko also buys out Falco and does the same thing.
Cool. I liked your post on Sabina above. That sounds like one I need to look at.
I agree that OR is a bargain and that Barkeville will pay off big some day. Sean is no dummy.
Charles, yes Sabina (SBB) is world class asset, and it another of the key development projects that will have and economic mine built (likely by a larger company that partners with them or takes them over). They got stalled for a few years in permitting due to caribou migrations & first nations, but they all got worked out 2 years back, but that was when Gold prices were stuck in the sideways channel and folks and it had gone off most folks radar as most of the developers were not really marketing hard.
OPEC+ Meeting to Be Delayed on New Saudi, Russia Rift
April 3, 2020 – Zaid Sabah, Will Kennedy, and Gregory White
“The OPEC+ meeting to try to end the oil price war is unlikely to go ahead on Monday as previously expected, as Riyadh and Moscow trade barbs about who’s to blame for the collapse in oil prices.”
“Saudi Arabia made a pointed diplomatic attack on Russian President Vladimir Putin, opening a fresh rift between the world’s two largest oil exporters and jeopardizing a deal to cut production.”
It just seems the markets put far too much faith Trump’s bluster about Saudi Arabia and Russia working it all out (hence today’s rally with Oil up over 14%), but I don’t see Putin backing down at all.
Russia and half dozen other countries are fine producing in the $20’s or $30’s but the US and Canadian Oil companies are screwed at current prices. With most transportation and business grounded for the short to medium term, hurting demand, this is going to be a much bigger hole to dig out of than it was last time.
Looks like Oil may get whacked again next week then and Friday celebration was premature. Glad I trimmed back my $DEE position today into the strength. I picked it up on March 25th and it ended up being one of the easiest swing-trades in 2020 so far.
I’m just not convinced Oil stocks are going to keep rebounding though, and expect the other shoe to drop soon. There is nowhere left to even store most of the oil being produced, and many fields are selling their oil for far less than WTI prices (1/4 to 1/2 of it) and that spells trouble for the Oil patch, and the banking sector that is holding onto their toxic debt. That is why the market rout really accelerated on the Oil price/production wars… it will crush the banks.
There is much more pain in store for all the companies that struggled at $40-$50 Oil, with it now in the $20s.
Where is the demand in Oil demand going to be coming from? With everyone on lockdown at home, airline travel mostly non-existent, cruises stopped, nobody driving, Uber/Lyft drivers with no business, and most corporations shuttered or on life-support, Oil production will just keep piling up. Amazon deliveries can’t fuel the whole Oil sector…
This is a huge problem, which is still lingering from 2016, the last time Oil took a nosedive down to $26. They also said there was no more storage back in 2016 and everything was at capacity, but those problems didn’t go away, and the world went feverishly back to pumping oil like crazy as soon as it rebounded back into the $40s and then it was blue skies when it got back up to the $60s.
The harsh reality is the world is awash with Oil and the demand has screeched to a halt in this present environment. There needs to be some real carnage and closures and bankruptcies this time, that were evaded back in 2016. Time to clear house and reboot.
Interesting commentary Ex.
As someone who has derived their livelihood from the oil patch for many years, I have posted of the insanity of the United States not having a National Energy Policy.
I know the free marketeers out there will yell at me as being a Socialist and I say so be it.
Recently Chris Temple came out and was complaining about the Execs at Whiting taking bonuses before entering bankruptcy. Can you blame them?
The U S Govt has been a Saudi Bitch forever. Until the day comes that some one gets elected that has the BALLS to stand up to the OPEC cartel and the Saudis, things are not in my opinion going change any time soon.
When the President was scrambling for cash, Adnon Kashogi was the one who ponied up the cash to buy his yacht.Our President has been in bed with the Saudi’s for longer than most realize.I think Putin has had enough and he has the Balls to say so.
Yeah, Putin is done playing by the rules of the west or their extensions in the middle east, and Russia is fine with Oil prices in the $20’s if it takes down some of their competition and sends a strong message to countries that believe their energy paradigm will always persist. The energy sector is under a sea change, and it will be interesting to see how thing develop.
Bailout BONUS Bonanza Going Bonkers … Again!
TheGreatRecessionBlog
“The banks that are begging for bailouts still cling to their bonuses. To terrorize us into letting them keep their bonuses, the banksters are threatening to release the button on their suicide vests and blow themselves up by not taking the bailouts if they can’t have their bonuses.”
“You would think the response to that would be a no-brainer: “O.K. Go ahead.” Then just walk off. Watch, however, as the European Central Bank Supervisory Board Chair pretends to be getting firm with the banks because it’s so important that we bail them out on their terms: (The first two-minutes-and-twenty-seconds are all you need listen to. Any more could cause medically unnecessary nausea or brain injury as he goes to say that his recommended conservative measures are “not reflecting a specific fragility” in the European banking system at present. No, there’s none of that. All is well in Bailout Bonus Bonanzaland. They’re just doing unnecessary bailouts.)”
https://thegreatrecession.info/blog/bailout-bonus-bonanza-going-bonkers-again/
Donald Trump And The Fed Are Destroying The U.S. Dollar
Forbes – Billy Bambrough
“It’s been an historic week for the U.S. with president Donald Trump signing a record $2.2 trillion coronavirus-induced emergency stimulus package.”
“This week’s losses come on the back of the dollar index’s biggest weekly gain since the financial crisis, with the dollar surging as investors scrambled for the world’s most liquid currency amid crashing stock and debt markets.”
“In short-term, huge dollar demand because short-covering, but it won’t last,” Wall Street veteran and founder of Wyoming-based crypto bank Avanti, Caitlin Long, said via Twitter, adding she expects the U.S. Federal Reserve’s balance sheet to top $10 trillion before the coronavirus crisis is over and predicting the dollar’s eventual crash.”
America is facing the end game. America became great because of it’s vigor and it’s vast natural resources. It also didn’t allow it’s politics to become distracted and embittered by dissension in other lands. Now they are meddling and muddling in every quarrel, great and small at home and in the rest of The World. Much of America’s industry is now dependent on China’s willingness to co-operate. America needs to disengage and bring their troops home before all is lost. Empire building is for foolish people and their foolish governments.DT
Agreed DT. The US has been too busy spending insane amounts of money and endangering our troops in proxy wars and conflicts all over the planet that were none of our business.
Yes we should bring most our troops home and worry about our own issues, rather than trying to tell other countries how to operate, and playing Team America World Police.
I want to give Jeff the benefit of doubt since he is well informed on the market, however his closing comment of “there is plenty of gold around” Come on Jeff that was a whopper.
I recommend listening to Josh Crumb’s comments on Macro Watch this week. Much more realistic assessment of the supply/demand of the gold market from a guy who is also very well informed on the state of the markets. No there is NOT “plenty” of gold around.
There is plenty of gold around since the above ground supply is equal to 60 or 70 years of production. If most of it is not available at the current price (it isn’t), then the price will rise.
The US Government has handled the virus situation very badly. Trader Vic has some reasonable and workable thoughts but it’s now too late to use. Just the ignorant stance on mask usage until yesterday, when they changed their minds and decided to ‘recommend’ all use them, has cost this country thousands of cases. Anybody with half a brain could watch Asian countries fight and win the battle knew our government was lying, without thinking of the repercussions. When it became common knowledge that asymptomatic carriers could pass the virus, the mask became all important. Now, it’s a bit late to close the barn door. From this point on, even Dr. Fauci is BS. He and the Surgeon General both spewed the political side instead of the health side. Wall St. on Parade got it right: https://wallstreetonparade.com/
I think we have been posting this same concern since FEB 22……
I am posting this as a HEADS UP……..CONCERNING COMEX IN JUNE>>>>>>>
SINCE NO ONE Posted a response….
HERE IS my first question…
On April 2, 2020 at 5:48 am,
OOTB Jerry says:
Anyone watching the GOLD FUTURES chart…….
https://www.barchart.com/futures/quotes/GC*0/futures-prices
I would like to know…………WHAT IS HAPPENING IN JUNE………look at the AMOUNT of contracts…..compared to the other months….just like to have some thoughts….THANKS
Notice when I posted……….june contract were 66,000 to 70,000 plus….which seem extremely HIGH…that is why , I asked the above question, with no replys…..
I am now……..posting ………ANDY Schlectman ……important info….46 min. mark…
https://www.youtube.com/watch?v=abpbMgAnzYw
Info on COMeX…….might be bused……IN JUNE….
NOW THE CONTRACTS are over………..130,000………check the low amount before JUNE, and after JUNE………
So, each contract is 100 oz.,so, that would be 13,000,000 oz. of gold….
Ton of gold is 2000 oz…….so, that is …….6500 tons…..standing for delivery….
I doubt……Comex can deliver 6500 tons of gold…….in JUNE.
10,400,000 oz of Gold…are registered as of April……….at Comex
Where is the rest coming from……looks like they are short….about 3,000,000 oz.
Hoping the virus idiots do not post and smother the report as they have for several months..
METALS INFO ABOVE…………………..I was afraid this would happen……….
Sorry to be a virus idiot Jerry.
I have people all around me (with in a couple miles) dying.
Doesnt look to hoaxy to me.
How to deal with it may be arguable, but its no hoax.
WITH FRIENDS LIKE THESE: U.S. HIJACKS MEDICAL SUPPLIES AIMED FOR FRANCE, GERMANY, BRAZIL
The americans are making themselves extremely popular around the world.
Real “leader” types.
Russia,China,Cuba on the other hand are helping everywhere they can.
This virus is showing the world who the real leaders are and could be the straw that brings down the empire.
Note to Jerry; you can skip this virus oriented post.
B: My sentiments exactly. My county has over 400 active cases, growing about 30-50 per day. Population only 22,000. Taiwan has less cases than us with 28 million residents. Seems we Americans have a lot to learn in this business. Czech Republic has done a very good job protecting their citizens and using masks from day one.
Best of luck to you and your area B.
Seems contrary to your above post……..hummm
From this point on, even Dr. Fauci is BS.
Thx SD.
What this is really all about or the best way to deal with it is way above my paygrade, all I can do is stay isolated as best I can.
Best wishes to you and yours too and everyone else on here of course.
I will be Virus idiot as well.
I still maintain my original position that I cannot give an intelligent assessment yet.
Excuse me.
Info…….I am not posting any virus post here…….so, go back to sleep
Go to the next section and do some reading….
Your not posting anything I didn’t realize years ago.
At this point I’m more interested in investing ideas.
Good………….so, answer the question……….. 🙂
I put out my April Futures 2021 for Gold the other day. $2,360.27
I have it on my wall now and will revisit in a year.
I asked about the JUNE CONTRACTS……….
To be honust, I have more good investment opportunities than I have cash.
Ive been in that position for awhile now.
Now, what Im watching for is the time to deploy more in PMs.
1 idea is tankers for storing oil.
I dont see that talked about much.
Jerry, I don’t trade the futures and I think all stocks are toast for a while.
I am looking at other possibilities other than mining.
b just posted storing oil. I’m trying to think out of the box as well.
John……..I think those are GOLD FUTURE CONTRACTS AT THE COMEX………FOR JUNE.
I doubt , YOU, Have Listened to the Tape, nor examined the report….. ?
Your right Jerry.
My Gold prediction was for one year from now.
I came up with the number doing a comparison between the Nikkei and Gold prices in the past.
b……..you are always about two steps behind….. 🙂
Thats what happens when your only 3 ft tall with really tiny feet.
I agreed with Bob from the start, this is a bigger deal than most realized.
Sure more people have died from diarrhea but around here people are dying from covid.
One interesting consequence, wait times at emergency rooms are down from hours to 0-30 mins.
I imagine this covid will pass tho.
I posted some info in the other section…..rather than in the MINING SECTION…
I think all the virus hip, should be in ONE SECTION…….this distracts from the people trying to get mining info……..JMO
Great point OOTB. Unless the virus info relates to economics or resources or currencies, then it is probably better suited for the Political hour blog.
That is exactly , why I have been bitching concerning the OVER FLOW of WORTHLESS INFO, FROM PEA BRAIN………
EX………..can you answer the question concerning the above question on the COMEX FUTURE CONTRACT FOR JUNE>……..Thanks…..I post two post, both together….
There was , what I thought to be a great amount of Future buying for the June contract, I posted it a couple of days ago, then I listened to Andy S…concerning his take on the FUTURE no supply Comex problem……Just want you opinion and Matthew…..THANKS.
Hi OOTB. I saw your prior posts on the June Comex future contracts but I didn’t respond because I don’t know the answer. I know that pricing has moved over to the June futures contract now that we are in April, but as for the number being 130,000 I don’t know, but that sounds high to me. I thought Jeff Christian mentioned there were about 36,000 open interest contracts in June, but I’d need to listen again to get the numbers he quoted.
Most of those will never take delivery and will get rolled or covered, so while there is a mismatch in how many futures contracts there are relative to available gold, it is mostly a trading vehicle and price discovery vehicle, more so than a fair representation of who actually wants the gold in their hands. That is actually where the spot gold prices are more instructive, but lately even those have been divorced from the reality of what people need to pay to acquire gold and silver with the inflated markups and fees relative to the price.
EX….thanks for being truthful…..I also, posted a tape….From Andy Schleckman(sp)
from Miles Franklin ….which gives some great info..concerning the JUNE CONTRACT AN COMEX. POTENTIAL FAILURE……that is why , I posted both together., I posted the min. mark….so, you do not have to listen to the entire thing…..THANKS AGAIN..
HOPEFULLY,……………..MATTHEW will review……
Ah, I now see on that first link you posted the 130,000** contracts:
GCM20 (Jun ’20) – $1,645.70 (04/03/2020)
> Volume: 130,930**
> Open interest: 359,745 (so maybe Jeff Christian said 360,00 contracts on open interest and not the 36,000 I had just mentioned. That makes more sense).
I just rarely if ever look at that kind of data, or COT reports, etc…. as it has never helped me as an investor. I look price data for Gold as the most instructive metric and this is what is populated on any Gold chart.
I’ve been fairly accurate for years in the basic directions and turning points in Gold simply by using pricing on charts as my guidance. Of course, on a chart there are also many other chart indicators and overlays like the RSI, Slow Stochastics, True Strength Index, Commodity Channel Index, Bollinger Bands, Key Moving Averages, Appropirate trend lines, Fibonacci retracements or extensions, Japanese Candlestick patterns, and prior peaks and troughs as areas that influence where price is heading and where support and resistance levels come in.
Ex…….did you listen to Andy….at Miles…..????
COMEX contract may be coming to and END…..that is why, the possible extremely LARGE AMOUNT of Contracts…just in that one MONTH…..just guessing…putting the dots together…..
What say you…..?
Hi OOTB. I finally had a chunk of time where I could watch the Andy Schlectman interview on Reluctant Preppers, and it was interesting to get his take on all the supply chain disruptions as the head of Miles Franklin Precious Metals.
What he was saying at the end in the 45-47 mins marks on the cracks to the Comex structure were concerning, but like he said, they’d more than likely settle in cash if tons of investors asked for delivery. I don’t believe we’ll see that by June, but anything is possible in these crazy markets and things seem to change every few days.
I do agree that the Shanghai Gold Exchange trades much more gold that actually gets delivered and is a much better barometer of investment demand, compared to the London Exchange or Comex. It is easy to envision a reshuffling of the responsibilities in Gold price discovery over to the East from the West, and there is a reverence there for the Precious Metals as sound money that has been lost in Europe and North America’s paper games and derivatives markets.
Jerry, I agree that we have a perfect storm for gold setting up and that the switching of gold to a tier 1 asset was/is a big deal.
EX……thanks for watching……We will see……June is a long ways off……
London pool was crack before..but, …who, knows for sure….
Thank you Matthew……….for your thoughts…………
Sadly this is showing the world that the US ain’t what it claims to be. We can’t even take care of folks in the US – how are we going to help anybody else. The long term consequences of this are huge – go see:
https://libertyblitzkrieg.com/2020/03/23/power-grab/
Thx for the show Cory.
Appreciate the comments as well.
Ex
From reading your comments in past your a Bar shl. My apologies if I missed your comments on it. Wondering what your thoughts are on the take out. Mackuch over at KL has sat on the sidelines. It is possible in the end WM will have better grade gold and just as much as many ounces as Detour property of course with out a
mill. 4 million for Fenelon and another 60 million as of few days ago for a total of
64 million. KL in at 4.5 billion and of course with a mill.
WM came out a few days ago with great numbers again. Seems like KL so burned with sky purchase of shares and price plunge on stock after DGC blood bath they are willing to watch from the sidelines.
Hi monty bissett. I was a long time shareholder of (BAR) Balmoral, but sold it when it gapped up on March 2nd & 3rd to pull profits, when then news broke about the (WM) Wallbridge takeove. I wanted to book a win, and wanted to use those profits towards other Gold and Silver miners that had fallen lower.
I’ve considered waiting until the merger is complete to position back into WM, or I may get back in before the merger is complete, because yes their Fenelon project is very high grade and could be better than the project Detour had, prior to KL’s recent takeover. It always possible that while Kirkland Lake is digesting their acquisition of Detour, than another big player may come in and takeover Wallbridge. That is the wildcard most are not watching for, and why I’d position back in WM, aside from their huge exploration upside. Also the BAR properties give them a huge land package of prospective projects all through the Detour Lake area, and their Grasset Nickel project (which ironically is why I initially started following BAR in the first place.
It is going to be fascinating to see how things develop in that hot area play.
Cheers!
Spanish Silver in Old Mexico
by @Keecher on 3 Apr 2020
“Venture capitalist Jamie Keech travels to Sinaloa Mexico and explores the historic Panuco silver mines.”
“While in the city of Mazatlán Jamie hooks up with (VZLA) (VIZSF) Vizsla Resources CEO Mike Konnert and learns about his plan to modernize mining in the region.”
For anyone looking for some good dividend yields.
Why Canada’s banks have no plans to suspend dividends despite a global trend of cuts
JAMES BRADSHAWBANKING REPORTER
Canadian bank CEOs insist they will keep paying dividends, even as banks around the world have axed payouts under pressure from regulators to preserve capital within the banking system.
Concern is mounting about the sustainability of banks’ dividends after major British and European lenders suspended payouts to prepare for an unpredictable health crisis. Banks everywhere are bracing for a major shock as measures to curb the spread of the new coronavirus shut down large parts of the global economy, putting millions out of work and making a painful recession into a virtual certainty.
Canadian banks made it through the last financial crisis with dividends intact, and they have built generous capital reserves since then. They have also treated the payouts as more or less sacrosanct: Steady dividends serve as signals of health in a banking system and stopping the payouts can erode confidence. Dividends also provide a flow of income to a wide array of investors, including retirees, at a time when low interest rates have sapped returns on bonds.
On Wednesday, the United Kingdom’s largest banks bowed to pressure from Britain’s financial regulator and suspended dividend payments. Several large European Banks, including Italy’s UniCredit and Dutch bank ING Group have also halted after a request from the European Banking Authority, and Mexico’s financial regulator followed suit on Thursday, saying that “it’s impossible to estimate how deep and how long the economic effects of the pandemic will be.”
Canada’s Office of the Superintendent of Financial Institutions, has told domestic banks not to increase dividends or buy back shares, but has made no effort to reduce payouts. And so far, bank executives are telling investors not to worry.
“At this time, I don’t see a change in TD’s dividend policy,” chief executive Bharat Masrani said in an interview with reporters after the bank’s annual meeting on Thursday.
Toronto-Dominion Bank has “more than adequate capital” to confront the crisis, Mr. Masrani said. He suggested Canadian banks’ conservative appetites for risk, and tendency to avoid some of the most risky lending undertaken by global banks, give them an extra margin of safety.
“All governments are trying their best to make sure that individuals do have the liquidity, that they do have the money, and they’re trying to introduce various programs to deliver that,” he said. “And to say that ‘alright, we’ll take this away,’ seems contradictory to that objective by elected officials.”
Banks are facing significant pressure from an anticipated spike in loan losses in the long run, as well as widespread demand from companies to draw down funds on credit lines immediately. But bankers and regulators are keenly aware that bank stocks are widely held by millions of Canadians, some of whom depend on them as retirement income. Some worry that cutting off dividends could worsen the economic hardship from the crisis.
“About 77 [per cent] to 80 per cent of our shareholders are Canadian, either institutional or retail, so the construct of our shareholder base is very different than would be a European bank,” said Bank of Nova Scotia CEO Brian Porter on Tuesday. Mr. Porter and Bank of Montreal CEO Darryl White both said they have no plans to slash their banks’ dividends
Several banking analysts agree that Canadian bank dividend cuts are unlikely, at least in the near term, and some suggested banks would be more likely to raise equity to bolster capital levels.
The Big Six are coming into this crisis in a strong position, Bank of America Securities analyst Ebrahim Poonawala said on Wednesday. On average, the banks have a common equity Tier 1 (CET1) ratio of 11.6 per cent – a key measure of a bank’s resilience – or 2.6 per cent above the minimum level set by OSFI. That gives banks room to absorb losses, Mr. Poonawala wrote in a note to clients.
“While the current crisis could be worse given the state of the energy sector and an over-leveraged consumer, we believe that the bar for dividend suspension/cuts is extremely high,” he said.
OSFI has already freed up an estimated $300-billion in lending capacity by lowering the domestic stability buffer, which serves as an extra cushion of capital amassed in good times, by 1.25 percentage points. Officials from the regulator said they have leeway to reduce the buffer further if necessary to free up more capital.
For now, banks are likely running stress testing models multiple times a week, and giving frequent updates to the regulator. But it has become far more difficult to make accurate predictions as banks grapple with the speed of the unfolding health crisis, as well as estimate the effects from an unprecedented response from governments.
“The biggest challenge is trying to understand how long the crisis is going to be, and then trying to overlay what will be essentially an unprecedented level of government support and trying to understand how this will impact the recovery,” said Mark Hughes, a former chief risk officer at Royal Bank of Canada who now chairs the Global Risk Institute in Toronto.
Canadian banks also differ from their British and European counterparts, which are tightly regulated. Many European banks are still building capital buffers under new rules introduced after the last financial crisis, and cleaning up bad loans on their balance sheets.
European banks’ dividend payments have also been more variable historically compared with Canadian bank dividends, which are considered ‘locked in,'” said Gabriel Dechaine, an analyst at National Bank Financial Inc., in a note to clients.
And Canadian banks are in a different position politically, after some British banks needed government bailouts in the last crisis, said Laurence Booth, professor of finance at the University of Toronto’s Rotman School of Management.
“The Canadian banks do not have the bad reputation that the European and the U.K. banks have got, so it’s not like the government can lean on them and say, ‘Look, we’ve bailed you out, you’re bad guys, do what we say, you’ve got to rebuild your reputation,'” Mr. Booth said. “So that moral suasion component is missing in Canada.”
Wofster – Thanks for sharing the compare/contrast between European and Canadian banks. Any idea how exposed the Canadian banks are to oil? Also isn’t real estate in Vancouver/Toronto way over done? Don’t they also have the same level of derivatives exposure as us banks? I am a U.S. resident so not really up to speed on Canadian banks or how they are regulated but in th U.S. I favor smaller banks that do not have investment banking arms or derivatives exposure.
Their exposure to oils has been minimized over the recent years. As far as real estate goes, the mortgage stress test rules are more stringent than in the USA. Vancouver and Toronto may seem over done(condo market has seemed that way to me for a couple of years) however the tightening of mortgage requirements helped and other rule changes helped keeping Vancouver from overheating. As far as the derivatives go, I may be wrong but I believe the derivative regulations are tighter than those in the states as well.
There are likely still plenty of Canadian banking and financial institutions exposed to the toxic debt of the oil patch, and if those companies go under, it is going to suck many banks down in the muck with them.
Canadian Banks Going Green Still Boost Loans to the Oil Industry
By Doug Alexander and Kevin Orland – February 12, 2020
“Canada’s big banks may be embracing green, but that hasn’t stopped them from lending more and more money to fossil-fuel companies.”
“Oil and gas loans accounted for an average of 5.2% of corporate financing at the big banks in 2019, down from 6.3% five years ago. Bank of Montreal and Toronto-Dominion Bank bucked that trend, with oil and gas loans representing a greater share of their corporate lending after acquiring energy books from foreign banks.”
“Bank of Montreal more than doubled oil and gas lending in five years, peaking at C$13.5 billion last year, driven up by the 2018 purchase of energy loans from Deutsche Bank AG and an overall corporate-financing surge. ”
The 2020 Outlook for Canada’s Big Five Banks Appears Bleak
Matt Smith | February 7, 2020
“Weaker economic growth — which sees the IMF predicting that Canada’s GDP will expand by a modest 1.8% during 2020 — doesn’t bode well for the banks. This because there is a correlation between GDP growth and consumption of credit, a key earnings driver for banks, meaning that if economic activity softens, then the demand for credit diminishes.”
https://www.fool.ca/2020/02/07/the-2020-outlook-for-canadas-big-five-banks-appears-bleak/
Canadian banks face higher loan losses, lower earnings after energy lending growth
March 10, 2020 – Reuters – Nichola Saminather
“Canadian banks boosted oil and gas lending at about double the rate of total business loan growth over the past three quarters, raising the specter of higher loan losses after Monday’s oil price crash.”
“Energy lending has picked up at Canada’s top banks even as bad loans and provisions for losses from the sector climbed, an analysis of company data by Edward Jones and Reuters shows.”
“The developments (over the) weekend … are certainly negative for any banks that made loans to borrowers in oil and gas,” said James Shanahan, an analyst at Edward Jones. “I definitely see an increase in loan losses.”
“Banks’ energy-related credit-loss provisions have climbed to the highest levels since 2016, while bad loans hit the highest in over two years in late 2019. The Canadian bank sub-index rose 0.9% by Tuesday afternoon, after Monday’s 11.2% decline.”
Thanks for the info Wolfster and Ex. I don’t plan to invest. Just curious more than anything. I work in the financial services industry so I try not to invest to much in that sector. I used to own a bunch of stock in a bank I worked for that became worthless so perhaps I am a bit Jaded. It was then that I got interested in hard assets and particularly precious metals.
Gold back at $1672
Gol held onto it’s gains at the open – now $1688
Nice to see Silver with a $15 handle again. Currently at $15.03
Big thanks to Cory & Big Al & all the KER contributors for another great week of daily editorials and another weekend show.
Ever Upward!