US market fade into the close along with all other stocks – Plus comments on the US Uranium news
Chris Temple wraps up the markets for today. US stocks sold off in the second half of the day which put a drag on a lot of other sectors. We discuss this overall environment where most sectors are tied to the confidence in the US markets.
We end with comments on the announcement out of the Nuclear Fuel Working Group and how this will impact the US Uranium companies.
Click here to visit Chris’s site and stay up to date on what he is sharing with his subscribers.
In case you missed it there are a couple special webinars in the coming week! Click the links below to sign up and have first access to the live event and the recording.
Great Bear Resources – Replay from Thursday April 23rd at 11:30am PT – Click here to sign up and watch the replay.
IsoEnergy – Wednesday April 29th at 1pm PT – Click here to sign up
Whether OPEC+ Formally Agrees, Deeper Oil Cuts Now Look Inevitable
Alex Lawler, Ahmad Ghaddar – April 22, 2020
“Whether or not OPEC+ oil producers formally agree to extra oil output curbs, rapidly filling storage capacity and plummeting demand due to the coronavirus crisis may force them to cut more.”
“With crude consumption collapsing, the Organization of the Petroleum Exporting Countries, Russia and other producers, a group known as OPEC+, is due to implement a deal to cut supply by a record 9.7 million barrels per day (bpd) from May 1.”
“But that unprecedented deal to withdraw about 10% of global supply already looks inadequate when demand has plunged by as much as 30% and the world is possibly just weeks away from running out of storage space for the surplus.”
Restoring Americas Competitive Nuclear Advantage
U.S. Department of Energy – April 2020 (32 pages of support for Nuclear & Uranium)
Ur-Energy (URE) (URG) – Everybody I’d like to announce…
CRUX Investor – Apr 22, 2020 #VIDEO
Interview with Jeff Klenda, President & CEO of uranium producer, Ur-Energy
Klenda tells us what he knows about the US Dept of Energy announcement due this week. And what he thinks these lost pounds mean for his shareholders. Immediate winners and who is at the back of the room.
2:21 – The Uranium Market: 7/10 Major Suppliers Taken Offline & What it Means for Ur-Energy
6:07 – Stagnant Utilities: Will it Drop the Price Down Again?
8:26 – Rumours from the Uranium Working Group: The Process of Negotiations
17:34 – The Winners: Ability to Position the Company as an Early Beneficiary
22:42 – The Price Ur-Energy Needs for Profitable Production
24:31 – Dynamic Duo: Conversations with Energy Fuels
https://www.youtube.com/watch?v=t8F1kz2b7bA&feature=youtu.be
Energy Fuels (NYSE: UUUU) – I’m back and ready to go
CRUX Investor – Apr 17, 2020 #VIDEO
“We like the uranium space. It’s been nearly a decade of hardship, but there are now signs of life. Uranium has the potential to make investors significant multiples of their initial investments; that’s if they pick a winner rather than a loser. Risk mitigation is key to this, and one of the most important components of certain uranium stories is commodity diversification. Energy Fuels, has mitigated risk with multiple cash streams: vanadium, milling and cleanup operations. Chalmers talks about another potential revenue stream: rare earths processing.”
2:14 – Getting into Rare Earths: Why, What’s the Idea?
5:30 – The Mill’s Capabilities: Setting it up for Different Streams
9:00 – Arrangements for Rare Earth Feed Stock: Making Money for Energy Fuels
13:26 – Impact of COVID-19 on the Uranium Market: Rising Share Prices
15:26 – Genesis of the Idea for Rare Earths and US Government’s Involvement
18:16 – Process of Understanding Economics and Timings on Moving Forward
23:16 – Spot Price Movement: When and How Might We See $40 and Over?
30:59 – Energy Fuels’ Position in the Uranium Space
(UUUU) (EFR) Energy Fuels Applauds U.S. Government’s Commitment to Reviving and Strengthening U.S. Uranium Mining
April 23, 2020
“Energy Fuels Inc. the leading producer of uranium in the United States, applauds the Trump administration and the U.S. Nuclear Fuel Working Group (“NFWG”) for developing the Strategy to Restore American Nuclear Energy Leadership. This comprehensive strategy seeks to revive and strengthen U.S. nuclear fuel capabilities, starting with uranium mining, with the goals of supporting U.S. energy and national security, preventing geopolitical adversaries (particularly those in Russia) from using their nuclear capabilities to influence the U.S. and the world, and promoting global non-proliferation objectives and nuclear safety. The report states that “the clear outcome of the Working Group’s efforts is confirmation that it is in the nation’s national security interests to preserve the assets and investments of the entire U.S. nuclear enterprise and to revitalize the sector to regain U.S. global nuclear leadership.”
Mark S. Chalmers, president and CEO of Energy Fuels stated: “President Trump initiated the most comprehensive review in decades of our nation’s nuclear fuel supply chain when he established the U.S. Nuclear Fuel Working Group. By appropriating and implementing the recommendations outlined in this strategy, our nation will take bold and much-needed steps toward reestablishing U.S. nuclear leadership, while protecting our national security. We are extremely pleased that the U.S. government has expressed such a strong commitment to supporting domestic uranium mining and nuclear fuel capabilities. It is our belief that this report is the first step toward reversing a multidecade trend, where the U.S. has ceded global nuclear leadership to Russia, China and other geopolitical challengers.”
Digging Deeper into Uranium – Part 2
Red Cloud Mini-Conference – April 23, 2020 #VIDEO
“The Uranium price continues to run hot as pandemic-related shutdowns expand the 2020 supply deficit. This near-term catalyst provides momentum to push Uranium prices to where they need to be for long-term demand to be met. In part two of our Digging Deeper into Uranium series, Philip Johnson from UxC shares how these three companies are making waves in the Athabasca basin, home of the highest-grade Uranium deposits in the world.”
https://www.redcloudfs.com/digging-deeper-into-uranium-part-2/
Hey Matt and Ex,
I found some money recently, and want to deploy it to “safeish” gold stocks that are not the majors, but have much more potential in the short term.
I am really wanting to get back into Sandstorm Gold, but it has doubled in the last month! Do you think that will retrace part of its massive move soon? I guess with stronger hands entering the market those 40%+ retracements might be wishful thinking as the game has changed? I also wonder if Gold stocks will get clobbered one last time when the when the main stock markets test March’s collapse levels again?
I’ve already have too much silver issues in IPT, U.S.A, and Excellon
Confused, I don’t own SAND but it looks like a great pick. I would normally expect a decent pullback considering the big rise off the low that the sector has had and looking at SAND’s daily chart but under the circumstances, I’d be inclined to buy today’s pullback. I think the whole sector is setting up for significant further upside before there’s a meaningful pullback.
There are obviously pros and cons to every approach but you might consider buying part of your position today and more on a much bigger pullback (even if it starts from a higher price). With a little luck, maybe yesterday’s gap will get filled today’s close…
https://stockcharts.com/h-sc/ui?s=SAND&p=D&yr=1&mn=0&dy=0&id=p10085360662
Unlike the daily chart, the weekly chart implies a move that is just getting started. Let’s see if that good-looking weekly MACD buy signal holds up into the close today to finish the week on a very positive note (I bet it will)…
https://stockcharts.com/h-sc/ui?s=SAND&p=W&yr=3&mn=11&dy=0&id=p16451274652&a=742863769
So much for filling that little gap! Today’s low was the same as yesterday’s and SAND is now 25 cents above it.
Matt,
thanks for that! I think I will place a “restrained 1/3 allocation” here instead of a 2/3 or all in position.
The very short term is always difficult to get just right but I think you will do very well over the coming weeks and months. Good luck!
confused – Yes, that approach of buying in tranches 1/3 at a time or 1/4 at a time has served me well for many years. I’ve never understood the need by some investors to go “all-in” and then sink or sail afterwards, when they can average into a business and often get a better cost-basis buying on the dips.
Thanks EX..good advicE
HI confused. Sorry for the delayed response but I’ve been tied up all morning and part of the afternoon and am just now circling around to read the posts.
Yes, Sandstorm, along with many of the royalty companies, are “safeish” bets as you mentioned, and some pay dividends which is another thing to consider beside shareprice movements for longer term wealth creation and protection.
If you don’t want the Majors, and you want gold stocks and performance there is nothing wrong with stepping things down to the Mid-tier producers or even the ETF (GDXJ) which is essentially a basket of Majors but mostly Mid-tiers at this point.
It is hard to use the word “safe” and mining stocks in the same sentence as there are so many risks to operations, weather, jurisdiction (taxes, civil unrest, protests, nationalization), power & water requirements, union issues, environmental concerns, etc…..
There are a couple of different approaches that can be used to minimize risks:
1) Find a Mid-tier Gold producer with consistent to growing production numbers, and with a solid AISC (All-In Sustaining Costs) that shows these revenues and free cashflows being represented on their balance statements. There are about 60-70 Mid-Tier gold producers and many are the survivors in the sector that have trimmed the fat, reduced costs, optimized mines and improved throughput and metals recoveries over the last decade and the vast majority should do well. A few companies that come to mind are Equinox Gold, Alamos, Alacer, K92 Mining, Wesdome, Northern Star, Teranga Gold, B2Gold etc… who all have an AISC from the $600’s – $800’s per ounce.
2) Pick a more distressed (but not hopeless) Gold producer (Mid-tier to Small) that has a bit higher AISC but will do well above $1500 Gold prices, and especially at current prices above $1700. These may have been more beaten down in the recent past, but will be staging reratings and turn-arounds the more the pricing situation in the metals improve, as as their costs are reduced. A few examples would be Jaguar Gold, McEwen, OceanaGold, Coeur Mining, Hecla Mining, Aura Minerals, and Argonaut Gold.
3) Some investors reduce risks by sticking with North American or Australian Operators, and not investing in the more “exotic” locations. This can be a double-edged stick though, as many of the US, Canadian, and Aussie producers are already valued at a hefty premium to their peers in Central & South America, West Africa, Asia, and Eastern Europe. While there may be more risks as the rule of law gets more questionable, there are also faster permitting times, lower labor costs, more untapped deposits, and a value arbitrage to be found, which compensates for the risks with better valuation metrics.
4) Another way to find safeish Gold mining companies is to look for companies that would make ideal takeover candidates. While this may limit some of the runaway growth to be had as the bull unfolds it is also a savvy way to get into companies that may appear distressed, but that have solid underlying assets that the big boys are going to want. Years back I had mentioned that Newmarket Gold, Lakeshore Gold, Richmont, Klondex, Claude, Detour, Metanor, Marlin, etc… looked ripe for takeovers for these reasons, and they were all nabbed at a nice premium. I’ve been part of dozens of takeovers in the last decade and while a 40-60% premium isn’t the same as a multi-bagger, it is still a fantastic return on the capital invested, if someone is buying a low valuations in front of when a major may go shopping and make an offer. This then frees up that cash & profit to reinvest into the next one, and maybe sprinkle in a few more smaller producers, developers, and explorers.
5) Developers with known deposits, clear economic studies done at lower Gold prices, that are even more economic today, seem like safeish bets, as at one point they will be developed into mines. There are about 100 of these development stage companies that could be on the acquisition menu, but a few that come to mind are Marathon, Minera Alamos, Sabina Gold & Silver, Orezone, Osisko Mining, Treasury Metals, Triumph Gold, West Kirkland, Probe Metals, Orca Gold, Bonterra, Novagold, Seabridge, Bluestone Resources, Gold Standard Ventures, Falco Resources, Midas Gold, Corvus gold, Maritime Resources, etc…. There are a lot of them, but they have been derisked, will get revalued higher as metals prices rise, and have the takeover aspect as a kicker and liquidation event to exit one’s position into.
6) Optionality plays. I won’t belabor this one, but basically defined projects or distressed producers can look lifeless or even ugly, but as the metals prices rise, they will rise into the better economic backdrop or improving production metrics, and this actually makes them less risky than a big boy company already at nosebleed prices that has less impact if the metals ramp up a bit higher proportionately. However, as is the nature of optionality plays, if the metals prices go back down, then they are more likely to tank as their projects don’t work at all with lower metals prices. It really depends on ones medium to longer range outlook on the metals prices for optionality plays.
Those are a few thoughts for now to get the wheels turning.
EX,
thanks for the great info!
have a good weekend
confused – May you pick a couple of winners and I hope it ends up being very prosperous for you. Cheers!
ER Doctors tell it like it is.
“Something else is going on here. This is not about science and it’s not even about COVID.”
Very interesting interview Mat.
Adam Hamilton says:
“The gold miners’ stocks surged to a major bull-market breakout this week! Powering decisively above their years-old secular resistance is a hugely-important technical event. It proves this gold-stock bull is alive and well, greatly improves sentiment, and puts this high-flying sector on countless more traders’ radars.”
Hamilton is correct.
http://www.321gold.com/editorials/hamilton/hamilton042420.html
I couldn’t agree anymore then what matt has said confused. I personally would be somewhat cautious here but many might take that as contraindication. Gold itself is ready to tag that longtime high from 2011. Matt or ex could if kindly provide us with those targets. We have a had a large move already and combined with “scare” tactic of coronavirus i see the market pricing this in and a larger correction coming in at some point in the not to distant future.
Looking at the gold/silver cup and handle formation it seems if it is to be we shall get one. So i agree with matt if you buy a little here and then save some powder “if” we do get that pull back and unleash the tranch.
Ive personally sold into some of this strength but have also not touched my impact or two others i hold. I also sold aurcana into this strength however i purchased it at the very low. A profit is a profit.
cheers
I hope you didn’t sell too much, Glen; I think we’re going higher on Monday!
I kept my core positions impact and iamgold included. I just sold a bit here and there. So its ok for me to have some powder in the event we get a retest or strong pullback. Im sure she is going higher in the short term. I just done know how much more legs some can go. If it keeps going higher then my great account pf the two increases so i win regardless 🙂
Matt if you have a chart or two with the cup and handle formations of gold/silver and projected handle pullback to share i think many in here would appreciate it. Its been sometime since we have reflected on a good looking pattern and what if possibilities with the handle projection.
I hope you can view a quarterly chart. The huge 40 year-old cup and handle is alive. Notice that we almost had the 5 quarter ema cross above the 25 quarter ma but the crash stopped it. The last time we had that bullish cross was in 2003. It is still coming and when it happens, silver will make big moves.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=Q&yr=45&mn=0&dy=0&id=p67578404451&a=714975649
Thats one insane chart! No price can be put on that great looking picture. What a crazy handle. Thanks matt
Speaking of great charts, here’s 50 years of quarterly gold with a modified pitchfork spanning the entire period:
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=Q&yr=50&mn=11&dy=0&id=p98258349861&a=714979644
Gold is going to keep shocking all those “smart” conservative observers.
The gold price of silver is more important to us than the dollar price of silver so here’s a chart to watch for improvements in the short term:
SLV:GLD daily:
https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=0&mn=11&dy=0&id=p26239173626&a=722423179
And this one is exciting because it shows that the silver-gold ratio crash last month was just like the April 2011 spike in the ratio but inverted. The 2011 spike ended a nearly decade long trend and I believe the spike down last month did the same. In other words, silver is going to beat gold for years to come.
https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=W&yr=11&mn=0&dy=0&id=p60600619860&a=738267221
Hey Glenfidish – I generally agree with your thoughts that things are getting more extended in the current leg of this PM rally, and I’ve been trimming a bit here in there in some of my positions. Yeah, I’m undecided on what to do with Aurcana and have a nice paper profit in it currently, but still feel it may have a ways to run as they get ready to go back into Silver production. If I had a larger position I’d trim it, but I don’t have a heavy weighting in it, so I am either going to sell the whole enchilada or hang on for a better valuation. Decisions….. 🙂
Hey Ex
I couldn’t disagree with you at all. It is indeed a very smart way of thinking. I have some stocks i play with and whatever happens happens. Then i have the one or two i trust fully in and put more weight in them.
I made decent amount in a solid double and im a happy camper. If it takes off now much higher them im excited because impact and other stocks i own go up as well. I also know my pal ex and matt will score as well :). If she comes back to me i know god sent me a gift that i wont refuse.
cheers
No shame in taking a solid double in these wild markets, especially if you still have exposure to other stocks in the sector. I still have PLENTY of irons in the fire, so I don’t mind trimming back a few, especially as their weighting grows more than I want them to be in my portfolio. I did a bit of pruning of the ones that keep going up double digits day after day, and have a bit more cash built up if we see any clearance sales or just a nice 20%+ pullback in some of them over the next few weeks.
Ex you and matt sure have large fields to trim lol, i could clearly never do it. I have tried to have a portfolio of at least 8 miners gold and silver included and that alone elevates my pressure. 4-6 is my sweet spot.
Well, I’m basically actively managing my own Silver and Gold ETFs at this point, but like the lineup and weightings in mine much more than what is available in GDXJ or SILJ, and I can rebalance them at will or if things change in a particular stock. I’ve consistently outperformed the main ETFs and really am working on getting the overall number down and into more concentrated positions as things keep rallying.
Everyone has different approaches, different investing goals, different time to allocate, and different projections on where certain companies are going.
I also will swing-trade the same stock over and over again, scalping gains and then buying dips. I’ve made all my losses back from late February and then some, and actually have a higher portfolio balance now than I did then, but I’ve done about 154 trades since late Feb. (not recommended for the faint of heart!!!) 🙂
lol sounds like matt! 154 trades ya not for the faint :(.
best wishes as always ex.
Along with silver beating gold, we need GDXJ to beat GDX so watch for GDXJ:GDX to move above the daily KAMA and Ichimoku Cloud…
https://stockcharts.com/h-sc/ui?s=GDXJ%3AGDX&p=D&yr=0&mn=7&dy=0&id=p99462499199
Here’s how that chart looked in 2016:
https://stockcharts.com/h-sc/ui?s=GDXJ%3AGDX&p=D&st=2015-12-28&en=2017-02-19&id=p99462499199
Yup.
Gold phyz………doing good………silver phyz stuck in a hole……
I am waiting on a stock market crash….sometime next month….I am forecasting it, because I can………. 🙂
Of course , the Fake Fed. needs to pump in some more fake fiat…….the Trillions no longer matter…………. 🙂
OOTB, I am waiting for the other shoe to drop in the general markets, as investors when from panic, to buy the dip, and now they are WAY to complacent again that everything is fine. Everything is not fine in the markets and the damage inflicted on small businesses, on millions of people’s disposable incomes, on buying habits, and top line revenues is still going to come home to roost and these are going to be some ugly ducklings.
darn voice to text.
When = went
to = too
Ditto , I agree,…….the shoe is going to drop and the sheeple are going to get another fleece job…..
The lame stream media and bobble-heads on economic shows have already been sounding the “all clear” now that the markets rebounded on the government stimulus and Fed bazooka money. Yes the sheeple are going to get fleeced….
Trumpster has screwed the Q sheep…….MAGA….lol…..Trump the Trojan Horse..
Thanks for stating the above.
Time to get the Feds to put the scum constitution deniers into place:
https://nationalfile.com/california-suspends-first-amendment-rights-in-response-to-protests/