Jordan Roy-Byrne - Technical Commentary on the Metals – Wed 17 Jun, 2020

Updating gold and silver technicals plus what truly drives metals stocks

Jordan Roy-Byrne joins me for a quick update on the technical set up for gold, GDX, and silver. We then shift focus to the PM stocks and what Jordan is looking for in companies to invest in. It’s all about growth whether exploration companies or production stories.

Click here to visit Jordan’s site for more metals commentary.

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Comments:
  1. On June 18, 2020 at 6:46 am,
    4 oz says:

    US Debt clock is a much watch…..if ya like hockey sticks anyway…. note Gold and Silver on here too. https://www.usdebtclock.org/#

    • On June 18, 2020 at 8:44 am,
      OOTB Jerry says:

      The debt clock is a wonderful view………..I have used it many times, and I think it tells a lot on what is really happening……There are some great looks into the past as well.

  2. On June 18, 2020 at 7:45 am,
    Dick Tracy says:

    Shandong Mining taking over Cardinal Resources, between them and Zinjin Mining, The Chinese are moving fast into resource based companies. They are playing chess, The Western World and in particular Canada is being rooked. It’s eat or get swallowed in the real world where government thinking does not prevail. DT

  3. On June 18, 2020 at 8:33 am,
    confused says:

    EX,
    I have question(s) for you regarding your reasons for dumping MUX. I know the company had tonnes of setbacks last year that affected operations and the bottom line. I also see that his company has also tried to address many of those problems too, which IS expected of a such a living mining legend.

    I am wondering though that “IF” several factors going forward including: a major 20%-30%+ draw-down/bear mkt in the U.S dollar which “could/should?” develop of the next couple of years, which would reawaken a long-dormant commodity bull market, and the EV copper-hungry revolution. Oh did I mention the gold/silver in the ground of his mines? Should those macro-things play out wouldn’t that take his stock WELL beyond a 20 bagger pay out? Yes this is gambling…..much of life is! 10 billion lbs of copper seems like enough of an incentive to ride the next copper gold-rush. Am I missing something?

    • On June 18, 2020 at 10:55 am,
      Excelsior says:

      Hi confused. Yes, I agree that Rob & company will likely do everything they can to get their company turned around, and yes in Gold/Silver bull market like we are in, and if there was a 20-30% draw-down in the US dollar, then I’m sure MUX would run higher just like most of the gold stocks, but keep in mind we HAVE BEEN in a Gold bull market for years and MUX has underperformed most of their peers.

      During the last few years most of the mid-tier Gold producers surged higher, whereas McEwen Mining has been on a steady decline ever since it’s 2016 surge high of $4.74 and now it is trading at $.88. It is abysmal performance, and the opportunity cost of me waiting to get their act together was too disappointing when so many other stocks I own or follow have had really great runs coming out of the last quarter of 2018 to present.

      Their Los Azules Copper project is large and could bring potential value in a rising Copper metals environment, but there are no shortage of Copper companies where that is their main thing (about 150-200 companies with Copper exposure).
      So far, MUX is getting hardly any traction or value for that asset, and it is listed in 6th position on their projects batting order, so if they could JV that or monetize that by selling it that could be a win, but it has sat lifeless on the shelf for years now.

      McEwen may very well be a nice turn-around story from present levels and I’ve considered getting a stake back in it once they prove they can get their ship turned around, but for now, I’d much rather be in a company like GAU Galiano Gold like mentioned above for their turnaround, as they are actually free cash flowing now, have lowered their costs, have a plan for exploration that improves their 3-5 year mine plan, and then don’t have the exposure to Argentina (which has been a disaster as well the last few years).

      • On June 18, 2020 at 10:56 am,
        Excelsior says:

        Confused, there is something wrong with the search function here at the KER where it is not pulling key words or phrases correctly like it used to, but I was able to find this post from January where I was giving MUX one more chance after a disappointing end to 2019. I also found a few posts of mine over at ceo.ca and I’ll just paste those below as they contain some of my opinions and feedback as long suffering MUX shareholder:

        ______________________________________________________

        @Excelsior – from #mux, 20 Nov 2019, 17:40

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

        “The time to do the capital raise was this summer in the midst of higher prices in this sector; not during a pullback to new lows.”

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

        @Excelsior -from #mux, 20 Nov 2019, 20:21

        “Agreed but it hasn’t been a single dilution event… it has been ongoing for existing shareholders. They just raised $25 Million 8-9 months ago and already burned through that, they’ve raised their cost estimates on several mines, and project lower production figures for 2020 while they go exploring (ie they need higher metals prices).”

        “Good grief, this is all happening in 2019 when Gold has climbed up into the $1450-$1550 range. What the hell would they have done if Gold had stayed in the $1150-$1250 range all year. Again, if they needed to raise doing it in when the wind was in the PM sails in August would have been a much better time on better terms.”
        ____________________________________

        @Excelsior from #mux, 20 Nov 2019

        “Good thoughts. I often look for companies that are growing through what appear to be accretive acquisitions or making strategic improvements that are underappreciated initially by the market and then realized over time.”

        “When MUX scooped up Black Fox from Primero for a fraction of what they had invested, or further back when they acquired Lexam or even further back merged US Gold with Minera Andes they each seemed like wise business consolidations, but they haven’t executed thus far in a manner that really has worked economically and the share price and share count reflects this. There have been a series of stalls, disappoinments, revisions, and it’s taking a toll on investor confidence.”

        “Personally, I rarely want the Tier 1 companies or Majors, and prefer the up and coming Mid-tiers and smaller producers represent more upside, but conversely, more risk on smaller scale projects, which can really put on the brakes if things go off script.”

        “I’ve defended MUX for a long time, and have traded in and out of it for years, but the clear pattern has been down since 2016/early 2017. I sold some of my position today as a tax loss candidate, and may buy it back next year, but there are no shortage of other Gold producers that are making better progress if they are underwater, or outperforming if they are profitable. Longer term I’m sure they’ll be fine, but I would have done better with this position in many other stocks the last few years and am redeploying.”
        _____________________________________

        @Excelsior – from #mux, 21 Nov 2019, 07:29

        “You nailed it. Very well stated. Rob went from over-confident and boasting about how they do things better than other mining companies, to desperate for funds and throwing out warrants like party favors, all while diluting down shareholders with repeated captial raises. It reminds me of countless other struggling miners at present.”

        “The MUX team clearly have not managed their costs in relation to their mine output, have high G&A, and have not been able to execute on their strategy for years now.”

        “Respect for Rob was a primary reason I was investing, but it’s time to find a new home for capital where a CEO gets paid commensurate with the job (more than $1), but can deliver to the marketplace on their strategy.”
        ___________________________________

        @Excelsior – from #mux, 21 Nov 2019, 11:39

        “I should clarify that I hope they can turn the ship around and I’m rooting for their success, but expected more. I’ve always liked Rob and he was influential in my thinking over a decade ago as it relates to the precious metals industry.”

        “I’m just losing patience with companies that continually miss their expectations and guidelines and perpetually raise/dilute shareholders.”
        _______________________________

        I know we discussed this more on the KER back in Feb/Mar/April, when I had done a few swing trades and day trades in MUX before exiting my position but I couldn’t find those.

        Here was the last time I was gave McEwen Mining yet another chance and posted my reasoning:

        > On January 4, 2020 at 12:21 pm,
        Excelsior says:

        “I’ve been in an out of MUX for years, and respect Rob McEwen, but I really was disappointed with how things were run the last year, including doing that big financing recently during a corrective move (instead of at much higher pricing).”

        “He’s been so vocally against companies cutting a streaming deal to finance projects for it eating into future margins, but for investors holding for the medium term, they are far less dilutive to the share count than the repeated dilutive capital raises they’ve done.”

        “In addition, their Argentina exposure hasn’t been a strong positive for them, but the recent political situation with the tax laws on miners being reversed was encouraging. They picked up Black Fox from Primero for a song and a dance in Ontario, but haven’t delivered as big as anticipated so far, but their exploration work is encouraging. They did get Gold Bar producing and it is improving, so we’ll see where it goes.”

        “I sold out of 1/2 of MUX position in late August for a nice gain, but then was disappointed in the financing news in mid-November and sold out my remaining position on that news the week before Thanksgiving at a slight loss.”

        “However, when MUX continued selling off to the point were it was looking over done, so I added back in an initial tranche right before Christmas (once I had waited the 30 day period for tax reasons). I’m willing to give Rob M. and team another shot at things for 2020 and expect them to have a better year than in 2019, but my position size is much smaller this time.”

        “I figure since his name is attached, and he has such a big stake in his company’s shares, that he’s going to work like crazy to get this company turned around, and I love a good turnaround opportunity.”

        ____________________________________________________

        Well clearly it was a mistake for me to have positioned in MUX again right before Christmas of 2019, and when things got ugly in late February I sold that position at a loss on March 2nd.

        I did buy a small position on March 13th at $.64 and sold it on March 16th at $.78, which recouped some losses, but had another failed trade buying on May 12th at $.95 and added on may 14th at $.91 but sold for a small loss on May 19th at .90.

        I’ve steered clear of MUX since then, and glad I did as it has done nothing and is at $.88 today.

        Again, I really do hope the team at McEwen Mining gets their act together and comes out of this as a good turnaround story. For now, I see so many other interesting opportunities in Producers that are making money, hitting milestones, achieving guidance, and moving the ball down the field that I’m making money in, so I haven’t wanted to sit in dead money with MUX waiting for them to figure things out.

        Again, if they can put up some good Q2 numbers and show the market that they are on a good path forward, I may reconsider, but they definitely need to show the markets that they can deliver and execute to rebuild investor confidence.

      • On June 18, 2020 at 12:26 pm,
        confused says:

        EX,
        thanks a million for that in-depth blow by blow analysis. Very helpful indeed.

        • On June 18, 2020 at 12:51 pm,
          Excelsior says:

          Sure thing confused. I’d like to see MUX turn things around, but want to see proof of that in their Q2 and Q3 quarterly operational reports.

          Ever Upward!

  4. On June 18, 2020 at 9:28 am,
    David says:

    Deja Vu everyday, or is it Ground Hog Week?

  5. On June 18, 2020 at 10:22 am,
    David says:

    First Majestic participated in a PP of GR Silver. Same neighborhood in Mexico.