Minimize

Welcome!

Gold and Silver stocks have started to outperform but will it lead to a sustainable run higher?

Cory댊
October 7, 2021

Brien Lundin, Editor of The Gold Newsletter and President of The New Orleans Investment Conference joins us to discuss the recent moves in gold and silver stocks. The argument being the stocks have been outperforming the metals and even the US markets on select days.

Click here to learn more about the upcoming New Orleans Investment Conference happening on October 19-22nd.

Discussion
60 Comments
    Oct 07, 2021 07:41 AM

    FWIW: Added Sterling Metals today. 321gold put up todays press release with 1,572 g/t Ag with 5.84% Cu and 29.2 % Zinc plus some other stuff. Sterling is an explorer looking for silver and base metals in Northwest Newfoundland. I don’t think they are that close to New Found Gold but not sure if it matters.

    Other than that I have been watching Emerita have a good day. Must be some managed money making a commitment or maybe Cory and Shad buying the company. Not sure.

    Reply
      Oct 07, 2021 07:38 PM

      Yeah, nice move today in Emerita, up 22% on the news update on the legal situation with Aznacollar in Spain. I did take out an EMO position again recently, but have just been watching the price keep moving higher this week. Very nice to see, but again, I wanted to put on a 2nd and 3rd tranche before lift-off, but alas it’s underway.

      Actually a lot of miners are popping today, like Scottie Resources up 12% on solid drill news in the Golden Triangle. Sailfish Royalty up over 8% on news of their Gavilanes Silver Project being combined with another Wexford silver project to create a new spin-co.

      There are some companies in my portfolio up nicely today for no apparent reason other than buying is coming into them, like Newcore Gold up 11%, Defiance Silver up 10%, and Amex Exploration up 9%.

      Maybe investors are bottom-fishing the oversold mining sector here.

      Reply
        Oct 07, 2021 07:43 PM

        (EMO) (EMOTF) Emerita Provides Update on Developments in Aznalcollar Court Proceedings, Spain

        7 Oct 2021
        https://ceo.ca/@nasdaq/emerita-provides-update-on-developments-in-aznalcollar-d439c

        Reply
          Oct 07, 2021 07:58 PM

          My Schwab % are always off…I don’t match most of the time.

          Reply
            Oct 07, 2021 07:04 PM

            David, it also may be that you have the OTC tickers, which will differ from the primary tickers. The primary tickers are the better judge of the movement of the stock, as sometimes due to less liquidity or wider bid/ask spreads the OTC tickers can have more wild fluctuations. I sometimes like to exploit that with the OTC tickers if there is a nice arbitrage between the two. The other factor that fluctuates are the changes in currency exchange rates between the US dollar and Canadian dollar or Aussie Dollar or British Pound, depending on where the main ticker is hosted (TSX & Venture, ASX, or London Exchange).

            Oct 07, 2021 07:40 PM

            I think you are right on the exchange differences. I have noticed EOD adjustments due to exchange rates and I would think there are delays between exchanges on a real time basis. Now I don’t feel guilty about being different.

            Oct 07, 2021 07:05 PM

            Never feel guilty for being different, as we are all unique my friend.

            As far as Schwab, it sounds like based on your posts in the past, that it often displays incorrect levels and prices intraday, so it does sound a bit wacky.

            What I meant with the OTC prices versus the primary tickers on the TSX, TSXV, ASX, or London Exchange, is that “over the counter” derivatives don’t always track the price moves in the primary tickers correctly, so they can have exaggerated moves on either side of the primary price. In addition they sometimes have really wide bid/ask spreads, which can accentuate the divergence from the primary ticker if a trader does a market order or a fat finger trade.

            As for the currency exchange rates, that is more looking at the primary ticker and then using that day’s exchange rate to calculate where the OTC stock should be trading, and then look for any arbitrage opportunities there.

            Depending on where the exchange rate in the US Dollar versus the Candian dollar is trading, then it can be a secondary driver on dislocations in the OTC stocks. For example, let’s say for simplicity sake that there is a Canadian stock trading for $1 and the exchange rate is such that the US currency exchange means that stock should be trading at $.80 on the OTC. If you find it trading for $.71 because it is illiquid and investors are asleep at the wheel then you can pick off a $.09 arbitrage in that manner. Also that next day the it may be that exchange rate is such that a $1 Canadian stock should be trading at $.78 US on the OTC and that would erode some of the arbitrage, even if the stock price didn’t move.

            Just another consideration, but that is why I generally discuss the pricing in the primary tickers. When a stock is dual listed on both major exchanges like the TSX and NYSE, then I almost always opt for the pricing action and percentage moves in the US listing as it typically has far more volume, and is a better indicator of pricing direction.

        Oct 07, 2021 07:44 PM

        My double figures are Emerita, Nobel Resources, Sterling Metals (just bought and helped push price up…argh), Great Bear Royalties and Trevali rounded up. Overall if I remove Emerita…all the rest, as usual, almost even. Just on the positive side.

        Reply
          Oct 07, 2021 07:48 PM

          Yeah, I noticed that move in TV Trevali up 8.8% today as well as one of my big Zinc positions. Again, I didn’t see any real news catalyst, so it appears to be technical buying off oversold conditions.

          Zinc prices have also been doing very well, back up $1.37, so that is a nice tailwind for Trevali, and really for all the Silver producers that have nice Zinc co-credits.

          Reply
            Oct 07, 2021 07:54 PM

            Take a look at Sterling…they have had some mixed bag stuff with silver and Zinc. I know you are overloaded with silver, but some interesting sized of #s. I looked at their share structure and it was below 50mil in May with over 50% Institutional and insiders. I don’t know as I didn’t spend too much time looking, but first impressions got me in the stock.

            Oct 07, 2021 07:11 PM

            Will do David. I’m not very familiar with Sterling, but do have a weakness for Silver, Zinc, Lead plays… haha! Yeah, I’ve got about 2 dozen of them in the stable at present, so as you point out, I’m a bit overloaded at present.

            Having said that I added new positions in both Benchmark (with Gold & Silver) and Summa Silver (focused in Nevada and New Mexico) to the portfolio today, after trimming back some positions in other stocks earlier in the session. I also finally took out a position in Perpetua (PPTA), which used to be known as Midas, as their development project is solid and the stock has just been slaughtered over the last year.

            Oct 07, 2021 07:56 PM

            Sterling was a small width but a good small width of grades.

            Oct 07, 2021 07:28 PM

            Vivia Perpetua. Christian martyr who chose to be eaten by lions in the arena rather than renounce her faith.

            Oct 07, 2021 07:45 PM

            Blazesb – Thanks for that backstory on Perpetua. Very interesting.

        Oct 07, 2021 07:44 PM

        (SCOT) (SCTSF) Scottie Resources Reports Intercepts 16.5 g/t Gold Over 10.0 Metres and 28.8 g/t Gold Over 4.94 Metres in Northern Blueberry Zone Extensio

        7 Oct 2021

        https://ceo.ca/@nasdaq/scottie-resources-reports-intercepts-165-gt-gold

        Reply
          Oct 07, 2021 07:04 PM

          Not sure how the Emerita post got under sailfish.

          Reply
            Oct 07, 2021 07:15 PM

            The posts cascade down indenting one level from the post you put them under.

            Since you replied to the Emerita post with the different market moves above, then it indented one level, but was filed down under the Sailfish post, because I had also previously replied to that same post, since it related to that FISH share performance referenced in that post of market movers today.

        Oct 07, 2021 07:52 PM

        Here was that news on Sailfish, spinning out a Swordfish, from a property they inherited from Marlin. 🙂

        It’s the same team of guys at Wexford and with Akiba from (MKO) Mako Mining and his partner at Sailfish Cesar Gonzalez implementing this transaction.

        ___________________________________________________________________________

        (FISH) (SROYF) Sailfish Announces Binding Letter of Intent to Spinout the Gavilanes Silver Project Combined with Wexford’s Commonwealth Silver-Gold Project into a Separate Public Company to be Named “Swordfish Silver”

        7 Oct 2021

        https://ceo.ca/@newswire/sailfish-announces-binding-letter-of-intent-to-spinout

        Reply
          Oct 07, 2021 07:53 PM

          Thanks Ex. I still hold some sailfish shares. Looks like an interesting deal. What’s your take?

          Reply
            Oct 07, 2021 07:58 PM

            Hi Charles. I like this transaction and was expecting it, since I had heard Cesar Gonzalez mention that this was the option the company was considering in an interview with Crux Investor earlier in the year.

            They were not getting any value for this Gavilanes Silver property in their portfolio, being a royalty company, but they had inherited this property from Marlin Gold, when it was spun out of Marlin and into Sailfish when they were merging with Golden Reign to form Mako Mining.

            I’ve been watching this property for a number of years, because it used to belong to Santacruz Mining until 2017 when they sold it Marlin to raise cash and pay down debt. I’ve always been wondering when someone would finally start working on exploring it, and Marlin never got to it, and Sailfish wasn’t going to do it.

            Now Gavilanes is being combined with the Commonwealth Silver-Gold project that Wexford holds to create the new spin-co Swordfish. Commonwealth has been another stranded asset, near First Majestic’s San Dimas project. At least now Sailfish shareholder will benefit from the strategic stake in Swordfish as these two projects start to get the work and attention they deserve.

            I still expect Sailfish to have its royalties continue to be sold off, or to be acquired outright as the exit strategy, but spinning out Gavilanes is another step in creating more value for shareholders before that happens.

        Oct 07, 2021 07:02 PM

        Good example of the Emerita last minute or two of trading. Today a big drop in the last 30 seconds. Still a good day but there were better moments several times today. But what the heck, Ever Upward has been the theme for the day.

        Reply
          Oct 07, 2021 07:19 PM

          Yeah, that was very likely traders locking in gains from being up 22-24% before the end of the day bell, and is just normal profit taking.

          Yes, today’s trade was ever upward in general and nice green day in the miners, with GDX, GDXJ, SIL, and SILJ all closing a bit higher, but with the actual juniors outperforming those ETFs. My account was up about 2.5% on the day, so I’ll take it…

          Reply
            Oct 07, 2021 07:49 PM

            Ex:
            Not sure where this will end up but I ended up +8.79%. Think I am a little heavy into emo.

            Oct 07, 2021 07:09 PM

            Nicely done David! Yeah, that is the advantage of having a concentrated position that is making an outsized move to the upside. Of course, the converse of that is true, and it represents more downside risk if the concentrated position sells off.

            Today was a good day for Emerita though. Congrats man, that is fantastic.

            Oct 07, 2021 07:35 PM

            Here is the gutsy part and that is that I am targeting long term capital gains treatment as a goal. That worked in Great Bear and Silver Crest but that was in the days when the World was round. I had to pay way too much in short term gains last year that I am trying to modify all that. The pattern has been to make a lot if trades with short term gains during a short period of time, then the market tanks and then they want me to pay taxes on something that has reduced in value…that is like a no win except the Federal Government. I Vote no to that…some of the te.

            Oct 07, 2021 07:44 PM

            Yes, with short term trading, one needs to make enough overall on a percentage basis to be worth the candle with the higher tax bracket, which was a lot easier in 2019 and 2020 than it has been in 2021 in the PM miners.

            Still, the overall motivation in active trading is generating profits over preferential tax treatment, and in upwards trending or especially sideways channeling markets, there is still more money to be made in trading the markets, than just buy and hold investing. (especially in the volatile and cyclical mining stocks). When the sector has pulled back like it has, then there were many swing trades that turned down underwater, and thus allowed for a wash out of the capital gains, and repurchase at lower levels.

            There is nothing wrong with either approach, shorter-term swing-trading, medium term position trading, or longer-term value investing. They all work, and have different strengths and weaknesses, and risk/reward profiles. Everyone needs to find a system and strategy that meets their own unique goals, risk tolerance levels, and time horizons.

            Oct 07, 2021 07:06 PM

            I am Trying to mix the options on trading this year. If I could depend on more than 2 months a year occasionally for an up market (like the General Markets going up 11-12 years for no apparent reason), then letting it ride on the table would be easier and a whole lot of fun.

    Oct 07, 2021 07:15 PM

    Great interview with Brien Lundin. He is easy to listen to and seems on top of things. Always a good guest.

    Reply
      Oct 07, 2021 07:40 PM

      Agreed David. Brien is such a sharp guy, with a nice way of presenting the macro picture, and we are very thankful he invests some time here with our KER audience.

      Reply
    BDC
    Oct 07, 2021 07:23 PM

    “New Orleans Investment Conference?” … uh-oh ….

    Reply
    Oct 07, 2021 07:44 PM

    dear Matthew, thank u for usas chart and info.

    Reply
      Oct 07, 2021 07:03 PM

      You’re welcome, Alex.
      It looks like USAS is probably going to rise from here, at least in the short term. The intraday charts look good so the daily chart is likely to continue to improve. Watch for a closing price or two above the daily “P” pivot at 89 cents. That should signal more upside and more strength to go with it.
      https://stockcharts.com/h-sc/ui?s=USAS&p=D&yr=0&mn=9&dy=0&id=p62085760854

      Reply
        Oct 07, 2021 07:10 PM

        The weekly chart is so oversold that it shouldn’t surprise us if this turns out to be much more than just a short term low. The weekly Fibonacci Pivot supports have all become resistance but the nearest one is at 92 cents, 25% above.
        https://stockcharts.com/h-sc/ui?s=USAS&p=W&yr=2&mn=9&dy=0&id=p21927333907

        Reply
        Oct 07, 2021 07:18 PM

        Hi Matthew,

        I responded to a couple of your comments on Saturday.

        USAS seems to be a bargain with the start-up of Cosala, and while the chart currently looks abysmal, the market cap looks a little low given the expectation/hope/wish by management to get 2.5Moz per annum of Ag (i.e. use $20/oz for silver). I liked your comment elsewhere that the true, final low often occurs when it seems like the stock price could go lower. I think this is one to watch for just such a scenario.

        Reply
          Oct 07, 2021 07:22 PM

          Thanks John, I agree with you. $14 and even $18 silver is over.
          Hecla is a favorite of mine as well and it closed right at fork resistance today (resistance that I think will fail to hold it back beyond today). I’ve been noticing a lot of such “uncertain” technical action across the sector lately.
          https://stockcharts.com/h-sc/ui?s=HL&p=D&yr=1&mn=3&dy=0&id=p10489079709&a=877925433

          Reply
            Oct 07, 2021 07:24 PM

            Silver provides an example; it finished at its daily KAMA today, not below it, not above it…
            https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=6&dy=0&id=p41139100713&a=937970450

            Oct 07, 2021 07:27 PM

            Matthew, based on that, do you believe the recent move down in Silver to $21.41 was the low?

            As mentioned yesterday, my concern is that if we were to see a move back down again where there was a weekly close below $21.50 that is could open a trap door down to that next major support at $18.50-$19.00.

            Oct 07, 2021 07:45 PM

            I do think we’ve seen the low for silver but a new low would easily sent it down to at least 19.45 or so.
            The bears have a lot of reasons for much lower lows and some of them are even compelling but’s nearly always the case at a major low so I watch the very short term charts for the earliest reversal action. Then, the bullish technical dominoes need to fall properly.
            Vertical moves usually get fully retraced but that seems unlikely for last year’s silver move for more reasons than the silver-specific technical ones seen on the following chart and others.
            https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=6&mn=0&dy=0&id=p68071657870&a=426943004

            Oct 07, 2021 07:50 PM

            Thanks Matthew. Those are encouraging thoughts to consider.

    Oct 07, 2021 07:25 PM

    BTW, watchers of Brien Lundin’s Golden Opportunities may have seen his email re Bunker Hill today (OTC: BHLL). These are to be scrutinized, but it was an interesting read of what might be a turn-around story for a previously bad boy miner. It actually might turn out to be a way for a mining company to appeal to the broader mainstream, and not just those in the “fear trade” as Brien notes.

    Reply
    Oct 07, 2021 07:29 PM

    As mentioned, I purchased a small amount of USAS recently—they have as mentioned started up Cosala again and are considerably oversold at this point. The weekly chart looks nice here and once the MACD turns up there should be a nice run in this stock for awhile. I’ll continue to purchase some more stock at this level and hit it a little firmer when the weekly MACD turns up.

    Reply
      Oct 07, 2021 07:32 PM

      I might mention that the USAS monthly chart signals that it may languish a little longer at these levels however, there doesn’t appear to be considerable downward risk.

      Reply
        Oct 07, 2021 07:47 PM

        Since I have 2 dozen other silver stocks, I elected to sell USAS for a tax loss, as it was really really beat down, with the plan to buy it back in 30 days after the wash sale rules. I may sacrifice a bit of upside if it turns up during this time period, but I’ve got plenty of other fishing poles in the pond to capture any sector strength in the interim. If Americas Gold and Silver languishes a bit longer, that will be fine with me, as I aim to get back into it again post wash period.

        Reply
    Oct 07, 2021 07:35 PM

    YUUUUUUUUUP, and YUUUUUUUUUUP! I think we are seeing enthusiasm for precious metal stocks. YEAH BABY!

    Reply
      Oct 07, 2021 07:51 PM

      They’re not quite at “fire sale” prices yet but they’re getting there. We have more work to do in the sector but we’re getting there.

      Reply
        Oct 07, 2021 07:54 PM

        Doc – would you consider the “fire sale” prices to be if Gold were to break down below that $1675 triple bottom, and if Silver was to break down through that recent low at $21.41? If so how far down do you think the metals would correct, and what might this relate to in percentage moves down in the miners (GDX, GDXJ, SILJ)?

        Reply
      Oct 07, 2021 07:52 PM

      I don’t want to get too excited off just a few days of strength, but your post did encourage me to respond with this:

      https://gifimage.net/wp-content/uploads/2018/10/austin-powers-gif-yeah-baby-2.gif

      Reply
        Oct 07, 2021 07:11 PM

        Ex, I wouldn’t be surprised to get a near term rally next week since some of the weekly charts look encouraging right now but the longer term charts are still signalling more work to be done.

        Reply
          Oct 07, 2021 07:45 PM

          Thanks Doc. I may look to lighten up a little bit on position sizing if we get a nice rally for a week or two, selling some partial positions into that that strength, to raise more rainy day funds.

          Reply
        Oct 07, 2021 07:33 PM

        Ex, For me the prosperity band wagon for investors who are in precious metal stocks is starting to roll down main street. To suggest to me at this point that it isn’t our turn to be in the promised land would be suicidal! LOL! DT

        Reply
          Oct 07, 2021 07:46 PM

          Sounds fun DT. I’ll be thrilled if the prosperity band wagon starts rolling down main street.

          Ever Upward!

          Reply
    Oct 07, 2021 07:51 PM

    GDXJ gave a daily MACD buy signal yesterday and a close above the important P pivot today. Now it needs to remain above P tomorrow.
    https://stockcharts.com/h-sc/ui?s=GDXJ&p=D&yr=0&mn=9&dy=0&id=p47758036084

    Reply
    BDC
    Oct 08, 2021 08:32 AM

Leave a Reply

Your email address will not be published. Required fields are marked *