Weekend Show – Markets and Metals – A Focus on The Precious Metals Selloff and Stock Recommendations
Hey everyone, thank you all for tuning in this weekend!
It was another choppy week for markets and metals. With the key driver right now being the Omicron variate and how countries are reacting it’s hard to predict where we will be in a few weeks. Therefore we decided to focus on the big picture for precious metals and more so on some select resource stocks.
We hope you all enjoy this Weekend’s Show! Please keep in touch by emailing us at Fleck@kereport.com and Shad@kereport.com.
- Segment 1 and 2 – Jeff Christian, Managing Partner at the CPM Group kicks off the show with a look ahead to 2022 for gold, silver and the PGMs. The key topic is what it will take to turn sentiment more bullish toward the precious metals. Click here to learn more about the CPM Group.
- Segment 3 – Brien Lundin, Editor of the Gold Newsletter shifts our focus toward a few resource stocks that he likes for a wide range of reasons. These stocks include Goldshore Resources, Cassiar Gold, and Trigon Metals. Click here to learn more about the Gold Newsletter.
- Segment 4 – Jayant Bhandari, Private Investor wraps up the show with a discussion on his current portfolio strategy. We then look at Montage Gold and GCM Mining (formerly Gran Colombia Gold Corp).
Exclusive Company Interviews This Week
- Granite Creek Copper Exploration Update In Preparation Of Resource Update And PEA In H1 2022
- Newcore Gold – Drill Results Continue to Intersect High-Grade Gold at Depth at the Enchi Gold Project
- Palamina – Drilling update at the Usicayos Project, recent share price action, and a Winshear Gold update
- Great Bear Resources – More Information On The New High-Grade Midwest Zone on the Dixie Project
- Ridgeline Minerals – Earn-In Partner Nevada Gold Mines Is Commencing Drilling On The Swift Gold Project
- Thor Explorations – A Maiden Resource Estimate At Douta, A New Discovery At Mansa, And An Operational Update At Segilola
- Burin Gold – Exploration Starting At The Hickey’s Pond – Paradise Gold Project in Newfoundland With Drills Turning Early Next Year
- TDG Gold – Preliminary Drill Results From The Shasta Property Show High-Grade Gold Mineralization
Great guests – thanks Cory and Shad
Much appreciated Thomas.
There are some gold producers for $40 million MC that look interesting
– Excellon EXN (highest grade silver producer)
– Elevation ELVT (producer with lots of exploration potential)
– Hycroft HYMC (largest US silver deposit)
Will they survive? The market cap says no?
Thomas, interesting comment. I’m out of almost all of my silver positions over time since the peak of the move in 2020. However, I am purchasing FSM in small quantities at the plunge. Ex, I still hold some EXN and I wonder about your thoughts on it since Thomas raised the issue.
Hi Doc. As far as Excellon, we had the President and CEO Brendan Cahill on the show a few times earlier in the year, and also had some candid discussions with him off the mic, and I’ve followed the company for many years now. I don’t currently have a position, and sold it in the summer as a tax loss sale, but have been debating buying it back soon, because of the extreme undervaluation for the overall sum of their assets.
I believe EXN is one of the more misunderstood companies in the Silver/Gold space because it is essentially a huge exploration company now with 5 different projects going, but it is only perceived and valued to be a small-scale producer in Mexico. Brendan sees the production at the Platosa mine as the company’s ATM machine that allows them to continue to explore, and yes, while they are the highest-grade producer in Mexico, that is not where much of their valuation should be coming from now, that is the myopic focus of many analysts and they miss the forest for the trees many times.
1) First of all – they are still exploring underground at Platosa, but that is mostly to expand reserves and mine life, but many people fail to recognize all the regional exploration targets around their mine that could have “more Platosas” as Brendan often mentions. Those regional drill programs could yield another deposit or 2-3 just like what they have and that would be a game changer. They’ve had some constructive exploration results but have yet to find the next big deposit there, but that could all change very quickly.
2) In Mexico, they also have their Evolución Project, where the historic mine is closed on care & maintenance, but they have a fully functioning flotation mill that has been doing toll mining over the last few years to bring in other revenues. Again though, the promise here is all the brownfields exploration they’ve done around this property. There has been a legal battle around this property, dating back to the company that held these assets prior to Excellon acquiring them, where another group is trying to get paid for past production and it has been contested legally by EXN as not germane since that mine has not been in production under their company, but I believe this took the wind of investors sails in regards to this project and that mine coming back online until all that eventually gets sorted, and is going concern for Evolución. While it is understandable they aren’t getting much value for this project as a result of that legal snafu, the mill is still quite valuable, and has been used effectively to generate revenues in years past, there has been interesting exploration work done over the last few years that seems to have been ignored by the market.
3) Shifting to Idaho, Excellon has the more gold-focused Kilgore Project, that they picked up when they acquired Otis Gold, and I don’t believe the company is receiving any value for this project, even though it was and is a solid gold development and exploration project. They company should have drill results coming from this project soon, and does have a longer range plan to get this developed into a mine, but the market never even factors any of these ~ 1 million gold ounces in the ground into EXN’s valuation. Just this project alone has a US$300M NPV at $1,800 gold. Keep in mind Excellon has a total market cap of $38M, which is a tiny fraction of just this gold project in Idaho, not to mention everything else. The company has not done enough to highlight how this asset fits into the mix, and is behind on getting new exploration results out to the markets for review, but the gold in the ground didn’t go anywhere while people are waiting, so there is big valuation disconnect here in the marketplace.
4) The company’s other project in Idaho is Oakley, where there is still considerable exploration work going on, and where Centerra Gold spending up to US$7M over six years to earn-in to up to 70% of the project. EXN is not receiving any valuation for this project either, which is stunning considering they are partnered with a solid operator on it, and have been progressing the project along in their JV.
5) The most exciting new acquisition the company has made is with their Silver City district scale project in Saxony Germany. They’ve hit big grade on their first drill program there, and have good relations with the local communities that is curious about getting this silver district going again, but I don’t believe most of the market even understands or much less believes the huge potential here, but Brendan and his team are convinced this could be a really huge value driver as they continue to explore this massive land package. They were supposed to have drill results out the middle to end of this year at Silver City, but we are in December and still haven’t seen anything. I believe this a project where they need to prove to the market with drill results what is going on here, but in their limited drilling last year they did put out a hole with 1,042 g/t AgEq over 0.45m, and another with 1,043 g/t AgEq over 1.3m. There are known historical high-grade veins on this property that are 10 m wide and up to 3,700 g/t Ag. They were supposed to have a 12,000 meter drill program there in 2021 and we are still waiting on seeing any assays from it. Again, EXN is receiving zero value for the project currently.
Bottom Line: As outlined, EXN has 5 projects, and all 5 have massive exploration upside, and the company thinks of themselves as an explorer, that just happens to have 1 high-grade producing mine, and 2nd mine on care and maintenance with an active mill in Mexico. Even though all 5 projects are brownfields exploration targets, and all have shown promise in prior drilling and historic drilling, and even though Kilgore has 1 million ounces of gold and used to be Otis’s flagship development project, EXN is still valued at a level smaller than many single project greenfield explorers with no clue what they have yet. It makes no logical sense, especially when we see other developers with 1 million ounces of gold valued at 2-4 times where they are that don’t have actively producing silver mines, or producing mills, or massive district scale projects in 3 different jurisdictions (Mexico, Idaho, Germany). Until they shake the stigma that they are just a small producer in Mexico, and until more investors wake up to their massive exploration strategy, then they won’t get the re-rating they deserve, but if they can put out the results from Kilgore, Oakley, and Silver City soon, and keep putting out solid results from Platosa, they could really have a massive rerating in the next 1-2 years, regardless of what happens with Evolucion.
Now as for (ELVT) Elevation Mining, I just picked my position back up yesterday on Friday for a tax loss silly season clearance sale. I owned this one off and on the last 2 years when it was Northern Vertex, and liked the idea of their margins improving when gold ran up in 2020, and the potential for expansion all around their Moss mine. They they acquired Eclipse Gold earlier this year, to add the Hercules exploration/development gold/silver project to the mix in Nevada.
However, while this bailed out distressed Eclipse Gold investors from company that was floundering, many of us Northern Vertex holders were surprised and disappointed by this acquisition. I was of the opinion that they should have kept all that capital to invest into expanding the resources around Moss, and then if making an acquisition should have picked up a 2nd producing asset to grow in size and bulk up as a producer to get a larger annual production profile. Many investors from both companies sold post merger, so it wasn’t one of the better understood business combinations of this year.
The team from Eclipse moved into a number of management positions at this newly amalgamated Elevation Mining, and they have more of a geological background, which is great for exploration, but they haven’t really gotten the markets attention with their ability to tell their story, or prove they are solid mine operators. As a result, the company has languished all year long, and while I’m still very bullish on the future of the Moss mine and the prospectivity around it to find many more ounces and extend the mine life, I’m less impressed with Hercules where it stands today, and would have preferred to have seen Northern Vertex either not make the acquisition of Eclipse at all and just stay Moss focused, or to have bought one of the many other smaller depressed producers, or at least a shovel-ready development project that could be fast-tracked into production as mine #2.
We’ll be following along with this company to see how things progress moving into 2022, but I personally decided to take a stake in the company yesterday, as I believe, to Thomas’s point, that they looked priced for failure, and the Moss mine is not a failure and could easily grow to be a much larger mine. Even though I’m not personally blown away by Hercules, it was still the flagship project for Eclipse Gold so it’s not insignificant, and if their team can roll up their sleeves and really expand the resources there, it may turn into a more enticing development project in Nevada.
Lastly, and this is pure speculation on my part, I would not be surprised in the slightest to see a larger producer come in and scoop up (ELVT) in the next year, while they are distressed, depressed in valuation, and the market has lost focus on it. That is often when M&A deals happen, and part of my investing thesis here, is that this may be more likely than not, and I’d be thrilled to see a more experienced operator come in and bring Moss and Hercules into their fold, so I see that potential of a 40%-50% takeover premium as looming for the next year, in addition to whatever re-rating the company can get for exploration at their two projects, and operational success at the moss mine.
Now as for the mess that is Hycroft Mining. I’ve looked at that one in while, because that Allied Nevada implosion left a bad taste in many investors mouths. When last I looked at it, Hycroft still had a major debt problem that needed to be financed to keep them from getting flushed down the toilet…. Did they get all that resolved and raise the funds? If so, then it could be an intriguing turn-around story with such a large metals endowment in the ground, but I’ve not checked in on them in some time to see if they have the funds to really move things forward or if they still have their hands out looking to raise.
Their chart is really fugly, and with all those massive ounces in the ground to only have a market cap of $48 million shows there must be some really big red flags still. When I just did a quick search for it, an article showed up stating it could be a great meme stock due to the heavy short position, so maybe the reddit crowds will save it like they did GameStop, AMC, Hertz, and Avis. It really reminds more of a Northern Dynasty black hole for investor hopium and waiting for the big mine to finally get off the ground. However, there really are such big resources there that it is possible that one of the larger mining companies could take on the project. I’d rather pass on that though, as there are PLENTY of other undervalued producers out there with far more certainty of actually playing ball in this metals cycle.
I think EXN is making losses at the current silver price and has no cash left
Hycroft is another (very) low grade operation in Nevada that probably don’t work
Elevation is probably the only one of three that is not in big trouble
Here is the financial information from (EXN) Excellon in their recent Q3 operations report:
> Q3 2021 Financial and Operational Highlights (compared to Q3 2020)
– Revenues of $9.2 million (Q3 2020 – $9.9 million)
– Gross profit of $1.8 million (Q3 2020 – $2.7 million)
– Total cash cost net of byproducts per silver ounce payable improved to $11.02 (Q3 2020 – $12.55)
– All-in sustaining cost (“AISC”) per silver ounce payable increased to $21.52 (Q3 2020 – $19.09), partially due to increased underground exploration at Platosa following up on the discovery of the 817 Zone, a new, high-grade and vertical zone of mineralization, with the discovery hole intersecting 2,860 g/t silver equivalent (“AgEq”) over 7.5 metres
– Production cost per tonne of $281 per tonne (Q3 2020 – $227 per tonne)
– Fifth consecutive quarter of over 21,000 tonnes mined and milled, with sizeable stockpiles of ore and concentrate at quarter-end that were processed and/or delivered in early October
– Exploration expenditures increased 27% to $2.5 million (Q3 2020 – $2,001), with increased drilling expenditures at Silver City
– Cash and marketable securities of $5.0 million at September 30, 2021 (December 31, 2020 – $10.7 million)
“Platosa continued to generate cash in Q3, which allowed us to realize our highest quarterly exploration expenditure since Q1 2013,” stated Brendan Cahill, President and CEO. “We continue to drill with two rigs at Silver City and aggressively follow-up on the 817 Zone at Platosa, where we discovered a new, high-grade and vertical zone of mineralization beneath an area that was mined in 2017. We expect to release new results from 817 shortly.”
“Revenues and costs have remained fairly stable over the past five quarters, though we have seen certain increases for electricity and labour – the latter due to labour law amendments in Mexico that took effect in Q3. Strong base metal prices and strengthening silver prices were beneficial in Q3 and have subsequently increased further. We also had ore in stockpile representing approximately 58,000 AgEq ounces at quarter-end, which will contribute to Q4 sales.”
They had a loss of $31 million or $0.94 / share in Q3 ($22 million for litigation)
From the $5 million cash is probably not much left, because they had more short term liabilities
The $22 million in litigation was a one-off situation, due to Evolucion, from a prior company that owned it versus a local land-owner group, as I’d already outlined up above, so not something to extrapolate out as normal or a go forward expectation.
This had nothing to do with their cash costs of $11.02 or AISC of $21.52 (due to increased exploration focus at Platosa where previously their AISC was $19). Granted with Silver prices pulling down to the mid $22s that doesn’t give them much margin left, so they may need to raise money on the back of good drill results. Again, they should be thought of as an exploration company that happens to have a producing mine. Normally it funds much of their exploration, when there isn’t a legal situation like in Q3.
DOC, did you already bought more Equinox?
I bought some at $6.55. But it went up to $6.80 again
Thomas, as I mentioned on my recent commentary I’m starting to buy more positions in EQX and other gold companies only when pricing hits their lower monthly BBs. Unfortunately, we have farther to fall for most of the mid cap and high cap companies. Watch Newmont—it’s getting ready to break even lower. I’m out of almost all of my silver positions with this recent spike higher. 2022 will be the year of bottoming. I believe there is pain coming to the conventional markets and that will not help the precious metal stocks as some believe. I’ll probably purchase EQX when it gets closer to a 6 price. I wouldn’t be surprised to see EQX at 5 in the next few weeks. EQX is one of the few positions I still hold along with SAND. We could see a 4 price on SAND in the next few weeks.
Are you in Michigan? I recently purchased a water front property near Lansing area, the town is called Grand Ledge. We could meet for drinks or dinner?
As for EQX, I think you’re correct. I’d be a big buyer around 5 dollar range, I’m thinking it could drop to even 4’s during blood bath event. Same thing for PAAS. I want to buy that stock when it hits $15-16 range.
Cali, you’re right on about your EQX comments—I didn’t want to mention the price of 4 since it might spook the usual suspects. You have my permission to ask Cory/Ex for my personal email—others have it as well. We will get together—I’ll have you out to my place on the Grand River near the big lake. Would love to meet with you.
Sure – I’d be glad to help play matchmaker.
CaliJoe hit me up at firstname.lastname@example.org and I can send you over Doc’s email.
I’m still a fan of EQX as well and had most recently picked it up on (07/19/21) @ $6.15, and then (08/20/21) @ $5.94. I had trimmed some of that position back on (10/13/21) @ $8.07, so it’s been a fun one trade this year (I’ve done about 10 trades in it so far this year, and about another 8 or so in the prior year). It’s a bit larger of a company than I like to hold, but have been following the story for years since prior to EQX being formed out of the pieces of Trek, Newcastle, and Anfield, where Trek was built from the pieces of (JDL, Luna, and a few other rollups). They’ve grown through more acquisitions and have become a larger mid-tier, that will effectively grow into a major in 1-2 years as they have targeted over 1 million ounces of production by then. Doc if (EQX) does dive down to $5 then I’ll throw another log on the fire there.
As for your statement that Sandstorm (SAND) may get down to $4…. Holy smokes!! That would be a true “back up the truck” moment, and personally I’d be very surprised to see it get down that low. I’ve got a big SAND position in my portfolio that I’ve picked up in a number of tranches and have been trading around the core position since late January of this year. I was considering adding more here in the high $5’s, but don’t really need to add much more, and may go chase other shiny objects and see if does get down as low as you mentioned it could before adding any more to the pile.
Hycroft Mining – how does a company go from a peak of over $15 to 0.70 in less than 1.5 years?
Dollar Week : Uptrend Holding
Jayant correctly criticized Uranium’s move.
Though he was right, what does he think now?
Jayant is not a big Uranium guy in speaking to him. He was right to note how overbought the U stocks were last time, which everyone including Uranium bulls could see, but keep in mind the time most were correctly bullish on Uranium stocks were 2 years back.
Also keep in mind that most investors that critiqued the higher valuations in Uranium stocks we saw in Sept & Oct also had no exposure to the sector and completely missed the 300% – 1000%+ moves un the U stocks from 2020 into 2021.
While the sector absolutely needed to take a break and digest the massive gains it has offered investors, the larger bull market is far from over.
Thanks! I picked up STTDF again after selling the first batch for a small gain. What concerns me is the possibility that a significant market downturn will sink many sectors.
Yes, that’s a legitimate concern, as the sectors that have run the hardest could be hit the hardest when investors sell the stocks they have gains in to lock in profits in the event of a market correction. Now at this point, the Uranium stocks have been correcting for a few weeks, so some of the hot money froth has started to get washed out, but it may have some more downside and sideways churn to work through before the next leg higher.
Swing low becoming qualified. Complete?
Swing low being qualified. Complete?
Possible Beast Bottom!!
Hi Matthew, I have been following Scorpio Gold, I know you had quite a large position awhile back but you haven’t mentioned them much lately. They have two large properties at Mineral Ridge and Goldwedge in Nevada that butt up against each other, as well as I believe two permitted mills. Lately they have been getting some really good drill hits on their two properties, Scorpio has 17 drill holes they are waiting to get back from the assay lab. I believe we will see news results next week on some of these assays. This stock is currently trading at 11 cents CDN, which I view as a very attractive price. Their consecutive drill results keep getting better and better, they may be closing in on a feeder vein. One of their big investors billionaire Richard Warke has been involved in a number of successful start-ups. Currently their management has been putting up their own capital to fund this latest drill campaign. They obviously like the previous drill results and want to raise money through a higher Private Placement. Any Thoughts? Thanks, DT.
Not Matthew here –;-} but thanks for pointing this out. I’m impressed with Management’s support and like it when “they” have real skin in the game. Perhaps it is time to add to my position.
Scorpio Gold SYL-SGN
April 13th, 2021, 9.02 G/T AU over 7.4 meters. Goldwedge Property
July 20th, 2021, 20.04 G/T AU over 15.3 m. Manhattan Mine Property
September 7th, 2021, 21.26 G/T AU over 18.3 m. near surface, including 57.74 G/T AU over 4.6 m. Manhattan Mine Property
October 26th, 2021, 50.2 G/T AU over 5.6 m. including 260 G/T AU over 0.9 m. Goldwedge Property
November 2nd, 2021, 71.3 G/T AU over 4.6 m. including 203.1 G/T over 1.5 meters. Manhattan Mine Property
DT, you’re on top things at Scorpio Gold and I agree that this pullback has made it very attractive.
I’m keeping my shares and might buy more.
Well you all haven’t listened to me, but maybe you can listen to Jeff Christian…. PMs have NOTHING going for them right now.
Do something, and do it NOW…
Bad Penny Joe you may be right.
But every darkside screens light.
Joe, I believe the final catharsis is coming the first of the year and then the real bottoming for a number of weeks/months.
Bitcoin loses $10,000, or 17% in 24 hours after overnight rout. That is a lot of money that just went to money heaven. The crypto market is so huge now that it could easily bring down the conventional markets. If crypto’s are worth 3 trillion, and 20% is lost that amounts to around $500 billion. OH, OH! DT
DT, good point. I have this uneasy feeling right now that everything is at risk especially come January of 22. I personally am in the biggest cash position in a long time (72%). I don’t like the smell of anything. I believe Bitcoin could head for $20,000-$25000.
DT, Doc: You are both right – but the silly debates out there if gold or crypto are inflation hedges really gets to me. Why aren’t bonds down, why isn’t gold, silver and crypto up? We all need to step back, stop looking at the symptoms and look at the incentives and perceptions in the market place. Let’s watch over the next few weeks and see what the “buy the dip folks” do. If they don’t step in and buy it is gonna be time for Mr Market to throw the baby out with bath water. That is when Doc’s dry power will matter.
One more thought on this – I do not think the market has to wait till Jan 3, 2022 to crash. Are all those fund managers with profits going to risk their bonuses to see what 2022 brings or are they gonna book their profits now and pull $’s off the table? Mr Market is sitting on the edge and will act to bring max pain to max investors. That is what he is and how he works.
Let’s watch what the “buy the dippers” do over the next few weeks. Mr Market will respond accordingly. Meanwhile I need to go shop for some bourbon.
Mike, you’re right about the inflation comment and those products that should be responding. The problem is that one has to avoid the noise of the present and realize markets are foreward gazing. Just because inflation is rising at present doesn’t mean the rate of increase in the foreseeable future will be as heady. The Fed is now making policy noise that may impact the future in a way they and we don’t even realize. Even the $CRB and uranium stocks are rolling over.
Newmont target: 51.64
BDC, if we see $51.64 for Newmont which I believe is a given then I believe the odds of $40-45 is better then 2 to 1.
Doc, if it breaks lower my target will become $42.05, which is a 78.6% retracement (not shown on the chart). This fits in well with your thinking.
Another deep pull-back measure I occasionally use: $42.90
Thanks for that info.
Insiders Have Sold A Record Amount Of Stock This Year
Jesse Felder – The Felder Report (12/04/2021)
3 Reasons to Buy the Lightest Metal Right Now
By Sean Brodrick on December 4, 2021
There has sure been a lot of wailing and gnashing of teeth about the little over 5% draw-down in Gold from $1880 to $1780 over the last few weeks, and this has some pundits proclaiming this proves gold is not a good inflation hedge. (huh?)
As some of our guests have pointed out often Oil and energy stocks have been better inflation hedges, during prior periods of inflation, but then again look at Oils 22% drop from $85 to $66 over the last few weeks. That is a far bigger drop percentage wise than that of gold, so does that mean Oil isn’t a good inflation hedge either? (haha!)
Then we’ve heard for the last year that Bitcoin and the cryptos are the superior inflation hedge to Gold and other assets, but then look at Bitcoin’s 29% drop from $69,000 to now $49,000. By that same rationale of those disparaging Gold, does that mean that Bitcoin is an even worse inflation hedge?
Yeah, some store of value eh? (LOL!). 😉
Despite all the recent bashing of Gold it should be pointed out that the yellow metal has been used as a store of value over the last 5,000 years (not just 13 like Bitcoin), and it is pretty hard to hold physical Oil at one’s house as a store of value, and it isn’t very fungible or transactable. If one looks at where gold is now in the high $1700s compared to where it was depegged at $35, then it’s clearly held up pretty well as a store of value.
Gold is less about an inflation hedge, and more an insurance policy against fiscal and monetary malfeasance, and in that regard, it’s done it’s job well in anyone’s portfolio for thousands of years.
As for the picking on Gold as bad inflation hedge because of 5% pullback, but completely IGNORING the 22% slide in Oil or the 29% crash in Bitcoin during the last few weeks, then that is the definition of ignorance.
Just some facts to mull over this weekend….
Same story…………… most do not get it…..
Agreed OOTB. Some things never change with the madness of crowds…
Gold is the Ultimate Inflation Hedge, Says Ted Oakley
Stansberry Research – Dec 3, 2021
“Gold is the ultimate inflation hedge for the long-run, especially when currencies are under pressure,” says Ted Oakley, founder and Managing Partner of Oxbow Advisors. “Investors are naive not to think there’s some sort of regulation coming for [cryptocurrencies]”, he tells our Daniela Cambone, based on the proliferation within the asset class.
“You have to be balanced within your investment portfolio, and assure there is a safety valve that can help you sleep at night,” Oakley explains. “Our biggest hedge is our liquidity, because when markets turn bear there is a massive investment opportunity, which investors need to realize,” he concludes.
Still time in 2021….for good stuff.
While there is always the possibility of good stuff in any stock or sector, it is most probable that we see the same pattern play out that we’ve seen the last 6 years with a pullback into the tax loss silly season near year end, and then the move higher from late December into the Q1 Run in Jan/Feb (and sometimes early March, although that typically is were PDAC feels and there’s that “PDAC curse” usually comes in right before, during, or after that event like clockwork).
I know my portfolio has benefitted from being a buyer of mining stocks adding to positions at this time of year (post Thanksgiving and pre-Christmas) and then trimming them back a bit in late February. Just because it worked the last half dozen years, is not a guarantee that seasonality will play out again from now into Q1 2022, but it is probabilistic setup I’m willing to take a bet on and have.
I was quite active on Friday, adding and buying a number of beat up positions in High Gold, Integra, Cartier, Gold Standard, Novo, Elevation, Coeur, Americas Gold & Silver. I did sell my Defiance Silver position today for tax loss purposes, but will buy it back in early January. Beyond the PMs I was also adding to the ETF POTX, and to Denison and Ur-Energy.
DOC, Coeur looks similar to Fortuna or Newmont? Do you have Coeur Mining on your radar?
From the country risk I would prefer Coeur over Fortuna
Agreed Thomas. CDE has historically been the better operator, and with their Silvertip being drilled further and studying the economics of coming back into production in a year or two, and a plan to optimize Rochester over the next 2 years (potentially with the sale of Sterling to Anglogold Ashanti to fund that initiative. Compare that to Fortuna that’s had a mine just come offline until the local community pushback on their operating license permit issue gets sorted, if it even does get renewed.
Now recently, Fortuna has been just pummeled far worse than Coeur, but both have been weak and could always get weaker. However, in past moves like in the 8 month from Jan-Aug, 2016, or in the Q1 runs in 2017 and 2018, or the big move higher in PM miners from Oct 2018 – Aug 2020, Coeur tends to have more torque to the upside than Fortuna.
One caveat to that is that Fortuna now has acquired Roxgolds really solid assets (1 producing mine, and one development project in west Africa), and has quite a bit more gold exposure now as a percentage of their production mix. It will be interesting to see how that may change the trajectory of the company moving forward.
Thomas, CDE is definitely on my list; in fact, I purchased a very small position this past week for the first time since I sold it at the top months ago. I’ll be purchasing a lot more in the weeks to come at lower prices.
Renewed Gold Weakness has Central Banks and Miners Buying
David Erfle – Friday December 3rd, 2021
“The gold price is gaining bearish momentum as recently re-appointed Fed Chairman Jerome Powell turned from a fiscal dove, to a hawk during testimony in Congress this week. And with concerns easing on Thursday about the risk posed by the newly discovered Omicron variant to the global economic recovery, gold selling pressure has increased.”
‘In his second day of testimony in Congress on Wednesday, the Fed Chairman reiterated that he and fellow policymakers will consider a faster wind-down to the Fed’s bond-buying program at the upcoming FOMC meeting in mid-December. This move is widely seen as opening the door to earlier interest rates hikes, which has kept pressure on the gold price despite the longer-term implications of rising inflation being bullion-friendly.”
“After last week’s bear raid to run the stops below $1800 on options expiration day in Gold Futures, the near-term chart posture deteriorated more this week and has invited some technical-based sellers into the market.”
Gold, Silver And Mining Stocks: Patience Will Be Rewarded
Dave Kranzler – Seeking Alpha – Dec. 01, 2021
Stocks Tank, Gold Jumps: A Glimpse Of The Future?
John Rubino – December 3, 2021
Gold Miners: Oversold But Should We Buy?
Morris Hubbartt – Dec 3, 2021 – Super Force #PreciousMetals Video #TechnicalAnalysis
Gold price moves higher on US jobs data letdown
Mining.com Staff Writer – December 3, 2021
Ira Epstein’s Metals Video (12/03/2021)
#TechnicalAnalysis, Gold, Silver, Copper, Platinum
The whole board is bearish and i can’t remember a time like this regarding gold and the miners specifically. From the looks of things we are long overdue for a cycle low in gold. looks to me like we put the cycle low in gold on Friday. I’m assuming we have at least 20 to 30 days up unless we roll over in 8 to 12. It’s been a relentless deep decline but quite frankly the miners are stuck in the same trading range we are back to the same spot. So even though many of you plead Armageddon and the Darkside is coming many have missed out on this trend the most recent one for example my iamgold.
The fact remains the same nobody seen the top in August because nobody called it nobody’s sold out completely in August 2020 and now nobody has a clue when the bottoms gonna come in but everyone thinks they have it down packed so the verdict remains to be seen respectfully.
I think this topic was brought up and somebody mentioned it but the facts are the last time around the conventional markets went down with gold and eventually gold bottomed first and went up but this time around gold has been tanking for a very very long time well conventional markets have been going up now conventional‘s are going down while gold has remained going down. I’m of the sense that gold and the minors are going to decouple very soon not later on again I’m on minority and I seem to be one of the only few on one hand that is predicting going higher sooner rather than later.
Let’s see what gives
Perhaps this is a sign of capitulation at long last.
On a more fundamental note – for those with access to the Essential tier at Real Vision the interview “Funny Money: How We’ve Created “Unsustainable Systems”” with Simon Mikhailovich and Jared Dillian is well worth a listen. Simon points out many things during the interview, perhaps the most important is that in this environment gold should be up and bonds down but they aren’t so you need to look at the Fed created incentives and perceptions to understand how they have shaped the market. When that reality is accepted and the market viewed in that way this all kind’a makes sense. Who knows what the Fed wanted but this is the mess they have created. He also says this will continue until “something” breaks the paradigm and then we will be left to pick up the pieces. That is when we will see if gold is still a store of value and if crypto is just another asset class that is tied to the market or if it is a new store of value. Right now all we can do is pay the cards we are dealt while we wait for fate to deliver a new deck of cards.
Thanks Cory and Ex.
I always like listening to Jeff Christian, despite the stick he gets on the internet, so thanks for continually getting him on. He knows his stuff.
Not that my opinion counts for anything, but Glen, I happen to think you’re right.
Much appreciated Aetas Aurea. Yes, agreed, Jeff is a very sharp guy and understands the physical markets for gold, silver, platinum, and palladium better than almost anyone.
In addition to getting Jeff Christian’s thoughts on the metals from this weekend’s show, here is a different take on Silver from a different and also knowledgeable Jeff… Mr. Clark.
Jeff Clark: Why is Silver so Cheap Compared to Other Commodities?
Palisades Gold Radio – Dec 2nd, 2021
Editorially, it must be easier to get a more populist and crowd friendly analyst on the show. So thanks for sticking to integrity in your decisions when choosing your guests
Will listen to the link you posted below.
Yes,I also like Jeff immensely.I have followed him for years.So, a Thankyou to Shad and Cory for continuously bring him on.Regarding Glen, again, immensely.
The crypto market is just another example of how The Federal Reserve has lost control of the money supply. You must ask yourself why would they let an alternative to the dollar form it’s own market and challenge fiat currency. When they decide to implement their own digital currency, they will crash the crypto market and bring destruction to many other financial assets that they are tied into. When 2.5 to 3 trillion dollars in crypto currency disappears it will cause a shot heard around The World. The longer this goes on the worst it will become, kicking the can down the road instead of applying the bridle to financial assets is a failed and broken policy. DT
Sunday Question (again):
This last week I got a voice mail on my phone that Schwab was assigning me a Named Personal Broker to assist me with anything I may wish assistance with. They followed up with a email with a Letter from the Named Broker but nothing more specific. Then they emailed a letter that starting Dec 6th they were going to charge $6.95 for OTC trades rather than being free. All I do is OTC trades.
I am trying to remember but wasn’t there general agreement the last time I asked this questions that International Brokers might be best for those investing in Canadian miners. If so, which of their account options are better. They have the free trading account and the Pro level or something like that.
If anyone has better ideas, fire away. Thanks in advance.
I am going to wait until next year and look at the brokerage issue again. Not too confident about any of the choices at this point.
I.B. is best for investing directly in Canadian and Australian or London listed companies and not having to use OTC tickers. Although, sometimes the OTC tickers present interesting arbitrage opportunities, but their bid ask spreads can be very wide and not advantageous many days, and their liquidity is much less.
Thanks EX: I am still battling the issue of How a basis is computed for a “spin-out”. Very frustrating.
I think the Schwab issue is they seem to have an information gap between the US Schwa and Schwab International. The international people seem to understand the miner market fairly well. The US side seems to lump all miners into penny stocks and appear to block out trading them over the OTC as legitimate. Fortunately most every trade can be done online. It is the occasional glitch that seems to be confusing. Anyway…
That’s a bummer man. Are you still waiting for them to fix that Vizsla Copper spin out?
I already sold my Vizsla Copper spin-co shares back in late October for nearly double the price of where they are trading currently. If I was still waiting to get them in my account I’d be pissed, and would not like being stuck in limbo with the trading exchange, and then watching them head down lower and lower. Hoping you get it all worked out with Schwab.
The Vizsla Silver/Copper issue hasn’t been resolved and it is irritating as they act like I am the problem. They cut the basis of all my Vizsla Silver shares in half which was wrong as I had been rotating all profits out and Bizsla price and basis about the same. That gave me a 100% profit when it was 0%. Then for Copper they gave it a$3.00 basis which gave it a couple 1000% loss. When told about it, it is like trying to find where “passing the buck” stops and it doesn’t.
The other issue is Great Bear Royalties. They finally came up with a price for the spin out shares, but can’t come up with a basis for the special offering. The special offering was to holders of the spin-out shares at 14 cents canadian and 11 cents US. Paperwork handled by Schwab. They don’t know what the basis is.
I have told them what the basis should be and it is in the “ ain’t my problem mode”. Then I look at brokerage firm ratings they ate one of the best.
The other big issue I ran into is “Broker” vs “Broker-Dealer”. When I hear Broker-Dealer, I think of Goldman trading against their clients. Then there is who is dealing in derivatives and who has insured their accounts beyond gov insurance. The issues just keep growing. So with Schwab I think they just don’t like people that trade miners as they know it is a corrupted area and they rather direct clients away rather than learn the area. But, I need to pay some property taxes and fund xmas and don’t want trading blocks on the account until next year.
Oh …so I called them and requested that they sell my Vizsla Copper at the $3.00 basis and they said there was a block on Vizsla Copper because they didn’t file some compliance paperwork. I said if they corrected the basis I wouldn’t try to sell it but the loss was hard to pass up. Catch 22
Oy vey…. sounds like a mess Lakedweller2. Yeah, sometimes even larger trading platforms and brokerages struggle with foreign stock spin-outs, consolidation/share roll backs, or name change/cusip changes. Still they way they did the cost basis sounds wrong. My Vizsla shares cost-basis never changed during the process, and the Vizsla Copper shares had a zero cost basis. It appears their back-end programming on Schwab is a little wacky.
CDE : Expander Reaction Target
BDC – Do you think it is concerning for the medium-term that CDE broke below that lower trendline on that megaphone “expanding” pattern? Where would you project support to come in based on that?
Ex, the near term bottom may be in, though a retest is expected. Qualified PM Saturation signalling a swing low could come soon. Then the price volume target would be possible, even likely. However, beyond that Doc’s long term analysis may hold sway.
Classic Expander completion: https://postimg.cc/LYx48kZv
Thanks for that feedback BDC. We’ll see how it goes with CDE and the PM miners finding a short-term bottom soon, or possibly needing to be dragged lower for a few more months as Doc and Jordan have projected.
I had hoped the Brian would have a comment on Heliostar (HSTXF). It has truly taken a beating since last summer. I know they went through a round of financing but to literally drop by half since July 2nd is amazing. Right now I’m trying to decide if I should add more Monday morning.
In speaking to him regularly, Brien is not an active trader or market timer, but more a deep value investor, and he waited until much later this year to get into Heliostar and skipped much of the downside move as a result. Personally I had gotten in Heliostar earlier in the year, then sold out of it in the summer for a tax loss sale, but got back in September, and then added another tranche in November.
The best person to hear from Heliostar from is the CEO Charles Funk. 🙂
We just had Charles on the show 2 weeks back:
Heliostar Metals – Exploration Overview In Mexico With Drilling Starting at Cumaro
Korelin Economics Report – November 22, 2021
Eric Coffin has been looking into Heliostar…I believe… might be a source.
Mike , just a note regarding,FAT and BTW,Shad gave you a pretty accurate summary on the company, I’m still comfortable holding shares .I am going to let it play out.I get fed a lot of information, a little BS, a lot accurate.There will be some dilution in future.Cheers.
Hellcat: Thanks –
In a former life I used to teach and when I went through all Far’s press releases I got a feeling that there was significant recycling of data. There was a pattern of releasing individual facts then repackaging the to create another press release. There is one conclusion I drew from the exercise – Far is far from drilling anything. Pardon the pun –
Fibonacci fan support marked the low in September for GDX and probably marked the low this month…
Our odds look very good. The thing to watch now is the character of the move up from here. If it’s destined to be just a bounce, there should be clues soon.
The 89 week MA of SLV vs GLD provided me with the chance to highlight something that “price-only” traders would never catch…
I’m still quite interested in Rare Earths and I added some more to my Ucore Rare Metals position just this last week to increase my exposure to the rare earths sector. In addition to having the mining deposit, much of Ucore’s focus is on the downstream processing of the rare earths, as well as other battery metals and strategic metals. Over time their ability to separate and extract different commodities and especially the REEs should be seen as quite advantageous as a company outside of China’s domination of the sector.
UCU- A Good buy.currently at it’s 52wL or close enough.Highly intelligent people.A great IR. guy.One of the best websites I have come across.IMO.A bit illiquid.A thin trader.Congrats.
Yeah, this seemed like a good risk/reward setup based on where Ucore is trading for a longer term appreciation over the next 1-2 years. Cheers!
One month ago:
Nov 05, 2021 05:48 PM
Group Ten looks good. You guys also got your best volume in 3 months…
(It went up 25% in 7 days following that comment and has now pulled back to backtest its downtrend breakout. The intermediate picture is still bullish.)
Thanks Matthew on Group Ten. I have been adding to it slowly recently.
Thanks Matthew – Good call and good chart on Group Ten.
Copper finished the last two weeks below its 30 week MA which turned down two weeks ago. Other factors also say “sell”…
Like stocks and most commodities, Bitcoin is in for a rough time.
Despite BC’s big bounce off of Friday’s low, it has been unable to take back its lower daily Bollinger band. That’s pretty bad.
A move below 43,000 will open the door to dramatically lower levels.
Will this help the true-believers and Kool-Aid drinkers to wake up?
COVID-19 Outbreak Reported on US Cruise Ship Despite Fully Vaccinated Passengers
I think a lot of you like Chris Martenson. In the following video, his guest explains the mass hypnosis of the vaxxers and their willingness to go along with the absurd.
DR. MATTIAS DESMET ON OUR GRAVE SITUATION BY PEAK PROSPERITY
From way back in April, 2020…
We Are Witnessing The Greatest Mass Hypnosis Of All Time
Thanks for the Dr. Martenson interview. I trust Chris to present the truth as well as anyone, without the drama, music, name calling, filthy language and other antics many use to keep the viewer’s interest. I’ll pass it along………
Yes, I believe Chris tells the truth as he sees it but I disagree with his Malthusian beliefs and concerns about the climate. Regarding covid, his big mistake is downplaying the planning of it and all the diabolical responses to it around the world.
The vaxxed and unvaxxed need to unite against the totalitarians or we’re all going to find ourselves serfs without any remaining rights whatsoever.
It’s 1976 again and the sheep are as gullible as ever…
THE SWINE FLU FRAUD OF 1976 (60 MINUTES WITH MIKE WALLACE)
Lots and lots of information regarding Covid-19.I am going to try to read through your numerous posts today. You’re very bearish onBC ? Friends of mine debate theT/A of BC constantly.None of us own it, but it gets very heated.I don’t get involved.One has a target of $110k -Q3/22.Im going to watch for the possible $43k you referred to.Thankyou.
BC could have a short term bounce soon so I am more bearish further out based mostly on the weekly and monthly charts. I wouldn’t bother with trading the short term since the big picture looks so unappealing.
Weakening crypto confidence
would be a powerful PM driver!
Well,…………. I guess…….. we can just forget the other ORPHAN SECTION….. and start posting in this section…. what ever we want……………
Personally Jerry I would prefer the antivax stuff stay on the other thread.
Prefer not to see “the other ORPHAN SECTION…..” stuff posted here.
Agreed. This is the economic blog, and the politics blog is for those kinds of comments.
Thanks to all the KER guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Jeff, Brien, and Jayant.
Also thanks to all the listeners of the podcast, and those members of the KER crew that post and participate here on the blog, sharing insights with our community.