Comparing the weakness in gold vs other sectors and gold stocks
John Rubino, Founder of the Dollar Collapse website joins me to share his thoughts on the pullback in gold that really picked up steam last week. We also discuss the rebound yesterday and how the underlying gold stocks performed.
Yep, that does it for me with EQX, as this is yet another blockade, and I already dabbled a bit in Americas Gold & Silver yesterday, with their own blockade issues to overcome. I sold out of Equinox today, and rotated those funds into a new position in Guanajuato Silver, and topped up my positions in Dolly Varden, Great Bear, and Kootenay Silver to move those funds further down the mining cycle into what I feel are still quality companies.
I also decided to sell my entire Ely Gold Royalty position today as it reached up even higher on the merger news, and this seemed like a good exit strategy. I’ve good plenty of royalties exposure with Sandstorm, Metalla, Maverix, Nomad, Elemental, Vox, Golden Valley, and Sailfish.
Yeah I ended up selling my position today too in EQX. I’ll figure out where I want to put it in the coming days.
Gwen Preston was touting GUANAJUATO LAST YEAR @ $.11 US
Vangold Mining – Name Change Coming To Guanajuato Silver, New $7.5 Million Loan Facility, And A Production Timeline Update
Korelin Economics Report – June 8, 2021
James Anderson, President and CEO of VanGold Mining (TSX.V:VGLD – OTCQX:VGLDF) joins us for an comprehensive update focused on the Company’s name change, new listing symbol, silver/gold loan facility, and a production timeline.
We start with the Company name change to Guanajuato Silver Company and new trading symbol, (TSX.V:GSVR – OTCQX:GSVRF). This is estimated to happen by the later part of this week. We then discuss the $7.5million silver/gold loan facility to assist in the refurbishment of the mill. Finally it’s all about when production is estimated to commence. James shares more information on this front and what work is still needed to start production.
Take a look at STN.AX, Dundee owns 16% of it and Sprott 8%. Also the mid tiers like SLR and RMS, all in #1 jurisdictions with no blockade issues.
Seems that Mexico gets more and more difficult
There are lots of bargains around now. Difficult to decide with that many choices
Mexico, like any country, has a number of different states, regional trends, and local jurisdictions to take into account. There are some areas that are moving right along and the miners are doing great, and other areas with more gang/cabal interference, and yet other areas struggling with local community pushback, so Mexico is definitely not a one-size-fits-all country.
To your point thought Thomas, there are plenty of bargains in quality companies, doing quality work, that are not facing roadblocks, protests, or jurisdiction interference. That’s why I personally decided to blow out EQX today until they get it all sorted out.
It’s a shame really because I like the team, portfolio of production and development projects, and overall company with Equinox Gold, and believe longer term they are a winner and on track to be the next Major once their production profile is north of 1 million ounces per year. I had just mentioned yesterday to Terry that they are one of the “filets” in my portfolio, and they are still quality, but just going through a “hamburger” period with this news out today.
There are other Senior miners that are blowing and going though, without the same roadblocks, and plenty of smaller to mid-size producers that have more potential upside, and a dearth of development and exploration companies that are doing good work.
Many of the seniors are quite cheap now, Kinross, Yamana, B2Gold, …
Are you still in Excellon? They dropped a lot too. Not sure why
Yes, the larger producers have gotten hit hard lately, and I was entertaining the idea of taking out a position in B2Gold. Yamana looks intriguing at current levels as well, as Doc had mentioned the other day.
Yes, I still own Excellon, and yes, they’ve also pulled back down again, as they aren’t getting valued on anything other than their production metrics, instead of the fact that they also have a large Gold development project in Kilgore, and exploration going on at Oakley, Silver City, Evolucion, and around their Platosa mine (and greenfields exploration work in Mexico further out from Platosa).
Once the market wakes up to the realization that Excellon is a lot more than a 1 trick pony, then I believe they have much higher to climb. Maybe a few good drill holes coming back from some of their other projects will turn on a lightbulb with some investors.
B2Gold pays a nice dividend of 3.6% and is a low cost 1 million oz producer
This is not normal for gold bull market I think
Something must be wrong ?
This is a shaking of the tree moment where many PM bulls will be knocked out of position, or go running to the “safety” of cash on the sidelines. In retrospect these periods of market inefficiencies are typically the best buying opportunities (just like March of this year when gold was down to $1673, or March 2020 when gold plummeted to $1450, and many miners were down 40-60%, irregardless of their underlying fundamentals.)
The value mismatch we are seeing in many high flying tech stocks at ridiculous PE ratios, compared to the very low PE ratios we see in larger gold producers will eventually sort itself out with a reversion to the mean. Overpriced high flying lunatic stocks will find gravity, and undervalued producers will get related higher.
Times like we are seeing now are the kind of “buy low” moments most investors love to give lip service to, but few are willing to pull the trigger and truly buy low, when sentiment is in the crapper. It has served me well to buy more as the worry, concerns, and confusion builds with investors. I was buying most aggressively during the pandemic crash of March 2020 and Feb/March of this year (when many were calling for much lower metals prices). Likewise I’ve really accelerated my buying since last Thursday’s swan dive in the PMs, and am running out of dry powder this week, so trying to be selective and wait for any further weakness to pounce on. There are many great deals out in the mining stocks right now, for those with the foresight to jump on these value arbitrages.
I did sell some AUY puts last night, see what happens with those.
Great interview! Does anyone know what is up with Irving Resources (IRVRF)? It used to be viewed as a great possible discovery, but it just keeps going down. Haven’t found much news on it to justify the fall really.
I’ve just started to purchase IRVRF—if you look back at their history they’re back to where their prices were when gold was a lower price—I don’t see much change in their prospects.
Thanks Doc, Yea I was about to purchase some today, but was not sure if I was overlooking something. It has gotten beat up pretty bad lately. Decided to add a little to my position down here too.
DOC,
Have to ask, do you agree Gold can drop below $1500? There’s a very eerie feeling of 2013 when price was smashed. The current administration is desperate the contain the inflation and Gold is their obvious target.
It is a while since I looked at Irving but the pandemic is dealt with more strictly in Japan. They went through a period when mining wasn’t very aggressive and as a result they lost the skilled mining workers. They couldn’t bring in the drillers and they didn’t have the labs for analysis. They have always been strict on permitting…so, it is a slower process. That is what tge stiry has been. I am only repeating what others have said.
IPT has important support at .61 if it dips further from here. (I bought more today anyway.)
https://schrts.co/vNGhkxKM
IPT sure has been and is having a hard time.
I think glen predicted .50cents.
I think it was .46-.48 that he predicted.
I’m pretty well stocked up on IPT, but if it got back down in the $.50’s or $.40’s then I’d likely reprioritize it over a few other stocks and then buy more Impact Silver; especially with Silver still in the mid $20’s and with all the insane exploration upside that they have on their land package.
It would be much better though, if IPT holds the line at the $.61 support level you mentioned.
GDX looked like it was forming a small pennant for a break lower but is now threatening to eliminate the pattern with a move up. Either way, it could still drop a bit lower this week.
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=0&dy=0&id=p03569070491&a=975972276
Matthew,
Do you follow any sentiment indicators while trading? I am on twitter and sentiment is horrible. Bought some gdx jan 22 calls for a trade.
I do not since it manifests in the charts to a large degree. But I do pay attention to various sites for the views of the average retail guy and others often share paid material.
I agree that sentiment is now extremely negative.
Check out the run down in Anglogold Ashanti:
https://stockcharts.com/h-sc/ui?s=AU&p=D&yr=1&mn=1&dy=0&id=p24821251989&a=977699514
Its PE is now under 8. That’s even lower than the average investor thinks since resource stocks legitimately carry much higher PEs due to their assets in the ground. At its bull market peak, AU could see a PE well north of 50.
I feel like the sentiment today is back to where it was in 2015. The opportunity cost of being in this sector cannot be ignored. Years of under performance takes a toll on everyone.
Wow, I didn’t realize how beat up Anglogold Ashanti was off it’s summer highs of last year until you posted that chart. Some of these big boy miners have really pulled back substantially now.
Anglogold Ashanti better get their acts together as I’m constructive they are going to take out Corvus Gold, but are unlikely to pull the trigger on that until they see a rebound in their shareprice.
Yes, a lot of inverse head & shoulders patterns developing in the larger miners, that will likely resolve in very bullish impulse legs to higher levels.
Bitcoin fans are doing their best to prevent the completion of a big bearish head and shoulders pattern but they will ultimately fail.
https://stockcharts.com/h-sc/ui?s=%24BTCUSD&p=D&yr=0&mn=9&dy=11&id=p25275032607&a=977627074
GDX found support at its anchored VWAP based on last year’s low.
https://schrts.co/KVEZJPDm
Nearby support for IPT vs SLV…
https://stockcharts.com/h-sc/ui?s=IPT.V%3ASLV&p=W&yr=5&mn=11&dy=0&id=p25735834876&a=947555240
SPY:GLD is heading for my little circle at R2…
https://stockcharts.com/h-sc/ui?s=SPY%3AGLD&p=D&yr=1&mn=1&dy=0&id=p94934106613&a=976577908
GROY – sold it all @ $5.77
Makes sense and good exit Marty.
I sold my Ely Gold today while you were selling your Gold Royalty Corp. 🙂
Apparently folks are not waiting around for the combined company to get solidified.
(SLVR) (SLVTF) Silver Tiger – Red Cloud 2021 Summer Silver Conference
June 17, 2021
Glenn Jessome, President, CEO & Director, Silver Tiger presents a company update.
Another blockade at Equinox Los Filos mine
https://www.equinoxgold.com/news/equinox-gold-announces-illegal-blockades-at-los-filos-mine