Weekend Show – Markets and Metals – US Market Insights, The Kinross-Great Bear Deal, and Other Resource Stocks To Watch
On this Weekend’s Show we feature Dana Lyons, Dave Erfle, and Sean Brodrick. Since most markets this week were fairly flat we focus on outlooks into next year and the key catalysts to watch as well as stocks that each guests likes.
Please go back through the week and listen to the Daily Editorials and Company Updates. We love hearing your thoughts on the guest we feature and any questions you have on the markets or companies we interviewed this week. Our email addresses are Fleck@kereport.com and Shad@kereport.com.
We hope you all have a great weekend!
- Segment 1 – Dana Lyons, Fund Manager and Editor of The Lyons Share website kicks off the show by sharing his out look for the US markets and his positioning in certain sectors as well as the precious metals. Click here to visit the Lyons Share website.
- Segment 2 – Dave Erfle, Founder and Editor of The Junior Mining Junky switches our focus to the big M&A transaction this week with Kinross acquiring Great Bear Resources for C$1.8billion. We also discuss the lack of a move in gold and gold stocks on the back of the hit inflation number on Friday. Click here to visit the Junior Mining Junky website.
- Segment 3 and 4 – Sean Brodrick, Editor over the Wealth Wave website and Natural Resource Analyst at Weiss Ratings wraps up the show with a focus on a wide range of commodity sectors. We start with energy, move to battery metals, and base metals. There are a wide range of stocks Sean shares so listen closely. If you miss a name of a stock please email us. Click here to visit the Wealth wave website.
Exclusive Company Interviews This Week
- Metallic Minerals – Exploration Update At The Keno Silver Project, La Plata, And Australia Creek
- GR Silver Mining – Recapping The Discovery At The Loma Dorada Target and Where The 7 Drills On Site Are Turning
- Libero Copper and Gold – A Focus On The Mocoa Project, A Large Resource With Surface Access and Land Use Agreements Now Signed
- Timberline Resources – More Information on the High-Grade Oxide Gold Sample Results At The Oswego Target, Eureka Project
- Enduro Metals – Final Share Payment Made For The Newmount Lake Project Plus An Exploration Update
- E2Gold Exploration Update Along The McKinnon Zone At The Hawkins Property
- Nickle Creek Platinum – Recapping The 2021 Exploration Results Focused On Near Surface High-Grade Mineralization
- Ophir Gold – Follow Up On The Initial Drill Results Yielding 13.02 g/t Gold and 46.6 g/t Silver over 7.4 m at the Breccia Gold Property, Idaho
- Dolly Varden To Acquire Homestake Ridge Gold-Silver Project From Fury Gold Mines
- Aztec Minerals – An Overview Of The Exploration Upside At The Tombstone Project and Cervantes Project
- Sailfish Royalty Corp – An Introduction To The Key Assets And Value Drivers
- Tristar Gold – Recapping The Key News Of This Year, Including The PFS, And A Look Ahead To Next Year’s Catalysts
- Nomad Royalty Unpacks Two New Cornerstone Gold Streaming Transactions And Q3 Financials
The Upside Down Year in Gold and Silver – Eric Sprott’s Yearly Wrap Up
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Sprott Money – w/ Craig Hemke – December 10, 2021
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“What a great way to close our 2021 Monthly Wrap Up series with a special Yearly Wrap Up courtesy of Eric Sprott. After a frustrating year where many things that would typically send precious metals higher had the opposite effect, what should an investor do? Host Craig Hemke sits down with special guest Eric Sprott to break down all the gold and silver news you need to navigate an upside down market.”
> In this edition of The Yearly Wrap-Up, you’ll hear:
– Why gold is down YTD even as real rates are the lowest in history
– Words of advice for new stackers
– Where we go from here
– Some companies discussed: Newfound Gold, Labrador Gold, Exploits, Sokoman, Wallbridge, Pure Gold, Discovery Silver, First Majestic, Freegold, and more…
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https://www.sprottmoney.com/blog/The-Upside-Down-Year-in-Gold-and-Silver-Erics-Yearly-Wrap-Up
I see you posted that while I listening to it…..and here I thought I’d be first with the return of Eric….had some interesting points and opinions……like the discovery potential……seemed like wallbridge and pure gold are going to be quiet/dead money for the short term
Yeah, I had already posted the Eric Sprott interview on yesterday’s blog with Craig, but felt it was good enough to repost. I was aware of it pretty early yesterday, because Craig was running a few minutes late for the call we did because he was recording and editing the Sprott Money interview with Eric right before that one. Haha!
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Yes, a nice review of the metals, and mining stocks towards the end. Yes, the new economic study out of Discovery Silver looked good with a lower capex than what Levon had proposed, because they are focused more on the high-grade zones to start with and not going a large or trying to fit all the billion ounces of lower grade silver into the mine plan to start off.
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As for Wallbridge, as noted in previous weeks when WM’s resource estimate was released, and briefly below in the discussion about Great Bear, it was actually a fantastic achievement for WM to have released 4 million ounces of gold in just 3 years of exploration, and that doesn’t include all their other properties or smaller deposits that are still being explored, or the nickel assets at Grasset. The issue and reason for the market tantrum was because deluded retail investors believed they’d have 5-10 million which was way too high and pie-in-the-sky, but that’s what happens to many company pre-resource data. Cory & I recently talked to Marz Kord, the CEO, and plan to have him on the show in a few weeks to unpack the company’s assets and business strategy.
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As for Pure Gold, they got off to a rough start in production, and people lost faith in the management team for not executing, but all their gold is still in the ground, the mine and mill are still there, they are ramping up into production, they’ve got really good exploration work going on at the “8 Zone” that is really high-grade like we see at other Red Lake deposits at depth, and now they’ve financed (and diluted down shareholders) one more time with the recent capital raise giving them more runway. I’m concerned that since Anglogold Ashanti was in that financing again, and already has a strategic stake in Pure Gold that they may get acquired at this low valuation, but if that happens the takeover premium would get me out in the money.
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Unlike the Great Bear story, that would not be exiting at the high if Pure Gold was taken over here, but it would still be a profitable exit and liquidity event. PGM has been crapped on all year, but many forget how well it did last year or in the years before. I made a lot of money trading into and out of PGM for a few years, and then exited at the end of the “golden runway” phase of Pure Gold in early December last year before first gold pour. I figured they’d sell down post production and have a few kinks to work out, but I unfortunately got back in later this year thinking the worst was over, but before that recent capital raise, so now I’m underwater on it. Pure Gold may be dead money for a while, but if they are not scooped up by Anglogold Ashanti, then I believe they’ll have a steady climb out of the hole they’ve dug themselves into, as production ramps up and grade improves and exploration continues.
Ex: Re: AngloGold Ashanti – something is happening here. They got my attention as a “buyout artist” when they made their initial offer for Corvus Gold. They came back later and finally made a binding offer but since then all I have seen is advertisements for Lawyers. I sold my position but as far as I know the shareholders of Corvus still have not voted. To confirm that I just check the News section of Corvus’ web site and no news since Oct 7th, that item was a report on a meeting that did not discuss the takeover. So, Corvus is still trading and the “Definitive Agreement” was inked 3 months ago – go figure. I don’t know if the lawyers have thrown a spanner in the works or what but that deal should have closed by now. When this all went down there was speculation that AngloGold had less “folding money” than people thought. Again, who knows.
Re: Pure Gold they haven’t been this low since April of 2020. If AngloGold made an offer for the remaining 85% of Pure I could easily see it being somewhere around $1.08 CAN or based on the charts a lot less. Unless you have owned that stock since May, 2020 you would loose money. At that price I will definitely be a bit underwater on the deal. Not a big loss but a definite loss. The problem is – Pure appears to be dropping like a knife these days, those better at charting than me should be consulted but looks like Pure’s next stop is around 0.61 CAN a share. Why shouldn’t AngloGold wait for a better price? Over at one of Pure’s ceo.ca boards one fellow offered a good piece of advice – when he see AngloGold show up he sells and leaves. I would be better off today if I had known and followed that advice.
Hey there Mike. Yeah, good point on the statement that something is going on with AngloGold Ashanti.
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If one takes a step back and looks at the a number of the Major gold producers, most of them have done some kind of big deal over the last 2 years, with Newmont and Goldcorp tying the knot, Barrick and Rangold merging, Endeavour Mining swallowing up both Semafo and Terranga, Sibanye going on a shopping spree taking over a nickel plant, a nickel mine in Brazil, buying in big ioneer lithium-boron project, and taking a strategic stake in New Century, Agnico Eagle and Kirkland lake combining forces, Newcrest taking over Pretium, and now Kinross taking over Great Bear. I’ve been wondering what Gold Fields, Harmony, Yamana, and Anglogold Ashanti were going to do. We just saw Yamana take out a strategic stake this week in Benchmark Minerals, so that would be a great business combination down the road. However, all that Anglogold Ashanti has done thus far is take over Corvus Gold.
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Personally, I was pretty happy with the Corvus Gold takeover, having positioned in late March of this year on the thesis that they would get taken over by either Coeur or Anglogold Ashantie based on the drilling at Motherlode and in particular along the Lynnda Strip. Once the financing was announced with AU, then it was pretty clear they were getting nabbed. I sold out for a 62% overall gain, so not a bad return in just 4 months, and Corvus was at least a bright spot of M&A green in the sea of red for most of the gold sector in 2021.
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Now, with Pure Gold, it is depressed in valuation and fairly distressed as a new operator who is behind in the generating the revenues planned for due to teething issues at the mine, overbreak from initial ore mined creating too much waste rock and diluting down the head grade in the first few months, but now they’ve worked through most of those issues and things are improving, but they lost investor confidence along the way with many throwing in the towel in PGM as a tax loss sale this year. This is exactly the type of environment where a distressed company gets gobbled up by a bigger fish that has more capital to throw at the project optimization and the exploration.
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When AngloGold Ashanti just participated again in the Pure Gold lifeline loan, some felt it was just them retaining their percentage stake. However, as we have discussed here on the KER blog and also in personal discussions, I felt like it could be another potential scenario where AU may be indicating interest in Pure Gold longer term. If Anglogold Ashanti acquired PGM, it would be wise as a bolt-on addition of an operating mine with lots of exploration upside in a good jurisdiction of Red Lake . We’ll see if that comes to fruition, but it sure wouldn’t surprise me, because they’ve been relatively quiet compared to the other Big Boys, other than with the Corvus deal.
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I also wouldn’t totally rule out them jumping ship and making a bid for Great Bear, because they are clearly interested in the area of Red Lake, but after already buying a development asset in KOR it seems more likely they’d go for a mine that was already in production for their next acquisition, so Pure Gold makes more sense, and has a much smaller price tag than Great Bear does.
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Personally, I’ve had good run with Pure Gold, and remember all the great exploration and development work they did prior to this year and had a few profitable trades in them along the way. I first started trading PGM in 2016, and swing-traded it a bit more in 2017 selling out completely. Then in July of 2019 I got back in, added more in May of 2020, did small swing trade on a partial position in Sept-Oct, and then sold completely out in Dec of 2020. All-said, that journey more than doubled my money in it with the 2016 and 2017 trading it was probably about a 125%-130% gain. Now, in 2021 the position has crapped the bed, where I have purchased in Aug, Sep, Oct, and Nov and am down about 32% on the position as one of my worst trades of the year. My point was simply that if they were purchased now by AngloGold Ashanti or any other larger producer, and if they got a 40% premium (or anything over 32%) then I’d be back in the money and would use that moment to hit the eject button for a small win.
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Now, if nobody wants Pure Gold in the next year or two, then I believe as the market sees a few more quarters of better production metrics, better grade, and more exploration hits, then they have the potential of doing a slow crawl higher over time for a double or triple from here in my opinion (not investment advice, just sharing my personal investing thesis). I’ve actually been debating buying one more tranche of Pure Gold here in December to average down in one more position and bring the overall cost basis down, or conversely selling it for a tax loss sale. If there wasn’t just this capital raise where AngloGold Ashanti participated, I probably would have sold it, but I’ve been hanging on to see if they get nabbed, and can always use it as a tax loss sale next year.
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I’m still not sure what I’ll do medium term, or even the short-term, but I didn’t want to exit for a 32% loss on this trade and then see them announce a takeover deal for a 40% premium a few days later, so it just in a holding pattern for now. Also, they are so bombed out at this point, and the valuation is starting to price them for failure with no exploration upside, so it may be more interesting to just add one more tranche for the rerating potential move higher in 2022 & 2023. We’ll see how it goes my friend. Until then….
I thought sure ES would mention Emerita as he bought in 3 hours after the mention of Emerita winning a court case earlier in the year. He has dine particularly well.
I thought sure ES would mention Emerita as he bought in 3 hours after the mention of Emerita winning a court case earlier in the year. He has done particularly well.
Well, Eric Sprott has about 80+ positions, so really he didn’t discuss most of those in the interview, including his 3rd largest allocation in Jaguar Mining (JAG) where he essentially has a 49% stake in half the company. His #1 position is in First Majestic (AG), after selling them his Jarritt Canyon gold mine, and his second biggest position is in New Found Gold (NFG), so he at least covered both of those. As of the most recent post I saw of this Eric’s portfolio some of the other more heavily weighted positions he holds are in Discovery Silver (DSV), Wallbridge (WM) Pure Gold (PGM) Tudor (TUD) Kirkland Lake (KL), and Freegold Ventures (FVL) and he definitely talked about those. He mostly talked his book of the biggest holdings in his portfolio in this update with Craig. I’m always surprised he doesn’t discuss Jaguar more openly, but maybe because he owns such a material part of the company he can’t really do so as much.
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Speaking of First Majestic…. K.N. was just on Palisades late in the week.
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Keith Neumeyer: The Pricing System for Gold and Silver is Broken
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Palisades Gold Radio – Dec 8th, 2021
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“Tom welcomes back Keith Neumeyer, President & CEO of First Majestic Silver Corp. Keith explains why the world needs enormous amounts of metals for electrification and carbon objectives. He says, “We will never be fully off oil and gas but we can reduce it given time.” He is a fan of hydrogen and nuclear solutions for energy. ”
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https://youtu.be/0S71JWknEb8
The Great Bear deal. I can’t believe there will not be a counter bid better than what Kinross gave. I mean Kinross does not have the money to match a better bid. It almost feels like a theft if it goes for $29. Kudos to Kinross if they pull it off, but Barrick and AEM/KL must feel like vomit if they don’t get the Dixie property.
There is still PLENTY of chatter on different chat forums, about the very real potential of a counter bid for Great Bear from one of the other Big Boys.
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Barrick seems like a prime candidate to make a counter offer, having just taken strategic positions in both neighboring projects to Great Bear) and wanting more Canadian gold exposure. Then again, after Kinross sold off so hard on the takeover offer of GBR, some are now speculating that maybe Barrick would just wait for Kinross to finish acquiring Great Bear, and then just buy Kinross. That isn’t that crazy of an idea, and it would move them back above Newmont/Goldcorp as the largest gold miner once again.
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As mentioned in the interview with Dave Erfle, other potential suitors outside of Barrick could be Evolution Mining (a large Aussie producer operating the nearby Red Lake Mine), or AngloGold Ashanti, another one of the larger Majors that has a big stake in the nearby Pure Gold Mining, but also hasn’t done any big transactions like the other Majors lately other than snatching up Corvus Gold. There are other larger producers that could be interested in taking a swing as well, but many investors are hanging on to see if we may just see a bidding war.
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Now granted, there may not be another offer for Great Bear other than Kinross’s offer, but don’t dare say that in the Great Bear room or you’ll be skinned alive. Haha! Most of the retail hordes believe GBR should be taken out way above $29 per share… and maybe they’ll be right. We’ll see how it all plays out…
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However, after such a turbulent year, this recent move higher in Great Bear higher for the last 2 months out of the September pullback (based on speculation of a Barrick takeover) was ALREADY a big win for 2021. Great Bear has also consistently put out good drill news all year long, just like last year, and the year before that, so it makes sense that overall it bucked the downward trend in most of the PM miners this year. However, after GBR has already had a really nice surge higher for the last few months, then to get this takeover offer for a premium is just the icing on the cake for GBR shareholders and has us finishing on high note for the exit.
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It’s been an awesome story to follow and have a position in, and a clear best in class success story in gold exploration. Period. Having said that, this is junior mining and we are start to see the inevitable negative comments surface on chat boards the last few days from either investors with sour grapes that are not in the story and think it is overvalued, or the negative nancies that have started to get their knickers in a twist because this all happened before the maiden resource estimate was released to the market. Who gives a crap?
It’s a takeover at a premium, and an all time high in the shareprice, where every investor of Great Bear made money, so take the friggin’ win….
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Investors love to whine and gripe even when they are being handed a win (literally on a gold platter), and it’s never enough for many of them. There is a growing contingency that thinks management should have declined the offer to put out the maiden resource estimate first, and is perpetually thinking everyone wants their pet stock, and that its always worth so much more than where it was taken over. That’s the same thing people say every time, and while it may even be true, keep in mind the company taking it over still has to also believe that same thing or they wouldn’t take it over in the first place. Like it was mentioned in the discussion with Dave Erfle, the companies taking over the juniors also want to believe they got a good deal, and want to buy when things are undervalued.
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There have been dozens of retail investors writing in on different sites saying they are voting “No” on the merger, because they think they company is giving away the asset. Sorry people, but a $1.8 Billion takeover for a company that hasn’t even released the resource estimate or any economic studies, and has no mines, no production, etc… is a MASSIVE WIN.
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Did these same people not see what just happened to Wallbridge (WM) where they put out over a 4 million ounce resource after 3 years (which is better than 99% of other gold explorers) and then the stock sold off by 25% because overly-hyped investors felt it should have been 5-10 million ounce resource? Nothing is ever enough for the fickle gold and silver retail hordes. What if Great Bear put out a 5-7 million ounce resource and then the stock correct by 15-20% for a few months, because everyone wanted to see 8-10 million ounces? Did they not see the part in the takeover deal where there is a kicker if Kinross can get it up to 8.5 million ounces? (that should be obvious that it is not at that level at present then). So these people want to vote No, then wait for the resource estimate to come out, and then piss and moan it isn’t as big as they hoped for, and then possibly watch the stock tread sideways for years until they finally get another takeover offer? Would that really be better? No F’ing way. There is a huge opportunity cost to sitting in the stock for that long and this is a really good exit at the high point, and now those funds can be cycled back into other gold exploration stories that are not at such lofty levels.
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Sometimes investors need to stop wanting what they don’t really want. The takeover is a guaranteed win at an all time high, and everyone makes money. I’m personally thrilled, and am keenly interested to see which companies all this investor money will rotate into next. Part of the excitement about M&A deals is that it gets money circulating from investors that won big on the takeover, and then they plow those funds into the next companies and so on. I’ve been in many takeovers already this year and every year, and love these transactions for getting a premium and an exit (even if I feel they robbed the future by picking off the bud before the flower bloomed). There is no shame in making a profit and then taking those funds and positioning in undervalued companies that haven’t run so much. There are always plenty of opportunities and deals to reinvest in at any given moment.
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With the Great Bear situation, it has clearly been the standout Gold Explorer from the last 3 years and has ratcheted higher and higher, because as they drilled about 500 holes they kept finding more and more gold and haven’t come close to finding the limits yet. It has been the prime example of a penny stock explorer going the distance from $.50 to $29 on a solid team, solid Tier 1 project, sold geological science, solid jurisdiction, solid promotion and market communication, and a little luck. Best to wrap it up with a takeover win and exit, than vote no and prolong things for a few more years with the risk of not getting an incrementally better offer.
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GBR has been the epitome of doing everything right and it is the perfect case study of the kinds of stellar returns the mining sector can provide, and an example of the kind of trajectory every exploration company hopes will be there journey. You can already see this is going to be one of those stories that plenty of future companies, promoters, and newsletter writers will try to invoke when discussing their exploration picks as “the next Great Bear.” [you can count on hearing that over and over again….] 😉
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Great Bear has been one of the standout success stories that resonates across the whole PM mining sector, and it has become one of the case studies others use to try to cram their future stories in to the same narrative. I can hear it now, “We are covering company XYZ because they are drilling off a monster deposit and it has all the indications it could be the next Great Bear…” Haha!
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We’ve seen the same thing in the Silver space for the last 4-5 years by invoking another best-in-class company Silvercrest. There have been soooo many companies, promoters, and newsletter writers start coverage on silver explorer, and state “With so much exploration potential, company XYZ has what it takes to be the next Silvercrest”. Cory and I have been on many calls together this year where people tell us “Guys, this is looking like the next Silvercrest.” LOL!
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I’m sure 2022 will be filled with dozens of calls with folks that claim, they “have a tiger by the tail” and may have honed in on “The next Great Bear…”
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Back to the merger there are two pathways forward and they are both wins. We’ll either see Kinross take over GBR, or see them receive a higher counter-offer and it will still be a great success story. I’ve just sat back, got out the bag of popcorn, and am enjoying watching the show. Ever Upward!
Bob Murphy(inflation is good for us guy) also said the Russians lining up on the Ukraine border could provide torque to the gold price just as it did when they invaded Afghanistan in 1979. No shortage of interesting scenarios going into 2022.
Cory and I have been on a number of calls for the last month where we are hearing more and more people referencing the potentials of geopolitical tensions in 2022 being a big driver for Gold, including the Ukraine/Russia/US tension, or Taiwan/China/US tension, or Iran/Israel/US tension, or NATO/Russia tension, or the mid-term elections in the US next year, or the trainwreck that is Europe as far as their economies and energy prices, etc…
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While all of those factors could lift gold prices, geopolitical events are always fleeting and don’t underpin a longer-term appreciation in the PMs, and usually are ugly things for humanity, so I don’t cheer on gold running for those kinds of reasons, and don’t invest in the PM thesis for those kinds of geopolitical drivers. The main drivers over history have been monetary policy and fiscal malfeasance and we’ve got plenty of that globally in spades.
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As far as geopolitical drivers, they always get factored into price. This is why Cory asked that question to Dana Lyons in the weekend show posted up above, because we are getting bombarded every day in our conversations with people speculating on their pet political theories of why they think this event or that geopolitical event is going to drive Gold or other markets (like Oil/Nat Gas) higher next year. Maybe they will, but all human behavior and forward looking nature will show up in the price. Dana Lyons nailed the question when he replied, he spends zero time worrying about geopolitical events for how he invests using quantitative analysis and technical analysis, and see all geopolitical news as noise. Bingo.
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We’ve discussed on here Signal versus Noise a few different times. Price action or economic data points are quantifiable “signal”, and geopolitical narratives and emotional reactions or theories are “noise.”
Ditto Ex………. “The main drivers over history have been monetary policy and fiscal malfeasance and we’ve got plenty of that globally in spades.”
For sure OOTB. Cheers!
Thanks, Excelsior, great post. At least things are exciting. The chat boards are on fire 🙂
Thanks Ulf the Wolf, and yes, the chat boards are definitely on fire for this (GBR) Great Bear takeover by Kinross (or potentially more bids to come). Overall, this is really good for the PM sector, and should get more money circulating, as well as more speculation on who will be the next company to get acquired.
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Cheers!
When it comes to the buyout of GBR it seems, to me as a layman, that the offer really hit the lowest point where it was even to be considered by the GBR BoD. Hopefully we will see at least one more bid but perhaps it would be foolish to hold ones breath.
Personally I want all cash and no shares but that is not part of the deal so the only way to execute this would actually be to sell now.
Flip side waiting would be if Kinross share price appreciate between now and the signing of the contract, as the payment – if in shares – is to be made on the fixed price of what Kinross traded at on closing Dec 7. This if I have understood things correctly.
Having read on all different forums I can find it seems there is a rather big portion of the retail shareholders that would consider voting no at this time. This for several reasons.
1) The sale seems to be of GBR as a whole. No spin outs of the other properties, and the deal also seems to include the rather large cash position GBR got at hand at this time (roughly $70M CAD).
2) Like I mentioned above, the sale price really sits at the very low end of “acceptable” and takes no blue sky whatsoever into consideration.
3) The deal includes a final 1 dollar per share payout, but only if Kinross initial MRE is 8.5M oz or above. This last dollar is to then be paid once mining commences. This seems like a possible $1 rebate per share, as there is nothing that guarantees the initial MRE to be 8.5M oz or above, and the time frame getting this last payout is very “rough”. Mining to commence in 2028 or 2029 has been mentioned, and thus one might have to wait for 6 or 7 years for that very eventual last dollar.
I am happy about owning GBR shares, but I am not completely thrilled with this offer.
One thing that would tip the scale for me, from ambivalent to positive, is if GBR got to spin out the other properties into a new company to benefit the current share holders. Along with that should follow a cash position of say $20M cad of what GBR currently holds in the bank.
Like more knowledgeable people than me have pointed out above, the value of unexplored properties could be anything – zero to millions (or billions even). Taking that uncertainty into consideration, a move by Kinross to sweeten the deal by agreeing on GBR to do such a spin out to the current share holders would not cost Kinross more than $20M cad. The claims could very well be nothing more than moose pasture. So yes, a complete lottery ticket.
I would be very happy with such a move, because GBR decided they wanted those claims for a reason, and Bob Singh has been right so far. My investment strategy in the future will definitely be to follow Rick Rules advice to not buy the project but the people running it. Where BS and CT goes, some of my cash will follow.
On C-SPAN this morning (20211211.0739 NY Time) inflation is the topic, with host Jessie directing discussion toward 1982, the second year of the Reagan administration, and the Volcker policy which ensued. They may be preparing the populous for something similar.
There are a lot of instructive charts, tables, and graphs throughout this article worth a quick look:
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Gold Divergences
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Variant Perception – Dec 4, 2021
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“Gold has been diverging from macro and market data. Our macro-driven gold price indicator (a fair value forecast based on macro inputs like the DXY, yields and CPI) has jumped as higher inflation overcomes the negative impact of the strong USD.”
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https://www.variantperception.com/2021/12/04/gold-divergences/
US Inflation Jumps 6.8% in November — Fastest Rate In 39 Years
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Emily McCormick – December 10, 2021
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“U.S. consumer prices rose at the fastest clip in nearly four decades last month, underscoring the persistently elevated inflationary pressures in the recovering economy.”
“The Labor Department’s Consumer Price Index (CPI) climbed by 6.8% in November compared to last year, marking the fastest annual increase since June 1982. This rate matched consensus economists’ estimates, according to Bloomberg data, but accelerated compared to the 6.2% year-over-year rate from the prior month.”
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https://finance.yahoo.com/news/consumer-price-index-posts-biggest-year-over-year-jump-since-1982-in-november-134529314.html
On the uranium front, I just missed out on redeploying my short term money on Friday morning as the uranium royalty warrants briefly touched my buy point. Hope I don’t regret being stingy about a few pennies on the buy side come Monday morning as it already got up by 5% in the afternoon…the swings up are sudden but a consolidation would be healthy at these levels for at least a couple of weeks.
It has been an absolute blast trading the Uranium stocks the last few months, and definitely one of the highlights of 2021, along with the crazy move higher in Lithium stocks this year, and the big run in the base metals earlier in the spring with Nickel/Palladium companies on a tear, the February Silver Squeeze, and Copper producers running hard in Q1 and Q2. The Uranium stocks though just have been going through wild swings every few weeks, which is perfect as a swing-trader and for position traders. People complain about whip-sawing markets, but that is what is ideal for trading to buy low and sell high, rinse and repeat….
I know Matthew has pointed out coppers up side in the near term is probably limited at best after its huge run but I still think there’s good opportunities in some of the exploration plays in the near term as they are either presently drilling or awaiting results in the long queue at the labs….kodiak is the obvious example and the great bear buyout will lead to a few reinvesting in Chris Taylor so hopefully any potential bidding war is quick. I want to start redeploying my kodiak profits in the first quarter of the new year
Good points on the Copper explorers potentially still having some room to run if they hit pay dirt, but that is always true about explorers in almost any commodity (gold, silver, base metals, lithium, uranium, oil, nat gas, whatever…), and in good prices or bad. If explorers hit a big discovery or find enough economic material then they can move agnostic of the underlying price gyrations. Obviously higher prices are a tailwind and lower prices are a headwind, but there are plenty of explorers that buck the underlying trend (in both directions) depending on what the drills hit.
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As for Chris Taylors halo effect from Great Bear being transferred over to his involvement with Kodiak Copper, that would be great to see as a shareholder of Kodiak as well. Bring it on! 🙂
Yes, the near term is not appealing but the medium term looks worse. On the daily chart, one might be tempted to think that copper has been forming a base since June but I doubt it very much. I think the August low will be broken which will cause a quick and significant drop.
Some supports including speed lines and Fibonacci fan:
https://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&yr=1&mn=9&dy=11&id=p87542812464&a=1079142485
After rising for about 73 weeks, copper’s 30 week MA turned down three weeks ago while price has finished each of those three weeks below it. Not good. I’d guesstimate the downside from here to be 18 to 20 percent.
https://stockcharts.com/h-sc/ui?s=%24COPPER&p=W&yr=7&mn=3&dy=0&id=p03011173899&a=1058384516
Thanks for those Copper charts Matthew. Yeah, Copper already had one heck of a run higher from 2020 into 2021, and it looks a bit top heavy here and like it could still correct in both price and time. A solid 20% move down in the copper price would put the red metal in the mid $3.40’s and that would be an excellent spot to load back up on copper stocks for the eventual move above $5 in the medium-longer-term.
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I blew out most of my Copper stocks earlier in the year but still have 4, and 3 of those are explorers/developers that can move more on their individual drill news, and the only producer I have was just picked up on Friday because it is so distressed. If Copper got back down in the mid $3’s again though, I’d likely just throw a COPX position on to ride the mid-tier and major producers higher for the next leg.
Neo Lithium buyout through Zijin approved by shareholders
https://ceo.ca/@newswire/neo-lithium-shareholders-approve-arrangement
Here’s another of the Big Boys (Yamana) taking a strategic stake in a Junior explorer/developer.
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________________________________________________________________________________________________________
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(BNCH) (BNCHF) Benchmark Metals Closes $40 Million Bought Deal Private Placement Including Strategic Investment by (AUY) (YRI) Yamana Gold Inc
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Dec 9, 2021
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https://tinyurl.com/4n9umuyf
Gold continues to confuse investors, but big moves always come as a surprise
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RM Capital Analytics: Rashad Hajiyev #Charts
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#TechnicalAnalysis of Gold and senior gold miners GDX
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https://youtu.be/8qwSvVJjNBE
Folks:
Someone I read and respect suggested late last week that Kinross may be paying too much for Great Bear. If so logically a counter offer won’t be in the works.
Re: the “Contingent Value Right” that is part of the deal – is there any way to value that? Personally I’m of a mood to sell and move on but I hate to leave something of value on the table.
Yeah Mike there are a few different people that have made that same point (including Dave Kranzler that we are putting out an interview from next week). If Kinross ends up being the only offer for Great Bear, then it’s a tough call as to what to do:
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1) hold whole position for the cash/Kinross shares/longer term incentive based on the performance metrics for more potential Kinross shares
2) sell a portion of the position for immediate gains, and save the other half for all the above mentioned.
3) completely sell out now for the profitable win, risking missing any potential better takeover offer.
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I’m probably going to opt for option #2 where I sell 40% or 50% next week, and keep the other half on to ride for either the Kinross shares or a better takeover offer if it surfaces from a larger suitor like Barrick.
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Decisions…. decisions…. Haha!
As outlined further up above, it wouldn’t be that crazy for Barrick just to wait for Kinross to finish acquiring Great Bear, and then for ABX to just takeover K for 6.5B-7B and get all their assets including Great Bear. So from that standpoint, it may be better for Barrick to wait in the wings for everything to play through, and then just merge with Kinross after the fact.
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Of course, in the short term, I’d much rather see Barrick take a swing at the piñata on GBR in the near future, with a superior bid. However, the logical path is also there for them to just wait it out and then pounce on Kinross while they are weak from rebuiding/recovering after the fire at one of their mines and from getting smacked down in valuation for announcing the bid for Great Bear.
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The more I consider that other option for Barrick, the more I’m leaning towards selling half of my Great Bear shares next week.
Ex – Right now I’m not feeling that a White Knight is gonna ride to the rescue. If Barrick ends up with GB they will end up getting it through buying out Kinross then dismembering the parts – saving the good stuff and selling off the rest to local players willing to take on the geopolitical risks.
After I heard about the buyout last week and feeling the need to raise cash I tried to sell two tiny lots of GTBAF for $21.50 a share – no takers. I figured that since $29 CAN ~~ $22.79 US that might fly but no sale for me. Let’s see what next week brings.
Good thoughts on the potential path where Barrick could just wait to buy Kinross, after it’s takeover of Great Bear, and then it could parse out which projects to keep in the Barrick portfolio, and which ones to divest to smaller companies.
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As for the white night riding in with a counter offer, it rarely happens, but we do see it time to time like with Cardinal, and GoldX & Guyana Goldfields. It normally only happens if an asset is highly coveted or if another company is deeply discounted where there is more wiggle-room to increase the offer. In the case of GBR it isn’t cheap, but is highly coveted, so it seems like it is still a potential.
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If there isn’t another counter offer, then all those claiming they are going to vote “no” on the Kinross offer are shooting themselves in the foot.
Kinross Gold: The Great Bear Acquisition Is A Gamble That May Pay Off Handsomely
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Peter Arendas – Seeking Alpha – Dec. 13, 2021
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https://seekingalpha.com/article/4474866-kinross-gold-great-bear-acquisition-may-pay-off-handsomely
I think waiting for Kinross to trip and fall is a little too passive an approach for Barrick. The jurisdiction that Great Bear is in is a compelling one. The metallurgy for a good portion of Great Bear’s gold is also compelling. Much of the land portion has been unexplored. Is this earlier than the timeframe that Barrick was planning on… I think so. Also, what if the gold price finally explodes while Barrick is waiting for Kinross to find itself in distress. I think Barrick and possibly another mining giant are completing their homework and we might see a competing offer in the next couple of weeks.
Good comments and considerations Ed. My point was less about Barrick waiting for Kinross to trip and fall, and more about the reality that Kinross has already tripped and fell. Much of that happened prior to this deal being announced to takeover Great Bear, because they were punished for a few setbacks at some of their mines and the fire they had at Tasiast and the money needed to be spent to repair and refurbish that mine. However, after already being at lower point in their valuation, they lost another 10% in market cap (~$800+ million) upon announcing the deal to takeover GBR. So that just further punished their valuation, and in that sense Kinross is already distressed compared to many of their other peer Majors.
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Barrick could very well come in and make a move on Great Bear for more than $1.8 million (maybe $2 Billion?), but they could also wait and buy Kinross for $8.4 Billion CAD ($6.5 Million US), and get all their mines and development/exploration projects along with Great Bear.
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Again, I sincerely hope to see another offer on Great Bear from Barrick or one of the other Big Boys, but if it doesn’t happen, then Barrick has another way to skin the cat, and can do it with shares in a merger with Kinross, versus forking over the cash.
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Also, there is no question that Great Bear is in a great jurisdiction, has an amazing asset, and has done amazing drilling, but many GBR shareholders have fallen in love with a stock/company that is not operating in a vaccuum, and many are not considering it in context with what else is also on the market at discounted prices. I’ve used this analogy recently when comparing some producers with big gold reserves to some of the high flying exploration stocks like New Found Gold or Great Bear that have Billion dollar valuations and don’t even have resource estimates or economic studies in place yet, not to mention constructed and producing mines.
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Contrast a $1.8 Billion offer for Great Bear or the recent $1.25 Billion valuation that New Found Gold got up to, both with a lot of unknowns and questions yet to be answered, to something with plenty of known data like Argonaut, that has just under a $1 Billion valuation but has 4 operating mines, 2 huge development projects both with ~5 million ounces of gold each, and global resource of 14 Million ounces of gold.
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We don’t even know what NFG or GBR has defined in the ground so far, but it isn’t 14 million ounces of gold for either of them, and they more likey have half of that (especially since the extra kicker on the GBR Kinross deal is when they can prove out over 8.5 million ounces… meaning that they don’t currently have that many ounces defined, and it is likely closer to 6-7 million).
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So all project that any company holds have exploration upside, but when doing a valuation one needs to look at what is known and quantifiable to try and wrap a number around it.
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> If just looking at the data of what is known:
– Great Bear (GBR) – (maybe 6-7 million ounces of gold for the resource estimate, and likely another 1-2 million that won’t make it into the resource estimate… again nobody really knows until they release the MRE). No economic study has been completed so that is a big unknown. No mines constructed, no production. Valuation currently is the $1.8 million takeover offer.
– New Found Gold (NFG) – Again it got up to the nosebleed valuation of $1.25 Billion, and now has starting finding some gravity taking it down to mere $1.18 Billion. No resource estimate, no economic studies, no operating mines.
– Argonaut Gold (AR) – 14 million ounces of gold, 4 operating mines, huge mine #5 (with 5 million ounces of gold) half way through construction, future mine #6 (with 4.7 million ounces of gold) is next in the cue. 210,00 ounces of production guidance, but set to nearly double by 2023 up to 350,000 ounces annually once Magino comes online, and then it can be expanded to get production up to 500,000 ounces per year. That doesn’t even factor in Cerro del Gallo’s production either. Current valuation is $977 Million.
– I-80 Gold Corp (IAU) – Global gold reasource of 14.7 million ounces in Nevada (one of the top jurisdictions), 3 mines will be online over the next 2 years and a unique Lone Tree processing center that can handle refractory ore, in addition to sulfide and oxide ore, and they have heap leach pads. Their production guidance is approximately 50,000 ounces for 2022, then 100,00 ounces in 2023, and then 200,000 ounces in 2024, with a goal of 400,000 ounces annually by 2025. Current valuation is $631 Million.
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So while everyone can get excited about the big valuations in a number of explorers with blue sky upside and where they may eventually grow, when they are stacked up next to actual producing companies, with mines built, and much larger gold resources in the ground, then either these high flying explorers are pricey, or the producers are insanely undervalued, or maybe a little bit of both. Just something to mull over…
The Kinross offer is not too much or too little. Great Bear is still drilling. They haven’t done that much deep drilling. That could be massive or not. I think all offers are premature and it has been one of the best discoveries in Canada in years. I can make uninformed projections as well as anyone…it is severely underpriced unless someone wants to roll the dice and make an offer like Kinross before we know the resource. Could be it is a steal…disprove that. Or should I say theft. Chris Taylor knows what he is doing. That is better than uninformed speculation. Let it play out.
When we’ve talked with Chris Taylor in the past, and even in one of his most recent interviews with us on the KE Report, he mentioned he felt there would be far more value to unlock over time if they had more time to work on exploration, and build out the economic studies before being taken over.
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As you mentioned C.T. was looking forward to continuing on with the deeper drilling for high grade, that wasn’t even going to be included in the upcoming resource estimate, as that would take more time to drill out to be able to define those resources.
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Chris mentioned that investors should be careful what they wish for as far as having suitors grab them after the maiden resource estimate or PEA, before much of the value has been truly daylighted. However, we are seeing a number of comments that seem to give him more power than he actually has.
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Yes, Chris is the CEO, but that only goes so far and that position, by design, only has so much power to influence. The reality is that on matters like a takeover, then it comes down to what the Board Of Directors thinks is the best value for shareholders and all stakeholders in the project. Any reasonable bid must be considered, brought before all investors, and voted on. Chris and the board already signalled they approved of this deal, so that should tell people everything they need to know. Those that claim they want to vote no against the board are the ones speculating that they know better, and again, they are only shooting themselves in the foot.
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As for whether the offer is too much or too little, that is subjective, but to be offered a $1.8 Billion price tag on an exploration project that doesn’t even have it’s first resource estimate out yet, or any economic studies is an anomaly in the industry and far from “cheap” and some would day quite pricey for an asset not even close to moving into production anytime soon.
EX: great comments as always. If that is the deal on Great Bear than I will take the shares and roll them when the taxes are LT. i have rolled a lot of the shares and will do again. Just do not want hear about GBR being over priced. Not an issue.
Thanks Lakedweller2. Yes, “underpriced” or “overpriced” are still pretty subjective terms, and the key point is that Kinross is willing to pay $1.8 Billion for Great Bear, so that is the correct current valuation, as it is what a big boy producer is willing to pay for the asset.
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In life with any asset, be it a house, a collectible, or a company, it is not what analysts or punters believe something is worth, but rather, what someone is willing to pay for it. I had some ideas last year of what my house was worth, but we had 54 different showings to various families in 4 days, and 13 offers all for more than what we listed it for. The true valuation was the price others were willing to offer for it. When I sold my baseball card collections and coin collections back in 2007/2008 to get through my own great financial crisis, it became clear that it didn’t matter what price guides said things were worth, but rather, the real value was what other parties were willing to pay for them. It’s no different with a company. Right now Kinross is willing to pay $1.8 Billion for GBR so that IS the fair market valuation.
HMY has fallen 7% so far since I said it was a sell on Wednesday.
https://stockcharts.com/h-sc/ui?s=HMY&p=D&yr=0&mn=11&dy=0&id=p72887803868&a=1038069350
Matthew, something to consider: https://postimg.cc/gXnHLqcN
with E as a buy stop and F a potential buy back. FWIW
Thanks, no disagreement there. That bounce was part of a perfect sell setup following that big bearish engulfing candle (“E”) and the selling opportunity was extra clear on the intraday charts. I posted what I did without other considerations because the rising wedge breakout was brand new.
If the decline isn’t over, it could be tomorrow after filling the rest of that 11/10 gap. Friday’s low happened at a low pivot support based on the 30 thru 240 minute charts but on the 15 minute, it finished half way between pivots with the next pivot support being at 3.60, perfect for the aforementioned gap-fill.
However, the daily chart looks quite bearish with Friday’s parallel channel breakout and close below the Bollinger bands. HMY just might have 2 to 4 more down days in a row. Both the broken wedge and the broken channel point to a retest of the September low but it could (bullishly) fail to get there. I have a feeling it will get there and that might be a sign that gold has further to fall. But who knows? Plenty of other miners look more promising so maybe HMY will just fall by itself.
https://stockcharts.com/h-sc/ui?s=HMY&p=D&yr=0&mn=7&dy=11&id=p36993935951&a=1079610587
Picked up some HMY.
I last bought HMY 21 years ago
at about the same price:
the entire account!
Today 50%. So far!
Slim stop tripped. Now 25%.
The rest of that 11/10 gap was filled today (which is easier to see on an intraday chart). It does look appealing on that oversold 2 hr chart. The 2 hr MACD hasn’t dipped so low since early September when it was trading around 3.10. Next pivot supports on that chart are at 3.45 and 3.25.
Cool! One tranche stopped, but added some more. Now 1/3rd long.
Some good news – the insurrection at FAR Resources won. From Thursday’s Concerned Shareholders press release: “The Concerned Shareholders deposited proxies with the Company’s transfer agent totaling approximately 79 million shares or an astounding 49.7% of FAR’s issued and outstanding common shares.”
A bit more activism in the Exploration/Junior Mining space is a good thing. Good riddance to bad rubbish. Way too many lifestyle companies out there. The new Management page is already up on Far’s website. Well that didn’t take long!
==================
Scott Taylor
CEO & President, Director
Scott Taylor is a successful entrepreneur with a strong financial markets background. Scott, born and raised in Vancouver, has over 20 years’ direct experience in finance, energy, mining, defense, and civil engineering industries. Scott started his career raising money for both public and private markets as well as mining projects in commodities trading. He continued in commercial finance in Moscow Russia with Delta Credit and then moved to Switzerland and intermediated commodities transactions for a private family office in Lugano, Switzerland. Scott has held positions spanning ownership (start-up founder), executive management and leadership, technology development, software commercialization, business development, technical sales, and product marketing. Scott sold his first company together with a portfolio of patents and software technology to Symphony Technology Group’s (“STG” of Palo, Alto CA) portfolio energy services company, Sigma Cubed. Scott ran the global operations and held the Profit & Loss responsibility of one of Sigma’s three service lines. Scott co-founded Reservoir Imaging Solutions and grew RIS into a multi-million-dollar SaaS business in less than 2 years. RIS provides cutting edge fiber optic based subsurface diagnostics to the oilfield and geothermal sectors.
Scott has prior technical and financial experience in exploration, development, and pilot scale production on two private mines in Mexico and the Russian Federation. His experience also includes five years working for an engineering company in the mining and energy space which included resource development and drill programs on mines. His skill set enabled him to work hands-on in the field on drill programs which brought old mines into productions using modern geo-physical techniques. Scott graduated from Franklin College (Lugano) Switzerland with B.Sc in Finance 2002 and graduated with honors from St. Georges High School in Vancouver in 1998. Scott is a published author, invited speaker and member of the Society of Petroleum Engineers and the Society of Exploration Geophysicists. With dual residency in both US and Canada, Scott brings the ability to cross borders easily and seamlessly, and visit and manage FAR assets in Manitoba, NWT and New Mexico at a moments notice, unencumbered.
Pierre-Yves Tenn
Director
Pierre-Yves Tenn, holds an MA in International Relations and Diplomacy and is an innovative and focused International sales leader, business strategist and global representative with the vision and leadership skills required to introduce, position and promote business development and sales for corporations in international markets. He offers 20 years of proven experience in the development of international strategies, business, trade, sales, and commerce, both domestically and abroad. Pierre-Yves is an accomplished strategist, communicator and consultant with the diplomatic acumen and talent needed to close major sales, negotiate contracts and manage small to major projects. Some of his key strengths include strategic planning and global growth as he’s well-versed in the marketing of North American critical minerals to key players in Asia and accessing Chinese investments funds as well as international business promotion, marketing joint ventures and negotiations. He understands nuances amongst international clientele and clearly understands the complexities and opportunities arising from a global market perspective. He thrives in challenging situations and achieves results consistent with established goals and is fluent in English, French, spoken Mandarin Chinese and highly conversant in Spanish.
His experience includes the promotion of Canadian mining and exploration projects with a focus on accessing Chinese investment funds for the development, exploration, and operations of international mining projects. Pierre-Yves was based in China for over a decade, working with Canadian entities to create joint ventures with Chinese private and state-owned enterprises for the advancement of natural resource projects as well as soliciting support from Canadian provincial and federal representatives for the securing off-take agreements and partnership initiatives. Pierre-Yves has played a central role in many international negotiations and strategic initiatives, as well as past project management in Canadian iron ore, potash, and uranium exploration projects. With a network of contacts throughout Asia in the investment, manufacturing and natural resource industries, his presence in these markets go FAR beyond regular trade shows and industry conventions and will prove invaluable for the promotion of FAR in this part of the world.
Andrew Lyons
Director
Andrew Lyons has over 30 years’ experience in program and project management in the public markets, financial and technology sectors. He holds a BSc(CS) and BBA from the University of New Brunswick, an MBA from the University of Ottawa and a PMP from the Project Management Institute. Andrew is well versed in corporate governance of organizations in the private, public, and non-profit, and has worked with private, public companies and governments, involving scope, budgeting, capital funding, and project management. Recently he has consulted with several mining companies, working with senior management and boards, and consulted on use of proceeds. Andrew was on the advisory board of Lida Resources before Lida went public and is currently on the advisory board of Lakestone Resources, both Canadian Mining Companies Andrew brings proven leadership working at C suite senior management level with corporate experience in the mining sector, utilizing his over 35 years experience as an independent consultant, helping drive business forward through development and implementation of enterprise-wide information technology solutions. He most recently consulted with several mining company senior boards to refocus their operations and streamline costs and efficiencies.
Victor Cantore
Advisor
Mr. Cantore is currently the President and CEO, Director of Amex Exploration. Mr. Cantore is a seasoned capital markets professional specializing in the resource and hi-tech sectors. He has more than 20 years of advisory and leadership experience having begun his career in 1992 as an investment advisor and then moving into management roles at both public and private companies. During his career he has organized and structured numerous equity and debt financings, mergers and acquisitions, joint venture partnerships and strategic alliances. Mr. Cantore serves on the boards of various companies both private and public.
Lindsay Bottomer P.Geo
Geoscientific Advisor
Lindsay has over 45 years of experience in international exploration and development, most recently focused on epithermal gold and porphyry copper-gold exploration in the American Cordillera and Central Asia.He and company founder Keith Anderson conducted the initial site visit and recognized the potential for high grade epithermal silver-gold mineralization in the historic mining camp which has been dormant since the early 1980s.
Vancouver-based geological consultant with over 40 years worldwide experience. Recently retired from Entrée Gold after 10 years as VP Acquisitions/Corporate Development; major involvement in exploration of Oyu Tolgoi concessions in Mongolia, leading to discovery and delineation of Hugo North Extension Cu-Au and Heruga Cu-Au-Mo porphyry deposits, and acquisition of Ann Mason Cu-Mo porphyry in Nevada.Significant previous experience with epithermal Ag-Au deposits in North and South America and Eastern Australia, and Archean lode Au deposits in Canada and Australia.
Mark Fedikow, P. GEO
QP
Dr. Fedikow has over 40 years of experience as an exploration geochemist and mineral deposits geologist working in both private and public sectors. He is a Fellow at the Association of Applied Geochemists, where he’s previously worked as a councilor. Dr. Fedikow has also served on numerous industry-related committees. Since 2002, he has been the President of Mount Morgan Resources Ltd., a mining exploration company. Dr. Fedikow pioneered the application of regional multimedia geochemical and mineralogical surveys in support of base and precious metal and diamond exploration in Manitoba.
Michael Feinstein, CPG, PhD
QP
Bio- Operations Manager and Geologist at Mineoro Explorations for over 14 years. He’s a geological scientist and consultant with global experience coordinating, leading and supporting high-value geological exploration and evaluating initiatives. Dr. Feinstein’s experience includes conducting mapping and petrophysical analysis of precious metals and minerals.
On Wednesday I thought (and hoped) that silver vs gold would test its September low and put in a decent reversal and yesterday it did so, finishing the week about 1.8% off its low…
https://stockcharts.com/h-sc/ui?s=%24SILVER%3A%24GOLD&p=D&yr=0&mn=9&dy=22&id=p82499386720&a=1077666344
Silver has held up better versus the dollar (better than versus gold) since September, falling to about 2% above its September low yesterday while testing its 600 day MA for the second day.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=3&dy=0&id=p09107784011
IPT finished 5.5% off of yesterday’s low.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=3&dy=22&id=p76018978171&a=993199613
Hi Matthew, with all that appears to be buzzing in the air, where does your charting show IPT to be heading? Do you see it doing a blip upward then down for another count? Thanks for your consideration.
Hi Canuckski, I think IPT bottomed on the 3rd vs dollars and vs silver and is in great shape. However, since volume has been low lately, the action is less bankable. Therefore, if the metals continue much lower from here, it is possible that IPT could test its August low without much effort from the bears. Nevertheless, the most likely scenario seems to be that it has seen its low and the bias from here will be to the upside, and sharply so as soon as the market thinks the metals have bottomed.
IPT:Silver
https://stockcharts.com/h-sc/ui?s=IPT.V%3A%24SILVER&p=W&yr=3&mn=11&dy=0&id=p17681160949&a=951207497
SILJ is close to a low if it hasn’t already seen one.
https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=1&mn=6&dy=0&id=p08182080224&a=1079343974
And IPT looks better than SILJ to me…
https://stockcharts.com/h-sc/ui?s=IPT.V%3ASILJ&p=W&yr=5&mn=11&dy=0&id=p53890117181&a=601239737
Trivia help! I’m having a senior moment – which one of the explores/developers working in Mexico recently picked up a producing mine in South America from one of the majors?
Expiring minds want to know!
Never mind – it was Santacruz! They are all starting to merge in what passes for my mind.
Yeah, that is a transformative deal for Santacruz Silver to pick up 5 mines, 3 mills, 2 exploration projects, and 2 power plants from partner Glencore. If we see the silver miners remain under pressure I’ll likely add more to my SCZ position, after having trimmed some back on the big surge higher they had when it was unhalted. In the medium term that could really move SCZ into the realm of the mid-tier silver producers, but they are still trading like a tiny junior.
Thanks for the comments on WM… such a welcome change to the nauseating retail narrative… retail love to speak negative and then pile on more negative and then try to outdo each other spinning even more negative… most have no idea what they are talking about… Wallbridge is a rough-edged deposit… a major deposit but still mostly undeveloped – it could be a dud (unlikely), a partial gem or on the extreme a diamond in the rough… to reach the extreme level Management has to stop managing Wallbridge like a project and step up to leading it as a business… to this end they have stop resisting wise advise and make important changes poste haste
Good thoughts Bob and totally agreed. I’ve been following Wallbridge (WM) since they picked off Fenelon from Balmoral (as a former Balmoral shareholder), and then advanced it so well that they became the bigger fish and took over Balmoral. Haha!
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Again, to have defined over 4 million ounces of Gold at Fenelon (2.67 million indicated and 1.72 inferred) in about 3 years is an amazing achievement for any gold exploration company. There are not many gold explorers with 4.39 Million ounces of gold in the ground in that short of an amount of time, and the huge sell-off since they released their maiden resource estimate was a silly market tantrum based on unrealistic pie-in-the-sky expectation from the retail hordes.
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We just spoke to Marz 2 weeks ago, and from what I gather they plan on drilling about 150,000 meters at Fenelon next year to expand things at Area 51, Tabasco, Cayenne, and Gabbro, and also to drill about 50,000 meters at Martiniere (which they are currently getting almost no value for. The also have more drilling for gold (not just nickel) at Grasset on tap for next year, and again they are getting zero value for Grasset’s nickel endowments. Then Wallbridge has the JV with Kirkland Lake at Detour East, that is another value driver.
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They also have the massive land position all over the Detour Lake area that they acquired from Balmoral that has plenty of other exploration targets. I’ve been adding to my WM position for the last 2 months into the weakness, and believe once they incorporate all the drill slated for next year into a revised resource estimate and produce a preliminary economic study, that they can get rerated higher multiple-fold. I love it when retail investors whine and moan and throw in the towel on a clearly quality asset, because it wasn’t big enough for their unrealistic expectations (yet). When it becomes more obvious to Joe six-pack just how well endowed WM’s assets are, the easy money in the re-rating will have already happened, and really, based on peer comparisons to other companies that don’t even have resources yet or that have much smaller resources, it should already be valued higher than where it sits today.
Technically, a real downer for the PM stocks is the fact that some good stocks are now in the process of taking out their 200 week simple moving average and this is happening with the price holding up this month—not a good sign for January and February of next year. The first quarter of 2022 will in all probability be a difficult time with 2022 being a bottoming year. The second half should be quieter.
Hi Doc – that thought bums me out man, as the last 5 years there has been a nice move out of late December tax loss selling season and into the Q1 Run in Jan – late Feb/early March. Now this year in 2021 was a bit different in that many gold miners only ran into mid January, and then the silver miners ran into February for that #SilverSqueeze phenomenon. Still January and to a lessor extent February are positive months seasonally.
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https://www.variantperception.com/wp-content/uploads/2021/12/2.png
Doc – I do appreciate getting your technical thoughts though, and while it may not be music to my ears, I respect your technical analysis and note that there could be more continued weakness in Q1 2022.
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As far as nibbling, yesterday on Friday, I added to positions in Sandstorm, Hecla, McEwen, Maverix, Fury, and Gold Mountain. On Thursday I added to Coeur, Jaguar, Metalla, and Endeavour Silver. I know… I know… probably way too early to be nibbling and they are likely heading lower, but it’s hard not to buy when they keep selling down. Haha!
Ex, I’m so tempted to purchase here but the compromisation of so many technicals has me waiting. You’re probably going to do just fine with those purchases in the long run. I’ve been watching a number of the ones you mentioned and am getting ready to pull the trigger on MUX in particular. I also like FURY a lot here and purchased a little last week. I plan on adding more in the near future. I’m looking at companies right now that technically don’t have a lot of downside any more. Another one that is probably going a little lower in FSM and I’ll add if that happens. IPT is getting attractive as well. Another one is ASM which I plan on purchasing when it breaks down a little more. I’m starting to find SVM attractive.
Good thought Doc. Yeah, FSM Fortuna really took it in the shorts lately, on the back of the community pushback and temporary pulling of their mining permit at their San Jose Mine in Mexico, but they do have some other quality assets (and now they have the very solid gold assets from Roxgold so it remains to be seen how those may factor in to a rerating once the market digests their valuations inside of Fortuna).
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Yeah, I had actually sold out of Fury for a tax loss sale, as it has just been taken out to the woodshed and beaten with an ugly stick this year, but I got a starter position back in place on Friday, as I still believe they have a lot of exploration upside, and now they have a 1/3 stake in Dolly Varden after selling them Homestake Ridge. I think that Dolly Varden (DV) rerating may do more for them in the near-term than their own gold drilling, and I’m expecting DV to have some of their 10,000 meters of drilling from this year back sometime soon, (whenever they get them back from assay lab hell).
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As for McEwen (MUX) it’s been an absolute dog for the last few years, but every dog has his day, and I consider them a “fixer upper” #TurnAround play, like Americas Gold & Silver (USAS). I was adding at $0.89 on Friday, so it didn’t feel like overpaying when I had sold some back in June at $1.39 and $1.66. Sure, it can fall further like all of these, but at this point, most of the downside is more than priced in, and I could see them being and easy 2-4 bagger from here by late 2023 or early 2024. That isn’t long to wait for those kinds of returns in a position-trade, although, I’ll probably swing trade around a core position dozens of times during the whipsaw before we get that far down the road. Haha!
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Impact Silver (IPT) is getting attractive again, and I hovered over the buy button twice this week but didn’t add more, because it already has a bigger weighting in my portfolio. I’ll likely add to SCZ first, but still am considering topping up my IPT position some before this month is over.
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Avino Silver & Gold (ASM) – I’ve been looking at it again myself, and had sold out of it last July at around $1 to chase other silver stocks that were performing better. However, that acquisition of the La Preciosa development property from Coeur Mining (CDE) is interesting and could boost their production profile in the medium term, so I’ve got it on a close watch, and if all the silver miners get hit hard, I may throw in a stink bid to start building a position in it.
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As for Silvercorp (SVM) yes, I’ve been trading it since late 2015/early 2016, and keep a fishing pole in that water because it is the lowest cost Silver equivalent producer on the planet with negative cash costs and industry leading very low all-in sustaining costs due to the huge credits they get from zinc/lead. They’ve also won 2 different mines in auctions this year from the Chinese government which is a big endorsement in SVM from that standpoint, and they’ve now got some key strategic positions in a few other junior companies in South America, most notably a 28% stake in New Pacific Metals (NUAG) and a 19% stake in Volcanic Gold (VG). I believe over time they’ll diversify even more into South America, which should help take away some of the “China worry” even though they’ve been operating there fine now for over a decade.
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Doc – Let me know if you want to get together earlier this week and record another segment where we “Talk Stocks”.
Kinross should look interesting from a technical perspective?
With the selloff last week we are back at the bottom of October. Any thoughts about Kinross as buying opportunity?
Ex, we could get another move up after December—-I’m now over 75% in cash and after the opening on Monday will probably be over 80% in cash—-even if we get a rebound in January there are so many technicals that have been compromised that the odds are we’ll do a slow bottoming instead of a move up like we saw in March of 2020. What I would like to see is a crescendo of selling in January/February like March of 2020 since that would give us a better chance of moving with vigor off the lows. The PM monthly BBs are now narrowing to the point where January will be another waterloo one way or another. A fair number of the exploration stocks have and are now double bottoming to the March 2020 lows with some of the mid tiers now moving to do the same with the large cap companies starting to roll over. Newmont on its’ monthly chart is now looking vulnerable and if that company moves down more, you can bet the rest of the sector isn’t going to do squat.
Well, that sounds frustrating Doc, but I appreciate you sharing your technical outlook, and I’ll try and save a little dry powder for any future weakness, but I just blew out a lot of my funds raised when the miners crashed in late November, so I’ll need to do a bit of horse trading for now. I guess if I sell half my Great Bear shares next week that will give me a little more to play with, and I’ve also got some well fortified Royalty company positions that I could trim back to rotate further down the food chain if need be. Also, if the Uranium miners put in another short term pop in the next few months, I may trim some of them back again and that could be used for more optionality with the PM stocks.
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I’m still a bit more optimistic moving into the Q1 Run, and feel many miners are already pretty trashed here, but will throttle that back to “cautiously optimistic.” 🙂
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Doc – Let me know if you want to get together earlier this week and record another segment where we “Talk Stocks”. We can pick 3-4 to discuss the fundamentals and technicals on them if you are interested in doing that.
RICHARD/DOC Dec 11, 2021 11:38 PM
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Yes Doc the worst performing sector for a long time. I’m not around much and only just took a couple trades based on seasonality but they look weak… Gold bugs get it wrong most of the time.
ie Moriarty said 20 years ago USD is used toilet paper and here we are still one of the best liquid currencies although their all being inflated away. Also calling for a stock market crash always.
I said right here years ago markets will prevail and they have rocketed due to the recession and on going inflationary policies.. He said gold would blow away the indexes. A BIG FAT NOPE.
My other assets have ballooned from inflation. RE rents ect. cars trucks backhoes all worth more than 2 years ago.
Hopefully a xmas rally here so I can unload these quick trades. I sold most my gold stuff Aug 2020.
I’m developing some more mini storage…that stuffs a cash cow.
All the best…
gotta agree with you Bill, and the best could still be on the way.
Crypto has been sucking the life outta PMs and looks like that could continue.
Maybe it could change if a government or two decide to back their currency in gold but barring that I’m not sure what could turn things around for PMs.
Young people just dont seem interested.
Peter Boockvar – Falling Stock Market or Higher Inflation: Powell Will Have to Choose One
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The Jay Martin Show – Dec 11, 2021
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“Peter Boockvar returns to the show to discuss the Fed’s big dilemma – keep the stock market up or deal with inflation? Jay and Peter also touch on supply chain disruption, Turkey’s currency crisis, gold as an inflation hedge, and how Cryptocurrencies might perform in a challenging stock market.”
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0:00 Intro
2:30 Inflation is The Most Important Story
9:48 Supply Chain Disruption
12:55 Is Real Estate
16:25 Currency Collapse in Turkey
20:04 Cryptocurrencies Has Only Existed in 13 years of money printing
24:08 MMT
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While normally a post with Tucker would be better suited for the Political section here at the site, in this particular rant, it was simply focused on the financial health of individuals, and spot on regarding the macro economic picture. In particular, the focus of this episode was the very timely topic of Inflation (and how terribly the CPI number actually reflects the real inflation numbers most families are facing). It also rips a new one in the narrative that the inflation is only because of covid or supply chain interruptions [as did Peter Boockvar in that other interview linked up above], and how it is has stuck around longer and is much worse than has been covered in most financial media.
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To some degree, when the mass media is finally discussing CPI numbers, inflation, debt, and the effect it is having on the real estate markets, the general equity markets, and yes he even discussed Bitcoin and Ethereum, then you know the inflation discussion has gone main stream.
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There is also an absolutely hilarious montage of callback quotes to March – June of this year where all the talking bobble-heads kept assuring us that inflation was going to be “transitory”. 😉
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Then he completely destroys Jim Cramer’s fumbling nonsense for the win. Savage. Ha!
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Tucker: This Is Impossible To Ignore (Inflation)
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https://youtu.be/oWMAOylxXpw
I wonder why AUY shares sold short almost doubled recently from 18M – 35M, almost 4% of float, taking 2.5 days to clear.
No similar change in other miners like KGC or FSM
Apparently some traders are expecting gold producers to sell down. Maybe they didn’t like their new strategic stake in Benchmark Minerals…. but I sure did as a shareholder of BNCH.
https://www.youtube.com/watch?v=MP6undOf5oE
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Posting here because EV = mining.
Canada: “3% of new cars registered are electric, which is more than ever before. But the Trudeau government believes by mandating quotas for auto dealers, 100% of new cars will be electric by 2035.
Is there really a need for the government to intervene?”
(IAU) i-80 Gold Announces C$12,576,000 Top-Up Subscription by (EQX) Equinox Gold
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Dec 10, 2021
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https://www.juniorminingnetwork.com/junior-miner-news/press-releases/2984-tsx/iau/112212-i-80-gold-announces-c-12-576-000-top-up-subscription-by-equinox-gold.html
(SGI) (SUPGF) Superior Gold Extends High-Grade Mineralization In Favorable Location To Current Portal At Plutonic
– December 13, 2021
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https://superior-gold.com/news/superior-gold-extends-high-grade-mineralization-in-122630/
Corruption is still the agenda. Fed Meeting this week. Time again for in your face crime by government endorsed Bankking System. Same algos, same result.
From recent conversations and interviews, I think the Comex and LBMA are in more trouble providing physical metals than has been reported. I don’t know how bad it has to get for there to be an acknowledgement of that situation as an admission of weakness might tend to be an admission of a cover-up. We will see…
So I picked up a few Honey Badger Silver after they had a halt, interesting “samples” and then halt removed. Yukon silver. Goes along with Keith Numeyer (sp) saying he liked primarily US and Canada going forward.
Hi : Well now many on hered are D J Trump supporters well its apparent now that liz Chainey was right to join the dec 6th investigation . Trump mark meadows and Bannon -guliani are all complicit in the Willard hotel WAR ROOM to encourage the rioters who trashed the capital. Dems have for years condemed the Electoral college system and i do as well. Simple popular vote system should be used and each state gov should be the one to certify his states popu;ar vote . any gov who fails to use the real ballots should be crimally charged with treason. The ceremony to count the states electoral certificates is outmoded anyway. Trump is also liable for state of ny real estate tax evasion and should stand trial for tax fraud in NY state . Why my friends on this blog still support Trumpet mouth is beyond me . Trump is a power hungry jerk . best of heath and wealth to you all rsh
Thanks to all the KER guest contributors for another great week of daily editorials, company interviews with management, and another solid weekend show with Dana, Dave, and Sean.
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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.