Dave Erfle – Should Gold Investors Be Encouraged By The Recent Action In Gold And Gold Stocks?
Dave Erfle, Founder of The Junior Miner Junky joins us to recap the recent action in gold, GDX and GDXJ. The gold price continues to hold above $1,800 and the stocks have also rebounded from key support levels. We discuss some of the key characteristics that Dave is looking for in junior stocks.
Click here to visit the Junior Miner junky website to learn more about Dave’s newsletter.
Been heart crash for long time, I guess if you say it enough and wait long enough it will happen. Just like when Trump won in 2016 stocks will crash, Ineantime set stops and just ride wave, still have my core gold but made lot money over last few years being 80/20 stocks/gold, if and when gold breaks out and holds then will buy more miners plenty time if it’s going to $5K over next 3 years don’t need to buy too early because gold always disappoints.
Hi Norrareal, the melt up that is happening in real estate is being caused by ignorance, the people that are buying real estate now, is because they want to get in before the rate hikes. They don’t understand markets, instead they should be saying now is not the time to buy because a crash is coming and I can buy at really distressed levels in 7 to 9 years when the real estate market will have bottomed. Instead they will lose their homes when their income is destroyed by inflation and they must renew a huge mortgage at much higher interest rate levels. DT
DT, I agree with you. In the last couple of years I have been playing a real estate developer buidling and selling property. Second/holiday homes to western european upper middle class (all bought and paid for by cash, no loan). All my buyers have told me that they are buying because of inflation. To them real estate is the way to protect their wealth from the galloping inflation. And so far they feel vindicated because the prices have rallied 15-20% since they bought. Yet, we both know that will soon change once the rates head north and the real estate market crashes. As for myself, I have pulled out of the real estate business and will be putting everything into the PMs when the collapse does happen.
Anybody know what is going on with Kootenay. Price is down around .13 US. Looks like they may have issued some warrants that maybe affected price. Just wondering. Looks tempting.
Yes. A .16 Canadian financing with .22 warrants. Great for whoever gets a piece of the pp.
Thanks W. I figure if silver escapes from the safe of JPM and gets a life, Kootenay could move up in the parade down Wall Street of silver miners. Could throw beads and stuff.
Kootenay has been one of the biggest disappointments in my portfolio. I’m hoping for a run in silver prices over the next 6-9 months, lifting all boats, so that I can offload.
I hear you….. I struggle with wanting to dollar cost average down just so I can get out sooner but find too many other options that are better. If silver pops it would definitely have a nice move tho.
Kootenay has great leverage to silver like so many other juniors which is why they do so well when silver rises and extra poorly while silver corrects. Kootenay will have its day since silver is heading much higher.
I’m not selling a single share into near term strength because I don’t doubt that it will deliver huge gains. You have to keep in mind that such stocks move quickest and most when confidence in the sector is high and right now it is very low. These explorers, especially the ones with significant assets in the ground are like call options that don’t expire.
Kootenay will fly when silver gets going and particularly when it goes to and through the low $30s. It has millions of lower grade ounces in the ground that are currently uneconomic. When they go “into the money” you’ll get option-like gains.
Kootenay pierced two supports today but closed above both of them. Because of the catalyst for the decline, it shouldn’t surprise anyone if it turns out that we’ve already seen the low.
https://stockcharts.com/h-sc/ui?s=KTN.V&p=D&yr=1&mn=7&dy=0&id=p99359952921&a=946952729
Agreed Aetas Aurea on Kootenay under-performing many other Silver explorers. I finally cut my losses in it last year for a tax loss sale.
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Sure silver juniors outperform to the upside and downside, and it has been a tough last 2 years, but there were plenty of other quality silver explorers (like Silver Tiger, Vizsla, Summa, Blackrock Silver, Defiance, Eloro, etc…) that didn’t correct down nearly as much and had much better exploration programs and results in both 2020 and 2021.
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Having said that Kootenay is so bombed out here that it does look attractive to take a punt on at current levels for a rebound higher. I still like the CEO Jim and think they have located enough ounces in the ground to have a nice optionality factor with rising metals prices.
The question is, what would you buy today? Vizsla? Defiance? Both are great but if you’re very bullish silver itself, I believe Kootenay offers much more upside with less risk. It has the goods and is not loaded with dumb money due to promotion. Look at Novo; it went to almost C$9 on promotion and now has a hard time even when the sector moves up. For example, it barely matched the senior golds following the 2020 crash low. For the record, Novo now looks pretty appealing and well wrung of weak hands, many of whom will never return.
Most people don’t understand companies like Kootenay so they buy for the wrong reasons and have misplaced expectations. Sure, it will go up nicely as silver heads for $25 and beyond but the really impressive gains will happen when silver is well over $30. It has a lot of lower grade silver. So that call option quality it possesses might not cause it to beat its larger, higher grade peers right off the bat when silver first starts to move but it will, and probably by a lot.
Those who aren’t at all convinced that much higher silver is coming might be better off without Kootenay.
Yes, Matthew good thoughts on Kootenay’s optionality to higher silver prices from the larger reserves of lower grade silver resources. Other similar plays would be Southern Silver, Orex, AbraSilver, or the biggest undeveloped low grade silver deposit and the best optionality play would be Discovery Silver (DSV). It’s why it is one of Eric Sprott’s more heavily weighted positions.
Before buying the producing Mercedes mine from Equinox, I would have put Bear Creek into the same group for it’s large bulk tonnage deposit, but it has changed things slightly by paying to play becoming a producer. Still their large book of lower grade silver will have nice optionality.
Now as for the Silver explorers making meaningful discoveries to grow resources and advance deposits that will be more attractive then yes I still think companies like Defiance, Vizsla, Silver Tiger, Eloro, Blackrock Silver, and Summa Silver have fantastic leverage to $30+ Silver along with the big kicker of continuing to make really encouraging drill discoveries. Probably the most deeply discounted company like that at present is Metallic Minerals (next door to Alexco).
It’s interesting that Sprott’s price is very close to the current price. I’d say the size of the company played a big role in the stake he took. It might be among the best “optionality” plays for him but a lot of smaller companies will probably outperform it. If DSV’s AISC is really near $12, that actually works against explosive upside (at least theoretically) since it puts it “deep in the money” even at the current silver price. So its leverage comes form the sheer number of very low grade AgEQ ounces in the ground (which is also good). Most of which appear to be metals other than silver.
DSV’s calculations are based on much higher gold, lead and zinc prices (the “EQ” part of their deposit) than KTN’s assumptions for Promontorio but a much lower silver price ($24 vs $31).
It’s important to note that the lower AISC that (DSV) Discovery Silver announced in their new PEA is based on a smaller higher-grade part of their deposit, which does look very robust, but they have the largest undeveloped Silver deposit on the planet with 1 billion ounces of Silver eq. ounces, and I believe only like 300-400 million ounces are factored in for the PEA leaving the vast majority of the lower-grade bulk tonnage ounces at Cordero, that would have a higher AISC to bring into production out of the current economic study, and thus more leverage to rising metals prices. That is where the massive optionality longer term comes from, once Silver is north of $30. At $40 silver, that project becomes mind-blowingly valuable with more optionality than any other silver developer or explorer.
That is a huge amount of optionality leverage sitting out there, albeit most of the resources not found in the PEA (outside of its project constraints) are still in the inferred status and would need to be upgraded to indicated and measured over time… similar to the category where the ounces that are in the current PEA are designated. Regardless, it is a simply massive project that is larger than any other that a Junior holds. The in-situ value of the metal in the ground there, if one considers the 600-700 million ounces not yet included in the economic study is many many multiples higher than where the company is valued today.
As for the project economics on the higher grade core of the deposit that is in the economic study here are those details .
___________________________________________________________________________________________________________
Preliminary Economic Assessment on the Cordero project. Highlights from the PEA as outlined in this previous news release include:
– Excellent project economics: Base Case after-tax NPV 5% of $1.2 B (C$1.5 B) and IRR of 38% (Ag – $22.00/oz, Au – $1,600/oz, Pb – $1.00/lb and Zn – $1.20/lb).
– Exceptional silver price leverage: Upside Case after-tax NPV 5% of $1.9 B (C$2.4 B) and IRR of 55% (Ag – $27.50/oz, Au – $1,880/oz, Pb – $1.10/lb and Zn – $1.45/lb based on one-year trailing 90th percentile prices).
– Large-scale, high-margin, long mine life asset: 16-year mine life with average annual production of 26 Moz AgEq at an AISC of $12.35/oz AgEq.
Low capital intensity: initial development capex of $368 M; attractive NPV-to-capex ratio of 3.2x.
– Rapid payback: after-tax payback of 2.0 years for Base Case and 1.4 years for Upside Case.
– Technically robust study: 99% of tonnes processed in the PEA mine plan are in the Measured & – Indicated category; process design and metallurgical recovery estimates are based on the Company’s comprehensive 2021 metallurgical testwork program.
– Silver-dominant revenues: silver represents +60% of the net smelter return in the first five years of the mine life and +50% of the net smelter return over the life of mine, in-line with the senior/mid-tier silver producer group.
Excellon looked like a buy. I went back and looked at their production #s and then their drill results today so I bought them for the 4th or 5th time. I went ahead and picked up some Kootenay, although not sure what the deal is with offering the warrants at .16 Cad. They also had a news release that talked about their joint venture but thought the release was premature since it seemed to say they had drilled some properties, but no results yet. Anyone interested should read all that info as .13 US seems like a good price. Watch out pilgrims.
I looked at a list I have of Sprott properties (not sure of the currency), but both Excellon and Kootenay still on them. If someone is a “Sprott Watcher”, maybe they will correct the list I have relative to those two.
Lakedweller2 – Yeah, I saw that news out from Excellon on the high-grade yet narrow drill intercept back from Silver City, but they have a bit of a cloud over them right now until they clarify to the market if they are going to be able to keep Platosa producing. If not that is a substantial change and still a going concern for them, but it’s odd, because they’ve put out a number of solid drill results from around the Platosa area and from underground, so it’s unclear what their path forward is there. I’ve invited them to come on the show a number of times for a update, but thus far they’ve declined to do so.
The other challenge they had last year was losing that legal case to the old legacy guys on Evolucion, even though that was a prior company’s deal with them on that asset, and it isn’t currently in production with Excellon, so they disagreed with the court’s decision.
Thanks Ex. I will ride it a little while and see what silver does. If silver stays dead, there was something I came across today that is in that price ball park…. Now if I can just remember what it was. Might be Labrador as I rolled it into Emerita last April.
Good luck in your trade Lakedweller2. It’s a bit to risky for me until they at least provide more clarity on if Platosa will stay online and in production, and if so what the guidance is.
Yes…possibly for me also.
I keep thinking Silver will have its day in the sun but I have definitely had thoughts of dumping all of it just because of JP Morgan and their criminal operation and ongoing negative influence on the Sector.
Oh I’m still very bullish on Silver and the silver miners and hold over 20 of them, so I’m looking forward to the latter part of this year into 2023 to see some of the silver stocks really start to shine.
Melt up in every thing could continue…..
Real Estate……… as long as interest rates remain under 3%……. real estate will be fine…….. remember even at 6% ….real estate is not dead……just back to normal….
Rents are not going down, …based on inflation, and the desire of the govt to heard everyone into the new Agenda 21…….. City planners are hard at work to fulfill the agenda.
If,we get above 12%…game over…. but, still will survive…… JMO, (from past experience)
People will out think the bankers, ….. owners, can still do a lease with option to purchase….. many tricks to the trade…. 🙂
Very much true Jerry. I experienced the rates go from under 4 to 16 in a couple of months on my mortgage back in the Early 90s. It crushed the real estate market, with prices plummeting 50-80% depending on the location. I am convinced a repeat is coming very soon.
I do think we will see prices correct, if rates rise,……. just as you say……. just part of the game.
Banksters always like to have their friends purchase the properties of the over extended…..
Blackrock or Blackstone…… love to purchase the real estate on the cheap…… then the rents go up….
Rents go up, and the sheeple , … look at the two cost, side by side…. rent vs ownership….. Circle of life…. lol……….. One thing for sure…… everyone needs shelter…
Maybe I bitch and complain more. Lion One has been looking good lately…..agree Matthew that impact looks good hear
Ex. The pots I follow all seem to have found a bottom as volumes are returning on their recent bounce from near to or at 52 week lows.
I bought Lion One back last week and am up. So far so good.
I have to wait a month on buying back Impact.
Haha! Good one Wolfster. Yes, we can start a “Wolf Indicator” and if you get real bearish on a stock, we’ll use that as an indication of a turn, and buy into that weakness. 😉
They are submitting a joint bill to the congress that will try to cut out their insider trading and getting away with it. They previously passed a Bill approving it several years ago and goes a long way to explain why they vote like they are bought and paid for…because they are. It would try to limit them to Mutual funds and ETFs so any one stock that they have inside information about , will tie their hands to back door trading.
It will be interesting to see who cries and moans the most as they will be the crooks. If successful, they can extend it later to The Fed (who has had people resign recently who have been inside trading for years), Cabinet Members, Appointees etc…In essence, you have to forgo “conflict of interest” to be a Public Servant. Poor babies. Maybe this will force them to read the Constitution and find out what they swore allegiance to. A bunch of Sociopaths and Narcissists are going to want to find a new line of work.
With my change from the above purchases I added more to Honey Badger Silver. They put out another release on some more “samples” they got assayed and had ridiculous grades of silver. But, doesn’t mean as much as drilling a hole. But…the interesting thing is they had some lead and zinc in the samplings that were interesting also. Early but interesting. Honey Badger and Copper Lake like to go up and down a lot …but very early. That is why I throw my left over cash at them. (although I have taken some Copper Lake profits off and on when I am short on a buy to get a round # of shares).
When I was checking the Sprott list for Excellon and Kootenay, there was a small investment in Honey Badger. It is what it is.
Justin will be beaming: Monster moves in hot stuff today. Note CCJ.
I had a piece of that CCJ and sold it today. Same with cannabis(MSOS) sold today.
Appreciate the information I got from KER.
Yep, lots of solid moves today in the Uranium stocks with many up 7%-10% on the day.
URNM up 7.7% on the day as a good proxy on the U miners.
Symbol – Uranium Stocks – Daily Change %
AL.V ALX Resources Corp. +15.38%
CCJ Cameco Corporation +14.82%
LAM.TO Laramide Resources Ltd. +13.33%
SYH.V Skyharbour Resources Ltd. +11.82%
GXU.V GoviEx Uranium Inc. +11.67%
AEC.V Anfield Energy Inc. +11.11%
FIND.V Baselode Energy Corp. +10.77%
DNN Denison Mines Corp. +10.66%
LTBR Lightbridge Corporation +10.29%
WUC.CN Western Uranium & Vanadium Corp. +10.19%
UEC Uranium Energy Corp. +9.90%
NXE.TO NexGen Energy Ltd. +9.55%
UUUU Energy Fuels Inc. +9.38%
PWM.V Power Metals Corp. +9.26%
RDM.AX Red Metal Limited +9.09%
LEU Centrus Energy Corp. +8.84%
URNM North Shore Global Uranium Mining ETF +8.14%
UROY Uranium Royalty Corp. +8.11%
UEX.TO UEX Corporation +7.94%
BSK.V Blue Sky Uranium Corp. +7.89%
AZZ.TO Azarga Uranium Corp. +7.58%
URA Global X Uranium ETF +7.17%
ISO.V IsoEnergy Ltd. +7.00%
FMC.V Forum Energy Metals Corp. +6.98%
CVV.V CanAlaska Uranium Ltd. +6.45%
FCU.TO Fission Uranium Corp. +6.25%
PTU.V Purepoint Uranium Group Inc. +5.88%
URG Ur-Energy Inc. +5.60%
GLO.TO Global Atomic Corporation +5.28%
STND.V Standard Uranium Ltd. +5.00%
MGA.TO Mega Uranium Ltd. +4.92%
QRC.V Queen’s Road Capital Investment Ltd. +4.69%
FSY.TO Forsys Metals Corp. +3.95%
MAW.TO Mawson Gold Limited +3.70%
FUU.V Fission 3.0 Corp. +3.45%
VO.V ValOre Metals Corp. +3.41%
AEE.AX Aura Energy Limited +3.28%
U-UN.TO Sprott Physical Uranium Trust Fund +3.05%
API.CN Appia Rare Earths & Uranium Corp. +3.03%
GGG.AX Greenland Minerals Limited +2.63%
NLR VanEck Vectors Uranium+Nuclear Energy ETF +2.55%
DYL.AX Deep Yellow Limited +2.53%
EU.V enCore Energy Corp. +2.22%
LOT.AX Lotus Resources Limited +2.04%
BOE.AX Boss Energy Limited +1.95%
92E.AX 92 Energy Limited +1.80%
UWE-H.V U3O8 Corp. +1.69%
1164.HK CGN Mining Company Limited +1.30%
Uranium Names Power Higher Following Market Leader Cameco’s Strong Q4
Feb. 09, 2022 – By: Carl Surran, Seeking Alpha News Editor
Shares of uranium companies scored big gains after Cameco (CCJ +14.8%) said it was raising its quarterly dividend by 50% and pledged “indefinite supply discipline” in limiting production at two of its key Canadian operations starting in 2024.
“We won’t chase the market down to win business and we won’t produce to dump uncommitted supply into a thinly traded spot market as we’ve seen some of our competitors do,” Cameco CEO Tim Gitzel said on the company’s Q4 earnings conference call. Gitzel pointed to a narrowing supply/demand gap and increased willingness for utilities to contract at higher prices.”
“Riding Cameco’s coattails in Wednesday’s trading were Denison Mines (DNN +10.7%), NexGen Energy (NXE +9.8%), Energy Fuels (UUUU +9.4%), Centrus Energy (LEU +8.8%), Uranium Royalty (UROY +8.1%) and Ur-Energy (URG +5.6%) Also, Uranium Energy (NYSE:UEC) closed +9.9% after it filed a technical report summary disclosing mineral resources at its Reno Creek project in Wyoming.”
Copper is up 3% to 4.61
DCFC, …Tritium, the charge station stock, was up near 100% earlier. now up 75% at 16.70
Biden pumped it in his press conference yesterday.
Anyone shorting Oil? :-I
I’m thinking of selling some puts on DRIP for those wanting to short oil.
curious, what month/strike
Feb $4
aghead – I believe David Brady and Steve Penny are starting to short Oil at current nosebleed levels.
Beginning to notice that many holders of mining stocks are selling this hour. Real conviction! I’ll be smiling tomorrow if gold continues to climb moderately like it has been doing. Just no real believers out there. One day…………………………..
I am trying to round out Kootenay buys today but not getting any bites on the Ask. Moved slightly over and nothing.
Got them while not watching.
nibbled on RNGTF, osisko
big volume today
Cory / EX… Do you know what happened to the Political page. It’s showing the weekend show , from June the 15th 2019…. something has gone wrong.
Hi IrishT. Thanks for the heads up. I notified Cory who is talking with the web guy and is doing some upgrade on the political side, but not sure why it is jumping to that 2019 post. They are working on resolving it though.
Hey Irish,
Al requested a tag line be added to the political home page so I think our webmaster is working on that now. Hopefully it will come back live when he’s completed the adding of the tag line.
Hi Ex / Cory . Thanks for the replies , yes it’s fixed now … Thanks
10-4 good buddy.
Highest percentage gainers of the day for me were: Copper Lake, Honey Badger and Nobel. Go figure. I will take it and walk slowly to the showers…
Galleon gold got halted just before the close???
Galleon put out a PR after the halt indicating a private placement(I think) of $5mil. Eric Sprott involved.
The doctor is standing at the candy store door with cash—inflation numbers coming out soon. Have not bought a penny of anything this week since last minimal purchase—am watching KTN and hope to take a nice position in the future at 10 cents. Prices of many PM stocks down today even with rising prices. We will continue to rise into the last 2 weeks of this month and then in all likelihood I short the PMs (especially silver) heavily. The conventional markets will also continue to rise as February deepens. As mentioned in December, 2022 will not be a kind year to many asset classes.
Doc let us know when you start buying some of that candy, and which sweet treats are getting a nibble when the time comes.
Ex, we live in exciting times. Every morning when I awake I can’t wait to get to my computer and look at charts. I thought the 60’s were amazing with the civil rights and ant-Vietnam movements but I don’t think they compare to what we’re witnessing today as the “empire” is showing cracks and with it the turmoil in the rest of the world as well. It’s also exciting to see “normal” people rising up against the vagaries (finally) of the elite. 2022 should be another year of uncertainty especially for asset classes. Yes, we are fortunate to live in exciting times.
Yes agreed Doc. It’s like the Chinese proverb “May you live in interesting times…”
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We are going to continue to see a great deal of change. I remain hopeful that after 2 full years of darker themes, that people are starting to get sick of the draconian government overreach and will start awakening once again and building a brighter future.
If not the Davos “Great Reset” globalist elites have their plan and it will make the last 2 years look like a picnic in comparison.
It seems that Doc sees a collapse in the price of silver, is that due to the financial system of The United States locking up because of a paralysis of their purchasing power. The only way I can imagine silver being heavily shorted is if we have a Deflationary Depression. DT
DT, I don’t see a “collapse” but a potential continuation of a grind lower. At this point, I hope we don’t see a price below $18.00. March will give us a good idea whether we see that move lower or a bullish breaking Above its’ 20 month MA. The chart that bothers me is HL—it’s not a positive looking chart at all and if HL moves down you can bet silver won’t hold pricing at this level. In addition, I expect a further moderation of the economy which won’t do any favors for an industrial metal like silver.
One thing about Hecla is that over the last few years they’ve really upped their exposure to gold in addition to silver and base metals so that may help them weather any storms in silver.
Hi Doc
Also continue to keep some skin in the game if for no other reason but to help maintain some interest, otherwise it’d be like hanging out at a casino without a chip to play to relieve the boredom. LOL
You sure took some heat going back a few months ago.
It is surprising however to see how the fundamentals for the golds with worsening inflation worries, geopolitics, a potential US civil war in upcoming elections, the constant positve drumbeat of kitco and alike news bearers continues to be ignored. Especially with silver and all the enthusiasm as to it’s touted outperformance.
That heat remains well-deserved. Experts should know when a low is setting up and at least mention it but that never happens, not before during or after the low. Big liquid GDX immediately ran over 20% after he said nothing was going to happen. Isn’t it preferable to get in and then manage your risk if it turns out not to be the big one? Of course it is. The same goes for the December low as well as the recent one which was a typical post-Fed meeting shakeout. Remember the heads-up I gave the day after the Fed?…
Matthew
Jan 27, 2022 27:03 PM
The daily gold chart is now net bearish but it might be bullish that this action followed the Fed’s
comments. More often than not, significant action (down or up) immediately following the Fed
reverses and goes the other way.
GLD is showing the greatest volumes since June and is oversold on the 2 hour and lesser charts after
hitting its lowest pivot supports on the 4 hour and lesser charts so tomorrow would be a good day
for a strong bounce that could prove to be something more.
A poke down to 1780 tomorrow would test six month uptrend support.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=0&dy=0&id=p94710993804&a=1104018722
Reply
jonsyl
Jan 27, 2022 27:47 PM
Really gold chart net bearish but might be bullish.
Yes 1780 gold would be a test of the six month support level (hopefully). So what.
Reply
Matthew
Jan 27, 2022 27:52 PM
No, the daily chart is net bearish and the bullish part had to do with statistics around Fed
meetings.
Indeed, so what?
How can you expect someone to identify a big low if they can’t identify a small one?
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=7&dy=0&id=p89226877857&a=1111126809
Matthew, lost count of all the small lows you’ve identified each with their pointless babble, there’s always another one out there if you’ve missed the last one.
Yes, this may just be the big kahuna and the world is watching, not just you
Right. Doc and countless others thought there was “always another one” in 2016 after they completely missed the biggest and best one. Many even said there was no rush to buy because there would be pullbacks. There wasn’t. It’s been the same ever since. Every low, big and small, comes and goes without a peep that there’s been a low.
There’s never been a shred of evidence to suggest that these guys have a working crystal ball but that hasn’t prevented them from behaving as if they do.
There is a major market crash/economic collapse coming that will take stocks/bonds/real estate/crypto and yes even PMs down. This one will indeed be epic. And I believe It’s coming this year. There might be, as David Hunter writes, a melt up rally in almost everything, PMs included, before that. As a matter of fact, where I live, a melt up rally in real estate is underway. Also, it appears the stock markets have bottomed and are starting their melt up. Let’s hope that the satanists Will allow the PMs to rally as well.