John Feneck, Portfolio Manager, Consultant, and publisher of the Feneck Commodities Report, joins us to share his macro outlook on the Fed rate hiking cycle in response to high inflation, and provide some insights on how he is approaching investing in resource stocks in this environment.  We start off with his reaction to some of the recent merger & acquisition deals announced where the all shares deals have continued to punish both company being acquired and the acquiring company as the transactions became liquidity events.  We discussed that Alexco Resources (AXU) is being acquired by Hecla Mining (HL), Gold Standard Ventures (GSV) is being acquired by Orla Mining(ORLA),  and Nomad Royalty (NSR) is being acquired by Sandstorm Gold (SAND) (SSL), and in all cases both companies pulled back down in tandem, due to the all shares deals which disappointed longer-term shareholders.   On the more positive side of M&A, we did just see a nice premium paid for Great Bear Royalties Corp. (GBRR.V) (GBRBF) by Royal Gold (RGLD), as well as the solid premium takeover of Orca Gold (ORG) (CANWF) by Perseus Mining (PRU) (PMNXF).*

John provides his strategy around buying or adding into market weakness, and selling or trimming into market strength, as a more active portfolio manager, but at present is in more of a holding pattern in most resource stocks, waiting to see where the bottom will come in before deploying much more capital.  We also take a look at how he holds hubs like Silver or GDXJ in his hub and spoke approach, and but that the larger returns and opportunities will come from the junior mining spokes of individual companies.   We talk about how high inflation costs are eating into the developers projects, and he provides some questions he asks management around when a PFS is slated to be released, and that he prefers that development stage companies already have some sunk costs and infrastructure in place to reduce the inflation risk, preferring companies like Braveheart Resources (BHT) (RIINF) or Gold Terra Resource (YGT) (YGTFF) in that category. *

Next we pivoted over to the stocks that will move first when the PM sector bottoms, and John agreed that sector leaders like Agnico Eagle (AEM) or Newmont (NEM) will get the funds flows out of the gate and he is positioned in AEM for that eventuality.   Despite being 60% in cash with regards to the energy fund that John manages, he is still is liking the setup in some companies and mentioned Jericho Energy (JEV) (JROOF) as one straddling the hydrogen and oil sectors.  Also with regards to a company with energy metals exposure, he still likes the diversified commodity mix that Forum Energy Metals (FMC) (FDCFF) has in their 3 projects. *

*Guests featured herein may have been compensated for their services in working with some of the companies mentioned. John holds positions in many of the Companies and ETFs mentioned.

If people want to contact John with regards to his services please email him at john.feneck@yahoo.com.

https://www.feneckconsulting.com/about