Dave Erfle – The Junior PM Mining Stocks Are Starting To Pop
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us review that the junior gold and silver stocks are starting to pop higher on large volume, and he shares insights on how he is managing his resource stock portfolio. The conversations gets into a number of topics around having patience not to over-trade, when it is time to take profits, what kind of projects and focus juniors should have, thoughts on jurisdiction, project scale, dilution, capital raises, successful track records, and what questions to ask management teams when you chat with them.
Click here to visit the Junior Mining Junky website to follow along with Dave’s market comments.
Agreed DT. The Crypto investors make it sound cool and hip as a “coin” but it’s not a coin, and as you mentioned they colored it “gold” but it’s not Gold 2.0.
Obviously, Bitcoin just crashed (again) since November of from $69,000 all the way down to $15,500, before it’s recent rally over the last 2 months up to just under $23,000, but it was absolutely slaughtered in comparison to Gold.
They make it seem like Bitcoin is really working, and that Gold is just for old delusional dinosaurs.
Here’s a graphic that was going around ceo.ca recently that imbeds those biases well.
SWIFT will no longer process currency transactions from bank accounts to crypto exchange, with a value of fewer than 100,000 USD, effective February 1st, 2023. The move is designed to reduce the access of crypto investors which is a step toward what I have been warning that governments will NOT allow private cryptos to compete. Governments have controlled official money and they have prosecuted those who dare to counterfeit their currencies. Even the Byzantine Empire would wage war to stop another from even imitating their currency.
This is a move that is to open the door for government digital currencies and to gradually reduce the private crypto marketplace. Imposing a $100,000 limitation will greatly reduce the ability to gather smaller investors. This will be interesting if January proves to be just a reaction high.
Just as SWIFT removed Russia from their system when they refused to do that before Biden, they have surrendered their independence and now take their order from governments. This is the preparation for the collapse of the Monetary System.
Thanks David. That is interesting on the SWIFT developments with regards to Cryptos, and another potential stumbling block for the Diamond Hands.
Junior Gold Stocks are Poised to Outperform in 2023
David Erfle – Friday January 20, 2023
“With the rally in gold prices over the past two months having defied analyst expectations for continued weakness, precious metals remain under-owned and out of favor despite their strong relative and absolute performance into 2023.”
“Since a monthly triple-bottom took place in November, I related in this space last week that the gold price continuing its climb has been mostly due to several eastern nations having recently begun to diversify their foreign reserves into physical bullion.”
“After a significant 7-year bottom was reached late last year, the mining sector is experiencing an impulsive rally with multi-day to multi-week sideways price congestions. Since bottoming last fall, both GDX and GDXJ have had two such pullback/consolidations, between 5 to 8%, and are currently experiencing a third.”
“The GDXJ closed above formerly strong resistance at $37 to begin 2023, which is a level that has become important support and 8% below the recent peak at $40.55. With the sector now overbought, this is a good time to accumulate long-term holdings in quality juniors on weakness. Many quality junior gold stocks have been popping higher one by one from 4 to 6-month basing patterns since late Q4.”
There were a number of technicians a month or two ago that felt $1920-$1925 would be strong resistance for Gold to get through (for a few different reasons that reinforced that focus there), but instead, Gold moved through that level and has hovered above it by $10-$15 the last 2 weeks.
We didn’t see the yellow metal go up and approach it and retreat, nor did we see gold get barely above $1920 and then fall right back down again to lower prices immediately. Instead we’ve seen Gold hang onto it’s gains for the last 2 weeks, consolidating where it is, as Silver channels sideways consolidating in the $23.50-$24.50 range.
Personally, I’m impressed that the PMs made it is high as they did considering where they were trading back in September, and for gold in early November. However, I more impressed that they have started working off some of the oversold readings on strength and momentum indicators through time versus price.
Gold is at $1938 and Silver is at $23.75.
Those are actually quite historically high nominal prices for the PMs and they are plenty high enough for producers and royalty companies to make excellent margins and have beefy revenues. Even most development projects economics would like quite robust at today’s prices. What’s not to like?
I started peeling back some of my beta plays today. I don’t have a feel for whether or not the next 10-15% in GDX is up or down. I hope it’s up and we head to $38-$40 on GDX. I reweighted my gold/silver 55/45 from a 70/30 bias to gold in case silver breaks higher from here. Status quo on juniors – letting the alpha try and make a run here while perhaps beta takes a breather/moves sideways. My junior portfolio is below:
Juniors: Fireweed, Magna, Snowline, Western Alaska, Rackla, Tectonic, Hercules Silver, Silver Tiger, Lion One, Brixton and Mawson Gold.
Weightings: 15% gold/11% silver 25% mid to large producers 25% juniors and 24% cash/money markets.
I was fully invested until today but sold half the beta names to get that cash position up. Good luck to all! Hope PMs keeps running and make the central banks continue to look like the silly fools that they are!
For juniors still looking for those long intercept finds like 100m of 1.5 gpt+ AU or 1000m 1% Cu in a new discovery. Some of the juniors I own haven’t discovered anything so they are certainly the most risky bets (Tectonic, Rackla, Hercules come to mind).
Could KE get an interview with Rackla and see what they are up to? Might be an interesting one for listeners that own Banyan Snowline etc….
Hi Ryan and good post. I like the mix of silver and gold mining stocks that you have, as well as the different stages of mining stocks and a lot of the companies you mentioned. Yes we could try to reach out to Rackla, but I don’t follow it that closely. If you have a way of putting us in touch with the company, then please just email me email@example.com.
I was in Rackla about 12 years ago when it was selling for .005 cents. At this time Simon Ridgeway bought up almost all the shares. Over the years Simon kept bringing in trading halts and the stock sometimes wouldn’t trade for months on end. Anything Simon gets involved in does spectacularly well but I couldn’t personally stand all the trading halts that went on for a long time and tied up my capital, so I got out.
Good point DT. I forgot Simon was involved with Rackla, and when we talk to him next we can ask about that. Personally, I’m more interested in getting an update on Volcanic Gold from Simon when the next one comes out, so that is more of a priority.
At the New Orleans Investment Conference, I hung out at their booth a bit and talked with Simon, and his business partner Bruce over at Radius Gold. We discussed getting Bruce on the show in the first part of this year to discuss Radius, so both of those updates are likely coming up down the road.
Remember when most had been bearish at this bottom? I mentioned w pattern..I expect higher before correction. And i don’t expect the correction most bears are hoping for..This bull is going to keep many losing money.
Right at the bottom Rick Bensignor thought it was over for gold and Paul said we should thank him for waking us up. That’s what important bottoms look like in any sector.
Of course Joe was also very bearish at the low and said the following:
“It’s far from over.
You might think we’ve hit the bottom, that the darkest of times for this sector are about to pass, but you’d be wrong to think that.
The last quarter of this year will be a washout to end all washouts.
You will see companies in this space trading for less than cash.
You’ll even see some bankruptcies.
And no amount of Excelsior multi-paragraph, specious diatribes will stem the tide.
Strap in, it’ll be a hell of a ride.”
I’ve posted Joe’s comments before but they’ve gotten funnier with time so why not once more?
Agreed Matthew – Joe’s comments have become funnier with age. He said that on September 24th.
My supposed “diatribe” that he was taking a swipe at me for in his post, in contrast, has aged better and better. Here is what I had said on that same thread on Sept 24th, 2 days before most of the mining stocks bottomed that following Monday Sept 26th.
I also made note of the short-squeeze rally we’d already seen in Silver as significant, and $17.40 was, in fact, the low. I also pointed to Goldfinger’s target of $1625 as a reasonable target in Gold to find support, and it ended up triple-bottoming around the $1620ish area as time went on.
At the end of my “diatribe” I postulated that due to the negative sentiment extremes and oversold conditions we were seeing that it made sense to start scaling into positions (which would have been precisely at the bottom in the mining stocks). In contrast, Joe was still advising everyone to sell everything and go to cash at the exact wrong time. Just sayin’…
@Excelsior – Sep 24, 2022
“I liked Goldfinger’s target of $1625 in Gold as potential spot where buying could come in, stop the bleeding, and then cause a reversal squeezing the shorts back higher. It was also encouraging the last 2 weeks to see Silver bounce off $17.40, and then springboard back up into the mid-$19s again, but it lost $19 support already to close this week at $18.91.”
“There is a lot of bearishness out there, and sentiment is getting about as bad as it was in 2015 again, so that is actually a contrarian bullish signal. The BPGDM chart going down to a reading of 7 is also a contrarian bullish signal, as the market breadth in the gold stocks is fugly. There are other readings of gold stocks below their 200 day moving averages, or making new 52 week lows that are now so bearish, that they look contrarily bullish.”
“Still, the markets can stay oversold and irrational longer than many can stay solvent, so these conditions could still deteriorate further. The BPGDM could go to 0 and stay there for a month like it did a few years ago, so it isn’t a great timing tool, but at these low levels, it is definitely showing we are closer to at turn than we are a whole leg lower. So while we could still see things sell off further, scaling into positions into this weakness is a solid approach for those that like to catch tradable rallies.”
Joe is clearly someone who has been burned in this sector. The action in the metals and miners has been relatively terrible for 7 years, with short but massive spikes interjected by a few massive retracements lasting1-2 years, so Joe is likely not alone.
The vast majority of investors ultimately get burned in all sectors. Remember when spanky declared that there would never be another correction greater than 5 percent in the stock market? I guarantee that his irrational exuberance was the norm and not the exception.
As for the gold space, there was no way that it was going just keep rising in 2016 or even 2020. It simply wasn’t technically ready to but now it is. The main event is here but few will believe it anytime soon so the selling into strength and top-calling will continue until very few retail/weak hands are positioned for it.
Great comments there Matthew on most of the herd being consistently wrong at both perceived tops and bottoms and then at the actual ones, or having perceptions entrenched in recency bias, where they extrapolate out recent trends to infinity and beyond.
When Spanky was railing on about the FAANGs poised to continue higher indefinitely, or suggesting we’d never see more than a 5% correction in the general equities moving forward, it was coming from an environment where that had been the case for years previously. What he failed to realize was, the only constant is change.
Then Spanky went on to famously declare repeatedly that Silver would never get above $18 again in his lifetime. Haha! 🙂
Obviously, that was a silly notion, that he doubled down and tripled down on, and then less than a year later, Silver shot way up past $18.
What was sad, but not surprising, were the people that agreed with Spanky then about Silver being dead forever, or general equities never correcting, just like we had folks here that were in the #JoeWasRight camp in late September expecting a brutal 4th quarter and beyond for the PMs, which conveniently marked the bottom in the sector, which has rallied ever since then. Gotta love it! 😉
Im expecting at most 1 monthly red candle at the triple top and it could come from higher level. But thats all we will coorrect imo and them cut through it like butter.
So far so good. On Saturday I said the following:
I sold quite a bit of Hecla yesterday but will buy back aggressively on weakness. There seems to be a good chance that any dip in silver/the sector will be sharp and short in duration.
Yesterday I did “aggressively” buy back much of what I sold on Friday and today I was trimming again (but lightly) with an average sell price above 6.38. Bought PSLV below 7.99 (representing a discount to NAV of over 3.6%).
It is obviously possible that a bigger drop is about to commence but I doubt it for many reasons.
NatGas Nears Ground Effect
PMs Hover Higher
Stillwater halted before the open…..🤔🤞
They are presenting at the Emerging Growth Conference today, maybe something special.
This is the headline from my bank site, I haven’t found a link yet.
Stillwater Critical Minerals Expands Resource 62% to 1.6 Blbs Battery Metals and 3.8 Moz PGE+Gold at Stillwater West Project in Montana, USA
9 minutes ago
PGE, Stillwater Critical Minerals, news that caused a trading halt today.
PGE, Stillwater, this is the official news release.
Good catch guys. I’ve been so busy on calls with Cory, and there has been so much news out lately, that I hadn’t seen Stillwater Critical Minerals put out their resource estimate yet. We’ll get Mike back on the show soon for an update and to unpack it for us.
I just noticed that Frank Giustra has upped his share count in MCF Energy (SYL-MCF), they are working on securing Europe’s energy needs. I haven’t posted a link yet because I need two sites to confirm. DT
Monday I took Magna profits over 100% and moved to Silver Tiger, Headwater and Defiance. Today after funds settled, and after good drill results by Silver Tiger, I took profits over 100% and moved back to Magna. Going to keep moving profits when sufficient percentage before the algos do.
Sounds brilliant and easy to do. Quick 100% in a stock flip to next 100% gain and so on and so on. Lol
Thanks. I was trying to figure out how to deal with the alternating days as well as sell the news computer generated action. I arrived at this idea a couple of weeks ago as the positive results were tangible and not in the future. I wanted to protect what I had but move it where a profit could be taken but possibly returned to the source before the stock taken down for no apparent reason.
I decided to not trade on potential but trade only among those in the green. I have taken profits above 50% but as a few have doubled, I decided to take those profits like a Magna Mining and move it for example to an I-80. Rather than wait 31 days and take losses (I have taken Emerita losses in Nov and Jan with an interim buy in Dec to fund the gains. I set up a base long term loss and now taking these gains tax free …at least for awhile). So in essence, I am moving tax free gains one stock to another which gives me a lower purchase price on the stock I purchase. If during the 2 day period one takes off, then I can either hold or move it back to the original. With Silver Tiger’s good news today, it would have normally taken off higher. But it was sell the news which was intervention. Magna has been going down, so even though Silver Tiger had the news, they didn’t get the movement. So I moved one-half of what I moved on Monday from Magna To ST on Monday back to Magna which opened good and then was hit again.
My whole theory is to try to counter the flagrant alternating day algo control of my account and find a way to compound gains within a counter production intervened in market.
(The Silver Tiger sale was based on FIFO accounting and the move back to Magna was a 100% gain in Silver Tiger. This system is based on FIFO accounting as early share prices are generally lower)
My suspicion is if this process disturbs those with Servers, they will have to consider climbing the Criminal ladder a little higher and make profits on “all” explorers short-lived. That may be acceptable to Regulators. That would also be disconcerting. Just a thought for the day.
My account just turned back green…isn’t that interesting.
Looks like just a general algo pop in the general markets affecting all sectors.
Silver Tiger has been in beast mode lately, and continues to put out solid bonanza grade drill hit after solid bonanza grade drill hit. Impressive!
I’ve said over and over that the only 2 silver companies in Mexico that appear to be replicating the success of Silvercrest have been Vizsla and Silver Tiger, and both those companies continue to deliver.
Lake, you better check your meds!
Account gone negative with some up and some down, but reverse of yesterday as far as individual stocks. However, I added to Infinity Stone. Possibly one you guys haven’t heard of but may find intersting.
Dick, you’d better increase your dose since you’re starting to sound a little silly.
Brumple, Maybe, you should give us some of your insights into investing, that will not happen! LOL! DT
DT telling Lake to check his meds is not investing advice and not necessary.
When silver breaks upward, as I expect it to soon, it’s going to hit $26 within 2 weeks max.
I bet silver will cruise right through 26 once it takes out this month’s high.
I bet you are correct………
TFPM – 1st buy @ 12.92
If central banks start issuing digital currencies, the level of purchasing power destruction of currencies seen in the past fifty years will be exceedingly small compared with what can occur with unbridled central bank control.
In such an environment, gold’s status as a reserve of value would be unequalled.
There are more reasons why a central bank might buy gold.
Central banks need gold because they may be preparing for an unprecedented period of monetary devastation.
Jordan looks to be correct here – just grinding out bears over time – every down tick met with more buying to stem the tide. Not breaking out but man some of these silver stocks looking strong and one would think they are sniffing out a silver breakout.
I added to Silvercrest after the KE Report interview as the CEO made it sound like they are a takeover candidate and it has turned out very well so far! Great job KE Report team on getting such a timely interview – would love to see SILV get bought out around $12-$14.
Thanks Ryan. Yes, Silvercrest is a best-in-class company, and they’ve done well from explorer, to developer, and now producer. I sure hope they don’t get bought out yet, as I’d like to see them stretch their wings and fly for a while with higher metals prices, but eventually Silvercrest 2.0 will get acquired, just like Silvercrest 1.0 was by First Majestic.
Silver doesn’t look like it is going to take out Monday’s high print (an outside day down) today (barring a 50 cent spike into the close), which means the reversal (to the downside) is still in play.
Given that the FOMC meeting is next week, I am not expecting a breakout of the range we’ve been in before then. I would like to be pleasantly surprised, of course.
The daily BBs (20,2) are also super tight, which often is a breeding ground for whipsaws and headfakes.
PGE, Stillwater Critical Minerals. I sure like the looks of this!;-D I am stoked about this company, it has become my largest holding and I’m not selling until it busts through some bolly bands…
I went back in and hoping the 5th time is the charm. Nice jump in resource that Maybe will get this stock moving.
Well, maybe I spoke to soon. Silver is perhaps trying to take off. A close over $24.30 today would be needed to get really bullish in the very near term.
I said recently that your AG an EXK would be fine and today was a good start toward proving it. Both far outperformed my HL and will probably continue to do so often.
IPT broke out late in the session on good volume finishing up 8.33%.
I noticed that. I am loaded up but might buy some more in the morning.
Do you know what I like about Bitcoin, they colored it in gold and made it look like it had the good housing seal of approval, but it has neither and will end up in the trash bin. “The con men con but life goes on”, Gordon Lightfoot. DT