Dave Erfle – Technical Outlook On The Precious Metals And Thoughts On The Recent Mega-Mergers
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review his technical outlook on gold, silver, and the precious metals stocks, as well as thoughts on the recent trend of more “mega-mergers.” We start off noting the similarities between the 26-month consolidation of the precious metals sector from the summer of 2020 to the recent low in Q4 of 2022, to the 26-month consolidation from the summer of 2016 to Q4 of 2018. There was the initial rally coming out late 2018 into early 2019, then a corrective period, and then another big move higher later in 2019, and that may be a pattern that rhymes with what we are seeing now. Dave provides some technical pricing support levels for gold, GDXJ, and silver for investors to keep a lookout for.
Next we shifted over to strategies for investors to consider regarding scaling into positions during the corrective pullbacks, versus waiting for clear breakouts to add into strength. We wrap up with a discussion around the recent pickup in mega-mergers between the major producers, reflecting on the news this week of Newmont Mining (NEM) putting in a bid to acquire Newcrest Mining (NCM.AX), after also just seeing recently Agnico Eagle (AEM) and Panamerican Silver (PAAS) beat out Gold Fields (GFI) in the bid to acquire Yamana (AUY). Dave provides some insights on what this may mean for garnering more generalist investor interest, what other majors may move next, and when it will filter down to acquiring the junior development companies.
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Click here to visit the Junior Mining Junky website to follow along with Dave’s market comments.
In the discussion above with Dave Erfle, with regards to the Major producers all consolidating one another, and the failed bid from Gold Fields for Yamana, where the winning offer went to the combined offer from Agnico Eagle and Pan American Silver…. That leaves Gold Fields on the prowl for more production.
Since Galiano Gold and Gold Fields each have 45% stake a piece in the JV at the Asanko Mine, (with the government of Ghana holding the remaining 10%), I could see Gold Fields taking over Galiano Gold in the next year or two to gain 90% exposure to this large producing mine.
Also in the discussion with Dave we reviewed that some of the larger Mid-tier producers would likely continue the trend of going after companies with large single-assets that are in production or advanced development projects. Well… here is B2Gold saying yes… the time for another transaction is near….
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B2Gold CEO says firm is close to next deal after targeting single asset companies
Brendan Ryan – Mining MX – Feb 7, 2023
(IAU) (IAUX) i-80 Gold Intersects 12.3 g/t Au Over 10.7 m in New Target at Ruby Hill
8 Feb 2023
https://ceo.ca/@newswire/i-80-gold-intersects-123-gt-au-over-107-m-in-new
Too Much of a Good F(Li)ng
Mining Stock Daily – Trevor Hall – February 3 2023
“In October 2022, prices for battery grade lithium carbonate in China hit an all-time high of $74,475 per tonne. The speculation in lithium carbonate has certainly become frothy. I understand there are fundamentals of supply/demand, EVs, battery technology, etc underlying the price moves.”
“Sentiment appears to have gotten out of hand. The indicators are all out there and it follows every other sentiment cycle in the metals space. First, the metal itself gets bid up on speculation, then the producing equities, followed by the junior exploration equities, and then the name changes with a heavy dose of new listings related to the metal.”
“Could the lithium equities continue its rise? Perhaps for a bit longer, but at at this point the technicals do not represent the fundamentals. Speculation has a tight grip on this market. And it will, until it doesn’t.”
As Jared Dillian reminds us, “what is unsustainable cannot be sustained.” Folks, 5X returns on little news is unsustainable.
SLVR, Silver Tiger, news triggered a trading halt and resumption.
A TD9 bottom on daily /NG…right now…price exceeded the bar 4 counts ago…now price must reverse above and reject that price of 4 bars ago…..could be a classic at least tradable bottom…i am in..glta
Again Larry, I have no idea why this was not approved.
(GAU) Galiano Gold: Turnaround Thesis Remains Intact
Feb. 07, 2023 – Taylor Dart – Seeking Alpha
https://seekingalpha.com/article/4576157-galiano-gold-stock-turnaround-thesis-remains-intact