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Weekend Show – Mike Larson & Dave Erfle – How To Play The Bull Market in Markets and Precious Metals

Cory
July 6, 2024

 

Welcome to another KE Report Weekend Show! For a shortened and choppy trading week there was a lot that happened in the back end of the week.

 

On this Weekend Show we focus on the broad markets, which hit all time highs this week and the move higher in gold and silver, along with the underlying stocks.

 

 

  • Segment 1 and 2 – Mike Larson, Editor-in-Chief at MoneyShow kicks off the show to discuss recent market momentum, economic data, and predictions about a potential recession. The focus for investors being on the performance of different market sectors, and the future outlook for tech, metals, energy, and more.
  • Click here to find out about the upcoming MoneyShow conferences. 

  • Segment 3 and 4 – Dave Erfle, Editor of The Junior Miner Junky wraps up the show with a focus on gold, silver and precious metals stocks. With a strong move in the later part of the week GDX, GDXJ and SIL all bounced off key support levels. We discuss the impact of fluctuating US economic data, anticipated Federal Reserve actions, and market speculations on future interest rates. Key highlights include: the bullish movements in gold and silver, technical analysis indicating a solid bull market, the growing strength in silver stocks, and the disparity in performance among junior stocks.
  • Click here to visit the Junior Miner Junky website to learn more about Dave’s investment letter. 

 

 

 

 

 


Mike Larson
Dave Erfle
Discussion
38 Comments
    Jul 06, 2024 06:52 AM

    In 1982 The UK and Argentina fought a war over The Falkland Islands, you knew that it had to be something other than the sheep population on The Falkland Islands.

    Falkland tensions explode as Argentina rejects illegal British action in the islands. Argentina has reacted with fury to the move and has threatened serious consequences if The UK proceeds with its plan to drill for oil. When you pull back the curtain war is always about money. DT

    https://www.express.co.uk/news/world/1919572/falklands-islands-argentina-uk-conflict

    Reply
      Jul 06, 2024 06:13 AM

      It’s all about oil, all they way back to Pearl Harbor.

      Reply
        Jul 07, 2024 07:43 AM

        Good point Rufust but you must remember that BP-British Petroleum had activities in The Middle East scouting for oil in the 1920’s. DT

        Reply
          Jul 07, 2024 07:17 AM

          Iran’s oil fields were first developed in 1901-09 by an Australian entrepreneur named William Knox Darcy. He then sold his holdings to the British, forming Anglo-Persian Oil Co., the predecessor to BP.

          On July 26, 1941 FDR issued an executive order cutting off oil shipments to Japan. That’s when the Imperial Navy got the green light to build up for the attack on Pearl. Plans for the attack were drawn up in 1940 when the US Navy moved the fleet from San Diego to Pearl. This was all part of escalation and diplomatic sanctions going back to the atrocities the Japanese were committing in China going back to 1937.

          It’s all about oil, at least back to Pearl Harbor

          Reply
      Jul 07, 2024 07:27 AM

      This is an interesting article by John Rubino entitled “Where You Store it: choosing a country for offshore Gold.” I think it makes life far too complicated, governments and businesses are moving so fast with the acceptance of Artificial intelligence that they will know everything about your activities all of the time. Gone are the days of wearing an ankle bracelet they will simply place a digital umbrella above your head and gather all your DNA all the time. DT

      https://rubino.substack.com/p/where-you-store-it-choosing-a-country

      Reply
        Jul 07, 2024 07:05 PM

        What passes for intelligence these days in so many circles is artificial at best.

        Reply
          Jul 07, 2024 07:06 PM

          What was important for warfare during The Falkland Island war in 1982 was The British Battleship Sheffield which was the pride of their fleet at the time was sunk by an Exocet missile from France that was fired by an old Argentinian Battlecruiser the General Belgrado. This was signaling a change in warfare. If The British send their fleet against Argentina now their losses will be heavy the anti-ship missiles are much more potent. If they send an aircraft carrier it will be sunk. DT

          Reply
    Jul 06, 2024 06:03 AM

    Oh oh! Problem for Silvercorp’s latest acquisition attempt! Lawsuit filed against Adventis threatening cancellation of environmental permit on ElDomo mine. Kind of sounds like Adventis doesn’t consider this as a material adverse event but Silvercorp does. Shad you have been following SVM- can you add any insight? Thanks in advance.

    Reply
      Jul 06, 2024 06:27 AM

      Hi there Badgermom3 – Yes, I still hold a heavier-weighted portfolio position in Silvercorp and have since late 2015, so I’ve been following the company more closely for over a decade now, and following this recent news that just broke.

      My initial thought is that they they seem cursed when trying to make an acquisition these last few years. First they tried to buy Guyana Goldfields, but were outbid by Zijin Mining. Then they tried to buy Orecorp, but then Perseus got all bowed up and blocked the deal by upping their stake and then paying much more than Silvercorp wanted. So then Silvercorp moved on to taking over Adventus Mining, which I think would be a fantastic acquisition for the project and price paid. However…. now they have a permitting challenge that is likely killing the deal.

      Based on the news they released just yesterday, it looks like they may be forced to pull out of the deal based on a Material Adverse Effect being triggered by the recent litigation to try and revoke their environmental license on the project. It’s a shame that radical environmentalists groups are at it again, killing a project that would provide so many jobs, infrastructure, complimentary support businesses, and taxes for the area. They have until the end of the month to have Adventus satiate their concerns on this litigation, so we’ll see how it goes, but this could be a “deal-breaker.”

      __________________________________________________________

      Update on the Acquisition of Adventus Mining Corporation – July 5, 2024

      “The Material Adverse Effect arises from the litigation referred to in the Adventus news release of June 17, 2024, which seeks to void the environmental licence of the Curipamba-El Domo project. Since we became aware of this litigation and brought it to the attention of Adventus some weeks ago, Silvercorp has made continuous, diligent efforts to understand and analyze the litigation and its implications. As a result of the analysis Silvercorp has done, and having taken advice from its legal and other advisors, Silvercorp reached the conclusion that this litigation presently constitutes a Material Adverse Effect, as defined in the Agreement, in respect of Adventus.”

      “The Company will continue to monitor and evaluate the litigation and its surrounding circumstances and remains open to working cooperatively with Adventus with a view to closing the Transaction if the conditions to closing for the benefit of the Company can be satisfied. The Arrangement Agreement specifies a deadline of July 31 for the satisfaction of all conditions to closing. Silvercorp has expressed to Adventus its willingness to discuss extending this deadline.”

      https://silvercorpmetals.com/update-on-the-acquisition-of-adventus-mining-corporation/

      Reply
        Jul 06, 2024 06:33 AM

        I was really thinking that this was “3 times a charm” and that Silvercorp finally had a solid development project in Latin America to sink their teeth into and build into a new mine outside of China. If the Adventus team can’t demonstrate the viability to permitting confidence to develop it, then Silvercorp is right to back out of the deal, because what point would there be to taking over a project that can’t be developed by an environmental blockage?

        Personally, if this deal falls through, I’d rather see Silvercorp make a run at Omai Gold Mines in Guyana, where they already have a nice strategic stake, from when they used their incoming funds from the break fee on the Guyana Gold Mines takeover deal being outbid by Zijin, to invest in Omai.

        Omai already has over 4 million ounces of gold in the ground and just did a big capital raise to fund their next stage of exploration and derisking. We’ve seen 2 other M&A deals in Guyana just in the last 6 months with Mako taking over Goldsource, and with G-Mining taking over Reunion Gold. If Silvercorp doesn’t move on Omai Gold in the somewhat medium-term, then I’m concerned another senior producer will.

        Reply
        Jul 06, 2024 06:38 AM

        Silvercorp normally would get the breakup fee, which in this case is $10 million. From what I have been reading, Adventis was pretty cash strapped which brought about the merger with Silvercorp. I don’t think Silvercorp will get a breakup fee from Adventis. Hope they can work it out but looking like another dud deal.

        Reply
          Jul 06, 2024 06:17 PM

          Correct. The breakup fee is usually if another company comes in with a competing bid where the acquiree decides to go another direction. (like what happened where Guyana Goldfields paid $10M to Silvercorp when they elected to go with the higher bid from Zijin Mining).

          In this case, Silvercorp as the acquirer would be breaking the deal based on the Material Adverse Effect being triggered by the recent litigation to try and revoke their environmental license on the project, so no break fee. It is more like a Force Majeure situation.

          Reply
            Jul 06, 2024 06:23 PM

            Thank you for the explanation on the breakup fee. Silvercorp can’t win for losing. Will Silvercorp be acquired at some point?

            Jul 07, 2024 07:33 AM

            It seems less likely that a larger company will acquire Silvercorp, (unless it is a Chinese producers), as North American investors and companies have a disproportionate amount of fear of that jurisdiction and Silvercorp, compared to the reality. The reality is that Silvercorp is one of the lowest producers of silver equivalent resources on the planet, (due to their credits from zinc, lead, copper, and gold). They are superior operators on multiple mines, with an internal communications platform and strategy that is far ahead of it’s time, and few companies could take over their operations and maintain the same results.

            It is far more likely that Silvercorp will be doing the acquiring, as is evident in their attempts to acquire Guyana Goldfields, Orecorp, and now Adventus Mining. All these conversations have caused me to refocus my Substack article today on why I’d like to see Silvercorp focus on acquiring Omai Gold Mines if this deal with Adventus falls through, or even if it does go through.

            Jul 07, 2024 07:13 PM

            Here is a link to my latest article on Substack, where I expand a little bit more on a half dozen different M&A deals in the PM sector, and the potential of Omai Gold Mines to be a likely takeover candidate down the road as the last development project of note available in Guyana (now that Goldsource was acquired by Mako and Reunion is being acquired by G-Mining).

            I make the case that if the Adventus acquisition deal does fall through, then I’d like to see Silvercorp (SVM) go after Omai Gold Mines (OMG), because they already have an 8.4% stake in the company, and Omai has 4.3 million ounces of gold resources defined, but likely much more than that, and now they are cashed up having just raised $13Million to do even more drilling in the gaps and at depth under the proposed pit shell.

            —————————————————

            Merger and Acquisition Opportunities In The Metals Resource Stocks – Part 2

            Excelsior Prosperity w/ Shad Marquitz – 07/07/2024

            https://excelsiorprosperity.substack.com/p/merger-and-acquisition-opportunities-51a

    BDC
    Jul 06, 2024 06:04 AM

    https://www.fibonomics.com/2024/07/natgas-week-much-deeper.html
    NatGas Week : Much Deeper : Awaiting Bull Run
    BackBox Turn or Breakout Test

    Reply
    Jul 06, 2024 06:19 PM

    Gold Stock Masterclass: Expert Analysts John Feneck & Erik Wetterling Share Strategies and Top Picks

    Stocks To Watch – June 27, 2024

    00:00 Intro
    00:39 Criteria for Categorizing Exploration Projects
    01:56 How Much Gold Qualifies a Project as High Potential?
    03:31 Junior Company vs. Major Mining Company
    05:39 Gold Prices and Future Valuations
    07:33 Cost of Mining Overview
    09:26 Tips for Investors
    10:59 Why Market Valuation Lags NPV
    12:39 Companies with Stock-Asset Value Disparity
    13:58 Undervalued Tier 1 Projects?
    16:24 Investor Tips: Gold and Mining Companies

    https://youtu.be/BoAOHeJOTOM

    Reply
      Jul 06, 2024 06:21 PM

      Always good to hear from HH and his thought process applied to specific companies as well as the points he makes in favor of mining friendly Sweden.

      Reply
        Jul 07, 2024 07:14 PM

        Yes indeed… always nice to get ideas from the Hedgeless Horseman. I also have learned a great deal by following John Feneck over the years and he makes some cogent points.

        Reply
    Jul 06, 2024 06:15 PM

    Silver’s low of almost a month ago is now 10% and almost $3 in the rearview and silver just put in its best weekly close in 11.5 years. In other words, on a closing basis we have a weekly breakout.
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=1&mn=11&dy=0&id=p23353701519&a=1697788032

    Reply
    Jul 06, 2024 06:19 PM

    SLV:GLD closed above its daily KAMA for the first time in 5 weeks (Silver:Gold did so one day earlier).
    https://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=0&mn=5&dy=0&id=p11843211200&a=733247074

    Reply
    Jul 06, 2024 06:34 PM

    ‘The AI Bubble Is Reaching A Tipping Point’

    Jesse Felder – The Felder Report (07/06/2024)

    https://mailchi.mp/thefelderreport/ai-bubble-tipping-point

    Reply
    Jul 06, 2024 06:50 PM

    If this shortened holiday week gets confirmed next week prepare for a silver rocket.
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=11&dy=0&id=p67687567777&a=1703420817

    Reply
      Jul 06, 2024 06:27 PM

      Good, I will look at writing weekly puts on liquid silver stocks and ETFs.

      Reply
        Jul 06, 2024 06:19 PM

        That’s a good idea.

        CDE has more than tripled since bottoming in November. Some might remember that I said a long time ago that CDE would smoke HL during a bull market and that’s exactly what it’s doing.
        https://stockcharts.com/h-sc/ui?s=CDE&p=W&yr=4&mn=11&dy=0&id=p75828375760&a=1381554333

        Reply
          Jul 06, 2024 06:08 PM

          I started selling puts on CDE near that November low but failed to buy some calls with a portion of my profits….oh well.

          Reply
            Jul 07, 2024 07:16 PM

            CDE has grown into one of my larger silver/gold positions and I just trimmed it back a little bit recently as it was becoming too large of a weighting for my comfort in the portfolio. When it moves… it really moves… and they have a lot of upcoming catalysts as fundamental tailwinds at their backs.

    Jul 06, 2024 06:30 PM

    Copper took back its KAMA after 6 weeks below it and did so on impressive volume.
    https://stockcharts.com/h-sc/ui?s=%24COPPER&p=D&yr=1&mn=6&dy=0&id=p07165812627&a=1629899188

    Brixton should catch a bid soon as the herd figures out that copper’s spike wasn’t a “one and done” affair.
    Likewise, the gold/silver miners are heading for much better performance for the same reason re gold and silver. Plenty of people were/are sure that the metals have seen their highs for the year.

    Reply
    Jul 06, 2024 06:48 PM
    Jul 07, 2024 07:03 PM

    GoldSeek reports that: “Hoye says the gold stocks and precious metals mining sector is early stages of a multi-year, fabulous bull market.”
    Hoye is absolutely right.
    https://goldseek.com/article/goldseek-radio-nugget-bob-hoye-crb-proxy-mining-costs

    Reply

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