Hour 1 – US Markets, Oil, Gold, and an update from Novo Resources
This week show we focus more on the broad market rebound that is extending further than most analysts expect. Mixed in with some investment thoughts on oil and an extended update from Novo Resources.
Please keep in touch by emailing me at Fleck@kereport.com.
In case you missed it there are two special webinars coming up next week! Click the links below to sign up and have first access to the live event and the recording.
Revival Gold – Monday, April 20th at 1pm PT. Click here to sign up Great Bear Resources – Thursday April 23rd at 11:30am PT – Click here to sign up
- Segment 1 & 2 – Mike Larson kicks off show by sharing his thoughts on the US market strength and where he sees value.
- Segment 3 – Josef Schachter is up next with a focus on the energy sector and the depressed oil price. We stick to most of the fundamentals between supply and demand and the stocks he likes when the sector rebounds. Click here to learn more about Josef’s new letter focused on the fundamentals in the oil market.
- Segment 4 – Quinton Hennigh joins me to update us on the recent news from Novo Resources. We discuss the fine grain gold sorting results from Beatons Creek and the new exploration targets at Egina. Click here to visit the Novo Resources website.
Exclusive Company Updates This Week
- Cartier Resources – Drill results from a new zone and a look ahead to a new resource
- SilverCrest Metals – Updating recent financing news and continued drilling success
- GR Silver Mining – Recapping high-grade results from the Plomosas Project
- Maple Gold Mines – Recapping recent exploration results and new targets from IP work
- Auryn Resources – Broad Exploration and Operational Updates and Comments On The Homestake PEA
Could Silver Soon See Its Day In The Sun?
By Darryl Schoon – Apr 16, 2020
“The whole concept of ‘owning shares’ is being questioned by those who’ve been taught to remain braindead by generations and generations of ‘economics teachers.’ It’s in this context that metal futures – especially of gold and silver – are moving apart from other ‘securities.’”
“Is there a true ‘reduction in demand’ for silver? Those who hold ‘securities’ are trying to switch from those that will vanish (‘shares’ and ‘bonds’) into ones that will not vanish, or at least ‘one side of which’ won’t vanish – and silver/gold futures/forwards, amongst other goods, fit that requirement. This is evidenced by looking at changes in COMEX system of repositories’ inventory, which gives a clearer picture as to the true ‘demand for silver.’”
https://safehaven.com/commodities/precious-metals/Could-Silver-Soon-See-Its-Day-In-The-Sun.html
Gold, Silver coin crunch is not getting better – Peter Hug
KitcoNews – Apr 16, 2020 #VIDEO
(EXN) (EXLLF) Excellon and (OOO) Otis Shareholders Overwhelmingly Approve Business Combination
by @newswire on 17 Apr 2020
https://ceo.ca/@newswire/excellon-and-otis-shareholders-overwhelmingly-approve
Fed Balance Sheet vs Gold Price
“This chart compares the monthly percentage growth of the Federal Reserve balance sheet (U.S. Treasuries and Agency MBS) against the price of gold back to 2004.”
https://www.macrotrends.net/1486/Fed-balance-sheet-vs-gold-price
LongWave Investing @WFLONGWAVE on Twitter – Apr 16
“Just in case anyone thinks this recent Gold rally is getting frothy: The price of Gold is still a complete and utter joke.”
Gold to Monetary Base Ratio Chart:
Sven Henrich @NorthmanTrader on Twitter Apr 17, 2020
“This crisis is following the same script as the last one 12 years ago:”
“The poor get poorer, the middle class shrinks, the big boys get bailed out and the bottom 90% gets settled with all the new record debt.”
“And then central bankers get “Hero” magazine covers.”
https://twitter.com/NorthmanTrader/status/1251152108214050816
Gold Closes Below $1700, Despite Dollar Weakness
April 17, 2020 – Gary Wagner #TechnicalAnalysis #Chart #VIDEO
https://thegoldforecast.com/video/gold-closes-below-1700-despite-dollar-weakness-0
Gold update: Big move coming
Smart Money Tracker – April 17, 2020 #TechnicalAnalysis #Chart #VIDEO
https://blog.smartmoneytrackerpremium.com/2020/04/gold-update-big-move-coming.html
Ira Epstein’s Metals #Video (4/17/2020)
#TechnicalAnalysis, #Chart Gold, Silver, Copper, Platinum
Gold & Silver Price Update + Strategy Update
iGold Advisor – Christopher Aaron – April 16, 2020 #TechnicalAnalysis #Chart #Video
The Next Big Breakout Trade: Large Cap Gold Stocks
by @TheTechnicalTraders – 16 Apr 2020
https://ceo.ca/@thetechnicaltraders/the-next-big-breakout-trade-large-cap-gold-stocks
Wow. The WTI Oil price is looking really Fugly. It closed at $18.18 on Friday:
https://www.investing.com/commodities/real-time-futures
With Oil prices getting smashed into the teens, many companies are going belly up and this is going to further impact the banks holding onto their toxic debt.
Get ready for pain in the Oil & Gas sector, as driving is down, air traffic is down (and most businesses are critically rethinking their need to keep flying, opting for doing video conferences instead), cruises are down, and businesses are still shuttered.
The demand just is not their to sop up and mop up all the ridiculously high levels of oil sloshing around the global supply backdrop. What a mess…
Strange that WTI crude fell almost 10% yesterday to 18, but XOM was up $3 and CVX and RDS were way up too. And SLB announced a big loss and cut its dividend 75% and yet the stock was up nicely.What gives? Have SLB, CVX, and XOM bottomed?
Bonzo, I’ve been purchasing SLB and HAL about 4 weeks ago. I believe they’ve finally bottomed.
I had picked up the Oil producers ETF (XLE) a few weeks back and traded it back and forth a few times in the $27-$33 range, but exited when WTI Oil got up to $26, thinking Energy investors were getting too bullish too fast.
I figured there was still another shoe to drop and more weakness in store, and now here we are at $18 Oil.
How many US or Canadian companies can really thrive or even stay in business with Oil prices in the teens?
Trudeau Announces $1.7B in Funding For Energy Eector
Global National – April 17, 2020
“Abigail Bimman and David Akin cover our top story tonight as Prime Minister Justin Trudeau’s government pledges $1.7 billion in funding to clean up orphaned wells in British Columbia, Alberta and Saskatchewan, part of a plan to keep people working during the COVID-19 pandemic.”
> Natural Gas Markets Beyond COVID-19
Baker Institute – Apr 1, 2020
> Battered Natural Gas Markets: The Real Story In Energy Rout
Dan Eberhart -Feb 25, 2020
I bought some GGN a closed end fund that uses a covered call strategy at the end of March. The fund is primarily large cap precious metals which has a fair amount of large cap oil exposure. At the time it had a 15% discount to NAV and had a 22% distribution yield. I look forward to the mean reversion.
The Oil futures contract has now rolled over to the June contract so it opened up at $25.03 and is now trading at around $24.50.
That should be a nice gap up on the charts, but it depends on if it gets sold down too much in overseas trading.
Oil did keep selling off in overseas trading and looks like it will open up in the mid $22s
Actually there is a big disparity in Oil prices in these early hours with some futures contracts showing Oil in the $12’s — Yikes!!
Again, I had made the comment the end of last week and the week before – Get ready for more pain in the Oil patch. I don’t see how most US or Canadian companies can survive long at these prices.
It is time to trim the fat, and consolidate the Oil & Gas companies by mergers, restructurings, or let some of the zombies finally die.
Actually there is a big disparity in Oil prices in these early hours with some futures contracts showing Oil in the $12’s — Yikes!!
Again, I had made the comment the end of last week and the week before – Get ready for more pain in the Oil patch. I just don’t see how most US or Canadian companies can survive long at these prices.
It is time to trim the fat, and consolidate the Oil & Gas companies by mergers, restructurings, or let some of the zombies finally die.
I see now that is West Canadian Select that is down at $11.15. This is going to hollow out the Canadian Oil companies.
Doc, Josef Scafter and Chris Temple think oil could go down more next month when the storage tanks top out. My gut feeling is things are going to get worse after smothering the economy. After reading what Adam Hamilton wrote about silver yesterday I feel better about buying silver than oil for the nonce. Were you waving a rebel battle flag in Lansing at the protest?
I was handing candy out to the kids.
You should’ve passed out rebel flag masks to the kids too.
Asian Oil Trading Legend Files For Bankruptcy After Hiding $800 Million In Losses, Secretly Selling Loan Collateral
Sun, 04/19/2020
“Last weekend we reported that one of Singapore’s biggest and most iconic – and extremely secretive – oil traders, Hin Leong Trading, whose website reports revenue surpassed $14 billion all the way back in 2012, was on the verge of collapse as the company’s banks had frozen letters of credit for the firm – a death sentence for any commodity merchant – over its ability to repay debt; as a result, the firm appointed advisers to help negotiate with banks for more time to resolve its finances.”
“After pointing out the perplexing lack of high-profile blow-ups in the current commodity crush (as a reminder back in 2016 when oil dropped less than it has now, the Glencores and Trafiguras of the world were this close to collapse), we explained the critical nature of L/Cs…”
“Letters of credit are a critical financial backstop for commodity traders, used as way of financing critical short-term trade. A bank issues the so-called L/C on behalf of the buyer as a guarantee of payment to the seller. Once the goods have exchanged hands, the buyer repays the lender.”
“… and said that Hin Leong had “suddenly found itself without providers of L/Cs – for reasons still not exactly known – without which it is effectively paralyzed as it needs to front cash for any transactions, something no modern commodity merchant can afford to do.”
The bankruptcies and implosion that nearly happened in 2016 to the Oil patch has officially begun…
Very possibly, Shad!
On a brighter note in the Energy Sector…
Uranium Surges 31% Amid Shutdowns to Become Year’s Top Commodity
By Aoyon Ashraf and Joe Deaux – April 17, 2020
“While most commodities are getting hammered by the coronavirus crisis, uranium prices are skyrocketing.”
“The radioactive metal used in nuclear fuel has climbed 31% this year, making it the world’s best-performing major commodity. The gains have been spurred by mine shutdowns that have wiped out more than a third of annual global output at a time when demand from power plants has remained relatively stable.”
Nice list of Uranium companies by market cap:
https://pbs.twimg.com/media/EVyehXzUwAAZCcF?format=png&name=large
For anyone following this U sector, I posted about a half dozen other Uranium related news updates, editorials, and macro economic supply/demand reviews on the Lobo Tiggre interview here on the KER yesterday:
____________________________________
Comments On Investing In #Gold and #Uranium At Current Levels
#KorelinEconomicsReport (04/17/2020) #AudioInterview
“Lobo Tiggre joins for a discussion focusing on the gold market and the recent pop in uranium prices. Both metals are doing well but for very different reasons.”
http://www.kereport.com/2020/04/17/comments-on-investing-in-gold-and-uranium-at-current-levels/
I mentioned about 2 months ago to purchase uranium shares. The spot price is spiking this month and is probably a signal that supply/demand is probably starting to balance.
Hey Doc, I was in agreement with you a couple months ago about grabbing the Uranian companies and added to a few positions in the mid-March sell-down in all markets. A lot of them are up nicely in the last few weeks.
Uranium breaking $30 was a big deal, and the supply destruction across-the-board is only going to lift these companies further.
Hi Doc – Have you purchased any FCX or are you still waiting. I am guess you are still waiting.
Ex, thanks for the list of uranium companies, I watched The Battle Of Midway again last night, The Americans were so lucky to have won. It was all over in 5 minutes but it changed The World forever. I feel we are at a turning point in World history again. Stay Tuned! DT
Hey DT. Yeah It was interesting to see the disparity in Market Caps in the uranium companies. Some of the developers were much higher values than the actual producers. Also some of those micro cap explorers won’t take much investor interest to send them ratcheting many levels higher.
Charles, I’m still waiting. For some of these stocks, there is a potential for a double bottom. If that happens, I’m a buyer.
Thanks Doc. I figured that is what you are waiting for.
What about Lithium?
Like Lithium more than uranium
It seems after a 2 year rout, that lithium is finally starting to gather some strength. The lithium companies are gradually starting to creep back higher, so yeah, this is a good time to be adding the Junior Lithium Producers like Orocobre, Galaxy, Pilbara Minerals, Altura, etc… and the advanced developers like Lithium Americas, Bacanora, Advance Lithium (being acquired by Orocobre), Cypress Dev, etc… or downstream processors like NeoMetals.
One doesn’t have to pick Lithium or Uranium stocks, as they aren’t mutually exclusive, and one can own stocks in both sectors. I know my portfolio has a growing presence in both.
Both the Lithium and Uranium stocks have a bright future in the energy sector, and both are still really oversold on a longer term basis, and represent excellent value at these levels.
Any thoughts on graphene and in particular nanoxplore (gra on the venture exchange)??? They are finding ways to improve batteries with the use of graphene powder
The Graphene narrative has been going around for years now, ever since the Rare Earth bubble shifted into Battery Metals (Lithium, Cobalt, Graphite, Nickel, Copper).
Graphene is supposed to be the new wonder product, and about a dozen companies have claimed their processing patents and products were going to change the planet and most of them imploded, so I’m not overly bullish or confident on it at this point in time, but like the concept in general if a few companies can actually pull it off and DELIVER on their pronostications.
Just a reminder, optimal Vitamin “C” absorption requires zinc, and zinc absorption requires copper. DT
Calcium absorption requires Vitamin D Vitamin K, so go out and have a little fun in the sun.
This may be the chart that Mr Schachter is referring to ? His twitter mentions “We got a BUY signal from the Energy Bullish Percent Index on March 13th” Apologies for the long URL.
https://stockcharts.com/h-sc/ui?s=%24BPENER&p=D&yr=2&mn=7&dy=0&id=p08508851205&listNum=5&a=740122816
FYI: Insider purchases of Brixton Metals (BBB) totaled 200,000 shares last Tuesday. The price range that day was .13 to .145
https://stockcharts.com/h-sc/ui?s=BBB.V&p=W&yr=4&mn=5&dy=0&id=p44800167127&a=601824555
It also looks like momentum is starting to point up on the slow and full stochastics, and that the MACD is about to make a bullish cross to the upside, so that is encouraging.
For those following some of the investor outrage over the latest (IPT) Impact Silver financing, it reached a fever-pitch over at ceo.ca where investors were demanding Jerry Huang, the Investor Relations contact at IPT, to address why the company did this $2M financing with Palisades.
I’m happy to report Jerry addressed the concerns with professionalism and class, and this quelled the dissent and got most investors to chill the hell out.
Here was his response:
__________________________________________________________________________
@j3rry – “Thank you everyone for following IMPACT Silver.”
“About your feedback on the financing – some background. We discussed deal back when silver crashed down to a low of $12.5/oz around Covid19 – not to mention we expected wanted to have some cushion in case covid19 shutdown prolongs. It wasn’t done at $0.45 despite the market timing this week nor do we need to discount an offering that much given IPT’s stage of operation. With $3.7m in bank Q42019 and operational cashflow but small loss after expenses/amortization, additional capital gives us flexibility on deals in market, adjusting size of operations, and exploration (greenfield) when shutdown ends.”
“Our last financing was done with over 90 subscribers and well marketed, taking 6 weeks to complete and we thoroughly enjoyed discussions with each investor about IPT outlook and potential. As a result we traded great volume and even saw a stock blip during a traditionally tough tax loss period in Dec 2019. We certainly would have preferred that but with volatility in market, a quick close with a strong marketing group, not to mention no broker fee (7-8% on $2M) was an attractive combination that beat out a marketed deal. We want to reassure that this deal does not change anything with the way IPT conducts business. Instead, view it as a strong addition to potential outreach and marketing given the investor’s visibility. We thank everyone for your interest in IMPACT and believe all of us will do very well in a rising silver environment as one of the purest leveraged silver play out there.”
– Jerry Huang (April 17, 2020)
I bought some more shares Friday. My order was only partially filled. Volume dried up on the pullback since the announcement which is healthy action.
Nicely done Charles, and yes that is a good sign.
I had added just a bit of IPT the 3rd week of March, and considered adding a bit more after the financing news, but feel comfortable with the position I already have in place and lower levels and wanted to keep some powder dry in case the PMs further pull back in April for other stocks.
@Quaid – “#Gold futures opened lower as of 6pm, and I think we’re going to see a pullback to the 50% or 61.8% fib retracement levels. I’ve charted out that potential scenario:”
Remarks by Governor Ben S. Bernanke – November 8, 2002
At the Conference to Honor Milton Friedman, University of Chicago, Chicago, Illinois
“For practical central bankers, among which I now count myself, Friedman and Schwartz’s analysis leaves many lessons. What I take from their work is the idea that monetary forces, particularly if unleashed in a destabilizing direction, can be extremely powerful. The best thing that central bankers can do for the world is to avoid such crises by providing the economy with, in Milton Friedman’s words, a “stable monetary background”–for example as reflected in low and stable inflation.”
“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.”
— Ben S. Bernanke
https://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021108/
(ROXG) (ROGFF) Roxgold Drill Program Continues to Return High Grade Intersections From the Séguéla Gold Project
@businesswire on 20 Apr 2020
“We continue to see the growth potential of the Séguéla Project through the efforts of our exploration team,” stated John Dorward, President and Chief Executive Officer. “The high-grade results from infill and extension drilling at Ancien, Agouti and Boulder were received following the cut-off for the excellent Preliminary Economic Assessment released last week and are expected to further underpin and increase the current Mineral Resource estimates, potentially adding meaningful ounces for inclusion into the Feasibility study. The ongoing exploration success at Séguéla continues to highlight the potential value accretion of the project from the existing satellite pits with further upside from an additional 21 targets on the property yet to be tested.”
Paul Weedon, Vice President, Exploration commented “These drill results illustrate the resource potential at Séguéla. We are also eagerly awaiting the results from more than 30 additional holes testing depth and strike extensions at Ancien and Agouti, with a significant grouping of holes at depth in Ancien which had visible gold marked during the logging. These assays are currently in the laboratory. Additionally, the recent aeromagnetic program has highlighted several additional target areas and favourable structural repetitions with at lease three emerging structural corridors identified.”
https://ceo.ca/@businesswire/roxgold-drill-program-continues-to-return-high-grade
Yeah I picked some up this morning. Like it a lot the more I read up on them
I’ve been following Roxgold from advanced exploration to development and into production and have been impressed with how they delivered on milestones. I was worried they may become a 1 hit wonder, but now they are making good progress on delineating and developing mine 2. For the last few years they’ve been a solid gold company, and they are moving higher in my weighting with the Gold producers in my portfolio.
Cheers!
(JAG) (JAGGF) Jaguar Mining Reports Updated 2019 Mineral Reserves and Mineral Resources for the Turmalina Mine, Brazil
by @accesswire on 20 Apr 2020
Vern Baker, CEO of Jaguar Mining stated; “Our geologic team did an excellent job in 2019. At Turmalina, the team focused on replacing reserves in the A Orebody, and then on understanding and delineating ore in our C Orebody. With very limited resources in 2019 the team was quite successful in both objectives. They maintained and even increased our reserve base in A orebody, and also significantly grew our reserve and resource base in C orebody. This is an outstanding achievement in a year where the Company faced multiple challenges. The hard work of our geologic team was rewarded with a significant increase in our overall ounce inventory, and they also provided Jaguar with some excellent targets to continue expanding our exploration success. At Pilar, we are currently limiting our update to a depletion calculation and expect to update the Pilar Mineral Reserves and Resources later this year now that work has been completed on Turmalina. In 2020, with the addition of two contract diamond drills operating at our mines, we look forward to delivering more positive news from our operations.”
https://ceo.ca/@accesswire/jaguar-mining-reports-updated-2019-mineral-reserves
Thanks, Cory. Hardly a man is now alive who remembers that night in ’75.
It was 245 years ago that Paul Revere took his famous ride into history.
One if by land and 2 if by sea was his signal. Paul loved silver.