2 Full Hours Of Investing Commentary – Recapping The Metals Markets and Stocks
Click download link to listen on this device: Download Show
This week you get two full hours of investing and metals commentary. At the start of the show we cover some of the monthly closes in key markets. For the entire second hour (and a couple segments of the first hour) we focus on the metals sector. It was a busy couple weeks with the Beaver Creek and Denver conferences. We get comments from analysts, investment advisors, and company executives on the health of the resource sector and what they see needing to change to drive prices higher.
Please keep in touch and email me at Fleck@kereport.com. I am always happy to answer your questions and follow up with companies.
- Segment 1: We kick off the show with Chris Temple and a look at some key monthly closes for Treasuries, oil, the USD, and gold.
- Segment 2: Fund Manager Dana Lyons shares his thoughts on the uptrend in yields and some market warning signs he thinks are more timely now.
- Segment 3: David Erfle, Founder of The Junior Miner Junky provides his thoughts on the Novo presentation from Denver and the corresponding market reaction.
- Segment 4: Chris Taylor, President and CEO of Great Bear Resources updates us on the recent drill results that continue to move the stock higher.
- Segment 5 and 6: Jeff Christian, Managing Partner at the CPM Group has some valuable insights into the CoT reports as well as the gross shorts for the metals. We breakdown key factors for the market as well as the major distractions.
- Segment 7: George Gero, Managing Director at RBC Wealth Management updates us on the open interest data for metals and the gold ratios he is watching.
- Segment 8: We wrap up the show with Hugh Agro, President and CEO of Revival Gold recaps the gold conferences in Colorado and shares some corporate updates.
Segment 1
Click download link to listen on this device: Download Show
Segment 2
Click download link to listen on this device: Download Show
Segment 3
Click download link to listen on this device: Download Show
Segment 4
Click download link to listen on this device: Download Show
Segment 5
Click download link to listen on this device: Download Show
Segment 6
Click download link to listen on this device: Download Show
Segment 7
Click download link to listen on this device: Download Show
Segment 8
Click download link to listen on this device: Download Show
Thanks for the weekend show guys as always.
Very much appreciated as always.
Cheers.
Ditto………..
I hope OWL does not become a victim of the medical mafia (or veterinarian mafia as the case may be).
Let’s face it, these doctors are modern day witch doctors and the whole healthcare complex is corrupt.
I agree………
Hope Owl’s doctor spoke English…………
No wonder the US is going down hill, and fast…………..
https://www.zerohedge.com/news/2018-09-20/48-us-residents-top-5-cities-dont-speak-english-home-67-million-overall
Oh wait…….it was a robot………..
Hopefully not this robot…
Oh wait…….it was a robot………..
Their native language is machine code.
Thank God, Mr. Big Al Korelin has never abused the robots…they will have the last laugh.
Any news of the Big Guy’s recovery from surgery?
“As fossil fuel deposits with abundant net energy are exhausted and have to be replaced by deposits with lower net energy, a larger and larger fraction of the total energy available to an industrial society has to be diverted from all other economic uses to the process of keeping the energy flowing. Thus it’s not enough to point to high total energy production and insist all is well; the logic of NET energy has to be applied”
“The blindness to whole systems needs to be overcome in order to make meaningful sense of energy issues”
“What is unsustainable cannot be sustained”
(JM Greer, Dark Age America, 2017)
End of the Oilocene: The Roar of the Oil-Fizzle Dragon King
Sep 20, 2018 – by Tim Clarke
“There are an increasing number of warnings about the next financial crash and the fact that it will be far worse than 2008. [Refs 1-13]. Global debt is expanding at a rate far faster than GDP (global increase of about 4 units of debt to one of GDP growth). Global national and private oil company debts are expanding faster than revenues, and most entities have shrinking balance sheets… Since the 2014 collapse in the oil price, the HSBC Bank and many others are warning that underinvestment in the global oil sector over the last 3 years and other factors will cause a supply shortage/increase in price within the next couple of years; a sentiment echoed by many in the industry”
“Economists do not understand the role of energy in the economy [Refs 28-29]. Least of all do they understand that actually what drives economic activity is not energy per se – but NET energy – the surplus energy available to power the economy after deducting the energy inputs required to extract, refine and deliver energy (especially oil). The fact that NET energy from oil/gas is declining very rapidly and is now at levels that are far below what is required to sustain our complex energy intensive industrial economy is not understood, nor is the devastating fundamental effect of this decline on the trajectory of the global economy. These trends are unequivocal and as clear as day…”
http://www.feasta.org/2018/09/20/end-of-the-oilocene-the-roar-of-the-oil-fizzle-dragon-king/
I’ve commented here before about ‘energy return on energy invested’ (EROEI or EROI), but never got much response.
The concept was originally developed by an ecologist, Hall, looking at the energy returns to migratory animals for their migrations. But it applies perfectly to industrial society. Hall estimates that American society needs an energy source with EROEI of at least 11 to continue functioning as we know it. As far as I know many newer discoveries fall far below that threshold. So I’m not exactly sure ‘Peak Oil’ was bunk.
Industrial ag has an EROEI of about 1:10. Permaculture can give the reverse of that ratio, 10:1.
Permaculture / small scale organic ag — the way to a positive future.
GH – Good thoughts further flushing out the “energy return on energy invested” concept.
Rocketing #Vanadium price primed for ‘Elon Musk moment’
Frik Els | about 12 hours ago
“If a vanadium #battery producer steps forward with bold plans to produce vanadium flow at mass scale, giving the industry its Elon Musk or lithium ion moment, the potential for the technology to be the second most deployed ESS battery in the world is there,” says Moores.
http://www.mining.com/rocketing-vanadium-price-primed-elon-musk-moment/
Markets to Musk: Stop messing around and settle with the SEC now
Bloomberg News | about 16 hours ago
http://www.mining.com/web/markets-musk-stop-messing-around-settle-sec-now/
(TSLA) Tesla’s Musk pulled the plug on a settlement with the SEC at the last minute
Fri, 28 Sept 2018 – Robert Ferris
“Elon Musk backed out of a deal with the Securities and Exchange Commission to settle allegations of fraud over his comments about taking Tesla private, sources tell CNBC’s Andrew Ross Sorkin.”
“Musk reportedly said that by settling he would be failing to be true to himself.
Robert Ferris”
https://www.cnbc.com/2018/09/28/teslas-musk-pulled-plug-on-settlement-with-sec-at-last-minute.html
Chinese interested in buying Rio Tinto’s Namibian Uranium mine
Cecilia Jamasmie | about 19 hours ago $RIO.L #China #Namibia
http://www.mining.com/chinese-interested-buying-rios-namibian-uranium-business/
An 18-Year Extreme For Silver
charts are courtesy Chris Kimble at Kimble Charting Solutions
“We are further seeing extremes in the silver market. As the charts below point out silver hedgers are betting bullishly on silver and the stocks could follow.”
This is an interesting place to be in the mining sector, where we should continue to see more mergers and acquisitions as it is easier to just buy a know resource while companies are so depressed in value than locate and prove up an economic deposit.
“M&A is cheaper and more certain than exploration”
http://cdn.ceo.ca.s3-us-west-2.amazonaws.com/1dqtefv-DoMQvfCXkAEaVxY.jpeg
Earlier in the week we went over 14 different takeovers in the last year or so and there are dozens more to come over the next year or so. It would be nice to see the miners recover in share price before companies scalp them at a 40-60% premium and steal all the future growth and opportunity.
This is the type of depressed market that may trigger larger mid-tiers and a few majors to be on the prowl to replace reserves by acquiring Jrs. That also means it is a good time to bottom fish for some of the most likely takeover candidates.
As a reminder the majority of the takeovers we’ve see the last few years were on distressed Developers and Small-Mid sized Producers (with a few larger exceptions and a few explorers)
Some great points……………
Cheers!
(SOLG.L) (SOLG) SolGold Loss Almost Doubles As It Goes All In At Ecuador Projects
Cecilia Jamasmie | about 18 hours ago
http://www.mining.com/solgold-loss-almost-doubles-goes-ecuador-projects/
I’m not sure if this chart will post correctly or not, but it shows some of the explosive moves in the exploration stocks over the last year. There was still money to be made in positioning early in these exploration companies “pumping” out the news releases when they think they may have a discovery.
This is encouraging that the “hot money” is still interested in trying to find a legitimate larger scale discovery. That doesn’t mean these companies have all found one, but just that the speculative fervor is there if there is a sniff or a whiff of a potential discovery.
JUGR.V,SIC.V,GLDN.V,GBR.V,EVM.V,TIG.V,GUG.V,RNX.TO,KTR.V,ABN.V
We saw the same thing in 2017 in many of these hot exploration stocks as well, but if you notice the trend, most go parabolic and then retrace much of those gains as gravity sets back in and the valuations get waaaaaayyyy ahead of themselves.
Even so, there is not denying that getting into some of these plays early and riding up the irrational exuberance can be profitable for those that know how to hit the sell button into the fever pitch and not overstay their welcome.
speaking of (GGI) Garibaldi – Wow what a chit-show that room has become over at ceo.ca.
There are 100+ investors in there almost every day, endlessly pontificating about results that have been released, as well as all the unreleased drill holes. However,
as the stock has pulled back since it’s epic rise at the end of 2017, the tension has steadily started to build where nobody can even offer a logical critique without being chased out of there by the group think echo chamber.
There have been avid bull pumper and skeptical bears ever since the inflated valuation was in place in late 2017, but now the newsletter writers are duking it out with retail investors. Warren Irvin, a resource hedge fund guy has voiced concerns over the way they are reporting & disclosing info, and that same concern has been echoed by Brent Cook and Eric Coffin. Emotions are running high, and everyone is convinced their view is supreme, and there are hosts of conspiracy theories afloat in there.
If you want an entertaining mob chaos blog to review, it is instructive to see the insanity in the GGI room and scroll up and down in the comments section.
Here is a good starting point with some cogent comments from Eric Coffin:
Actually it is better to start with this comment from Eric Coffin defending Warren Irvin’s critique of GGI here on Sept 27th and then keep reading. Wow what a crazy blog!
For me the fever pitch is the way to go otherwise this market is just to cruel to mining investors. Most of these juniors have such low trading numbers that they aren’t a buy unless you have the background to understand the fathomless information required to make an informed decision. Just wait for the herd to stampede into all or any of the junior’s with enough volume and a reasonably low share count, that is my strategy. Of course you should have enough knowledge to understand which companies have the three P’s. DT
It’s crazy watching juniors jump 130% in one day, Gr Great Atlantic Resources rocketed 130% in one day last week. It makes me think that the tide could start to turn, possibly due to Royal Nickel turning heads. We’ll see! DT
Good points DT. Sometimes it is best to get in on the very front end of a new narrative, and sell into the fever pitch of the roar of stampeding investors into a hot play, and sell when it starts to seem ridiculous in valuation metrics, and yet investors are advising to keep adding for the pie in the sky. All one needs is a nice slice and waiting for the whole pie in the initial thrust up is typically a losing proposition as the stock will correct a few times on the way up.
Yes, Royal Nickel was quite the find/discovery, so interested to see if the huge move up can be sustained by some more exploration work to show how they can improve the production metrics at Beta Hunt. Rooting for their team, and as a Maverix (MMX) shareholder with a 7.5% royalty on that project, it will still benefit that position over time.
Adamera ADZ.V @CautiousNow In the interest of disclose, I have a material shareholding in ADZ and have been talking with Mark at shows for over ten years. I have a lot of time and respect for him, and find him a personable, straight shooter who combines intelligence, passion and a focus on keeping costs down.
I ran into Mark who was attending the #MIF as a registrant, rather than an exhibitor. He was very generous in spending a nice block of time with me. He seemed very optimistic about the project, and particularly so with respect to the potential identification of the alteration they saw in hole 2 as a marker as things moved forward.
Waiting on assays in hole 3. I sensed that he was pretty excited about it, but was trying not to be too excited because of some negative surprises before.
Drilling is going better now, as there was a learning curve while his guys adjusted to drilling with the small rig. They’re bringing in a bit larger rig now that can go a bit deeper to test the target type discovered in hole 2. In the longer term, they may look at buying their own larger rig given the potential cost savings associated with a large scale drilling program if things progress that way.
They had some bumps in the road in getting their drilling approvals from the regulator (a regulator process problem, not a deficiency in the ADZ application), but those have been resolved now.
They added a bit of land that Kinross had allowed to expire in the summer to fill in a hole in their holdings, so he thought that was a nice synergy for them as things progress.
They’re really happy with the way that the IP has supplemented all of the other sampling, geochemical and mag work they have done. The combination of the advances in technology and the layered, systematic approach they are taking to the area is offering a depth of insight that Kinross/Echo Bay would not have had about the area, as the focus was only on the mining operation for a very long time.
The nature of the residual holdings of Kinross and the care and maintenance status of the mill are such that there will need to be further discussions with Kinross at some point.
He also confirmed a potential interest in going back to look deeper at some point when it makes sense from a treasury perspective. There is a seal dynamic at locations in the region that appear to have prevented fluids from flowing up into what was otherwise really nice rock (i.e., one of the early surprises when he wrote about core in an early hole before assays were in hand). As he controls all strata in the area he is working and doesn’t have any timing issues any time soon, he can do this when he’s ready.
He was attending a number of sessions and getting some ideas from watching the other presentations. Of particular interest is how well received his videos are. He’s considering whether to add a video for each NR, which I think would be a great idea for those of us without a technical background.
On the downside, things have been more expensive than hoped, and assay costs are independent of drilling costs. We’re looking at another PP at some point in the new few months-hopefully at a materially higher price than today.
Overall, I continue to believe in the potential of the area, with the risk of dilution at low prices the one material cloud on the project.
I think that the results from hole 3 and the deeper work on the hole 2 target will be key milestones in the path forward. The next results could be a buy signal, notwithstanding that the share structure is starting to become a bit of a concern. GLTA.
If you go to the bullboards you soon realize why they are called BULLboards. There are many sad stories because most people who buy into the stock market are being fleeced by the smart money. Investing doesn’t exist there is only speculation and gambling. Before anyone wants to buy stocks this is the number one rule to learn before any due diligence is considered. Sadly most people don’t even want to hear that they are being taken by other much smarter market players. DT
100% correct DT
Its gambling pure and simple, yes there are ways to improve your odds, but it would be nice to see the industry being honust about it and speak about it as it really is.
Poker is a gamble too, a person can improve his odds big time, literally to the point of looking at a table and the question becomes “how long will it take me to bust this table?” but its still gambling.
Poker players at least speak honustly about it.
Precious Metals Sentiment Hasn’t Been This Bad Since 2001, Get Ready For A Turn Like February 2016
by @Goldfinger on September 30, 2018
Goldfinger’s Golden Dozen Rules For Trading Junior Miners
by @Goldfinger on September 25, 2018
https://ceo.ca/@goldfinger/goldfingers-golden-dozen-rules-for-trading-junior-miners
Joe Mazumdar | Expert Advice on Investing in Today’s Resource Markets
MiningStockEducation – Sep 29, 2018 #AudioInterview
0:05 Introduction
0:59 Commentary on the 2018 Beaver Creek Precious Metal Summit
5:13 Reflections on the investor panel discussion Joe moderated
6:30 Discussing good commodities to invest in right now
9:19 Commentary on the uranium market
11:58 Commentary regarding vanadium
12:52 Is there a strong catalyst for a rising gold price?
16:58 How Joe & Brent Cook approach investing in resource stocks
22:20 Discussing mining jurisdictions
Joe Mazumdar Discusses Mining Money Flows, Keen Commodities, Jurisdictional Risk, and Much More
Outsider Club – Sep 27, 2018 #VIDEO
“Exploration Insights editor and economic geologist Joe Mazumdar discusses the current state of the mining industry, insights from the so-called “smart money,” how he handles jurisdictional risk, and much more in this interview with Outsider Club’s Gerardo Del Real.”
Keynote Investor Panel (Vilar Center) #Beavercreek Precious Metals Summit
– Featuring Joe Foster, Josh Parrill and Steve Todoruk;
– Moderated by Joe Mazumdar
#Gold #Silver #BaseMetals financing and market overview #VIDEO
For stockcharts subscribers:
IPT:GLD monthly:
http://schrts.co/r6hF8w
IPT monthly:
http://schrts.co/2Ydibx
IPT daily:
http://schrts.co/HHorm4
Weekly:
http://schrts.co/5hZ89B
Matthew – Thanks for all the charts on various miners and ETFs. Much appreciated.
Gold miners vs Dow (daily):
http://schrts.co/pr5aYz
GDXJ weekly:
http://schrts.co/Uq815m
BBB weekly:
http://schrts.co/M9nDHg
Matthew, thanks for these charts which make me glad I bought more NGD@.81
I almost bought more NSRPF@2.25 on Fri, but it got away from me. I did not buy the Ruger LCP, but am considering the LCP 2 which is much better. Also considering a Ruger LCR .22 LR, a 15 oz snubnose revolver which fires 8 rounds. Both would fit in a pocket. I have my grandfather’s old 1917 Savage .380 ACP but it is worth $900 and I’d hate to have the police take it if I ever shot anyone, so I don’t want to carry it outside my home.
I had a Taurus 9 shot 22 with a nice leather Galco holster that never got used because it was too easy to put in my pocket. However, it wasn’t as light as the Ruger you mentioned.
https://www.taurususa.com/images/imagesMain/94B2UL.jpg
I currently have a 10 shot 22 that is 15 oz but obviously not as compact (it’s 85% the size of the .45 ACP 1911).
https://www.browning.com/content/dam/browning/product/firearms/pistols/1911-22/support/1911-22FinalBanner.jpg/_jcr_content/renditions/cq5dam.web.1200.1200.jpeg
Bonzo, something tells me you’re going to be very happy with that NGD purchase.
http://schrts.co/XQAd1j
Matthew, that NGD chart makes me want to buy more. Glad to know you like .22LR.
It’s more lethal than many think, and very cheap and easy to find, and costs only 4 cents a round so you can practice a lot for little money. And recoil is so low you can get off several shots very quickly, and it won’t damage your eardrums. No wonder mafia hit men like the humble .22LR
New Gold sold their Mesquite mine to Equinox Gold due to their debt load, and it appears that EQX got the better end of the bargain, just like they did getting Trek (Lowell copper & Luna Gold’s assets) and Castle Gold’s assets. This may give NGD some room to breathe in the short term and they do look primed for a bounce, but Equinox made the better move for the long game.
Bonzo, try the 60 grain Aguila Sniper Subsonic ammo for reduced noise and greater penetration: https://www.midwayusa.com/product/2506135961/aguila-sss-sniper-subsonic-ammunition-22-long-rifle-60-grain-lead-round-nose
…or the 40 year old CCI Stinger if want a fast and explosive hollow point:
http://www.cci-ammunition.com/products/detail.aspx?use=2&loadNo=0050
Matthew, thanks for the ammo tip. For self defense purposes do you prefer the 60 grain or the 40 grain fired from a snubnose .22LR revolver? Do you prefer lead or copper bullets?
I’d choose the Stinger for self defense. It’s 32 grains of lead that has a very thin copper coating – not a copper jacket like a centerfire round would have. I like the fact that it would make a more painful mess of an attacker if shot placement isn’t ideal. The 60 grain subsonic would just punch a clean hole unless something in its path causes it to tumble. Heck, considering the slow twist rate of the average 22’s rifling, the long slow 60gr projectile could tumble in flight out of some guns. Not good.
There is also a pure copper one that I have not tried that could be very good. It’s a very light 21 gr. hollow point that’s even faster than the Stinger at 1,850 fps. It’s at the other end of the spectrum bullet length/speed spectrum so it might have stability issues as well. The way to test for that is to shoot paper at various distances. The holes should be round if your gun likes them.
https://www.basspro.com/shop/en/cci-copper-22-rimfire-ammo
I must get myself some IPT, before Matthew say’s ” I told you so.” LOL! DT
That’s right, mister!
I just now heard about all the issues in Colombia around Continental Gold, and the 3 geologists that were murdered by gang-led attacks from FARC. If the company did know about all the trouble brewing, (and based on accounts of the parents of some of the employees that were killed or wounded, they did know) then there handling of security measures for their team was very disappointing. Uniforms were arriving all cut up, and there had been many threats, but it appears that a committee asked the military to move further out away from the area? That makes no sense…?
____________________________________________
The Continental Gold $CNL.to news release yesterday afternoon
9/22/18 – IKN
https://incakolanews.blogspot.com/2018/09/the-continental-gold-cnlto-news-release.html
there = their handling…..
That is a sad reality of operating in that part of Colombia, and while it isn’t fair to size up any country based on the actions in a specific region, I wouldn’t want to be a company operating anywhere near that mess, and the local government seems unable to properly contain the issue and get the rebels out of there. What a mess…
The reality is that in many countries all over the planet, that there are many good things large mines bring to an area: (improved power infrastructure, improved roads, jobs, better sanitation of water by using industry best practices versus illegal mining, money put back into the community, education programs, job training programs, etc…. However, it is easy to see where some companies clash with local communities in a way that causes a violent response.
This documentary from 2015 foreshadowed many of the problems we’ve seen in Colombia, where local villages resisted the entrance of multi-national miners (like Gran Colombia Gold Corp), because their livelihoods and communities were decimated when the government valued the big business over the local traditions.
____________________________________________________
The battle over mining for gold in Marmato #VIDEO
CGTN America – Mar 6, 2015 $GCM Gran Colombia Gold Corp
This is why it is so important for large companies and local communities to come to agreements and synergistic working relationships that value all the various stakeholders affected.
Oil looks like it’s going another 3 or 4 dollars higher:
http://schrts.co/VFqGqi
Longer term, it is probably going much higher:
http://schrts.co/7iE6Vb
Great, then ditto for fuel prices here in Aus which are some of the most inflated in the world.
Oil may well be going higher over the long term but in the short term the DSI up up to 94 and that suggests a turn lower is nearby. If it goes to 96-97 it will turn at once.
I agree that the turn lower is likely nearby. Today, it’s up by almost half of the $3-$4 that I thought it had left. So it could easily top this week.
USA looks like a strong “accumulate” these days:
http://schrts.co/bziz2B
(USA) (USAS) AMERICAS SILVER CORPORATION AND (PGLC) PERSHING GOLD CORPORATION ANNOUNCE BUSINESS COMBINATION
September 30, 2018
“This transaction aligns with our stated initiative of building a profitable and low-cost precious metal company in the Americas by operating and building low risk, low capital, high return projects,” said Darren Blasutti, President and Chief Executive Officer of Americas Silver. “With the on-schedule and on-budget construction and rapid commissioning of San Rafael now successfully completed, we are focused on the next leg of growth – today’s transaction delivers this growth platform, while also providing us with additional precious metal exposure and a near-term operating presence in Nevada.”
“We are excited to announce today’s transaction and believe this provides a clear path to the development of Relief Canyon,” stated Steve Alfers, President and Chief Executive Officer of Pershing. “With the increased financial and operating capabilities of the combined company, our shareholders are better positioned to realize significant value from Relief Canyon as it is advanced through construction and into production.”
Here is a Corporate Presentation on the business combination of (USAS) (USA) & (PGLC):
http://www.pershinggold.com/Cache/1001243721.PDF?O=PDF&T=&Y=&D=&FID=1001243721&iid=4353299
The combined company will become a solid mid-tier Producer, with several great Development projects in the pipeline, fed by revenues from San Rafael. If Americas Silver sells off a bit in shareprice, (as the company doing the acquisition normally does), then I may add a bit more here, or if there is an arbitrage, pick up some Pershing prior to the merger. Ever Upward!
It is interesting, because we again see Silver companies diversifying more of their product mix into Gold. USAS will now have Silver/Lead/Zinc/Copper/Gold.
That about covers it 🙂
USAS is really a zinc and lead company that has enough silver to make it interesting. Silver accounts for roughly 25% of its revenue.
The PGLC deal looks good but (or “and’) will likely bring the company’s beta down considerably.
USAS is still a Silver company, but openly communicated to the marketplace for the last year that they were saving the majority of their Silver assets at Galena in Idaho and at Cosala & San Rafael in Mexico (along with their San Felipe Silver project they bought of Santacruz Silver) for when it makes sense.
At $14-$16 it doesn’t makes sense to chew through their Silver reserves only to make a buck or two, so they switched around their floatation tanks to produce mainly a Zinc/Lead concentrate and adjusted their mine plan to focus on Zinc & Lead stopes at present while those prices were higher and save the Silver.
They announced they were scaling back the Silver production last year and would keep it that way for 2018, so that is the only reason it is around 1/3-1/4 or production at present, but it is incorrect to say that they only have enough Silver to make it interesting. The Silver is there for when the Silver price is higher and they can produce their Copper/Silver concentrate.
Darrin has reviewed this topic about holding back their Silver production on purpose many times, but here is their most recent Corporate Presentation and live review he did at Beavercreek.
_____________________________________________
(USAS) (USA) Americas Silver Corporation – #CorporatePresentation #Video
Darren Blasutti, President & CEO (09/21/2018) – Beavercreek Precious Metals Summit
That’s funny, Ex. How is it incorrect for me to say that it has enough silver to make it interesting? I am well aware of what it has and that’s why it’s interesting. You don’t get to set my parameters. 😜
It’s a good company that does not move like a pure silver company. Yes, it mines silver so it’s “still” a silver company.
I was just responding to the post where you said they are mostly a Zinc & Lead company and only have enough Silver silver to make it interesting since only 25% of their production is from Silver. For anyone else reading that statement, they may get the wrong impression as they are still primarily a Silver company from their overall asset mix in the ground.
My point was to clarify that they aren’t just a Zinc/Lead company with a little, Silver; but rather, they have huge silver reserves much larger than most of the Silver names people toss around in the Jr space, that are production ready but on standby, or in their development pipeline. Again, looking only at Silver production percentages from the last few quarters of is misleading to the overall longer-term strategy, as they purposely aren’t producing from them in lieu of shifting their production more to Zinc/Lead for the last 2 years. That won’t be the case for very much longer, if Silver pricing improves in 2019.
They also have Copper reserves, like the Zinc & Lead, but those are secondary compared to the value of their in-ground Silver reserves. Now with the acquisition of Pershing they are bringing in more Gold, which does dilute down the Silver some, but Pershing also has a fair bit of Silver to add to the mix.
They have been moving more like a Zinc/Lead company since they switched over their production mix since mid-2017, so maybe that is the point you were eluding to, but when they kick back into the Silver production in a better pricing environment they will have good leverage to the price. Investors and analysts only looking at recent base metals production numbers , versus their capacity to expand Silver production very quickly will be surprised when USAS takes off as a serious Silver Mid-tier that isn’t being properly valued for the ounces they do have in the ground at present.
That’s twice now that you used the word “only” as if I did too. I did not say USAS had “only” enough silver.
Yes, it has more silver than many of its peers, but you should know that it’s not the absolute amount of silver that matters when it comes to how the shares perform, it’s the amount relative to the amount of the other metals. Even at full silver production when the silver price is higher, the zinc and lead components of the company’s production and reserves will remain huge. This can be good or bad but the fact remains that USAS price action will be much more heavily influenced by base metals than purer silver plays.
So it was correct from any angle to say that it has “enough” silver to be interesting.
Thanks for the clarification. I hear what you are saying about the proportion of Silver to the Base Metals and how that effects the leverage of a Silver miner.
I guess that was my point. They are depleting most of the obvious high grade Zinc/Lead stopes now, and in the future USAS will start to mine from their higher grade Silver stopes in Mexico & Idaho. Basically, by late 2019 to 2020 the mix was supposed to ramp up to around 60% Silver , not just 25-30%, and Zinc & Lead will come down in percentage, and Copper will be increased as the Silver will often be included in the Copper concentrate. They’ll have to add that other flotation circuit to produce an additional concentrate but the percentages will be much more skewed to a primary Silver producer when they make that shift.
For now, I agree with you that they are trading more like a base metals producer than Silver producer, and rightly so, but it did help them bring down their costs to the point where they can fund future development out of incoming revenues and FCF.
What I’m not sure of is how that will be affected by the Pershing acquisition that introduces much more gold in the equation.
Like I said, it’s a good company and the Pershing deal is fine. Increasing the company’s exposure to the PMs and North America, ex-Mexico, is a good thing right now.
ISVLF:
http://schrts.co/Myx2AA
IPT:ZJG
http://schrts.co/ughR7Z
USERX
http://schrts.co/K2FTJK
(BTR) Bonterra Intersects 37.5 g/t Au over 3.3 m at Gladiator Deposit
Oct. 1, 2018
https://ceo.ca/@newswire/bonterra-intersects-375-gt-au-over-33-m-at-gladiator
Kirkland Lake Gold Files Early Warning Report
Sept. 28, 2018 (GLOBE NEWSWIRE)
– Kirkland Lake Gold Ltd. (TSX:KL) (NYSE:KL) (ASX:KLA) today announced that, as a result of the completion of the plan of arrangement involving Bonterra Resources Inc. and Metanor Resources Inc. , and pursuant to which, among other things, Bonterra acquired all of the issued and outstanding common shares of Metanor), the Company now holds in aggregate 37,540,290 common shares of Bonterra and 6,136,072 share purchase warrants exercisable to acquire an additional 9,841,646 Bonterra Shares. This represents a 9.44% interest in Bonterra on an undiluted basis and an 11.63% interest on a partially diluted basis, assuming the exercise of the Warrants held by the Company.”
I realize many on this page wouldn’t give Gary the time of day. Personally, I’ll take every bit of positive comment on the sector I can find: http://news.goldseek.com/GoldSeek/1538395980.php
Greetings to the KER crew! Thanks Cory for putting together another great weekend show, and please send Big Al our best and hoping for a speedy recovery.
Ever Upward!