Dave Erfle – Mega-Merger Mondays Are Back In The Precious Metals Stocks
Dave Erfle, Founder and Editor of The Junior Miner Junky, joins us to review the trend of more recent “mega-mergers” with the majors, also spawning even more mergers and acquisitions within the mid-tiers and junior stocks. Last Monday we saw the announcement of Newmont Mining (NEM) putting in a bid to acquire Newcrest Mining (NCM.AX), on the heels of the recently closed Agnico Eagle (AEM) and Panamerican Silver (PAAS) acquisition of Yamana (AUY). Then this Monday we saw more M&A news with B2Gold (BTO) (BTG) announcing it had placed a bid to acquire Sabina Gold (SBB) (SGSVF), and Victoria Gold (VGCX) (VITFF) announcing a bid to acquire ATAC Resources (ATC) (ATADF).
Dave provides some insights on what this may mean for garnering more generalist investor interest, and what other kinds of M&A deals we may see in the sector next. We also discuss how these transactions can be both positive and negative sentiment drivers in the space. Sure, takeovers provide a clear exit strategy for investors, freeing up capital to rotate into other PM stocks, but also create negative sentiment in the space for many longer-term buy and hold investors that sat in these junior companies for years sometimes, only to barely break even break, make muted gains, or worse lose money. In general though, mergers and acquisitions activate the animal spirits of investors as they speculate on which companies will be next?
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Click here to visit the Junior Mining Junky website to follow along with Dave’s market comments.
Same pattern, same algos ….month 13. Going to do something else. No point in wasting more time.
Added to Hecka ( HL ) @ $5.10
I just got filled at 5.07 and 5.05 but have a feeling it will reach at least 4.95 and possibly, in a few days, more like 4.50. What a deal.
78.6% retracement closes the gap at 4.07 to the ‘penny’.
I don’t see 4.07 happening but that could change.
Matthew (and BDC)
As a long-suffering ex-Alexco shareholder, I decided to start a position in HL this morning (@5.11). I also noticed the 50% retrace target at $4.95. I have three more tranches to purchase, so I am waiting to see what happens. I would, of course, greatly appreciate any charting you have. Here is my current HL chart…
I went ahead and bought 2 more tranches at 5.07 but it WILL go much lower if silver has further to fall than I think.
Matthew, if it goes down there you’ll be needing one of these!
https://www.youtube.com/watch?v=gMQnj6X_vyc
TURNS: https://tinyurl.com/52euebw7
Ongoing NatGas Trading Range.
Thursday PMs Bottom?
HL at 5.07 much better than 6.40 at the Feb jubilation high. BDC posted 4.07 gap fill even better.
Content and happy with the cash out from the sector at the time.
Watching the jubilation once again largely disappear judging from the lack of postings here.
Glad I was essentially out of it at 6.36 (average of sales). As reported here, I sold the day it went over 6.40 even though I thought it would continue higher without me. As I said at the time, I got lucky selling the day of the high.
My “jubilation” is intact and growing, btw, and more weakness tomorrow would only add to it.
“If you want to be loathsome to God, just run with the herd.”
— Soren Kierkegaard
Yes but you forget to mention, you repurchased your that earlier Jan exit on the rebound Feb 1 top for same 6.36. And you continue to average down with it at 5.07.
With any luck you may be able to get it again with BDC retracement at 4.07.
I hope to start there.
Matthew
Feb 01, 2023 01:49 AM
I dig the action. It wasn’t quite the drop I was hoping for but I still bought HL and SILJ this morning among others.
Reply
I repurchased part of it, yes. Even today my HL position is small compared to a month ago. I trade the likes of HL (including SILJ and GDXJ) often and based on the intraday charts. Have you heard of sell stops or other risk-limiting tools? I do not report everything I do to you/the herd because that would be too close to self sacrifice of which I am not a fan.
People like you prove the validity of this:
Matthew 7:6
Do not give what is holy to dogs, and do not throw your pearls before swine, or they will trample them under their feet, and turn and tear you to pieces.
I ranted plenty on the Elemental Altus blog yesterday on some of these recent and prior M&A deals, but spent a fair bit of time unpacking my thoughts on the matter.
It was really nice to get Dave Erfle’s hot take on the M&A deals in the sector in this discussion.
Ever Upward!