Weekend Show – Jordan Roy-Byrne, Matt Badiali, Joe Mazumdar – 2024 Outlook For Gold, GDX, Oil, Uranium, Critical Minerals and Producing PM Stocks
Welcome to the final Weekend Show of 2023! It was a wild ride this year, and in many ways a drastically better year for investors compared to 2022. With so many sectors in up-trends to end the year we focus this Weekend Show on a wide range of resources and stocks to get 2024 outlooks from our guests.
We hope you all have a very happy New Year! We will be back in 2024 with more market commentary and company interviews.
- Segment 1 – Replay from Wednesday – Jordan Roy-Byrne – Price Action And Breadth Readings Of Gold Miners Is Constructive
- Segment 2 – Matt Badiali, Editor of the New Energy Investor published under the Mangrove Investor joins us to share his outlook for oil, uranium, lithium and copper.
- Segment 3 and 4 – Joe Mazumdar, Editor of Exploration Insights wraps up the show by sharing his recent research on major miner leverage to the gold price. It was very interesting to hear why costs are rising for major miners and the impacts of companies lowering cut off grades to add in more ounces. We also discuss how mid and small mining companies could provide leverage to the gold price.
Breaking out.
Thanks guys for another great year. Looking forward to 2024 … it will be interesting.
Much appreciated Lakedweller2. Yes, looking forward to a better setup for bull market moves in 2024.
Happy New Year to the KER Crew!
Ever Upward!
You must remember that trading lottery tickets on the stock market is what keeps me invested in this dangerous game. I derive most of my pleasure when I pick up a stock tracing for .015 buy a lot of shares and watch it move shortly after. Like Bayhorse Silver I got a train full for less than 2 cents two months ago and now it is up over 475%. I have taken my initial investment off the table and the rest are house positions. I have the same feeling for Eastern Platinum which I bought for 10 cents one month ago and it is up 85%. I also recently bought a junior in Fuji near Lion One which is selling for .025. They had one fantastic drill intercept and the smart money started collecting shares for their family trust. It is a big gamble but one I am willing to take because I like the chance to beat the odds. The only way to really beat the odds is “To Go All In”. For me the biggest thrill is in the most speculative stocks, and I have felt the pain many times in the past, but I have survived and learnt a few lessons. You can teach an old dog new tricks if he is willing to learn. This is not investment advice this is just how I like to trade.
The best investment advice for most traders is to listen to Excelsior, John Rubino, Rick Rule, Goldfinger, or Matthew (there are others) be a good listener and learn how to sell. By the way I do all of the above. LOL! DT
DT – Congrats on some very solid trades you executed this year. Happy for you buddy!
Keep on sharing the good ideas with us here at the KER. Cheers!
Well done DT
Lottery Tickets are a result of chance and the only thing you may be able to do is buy the ticket selector or some other illegal or unethical action (to alter outcome).
Buying mining stocks obviously can be affected by illegal, unethical or immoral action by the corporation, or for that matter the government, regulators, market makers, banks or other entities thereby associated with corrupt activities.
Here’s where lottery tickets differ from, let’s say, Junior Explorers. It probably has to start with some kind of funding. Then you form some kind of exploration team which could have a lot of experience, track record, wealth, Geos, etc. Then there is location, mines in area, type of metals, known, what type of surveys have been done; political situation, utilities/roads/shipping availability and depending on your personal knowledge and experience….
In other words, there are many variables that go into reducing the “risk” but that risk is hardly without information unless a person chooses to not do a bare minimum of research, put a blindfold on and throw a dart in the general direction of a listing of possible investments. I guess that could be called passive investing.
So I would say depending on the factors considered you can reduce your risk but it is not a lottery ticket where chance determines outcome. Add someone like Joe Mazumdar to the equation, who has been recommended by such successful investors as Rick Rule, you can reduce risk even more. Geology is a science which makes itself available for the decision making process. Probably one of the biggest threats to research and ultimate success is price and market manipulation. That does not change the true value of the particular property but does alter success by criminal intervention. Corruption does alter risk but hardly can be blamed on investors or a legitimate mining company. If there is a lottery nature to mining, it is externally imposed and could be applied to any sector or investment.
The reason I call junior miners lottery tickets is because it is absolute gambling, however; a lottery never changes you buy in and the number on the ticket determines whether you win or lose. Junior miners start out as lottery tickets if you get lucky your position can go up, but if after going up your buy in gets a whiff of uncertainty you can instantly lose, although you bought in for one reason there are a million reasons to sell. Lottery tickets are actually safer than micro-cap stocks. LOL! DT 😉🤣
Here’s my latest rant on Substack that went out to subscribers yesterday.
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Opportunities With Growth-Oriented Gold Producers – [Part 2]
Excelsior Prosperity – Shad Marquitz – December 29th, 2023
https://excelsiorprosperity.substack.com/p/opportunities-with-growth-oriented-20e
Ex:
Good examples of why if you do proper research, miners are not a lottery. The info you provided goes a long way toward risk reduction. Probably the most sure bet is that the Government will tax your gains. But the IRS has not gone public yet.
Thanks for that feedback Lakedweller2. Yes, I agree with the points you made contrasting gambling on buying actual lottery tickets, versus reducing risk by becoming better informed on the companies one is speculating on based on having some handle on the risk/reward setup. They are not the same thing at all when contrasting a random lottery ticket to a producing gold company (like Calibre highlighted in that article I posted), with real quantifiable operational metrics, and clear exploration/development value drivers. Sure, both are very risky but they are not nearly the same kind of speculation.
The “lottery ticket” analogy is more appropriate to an early-stage pre-discovery drill-play story, where the odds of finding the next economic and future mine on any exploration target has been estimated at 1 in 3,000. Las Vegas had much better odds than that just betting on black or red, even or odd on the roulette wheel.
Even with a drill-play though, as you pointed out, you can further reduce risk by looking at the management team’s experience on both on prior capital market stewardship and prior exploration success.
One can study how has this team done at similar targets and geology (or if they are off trying something totally new or different to their skillsets). One can consider the types of targets and mineralized system being explored for (is this an easy gold-focused or silver-focused deposit, or is it a complex polymetallic deposit that will require complicated milling/processing and multiple concentrates.
Based on these, one can then consider the typical capital needed to properly explore this type of deposit and balance that out against the teams ability to structure the company correctly and have access to enough capital to really make such a multi-year exploration voyage possible (think how insanely expensive it is to drill a coppery porphyry system at depth, or a marginal project in the Golden Triangle in a limited drill season, versus a shallow oxide gold open-pit style deposit in Nevada or Mexico).
So thinking of how far the capital raised for exploration will stretch is critical (as everyone knows there will be a series of raises over and over again). Based on this information, then one can talk to management about how a project needs to be drilled (shallow or at depth), what kind of mineralization are they drilling for and is this easy to drill or challenging with lost or abandoned holes, or through underground water table, or through the swiss cheese of a prior operating mine (professional or artisanal) where there may be gaps missing and throw the drillers into a tizzy. Also how far will the capital stretch based on the G&A burn versus what is actually going into the ground to build actual value for the companies. Sadly, many times, most of the money goes to excessive salaries, too big of a staff (sometimes people are only part-time and working for multiple companies, or too many directors sucking at the company teat), too much carrying cost on multiple non-core properties, too much spent on promotion, too much spent on listing fees on multiple exchanges for the stage of the company, too much spent on part excessive ESG expenditures for green-washing at a stage where the company doesn’t even have anything proven in the ground yet.
One can consider if the mineralization is expected to be high-grade underground versus lower-grade bulk-tonnage open-pit at surface, or the jurisdictional risk/taxation/available skilled labor, the geographical concerns — (ie… helicopter supported = much higher cost versus drive up road access to shallow drilling, on the side of a mountain difficult to get crews/roads/drill pads/heavy equipment versus flat barren terrain versus brownfields underground drilling, does the staff need to be transported in or can the live on site or can they live in a local town, etc… etc….)
There are definitely things that management can do and that investors can do to stack the odds more in their favor, versus just straight-up blindfolded dart throwing, but even then, it still does take a lot of luck to over the lap the targeting science to make a discovery that actually matters… so still very much a luck of draw, after reducing the odds with IP and Magnetic surveys, soil sampled/geochemical studies, rock chips and trenching…. At one point a company needs to get a truth machine in there, and drill the target, get the assays back, and report back what they find. That is when an investor finds out if they have a winner, a loser, or a more boxes to scratch first to see if one has a paying lottery ticket with the junior explorer.
It is fun to do one’s due diligence and then speculate on a drillplay story, and most of here have done that many times, knowing in advance, it only takes a few big winners to bail out a lot of losing bets, if one really lets their discovery story winners run. For me personally, I don’t have the risk tolerance profile to speculate on only drill-plays, so I counter some of that extreme risk with lower risk / lower (but still great) payoff probabilities in royalty companies, mid-size and smaller producers, and the better quality advanced explorers/early developers.
Wishing everyone here great prosperity in the speculations they have in place or make in 2024!
Ever Upward!
I need to go back and reconsider Calibre. I had it a couple of times and the Nicaraguan projects seemed to get good drill results. I started getting concerned about Nicaragua in general after issues in Chile, Peru, Panama and recently Venezuela/Ghana. However, after reading your write-up on all the expansion Calibre is doing, things have changed and the threat has been modified (assuming there could be a problem in Nicaragua that hasn’t surface). Worth another look.
Yes, good points on the concerns about Nicaragua’s jurisdictional risk, but I feel that is plenty priced in at this point, especially after that fishing line selloff in October of 2022, after the US announced sanctions on Nicaragua. Eventually investors awakened to the reality that those didn’t really have much impact on a Canadian based company operating there, and both company officers from Calibre and Mako came on the show and unpacked that essentially it had no material affect on their operations and both have continued ramping up production since then.
However, the 2 risks that remain (and again I feel are more than priced in at this point) are if trading platforms in the US ever put a restriction on investing in the OTC version of the stock, or if if Canada were to ever do a very specific sanction on Nicaraguan gold mining, which would hurt 2 of their domestically owned mining companies. There are also all the normal operations risks that any producing company faces, but that is true across the board.
So with the balance of risks versus the solid performance year after year on production growth, successful development of new open-pit mines, and superior exploration results from multiple targets and projects, then I think it has been worth the candle to be positioned and stay positioned in this stock for me personally.
Also, as Ryan noted in our recent interview that I linked in that article, with their Nevada assets at the Pan Mine and Gold Rock development project, and the acquisition of the Valentine Lake project from Marathon Gold in Newfoundland, then they’d have about 60%-65% of their key development and operational assets in North America. That really changes their jurisdictional risk profile, to not making Nicaragua such an over-riding factor. Especially if they can also get Gold Rock into production as another hub for Pan, and double their production in Nevada in the next 2-3 years. As another kicker, the company has 2 million ounces of gold in Washington state at their Golden Eagle project, and that further diversifies the jurisdiction, although, I feel better about Nicaragua than I do Washington. Haha!
The other consideration is that the annually production profile will be essentially doubling in 2025, 2026, (to 500,000 ounces per annum) and beyond, once the Valentine gold mine is marching a full commercial production. That will be a step change higher in their production profile, from the 250,000-275,000 ounces per year target for 2023, and move them into a true Mid-Tier producer category. Normally this size of company gets better valuation metrics from analysts.
Calibre is definitely still got a fair bit of risk embedded, but again, I feel more than priced in at this point, and yet the upside future potential leaves a lot of room for this stock to go up multiples of where it is rated currently even at flat metals prices, and especially if metals prices rise and juice up their margins even further.
Thanks for that feedback Marc, and yes, I agree with your comments on the attractiveness of the mid-tier producers, especially at this point in the cycle.
Many people think the only way to make money in this sector is to be in pre-discovery drill plays that hit it big, but there have been plenty of really solid tradable rallies in the Mid-tier gold and silver producers for decades now, and especially the last 8 years, since gold bottomed in Dec 2015, and the mining stocks started rallying a few weeks later in mid-January 2016.
There have been plenty of 2-8 month runs in the PM stocks where the intermediate producers have had wonderful double-digit and triple-digit tradable rallies, whereas many micro-cap juniors barely budged to the upside (or worse still sold off while the rest of the sector was rallying). I can think of a number of Q1 runs or Fall Rallies, where I was pretty jazzed about the gains in the mid-tiers overall, while so many others on chat boards were belly-aching that their junior drill play had not even moved.
Obviously an early stage drill play can rally the most 10x – 50x, but those are so rare, and so to counteract the odds, I like stacking in a few PM mid-tier royalty plays, mid-tier and smaller producers, some advanced developers, and some of the most advanced explorers/early-stage developers, in addition to the bets I place on tiny early-stage explorers.
In talking with many investors privately about their portfolios, I find that rarely do many people have a solid weighting to the producers or royalty companies (many have absolutely 0 of them). So, as a result of only picking drill-plays, they may be down in their portfolio 60%-90% at this point in the cycle.
It just always shocks me when investors love gold and silver (the metals) and then want to amp up their exposure and leverage to them with mining stocks, but then they end up selecting a basket of companies with no proven gold or silver in the ground, and nothing more than stack of cash, a drill program, and a dream. (??)
–> For goodness sakes, get some companies in the portfolio with ounces in the ground for the optionality to higher prices, and even better, some companies pulling those ounces out of the ground profitably.
Also, if they have the producers and royalty companies, but did not actively manage their accounts over the years by accumulating the dips and lightening up on the rips, then they may have underperformed or in some stocks had a slow bleed. These are cyclical commodities, with even more volatility in the resource stocks that track the underlying commodities, and these have not been buy and hold for years or decades types of stocks. These are not the DOW & S&P500 blue chip leadership that Jesse Livermore is talking about with his “buy right and sit tight” mantra for years or decades. Having said that I do think we have hit a point where those that have accumulated in late 2022 or late 2023 will be able to hold the quality larger names for years (maybe 1-3 years) and make longer-term gains in them as the next phase or wave of the secular bull appears to be underway.
Cheers and good trading to you!
Marc – Good additional points and considerations for riding the cycles, the definition most of have of “long-term” investors, and portfolio construction and position-sizing.
Looking forward to seeing the good folks here at the KER see their portfolios rise in size and value in the year to come, regardless of their unique individual strategies. I’m feeling pretty good about 2024 setting up both technically and fundamentally to be a banger of a year for the resource investors!
I was looking at gold priced in oil when I came across this old chart I posted in January of 2016. Turns out I was right about the blow off as well as what to do with it. Check out SILJ’s action after gold:oil peaked of Feb. 11…
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=D&st=2015-02-02&en=2016-07-26&id=p36301428959&a=675343152
Gold seems to smoke oil every 4 years and 2024 looks like it will be no different.
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=W&yr=5&mn=3&dy=0&id=p57508653985&a=1269834098
Higher gold vs oil will do wonders for the miners’ bottom line.
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24WTIC&p=W&yr=3&mn=11&dy=0&id=p14380436577&a=637189322
Gold priced in CPIW (Consumer Price Index – Wage & Clerical Workers) looks great…
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24%24CPIW&p=M&yr=15&mn=0&dy=0&id=t9505343157c&a=1126079381&r=1703986144213&cmd=print
Gold priced in plain CPI is also ready to go.
https://stockcharts.com/h-sc/ui?s=%24GOLD%3A%24%24CPI&p=M&yr=45&mn=11&dy=0&id=t3785835946c&a=915738730&r=1703987046772&cmd=print
Has this fork marked the top for Southern Copper yet again?
https://stockcharts.com/h-sc/ui?s=SCCO&p=W&yr=6&mn=9&dy=0&id=p99653847139&a=683577631
An interesting sidenote, Eric Sprott mentions that Barrick had about 8 million ounces of gold at the beginning of this century, and they are now down to around 4 million ounces. I know they have other irons in the fire involving base metals, but Barrick had always been known as the Big Kahuna of gold producers. Sprott talks about this around 31:30, he says it is much harder to find and develop worthwhile deposits. Interesting when Goldfinger recently discussed how he felt Iamgold and Rupert Resources were on his takeover list. I feel Barrick must go out and now be an acquirer just for the sake of their position in the mining industry. Newfound Gold must definitely be on someone’s radar. Anyway, here is the yearly wrap discussion Craig Hemke had with Eric Sprott. DT
Costco is now selling Silver Bullion as well as Gold Bullion. Is Walmart that far behind and what about other big retailers. This will start to move the silver market much more than the gold market because of the price differential. I would much sooner own 85 Silver Maples than one gold one, it makes you feel so much richer, and silver prices are more easily assimilated into day-to-day money transactions. I hope they start offering Platinum and Palladium. This will negatively affect The Crypto market, and that’s a good thing as more investment money moves into precious metal. DT
I wonder how long it will take Costco to sell $100 million US of Silver Bullion. I’m thinking one week because they will run out of supply. LOL! DT This is getting really interesting! Look that up in Your Funk & Wagnall’s! That is only around 3.5 million silver maples or eagles, once their profit is included. Peanuts!
Already is at Walmart
https://www.walmart.com/browse/jewelry/gold-bars/3891_4718514_3708899_8655615
You have to be very careful about what you post on the internet, once written it will always be available. DT
A good rule of thumb that everyone has heard a million times is “Truth is an Absolute Defense”.
The operative word is “Truth”. Where some get in trouble is they believe opinion is the same as Truth, and somehow will hold up after scrutiny of a Court and/or Jury.
You are correct. Court implies proof.
I am advancing information concerning your and DTs discussion of “careful what you write on the internet”. I really have no interest and will go back to an interview between Adam Taggert and Jim Rogers I am listening to also.
The euro sold off a little at fork resistance last week but I doubt that it will hold like it did in July. The euro is going much higher.
https://stockcharts.com/h-sc/ui?s=%24XEU&p=W&yr=6&mn=11&dy=0&id=p89847512438&a=1256639293
You’re reading it correctly and the euro’s uptrend will soon get much stronger.
The Nasdaq 100 looks like it topped after perfectly touching Schiff fork resistance on Thursday…
https://stockcharts.com/h-sc/ui?s=%24NDX&p=D&yr=1&mn=7&dy=0&id=p06964742814&a=1562826881
http://tinyurl.com/captwse8
Focus : DOLLAR
Turn?
This time it may be different instead of the real gains being made initially in the producers, it may start with the small to micro-cap stocks, they have suffered the biggest declines, and a lot of players might find the small to medium producers more expensive with their beer budget. In this environment I wouldn’t be surprised if the pricier stocks get bid up after the juniors have started to move. Always expect the unexpected. DT
/NG weekly…….It has lovely volatility for 30 and 120 minute chart trading……Look when this monster was setting up after the 1.44 low price in june 2020…When all the holders are punched out at maximum suffering exhaustion you get several weeks of moderate volume sideways accumulation…and dureing that time your indicators gently round up…It seems that same way in current actions….i will keep waiting …glta
will not post chart share….,another thing to remember to fix…glta
http://tinyurl.com/yfynr3yw
Gap up in early trading.
XNG/USD (2.594).
Hey Matthew and Lake. Appreciate being considered one of the good guys…I will say I read all posts. I’ve always felt the best way to learn is to get everyone’s opinion on something and make my decisions and research more from there. Obviously I’m part of the minority being someone who listened to everything and researched more and decided not to get vaxed and spent lots of time defending my choice against those who thought they were well informed and I was the uninformed…..
Heading into 2024 I think the undervalued jrs will start to realize there true value……the cow pasture mania level isn’t even on the radar yet as far as I’m concerned. Gold Silver Copper mainly. I’m a fan of uranium when it comes to near term producers in NA. Do like some of the Doc Jones picks as well and like his interviews so if you can get a 2024 Doc Jones preview Ex I’d appreciate it big time. 😎
Hi Wolfster, (a joke) When you watch crime TV it always starts out with the good image that the really bad guys adapt to fool their family and the public. Being good can mean being bad, always beware of the overly good guy image. Stay alert and stay safe. Remember I find crime fascinating. LOL! DT 😎
Wolfster, I have to agree with your take on the miners and metals but would add platinum to those with a bullish outlook. The juniors can perform very well while they build steam toward that elusive mania.
day /NG…next buy point near 2.36…imho…..https://tos.mx/FT6fAvp
this is what they give me!…lol…glitch glitch
“Maybe next year”
Weeks ago I said that new highs in stocks would represent a selling opportunity and the action since has given me no reason to change that view.
AAPL weekly:
https://stockcharts.com/h-sc/ui?s=AAPL&p=W&yr=5&mn=2&dy=0&id=p65745975568&a=1438903390
Gold or the Qs? Looks like gold to me…
https://stockcharts.com/h-sc/ui?s=GLD%3AQQQ&p=D&yr=0&mn=11&dy=0&id=p22471107881&a=1571560739
http://tinyurl.com/yfynr3yw
NatGas : Consolidation
BackBox Strangle