Big news out of Kirkland Lake and Detour Gold. Also comments on Great Bear and Novo
John Rubino joins me today to discuss some of the resource companies that are catching his eye. We start with the news today of Kirkland Lake buying Detour Gold for $4.9billion in an all shares deal. We then look down the food chain to some of the more advanced explorers. Great Bear Resources and Novo both released news recently that we comment on.
Please send me any company questions and I will do my best to get them answered. My email is Fleck@kereport.com.
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(KL) Kirkland Lake Gold to acquire (DGC) Detour Gold in stock deal worth $4.9 billion
by @canadianpress on 25 Nov 2019
Wow. (BAR) (BALMF) Balmoral Resources up 20% on this news today since it’s Martiniere gold project is on the Detour Gold trend. I’ll take it!
Another poster over at ceo.ca put this graphic up:
Balmoral’s “Detour East”: covers over 20 kilometres of the Detour/Sunday Lake deformation zone and Also covers over 13 kilometres of the gold bearing Lower Detour deformation zone
“The Martiniere Property is located centrally within the Detour Gold Trend Project, approximately 45 km east of, and along geological trend from, Canada’s second largest gold mine and a similar distance north northeast of Hecla’s Casa Berardi gold mine”
http://www.balmoralresources.com/projects/martiniere/introduction
Detour Trend Project, Quebec
“Property covers over 20 kilometres of the Detour/Sunday Lake deformation zone which hosts the 15+ million ounce Detour Gold Mine located 11 kilometres to the west in Ontario.”
“Also covers over 13 kilometres of the gold bearing Lower Detour deformation zone
Over 20 gold occurrences, including the advanced Lynx and Rambo prospects are known property wide”
http://www.balmoralresources.com/projects/detour-east/introduction
This BAR position was very well timed Eric. Nicely done. It does make me wonder if he knew KL was going to gobble up DGC?
______________________________
BALMORAL WELCOMES STRATEGIC INVESTMENT FROM MR. ERIC SPROTT, CLOSES FINAL TRANCHE OF NON-BROKERED PRIVATE PLACEMENT FOR TOTAL GROSS PROCEEDS OF $3.5 MILLION
November 8th, 2019
I wish I had more money. Everything is a trade off or possibly a premature exchange.
There was a line in the original Arthur movie with Dudley Moore.
“I wish I had a dime for every dime I have.” 🙂
Interesting news coming out of Florida courts:
Evolution To Acquire Red Lake Gold Complex In Canada
26 November 2019
“Evolution Mining Limited (EVN.AX) is pleased to announce that it has, through a wholly owned Canadian subsidiary, entered into an agreement with (NGT) Newmont Goldcorp Corporation to acquire 100% of the Red Lake gold complex.”
https://evolutionmining.com.au/wp-content/uploads/2019/11/Acquisition-of-Red-Lake-Announcement.pdf
So there’s a 2nd big acquisition in the Gold sector today.
Keep them coming Mr Market!
Here is a whole slide deck presentation on this Australian producer’s takeover of another Canadian asset in Red Lake from one of the majors. Those Aussies are still on the buy…
https://evolutionmining.com.au/wp-content/uploads/2019/11/Acquisition-of-Red-Lake-Presentation.pdf
Looks like Australia and Ontario have become blood brothers today. Who next?
Well, if Red Lake is on the menu, I’d like a larger company to buy out Pure Gold as they move into the construction phase. 😉
If if Kirkland Lake goes shopping again, I’d like them to take out (BTR) Bonterra for their next acquisition.
Australians make a $475-million splash in Red Lake
11 h By: Northern Ontario Business Staff
“Evolution Mining enters northwest gold camp with plans to boost production, lower operating costs, spend like mad on exploration.”
I traded off Bonterra for something, and held onto Great Bear and Pure Gold for my Red Lake holdings. I figure Bonterra will be the one…
Yes, Great Bear and Pure Gold are 2 good picks for Red Lake, Ontario.
As for Quebec, Bonterra and Osisko Mining are the 2 big stakeholders in the Urban/Barry and Windfall Lake area play. KL has a good position in BTR, and Eric Sprott, who was involved with KL also has a nice stake in Bonterra, (by way of a stake he had in Metanor that Bonterra acquired). It just seems like a likely takeover for Kirkland Lake down the road.
Excelsior,
I would love to hear an, or several interviews with You and Cory. I would like ‘ your take ‘ of the copper and zinc miners.
In my opinion, the base metals are the deal. And PMs are going down for the short/mid term.
Thanks, that’s kind of you to say Chartster, but I’m no expert on anything and would rather hear Cory interviewing the pros.
The PMs may have a bit more seasonal year-end weakness, just like the previous 5 years during the holiday season, and preparing for more year-end FEDbabble. We saw this same pattern play out in 2014, 2015, 2016, 2017, and 2018. Typically this is a good time to go on the hunt for beat up PM miners, during tax loss selling season, and then ride them higher during the “Q1 Run” when new buying enters the space early next year.
As for the base metals, they will be more of a gradual climb higher from here over the next 2-3 years as we see inflation come back as the dollar tops and rolls over for a gradual trek lower. The US / China “Phase 1” deal will help as a catalyst, but it will be a series of deals and fits and starts between both nations, and it is unlikely everything will get ironed out on the first deal.
Zinc got down to a buck, and Lead was at $.80-$.90, but both have slowly started to head a bit higher with Zinc around $1.05 and Lead in the high $.90s. If Zinc can get back up to to $1.25-$1.50 that would be a real shot in the arm for the sector.
Copper is in the same boat at $2.65 which is why the sector is so lackluster and most companies have sold down over the last year and 1/2. Copper needs to be in the mid $3s to get some enthusiasm going in the space. If it eventually gets up into the $4.00 plus range it may be short lived as all kinds of supply would flood back into the sector at those prices. I’d rathe see a $3.25-$3.50 price in Copper so that the better Copper companies shine, but to keep all the marginal optionality ounces from coming back in.
Seasonally copper is strong in the first few months of the year. Here I see tax loss selling creating good buy opportunities unlike the precious metals. Also having excelsior move into producer status at this time is interesting as well
I actually see more tax loss selling in a number of Gold & Silver miners lately than in the base metals. (and I’m not talking about the larger mid-tiers in the ETFs GDX or GDXJ).
The base metals have been pulling down for the last year 1/2 and it will likely take them longer to rebound, but we have seen a very tiny uptick in Zinc & Lead prices, but not so much in Copper. Most Copper stocks (Excelsior withstanding) have had their rear ends kicked in for over a year and are at dismal valuations lately.
Look at the over-hyped SolGold (SOLG) and Cornerstone Captial (CGP) that have gotten royally stomped on since their breakout moves in 2017. Some of that is due to all the poor management decisions and company infighting.
Look at the pullbacks this year in companies like Turquoise Hill, Triology Metals, Regulus, Kincora, Kutcho, Copper Fox, Bell Copper, Black Sea Copper, Amerigo Resources, Chakana Copper, Constantine Metals, Cordoba, Highland Copper, Taseko, etc….
Copper may be experiencing a little tax loss selling now, but it is likely investors already hit the escape hatch earlier this year (I know I sure did) and took their lumps long before now.
Again, if we get a US/China “Phase 1” deal that would be constructive for Dr. Copper, but there has not been much buying interest in the sector.
If the US Dollar rolled over that would also help.
I just don’t see much of rush to get into Copper stocks here compared to the PMs which have a far more reliable history of having a Q1 Run from late December into Jan and Feb.
Ever Upward!
I will add on the larger macro trend, over the next 1-3 years I do expect Base Metals like Copper, Zinc, Lead, Nickel, Platinum, to recover and head much higher in price, but expect it to be a gradual all boats rise with the tide scenario… a steady climb, but nothing akin to a frenzy.
And I really don’t understand osisko and where it trades based on what they have discovered so far……but then again I’m dumbfounded by most things these days. 🤞
Agreed Wolfster. Initially Osisko Mining was over-valued based on the Osisko Gold Royalties hype premium, but then over the last 2 years their exploration team has continued to nail high grade intercepts over and over again, and they just didn’t get rewarded for all their good work with multiple drills turning and growing the deposit. They sold off when the took over Beaufield (which is normal for the acquiring company for forking out cash or shares) but then didn’t recover much higher. It is odd.
I’m invested in their neighbors Bonterra, as mentioned above, because I see more immediate upside leverage and the potential of a Kirkland Lake takeover down the road, and they have a mill (which Osisko doesn’t) which is key.
However, both companies Osisko mining and Bonterra should be valued higher than they are currently, especially when we such dramatic moves in other Drill Plays and hot exploration narrative stocks that haven’t had near the repeated success.
One of these days Mr Market will wake up from his slumber and these will get rerated higher based on the size/grade of these deposits, and the rising metals prices.
Peter Hug – When Gold Goes Above $1550, Investors Will Rush in for the Next Leg Higher
by @PalisadeRadio on 26 Nov 2019 #AudioInterview
Today’s low for GDX happened at a PERFECT place for a low. It better hold…
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=5&dy=0&id=p08776977053&a=702751320
The next time you talk to Quinton Hennigh can you ask him what is holding up the Native agreements at Egina?
Would appreciate your comments on Wesdome Gold Mines as a takeover candidate. Mid tear, Canada, continues to make new highs, low number of outstanding charges, etc…
Thanks