Dave Erfle – A Constructive Outlook On Precious Metals And Select Mining Stocks In 2022
Dave Erfle, Founder and Editor of the Junior Miner Junky, joins us to assess where the precious metals and mining stocks were priced coming out of 2021, and what trends may develop moving into 2022. We discuss again the severity of the recent tax loss selling season in the mining stocks, and the potential for a sector bounce over the next month or two to start of the year. However we also review the potential for another sell down before the Fed rate hiking cycle actually gets started. We also note, the disconnect in where the mining stock valuations are in relation to the fairly buoyant underlying metals prices, and the accumulation opportunity this may present.
Next we reviewed the group of newly minted companies and that have continued to trend lower since later 2020 and having continued to sell off and drift lower after their listings and IPOs. Then we pivoted over to the more advanced exploration and development companies and why they are not getting the kinds of valuations we’ve seen in the past for their 1-2 million ounce deposits. This brought focus to the recent increase in mergers and acquisitions, a trend that Dave sees continuing. This may get more investors speculating as to which transactions will come next, and get more capital rotating within the sector.
We also give consideration to whether generalist investors, who are overwhelmingly taking passive investing strategies in today’s markets, have shifted their focus more to ETFs rather than individual stock picking, and if this may changed future trends in mining stock interest. Dave wraps us up with why he is much more attracted to high margin exploration/development projects in safe jurisdictions than he is to higher risk drill plays without resources or optionality projects that need higher metals prices.
Asian Stocks Down Ahead of Latest Fed Meeting Minutes
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Investing.com – 1 hour ago (Jan 04, 2022)
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“Asia Pacific stocks were down on Wednesday morning, with investors awaiting the minutes from the U.S. Federal Reserve’s latest meeting for clues on the central bank’s interest rate hike moves.”
“Japan’s Nikkei 225 inched up 0.05% by 9:04 PM ET (2:04 AM GMT) while South Korea’s KOSPI slid 1.32%. In Australia, the ASX 200 was down 0.26% and Hong Kong’s Hang Seng Index fell 1%. China’s Shanghai Composite fell 0.67% and the Shenzhen Component was down 0.55%, after their worst New Year debut since 2019 on Tuesday. An index of Chinese companies trading in New York also fell the most in more than two weeks.”
“U.S. Treasuries steadied after yields rose for a second day over increasing bets that the Fed will hike interest rates at least three times beginning in May 2022. Yields on long maturities rose due to a cascade of new corporate bonds following a year-end pause.”
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Yup, HK, SS, SZ down.
Just watched Kitco interview Frank Holmes, mostly general comments. With KER interviews, always meat on the bone but not much meat with Frank.
Thanks for that feedback Terry, as it is appreciated. We try to provide some substance in our interviews and bring on guests that share good insights with the KER crew.
Oil Prices Chug Higher as OPEC Allows Feb Output Hike
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Investing.com – (Jan 04, 2022)
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“Crude prices returned to the $80 per barrel mark on Tuesday as producer alliance OPEC+ allowed another output hike in February…”
“OPEC+ — which groups the 13-member Saudi-led Organization of the Petroleum Exporting Countries with 10 other oil producers steered by Russia — greenlighted at a meeting on Tuesday a 400,000 barrel-per-day output hike for next month, similar to what it had done each month since August.”
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https://www.investing.com/news/commodities-news/oil-prices-chug-higher-as-opec-allows-feb-output-hike-2730329
John Quakes @quakes99 3:13 PM · Jan 4, 2022 · Twitter
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“Rumours are circulating that the government of #Kazakhstan will step down tomorrow. If that does indeed happen then I think U can expect that the resulting political uncertainty could set off alarm bells in all the countries that have #Uranium mine Joint Ventures with $KAP 👀”
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https://twitter.com/quakes99/status/1478504961142972417?s=20
(EU) enCore Energy Announces Completion Of (AZZ) Azarga Uranium Acquisition: Creation Of Top Tier United States ISR Uranium Company
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Jan. 4, 2022
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https://encoreuranium.com/wp-content/uploads/2022/01/EU-NR2022-AZZ-Acquisition-Closing-FINAL.pdf
(LBC) (LBCMF) Libero Copper Intercepts 97 Metres Of 0.34% Copper Equivalent At Big Bulk
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by @PretiumCap on 4 Jan 2022
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https://ceo.ca/@pretiumcap/libero-copper-intercepts-97-metres
Long KOLD (short NatGas). Building.
Added (both pre-market).
Dollar downside gap will fill. When?
Added more. Now 50% short.
Stopped out. May try again tomorrow.
Some interesting articles on http://www.wallstreetonparade.com on how the Bailouts of the banks continue and the blackout of coverage by the Financial Press. Think about those articles when listening to The Fed babble.
Going along with the articles on Wall Street on Parade, I just noticed that CNBC put up a border that “Financials lead the way into the new year”… along with some guy saying with the reductions in bailouts (which is a lie) bank profits will grow (which is a lie unless bailouts continue).
Picked up an opening position in CGX Energy yesterday. Oil story.
Looks like by the behavior of the General Markets and Commodities, that Wall Street is not favorable to the AG comments that “no one is above the law”.
The Year Ahead: 6 Trends to Watch for in 2022
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Jan 04, 2022 – Investing.com
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1. The Global Monetary Tightening Cycle
2. Covid: Year 3 And Counting…
3. China’s Trifecta: Omicron, Evergrande and Taiwan
4. Europe’s Energy Crisis
5. Can OPEC and the U.S. Keep Pace with Oil Demand?
6. Crypto’s Watershed Year
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https://www.investing.com/news/economy/the-year-ahead-6-trends-to-watch-for-in-2022-2729657