Four Extraction Companies That Top BT Global Growth's List

BT Global Growth’s game plan is to go long and short on a wide range of investments, but in this interview with The Gold Report, Paul Beattie, cofounder and managing director of the hedge fund, focuses on four undervalued extraction companies on which the fund is definitely long. The Gold Report: Welcome, Paul. Would you tell us a little about Montreal-based BT Global Growth and your investing philosophy? Paul Beattie: BT Global Growth is a hedge fund that I cofounded 10 years ago. We’re focused on the Canadian capital markets, especially international companies listed on Canadian exchanges. The business is abroad, but the company may be listed here. We find this to be the most inefficient part of the Canadian market. We are long and short on all sorts of things and we don’t use leverage. We look for companies that are trading three and four times cash flow and have enterprise value:earnings before interest, tax, depreciation and amortization (EV:EBITDA) as low as three times or four times, if we’re lucky and find these opportunities. Then, of course, there are stocks in the same sector that have monumental valuations and trade at 50 times or 35 times cash flow, and it makes no sense. We short one against the other, and over time it works. And on top of that, we short other things. The Japanese government wants the yen much lower, so we short the yen against the U.S. dollar. We’ve been doing it for years, and we’ll probably … Continue reading

Jack Chan Finds Data Supportive of Higher Oil Prices

Technical Analyst Jack Chan reads the charts and sees a major buy signal for energy. $OSX is on a major buy signal, which can last for months and years. COT data is supportive for overall higher oil prices. OIH is one of a few energy sector ETFs we are holding for long term gains. Prices dipped into our buy zone in November, and again this week. Our trading model identifies the buy zones in a bull market, simple and effective. Energy sector gave a major buy signal in 2016, and the current correction has dropped prices into our buy zone. Summary Energy sector is on a major buy signal. Prices are now in our buy zone. We are holding energy sector ETFs for long term gains. Want to read more Energy Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles with industry analysts and commentators, visit our Streetwise Articles page. Disclosure: 1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. 2) Jack Chan: … Continue reading

Five Companies Positioned for Healthy Returns as Energy Markets Recover

Volatility in the oil and gas markets continues, with prices plunging yet again in the recent chaos surrounding Greece’s default negotiations and other global political uncertainties. But a rebound is inevitable, and Mackie Research’s Bill Newman has his eye on companies that have managed to grow, step by step, even in hard times. In this interview with The Energy Report, Newman identifies companies with individual stories that will, in the end, defy the trend. The Energy Report: With the collapse of the crude oil price and the timing of a recovery difficult to predict, the energy sector has fallen out of favor with investors. In the current oil and gas investment climate, are there any stocks that are immune to the negative sentiment and can still perform? Bill Newman: We had low commodities prices over the past two years, which have really hit the junior oil and gas sector hard, alongside the corresponding valuations and share prices of many small-cap energy companies—but this is where the opportunity exists for investors today. The companies that have survived are generally underleveraged and it’s been incredible how efficient they’ve become in driving down drilling and completion costs. These companies have been able to really improve the well economics and are generating strong returns even at lower commodity prices. With a stronger and more stable oil price outlook expected in 2017, activity is starting to pick up and investors should be once again looking at those juniors that have survived the last two years, … Continue reading

Millennial Lithium's Deposits Go Deep in 'Lithium Hot Spot'

The most recent drill results from Millennial Lithium’s Pastos Grandes project in Argentina show the lithium grades extend to depth. Millennial Lithium Corp. (ML:TSX.V; MLNLF:OTCQB) reported that two holes drilled vertically to 355 meters and 400 meters at the Pastos Grandes project in Argentina in the Lithium Triangle have returned high lithium grades to depth. The Lithium Triangle is the area where Argentina, Bolivia and Chile meet and is home to over half of the world’s identified supply of lithium. The two holes Millennial Lithium drilled in the northern part of the salar, according to the company, “ended in brine bearing formations and confirm that the salar’s brine carrying capacity extends to much greater depths than encountered in previous exploration.” The company noted that its drilling has been confined to the northern part of the salar and it is in negotiations to expand the southern land package. “Future drilling will include the Southern end of the salar where lithium values are expected to be higher. Two historical holes drilled by Eramine SA in 2011, in the southern portion of Pastos Grandes returned average lithium grades of 558 mg/L and 566 mg/L, significantly higher than Eramine drill holes in the Northern portion.” Iain Scarr, AIPG CPG., VP Development and Exploration, commented, “We are very pleased that our work has improved on historical results and has significantly increased the potential we see at Pastos Grandes. . .we look forward to advancing this project in 2017.” Analyst Paul Renken of VSA Capital, in … Continue reading

Oil Poised to Reach $80

Joe McAlinden, founder of McAlinden Research Partners and former chief global strategist with Morgan Stanley Investment Management, outlines the trends for energy and discusses which sectors should see the most growth under the Trump administration. The Energy Report: Welcome, Joe. What is your outlook for oil? Joe McAlinden: We’ve been bullish on oil prices and published a piece last April predicting an energy shortage. I continue to think that is where we’re headed. There is a self-correcting mechanism in relatively free markets that have been operative in the U.S. As prices fell, producers that are capitalists have cut back production and shut down a lot of drilling activity. We see that in the plunge that we’ve had in the number of operating rigs and in the number of barrels produced in the U.S. Meanwhile, in less free markets for energy, namely the Organization of the Petroleum Exporting Countries (OPEC) members, we have seen more and more duress in the governments that are dependent on high oil prices to maintain their governments and living standards for their citizens. And even with non-OPEC members where there’s a lot of government intervention in the markets, such as Russia, the same thing has been true. Another factor is that the financial pressures on producers basically have forced them to the negotiating table, resulting in the recent agreement to cut production that finally came out between OPEC and non-OPEC producers but really between the Saudis and the Russians as the big players. It is important. … Continue reading

Frack Sands Rebound Predicted Under Trump Administration

Fracking is poised to increase under the Trump administration, and with it will come the need for larger quantities of fracking sand. President-elect Donald Trump is widely expected implement pro-energy exploration policies. His “America First Energy Plan” calls for making “American energy dominance a strategic economic and foreign policy goal of the United States,” and the unleashing of “America’s $50 trillion in untapped shale, oil, and natural gas reserves. . .” Pro-energy policies coupled with rising energy prices point to an increase in fracking. And with the growth of fracking comes the need for fracking sands. Sand is essential to fracking. Bloomberg reports that sand “is a much greater tool in hydraulic fracking than drillers had understood it to be. Time and again, they’ve found that the more grit they pour into horizontal wells—seemingly regardless of how extreme the amounts have become—the more oil comes seeping out.” Bloomberg cites IHS figures that show that drillers are using twice as much sand per well as they did in 2011: “The per-well increases have analysts and investors betting that the sand industry will boom again as soon as fracking activity starts to pick up even a little bit.” Torchlight Energy Resources Inc. (TRCH:NASDAQ) is one exploration company that is using larger amounts of sand. On Jan. 10, the company announced that on its Flying B Ranch #2 well in the Midland Basin in Texas, it will be performing a “significantly larger multiple-stage frac than previously employed, [utilizing] 600,000 lbs. of sand pumped … Continue reading

Uranium Stocks Gain Big as Kazakhstan Cuts Production

In the wake of announced production cutbacks by Kazakhstan’s state-owned uranium mining powerhouse, Kazatomprom, the beleaguered uranium market has seen an upswing. Uranium markets have been in decline for more than ten years, with prices plummeting from highs approaching $140 per pound in 2007 to lows in 2016 below $20 per pound. The market took a further hit after Japan shut down its nuclear reactors following the Fukushima disaster in 2011, with spot prices losing more than half their value. But in recent days, significant stock and spot price moves have been noted by industry watchers. “Uranium surged the most in more than three weeks as Kazakhstan said it will reduce production by 10 percent this year after prices slumped in 2016 amid a global inventory glut,” Bloomberg Markets noted in an article published Jan. 10. The 10% cut was matched with a 10% rise in the U3O8 spot price, which reached $24.25 a pound on the news. The uranium spot price currently stands at ~$22.00 per pound. In an interview with Palisade Radio, David Cates, president and CEO of Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT), noted his company has seen increases in both volume and stock price following the announcement. Cates views recent gains as “sustainable,” noting he believes “the market was oversold and was in total apathy.” The Kazatomprom cutback represents a realization that it may be more valuable to have “pounds out of the ground” than to sell at current prices. Miners like Denison and Cameco Corp. (CCO:TSX; … Continue reading

MGX Minerals Is a Play on Three Commodities in Canada

The Critical Investor takes a close look at MGX Minerals, a Canada-listed company with portfolios of magnesium, lithium and silicon projects in British Columbia and Alberta. MGX Minerals Inc. (XMG:CSE; MGXMF:OTCPK) is a diversified Canadian mining company engaged in the development of large-scale industrial mineral portfolios in western Canada. The Company operates magnesium, lithium and silicon projects throughout British Columbia and Alberta. Although the company has a Canadian Stock Exchange (CSE) listing at the moment, it is one of the most liquid stocks over there, and management is currently looking into the possibility of uplisting to the TSX Venture. The strategy of MGX Minerals is well-thought out by management. It seeks to build long-term shareholder value through development of industrial mineral assets, in specific commodities and mining-friendly jurisdictions. Benefits of this type of assets are relatively low initial capex needs, solid demand and price decks, near term cash flow, very simple quarry-like open pit operations with shovel and scoop mining with no tailings, fixed operating inputs, long -term supply and energy contracts, streamlined permitting as industrial minerals like magnesium and silicon just need quarry permitting. On top of that the company also has partnerships in place or is seeking those, providing financing, engineering expertise and low-cost energy solutions. The company is led by President and CEO Jared Lazerson, who is a relatively unknown name in the field of junior mining. When talking to him, I became impressed by his knowledge on almost every aspect of the company, the projects and … Continue reading

NexGen's High-Grade Drill Results Signal a Bright 2017

The continuing stream of high-grade drill results from NexGen Energy’s Arrow deposit has one analyst predicting 50% resource growth. Throughout 2016, NexGen Energy Ltd. (NXE:TSX; NXGEF:OTCQX) has been announcing drill results. On Dec. 20, NexGen released the results from the final 10 holes of the 2016 drill program at the Arrow deposit, part of the Rook I property in the Athabasca Basin in Saskatchewan. David Talbot, an analyst with Dundee Capital Partners, noted that “positive highlights include four intercepts along A2 Shear, and another on A3 Shear. Mineralization continues to be intersected at higher than [the] current resource grade of 2.63% U3O8.” These results, Talbot stated, “complete 2016’s massive 73,091m drill program designed to expand and improve upon the existing 202 MM lbs resource at Arrow. We believe results should 1) increase confidence with closer spaced holes to upgrade to measured and indicated; 2) expand the mineralized footprint; and 3) delineate higher grade areas within areas previously believed to be lower grade. We estimate resource growth of at least 50% to over 300MM lbs U308.” In a Dec. 14 report, Talbot noted that “management has spent time and effort attracting a strong and experienced technical team. Plenty of geotechnical and metallurgical work is going on behind the scenes in preparation for the PEA. This should provide a strong valuation footing for investors. In the meantime the Arrow Deposit continues to grow and improve with each press release.” Gwen Preston, editor of Resource Maven, concurs, writing on Dec. 14, “If uranium … Continue reading

Jack Chan: 2016 Year-End Review and Forward Analysis for 2017

Technical analyst Jack Chan looks back on the precious metals and energy markets in 2016, as well as forward into 2017. As always, I provide no predictions or forecasts for the future. As a successful long-term investor, I remain faithful to Warren Buffett’s life-long commitment in investing by observing his two rules. Rule #1 – do not lose moneyRule #2 – do not forget rule #1. Looking back on 2016 Our long-term investment model has switched back to favoring equities after placing us on the defensive in 2015. A false alarm in hindsight. The growth sector as represented by $SPX also switched back to a major buy signal in late 2016. The oil and energy sector as represented by $OSX had a major buy signal in early 2016, ending the major sell signal from 2014. The multimonth consolidation after the new major buy signal provided us with excellent entries, with a 40% allocation for the long term. The gold sector as represented by $HUI had a major buy signal early in 2016, but it was a price spike and no entries could be made. No consolidation with no trendline support has been established so far to set up for a long-term allocation. The copper sector also had a major buy signal in 2016. TECK went straight up, while FCX consolidated. We entered near the bottom of the consolidation range, with a 10% allocation for the long term. Summary All three sectors are on major buy signals at the end of … Continue reading