Experts See Opportunity in Ratios of Gold to Silver and Platinum

Source: Maurice Jackson for Streetwise Reports 01/23/2020 Andy Schectman of Miles Franklin Precious Metals Investments and Maurice Jackson of Proven and Probable discuss investment strategies centered on precious metals ratios. Maurice Jackson: Joining us for a conversation is Andy Schectman, the president of Miles Franklin Precious Metals Investments. Always a pleasure to have you on the program to discuss the value proposition before us in precious metals. Today we will identify three exciting value propositions for your precious metals portfolio that are currently selling at a deep, deep discount. Mr. Schectman, you have a proven pedigree of success in the precious metals space. I want to discuss a methodology that has made you and the clients of Miles Franklin very handsome returns over the years, and that is your use of ratios. Sir, please explain why it is paramount for precious metals investors to have a thorough understanding on precious metals ratios. Andy Schectman: When we last spoke I shared that legendary investor Rick Rule is fond of saying, “the deal’s in rhetoric,” and he deals in arithmetic. I like to look at the world the exact same way, from the standpoint of arithmetic, and at least in terms of any precious metals investor, ratios are very, very, very important in mathematics. They are another way of saying the law of averages. As we look at ratios that fall out of historical average, they represent opportunities—in fact, distinct opportunities. I guess the easy way of saying that is the farther … Continue reading

Golden Arrow Resources Renegotiates Indiana Project Deal; Ready for Drilling and a Potential New Precious Metals Bull Market

Source: The Critical Investor for Streetwise Reports 01/23/2020 The Critical Investor provides an update on this explorer’s Indiana project in Chile. Golden Arrow Resources Corp. (GRG:TSX.V; GARWF:OTCQB; G6A:FSE) recently came out with some pretty interesting news on its Indiana gold project in Chile. The company managed to amend the definitive agreement with the property owner, Mineria Activa (MSA), a Chilean private equity investment management firm focused on exploration to production-stage assets in mining. Golden Arrow now has the right to earn 100% of Indiana over a 74-month period, expiring in December 2024, and the total cost of US$15.1 million has not changed. However, the payment of US$1 million due to the end of 2019 was reduced to US$150,000, and the subsequent payment of US$2 million due in one year is reduced to US$200,000. Another great advantage is moving US$7 million of the total US$15 million payment obligation for the 25% MSA interest during production after a production decision, meaning that MSA will be bearing execution risk now. This is obviously a great advantage to have as hard dollar commitments have been scaled back significantly this way, and that money can be spent at exploration. I was interested in the fact that this agreement could be adjusted so considerably after a relatively short period of time, during what seems to be the first innings of a new precious bull market. After asking VP Exploration and Development Brian McEwen a number of questions about this, he had the following insights to share: … Continue reading

Standard Lithium Demo Plant Operating Soon, First Production in 2022

Source: Peter Epstein for Streetwise Reports 01/23/2020 Peter Epstein of Epstein Research provides an update on a company with a lithium project in Arkansas. This month, Standard Lithium Ltd. (SLL:TSX.V; STLHF:OTCQX) is targeted to switch on a relatively large-scale, proof-of-concept lithium extraction Demonstration Plant in southern Arkansas. If all goes reasonably as planned, it should take just a few months to prove the company’s proposed operational flow sheet. Then, management believes a final JV agreement with Lanxess Corp. will be signed. CEO Robert Mintak commented, “We’re making chemical products, not merely extracting a raw commodity. We’re doing sophisticated chemistry to produce a chemical that goes into batteries. It’s a high-end product.” GM [recently] announced they were going to build a $2.3 billion factory in Ohio to make lithium batteries. The industry is only going in one direction. We’re at the point where we’re going to be the U.S. hub for it. It’s the next energy revolution and El Dorado [Arkansas] will play a part in it…. ….The key element is our growing partnership with German specialty chemicals giant Lanxess, a company with 73 chemical plants around the world employing tens of thousands. They have extensive and sophisticated sales networks to sell specialty chemical products. That’s a critical part of the whole story.” Significant vote of confidence in Standard Lithium’s JV project On October 30, Standard Lithium Ltd. (TSXV: SLL) (OTCQX: STLHF) obtained a C$5 million five-year loan, at just 3% interest from strategic partner Lanxess. The loan is convertible into … Continue reading

Millennial Lithium: Full Speed Ahead

Source: Peter Epstein for Streetwise Reports 01/22/2020 With initial production at its Argentina project expected in 2022, Peter Epstein of Epstein Research believes the company could be an “excellent” bet when lithium prices rebound. Earlier this month, the mining court of Salta, Argentina, granted Millennial Lithium Corp.’s (ML:TSX.V; MLNLF:OTCMKTS) Argentine subsidiary four mining licenses on its 100%-owned Pastos Grandes project in Salta province. Readers may recall that Millennial recently delivered a bank feasibility study (BFS) and expects to reach initial production in 2022 (subject to funding and permits), ramping up to nameplate capacity of 24,000 tonnes lithium carbonate equivalent (LCE)/year by mid-decade. Farhad Abasov, president & CEO, commented: “Millennial is pleased to have received four mining licenses which comprise ~97% of the property area at Pastos Grandes. Millennial expects the final license to be granted in the near future. The company continues to actively advance its three-tonne-per-month lithium carbonate plant and pilot evaporation ponds. Millennial is moving forward with financing, off-take and other key strategic initiatives with large industry players.” This news comes on the heels of the October announcement that the national mining secretary of Argentina granted a federal fiscal stability certificate (FFSC) for Pastos Grandes. The certificate outlines the tax regime, plus additional benefits bestowed on the project, and officially confirms a reduction in the corporate income tax rate from 30% to 25%. CEO Abasov commented, “The granting of the FFSC assures the tax and additional benefit terms under which we can operate a lithium carbonate production operation. … Continue reading

Explorer 'On the Road to Production'

Source: Streetwise Reports 01/21/2020 The next steps for the precious metals company are provided in a ROTH Capital Partners report. In a Jan. 17 research note, analyst Jake Sekelsky reported that ROTH Capital Partners raised its price target on SilverCrest Metals Inc. (SIL:TSX.V) to $7.75 per share from $7.25. The current share price is $6.85. “Our increased valuation is primarily a reflection of rolling our model forward to 2020, coupled with the inclusion of the company’s financing announced in Q4/19,” he added. Sekelsky noted that SilverCrest will be announcing in Q1/20 results from several hundred holes drilled at the Las Chispas property in 2019. It will include all results available through the end of Q1/20 into the upcoming feasibility study. After, it will likely shift focus “from infill drilling for the feasibility study to expansionary drilling at various targets across the company’s land package,” he added. The analyst highlighted that with C$124 million in its treasury, SilverCrest is well funded for both exploration and development work this year. Its financial position also portends a positive production decision, expected around mid-2020. Accordingly, production could begin as soon as late 2021 but more conservatively in Q1/22. Sekelsky commented, “2019 featured significant exploration success culminating in the establishment of what we view as a significant resource estimate at Las Chispas, which outlined over 100 million high-grade AgEq ounces. Despite this, we believe the surface has just been scratched as Las Chispas and expected 2020 to serve as a transformational year.” ROTH has a … Continue reading

Gold Company's 'Ramp-up to Commercial Production on Track for Q2/20'

Source: Streetwise Reports 01/21/2020 An update on the project and its production is provided in a Haywood report. In a Jan. 10 research note, Haywood analyst Kerry Smith reported that Lundin Gold Inc. (LUG:TSX) remains on track and on budget to achieve commercial production at its Fruta del Norte project in Ecuador in Q2/20. “Fruta del Norte is one of only a few new large mines being built,” Smith highlighted. Lundin poured first gold from the gravity circuit at Fruta del Norte on Nov. 16, 2019, after which it went on to produce 28,678 ounces of gold in 2019. Of those, 3,411 ounces were made into doré form, and the remaining 25,267 ounces were produced as a concentrate. Of the 3,400 tons of concentrate produced, 2,676 tons were shipped to a smelter in Finland. Smith also reported on development progress of the mine and infrastructure. At year-end 2019, 13 kilometers of underground mine development were finished. Construction was 99.2% complete, and ore stockpiles amounted to 153,000 tons. Now, the water treatment plant is being commissioned. Boring of the south ventilation raise, in progress, is slated for completion in Q1/20. Lundin should get the paste plant and Zamora River bridge, which still need to be done, completed in Q2/20 and Q3/20, respectively. The analyst pointed out that Lundin revised its life of mine plan for Fruta del Norte. It raised the all-in sustaining cost (AISC) by about 6.5% to US$621 per ounce from US$583; the new figure is lower than Haywood’s … Continue reading

Palladium Miner Shows Promise

Source: Ron Struthers for Streetwise Reports 01/20/2020 Given current market conditions, the location and potential of its flagship project, and the strength of its management team, Ron Struthers of Struthers’ Resource Stock Report believes this firm represents a solid investment. I have been looking for a very good junior palladium stock, and I believe this is the best one out there for potential enormous gains. But before I get to that, it is important to have a look at the palladium market, because this bull market is much different than the last one. The one from 1997 to 2000 was about three years’ long, and then palladium dropped, giving up most of the gains in less than a year. There was a nice bump up from the 2008 crisis and then the price traded sideways for several years. The price bottomed at the end of 2015 with the severe bear market in precious metals. Since then the price has been going steadily higher, with a major break out in 2016. This bull market is not going to end anytime soon for the reasons I will show you in the next couple pages. Palladium is mostly used in the auto industry for pollution control with catalytic converters. Electric vehicles will be a long time coming to replace any significant amount of gasoline/diesel-driven vehicles. Meanwhile, pollution standards are being tightened that will keep demand high. China has been gobbling up palladium since their China 5 pollution standards took effect in 2013. China … Continue reading

Gold Update: May Retreat Before Next Upleg

Source: Clive Maund for Streetwise Reports 01/20/2020 Technical analyst Clive Maund looks at the charts and finds that gold may react back before continuing to climb. At first glance gold looks like it may be about to advance out of a bull Flag, but there are a number of factors in play that we will examine that suggest that any near-term advance won’t get far before it turns and drops again, and that a longer period of consolidation and perhaps reaction is necessary before it makes significant further progress. On the 6-month chart we can see how gold stabbed into a zone of strong resistance on the Iran crisis around the time Iran’s general was murdered, but after a couple of bearish looking candles with high upper shadows formed, it backed off into what many are taking to be a bull Flag. The 10-year chart makes it plain why gold is vulnerable here to reacting back over the short to medium term, because it has advanced deep into “enemy territory”: the broad band of heavy resistance approaching the 2011 highs, with a zone of particularly strong resistance right where it is now. It would be healthier and increase gold’s chances of breaking out to new highs if it now backed off into a trading range for a while to moderate what now looks like excessive bullishness. Thus it remains a cause for concern (or it should be for gold bulls) to see gold’s latest COTs continuing to show high Commercial … Continue reading

Silver Update: Expect a Price Decline

Source: Clive Maund for Streetwise Reports 01/20/2020 Technical analyst Clive Maund charts silver and predicts a small drop in the price of the metal. If gold is looking set to react back over the short to medium term, which it does, then it implies that silver, which is weaker at this stage in the cycle, is set to react back too. On silver’s latest 6-month chart we can see that the fairly tight pattern that has developed over the past several weeks, which is widely interpreted to be a bull Flag, is now looking more like a small Head-and-Shoulders top, and being small, it has correspondingly small downside implications. It projects a drop soon at least to the upper boundary of the channel that silver broke out of in December. Factors making it more likely that the pattern is an H&S top are the way the advance reversed at resistance at the late September highs, with a dramatic high volume reversal candle appearing after a string of bearish looking candlesticks with long upper shadows, and, of course, the extreme positions evident on the COT and Hedgers’ charts that we will come to shortly. Should silver drop back now or soon it shouldn’t have much effect on its long-term chart or outlook, for as we can see on its 10-year chart, it is still within a large base pattern and could drop to support in the $16 area, without doing any significant technical damage. Silver’s latest COT chart shows that there … Continue reading

The Only 'Bubble' That Counts

Source: Michael Ballanger for Streetwise Reports 01/20/2020 Sector expert Michael Ballanger considers the last week in the stock and precious metals markets. Ever since Sept. 19, 2008, when Hammerin’ Hank Paulson appeared in front of the U.S. Congress on bended knee and begged those clueless politicians for a bailout—which he did successfully—the spread of moral hazard throughout the world has been a contagion that makes the Bubonic plague appear as harmless as the common cold. That was, in fact, the day that shall go down in fiscal infamy as a most dangerous precedent was etched into the fabric and soul of the U.S. financial system. Not only did it set the behavioral course for the banker-politico alliance, it laid out as an insidious blueprint the operation manual for treasury departments and central banks around the world, the result being where we are today, a global economy teetering on an Mount Everest of debt with no solution on any horizon. This week the investor class has seen the continuation of an advance in that began with the first whispering of the phrase “repo operations” in September, the realization of which did not manifest itself until late October, when I penned the missive “Q4 Guesstimates.” As I wrote in September, “I have the feeling that the PPT, with DJT at the helm, is going to go all-out in making damn sure that we have a booming stock market going into 2020, so that his re-election chances don’t suffer from the ‘It’s the … Continue reading