How to Buy in a Recovering Market

Source: John Newell for Streetwise Reports 02/13/2019 Following a painful decline, some quality mining shares are poised for recovery. Fund manager John Newell at Fieldhouse Capital Management explains his process to identify them. In the larger picture, the first chart shows the CDNX Index, which represents many of the junior mining companies we follow (but not perfectly). They tried to breakout in early 2018 after moving sideways for more than a year and half from the late summer highs of 2016. They then slipped back into a downtrend in early 2018 and then bottomed on December 24, 2018 at 528. Chart courtesy of Since that low, the index has climbed steadily up, about 13.5% in early 2019. However, what the CDNX chart above hides are the positive moves some companies made in the space, despite the difficult market. So, we will look at the traits of the companies that did well in 2018, for clues on what could continue to work in 2019. But first I will show charts that make us believe that 2019 could be a very good year in the precious metal space. The Gold Chart shows that gold bottomed on August 16, 2018, yet despite a ~10% rise in gold off its lows, precious metal shares lagged, much like 2016. (First posted on August 22, 2018) (The Gold-Silver Ratio is how many ounces of silver it takes to buy one ounce of gold.) Chart courtesy of Historically, this ratio suggests that investors are willing … Continue reading

A Most-Revealing COT Comparison

Source: Michael J. Ballanger for Streetwise Reports 02/12/2019 Precious metals expert Michael Ballanger discusses COT reports, the Fed, the dollar and gold. Over the years, you have all read my rants and ravings (as well as those of many other learned scribes) on the issue of government-sponsored and regulatory-sanctioned bullion bank interference in the gold and silver markets. What back in the 1970s was deemed “rank speculation” and “conspiracy theory nonsense” has now been totally legitimized by way of indictments and admissions but all with little or no remorse of any kind on the part of the perpetrators. Fines are mere annoyances and written off as “the cost of doing business” while the practices of these financial behemoths are permitted to continue to the benefit of the banco-political class and to the extreme monetary detriment of the middle and working classes, as well as those believers in the principles of sound money. With this as an introduction, observe the following graphic containing the COT report from October 10, 2018. Note the extremely RARE net long position held by Commercial gold traders. October 10, 2018, COT and Daily Gold Chart: Commercial traders had amassed the largest net long position in COMEX gold futures that we followers of these data had EVER seen. The bullion banks, purported to be acting “only in the interests of their hedge book clients” (rolling eyes), had allegedly covered all shorts on behalf of their gold producer clients and actually went “net long”—but only for their clients, … Continue reading

Drilling About to Begin at Explorer's Nevada Lithium Asset

Source: Streetwise Reports 02/12/2019 Data for a prefeasibility study will result from the forthcoming drill program. Cypress Development Corp. (CYP:TSX.V; CYDVF:OTCQB; C1Z1:FSE) announced in a Feb. 7 news release that drill rigs are being mobilized to its Clayton Valley lithium project in Nevada to begin drilling there. The drill program will focus on the area between previous drill holes GCH-06, DCH-04 and DCH-05. The main targets there are the Upper Olive and Main Blue Mudstone units. Primarily, Cypress aims to upgrade and convert resources for a prefeasibility study and to obtain material for additional metallurgical testing, including about 500–800 meters of core. Secondarily, the company intends to gain “geotechnical data and additional information on lithology, mineralization and clay speciation,” the release noted. Weather permitting, drilling should conclude in March. Read what other experts are saying about: Cypress Development Corp. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Cypress Development Corp. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above … Continue reading

Prospector Extends Mineralization at Portugal Project

Source: Streetwise Reports 02/12/2019 This company’s multiphase drill program continues to meet objectives. Avrupa Minerals Ltd. (AVU:TSX.V; AVPMF:OTC: 8AM:FSE) announced in a news release it has finished drilling the seventh phase, or six holes totaling 2,498 meters, at Sesmarias, on the Alvalade license, in Portugal. According to the company, “the program continues to be highly successful, accomplishing goals of better technical understanding of the Sesmarias mineralizing system and significantly enlarging it. Sampling of the drill core is ongoing, with full assay results expected by the end of February.” The program afforded “a much higher degree of predictability in location of mineralization” and expanded it “significantly,” the release noted. Visual results showed the 10 Lens to be larger, at least 600m long, up to 400m wide and 25m thick, and revealed above it a stockwork-stringer sulfide zone. Drilling also identified the footwall feeder zone stockwork for the 8 Lens and the edge of the 2 Lens/Horizon. Mineralization remains open to the east and west. Complete assay results should be available by the end of February, the company noted. Read what other experts are saying about: Avrupa Minerals Ltd. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. … Continue reading

Resource Estimate Increases Silver 59% in Historical Mexican Mining District

Source: Streetwise Reports 02/11/2019 Company is working in district that has 250 years of silver and gold production. Goldplay Exploration Ltd. (GPLY:TSX.V; GLYXF:OTCQB), a Canada-based company that has been focused on exploring its properties in Mexico, has released its maiden resource estimate at its flagship San Marcial project in the Rosario Mining District in Sinaloa. “The maiden resource was completed by an independent qualified person, WSP Canada Inc., defining an open pit amenable Indicated and Inferred resource,” Marcio Fonseca, Goldplay’s president and CEO, told Streetwise Reports. “In doing so, the company has delivered a material increase in the tonnage, grades and ounces of silver in the maiden resource estimate.” The new, independent resource completed by WSP Canada derives a total resource of 47 million ounces (47 Moz) silver equivalent (Ag eq) Indicated and Inferred. It includes a “shallow, high-grade silver core zone (Breccia Zone), up to 40 meters in thickness, which represents 3.0 million tonnes at an average grade of 239 grams per tonne (239 g/t) Ag eq, 200 g/t Ag, equivalent to 23 Moz Ag eq and 19 Moz Ag, respectively,” the company noted. The total resource consists of 36 Moz of Ag eq at an average grade of 147 g/t in the Indicated category and 11 Moz silver equivalent at an average grade of 99 g/t in the Inferred category. Cutoff grades of 30 g/t Ag eq were used for the open pit and 80 g/t Ag eq for underground. The maiden resource marks a substantial increase over … Continue reading

Cobalt Company's New Plan Would Increase Production by 50%

Source: Streetwise Reports 02/11/2019 With the cobalt market expected to ramp up, one company is building North America’s next primary cobalt mine. Editor’s note: An earlier version of this article stated that a processing plant would not be necessary. Although eCobalt will not be building a full hydromet facility, it may still build a processing facility. We apologize for the error. Over the past few years, the cobalt market has been volatile, but demand is expected to increase as the element is a necessary component in the rechargeable battery and renewable energy sectors. Much of the world’s production comes from the Democratic Republic of the Congo, where issues such as corruption, child labor and pollution have many manufacturers looking for alternative sources. eCobalt Solutions Inc.’s (ECS:TSX; ECSIF:OTCQX; ECO:FSE) Idaho Cobalt Project (ICP) is the only near-term environmentally permitted primary cobalt project in the U.S. It’s 100% owned by eCobalt’s wholly owned subsidiary, Formation Capital Corporation. Located in the Idaho Cobalt Belt, “the ICP has the potential to become a reliable and transparent source of cobalt in the face of rapidly growing demand for the metal,” the company declared. Michael Callahan assumed leadership of the company in late 2018 as President and CEO. “We see the sentiment around battery materials correcting in 2019 and this optimized feasibility study as a potential re-rating opportunity for the company.” – Eric Zaunscherb, Canaccord Genuity “When I joined the company late last year, my main priority was to determine how to maximize the greatest value … Continue reading

Gold Explorer Updates Resource with Increased Ounces at Red Lake Project

Source: Streetwise Reports 02/09/2019 An Echelon Wealth Partners report reviewed the numbers associated with the increase and its “positive” implications for the miner. In a Feb. 5 research note, analyst Ryan Walker reported that an Echelon Wealth Partners Top Pick, Pure Gold Mining Inc. (PGM:TSX.V), released an updated resource for its Madsen project that shows a 24% increase in high-grade gold resources to 2.53 million ounces (2.53 Moz). Walker relayed that in the update for Madsen, located in Ontario’s Red Lake camp, the company increased Indicated resources by 18% for a new total of 6.43 million tons (6.43 Mt) at a 9 grams per ton (9 g/t) grade, for 1.86 Moz. Pure Gold also expanded Inferred resources by 58% to 467,000 ounces (467 Koz) at 7.7 g/t from the previous 296 Koz at 7.89 g/t. The grade rose “slightly,” with the boost in overall ounces to 8.65 from 8.6 g/t, Walker noted. “The accompanying potential increase in potentially mineable resources at Madsen suggests the potential for increased mill throughout from the 600 tons per day (600 tpd) utilized in the preliminary economic assessment (PEA),” the analyst commented. Specifically, Walker indicated, the Madsen mill could see production surpass 100 Koz per year over about 16.5 years at a rate of 1,089 tpd, for which the facility is permitted. This output compares to the quantity outlined in the PEA, an annual average over the mine life of 66.1 Koz. Pure Gold’s Madsen resource update also included a maiden resource estimate for the … Continue reading

Streaming and Royalty Firm Posts Q2 FY19 Earnings Beat 'Thanks to the IRS'

Source: Streetwise Reports 02/09/2019 A BMO Capital Markets report reviewed the figures released by this company and explored contributing factors behind them. In a Feb. 6 research note, BMO Capital Markets analyst Andrew Kaip reported that Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) achieved an earnings per share (EPS) beat in Q2 FY19. Kaip relayed the company’s EPS at quarter end was $0.36, after having delivered 79,600 ounces of gold equivalent and generating $97.6 million in revenue. Of that total revenue, $67.7 million were from streams, and $29.9 million were from royalties. These figures were in line with BMO and consensus’ forecasted EPS of $0.31. Yet Royal Gold’s EPS was a beat due to “$6 million positive true-up based on recently issued Treasury and Internal Revenue Service guidance,” Kaip explained. Kaip noted Royal Gold’s Q2 FY19 operating cash flow was less than expected, at $58.8 million versus $65 million. That resulted from negative working capital adjustments as the company did not outlay a significant amount of capital during the quarter. At the end of Q2 FY19, Royal Gold had $157 million in cash and cash equivalents, and full access to its $1 billion revolving credit facility. Sign up for our FREE newsletter at: Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the … Continue reading

Lithium Explorer Continues to Expand Peruvian Deposit Ahead of Resource Update

Source: Streetwise Reports 02/08/2019 A Haywood report discussed the results from seven holes drilled at this company’s project, as well as upcoming catalysts. In a Jan. 31 research note, Haywood analyst Colin Healey reported Plateau Energy Metals Inc.’s (PLU:TSX.V; PLUUF:OTCMKTS) new drill results show Falchani West “continues to suggest large resource potential, which is consistent with our expectation that the total resource at the project can easily double from the maiden estimate with more drilling.” The recently released results are from four holes at Falchani West and three holes at Falchani East. Results from four additional completed Falchani West drill holes remain outstanding. Healy relayed that the just-reported holes in the west demonstrated expansion of mineralization previously identified through surface sampling and mapping. Hole PLAT33-V, for instance, showed 200 meters (200m) of 2,519 parts per million (2,519 ppm) graded lithium from 117m downhole in thin upper brecchia, tuff and lower brecchia, including a 156m intersection within the latter averaging 2,624 ppm lithium from a 161m depth. Also in this hole, lithium values up to 4,862 ppm were detected. Mineralization is shallower than in the east. The prospect is good for Plateau Energy to add to the existing resource before its next update, Healey pointed out. The thickness and grade of the lithium-rich lower brecchia, which are superior to those in the east, “should build resource tons quickly,” he noted. Preliminary metallurgical testing on this brecchia indicates leaching qualities like those of the main tuff unit and, therefore, suggests potentially similar … Continue reading

Silver Explorer Releases Maiden Resource Estimate for Mexico Project

Source: Streetwise Reports 02/08/2019 The totals are materially higher than the original, 2008 calculations. Goldplay Exploration Ltd. (GPLY:TSX.V; GLYZF:OTCQB) announced in a news release that an independent NI 43-101 mineral resource estimate has been completed for its San Marcial project in Mexico and reflects a “substantial increase” over the previous, 2008 estimate by Silvermex. “The mineral resource provides a strong foundation to realize the full potential of the San Marcial project,” President and CEO Marcio Fonseca said in the release. The estimate delineated a shallow, high-grade Breccia zone up to 40 meters thick. It represents 3 million tons, at an average grade of 239 grams per ton (239 g/t) silver equivalent (Ag eq) and 200 g/t silver (Ag), which equate to 23 million ounces (23 Moz) Ag eq and 19 Moz ag, respectively. The total updated resource outlines Indicated resources of 36 Moz of Ag eq at an average grade of 147 g/t. Of the Indicated resources, the high-grade silver core, or Breccia, zone, accounts for 63%. Inferred resources are 11 Moz Ag eq and have an average grade of 99 g/t. These figures denote a significant increase in both silver and silver equivalent contained ounces. In the Indicated category, they were 59% and 57% higher, respectively than they were in the historical estimate of 2008. In the Inferred category, silver and silver equivalent ounces increased 126% and 44%, respectively. In the Indicated category, the zinc resource went up 56% and the lead resource, 77%, both since 2008. Of note … Continue reading