Expert's Opinion: 'Back Up the Truck' for this Stock

Source: Ron Struthers for Streetwise Reports 11/21/2017 Ron Struthers of Struthers’ Resource Stock Report takes a look at results from two mining companies, and picks the one he considers a winner. I think a comparison of Garibaldi Resources Corp. (GGI:TSX.V) and Silver Bull Resources Inc. (SVB:TSX; SVBL:NYSE.MKT) would be a very good exercise. Both are hitting some high-grade sulphides: Garibaldi, nickel and copper with precious metals; and Silver Bull, zinc and lead with silver. GGI had a high-grade intersect of 7.2% nickel and 3.4% copper over 4.8 meters with 0.82 g/t palladium, 0.78 g/t platinum, 0.40 g/t Au, 10 g/t Ag and 0.195% cobalt. Based on current metal prices that 4.8 meters by GGI is worth around $1,018 per ton. SVB hit 9 meters @ 20.7% zinc, 1.0% lead, 98 g/t silver and 0.26% copper including 3.65 meters @ 47.8% zinc, 2.5% lead, 105 g/t silver and 0.26% copper from 3.55 meters to 7.2 meters. Based on current metal prices that 3.65 meters by SVB is worth around $1,498 per ton. So on yesterday’s drill results the Silver Bull intersect is worth about 50% more than GGI’s intersect, but GGI is valued 1,200% higher, or 13 times. If you own GGI and not SVB it is obvious what to do. Regardless this exercise points out the extreme undervaluation of SVB, and I am not factoring the deposit SVB already has. GGI market cap: 96.7 X $3.80 = $367 million SVB market cap: 199 X $0.14 = $28 million Garibaldi (recent … Continue reading

Pure-Play Vanadium Producer's Q3 Revenues Increase 153% YOY

Source: Streetwise Reports 11/21/2017 With the price of vanadium on the rise, one pure-play producer is reaping the benefits. Vanadium, a metal that maintains a low profile, has been on a tear recently. The metal is used to harden steel: a mere two pounds of vanadium added to one ton of steel doubles its strength. The price of vanadium has surged since the summer, led by the expectation of China increasing the required amount of vanadium in steel used for construction, according to Bloomberg. China is the largest supplier of vanadium, responsible for over 50% of the world’s annual production. Although over 90% of vanadium is used in steel, rechargeable vanadium redox flow batteries are gaining in popularity for large-scale energy storage, and with them the demand for vanadium grows. Bloomberg reported that while the price of vanadium is soaring, “there’s currently no easy way to invest directly in vanadium. The metal isn’t traded on any exchanges and for a company like Glencore Plc, which describes itself as one of the largest producers of primary vanadium, the metal represents a small percentage of the group’s total production.” Largo Resources Ltd. (LGO:TSX) offers a pure play on vanadium. The company hosts the Maracás Menchen Mine in Brazil, which, according to the company, boasts the world’s highest-grade vanadium deposit with a P&P reserve grade of 1.17% vanadium pentoxide (V2O5), with low costs of production. The company released its Q3 earnings on Nov. 6, reporting revenue growth of 153% year over year, and … Continue reading

Streamlining of U.S. Environmental Permits Could Benefit Nevada Mine Developer

Source: Streetwise Reports 11/21/2017 As this company moves closer to bringing a mine into production, a U.S. Department of the Interior decision could help derisk the project. Pershing Gold Corp. (PGLC:NASDAQ; PGLC:TSX) continues to develop the Relief Canyon Mine in Nevada. In June, the company released the Preliminary Feasibility Study (PFS) on the property. The PFS estimated a pre-tax net present value of $144.6 million, an 89% internal rate of return and net cash flow of $192.7 million using $1,250 per ounce gold, $16.75 per ounce silver and a 5% discount rate. The All-in Sustaining Costs are $802 per ounce gold. “The PFS is a major milestone for Pershing Gold. We announced an upgraded mineral resource that includes proven and probable reserves of approximately 635,000 ounces of gold and 1.6 million ounces of silver,” stated Stephen D. Alfers, Pershing Gold’s Chairman and CEO, when the PFS was released. “The PFS is based on a mine plan and financial model with an annual average production of over 90,000 ounces of gold per year.” Alfers explained. Nevada was ranked the fourth most attractive jurisdiction worldwide for mining investment in the Fraser Institute’s 2016 survey of mining companies. The PFS indicated an initial capex of $23.6 million and working capital of $11.1 million. According to Jack Perkins, Pershing’s Vice President of Investor Relations, the company is now weighing options to fund the capital needs, including “debt, royalty or streaming options, strategic investment, offtake agreements and equity, or a combination of these, to bring … Continue reading

Holding on Companies in Gold and Silver, and a Food Multinational

Source: Adrian Day for Streetwise Reports 11/20/2017 The news from three companies has prompted updates from Adrian Day of Adrian Day Asset Management. Strong Holdings to Buy on Pullbacks Nestle SA (NESN:VX; NSRGY:OTC, 83.70) continues to see small improvements toward its somewhat modest goals. In particular, there has been an improvement in the margins, the result of efficiency programs. Margins are all important to a company such as Nestle, particularly given the current pricing pressures. There has also been increased growth, particularly in China, though the company is not expecting further acceleration of growth in that market. Nestle remains a global blue chip, with strong management and a solid balance sheet, with diversified assets and sales, and innovative programs, though in the short term, it can be difficult to move the needle. The problem is the valuation. Though not out of line industry peers, it is trading at a high price-to-cash flow; a high P/E; and importantly, the lowest yield since the beginning of 2008 (and we know what followed that). So we are cautious. For now, it is a hold. Undervalued Awaiting Tax Decision Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE, US$20.59) continues to perform in-line with guidance and expectations. This past quarter, though silver sales were weak, gold made up for that; lower operating and corporate expenses also helped. Some of the silver lag was the result of under-sale relative to production, which will be made up in the next quarter. In accordance with its policy to distribute 30% … Continue reading

Jack Chan's Weekly Precious Metals Market Update

Source: Jack Chan for Streetwise Reports 11/20/2017 Technical analyst Jack Chan charts the latest movements in the gold and silver markets. Our proprietary cycle indicator is down. The gold sector is on a long-term buy signal. Long-term signals can last for months and years and are more suitable for investors holding for long term. The gold sector is on a short-term buy signal. Short-term signals can last for days and weeks, and are more suitable for traders. Speculation favors overall higher gold prices. A pullback on the dollar is supportive for the metals. Our stocks/gold ratio is now at the same level as in December 2016, with a divergence to boot. Silver is on a long-term buy signal. SLV is on a short-term buy signal, and short-term signals can last for days to weeks, more suitable for traders. Speculation favors overall higher silver prices. SummaryThe precious metals sector is on a major buy signal. The cycle is down, as consolidation continues. COT data is supportive for overall higher metal prices. We are holding gold-related ETFs for long-term gain. Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the … Continue reading

Gold in Contradictory Position

Source: Clive Maund for Streetwise Reports 11/19/2017 The signals for gold are mixed, says technical analyst Clive Maund, who delves into the ramifications. Gold appeared to break out on Friday, but the situation is contradictory because on its price charts it appears to be in position to begin another upleg within an uptrend, but its COTs are still neutral/bearish at best, and don’t appear to allow much room for a rally, while the dollar Hedgers chart is still calling for the dollar to advance, despite its downturn last week. On gold’s 6-month chart we can see how, after weeks of indecisive sideways movement, it broke sharply higher on Friday, looking like it has aborted the potential Head-and-Shoulders top that we earlier observed. With the rising 200-day moving average having pulled up beneath the price, it is in position for another upleg, especially as the 50-day has dropped back to close up with the price and 200-day, creating a bullish bunching of all three. While volume was unimpressive on Friday’s rally in gold, such was not the case with gold proxy GLD, which DID break higher on impressive volume—the highest since early September. This is a positive sign. The 2-year chart for gold enables us to see clearly what is going on. Friday’s break higher looks like it marks the start of another intermediate uptrend within the now clear channel shown, after the price dropped back to ease its earlier overbought condition and test the support level shown and the support … Continue reading

Technical Analyst Sees Weakness in Silver

Source: Clive Maund for Streetwise Reports 11/19/2017 Technical analyst Clive Maund charts silver and finds the signals contradictory. At the same time that gold broke out of a coiling pattern to the upside on Friday, silver broke out of a Symmetrical Triangle pattern shown on its 6-month chart below. Volume was lacking on this breakout, however, and the same reservations that apply to the outlook for gold also apply to silver, namely that its COTs look more bearish then bullish, and that Hedgers positions in the dollar index are still calling for it to rally. On the other hand, gold proxy GLD did make a volume breakout on Friday, and what’s good for gold is usually good for silver. Although these conflicting factors make the situation somewhat ambiguous, there is a favorable trading setup here, because silver is still quite close to the apex of the Symmetrical Triangle, so it is possible to open long positions with fairly close stops beneath the apex of the triangle in case the breakout was false. Gold’s price pattern now looks quite favorable, with it looking set to run to a resistance level towards the top of an uptrend channel, and if that happens, silver should follow suit and advance towards its early September highs at about $18.25, perhaps stopping short at about $18.00 for a reason we will observe on its 2-year chart. Point for a stop for traders going long is about $16.70. On silver’s 2-year chart we can see that it … Continue reading

'Explorer of the Year' Recipient Convincingly Updates Resource in a Booming Zinc Market

Source: The Critical Investor for Streetwise Reports 11/17/2017 The Critical Investor profiles a company exploring a high-grade zinc property, and explains why he believes the upcoming PEA could surprise markets. Ayawilca project; drilling location 1. Introduction It is a busy and exciting time for top zinc junior Tinka Resources. Drill results are rolling in all year now, Tinka is the talk of the town at many conferences, the team got a much deserved accolade by receiving the Mining Journal “Explorer of the year 2017” award, and the company got listed on the Peruvian stock exchange (Lima Stock Exchange or BVL). I liked this move, as it made the company less dependent on for example Canadian brokers/banks to raise money in the future. Being one of the major zinc juniors of 2017, the recent resource update of November 8th was highly anticipated by a number of newsletter writers, among them no less then Joe Mazumdar and Brent Cook of Exploration Insights, and of course yours truly. There seemed to be a widespread consensus about a 30-33Mt target, which turned out to be a 42.7Mt resource in the end, but this needs a bit more explanation as the newsletter writers used the higher cut-offs from the first resource estimate, in order to compare apples with apples As the zinc price staged a decisive upswing for the last year as the long-time deficit theory finally played out, Tinka management felt it was fitting to use a higher zinc price, which in turn meant … Continue reading

Streaming Company's 'Attractive Valuation' Is Behind Analyst's Outperform Rating

Source: Streetwise Reports 11/16/2017 BMO Capital Markets reviewed this company’s Q3/17 financial results and an impending deadline pertaining to one of its streams. A Nov. 9, 2017, research note indicated that Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) reported “an in line Q3/17 despite lower-than-expected sales,” wrote Andrew Kaip, an analyst with BMO Capital Markets. This company’s deliveries of gold and silver “were a beat relative to our expectation,” Kaip said. Gold deliveries were 95,900 ounces (95.9 Koz) versus BMO’s 92.1 Koz estimate. For silver, they were 7.6 million ounces (7.6 Moz) relative to BMO’s 6.9 Moz estimate. The streaming firm’s sales of 82.5 Koz of gold and 5.8 Moz of silver were a miss in Q3/17 due to “concentrate build-up at a number of operations,” Kaip explained. This resulted in lower-than-projected operating cash flow. That came in at $129 million ($129M), which compares to BMO’s $150M projection. During Q3/17, the company’s Penasquito and Salobo streams outperformed. In contrast, the San Dimas stream underperformed and “is at risk of missing delivery guidance of 4 Moz,” the analyst noted. Wheaton, however, reiterated 2017 overall guidance of 28 Moz of gold and 340 Koz of silver. Adjusted EPS was $0.15, which was as expected “despite the revenue miss on lower sales,” reported Kaip. BMO anticipated EPS of $0.14, and consensus estimated $0.15. On the balance sheet at quarter’s end, Wheaton Precious Metals had $70M in cash, $854M in debt and $1.1 billion available under its $2 billion revolving credit facility. On that obligation, … Continue reading

Three Resource Companies; One Good Buy

Source: Adrian Day for Streetwise Reports 11/16/2017 Adrian Day of Adrian Day Asset Management reviews the current news and prospects at three resource companies, and comes up with at least one good buy. Lack of News Sees Stock Slip Even as Project Progresses Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE, US$0.92) plans to deliver a bankable feasibility study by midyear—a delay on the previous Q1 schedule—with much of the technical work already done in the prefeasibility study. The company expects permitting to be complete by the end of next year, with the critical Environmental Impact Study (EIS) filed by the end of this year. There will be a community consultation on the EIS, probably some questions, with a decision within six to 12 months after filing. If all goes well, the project would be ready for a production decision by early 2019. My expectation, however, is that once the full feas study has been published and permits received, Almaden’s Ixtaca would become a target for a midsize producer, and probably a silver one, given that 50% of Ixtaca’s production will be silver and given the paucity of good silver projects. Why is the stock down? The stock has fallen significantly, from trading above $1.20 most of the time in September and early October. (It hit a peak of $1.72 earlier in the year, briefly.) Why? First, most juniors have declined over the past several weeks. Second, this period in a mine’s life is often a boring one, with lots of detailed work … Continue reading