Aftermath Makes a Giant Bet on Silver

Source: Bob Moriarty for Streetwise Reports 06/10/2019 Bob Moriarty of 321gold deciphers the forces that affect the cost of silver and describes a company he believes is poised to become mid-tier. When we first started 321gold back in 2001 I went to a lot of shows and met most of the players in the resource business. Many of the other writers felt there was something special about silver and it was going to go up far more than gold. My response was that it was a commodity and like every other commodity it would go up and it would go down. Actually when the silver speculators get frothy about the mouth and silver makes a top, it falls off a cliff faster than any commodity I have ever seen. If you tested all resource investors for sanity, those who worship silver are easily the nuttiest. For the best part of 20 or more years the most popular silver “guru” was preaching that silver was the most valuable metal known to mankind. It would be in great shortage if the U.S. ever got into a war and go to $50–$100 an ounce while everything else stayed the same. It was so valuable that you should “never, never, never, ever sell” silver. The fact that he missed every prediction he ever made didn’t seem to bother anyone. We have been in war constantly since 2001. Silver has gone up and silver has gone down just like everything else. But you can price … Continue reading

Ethos Swings for the Fence Three Times

Source: Bob Moriarty for Streetwise Reports 06/08/2019 Bob Moriarty of 321 Gold explains why he believes this exploration company could be a good bet. I wrote a new book for resource investors in January of this year called Basic Investing in Resource Stocks. In it I predicted that 2019 would be the year the everything bubble would be popped and our lives changed in a big way for a long time. Should my prediction of doom be accurate, I will go down in the history books as being brilliant. On the other hand, since the odds are always against a collapse happening in a particular year if I am wrong, I will go down as a blithering idiot. We had a record-breaking climb in the general stock market starting right as Christmas and I did get that right. And for months I have said we were approaching a top and the start of a crash. That seems to have happened in April and we are in yet another dead cat bounce I think. When it makes the next turn I will either look like a genius or a fool. But so far, so good. “Bitcon,” Mary Jane and the Dow all have the attention of the mob. I hate crowds but if you can track what they are doing, all you have to do is to do the opposite and you can make a lot of money. Once the fools following the 2568 variations of Bitcon have been burned once … Continue reading

Storm Clouds on the Horizon

Source: Michael Ballanger for Streetwise Reports 06/07/2019 Sector expert Michael Ballanger discusses macroeconomic factors and his trading decisions. I have had more than a few emails asking me what I think of the current set-up for stocks, bonds, currencies and gold since everything began to re-inflate a few days ago and without going off on a literary tangent, it is obvious that the banks are absolutely freaking out over the declining high-end real estate numbers coming in from not only the money centers but also the fringe regions. Mortgages, the bulk of the loan portfolios for the global banking industry, are only as sound as the collateral upon which they are hypothecated (secured) and if you go back to the sub-prime crisis of 2008, the big revenue drivers for the banks were the sheer volume of homes being financed. Like every masterfully run Ponzi, the Greater Fool Theory is allowed to sustain itself only as long as the banks and the regulators all agree that there are “no limits” and with that, “no rules.” It was 2003 that the U.S. real estate market was experiencing a modest correction and no one was particularly worried about it because they had years and years of payments into their houses and “SO WHAT?” if the market was going sideways. However, the bankers, so astute at managing leverage, had earlier decided that it was time to reduce the margin requirement so while you and I could care less about a 5% drop in the … Continue reading

Fed to Tank Dollar—And Will Not Save the Stock Market

Source: Clive Maund for Streetwise Reports 06/07/2019 Technical analyst Clive Maund discusses moves by the Fed and what they might mean for the U.S. dollar and precious metals. It is measure of how fragile and precarious the situation is that the moment the markets looked like they were on the verge of crashing again, which of course they were, the Fed moved to head it off by saying that they would start cutting rates. How things change as it was only late last year that they were talking about raising rates three or four times this year. Basically what has happened is that they have lost control they don’t control the markets, the markets control them. The reason that they gingerly raised rates into last year was they were trying to build up some “wiggle room” ahead of the next crisis—well, the next crisis is on our doorstep, and they are already using up their now very limited ammo. There is a big difference between now and 2008, when they were able to drop rates from 5% to zero, because now they can only drop them from about 2%. This talk about cutting rates and the actual cutting of rates going forward is too little too late—the effects of the earlier higher rates against a background of massive debts and of the trade war are working their way through the system, are a destructive juggernaut that will not be stopped by tinkering around with already very low interest rates. Thus … Continue reading

Company with Positive Drill Results at 'Good Entry Point'

Source: Clive Maund for Streetwise Reports 06/07/2019 Technical analyst Clive Maund charts this miner with a gold project in Arizona and explains why he believes its stock is a good buy. Kerr Mines Inc. (KER:TSX; KERMF:OTC; 7AZ1:FRA) has not—so far—responded to the rally in gold of recent days, but the pattern looks most favorable with it having consolidated a sharp high volume rally at the start of last month, that allowed its 50-day moving average to catch up and rise through its 200-day. The company has reported a run of good drilling results that augment the value of its Copperstone Mine in Arizona, and just came out with more very positive results, that are thought likely to get the stock moving. As we can see on its latest 6-month chart, although it has not so far responded to gold’s advance, it appears to be completing a bull Flag, so there is considered to be a good chance that the positive drilling results will get it moving again. It is at a good entry point here and rated an immediate buy. Another reason that it is at a good entry point is that this is stock that can be expected to take off like a rocket once gold breaks above $1400, a development that is expected to occur quite soon. Kerr Mines website. Kerr Mines Inc, KER.TSX, KERMF on OTC, closed at C$0.155, $0.12 on 4th June 2019. Originally posted at 7.50 am EDT on 5th June 2019 on CliveMaund.com. Read … Continue reading

Vindication…

Source: Michael Ballanger for Streetwise Reports 06/04/2019 Precious metals expert Michael Ballanger discusses geopolitical events and movements in the precious metals markets. Hallelujah! It was only a week ago that I was opining that there was nothing ominous in the technical picture for gold and silver that was altering my bullish stance; RSI and MACD were trending up and price was stubbornly refusing to yield to the myriad of bullion bank attacks mission-driven to force a crack of the critical $1,260.90 50-dma level so widely discussed in past weeks. As I show in the chart posted below, the first major up-gap in gold pricing occurred in the days back in October after the ratings agencies decided to “downgrade” the bonds of GE, a company that is now being seen as serially deficient in its reporting practices and masterfully adept at avoiding the long arm of SEC “law” (that’s a joke 😊) while using the stock price performance to advance book deals for the two rock star CEOs of the ’90s and early 00s, Jack Welch and Jeff Immelt. I actually wrote about GE back in 2005 after listening to a promotional video on the “unparalleled brilliance” of GE Financial whose use of leverage was deemed “second to none.” Immelt was regurgitating the company line of “Growth without Regret” that Welch was spewing all through the mid-to-late-1990s with the objective being not an advancement in the “E” part of the price-to-earnings-ratio but rather a simple advancement in the “R,” which does … Continue reading

Torrid Advances in Gold ETFs Warrant Caution

Source: Michael Ballanger for Streetwise Reports 06/04/2019 Michael Ballanger explains how he is reacting to the advances in the gold ETFs. Given the torrid advance in gold (GLD [SPDR Gold Shares]) and the leveraged miner ETFs (NUGT [Direxion Daily Gold Miners Index Bull 3x]/JNUG [Direxion Daily Junior Gold Miners Index Bull 3x]), it is of note that RSI readings have screamed northward to the point where I don’t think I can recall a shift in momentum quite this quickly or with such torque. Now, it doesn’t automatically follow that these ETFs are going to crash. In fact, long after RSI readings topped out in February 2016, NUGT and JNUG continued to make new highs for the move. However, today’s set-ups appear to be similar to 2016 so caution is warranted in both exiting too soon and staying too late, so how I deal with that is to take down a portion of the risk and that is precisely what we did yesterday. GLD is somewhat more overbought than the miners so having pitched 50% of the June $120 calls yesterday (@ $5 plus), I am jettisoning the rest in order to leg out to the September calls at some point in the future. The preferable entry point will be in late June or early July or if the RSI numbers can get back to around 30 and preferably the 20s so as to reflect an oversold condition rather than the current overbought condition we have today. The junior miners too … Continue reading

Updated PFS Expected to Show Improved Economics for Australia Gold Project

Source: Streetwise Reports 06/03/2019 The reasons for the better scenario are discussed in a ROTH Capital Partners report. In a May 29 research note, ROTH Capital Partners analyst Jake Sekelsky reported that recent additional metallurgical test results from Vista Gold Corp.’s (VGZ:NYSE.MKT; VGZ:TSX) Mt. Todd project “indicate the potential to increase recoveries” there. “Given Mt. Todd’s scale, we believe an increase in overall recoveries could have an outsized positive impact on the project’s economics,” Sekelsky added. He reviewed the test results. Initial leach tests using a grind size of about 50 microns resulted in average gold recoveries of 92.7%, which compare favorably to those outlined in the 2018 prefeasibility study of 86.4%. They also exceed management’s expectation of about 90%. Vista Gold is now testing samples with a finer grind size of 40 microns, results from which should be out later in Q2/19. Following that, an updated prefeasibility study on Mt. Todd is expected in Q3/19. That revised study will likely reflect two major changes that would improve the project’s economics, Sekelsky noted: recovery rates and foreign exchange rate. “We expect recovery rates to come in above 90%, which we believe could result in an addition of approximately 300,000 ounces of gold production of the life of mine,” he wrote. Also, the study will likely use today’s exchange rate of about 0.7 instead of the higher rate of 0.8 used in the prior study. If the prefeasibility study outlines an increased recovery rate and a foreign exchange rate that is … Continue reading

Midland Results: Not Blockbuster but Encouraging

Source: Adrian Day for Streetwise Reports 06/01/2019 Money manager Adrian Day discusses recent results from Midland’s drilling at Myrthril, as well as recent results from several other major gold companies, noting some are good buys. Midland Exploration Inc. (MD:TSX.V) (0.95) released its eagerly awaited maiden drilling results from its Mythril property in James Bay. They were not a blockbuster, as some had unrealistically been expecting, but nor were they “dusters”; rather, they offered encouragement. After a break for the goose-hunting season, Midland plans a stepped-up drilling program early next month. The initial results, from a 2,500-meter, 10-hole program, showed some good copper grades on a few holes, and demonstrated thickness. Each of the 10 holes intersected high-grade copper-gold-molybdenum mineralization. President Gino Roger said the results shows that the property was “fertile,” emphasizing that to date, Midland had touched only 8–10% of the property. What’s next for Mythril? The next drill program, of six to seven thousand meters, utilizing two drills, will last through the end of July. It is therefore significantly more extensive than the first program. It will test to depth below the two most promising of the initial holes, and will test to the south, where geophysics suggests the mineralization gets stronger. The world’s largest mining company, BHP, which invested in Midland in April, is sending some ore to its lab to test the age of the rocks. This is important because indications are that the rock is Archean, and porphyries from that era, though not unknown—including in … Continue reading

Gold Miner Declares Commercial Production in Nevada, Continues Exploration

Source: Streetwise Reports 05/30/2019 The company’s campaigns for its U.S. and Canadian assets are outlined in a ROTH Capital Partners report. In a May 24 research note, ROTH Capital Partners analyst Jake Sekelsky reported that McEwen Mining Inc. (MUX:TSX; MUX:NYSE ) achieved commercial production at Gold Bar in Nevada and announced drill results from its Timmins assets in Ontario. “We expect management to shift focus towards high-value exploration targets in Timmins and Nevada,” he added. The declaration of commercial production means the problems that delayed construction, primarily adverse weather, now are moot. Recoveries are coming in as expected, according to McEwen, and it reiterated 2019 production guidance of 50,000 ounces of gold at an all-in sustaining cost of $975 per ounce. The company intends to modify Gold Bar’s crushing and stacking system to lessen the effects of future inclement weather. In terms of exploration, McEwen already started this year an aggressive, $17 million program at its Black Fox complex in Ontario’s Timmins gold camp. Results from some of its Q1/19 efforts, an initial seven holes at Grey Fox, “appear encouraging,” Sekelsky noted. “Exploration success at Grey Fox could pave the way for the delivery of higher-margin tonnage to the Black Fox mill in the future.” Also this year, McEwen plans to spend $15 million on exploration at Gold Bar to identify Carlin-style mineralization there. “A discovery at depth could transform Gold Bar,” Sekelsky commented. An exploration update for that Nevada property is expected in H2/19, which could catalyze McEwen’s stock. … Continue reading