Deflation or Inflation: Gold Doesn't Care

Source: Rudi Fronk and Jim Anthony for Streetwise Reports 10/01/2019 Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, discuss recession, central bank panic and an outrageous gold price. In our view, gold investors should settle back with some popcorn and enjoy the coming fireworks, which will include the best gold bull market ever, with all the volatility that implies. We see new all-time highs just around the corner. The challenge is to take a position and stay the course. Central banks are about to pay for decades of bad policy and gold will reap the dividends. Let’s be clear about one thing: the global economy is falling into a deep recession but it is NOT due to the U.S.-China trade war, and a resolution of that war, no matter what it is, will not avoid the inevitable. Inverted yield curves and an historic collapse in bond yields are the clearest message that markets can send on the economic outlook. The trade war does not explain why Europe and Japan have been on the brink of recession for more than a year. Nor will central bank easing prevent a recession when monetary conditions are already the loosest in 25 years. Central bank monetary policy is part of the problem, not the solution. In our view, the economy and the stock market are not going to be saved by trade deals and monetary policy. The problem is the debt…way too much of it, mostly unproductive and at ultra-low interest rates. In … Continue reading

My Second-Worst Nightmare

Source: Michael Ballanger for Streetwise Reports 09/30/2019 Sector expert Michael Ballanger interprets the implications of the last COT report for the precious metals markets. It was only a few hours ago that I was cruising through a lovely early-autumn Friday afternoon preparing for one of the last weekends at the marina for the 2019 season when I came across the much-heralded (and often misinterpreted) COT report. I was on the way up the eastern shoreline of Lake Simcoe when I saw that, for the COT week ended Sept. 24, the Commercial Cretins, seeing the usually wrong Big Money managers drunkenly piling into carloads of December gold contracts (29,845 contracts to be sure) hand over fist, decided to “fill ’em”—and they happily supplied all of the paper gold needed to crush the advance at the exact, precise peak of the advance, which ended Tuesday at $1,543.50. The rest (of the week), as they say, was history, and in more ways than simply the passage of time. December gold lost over $50 as option expiries, futures expiries and general Bullion Bank shenanigans all conspired to vaporize any semblance of investor optimism. It puts to bed the notion, as I have been warning for weeks now (amid blogosphere ridicule and investor anxiety), that the “Forces of Goodness” had finally and forever vanquished the banking cartel and its symbolic putrefaction. My worst recurring nightmare of the past forty-five years has me sitting in a final exam room during my graduation year of university completely … Continue reading

Golden Arrow Resources Completes Selling of 25% Interest in Puna Operations to SSR Mining; Exciting Exploration Up Next

Source: The Critical Investor for Streetwise Reports 09/30/2019 The Critical Investor reviews Golden Arrow’s deal with SSR Mining to sell its remaining interest, and also discusses the company’s other projects. Golden Arrow Resources Corp. (GRG:TSX.V; GARWF:OTCQB; G6A:FSE) recently ended the seven-year-long Chinchillas adventure, by closing the deal involving selling its 25% interest in Puna Operations to SSR Mining Inc. (SSRM:NASDAQ) on September 19, 2019. Despite a rising silver price since the announcement of the sale on July 22, 2019, and consequently growing unease among shareholders of Golden Arrow about the appropriate value of the Puna asset, no less than 94.62% of represented voting interest voted in favor of the transaction. All presented tables are my own material, unless stated otherwise. All pictures are company material, unless stated otherwise. All currencies are in US Dollars, unless stated otherwise. The final specification of the C$44.4 million transaction payment came in as follows: C$3.0 million in cash consideration—unchanged 1,245,580 common shares of SSRM representing a value of approximately C$25.9 million and calculated using a price per share based on the 20-day volume weighted average trading price of SSRM’s common shares on the Toronto Stock Exchange ending on September 17, 2019—this resulted in an average price per share of C$20.79, compared to an estimated 20d VWAP price per share of about C$19.40 at the time of the announcement at July 22, 2019. If Golden Arrow Resources had been able to fix the price at that day, it would have received 90,000 shares more, currently … Continue reading

Cheap for a Reason: Osisko Gold Royalties and Fortuna

Source: Adrian Day for Streetwise Reports 09/30/2019 Money manager Adrian Day reviews two undervalued resource companies that have seen important recent developments. Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE, US$9.69) has moved further away from the pure royalty model with the acquisition of Bakerville Gold Mines for equity valued (at the time of the bid) at CA$338 million. Based on the August PEA (preliminary economic assessment) on Bakerville’s Cariboo project in British Columbia, this is an acquisition price of 0.6 times net present value. Osisko, which already held 33% of Bakerville, says it intends to develop the project and then monetize it, “ultimately,” when the junior market improves. At the same time, Osisko announced it had formed the North Spirit Discovery Group, intended to develop and finance projects in Canada, in conjunction with joint venture partners or private equity. Few details were revealed. Royalties or Development: Which Is Primary Though the Bakerville acquisition is accretive to net assets—it does reduce cash flow per share—more importantly to us, it moves Osisko away from the pure royalty model. It has long been a hybrid, with its increasingly important “accelerator model.” But rather than financing a junior in exchange for royalties, it increasingly seems to be using royalty revenue to acquire and develop projects. It is fair to say that CEO Sean Roosen is a mine builder at heart; he and his team built Canadian Malartic, one of the largest mines in the country. They lost the mine after a hostile takeover fight initiated … Continue reading

Miner Increases Gold Ounces, Grade in New Resource Estimate

Source: Streetwise Reports 09/29/2019 Company notes “significant increases in gold grade and ounces of gold.” Wesdome Gold Mines Ltd. (WDO:TSX) updated the mineral resource estimate for its Kiena mine complex in Val d’Or, Quebec, it announced in a news release. The updated estimate includes 36,050 meters (36,050m) and 140 holes more of drill data than the previous one from December 2018. Data from 66 of those holes, covering 18,365m, were from Kiena Deep (the A zone). The newly calculated resource for the Kiena Deep A zone amounts to 405,100 ounces (405.1 Koz) of gold at a grade of 18.55 grams per ton (18.55 g/t) in the Measured and Indicated (M&I) category. That compares to 99.3 Koz of 9.95 g/t M&I gold in the 2018 resource estimate. Between the new and the 2018 estimates, the Inferred gold resource there grew to 332 Koz from 241.1 Koz, and the grade increased to 15.27 g/t from 11.43 g/t. “Our work has continued to grow and better define the high-grade Kiena Deep A zone, and we are confident that the mineral resource will increase as a result of the ongoing drilling of this high-grade area that remains open up and downplunge,” President and CEO Duncan Middlemiss said in the release. Along with Kiena Deep, the new report includes resource quantities for other areas of the property: proximal to the Kiena mine development (the A, B, South, VC and S50 zones), outside the Kiena mine area (the Martin, Dubuisson, Northwest, Presqu’ile zones and Wesdome deposit) … Continue reading

Explorer Expands Footprint at the Golden Triangle Site

Source: Maurice Jackson for Streetwise Reports 09/26/2019 In this interview with Maurice Jackson of Proven and Probable, Aben Resources’ CEO explores the ramifications of recent analytical results from the company’s flagship project. Maurice Jackson: Joining us for a conversation is James Pettit, the president, CEO and director of Aben Resources Ltd. (ABN:TSX.V; ABNAF:OTCQB). Before we delve into today’s interview, Mr. Pettit, please introduce us to Aben Resources and the opportunity you present to the market. James Pettit: Aben Resources is a gold exploration company, and we’re focused in really safe jurisdictions in Canada. Our flagship Forrest Kerr Gold Project is in the Golden Triangle, which is the northwest quarter of British Columbia. That is a very notable area where people are going. It’s got a strong history, with some very high-grade discoveries in the past, and currently too. Maurice Jackson: Mr. Pettit, take us to your flagship Forrest Kerr gold project, and let’s visit the North Boundary Zone, where Aben Resources just released an exciting press release regarding analytical results from the ongoing 2019 drill exploration program. James Pettit: Aben Resources has released eight holes on the season. I do believe we’re on hole 23, actually still drilling. And those holes were drilled just south of the high-grade part of the North Boundary Zone, trying to connect the dots between the high-grade zone in the North Boundary and the old Noranda hole, about 30 years old, which was a very high-grade hole. . .let’s abbreviate it to 10 meters of … Continue reading

Blackrock Swings for the Fences for Gold in Nevada

Source: Bob Moriarty for Streetwise Reports 09/25/2019 Bob Moriarty of 321 Gold explains why he’s a fan of this company’s exploration efforts. I finished my latest book in January. It took another month to get the layout and a cover made just right for it. Since that time about ten thousand people have bought the book or downloaded the Kindle version for free. It is one of the highest rated books I have ever seen on Amazon and I buy hundreds of books a year. But I read a lot of trash, too. In the book I predicted this year would be the demise of the “Everything Bubble.” In a number of postings since then I have maintained a steady course calling for a top in September leading to a major crash starting in October as the result of any one of a number of black swans landing. I couldn’t or wouldn’t predict just which black swan would do the swan dive first. So far so good. We have had a test of the highs in September, which is good enough for government work. But unfortunately my prediction of “a” black swan doing the belly flop might have missed the mark. It sounds a lot more like an Arc Light B-52 mission with nine B-52s carpet bombing with 117 of the Mark-82 500 pound bombs apiece blasting hell of out of the ground below. I’m shocked at the constant crashes of different blacks swans I highly suspect my prediction of … Continue reading

Osisko Gold Royalties Acquires Remaining Barkerville Shares

Source: Streetwise Reports 09/25/2019 In a report, iA Securities explains the deal and makes a recommendation to the shareholders of the seller. In a Sept. 23 research note, iA Securities analyst George Topping reported that Barkerville Gold Mines Ltd. (BGM:TSX.V) agreed to sell to Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE) the remaining Barkerville shares Osisko does not already own, for CA$338 million, or CA$0.58 per share fully diluted. Barkerville shareholders will receive about 0.0357 of a common share in Osisko Gold Royalties. The analyst noted that iA Securities recommends Barkerville shareholders tender their shares to the offer or market and instead buy a Barkerville peer, such as Sabina Gold & Silver Corp. (SBB:TSX; RXC:FSE; SGSVF:OTCPK) or Probe Metals Inc. (PRB:TSX.V), for low-risk junior mining exposure. This is because post deal, the Osisko Group (Osisko Gold Royalties and Osisko Mining Inc. (OSK:TSX)) will own 48+% of Barkerville versus 32+% previously. Topping pointed out, too, that Barkerville shareholders may find the transaction disappointing because they lose the direct exposure to Cariboo’s future growth and because “the stock never reached its full potential under the weight of financing costs.” Accordingly, iA Securities revised its rating on Barkerville to Tender from Buy and lowered its target price to CA$0.58 per share from CA$0.95. The stock is currently trading at around CA$0.47 per share. For Osisko Gold Royalties, the acquisition is accretive in the medium term, however, may alienate investors in the name solely for the royalties focus, Topping wrote. “The transaction represents a 44% … Continue reading

Barrick-Newmont Goldcorp Joint Venture Leads to 'Cornucopia of Opportunities'

Source: Streetwise Reports 09/25/2019 The synergies, potential and realized, that resulted from combining these two companies’ Nevada assets are discussed in a BMO Capital Markets report. In a Sept. 23 research note, BMO Capital Markets analyst Andrew Kaip reported his impressions from 2.5 days spent with the management of both Nevada Gold Mines and Barrick Gold Corp. (ABX:TSX; GOLD:NYSE) “reviewing integration efforts at the Nevada operations.” Nevada Gold Mines is the joint venture (JV) between Barrick, the operator and 61.5% owner, and Newmont Goldcorp Corp. (NEM:NYSE), which owns 38.5%. The JV forecasts H2/19 production of 3.5–3.8 million ounces (3.5–3.8 Moz) of gold annually over the next five years. Kaip highlighted the various synergies Nevada Gold Mines already made or identified since the JV transaction closed earlier this year. To date, the “easy wins,” as Kaip calls them, amounted to about $240 million. They came primarily from consolidating regional general and administrative expenses, integrating Turquoise Ridge into Twin Creeks and eliminating the toll milling agreement. Already the JV attained $70 million in savings from supply chain cost reductions, and another $28 million are expected to be achieved soon. Also, management started seeking ways to improve efficiencies within each segment of the business, expecting to ultimately realize about $450–500 million worth of synergies and do so in the specific time frame. Nevada Gold Mines is realizing synergies, too, much faster and easier than anticipated, Kaip noted, from having optimized the routing of ore. For instance, “at Carlin, roaster feed has been realigned … Continue reading

Something Wicked This Way Comes

Source: Michael Ballanger for Streetwise Reports 09/24/2019 Precious metals expert Michael Ballanger dissects the recent Federal Reserve injection of liquidity into the market and contemplates what could be behind it. Ill winds mark its fearsome flight, And autumn branches creak with fright. The landscape turns to ashen crumbs, When something wicked this way comes… (Ray Bradbury) There is a certain maneuver in military strategy that involves the act of conveying a warning to an opposing captain by way of firing a missile or (in ancient times) a cannon ball across the bow of his ship. It was akin to the throwing down of the gauntlet or slapping a man across his cheek with one’s glove and represents a signal that one is prepared to do battle. Your response will be “coming to” and hoisting a white flag if you are not willing to engage. Last week, the Good Ship “MMT” (Modern Monetary Theory) had two such events with the first being the revelation that the U.S. Justice Department was invoking the RICO statute to indict our old nemesis, JP Morgan, alleging that it conspired to manipulate the gold market and in doing so, named senior managers as masterminds of the scheme. What was the shocker was NOT the indictment itself but rather the fact that they brought in RICO. RICO (RICO Act) stands for “Racketeer Influenced and Corrupt Organization Act” and “focuses specifically on racketeering and allows the leaders of a syndicate to be tried for the crimes they ordered … Continue reading