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 reporting quarterly net income for the first time since the Maracás Menchen Mine began commercial production. “Net income for Q3 2017 of $13.5 million compares to a loss of $24.7 million for Q3 2016. . .Revenues increased to $53.5 million in Q3 2017 from $35.8 million in Q2 2017 and from $20.8 million in Q3 2016, mainly driven by higher V2O5 prices and increased production,” the company reported.

Mark Smith, Largo’s president and CEO, stated: “Our Q3 2017 financial performance is our best to date and the first time Largo has achieved net income and earnings per share. This represents a significant improvement over previous quarters and was driven by excellent operating performance, especially due to our improvements in overall recovery levels and robust vanadium prices. We anticipate continuing to deliver strong financial performance as the vanadium market continues to tighten and place upward pressure on vanadium pricing levels.”

At the end of October, Largo released an independent technical report on the project, which included a life of mine plan for the Maracás Menchen mine, a feasibility study for the Campbell Pit of the mine, and a preliminary economic assessment for a number of satellite deposits.

The technical report included the following highlights:

  • NPV8 (net present value at an 8% discount) post-tax is $542 million (U.S.) for the reserves at the Campbell pit, representing an increase of approximately 195% over the NPV reported for reserves in Largo’s updated mine plan and mineral reserve report filed on July 8, 2016.
  • NPV8 post-tax is $140-million (U.S.) for the mineral resources in the Satellite deposits.
  • Life of operation for the reserves in the Campbell pit is 11 years.
  • An additional mine life of 12 years was estimated, if the inferred resources in the Satellite deposits come to be converted to mineral reserves.
  • The technical report is a vanadium-only study. No value was given for any byproducts at this time, including iron, ilmenite (TiO2) and platinum group metals.
  • The technical report used a long-term vanadium pentoxide (V2O5) price of $6.34 (U.S.)/pound for the life of mine except for the years 2018 and 2019, where vanadium pentoxide price of $9.00 (U.S.)/pound was used.
  • The LOMP results indicate an operating life of the Maracás Menchen mine, including the Satellite deposits, to be of 23 years.
  • The technical report contemplates two expansions to increase production at Campbell pit as follows: in 2019: 960 tonnes/month (11,520 tonnes per annum) and in 2020: 1,100 tonnes/month (13,200 tonnes per annum).

Largo CEO Mark Smith noted, “Both the increase in the net present value of our operations and the greatly increased mine life that could be achieved as a result of the Satellite Deposits speak to what I view as a very bright future for Largo. This Technical Report further reinforces that Largo has a world class vanadium operation.”

In early October, Largo announced that it achieved a new quarterly production record at the mine in Q3/17, producing 2,513 tonnes of V2O5, 4.7% over the plant’s nameplate capacity.

Largo has a 100% 6-year take-or-pay off-take agreement for Maracás with Glencore that began in 2014. It also has entered into a non-binding agreement with Vionx Energy Corp., which produces vanadium redox flow batteries for utility grid applications.

In addition to the Maracás Menchen Mine, Largo’s portfolio also includes a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil, a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil, and a 100% interest in the Northern Dancer Tungsten-Molybdenum Property in the Yukon Territory, Canada.

Largo has 473 million shares outstanding, with 80% in the hands of management and institutions. Its market cap is approximately CA$463 million.

Arias Resource Capital, an investment firm that manages funds, holds a large equity stake in the company. J. Alberto Arias, the firm’s founder, who also serves as a Largo board member, told Streetwise Reports that the vanadium market is currently in supply deficit, which he expects to continue to reduce inventories and strengthen prices for another year or two. “Recently, a lot of attention has focused on vanadium redox flow batteries, which have the potential to be a significant source of new vanadium demand. Largo is very well positioned to benefit from the stronger outlook for vanadium prices,” he said.

Arias Resource Capital has been involved with Largo since before construction began on the Maracás Menchen Mine. “Largo, in our view, has three very attractive key features,” Arias stated. “The first is the quality of the team; they are doing an excellent job delivering great operating results and planning for an even better future. Second, Largo’s high-grade vanadium near-surface ore deposit is considered among the highest quality in the world; that high quality gives Largo a competitive edge for further growth with very attractive returns on capital employed, in our view. Third is the vanadium industry fundamentals. Vanadium is a critical element that is starting to get more recognition and I believe we are still at an early stage for the equity market to recognize full credit for it.”

Want to read more Energy Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. 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: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

( Companies Mentioned: LGO:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/21/pure-play-vanadium-producers-q3-revenues-increase-153-yoy.html

Advertisements

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 the mine to production.”

Once the funding is set, Perkins said, “production could begin Q3/18.”

“The project is open in three directions,” Perkins told Streetwise Reports. “Pershing’s priority is to get Relief Canyon to production, and then fund exploration from cash flow.”

Pegasus Gold operated the Relief Canyon Mine in the 1980s and Pershing has all the state and federal permits in hand to begin mining and heap-leach processing.”

Cantor Fitzgerald analyst Rob Chang, in the firm’s Oct. 26 Quarterly Commodity Outlook, reiterated that the firm maintains a Buy rating on Pershing and has a target price of US$4.25. Shares are currently trading at around US$2.81.

In mid-September, Chang noted, the U.S. Secretary of the Interior issued Secretarial Order 3355. “This very positive Secretarial Order significantly streamlines the Environmental Impact Statement (“EIS”) process by imposing limits of a year to complete. This order has across the board positive impacts for several mining projects including Pershing Gold’s Relief Canyon project, which expects to submit its Plan of Operations for the Phase 2 portion of its project early next year,” Chang noted.

According to Chang, “the most notable portion of this order is the requirement for each bureau to complete a Final EIS within 1 year from the issuance of a Notice of Intent to prepare an EIS.” The analyst explained that “with a Plan of Operations for Phase 2 expected to be submitted early next year, this Secretarial Order de-risks the time risk for Pershing by providing an expectation of about a year for the approval of the EIS, which is a very significant development.”

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. 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: Pershing Gold Corp. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Additional disclosures about the sources cited in this article

( Companies Mentioned: PGLC:NASDAQ; PGLC:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/21/streamlining-of-u-s-environmental-permits-could-benefit-nevada-mine-developer.html

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 price $3.80; entry price $0.21) Opinion: Hold

GGI put out news Nov. 20 that drill hole 17 has hit a new zone of mineralization and the company released the assay results for the first four holes. Although it hit some good grades and decent widths I believe the stock was pricing in much longer intercepts. We have already taken out good profits so I am content to hold the rest longer term.

Hole 4 had a high-grade 7.2% nickel and 3.4% copper over 4.8 meters within a 48.2-meter interval grading 1.1% nickel and 0.69% copper. Hole 3 hit 13.5 meters of 1.05% nickel and 1.0% copper. Hole 2 hit 18 meters of 0.69% nickel and 0,80% copper. Hole 1 hit 60.5 meters of 0.54% nickel and 0.53% copper.

These are some good results but nothing compared to Voiseys Bay, and I am sure the stock price was looking for much more. The company is also hitting gold, platinum and palladium. There are plenty more results to come and we will get a better idea of this discovery in time. For now I will watch the stock price and may suggest buying some position back if it gets low enough.

Otherwise hold remaining positions. The stock opened strong, going above $5 and then some reality sunk in.

From the company news release:

Fourteen holes over 3,671 meters have been completed to date (new photos, maps and an updated presentation will be posted soon at GaribaldiResources.com). EL-17-04 cut 7.2% nickel, 3.4% copper, 0.82 g/t palladium, 0.78 g/t platinum, 0.40 g/t Au, 10 g/t Ag and 0.195% cobalt over 4.8 meters at the bottom of a broader 48.2-meter interval from 108.4 meters grading 1.1% nickel, 0.69% copper, 0.38 g/t palladium, 0.23 g/t platinum, 0.16 g/t Au, 3.1 g/t Ag and 0.032% cobalt;

• EL-17-04 also intersected a second zone of mineralization within a variable-textured gabbro featuring 1.08% nickel and 0.68% copper over 12 meters starting at a depth of 189 meters;

• EL-17-03, cutting across part of the historic northwest zone, intersected 13.5 meters grading 1.05% nickel and 1.0% copper within a broader core interval of 39 meters featuring 0.91% nickel and 0.74% copper beginning at a depth of 42 meters;

• EL-17-02 intersected broad core intervals of disseminated sulphide mineralization between a depth of 58.5 meters and 190.5 meters. Significant intercepts included 18 meters @ 0.69% nickel and 0.80% copper, and 24 meters @ 0.56% nickel and 0.65% copper. The hole was drilled toward the east into a previously untested area. Valuable data was generated from the downhole probe;

• EL-17-01 was drilled away from the historic northwest zone toward the untested east, providing the best platform to collect important data from the downhole probe. Encouragingly, the hole intersected two long core intervals of disseminated sulphide mineralization totaling 176 meters to a depth of 332 meters, highlighted by a 60.5-meter section grading 0.54% nickel and 0.53% copper. Higher grades of copper (0.80%), palladium (1.26 g/t), platinum (0.60 g/t) and gold (0.60 g/t) were intersected over 4.5 meters.

The best positive factor that the market probably likes is that the high-grade intersect in hole 4 was at the bottom so it probably continues deeper.

There are a few observations on the chart. There is a triple top around $5 and that will now be very difficult to overcome. Quite possibly a significant correction might take grip. Support is around $3.30, and if the stock falls below that it will probably trade down to around $2 and fill the gap between $2.20 and $3.20.

strutherschart11-21

Silver Bull (recent price $0.14; entry price $0.12) Opinion: Strong buy; back up the truck.

Everyone should own a position in this stock before the market catches on to this. There was a $0.08 financing; most of that (18 million shares) became free trading last week and that might be some of the pressure holding the stock back. I believe it is not very wise to be a seller here, but some just see a good profit, take it and run?

The Nov. 20 press release headline reads: Silver Bull intersected 9 meters of sulphide mineralization grading 20.7% zinc, 1% lead and 98 g/t silver, including 3.65 meters of massive sulphide mineralization grading 47.8% zinc, 2.5% lead and 105 g/t silver on its Sierra Mojada project in Coahuila, Mexico. SVB is hitting better numbers than Garibaldi; the stock is a steal here. Zinc is not priced as high as nickel, but the SVB zinc grades are much higher—and so are the precious metals, because the silver grades so high; 537 g/t silver is like 10 g/t gold.

Highlights from the four holes announced in this news release include:

Hole T17010: 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.

Hole T17009: 3 meters @ 537 g/t silver, 3.9% zinc and 1.06% copper including 1 meter @ 1,280 g/t silver, 14.8% zinc and 2.3% copper from 0 meters to 1 meter.

Holes 7 and 8 had no significant hits.

This drilling was on the second of three sulphide structures that Silver Bull has identified, and this second one seems more dominant in zinc compared to copper in the first structure.

Tim Barry, president, CEO and director of Silver Bull states, “We are extremely pleased with the results from this batch of drill core. The new sulphide zone is proving to be very productive for high grade sulphide mineralization. The drilling summarized in this news release targeted the second of three steeply dipping, discreet structures we have identified in the sulphide zone. Drilling from the first structure previously announced in the news releases of holes T17001 to T17006 was dominated by high grade silver-copper sulphide mineralization grading up 1,300g/t silver and 6% copper. This second structure is dominated by extremely high zinc sulphide mineralization, grading up to 48% zinc and suggests a metal zonation in the mineralization we see at Sierra Mojada and provides very useful information in helping us vector into an intrusion, interpreted as the source of metals currently defined on the project. In addition to vectoring in on an intrusive source we can now project the mineralization we are currently drilling into the extensive channel sampling and drilling completed at the eastern end of the deposit and show a target over 3 kilometers in strike length. When you consider this, coupled with the fact we have identified three structures in this east-west trend similar in style, dip and grade of mineralization, we see some very significant immediate targets at Sierra Mojada. In addition to the drilling, work is currently underway to access some of the underground workings further east to confirm the style of mineralization.”

Ron Struthers founded Struthers’ Resource Stock Report 23 years ago. The report covers senior and junior companies with ample trading liquidity. He started his Millennium Index of dividend stocks in 2003 – $1,000 invested then was worth over $4,000 end of 2014 and the index returned 26.8% in 2016. He retired from IBM after 30 years in customer service, systems and business analyst, also developing his own charting software. He has expertise in junior start-ups and was a co-founder of Paramount Gold and Silver.

 

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

 

Disclosure:
1) Ron Struthers: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Silver Bull Resources and Garibaldi Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: Silver Bull Resources. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Smartcool Systems and NeutriSci International, companies mentioned in this article.

Charts and images provided by the author.

Struther’s Resource Stock Report Disclaimer:
All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author’s control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.

( Companies Mentioned: GGI:TSX.V,
SVB:TSX; SVBL:NYSE.MKT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/21/expert-opinion-back-up-the-truck-for-this-stock.html

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% of cash flow, the dividend of $0.09 was announced, down a penny from last quarter, but up $0.02 from the quarter before.

The balance sheet, with $70 million of cash against $784 million of net debt, is the weakest of the big four, though overall valuations compare favorably with peers. The trigger for higher stock prices will be a recovery in silver or a favorable resolution of the dispute with the Canadian tax authorities, which is dragging on the stock. We are holding.

News from Almadex

Almadex Minerals Ltd. (AMX:TSX.V, 1.31) has reported a series of strong assays from recent drilling on its El Cobre deposit, primarily at the main Norte zone. Results include 481 meters grading 0.67 g/t gold and 0.27% copper. Due to a backlog at local labs, there are more results to come, including from a new zone, Raya Tembrillo, which has very strong surface expressions and for which many analysts are eagerly awaiting.

Significant deposit, attractive to suitors
This is a district play, with a cluster of deposits, and Almadex has now reached technical certainty it has a feasible deposit. Metallurgy is clean and straightforward. Additional drilling will now be in-fill on the main zone and expansion of the main zone (open to depth and along strike) as well as other zones around the property.

Given the stage at which Ixtaca now stands, and the funding needed for a good drill program ahead, consideration is being given to spinout El Cobre, with a producer as a lead shareholder (or similar arrangement), leaving Almadex with numerous other properties, mostly in Mexico, as well as royalty interests (on Ixtaca and Almaden’s Ixtaca and other projects sold over the years). The balance sheet of approximately $7 million (divided more or less equally between cash, gold and securities) would likely stay with Almadex, as more money would be raised for El Cobre. This is just under consideration and no plan has been announced.

Almadex is one of our favorite exploration companies, well funded with strong management and multiple projects at various stages. A price pop over the last month from under $1.10 cause us to wait for better buying opportunities.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

 

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Nestle. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Nestle, Wheaton Precious Metals and Almadex. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Wheaton Precious Metals. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Wheaton Precious Metals and Almadex, companies mentioned in this article.

( Companies Mentioned: AMX:TSX.V,
NESN:VX; NSRGY:OTC,
WPM:TSX; WPM:NYSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/20/holding-on-companies-in-gold-and-silver-and-a-food-multinational.html

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.

chanhui111-20
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.

chanhui211-20
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.

chanspec11-20
Speculation favors overall higher gold prices.

chanusd11-20
A pullback on the dollar is supportive for the metals.

changoldbug11-20
Our stocks/gold ratio is now at the same level as in December 2016, with a divergence to boot.

chansilver11-20
Silver is on a long-term buy signal.

chanslv11-20
SLV is on a short-term buy signal, and short-term signals can last for days to weeks, more suitable for traders.

chansilverspec11-20
Speculation favors overall higher silver prices.

Summary
The 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 new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011.

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) Jack Chan: We do not offer predictions or forecasts for the markets. What you see here is our simple trading model, which provides us the signals and set-ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
3) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Charts courtesy of Jack Chan

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/20/jack-chans-weekly-precious-metals-market-update-2.html

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 looks considerably weaker
than gold, and its trend is at best neutral overall, and any short-term
rally is thought likely to top out close to the upper boundary of the
much larger Triangle shown on this chart at about $18.00. Such a rally
would “not be much to write home about.”

Although a near-term rally in silver in sympathy with gold looks quite
likely, we can see why it is unlikely to get very far on its latest COT
chart. COT positions on this chart look more bearish than bullish, and
any near-term rally is likely to quickly take them to extremes.

Click on chart to pop up a larger, clearer version.

The conclusion is that although silver may be starting a rally here, it
still looks weak compared to gold, and so the rally is thought unlikely
to get very far, especially as it is blighted by a still rather bearish
COT structure, and, like gold, continues to be threatened by a dollar
rally. So it looks like it will be going along with gold “just for the
ride.”

Clive Maund has been president of http://www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

Want to read more Gold Report articles like this? Sign up at www.streetwisereports.com/get-news for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Charts provided by the author.

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/19/technical-analyst-sees-weakness-in-silver.html

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 at the lower boundary of the
channel. The potential Head-and-Shoulders top that we saw earlier will
probably soon be history. There has been a very noticeable build up in
upside volume in recent weeks, resulting in strong volume indicators,
especially On-balance Volume, which is at new highs. These volume
indications certainly augur well for gold in coming weeks.

Against the now positive picture on the gold charts we must weigh the
latest gold COT data, which is still neutral/bearish, as normally
wrong Large Specs are still holding a big long positions, although they
have eased somewhat, allowing room for a rally.

Click on chart to pop up a larger, clearer version.

We will end now by looking at the dollar and its Hedgers chart. On the
9-month chart for the dollar index we can see the Head-and-Shoulders
bottom that it broke out of last month. Following the breakout it has
reacted back over the past week or so to the extent that many are now
writing it off again. As we can see it is now dug into support near to
the upper boundary of the Head-and-Shoulders bottom and is also at
support at its rising 50-day moving average, and the big question is
whether this support is enough to turn it higher again, especially as
its longer-term charts look rather grim. The answer to that is that it
probably is, because of the bullish Hedgers positions that we will now
look at.

On the latest Hedgers chart we can see that Hedgers’ net positions are
now at levels that in the past have always led to a significant rally,
and that therefore is what we can reasonably expect to see again. This,
needless to say, would complicate the outlook for gold and other
commodities (copper’s latest COTs are still quite heavily bearish).



Click on chart to pop up a larger, clearer version.

Chart courtesy of http://www.sentimentrader.com

So how do we reconcile the now bullish looking gold charts, especially
the 2-year chart, with the still bullish looking dollar index chart, and
especially its latest Hedgers’ chart? With difficulty, that’s how. Here
we should note that it is possible for the dollar and gold to rally
together, although this is a rare event that would involve gold
outpacing the dollar, which could happen for example if money flooded
out of Europe into the U.S. as a relative safe haven, and also into gold
for the same reason. One scenario that is considered quite likely is
gold rallying up within its uptrend channel to the band of resistance in
the $1360–$1380 area where a COT extreme develops (which it is not
too far off now) before stalling out and dropping again.

An effective strategy for pragmatic traders to play this situation is to
be long the Precious Metals sector now, following the buy signal on
Friday, and to start taking profits on gold arriving at the resistance
level in the $1360–$1380 area and especially if it should make it all
the way to the upper boundary of the channel shown on our 2-year chart.
Alternatively, positions should be scaled back if it breaks below the
lower boundary of the channel and especially if it breaks below the
support level at about $1260.

Finally it is worth pointing out that we are perfectly well aware of the
price suppression of gold being undertaken in the paper market as the
physical supply continues to tighten, and that the Chinese and Russians
are wisely taking the opportunity this presents to vacuum up much of the
West’s gold on the cheap, so that later, and quite possibly at a time
of their choosing, they will be able to bury the dollar and forcibly put
the self-appointed global policeman with its 700-plus military bases
around the world “out to grass” as a result of its being economically
ground into the dust. At that time, when the Chinese may back the Yuan
with gold, gold will reassume its central and traditional role and is
likely to soar due to the extremely high level of paper assets relative
to gold. A growing awareness of the raw power that China now wields is
the reason why the U.S. has suddenly started being nice to China, which
has noted and learned the lessons from the U.S.’ treatment of Russia.

Clive Maund has been president of http://www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

Want to read more Gold Report articles like this? Sign up at www.streetwisereports.com/get-news for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.

Charts provided by the author.

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/19/gold-in-contradictory-position.html