Silver Producer Moves Newly Acquired Argentinean Projects Forward

Source: Streetwise Reports   08/15/2017

Andrew Kaip, an analyst with BMO Capital Markets, reviewed this senior mining company’s Q2/17 financial highlights and project milestones.

According to an Aug. 9 research report, Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ) achieved an earnings per share beat in the second quarter. “Adjusted EPS of $0.18 was substantially higher than our forecast of $0.07 and consensus of $0.10 on the back of higher revenue and lower costs,” Kaip wrote.

The silver company’s Q2/17 operating cash flow of $43M was in line with BMO’s estimate of the same amount “as a result of negative working capital adjustments and deferred taxes,” reported Kaip. Free cash flow of $1M, however, missed BMO’s expectation of $3M. Pan American had $161M in cash as of June 30, 2017.

During the quarter, Pan American produced 6.3 Moz silver and 38 Koz gold, both in line with estimates, Kaip said. “Revenue beat our estimates on higher-than-expected silver and copper sales,” he added.

Pan American reiterated production guidance and lowered its cash cost guidance to $5.50–6.50/oz from $6.45–7.45/oz “as a result of solid cash performance in H1,” wrote Kaip.

As for capital expenditures, the report indicated the silver producer plans to spend $12.5M on development of Joaquin and COSE, its newly acquired projects in Argentina, and $5M on finishing the Dolores expansion. “Presently, the company is advancing two major expansions at Dolores and La Colorada, expected to grow its production profile in 2017,” the analyst said.

With respect to those efforts, Kaip’s research also revealed the advancements Pan American made during Q2/17:

1. At Dolores, it finished “construction of the pulp agglomeration plant and commenced commissioning. Initial underground stope mining is expected to begin before year-end,” Kaip noted.

2. At La Colorada, it reached production of 1,800 tpd in June, said Kaip, and “development of the underground mine is advancing ahead of plan.”

About BMO’s investment thesis for Pan American, Kaip said, “PAAS remains a higher-quality name amongst silver miners, but we believe recent share performance incorporates the execution of its Mexican expansions and the steady three-year production outlook. Beyond these milestones, the company offers limited catalysts, as longer-dated projects require firmer timelines and deliverables to establish a meaningful pipeline.”

BMO Capital has a Market Perform rating and $17.50 price target on Pan American Silver. The company today is trading at around $15.96.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, securities of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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) 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: PAAS:TSX; PAAS:NASDAQ,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17627

Bet on the Jockey, not the Horse

Source: Bob Moriarty for Streetwise Reports   08/15/2017

Bob Moriarty of 321 Gold explains why in some cases—and particularly in the case of this explorer—you don’t need to know all the details, you just need to know the geologist.

I first wrote about Aurania Resources Ltd. (ARU:TSX.V) back in March. The shares were $1.25 then and are $2.36 now. Keith the Barron did a private placement four months ago. The shares come free trading in a week. It may be the last chance to jump on this wagon.

Over the past sixteen years I have visited a lot of projects. And I’ve met a thousand or more geologists. Everyone has their own idea of whom the best are at anything but after having met most of the players in the industry, I’m convinced I know who are in the top five.

In no particular order you would have Peter Megaw, who pretty much invented mining in Mexico. The mining industry began a slow death when the Mexican Revolution began around 1910. By 1939 socialism in the country had pretty much destroyed the mining industry as investment capital dried up.

Dr. Megaw saw the potential in the country and spent 25 years educating himself on various deposits. When Mexico finally realized it needed investment capital from abroad, he founded and helped dozens of companies sink roots in Mexico. He’s the brains behind MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT), Excellon Resources Inc. (EXN:TSX; EXLLF:OTCPK) and many others. When someone calls me and tells me he is on board, I know everything I need to know about the deposit. I don’t have to know anything about the vehicle, all I need to know is who the jockey is.

Quinton Hennigh is the same. He’s the brains behind Novo Resources Corp. (NVO:TSX.V; NSRPF:OTCQX). They look as if they have found one of the biggest gold deposits in Australia in history, in an area where gold has been mined for wall over 130 years. He recognized the potential for a massive discovery 20 years ago in Witwatersrand-age basins, and only lately has proved it. If Quinton Hennigh signs off on a project or a company, you need to know no more.

If you ask anyone in the industry about who was behind the concept of mining massive but low-grade copper porphyries, the answer would be David Lowell. He has made more major discoveries all over the world than anyone I know, including Escondida, the largest copper mine in the world, and Pierina. David Lowell literally is Mr. Copper. David Lowell finds giant deposits. If he is riding, you need to belly up to the betting window.

I haven’t met every single geologist in the world so I won’t list my five best. I have to keep at least one slot open, but certainly one of the best gold projects discovered in the last 20 years would have to be Keith Barron’s, who restarted mining in Ecuador with his discovery of the Fruta del Norte gold mine, with 13.7 million ounces of high-grade gold.

Keith’s company, Aurelian, sold the deposit to Kinross Gold Corp. (K:TSX; KGC:NYSE), but the government in Ecuador turned both stupid and greedy at the same time, as governments do on a regular basis. Kinross gave the project away to Lundin Gold Inc. (LUG:TSX) in 2014.

Ecuador turned smarter and more sober lately. They missed the millions of dollars mining companies poured into their economy. Led by SolGold, juniors are hitting home runs out of the park again. In the past 18 months SolGold plc (SOLG:AIM) has rocketed from £.03 to £.47, a 1,400% advance. Even the government of Ecuador is waking to the possibility of earning money through royalties.

Keith Barron is back with yet another venture in Ecuador. This time he’s looking for the two missing lost cities of gold. No kidding. If it were anyone but Keith Barron I would be convinced someone had been hitting the cerveza a little too hard. After all, the Lost Cities of Gold? Are you kidding me?

Keith is doing a wonderful job of communication and has put out five videos telling the story. It’s not crazy talk; there were seven major gold production areas in Ecuador under the Spanish. Five have been located. In two, the locals ran the Spanish off and told them not to come back any time soon. The Spanish didn’t, but the two locations did exist and need someone to find them.

When I heard the story, I bought shares in Aurania. No one on earth knows more about Ecuador and the potential than Keith Barron. You and I don’t need to know much as long as we know him. Let him do all the thinking and hard work.

I own shares in Novo Resources and Aurania and both companies are advertisers. Naturally I am biased. Do your own due diligence.

Aurania Resources
ARU-V $2.36 (Aug 14, 2017)
22.8 million shares
Aurania Resources website

Bob and Barb Moriarty brought 321gold.com to the Internet almost 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Auriana and Novo Resources. Auriana and Novo Resources are advertisers on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are sponsors of Streetwise Reports: MAG Silver. 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) 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: ARU:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17628

China, Gold and the US Dollar

Source: Clive Maund for Streetwise Reports   08/15/2017

Clive Maund analyzes where the price of gold will go when China backs the yuan with it.

The Neocon–Zionist drive for world domination is set to be brought to a screeching halt by something as simple as gold. This article is not politically motivated—the writer has no political agenda or affiliation—and the motivation for producing it is to enable you to understand the pivotal role that gold will play in thwarting the Empire’s imperialist ambitions, and how this means that the price of gold—and silver—will skyrocket, and sooner than many think possible. When you know that this is set to happen, and you understand the key reasons why, you will be able to position yourself to profit greatly from this profound and seismic global shift.

First we will consider briefly the ambitions of the Empire and its current situation. Although transnational in scope, the Empire’s main geographical centers of power are the United States, Israel, whose power is out of all proportion to its size, and the old center of power Britain, which serves as the “Right Hand Man” or “Number One.” The goals of the Zionist part of the Neocon–Zionist alliance are the creation of a greater Israel, to use their words “stretching from the Euphrates to the Nile,” and in pursuit of this goal they have already destroyed a significant part of the Arab world employing a “scorched earth” policy utilizing the U.S. military, which they control, and which is designed to wreck the economies of neighboring Arab States, leading to their subjugation. Their ultimate prize is Iran—once they have overcome Iran, the hugely indulgent and self-important Arab Sheiks in Saudi will be unceremoniously kicked out of their palaces and probably left to the mercy of the mob. At this point most Arabs will be turned into an army of indentured servants who exist to serve their Masters in the Greater Israel—the only other choice they will have will be to flee to the emerging Caliphate in Europe, where Germans have already become second class citizens in their own country, since immigrants have more protection under law than the indigenous population. The ambitions of the Neocon element of the Neocon–Zionist alliance are much more succinctly stated as world domination, pure and simple—the control and exploitation of all the peoples of the world.

The key question in all this is from what or where does the Neocon–Zionist alliance derive the power to pursue these goals, which they are getting ever closer to achieving? How does a country of just 300 million people (the U.S.) come to control most of the planet with a massive military machine and hundreds of military bases spread across the globe? How can it afford to do this? The answer is simple—it has turned the rest of the world into a sweatshop that produces unlimited goods and services for the Empire in exchange for piles of intrinsically worthless paper. This has been made possible for many decades since the 2nd World War by the ascendance of the dollar to become the global reserve currency. What this means is that dollars can be produced in infinite quantities without risking hyperinflation at home in the U.S., because the cost of the dilution is borne by the whole world, and just so that the rest of the world knows what to do with its heaps of intrinsically worthless dollars, they have created endless series of Treasury Bills and Notes, which are worthless IOU’s, for them to buy so they think they have gotten themselves an investment. It is the biggest scam in the history of the world and the rest of the world might fairly be pictured as a jackass, with “Jackass” branded on its hind quarters.

While the rest of the world has so far gone along with this Master–Servant relationship, it has had ample opportunity to observe the growing negative consequences of it, as the Empire, unrestrained by the old Soviet Union, has become more bold in pursuit of its objective of total global hegemony, and has already laid waste a large part of the Mideast and also Libya, driving armies of refugees into Europe where they are ruining the quality of life, and has subjected Russia to economic blockade and military threats, in pursuit of its ultimate goals of overpowering and subsuming Russia, China and Iran, to achieve world domination. The Chinese are not stupid and know what the game is, and they and others such as Russia could not have more motivation to stop the Empire in its tracks. Russia, which has been subjected to an endless barrage of negative propaganda by Western media, has exercised enormous restraint and played a very skillful game so far of avoiding being sucked into a military confrontation, despite extreme provocation.

So, the next question is, how do you stop the Empire? The answer to that could not be more simple: destroy the dollar’s global reserve currency status. Do that and its value will evaporate almost overnight, because there are trillions and trillions of dollars in the world that suddenly nobody will want. Now do you begin to understand why China (and other Eastern powers) have been buying gold as fast as Western banks can clear out their vaults, and for years now? What they are going to do, and at a time of their choosing, is back the yuan with gold, and given how the yuan has been rising in recent weeks, that time could be close at hand.

Timing is key, of course. Currently the U.S. allies in the region are Japan and South Korea. Japan has been an obsequious ally of the U.S. ever since the U.S. spent billions rebuilding after the 2nd World War, and it has been kept in a state of contrition ever since, with the media never letting you forget their dastardly acts in China during the Chinese invasion and the exploitation of the “comfort women,” the aim being to maintain a simmering resentment between China and Japan in order to try to stop them from forging a closer alliance, but the younger generation are fed up with it, and don’t see why they should be held responsible for the sins of their grandparents, and are much more pragmatic about closer cooperation with China, so the result of this is that Japan is moving away from the U.S. and towards the regional center of power, China. Meanwhile, a complex game of brinksmanship is playing out in the Korean peninsula, the underlying goal of which, from the Chinese standpoint, may be to get South Korea to cast off its close relationship with the U.S., once it fully understands how much trouble it can lead to, and the actions and words of erratic and heavy-handed Trump may assist South Korea in arriving at this understanding. China is now immensely powerful and is the cornerstone of a new economic order in Asia, that does not need the West and certainly does not need the dollar. Alarmed by its growing power and influence, the Empire is thought to be trying to instigate a war between China and India in Bhutan—Narendra Modi, the prime minister of India, is an Empire stooge, who has probably in some way been bought off. This being so it looks like the timing for China to drop its bombshell by backing the yuan with gold is sooner rather than later—why wait for the Empire to instigate a war by getting its stooge India to attack?

When China backs the yuan with its big piles of gold, assiduously accumulated over the course of many years from generous Western banks disposing of the “barbarous relic,” the effects will be immediate and dramatic—the dollar will crash and burn, and gold and silver will skyrocket into the stratosphere. In the U.S. hyperinflation will quickly become reality, and the population, made more psychologically unstable by heavy drug consumption and years of eating adulterated foods including dangerous substances like Aspartame and GM foods, will go crazy, and they are heavily armed. We can expect entire districts to go up in flames, food supplies will dry up as supermarkets have their shelves stripped in a matter of hours and truckers refuse to risk making the run to replenish supplies knowing they will be hijacked and their cargoes plundered. The now militarized police force will turn their impressive firepower on the rampaging citizenry, and possibly kill thousands, with thousands more being interred in FEMA camps. Angry mobs will march on Washington. U.S. military bases across the world will be closed and become ghost towns. Starved of generous funding and military support as its host implodes, Israel could suddenly find itself very vulnerable. It’s a very ugly prospect and it could happen very, very fast. The Empire may come to rue the day they crudely insulted and threatened China over their activities in the South China Sea.

Where will gold price go when China backs the yuan with it? It’s impossible to say but $8000 – $10,000 an ounce would probably be easily attainable within a matter of weeks or a month or two, especially given that the dollar would be in free fall. Gold and silver stocks will moonshot rising to possibly hundreds of times their current valuations.

Are you starting to understand now why we are so bullish on gold and silver almost to the exclusion of everything else?—and why we are not concerned by minor day to day wiggles?

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.

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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.

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17626

Still Good Values Despite High Market

Source: Adrian Day for Streetwise Reports   08/13/2017

Money manager Adrian Day updates developments at several companies in his portfolio.

Gladstone Investment Corp. (GAIN, NASDAQ 9.65, 8%) had a mixed quarter, with total investment income up despite slow investment activity–$2.1 million into existing portfolio companies, but no new investments—but per-share metrics declines due to the recent share issuance. Given the shares were issued below net asset value, NAV per share fell. The company notes the difficult investing climate, with high competition pushing up prices. We prefer companies issuing shares below NAV unless there is a near-term and compelling use of the proceeds. Gladstone appears not to have such a use, and still has extensive availability on its credit line.

Credit quality remains stable, though loans on nonaccrual amount to almost 7% of the portfolio at cost. Some loans were written down, though most of the companies where loans were written down are still paying as agreed. Often, investments are written down simply because of variations in prices in the marketplace, rather than any concern about a particular loan.

Dividend boosted
Management’s optimism was evidenced by an increase in the monthly dividend, as well as a special dividend paid in June. The company said it expects to pay a supplemental distribution semi-annually going forward, and would use capital gains and other income received on exits to fund such dividends. GAIN, recall, has about 20% of its total NAV in equity investments, unusual for a Business Development Company (BDC), with more opportunities for gains than most.

Selling very close to post-credit crisis highs—it hit $9.79 earlier in the month—and at long-term high valuations, more-or-less at book and yielding just under 8%—we are holding Gladstone Investment, but not buying at this time.

High yield while you wait
Ares Capital Corp. (ARCC, NASDAQ, 26.35, 9.3%) also saw income-per-share down, again because of a larger share count. In Ares’ case, it follows the acquisition at the beginning of the year of American Capital, which owned lower-yielding assets as well as significant equity, thus diluting the income per share. The net income is also below the dividend, which is generally a matter of concern for BDCs.

In Ares’ case, the external manager is waiving part of its fee following the ACAS merger; it has a supportive “parent”; and Ares itself has carry-over income that can help cushion the gap, so we are not too concerned about the dividend.

The digestion of the ACAS acquisition may take a little while, as Ares rotates out of low-yielding assets into higher-yielding loans on its own platform, and sells equity investments for the same purposes, though this can take time.

Strong record and low valuations
We are willing to be patient during this period—and a better-than-9% yield helps one maintain patience. Ares offers a stable dividend and a strong management, and at very attractive valuations. Historically, it has had among the top-level metrics, with high income-to-earnings conversion (over 100% compared with 80% for the BDC group); low credit losses; and consistent equity raises above NAV. Today’s valuation is well below the stock’s historical average valuations.

We don’t think there is a rush, and you may need to be patient before we see a higher stock price of increased dividends, but at today’s price, Ares is a very good long-term buy.

Still undervalued despite strong rally
Osisko Gold Royalties Ltd. (OR, NY, 12.53) reported on its latest quarter that largely updated the Orion acquisition we discussed recently. However, it also reported strong results at its legacy assets, particularly strong production at Canadian Malartic. Although production was down 15% at Eleonore, this largely was expected as the company focuses on additional development.

Following the closing of the Orion acquisition, Osisko’s cash is down to around $100 million, with debt of around $200 million. However, the company also has a securities portfolio with a market value of around $425 million (on a purchase price of less than $300 million), so does have liquidity. In addition, it continues to have strong support of Quebec pension funds, who supported the Orion transaction, so access to capital is not a problem.

Discount only partially justified
There is concern that some of the most attractive royalties it just acquired (notably on Pretium’s Brucejack mine) could be repurchased by the mine owners, removing the long-term upside. Nonetheless, Osisko continues to sell at a meaningful valuation discount to other large royalty companies, admittedly more diversified ones, and this continues to make Osisko a relatively attractive stock. On a price to NAV basis, Osisko trades at 1.1 times compared with the average for its peers of 1.8 x. Price to next year’s EBITDA is only 14 x, compared with the peer average of 19 x. Given the volatility in gold and Osisko, we are not buying today, but would look to buy on any pullback.

All dressed up and ready to date!
Vista Gold Corp. (VGZ, NY, 0.74) announced it would undertake an updated Prefeasibility Study (PFS) on its Mt. Todd project, following completion of various metallurgical studies. Incorporating the results of the current studies as well as new economics since the last PFS in 2013, Vista expects the study, to be released by year-end, to show improved economics. The company has undertaken several studies since the last PFS, including a new flowsheet for improved recoveries at the end of last year.

Vista is in a strong position, owning the largest undeveloped gold deposit in Australia, a world-class asset in a top jurisdiction. With $23.6 million in working capital—most of it in cash—Vista has sufficient funds to bring Mt. Todd to a production decision without additional dilutive financing. The goal is to remove development and production risks, and have a deposit attractive to a potential suitor.

Some unusual trading activity last Monday took the stock down—the prior week, it traded in the mid-80s, itself down from earlier in the year and a very attractive price—making the current level a “strong buy.”

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.”

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Gladstone Investment, Ares Capital, Osisko Gold Royalties, Vista Gold. 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: Gladstone Investment, Ares Capital, Osisko Gold Royalties, Vista Gold. 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: Pretium Resources Inc. 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 Osisko Gold Royalties and Vista Gold, companies mentioned in this article.

( Companies Mentioned: ARCC:NASDAQ,
GAIN: NASDAQ,
OR:TSX; OR:NYSE,
VGZ:NYSE.MKT; VGZ:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17625

Fanciful Fed Follies

Source: Michael J. Ballanger for Streetwise Reports   08/14/2017

Precious metals expert Michael Ballanger discusses the gold COT report and its implications for the metal.

Having just returned from boating in northern Georgian Bay and an area called The North Channel, I have been by and large out of contact with gold and silver prices since July 22 and am delighted to see that prices have stabilized after dipping in late Spring to under $1,210. Over the past month, the global stock markets have all danced around all-time highs with Dr. Copper forging a break-out above the $2.90 level, marking the highest close in two years. Amazon CEO Jeff Bezos briefly became the richest man in the world as his stock traded up over $1,080 per share and Twitter closed a couple of dollars off the 52-week lows and over $9 below its IPO price of $26. And yet, despite all of this, the CNBC bubbleheads continue to spew out complete nonsense as to why they remain “positive” on the outlook for equities. The name of the game in asset management is the fee structure and if you suddenly get “cautious” as opposed to “positive,” investors yank their money out and the wealth advisors take a serious pay cut. And we KNOW how Wall Street feels about pay cuts. . .

Of note this week is the sharp increase in Commercial shorts revealed in the August 1, 2017 COT whereby the bullion bank criminals fed 69,750 contracts representing 6,975,000 ounces of gold with a notional value of around $8.9 billion of phony, synthetic “gold” into the market during the two-week period that began on July 21. While I was moored in breathtaking fjords in northern Georgian Bay, swimming next to snapping turtles with shells two-feet in diameter, I was unaware that reptiles of a similar disposition were snapping up shorts at an alarming rate. We have seen this epic movie before; we will see it again; and we know that it will end with the Large Specs covering shorts and ramping up their net longs at the top of the rally while the bankers feed out fictitious “supply” before the inevitable reversal that punctuates the advance with felonious certainty.

Gold COT Report
COT Report August 1

Shown below is the COT from July 18 so that we may all observe how nauseatingly predictable this exercise has become. The large specs represent investors by way of either mutual or hedge funds and in many cases pension funds that use technical analysis as a trading tool. My beef with the system is that the bullion banks can act under the guise of “client hedging” (producer hedging) while in most cases taking equal (or larger) proprietary positions for the house account. Since they are not actually hedging anything other than their end-of-quarter bonuses, they are still allowed to sell an infinite number of notional product without proof of ownership. It is the ultimate rigged casino because they know precisely when they will strike and how big the move is going to be because they CREATE the move itself. And that, my friends, is market manipulation—period.

Gold COT Report
COT Report July 18

My outlook for gold was “bang-the-table-bullish” three weeks ago at $1,230 based on the COT data and I opened a position in the JNUG (Triple-leveraged GDXJ ETF) and the USLV (Triple Leverage Silver) while convincing myself to ignore the stops while out of internet range in Northern Ontario. As a result, I find myself in the rare position of being correct on precious metals prices and wrong on gold miner prices. We have rallied over $80 per ounce of the lows of early July at around $1,210 and yet the HUI (NYSE Arca Gold BUGS Index) can’t even manage to get above 200 whereas it hit 205 back on June 14 with gold at these levels taking the JNUG to $21.85 during the move. The dilemma I face now lies in the seasonality associated with the August-November period when the gold and silver stocks usually have a decent pop. However, the Commercials are setting me up for a colonoscopy in the face of positive seasonal patterns and that makes it difficult to gauge the target price for the JNUG looking out to November. I am probably going to defer additions to JNUG and USLV until after Labor Day but remain long the unleveraged positions until we get some clarity.

Stock prices for the major averages have been on a tear lately—well, they have been on a “tear” since April 2009 when the global central banks decided to act as a collective placing a floor on volatility and an arm lock on prices. Last November 8 at approximately 10:30 in the evening, the Dow Jones was down a whopping 1,000 points on the eve of the Trump victory. Being long a number of S&P put options and a goodly position in the UVXY, I went to bed happy with visons of sugar plum profits dancing in my head for the next morning only to rise to the horror of that overnight reversal where the bankers decided to re-jig perceptions of a Trump victory.

The narrative changed from disaster to euphoria as stock prices began was has been an incredible show of strength (“interventions”) in ignoring the near-farcical conditions in the White House. This has occurred week after week after week despite a raging battle between Trump and virtually anyone that defies him starting with the mainstream media to the point where the new “traders’ perspectives” have become completely polarized. You now reside in either “The Bubble Will Live Forever” camp or the in “The Crash is Coming Tomorrow” camp with virtually no one in between.

Since I have long opined that “One can never underestimate the replacement power of equities within an inflationary spiral,” I get perpetually shouted down because of the absence of any serious CPI or PPI increases. However, monetary inflation (“Printing” by the central bankers) has been ongoing since the financial crisis of 2007-2008, and that is what has propelled stocks. It certainly isn’t productivity gains and it certainly isn’t a manufacturing renaissance, and with the Amazon-Walmart slugfest for retail dominance, the major driver is multiple expansion brought about by excess liquidity so when the Fed’s Janet Yellen talks about “normalizing the balance sheet,” it is actually a signal that she is about to remove liquidity and that is BAD for stocks. The replacement value of stocks in a “quantitative tightening” (“QT”) environment is diametrically opposite to where we have been since April 2009 when the S&P hit the 666 (Sign of the Beast) level, so depending how fast and furiously they decide to “normalize”, stock prices are perched on a “permanently perilous ledge” as opposed to Irwin Fisher’s famous “permanently high plateau” that preceded the 1929 Crash.

Moving along to the topic of the junior miners, I am delighted to see that my number one pick for 2017, Canuc Resources Corp. (CDA:TSX.V) recently hit a record high at $0.60 per share, largely on speculation surrounding the San Javier project. In the interest of full disclosure, I have assisted this company and participated in private placements for both CDA.V and the privateco (Santa Rosa Silver Mining Company) that was RTO’d into CDA earlier this year (which means I was compensated by CDA and Santa Rosa). The San Javier project was introduced to me in 2014 and after some careful consideration, I decided to do what it would take to keep it alive with the help of a number of key investors with financings at the equivalent price of $0.10 per CDA share with the final raise at $0.25 per share in March 2017.

This is my premier holding in both size and effort and is the direct result of an assessment made by current V.P. Exploration John Nebocat back in 2014. You will all recall that John was V.P. Exploration for Tinka Resources and was directly responsible for the Ayawilca zinc discovery that is now making the rounds of the newsletter, blogster and chatroom arenas. His favorable assessment in 2014 made me think that there was a big silver (and gold) resource to be established here and while assays have yet to be reported, I have never doubted for a moment that drilling was going to reveal some big and very impressive surprises. Because of the workings down to the 125 meter level, the 43-101 confirmed the presence of an average grade of 11.3 ounces per tonne of silver and 0.06 OPT gold, commanding an ore value per tonne of nearly U.S.$300 per tonne (at today’s prices).

Since the project had never actually been drilled, I surmised that a resource estimate could quite easily be established at minimal cost and with maximal certainty. The upside surprise would be how far to depth this vein system extends and how many more veins are present. They are on the last of a five-hole program and are expected to report assays after Labor Day but judging from the action in the stock, it sure looks like speculators like what they either hear or see and are willing to place bets on the outcome. I have privately thought that an initial resource of 100 million silver-equivalent ounces was possible and that the valuation would be roughly $2 per ounce, so with 54.2 million shares issued (including all warrants and options) and assuming that they will issue another 10 million by year-end to further finance the project, a valuation would be slightly north of U.S.$3.00 per share. Now, the initial resource calculation is many months away but this first-ever set of drill results will serve to advance the needle and increase investor confidence in the likelihood that the San Javier project carries scale and grade, which in turn will attract the attention of the major silver miners all of whom are active and comfortable with the jurisdiction.

So, with the S&P off, the all-too-familiar month of August, being a harbinger of sorts, is threatening to do it again. I recall that in August of 1987 we had a fairly severe correction and one that preceded the 22.6% single-day drop seen in October of that year. It was a nightmarish event and one that evoked the usual macabre salvos of dark humor jokes like “How do you get your broker out of a tree? Answer: Cut the rope!” or “It’s raining financial advisors today!” but all I remember was my beloved Fido clinging to the ceiling with embedded claws as I ranted and raved at my quote screen. The Fed and its lip service surrounding “balance sheet normalization” would be well-advised to heed the forebodings of the month of August because the mere mention of “QT” is nothing more than fanciful folly, if executed.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael Ballanger: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: A family member owns Stakeholder Gold. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: I am currently a consultant to CDA, SRC, and WUC by way of Bonaventure Explorations Limited. My company has a financial relationship with the following companies mentioned in this article: Bonaventure Explorations is 50% owned by me. It has in the past been paid consulting fees by CDA, SRC, TK, GI and WUC. 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 article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Stakeholder Gold (and owned securities of Santa Rosa Silver Mining Co. prior to the RTO) companies mentioned in this article.

All charts courtesy of Michael Ballanger.

( Companies Mentioned: CDA:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17624

11 Opportunities in Gold, Uranium and Diamonds

Source: Streetwise Reports   09/14/2017

Former journalist James Kwantes, editor of Resource Opportunities, provides a tour of promising junior mining opportunities, from the extremes of northern Canada to the tropics of French Guiana.

The Gold Report: The U.S. stock market has been in a bull run for a number of years. What are your thoughts on the market and what it means for precious metals?

James Kwantes: Since Donald Trump was elected president, but also for years before that, large-cap U.S. stocks have been a “can’t miss” for investors, who have been rewarded for chasing returns. It seems very toppy to me, but that doesn’t mean it couldn’t go on for a while still. In 2000, in the big tech boom, the market caps of the two or three largest technology companies equaled the market cap of something like every mining company in the world. We’re at that level again. We’re starting to see weakness in the U.S. dollar, and that’s positive for gold. These things are cyclical. Gold looks like it’s ready for the next longer-term breakout and we’re heading into a period of seasonal strength. We’re starting to see signs of strength in the junior market as well.

TGR: Would you talk about a couple of companies that you like in the precious metals area?

JK: Let’s start with the Yukon, where I recently did some site visits. When you fly into the Yukon, you see placer mining operations, where miners pull gold out of the rivers and the gravels. They look like big gravel pits from the air, and some of the operations are very large. Placer mining is a big industry in the Yukon—about 20 million ounces (20 Moz) of placer gold has been pulled out since the Klondike Gold Rush days in the late 1890s—but the Yukon has never really had a large bedrock gold mine. So the hard-rock source for all that gold is a kind of holy grail in the Klondike.

Last year, Goldcorp Inc. (G:TSX; GG:NYSE) bought Kaminak Gold Corp. and its Coffee project for $520 million. That sparked another gold rush, an exploration rush, that is seeing many of the world’s largest gold mining companies do joint venture deals with companies that have Yukon projects.

TGR: What are some of the companies you are excited about in the Yukon?

JK: There’s an interesting company called Klondike Gold Corp. (KG:TSX.V). It owns a large land position around Dawson, the epicenter of the Klondike Gold Rush, that includes some of the most productive placer mining creeks where a lot of gold is still being pulled out. Klondike Gold owns the claims above many of the best creeks.

Klondike is systematically exploring an area called Lone Star, which was the site of one of the only historical bedrock gold mines that produced high-grade gold. Klondike has hit about 2 kilometers (2 km) of gold mineralization along a structure that CEO Peter Tallman thinks may continue for as long as 7 km.

I like Klondike for several reasons. It’s very close to Dawson City, so its costs of drilling are very low. And in the Yukon that’s important. A lot of these companies require helicopters to get in and out, which is expensive. Klondike has great backing. Frank Giustra, the co-founder of Goldcorp and founder of Lionsgate Films, is a major shareholder. So is Francesco Aquilini, another Vancouver-based billionaire whose family owns the Vancouver Canucks hockey team. So Klondike has some deep-pocketed shareholders and a plan to home in on an area with lots of gold mineralization. I really like its prospects for this year.

TGR: What’s another company in the Yukon that you like?

JK: Arcus Development Group Inc. (ADG:TSX.V), a small company that is under the radar. The CEO, Ian Talbot, is a geologist and a lawyer, and was BHP Billiton Ltd.’s (BHP:NYSE; BHPLF:OTCPK) lawyer out of its Vancouver office. Arcus owns a land position directly north of Goldcorp’s Coffee deposit. The Coffee project covers a vast land position, but a lot of the gold mineralization is on the northern portion, very close to where Arcus’s Dan Man project is. Last year, Goldcorp bought 19.9% of Arcus. So even though it’s not on the radar of investors, it’s on Goldcorp’s radar. Arcus is drilling the project this year. I’d be surprised if Goldcorp didn’t buy it out at some point.

Arcus Development

TGR: Did any other companies in the Yukon catch your attention?

JK: One company that I like in the Yukon is Strategic Metals Ltd. (SMD:TSX.V). It is a project generator with the largest claims position in the Yukon. It has projects all over the Yukon, so it’s really well poised to capitalize on this money that’s flowing into Yukon exploration companies.

Strategic is almost like a mutual fund focused on the Yukon. It owns 40% of Rockhaven Resources Ltd. (RK:TSX.V), which has a high-grade gold, polymetallic Yukon deposit of more than 1 Moz of gold in the Inferred category. Strategic owns 7% of the shares of ATAC Resources Ltd. (ATC:TSX.V). ATAC is one of the exploration companies that had a major come in: Barrick Gold Corp. (ABX:TSX; ABX:NYSE), the world’s largest gold mining company, did a joint venture deal on one portion of ATAC’s large land holdings. Both Rockhaven and ATAC have very large drill programs. Strategic also recently spun out to shareholders a new Yukon-focused exploreco called Trifecta Gold (TG:TSX.V) that is drilling at two projects.

Before Goldcorp bought Kaminak, it wasn’t easy to raise exploration money for the Yukon. Now there’s money flowing and quite large drill programs underway. It will be interesting once the results start flowing in to see if the Yukon can sustain the interest and capital flow.

TGR: Are there other companies that you’d like to talk about?

JK: Since we’re talking about gold and high-grade gold, another company that I follow in Resource Opportunities is Sabina Gold & Silver Corp. (SBB:TSX; RXC:FSE; SGSVF:OTCPK). It used to be called Sabina Silver, with a silver polymetallic project that it sold for quite a large amount of money back in 2010-2011. Sabina has been well financed through this terrible bear market that we’ve come through. I picked up coverage of Sabina during the bear market at $0.39. A new CEO had just come in, Bruce McLeod, whom I was familiar with and respected.

Sabina has the very high-grade Back River gold project up in Nunavut, again a northern project. What’s interesting about Sabina is a lot of the gold is in open pits. Sabina has in all categories more than 7 Moz of gold, and the grades are 5–6 grams/ton (5–6 g/t) gold with some zones that are much higher grade that the company is drilling. Back River is one of the last large, high-grade gold deposits globally that’s owned by a junior mining company.

But Sabina has had some trouble with permitting. The company went through a lengthy permitting process, with thousands of pages of material and mitigation plans for tailings and caribou management and everything else. The Nunavut Impact Review Board (NIRB) last year recommended to the federal government that the project not go forward. That was obviously a big blow to the company. The federal government went back to the regulator and said we want you to have another, closer look at this project. Sabina went back to the drawing board and altered its plan to address some of the concerns. NIRB reversed itself earlier this summer.

Sabina stock is now at about $2.27 or so and the company has more than $36 million in the treasury. It is drilling some of the “treasure boxes,” high-grade gold areas that could be a real sweetener for any mining company that takes over the project.

The Nunavut area is quite active. There’s a company called TMAC Resources Inc. (TMR:TSE) that’s building a high-grade gold mine nearby. Agnico Eagle Mines Ltd. (AEM:TSX; AEM:NYSE) has some of its best operations up in Nunavut as well.

TGR: What is another company you would like to talk about?

JK: If we’re talking high-grade gold, we can’t leave out Pretium Resources Inc. (PVG:TSX; PVG:NYSE) and its Brucejack project up in the Golden Triangle in British Columbia. Before I took over the Resource Opportunities newsletter, I was an editor and reporter at the Vancouver Sun newspaper. Working as the newspaper’s mining writer was good preparation for the newsletter. Vancouver has so many mining and exploration companies, so I really had to be selective and focus only on the best projects and people. One of the people I interviewed was Bob Quartermain, Pretium’s CEO, when the company had its IPO. He was raving about the high-grade gold up on the Brucejack property.

Pretium Resources Inc.’s Brucejack is high grade, but also has size.

Fast forward a few years, and Pretium recently announced commercial production at Brucejack. The mine is high grade, but also has size. There have been gold mines in the Golden Triangle, which used to be quite an active mining area, with higher grades, but none of them was nearly as large as Brucejack.

It will be interesting to see how that one plays out. Of course, there was some controversy over the resource and whether the grades hold up. Now Pretium is feeding ore into the mill. So that’ll be a good one to watch for the coming years.

Also up in the Golden Triangle is a little exploration company called GT Gold Corp. (GTT:TSX.V). In its first pass at drilling, GT Gold is hitting some really nice near-surface intercepts, including 13.03 g/t over 10.67 meters. The stock has gone on quite a run. That company has a market cap of about $100 million. Companies that have properties bordering on GTT’s ground are starting to see their stock prices come up.

I do like to compare companies because in this market things can get out of whack. All the excitement goes to certain names and other ones get neglected. That can create opportunities. For example, there’s a company called IDM Mining Ltd. (IDM:TSX.V) that is building a small underground gold mine in the Golden Triangle that is very high grade. It’s taken over a project that majors had put several million dollars’ worth of work into, including about 2 km of underground workings, tunnels and so on. It just published a feasibility study. IDM, an advanced-stage company that’s now going through permitting, has a market cap of about $50M.

There’s interest and money flowing into the Golden Triangle, which is very remote and has a winter climate. But more roads have been built in the last few years and also the British Columbia government has built a high-transmission power line that goes right through the heart of the area. There’s another mine called Red Chris, a copper-gold mine that Imperial Metals Corp. (III:TSX) has opened. So there’s a lot going on up there as well.

TGR: Any other gold companies you want to touch on?

JK: Columbus Gold Corp. (CGT:TSX; CBGDF:OTCQX) is an interesting story. It has some recent news, too. Columbus owns a 45% stake in the Montagne d’Or project in French Guiana. Nordgold SE, a big Russia-based gold mining company, funded a feasibility study at Montagne d’Or, so it now owns 55%. Columbus will probably either sell its 45% stake to Nordgold, or it’ll sell it to another gold mining company. Montagne d’Or is a very large deposit, 5 Moz, with good grades, considerably higher than average gold grades being mined now globally.

Columbus Gold Corp. has a very powerful exploration partner in Nevada.

Columbus also has a Nevada angle. It recently announced plans to spin out the Nevada properties into a new company called Allegiant Gold. Columbus is shifting focus to its very large land package in Nevada. The exploration team it works with is Cordex, a legendary Nevada exploration team that’s now run by Andy Wallace. Cordex was founded by John Livermore, who was the key person who discovered the Carlin Trend in Nevada, one of the world’s largest stores of gold. Columbus has a very powerful exploration partner there. Columbus is narrowing in on the zones it’s going to drill. It’s another one to watch, especially if the spinout of the Nevada properties goes through as planned.

TGR: In Resource Opportunities, you also cover uranium. What’s your take on the market?

JK: I love finding things that are hated or neglected, that people don’t care about because they have been low for so long that they’re not even on the radar. And uranium fits that bill. Ever since the Fukushima disaster in 2011, it’s just been lower lows, more or less continually.

But uranium is a funny market because it’s very cyclical. In the late 2000s, there was an incredible uranium boom that took the spot price up to about $100/lb. And as the uranium price goes down, of course, it becomes less and less economic to mine. Some of the world’s largest producers are cutting production and at a certain point, that will affect the price, which will come up.

I think uranium is a really good opportunity right now, especially for companies that can go into production in the 2020 decade. And because it’s such a small market, there are not many companies that produce uranium, so when the move happens, it can happen quickly, and it can be fairly violent as well.

TGR: What uranium companies fit that bill?

NexGen Energy Ltd. is really positioned to take a dominant place in the world’s uranium sector.

JK: NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) has a spectacular—I’ll call it a discovery—but it’s actually a very large, growing high-grade deposit in the Athabasca Basin in northwestern Saskatchewan. In 2014, Resource Opportunities picked up coverage on NexGen Energy during that terrible bear market. It was a little junior with a land position in the Athabasca Basin, and the stock was at $0.30. For a long time nobody else covered it.

But it started hitting these spectacular, high-grade intercepts, and it’s been quite a success story. The stock is now at $2.73. NexGen just came out with a preliminary economic assessment (PEA) on the Arrow deposit showing very strong economics, including an after-tax internal rate of return of 57% (at an 8% discount rate).

NexGen Arrow map

For some perspective, Cameco Corp. (CCO:TSX; CCJ:NYSE), the Canadian uranium company, is one of the world’s largest producers, producing something like 15% of annual global supply. The PEA that NexGen just came out with shows that in the first five years of Arrow’s mine life, NexGen would produce more uranium annually than Cameco does now.

NexGen is really positioned to take a dominant place in the world’s uranium sector. The world’s largest mining companies are all keeping a close eye on it. The stock price has performed in a terrible market for uranium, and I think there’s upside from these levels. If NexGen gets taken over, the company that owns and develops Arrow will have a dominant position in the global uranium market. So it is quite a large prize.

TGR: Recently, NexGen announced that it had a $110 million financing with CEF Holdings Ltd. Does that give it the financial security that it needs to get to production if it decides to take the mine into production itself?

JK: One of the things that makes junior mining companies vulnerable to hostile takeovers of course is being in a weak financial position. CEF Holdings is a joint venture between CIBC, one of the big Canadian banks, and Li Ka-shing, Asia’s richest person. He’s a multibillionaire and very successful across different sectors, including mining and energy. It’s a real validation. He first took a position last year, and has now doubled down. NexGen’s cash position is about $200 million, and the company’s market capitalization is less than $1 billion. So that treasury really does give NexGen options.

And the Li Ka-shing connection is important because a lot of the demand growth on the uranium side will come from China. Uranium supply is very important for China, which is building lots of nuclear reactors due to its growing population and energy needs. China is also going big into solar power but the nuclear push is substantial.

TGR: Let’s switch to diamonds, which your newsletter also covers. Any companies you want to talk about there?

JK: As in uranium, I like to find things that people aren’t interested in or that are out of favor, and diamonds fits the bill.

I was at the annual Prospectors & Developers Association of Canada meeting in Toronto back in March, and it was a big crowd, lots of good energy. I went to a diamond presentation that had some pretty high-quality companies presenting and the room was almost empty. I found that interesting, especially because among the few people there were Chuck Fipke, a billionaire who found Canada’s first diamond mine, and Eira Thomas, who helped discover Diavik, Canada’s second diamond mine. She was also the CEO of Kaminak when it was taken over by Goldcorp. Eira is a cofounder and director of Lucara Diamond Corp. (LUC:TSX.V) and continues to have an interest in diamonds.

Some of the biggest mining companies in the world are quite interested in diamonds because a profitable diamond mine is a very powerful cash machine. For example, the new boss of Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK), Jean-Sebastien Jacques, has talked about how he loves the diamond business. And Rio Tinto just inked a joint venture deal with Shore Gold (SGF:TSX), which is exploring for diamonds in Saskatchewan. And then of course, De Beers for a long time had almost a monopoly on diamond production and marketing. It is now majority owned by Anglo American (AAL:LON), and De Beers has been a real profit generator for Anglo American.

Back in April, I did a site visit to Lucara’s Karowe diamond mine in Botswana. Lucara is a Vancouver-based Lundin Group company that is quite an interesting story. It bought a De Beers exploration project that De Beers gave up on, and started finding these very large diamonds. A couple of years ago, Lucara found a 1,109-carat diamond, the second largest ever discovered.

Lucara tried selling the historic diamond at a live auction last year. There were different factors, but it was unable to sell it last year. But Lucara also found an 813-carat diamond that sold for $63 million, a record for a rough stone.

Lucara’s Karowe mine is small. It only produces about 0.03% of diamonds globally each year, but it produces more than 60% of diamonds that are larger than 10.8 carats (called “specials”). Lucara keeps finding very large diamonds that command really high prices. The company has now paid out more in dividends than it has raised in the capital markets, and the stock yields more than 3.5% at these share price levels. Lucara has been weighed down by this 1,109-carat diamond that remains in inventory, which it named the Lesedi La Rona. I think the Lesedi will sell and for a lot of money. So Lucara is a company that generates a lot of cash flow from Karowe and has consistently increased the dividend.

On the exploration front, a company I follow is called North Arrow Minerals Inc. (NAR:TSX.V). The chairman of North Arrow is Gren Thomas, who is Eira Thomas’s father. He was the CEO of Aber Resources, which discovered the Diavik diamond mine up in Canada’s Northwest Territories.

North Arrow has the Naujaat diamond project in eastern Nunavut, which has a population of rare, valuable orangey-yellow diamonds. North Arrow recently raised $5 million from investors, including Ross Beaty who invested $2 million. Similar to the large diamonds, colored diamonds are much rarer. And North Arrow has actually cut and polished some of the orangey-yellow diamonds, and they’re quite beautiful stones. With the money raised, North Arrow has taken a small bulk sample and is doing some drilling. The orangey-yellow diamond population could put that project over the economic hurdle to allow it to become an operating diamond mine.

Orangey-yellow diamond

North Arrow has other projects across Canada as well and a very strong team, with quite an active program over the next nine months. It has discovery potential at some of its other projects, including Mel and Loki.

TGR: Thanks so much for your insights, James.

James Kwantes is the editor of Resource Opportunities, a subscriber supported junior mining investment publication. Kwantes has two decades of journalism experience and was the mining reporter at Vancouver Sun, the city’s paper of record.

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Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: Columbus Gold, Pretium Resources and NexGen Energy. 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) James Kwantes: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Klondike Gold, Arcus Development Group, Strategic Metals, ATAC Resources, Rockhaven Resources, Trifecta Gold, Sabina Gold & Silver, IDM Mining, Columbus Gold, NexGen Energy, Lucara Diamond Corp, North Arrow Minerals. I, 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 interview: Strategic Metals, IDM Mining and North Arrow Minerals. I determined which companies would be included in this article based on my research and understanding of the sector. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) The interview 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 Agnico Eagle and Cameco, companies mentioned in this article.

Images provided by James Kwantes

( Companies Mentioned: ADG:TSX.V,
CGT:TSX; CBGDF:OTCQX,
GTT:TSX.V,
IDM:TSX.V,
KG:TSX.V,
LUC:TSX.V,
NXE:TSX; NXE:NYSE.MKT,
NAR:TSX.V,
PVG:TSX; PVG:NYSE,
SBB:TSX; RXC:FSE; SGSVF:OTCPK,
SMD:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17623

North Korea Showdown: Pivotal Turning Point

Source: Lior Gantz for Streetwise Reports   08/13/2017

The next two weeks could be a make-or-break period for President Trump, says Lior Gantz, founder of Wealth Research Group.

We’re witnessing a classic political attention diverting operation.

Like many before him, President Trump is provoking a foreign affair crisis in order to take our minds off of the problematic U.S. domestic economic and political tensions and focus on matters the government can blame on others instead of themselves.

As you know, Trump’s administration and political capital are at stake in September as he pushes to pass a bill regarding the wall, the infrastructure plan, the budget, and the debt ceiling.

These topics will play a major role in determining the fate of natural resources, commodities, safe havens and cryptocurrencies.

The pressure is on as we approach a year in the President’s term in office.

Complete Rundown of Upcoming Events:

1. North Korea Conflict: The war of words between President Trump and North Korea’s Kim Jong Un is not slowing down at all.

Trump denied that his remarks—where he warned that North Korean threats would be responded with “fire and fury”—had gone too far. Instead, he commented that he may not have gone far enough—that’s clear propaganda.

Trump is a master negotiator, so we know this is part of an elaborate strategy, but Ray Dalio, the world’s largest hedge fund manager, along with Dennis Gartman, one of the best commodity analysts ever, and even PIMCO, the bond investment conglomerate, and Jeff Gundlach, the bond god, have all increased gold allocation themselves and advised clients to do the same.

Gold has closed the week at $1,289 with silver being the top-performing precious metal, up 5.18%.

Exploration ActivityCourtesy: U.S. Global Investors

You’re going to love this: gold exploration budgets are finally on the rise.

Wealth Research Group updated you just a few days ago saying that for gold stocks to finally kick into 6th gear, we need discoveries and takeovers—we’re starting to see both.

2. Volatility is Back: It was no more than a week ago when Wealth Research Group alerted that the VIX is about to spike and that betting on rising volatility is a phenomenal short-term trade.

Our call was dead-on.

Volatililty IndexCourtesy: Stansberry Research

September is historically the worst-performing month of the year for the U.S. stock market, so we could be in the midst of a correction already.

Some 200 stocks in the S&P 500 had fallen 10%+, which means nearly half are in correction mentality.

3. Industrial Metals: China, as opposed to the United States, doesn’t have to endure a long, drawn out political debate on things that matter—they simply execute.

Their infrastructure plans are huge and have driven aluminum prices to over $2,000 per ton for the first time in three years.

In fact, most metals are in an uptrend.

Metals RiseCourtesy: U.S. Global Investors

This is significant, and it means that the missing piece of this puzzle is rising oil prices.

When we experience this, either by the escalation of the North Korean showdown or by supply cuts, inflation will be doing a 180 from its slumber and will hit Main Street.

4. Central Banks Disgust Me: When do you finally admit failure and begin fixing what’s wrong?

The Swiss central bank is a disgrace.

In the second quarter alone, it bought Apple, Microsoft, Amazon, Facebook, and Alphabet, among others—almost $90,000 in securities per Swiss citizen.

Swiss National Bank US Equity HoldingsCourtesy: Stansberry Research

At the end of the day someone will begin paying the price for all of this, and I’d love to see how this all plays out.

The Bitcoin position keeps ballooning like few things ever can, and I’m about to shock you with a new crypto suggestion that will be like no other.

Make sure you and your family are prepared for anything, own safe havens, and live life to the fullest.

Lior Gantz, the founder of Wealth Research Group, has built and runs numerous successful businesses and has traveled to over 30 countries in the past decade in pursuit of thrills and opportunities, gaining valuable knowledge and experience. He is an advocate of meticulous risk management, balanced asset allocation and proper position sizing. As a deep-value investor, Gantz loves researching businesses that are off the radar and completely unknown to most financial publications.

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.

Disclosures:
1) Statements and opinions expressed are the opinions of Lior Gantz and not of Streetwise Reports or its officers. Lior Gantz is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Lior Gantz 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.
3) 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.

Charts provided by Wealth Research Group

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17622