Gold and Silver and Hard Assets after Trump’s Inauguration…2017MAKE YOUR PORTFOLIO GREAT AGAIN !
This thread is a continuation of several threads posted previously by the author on gold and silver and hard asset investments. I am still a believer in hard assets. I also believe we are entering a period of inflation with continued dollar devaluation, higher interest rates, and a sluggish economy with chaotic dislocations. I believe there will be a lot of uncertainty and high volatility.
PURPOSE My intent is to find and discuss good mining and commodity ideas. Gold and silver remain a focus, but I want to achieve a more balanced approach still based on tangible commodities.
STEEL and IRON ORE…I believe Trump’s programs will benefit iron ore and steel. Stocks in this sector have been beaten down terribly but are rebounding. I am long VALE, a Brazilian company which is the world’s largest iron ore producer. I have been long Arcelor Mittal but do not have a position at the moment. Anybody know anything about cement and asphalt ?
COPPER, ZINC, PGM METALS…My very best conviction stock is Ivanhoe Mines IVPAF. I am completely comfortable with a large single position in IVPAF to cover these metals. However other investors may be uncomfortable with a small cap in sub-Saharan Africa. So I think it is beneficial to introduce other names even though I myself am not interested. Rio Tinto, Freeport-McMoran, Teck, Turquoise Hill, BHP and others come to mind. Travis, our host, is long Altius Minerals, and I have been also.
URANIUM…I’m bullish but the choices seem pretty limited. My top three investment-grade choices are Cameco first, then Cameco second, or my third pick would be Cameco. After that, you are speculating on small caps, or buying ETFS or funds comprised of Cameco and some small caps. At the moment, I am long Cameco and UEC.
LITHIUM…I am considering a long position in lithium. I have nothing to recommend at the moment, although I am strongly considering Galaxy, an Australian company. And I like Neometals, also an Australian, but it is difficult to get from my broker, who hates it when I want to buy obscure 50 cent companies on small foreign exchanges. If anybody’s got a great battery play, I am interested.
POTASH/FERTILIZER…very interested but they all seem pretty expensive. There has been consolidation but I have considered Agrium, Mosaic, and there is a German company whose name I forget at the moment (K&D? K&S?).
OIL AND GAS…I would like some very good conviction picks accompanied by strong reasons and decent research. This field is so big, we could get completely lost just tossing names around. I am somewhat worried about price weakness in the energy sector but feel that it is worthwhile to develop a point of view on a few companies. I have little experience although I made very good money in the past on XOM and CVX. Currently I would be interested in pipelines, LNG, or any other sector that someone knows something about. In natgas I like OGZPY.
SOLAR and WIND…really not too interested. The results depend too much on politics, the time frames seem too long. But I am not completely closed-minded on it if you have conviction on something.
COAL…same opinion as solar and wind, but the prices are low and depressed instead of hyped and high-flying. I am still stuck with some defaulted Arch Coal bonds that my financial advisor recommended. They went to ZERO. Now they are worth a Starbucks latte and a pastry. And no espresso shot in the latte, either.
AGRICULTURE…very interested. A large sector but really not too many choices if you rule out futures, like I do. I have a few obscure favorites, but no positions at present:
WHGPY (Chinese pork processor who bought Smithfield)
LAND (Gladstone Land, California farmland)
INCPY (Input Capital, a Canadian canola, streaming model).
Open to more conventional picks like ADM and DBA.
GOLD AND SILVER…my picks have been discussed at length previously. I follow these pretty closely. I am long royalty/streamers SAND, FNV, SLW, and OR; miners PVG, MAG; developers SA, CLASF, MRDCF, BALMF, KNTNF, and LXVMF; and I own PSLV and physical bullion. I swing trade big caps ABX and NEM.
****
DISCLOSURES. I am a retired executive and an amateur investor. I like both fundamental and technical analysis. I am a medium-term to long-term position player and prefer to discuss stock investment in that context. Please no minute-by-minute reports that oil is now 52.50 down 10 cents and the Iranians may suspend Ramadan next week so you are going long until the afternoon bell.
I am not an expert in any of the commodities discussed nor am I qualified to give advice.
Everyone makes mistakes and I make more than my share.Sometimes I change my mind.
When I post, I express my opinions and my positions. These are just that…they are my opinions and my positions. They are not advice or recommendations, which I remind you I am unqualified to make.
Opinions and positions are subject to change at any moment. That is quite unlike the pig-headed and foolish political convictions everybody carries around adamantly, and which change only rarely for unpredictable reasons that have nothing to do with logical thought or reasoned discussion.
Because of this, political developments can be introduced on this thread only when they have a clear bearing on the commodities or companies under discussion.
You are responsible for your decisions, and I am responsible for mine. Caveat emptor.
I would like to operate in a friendly, honest, and constructive atmosphere.
As thread moderator I reserve to myself the role of referee, censor, arbiter, and Grand Poobah, subject to the over-arching authority of Travis, who owns the site and who has on occasion exercised his right to ruthlessly censor and suppress my radical blatherings.
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
Ivanhoe Mines News Release.
http://www.geologyforinvestors.com/ivanhoe-mines-announces-that-kakula-now-contains-indicated-resources-of-116-million-tonnes-at-6-09-copper-plus-inferred-resources-of-12-million-tonnes-at-4-45-copper-at-a-3-cut-off/
Mr. Robert Friedland reports
IVANHOE MINES ANNOUNCES THAT KAKULA NOW CONTAINS INDICATED RESOURCES OF 116 MILLION TONNES AT 6.09 COPPER, PLUS INFERRED RESOURCES OF 12 MILLION TONNES AT 4.45% COPPER, AT A 3% CUT-OFF
Ivanhoe Mines Ltd. has completed an independently verified, updated mineral resource estimate for the extremely high-grade Kakula discovery on the Tier 1 Kamoa-Kakula copper project, near the mining centre of Kolwezi in the Democratic Republic of the Congo (DRC). The Kamoa-Kakula Project is a joint venture between Ivanhoe Mines, Zijin Mining and the government of the Democratic Republic of Congo.
The new Mineral Resource estimate covers a strike length of approximately 7.7 kilometres along the eastern section of the Kakula Discovery. It boosts the tonnage of Kakula’s estimated Indicated Resources by 75% compared to the October 2016 resource estimate – which covered a strike length of 4.1 kilometres.
Kakula’s Indicated Resources increased by 50 million tonnes, to the current total of 116 million tonnes at 6.09% copper, at a 3% cut-off grade. This compares to 66 million tonnes at 6.59% copper estimated in October 2016, also at a 3% cut-off grade.
Kakula’s new estimated Inferred Resources are an additional 12 million tonnes at 4.45% copper, at a 3% cut-off.
“With 12 rigs currently drilling at Kakula and Kakula West and another two rigs about to begin testing important new targets on the licence area, Kakula is an international story of discovery that has earned the mining world’s attention,” said Mr. Friedland.
“To keep the mine-planning process driving forward, we need to provide the mining engineers with updated resource numbers for the expanded-case preliminary economic assessment due to be issued in the third quarter.”
Mr. Johansson said that the copper grades at Kakula are significantly higher than the average grades found at the adjacent, earlier Kamoa Discovery. “We’re highly confident that fast-tracking mine development at Kakula will have a profound, positive impact on the economics of the overall Kamoa-Kakula Project.
“Kakula alone already has enough resources, grading 6% copper or higher, to maintain approximately 20 years of mining at a rate of six million tonnes per year. We’re also confident that Kakula West has similar potential.”
The new Kakula resource estimate covers approximately two thirds of the known strike extent of the high-grade, chalcocite-rich Kakula trend, which now is approaching 12 kilometres, and remains open along strike in both directions.
Kamoa-Kakula geologists now are planning for a resource estimate at the newly discovered Kakula West area, located approximately three kilometres west of the new Kakula resource boundary. Excellent visual drill intercepts at Kakula West show a rapidly expanding area of shallow copper mineralization characterized by finely disseminated chalcocite in siltstone and maroon diamictite. The style and the overall geometry of mineralization at Kakula West are typical of the high-grade Kakula trend to the east.
The Kakula Discovery is approximately 10 kilometres southwest of Kamoa’s initial Kansoko Mine development. Ivanhoe and Zijin have been conducting an aggressive drilling program at the Kakula Discovery since April 2016. More than 85,000 metres of drilling have been completed. Given the outstanding success to date in delineating high-grade copper resources, the Kakula drilling program is expected to continue throughout 2017.
Nearly 200 square kilometres of the approximately 400-square-kilometre Kamoa-Kakula Project area remain untested. The Kamoa-Kakula geology team, with the assistance of its technical advisors, has intensively evaluated the structural and stratigraphic controls on mineralization of the broader Kamoa-Kakula basin. This work has highlighted at least nine high-priority targets located in the untested areas of the Kamoa-Kakula Project that are planned to be drill tested this year.
“The potential exists to find another Kakula. Or perhaps something even better,” Mr. Friedland said.
Figure 1. Kamoa-Kakula mining licence shows the Kamoa and Kakula Indicated and Inferred Mineral Resource areas, and the Kakula West Discovery: http://media3.marketwire.com/docs/1095004-F1.pdf
The Kakula Mineral Resource estimate was prepared by Ivanhoe Mines under the direction of Dr. Harry Parker and Gordon Seibel, both RM SME, of Amec Foster Wheeler, of Reno, Nevada, in accordance with the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves. Dr. Parker and Mr. Seibel are the Qualified Persons for the estimate, which has an effective date of May 16, 2017.
Highlights include:
Indicated Mineral Resources total 349 million tonnes at a grade of 3.23% copper, containing 24.9 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Indicated Mineral Resources total 210 million tonnes at a 4.41% copper grade, containing 20.4 billion pounds of copper. At a higher cut-off of 3% copper, Indicated Mineral Resources total 116 million tonnes at a grade of 6.09% copper, containing 15.6 billion pounds of copper.
Inferred Mineral Resources total 59 million tonnes at a grade of 2.26% copper, containing 3.0 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-off, Inferred Mineral Resources total 27 million tonnes at a 3.19% copper grade, containing 1.9 billion pounds of copper. At a higher cut-off of 3% copper, Inferred Mineral Resources total 12 million tonnes at a grade of 4.45% copper, containing 1.1 billion pounds of copper.
The average true thickness of the selective mineralized zone (SMZ) at a 1% cut-off is 12.0 metres in the Indicated Mineral Resources area and 6.4 metres in the Inferred Mineral Resources area. At a higher 3% cut-off, the average true thickness of the SMZ is 5.3 metres in the Indicated Mineral Resources area and 3.9 metres in the Inferred Mineral Resources area.
A technical report on the new resource estimate will be filed on SEDAR at http://www.sedar.com and on the Ivanhoe Mines website at http://www.ivanhoemines.com within 45 days of the issuance of this news release.
The Kakula Mineral Resources are defined within an area covering a total area of 12.8 square kilometres at a 1% copper cut-off. The total areal extent of Indicated Mineral Resources is 9.8 square kilometres at a 1% copper cut-off and the areal extent of the Inferred Mineral Resources is 3.0 square kilometres at a 1% cut-off. The average dip of the mineralized zone in the Indicated Resources area is 15 degrees, while the average dip is 18 degrees in the Inferred Mineral Resources area.
The Kakula Discovery remains open for significant expansion along trend to the west and the southeast, while the remainder of the southern parts of the Kamoa-Kakula mining licence area remains virtually untested (see figures 2 and 3). Twelve rigs now are drilling in the Kakula Discovery Area and more than 25,000 metres have been drilled at Kakula since the start of the year.
The May 2017 Kakula Mineral Resource estimate is based on the results from approximately 61,400 metres of drilling in 121 holes. The May 2017 estimate includes drill holes completed by April 18, 2017 in the eastern section of the high-grade, chalcocite-rich Kakula trend; it does not include any holes drilled in the new Kakula West Discovery area. The October 2016 Kakula Mineral Resource estimate was based on results from approximately 24,000 metres of drilling in 65 holes.
Indicated Resources are defined when the drill-hole spacing approximates a 400-metre grid, while Inferred Resources are defined when the drill-hole spacing approximates an 800-metre grid.
Jackpot.
$IVPAF…from the same release:
“Kamoa-Kakula now ranks as one of the world’s five largest copper deposits. The May 2017 Kakula estimate firmly establishes the Kamoa-Kakula Project in the ranks of the five largest copper deposits in the world – and its copper grades are the highest, by a wide margin, of the copper world’s top 10 deposits… Significantly, both the Kakula Discovery and the earlier Kamoa Discovery continue to remain open for expansion.”
I have no idea why the stock price has not reacted more strongly.
Looking to buy more under $3.50.
hn regards – I have no idea why the stock price has not reacted more strongly.
Although I know very little and the markets have taken some beaten today and I’m sceptical of to many conspiracy theories I believe manipulation (some call it trading) is behind this. Shaking the Tree, holding the price down while accumulation goes on by certain institutions/players. It’s casino chips to them and we are all small bit players in comparison. Proof I don’t have, but I still think this is true,
The real price of this huge asset will come true in time and as Long as most are here, it’s so what really.
Current price should be C$5+ going towards 6, especially with many announcements coming soon that can imo only add value….
$KNTNF
K92 Intersects High Grade Gold In Multiple Drill Holes at Irumafimpa
K92 is very pleased to provide you with a link to today’s News Release, describing multiple high grade drill results from the grade control drilling program at Irumafimpa.
http://www.k92mining.com/2017/05/6265/
Long $KNTNF
$KNTNF…thanks, Leslie, it’s good news. Remember there is already an operational mine on the property that was built by Barrick, the only issue is how much gold they can find in the vicinity to feed the production.
Long $KNTNF
Ivanhoe Mines Bank of America Merrill Lynch Conference Presentation by RF.
https://www.ivanhoemines.com/site/assets/files/2769/ivanhoe_mines_baml_conference_presentation_-_may_17-_20.pdf
Secretsquirrel…thanks. Beat the Merrill guys to lunch today and added IVPAF this morning at $3.56.
Mentions Ivanhoe….
http://www.barrons.com/articles/7-commodity-winners-in-electric-car-revolution-1487776843
C$IVN
$SA Seabridge Gold…long…RE: short interest…I am a little concerned about the high short interest in Seabridge Gold. It is in the vicinity of 20% outstanding shares.
Someone thinks the price is going down…but why ? Maybe it has to do with the reconfiguration of the GDXJ. Any ideas ?
Not sure if I am going to take any action on account of it…
If you are sold on their thesis then sell part and rebuy after drop or…… let it drop and average down.
If it is not moving up with the recent rise in gold then shorts in control.
$SA…sent an email to investor relations and guess who called back…Rudi Fronk, the prez ! He said the situation has been like this for a while, there are some big bets against them but he is not especially worried about it.
I suppose the chances of a short squeeze are as good as a price collapse, on account of the GDXJ rebalance.
$SA Similar to NAK. Megatons of gold in the ground, and no way to get it out. The 5 billion dollar initial cost means its probably a pipe dream.
renby, I disagree on the comparison between $SA and $NAK.
$SA has permits, proven reserves, and a viable deposit. $NAK does not. I consider $SA to be a pretty sound speculation, and $NAK an over-promoted pipe dream.
$NAK vs $SA…from $SA webpage
http://seabridgegold.net/pdf/WhyKSMMakesSense.pdf
Article in Seeking Alpha on Ivanhoe Mines.
https://seekingalpha.com/article/4074350-ivanhoe-mines-world-class-copper-project-keeps-growing?app=1&auth_param=d2ta:1chr6lv:b1b194dc5cf3ef326aefe59f2cf8c5fb#alt1
C$IVN
Ivanhoe…lack of market reaction to resource expansion…I suppose copper falling back to $2.50 range may have something to do with it. But It should be kept in mind that Ivan has very low costs per pound, 1st quartile, as low as 70 cents.
Ivanhoe…lack of market reaction to resource expansion…I suppose copper falling back to $2.50 range may have something to do with it. But It should be kept in mind that Ivan will have very low costs per pound, 1st quartile, as low as 70 cents.
$IVN
I think that once the company gets to over 1billion MC that market looks for plans for when their will be actual production. Showing more in the ground does not have the same big effect.
There may also be demand concerns when you increase potential supply by such a large amount. One never seems to really know how much China will really need to import in the next 10 years.
Finally Copper just not as sexy as gold mining. And of course ALL MINERS SUCK. 🙂
$PVG Pretium Resources…you never know enough about the rocks underground, but there is a noteworthy drill intercept on the Pretium claim about 1000 yards to the east of the main reserve area at Brucejack. They had an intercept of half a meter in hole SU666 of over 8,000 grams per ton.
There are other good drill holes not counted in any of the proven and probable reserves. More resource expansion in the cards eventually.
http://s1.q4cdn.com/222336918/files/doc_presentations/2017/PVG-Presentation-Roth-March-13-2017-PRESENTATION.pdf
Some thoughts on the Sandstorm Gold/Mariana Resources combination
I believe the proposed combination will be approved in June, and I believe it is worth looking at carefully to see if there are unrecognized opportunities in the combination as reflected in current prices for the two companies.
As a takeover, one has a tendency to look at the price of the acquired asset, and the dilution and debt of the acquiring party. However in the Sandstorm Gold/Mariana combination, there are some unusual aspects that deserve attention. I am not an accountant or financial guy, so if I make any serious mistakes please call them out.
First let us consider what the Hot Maden asset may be valued at, irrespective of Sandstorm’s offer.
The Hot Maden resource has 3.5 to 4.0 million ounces of AU equivalent and is not yet fully defined. Sandstorm will have 30% of it, plus a royalty on the balance. So, round numbers, let’s say they will have about 1/3 of the production…call it 1.2 million gold equivalent ounces. Capital costs are reasonable, it has straight-forward mining and metallurgy; let’s suppose an AISC of $600 per ounce. This would imply net income of $600 per ounce at $1200 per oz gold, even though the royalty is off the top; so again round numbers, we are looking at say $750 million in net income that one could reasonably forecast, without any commodity price appreciation or expansion of the resource. Nor do we give any value to the early stage projects of Mariana Resources in Africa and Argentina.
Now what is Sandstorm paying for this ?
Let us consider the out-of-pocket cash first. Mariana has about 150 million shares outstanding, each share will get about 37 cents. This would be $56 million, but it will come to considerably less because Sandstorm already owns about 9 million shares of Mariana. So let’s call it $50 million. Sandstorm has cash, they have unused credit lines of $110 million, and income of 60,000 gold eq ounces per year, so this is manageable.
Then there is a stock component. Each shareholder of Mariana will be awarded .256 of a share of Sandstorm. It is unclear to me whether this will be a new issue or from treasury stock, no matter; though granted it is dilutive to Sandstorm holders: the price of Sandstorm stock reflected this immediately. (The day prior of the announcement, Sandstorm was $4.04; it subsequently fell to $3.30 and is now about $ 3.50. )
But here is the crux of it: Sandstorm Gold will expend about $ 50 million in cash…but they will gain the residual value in the Mariana stock, without laying out any more cash or debt. Mariana is trading for about $1.20-1.25, which implies a residual value of about 80 cents a share after the cash payment; and Sandstorm will own that asset. 150 million shares at 80 cents is $120 million. This is roughly equal to the dilutive effect of the transaction since the Sandstorm market cap is less than 600 million. There is no cash outlay or debt on this part of the deal. And let us keep in mind that the asset in question that is being acquired is worth north of $750 million.
My take on the deal: For about $50 million in cash and $100 million in stock, Sandstorm acquires an asset worth $750 million.
I’m liking both ends on this one. On Mariana, you can basically buy Sandstorm right now for about $3.30 a share (Mariana price minus cash payment, times 4). I have no issue with anyone skittish about an investment in Turkey, but I think the financials on this are great for Sandstorm Gold.
Sandstorm/Mariana combination…more thoughts
Sandstorm market cap is roughly 600 million. Mariana market cap is roughly 150 million. Round numbers, I say the the 30% Hot Maden interest will generate an amount approximately equal to $750 million or more, or about the combined market cap of the two companies combined at current prices.
Dividing up the goodies between one pocket or the other won’t matter, it is all going to be in one pocket…Sandstorm Gold’s. Sandstorm will double its assets for a $50 million cash outlay and stock. I’ll trust them to convert the asset to cash flow later.
What am I missing here ?
Long $SAND, long $MRLDF
Missing? Very little if anything. I think you have an excellent grasp of the details of SAND. And other investors? Junior producers are not mainstream – at least not yet. This is good, for those of us accumulating positions (not just in SAND). BTW, thank you for the great work you’ve done detailing the juniors you have. After reading your posts, I’ve added more to my previous SAND position than I likely would have.
Long $SAND
deanbob…thanks, I hope these things work out. They can go against us no matter how much research we do and now much we think they will work.
And remember, these guys are not producing anything yet other than drill cores and assays.
Colorado Resources: Positioning Yourself For Success In This New Gold Bull Market
http://www.juniorstockreview.com/2017/05/19/colorado-resources/
Long CXO
$CXO $CLASF Colorado Resources…thanks for the link, lots of color on the personalities involved. I knew about Neolitzky, I think he is holding out with the Skeena claim, but I didn’t know he was involved in the Eskay discovery.
My impression is that the main priority is the Inel zone, a section of the KSP property. As an explorer with a tiny market cap, they have a chance to explode if they can find a really good deposit, and there are lots of good targets besides Inel within the KSP holding under option from Seabridge.
It is also telling that Colorado hopped up six months in advance to gain half the project, and have announced they are going ahead with the necessary drilling to earn in 80% of the thing. As noted previously, I believe Sprott is into them big-time also.
In passing, I saw in the Mariana site that Sprott interests are also heavy into Mariana and presumeably will be voting in favor of the Sandstorm/Mariana combination.There are irrevocable letters of intent by most of the major Mariana shareholders so I think the approval of combination is as sure a bet as one can hope for. How the market values the combination is, of course, another matter altogether. But speaking for myself, I don’t understand why the new entity should not be valued well north of a billion.
Kings in the Golden Triangle…in following the news releases on my BC Golden Triangle holdings, I have become very impressed by the precision, timing, and execution of the players involved not only with respect to their own holdings, but in the relationship and timing of their announcements with respect to their neighbors in the area.
I speak of the chain of moves and financing by Pretium Resources, Seabridge Gold, Colorado Resources. The impression is created altogether that between them, there is a definite and co-ordinated plan to create a powerhouse gold district anchored by the Brucejack mine in the southeast, and stretching towards the northwest through the Seabridge KSM holdings and further to the KSP and Iskut Seabridge/Colorado claims, terminating at the Skeena holdings.
Of course, PVG is the “lead dog” in the development of the zone. One can see the next targets only a few kilometers from Brucejack…the monster Seabridge KSM zone and the the Pretium Snowfield zone; and Brucejack still remains open to the east and south. Then one moves into the Seabridge claims of Kingpin property, and to the joint Seabridge/Colorado KSP properties, and then to the wholly-owned
Colorado properties around Iskut and Johnny Mountain, with Skeena still holding out a choice parcel.
It is amazing to consider that no gold is being produced on these properties yet, excepting the small production samples being run through the Brucejack commissioning. But the mine is built, and there are roads and power now that terminate only a few dozen kilometers from the enormous permitted Seabridge reserves (which are higher tonnage/lower grade than those forecast for Pretium).
It is public record that Seabridge and Pretium are co-operating in a neighborly fashion and have done joint studies together; and Seabridge has many recent news releases on their deals and co-operation with Colorado Resources, and has had an easy time of it procuring private capital; and even Colorado Resources, the midget of the three, has been very active not only with Seabridge, but with other claim holders in the northwest quadrant of the area, and did not seem to have any problems at all raising an amount of money roughly equal to 2/3 their market cap to buy into the Seabridge option six months ahead of schedule.
The whole thing could go *poof* if Brucejack is a bust. But unless and until that unfortunate scenario occurs, I am going to be to be long these guys, and look forward to the development of the district.
Gold stock price action…not sure what to make of this but there was a noticeable divergence in the price action of the big cap miners today compared to the juniors that I follow. The little guys were flat or off slightly but the big caps had good upside action.
HN, The last newsleter from Gold Invetment (Eric Muschinski, Gold Investment Letter, 5/17/17) had this to say about the gold market.
“Gold exploded through its 50 and 200 day moving averages today, which were main resistance areas. I want to see us close the week above the 200 day but this is the real deal Holyfield move and gold looks higher. So many investors have been very negative/worried and complaining about manipulation in precious metals prices(my view has always been that focusing on this is a waste of time. Yes, it happens. But, even massive institutions can only delay, not deny major trends) recently instead of buying when others have been fearful. As I’ve mentioned, I’m betting we do not see the widely held view that gold is going to/sub $1,000 before going higher. Yes, it is possible until gold finally breaches its 10 year downtrend line which would happen now at about $1,300 an ounce.” I’m hoping.
re: Muschinski
Griffin – thank you for sharing Eric Muschinski’s thoughts with us. I’ve been interested in precious metals for more than 20 years, and find Eric’s remarks to be right on target
petervr, I’m not sold on how accurate he might be, but he does add a little ‘color’ to his market news.. I’ll post qoutes from his free newsletter and a link if there.
Just a theory but higher prices, unless hedged. drop to bottom line with a producer. Non producer not enough movement to change risk profile.
$40 change in ounce price only = 3+%
Hedy, there is a lot of logic to that line of thinking and it often plays out that way. However the early gold-in-the-ground plays get asset appreciation with no overhead and the same risk profile, so they can have very high betas when the discoveries are firmed up or commodity prices go up.
HN-agree but a 3% change, which many view as temporary will not move the needle any where near as much as firming up what the liar standing over the hole is claiming.
http://blackhamresources.com.au/documents/riu-sydney-presentation-2017/ Any thoughts on Blackham folks? Looks like a prospect, not invested in. Thanks!
Scottu.
What are your thoughts?
What have you learned about it?
Why do you have an interest now?
Is it in production?
Does it have proven reserves?
Can’t just throw it out there an ask us to do all the heavy lifting for you…….
Thanks Hedy, my thoughts- looks like a good prospect to me from the 32 pg thorough presentation ( or I wouldn’t mention it)- Gold producer with experienced team in a historcal productive Australian zone, with 6.4 m oz proven & indicated, aiming to ramp up from 100k oz to 200k oz pa long mine life, suffered an “extreme rain event” which impacted Jan -March production but back on track, appears low market cap (118$AU) for its resources,, claims $19 AU per Gold resource, plans to develop a 2nd stage, capital requirements paid w/cash flow from the first so perhaps no upcoming dilution, claims 4 large open pit & high grade ore systems, all in costs $860US/ oz, claims room for expansion. Because I just found out about it & presentation doesn’t seem to sugarcoat & in viable jurisdiction outside of Canada or “exotic locales” I’m mentioning it as food for thought, tho I’m definitely not a numbers guy. Have a great weekend.
Scottu
Good data.
So why has the price dropped so low and continues to look weak?
For Blackham Resources AU & f, low sp could be combination of record (4x) usual rainfall that in March slogged down & flooded their pit production, led to their COO being reassigned, plus underground vein they thought ran for example looking down at an x, ran in line from nw to se now seen as running from ne to sw- their new May 7 estimate bears out where the higher line runs & the feasibility of 100k then 200k ozpa but says will take months to get geared up to meet that 100k expectation so maybe market is busy driving down price to yearly low on low volume & other candied apples to chase. Looks solid otherwise & market bottomed might be buyin point.
$NULGF vs $GSV: I am looking at adding a small position in either of these two companies. I am all set in my core silver and gold positions, but have a little money I am going t0 place in one of these two positions. I want to have a little exposure in Nevada. I have owned NULGF in the past and sold at a nice profit. I have done some D.D., but am interested in the thoughts of other Irregulars. Thanks!
I was long NULGF at one point but pruned it for what I considered stronger prospecrts, none of which are in the USA. I am not comfortable comparing the two as they are both active in the same geological area, and highly prospective. It seems that NULGF is a little faether along in defining a specific deposit. but neither website has any hard core measured 2 P reserves.
I have recently come to the opinion that gold grades are of prime importance. Both mines are in tent on large tonnage lower grade deposits in single grams per ton that I do not find compelling.
I agree. Two basics,,, richness of ore and relative ease of recovery are primary drivers of a mines worth.That is why I no longer own $NAK,,, though the ore is good it is unlikely to ever be mined for several reasons.
I think the only time to own speculative is when gold fever is in full force and everyone wants in. At that time juniors and speculative out pace the major producers. Long $SAND, $PVG, $HL, $PHYS, $PSLV as major holdings
The Carlin deposits are there all right, but they are not especially high grade. They seem to be large tonnage at single digit grades. It is expensive to process a ton of ore…I’d prefer to get as well get 8 or 10 or 16 grams per ton in an efficient operation versus 1.5 or 2 or 3 in an open-pit cyanide operation. . And tell me, why is the US a better jurisdiction than Canada or Australia ?
As far as $NAK, they claims are mostly in terms of contained metal. The ore grade is not impressive, there is just so much of it that he contained metal numbers are large. But this does not translate to an economical deposit. That is why there is no PEA after a decade of expenditures totalling $750 million. The deposit may be exploited without killing salmon and they may get permits, but there is not strong evidence of an economical mine being feasible. This is not to say that one cannot make money trading the stock, it is well promoted and it will take years for the final failure to become obvious. The great future potential can be promoted for years before the fallaciousness of it becomes obvious to everyone.
Nor is anyone guaranteed a profit by trading a stock with a superior deposit.
Jurisdiction isn’t really a concern. I am long in a lot of the usual suspects ($PVG, SA, CLASF, MAG, BCEKF, SAND). My play on the two Carlin projects is which one is more likely to be bought out by one of the majors operating in the area.
Yooper…I do not own it for this reason, but you might check out the new property acquired by Seabridge in the Carlin Trend. It is at the intersection of two perpendicular trends in the Carlin and their focus there may be one of the reasons SA shed some of their interests in BC to Colorado Resources.
$KNTNF
Not worried, just curious. Does anyone know why trading has been halted on K92?
$KNTNF
Didn’t find anything on the website, but I just found this:
K92 Mining : IIROC Trading Halt – KNT
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05/23/2017 | 09:40pm CEST
VANCOUVER, May 23, 2017 /CNW/ – The following issues have been halted by IIROC:
Company: K92 MINING INC
TSX-Venture Symbol: KNT
Reason: At the Request of the Company Pending News
Halt Time (ET): 3:16 PM
IIROC can make a decision to impose a temporary suspension (halt) of trading in a security of a publicly-listed company. Trading halts are implemented to ensure a fair and orderly market. IIROC is the national self-regulatory organization which oversees all investment dealers and trading activity on debt and equity marketplaces in Canada.
SOURCE Investment Industry Regulatory Organization of Canada (IIROC) – Halts/Resumptions
© Canada Newswire, source Canada Newswire English
$KNTNF K92…long… Mining trading halt…I called IR and they cannot give any information other than the halt was initiated at the request of the company. Usually these things don’t last too long, so good or bad we should know pretty soon.
$KNTNF
Here’s the answer!
K92 Mining Makes Significant Exploration Discovery of High Grade Kora Extension
K92 is very pleased to provide you a link to today’s important news.
K92 has intersected high grade mineralization in the first completed exploration hole within a program designed to test for extensions of the Kora Deposit.
The intersection is approximately 500 metres along strike and 150 metres down dip from the closest point of the currently defined Kora Deposit.
The exploration intercept reported is 5.4 metres at 11.68 g/t Au, 25.5 g/t Ag and 1.33 % Cu (a gold equivalent grade of 14.1 g/t AuEq) including 0.75 metres at 71.94 g/t Au, 168.7 g/t Ag and 8.51 % Cu .
Kora is a large and high grade deposit, open for expansion in every direction and strongly mineralized at the extent of all drilling, with a current Inferred Resource of 4.36 million tonnes of 7.3 g/t Au, 35 g/t Ag and 2.23% Cu (11.2 g/t AuEq).
The full News Release can be viewed here.
We look forward to keeping you posted as this drill program now intensifies and expands.
Regards,
The K92 Team
Long $KNTNF
$KNTNF – K92 Mining Makes Significant Exploration Discovery of High Grade Kora Extension
http://www.marketwired.com/press-release/-2218304.htm
The reason for the trading halt.
$KNTNF…Hope so. Pretty good hit for a new exploration hole. And just think, the mine is already built and running. Now it looks like they’ll have some decent ore to run through it.
Myron Martin’s original pick a while back; and I agreed after checking it out.
$KNTNF K92 Mining…of course I am delighted that they are finding good rock but I can’t get too giddy until I’m in the black…I entered at 92 cents so I have a ways to go yet before I am above water. Honestly, while I think the find in the first hole is pretty good, I’m not sure it warrants a suspension in trading…it seems more like a publicity ploy than discovery of a bonanza. Still and all, it is very good and I will hold on.
Reading the particulars, it seems very promising because the grades are higher than previously found, and the location of the hole from the prior drilling is fairly far away, so there is a real possibility of a much more robust and sizeable deposit than previously known.
The main thing here is that there is no construction risk. The mine is paid for. What is needed is more mineral discovery. The claim is large geographically, and this is obviously an important step in the right direction.
My main hesitation initially was that there was no PEA, no substantial proven deposit. Barrick apparently never needed one to raise investor money for the mine, but they were confident enough to go ahead and build it, so I felt there was sufficient reason to go in without a rock-solid PEA. Barrick sold off the finished mine to the current group, and it is already operating on a small scale; the idea is to fund exploration from current sales of gold. So far, so good.
K92 management is now hell-bent-for-leather to do more drilling and there doesn’t seem to be much reason to get out now. This one will be interesting because, as I noted previously, we will get both production announcements and drilling results.
In a few months there is likely to be some robust looking indicated and inferred numbers…but I wouldn’t be surprised is they don’t ever do a full-fledged PEA.
These things take time and money…and what do they need it for ?
More on $KNTNF K92 Mining…long…while Barrick did not do a PEA on Kainantu, the new K92 management did one based on the known drill results of the time.
The new drilling results obviously make the older PEA of 9 year mine life and 1oo,000 + ounces per year pretty conservative, although as usual the ultimate size of the deposit remains highly speculative. NPV was calculated at 400 million, market cap now is in the low 100 million range. So I like the odds.
The new drill hole is 500 meters away down strike from the last completed one. So there is a lot of potential resource paydirt that can be expected to be added to formal reserve and resource estimates between the older hole and the new one, especially since the new hole is above average grade from the previous drilling.
They are also considering expanding the geography of the claim, with the supposition that the strike continues beyond the existing license.
EXTRA ! EXTRA ! Gold and silver ARE MONEY !
At least, per new Arizona law.
https://www.marketslant.com/article/tide-turns-gold-silver-now-treated-money-arizona
Hard to see how a Federal challenge could win. It is the Federal Reserve which is contrary to the US Constitution, which designates Congress as the one responsible
for money.
And to quote the U.S. Constitution, Article 1 Section 10:
“No state…shall make any Thing but gold and silver coin a Tender in Payment of Debts…”
Just shows how far we have deviated from the Constitution. Glad someone in Arizona is fed up with the Fed. Will be interesting to see what happens.
You mean those pieces of paper with pictures of presidents and a bazillion “dollars” worth of blips on a computer screen aren’t money??? Who would’ve thought?
How in the world have the “powers that be” gotten away with ignoring the “No state…shall make…” clause in the Constitution for half a century? And worse, how did a PRIVATE banking organization end up being in charge of the PUBLIC money supply for more than a hundred years?
The best thing that could happen would be the dissolution of the Federal Reserve and other central banks worldwide. It would be chaotic for a while (and there would be some really p*ssed-off elites), but maybe after that we would (if we could keep the globalists out of it) end up with a stable and honest monetary system with money that has real value.
The politicians were either hoodwinked or bought off or corrupted and got used to being able to give out m0ney to constitutents without direct taxation to pay for it. So down the slippery slope we went.
The politicians were either hoodwinked or bought off or corrupted and got used to being able to give out m0ney to constituents without direct taxation to pay for it. So down the slippery slope we went.
Leslie…in fact those papers are not money, they are currencies. We call it money out of habit from the old days when the currencies were actually backed by something. So technically they are not really money, they are CURRENCIES.
Zimbabwe must really being doing well with their 10 and 100 trillion $$$ bills!
My dad liked to joke he was a trillionaire. They use the US dollar now, and bitcoin.
Leslie, congress in its infinite wisdom didn’t want to be troubled with managing the money supply so they abdicated their responsibility to the federal open market committee, i.e. the FED and we’ve been playing “see no evil,hear no evil and speak no evil” game ever since. Congress hasn’t changed very much over the past 100+ years. That is to say, the only thing important to them is to ensure they are doing everything to get reelected in the next voting cycle.
Regards,
Frank
Arizona Governor Ducey for Fed chairman. Follow up commentary on Arizona gold/silver law.
http://www.kitco.com/news/2017-05-25/Arizona-Recognizes-Gold-Silver-Bullion-As-Legal-Tender-But-More-Work-Needs-To-Be-Done.html
$PVG Pretium Resources…something is peculiar. Not enough to make me change my holdings, but there is something brewing with the commissioning processing at the mill.
It was announced on May 1 that initial ore had been introduced for processing (900 tons, about 1/3 of a day’s forecasted production), and that wet commissioning (testing of all components) was to “begin shortly”.
Well, here it is May 25 and the silence is deafening. Surely it does not take three weeks to process one-third of a day’s production. And the stock price has been sickly.
There are a few possibilities.
1. One is that the ore processed had bad or disappointing results below PEA forecasts (16 grams per ton). . This would be discouraging, but would not necessarily be catastrophic, because we do not know what the criteria were for the ore selection and the sample size is relatively small. Plus, they may have deliberately chosen mediocre ore to test the equipment. In that case I would expect that we will get a report about the equipment functioning, but no special information about grade or recoveries. But I would think that this type of announcement would be ready by now: “Low grade ore was selected to test equipment, yadda yadda yadda.”
2. The second possibility is that the results are at or near forecast by the PEA (16 grams per ton), or a little better. But again, the lack of announcement is puzzling. If the ore results are decent and near PEA pro-formas. again one would think we would have heard about it by now.
3. The third possibility is that the results are so darned good, they are figuring out how to announce it without creating unrealistic expectations in the investment community. I consider this to be the least likely possibility.
4. Another possibility is that the results deviate, plus-or-minus, to such a degree that management has decided to run through a larger lot than 900 tons to verify. This would be pretty unusual given the full and detailed disclosures and updates PVG is in the habit of giving.
5. A fifth possibility is that there were technical problems in the wet commissioning.
Again, I would think an announcement would have been made with respect to this.
So bottom line, something should be forthcoming and it ought to be pretty damned soon. Whatever the results, legally the insiders should not be able to trade on it. So I can discount the price weakness on general market anxiety; but again the lack of updates from management is puzzling and should really be resolved by the end of the month. I mean, how long does it take to process one-third of a day’s production and analyze the results ?
Long $PVG
Having commissioned a couple of mills with old ore, I would start with low grade ore to bed in thickeners and to get flow rates set rather than attempting to treat average or high grade ore. No mill starting up will operate at expected efficiencies initially, so you don’t want to waste good ore on the trials. A few corrections to equipment and pumping rates, etc. are par for the course so a bit of delay is not surprising. I would not expect a confirmation of grade from the commissioning; that will come with time and production.
Richard, I really appreciate your insight, but why does it take 3 weeks or more to complete the commissioning on less than half a day’s production ? If there was some technical issue with the equipment, they could say so.
You do not take 900 tons and go through the total mill circuit with the same 900 tons without having follow on material; other wise you will never fill the leach tanks and the rest of the circuit. So you have to commission slowly to bring the whole circuit up to the operating conditions. I have not seen the actual proposed circuit for this mill, but likely it will take several days of full tonnage to bring the total circuit to the operating conditions intended for the mill and leach circuit. There is little way that there will be complete metallurgical data on that first tonnage; not all of the circuit may yet be available for leaching or recovery. Commissioning will likely take a couple of months until all of the circuit is operating at near the expected rate. Until that has been achieved, I would not have put in my high grade ore as the metallurgical efficiency will not be available and you will lose part of the gold contained. The mill folks are likely very busy 24 hours a day trying to get everything to flow with the right pulp densities, the grind to become close to that expected with slowly adding mill balls to a less than loaded ball mill, etc. Typical operating curve expectations will allow 6 to 9 months prior to a mill operating at expected tonnages and extraction efficiencies. Unfortunately, I think that you need to be patient a bit longer. I would not read anything dire into not hearing an announcement at this point. And if you were to confront the engineers in charge of commissioning who are likely pretty stressed and tired at this point as to why they aren’t taking to the press, you would likely receive a profanity in return, smile. Love, Richard
That is fascinating, Richard. Thanks for taking the time to explain it.
Richard, it is really great to have someone with knowledge of this aspect of mine operations, so I hope you stay with us.
I’m plenty patient with PVG, have been in it over two years. In passing, the 900 ton figure was given by PVG.
A few questions:
1. As I understand your comments, you wouldn’t put too much into any recovery announcements for the next few months, is that correct ? Would you consider results after three months to be pretty representative ?
2. PVG has stockpiled about 200,000 tons of ore, over 60 days nameplate production.
Would there be a standard practice for the mines to stockpile better, worse, or average grades ?
3. PVG has stated they intend to run higher grade ore first, to recover capital faster.
At what poinmt do you tthink such a strategy would be implemented…after the same 90 day or so period needed to get the bugs out ?
4. As someone knowledgeable about mine operations,m what is your opinion on PVG as
an investment ? Are you long ?
1)Yes, I think that it will be a few months before the company will comment on recoveries, until the mill and the leaching and recovery process is running efficiently. I would expect the company to make some announcements about operations earlier. As efficiency of the leach reaches expectations, I would think that the company would start treating better ore that is available, so with some luck and good engineering, the three month period should be pretty representative. Additional improvements will continue to come during the next several months (years?) after that.
2)Mines will stockpile what they can mine first, which may not be the best or average grade ore. Depending on the mine plan, the early grades may vary considerably until more mining areas are opened up to allow mining ore. If they have enough tonnage of higher grade ore mineable initially, they might stockpile it separately from the rest of the stockpile.
3) They will run higher grade ore once their recoveries are sufficiently high that they can extract the values. They will want to have the bugs out before they waste high grade to low recoveries.
4) My wife is an “Irregular” and we are long PVG in our joint account. I thought it more appropriate to reply in my own name although we do have an “Irregular” account under her account name (Dunnydame).
Hope that helps some. Richard
Richard and Dunnydame…thank you for the courtesy of your excellent reply.
Richard, Thank you for that information. It’s great to have someone with your experience as one of the “Gold Gummies.” 🙂
Make that gold ore not old ore, smile!
$FFMGF – First Mining Finance Releases Third Set of Assay Results from its Goldlund Infill Drilling Program
12 of 14 drill holes intersect significant gold mineralization
VANCOUVER, BRITISH COLUMBIA–(Marketwired – May 24, 2017) – First Mining Finance Corp. (“First Mining” or the “Company”) (TSX VENTURE:FF)(OTCQX:FFMGF)(FRANKFURT:FMG) is pleased to announce the third set of assay results from its, 28,500 metre diamond drill infill program on its 100% owned Goldlund Gold Project (“Goldlund”), located near the town of Sioux Lookout in northwestern Ontario, Canada.
Highlights:
Hole GL-17-032 intersected 64.5 metres of 3.25 grams per tonne gold
Including 0.5 metres of 335.76 grams per tonne gold
Hole GL-17-059 intersected 70.5 metres of 2.50 grams per tonne gold
Including 0.5 metres of 186.49 grams per tonne gold
Hole GL-17-073 intersected 48.0 metres of 2.34 grams per tonne gold
Including 2.0 metres of 36.53 grams per tonne gold
Hole GL-17-014 intersected 6.0 metres of 30.69 grams per tonne gold
Including 2.0 metres of 91.63 grams per tonne gold
https://www.firstminingfinance.com/news/releases/index.php?content_id=242