Sunday, 25 September 2016

More State and Fiscal Policy action using free money - Turning points for Bonds?

Ambrose Evans Pritchard highlighting enormous global debt levels, issues with free market capitalism and encouragement by global institutions to government spending and investment, fiscal policy to take the baton from monetary policy, or be supported by monetary policy.

Acting Man reviews moves by the Japanese Central Bank targeting 10 year bonds to 0% giving governments free long term money to enact plans. Do the Central Banks have such control or can the bond vigilantes influence?

Sunday, 11 September 2016

Steve Saville - Explaining Moves in the Gold Price

Gold price drivers / correlations  

These are traditional flight to safety associations. 
The question will be if bonds turn as interest rates rise, if the Yen weakens due to central bank actions will gold automatically fall?

Jeff Gundlach at DoubleLine
“This idea that fiscal stimulus may be coming seems to be getting sniffed out by the bond market,” Gundlach said. More debt spending may increase the cost of government borrowing by adding supply and making investors demand higher yields...........Gundlach told Reuters this summer that his firm went “maximum negative” on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent. The 10-year now yields around 1.60 percent. All told, Gundlach said he turned short-term negative on gold and gold miners but has not sold any of his firm’s positions.


















Sunday, 4 September 2016

Gold and Silver Miner Fundamentals - 2016-Q2

Reviews from Adam Hamilton at Zeal
GDX     GDXJ     SIL

A point of particualar note; acquisition activities over the past few years have seen the "Silver Miners" become increasingly gold weighted.
A company like Silver Standard which was an ounces in the ground silver play has acquired gold mines.
Plenty more to the analysis of these companies in particular reserves and resources.
An ETF 'fundamentally' weighted by sales or production would be an interesting comparison in a bull market.






































































Canadian Venture Holds the 50 Day?

Worth keeping a close eye on this as we move into what are usually the best seasonals for gold and miners, but following an extremely big run this year.
A lot of the bigger indices and ETFs haven't done this.
Will the Venture lead or fold?


Saturday, 20 August 2016

Exploration Leaders - Quality is Important

Discussion with Brent Cook, Joe Mazumber, John-Mark Staude and Morgan Poliquin from Sprott's Natural Resources Conference

Linked HERE

  • Finance flooding into the sector
  • Questions of how long will your treasury last has become can you get more drills? How much money do you need, how quickly can you do something.
  • Many stocks have moved only justified at $1500+ gold
  • Majors have taken big write downs, slower to move aggressively, many established deposits are low quality and much higher prices, majors may move down the food chain for higher quality at lower price. Majors have a lot of marginal ounces they have written down, acquisition only makes sense for higher quality.
  • Up cycle people want to drill. Many companies just marketing, don't want to drill just finance. Better companies want to drill and find the fatal flaw quickly, not romance the project, move on.
  • Further along in the cycle, there will always be new projects and discoveries as more exploration underway.
  • investors making money in the big stocks only just beginning to trickle down, the general public isn't in yet despite big moves up from extreme bear bottom.









Saturday, 28 May 2016

Brent Cook & Joe Mazumder - Quality vs Leverage / Evaluating Stocks - at MI.Forum

Linked at IKN







Brent discusses failures at Allied Nevada, Rubicon, Midway. Lack of quality, poor supply of good projects against investment demand. Complex Industry. On drill plans, continuity, dilution, strip ratios, impacts for Dalradian, Moneta. Grade smearing - drill interval calculator.
Presentation of all data, e.g. Mirasol & Alamaden vs Otis.

Joe discusses quality vs leverage. Lower quartile long lived assets, return vs scale. Heap leach study and Kaminak gold, recoverable gold. Reservoir minerals.District scale exploration upside. Bought quality in poor market. Opposite strategy buy optionality, leverage to price, duration to cash, jurisdiction key to liquidity. Need to understand the majors gain ozs in their current portfolios as prices rise, impairments due to write downs of current assets. Low liquidity can't exit positions. Optionality has worked but needs trading focus - in a bear quality goes down too though.





































Wednesday, 25 May 2016

Gold Bull Analogues

Jordan Roy Byrne updating the current bull against previous markets, due the correction we are seeing





















And Longer Term Gold Price Bulls in Perspective !! From Jordan's presentation - HERE


Rick Rule Interviews

Interview at KWN - Here

Interview at Palisade





  • Sees likely pause of momentum trade. 
  • Big discovery would drive the whole market.
  • High quality deposits are rare, when discovered go for good prices, Reservoir, Kaminak.
  • Urgent need for exploration and discovery. Last cycle $ were spent re-treading old properties, mining markets not deposits.
  • Sticking to tried and true terrain, real large world scale discoveries taking place in politically risky locations.
  • Discipline and rationality set apart successful long term speculator. Stupidity vs reality
  • Cobalt mostly in Russia / Congo but likely for 
  • We are in a bull market, bull markets consolidate, early stage, don't get shaken out.
  • Most of the gain concentrated in the best stocks.
  • Most fortunes will be made and given back.
  • Avoids greater fool theory on 10c stocks, big positions with high quality teams.
  • Limit stocks held to those you will spend an hour a month analysing.
  • All the big winners fell 50% at least twice on way to huge gains, if know well will add to positions.
  • Moved down into high quality early exploration, prospect generators and specific names with high grade drill holes, been selling some high profile companies. Buying new names unknown, unloved with undiscovered unappreciated values, $10m caps.


Saturday, 23 April 2016

Monday, 18 April 2016

Lithium Stock List

All sensible advice is that this is a bubble, like Uranium, Rare Earths & Graphite before.
The big low cost 'salar' producers will expand to fill requirements.
As the price rises any and all project costs appear to make a return.
In the meantime many of these are the best performing stocks on the Australian and Canadian exchanges.....until....

Tuesday, 12 April 2016

Rick Rule Interviews

While continuing to warn of pullbacks, volatility and poor issuers, Rule speaks with increased conviction of the bottom being in for precious metals and their stocks.

Interview at Korelin.

Interview at KWN

Interview at Palisade
Continuing to seek a management team and deposit for large scale optionality prepared to 'do nothing'.
Biggest returns from placements with warrants but large numbers of placements are low quality.
High returns from good optionality plays. Good returns from investing in discovery after first drillholes.
Limited number of companies involved in the silver space will create a wild market.
Admits inability to sell at the top. Backing superior managements, deposits and balance sheets but when the market rolls over everything goes down, good, bad and ugly.

Gold Stocks Break Out

At Acting Man -
Gold stocks breaking out but early stage.
CEF still offering discounts and Rydex inflows still low.


Sunday, 20 March 2016

2016 Gold Stock Rally in Perspective

The fierce and persistent rally in Gold Stocks during 2016 has many awaiting a pullback. Jordan Roy-Byrne cautions against applying bear market analysis to a new bull.




Rick Rule Interview

Lessons of the last down cycle should last for 2-3 years and see gold miners earn increasing cashflow per share with a rise in gold prices, benefiting shareholders.



Identify senior and intermediate producers with growing revenues.
Real move in speculative stocks in 9 months, will be a spectacular market, understand depth and severity. Long long way to run with the correct stocks.
Precious metal streams very valuable to struggling base metals miners, streamers offer lowest cost of capital, increase quality and visibility of revenue stream, plus optionality on the streamed mine.
Loves 'optionality' companies, large deposits drilled off with nil NPV at the bottom of the cycle, must preserve the optionality, management must do almost nothing to dilute shareholders, merge and lower SG&A, number of projects then focus on the best. Spend money when the move has progressed and share prices have advanced. Easiest and most dramatic upside except for occasional discovery will be optionality plays. Preference with developement studied and permitted, but less likely. Power of private placements and warrants in micro-caps. Sellers and buyers are exhausted driving outsize moves with some bids.
Risk of appearance of being profitable during low commodity prices through high-grading.

Brent Cook & Joe Mazumder at PDAC

Seeing fundamental drivers for this upturn in previous metals.



Companies with debt had higher levels of due diligence.
Streamed assets showed poorer quality.
Change in the industry and investors looking for returns, but how long will that last if gold heads back over $1,500

Wednesday, 16 March 2016

Druckenmiller 30% in Gold

At the end of 2015 Stanley Druckenmiller held 30% of the $1bn Duquesne family office fund in GLD. Druckenmiller accumulated around $1,200 during early/mid 2015.
Druckenmiller tipped his hand when he gave a speech during Q2 2015 where he said the following:    “Our monetary policy is so much more reckless and so much more aggressively pushing the people in this room and everybody else out the risk curve that we're doubling down on the same policy that really put us there (in the 2008 financial crisis) and enabled those bad actors to do what they do. Now, no matter what you want to say about them, if we had had five or six percent interest rates, it (the housing bubble) would have never happened because they couldn't have gotten the money to do it.......This is crazy stuff we're doing. So, I would say you have to be on alert to that ending badly. Is it for sure going to end badly? Not necessarily. I don't quite know how we get out of this, but it's possible.”

Institutions - Gold & Negative Rates

Munich Re including gold investments
The world's largest reinsurer is far from alone in seeking alternative investment strategies to counter the near-zero or negative interest rates that reduce the income insurers require to pay out on policies. Munich Re has held gold in its coffers for some time and recently added a cash sum in in the two-digit million euros, Chief Executive Nikolaus von Bomhard told a news conference. "We are just trying it out, but you can see how serious the situation is," von Bomhard said. The ECB last week cut its main interest rate to zero and dropped the rate on its deposit facility to -0.4 percent from -0.3 percent, increasing the amount banks are charged to deposit funds with the central bank.

Wednesday, 3 February 2016

Sunday, 7 June 2015

PWC - Mine 2015 - The Gloves are off

PWC's annual review of the Global Mining Industry through analysis of the Top 40 Global miners.
Summary            Full PDF 54pp

OT - UK Marginal Tax Rates

UK headline tax rates are not all they seem at certain earnings threshold levels, with various traps reviewed at the FT this weekend


John Kaiser & Others - Vancouver Canvest 2015

A roundup of all Coverage by Resource Investing News, including two interviews with John Kaiser discussing several of his regular picks.

Gold miners increasingly making bite-sized developments that carry less risk

Article at Business Insider
The cautious approach will likely persist even if conditions improve, with miners increasingly teaming up on big, complex projects to share costs, expertise and risk, senior mining executives and industry watchers said.......To be sure, not all mines can be built in phases and bigger projects will find fresh appeal when gold rebounds from the current $1,175 an ounce. "The market is short-term focused," said Jeannes at Goldcorp. "If the gold price were $1,800 an ounce and the equity markets were wide open . . . our investors would be questioning us if we weren't going for the full, large, build-out." But miners have learned from the past five years, said Joseph Foster, portfolio manager at Van Eck, Barrick's biggest shareholder. "I don't think we'll see the capital cost blowouts and the margin squeezes going forward that we have in the past," Foster said. "They've learned a very hard lesson and I don't think they'll forget it."

Saturday, 6 June 2015

Brent Cook at Vancouver Canvest 2015

Reporting HERE

Another who likes Dalradian and Kaminak.
Ross Beaty invested significantly in both.

Also Brent Cook Interview on Al Korelin Show - segment 6
  • "Getting a bit more positive on the sector"
  • Lack of discoveries, looking blind, under cover, more drilling, more complex metallurgy at depth, more strip, therefore own the few economic deposits that work or those capable of finding them
  • Accumulating over summer
  • Industry wastes too much money on projects that never stand a chance.
Another recent Interview at Kitco



Discusses, and owns
  • Premier Gold, cash and 2 big projects in Nevada and JV with Centerra in Ontario.
  • Focus ventures - high margin potential phosphate project in Peru
  • B2 Gold following buyout of Papillon. Namibia and Mali high margin developments
  • Companies with cash to last over 1.5 years, and high margin legitimate projects with good people..
Avoiding 100's of juniors with market caps under $15m with no project, no cash, can go to zero. So little money out there to finance high capex low margin deposits, leads to continual dilution.

Another Interview HERE
 Really, if you own 10 solid companies that are doing solid work and have the money to stay alive and have a deposit or discovery that looks like it’s going to work, that’s all you need. You don’t need 50 companies.
Discusses and Owns

  • Pilot Gold
  • Mirasol (JV with Yamana)
  • Mariana Resources "I was just there looking at it. It’s pretty darn interesting. It’s certainly a discovery. It’s got high-grade potential" (See Interview at PDAC)
  • Likes / Owns - Fission Uranium, Denison Mines, Energy Fuels. "because they’ve got a lot of resources drilled out, permitted, ready to go. I would not spend a dime looking for uranium. There is so much uranium out there. It’s just waiting on higher prices."

Peter Spina Stock Picks at Vancouver Canvest 2015

Reporting HERE

Sunday, 31 May 2015

Eric Coffin Interview - Vancouver Show & Metals Investor Forum

As reported at IKN the traditionally large scale Cambridge House Vancouver Show looks to be poorly attended this year as junior metals exploration falls further out of favour and the companies involved run shorter of cash.

A more select "forum" has been put together with some well known letter writers.

Highlighted companies include  -  Eric Coffin's Liongold, Goldquest   -  John Kaiser on Sabina  - Brien Lundin on Balmoral & Fission 3  -   Gwen Preston's Kaminak & Pilot Gold.   -   Nevsun and First Mining Finance also announced attendance.
Post Show Review of 12 presenting companies

Eric Coffin in discussion with Gwen Preston

The Real Value of Gold in the Ground - Mickey Fulp / Cipher Research

Mercenary Geologist Mickey Fulp continues to publish an interesting series of deeper studies with Cipher Research.
Previously looking at the real long term costs and profitability of gold mining and "adequacy ratios".

The recent publication looks at the more junior "gold in the ground" explorers and developers, identifying points of over and under-valuation.

A case study of Rainy River, (with it's perfect bull ending at the start of 2011), subsequently bought out by New Gold makes clear the cycles of value creation and destruction for investors buying at different points in the discovery and development process and in particular during the bull and bear phases when capital floods in and out of the relatively small gold mining market. Valuations are leveraged to peak and increasing gold prices rather than more conservative and eventually pessimistic assumptions.
Whilst Fulp dismisses Rainy River as never being on his radar due to over-valuation it is clear that in bull markets for gold miners go-to stories emerge which can move well over "fair value". Value is far easier to find in bear markets but cheap can get cheaper until the turn.

Fulp leaves with some checklists to consider

  • Because the consulting engineering firms operate in a highly competitive business environment, they are hired with the expectation of tailoring technical reports to the client’s needs and desires.....For this reason, investors must scrutinize engineering reports carefully. It is often necessary to make adjustments to the assumptions and key variables to arrive at a more realistic project value at any point in time........As an aside, have you ever come across a negative feasibility study? Remember folks, for every failed mine, there was a positive feasibility study
  • Too often we find the so-called “experts” that lay investors choose to rely upon are not experts at all. Instead they are brokers, investment bankers, or in-house promoters whose primary interest is in collecting commissions or fees for selling stock, deals, and private placements, or earning consulting fees from the company....Folks, please make sure that you understand the motivations of any expert, analyst, broker, promoter, writer, or talking head whose advice you choose to follow. Here are a few questions you can ask that will afford valuable insight into this matter:
    • Does he own shares in the company and at what price? 
    • Is he participating in the deal or placement with his own personal funds?
    • Will he collect a commission or fees for selling you the stock or deal?
    • Does he get paid to promote the company via fees, stock, and/or options?
    • Is he or his firm underwriting the deal for a fee, commission, and/or warrants?
    • Will he give you a full disclosure statement regarding his financial relationship with the company and/or project?



John Kaiser Interview

Interview At Korelin

Kaiser believes the better juniors have bottomed while sentiment is 1/10.
Discussion of Eastmain Resources as a destination for investors bought out of Probe by Goldcorp. Believes adding value through increasing understanding of the structural controls, spent too long in the past drilling and exploring, PEA due for current deposit plus future exploration potential.

Kaiser "Tracker" report on Eastmain (much of Kaiser's work can be followed free after a short period)

















Deposit comparables from Eastmain's presentation