Month: March 2020

With the spread of the Global Contagion, the demand for physical precious metals has increased significantly. According to the U.S. Mint’s newest update, another million Silver Eagles were sold over the past two days. This brings to total Silver Eagle sales in March at 2.3 million, more than three times the previous month.

On my last update, the U.S. Mint sold a total of 1,345,000 Silver Eagles as of March 9th. Over the next two days, another 975,000 Silver Eagles were sold for a total of 2,320,000.

We haven’t seen this type of buying for quite some time. The U.S. Mint doesn’t sell Silver Eagles directly to the public, but rather to Authorized Purchasers who sell to the public. So, these sales figures represent purchases by the Authorized Dealers. Regardless, if the Authorized Dealers are buying a great deal more Silver Eagles in March, they are doing so because they are experiencing much higher demand from the public.

However, there may be a problem shortly for the Authorized Dealers if the U.S. Mint runs out of stocks of Silver Eagles. Why? Because, the U.S. Mint has cut back on monthly production runs of Silver Eagles due to the decreased demand for the past few years. I doubt the U.S. Mint will be able to supply another 1-2 million Silver Eagles in a short period of time. Thus, we may see the U.S. Mint suspend sales of Silver Eagles shortly until they can increase stocks.

If you do not own any physical precious metals, it may be a good idea to start DIVERSIFYING some assets into Gold and Silver. With the continued spread of the Global Contagion and coming disruptions in the Just-In-Time Inventory Supply Chain, it’s highly likely that demand for precious metals will only increase going forward. With rising demand and constrained supply, we may start to see much higher prices for gold and silver.

Source: Streetwise Reports   03/11/2020

Franco-Nevada’s Q4/19 and full-year 2019 numbers and 2020 guidance are reviewed in a CIBC report.

In a March 9 research note, CIBC analyst Cosmos Chiu reported that Franco-Nevada Corp. (FNV:TSX; FNV:NYSE) significantly beat earnings estimates in Q4/19 due to record sales of gold equivalent ounces and revenues.

Thus, CIBC increased its target price on the gold royalty streaming company to CA$162 per share from CA$157. In comparison, the stock, rated Outperformer by the bank, is trading now at around CA$140.45 per share.

Chiu highlighted that Franco-Nevada’s strong Q4/19 included record sales of 153,396 gold equivalent (Au eq) ounces. This led to full-year 2019 sales of 516,438 ounces. The total was well above the high end of guidance of 465,000–500,000 ounces (465–550 Koz) and CIBC’s forecast of 498 Koz. The high producer was the Cobre Panama mine in Panama, from which Franco Nevada received 43,554 ounces Au eq, also above guidance of 20–40 Koz.

With the strong sales, Franco Nevada posted total 2019 revenue of $844 million, surpassing consensus’ estimate of $814 million, Chiu pointed out. Full-year oil and gas revenue of $115.9 million contributed about 14% to the total revenue. This was driven by oil and gas revenue in Q4/19 of $30 million, which exceeded projections.

Q4/19 adjusted earnings per share (EPS), cash flow per share (CFPS) and EBITDA all exceeded consensus and CIBC’s estimate. Adjusted EPS was $0.59 versus $0.49, CFPS was $0.98 and EBITDA was $202 million.

At the end of 2019, Franco-Nevada had $132 million in cash and $1 billion-plus in available liquidity.

Chiu also noted that Franco-Nevada’s 2020 production guidance of 550–580 ounces of Au eq is solid and reflects a more than a 10% year-over-year (YOY) increase. A primary contributor will be Cobre Panama, in its first full year of operation. CIBC forecasts 555 Koz and consensus estimates 560 Koz. Guidance is expected to be offset by a YOY oil and gas underperformance of about 25%, assuming a West Texas Intermediate oil price of $45 per barrel. 2020 oil and gas revenue is forecast at $80–90 million.

By 2024, Franco Nevada aims to produce 580–610 Koz Au eq versus CIBC’s projection of 570 Koz.

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3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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 three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Franco-Nevada, a company mentioned in this article.

Disclosures from CIBC, Franco-Nevada Corp., Earnings Update, March 9, 2020

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

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Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Important Disclosure Footnotes for Franco-Nevada Corporation (FNV.TO)

• 2a These companies are clients for which a CIBC World Markets company has performed investment banking services in the past 12 months: Franco-Nevada Corporation
• 2e CIBC World Markets Inc. has received compensation for investment banking services from these companies in the past 12 months: Franco-Nevada Corporation
• 2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from these companies in the next 3 months: Franco-Nevada Corporation
• 7 CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities issued by these companies: Franco-Nevada Corporation

For important disclosure footnotes for companies mentioned in this report that are covered by CIBC World Markets Inc., click
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( Companies Mentioned: FNV:TSX; FNV:NYSE,
)

Source: John Newell for Streetwise Reports   03/11/2020

Technical analyst John Newell charts the Dow-Gold ratio and speculates on where it could be heading.

The Dow/Gold ratio broke a trend-line in past few weeks that could be signaling that gold could be trending higher against the Dow Jones Industrial Index in the next 18 months to two years.

An example might be a ratio of 10 or the Dow at 20,000 and gold at $2,000 (a new all-time high in U.S. dollars) equals 10.

Conversely, if the Dow went to 30,000 and gold went to $3,000, the ratio would equal 10. This is not a prediction but an observation.

What I found interesting was in the mid-1970s gold corrected from ~$200 to ~$100 and the Dow/Gold ratio went up ~260%, as it did again from the 2012 lows into mid-2019 but over a longer period.

John Newell is a portfolio manager at Fieldhouse Capital Management and president and CEO of Golden Sky Minerals Corp. He has 38 years of experience in the investment industry acting as an officer, director, portfolio manager and investment advisor with some of the largest investment firms in Canada. Newell is a specialist in precious metal equities and related commodities and is a registered portfolio manager in Canada (advising representative).

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Disclosures:
1) John Newell: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures/disclaimer below.
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3) Comments and opinions expressed are those of the specific experts 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. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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 three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Additional Disclosures and Disclaimer from John Newell, Fieldhouse Capital Management

Legal Notice / Disclaimer:

This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

John Newell has based this document on information obtained from sources he believes to be reliable, but which has not been independently verified.

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Furthermore, I, John Newell, assume no liability for any direct or indirect loss or damage or for lost profit, which you may incur because of the use and existence of the information provided within this Report.

It should not be assumed that the methods, techniques, or indicators presented in these pages will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these pages are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
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