Month: December 2020

Gold prices steady, back off a bit following FOMC statement  Kitco NEWS

Gold Price Forecast – Gold Markets Testing 50 EMA  FX Empire

Price gains in gold, silver and bulls have momentum  Kitco NEWS

Source: Peter Epstein for Streetwise Reports   12/15/2020

Peter Epstein of Epstein Research speaks with Golden Independence Mining’s CEO about the company’s “simple, low-risk” heap leach project in Nevada.

Note: For the purposes of this article/interview, all references to historical or prospective mineral resource estimates at the Independence Gold project are on a 100% basis. Management expects to earn a 51% interest in the project by 12/31/21. Management then has the option to acquire (up to) a 75% interest, by spending (up to) US$10 million more over four years (2022–2025).

Golden Independence Mining Corp. (IGLD:CSE; GIDMF:OTCQB) is flying under the radar, with its flagship project in Nevada on property within Nevada Gold Mines’ (NGM; a joint venture between Barrick Gold Corp. [ABX:TSX; GOLD:NYSE] and Newmont Corp. [NEM:NYSE]) Environmental Impact Statement and Permitted Plan of Operations footprint. The Independence Gold project is just 0.5 km southwest and adjoins to NGM’s Phoenix-Fortitude mining operations in the Battle Mountain-Cortez trend.

Management is proposing an initial low-cost, low-risk, heap leach project that could potentially grow into a bigger operation incorporating already identified, much deeper, higher-grade (6.5 g/t Inferred) sulfide mineralization.

IGLD is earning up to 75% of a brownfields project with an historical (non-NI-43-101 compliant) resource estimate from 2010 of just over 1.0 million gold equivalent ounces—343,000 of which are in a shallow oxide zone. The overall resource comprises oxide epithermal mineralization, plus a deeper sulfide Carlin gold skarn zone. Mineralization remains open along strike and at depth.

The main focus is next year’s new mineral resource estimate and a preliminary economic assessment (PEA). Only the near-surface oxide ounces will be considered in the PEA. Over 50 holes were drilled after the 2010 resource was published. Those holes, plus new holes from this year, will be added to the next resource. Some of the best historical drill intersections were reiterated in this recent press release.

Management has ~$3 million (~$3M)in cash to fund its phase 1 drill program, which was recently expanded to ~18,000 feet/20–22 RC (reverse circulation) drill holes and 3–5 diamond core holes. More than $34Mhas been invested, and >200 drill holes logged prior to IGLD starting work on the project. Golden Independence has 31.6M shares outstanding for a market cap of $15.4M.

With zero debt and $3Min cash, the enterprise value is $12.4M = US$10M. Note: Shares outstanding and cash is increasing this month due to an accelerated warrant exercise campaign ending Dec. 28.

Importantly, a new CEO/director was appointed last month, as Tim Henneberry transitioned into the role of president/director, as planned. Christos Doulis has 25 years’ direct metals and mining experience in the realms of equity research, capital markets and investment banking, including a significant background in Nevada operations. See his full bio here.

I’ve had a few conversations and email exchanges with him, he knows exactly what investors and strategic partners are looking for. The following is an interview of CEO Doulis conducted Dec. 8¬–10.

Peter Epstein: Subsequent to the 2010 resource calculation, there have been over 50 new holes, and a 12,000-foot (~3,660 m) phase 1 drill program is currently underway. Do you have a conceptual target of how large your upcoming (Q1/2021) mineral resource estimate could be?

Christos Doulis: We hope to be able to report ~500,000 low-risk, near-surface, high-quality, Measured, Indicated and Inferred oxide-only ounces in our next resource estimate, which should be out in March or April. That’s low-hanging fruit. The much deeper, higher-grade material is valuable, but won’t be exploited before we throw a lot of tonnage onto our heap leach pads.

We believe that 500,000 ounces could potentially support a seven or eight-year mine life at 50 or 60,000 ounces per year in a PEA, which we hope to deliver in the second half of next year. Ongoing drilling in 2021/22 could add a few hundred thousand shallow, oxide-only ounces.

In addition, we’re looking at opportunities to acquire ounces from deposits located within economic trucking distance of our heap leach pads. Once we have established a mine and are generating cash flow, we will look to explore and develop our higher-grade sulfide resources, which currently sit at nearly 800,000 Inferred ounces at 6.5 g/t gold [that’s an undiluted, in-situ value of ~US$382/tonne].

PE: In reading your corporate presentation, it seems that the Independence Gold project could potentially be fast-tracked. Please describe the steps that could get you into production sooner.

CD: We’re proposing a modest, low-risk project to start. Since our proposed operations would be contained within NGM’s Plan of Operations, we believe several permitting, environmental and reclamation steps could potentially be pursued faster than usual.

For example, we’re fully permitted for the exploration and development drilling of over 160 drill holes from 80 drill sites. And, we think that we can get our heap leach-related permits, once we start that process, within 24 months, [versus three or four years for less well-positioned juniors in Nevada].

If the gold price remains strong, that would really help us attract project financing. The average gold price in the six-year period from 2014–2019 was $1,267/ ounce (oz). Today it’s $1,840/oz, after having touched $2,074/oz in early August. PEA and feasibility studies done during that period used gold price assumptions of $1,200–$1,350/oz. Recent studies are using $1,500–$1,600/oz gold.

PE: Why should readers consider buying shares of Golden Independence Mining (CSE: IGLD) instead of the dozens of other precious metal juniors in Nevada?

CD: There are many companies and projects to choose from, but investors should favor management teams with the experience and good judgement to choose safe, world-class jurisdictions and low-risk projects. In a low-price environment, heap leach operations in Nevada are a different story, but at today’s levels — they’re printing money.

Readers should look for companies that can raise investment capital, explore, develop and place into production projects within three to four years. Most early-stage projects in Nevada are six to 10 years from production. Finally, we believe that U.S. investors are going to become increasingly interested in investing in U.S.-based precious metal mines.

Based on recent gold junior PEAs, if we can model an initial heap leach mine at $1,550–$1,600/oz gold, and a seven- or eight-year mine life, at 50 or 60,000 ounces/year—that would be a small, but nicely profitable operation with ample room to grow. This is what we hope to achieve in a PEA as soon as the second half of next year, subject, of course, to the analysis of third-party consultants.

There are dozens of heap leach projects at PEA/PFS stage in the U.S. Projects like ours have after-tax NPV (5%)’s of about CA$100M [see above chart of U.S. heap leach projects at PEA stage]. Another way of thinking about our company’s low relative valuation is by looking at our enterprise value (EV) divided by resource ounces. We’re trading at about $24 per ounce in the ground (assuming sulfide ounces are worth half that of oxide ounces).

Despite having more complex projects, in more challenging jurisdictions that will take twice as long to reach commercial production—many peers trade at two to three times our EV/oz. multiple. Golden Independence Mining is a relatively low-risk, high-quality, near-surface oxide play in a safe, prolific location. Longer-term upside can be found in our higher grade, deep sulfide resources [currently at ~800,000 ounces, with ample room to grow, and grading 6.5 g/t gold].

PE: Thank you Christos. I look forward to continued near-term progress on your near-surface resource expansion, and on your plans to deliver a PEA in H2/2021!

Disclosures / disclaimers: The content of this article/interview is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Golden Independence Mining, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Golden Independence Mining are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.

At the time this article was posted, Peter Epstein owned stock options in Golden Independence Mining, and the Company was an advertiser on [ER].

While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover any specific events or news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

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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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

( Companies Mentioned: IGLD:CSE; GIDMF:OTCQB,
)

Source: Peter Krauth for Streetwise Reports   12/15/2020

Peter Krauth explains why he believes gold will reach record highs next year.

Gold is winding up to set new all-time high record prices next year.

I know it may not feel that way for some right now, with gold correcting and consolidating since early August.

Still, the last four months have been productive. By now gold has worked off most of the excess bullish sentiment its market had built up. Gold’s huge 38% gain between March and August was exciting, but not entirely sustainable.

A correction from that point was likely, as most who’d wanted to buy had bought. Unfortunately, many did so in the last month or two of that rally. When gold retreated, those who saw some or all of their gains evaporate, and lacked conviction, became sellers.

But now most of that sentiment has rebalanced along with declining volumes. However, gold remains in its early days of a solid, multi-year bull market. The fundamentals are only becoming more supportive. And gold prices remain near all-time record highs in every existing currency.

The outlook could hardly be more bullish. And I expect we will see new record high nominal gold prices in every major currency next year.

Gold Highs Around the World

One of the hallmarks of a secular gold bull market is its performance in all currencies. When gold keeps establishing new highs, then it’s a key indicator of gold’s ongoing strength.

Here’s a look at gold’s performance in the world’s most commonly used currencies for perspective.

As you can see, over the past ten years, which includes gold’s peak in many currencies back in 2011, gold established a record high this year in every single one.

It’s true that it has retreated in recent months, but that’s just normal ebbing that comes after flowing. Expecting gold to rise in a straight line is simply unrealistic.

Like I’ve said many times, more stimulus is coming. Businesses are hurting, and unemployment remains stubbornly high. Fed Chair Powell’s comment in June that “…we’re not even thinking about thinking about raising rates…” underscores that low rates are here to stay.

In fact, the trend towards negative real rates began in late 2018.

That’s when the Fed raised rates for the last time. The market was not happy, as evidenced by the S&P 500 index’s volatility in 2018, and even ending that year with a loss.

Interestingly, the 10-year Treasury Inflation-Indexed Security initially bottomed on the very day gold peaked: August 6th. It began rising, and gold began falling. But then it peaked in early November. Within weeks, gold appears to have bottomed.

Rumblings about the Fed initiating yield curve control (YCC) to manage longer-term rates have grown louder. The last thing the Fed wants is longer rates to climb, which will discourage fund flows into equities. Sideways action in the S&P 500 between early September and early November once again indicates the markets didn’t appreciate rising rates. Here again, stocks bottomed in early November and started to rise as the 10-year Treasury Inflation-Indexed Security topped.

So Where Is Gold Headed Next?

Let’s take a closer look at gold’s action over the recent past.

Despite testing its 200-day moving average in late November, gold’s held well above that level since. Both the RSI and MACD also bottomed at that point and have trended higher, reinforcing gold’s gains of the last month.

That doesn’t rule out a retest, however. We could still revisit gold’s late November low of $1,775. But with over 4 months of correction/consolidation behind us, odds are good that we’ve already seen most of the selling. There could be overhead resistance at $1,877, the 50-day moving average. But once that’s overcome, we could see a new rally begin in earnest.

What’s more, we’re now entering the historically strongest seasonal period of the year for gold.

December to February tends to bring some of the biggest gains for gold, starting with Christmas holiday buying, then topping out with Chinese New Year purchases in late February. Add in a late January presidential inauguration, combined with growing expectations for more stimulus, further supported by a few more challenging winter months of Covid-19 restrictions, and gold could well soar.

I expect gold will not only perform well in 2021, but establish a new all-time nominal high in U.S. dollars and all other currencies as well. In my view, gold is likely to reach US$2,300 at some point next year.

Gold is heading higher, and we gold bulls have the world’s major central banks and profligate governments to thank for that.

Now’s the time for gold. Buy the dips.

–Peter Krauth

Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in energy, metals and mining stocks. He has been editor of a widely circulated resource newsletter, and contributed numerous articles to Kitco.com, BNN Bloomberg and the Financial Post. Krauth holds a Master of Business Administration from McGill University and is headquartered in resource-rich Canada.

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Disclosure:
1) 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. Streetwise Reports was not involved in any aspect of the article preparation. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

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