‘We are sitting on economic cliff’: Gold price will be ‘well north of $2000 this year’ – ex-JP Morgan MD Kitco NEWS
Month: April 2021
Gold price is starting to find its ‘mojo,’ should test $1900 before year-end, says TD Securities Kitco NEWS
Gold edges lower as traders await this week’s Fed meeting MarketWatch
Gold, silver pausing ahead of FOMC meeting Kitco NEWS
Gold Price Forecast – Gold Markets Continue to Get Squeezed FX Empire
Is Bitcoin losing its luster?
Prices for the cryptocurrency have slid from a high of over $64,000 on April 14th to under $48,000 in trading this past weekend.
The 25% sell-off would be akin to a crash in the S&P 500. But for crypto markets, that kind of volatility is fairly routine.
Bitcoin is still substantially higher for the year. And cryptocurrency “hodlers” continue to eye much higher prices ahead.
Nevertheless, Bitcoin’s volatility makes it very difficult to serve the functions of a conventional currency.
For example, there is virtually no institutional lending or borrowing denominated in Bitcoin.
And few counterparties are willing to sign long-term contracts such as monthly leases with future payments to be made in cryptocurrency.
In contrast to Bitcoin, gold’s volatility profile is much lower.
Having thousands of years of history behind it as a store of value also provides more certainty that gold will continue to hold value far into the future.
Gold is considered by the Bank for International Settlements to be a “Tier 1” asset within the financial system – meaning banks can hold it as qualified reserves with no discount – along with cash and high-quality debt instruments.
While you’re unlikely to be able to walk into a commercial bank and get a certificate of deposit or a loan denominated in gold, you can pledge gold assets as collateral.
Meanwhile, innovations in gold-backed finance are making interest-bearing gold instruments a reality.
Monetary Metals & Co. issues gold-based bonds: “A Gold Bond is similar to a conventional dollar bond, except that the face value is denominated in ounces of gold, and the interest and principal are paid in gold.”
Meanwhile, Money Metals Capital Group offers loans against physical precious metals holdings.
If you own at least $35,000 worth of precious metals and store them in the Class 3 vaulting facility operated by Money Metals Depository, you may be eligible for a low-interest loan for business or investment purposes (if allowed in your state).
Another way gold can be harnessed for financial transactions is through gold clause contracts that define gold as the means of payment. They allow both parties to an exchange to avoid transacting in dollars.
Gold clause contracts can be especially useful in long-term agreements such as loans and leases. If you’re going to be the recipient of a long-term payment stream, you can avoid the risks of currency debasement by insisting on gold. And if you’re going to be the one making payments, offering to pay in gold can give you leverage to negotiate for better terms.
A gold clause contract is perfectly legal. That said, there are many nuances that go into drafting it properly. Full enforcement of the contract to prevent dollars from being substituted for gold will depend on your state’s laws.
Some legal and tax barriers to gold and silver being able to compete freely with the U.S. dollar exist at both the state and federal level.
One of the biggest impediments is that gold and silver aren’t recognized as money in the tax laws. Therefore, federal income taxes are imposed on realized “gains” on sound money (which are largely a reflection of losses in the dollar’s purchasing power).
Rep. Alex Mooney’s Monetary Metals Tax Neutrality Act (H.R. 2284) would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation. “My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and are legal tender,” Rep. Mooney said.
There is obviously no Constitutional basis for Bitcoin as money. Cryptocurrency has recently drawn the ire of politicians and regulators, who are bent on restricting or banning its use, in a way that gold hasn’t.
That doesn’t mean cryptocurrencies can’t continue to flourish as alternative digital assets.
And it doesn’t mean that they do not represent remarkable innovations with excellent use cases.
In fact, Money Metals is the top U.S. dealer when it comes to use of crypto currencies as a payment medium for customers who wish to buy or sell precious metals.
But especially given the hostility of the global banking system shows toward cryptocurrencies, their prospects for being integrated into the financial system could be limited, and their ability to serve as long-term stores of value currently rests on speculation.
Gold is a more stable form of money. Beyond merely being hoarded for wealth protection, it can also play an important role in banking, finance, and contracts.
Source: Streetwise Reports 04/23/2021
BMO Capital Markets initiated coverage of Corvus Gold with an “Outperform (Speculative)” rating as it expects that additional exploration and infill drilling will expand Corvus’ resource base, further driving a higher net asset value and share price multiple.
In an April 15 research note, BMO Capital Markets Analyst Brian Quast advised that the firm is initiating coverage of Corvus Gold Inc. (KOR:TSX) with an “Outperform (Speculative)” rating and a price target of CA$3.50/share. The shares are currently trading at around2.50. CA$
BMO Capital Markets believes that Corvus Gold’s senior management team has demonstrated its capabilities of making highly prospective discoveries as evidenced at its properties. BMO Capital anticipates that continued drilling will serve to expand the resource base and therefore drive an increase in NAV and expand the share price multiple to levels similar to other small producers operating in top-tier jurisdictions. The analyst noted that Corvus presently trades at around 0.8x P/NAV, which is comparable to several other project developers covered by BMO Capital Markets.
“”We assert that a premium valuation is warranted given Corvus’s highly prospective properties in the world’s leading mining jurisdiction, Nevada,” Quast wrote, adding, “We believe that exploration and infill drilling will expand Corvus’ resource base further, driving the company’s NAV higher and that the stock will experience multiple expansion as its projects advance toward production.”
The analyst pointed out that the financial projections prepared for the company were based primarily upon the November 2020 Preliminary Economic Assessments (PEAs) for both the North Bullfrog Project (NBP) and Mother Lode Project (MLP). Using what it called fairly conservative metal price estimates of US$1,400/oz Au, BMO assigned NBP a value of US$387 million and MLP a value of US$139 million.
Corvus is expected to fund construction and development of each project utilizing a combination of both debt and equity and will be able to leverage cash flow from NBP in order to finance mine construction at MLP.
BMO stated that “to finance the US$167 million of initial capital for NBP, we assume that Corvus will raise approximately CA$220 million, CA$120 million of equity and CA$100 million of debt.”
“The prime location of Corvus’ assets in Nevada along a known occurrence of mineralization — the Walker Lane Trend — is a definite positive for the company,” Quast wrote. “So far, 80 Moz gold and 700 Moz silver have been discovered in this trend,
and Nevada is one of the world’s best-known mining jurisdictions.”
Quast noted that key catalysts for Corvus will be derived from successful exploration drilling at high priority targets, positive results from expansion and infill drilling and the firm’s performance in achieving various development milestones at NBP.
Corvus Gold is a precious metals exploration and development company based in Vancouver, B.C. The analyst stated that Corvus has a large Measured and Indicated resource totaling 3.7 Moz gold and 11.8 Moz silver at its two primary assets.
The analyst noted that Corvus’ Board of Directors and management team are composed largely of former AngloGold Ashanti (AU:NYSE) operations managers and executives.
BMO advised that according to the data included in the respective PEAs, NBP offers a 15-year mine life with life-of-mine (LOM) gold production of 1.46 Moz and LOM silver production of 3.20 Moz, and MLP includes a 9-year mine life with LOM gold production of 1.35 Moz and LOM silver production of 626 Koz.
Corvus Gold has a market cap of about CA$300 million with 127 million common shares outstanding.
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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
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 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.
Disclosures from BMO Capital Markets, Corvus Gold, April 15, 2021
IMPORTANT DISCLOSURES
Analyst’s Certification
I, Brian Quast, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from Corvus Gold.
Disclosure 6C: Corvus Gold is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services.
Disclosure 18: A redacted draft of this report was previously shown to Corvus Gold (for fact checking purposes) and changes were made to the report before publication.
For Important Disclosures on the stocks discussed in this report, please click here.
( Companies Mentioned: KOR:TSX,
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