Month: June 2021

‘Taper’ talk from the Federal Reserve is back in focus. But for now, it’s all talk and no action.

Last week, former New York Fed President William Dudley said the central bank will begin the process of tapering – winding down its monthly asset purchases – by year end.

While echoing current Fed policymakers’ position that the recent spike in prices is “transitory,” Dudley acknowledged the likelihood of inflation persisting above 2% longer term.

“I think in the long run, are we going to see inflation… above 2%,” he said. “I think the Fed is going to succeed in doing that.”

The latest Consumer Price Index report due out on Thursday could be a doozy. The CPI is likely to come in even hotter than last month’s 4.2% annual increase.

The Fed may be forced by inflation realities to start tapering sooner than it (and Wall Street) would like.

Some Fed watchers are eying the August Jackson Hole gathering of central bankers as a potential time and place for officials to signal strongly on tapering.

A “taper tantrum” redux could roil markets heading to the fall.

Back in May 2013, then Fed chairman Ben Bernanke announced plans to taper the Quantitative Easing program. It was only words at that point, not action. Nevertheless, the stock and bond markets responded by throwing a tantrum marked by a spike in Treasury yields.

Gold prices also sold off, although they had been in a downtrend in the months prior to the Fed’s taper talk. The gold market finally bottomed out in late 2015 at $1,050/oz.

This time around, Fed Chairman Jerome Powell will undoubtedly tread more carefully when it comes to announcing any move toward curtailing bond purchases, i.e. monetizing the federal debt with new money creation.

More importantly for the outlook on precious metals markets, this time around inflation pressures are much more acute.

The pressures on the Fed to help facilitate record-high government borrowing at artificially low rates are also much more pronounced today than they were a few years ago, when budget deficits were much lower.

Gold and silver markets tend to thrive on negative real interest rates. With inflation running over 4% officially and the 10-year Treasury yielding under 1.6%, rates are deeply negative in real terms across the entire yield curve.

Precious metals markets are also on a more bullish technical footing than they were in 2013 – two years removed from major tops in 2011.

Silver, in particular, put in an historically significant low during the depths of last spring’s COVID lockdown panic and now appears to be in the early stages of a major bull market.

Meanwhile, a de-dollarization process is proceeding on the global stage, led by China, Russia, and other countries eager to ditch the U.S. currency. Some countries are embracing cryptocurrency while others are acquiring hard currency.

The Russian National Wealth Fund announced last week it will dump its U.S. dollar assets and increase its holdings of gold.

Investors who considering tapering their precious metals holdings ahead of potential Fed tightening may wish to reconsider.

Although Fed-driven volatility in metals and other markets is possible, officials are in no position to take significant action on interest rates that would make U.S. fiat dollars a compelling alternative to sound money.

      

Source: Peter Epstein for Streetwise Reports   06/04/2021

Peter Epstein of Epstein Research profiles Sassy Resources and discusses its Canadian projects located in two very active camps.

Sassy Resources Corp. (SASY:CSE; SSYRF:OTCQB) has been killing it since its shares started trading nine months ago, yet the company’s valuation remains quite low. In addition to Sassy’s flagship Golden Triangle British Columbia project, its wholly owned, privately held subsidiary Gander Gold Corp. (GGC) controls eight claims blocks {9,032 claims/~225,905 hectares} in Newfoundland.

Moving aggressively, boldly into Newfoundland has proven to be very wise. The province is red hot. Neighbor New Found Gold [NFG] announced one of North America’s best assays of the century; 25.6 m @ 146.2 g/t gold = 3,743 gram-meters. That 3,743 figure is more than Great Bear Resources’ seven best holes combined!

Bold move into Newfoundland, now largest mineral claims holder

A handful of juniors have properties within 50–60 km of NFG’s blockbuster Keats zone. Two sizable blocks (~98k + ~48k hectares) controlled by Sassy’s GGC sit west and east of Keats. Future exploration done by surrounding companies—(combined, hundred(s) of thousand(s) of meters/year)—will provide invaluable insights for Sassy’s technical team. (See map below.)

On June 1, C2C Gold Corp. announced an option on a 100% interest in two non-contiguous blocks totaling 550 hectares, adjacent to and on trend with Sokoman Minerals’ highly regarded Moosehead project. If that option were to be exercised today, C2C would be paying ~C$645/hectare. Yet, GGC’s land package has an implied value of just $84/hectare.

In other big news, Terence Coughlan, P.Geo, joined the Board. Mr. Coughlan was founding CEO of gold-silver producer GoGold Resources. He has 38 years’ experience in exploration, operations and corporate development, and is quite familiar with Newfoundland. Each of the last three public companies he’s been involved in developed a producing mine.

Also in May, Eric Sprott invested (twice) into Sassy’s GGC entity, adding to his portfolio of Newfoundland juniors including NFG, Labrador Gold, Exploits Discovery, Sokoman Minerals, Maritime Resources, C2C Gold, Canstar Resources, K9 Gold and TRU Precious Metals. GGC now has ~C$4.5 million in cash dedicated to exploration across the province.

Gold strong heading into summer, some peer valuations have already soared

Gold is @ $1,905/o., the highest since early January. Will we see another explosive gold stock rally like last summer’s? On May 31, 2020, gold began an epic 10-week rally from $1,686/oz, to an all-time (nominal) high of $2,073/oz, a gain of +23%. If gold were to repeat that performance, it would surpass $2,300/oz. by early August!

In the past three months, NFG, Exploits, Labrador and Sokoman—all pure-play Newfoundland gold stories—are up from 152% to 259%, (average of +208%). Gold is up +10.4% over that same period. Yet, shares of Sassy Resources have gained 36% ?!?

Sassy has not one, but two potential company-making opportunities. Both are in sweet spots of world-class mining jurisdictions. Both have tremendous blue-sky potential. Both are prospective for high-grade gold mineralization, plus base metals including copper and nickel.

In my view, each opportunity could easily be worth (subject to fully funded initial drill programs) as much or more than the company’s entire (partially diluted) enterprise value [“EV”] {market cap + debt – cash} of $37 million.

Note: For the purposes of this article I ascribe a value of $18 million to each property portfolio (Newfoundland and the Golden Triangle of northwestern B.C.)

The map tells the story! Sassy’s Gander Gold looks very well positioned

In Newfoundland, two of Sassy/GGC’s claims blocks really stand out. Notice in the above map how close Mt. Peyton and Gander North are, (in yellow, blocks #1 and #4), west and east of NFG’s Keats zone. Note again the sizes, ~98k and ~48k hectares. These blocks should be of tremendous interest to NFG, Marathon Gold, Sokoman, Exploits, Labrador Gold and Anaconda Mining!

Not on the map, but southwest of the main story, sits a claims block very near Matador Mining. Matador has an EV of $77 million. It hosts a past-producing mine and has an Indicated + Inferred resource of 837k ounces @ ~2 g/t gold.

Management believes its property shares key geological features with Matador. This third largest block alone (after Mt. Peyton and Gander North) could be worth $5–$10 million if found to be mineralized, or more if mineralization is widespread and shows good continuity and depth potential.

There are fewer than 18 publicly listed juniors (with EVs >$10 million) that have all or substantially all of their properties in the province. GGC controls 9,032 claims/~2,259 sq. km / ~225,905 hectares, making it the largest mineral claim holder in Newfoundland. [Exploits reportedly controls 2,111 sq. km]

Gander Gold appears cheap vs. Newfoundland peers

Imagine how much GGC’s considerable land package could be worth to a mid-tier or major wanting to enter Newfoundland? In the chart below, 11 pure-play Newfoundland and Labrador gold juniors are valued in the market at $21 million to $181 million (average = $65 million). Only two (Maritime and Matador) have delivered maiden resource estimates.

By contrast, the implied value of Sassy’s footprint is $19 million. How do I arrive at that valuation? I ascribe $18 million of value to Sassy’s well located, high-grade Golden Triangle project.

As the largest mineral claims holder in Newfoundland, and with two sizable blocks very near NFG, and the best parts of Labrador Gold, Sokoman and Exploits, one could argue that GGCs valuation should be headed towards the top of the chart (subject to success with the drill bit).

Mid-tiers and majors operating in the Timmins, Kirkland Lake, Abitibi Greenstone, Golden Triangle, Red Lake districts are no doubt closely watching developments in Newfoundland.

In the peers table above, the average EV/hectare ratio is $1,305/hectare. Sassy’s GGC is trading at an implied ratio of $84/ha. To be fair, most of the peers are more advanced, but even still, should GGC be valued at a 94% discount on this metric?

It seems very likely that in addition to Marathon Gold entering production in a few years, multiple gold mines will be built in Newfoundland. The same dynamic is at play in B.C.’s Golden Triangle.

Drilling starts soon at Flagship Foremore project in the Golden Triangle

Turning to the Golden Triangle (GT), Sassy has an exciting and substantive, 14,585-hectare project in the Eskay Camp, the heart of the GT. The Foremore project is Sassy’s flagship asset, although GGC is clearly gaining traction.

By way of comparison, Sassy’s 14,585 ha footprint is similar in size to other high-profile projects like Skeena Resources’ Eskay Creek at 6,151 ha or Ascot’s Red Mountain (17,125 ha). Tudor Gold owns 60% of the (17,913 ha) Treaty Creek, and Benchmark Minerals has the (14,000 ha) Lawyers project.

Management remains optimistic about the dozen promising zones at Foremore. Not all 12 will be drilled this season, but Westmore is high on the list. Aside from Westmore, phase 2 drilling will be in the Hanging Valley. CEO Mark Scott wants to “map and ground-truth a number of potential drill targets in the Hanging Valley, especially around the SG, Sunday and Boulder showings.”

Holes will be added to the phase 2 program if early-season exploration results warrant it. The scope of the planned program will be roughly the same as last year’s, a base case of ~3,000 meters of drilling. In addition, prospecting, surface sampling and mapping of additional intrusive rocks elsewhere on the Foremore property will be ongoing.

Sassy appears cheap vs. Golden Triangle peers

Above is a chart showing the top 18 pre-construction juniors in the GT. Five have current mineral resource estimates, one has a PEA and another a DFS. These 18 are trading at an average EV of $199 million. The average (partially diluted; includes deeply in-the-money warrants + options) share count = 166 million shares vs. just 50 million at Sassy.

Good drill results from peers in BOTH jurisdictions will be good news for all. Early-stage exploration in top area plays, seeking high-grade mineralization, in safe locations, led by expert teams, in a bull market for gold, silver, copper and nickel—it’s hard to beat that combination of factors!

CONCLUSION

It’s now June. Exploration and drilling in the GT are heating up, with assays released from August on. If one believes in gold and copper prices remaining stronger for longer—then one should consider digging deeper into Sassy Resources’ portfolio of properties in Newfoundland and the Golden Triangle.

There will be a few dozen more hugely successful companies like Great Bear, New Found Gold, Skeena Resources, Eskay Mining and Filo Mining minted in the next few years. This could be a once in a generation-type investment opportunity for select natural resource juniors.

Sassy Resources (CSE: SASY) / (OTCQB: SSYRF) has multiple compelling shots to strike it rich and see its valuation potentially soar above $100 million. Consider that Sassy traded as high as $1.24 BEFORE management secured its first property in Newfoundland. Shares last traded at $0.79, 36% below the high. I believe this company is twice as valuable today as it was when shares topped out at $1.24.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

Disclosures: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Sassy Resources, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not 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 under any circumstances 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 Sassy Resources 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, Sassy Resources was an advertiser on [ER] and Peter Epstein owned shares in the company.

Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. 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 & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

Streetwise Reports Disclosure:
1) Peter Epstein’s disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) 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. 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. 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 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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sassy Resources, a company mentioned in this article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sassy Resources, a company mentioned in this article.

( Companies Mentioned: SASY:CSE,
)