Month: January 2022

Gold Hub/Staff/1-13-2022

“Dot-plot projections suggest that year-ahead Fed expectations have significantly exceeded actual target rates. More importantly though, financial market expectations of future monetary policy actions – expressed through bond yields – have historically been a key influence on gold price performance.  Consequently, gold has historically underperformed in the months leading up to a Fed tightening cycle, only to significantly outperform in the months following the first rate hike. (See below) Gold may have partly been aided by the US dollar which exhibited the opposite pattern. Finally, US equities had their strongest performance ahead of a tightening cycle but delivered softer returns thereafter.”

USAGOLD note: The World Gold Council offers a comprehensive review of gold’s prospects for 2022. In essence, it sees rising rates as a headwind for gold, but with limited effect along a six-month to one-year timeline.

Chart courtesy of the World Gold Council • • • Click to enlarge

The post Today’s top gold news & opinion first appeared on Today’s top gold news and opinion.

Over the past year, the Federal Reserve Note “dollar” has been losing value at an alarming pace as reflected by broad price level increases.

Last week’s Consumer Price Index and Producer Price Index reports put those measures of inflation at 7.0% and 9.7%, respectively.

Manufacturers had to bear the brunt of the inflation surge in 2021.

The worst may be yet to come for consumers as producers pass on their costs to wholesalers and retailers.

Some politicians, such as Senator Elizabeth Warren (D-MA) and others whose policy preferences are largely responsible for the inflation problem, have now taken to inflation demagoguery – crusading against producers for raising prices while peddling conspiracy theories about “price gouging” and collusion.

Other supporters of President Joe Biden, concerned about his plummeting job approval numbers, are trying to downplay inflation.

Republicans, of course, are trying to exploit “Bidenflation” as a winning political issue heading into this fall’s election. They note that American families will have to pay an additional $3,500 on average just to maintain their standard of living in 2022.

Hardly anyone in Washington wants to talk about the real elephant in the room, though. The Federal Reserve’s easy money policies combined with massive handouts and fiscal spending – the primary drivers of inflation – have been championed by both Republicans and Democrats.

Fed Chairman Jerome Powell was appointed and confirmed by Republicans. He has now been reappointed by a Democrat. He will soon probably be confirmed for another term with bipartisan support in the Senate.

Consumers and investors should therefore expect more of the same.

Although the Fed intends to push up interest rates, likely beginning in March with a quarter-point baby step, it is way behind the curve. The central bank would have to impose a massive series of hikes starting immediately in order to have any hope of getting out in front of rising price levels this year.

That isn’t going to happen. The powers that be in Washington and on Wall Street wouldn’t stand for it.

The currency will continue to lose value. The only question is how rapidly.

America’s fiat currency lost purchasing power last year at its steepest pace in 40 years.

Yet over that same period, the U.S. Dollar Index, which measures the currency against a basket of foreign currencies, actually gained value.

This anomalous dollar “strength” was caused by competitors such as the euro losing value even more rapidly.

Although gold is not a component of the Dollar Index, it does often behave as a currency. It is, after all, sound money – sought by individuals for wealth protection and even central banks as backing in reserves.

In the paper markets, traders may hastily hit the “sell” button on gold and silver when they see the U.S. Dollar Index strengthening. That’s one big reason why precious metals underperformed last year.

For the same reason, though, gold and silver could get a boost in 2022 if the Dollar Index begins to trend lower along with the value of the currency itself.

The Dollar Index dropped last week.

More significantly, it appears to have breached an uptrend line that had been in force since last June.

Dollar bears will be looking for confirmation of a breakdown in this week’s trading with any additional move lower. It could just be the catalyst gold and silver markets need to break out to the upside.

      

Source: Streetwise Reports   01/15/2022

If your neighbors sell their house, the sale price will tell you a lot about the value of your home. In British Columbia’s Golden Triangle, companies with mines and well-defined resource development plans are getting taken out and the remaining players — and their investors — can see the favorable writing on the wall.

If you’re buying a house, most real estate agents will preach just one mantra: location, location, location.

StrikePoint Gold Inc. (SKP:TSX.V; STKXF:OTCQB) CEO and Director Shawn Khunkhun thinks he has a nice “fixer upper” in a trendy neighborhood.

“Think of this as real estate: We’re in a neighborhood where we’re surrounded by $5 to $10 million homes, and our home is trading at $500,000 or $600,000 valuation – and there’s a reason for that. The reason is we haven’t done as much work as a company like Skeena Resources Ltd. (SKE:TSX; SKE:NYSE),” Khunkhun tells Streetwise.

“But then you look at some of the other neighbors where we have done as much work or if not more, and we’re trading at a lower valuation, I think there’s a tremendous opportunity.”

The “neighborhood” is northern British Columbia’s Golden Triangle, witness to more than 100 years of mining and home to the highest-grade mine ever discovered in North America: Barrick Gold Corp. (ABX:TSX; GOLD:NYSE)’s past-producing Eskay Creek.

Over the course of 14 years, Eskay Creek produced 3.3 million ounces (3.3 Moz) gold at an average grade of 45 grams per tonne (45 g/t) and roughly 160 Moz silver at around 2,220 g/t.

The triangle has also witnessed roughly $4.8 billion in mergers and acquisition activity over the last three years or so.

Pretium Resources Inc. (PVG:TSX; PVG:NYSE) and its high-grade Brucejack gold mine recently found itself in the crosshairs of a US$2.8-billion all-cash takeover bid from Australia’s Newcrest Mining Ltd. (NCM:ASX; NCM:TSX; NCM:PNGX).

That deal came about two years after Newcrest unloaded US$804 million to buy Imperial Metals’ Red Chris polymetallic mine at the Golden Triangle’s northern tip.

Six months earlier, in March 2019, Ascot Resources Ltd. (AOT:TSX.V) acquired IDM Mining and its Red Mountain gold-silver project (not to be confused with Red Chris).

Ascot plans to bring the past-producing Premier gold mine, acquired in a separate deal in 2018, back into production late in 2022 before bringing Red Mountain into production at some point down the road. Ascot also owns about 5% of Strikepoint.

Strikepoint acquired Willoughby, located about 6 km east of Red Mountain, in 2019 for $85,000 cash and issuing Arcwest Exploration 3 million shares. Willoughby had about 119 holes drilled on it in the 1990s by now-defunct companies like Camnor Resources and Gold Giant Minerals.

Khunkhun believes Red Mountain is in a gold system that’s part of a much larger gold system.

An April 2020 feasibility study pegged reserves at Red Mountain at 2.5 million tonnes grading 6.52 g/t gold and 20.6 g/t silver or 534,000 oz gold and 1.7 million oz silver, while reserves at Premier are 3.6 million tonnes grading 5.45 g/t gold and 19.1 g/t silver or 637,000 oz gold and 2.2 million oz silver.

“There was a significant amount of work done on (Willoughby). And we inherited a tremendous drill database that highlighted some very high-grade gold and silver intercepts,” Khunkhun tells Streetwise. “Without a doubt I knew this was one of the premier properties in the Golden Triangle. The question that I’m trying to answer is, ‘Can we prove continuity between these high-grade zones?’ If we can prove continuity, we’ve got a mine on our hands.”

Not far south of Brucejack, which initially had difficulties with continuity of its mineralized systems, Strikepoint is not just whistling Dixie. Channel samples taken from well-exposed bedrock along steep terrain at the Icefall zone at Willoughby show promise.

Highlights include 94 g/t gold and 31.04 g/t silver (3.38 g/t gold-silver equivalent) over 15 meters, which includes an interval of 11.5 g/t Au and 69.4 g/t silver or 12.53 g/t gold-silver equivalent over 2 meters.

Another sample returned 21 g/t gold and 16.61 g/t silver or 3.45 g/t gold-silver equivalent over 12 meters, including 4.46 g/t gold over 5 meters and 31.23 g/t silver (4.82 g/t gold-silver equivalent) over 3 meters.

Strikepoint also drilled 23 holes on Willoughby in 2021 but has only reported four holes – with gold-silver mineralization encountered in all of them.

Among the highlights: Hole W21-109 hit 7.34 g/t gold and 202.85 g/t silver (10.24 g/t gold-silver equivalent) over 6.16 meters. That hole was a step-out of approximately 25 meters down-dip from 2020 intercept W20-106, which intersected 10.04 g/t gold and 5.61 g/t silver (10.12 g/t gold-silver equivalent) over 7.72 meters within a broader interval of 4.19 g/t gold and 18.28 g/t silver over 27.78 meters.

Strikepoint hopes to publish the 19 remaining drill holes and additional channel sampling results in the coming weeks as assay labs everywhere attempt to process backlogged drill core.

“Once we get all of those definitive assays, and we model those 2021 results with the drilling the Strikepoint did in 2020 and 2019. And then we will factor in the historical drilling that was predominantly done in the ‘90s, and we’ll come up with a model. And we’ll go out and drill some serious meters in 2022,” Khunkhun says, adding that an initial resource estimate will likely follow this year’s drill program.

Some of the biggest players in the junior mining sector are Strikepoint shareholders. Eric Sprott owns about 16.5%, while Skeena Resources owns 6%. Other institutions with significant positions include Denver-based Crescat Capital, Vancouver-based Delbrook Capital Advisors, and Calgary-based Middlefield Capital.

Strikepoint has about 207 million shares outstanding and trades in a 52-week range of $0.12 and $0.325.

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Disclosures

1) Brian Sylvester 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 and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None.

2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Strikepoint Gold Inc. and Pretium Resources. 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) 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.

4) 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 Strikepoint Gold Inc. and Pretium Resources, companies mentioned in this article.

( Companies Mentioned: SKP:TSX.V; STKXF:OTCQB,
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