Gold News Today

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Gold and silver markets sprung higher on Thursday as April and second quarter trading kicked off. After suffering losses in the first quarter, precious metals may now be due for a spring rally.

Despite gaining ground yesterday, gold finished the holiday-shortened trading week down fractionally overall at $1,738 an ounce. Silver, meanwhile, gave up just 8 cents on the week to close at $25.16 per ounce.

Mining stocks outperformed, which is usually a bullish sign for the metals. Shares of major gold streaming company Franco-Nevada broke out to a 3-month high. Perhaps the mining stock indexes will soon follow suit, along with gold and silver prices.

Turning to platinum, the market gained 2.2% this week to trade at $1,228. And finally, palladium fell a slight 0.2% to come in at $2,714 an ounce.

The U.S. Dollar Index was up slightly this week. Regardless of how the dollar fares against other fiat currencies, investors can expect massive depreciation ahead in real terms. There is no end in sight to the inflationary cycle of spending, borrowing, and printing in Washington.

This week President Joe Biden promoted a so-called infrastructure package that comes in at more than $2 trillion.

Much of the proposed spending has nothing to do with paving roads, building bridges, or expanding ports. These sorts of transportation upgrades are slated to only get $115 billion. Meanwhile, Biden would spend $174 billion on electric vehicle subsidies and hundreds of billions more on various “green” and racial leveling programs.

The bulk of the proposed spending appears to be very much inspired by the World Economic Forum’s Build Back Better agenda – also known as the Great Reset.

Of course, the Federal Reserve will be expected to play its part. Even though the Biden administration and Democrats in Congress are talking about raising revenues through tax hikes on corporations and investors, they will keep spending regardless of tax receipts. They will issue more debt, and the Fed will print more currency to cover it.

Although the news out of Washington is pretty grim these days from the standpoint of sound money, precious metals investors do have a few allies in the halls of Congress.

On Tuesday, Representative Alex Mooney re-introduced legislation that would remove all federal income taxation from gold and silver coins and bullion.

Mooney’s Monetary Metals Tax Neutrality Act is backed by the Sound Money Defense League. It 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.

Acting unilaterally, Internal Revenue Service bureaucrats have placed gold and silver in the same “collectibles” category as artwork, Beanie Babies, and baseball cards. This classification subjects the monetary metals to a discriminatory long-term capital gains tax rate of 28%.

Sound money activists have long pointed out it is inappropriate to apply any federal income tax, regardless of the rate, against the only kind of money named in the U.S. Constitution.

Furthermore, the U.S. Mint continuously mints coins of gold, silver, platinum, and palladium and gives each of these coins a legal tender value denominated in U.S. dollars. This formal status as U.S. money further underscores the peculiarity of the IRS’s tax treatment.

Under current IRS policy, a taxpayer who sells his precious metals may end up with a capital “gain” in terms of Federal Reserve Notes and must pay federal income taxes on this “gain.”

But the capital “gain” is not necessarily a real gain. It is often a nominal gain that simply results from the inflation created by the Federal Reserve and the attendant decline in the Federal Reserve Note dollar’s purchasing power.

The Monetary Metals Tax Neutrality Act would protect precious metals holders from income taxes on nominal gains when they sell.

Unfortunately, the current leadership in Congress is more interested in bills that would extract additional revenue from taxpayers. House Speaker Nancy Pelosi is unlikely to take up any sound money legislation.

But other members of Congress can be persuaded to join the fight for fairer tax treatment of precious metals and help build longer-term political momentum.

The recent surge in demand for bullion reflects growing numbers of people across the country becoming precious metals investors. Mints remain backed up and supplies of popular products remain scarce amid the buying pressure.

We have also seen a huge increase in internet activism focused specifically on silver. The Wall Street Silver Reddit forum promotes physical silver buying through clever online memes and real-world campaigns aimed at squeezing the big institutional paper market short sellers.

The “silver squeeze” movement could translate not only into much higher silver prices but a much higher profile for sound money issues.

In the meantime, those concerned about their bullion holdings being taxed should remember that income taxes only apply upon sales. Long-term holders don’t have to worry about filing annual tax paperwork like they do with interest-bearing bank accounts or bonds.

Physical precious metals can also be held within an Individual Retirement Account, providing tax sheltering on any transactions executed within the IRA.

It can be a great tool for protecting against the twin threats of inflation and taxation. And unlike with ETFs that track the paper market prices of metals and must be sold for cash, you can withdraw your bullion and take direct physical possession of it under normal IRA distribution rules.

More information on setting up a Self-Directed Precious Metals IRA can be found on our website at MoneyMetals.com or by calling one of our Specialists at 1-800-800-1865.

In other developments, you may have noticed the financial narrative in recent weeks has increasingly included concerns about inflation. This inflationary scare comes at a time when the government is unleashing massive stimulus measures to bailout states, businesses, and consumers – all in the name of combatting the pandemic.

We’ve already seen a $1.9 trillion helicopter money drop this year, and the Biden administration appears just to be getting started.

The latest reading of government’s CPI (Consumer Price Index) continues to suggest that inflation so far remains low. Even if we do experience high inflation, government officials continue to assure, it will be transitory. Despite these weak guarantees, financial establishment luminaries are starting to sound the alarm.

Even Former Treasury Secretary Lawrence Summers along with former IMF Chief Economist Olivier Blanchard recently voiced concerns over President Joe Biden’s $1.9 trillion stimulus plan, suggesting that so much new largess on top of all last year’s large stimulus packages could cause the economy to “overheat.”

Inflation is a tax on savers, wage earners, and those without sound money or hard assets, so while the exact definition of “overheat” remains under debate, it seems clear that a sudden rise in price pressures could cause the Fed to lift rates rapidly, potentially causing job losses and other issues as the economy slows.

Such a scenario could lead to a period of higher inflation, or even 1970s-style stagflation.

Considering more than 25% of all U.S. Dollars ever printed have been printed in the last year, would anyone be surprised?

The ongoing threat of inflation – and actual inflation – will lead to more buying of gold, silver, and other hard assets. Especially since Fed chief Jerome Powell has said that the central bank would be happy to allow inflation to run hot for a while before taking any action.

This means that the central bankers will not hike interest rates or roll back bond purchases to slow things down. And when government-reported inflation rises well above 2%, while interest rates remain at lower levels, the resulting negative real interest rates will underpin gold prices.

The gold and silver markets may very well have entered a win/win scenario.

The market has already been buoyed by ultra-low interest rates, quantitative easing, and the threat of rising price pressures.

And even if the Fed ultimately hikes rates, if history is any guide, central bankers will be behind the curve – and gold and silver will benefit from real interest rates that continue to remain in negative territory.

That’s why precious metals may well rise in price regardless of what the Fed does or does not do in the years ahead.

Well, that will do it for this week. Be sure to check back next Friday for our next Weekly Market Wrap Podcast. Until then this has been Mike Gleason with Money Metals Exchange, thanks for listening and have a great Easter weekend everybody.

      

Source: Streetwise Reports   04/01/2021

A CIBC report discusses Wheaton Precious Metal’s acquisition of a gold stream at Santo Domingo.

In a March 25 research note, CIBC analyst Cosmos Chiu reported that Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) agreed to purchase from Capstone Mining a gold stream on future production from its Santo Domingo copper-iron-gold project in Chile for $290 million.

“This is a good transaction for Wheaton Precious Metals, furthering the relationship with a known partner in Capstone Mining at an asset that is projected to be first quartile in terms of production costs,” Chiu wrote.

He explained that with the stream, Wheaton Precious Metals will get 100% of the payable gold production from Santo Domingo up to 285,000 ounces (285 Koz). After that, the company’s percentage drops to and remains at 67% for the remainder of the mine’s life. Wheaton Precious will make ongoing payments equal to 18% of the spot gold price until the value of gold delivered (less the cumulative payments) equals the upfront $290 million payment. Then its payments will increase to 22% of the spot gold price.

With the stream, Chiu indicated, Wheaton Precious Metals will receive an estimated 35–40 Koz annually for the first full five years and an estimated 25-30 Koz for the first full 10 years.

Capstone is targeting 2024 as the first full year of production with initial mine construction expected to commence in late 2021.

Chiu noted that the “Santa Domingo project is a first-quartile copper-iron gold project and Chile’s only fully permitted greenfield project.”

Chiu relayed that as for the deal terms, of the total $290 million concession for the stream, Wheaton Precious Metals is to pay $30 million upon transaction close and pay the rest during project construction, subject to certain conditions. One of those is Capstone obtaining financing to cover total expected capital expenditures; according to Capstone, it needs $800 million.

“We calculate an acquisition cost valued at less than 1x price:net asset value and 7x price:cash flow (based on first five years of attributable production), which are favorable metrics, especially considering the upside potential at the asset, which hasn’t had any exploration drilling since 2011,” commented Chiu.

As for Wheaton Precious Metals’ financial standing, Chiu noted, the Canadian company had, at year-end 2020, $193 million in cash and about $1.8 billion available via its revolving credit facility.

CIBC has an Outperformer rating and a $65.60 per share target price on Wheaton Precious Metals, the current share price of which is about $38.99.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her 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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Wheaton Precious Metals, a company mentioned in this article.

Disclosures from CIBC, Wheaton Precious Metals Corp., Company Update, March 25, 2021

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.

Potential Conflicts of Interest:
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 Wheaton Precious Metals Corp. (WPM.N)

• 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: Wheaton Precious Metals Corp.

For important disclosure footnotes for companies mentioned in this report that are covered by CIBC World Markets Inc., click
here: Disclaimers & Disclosures.

( Companies Mentioned: WPM:TSX; WPM:NYSE,
)

Source: Streetwise Reports   04/01/2021

BMO Capital Markets advised that it has raised its rating on Calibre Mining Corp. to an Outperform after the firm successfully increased its mineral reserves and thereby considerably extended the projected mine life at two of its Nicaraguan gold projects.

In a March 29 research note, BMO Capital Markets research analyst Brian Quast reported that the firm is upgrading gold exploration and development company Calibre Mining Corp. (CXB:TSX; CXBMF:OTCQX) to “Outperform.” The analyst stated that the upgrade was based upon a significant increase in mineral reserves and resources as of FY/20 at its Libertad and Limon projects located in Nicaragua.

Quast explained that the increase in reserves form the basis to extend the mine life at the properties and thus raises BMO Capital’s NAV/share estimates by 7% to US$1.73, or CA$2.32.

The analyst reported that Calibre had delivered on expectations for increasing its underlying reserve base. The analyst stated that Calibre now reports probable reserves of 864 Koz Au and 1.1 Moz Ag. These amounts were said to include 568 Koz Au from Limon and 296 Koz Au from Libertad with the bulk of the resources at each location coming from open pit sources.

“Enlarging the reserve base is a milestone for Calibre, enhancing the mine life of Limon and Libertad,” Quast wrote.

The analyst pointed out further that Calibre reported Measured and Indicated resources of 1.5 Moz Au grading 4.74 g/t and Inferred resources of 1.3 Moz Au grading 4.72 g/t.

BMO noted that two new discoveries by Calibre, identified as Atravesada and Panteon, along with the potential offered by the Pavon open pit gold mine, contributed to the higher Inferred gold grades.

The analyst highlighted that ultimately the inclusion of Limon’s 462 Koz of open pit gold reserves serves to extend the Limon’s mine-life considerably.

The analyst’s report noted that key catalysts to watch for in Q1/21 are when the company is expected to release “the Pavon Pre-feasibility study, Rio Tinto Calibre exploration results and updated reserve and resource statements.”

BMO Capital Markets advised that it has raised its rating on Calibre Mining to an “Outperform” from “Market Perform” and is reiterating its CA$2.50 per share price target. The stock is currently trading at around CA$1.71.

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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, Calibre Mining Corp., March 29, 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
None.

For Important Disclosures on the stocks discussed in this report, please click here.

( Companies Mentioned: CXB:TSX; CXBMF:OTCQX,
)