Gold News Today

Johannesburg, 26 July 2018: Gold Fields’ South Deep mine has handed over a new home to an elderly Bekkersdal grandmother, who looks after five of her grandchildren without any financial support. 70-year old Mrs Lemphane has been living in an informal settlement in Bekkersdal, one of South Deep’s host communities in the Rand West City Local Municipality, for over 20 years.

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

Coming up we’ll hear an eye-opening interview with Craig Hemke of the TF Metals Report. Hear from the man who accurately predicted a year ago that 2019 would be the best year for gold and silver since 2010. And we’ll hear his new call for 2020. Craig also takes serious issue with some of the gold naysayers and perma-bears and calls them out for being blinded by their agendas. So, don’t miss my conversation with Craig Hemke, coming up after this week’s market update.

A wild week for markets as the U.S. and Iran come to the brink of war before both sides apparently decided it would be wiser to pull back.

After Iranian missiles hit a U.S. military base Tuesday night, gold prices surged above $1,600 an ounce. As gold headed toward a 7-year high, even the mainstream media had to take note. Jim Cramer and his fellow stock market pumpers on CNBC took time to lament the fear-driven buying of gold.

CNBC Anchor: All right. Jim, what’s caught your attention this morning beyond Citi in terms of the key to this market? Obviously, we see, broadly speaking, a down market.

Jim Cramer: It’s gold, gold, gold, gold. When I see this endless buying of gold, it makes me think, for the first time, maybe people are just saying, “I am really fearful.” It’s not just Treasures. The gold buying has been endlessly, over and over and over. There are only a few growth gold companies. The main one is Agnico Eagle. People want to buy, that’s the one to buy. But it’s relentless and it feels like gold wants to go to $1,700, $1,800. That would be very negative for the market.

CNBC Anchor: Uh, yeah.

Fear buying of gold and other safe havens ended up being short lived. After U.S. officials reported there had been no casualties and Iran stood down, fears of World War III suddenly turned into hopes for a quick end to hostilities. Wall Street celebrated as metals markets sharply reversed mid-week.

As of this Friday recording, gold is now relatively flat overall for the week to trade at $1,560 per ounce. The silver market shows a slight weekly gain of 0.2% to bring spot prices to $18.16 an ounce. Platinum is off 0.4% last Friday’s close to come in at $982.

And finally, palladium pushed through the $2,000 level for the first time ever. It currently trades at $2,129 on the heels of a 6.5% advance this week.

Well, while we can all take comfort in the tamping down of tensions between the U.S. and Iran, it would be naïve to believe that the threat of further conflict in the region is over.

It appears that Iran was in fact responsible for shooting down a Ukrainian passenger jet. If it instead had been an American Airlines jet loaded with U.S. citizens, we’d likely be seeing much more of a reaction from President Donald Trump and perhaps our military forces as well.

Iran or Iranian-backed terrorists could be planning other forms of retaliation as I speak. The assassination of Iran’s top general has stoked extreme new levels of anti-American resentment. It won’t abate anytime soon, especially as the Trump administration is vowing to impose tougher economic sanctions to punish Iran.

America is also struggling to keep Iraq from forging closer relations with Iran. Iraqis increasingly want U.S. forces out of their country.

Democracy in the Middle East never quite works out the way the foreign policy central planners in Washington envision. After so many years since 9/11, after so many trillions of dollars invested and ultimately wasted in Iraq and Afghanistan, President Trump at this point is looking for an honorable way to cut our losses.

But his neo-conservative advisors still cling to grand notions of re-making the region in our own image. And the pull of the Israeli lobby and military-industrial complex is perhaps the most powerful force in Washington. D.C. — as all Presidents come to learn.

Of course, precious metals markets will need more than occasional geopolitical flare ups to drive a long-term bull market advance. The fundamentals are turning in favor of higher gold and silver prices. From fiscally reckless trillion-dollar deficits in Washington, to a Federal Reserve obsessed with generating higher rates of inflation, to mining supplies of gold and silver looking tight, the ingredients for a big bull market are in place.

However, safe haven demand from investors has yet to pick up in a big way. We saw some of it this week, but it will likely be fleeting until the general public sees good reason to pull assets out of the stock market.

As stocks hit record highs last year, gold and silver coin sales at the U.S. Mint plunged to multi-decade lows.

The U.S. Mint sold just 152,000 ounces worth of gold American Eagles in 2019. That marks the lowest total on record going back to 1986. Meanwhile, sales of silver American Eagle coins came in at their lowest level since 2007. Now granted, a robust secondary market as a result of hordes of retail investor selling supplied the market with a cheaper alternative to the newly minted coins, and that explains part of those low numbers for 2019 U.S. minted product.

Australia’s Perth Mint, however, saw an increase in coin demand from its more internationally based buyers. Many sought physical bullion as a refuge from negative interest rates in their home countries.

As U.S. investors realize that they too face the prospect of negative real interest rates on savings and bubble valuations in equity markets, they too will increasingly find a compelling value proposition in gold and silver.

Well now, for some predictions on what 2020 will look like for the metals and the other markets, let’s get right to this week’s exclusive interview.

And be sure to check back here 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 weekend, everybody.

For the first time in more than six years, gold broke through a key level. Gold surged on Friday due to the geopolitical tensions stemming from the Middle East after the U.S. took out Iran’s top military leader.

During early trading in the early Asian markets, the gold price continued even higher, reaching $1,579.

This morning, gold is trading at the $1,575 level. It will be interesting to see if gold closes at the end of the day near its high or a low. The key resistance level is $1,550, which gold surpassed by $25.

Here is gold’s monthly chart below (each candlestick represents one month of trading).

If you look at the “Larger View” insert, I have superimposed the candlestick breaking through the Key level.

The Gold price finally broke through this level, and for it to remain in a bullish trend in the monthly chart below, it will have to close above the $1,550 (actually $1,560) level by the end of January. If we look at the next chart, the gold price surpassed the high of $1,566 in September:

Gold is currently trading at $1,574. And, if we look at the weekly gold chart, we can clearly see gold breaking through the $1,550 level:

Here we can see the three Key Levels for gold. After the big run-up in the summer, I thought gold would retest its breakout level of $1,360 before moving higher. While it’s not a guarantee that gold would retest this $1,360 level before moving higher, traders typically expect it to happen.

Furthermore, the latest Gold COT Report shows the Commercial Net Short position at the highs from last summer:

This is a very strange situation for gold. Due to the Fed continued Repo Market intervention and the $60 billion a month in U.S. Treasury purchases, it seems that gold just won’t selloff or correct down to that $1,360 breakout level.

However, with the Commercial net short position at a high, logic suggests that gold will likely correct lower before resuming its trend higher in 2020.

Moreover, at some point, the bloated U.S. stock market will need to experience a correction lower, even if it continues higher due to the massive Fed and Central Bank liquidity. Thus, the gold and silver price may correct lower with the broader markets once a correction takes place.

But, again… this is only short-term trading possibilities. The situation for the U.S. Financial and economic system is heading for a BRICK WALL. Only 1% or less of investors have diversified some of their assets into gold (and silver).

For months, there have been signs of big changes in the gold and silver markets, including indications of exceptional tightness. For example:

For some musing on these developments from two weeks ago, see this article recently published by Money Metals Exchange.

If the recent developments really signify extreme strain on the physical gold market, and if, as there is still every reason to believe, the ratio of paper claims to real metal ranges from 90 or 100 to 1 – that is, 90 or 100 claims for every ounce – an international crisis like the current one might induce enough physical buying at precisely the wrong moment for the price suppressors, causing delivery defaults and exposing the fraud of the paper gold system.

Besides, if supplies are really tight, it would not take an international crisis to explode the system. Any substantial demand for physical delivery might explode it. Indeed, many governments long have known about the fraud of the system and could have pulled the plug on it any time in the last 10 years or more just by taking enough delivery. The Russians and Chinese long have talked openly about the Western central bank policy of gold price suppression.

With the United States having recently weaponized the dollar to an unprecedented extent, is it so farfetched to imagine adversaries of the United States counterattacking by weaponizing gold, the former world reserve currency?

This is exactly what the U.S. government has feared as long ago as 1974, when U.S. Secretary of State Henry Kissinger was warned about the possibility by his deputy, Thomas O. Enders, in a meeting in Kissinger’s office. The remarkable transcript of this meeting was discovered in 2013 by gold researcher Jan Nieuwenhuis, then writing under his pen name, Koos Jansen, and was analyzed by GATA here.

The transcript remains on the internet site of the State Department’s historian, a wonderful if studiously overlooked explanation of the U.S. policy of gold price suppression:

Gold, Enders told Kissinger, is the international “reserve-creating instrument” and whoever has the most gold can change its price periodically and thereby enrich himself and alter all the world’s financial valuations in his favor. Gold, Enders explained, is the great threat to the dollar and U.S. control of the world financial system and as such it must be pushed out of the system.

In any case, the previous U.S.-instigated gold price-control system, the London Gold Pool, failed in 1968 for geopolitical reasons and the current gold price control system will fail eventually too. As was said by the leader of the doomsday cult first portrayed by some British comedians including Peter Cook and Dudley Moore back in the 1960s: “We must get a winner one day.”

Tomorrow would be as good as any!

Gold continues to move higher due to trouble in the Fed Repo and U.S. Treasury Market. In the first hour of business today, the Fed has already injected $57 billion in the Repo Market. While the Fed’s Repo Market injections didn’t spike during the last few days of 2019, as many analysts forecasted, there’s still BIG TROUBLE ahead.

Many reasons have been attributed to the break-down in the U.S. Repo Market that started on September 17th when the daily repo rate spiked to 10%. Several readers have sent me very interesting information and youtube videos on the subject matter. I thought it was a good time to sift through all the information and present my analysis on what the hell I believe is going on.

First and foremost, while there are many reasons given for why the Fed Repo rate spiked, forcing the Fed to provide hundreds of billions of dollars of short-term liquidity in the market, these are “ALL SUPERFICIAL” reasons. The major factors causing wide-spread havoc throughout the financial system are the Falling EROI- Energy Returned On Investment of oil and the Thermodynamics of oil depletion. While these are two different energy analyses, they come to the same conclusion. The financial analyst community and market are still ignoring these key energy factors.

Second, the main “SUPERFICIAL” reason that caused the Fed Repo rate to spike is that there weren’t enough buyers for the increasing amount of U.S. Treasury issuance.

After the 2008-2009 financial crisis, U.S. Government deficits ballooned, forcing the “Net Issuance” of more U.S. Treasuries. In the chart above, the net issuance of U.S. Treasuries spiked to $1,585 billion ($1.58 trillion) in 2010. However, after the economy started to recover, the net issuance of U.S. Treasuries continued to decline to only $534 billion in 2017. But, the very next year, in 2018, something changed as the U.S. Treasury net issuance surged to $1,104 billion. This was bad news… but why?

We have to remember that the Fed started reducing its balance sheet by selling U.S. Treasuries and Mortgage-Backed Securities into the market in early 2018:

So, get this… the Fed was a net seller of U.S. Treasuries and Mortgage-Backed Securities in 2018 right at the very same time, the U.S. Government’s net issuance of U.S. Treasuries doubled from $534 billion in 2017 to $1,104 billion in 2018. This had a profound impact on the U.S. Treasury rates, especially the 10 Year/3 Month Spread.

Now, to make this easy to understand, the 10-Year/3 Month Treasury rate spread shows how much more demand there is for either the shorter-term Treasuries or the longer-dated ones. If the 10-Year/3 Month spread falls, then there is more demand for the 10 year Treasury, which suggests investors are worried about an upcoming recession. The 10-Year/3 Month U.S. Treasury spread has been steadily falling since 2010 and is now only 0.02 compared to 3.08 in 2010:

According to SIMFA, the Securities Industry & Financial Markets Association, the average rate for the 10 Year U.S. Treasury (Jan-Nov) was 2.17 versus 2.15 for the 3 Month Treasury Bill. Thus, there is a positive 0.02 Spread. However, there were some real problems starting in June when the 10-Year/3 Month Treasury spread went NEGATIVE:

There is no coincidence that the Gold Price began to take off in June 2019 when the 10-Year/3 Month Treasury spread went negative… for the first time since the 2007 financial crisis began. As the 10-Year/3 Month, Treasury spread went further negative until August, the gold price continued higher to reach a peak of $1,560 at the end of the month. Then what happened in September and October?? You got it, the Fed came in and started the Repo Operations in mid-September and then announced the $60 billion a month in U.S. Treasury purchases in mid-October:

The GREEN arrow shows where the 10-Year/3 Month Treasury spread started to go negative, and over the next three months, as the spread reached a low of -0.36 in August, the gold price increased $300. The RED arrows show that when the Fed came in to save the day in September with its Repo Market operations, providing short-term liquidity, and then again in October to buy $60 billion a month, the 10-Year/3 Month spread moved higher.

If we look at the U.S. Treasury Net Issuance chart again, we can see that the U.S. Government is in trouble as it has to finance a lot more of its annual deficits:

With the global economy stalling and some regions heading into a recession, there are fewer surpluses available to be able to buy the increasing amount of U.S. Treasuries, not including the amount that is continuously rolled over.

Even though there may be a BIG PROBLEMS with individual banks that caused the Fed Repo rate to spike on September 17th, the main issue is that the U.S. Government is issuing more Treasuries than the market can absorb. Thus, the Fed had to start buying U.S. Treasuries, which helped push the 10-Year/3 Month spread back into positive territory. However, the problem isn’t over as the market mistaken assumes… IT’S JUST BEGINNING.

I believe the September 17th Fedo Repo rate spike to 10% was the CRISIS and will only get worse as time goes by.

Source: Bill Powers for Streetwise Reports   01/08/2020

Bill Powers of Mining Stock Education sits down with Kevin Drover, CEO of Aurcana, to talk about the company’s production plans for its high-grade project in Colorado.

Aurcana Corporation (AUN:TSX.V; AUNFF:OTCQX) has 100% ownership of the world’s highest-grade silver mine (P&P): the Revenue-Virginius mine in Ouray, Colorado, USA. This fully permitted mine will also be one of the lowest-cost silver producers in the world at only US$8/oz Ag (AISC) after byproduct credits. Aurcana is currently (Q1 2020) securing the final capex needed to commence production, which it expects to accomplish in Q4 2020. In this interview, Aurcana CEO Kevin Drover provides an overview of the Revenue-Virginius mine and Aurcana’s investment value proposition.

Kevin Drover has over 40 years of both domestic and international experience. He was previously VP Worldwide Operations at Kinross Gold and possesses experience in all aspects of mining industry operations, process re-engineering, project development and corporate management.

Bill Powers: I would like to welcome Aurcana Corporation president and CEO, Kevin Drover. I’ve met Kevin at the last two Beaver Creek Precious Metals Summits and have been following the company and getting updates annually at the Precious Metals Summit. So, Kevin, it’s your first time on Mining Stock Education, welcome. Please begin provide an overview of this mine that I’ve referenced with the highest grade proven and probable silver reserves in the world?

Kevin Drover: Well, thank you, Bill. Yes, this mine, it’s located in Colorado in the San Juan Mountains near the town of Ouray, and it’s up at about 10,000 feet, in that range, and it is extremely high grade. Our Proven and Probable reserves are 21 million ounces at 37 ounces of silver equivalent per ton. And I don’t know of any other mine in the world, at least that I’m aware of, with a Proven and Probable reserve of that grade. And the exploration potential of this property is quite significant as well for the future.

Bill: And you own this project 100% outright?

Kevin: We own the project 100%. We own this one, and this mine is essentially fully built. It is fully permitted. There’s a feasibility study completed and it’s ready to go. Technically, there’s nothing left to do with this mine but to put it into production and we, of course, are seeking funding to do that now.

We also have a fully-permitted, fully-built mill in place, 1,500 ton a day mill, located at the Shafter Mine in Texas and that’s near the town of Marfa, Texas. It’s currently on care and maintenance, but at some point we will need to revisit that one as well. It needs some additional technical work and that’s not our focus right now. Our primary focus is to get the Revenue-Virginius mine back into production as soon as possible.

Bill: What are some of the highlights of the Revenue-Virginius mine? The feasibility study that you referenced?

Kevin: Well, first, maybe I can just step back a second and just talk about the resources and reserves. We have a Measured and Indicated resource of 30 million ounces at 30 ounces per ton. An Inferred resource, of course, which you cannot include in your feasibility study, but it’s still an Inferred resource of 13.2 million ounces at 40 ounces per ton and ,of course, our Proven and Probable reserves are 21 million ounces at 37 ounces per ton. Currently, it’s at six and a half year mine life, an average production rate of 3.1 million ounces per year. Our all-in sustaining cost of production after byproduct credits is $8 an ounce. If you look at byproducts and convert them to silver equivalent, our all-in sustaining cost is $10.71 per ounce, which is one of the lowest cost silver producers in the world by far.

Our pre-production capital needs are $37 million. We’ve recently raised approximately $7 million in August and September, so our needs are somewhat less than that $37 million on a go-forward basis. The NPV on this project at 5% using an $18.50/ounce silver price, which is not far from where we are today, is $75 million and the IRR is 71%. Time to production from full funding is seven months.

Bill: And of your total resource, what percentage of that is actually silver?

Kevin: Probably the best way to look at that would be from a revenue perspective and silver generates 71% of the revenue. Gold will produce 8% of the revenue, lead 15% and zinc 6%. There is some copper here, but it’s not a high enough grade to make sense for us to start up our copper circuit. We do have a copper circuit in the mill, but on some of the other veins that we have, we may look at producing a copper concentrate, but right now we won’t do that.

Bill: So you’re in Colorado, you have your permit, so there’s nothing on the environmental front or the permitting front that you have to worry about. The main hurdle here is just securing the funding in order to bring the mine into production?

Kevin: That’s correct. Yes. There’s no permits required whatsoever to go into production. Our environmental, social and government relations are excellent. Our guys down there have done a fantastic job with our environmental folks in that area and of course, we’re not far from Telluride, Colorado, and it’s a primary ski area, but the guys on the ground down there have done a fantastic job. We’ve had environmental groups to the site. We’ve had most of the senators, local county commissioners, mayor and such visit our site. We enjoy a good relationship with them.

We won the Colorado environmental stewardship award last year and we continue to pay a lot of attention to our health, safety, environmental, government and community relations. The community has been extremely supportive of us down there and so we continue to enjoy that and we want to make sure that that continues on into the future as we get up and running.

Bill: Kevin, is there anything more of pertinence regarding your treasury and how you might obtain this CAPEX money that you could share with investors?

Kevin: We’re looking for a debt facility at the moment and we’ve been somewhat successful. We’re going down the road on a couple of a different routes in terms of raising that. Gary Lindsey (Investor Relations) and I were recently through Europe and we have talked to a number of entities that appear to be interested in taking a deep look at this operation here.

So, we’re rather hopeful that we’re going to be able to find the funds, certainly within the next quarter, which is what we are targeting. And there will be a debt facility. We will do some more equity as well in the next little bit here, and between those two we think we’ll have sufficient funding to be able to fully restart the project.

Bill: What about expansion potential? Do you own the full strike length and are there other veins that you could potentially target to increase your resources?

Kevin: There are significant vein systems in this particular area. This is a very prolific area of the San Juan Mountains. Over the course of the last century and a half, there’s probably been thousands of mines in this region here. We are currently the only one with a mill that’s fully permitted and ready to go into operation.

The Virginius vein that we have is rather prolific. It’s the highest-grade vein, relatively cleanest and easiest to mine. It’s rather vertical. There was one area on the Virginius vein and basically one claim that we didn’t own that interrupted our ownership of the Virginius vein. We’ve recently acquired that vein and signed an agreement. The closing of that should be relatively soon, within the next month or thereabouts. And that is contiguous to our operation where we’re actually going to be first restarting the mining.

We intend this coming spring to do a drill program on that. This is one area up there that you can drill from surface, for the most part. There are no other areas that you can really drill from surface in this particular area. So, we’re pretty excited that we’ve been able to acquire that claim and that we will start a drill program. The goal of this drill program will be to add another couple of years of mine life to the operation along with the target that we already have as we develop the underground mine up toward the Monongahela, which is the area where we will be mining first.

Bill: And typically, with these underground mines in Colorado in the mountains, you kind of have that six to eight-year runway and then you keep that six to eight-year runway often, don’t you, as you just drill and expand?

Kevin: That’s absolutely correct. These narrow vein mines, I mean they’re narrow vein, but they’re very high grade of course and almost impossible to drill from surface and in order to drill them from underground, you actually have to do a significant amount of development in order to get yourself in a position where you can access the vein so you can point your drill in the right direction. And it’s very, very costly. Not just this mine, but any narrow vein mine in the world.

For instance, I used to work for Dome Mines in Timmins, Canada. And Dome Mines was a mine that ran for 120 years and it had only about two years of reserves for those 120 years. So, nobody spends that huge amount of money upfront to put all of these reserves out in front of you when you know all you’re going to do is you follow the vein. Right now we have six and a half years. We believe within the next year to year and a half, we’ll have closer to 10 years. We’ll add a couple of years from this Blue Grass claim. We think we will convert some of our Inferred that’s underground and if you look on page 17 of our presentation (see chart below), you’ll see there the green area that’s outlined by the red. We believe we’ll convert that into Measured and Indicated within the next year and that as well will add about two years of reserve. So, we’re looking at close to 10 years of reserves by the time we really get into operation and that’s quite a long time in the narrow vein environment.

Bill: Kevin, we’ve mentioned some of the unique factors and highlights of the Revenue-Virginius Mine, but are there any other market comparables that you could point out for investors?

Kevin: Yes. As a matter of fact, there are. If you were to go in our presentation to page 20 (see chart below), probably the best one to look at is the comparable valuations of enterprise value to M and I resource, silver equivalent ounces. And if you look there, you’ve got Excellon, Great Panther, Alexco, Endeavour and Aurcana. And if you look at that, we’re at 45 cents per enterprise value per silver equivalent ounce. You look at Endeavor, they’re at $1.17, Alexco, which probably is more comparable to us, they’re not operating at this stage of the game. I believe they’re still waiting on one permit and they’re at $1.34. I think what this chart tells you is that you can you buy a dollar stock here for about 30 cents as of today.

Bill: Are there any other monetization opportunities within the company? Assets that you could sell to self-fund?

Kevin: Yes, there are. And we have some options in that regard. As I said at the outset, the Shafter project is certainly not core to us. We’ve had some offers to purchase. We’ve had some offers to purchase just the milling facility itself. The mill is designed for 1,500 tons a day. We see Shafter more as a 500-600 ton a day operation in the future. So, the mill is probably not the right mill to start with and I certainly believe we could monetize the mill. We may or may not do that, but it is one of our options that we do have here.

Bill: Please share a little bit about your background and what makes you qualified to advance this project?

Kevin: I’ve been doing this for close to 45 years, I guess. At this stage, I’ve worked in most places around the world. My background is in operations. I work with Kinross as Vice President of Operations. Ran six of their mines in the Northern Hemisphere around the world for a number of years. Spent a lot of time in Russia. Built mines, restarted mines in countries like Nicaragua, Costa Rica, Peru, Russia, United States, Canada, and I’ve been doing this a very long time and I guess if there’s one claim to fame from my perspective, is that what I’ve typically done most of my life has gone into operations. I restarted them and get the production going, get the cost down, and those things are the focus that we have here, is we get ourselves funded, we will get this thing restarted, we will control our costs. We don’t have any control over the price of the metal that we sell. What we do have control over is how we operate and how we spend our money and we’re going to spend it very, very wisely going forward.

Bill Powers is the host of the Mining Stock Education podcast that interviews many of the top names in the natural resource sector and profiles quality mining investment opportunities. Powers is an avid resource investor with an entrepreneurial background in sales, management and small business development. His latest interviews can be found at MiningStockEducation.com.

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( Companies Mentioned: AUN:TSX.V; AUNFF:OTCQX,
)

Source: Maurice Jackson for Streetwise Reports   01/08/2020

In this interview with Maurice Jackson of Proven and Probable, Exploration Insights’ Brent Cook discusses the value of site visits to determining the potential of a prospect, and offers insights into various metals markets.

Maurice Jackson: Joining us for conversation is Brent Cook. He’s the founder of the highly regarded Exploration Insights. Mr. Cook, you’re one of the most trusted, highly regarded names in the natural resource space, so it’s a real pleasure to be speaking with you today sir.

Today we will address the positives and negatives for the mining sector in 2020. Sir, from a macro perspective, please share with us what is your view on the current state of the mining sector?

Brent Cook: For my colleague Joe Mazumdar and me, the overriding issue that the mining sector faces is they’re just not finding enough economic metal deposits to replace what’s been mined. To put that into terms that might make sense, we are producing on a global scale, 90 million ounces a year, which is about what’s come out of the Carlin Trend in Nevada since 1980. We’re not finding 90 million ounces a year. Ditto for copper. We’re burning through one Bingham Canyon deposit just outside of Salt Lake a year. We’re not putting in production one of those a year. So that’s the real issue they face. It’s real positive for those of us in the exploration sector.

Maurice Jackson: Speaking of positives, are there any catalysts that you see that will enhance the value propositions of companies in 2020?

Brent Cook: Well, certainly metal prices. We expect gold to do well, platinum, palladium, nickel—but the lack of production we really see as the catalyst for the metal prices.

Maurice Jackson: And where do you see the best value propositions in 2020? Is it the precious metals or is it the base metals?

Brent Cook: We’re going with precious metals for a lot of reasons, from a shortage of deposits, to global geopolitical risks that keep increasing with every threat, to global debt. There’s just so much going on that I think gold is going to act as a safe haven more and more.

Maurice Jackson: And regarding base metals, which base metals have your attention and why?

Brent Cook: Copper for the future is certainly something that’s going to be in deficit—the demand for copper with the increase with electric vehicles, electrification, green energy, etc. So copper, further down the road. Right now, probably the one base metal we’re most interested in is nickel. Fortunately or unfortunately, there’re not many decent nickel plays out there, so nickel is a good one. Palladium, I think, is also going to do well again this year. So those are the base metals we’re sticking with. Zinc, lithium, lead; sort of so-so on those.

Maurice Jackson: I’d be remiss if I didn’t ask you about uranium.

Brent Cook: Not keen on the uranium price, per se. I started off the business in the uranium industry, working in the Colorado Plateau, and I’ve done work in Australia and Africa as well. There is no shortage of uranium out there. It’s just waiting on an increase in the price. So I don’t see uranium as a good investment.

Although, having said that, we recently purchased Energy Fuels (NYSE: UUUU), just based on the potential for the U.S. to start stockpiling uranium bought from U.S. uranium producers, which requires about a $50–60 a pound price for them to even break even or make money. So there’s that play, but that’s not really a play on uranium. It’s more a play on a political event.

Maurice Jackson: Speaking of that political event—Section 232? Do you think it will pass?

Brent Cook: I honestly, give it a 50/50 chance. I think it’s a dumb idea. There’s no shortage of uranium in the world, and it doesn’t make sense for the U.S. government to subsidize industries like that. Having said that, anything could happen.

Maurice Jackson: Moving on to physical precious metals: You alluded to gold earlier, and palladium. What are your thoughts on platinum, and silver, and rhodium?

Brent Cook: Platinum is not used as much as palladium, so I don’t think it’s got that much of an upside to it. Rhodium is such a small market, we don’t even consider it. I think the price is great, but there’s no rhodium deposits. It all comes with the platinum group metal mining anyway. I mean, there’s no way to play, in my mind, rhodium.

Maurice Jackson: And if you don’t mind me asking, because readers like to follow your work. . .what are you buying at the moment, as far as physical precious metals? Or are you buying anything at all?

Brent Cook: I’ve got some physical gold—coins, basically, I store in a safe deposit box in two countries, just in case. And I don’t own a lot of precious metals, personally.

Maurice Jackson: Moving onto Exploration Insights. Sir, you run one of the most successful newsletters in the space. For someone not familiar with your work, please introduce us to Exploration Insights.

Brent Cook: Love to. I bought Exploration Insights from Paul Van Eaton back in early 2009, as everything was collapsing, and I switched over. His was more of a macro picture sort of thing. And I did the geology forum, so I rebranded it Exploration Insights. The letter’s basically about what. . .I was buying and selling and seeing in the metals exploration market.

Recently, I brought on Joe Mazumdar, who is an extremely smart economic geologist who worked and studied in Australia, Argentina—basically all over the world, including Canada and the U.S. It’s now his letter, and so he writes almost all of the letter. He and I communicate back and forth. I’m sort of a senior advisor there. The letter is about what he is buying, selling and seeing in the exploration industry.

We make no money from companies. Everything we make is based on subscriptions and how we do in terms of our purchases. And it’s pretty technical. That’s a positive and a negative, because sometimes we get pretty far in the weeds explaining what exactly is happening in terms of the geology, the metallurgy, the geopolitics, all that sort of thing. We get pretty heavy into the weeds, but it’s our money, so we don’t want to make any mistakes, or as few as possible.

Maurice Jackson: Prior to this interview, you shared with me that if you’re going to be in the space, the importance of attending site visits, specifically on early-stage exploration and development projects. Please share why access to site visits are paramount for speculators in the natural resource space.

Brent Cook: You go to the shows or you sit down with a company’s investor relations person, and you go through the, “It all looks great. Here’s the geology. This looks just like this deposit over here, which is a $1 billion company. We’ve got this project that looks the same, it just hasn’t been drilled. We’re going to drill it and we’re going to find a billion-dollar deposit,” or something like that. But the reality is only maybe 1 in 10,000 prospects turns into an economic mine.

It’s important to realize that an economic deposit is a unique geological event, and to go there and see it with knowledgeable eyes. I’ve been doing this for almost 35, 40 years, and Joe has been doing it for 30, all over the world. To go and look at these projects with your eyes and experience that you’ve gotten from previous work you’ve done, you see things that you might not see in those flip books.

For instance, I remember one project in Mexico—great trench, I think it was like, 40 meters of six grams. Looked fantastic on paper. You get there and the things sits in the bottom of a canyon, and there’s no way it’ll ever be a mine.

I can think of a lot of examples like that, where you get there and go, “Wait a minute, this isn’t going to work.” We were in Colombia, another project; sounded really good. Got there, and there was this beautiful, little, white church sitting on top of the hill that they want to mine. Well, that isn’t going to happen.

On site visits you are able to see things like that. I’ll give you one more. I was in Peru—again, a high-sulphidation epithermal discovery. The theory was that a later, volcanic rock had covered up the deposit, and all what we were seeing was a small window into what was below. Sounded great. Went and looked at it—actually, what happened was that they had misinterpreted, and the small window was in fact a small crack, and the rest of the rock was the same rock that hadn’t been altered. It’s about just those things you see on the ground that you don’t necessarily get on the website or out of the flipbook.

Maurice Jackson: On average, how many site visits do you attend?

Brent Cook: I think last year Joe and I visited 33 projects. So quite a few. We’re trying to slow down, but you know how it goes.

Maurice Jackson: So if I, as a speculator, don’t have access to site visits, I can gain access through Exploration Insights?

Brent Cook: Most definitely. I mean, again, I think if mining and exploration is not your expertise, it really is critical, especially in the early-stage exploration stuff, to have someone that you trust and can give you insights into the companies. Now, this could be a broker that you trust, or a relative who’s in the industry, that sort of thing—or a newsletter. I personally think ours is one of the best in terms of technical detail and that—I mean, you’ve got two economic geologists writing it. So I really think it’s a big help to have expert advice if this isn’t your area of expertise.

But the rewards are huge. I mean, as you know, you can take a $0.20 stock to two bucks within a couple of weeks with a discovery, or vice versa. You can take a $2 stock to $0.20 if something goes wrong. And that’s the key. We spend a lot of time looking for that fatal flaw ahead of the market.

Maurice Jackson: And you have a proven pedigree of success. In closing, sir, what keeps you up at night that we don’t know about?

Brent Cook: Someone’s tweets (laughter).

Maurice Jackson: Someone, huh? No particular name there (laughter).

Brent Cook: It’s pretty crazy out there. And I guess in terms of the mineral industry and mining, that is it. I mean, one geopolitical event can just trash the market—the larger markets or the smaller markets—or make them go up. I mean, just this week we’ve seen gold jump $50–60 bucks? And who would’ve thought that was going to happen last week?

So it’s those sorts of things. . .It’s the unforeseeables, the black swans that hit you that you really can’t know. And I think the best way to avoid that—what we try and do—is if we’re into a project or a company that has a legitimate play, a legitimate deposit that we think will make money, at least we’ve got some founding, some basis for owning it, as opposed to just betting on the metal price or betting on what’s the greater fool theory. We prefer to sell to someone smarter than us than someone dumber than us. I guess that’s our game plan, which means we try and get into projects that a major mining company will buy.

Maurice Jackson: Last question, sir. What did I forget to ask?

Brent Cook: You’ve covered everything pretty well. . .our website is explorationinsights.com.

One more thing, Maurice. Joe just finished our year-in New Year review, and he’s putting together an article, I guess, if you will, that would be free to any of the readers. Just go to our website, www.explorationinsights.com, and contact us and we’ll send that along for free.

Maurice Jackson: Before you make your next bullion purchase, make sure you call me. I’m a licensed representative for Miles Franklin Precious Metals Investments, where we provide a number of options to expand your precious metals portfolio, from physical delivery, offshore depositories, precious metal IRAs, and private blockchain-distributed ledger technology. Call me directly at (855) 505-1900, or you may e-mail maurice@milesfranklin.com. Last but not least, please subscribe to www.provenandprobable.com for mining insights and bullion sales.

Brent Cook of Exploration Insights, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Source: Peter Epstein for Streetwise Reports   01/07/2020

Peter Epstein of Epstein Research profiles this explorer and explains why he believes it could be a take-out target.

Strong drill results have confirmed and expanded the Bend Vein target on Scottie Resources Corp.’s (SCOT:TSX.V) 100%-controlled Bow property. During September, the company completed 878 meters of diamond drilling, 2 km NE of the 100%-owned past-producing Scottie Gold Mine located in the Golden Triangle (GT) of northwest British Columbia, Canada.

Readers are reminded that Scottie Resources owns or controls 18,500 hectares, all in the GT, across seven properties, contained in two groups of contiguous parcels. Some properties border Ascot Resources (between Ascot’s Premier Mine and Red Mountain projects), others border Pretium Resources’ property south of the world-class, high-grade, operating Brucejack mine. Pretium’s enterprise value (EV) is $3.3 billion.

Very high-grade gold at Bow, Scottie Gold & Summit Lake properties

Drill hole SR19-11 hit an interval of 73.3 g/t gold (Au) and 71.0 g/t silver (Ag) (or 74+ g/t Au Eq) over 4.3 m, (true width 80%–90%). That blockbuster interval included 1.9 m of 152.5 g/t Au plus 143.6 g/t Ag, equal to 154+ g/t Au Eq. Additional drill results are expected as soon as this week. Importantly, all of the reported intervals to date are near-surface, between 25 and 85 meters in depth. The best intercept in this latest batch is between 25.5 and 30 meters.

According to Scottie’s CEO & president Bradley Rourke,

“These new assays confirm the superb results of previous studies and demonstrate a truly under-explored high-grade gold and silver target. Past drilling on the Bend Vein only probed to a vertical depth of ~55 m. Our drilling this season proves that the mineralized structure extends deeper. We substantially increased the strike length of known mineralization. Drilling in the 2020 season will allow us to further prove the scale of this structurally-controlled, high-grade vein deposit.”

Scottie’s technical team integrated historical and recent (2018–2019) exploration work into new structural models to better understand the geometry of mineralization. Prior to the company’s 2019 drill program, Bow’s Bend Vein had only 1,525 meters of drilling on it. No exploration-style drilling had been done to test along the Bend fault structure to assess the potential of a bigger system.

Management is thrilled that drilling in 2019 substantiated the very high grades contained in the historically known ore block, and extended the structure both at depth and along strike. The drill campaign (so far) has already shown gold mineralization expanding east an additional 375 meters. 2020 is off to a great start! Over the past year, management has achieved excellent bang for their exploration buck, with more results any day now.

Previous drilling on the Bend Vein returned the following select high-grade assays:

Notice that drill hole SR19-11, mentioned above, had a [grade x thickness] of 318. Compare that to these other [high-grade] intervals in the GT in 2019. Also, the midpoint of each interval’s depth is provided. Scottie’s blockbuster interval was found at 28 meters. The average depth of peer intervals is 115 meters.

Surface grab samples at Summit Lake look very promising….

CEO Rourke and VP exploration Thomas Mumford, PhD, are ecstatic over the latest drill results, and also recent surface samples from the much larger Summit Lake property.

The above surface (grab) samples were reported three weeks ago. The best eight (in green) range from 11.0 to 62.8 g/t Au Eq, and average 22.2 g/t Au Eq. There are high-grade showings of copper, lead, zinc and silver, (884 g/t = 28.4 troy oz./t Ag). Summit Lake, Bow and the past-producing Scottie Gold mine total 5,672 hectares. As can be seen in the map above, the top half of this three-property contiguous block borders Pretium.

These impressive Summit Lake samples were reported about a month after even more exciting samples were announced on November 14th. The best four samples are listed below. They come from the newly discovered Domino zone on the 100%-owned Scottie Gold mine property.

Referring to the Domino zone, VP of Exploration Dr. Thomas Mumford commented,

“These initial sample results are exciting, their distribution and high-grade nature fit spectacularly well with our working geological model. This mineralized structure will be a high-priority drill target for the 2020 field season. The potential that it may connect to the Scottie Gold Mine mineralizing system make this an exceptional discovery. Sampling of many of these sites was only possible due to significant glacial retreat in recent years. We are eager to get back on the ground to find and delineate additional drill targets.”

Scottie Gold mine property hosts past-producing mine

We already know for certain that the Scottie Gold mine property hosts high-grade mineralization, from 1981-1985 it produced over 95,000 ounces of gold at a tremendous average grade of 16.2 g/t. That’s a much higher grade than Pretium’s world famous Brucejack mine is currently producing at ~9 g/t.

In addition to high-grade production records, there are some outstanding historical drill results at the Scottie Gold mine project as well. How about 108.3 g/t Au over 3.4 meters, or 107.7 g/t Au over 4.2 meters? Not bad at all! All known mineralization on Bow and Scottie Gold, from a total of 525 drill holes, is found at shallow depths. I find it encouraging that these blockbuster grades were found across 3.4 and 4.2 meters, not merely half-meter, one-hit wonders.

Mining M&A in N. America & the gold price making big moves!

Three big gold deals were announced in 4Q 2019 alone, including Kirkland Lake’s plans to acquire Detour Gold. If Detour is taken out, Pretium would be one of the last single-asset gold companies in Canada. Brucejack, situated less than 50 km from Scottie, is one of North America’s lowest-cost, highest-margin producers.

Pretium is 234x the size of Scottie Resources. If it’s not acquired, it might try to acquire one or more GT juniors like Ascot, GT Gold, Skeena Resources, Tudor Gold or Garibaldi Resources. As an aside, Seabridge Gold is also a potential acquirer. Those companies, with EVs ranging from $84 to $217 million, could in turn look to buy a company like Scottie Resources, with an EV of $14 million.

I don’t mean to overplay a takeout thesis, but, the gold price is now at US$ 1,576/oz, up ~US$ 112/oz since U.S. impeachment proceedings and Iran / North Korea troubles commenced, and up ~US$ 300/oz from the low of 2019. Gold in $USD is the highest it’s been in 80 months. Furthermore, 2019 was reportedly the biggest year for gold mining M&A in North America since 2010.

Neighboring Pretium and Ascot valuations bullish for Scottie

Looking at the map, it’s clear why Pretium might want to acquire Scottie Resources. Or, at least move to control the three properties where Pretium and Scottie share a border. Scottie’s valuation is so low relative to Pretium’s that it might be cheaper to pursue Scottie’s properties than to drill virgin areas on Pretium’s existing footprint.

Perhaps more likely—look at the map again—Ascot certainly has a compelling reason to care about Scottie, and the company’s digestible EV of $14 million is right in Ascot’s sweet spot. Ascot has multiple projects and properties, but only one with evidence of very high-grade mineralization like that of Scottie’s Bow (new drill results), Scottie Gold mine (past production + historical drill results + new surface samples) and Summit Lake (new grab samples).

Ascot’s EV of $210 million is 15x that of Scottie, and its share price is up 85% in the past two months alone, resulting in Ascot trading at $8,631/ha vs. $766/ha for Scottie. While Ascot’s Red Mountain and Premier projects have substantially more drill holes on them, both have lower gold grades, and high-grade mineralization starting roughly 100 meters deeper than that of Scottie’s near-surface deposits.

Tudor & GT Gold have giant intercepts of sub 1.0 to 1.5 g/t Au Eq as thick as one kilometer or more. Grade x thickness readings for these assays are quite good, but drilling and mining through 1,000+ meters of rock can be costly and time consuming, especially if the projects are far from critical infrastructure.

Garibaldi’s assets in Canada are base metal (especially nickel + copper) heavy. Diversification into high-grade gold and silver could be an attractive option. With an EV of $96 million, it too could comfortably afford to make a run at Scottie. After 2020’s drill results (I believe Scottie is thinking about 5,000 meters of drilling, subject to adequate funding), the company will be well more advanced.

Soon after 2020 drill results, one or more resource estimates likely

Within 12–18 months, management should be able to deliver a robust NI 43-101 compliant resource estimate from one or both of the Scottie Gold and Bow properties. In 2H 2021, shareholders might receive a third-party Preliminary Economic Assessments (PEA). In my opinion, Scottie could secure a JV or farm-in partner as soon as next year, upon which time funding requirements would drop dramatically.

Located at the southern end of the GT, Scottie’s properties are an easy drive of about an hour, on paved roads, from Stewart, BC. For the most part, infrastructure in the southern portion of the GT is significantly better than the middle and northern regions.

Conclusion

With gold prices and M&A activity up substantially, all eyes are on the Golden Triangle. However, not all of the GT juniors have had recent drilling success. Not all are focused on shallow, high-to-ultra-high-grade gold deposits. Not all have good infrastructure. Not all own or control 100% of sizable land packages. Not all have enterprise values of $14 million or less.

Scottie Resources (TSX-V: SCOT) is blessed with many positive attributes and has successfully advanced its flagship properties very nicely in 2018–19 with limited capital expenditures. There have been three major initiatives over the past several months, and three fantastic outcomes.

1] great new drill results on January 3rd at Bow, 2] excellent surface samples on the Scottie Gold mine property and 3] great grab samples at Summit Lake. This is a company to watch closely in 2020. In fact, watch closely the rest of January, as further drill results are imminent.

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.

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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 Scottie 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 Scottie Resources are highly speculative, not suitable for all investors. 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 shares of Scottie Resources and the Company was an advertiser on [ER].

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, 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, etc., or for the completeness of this interview or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company. [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 interview or the decision to write an article until three business days after the publication of the interview or 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 Pretium Resources, a company mentioned in this article.

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Source: Adrian Day for Streetwise Reports   01/07/2020

Fund manager Adrian Day reviews recent developments with precious metals producers in his portfolio.

Newmont Goldcorp Corp. (NEM:NYSE, $42.83) is in our portfolio because Newmont acquired Goldcorp. Over the past eight months, it has been active with major sales, including 50% of Kalgoorlie in Australia—Barrick also sold the other 50% just a little before—and Red Lake (which came with Goldcorp), both sold to Australia companies. It has also sold its stake in Continental Gold. Together, the dispositions have raised $1.48 billion ($800 million from Kalgoorlie), reaching the upper end of its targeted sales.

However, we believe it is likely that Newmont will make several more smaller dispositions, mostly assets acquired in the Goldcorp purchase that don’t fit the company’s hurdle rate or profile.

These sales have dramatically improved the balance sheet, now with $4.4 billion of cash, net debt down to $2.8 billion. Newmont has also initiated a $1 billion share repurchase program.

Costs, though low, are increasing

In its recent “Outlook 2020 and Beyond,” Newmont guided for reduced production (largely because of the sale of producing assets), and with it a reduction in sustaining capital requirements. Costs are estimated to increase, however, though at cash costs of $750/ounce and “All-In Sustaining Costs” of $975, they remain low.

So, an improved balance sheet and low costs, as well as strong political-risk profile, are all positive for Newmont. The modest growth profile as well as the slow integration with Goldcorp (including alleged cost savings) offset that, at least in the near term. The valuation is high, given the lack of growth. But in a strong gold market, Newmont will be a beneficiary, both from index buying and retail investment as a well-known name. We are holding.

Turnaround underway at Yamana

Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE, NY, $3.83) appears to be slowing turning around, though it has seemed that way before. The balance sheet has improved after last year’s sales, with a current $100 million in cash. Debt remains high, however, with debt-to-equity of 44% and a “quick ratio” of just 0.2x. It’s not a great balance sheet, but the company appears to be out of the danger zone.

There are also several opportunities for growth in the year ahead and beyond. Cerro Moro, the major deposit in Argentina, continues to expand, now with drilling on new zones. Jacobina and Malartic both have major expansions underway. And drilling at El Penon suggests that profitable mine can be expanded.

With its current valuations reasonable—price-to-cash flow of 8.5x and less than book (though price-to-free cash flow is less satisfactory 36x)—we are holding for now.

Fortuna’s new mine: Almost there

Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE, NY, $4.03) reported improved production at its two existing mines, but costs continue to be high. However, the company is maintaining full-year guidance, though at the upper end of its cost range.

The major news, of course, is in Argentina, where its large Lindero gold mine is nearing completion. The company failed to meet its goal of putting ore on the pad in 2019, but that will occur any time now, with ore processing in mid-January. Under new regulations, mining companies have to convert their dollars to pesos and hold them a year before exporting dollars, and the potential for further declines in the peso could significantly affect earnings. Fortuna is looking at its options, though hedging is too expensive.

Fortuna has cash of $72 million. A successful start to operations will see the stock advance nicely, though it may take a couple of quarters for the market to be convinced. Developments in Argentina, outside the company’s control, could hurt (or help) the stock. It has already advanced from the below $3 in November to over $4 as the mine gets closer to completion. With that, the short interest in the stock fell, though it remains high, so a successful ramp-up and the stock rally could be leveraged. The stock remains undervalued against other silver stocks. We are holding for now, but ready to buy on any set back.

Osisko plans caught market offguard

Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE, NY, $9.64) is not a producer, of course, but we are including it in this report since it is exposed to production, development and exploration at its “incubator” companies more than pure royalty companies. It is a hybrid royalty, and trades deservedly at a lower valuation because of the higher risk. It was severely punished recently for going too far, and buying an entire exploration company, Barkerville, as we discussed recently. It also announced a new initiative, Northern Spirit, a “project development program…the next step in the evolution of our accelerator business.” The lack of details also hurt the stock. Osisko also had another black eye; following the bankruptcy of Stornaway, now Lydian, on whose project in Armenia it holds a stream, has sought protection from creditors. The impression, fair or not, is of a company a little too aggressive in spending its money. However, we think the stock is oversold; Osisko will not be building Barkerville’s mine itself, and we hope there will be more details on Northern Spirit and Osisko’s role in it soon. Meanwhile, two of its major units, Osisko Mining and OIII, are continuing to advance their projects, the former more advanced than the latter.

More clarity on its plans, as well as a major success at one of its main investments, will certainly help the stock recover. Selling at 20x free cash flow, and 12x book, Osisko stock is significantly undervalued relative to the pure royalty peers. It is in the midst of a major stock repurchase program, which has been the stock recovery from its post-Bakerville low under $8.50, and has another 13 million plus shares to go. Osisko is a buy at the current level.

In our next report, we will briefly review some of the non-resource companies on our list.

BEST BUYS at current prices include, in addition to above: Midland Exploration Inc. (MD:TSX.V, 0.94), Kingsmen Creatives Ltd. (KMEN:SI, Singapore, S$0.42), Lara Exploration Ltd. (LRA:TSX.V, $0.59), Ares Capital Corp. (ARCC:NASDAQ, $18.66), and Evrim Resources Corp. (EVM:TSX.V, $0.325).

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Evrim Resources, Midland Exploration and Lara Exploration. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Newmont Goldcorp, Yamana Gold, Fortuna Silver, Osisko Gold Royalties, Midland Exploration, Kingsmen Creatives, Lara Exploration, Evrim Resources and Ares Capital. I determined which companies would be included in this article based on my research and understanding of the sector.
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Adrian Day’s disclosures: Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2019. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst fax or e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

( Companies Mentioned: FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE,
NEM:NYSE,
OR:TSX; OR:NYSE,
YRI:TSX; AUY:NYSE; YAU:LSE,
)