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#USAS: THE CYCLE GOES ROUND..
...$1.31...
https://www.lbma.org.uk/prices-and-data/london-vault-holdings-data?_cldee=cm9zcy5hLm5vcm1hbkBtZS5jb20%3d&recipientid=contact-0f46f9024fa4e71180d6005056b11ceb-cba3687549d44f718401d09f4f6d1924&esid=75e6c137-b6f6-eb11-8107-005056b11ceb
Record Stocks of Gold Held in London Vaults
As at end July 2021, the amount of gold held in London vaults hit a record high of 9,634 tonnes of gold (+0.49% on previous month), valued at $565.5 billion, which equates to approximately 770,757 gold bars.
We publish total vault holdings data as part of our continued efforts to improve transparency in the Loco London Precious Metals Market, which also includes reporting weekly LBMA Trade Data. The statistics below include the holdings of the London commercial vaults as well as the Bank of England’s gold holdings (the Bank does not hold any silver).
Record Stocks of Gold Held in London Vaults
As at end July 2021, the amount of gold held in London vaults hit a record high of 9,634 tonnes of gold (+0.49% on previous month), valued at $565.5 billion, which equates to approximately 770,757 gold bars.
There was also 36,589 tonnes of silver (-0.32% on previous month), valued at $30 billion, which equates to approximately 1,219,641 silver bars.
These figures provide an important insight into London’s ability to underpin the physical OTC market.
The publication on the fifth business day of each month of the amount of gold the London vaults were holding at the end of the previous month follows the recent move to publish the equivalent data for silver. It represents a continued move towards greater transparency and timeliness.
#USAS: Watch out for BASEL III...Go NYBoB
Basel III – Implementation
https://www.fsb.org/work-of-the-fsb/implementation-monitoring/monitoring-of-priority-areas/basel-iii/
Suffering A Sea-Change: SATURDAY, MAY 29, 2021
https://www.zerohedge.com/markets/suffering-sea-change-china-taking-its-financial-war-us-fx
https://www.goldmoney.com/research/goldmoney-insights/suffering-a-sea-change
China Is Taking Its Financial War With US Into FX
It has to be physical metal, because anything else imparts counterparty risk, and that’s the last thing you will want in a financial crisis. When the importance of gold is realised again, there is a significant risk of government confiscation, which is where silver comes into the picture. Central banks own none, or at least none that we are aware of, so in the event of governments doubling down against gold ownership silver would become much more precious.
There is an established theoretical relationship between bonds and equities which provides a framework for the future performance of financial assets. It would be a mistake to ignore it, ahead of the forthcoming rise in global interest rates.
Price inflation is roaring, and so far, central banks are in denial. But it is increasingly difficult to see how monetary policy planners can extend the suppression of interest rates for much longer. There can only be one outcome: markets, that is to say prices determined by non-state actors, will force central banks to capitulate on interest rates in the summer.
Hardly noticed, China is deliberately putting the brakes on its economy, which will cause an inflationary dollar to collapse, unless the US defends it by putting up interest rates.
Deliberate?
Almost certainly, as part of its strategy, China is taking the financial war with the US into the foreign exchanges.
Bond yields will rise, with the US Treasury 10-year bond leaving a 2% yield far behind.
Equity markets will sense the danger, and it might turn out that the month of May marks a peak in financial asset values — following cryptocurrencies into substantial bear markets.
Introduction
There is an old stock market adage that you should sell in May and go away. It has already proved its worth in the case of cryptocurrencies, with Bitcoin more than halving at one point, and Ethereum losing 57% between 10—19 May. A sea-change in cryptocurrencies’ market sentiment has taken place.
As for equities, it could also turn out that 10 May, which so far has marked the S&P 500 Index’s high point, will mark the beginning of their decline. But it’s too soon to tell. However, we do know that following the unprecedented dilution of the major currencies’ purchasing power since March 2020 commodity prices have increased substantially, global logistics are fouled up and consumer prices are rapidly rising everywhere, a combination of events which is bound to lead to higher interest rates. But as is usually the case in times like these, central bankers and market bulls are wishing this reality away.
Only last week, the Federal Reserve Board told us that:
“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer-term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved.”
Two per cent, two per cent, two percent and two per cent. Clearly, the world’s most powerful monetary policy planners are wilfully blind to reality. In an interview with Greg Hunter of USAWatchdog.com this week, John Williams of Shadowstats.com, who calculates US CPI on an unadjusted basis, put current price inflation at over 11%. If his numbers are closer to reality, a huge interest rate shock is being stored up, likely to hit markets without much warning.
Central banks are always reluctant to raise interest rates and consequently are horribly wrong-footed. Not mentioned in the Fed’s statement quoted above is the $120bn monthly QE stimulus still inflating financial bubbles and which are feeding yet more inflation into the system. Furthermore, the Fed cannot stop inflating. Unless interest rate suppression and QE are abandoned the certain outcome will be hyperinflation. Arguably, the dollar is on that path already and its purchasing power is early in the process of collapsing.
The notion that maintaining the QE stimulus and interest rates at zero is to help the economy is poppycock. The Fed has two unwritten objectives that override the economy: to fund a free-spending government as cheaply as possible, and to keep the bubble in financial assets inflated. Therefore, it cannot afford to consider the horrors of raising interest rates and to reduce the monthly money-pumping, the objective of which is to keep blowing financial bubbles. In these circumstances, markets themselves, being the collective pricing of everything by non-government actors, will eventually force control over financial asset prices away from government agencies.
Non-government actors include both foreign and domestic investors, and they need to be considered separately because their motivations in important respects are different. According to the US Treasury’s TIC statistics, foreign ownership of dollar-denominated financial assets and bank deposits total $30 trillion and are one and a half times America’s GDP. The private sector element alone is $22 trillion. If the dollar’s trade weighted index is any guide, it may be just beginning to dawn on this class of investor that the dollar is losing purchasing power, not only measured against industrial commodities and raw materials, but against rival currencies as well. An over-owned dollar has been falling for over a year and will slide lower when foreign interests start to liquidate dollar financial assets in earnest — and that includes equities.
So far, other than commodities they may not see another currency which offers clear benefits over the dollar, but that will change with an inflation-driven outlook. It is also changing with China’s policy of restricting credit creation, a monetary policy starkly at odds with those of reflationist Western governments.
It was William Shakespeare who came up with the phrase “sea-change” as a substitute for the turn of the tide in The Tempest. The line that followed was “Into something rich and strange”. Bitcoin hodlers will identify with strange. But as for riches, their fortunes have changed substantially for the worse. In its reluctance to protect the dollar, the Fed’s rejection of the consequences of its ongoing monetary inflation is teeing up more conventional markets for a similar price outcome to that currently being suffered by cryptocurrencies.
The fallacy of money-printing to preserve wealth
The empirical precedent about to how to destroy a fiat currency by pursuing monetary policies to inflate asset values was given to us by John Law, the proto-Keynesian who, in 1720, tried to sustain his Mississippi bubble by printing money. Thanks to the dominance of the US dollar, the Fed is repeating Law’s policy on a global scale, seemingly oblivious to the consequences. In 1720, Law’s company survived, though the Mississippi venture’s share price collapsed from a high of 12,000 livres to about 3,000. What did not survive was the currency, the French livre which in about six months from the bubble top became completely worthless. It would seem the Fed and other central banks are now locked into a modern, global version of the John Law experience.
Those who have yet to understand why markets and the dollar are set to fall together should consider how things will develop from here. Without doubt, financial markets have become wildly over-valued, and their future is becoming binary but with both outcomes being negative. Let us assume the optimists are correct about a post-lockdown sustainable spending recovery. In that case, interest rates will “normalise”, bond yields will rise, and equity valuations will be undermined. Every bear market in a normal credit cycle evolves out of these conditions.
Alternatively, let us assume that the post-lockdown recovery is hampered by rising prices, the consequence of lack of production to satisfy spending inflated by monetary means, and the inability for this imbalance to be rectified by just-in-time manufacturing policies at the mercy of the greatest global logistic foul-up ever recorded. Add to that a shortage of bank credit to finance production, because banks have run out of balance sheet capacity.
Both outcomes will see financial values undermined, because in common they lead to higher price inflation and inevitably to higher interest rates. But the Fed and its confrères at the ECB, the BoJ and the BoE are all committed to keeping their bond and equity bubbles continually inflated. The first sign of an inflation crisis can result in only one response: inject yet more money into financial markets to keep them afloat and to compensate for a reluctant rise in interest rates. If the central banks fail to increase the pace of monetary inflation targeted at financial assets, bond yields and market interest rates will continue to rise, and the equity bubble will burst. With no option but to continue to support markets and their wealth effect, a rise in the natural rate of interest simply leads to an acceleration of monetary inflation. A vision of the 1929-32 Wall Street crash will haunt policymakers if they don’t act quickly enough to supply the extra currency.
For the fact of the matter is that using monetary inflation to rig markets requires accelerating debasement to keep the illusion going. But at best, the sacrifice of the currency only delays matters temporarily. This is what Richard Cantillon, the Irish-French banker contemporary with John Law worked out in 1719: the most certain way to profit from a bubble’s implosion was not to short it, but the unbacked currency, which he did in London and Amsterdam for specie-backed alternatives.
Today, there are no specie-backed alternative currencies, the backing for all of them being the US dollar, which faces the same fate as Law’s livre. Another important lesson from the fallacy of money-printing to preserve wealth by inflating financial assets is that it does not take an incremental and accelerating loss of purchasing power through a policy of continual debasement to undermine the currency on a formulaic basis as monetarists would suppose. Instead of initially being driven by rising prices for goods and services the collapse of currencies is linked initially to that of financial assets, less so than to the prices of goods. Instead of an evolutionary process it has the potential to be much more sudden, tied into an overwhelming stock market collapse.
While events run concurrently, it is after a financial crisis that the principal users of a collapsed currency, its domestic actors for their daily purchases, suffer the full effects. Not only do they see prices of essentials rising, which they might mistakenly attribute to the preceding financial crisis, but interest rates rise as well. Mainstream economists will tell everyone that higher interest rates are reducing demand, and without more stimulus businesses will fail in even greater numbers. Inflation, by which they mean increasing prices, will only be temporary due to falling demand and they urge the authorities to maintain and even increase the rate of money creation to boost the economy and stop it from entering a slump.
What economists, investors and the ordinary person fail to understand until too late in the process is that the problem is of a collapse in the purchasing power of an unbacked state currency, which requires a completely different solution. That oft-quoted phrase about fiat money reflecting faith and credit in the government means something after all.
After the foreign holders have sold out, it is the actual users of a currency, who pay for their consumption with it, that are last to realise the currency is set to collapse entirely, and that they should get rid of it for anything they can buy. This eventual outcome is certain, so long as the central bank continues with its inflationary policies.
It is at this endpoint that the economy experiences a crack-up boom. When and if they can afford it, people even buy equities and property, simply to get out of fiat currency. But both these classes of asset will have fallen substantially measured in a rapidly depreciating currency before this condition has arrived.
Interest rates are already rising
In our analysis we have identified higher interest rates as the trigger that will burst the financial asset bubble. While Western central banks continue to suppress very short-term interest rates, insofar as they reflect the cost of borrowing they are already rising as the chart of the US Treasury 10-year bond in Figure 1 shows.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SufferingSea1.png?itok=DzM57ICT
The initial rise in yield from 0.48% in March 2020 has not yet curbed enthusiasm for equity markets. This is normal cyclical behaviour, because bond yields usually rise during the last leg of an equity bull market. And the current and likely final leg for rising US equities — and most others — commenced only days after the lowest yield seen on 9 March 2020.
Investment psychology for equities turns positive at these times. A moderate rise in bond yields is taken to be evidence of improving economic prospects, and not a danger signal. A backward-looking investment establishment does not yet fear inflation, which it naively takes to be rising prices. Public participation increases, in the sure knowledge that the market is going up. This is reflected in borrowing to leverage bullish returns, the current position of which is shown in Figure 2.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SufferingSea2.png?itok=rW-egd4Z
Figure 2 is an alarming reflection of investors’ bullish mentality, but very few participants are paying attention to it. Furthermore, the Fed’s monthly QE injection of $120bn into financial markets gives everyone enormous confidence it will continue.
It is the unwinding of this madness of crowds that always feeds into a subsequent bear market. The cause is in plain sight. A second rise in bond yields, driven by rising prices for goods being so assiduously ignored by the investing establishment and public alike, is in the making. And it is almost always the second rise in bond yields that triggers cyclical bear markets. But the US stock market does not operate in a global vacuum: out of their $30 trillion total in dollars, foreigners have $10.7 trillion invested in US stocks.[ii] Bearing in mind the messages from Figures 1 and 2, they are also deeply affected by the message from Figure 3 below, of the dollar’s trade weighted index.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SufferingSea3.png?itok=QoneBVKG
Since late-March 2020, when the dollar’s TWI turned south, gains of 90% on the S&P 500 have been offset by a 12.6% decline in the TWI. And in the light of President Biden’s high-spending policies, the chart suggests foreign investors will be faced with an important break lower in the TWI, and that the cyclical rise in bond yields that inevitably follows will lead to a double loss for them on holdings of US equities. Unless they move quickly, foreign-owned financial interests could simply evaporate into losses.
The dollar’s TWI is very heavily weighted in favour of the euro, so the outlook for the latter is also important. In the Eurozone, consumer demand is now surging at the fastest pace since before the great financial crisis, without enough production to supply it. Consequently, the prospects for price inflation are at least as dangerous as for the dollar. The difference is the ECB still maintains a negative deposit rate, so bond yields and interest rates have a lower base from which to rise. It is that prospect which is sure to make an over-owned dollar vulnerable to a relatively under-owned euro. A similar situation pertains for the Japanese yen.
But perhaps the most important currency rate will be that of China’s yuan. Last September, China began a progressive clampdown on excess credit which continues today. The few western analysts who are aware of it attribute this policy to cyclical factors, an attempt to prevent China’s economy overheating after earlier stimulus. They are also aware that tighter money in China will be reflected in a stronger yuan, potentially destabilising foreign exchange rates.
Furthermore, it also makes sense for China to attract investment flows currently overexposed to the dollar, by sending a clear signal that the yuan is the stronger currency. It would be China’s response to America’s attempted destruction of the Hong Kong—Shanghai Connect route for inward investment by deliberately destabilising Hong Kong. And it would also strip US capital markets of foreign funds, forcing an early increase in dollar interest rates in the US’s authorities attempt to prevent a dollar collapse.
The conclusion can only be that the sea-change about to hit capital markets will be both widely unexpected and sudden. Its degree of financial violence will reflect the accumulated difference between increasing government manipulation of markets along with the illusions created, and economic and monetary reality. Interest rates will not stop rising at a few per cent. Taking John Williams’s estimate of 11% price inflation as a starting point, markets will drive interest rates towards related levels. Swathes of indebted businesses will be threatened with failure before then, which is bound to be reflected in equity market valuations. The longstanding myth that the equity class offers protection against inflation will be debunked.
The property/equity relationship
Another class of asset that is commonly believed to offer protection against a collapsing currency is property. At a personal level, both productive agricultural land and residential property are commonly cited. But owning them requires additional resources to ensure their continued possession through an inflationary crisis. And the resources required will in turn depend on the characteristics and duration of the disruption to economic activity.
During a normal credit cycle, in the early stages of increasing price inflation equities prove more sensitive to the threat of rising interest rates than residential property. Individual investors tend to more immediately see that declining share prices offer little or no protection against an inflation threat, because the increases in interest rates sparked by it are deemed to be bad for the business outlook, but not enough to undermine the values of non-financial assets. There are some exceptions, such as mining shares, but otherwise generally this statement holds true.
Consequently, people turn to non-financial assets for protection against inflation, and the most prominent of these is property: principally residential and farmland. Furthermore, there are usually encouraging benefits such as the absence of capital gains taxes owner-occupiers of residential property. And first-time buyers are often subsidised by governments.
Residential property has already been booming on the back of very low interest rates and a widespread desire to move out of major conurbations, triggered by pandemic lockdowns. In many jurisdictions, home working for at least part of the working week is seen to be the future, increasing time spent in and therefore the relative importance of one’s home. For the middle classes, unspent funds have been accumulating. And behind it all has been enthusiastic mortgage lending fuelled by the Fed’s interest rate suppression and QE targeted at agency debt.
Prospects for residential property markets normally change when mortgage rates are forced significantly higher, in line with rising interest rates. The erosion of a currency’s purchasing power, which feeds into rising consumer prices, pushes interest rates higher than the majority of mortgagees can afford to pay. Those who have fixed interest mortgages obtain some relief, but new buyers are deterred. Furthermore, inflation sets in train a destructive transfer of wealth from the productive economy, impoverishing its economic actors for the benefit of the state. Inevitably, production suffers, and unemployment rises. Many homeowners with mortgages are driven into negative equity, and they can no longer afford their mortgage payments. Repossession rates rise.
This cycle is different in that the rush into residential property has occurred before the inflation threat has materialised sufficiently to undermine both financial and non-financial asset values. It is therefore probable that the rise in interest rates and borrowing costs we can expect in the next few months will undermine residential property prices at the same time as the ending of the equity bull market.
But so long as homeowners maintain their mortgage payments, they can probably see the inflationary crisis through. If they can hang on, their situation could be rescued by a near-total collapse in the purchasing power of their government’s currency, eliminating much or all of their mortgage liabilities in real terms. The mortgagees who have the resources to keep payments going will avoid the crisis. Instead, it will be borne by the mortgage providers and their savers.
Only then does residential property come into its own by offering a degree of protection against a currency collapse.
The role of precious metals
Earlier, we referred to the wisdom of Richard Cantillon when he sold John Law’s unbacked currency in London and Amsterdam for alternatives readily convertible into specie —principally sterling and guilders.
Incidentally, when the Mississippi venture collapsed, taking the livre down with it, Britain’s South Sea Bubble suffered the same fate; but the silver shilling survived. Today, there are no currencies backed by precious metals; instead, they are almost all on a dollar standard, and the dollar is at the heart of our problem. Where the dollar goes, we should assume all other currencies will follow.
We must also dismiss cryptocurrencies as being impractical. Central banks are planning their own versions and the intention is to use them to accelerate their failing monetary policies even faster. Fortunately for their long-suffering subjects, central bank digital currencies are unlikely to see the light of day, given the imminency and potential scale of a financial and monetary crisis.
Initially acting as a reserve of purchasing power, that leaves precious metals emerging to form the basis of a future money, as they always have done throughout history. Gold is the one monetary asset possessed by the majority of central banks that is not fiat — only 24 out of 130 central banks have reported they hold no gold or failed to report a holding to the IMF at the end of last year. After fiat fails, the only way a central banker and his political masters can get paid in a form of money with any purchasing power will be for the state to back its currency with gold. And even then, unless this is done correctly, it will probably be little more than a temporary fix.
One mistake frequently paraded is that gold has no interest rate. Therefore, the logic goes, rising fiat interest rates penalise holders of gold. But this is to misunderstand the role of interest rates. Interest rates compensate a lender for parting with possession of his money, compensates for any expected change in purchasing power over the duration of the loan, and compensates for the risk of being a creditor of the borrower. With a fiat currency whose debasement is obvious to a lender, the combination of these factors can be expected to lead to a high rate of interest, which, as is argued in this article, will lead to higher dollar interest rates to prevent foreign selling of the dollar.
Like folding fiat notes, physical gold in possession has no interest rate, but as money it is routinely loaned, leased and swapped for fiat. This would not happen if gold was not money. Because of its innate stability, gold’s interest rate is low. Figure 4 illustrates why.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/SufferingSea4.png?itok=G5OXIxXI
The chart shows the monthly price of copper measured in dollars and gold since 1990. Copper is regarded by commodity analysts as a reference for industrial demand for metals, and therefore as a reflection of global economic demand.
Over the last three decades the dollar price of copper has varied between a low of 58% of the price in January 1990, and a high of 418% in 2011, a level which it is approaching again today. The average value over the whole 31 years was 186% of the 1990 price.
Copper priced in gold varied between 45% and 192%, ending up 8% today compared with the start of the period. Its average price over the whole 31 years was up 0.8% on the 1990 price — pretty much unchanged.
Not only has gold been a far more stable form of money over the last thirty years for users of copper, but it has proved to be stable over far longer periods for everything from common commodities to low-tech finished goods. Price stability was an important driver behind the industrial revolution, because it permitted entrepreneurs to calculate production costs and investment returns. Investment in production also tended to reduce consumer prices, increasing standards of living. Not only did consumers have access toimproved products, but their gold-backed currencies went further.
Therefore, we can say unequivocally and, without having to delve into monetary theory, proclaim that only gold can be the basis of the future non-fiat monetary system. The successes and failures of future gold-backed currencies do not concern us yet — those are bridges to be crossed later. Our present interest is to seek protection from the accumulating folies of central banks and their inflationary policies. In that sense, ownership of gold remains our principal link with a post-crisis future.
It has to be physical metal, because anything else imparts counterparty risk, and that’s the last thing you will want in a financial crisis. When the importance of gold is realised again, there is a significant risk of government confiscation, which is where silver comes into the picture. Central banks own none, or at least none that we are aware of, so in the event of governments doubling down against gold ownership silver would become much more precious.
$captaiscotty thanks; Silver Tsunami Incoming? Prices Cannot Be Stopped Now - Robert Kientz
) 
#USAS: THE FIRST STEP OUT OF THE BASEMENT... 1.74
https://stockcharts.com/c-sc/sc?s=USAS&p=D&b=5&g=0&i=t1212887471c&r=1622292259043
#USAS: $SILVER ABOUT TO START THE NEXT LEG UP...
https://bullionexchanges.com/customer/account/login
$34 NEXT STOP...!
https://stockcharts.com/c-sc/sc?s=%24SILVER&p=D&b=5&g=0&i=t7964631663c&r=1622110605211
Where Do We Go From Here? Silver Headed Back To $50 All-Time High Plus Other Surprises
May 22, 2021
https://kingworldnews.com/where-do-we-go-from-here-silver-headed-back-to-all-time-high-plus-other-surprises/
Legend Pierre Lassonde Has Been Aggressively Buying This Mining Stock, His Top Pick For 2021
February 23, 2021
https://kingworldnews.com/pierre-lassonde-has-been-aggressively-buying-this-mining-stock-his-top-pick-for-2021/
Gold Price: Still on Track for $3,000, Another Shot Is Coming Says John Doody
37,911 views •Mar 24, 2021
#USAS: The End Of Paper Gold & Silver Markets...?
The conclusion is that unless the BIS has an ulterior motive to trigger a chaotic financial reset of some sort, it is a case of regulators not understanding the market consequences of their actions.
https://www.zerohedge.com/commodities/end-paper-gold-silver-markets
The End Of Paper Gold & Silver Markets
Tyler Durden's Photo
BY TYLER DURDEN
SATURDAY, MAY 22, 2021 - 09:20 AM
Authored by Alasdair Macleod via GoldMoney.com,
https://www.goldmoney.com/research/goldmoney-insights/the-end-of-paper-gold-and-silver-markets
This article looks at the likely consequences of the Bank for International Settlements’ introduction of the net stable funding requirement (NSFR) for bank balance sheets, insofar as they apply to their positions in gold, silver and other commodity markets.
If they are introduced as proposed, banks will face significant financing penalties for taking trading positions in derivatives. The problem is particularly important for the London gold market, as described in last week’s article on this subject. Therefore they are likely to withdraw from providing derivative liquidity and associated services.
This article delves into the consequences of the NSFR leading to the end of the London forward markets in gold and silver. Replacement demand for physical metal appears bound to rise, and an assessment is therefore made of available gold not tied up in jewellery and industrial uses. An analysis of gold leasing by central banks, leading to double ownership of physical gold, is included.
The conclusion is that unless the BIS has an ulterior motive to trigger a chaotic financial reset of some sort, it is a case of regulators not understanding the market consequences of their actions.
https://assets.zerohedge.com/s3fs-public/styles/inline_image_mobile/public/inline-images/Breather%20%281%29.gif?itok=-Wy5at7a
Introduction
Last week I explained why as they stand the new Basel 3 regulations will make it uneconomic for banks to continue to run bullion trading desks. The introduction of the net stable funding requirement (NSFR) means that mainland European banks, of which ten are LBMA members including the Swiss, will have to comply with the new regulations from the end of June, and all UK banks, in effect the entire banking membership of the London Bullion Market Association (LBMA) will have to comply by the year-end. There are 43 LBMA members listed as banks, and on Comex there are currently 17 with long and 27 with short positions in the Swaps category, which represent bullion bank trading desks in the dominant futures contracts. So being similar, the Comex numbers must broadly replicate those operating in London. It is therefore reasonable to assume that if the LBMA’s banking membership ceases dealings in unallocated bullion, then very few will continue to deal on Comex — the LBMA crowd having ceased taking trading positions.
We are discussing not gold or silver but their derivatives. But there is a problem borne out of the LBMA’s insistence that it involves bullion, albeit unallocated, and not derivatives. The distinction could be important, depending on how the UK regulator applies the NSFR rules. This is because in the calculation of required stable funding, gold consumes 85% of available stable funding while gold liabilities contribute no available stable funding at all. The effect is to impart a negative factor into a bank’s overall net stable funding calculation, making unallocated gold trading hopelessly uneconomic in terms of deployment of total funding capital. The alternative, which does not appear to be under the LBMA’s consideration, is to admit that the whole unallocated gold trading business has nothing to do with gold bullion but is in fact gold derivatives; in which case capital funding penalties under the NSFR would be broadly limited to imbalances between derivative liabilities and derivative assets.
Consequently, it appears that an allocation backstop of 85% of available stable funding (ASF) must be swallowed in the case of gold, which does not appear to be the case if the LBMA confesses to the paper charade.
There are in London, in effect, two markets conflated into one, but they must not be confused. The unallocated market, otherwise known as dealing for forward settlement, is the product of bank credit expansion, not as the LBMA claims, physical metal whose bar origins, weights and fineness are not recorded for convenience’s sake. Perhaps the LBMA would like to let us know where they think it’s all stored; it’s certainly not in LBMA vaults, where after deducting headline figures for custodial gold the float reduces to as little as a few hundred tonnes. Unsurprisingly, the Bank for International Settlements lists these transactions as over-the-counter derivatives for statistical purposes, so we know how they are regarded by the international regulator.
Physical gold held on behalf of customers is never recorded on bank balance sheets. If a bank owns physical gold in its own vault, an independent vault, or allocated to it by another bank acting as custodian with its own vaulting facilities then that appears as an asset on its balance sheet. In that case, it can hedge out the price risk with a matching liability for a zero price-haircut within Basel 3 rules. But this has nothing to do with the NSFR calculation.
Clearly, unless the NSFR calculation is amended at the last moment, following its introduction the character of bullion markets will become markedly different. Gone will be roughly $600bn of paper gold, while presumably some of the paper demand released will migrate to physical metal. There is also the question of how outstanding imbalances will be resolved. This article assesses the consequences.
Unknown motives and politics
It is difficult to understand why the Financial Stability Board, under whose aegis the Basel Committee on Banking Supervision has produced Basel 3, seems intent on destroying derivative markets for gold, silver and also for other commodities. That will be the consequence of the introduction of the NSFR calculation in these markets. As the supreme authority overseeing fiat currencies, the Bank for International Settlements, which oversees the FSB, has no love for gold. One can explain the desire to do away with it: as the riskless form of money, it has been at the centre of monetary affairs for ever and the desire to do away with it must be overwhelming for neo-Keynesian modernists. But if that is the case, then it will be a serious misjudgement, because as this article reveals, the consequence of withdrawing paper supply is likely to drive the gold price significantly higher, along with silver and a host of other important commodity prices. Furthermore, this delayed act, first published in 2014, now comes at a time of rapidly rising commodity prices, reflecting the unprecedented acceleration of global money-printing in 2020, which ironically proves the importance of sound money — gold.
Already, tight, gold silver and commodity markets cannot accommodate a migration out of defunct paper into physical metals and energy without massive price rises to defuse the unsatisfied demand unleashed by this action. Perhaps the regulators at the FSB know this. If they do, then we can only conclude it is a deliberate attempt at a reset of all commodity markets. Bank corruption, particularly in precious metals has been rife: major banks have been regularly fined and continue to manipulate and spoof these markets, fines being seen as little more than a cost of doing business. These are systemic risks a regulator should address. But to assume the FSB is shutting down these paper markets to curb this behaviour exhibits a touching faith in its altruism.
Another popular theory is of an even wider financial reset. The BIS is coordinating research into central bank digital currencies, which if adopted cuts out the commercial banks altogether. In theory, it would allow central banks to more effectively target stimulus and do away with the destabilising cycle of bank credit. The ultimate aim could be to demote and then remove commercial banks from the financial system entirely, in which context the closure of derivative markets by regulatory means makes some sense.
Quantifying gold derivatives
We know from the Bank for International Settlements’ statistics that at the end of the second half of 2020, gold forwards and swaps totalled $530bn, which at the then price of $1898 was the equivalent of 8,685 tonnes of gold in paper form. But other than a triannual survey, the next being due in 2022, according to the BIS this figure is culled from dealers, mainly banks, in only twelve jurisdictions. With respect to commodities and foreign exchanges, these twelve jurisdictions have been found to capture roughly 80% of the total, so grossed up the gold tonnage rises to an equivalent of 10,806.
The LBMA positions are just part of the BIS total. The LBMA only records monthly settlements in London (Loco London) reported by the four clearing members that own and operate London Precious Metals Clearing Limited. They deal solely with LBMA members. The daily average settlement for December 2020 was recorded at 18.9 million ounces, or 588 tonnes. This is only one eighteenth of the BIS figure quoted above. The first thing to note is that daily settlements are not the same thing as outstanding obligations. Furthermore, the BIS statistic includes swaps and forwards not recorded in London nor, for that matter, are they necessarily settled through the LPMCL. But even taking these factors into account the difference between the BIS and LBMA figures still need further explanation.
In an analysis for Hardman & Co published in January 2020, Paul Mylchreest identified two other sources of turnover not included in the LBMA figures: trade between LBMA members and non-members, and central banks dealing in unallocated gold.
Now let us assume that the new Basel regulations have the effect of bringing unallocated bank trading in gold to an end. From the value of outstanding OTC contracts recorded by the BIS adjusted for the trends of its triannual surveys, we can take it to be about 10,800 tonnes. Assuming LBMA members on their own account run relatively minor net positions in the context of this enormous figure, we can assume this outstanding balance is mostly split between central banks, other non-LBMA users of the unallocated market, and OTC trades recorded in other centres.
We have no idea what the central bank position is at any one time, but it would be surprising if they took long positions. Instead, they can be expected to attempt to bolster market confidence in fiat currencies, and in particular the US dollar by selling gold. And by shorting paper gold, they also would seek to encourage physical supply by shaking out weak holders in ETFs. That being the case, not only has the central bank cohort no reason to be long of gold derivatives, but if they have positions, they are almost certainly short. The only likely exception is when a central bank which has leased gold sold into the market might hedge the price risk of not getting it back.
The ending, therefore, of London’s forward settlement market would remove an artificial supply of gold, which we can estimate to be the equivalent of over 10,800 tonnes of gold. To this we should add the net short Swap position on Comex, comprised of bullion bank trading desks, which is currently 486 tonnes. From the main sources of derivative supply, we can therefore see roughly 11,300 tonnes of paper gold supply being withdrawn from the markets if the bullion bank cohort ceases trading in derivative gold. We should now examine the position of central banks further.
Central bank leasing — yet to be resolved
In 2002, Frank Veneroso, a respected analyst, concluded that central banks had leased anything between 10,000—16,000 tonnes of gold at that time — the upper figure being about half of global central bank gold reserves at that time. He gave his reasoning at a speech in Lima on 17 May that year. Central bank leased gold was being sold into the market for dollars, which as part of a carry trade were being reinvested by banks in US Treasury bills and the like, the cost of finance being a gold lease rate of one or two per cent, for a yield of six or seven. Veneroso concluded that much of the gold was repurposed into jewellery and had effectively disappeared from the market.
Between the 1980s and the turn of the millennium, gold had been in a bear market, so the general public, including investing institutions, were either genuine sellers (which was in limited physical quantities) or hedging and speculating on the short side using derivatives. This enabled the bullion banks to hedge out the price risk on gold that would have to be eventually returned to central banks by going long for forward delivery relatively cheaply. But at the time of Veneroso’s speech, gold was $325, having risen from about $255 over the previous fourteen months.
Conditions were changing from a long-established bear market, which favoured gold leasing activity, into the beginning of a new bullish phase. Leasing and even undeclared sales then became a tool for central banks to supply physical liquidity to the gold market, either to rescue bullion banks from being badly squeezed or simply to suppress the price.
The leased gold might not have always left the vaults of central banks in the main gold dealing centres, as Veneroso assumed. However, during the period covered by Veneroso’s analysis, I regularly lunched at The Banker’s Club opposite the Bank of England’s rear entrance in Lothbury. On most days, security vans could be observed entering and leaving the Bank’s premises, transporting physical gold to and from the Bank’s vaults. So perhaps Veneroso was right about physical being sold and delivered into the market, at least to some degree.
In March 2008 gold breached $1,000 for the first time. It would have been impossible for central banks to recover their leased gold by then, because Chinese and Indian demand was beginning to suck physical gold out of Western markets at an alarming rate, in any case significantly faster than any replacement by available mine and scrap supplies. It might appear that leased gold could then have been returned to central banks during the 2012—2015 bear market, but again, Chinese and Indian demand continued to absorb most of the available physical released by any ETF sales and other sources of physical supply.
Alternatively, there would have to have been substantial selling of Western-owned stockpiles, and there is no evidence of that. The best one can say is that in some years, notably 2013, there was some ETF liquidation, but not in the quantities required to resolve the leasing problem. By way of confirmation, in 2014 I was told by one of the large Swiss refiners that they were working double shifts seven days a week turning 400-ounce LBMA bars into 1 kilo 9999 bars, the new Chinese standard. Some of the LBMA bars arrived in a poor condition and obviously had not been touched for decades, scraped out from the darkest recesses in deep-storage vaults. Furthermore, customers from the Middle East were submitting LBMA bars for refining into the new 1 kilo standard and taking them back to be re-vaulted in that form. Not only did this indicate that they were aligning themselves with China’s growing gold presence, but they were definitely not selling. Clearly, the 40% decline in the gold price between September 2011 and December 2015 led to substantial unrecorded increases in physical demand, cleaning out Western vaults. It would not have been possible for central banks to regain their leased gold.
There was, perhaps, further circumstantial evidence of the leasing problem, when Germany decided to withdraw her earmarked gold from the New York Fed’s vaults. The desire to do so was publicly justified on the basis that Germany’s gold no longer needed to be stored abroad, because the threat of a Soviet invasion had been removed by the collapse of communism. But given that the suppression of gold involved leasing and gold swaps in significant quantities in order to maintain the dollar’s credibility, was the true reason nothing to do with Soviet presence but that the Bundesbank suspected its gold was being used for this purpose without its permission?
The Bundesbank’s first action was to request to inspect its gold, a request that was flatly refused. Following that refusal, the decision was taken to begin a process of repatriation. Why it was partial is not entirely clear but could be explained if the Bundesbank suspected it wasn’t actually there. There would be nothing to be gained by demanding the return of all of it, but a partial return might at least enable the New York Fed to find some gold from elsewhere and avoid a public crisis. It turned out that after a series of meetings it was agreed to repatriate only 300 tonnes of Germany’s gold over a period of seven years. In fact, it was returned three years early. The Netherlands also sought, and obtained, 122.5 tonnes of her gold repatriated from New York. Austria arranged for the repatriation of some of its gold from London. While some of these repatriations were in the wake of public demands, they were never important enough to trigger them on their own. But they are consistent with substantial quantities being leased and assessments by the central banks repatriating national gold stocks that they are better secured on their own territory.
Since the days, as Veneroso put it, when central bank gold ended up adorning Asian women, leasing procedures, being targeted at providing liquidity and at supressing the gold price, will have changed. Wherever possible, leased gold need not leave the Bank of England’s or the New York Fed’s vaults. A ledger entry, or book entry transfer confirming it is at the disposal of the lessee is all that’s required, and for the payment for the sale of leased gold to be arranged through the appropriate channels. And from there it can be reassigned by another book entry transfer. We saw this in action when GLD, the gold ETF, ended up with the Bank of England recorded as a sub-custodian holding some 70 tonnes of gold last August precisely in these conditions.
In a leasing contract, ownership remains with the lessor. When arranging gold leasing, we can be sure that in recent times the Bank of England will have comforted lessors that their gold never leaves the Bank of England’s vault, so there’s no need to worry about repossession. This would be an operational justification for continuing leasing activities to offset physical shortages in the market. But the question over how much leased gold that has left the Bank of England and the New York Fed in the past remains unresolved, but it is likely to be in significant quantities with Veneroso’s lower estimate perhaps a bare minimum.
The true quantity of monetary gold
It is commonly stated that the above-ground gold stock is 200,000 tonnes. While that may be a reasonable approximation, most of it is not monetary gold in any sense of the definition and is not therefore its monetary supply.
The statist definition of monetary gold is physical bullion held as part of a central bank’s declared monetary reserves. According to the IMF the current total of all such monetary gold is 35,244 tonnes, though as we have seen from the foregoing paragraphs it is unlikely to be all there or unencumbered. But to this we must add gold bullion hoarded and stored by all other parties on the assumption that it is either a more stable store of monetary value than fiat or an insurance against fiat currencies losing purchasing power. It must be in a form immediately available for monetary purposes, being in bar or coin form. Of an estimated 200,000 tonnes of above ground gold, it is generally assumed that 60% is used for other purposes, mainly jewellery but also some industrial purposes, leaving 80,000 tonnes of monetary gold conforming with our definition. After subtracting official monetary gold from the total, we are left with 44,756 tonnes.
In October 2014 I published an article explaining why China had considerably more gold in storage than her declared reserves, and I estimated that by 2002, when the Chinese government removed the ban on personal ownership and opened the Shanghai Gold Exchange, the state could have acquired up to 25,000 tonnes. Much of this gold would have been leased gold sold into the London market. (Veneroso’s statement about ending up adorning Asian women could not have been true for Chinese women, because they were not permitted to own gold until 2002 and Indian imports were severely restricted for some of the relevant time).
That China had accumulated substantial undeclared bullion stocks was confirmed to me anecdotally by experienced China watchers. If we treat that as part of our estimate of monetary gold, and make an allowance for Russia, of perhaps an unrecorded 5,000 tonnes, monetary gold in the hands of everyone else appears to amount to only 15,000 tonnes.
But this figure will have been bolstered by central bank leasing activity, perhaps even doubled, with leased gold appearing to have two or even more owners, and the actual possession being in undeclared Asian hands. It is in this context that the threat to derivative trading from Basel 3 must be viewed. Not only will paper supply estimated at 11,300 tonnes equivalent in unregulated and regulated markets be threatened with removal, but there is an additional unknown figure of central bank leasing and swaps to be unwound. Obviously, there is significant guesswork involved, but if the numbers outlined herein have the slightest validity, the ending of gold derivative markets, if it is permitted to go ahead, will create a major gold crisis, of which the BIS regulators seem blissfully unaware.
Silver
The mechanics behind dealing in the LBMA silver market are the same as for unallocated gold. The LPMCL settlement system is the same, providing access only to LBMA members. The basis of calculating the net stable funding requirement is the same, so silver derivatives suffer from the same balance sheet disincentives. The principal difference is no silver is vaulted at the Bank of England, nor, so far as we are aware, in the vaults of any other Western central bank.
In terms of demand, it is also primarily an industrial metal, and is mostly consumed. According to the Silver Institute, of a total annual demand of roughly a billion ounces that is forecast in the current year, 253 million ounces is identified as investment demand and a further 150 million ounces as ETF/ETP demand. Bizarrely, the report estimates there will be a fall in ETF demand, when it is already rising. And of the supply, only 18.5% is from recycling.
The BIS figure for outstanding silver OTC derivatives is included in “Other precious metals” at $64bn. The same NSFR treatment for all commodity derivatives, including energy, involves an estimated $858bn’s worth. Not only is the introduction of the NSFR disruptive of precious metal markets, but it also threatens to disrupt wider commodities at a time when their prices are already increasing rapidly as a consequence of falling purchasing powers for fiat currencies.
#USAS: GREAT TIME TO ADD $1.63... Go Jerry
#USAS: Americas Gold and Silver Corporation Reports First Quarter 2021 Results and Provides Operational Update...
https://www.americas-gold.com/
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Americas Gold and Silver Corporation (TSX: USA) (NYSE American: USAS) (“Americas” or the “Company”), a growing North American precious metals producer, reports consolidated financial and operational results for the quarter ended March 31, 2021 along with the progress to reopen the Cosalá Operations, continued exploration success at the Galena Complex and an update for Relief Canyon.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20210517005486/en/
This earnings release should be read in conjunction with the Company’s Management’s Discussion and Analysis, Financial Statements and Notes to Financial Statements for the corresponding period, which have been posted on the Americas Gold and Silver Corporation SEDAR profile at www.sedar.com, and on its EDGAR profile at www.sec.gov, and which are also available on the Company’s website at www.americas-gold.com. All figures are in U.S. dollars unless otherwise noted.
Highlights
? Revenue of $10.2 million and a net loss of $91.8 million for Q1-2021 or a loss of ($0.72) per share, which includes an impairment charge of $55.6 million and an inventory write-down of $23.0 million related to Relief Canyon. Adjusted net loss1 was $13.2 million prior to these one-time adjustments or ($0.10) per share.
? Following an extensive review and a challenging ramp-up at Relief Canyon, the operation is proceeding with run-of-mine heap leaching. The Company expects this change will improve overall project economics going forward.
? The Company is confident that a resolution will be reached to reopen the Cosalá Operations with all employees returning to work in the near term with a ramp-up to full production in Q3-2021. Full Mexican government support will ensure the long-term stability of the operation.
? At the Galena Complex, geologists have located and drilled the downdip extension of the prolific Silver Vein. All of the first 8 holes hit high-grade mineralization highlighted by the following:
Hole 55-175A: 7,370 g/t silver and 6.3% copper (8,020 g/t silver equivalent [2]) over 2.7 m [3]
including: 30,200 g/t silver and 26.1% copper (32,900 g/t silver equivalent) over 0.3 m
including: 23,000 g/t silver and 17.0% copper (24,800 g/t silver equivalent) over 0.2 m
including: 11,500 g/t silver and 10.0% copper (12,500 g/t silver equivalent) over 0.2 m
Hole 55-148: 5,320 g/t silver and 4.1% copper (5,730 g/t silver equivalent) over 0.8 m
including: 10,200 g/t silver and 7.9% copper (11,000 g/t silver equivalent) over 0.4 m
Hole 55-176: 3,110 g/t silver and 2.4% copper (3,350 g/t silver equivalent) over 1.8 m
including: 23,900 g/t silver and 17.5% copper (25,700 g/t silver equivalent) over 0.2 m
and: 1690 g/t silver and 1.1% copper (1,810 g/t silver equivalent) over 0.4 m
“Based on our latest discussions with both the state and federal Mexican government, we are on the cusp of a resolution to the illegal blockade at our Cosalá Operations and anticipate our employees will be back to work this quarter,” stated Americas Gold and Silver President & CEO Darren Blasutti. “The restart of the Cosalá Operations and the recent high-grade Silver Vein discovery at the Galena Complex, near existing infrastructure, will increase exposure to silver and cash flow to the Company and our shareholders. At Relief Canyon, following months of study, we have decided to transition to run-of-mine heap leaching to simplify the flowsheet and improve performance. While the ramp-up has been more difficult than the Company envisioned, I believe this change will lead to better economics and enhanced profitability for the operation.”
Relief Canyon
The ramp-up at Relief Canyon has been a challenge and continues to be challenging as documented since the Company first poured gold in February 2020. During this period, the Company and its consultants have performed extensive analyses and implemented a number of procedural changes to address the start-up challenges. As part of this analysis, the Company identified naturally occurring carbonaceous material within the Relief Canyon pit. The identification of this material was not recognized in the feasibility study.
During the first phase of mining (Phase 1 of 5), several adverse impacts affected the operation including the onset of the COVID-19 pandemic and the failure of the Company’s radial stacker. Offsetting these challenges was that the definition of the gold mineralized zones through blasthole sampling reconciled reasonably to the block model. However, during Phase 1, an unknown quantity of carbonaceous material was crushed, stacked and disseminated onto the leach pad resulting in lower-than-expected recovery of the placed gold ore. Following realization of this adverse material, the Company implemented additional measures to the ore control procedure to minimize the impact the carbonaceous material could have on leach pad performance. Additional efforts focussed on improving mining selectivity including the use of a hydraulic excavator operating on split (10 foot) benches when required.
Phase 2 mining, which commenced in late Q4-2020/early Q1-2021, has demonstrated a more structurally complex area than initially interpreted, caused by additional faults and folds. Gold mineralization is strongly influenced by structural controls. The impact of the structural complexity, combined with the increased mining selectivity to reject carbonaceous material, has decreased ore availability in Q1-2021 and into Q2-2021.
As a result of these challenges, the Company began two small run-of-mine test pads in Q1-2021 to evaluate the possibility of simplifying the flowsheet by by-passing the crushing and conveying circuits. Results have been encouraging and the operation has transitioned to this method of ore placement to further demonstrate its applicability with haul trucks now delivering the ore directly from the pit to the leach pad. The Company continues to evaluate options to improve the short-term operational and financial performance of the asset.
Additional improvements in the predictability of the resource model are progressing with incorporation of the latest geological detail from recent pit mapping as well as new data from an extensive re-assaying program of over 10,000 historic exploration pulp samples. Completion of this data compilation and analysis is targeted for late Q3-2021 as part of the Company’s mid-year update of its reserve and resource estimates.
As a result of the differences observed between the modelled (planned) and mined (actual) ore tonnage and the carbonaceous material identified in the early phases of the mine plan, an impairment charge of $55.6 million has been taken in Q1-2021, reducing the carrying value of the Relief Canyon mineral interest, and property, plant and equipment. An additional reduction of $23.0 million was taken to inventory as a result of the decreased recovery expected from crushed gold ounces already placed on the leach pad. As further test work is ongoing, future results may cause a reassessment of the remaining carrying value and cause a subsequent recovery or an increase to the impairment.
Cosalá Operations
The illegal blockade at the Cosalá Operations, which has been in place since February 2020, is nearing a resolution and the Company is confident that the operations will restart this quarter. The expected resolution follows tireless efforts by the Company’s representatives in Mexico in cooperation with various members of as the Mexican federal government, who have sought to properly characterize the nature of the conflict with decision makers (including President Manuel Lopez Obrador) and to establish a framework that will allow for the safe return of the Company’s employees and allow for continuous operation in the long term. The Company understands that a recent positive development in the conflict is the engagement for the first time of state government with its federal counterparts to support a resolution that benefits the people of Cosalá with the peaceful removal of the illegal blockade. Assuming the delivery of agreed conditions and the enforcement of applicable law, the Company eagerly anticipates getting the operation restarted and is targeting full mining operations in Q3-2021.
Upon resolution of the illegal blockade and a re-start of operations, higher silver prices will allow the Company to target the higher-grade silver ores in the Upper Zone of San Rafael and develop the silver-copper EC120 project. Mining these silver-rich areas of the Cosalá Operations is expected to significantly increase silver production to over 2.5 million ounces of silver per annum in the years following the removal of the blockade.
Galena Complex
Initial drilling from the new drill station on the 5500 Level has yielded several high-grade intercepts at depth. Galena geologists discovered a new silver-copper trend south of the prolific Silver Vein. The strike and dip of this new trend matches very well with the strike and dip of the majority of the Silver Vein mined from the 3200 Level to the 4300 Level. Initial interpretations are that this trend is either a southern splay of the Silver Vein or that it is the true Silver Vein at depth.
Initial intercepts from the 5500-level drilling includes:
Hole 55-175A: 7,370 g/t silver and 6.3% copper (8,020 g/t silver equivalent) over 2.7 m
including: 30,200 g/t silver and 26.1% copper (32,900 g/t silver equivalent) over 0.3 m
including: 23,000 g/t silver and 17.0% copper (24,800 g/t silver equivalent) over 0.2 m
including: 11,500 g/t silver and 10.0% copper (12,500 g/t silver equivalent) over 0.2 m
Hole 55-148: 5,320 g/t silver and 4.1% copper (5,730 g/t silver equivalent) over 0.8 m
including: 10,200 g/t silver and 7.9% copper (11,000 g/t silver equivalent) over 0.4 m
Hole 55-178: 4,290 g/t silver and 3.1% copper (4,610 g/t silver equivalent) over 0.9 m
Hole 55-146: 3,430 g/t silver and 3.1% copper (3,740 g/t silver equivalent) over 1.1 m
including: 21,800 g/t silver and 18.9% copper (23,700 g/t silver equivalent) over 0.1 m
and: 844 g/t silver and 7.9% lead (1,180 g/t silver equivalent) over 2.0 m
Hole 55-147: 3,290 g/t silver and 3.7% copper (3,680 g/t silver equivalent) over 2.5 m
including: 5,250 g/t silver and 5.7% copper (5,840 g/t silver equivalent) over 1.2 m
and: 1,110 g/t silver and 6.8% lead (1,430 g/t silver equivalent) over 1.6 m
Hole 55-174: 1,750 g/t silver and 2.0% copper (1,960 g/t silver equivalent) over 2.2 m
including: 2,770 g/t silver and 2.5% copper (3,040 g/t silver equivalent) over 0.7 m
Hole 55-176: 3,110 g/t silver and 2.4% copper (3,350 g/t silver equivalent) over 1.8 m
including: 23,900 g/t silver and 17.5% copper (25,700 g/t silver equivalent) over 0.2 m
and: 1,690 g/t silver and 1.1% copper (1,810 g/t silver equivalent) over 0.4 m
and: 758 g/t silver and 0.6% copper (820 g/t silver equivalent) over 1.7 m
Hole 55-144: 749 g/t silver and 0.7% copper (818 g/t silver equivalent) over 0.9 m
East Coeur drilling, which commenced in January 2021, targeting the area between Galena’s historically prolific West Argentine mining front and the Coeur mine continues to provide solid results. Key results from the East Coeur drilling includes:
Hole 34-122: 1,170 g/t silver and 1.3% copper (1,310 g/t silver equivalent) over 1.8 m
Hole 34-125: 1,900 g/t silver and 2.4% copper (2,150 g/t silver equivalent) over 0.4 m
Hole 34-124: 2,590 g/t silver and 2.7% copper (2,870 g/t silver equivalent) over 0.2 m
Hole 34-132: 2,360 g/t silver and 3.6% copper (2,730 g/t silver equivalent) over 0.2 m
Geologists drilled an additional hole further east of the current East Coeur drilling which intercepted a new, un-named vein. Additional drilling is planed to further test this area but initial results are encouraging.
Hole 34-133: 713 g/t silver and 2.0% copper (914 g/t silver equivalent) over 1.4 m
A full table of drill results can be found at:
https://americas-gold.com/site/assets/files/4297/dr20210516.pdf
The Company expects 2021 to be a transitional year at the Galena Complex for future production with continued exploration drilling supporting production growth toward a 2 million silver ounce per year plan. Longer term and assuming continued exploration success, with the results from the 5500 Level and East Coeur drilling providing a solid initial indication, the Company is confident that the operation will again reach peak historical annual production levels of approximately 5 million ounces per year.
The Company is targeting further mineral resource additions at the Galena Complex from the remainder of Phase 1 drilling through June 2021 with the potential increase exceeding the originally targeted addition of 50 million ounces of silver.
At-The-Market Offering
Americas has entered into an at-the-market offering agreement dated May 17, 2021 (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (the “Lead Agent”) and ROTH Capital Partners, LLC as agents, pursuant to which the Company established an at-the-market equity program (the “ATM Program”). Pursuant to the ATM Program and ATM Agreement, the Company may, at its discretion and from time-to-time during the term of the ATM Agreement, sell, through the Lead Agent, such number of common shares of the Company (“Common Shares”) as would result in aggregate gross proceeds to the Company of up to US$50.0 million. Sales of Common Shares, if any, through the Lead Agent, acting as agent, will be made through “at the market” issuances, including without limitation, sales made directly on the NYSE American LLC or other existing trading market for the shares in the United States at the market price prevailing at the time of each sale, and, as a result, sale prices may vary. No Common Shares will be offered or sold on the Toronto Stock Exchange or any other trading markets in Canada. The ATM Program will be effective until March 1, 2023 unless terminated prior to such date. Americas intends to use the net proceeds from the ATM Program, if any, primarily to support the growth and development of the Company’s existing mine operations as well as working capital and general corporate purposes.
The ATM Program will be made by way of a prospectus supplement dated May 17, 2021 (the “Prospectus Supplement”) to the Company's existing Canadian short form base shelf prospectus dated January 29, 2021 (the “Base Shelf Prospectus”) and U.S. registration statement on Form F-10, as amended (File No. 333-240504) (the “Registration Statement”), dated January 29, 2021. The Registration Statement was declared effective by the United States Securities and Exchange Commission (the “SEC”) on February 1, 2021. The Prospectus Supplement has been filed with the applicable provincial regulatory authorities in Canada and the SEC. The Canadian Prospectus Supplement (together with the related Canadian Base Shelf Prospectus) is available on the SEDAR website maintained by the Canadian Securities Administrators at www.sedar.com. The U.S. Prospectus Supplement (together with the related U.S. Base Shelf Prospectus) is available on the SEC's EDGAR website at www.sec.gov.
This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these Common Shares in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
About Americas Gold and Silver Corporation
Americas Gold and Silver Corporation is a high-growth precious metals mining company with multiple assets in North America. The Company owns and operates the Relief Canyon mine in Nevada, USA, the Cosalá Operations in Sinaloa, Mexico and manages the 60%-owned Galena Complex in Idaho, USA. The Company also owns the San Felipe development project in Sonora, Mexico. For further information, please see SEDAR or www.americas-gold.com.
Technical Information and Qualified Persons
The scientific and technical information relating to the operation of the Company’s material operating mining properties contained herein has been reviewed and approved by Daren Dell, P.Eng., Chief Operating Officer of the Company. The scientific and technical information relating to mineral reserves contained herein has been reviewed and approved by Shawn Wilson, Vice-President, Technical Services of the Company. The scientific and technical information relating to mineral resources and exploration contained herein has been reviewed and approved by Niel de Bruin, Director of Geology of the Company. Each of Messrs. Dell, Wilson, and de Bruin are "qualified persons" for the purposes of NI 43-101.
The Company’s current Annual Information Form and the NI 43-101 Technical Reports for its other material mineral properties, all of which are available on SEDAR at www.sedar.com, and EDGAR at www.sec.gov contain further details regarding mineral reserve and mineral resource estimates, classification and reporting parameters, key assumptions and associated risks for each of the Company’s material mineral properties, including a breakdown by category.
The diamond drilling program used NQ-size core. Americas Gold and Silver’s standard QA/QC practices were utilized to ensure the integrity of the core and sample preparation at the Galena Complex through delivery of the samples to the assay lab. The drill core was stored in a secure facility, photographed, logged and sampled based on lithologic and mineralogical interpretations. Standards of certified reference materials, field duplicates and blanks were inserted as samples shipped with the core samples to the lab.
Analytical work was carried out by American Analytical Services Inc. (“AAS”) located in Osburn, Idaho. AAS is an independent, ISO-17025 accredited laboratory. Sample preparation includes a 30-gram pulp sample analyzed by atomic absorption spectrometry (“AA”) techniques to determine silver, copper, and lead, using aqua regia for pulp digestion. Samples returning values over 514g/t Ag are re-assayed using fire-assay techniques for silver. Additionally, samples returning values over 23% Pb are re-assayed using titration techniques.
Duplicate pulp samples were sent out quarterly to ALS Global, an independent, ISO-17025 accredited laboratory based in Reno, Nevada to perform an independent check analysis. A conventional AA technique was used for the analysis of silver, copper and lead at ALS Global with the same industry standard procedures as those used by AAS. The assay results listed in this report did not show any significant contamination during sample preparation or sample bias of analysis.
All mining terms used herein have the meanings set forth in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), as required by Canadian securities regulatory authorities. These standards differ significantly from the requirements of the SEC that are applicable to domestic United States reporting companies. Any mineral reserves and mineral resources reported by the Company in accordance with NI 43-101 may not qualify as such under SEC standards. Accordingly, information contained in this news release may not be comparable to similar information made public by companies subject to the SEC’s reporting and disclosure requirements
Cautionary Statement on Forward-Looking Information:
This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information includes, but is not limited to, Americas Gold and Silver’s expectations, intentions, plans, assumptions and beliefs with respect to, among other things, estimated and targeted production rates and results for gold, silver and other precious metals, the expected prices of gold, silver and other precious metals, as well as the related costs, expenses and capital expenditures; the recapitalization plan at the Galena Complex, including the expected production levels and potential additional mineral resources thereat; the expected resolution of the illegal blockade at the Company’s Cosalá Operations and the restart of mining operations, including the expected timing thereof; the Company’s production, development plans and performance expectations at the Relief Canyon Mine and its ability to finance, develop and operate Relief Canyon, including the Company’s determination to proceeding with run-of-mine heap leaching operations and the expected improvement of operations and overall project economics in connection therewith, the timing and conclusions of the data compilation and analysis occurring at Relief Canyon and the potential for reassessment of the remaining carrying value of the Relief Canyon asset; and anticipated offering of Common Shares under the ATM Program and the anticipated use of proceeds from the ATM Program, if any. Often, but not always, forward-looking information can be identified by forward-looking words such as “anticipate”, “believe”, “expect”, “goal”, “plan”, “intend”, “potential’, “estimate”, “may”, “assume” and “will” or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions, or statements about future events or performance. Forward-looking information is based on the opinions and estimates of Americas Gold and Silver as of the date such information is provided and is subject to known and unknown risks, uncertainties, and other factors that may cause the actual results, level of activity, performance, or achievements of Americas Gold and Silver to be materially different from those expressed or implied by such forward-looking information. With respect to the business of Americas Gold and Silver, these risks and uncertainties include risks relating to widespread epidemics or pandemic outbreak including the COVID-19 pandemic; the impact of COVID-19 on our workforce, suppliers and other essential resources and what effect those impacts, if they occur, would have on our business, including our ability to access goods and supplies, the ability to transport our products and impacts on employee productivity, the risks in connection with the operations, cash flow and results of the Company relating to the unknown duration and impact of the COVID-19 pandemic; interpretations or reinterpretations of geologic information; unfavorable exploration results; inability to obtain permits required for future exploration, development or production; general economic conditions and conditions affecting the industries in which the Company operates; the uncertainty of regulatory requirements and approvals; fluctuating mineral and commodity prices; the ability to obtain necessary future financing on acceptable terms or at all; the ability to operate the Relief Canyon Project; and risks associated with the mining industry such as economic factors (including future commodity prices, currency fluctuations and energy prices), ground conditions and other factors limiting mine access, failure of plant, equipment, processes and transportation services to operate as anticipated, environmental risks, government regulation, actual results of current exploration and production activities, possible variations in ore grade or recovery rates, permitting timelines, capital and construction expenditures, reclamation activities, labor relations or disruptions, social and political developments and other risks of the mining industry. The potential effects of the COVID-19 pandemic on our business and operations are unknown at this time, including the Company’s ability to manage challenges and restrictions arising from COVID-19 in the communities in which the Company operates and our ability to continue to safely operate and to safely return our business to normal operations. The impact of COVID-19 on the Company is dependent on a number of factors outside of its control and knowledge, including the effectiveness of the measures taken by public health and governmental authorities to combat the spread of the disease, global economic uncertainties and outlook due to the disease, and the evolving restrictions relating to mining activities and to travel in certain jurisdictions in which it operates. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, or intended. Readers are cautioned not to place undue reliance on such information. Additional information regarding the factors that may cause actual results to differ materially from this forward-looking information is available in Americas Gold and Silver’s filings with the Canadian Securities Administrators on SEDAR and with the SEC. Americas Gold and Silver does not undertake any obligation to update publicly or otherwise revise any forward-looking information whether as a result of new information, future events or other such factors which affect this information, except as required by law. Americas Gold and Silver does not give any assurance (1) that Americas Gold and Silver will achieve its expectations, or (2) concerning the result or timing thereof. All subsequent written and oral forward-looking information concerning Americas Gold and Silver are expressly qualified in their entirety by the cautionary statements above.
1 The Company’s profitability was impacted by non-reoccurring and non-cash charges, specifically $55.6 million in impairment of Relief Canyon’s net assets carrying amount and $23.0 million in inventory write-downs from lowered leach pad gold recoveries.
2 Silver equivalent was calculated using metal prices of $20.00/oz silver, $3.00/lb copper and $1.05/lb lead.
3 Meters represent “True Width” which is calculated for significant intercepts only and is based on orientation axis of core across the estimated dip of the vein.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210517005486/en/
Stefan Axell
VP, Corporate Development & Communications
Americas Gold and Silver Corporation
416-874-1708
Darren Blasutti
President and CEO
Americas Gold and Silver Corporation
416-848-9503
#USAS: USA Producer Prices Surge Most On Record....!
April 2021 Producer Prices exploded 6.2% YoY
https://www.zerohedge.com/economics/us-producer-prices-surge-most-record
US Producer Prices Surge Most On Record
Tyler Durden's Photo
BY TYLER DURDEN
THURSDAY, MAY 13, 2021 - 08:37 AM
After consumer prices exploded higher yesterday - and were immediately rejected by establishment types as 'transitory', despite the market's obvious disagreement - all eyes were on this morning's producer prices for signs of more pressure. Many were fearful of a repeat of last month's debacle delay (and there were rumors of a softer PPI print leaked earlier today)
The rumors were wrong as April Producer Prices exploded 6.2% YoY (well ahead of the 5.8% expected) which was clearly impacted by the base effect of last year's collapse, but even sequentially, the PPI print was shockingly hot, rising 0.6% MoM (double the +0.3% expected). Excluding food and energy, so-called core PPI advanced even more, or 0.7%.
Source: Bloomberg
That was the biggest YoY jump on record:"There is more inflation coming,” Luca Zaramella, chief financial officer at Mondelez International Inc., said on the food and beverage maker’s April 27 earnings call.“The higher inflation will require some additional pricing and some additional productivities to offset the impact.”
jumped 0.7% from the prior month and increased 4.6% from a year earlier.
Michael Hsu, chief executive officer at consumer-product maker Kimberly-Clark Corp., said in April that the maker of Scott toilet paper and Huggies diapers is “moving rapidly especially with selling price increases to offset commodity headwinds.”
Digging below the surface further, ex-food, energy, and trade, producer prices soared 4.6% YoY, the most on record also.
Source: Bloomberg
Some more details at the final demand level:
Final demand services: Prices for final demand services rose 0.6 percent in April, the fourth consecutive advance. Half of the broad-based increase in April is attributable to the index for final demand services less trade, transportation, and warehousing, which moved up 0.5 percent. Margins for final demand trade services also rose 0.5 percent, and the index for final demand transportation and warehousing services jumped 2.1 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)
Product detail: Within the index for final demand services in April, prices for portfolio management rose 1.5 percent. The indexes for airline passenger services; food retailing; fuels and lubricants retailing; physician care; and hardware, building materials, and supplies retailing also moved higher. Conversely, margins for machinery and vehicle wholesaling fell 5.6 percent. The indexes for apparel wholesaling and for securities brokerage, dealing, investment advice, and related services also declined.
Final demand goods: Prices for final demand goods climbed 0.6 percent in April, after rising 1.7 percent in March. Leading the April advance, the index for final demand goods less foods and energy increased 1.0 percent. Prices for final demand foods moved up 2.1 percent. In contrast, the index for final demand energy fell 2.4 percent.
Product detail: A major factor in the April increase in prices for final demand goods was the index for steel mill products, which jumped 18.4 percent. Prices for beef and veal, pork, residential natural gas, plastic resins and materials, and dairy products also moved higher. Conversely, the index for gasoline fell 3.4 percent. Prices for chicken eggs and for carbon steel scrap also declined.
Yesterday's data - which showed the strongest monthly gain in the overall consumer price index since 2009 - suggested companies are passing along at least some of the input-price inflation.. and today's PPI surge suggests that push through to CPI is far from over.
Not transitory.
#USAS: THE MAIN STREAM IS COMING... $2.40
$PDAC: Americas Gold & Silver's transition toward more gold revenue
Americas Gold and Silver CEO Darren Blasutti gives an update on
the Relief Canyon mine in Nevada and the latest news on
the blockade at their Cosala mine in Mexico.
https://www.bnnbloomberg.ca/investing/video/pdac-americas-gold-silver-s-transition-toward-more-gold-revenue~1914748
https://www.americas-gold.com/investors/presentations/
https://www.americas-gold.com/site/assets/files/5628/fact20210303.pdf
https://www.americas-gold.com/
https://www.americas-gold.com/investors/upcoming-events/
Legend Pierre Lassonde Has Been Aggressively Buying This Mining Stock, His Top Pick For 2021
February 23, 2021
https://kingworldnews.com/pierre-lassonde-has-been-aggressively-buying-this-mining-stock-his-top-pick-for-2021/
In GOD We Trust - Real Money -
https://www.kitco.com/images/live/silver.gif?0.8344882022363285
http://www.kitconet.com/images/live/au0001wb.gif
Gold & Silver is the only REAL Legal Tender -
by The Founding Fathers for your -
Rights, Liberty and Freedom -
http://www.biblebelievers.org.au/monie.htm
God Bless America
Ps.
opinion appreciated
TIA
#USAS: HERE WE GO. . $2.33
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