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>>> Why copper and lithium could be 'the new oil'
By Julia Horowitz
CNN Business
April 20, 2021
https://www.cnn.com/2021/04/20/investing/premarket-stocks-trading/index.html
For decades, crude oil has been at the center of global commodities markets. Demand has served as a crucial metric of economic health, and price spikes have had major ramifications for gas-guzzling consumers.
But as countries around the world try to combat the climate crisis, oil could take a backseat, while metals like copper and lithium gain prominence.
"The critical role copper will play in achieving the Paris climate goals cannot be overstated," Goldman Sachs analysts said in a recent research note titled "Copper is the new oil."
'Dire warning' for the planet: Coal is powering the economic recovery
Setting the scene: Copper is an essential component of systems that allow wind, solar and geothermal energy to be tapped and transmitted for applications like heating homes, the analysts noted.
And the market already looks tight. Copper prices have rallied 80% over the past 12 months, and supply is constrained as demand skyrockets. It takes two to three years to extend an existing mine, and as many as eight years to establish a new project, according to Goldman Sachs.
That could set up the price of copper to jump from current prices of more than $9,000 per tonne to $15,000 per tonne by 2025, per the bank's estimates.
There's also a growing focus on lithium, a key component for batteries in electric cars. In a recent note, analysts at Macquarie Research predicted that demand for electric vehicles could trigger "material shortages" of the metal from 2025.
These constraints are putting lithium miners in the spotlight. On Monday, Australia's Orocobre and Galaxy announced a $3.1 billion merger that would create one of the biggest lithium companies in the world.
Why it matters: Global carbon dioxide emissions are set to surge dangerously this year as the global economy undergoes a huge recovery, according to a report published Tuesday by the International Energy Agency.
The Paris-based group estimates that carbon emissions from energy use are on track to spike by 1.5 billion tonnes in 2021, as heavy coal consumption in Asia, and in China in particular, outweighs rapid growth in renewable sources. That would be the second largest annual increase in energy-related emissions in history.
"This is a dire warning that the economic recovery from the Covid crisis is currently anything but sustainable for our climate," Executive Director Fatih Birol said in a statement.
Watch this space: The IEA is sounding the alarm before 40 world leaders come together later this week for a two-day virtual summit on the climate crisis convened by President Joe Biden. Birol called it a "critical moment to commit to clear and immediate action."
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>>> American Battery Metals Company Selected for $4.5 Million Grant by U.S. Department of Energy Advanced Manufacturing Office
Yahoo Finance
January 28, 2021
https://finance.yahoo.com/news/american-battery-metals-company-selected-130000503.html
INCLINE VILLAGE, NV / ACCESSWIRE / January 28, 2021 / American Battery Metals Corporation (OTCQB:ABML) (the "Company"), an American-owned lithium-ion battery recycling technology and advanced battery metals extraction company with extensive mineral resources in Nevada, which is in the process of changing its name to American Battery Technology Company, has been selected for a $4.5 million grant by the U.S. Department of Energy's Advanced Manufacturing Office.
This funding opportunity is part of the Department of Energy's efforts to reduce American dependence on imported critical materials by both diversifying the sources of materials needed for energy technologies and establishing domestic capabilities to refine materials used in manufacturing. American Battery Technology Company, and its industry partners, are excited to have been selected for this competitive opportunity to address these challenges and to help fuel our nation's energy storage needs while shifting towards a clean energy economy that addresses climate change and grows domestic manufacturing employment.
"We are proud to have been selected for this opportunity along with our industry partners after undergoing a rigorous competitive assessment over the past six months," stated American Battery Technology Company Chief Technology Officer, and project Principal Investigator, Ryan Melsert. He added, "We are excited to move forward with this proposed 3-year project that will evolve our first-of-kind system design from bench scale validations to the construction, commissioning, and operation of a multi-ton per day integrated system that receives lithium-rich claystone material as the feed and manufactures battery cathode specification lithium hydroxide as the product."
American Battery Technology Company CEO Doug Cole stated, "We are grateful to have been selected for this award from the Department of Energy. We are fortunate to work with forward-thinking, collaborative partners - including the United States government - as we seek to create a self-sustaining and closed-loop economy for the domestic production of critical and strategic battery metals that will fuel the clean energy revolution."
Further details on this project, titled "Field Demonstration of Selective Leaching, Targeted Purification, and Electro-Chemical Production of Battery Grade Lithium Hydroxide Precursor from Domestic Claystone Resources," and the funding opportunity are available here.
About American Battery Metals Corporation
American Battery Technology Company is uniquely positioned to supply battery metals through its three divisions: lithium-ion battery recycling, extraction technology, and primary resources. The Company recently announced the groundbreaking of its lithium-ion battery recycling facility in Fernley, NV, and issued a recent shareholder letter outlining achievements of the past year.
American Battery Technology Company has built a clean technology platform that increases production of primary metals used in the batteries that power electric cars, grid storage applications, consumer electronics and tools. The green platform creates a circular economy for battery metals that champions ethical and environmentally sustainable sourcing of critical materials.
For more information, please visit: www.americanbatterytechnology.com
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including those with respect to the expected project economics for Western Nevada Basin (Railroad Valley), including estimates of life of mine, average production, cash costs, AISC, initial CAPEX, sustaining CAPEX, pre-tax IRR, pre-tax NPV, net cash flows and recovery rates, the impact of self-mining versus contract mining, the timing to obtain necessary permits, the submission of the project for final investment approval and the timing of initial gold production after investment approval and full financing, metallurgy and processing expectations, the mineral resource estimate, expectations regarding the ability to expand the mineral resource through future drilling, ongoing work to be conducted at the Western Nevada Basin (Railroad Valley), and the potential results of such efforts, the potential commissioning of a Pre-Feasibility study and the effects on timing of the project, are "forward-looking statements." Although the Company's management believes that such forward-looking statements are reasonable, it cannot guarantee that such expectations are, or will be, correct. These forward-looking statements involve a number of risks and uncertainties, which could cause the Company's future results to differ materially from those anticipated. Potential risks and uncertainties include, among others, 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, final investment approval and the ability to obtain necessary financing on acceptable terms or at all. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in the Company's filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year ended September 30, 2020. The Company assumes no obligation to update any of the information contained or referenced in this press release.
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>>> American Battery Metals Corporation (ABML) engages in the exploration, mining, extraction, and recycling of battery metals. It owns 647 placer mining claims on approximately 12,940 acres in the Western Nevada Basin, situated in Railroad Valley in Nye County, Nevada; and a 120-acre parcel of private property with water rights, in the town of Currant, NV near Railroad Valley. The company was formerly known as Oroplata Resources, Inc. and changed its name to American Battery Metals Corporation in May 2019. American Battery Metals Corporation was founded in 2011 and is based in Incline Village, Nevada. <<<
Mr. Paul Pelosi Jr. - Sr. Advisor and Member of Advisory Board
https://finance.yahoo.com/quote/ABML/profile?p=ABML
>>> 3 Platinum ETFs for Q1 2021
PLTM, PPLT, and PGM are the three platinum ETFs that trade in the U.S.
Investopedia
By MATTHEW JOHNSTON
Nov 11, 2020
https://www.investopedia.com/etfs/top-platinum-etfs/
Platinum is regarded as an important precious metal by many investors though it's less commonly talked about than gold and silver. Many investors use platinum as a hedge against inflation or as a safe haven in troubling economic times. Platinum is also valuable as an industrial metal, used in the manufacturing of products such as cars, jewelry, and electronics. To gain exposure to the metal, investors may purchase platinum bars or coins, platinum futures contracts, or shares of platinum mining companies. Another option is a platinum exchange-traded fund (ETF). This instrument tends to be more liquid than holding the physical commodity, and does not require paying related storage or insurance costs.
KEY TAKEAWAYS
Platinum prices have dramatically underperformed the broader market over the past year.
The ETFs with the best 1-year trailing total return are PLTM, PPLT, and PGM.
These ETFs are backed either by physical platinum or platinum futures contracts, rather than stocks of platinum mining companies.
There are two main types of platinum ETFs for investors to choose from. The first is structured as a grantor trust, which means that the fund holds physical bullion in its vaults and then administers the buying, storage, and sale of that bullion on behalf of the trust’s owners. The other common structure is what’s called an exchange-traded note (ETN). These products are unsecured debt securities that track an underlying index and trade on a major exchange in the same manner as a stock. Platinum ETNs invest in futures contracts that track the price of the metal, as opposed to holding it in physical form.
There are 3 distinct platinum ETFs that trade in the U.S. They are aimed at tracking the price of platinum by holding the physical metal or through futures contracts and do not hold shares of platinum mining companies. Platinum futures prices, which generally drive these ETFs, have fallen 2.9% over the past 12 months compared to the S&P 500's total return of 16.9%, as of November 10, 2020.1? The best-performing platinum ETF, based on performance over the past year, is the GraniteShares Platinum Trust (PLTM). We examine the 3 platinum ETFs that trade in the U.S. below. All numbers below are as of November 10, 2020.
ETFs with very low assets under management (AUM), less than $50 million, usually have lower liquidity than larger ETFs. This can result in higher trading costs which can negate some of your investment gains or increase your losses.
GraniteShares Platinum Trust (PLTM)
Performance over 1-Year: -2.6%
Expense Ratio: 0.50%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 39,103
Assets Under Management: $15.3 million
Inception Date: January 22, 2018
Issuer: GraniteShares
PLTM is structured as a grantor trust, which is backed by physical platinum held in a vault. The vault is located in London, and is inspected twice per year. The goal of the fund is to provide a cost-effective way to invest in platinum, by tracking the price of the platinum spot market, less the fund’s expenses.
Aberdeen Standard Platinum Shares ETF (PPLT)
Performance over 1-Year: -3.1%
Expense Ratio: 0.60%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 191,177
Assets Under Management: $1.1 billion
Inception Date: January 6, 2010
Issuer: Aberdeen Standard Investments
PPLT is also structured as a grantor trust whose goal is to track the spot price of platinum, after deducting the fund’s expenses. Its benchmark is the PM London Spot Fix for platinum. The fund is backed by physical platinum held in a secure vault located in London.
iPath Series B Bloomberg Platinum Subindex Total Return ETN (PGM)
Performance over 1-Year: -4.8%
Expense Ratio: 0.45%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 1,006
Assets Under Management: $4.4 million
Inception Date: January 17, 2018
Issuer: Barclays Capital
PGM is unique on this list in that it is the only fund structured as an ETN. Rather than being backed by physical platinum, the fund invests in futures contracts. Aside from this difference, the core objective of the fund is the same: tracking the spot price of platinum after accounting for the fund’s expenses. Due to PGM's extremely low trading volume, trading costs are likely to be higher as compared to more liquid investments.
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>>> The Resurgence of Silver
BY JAMES RICKARDS
JANUARY 27, 2021
https://dailyreckoning.com/the-resurgence-of-silver/
The Resurgence of Silver
Most investors who focus on precious metals and commodities know that gold had a great year in 2020, up 24.6%. However, not as many know that silver did even better! Silver was up 47.4% in 2020, rising from $17.80 per ounce on January 2, 2020, to $26.35 per ounce on December 31, 2020.
Silver didn’t just outperform gold in 2020; it also outperformed every other major asset class, including U.S. small cap stocks (up 18.5%), U.S. stocks (up 15.5%), U.S. corporate bonds (up 9.7%) and U.S. Treasuries (up 3.6%). Many other asset classes declined in price in 2020, including commodities, the U.S. dollar, real estate and crude oil.
Silver backed off a little in early 2021 (it’s now trading around $25.25 per ounce), but it has held onto almost all of its 2020 gains. Of course, the question for investors is: Where do we go from here?
>Your correspondent with a pallet of 1,000 ounce (about 62.5 pounds) silver ingots in a vault in Switzerland. The walls of the vault are draped with brown paper in order to avoid revealing security details or possible clues to the location. The silver is pure bullion: 99.99% silver. The date the bar was poured, serial number, purity and name of the refiner are all clearly shown stamped on the ingots. At current market prices, one of the silver ingots is worth $25,000. By way of contrast, the small gold bar (seen in the photo near my left hand) is worth about $65,000.<
For reasons explained below, investors should expect continued strong outperformance by silver both in bullion form and in the form of shares in well-run silver mining companies.
Before turning to the fundamentals that will send silver prices higher, it’s useful to clear away some of the fog and outright myths surrounding the role of silver in the monetary system and the relationship between the price of silver and the price of gold.
Silver-to-gold comparisons are apples-to-oranges despite the fact that both silver and gold are elements and precious metals.
Let us begin by looking at a simple fact: while silver and gold are both precious metals, silver is a commodity, and gold is not. This statement surprises many readers, but it’s true. The difference turns on the definition of a commodity.
A commodity is a generic and fungible input used with other inputs in manufacturing or other processing activity. Copper is a commodity used in wires. Coal is a commodity used to make steel. Corn is a commodity used in food processing.
Silver is a commodity used in many industrial processes, including water purification, tableware, solar panels, electrical contacts, X-Ray film, mirrors and medical instruments. It’s the best electrical conductor of any metal. It is also used in automobile emission control equipment. All of these industrial and scientific applications qualify silver as a commodity input.
Gold is not good for much of anything except as money. Yes, I know that gold is mined from the ground like other commodities, and it is traded on commodity exchanges, but it’s not a commodity.
There are some specialized applications such as coatings for space helmets and ultra-thin wires made from “five nines” gold, but that’s about it. Jewelry is just bullion that you can wear; it’s not a generic input. Gold is only good as money. Still, it’s the best form of money.
Of course, silver also performs as a precious metal (along with gold, platinum and palladium), and it has long been used as a form of money in coins and bars. The U.S. dollar itself was based on the older Spanish dollar, also known as a piece of eight (in Spanish: Real de a Ocho).
And, that history points to the difficulty of valuing silver and forecasting its price. Silver is both a form of money and an industrial commodity. Its monetary price responds to the same factors as gold, including inflation, interest rates, flight to safety and the exchange value of the dollar.
At the same time, silver (but not gold) responds to the business cycle, since more or less silver may be needed for industrial processes as the economy is either in expansion or contraction.
Of course, it is possible to forecast silver prices by taking account of both the precious metals factors and the business cycle factors. The point is that silver price vectors often diverge from gold price vectors because gold is a pure play on money while silver is a dual play on money and the industrial economy.
This hybrid role for silver can often be frustrating for investors who see gold surging while silver marks time. They may be quick to allege price manipulation in the silver market. The reason is much more mundane, involving only supply and demand for industrial commodities.
Another myth about silver prices involves the infamous “sixteen-to-one” ratio of gold to silver prices. Silver advocates suggest that the price of gold should not be more than 16 times the price of silver. They base this on a misreading of history and law.
Today gold is $1,842 per ounce, and silver is $25.24 per ounce, which yields a ratio of about 73-to-1. If you believe that the appropriate ratio is 16-to-1, then the price of silver would have to be $115 per ounce, assuming gold is unchanged. The silver bulls make this case and suggest that only market manipulation is keeping silver away from that $115 per ounce target.
The entire 16-to-1 argument is nonsense. It’s a popular talking point among some silver aficionados, but it has no economic significance whatsoever.
With that said, there’s no doubt that the price of silver is influenced to some extent by the price of gold. While the two do not move in lockstep, and while there is no necessary ratio between the two prices, it is the case that the factors that drive gold prices higher (inflation, low interest rates, flight to quality) will also drive silver prices higher.
Given silver’s recent outperformance and the tailwinds provided by the surging price of gold, what are the prospects for silver prices in the months ahead?
Right now, my models are telling me that silver is set to have another strong year to follow the surge of 2020. The basis for this can be seen in Chart 1 below.
In 2020, silver followed the same pattern as gold and stocks. It began the year with a slight gain, crashed during the worst of the pandemic panic, rallied back to new highs and then held those gains while trading in a fairly narrow range. The high for silver was $29.15 per ounce on August 10, 2020, just a few days after gold hit its high for the year.
What are the factors affecting the price of silver going forward?
We should expect geopolitical stress as North Korea, China, Russia and Iran are all expected to test the resolve of the new Biden administration. This does not mean war will result, but it does mean we can expect hot spots to become tenser.
This list of hot spots includes the Taiwan Strait, the South China Sea, the Straits of Hormuz, Ukraine and the Korean peninsula. Our enemies will probe in all directions to see if Biden will stand firm or give ground. This expected tension is bullish for the prices of precious metals.
Interest rates will remain at zero (for short term rates) and 1% or less (for long-term rates) through all of 2021. That’s bullish for silver because silver competes with interest-bearing instruments for investor dollars. Lower interest rates tilt that competition in favor of silver.
The dollar should remain weak due to zero interest rates and weak economic growth. Don’t believe the narrative about a V-shaped recovery and pent-up demand. The economy is locking down again because the pandemic is worse now than it was last spring. Small business is being destroyed, and unemployment is rising. With credit losses emerging, silver becomes a safe-haven.
Finally, the Biden administration and its Secretary of the Treasury, Janet Yellen, have embraced Modern Monetary Theory in all but name. This means a $3 trillion deficit in fiscal 2021 on top of the $4 trillion deficit in fiscal 2020. The Federal Reserve has chipped in with $4 trillion of money printing in the past year. Even if inflation does not emerge immediately, inflationary expectations are on the rise. That’s also bullish for silver.
All of these factors – geopolitics, interest rates, exchange rates and inflation – are set to boost the price of silver in 2021.
Regards,
Jim Rickards
for The Daily Reckoning
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>>> The Money of Kingdoms and Empires
BY JAMES RICKARDS
JANUARY 27, 2021
https://dailyreckoning.com/the-money-of-kingdoms-and-empires/
The Money of Kingdoms and Empires
While gold gets most of the headlines (for good reason), silver is often ignored. Silver is sometimes referred to as “poor man’s gold.” But it shouldn’t be ignored. Silver has a long history as a monetary metal. It also has many industrial applications that make it valuable.
Today, we’re going to take an in-depth look at this important metal.
The Roman Republic and the later Roman Empire minted a popular silver coin called the denarius. One denarius was the daily wage for unskilled labor and Roman soldiers.
Of course, in the late Empire, it was debased by mixing the silver with base metals. The decline of the Roman Empire went hand in hand with the decline of sound money.
Silver was also an important monetary metal in China, adopted to end hyperinflation caused by overissuance of paper money.
In the early ninth century AD, Charlemagne greatly expanded silver coinage to compensate for a shortage of gold. This was successful in stimulating the economy of the predecessor of the Holy Roman Empire.
In a sense, Charlemagne was the inventor of quantitative easing over 1,000 years ago. Silver was his preferred form of money.
Under the U.S. Coinage Act of 1792, both gold and silver coins were legal tender in the U.S. From 1794 to 1935, the U.S. Mint issued “silver dollars” in various designs. These were widely circulated and used as money by everyday Americans. The American dollar was legally defined as one ounce of silver.
The American silver dollar of the late eighteenth century was a copy of the earlier Spanish Real de a Ocho minted by the Spanish Empire beginning in the late sixteenth century. It became a benchmark for the U.S. monetary system long before a gold standard was formalized in the U.S.
The English name for the Spanish coin was the “piece of eight,” (ocho is the Spanish word for “eight”) because the coin could easily be divided into one-eighth pieces.
Until 2001 stock prices on the New York Stock Exchange were quoted in eighths and sixteenths based on the original Spanish silver coin and its one-eight sections.
Until 1935 U.S. silver coins were 90% pure silver with 10% copper alloy added for durability. After the U.S. Coinage Act of 1965, the silver content of half-dollars, quarters and dimes was reduced from 90% to 40% due to rising price of silver and hoarding by citizens who prized the valuable silver content of the older coins.
The new law signed by President Johnson in 1965 marked the end of true silver coinage by the U.S. Other legislation in 1968 ended the redeemability of old “silver certificates” (paper Treasury notes) for silver bullion.
Thereafter, U.S. coinage consisted of base metals and paper money that was not convertible into silver; (gold convertibility had already ended in 1933).
In 1986, the U.S. reintroduced silver coinage with a .999 pure silver one-ounce coin called the American Silver Eagle. However, this is not legal tender, although it does carry a “one dollar” face value. The silver eagle is a bullion coin prized by investors and collectors for its silver content. But it is not money.
Who in their right mind would pay a full ounce of silver for goods or services worth only a buck?
In short, silver is as much a monetary metal as gold is and has just as good a pedigree when it comes to usage as a coin. Silver has supported the economies of empires, kingdoms and nation states throughout history.
It should come as no surprise that percentage increases and decreases in silver and gold prices denominated in dollars are closely correlated.
But below, I show you why gold and silver prices sometimes diverge and several reasons why silver should shine this year. Read on.
Regards,
Jim Rickards
for The Daily Reckoning
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>>> Why Hecla Mining, Endeavour Silver, and Other Precious Metals Stocks Rallied as Much as 38% at the Open Today
Shares of these miners took off, but that was pretty much a forgone conclusion. Here's why.
Motley Fool
by Reuben Gregg Brewer
Jan 28, 2021
https://www.fool.com/investing/2021/01/28/why-hecla-mining-endeavour-silver-and-other-precio/
What happened
Shares of precious metals miner Coeur Mining (NYSE:CDE) rocketed 19% in the first few minutes of trading on Jan. 28. Hecla Mining's (NYSE:HL) stock did better, up 20%. Shares of Endeavour Silver (NYSE:EXK) and Fortuna Silver Mines (NYSE:FSM) did even better than that, with each rising as much as 25% or so. And at the top of the heap was First Majestic Silver (NYSE:AG), which was up a huge 38%. Compared with the above gains, Pan American Silver (NASDAQ:PAAS) and Silvercorp Metals (NYSE:SVM) were laggards, up just about 12% each.
All those gains showed up in less than half an hour, which isn't all that shocking lately if you watch the Wall Street headlines. But, perhaps refreshingly, the big price advances among this collection of miners probably had nothing to do with the short squeeze mania swamping the market lately. It was likely much simpler than that.
So what
The top and bottom lines at Coeur, Hecla, Endeavour, and the rest of the miners above are tied directly to the commodities they produce. That's not shocking, given that they are miners. And today gold and silver prices were on the rise. So, as you would expect, these stocks went along for the ride. That said, silver tends to be more volatile than gold, and today this difference was on display, with silver rallying far more strongly. To put that in perspective, at roughly 10 a.m. EST, silver was up over 5% while gold was up a tad less than 1%.
Which brings the story around to this specific group of miners, which all tend to have more exposure to silver than other precious metals miners. Without getting into the entire list of names, some cherry-picked examples will show just how notable an issue this is. Coeur generated around 25% of its revenue from silver in 2020. That figure at Endeavour was roughly 50%. And Hecla Mining proudly estimates that it produces roughly a third of all the silver mined in the United States. Silver prices are important here.
The thing about precious metals miners that investors need to keep in mind is that they tend to be leveraged to the price moves of the metals they produce. For example, First Majestic Silver, which gets about 65% of its revenue from its namesake metal, is currently projecting silver equivalent all-in sustaining costs of roughly $16 per ounce in 2021, at the high end. All-in sustaining costs estimate what it costs to both mine for silver and invest in the business to maintain production.
Simplistically speaking, if silver trades at $16 an ounce, First Majestic makes no money. If silver goes to $17 per ounce, it makes a dollar for every ounce it sells. If silver goes to $18, its profit doubles because its costs are pretty static. In this example, however, the price of silver increased only 6%. In other words, a small price move in silver, so long as the metal is trading above the miner's costs, can result in an outsize increase in profits. That's why investors tend to get excited about precious metals stocks when gold and silver are on the rise.
Now what
The problem is that gold and silver don't always go up. The simplified example above works in reverse fashion when prices are falling, which can, and does, lead to material stock declines. In fact, for most long-term investors, it's probably better to look at silver- and gold-linked investments like miners as diversification tools, avoiding the temptation to try and time their ups and downs. The goal being to always have a small amount of precious metals exposure, which many on Wall Street view as a safe haven in troubled times -- which, by the way, is likely why investors were buying the metals today.
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>>> 4 Stocks to Watch as Silver Gains on Higher Industrial Activity
Zacks
Madhurima Das
January 6, 2021
https://finance.yahoo.com/news/4-stocks-watch-silver-gains-142202216.html
Silver had a solid run in 2020 delivering a yearly gain of 47.5% — its best year since 2010. In fact, the white metal’s run eclipsed gold’s rally of 24.6% in 2020. Silver futures for March 2021 delivery closed at $27.64 an ounce on Jan 5, gaining 4% so far this year. This uptrend can be attributed to upbeat U.S. economic data, with the Institute for Supply Management’s manufacturing index climbing to its highest since August 2018. This scenario looks promising for silver as it an indispensable component for several industrial products.
Silver in 2020: The Highs & Lows
Industrial applications account for roughly 60% of the global silver consumption. Demand for the white metal was severely impacted as the COVID-19 pandemic battered the industrial sector last year. The Official NBS Manufacturing PMI in China plunged to a record low of 35.7 in February 2020. Per the Institute for Supply Management, the U.S Manufacturing Purchasing Managers’ Index (PMI) came in below 50 (which indicates contraction) from March to May. IHS Markit Eurozone Manufacturing PMI reading slumped to an all-time low of 33.4 in April and remained below 50 till June. Silver prices had plummeted to 11 year lows to $11.68 an ounce in March.
However, as economies started reopening and businesses gradually resumed operations, industrial activity picked steam. Silver hit a high of $29.92 per ounce in August 2020 — levels last seen in 2013. Apart from industrial demand, the market uncertainty amid the pandemic and the U.S elections renewed interest in silver as an investment vehicle. Remarkably low interest rates and continued liquidity boosts by central banks also contributed to the rally. Silver closed the year 2020 at around $26 an ounce.
The Way Ahead
The U.S Manufacturing PMI registered an impressive 60.7% in December 2020 — the highest in two and half years. The IHS Markit Eurozone Manufacturing PMI’s December reading of 55.2 also marked the strongest growth in factory activity since May 2018. The Manufacturing PMI in China came in at 51.9 in December, marking the 10th consecutive month of expansion in factory activity. This momentum is expected to continue this year as well and, in turn, drive silver prices north.
While the global silver jewelry market was impacted by the pandemic in 2020, it is set to bounce back and is likely to see a recovery of 13% primarily due to the economic revival in 2021. Silver will also continue to serve as a safe haven asset in times of uncertainty. The ongoing revolution in green technologies, aided by exponential growth of new energy vehicles and investment in solar photovoltaic energy, will act as a major catalyst for the white metal going forward. Silver’s use in 5G-infrastructure and upcoming intelligent electronics is also likely to drive demand.
Meanwhile, absence of development of new projects, declining ore grades and depleting reserves remain headwinds. While demand remains strong, shortage in supply will drive silver prices in the days ahead.
In a year’s time, the Mining - Silver industry has rallied 43.0%, outperforming the S&P 500’s growth of 16.8%. The industry falls under the broader Basic Materials sector, which gained 26.3% in the same time frame. Amid the pandemic induced uncertainty, the mining industry has been resorting to technological innovations targeted at nearly every level of operation to increase efficiency, sustain growth and keep costs low.
4 Silver Stocks to Watch
We suggest you to keep an eye on these silver-mining stocks. We have handpicked four such stocks that have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a VGM Score of A or B. Our research shows that stocks with such a combination offer the best investment opportunities.
Over the past year, these stocks have outperformed the S&P 500’s rally of 16.8%. These stocks are anticipated to carry the momentum forward backed by their earnings growth projections.
First Majestic Silver Corp. AG: Headquartered in Vancouver, Canada, the company is focused on silver production in Mexico. It owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine.
The company has recently adopted a dividend policy per which it intends to pay quarterly dividends of 1% of net revenues. This is a major milestone for the company and highlights strength and sustainability of its business. The company’s focus on technological innovation has driven efficiencies and lowered cost of production. Since the acquisition of the San Dimas mine in 2018, the company has transformed it into its lowest cost and largest producing mine. First Majestic successfully installed a new (High Intensity Grinding) HIG mill at the Santa Elena mine, which has resulted in record silver/gold recoveries. This HIG mills will be installed throughout the business, which is expected to bolster the bottom line. Higher metal prices, improved production rates and effective cost control management will continue to aid its results.
The Zacks Consensus Estimate for the company’s fiscal 2021 earnings suggests year-over-year growth of 84%. The estimate has been revised upward by 64% over the past 90 days. The stock has a Zacks Rank #2 and a VGM Score of B. Its shares have appreciated 22.2% in a year’s time.
Pan American Silver PAAS: This Vancouver, Canada-based company owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia.
In 2019, the company closed the buyout of Tahoe Resources and is the world's second largest primary silver producer with the biggest silver reserve base globally. It is also an industry leader in high margin low cost production. The La Colorada mine in Mexico is expected to act as a catalyst. Recently, the company announced that exploration drilling led to an increased inferred mineral resource estimate for the skarn deposit of 100.4 million tons, containing an estimated 141.0 million ounces of silver. This marks a 38% increase from its previous estimate. The Navidad project in Argentina is also anticipated to be a growth driver going forward. It is one of the largest undeveloped primary silver deposits globally.
The Zacks Consensus Estimate for the company’s current-year earnings suggests year-over-year growth of 149%. The stock has a trailing four-quarter earnings surprise of 3.51%, on average. The company’s shares have gained 61% in the past year. The company has a Zacks Rank #3 and a VGM Score of B. It has a long-term projected earnings growth rate of 15.7%.
Hecla Mining Company HL : This Coeur d'Alene, ID-based company, together with its subsidiaries discovers, acquires, develops, and produces precious and base metal properties in the United States and internationally.
The company has a diverse asset portfolio in mining friendly jurisdictions. It boasts two of the largest silver mines in the world and two highest-grade large silver mines. The company currently produces about one-third of the silver mined in the United States. This is expected to grow as Lucky Friday Mine in Idaho ramps up. The mine’s production is expected to double again in 2021 and 60% more within four years. The company is also one of the lowest-cost U.S. silver producers. In third-quarter 2020, silver margins exceeded 50% of the silver price. Upbeat production, lower costs and higher metal prices will bolster the company’s margins.
The Zacks Consensus Estimate for the company’s fiscal 2021 earnings suggests growth of 722% over the prior fiscal year. The company has a long-term estimated earnings growth rate of 1%. The stock has surged 105% in the past year. It currently has a Zacks Rank #3 and a VGM Score of B.
Fortuna Silver Mines Inc. FSM: Headquartered in Miraflores, Peru, the company engages in exploration, extraction, and processing of precious and base metal deposits in Latin America. Its main properties include the Caylloma mine in Peru; the San Jose mine in Mexico; and the Lindero gold project in Argentina.
The company will continue to gain from its focus on maximizing production while simultaneously maintaining operational efficiencies to lower cash costs. Such initiatives and high metal prices will drive the company’s bottom line. Fortuna Silver’s disciplined strategy of locating new deposits or pursuing mergers and acquisitions will continue to drive growth. The first gold pour at Lindero in October 2020 was a significant achievement for the company. The mine is on track start commercial production in first-quarter 2021. Lindero has reserves for a projected life of 13 years and is expected to act as a tailwind going forward.
The Zacks Consensus Estimate for earnings for fiscal 2021 indicates year-over-year growth of 422%. The estimate has been revised upward by 11% over the past 90 days. Shares of the company have soared 125% over the past year. It has a Zacks Rank #3 and a VGM Score of B.
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>>> 4 Factors That Drive Silver Demand
Investing News
Priscila Barrera
May 21st, 2020
https://investingnews.com/daily/resource-investing/precious-metals-investing/silver-investing/5-factors-drive-silver-demand/#:~:text=Silver%20is%20the%20best%20electrical,%2C%20switches%2C%20contacts%20and%20fuses.
Silver has both industrial and investment applications, meaning that silver demand comes from a variety of different places.
Silver is known as the most versatile precious metal, as it has unique properties and is used in many applications, from everyday silverware to medicine.
Industrial and technological uses for physical silver account for well over half of annual global silver demand, spurred by the metal’s strength, malleability and ductility.
In 2019, global physical silver demand increased to 991.8 million ounces from 988.3 million ounces in 2018. Despite another drop in the consumption of silver jewelry and silverware, 2019 showed greater silver consumption in the form of physical investment through silver bars and silver coins, as well as through the photovoltaics sector, as per the Silver Institute’s latest supply and demand report.
Moving forward, increased demand is expected to come from the solar energy sector, since the precious metal is a great conductor of both heat and electricity, making it perfect for use in solar panels.
Here’s a look at four factors driving silver demand that silver investors should consider when they look at the market, according to the Silver Institute.
1. Industrial fabrication
Demand in 2019: 510.9 million ounces
Silver is the best electrical and thermal conductor of all the metals, and so it is used in industrial fabrication, including electrical applications such as conductors, switches, contacts and fuses.
In electronics, industrial silver is used mainly in multi-layer ceramic capacitors, in the manufacturing of membrane switches, in silvered film, in electrically heated automobile windshields, in conductive adhesives and in the preparation of thick-film pastes. In 2019, demand from industrial applications was nearly unchanged from the previous year, remaining a huge driver of the white metal.
Aside from electronics, silver supply has been used by many other industrial applications. Solar panels, the automotive industry and brazing and soldering are the main industries in which demand for silver is currently increasing. Here’s a brief rundown of those three categories:
Solar panels — The use of silver in the fabrication of photovoltaic cells, more commonly known as solar panels or solar cells for solar power, is seen as an area of rapid growth in the short to medium term. It is expected that the US will have more than 100 GW of solar power installed by 2021.
Using silver as conductive ink, photovoltaic cells transform sunlight into electricity. In 2019, photovoltaic demand for silver rose to 98.7 million ounces, up from 92.5 million ounces the previous year.
Automotive industry— Every electrical action in a modern car is activated with silver-coated contacts. Basic functions such as starting the engine, opening power windows, adjusting power seats and closing a power trunk are all activated using a silver membrane switch.
Brazing and soldering — Adding silver to the process of soldering or brazing helps produce smooth, leak-tight and corrosion-resistant joints when combining metal parts. In addition, silver-brazing alloys are used widely in everything from air conditioning and refrigeration to electric power distribution.
2. Jewelry
Demand in 2019: 201.3 million ounces
Jewelry is often what most people think about when they consider silver demand. And for good reason — when it comes to jewelry, few materials are better suited for it than silver. Lustrous but resilient, the metal responds well to sculpting, requires minimal care and lasts for a lifetime.
While both silver and gold possess similar working qualities, the white metal enjoys greater reflectivity and can achieve the most brilliant polish of any metal. The vast amount of silver supply from mine production gets turned into a form of jewelry. In 2019, silver jewelry fabrication increased by 2.2 million ounces from the previous year, rising up to 201.3 million ounces.
3. Bullion coins and silver bars
Demand in 2019: 186.1 million ounces
Minted silver coins were first used in the Eastern Mediterranean region in 550 BC, and by 269 BC the Roman Empire had adopted silver as part of its standard coinage. Silver was the main circulating currency until the 19th century, when it was gradually phased out of regular coinage.
Even so, silver is still used in some circulating coins, especially in American (the American silver eagle coin), Australian, Canadian, Mexican and Austrian bullion coins for investors. Silver consumption in terms of coin and bars increased significantly in 2019, jumping by 12 percent.
4. Silverware
Demand in 2019: 59.8 million ounces
Sterling silver has been the standard for silver hollowware and silver flatware since the 14th century. Silver cutlery and other decor lasts for generations as it resists tarnish and is a traditional decoration in homes around the world. Base metal copper is mixed with silver to strengthen it for use as cutlery, bowls and decorative items.
In 2019, silver consumption from the silverware industry declined 9 percent from the previous year due mostly to an economic slowdown in India, which saw demand fall by 11 percent.
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>>> Dollar Is Evolving From a Haven Into a Must-Have Recovery Play
Bloomberg
By Kriti Gupta and Vincent Cignarella
January 14, 2021
https://www.bloomberg.com/news/articles/2021-01-14/dollar-is-evolving-from-a-haven-into-a-must-have-recovery-play?srnd=premium
Economic rebound could send capital to stocks, U.S. currency
Rising Treasury yields likely to make dollar bid a carry trade
The dollar has long been a safety trade for global investors. But in post-recessionary phases with the help of fiscal aid, it can double as a bet on a global recovery. With that in mind, as capital flows to the U.S. increase, so might the bid for the currency -- much to the chagrin of traders who entered 2021 with overstretched short dollar positions.
The U.S. has pumped trillions of dollars into the economy, with more to come, all of it aimed at supporting the economy through the pandemic and jumpstarting it as vaccinations take hold. The market is pricing it in, as investors increasingly favor economically sensitive assets like small-cap stocks.
“The consensus on economic forecasts already shows the U.S. as one of only two major economies expected to end this year larger than it started last year,” Elsa Lignos, RBC Capital Markets Global Head of FX Strategy, wrote in a Jan. 12 note.
As American jobs and spending bounce back, international investors are likely to rush to gain exposure to the U.S. recovery, possibly sparking a rotation out of foreign equities and into U.S. stocks. To do that, they’ll need dollars. And those capital flows are likely to boost the greenback.
“We think better economic performance in the U.S. will translate into a cyclical advantage for USD vs non-commodity producing G10 in particular,” Lignos added. “Historically the opposite has rarely been true.”
Bearish Bets
The consequences of a dollar rebound could be far-reaching. In stocks, the inverse correlation between the greenback and S&P 500 has been at multi-year highs since the start of the pandemic. Dollar weakness incentivizes global investors to buy U.S. equities, which are widely seen as expensive. With a rush to U.S. stocks, and consequently the dollar, that relationship could break down as both rise. Even commodities could become less sensitive to the greenback if there’s an infrastructure bill or broad return to work.
S&P 500 inverse correlation with dollar remains at strongest since 2016
Shorting the dollar has become an extremely crowded trade after the currency pared not only its 2020 gains but also the haven bid it received throughout the trade war with China. The Bloomberg Dollar index is now trading at its lowest level since April 2018, right before the conflict magnified.
Bank of America’s December client survey included shorting the currency as its second most crowded trade -- after going long on tech stocks. The poll in November didn’t feature the dollar at all. And CFTC data shows the most bearish bets against the greenback in nearly a decade. That said, technicals show the greenback may be looking at a reversal after a nine-month slide since the March crash. Despite the downtrend from its 2020 peak, there’s support at the 2018 low.
2018 low (pre-trade war) likely to serve as support level for dollar
Next Carry Trade
A U.S. recovery also has implications for real yields. Nominal yields have risen substantially since the Capitol Hill riots last week. Meanwhile, core inflation is expected to remain stable, in contrast to the surge being priced in breakevens. That could give real yields a boost and make the U.S. more attractive than markets with negative yielding currencies. It also gives global investors incentive to buy Treasuries and American bonds rather than their own domestic paper. That could help the dollar emerge as the next big carry trade.
“Japanese investors who have sold foreign bonds over two successive weeks for the first time since May could make their return with the JPY-hedged 10y yield of 64bps, offering a 60bps pick-up relative to domestic 10y JGBs,” a team of strategists at Societe Generale led by Kenneth Broux wrote in a Jan. 12 note.
It’s unlikely, however, to be a straight shot up. Given the influx of stimulus in the near term, the dollar could weaken first. As the economy recovers, investors are likely to abandon the dollar and metals as havens and buy risk, like emerging-markets assets. But that may not last long. The subsequent spike in yields and the potential outperformance of U.S. stocks will draw investors back to American shores. So the dollar smile trade will be shallow, with the bounce in the greenback likely to last well into 2021.
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>>> 3 Silver Miner ETFs for Q1 2021
SLVP, SIL, and SILJ are the three silver miner ETFs for Q1 2021
Investopedia
By MATTHEW JOHNSTON
Dec 16, 2020
https://www.investopedia.com/best-silver-miner-etfs-5092394?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral
Silver miner exchange-traded funds (ETFs) provide exposure to companies that produce silver, which is valued as both an industrial metal and a precious metal. These companies are engaged in the acquisition, exploration, development, and production of silver and other metals such as lead, copper, or gold. Silver is often produced as a byproduct from mining for these other metals. While there are silver ETFs that track the price of the silver commodity, silver miner ETFs are focused specifically on stocks of companies that produce silver. Silver miner ETFs provide investors with a straightforward way to gain broad diversification across the silver mining industry.
KEY TAKEAWAYS
The price of silver outperformed the broader market over the past year.
The ETFs with the best 1-year trailing total return are SLVP, SIL, and SILJ.
The top holding of the first and third of these ETFs is Pan American Silver Corp., and the top holding of the second is Wheaton Precious Metals Corp.
There are three silver miner ETFs that trade in the U.S. The price of silver, which is a major determinant of the profitability of silver mining companies, has outperformed the broader market over the past year. Silver prices have risen 42.0% over the past 12 months, more than double the Russell 1000's total return of 19.8%, as of December 14, 2020.1? The best-performing silver miner ETF, based on performance over the past year, is the iShares MSCI Global Silver Miners ETF (SLVP). We examine the top 3 best silver miner ETFs below. All numbers below are as of December 15, 2020.2?
iShares MSCI Global Silver Miners ETF (SLVP)
Performance over 1-Year: 41.8%
Expense Ratio: 0.39%
Annual Dividend Yield: 1.36%
3-Month Average Daily Volume: 182,245
Assets Under Management: $214.3 million
Inception Date: January 31, 2012
Issuer: iShares
SLVP tracks the MSCI ACWI Select Silver Miners Investable Market Index, which gauges the performance of companies across developed and emerging markets that generate most of their revenues from silver mining.3? The ETF is comprised of silver mining companies across the market-cap spectrum and follows a blended strategy, investing in a mix of both value and growth stocks. Although considered a global fund, as attested by its name, the fund is heavily tilted towards the Canadian silver mining industry with about 60% of its 31 holdings based in Canada. U.S.-based companies receive an 18% allocation and U.K.-based ones receive 10%.4? The fund's top three holdings include Pan American Silver Corp. (PAAS:TSE), a Canada-based silver producer with operations in Latin America and the U.S.; Hecla Mining Co. (HL), a mining company that explores, develops, and produces minerals, gold, silver, and other base metals; and Fresnillo PLC (FRES:LON), a Mexico-based mining and exploration company that owns and operates both silver and gold mines.5?
Global X Silver Miners ETF (SIL)
Performance over 1-Year: 33.0%
Expense Ratio: 0.65%
Annual Dividend Yield: 1.30%
3-Month Average Daily Volume: 407,588
Assets Under Management: $989.6 million
Inception Date: April 19, 2010
Issuer: Global X
SIL tracks the Solactive Global Silver Miners Index, which is designed to gauge the performance of the global silver mining industry.6? The ETF provides exposure to a broad range of silver mining companies with various market capitalizations. It follows a blended strategy, investing in both growth and value stocks. Of the fund's 41 holdings, about 56% are based in Canada, 13% in Russia, and 9% in the U.S.7? Its top three holdings include Wheaton Precious Metals Corp. (WPM:TSE), a Canada-based precious metals streaming company focused on gold and silver projects; Polymetal International PLC (POLY:LON), a Cyprus-based gold and silver mining company; and Pan American Silver.8?
ETFMG Prime Junior Silver ETF (SILJ)
Performance over 1-Year: 19.4%
Expense Ratio: 0.69%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 1,051,715
Assets Under Management: $491.9 million
Inception Date: November 29, 2012
Issuer: ETF Managers Group
SILJ tracks the Prime Junior Silver Miners & Explorers Index, which gauges the performance of small-cap companies engaged in the silver mining and production industry. The ETF provides exposure to small-cap silver mining companies across developed markets.9? It follows a blended strategy of investing in a mix of both growth and value stocks. Of the fund's 51 holdings, about 53% are based in Canada, 41% in the U.S., and 5% in the U.K.10
? The fund's top three holdings include Pan American Silver; Hecla Mining; and First Majestic Silver Corp. (FR:TSE), a Canada-based mining company focused on silver production in Mexico.
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>>> Gold Caps Its Best Year in a Decade With the Dollar on the Ropes
Bloomberg
By Eddie Spence
December 31, 2020
https://www.bloomberg.com/news/articles/2020-12-31/gold-heads-for-best-year-in-a-decade-with-dollar-on-the-ropes?srnd=premium
Bullion finds support as greenback hits the lowest since 2018
Investors weighing up haven’s appeal as vaccines rolled out
Gold posted the biggest annual advance in a decade after a tumultuous year, with gains this month aided by the dollar’s decline to the lowest since April 2018.
Bullion hit a record in August as investors feared an unprecedented wave of stimulus by central banks and governments would lead to currency debasement and inflation. Holdings in bullion-backed exchange-traded funds set an all-time high in October.
While prices ebbed as the roll-out of vaccines injected optimism into financial markets, the dollar’s continued weakness has helped support gold into the year-end.
Looking ahead, there’s little consensus from Wall Street’s biggest names on bullion’s direction. Morgan Stanley sees gold and other precious metals coming under pressure as financial markets normalize and longer maturity bond yields rise. Meanwhile, HSBC Holdings Plc sees gold climbing higher on continued uncertainty.
Bullion is poised for its biggest annual gain in a decade
Much of gold’s performance next year will depend on whether the eventual return to normality is outweighed by ongoing stimulative policies. Led by Chair Jerome Powell, the U.S. Federal Reserve has signaled that its ultra-easy monetary conditions will last throughout 2021. Efforts to pass further fiscal stimulus through the Senate have hit another roadblock.
“Gold’s main drivers -- weaker U.S. dollar and low real interest rates -- are likely to provide support” even as vaccines are distributed around the world, said Vasu Menon, executive director, investment strategy, at Singapore-based Oversea-Chinese Banking Corp. With the lower-for-longer Fed, “it is too early to throw in the towel on gold,” he said in an email.
Gold added 0.2% to settle at $1,898.36 an ounce on Thursday. That’s up 6.8% for the month, and 25% higher for 2020, the biggest full-year advance since 2010. Futures for February delivery on the Comex rose 0.1% to settle at $1,895.10 an ounce. The Bloomberg Dollar Spot Index had a third straight quarterly loss.
Spot silver was up 48% this year, while palladium had a fifth consecutive annual gain, with a rise of about 26% in 2020. Platinum climbed 11% for the year.
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Franco Nevada - >>> 3 Gold Stocks to Buy Right Now
These gold stocks deserve a spot in your portfolio as you brace for 2021.
Motley Fool
by Neha Chamaria
Dec 12, 2020
https://www.fool.com/investing/2020/12/12/3-gold-stocks-to-buy-right-now/
Investors in gold won't forget 2020 anytime soon. It appears a gold bull supercycle is underway. Gold prices and many gold stocks have had double-digit surges this year. The rally may not be over yet, what with a pandemic raging on and global uncertainty still high.
In fact, now's a great time to add some gold stocks to your portfolio as you buckle up for a new year. Here are three compelling ones you'll want to consider buying now (psst... two of these gold stocks have flown under Wall Street's radar, so you might want to jump in while there's still time).
An offbeat but incredible gold play
What if you could gain exposure to gold without having to worry about the risks inherent in a mining company? Franco-Nevada (NYSE:FNV) offers this incredible way to invest in gold.
Franco-Nevada is a streaming and royalty company. So it doesn't own and operate mines; instead, it buys gold and other metals like platinum from third-party miners at a predetermined percentage of their mine production. In exchange, it finances those miners upfront.
The deals are such that Franco-Nevada's purchase price of gold is significantly below spot prices. That's where the real appeal of investing in the company lies. Franco-Nevada earns hefty margins, and can mint a lot of money when the price of gold rises. Just see the company's latest numbers -- its cost of sales for the nine months ended Sept. 30 was only $285.6 million against revenue worth $715.7 million.
That puts Franco-Nevada on track to deliver record revenue in a year when several mines closed because of the COVID-19 pandemic. Credit goes to a strong and diversified portfolio of streaming agreements with 51 producing mines. One of them is First Quantum Minerals' Cobre Panama mine, which is rapidly expanding. It's expected to be the largest contributing mine to Franco-Nevada's sales by 2024.
Long-life agreements, a large asset base of mines under development, and royalties in oil and gas assets leave ample room for growth at Franco-Nevada. What's more, Franco-Nevada is also among the best gold dividend stocks, having increased its dividends for 13 consecutive years. That pretty much explains the stock's staggering returns in the past -- a trend I believe could continue for years to come.
This gold stock wants to pay you more
2020 will go down in SSR Mining's (NASDAQ:SSRM) history as one of its biggest years thanks to the merger of equals between SSR and Alacer Gold. The market wasn't pleased with the deal, though. There are valid reasons for concern, but investors might want to look at the brighter side of things. SSR Mining's growth may have just started, but the stock's still down about 2% so far this year. I smell an opportunity there.
Alacer's cornerstone mine, Copler, is in Turkey, where the economy is grappling with geopolitical concerns. That adds significant risk to SSR's portfolio, which otherwise consists of three operations in safe locations: Marigold in the U.S., Seabee in Canada, and Puna in Argentina. That Alacer Gold's President and CEO Rodney Antal took over at SSR also added to investors' uncertainty.
However, Copler is a massive mine that will boost SSR's production significantly and help lower costs. Copler produced record 391,213 ounces of gold at all-in sustaining cost (AISC) of $623 per ounce of gold sold in 2019. Comparatively, SSR produced 421,828 gold equivalent ounces at AISC of $1,034 per ounce of gold sold in 2019.
Moreover, SSR's free cash flows should get a big lift. The company is expected to generate FCF worth $450 million annually through 2022. In fact, SSR is initiating a dividend of $0.05 per share beginning in Q1 2021. It further expects to return excess FCF to shareholders as supplemental dividends or share repurchases.
Investors have a lot to look forward to from SSR Mining. Meanwhile, the Turkish government is striving to revive the economy. Turkey's gross domestic product (GDP) grew 6.7% during the third quarter. That respite makes SSR Mining an even more compelling gold stock to buy now.
The market is ignoring the explosive growth here
Kirkland Lake Gold (NYSE:KL) is growing at a staggering pace, yet its shares are down nearly 8% so far this year. Kirkland's gold production has jumped more than threefold between 2016 and 2019.
Kirkland's AISC has fallen steadily at the same time, driving its net earnings to $560.1 million in 2019 from only $42.1 million in 2016. 2019 was, in fact, a record year for Kirkland in terms of gold production, revenue, and net profit. Investors have been richly rewarded, with Kirkland increasing dividend twice in 2020. With that, its dividend per share has nearly tripled just this year.
Here's the best part: Kirkland is all set to deliver yet another record year in 2020, thanks to its acquisition of Canada-based Detour Gold for roughly $3.7 billion. The acquisition added a long-life, high-grade mine, Detour Lake, to Kirkland's portfolio. As a result, Kirkland expects to produce $1.35 billion-$1.4 billion gold ounces in 2020.
There's just one catch: Detour Lake is a relatively high-cost mine, which is why Kirkland's AISC has shot up this year and is expected to be $790-$810 per ounce of gold sold for the full year. However, I'm not too worried, as I expect Kirkland to turn Detour Lake into a lower-cost mine with time. Also, the acquisition has been earnings and free-cash-flow accretive: From Jan. 31, 2020, to Sept. 30, 2020, Detour Lake contributed $231 million, or nearly 41%, to Kirkland's total free cash flow. Kirkland is already a debt-free company, so its balance sheet looks even stronger now.
In short, Kirkland's production, cash flows, and dividends are clearly on an uptrend. Yet, the stock is trading significantly below its five-year average P/E of 27 times earnings, making it a great gold stock to own now.
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>>> 3x, -3x Gold Miner ETNs Debut
Yahoo Finance
December 3, 2020
https://finance.yahoo.com/news/3x-3x-gold-miner-etns-150000490.html
REX Shares added another pair of ETNs to its lineup today, both of which are tied to the gold miners space. The MicroSectors Gold Miners 3x Leveraged ETN (GDXU) and MicroSectors Gold Miners -3x Inverse Leveraged ETN (GDXD) offer 300% and -300% exposure on a daily reset to the S-Network MicroSectors Gold Miners Index.
The products come with expense ratios of 0.95% and list on the NYSE Arca.
The underlying index for both products is an interesting one as it tracks the performance of two of the most popular gold miners ETFs, the $15.3 billion VanEck Vectors Gold Miners ETF (GDX) and the $5.6 billion VanEck Vectors Junior Gold Miners ETF (GDXJ). Both of the ETNs are backed by the Bank of Montreal.
The two ETNs join 18 other REX Microsector ETNs that have combined assets under management of $1.7 billion.
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>>> Central Banks To Keep Buying Gold, Drive The Price
Yahoo Finance
Valuewalk
November 27, 2020
https://finance.yahoo.com/news/central-banks-keep-buying-gold-195134503.html
The world’s central banks have been buying gold for years, and that trend could drive the price up over $2,000 next year, according to some experts. The problem is the ever-growing pile of public debt, which could be exacerbated by inflation next year.
Central banks deal with stimulus using gold
Noble Gold founder and CEO Collin Plume told ValueWalk in an email that central banks will have to bear to brunt of "government generosity" by covering the costs of the many stimulus packages that have subsidized workers and businesses that couldn't function during the lockdowns. However, that money will still need to be paid back, which causes three major challenges for central banks.
"They are all struggling with these issues simultaneously, and so borrowing amongst each other is not an option" Plume said. "Unemployment and bankruptcies will mean less tax revenue coming in to balance the books, and inflationary pressures are almost inevitable given the colossal figures involved. All of these realities will likely push prices for everyday household items higher (along with interest rates as well) at a time when people can least afford them – leading to recessionary fears down the line."
According to Plume, this is the second-highest year on record for gold buying by central banks. He said the trend started to pick up momentum in 2018. This year central banks have already bought 651 tons of gold, and a larger pool of central banks have been buying gold for its diversification benefits. This pushed annual demand from them to its highest level since 1971.
"The most obvious countries adding gold to their reserves included Russia, China, Poland, Turkey, and Kazakhstan, while other countries, such as Poland and Germany, have begun to ‘repatriate’ their gold from other countries where it has been kept for safekeeping," Plume explained.
Why central banks are buying gold
Plume explained that the main reason central banks want to hold gold is because of the stock-to-flow ratio, which compares the newly mined gold supply, or the flow, with above-ground stockpiles, or stock. He said new gold keeps getting added to the stockpile, amounting to about 1.5% per year. According to Plume, gold has a natural inflation rate of about 1.5%.
"If gold were money, it would be physically impossible to duplicate the rate at which the printing of fiat currency takes place," he said. "Gold is finite, and as more ‘currency’ is printed, it becomes more valuable. Central banks of course know this, so in anticipation of them stepping up their printing of money, they buy gold to offset this. It comes down to simple supply and demand."
For this reason, Plume expects the gold price to climb above $2,000 and stay there starting next year. He pointed out that U.S. national debt hit a new high of $27 trillion, which is an increase of almost 36% in less than four years. Plume added that it's simply unsustainable to keep printing more money.
A year of uncertainty
RBC analyst Christopher Louney also thinks the gold story isn't over yet. He noted that the gold price tumbled the most in months due to the news about the COVID-19 vaccine, but current price levels still leave plenty of unanswered questions. Louney pointed out that this has been a year of uncertainty which included a pandemic, economic crisis, heightened political tensions and plenty of drivers that have been positive for gold.
Even though the markets have appeared to be buoyant, he doesn't believe investors have forgotten their fear. Louney added that the dollar has strengthened alongside real and nominal rates, which is bad for gold. However, he doesn't believe those factors were enough to explain the steep drop in the gold price on their own.
He saw the decline as "a reset of gold-related pandemic expectations, a repricing of stimulus expectations by gold investors, a realignment of inflation fears and a shift in mindset around post-election political uncertainty." Louney said the reset could have helped gold find a new equilibrium and noted that even after the first shipments of the vaccine, there will still be challenges in distribution and uptake, which means the health crisis won't end immediately.
He is less positive on the gold price than Plume as he sees a price of $1,893 for next year with a low price of $1,628 and a potential high price of $2,608.
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>>> Silver Prices Are Set to Benefit From Surge in Solar Panels and 5G
Barron's
By Liz Moyer
Nov. 27, 2020
https://www.barrons.com/articles/silver-prices-are-set-to-benefit-from-surge-in-solar-panels-and-5g-51606474800?siteid=yhoof2
Silver prices have surged this year—and more gains are likely.
Silver could add some luster to portfolios in the new year.
Analysts see the white metal rising to $30 an ounce in the next year from the current $23.36, and even higher given the large-scale stimulus needed to revive economies. It would be a continuation of the trend this year, which has led to the surge in gold and silver prices as investors hunt for havens.
Gold grabs most of the attention, but silver acts in much the same way as its yellow cousin, namely as a hedge against a decline in the dollar. That has been the case this year, with bigger fiscal spending and near-zero interest rates as a result of monetary policy pressuring the dollar.
The $13 billion-asset iShares Silver Trust exchange-traded fund (ticker: SLV) is up 30% this year and 36% in the past 12 months. Silver is also important in manufacturing, with prices rising when the economic recovery leads to industrial demand.
Goldman Sach’s Mikhail Sprogis explained in a note last month that silver is a key component in the solar industry, which is poised for big growth. Solar investments account for 18% of silver industrial demand and about 10% of overall demand for the metal. Sprogis has a $30 price target on it.
President-elect Joseph Biden wants to install 500 million solar panels over the next five years. Goldman estimates solar installation will jump 50% from 2019 to 2023. Installations are also expected to increase overseas, especially in China.
Granted, higher silver prices might encourage solar-panel makers to find ways to use the metal more sparingly—as is already evident, Sprogis says. Newer panels have about 25% less silver by content, which will tamp down demand growth but not eliminate it, he says.
“All in all, over the next three years solar should boost silver total industrial demand by 2% in the base case and by 9% in a bull case.” If the bull case materializes, silver could see a 10% price boost, Sprogis says.
CIBC analysts are slightly more bullish, citing continued low interest rates and elevated government debt as “supportive of further significant price appreciation. CIBC has set a $32 price target over the next year.
The U.S. election outcome isn’t murky anymore, with Biden set to be inaugurated in January. But the economic recovery is far less clear, especially with new business restrictions in parts of the world where new coronavirus cases are surging.
Silver started the year at about $18 an ounce but tumbled to an 11-year low of $11.74 in March. By Aug. 6, it was back in the $20s and currently trades around $23. A $32 price target implies a 39% gain.
Citigroup analysts are even more bullish, with a $40 price target on silver over the next 12 months, driven by investor desire for safety as well as industrial demand once the recovery picks up. They see a return of the 2010-11 bull market in silver as demand rises 6% in China, from both industrial buyers and retail investors.
Chinese consumer spending should support higher jewelry and silverware demand given the holiday season and future celebrations like weddings. Citi estimates 12% growth next year on demand for jewelry and silverware.
Silver is also used in 5G network equipment, and the expansion of 5G networks will be a major driver of electronics silver demand over the next two years. “The rapid development of 5G network infrastructure and rising demand for high-speed internet access should become the new pillars” supporting the network upgrade and boosting silver, Citi analysts say.
Silver is also widely used in electric vehicles, from semiconductors to harnesses and displays. Pure battery-powered electric vehicles require more electrical control, which boosts their relative silver consumption.
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>>> Gold and Copper Diverge as Investors Make Bets on Recovery
Bloomberg
By Yvonne Yue Li
November 27, 2020
https://www.bloomberg.com/news/articles/2020-11-27/gold-holds-above-1-800-as-vaccine-trials-u-s-data-weighed?in_source=postr_story_0
Bullion headed for third weekly drop, ETFs see outflow
Copper hits seven-year high as post-Covid demand hopes build
Gold plunged while copper soars, with increasing optimism that a vaccine will spur a global economic recovery from the pandemic.
Copper surged to a seven-year high in London while gold slid below $1,800 an ounce for the first time since July, with the sell-off accelerating after liquidation pushed it through a key technical support level. Gold’s decline quickened pace as investors continued to swap into riskier assets looking to profit from an eventual recovery from the pandemic.
The divergence underscores how investors are increasingly turning away from gold, considered a haven in times of economic stress, in favor of copper, seen as a bellwether for the global economy and an important part of the transition to low-carbon energy resources.
Gold/copper ratio shrinks as economic optimism dampens haven demand
Gold prices are heading for a third weekly drop, having declined 13% from its record high in August. Copper rallied for a fourth day as other industrial metals climbed, while global stocks are on track for the best month on record with valuations near the highest in about 20 years. A gauge of global copper producers rose to the highest since January 2013, led by Teck Resources Ltd., Vale S.A. and Antofagasta Plc.
China’s rapid economic rebound has driven its imports to record levels this year, helping to offset lower demand in the rest of the world. The country’s latest factory gauge, due Monday, is expected to show activity in the top copper consumer continuing a steady expansion.
On Friday, data from the Shanghai Futures Exchange showed copper stockpiles in its warehouses falling to the lowest since late 2014.
“The optimism sparked by positive vaccine news has particularly impacted gold, which continues to slump despite a weaker dollar,” said Tai Wong, head of metal derivatives trading at BMO Capital Markets. “It’s below the 200-day moving average now, which could trigger more technical selling.”
Bullion’s steep decline was in line with continued outflows of gold exchange-traded funds, which are now headed for their first monthly outflow this year. The funds have been a crucial support pillar for bullion in 2020, so their current erosion has significant implications for the price.
Gold heads for a third weekly decline, longest run since June
Positive vaccine developments, which started at the beginning of the month with the Pfizer Inc. announcement, have seen bullion on a downward path even though there are uncertainties surrounding the shots.
U.S. President Donald Trump’s statement that he will relinquish power if the Electoral College affirms Democrat Joe Biden’s win also signaled that there’ll be a peaceful transfer to the new administration, though he signaled he may never formally concede defeat and may skip the Democrat’s inauguration.
“Gold has moved into the next ‘down-leg’ of its correction phase,” according to United Overseas Bank Ltd. market strategist Quek Ser Leang. A break of the support zone between $1,760 and $1,780 would open up the way for further weakness toward the $1,600s, he said.
Spot gold fell 1.5% to $1,788.53 an ounce at 2:05 p.m. in New York. Bullion for February delivery declined 1.3% to settle at $1,788.10 an ounce. Silver dropped 3.6%, while platinum and palladium advanced. Copper for three-month delivery on the London Metal Exchange rose 1.3% to $7,499.50 a metric ton. The Bloomberg Dollar Spot Index fell 0.1%.
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Franco Nevada - >>> Where to Invest $5,000 Right Now
Make your money work for you with these great stock picks.
Motley Fool
by Neha Chamaria
11-14-20
https://www.fool.com/investing/2020/11/14/where-to-invest-5000-right-now/
This gold stock is minting money
Gold stocks are great investments when the markets are as volatile as they've been this year. While several gold miners are doing well, I like Franco-Nevada (NYSE:FNV) because of its business model.
Franco-Nevada isn't a miner; it's a streaming and royalty company that buys metals from miners at discounted prices in exchange for funding them upfront. That eliminates much of the cost and risk associated with mining, and the low purchase price means big margins for Franco-Nevada.
Earlier this month, Franco-Nevada reported a net earnings margin of 55% for its third quarter -- a record for the company. It added 25 new royalties in the quarter. It now expects its full-year gold equivalent ounces to come in at the higher end of its guidance range of 475,000-505,000. Revenue from energy assets should also be near the top of its predicted range of $60 million-$75 million.
With gold prices likely to remain firm, Franco-Nevada could continue to be one of the top-performing gold stocks.
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SSR Mining (SSRM) - >>> 5 Stocks to Buy With $100 During a Market Sell-Off
Fortunes are made by putting your money to work during periods of panic.
Motley Fool
by Sean Williams
Oct 30, 2020
https://www.fool.com/investing/2020/10/30/5-stocks-to-buy-with-100-during-a-market-sell-off/
SSR Mining
A stock market sell-off is the perfect time to consider putting $100 to work in gold stocks. While gold is often viewed as a safe-haven investment during times of uncertainty, current monetary policy and company-specific catalysts make SSR Mining (NASDAQ:SSRM) quite intriguing.
On a macro level, the Federal Reserve has been clear that it doesn't intend to raise its federal-funds target rate for years. This means interest rates and bond yields will remain at or near record-tying lows for a while. Low yields, coupled with a ballooning money supply -- a result of the Fed's unlimited quantitative-easing measures to support financial markets -- should pave the way for a higher gold price.
On a company-specific level, SSR Mining recently completed a merger of equals with Turkey's Alacer Gold. The combined company should have the potential to easily top 700,000 ounces of gold each year, with an all-in sustaining cost of around $900 an ounce. This would work out to a cash operating margin of around $1,000 per gold-equivalent ounce.
Furthermore, SSR Mining is one of a small handful of gold stocks with a net cash balance. Considering the newly combined company expects $450 million in annual free cash flow through 2022, there's a good chance a dividend or share buyback will be announced soon.
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Does anyone know of any green energy ETFs with a low expense ratio ?
Kirkland Lake, Yamana - >>> Should You Buy Gold Stocks Right Now?
Physical gold is at a record high -- is now the time to add a little luster to your investment portfolio?
Motley Fool
Sean Williams
Jul 29, 2020
https://www.fool.com/investing/2020/07/29/should-you-buy-gold-stocks-right-now.aspx
If you thought the financial crisis was a wild ride for investors, then the coronavirus disease 2019 (COVID-19) pandemic has completely raised the bar. In just a few short months, equities have packed in about a decade's worth of volatility. We've witnessed the fastest and steepest correction in history, followed by one of the strongest quarterly performance in history (Q2), as well as a brief period of negative oil prices.
For many investors, it's been a challenging year. That is, unless you were holding precious metals like gold.
Few investments are looking as lustrous at the moment as physical gold. Over the past six months (through Monday, July 27), gold is up $363 an ounce, which is good enough for a 23% increase. The precious metal has now bounced almost $900 off of its decade-low of $1,050.60 an ounce, set back in 2015.
The question is, with gold notching a new all-time high on Monday, should you be buying gold stocks, or taking this as your cue to avoid the industry?
Let me not beat around the bush. Yes, you should be buying gold stocks right now.
Three reasons physical gold is nowhere near a peak
To be perfectly clear, no one can predict the very short-term movements in any asset, including physical gold. Having gained over $100 an ounce in just the past week, it's not out of the question that the lustrous yellow metal could have a few bad days here and there. Remember, no asset goes up in a straight line. But there are three key reasons physical gold is primed to outperform, and perhaps even approach $3,000 an ounce in the coming years.
First of all, global bond yields have been plunging for a while, leaving income seekers with few avenues to make a buck. Even if bondholders are generating a positive nominal return, they're likely to lose real money to inflation over a longer period of time. These persistently low yields make gold, an asset that doesn't offer a yield, all the more attractive as a store of value or as an investment.
Secondly, central banks around the world (and especially in the U.S.) have rolled out the red carpet for physical gold to thrive. In the U.S., unlimited quantitative easing will mean a huge jump in the money supply, which is almost always bad news for the U.S. dollar. Since the dollar and gold move opposite of one another, central banks throwing money at their respective ailing economies is a big-time boost for the yellow metal.
Third, keep in mind that gold investing cycles tend to last for long periods of time. Though we've recently hit a new all-time high for gold, you should realize that it's been rallying for more than four years. The last bull market in gold went on for more than a decade. Historically speaking, the tail-end of a recession through the first 18 months of an economic recovery is when gold shines brightest.
Here's why you should consider buying gold stocks and not physical gold
However, owning physical gold isn't the best way to play this ongoing rally. Instead, you're going to want to consider buying gold stocks or an exchange-traded fund that owns gold stocks.
Why mining stocks and not physical gold? First, the leverage is considerably greater with gold stocks. If gold rises another $100 an ounce, you'd make a little over 5% on your investment in the physical metal. But if a gold mining stock sees an extra $100 in average selling price, its cash operating margin per ounce will probably rise by a double-digit percentage.
Additionally, gold mining companies have the ability to proactively and reactively respond to market conditions. New mines can be brought online or costs can be reined in, depending on existing market conditions. That's not something that's a consideration with owning physical gold.
To build on this point, management teams and boards also have the power to reward shareholders through capital return programs. This may involve a dividend or share repurchase program. By comparison, physical gold offers no perks of ownership.
Finally, it's a lot easier to peruse an income statement or balance sheet for a publicly traded company than it is to navigate macroeconomic data on physical gold.
In other words, it's a no-brainer to buy gold stocks if you believe physical gold is in a long-term bull market.
These gold stocks should have plenty of upside
Since I've established that buying gold stocks right now is a smart move, how about a quick look at some of the most attractive names in the industry.
First up is Kirkland Lake Gold (NYSE:KL), which has the most pristine balance sheet of any gold stock. Kirkland Lake ended March with $530.9 million in cash and no debt despite having recently completed the acquisition of Detour Gold. Even with this buyout temporarily increasing the company's all-in sustaining costs (AISC) to $776 per gold equivalent ounce (GEO), it's generating close to a $1,200 cash operating margin per GEO at the moment.
It's also worth mentioning that Kirkland Lake doubled its dividend and repurchased $330 million worth of its stock just in the first quarter. Every move being made is designed to make shareholders money.
Another gold stock with plenty of upside is Yamana Gold (NYSE:AUY). Yamana got itself into a bit to trouble back in 2014 when it and Agnico Eagle Mines acquired Osisko Mining. This deal and some early decade expansion weighed Yamana down with quite a bit of debt. But as of the end of its most recent quarter, Yamana has slashed its net debt to $768 million. All the while, new assets have come online (Cerro Moro), operational efficiency is improving, and AISC should continue to decline. Yamana is likely to see 1 million GEO produced in 2021 and 2022, up by a low double-digit percentage from what it'll produce this year.
Similar to Kirkland Lake Gold, Yamana Gold has been putting its operating cash flow to work to improve shareholder value. The company has increased its dividend four times over the past year, and it anticipates paying off its $100 million revolving credit line with its extra cash flow before the end of the year. Just keep in mind that for every $100/oz. gain in gold above $1,750/oz., it'll net an extra $70 million in net free cash flow.
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>>> GoldMining Commences Trading on NYSE American
Yahoo Finance
October 6, 2020
https://finance.yahoo.com/news/goldmining-commences-trading-nyse-american-120000074.html
VANCOUVER, BC, Oct. 6, 2020 /PRNewswire/ - GoldMining Inc. (the "Company" or "GoldMining") (TSX: GOLD) (NYSE American: GLDG) is pleased to announce that, further to its news release dated October 1, 2020, its common shares (the "Common Shares") will commence trading on the NYSE American under the symbol "GLDG" at the open of markets today.
The Common Shares will continue to trade on the Toronto Stock Exchange under the ticker symbol "GOLD". Concurrent with the commencement of trading on the NYSE American, it is expected that the Common Shares will cease to be quoted on the OTCQX under the symbol "GLDLF".
While shareholders are not required to take any action, the Company recommends that holders who acquired shares through the OTCQX monitor their institution or brokerage account to ensure their holdings are correctly reflected under the new ticker symbol.
About GoldMining Inc.
GoldMining Inc. is a public mineral exploration company focused on the acquisition and development of gold assets in the Americas. Through its disciplined acquisition strategy, GoldMining now controls a diversified portfolio of resource-stage gold and gold-copper projects in Canada, U.S.A., Brazil, Colombia and Peru.
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>>> World’s gold miners wary of production ramp-up despite price surge
Reuters
September 13, 2020
By Tanisha Heiberg and Arunima Kumar
https://finance.yahoo.com/news/world-gold-miners-wary-production-110000066.html
JOHANNESBURG/BENGALURU, Sept 13 (Reuters) - The world's top gold miners are retrenching after COVID-19 related shutdowns despite record prices for the yellow metal, with cost-conscious executives prioritizing investor returns over production growth.
Gold prices have jumped 30% this year to roughly $2,000 an ounce as central banks dial up stimulus measures in response to the coronavirus pandemic.
That has fuelled a cash surge for miners, with top- and mid-tier producers holding roughly $5 billion in cash as of June 30, according to Scotiabank estimates.
But interviews with executives, analysts and fund managers show miners are hesitant to spend on pricey projects and tap marginal deposits that require sizeable capital and take years to break even.
Seven out of 10 of the global gold miners, including Newmont , the world's biggest gold miner, Canada’s Barrick and South Africa's Gold Fields, have cut planned output for the year by 7%, citing coronavirus-related shutdowns, regulatory filings show.
The caution is a reversal from the 2011 gold price boom, which prompted buyers to overspend on acquisitions and led to billions in impairments when prices crashed in subsequent years.
Companies which have won back investor favor are fearful of making similar mistakes.
"The real trap in the gold industry in the past was chasing volume," Newmont Chief Executive Officer Tom Palmer told Reuters.
Newmont's budget this year is $1.3 billion, about half levels seen in the previous cycle.
Gold Fields said it wasn't rushing to change cut-off grades, the minimum grade that can be economically mined, despite the higher price.
"It's not easy to just turn the ship in a different direction," Gold Fields CEO Nick Holland told Reuters, referring to boosting output with the higher price.
Barrick's long-term price assumption remains unchanged at $1,200, underpinning a growing dividend and debt reduction, CEO Mark Bristow said.
"No one made any real money" in the last cycle, he said at the Mines and Money Online Connect virtual conference last week.
GROWTH VS RETURNS
The spot price of gold has climbed more than 500% over the last 20 years, according to Refinitiv data. Global gold output, including from mines and recycling, rose 22%, according to World Gold Council data.
Miners have hiked dividends on the back of those stronger prices, with Barrick raising its quarterly payout 14% last month and Newmont boosting its payout 79% in April. Scotiabank analysts expect the industry's dividend growth to continue into 2021.
"Companies still need to take a very conservative approach," said Joe Foster of Van Eck Associates Corp, which holds shares in Barrick and Newmont and expects gold prices to eventually hit $3,000.
Investors have even threatened to dump shares of companies that don't prioritize payouts.
"If we get to the point where growth versus returns becomes a decision point, we'll back the companies paying returns," said Mark Burridge at Baker Steel Capital Managers, which hold shares in Kirkland Lake Gold, Kinross Gold and others.
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>>> A Trio of Precious Metals Stocks for the Next Gold and Silver Bull Markets
GuruFocus.com
August 28, 2020
By Alberto Abaterusso
https://finance.yahoo.com/news/trio-precious-metals-stocks-next-202233114.html
Outlook for gold and silver prices
Gold and silver were down over the past couple of days as a result of what the Federal Reserve said last week about its committee not seeing any need to set up a specific control program to keep bond yields depressed.
The yellow metal lost 4.2% from last week's highest price to trade at $1,923.85 an ounce on the London bullion market and $1,932.60 an ounce on the Comex, at close on Thursday.
The grey metal dipped about 3.75% to close at $27.245 an ounce on the London bullion market and $27.025 an ounce on the Comex on Thursday.
Thanks to the tailwind from several favorable factors, however, gold and silver skyrocketed on both markets, hitting record highs many times in August, which allowed investors to achieve impressive returns.
Year to date, gold is up about 25%, while silver gained approximately 51%.
The precious metals are expected to rebound from the recent corrections to continue to uptrend in the upcoming months as their fundamentals remain strong.
While the supply side may suffer from the temporary closure of operations due to restrictions imposed by governments worldwide to prevent the spread of Covid-19, the demand is growing as increased volatility spurs investors toward safe haven assets.
Gold and silver operators
Therefore, with gold and silver expected to move higher, investors should increase their positions in strong performers.
For the upcoming period, I recommend Barrick Gold Corp. (NYSE:GOLD), Wheaton Precious Metals Corp. (NYSE:WPM) and Silvercorp Metals Inc. (SVM), whose share prices have risen 54%, 73% and 36% so far this year, benefitting from strong operating activities.
Barrick Gold
The Canadian gold giant closed at $28.58 per share on Thursday for a market capitalization of $50.7 billion.
The share price is not cheap as it is above the 150- and 75-day simple moving average lines, and about 30% above the midpoint of the 52-week range of $12.65 to $31.22. However, it is not expensive either as the enterprise value-earnings before interest, taxes, depreciation and amortization ratio of 5.83 stands below the industry median of 10.71 and the price-book ratio of 2.23 is on par with the industry median.
Furthermore, a 14-day relative strength index of 50 indicates there is still room for further upside as the stock has yet to reach overbought levels.
Barrick Gold is topping the industry in terms of a higher trailing 12-month Ebitda margin rate (90.6% compared to the industry median of 22.5%) thanks to a portfolio of strong mining activities it holds in North America, Latin America, Africa and the Middle East.
When investors purchase shares of Barrick, they should be aware that, although unique from both a quantitative and qualitative standpoint, the assets base of the company, which also includes six world class deposits, implies taking some risks related to the hosting countries.
Nearly 20% of the total output of attributable gold derives from production in Argentina, Papua New Guinea and Mali, three countries that for various reasons pose a threat to operating activities.
Barrick mines gold and copper from its mineral reserves, which account for 64 million ounces of gold and total 10 billion pounds of copper, located in Canada, Nevada, the Dominican Republic, South America, Papua New Guinea, West and Southern-Central Africa,and Saudi Arabia.
Looking ahead to full-year 2020, the mining company expects to dig up 4.6 million to 5 million ounces of gold at an all-in sustaining cost of $920 to $970 per ounce of metal sold, and mine 440 million to 500 million pounds of copper at an AISC of $2.20 to $2.50.
In the second quarter, Barrick posted adjusted earnings of 23 cents per share, topping estimates by 5 cents, on revenue of $3.06 billion (up 49% year over year) thanks to a 31% rise in the realized gold price to $1,725 per ounce and a 24% jump in the copper production to 120 million pounds. The production of gold fell 15.1%, mainly due to restrictions related to the coronavirus.
Wall Street recommends an overweight rating, which means the share price is projected to outperform the industry with an average target price of $33.18 per share.
Wheaton Precious Metals
The Canadian gold and silver streaming company traded at $51.41 per share at close on Thursday, determining a market capitalization of $23.01 billion.
The stock is not trading cheaply as the share price is 34.3% over the midpoint of the 52-week range of $18.66 to $57.89 and above the 150-, 75- and 35-day SMA lines.
Also, the enterprise value-Ebitda ratio of 36.19 and the price-book value of 4.14 stand higher than the industry medians of 10.67 and 2.22.
However, a 14-day relative strength index of 50 indicates that the share price can still go higher.
The streamer is benefitting from high profitable operating activities as the trailing 12-month Ebitda margin is 67%, compared to the industry median of 22.5%.
Although the streaming agreements of Wheaton refer to assets residing in friendly mining jurisdictions, a fraction of total production is exposed to a considerable risk of loss as some of the operating mines are located in regions that are characterized by intense seismic activity.
Three operating mines in Peru and one in Mexico, which together account for 5% of total production of gold and 30% of total production of silver, fall within the Ring of Fire, which is a path extending for total 20,854.8 miles along the Pacific Ocean, producing 85% of the world's seismic activity.
The other streaming agreements are for assets located in North America, the Republic of Guyana, Chile, Argentina, Brazil, Portugal, Greece and Finland.
The company has lowered its full-year output guidance at a range of 655,000 to 685,000 ounces of gold equivalent, while reaffirming its long-term production forecast of 750,000 ounces of gold equivalent to produce every year over the next four years.
In the second quarter, Wheaton Precious Metals recorded pro-forma earnings of 22 cents per share, beating estimates by 3 cents, on revenue of nearly $248 million (up 31% year over year) thanks to higher metal prices and a 5.5% sales volume jump to 156,200 ounces of gold equivalent. Furthermore, the cash operating margin rate advanced by 35% year over year to $1,170 per ounce of gold equivalent sold despite the temporary closure of some operating activities due to Covid-19.
Wall Street recommends an overweight rating with an average target price of $55.11 per share.
Silvercorp Metals
The Canadian silver, lead and zinc mining company closed at a price of $7.7 per share on Thursday, for a market capitalization of $1.34 billion.
The share price is not cheap as it stands 54% above the midpoint of the 52-week range of $1.5 to $8.49, and significantly over the 150-, 75- and 35-day SMA lines. Moreover, the enterprise value-Ebitda ratio of 14.46 is higher than the industry median of 10.71, and the price-book ratio of 3.28 stands above the industry median of 2.23.
Despite these valuations, the share price can still grow a lot as indicated by a 14-day relative strength index of 56, which means that the stock is far from approaching overbought levels.
Its Chinese assets, where the miner is producing the metals in concentrates, are operating profitably as the trailing 12-month Ebitda margin rate yields 52.5% versus the industry median of 22.5%.
Investors should know that 10% of the total silver, 15% of total lead and 70% of total zinc sold are extracted from mine sites in the Guangdong province, which, given its geographic position, is exposed to natural events such as floods and landslides due to monsoon rains.
In general, China is still considered a tough place for American companies to do business, which enhances the country risk to the maximum level.
For fiscal 2021, which will end on March 31, 2021, the company is targeting to mine between 6.2 million and 6.5 million ounces of silver, between 66.1 million and 68.5 million pounds of lead and between 24.5 million and 24.7 million pounds of zinc. The AISC per ounce sold is expected to fluctuate in the $122.6 to $135.5 per ton range.
Silvercorp posted earnings of 9 cents per share, topping expectations by 5 cents, on a 2.5% year-over-year increase in revenue to $46.7 million, benefitting from more silver sold (up 1% to 1.9 million ounces), gold (up 10% to 1,100 ounces) and lead (up 17% to 20.9 million pounds) and higher precious metals prices. The 5% decline in the total sales volume of zinc to 7 million pounds was, therefore, more than offset by the above improvements. The operating cash flow rose 51% to approximately $30 million.
Wall Street recommends an overweight rating with an average target price of $7.01 per share.
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>>> Barrick, Chinese firm to challenge PNG's 'purported grant' of mine lease
Reuters
August 28, 2020
By Jeff Lewis
https://finance.yahoo.com/news/barrick-gold-says-challenge-purported-125412679.html
TORONTO (Reuters) - Barrick Gold and a Chinese partner on Friday said they would challenge Papua New Guinea's apparent move to grant a 20-year lease for the Porgera gold mine to a state-backed firm, the latest escalation in their dispute with the country.
Barrick Niugini Ltd (BNL), the joint venture that operates Porgera, said in a statement that it would challenge the "purported grant" of the special mining lease by PNG Prime Minister James Marape to state-owned Kumul Minerals Holdings Ltd as "unlawful and invalid."
Barrick stopped production at Porgera and sued PNG's government after it refused to extend the mine’s lease in April because of community unrest and pollution concerns. A prolonged shutdown could jeopardize the mine's future, Barrick Chief Executive Officer Mark Bristow has said.
In its release, BNL said it "will take steps to challenge the purported grant" on Aug. 25 of a 20-year mine lease to Kumul.
A Barrick spokeswoman declined comment on what those steps would entail.
The Canadian miner in July served a dispute notice to the PNG government and said it would seek international arbitration to resolve the impasse.
A spokesman for Marape did not confirm whether the lease was granted to Kumul in a text message exchange with Reuters on Friday.
The Prime Minister said in a statement earlier in the week that the government wants to reopen the mine, but that the lease had reverted to the state. He has previously said the government wished to operate the mine itself.
The Porgera joint venture is owned by Barrick and China’s Zijin Mining Group, each with 47.5%, with the remainder owned by local landowners and the Enga provincial government.
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>>> Barrick Sells Stake in Morila to Focus on Tier One Assets
GlobeNewswire
8-31-20
https://finance.yahoo.com/news/barrick-sells-stake-morila-focus-060000423.html
All amounts expressed in US dollars
TORONTO, Aug. 31, 2020 (GLOBE NEWSWIRE) -- Barrick Gold Corporation (NYSE:GOLD)(TSX:ABX) and AngloGold Ashanti Limited (JSE:ANG)(NYSE:AU) have agreed to sell their 80% interest in the Morila gold mine in Mali to Mali Lithium Limited (ASX:MLL) for cash consideration estimated at between $22 million and $27 million, depending on closing adjustments. The sale is subject to certain conditions, including the acknowledgement of the transaction by the state of Mali, which holds the remaining 20% of the Morila gold mine.
Barrick said the decision of the current shareholders to sell their stakes in Morila, which it operates, offered the potential for the mine to continue under a new ownership structure which would bring access to additional resources and a different approach to how the infrastructure is used to extend the life of operations. This would allow Barrick to focus on its strategy of discovering, developing, owning and operating Tier One1 assets. The parties are targeting the closing of the deal before end of October 2020.
The discovery and development of Morila, which poured its first gold in October 2000, laid the foundation for Barrick legacy company Randgold Resources’ growth into one of the world’s leading gold miners.
Known in its heyday as “Morila the Gorilla”, the mine produced 6.9 million ounces of gold and paid more than $2.5 billion to its stakeholders in the form of taxes and dividends. It served as the base for Randgold’s expansion into Africa, among other things through the development of Loulo-Gounkoto in Mali and Kibali in the Democratic Republic of Congo. Both these mines are now part of Barrick’s Tier One portfolio.
In 2015, Morila transitioned to a stockpile and tailings treatment facility and was forecast to close in 2021.
Willem Jacobs, Barrick’s chief operating officer for Africa and the Middle East, said the proposed acquisition by Mali Lithium Limited offered an opportunity for a new owner to extend the life of the mine by utilising the existing infrastructure, applying different planning and evaluation criteria, and accessing additional satellite resources which would continue to benefit Morila’s in-country stakeholders.
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>>> Starr Peak Exploration Ltd. (STRPF), an exploration stage junior mining company, engages in identification, acquisition, and exploration of mineral properties in Canada. The company explores for gold. It holds interest in the NewMétal Property, which consist of 74 claims covering an area of 2,279.53 hectares located in the northwestern Quebec. The company was formerly known as Lions Gate Energy Inc. and changed its name to Starr Peak Exploration Ltd. in July 2015. Starr Peak Exploration Ltd. was incorporated in 1981 and is headquartered in Vancouver, Canada. <<<
>>> Why $5000 Gold Could Soon Become A Reality
Motley Fool
by Paul Garner
August 25, 2020
https://finance.yahoo.com/news/why-5000-gold-could-soon-230000907.html
The post-COVID ‘new normal’ and a flood of stimulus packages from the Federal Reserve have crushed the dollar and pushed gold to record heights.
And with the real economy in a precarious situation, gold prices could soon hit $3000, $4000 or even $5,000 dollars per ounce.
Investors of all types are piling into safe-haven assets in unprecedented numbers, and when even the most gold skeptic investors are starting to bet big on bullion, one may conclude that things have fundamentally changed.
This week, The Oracle of Omaha himself, Warren Buffett, disclosed Berkshire Hathaway’s recent investment in gold miner Barrick Gold Corp. This is the first time he has bought gold, and it is a sign that the legendary investor places significant value in the yellow metal.
One thing Buffett knows is that gold mining stocks have historically always performed better than physical gold. Currently, the best indicators such as the popular Gold Miner ETFs are outdoing physical gold by 50% ...
VanEck Vectors Gold Miners ETF (GDX) has surged over 53% in the past 52 weeks.
VanEck Vectors Junior Gold Miners ETF has surged over 52%.
And for even bigger gains, Canadian junior Amex Exploration (TSX-V:AMX) is up a staggering 7,000% over the past 12 months …
That’s because AMEX has hit very high-grade gold in three distinct zones including its iconic 100% owned Perron Gold Project located in the mining-friendly jurisdiction of Quebec.
But if you missed out on the mad Amex rally, don’t worry…it could happen again.
Junior Gold Mining Stocks Are Major Multipliers
Gold Mining Stocks offer the best opportunity to multiply your returns over the long run.
That’s the case because gold mining stocks act as a leveraged play on gold, multiplying gold moves by 1.5x, 2x or even 3x.
When the first round of Amex investors earned over 7000% returns, it was because the company had no exposure and did something the major miners couldn’t do: It found a huge gold deposit in the very place that the bigger drillers had failed.
The biggest risk/reward ratio for investors in junior gold is when they jump in before a major discovery, and before a company has exposure.
That’s exactly what happened with Amex. But the returns don’t stop there: With every stage of proving up and development, the stock gets another boost. In the last 12 months alone, Amex is up over 2000%.
That’s why the attention is beginning to focus on the exciting story that is unfolding with Starr Peak now--in Phase 2.0 of the Quebec gold bonanza.
And the timing is perfect: Gold hasn’t seen this kind of setup in nearly eight decades.
Government-ordered lockdowns have decimated economies everywhere, with the global economy experiencing its worst recession since WWII--and the pandemic still rages on.
Unprecedented stimulus packages are being pushed through to the tune of $15 trillion globally, which could spark the classic cobra effect culminating in a hyperinflationary economic collapse.
Central Banks are printing money at the fastest clip in history, leading to a plunge in inflation-adjusted bond yields into negative territory and the dollar’s sudden collapse.
US election concerns with talk of postponement and refusal to accept results are leading to the worst domestic political uncertainty the country has ever seen.
And amid this fog of chaos, US-China tensions have reached fever pitch once again over world dominance, espionage and, even the pandemic itself.
It all triggers alarm over stagflation--a deadly combination of sluggish growth and rising inflation that quickly erodes the value of fixed-income investments. That’s prompted investors to flee into safe havens like gold, the biggest and best of them all.
Wall Street is already full-on bullish on the precious metal.
Goldman Sachs has revised its 12-month forecast to $2300 per ounce--or a 20% gain.
UBS has a $2,000 price target on gold for the end of September, while Deutsche Bank is targeting $2,000-$2,100.
JPMorgan has a $2,000 price target, and Bank of America says gold prices could hit $3,000-an-ounce over the next 18 months.
And if that gold is still in the ground--even better. That’s the gold that can seriously multiply if the owner’s price doesn’t reflect the net price.
Gold prices going to $3,000 when Amex netted the earliest investors in the neighborhood of 7000% would have multiplied that massive return even more. And now, Starr Peak is positioning itself as a mini-Amex in more ways than one. So, this could be a re-run on a smaller scale.
Acquisition After Acquisition in Quebec’s Best Gold Play
Another small Canadian company, Starr Peak, acquired its first property directly adjacent and joining Amex’s property back in June 2019.
That was prescient because it was done before Amex made its first big discovery, and even before it started drilling aggressively.
Starr Peak’s NewMétal Property is immediately east of AMEX’s Perron Property, and also hosts the past-producing Normétal Mine, which Starr Peak just acquired on August 10th, 2020.
It’s been a series of acquisitions over the past 12 months, including a huge package that looks like a pincer movement around Quebec’s best-positioned gold play.
In June 2020, it expanded the first property by strategically acquiring a property that almost doubled its existing land position next to the world-class deposit discovered by Amex.
There were dozens of companies trying to get their hands on the property, but Starr Peak already had a leg up in the area.
On August 10th, 2020, Starr Peak acquired a 100% interest in three prospective gold properties, in a major coup for a small-cap company:
The Normetal/Normetmar Property (the past-producing gold mine I mentioned above)
The Rousseau gold property
The Turgeon Lake gold property
And that’s the pincer movement that not only further expands the already large NewMétal property that adjoins Amex, but adds additional prospective gold claims to the portfolio in the former of Rousseau and Turgeon Lake.
Rousseau alone is a bloc of 12 claims covering over 470 hectares in the Rollmac gold zone of 31,298 tonnes grading 11.99 g/t Au (historical).
Turgeon Lake is another 2 claims east of Rousseau covering almost 113 hectares with samples at the water line assaying up to 168.3 g/t Au, 30.2 g/t Au and 23.7 g/t Au (GM 52490) and a drill hole assaying 18.7 g/t Au over 3.09 m, including 68.9 g/t Au and 10.48 g/t Ag over 0.4 m.
Time to Drill Down on The Play That Made Amex Investors Rich
Let's back up a bit to the Amex discovery, which we think sheds more light on what is anticipated with Starr Peak.
First of all: Amex did what major miners thought impossible in this gold-rich area of Quebec. They’d given up while Amex kept drilling until it hit high-grade gold in a series of holes in a stunning discovery.
It was no secret that there was gold here, and tons of historical production was pretty easy to follow. But the majors weren’t tackling the drilling right.
Anyone who was savvy enough to bet on this small company trumping the big gold miners was rewarded wonderfully because AMEX hit very high-grade gold in three distinct zones here, on its Perron Gold Project.
Amex currently has $25 million in cash and is now fully funded for its ongoing 200,000-meter drill program. They have 6 drill rigs working around the clock and have basically announced high-grade results hole after hole--with no sign of anything slowing down.
Eastern Gold Zone Drill Core Sample
With Amex founders also shareholders in Starr Peak, Amex is drilling closer and closer to Starr Peak’s property. The trend and strike direction of the discovery is heading due East towards Starr Peak’s property.
It’s now only about 1 kilometer away from Starr Peak’s property border and with each easterly move it makes toward Starr Peak, the numbers get better. The grades are getting higher and the gold mineralization is open at depth. The grades are so high it is deemed to be some of the richest grades found in the Abitibi Greenstone Belt.
Anyone who’s already gotten in on this one is eyeing a potential high-grade repeat of the Amex discovery, which came back with drill results of 32.2 g/t Au over 5.90 meters and 30.98 g/t Au over 8.50 meters. They’re also eyeing the high grades historically produced by Starr Peak’s Normétal Mine, which produced 10.1 million tonnes over the span of four decades.
The Golden End Game: Watch the News Flow
This is all happening in the beating heart of Quebec’s gold bonanza.
Just as gold, in general, has moved from Wall Street to Main Street, Amex has followed suit--attracting institutional investors to keep it off the radar while it grew serious legs.
Consider that AMEX is sitting potentially on ~10 million ounces of gold and has a current market cap of $264 million.
The opportunity for Amex is still mind-blowing even after all the success they have already had. There is potential for its market cap to grow exponentially with all the drilling that they are currently doing and in the future as their stellar high-grade results keep rolling in.
Yet, Starr Peak’s property could be sitting on a similar discovery … with a much smaller market cap...
Currently, It has a $40 million market cap and they haven’t even begun to scratch the surface. As the drills at Amex come closer and closer to their property line, it just adds to the probability of another potential discovery.
And spurring it all along is this: The gold rally could have plenty of space to run still; so if you missed out on the mania so far, or if you missed out on Amex, this train hasn’t left the station.
Global bond yields were on a downtrend even before Covid-19 struck, leaving income seekers with few avenues to make a buck. Even if bondholders are generating a positive nominal return, they're likely to lose real money to inflation over a longer period of time. These persistently low yields make gold, an asset that doesn't offer a yield, all the more attractive as a store of value or as an investment.
Many analysts think gold prices still have plenty of room to run, and $2,000+ could become the new normal.
Meanwhile, early-stage gold explorers like Starr Peak with a good discovery could make outsized returns for investors who get in early--especially when they set up shop right next to a major discovery that eluded the majors the first time around.
But watch what happens next as the news flow maintains a fast and furious pace: As Amex continues to drill, and with expectations of a substantial resource calculation by the end of the year, Starr Peak stock is hoping to be the biggest beneficiary.
Other gold companies set to benefit from higher gold prices:
Newmont Goldcorp (NYSE:NEM; TSX:NGT) is the world’s largest gold miner following last year’s merger between Newmont and Goldcorp. Thanks to the merger, in addition to growing economic concerns fueling a wider gold rally, its revenue increase of 43%. The spike in income paid off for investors, who saw share prices increase drastically as well as a dividend hike of 79%, making its dividend yield higher than any of its top-tier competitors. Newmont recently updated its 2020 outlook, aiming for stable production of 6 million ounces while cutting back costs into 2020.
Tom Palmer, President and Chief Executive Officer noted, “We are pleased to be ramping up operations at our four sites previously placed in care and maintenance and we remain committed to protecting our workforce and neighboring communities,” adding “We continue to respond to this pandemic from a position of strength and Newmont’s diverse portfolio in top-tier jurisdictions provides a long-term, stable production profile with the potential to generate significant free cash flow over time.”
Though Newmont took the throne as the world’s largest gold miner from Barrick Gold (NYSE:GOLD; TSX:ABX) last year, Barrick is still a force to be reckoned with. In fact, it’s even caught the attention of legendary investor and notorious gold bear Warren Buffett, whose Berkshire Hathaway invested over $560 million in the company, securing a clean 20.9 million shares, sending Barrick’s stock price up by 12% in a single day.
Buffett’s investment in Barrick and change in tune on the gold front shouldn’t come as much of a surprise, however. As the future of the economy looks more-and-more uncertain, and the Federal Reserve continues to print money at a record rate, solid gold miners like Barrick have drawn a lot of attention for investors, especially considering the healthy 0.96% dividend per share that comes with the purchase.
Kinross Gold (NYSE:KGC; TSX:K) is another veteran in the gold game. Though it does not boast a strong dividend like Newmont or Barrick, it has had incredible earnings reports this year, and aas a result, has seen substantial gains in its stock price. In its most recent report on its second-quarter earnings, Kinross reported a revenue of a whopping $195.7 million.
Not only did Kinross blow earnings estimates out of the water, it did so while maintaining a healthy balance sheet, with an operating cash flow of $432.8 million and adjusted operating cash flow of $416.9 million, a 30% and 45% increase, respectively, compared with Q2 2019.
Though Kinross has withdrawn its full-year guidance as a precautionary measure given the global uncertainties caused by the COVID-19 pandemic, it’s still on track to meet, or even exceed, its 2020 projections.
Agnico Eagle Mines (NYSE:AEM; TSX:AEM) is an especially noteworthy company for investors. Why? Between 1991-2010, the company paid out dividends every year. Though it is set to cut its dividends slightly following its poor 2019 performance, it is still treating its investors right.
Despite reducing overall dividend yield, Agnico’s earnings-per-share and overall dividends-per-share have increased significantly this year. Agnico Eagle Mines has grown its earnings rapidly, up 37% a year for the past five years. And as gold prices continue to rise, Agnico remains as attractive as ever. If the current economic situation fails to turn around soon, as analysts have already pointed out, gold prices could soar to $3,000 or even $5,000 - which would be great news for Agnico - and by extension, its shareholders.
Eldorado Gold (NYSE:EGO; TSX:ELD) is another Canadian giant that has had a stellar year. Despite the global COVID-19 pandemic and the extensive measures it’s taken to protect its workers, Eldorado still managed to pull down over $43 million in the second quarter alone. All while maintaining a healthy cash flow of $63.4-million in Q2 2020, increasing significantly from $4.8-million in Q2 2019 and $7.2-million in Q1 2020 as a result of higher sales volume and a higher gold price.
“Our outstanding operational performance during the quarter positions us to continue to generate significant value for our stakeholders. Even while managing COVID-19, we achieved strong quarterly production while seeing lower all-in sustaining costs,” said George Burns, President and CEO, adding “We are pleased to have made our first scheduled term loan repayment in June. Additionally, we have issued a redemption notice to repay $59 million dollars of principal in August under the equity clawback provision of our senior secured notes. We are committed to reducing our debt, while at the same time maintaining a strong liquidity position as we continue to grow our business."
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>>> Amex Exploration Inc. (AMXEF), a mining exploration company, acquires, explores, and develops gold and base metal projects in Canada. It holds interests in the Perron gold project that consists of 116 mining claims covering an area of 4,518 hectares situated in Rouyn-Noranda, Quebec. The company also holds 100% interests in the Cameron property which, consists of 13 mining claims covering an area of 731 hectares; Madeleine West property consisting of 11 mining claims covering an area of 617 hectares; Madeleine East property, which consists of 3 mining claims covering an area of 168 hectares; and Pusticamica property consisting of 46 mining claims covering an area of 2,600 hectares situated in Lebel-sur-Quévillon, Quebec. In addition, it holds 100% interests in the Eastmain River North property, which consists of 77 mining claims covering an area of 4,055 hectares; Eastmain South property consisting of 38 mining claims covering an area of 1,996 hectares; and Eastmain River Centre property consisting of 4 mining claims covering an area of 350 hectares located in the Eeyou Istchee Territory of Baie James, Québec. Additionally, the company has an option to acquire a 100% interest in the Gowan property covering an area of 256 hectares located in the Kidd Creek Mine, Timmins. The company was formerly known as Coleraine Mining Resources, Inc. and changed its name to Amex Exploration Inc. in September 2001. Amex Exploration Inc. is based in Montreal, Canada.
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>>> GoldMining Announces Appointment of John Griffith as Chief Development officer of Gold Royalty Corp.
PR Newswire
August 31, 2020
https://finance.yahoo.com/news/goldmining-announces-appointment-john-griffith-103000796.html
VANCOUVER, BC, Aug. 31, 2020 /PRNewswire/ - GoldMining Inc. (the "Company" or "GoldMining") (TSX: GOLD) (OTCQX: GLDLF) is pleased to announce the appointment of John Griffith as Chief Development Officer of its subsidiary, Gold Royalty Corp. ("Gold Royalty"). Mr. Griffith has also joined the advisory board of GoldMining.
David Garofalo, Chairman and CEO of Gold Royalty, commented: "We're delighted to welcome John to the Gold Royalty team. As the former Head of Bank of America's Metals and Mining Investment Banking, John has advised on more than $60 billion of successful mining transactions over the past decade alone. John was a trusted advisor to me and Goldcorp in our US$32 billion merger with Newmont Mining last year, the largest merger ever completed in the gold sector. I am confident that John's wealth of experience in capital markets with one of the largest investment banks in the world will serve Gold Royalty very well as we grow our business."
John Griffith commented: "It is a tremendous privilege to be working closely with David Garofalo, Amir Adnani and the team at Gold Royalty and GoldMining as we set out to build upon an already exciting portfolio of assets to create value for all stakeholders. The royalty and streaming business model has emerged over the past decade to become a critical yet growing part of the global precious metals sector. Whether funding development growth, M&A, or enhancing balance sheet strength, royalty and streaming companies are no longer viewed as niche players within the industry, but as a primary source of capital and efficient vehicles for driving sector-leading investment returns."
Mr. Griffith is a former Managing Director and the Head of Americas Metals & Mining Investment Banking for Bank of America (2006-2020). He brings nearly 30 years of financial services sector experience spanning three continents, including 26 years of global investment banking expertise. He has advised senior management and executive board members in M&A, capital markets, investor relations, risk management and general advisory in the global mining industry.
John's global landmark transaction was representing Goldcorp in its merger with Newmont Mining in 2019. Other notable advisory transactions in the gold sector include Barrick Gold's sales of Yilgarn South, Kanowna Belle and Plutonic for A$400 million, Eldorado Gold's acquisition of European Goldfields for $2.5 billion, Agnico Eagle's acquisition of Comaplex Minerals for $655 million and Yamana Gold's sale of Agua Rica to Xstrata and Goldcorp for an undisclosed amount.
He has extensive structuring and negotiating experience and has led complex multi-jurisdictional transactions. In an industry first – he structured the US$648 million gold stream with Franco Nevada to partially finance, in combination with high yield notes and equity, Lundin Mining's US$1.8 billion acquisition of the Candelaria mine from Freeport McMoRan. Most recently, John worked extensively with Triple Flag Precious Metals Corp., a private precious metals-focused royalty and streaming company backed by Elliot Capital Management Corporation.
Mr. Griffith holds a Bachelor of Commerce from the University of Cape Town and is a dual citizen of the U.S. and Canada.
About Gold Royalty Corp.
Gold Royalty Corp., a private wholly-owned subsidiary of GoldMining, is a gold-focused royalty company. Gold Royalty's royalty portfolio is expected to initially comprise of 0.5% to 2.0% net smelter return ("NSR") royalties on the Company's interest in 14 existing projects with the opportunity to expand the royalty portfolio through the Company's buy-back rights on existing NSR royalties ranging from 0.5% to 2% held by third-parties on up to 5 of the 14 projects.
About GoldMining Inc.
GoldMining Inc. is a public mineral exploration company focused on the acquisition and development of gold assets in the Americas. Through its disciplined acquisition strategy, GoldMining now controls a diversified portfolio of resource-stage gold and gold-copper projects in Canada, U.S.A., Brazil, Colombia and Peru. Additionally, GoldMining owns a 75% interest in the Rea Uranium Project, located in the Western Athabasca Basin of Alberta, Canada.
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>>> Gold Mining, Inc.. (GLDLF) <<<
Comments by the poster Bigworld -
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=157435810
>>> It came to me recommended by 2 of my favorite precious metal analysts, Craig Hemke of TF MEtals Rport and Marin Katusa of Katusa Research. Both of them rave about the management team at GLDLF, led by Amir Adnani. Both Hemke and Katusa have their own money in it. It's a pink sheet stock, trades about $1.90-ish a share. According to Hemke and Katusa the company is rapidly expanding, and added a Royalty division in June, which they will eventually spin off to shareholders. They said that the company would make it onto one of the Exchanges within a year and that after that it will achieve escape velocity. Lots of Funds want in but their charters don't allow them to hold pink sheet stocks. I picked up 5250 shares today. I plan to do what I did with MUX....keep buying until I have maybe 25,000 shares. I have to do something with my free cash. I don't want to hold too many Dollars. The DXY is under 93 as I write this. If Hemke and Katusa love this company I feel highly confident in their analysis.
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>>> Best Precious Metals ETFs for Q4 2020
SIVR, SLV, and PALL are the best precious metals ETFs for Q4 2020
Investopedia
By MATTHEW JOHNSTON
Aug 11, 2020
https://www.investopedia.com/articles/etfs-mutual-funds/062416/top-5-precious-metal-etfs.asp?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo
Precious metals such as gold, silver, and platinum are valued by many investors as a hedge against inflation or a safe haven in times of economic turmoil. They also are valued for their rarity and their use in a broad range of industrial applications. Precious metals exchange-traded funds (ETFs) are a popular way to invest in these metals, either through physical or futures-based exposure. ETFs can offer a more liquid and easier approach to investing in precious metals than buying futures contracts, purchasing bullion, or buying stock in publicly traded companies involved in the exploration or production of these metals.
KEY TAKEAWAYS
The precious metals sector has dramatically outperformed the broader market over the past year.
The ETFs with the best 1-year trailing total return are SIVR, SLV, and PALL.
Two of the top precious metals ETFs hold silver while the third is invested in palladium.
The precious metals ETF universe is comprised of 14 ETFs, excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). These ETFs are invested in physical precious metals rather than the shares of precious metals mining companies. The S&P GSCI Precious Metals Index has outperformed the broader market with a total return of 35.4% over the past 12 months compared to the S&P 500's total return of 17.5%.1? The top precious metals ETF, based on performance over the past year is the Aberdeen Standard Physical Silver Shares ETF (SIVR). We examine the top 3 best precious metals ETFs below. All numbers in this story are as of August 10, 2020.1?
Aberdeen Standard Physical Silver Shares ETF (SIVR)
Performance over 1-Year: 65.1%
Expense Ratio: 0.30%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 636,571
Assets Under Management: $901.6 million
Inception Date: July 24, 2009
Issuer: Aberdeen Standard Investments
SIVR is structured as a grantor trust, offering investors a certain degree of tax protection. The fund tracks the price of silver and its holdings are 100% silver bullion. The ETF offers investors a simple way to invest in silver without having to worry about storage or insurance costs of holding physical metal or with some of the complexities involved in trading futures contracts.2?
iShares Silver Trust (SLV)
Performance over 1-Year: 64.8%
Expense Ratio: 0.50%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 42,191,020
Assets Under Management: $16.2 billion
Inception Date: April 28, 2006
Issuer: iShares
SLV is also structured as a grantor trust, providing some tax protection for investors like SIVR. The fund is 100% physically-backed by silver bullion and seeks to track the price of silver. It provides investors a way to benefit from appreciation in the price of silver without the costs associated with holding the physical metal and without being concerned with the complexities of investing in silver futures. While it is similar in many ways to SIVR, it does have a slightly higher expense ratio.3?
Aberdeen Standard Physical Palladium Shares ETF (PALL)
Performance over 1-Year: 51.9%
Expense Ratio: 0.60%
Annual Dividend Yield: N/A
3-Month Average Daily Volume: 42,791
Assets Under Management: $363.1 million
Inception Date: January 6, 2010
Issuer: Aberdeen Standard Investments
PALL also is structured as a grantor trust, which has certain tax advantages like SIVR and SLV, above. The fund offers physical exposure to palladium by holding bars of the metal in a secure vault, and tracks the spot price of the metal. PALL offers investors a convenient way to invest in palladium without having to worry about separate storage costs or with the complexities associated with futures contracts. However, palladium is often highly correlated to the automobile industry and can be very cyclical.
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>>> Berkshire Makes a Bet on Gold Market That Buffett Once Mocked
Bloomberg
By Justina Vasquez
August 14, 2020
https://www.bloomberg.com/news/articles/2020-08-14/buffett-s-gold-averse-berkshire-jumps-into-a-big-bullion-miner
Berkshire added Barrick Gold to portfolio in second quarter
Shares of Barrick, world’s second-largest gold miner, soared
Warren Buffett’s Berkshire Hathaway Inc. added Barrick Gold Corp. to its portfolio in the second quarter, sending shares of the world’s second-largest miner of the metal surging.
Berkshire took a new position in Barrick, buying 20.9 million shares, or 1.2% of the company’s outstanding stock, with a current market value of $565 million, according to a regulatory filing on Friday. The filing shows moves made by Buffett or his two investing deputies, Todd Combs or Ted Weschler.
In the past, Buffett, the billionaire chairman of Berkshire, cautioned against investing in the metal because it’s not productive like a farm or a company. Now, gold miners are benefiting from surging bullion prices that are boosting profit margins as costs of production have steadied, making them increasingly attractive investments. Large miners including Barrick and Newmont Corp. have been hoping to woo back generalists who fled the sector years ago.
Paulson & Co., run by billionaire hedge-fund manager John Paulson, also added to its holdings in Barrick.
Barrick’s shares rose 7.4% as of 5:32 p.m. in after-hours trading in New York.
Buffett might’ve been averse to gold in the past, but he has bet big on metals before. In 1997, he bought 129.7 million ounces of silver, banking on demand exceeding production and re-use. He bought most of it for less than $6 an ounce and sold it soon after, he said nine years later. “I was the silver king there for a while,” he said at the time.
The jump in gold prices has boosted investors’ willingness to pump billions into the industry, with precious-metals miners raising $2.4 billion in secondary equity offerings during the second quarter. Gold has gotten a boost as Federal Reserve interest-rate cuts and a plunge in real government bond yields lifted demand for the metal, which doesn’t offer interest.
Filings released this month don’t include hedge funds’ current position, which may have changed since the end of the quarter. Money managers who oversee more than $100 million in the U.S. must file a Form 13F within 45 days of each quarter’s end to list those stocks as well as options and convertible bonds. The filings don’t show non-U.S. securities, holdings that aren’t publicly traded, or cash.
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>>> Barrick Gold Boosts Dividend 14% as Gold Price Surges
A rallying gold price and strong cash flows in the second quarter encouraged Barrick Gold to increase its dividend.
Motley Fool
Neha Chamaria
Aug 10, 2020
https://www.fool.com/investing/2020/08/10/barrick-gold-boosts-dividend-14-as-gold-price-surg.aspx
At a time when several companies are cutting or suspending dividends, Barrick Gold (NYSE:GOLD) just gave investors in the precious metal stock another reason to smile: The gold mining giant has increased its dividend by 14% as cash flows surged in its second quarter, buoyed by a rallying gold price.
Gold has shot up in recent weeks amid the COVID-19 pandemic and global uncertainty, even topping the $2,000 mark. With every dollar-price increase in gold, gold miners like Barrick can earn wider margins.
On the morning of Aug. 10, Barrick Gold not only delivered a solid set of second-quarter numbers, but also rewarded shareholders with a 14% increase in its dividend. Chief Financial Officer Graham Shuttleworth was quoted in a company press release as saying:
The Board believes that the dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7 billion, including a cash balance of $3.7 billion as of the end of the second quarter, and no material debt repayments due before 2033.
Despite a 15% drop in gold production, Barrick's gold sales shot up 45% year over year. Barrick generated $1 billion in operating cash flow and half as much in free cash flow in Q2 as its average realized gold price increased to $1,725 per ounce from $1,317 an ounce in the year-ago quarter. Its realized price was up nearly 9% sequentially. The strong cash flows and liquidity encouraged management to increase the dividend.
Barrick has grown its dividends substantially in the past year or so. At the time of its merger with Randgold Resources in September 2018, Barrick was paying out $0.03 per share in dividend. With the latest increase, its dividend has more than doubled to $0.08 per share.
Barrick's dividend increase comes at a time when investors in the stock are already minting money: The stock is up a whopping 56.9% so far this year and yielding 1% as of the time of this writing, underpinned by the miner's strong operating performance and the persistent rally in the gold price.
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>>> Barrick Gold Beat Earnings Estimates. Its Stock Continues to Rise
Barron's
By Connor Smith
Aug. 10, 2020
https://www.barrons.com/articles/barrick-gold-beat-earnings-estimates-its-stock-continues-to-rise-51597073316?siteid=yhoof2&yptr=yahoo
Barrick Gold stock’s huge two-year run continued on Monday after the company’s second quarter results proved it’s a great time to be a gold miner.
For the second quarter, Barrick reported earnings of 20 cents a share, ahead of consensus estimates calling for 18 cents a share, according to FactSet. Revenue of $3 billion eked out estimates calling for $2.9 billion.
Barrick said the realized gold price during the second quarter was $1,725 an ounce, up from $1,589 an ounce in the first quarter. Its free cash flow was $522 million, up from $55 million in the second quarter of last year. The miner produced 1.15 million ounces of gold and 120 million pounds of copper.
Barrick also raised its quarterly dividend 14% to 8 cents a share. Chief Financial Officer Graham Shuttleworth called the dividend sustainable, adding in the earnings release that it reflects the company’s, “ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $6.7 billion, including a cash balance of $3.7 billion at the end of the second quarter, and no material debt repayments due before 2033.”
CEO Mark Bristow said in the earnings release that Barrick’s major projects remain on track, aside from the Veladero mine in Argentina, where Covid-19 restrictions impacted its heap leach and cross-border Chilean power line projects.
Barron’s turned bullish on gold in a 2018 cover story, calling the metal cheap amid fears of inflation. Shares of Barrick (ticker: GOLD) and peer Newmont (NEM), both favored by Barron’s in January of 2019, soared last year. The stocks continued their run in 2020, as the price of gold passed $2,000 a troy ounce. In a July 31 story, Barron’s argued gold’s rally could continue with inflation-adjusted U.S. rates negative and the U.S. government running massive deficits.
Other than miners, investors can play the metal’s rise with exchange-traded funds like the SPDR Gold Shares ETF, which has returned 18% year-to-date. Barrick Gold stock was up 1% to $29.19 on Monday. The stock has risen about 62% in the past 12 months.
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Bigworld's mining stock list - >>> For primary silver miners I own HL, CDE, AG, and PAAS. But I own more SILJ in Dollar Terms than all of my individual silver stocks. For Gold I have $58 K in Schiffs EuroPacific Gold Fund and I've been really happy with that. As of the close today I'm up 18% in 2 months. That fund is pretty heavy into the Royalty Companies. I also own a ton of GDXJ. For my individual Gold mining holdings I own MUX (I've been disappointed so far), NGD, AUY, KGC, AEM, EGO and IAG. I also own some WPM which I like a lot. I made a really nice profit in its early incarnation (Silver Wheaton) over a decade ago. It's the only royalty company stock I own individually. I want more. I have a couple more gold miners on my shopping list but don't own them yet. Equinox Gold (EGX) (post merger with Leagold), and Kirkland Lake (KL). I also continue to look at Tanzanian Gold Corp (TRX) just for geographical diversity. I might buy some of that but I won't go overboard. It's at $1.06, so I could see eventually owning maybe 25K shares of it. Not much more than that. You can't completely trust investments in Africa. You never know when the next civil war is going to breakout somewhere on that continent.
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https://investorshub.advfn.com/boards/read_msg.aspx?message_id=156778143
>>> GoldMining Inc. (GLDLF), a mineral exploration company, focuses on the acquisition, exploration, and development of projects in Brazil, Colombia, the United States, Canada, Peru, and other regions of the Americas. It explores for gold, copper, and uranium properties. The company's principal exploration properties include the Whistler project comprising 304 Alaska State mineral claims covering an area of 17,000 hectares located northwest of Anchorage; Yellowknife project consisting of 34 mining leases and 2 mineral claims with an aggregate area of approximately 9,704 hectares situated to the city of Yellowknife in the Northwest Territories; and Titiribi project, which covers 1 concession with an area of approximately 3,919 hectares located in central Colombia. Its principal properties also comprise the La Mina project consisting of 2 concessions that cover an area of approximately 3,200 hectares situated in Antioquia; and São Jorge project comprising 7 exploration concessions covering 45,997 hectares located in Para State. The company was formerly known as Brazil Resources Inc. and changed its name to GoldMining Inc. in December 2016. GoldMining Inc. was incorporated in 2009 and is headquartered in Vancouver, Canada.
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>>> 8 Silver Stocks to Consider If Gold Isn’t Your Thing
InvestorPlace
Vince Martin
July 17, 2020
https://finance.yahoo.com/news/8-silver-stocks-consider-gold-165154789.html
Gold has moved to an all-time high, and many gold miners have rallied in response. But, somewhat quietly, silver stocks have gained as well.
A move higher in the underlying commodity no doubt has helped. Indeed, save for a brief move last year, silver trades at its highest level in almost four years. And there’s a case that silver stocks should continue to rally and potentially outperform its more valuable and more widely-held counterpart.
To be sure, the setup for gold at the moment seems almost perfect. The coronavirus pandemic adds risk worldwide, and can lead investors to the safety of the yellow metal. A ballooning federal deficit, along with interventions by the Federal Reserve, raise the specter of inflation — another bullish catalyst for gold.
But silver and silver stocks, can benefit for similar reasons. Indeed, they have: silver has rallied some 65% from March lows. Meanwhile, silver can get a boost from industrial demand as well, meaning it might outperform if the global economy manages to recover. Electric vehicles and solar panels both require silver, which could drive demand in coming years as well.
At the least, precious metals investors can look to the group for diversification. For those investors, here are eight silver stocks that deserve at least a long look:
Pan American Silver (NASDAQ:PAAS)
Endeavour Silver (NYSE:EXK)
MAG Silver (NYSEAMERICAN:MAG)
Fortuna Silver Mines (NYSE:FSM)
Wheaton Precious Metals (NYSE:WPM)
Silvercorp Metals (NYSEAMERICAN:SVM)
First Majestic Silver (NYSE:AG)
iShares Silver Trust (NYSEARCA:SLV)
The simplest play among silver stocks is to go with the biggest play. As far as U.S.-listed names go, that’s Pan American Silver.
Pan American admittedly isn’t the world’s largest producer. That honor goes to Mexico’s Fresnillo plc (OTCMKTS:FNLPF). In fact, despite its name, Pan American isn’t even a pure-play silver stock.
Revenue recently has been tilted more toward gold. But last year’s acquisition of Tahoe Resources added substantial silver reserves, Tahoe’s Escobal mine is the world’s second-largest.
After that deal, almost half of reserves come from silver. But regardless of where its revenue has come from, PAAS stock is a winner. The stock has rallied over 300% in the last five years, far outpacing gains in silver or gold.
That’s what miners are supposed to do: outperform the commodity when it rises. But as I’ve written relative to gold miners like Barrick Gold (NYSE:GOLD), the industry often has failed to provide that leverage.
The fact that Pan American has delivered on its promise makes it a solid pick for silver bulls going forward. The diversification of the portfolio, and industry-leading all-in costs, provide downside protection as well. As far as long-term, “set it and forget it” picks in the mining space go, PAAS is at or near the top of the list.
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>>> Why New Gold Fund OUNZ Isn’t A Gimmick
May 19, 2014
ETF.com
https://www.etf.com/sections/blog/22125-why-axel-merks-ounz-isnt-a-gimmick.html?nopaging=1
The latest physical gold ETF might very well shake up the space anchored by 'GLD.'
The long-awaited Merk Gold Trust ETF (OUNZ) finally launched last week. The trust, which owns physical gold bars much like the SPDR Gold Trust (GLD | A-100), includes a groundbreaking feature—it allows even small investors to redeem their shares for gold.
No doubt, physical gold ETFs, like GLD and theiShares Gold Trust (IAU | A-100), have already been on the market for nearly a decade now, and like OUNZ, they also hold physical gold bars in some of the world's most secure bank vaults.
But those bars can only be claimed by an authorized participant, and only by redeeming whole creation units—in GLD's case, a block of 100,000 shares worth about $12.5 million at current prices. Here's where OUNZ stands out: It allows any investor to make a redemption, even in amounts as small as 1 troy ounce.
That redemption isn't free. Merk charges a fee to pull gold out of the fund in exchange for shares, and this fee varies depending on what kind of bar or coin you want. The transaction would be subject to either a minimum fee or a fee per ounce (whichever is bigger), as laid out by the fee schedule below:
Fee Per
Ounce Minimum
Fee
1oz. American Gold Eagle $60 $2,500
1 oz. American Buffalo $60 $2,500
1 oz. Australian Kangaroo $40 $1,600
1 oz. Canadian Maple $42 $1,600
1 oz. Australian Bar $30 $1,200
10 oz. Australian Bar $25 $1,000
London Good Delivery Bar $32 $0
For example, if you were to redeem a single ounce of American Eagles, you'd pay $2,500 to do so. Some quick arithmetic shows you'd have to take delivery of about 40 ounces of gold at once, currently worth slightly more than $50,000, to avoid the minimum fee. That's not out of reach for an individual investor, but it's hardly chump change. Taking delivery of a single 1 ounce coin—or even several—is not advisable.
So, is OUNZ's redemption feature just a novelty?
I don't think so. While it might not be as convenient as it would appear at first blush, the redemption feature still conveys several benefits.
First, it gives investors an option, and that has value. Gold investors who think they might want to hold physical gold coins or bars someday can buy OUNZ for now, knowing they can easily redeem their shares for gold in the future.
The fund's small handle (just 1/100th of an ounce of gold) means that small investors can accumulate shares of OUNZ in small chunks over many years, and then redeem once they have enough to make self-storage economical.
It's also possible to do this by accumulating shares of GLD or IAU, then selling and using the cash proceeds to buy gold, but there's a problem with that: taxes. If the value of gold appreciates while you're accumulating shares, you'll owe taxes on the gain upon sale, charged at the 28 percent collectibles rate. With OUNZ, that's not a problem. Since the gold you receive by redemption already belongs to you, it's not a taxable transaction.
But aren't those fees exorbitant? After all, redeeming for 50 ounces of Gold Eagles would result in a $3,000 fee on a $65,000 transaction. That's 4.6 percent!
Actually, the fee simply reflects the convenience premium that gold coins command in the market. Here are the exchange fees compared with the premiums over spot charged by two major online gold retailers:
OUNZ Kitco Apmex
1 oz. American Gold Eagle 4.63% 3.92% 3.78%
1 oz. American Buffalo 4.63% 4.24% 3.93%
1 oz. Australian Kangaroo 3.08% N/A 2.78%
1 oz. Canadian Maple 3.24% 2.73% 2.39%
1 oz. Australian Bar 2.31% N/A 1.77%
1 oz. Australian Bar 1.93% 1.92% 1.62%
Assuming 50 oz. are exchanged at a spot price of $1296.80/oz. Shipping and insurance to the continental U.S. are included.
While OUNZ redemptions aren't the cheapest option, they aren't unfair—especially after accounting for the commissions and trading spreads you'd have to pay to sell shares on the market.
Finally, the redemption feature addresses some of the "paper gold" criticisms that have dogged GLD and IAU. While OUNZ won't put to bed conspiracy theories about how much gold these funds actually own, the redemption feature functions as a guarantee of good faith on Merk's part. If the trustee has to make in-kind redemptions to any investor on demand, they had better have the gold to back it up.
In any case, investors in OUNZ should sleep better knowing that they could, theoretically, withdraw their gold from the fund at any time, even if they have no current intention of doing so.
With a fee of 0.40 percent—equal to GLD and only 0.15 percent more than IAU—OUNZ is well positioned to shake up the gold ETF market. If it catches on, we might even see individual redemptions show up in other ETF segments as well.
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VanEck Merk Gold Trust (OUNZ) -
>>> Fee Cut Further Increases Appeal of VanEck Merk Gold Trust (OUNZ)
Business Wire
July 21, 2020
https://www.businesswire.com/news/home/20200721005179/en/Fee-Cut-Increases-Appeal-VanEck-Merk-Gold
Fee Cut Further Increases Appeal of VanEck Merk Gold Trust (OUNZ)
OUNZ provides investors direct exposure to gold with the option to take physical delivery.
As of July 24, 2020, Sponsor’s fee will be reduced from 0.40% to 0.25%.
VanEck and Merk Investments are today announcing that as of July 24, 2020, the Sponsor’s fee for the VanEck® Merk® Gold Trust (NYSE Arca: OUNZ) will be lowered from 0.40% to 0.25%.
"As investors increasingly embrace OUNZ we are now able to lower the expense ratio. A lower cost should provide further incentive for investors to use OUNZ as their preferred gold ETF. OUNZ is the only gold ETF with a patented delivery process, allowing investors to request delivery of the gold they own through OUNZ if and when desired—anywhere in the world," said Axel Merk, President of Merk Investments. "When markets seized earlier this year, OUNZ continued to trade with high liquidity and we continued to facilitate deliveries."
OUNZ offers investors a compelling, convenient and cost-efficient means through which they can buy and hold gold. Launched on May 16, 2014, OUNZ was the first U.S. ETF of its kind to offer investors with the option to take physical delivery of gold bullion in exchange for their ETF shares.1 OUNZ gold is held in fully allocated form in a secure London vault and is the only ETF with a patented process that allows for the conversion of London Bars, which are held by the Trust, into various gold coins and bars available to investors.
"Gold investing is part of VanEck’s DNA and we’ve long made it a point to be able to offer investors a full menu of opportunities through which they can add exposure to gold bullion and gold miner equities," said Brandon Rakszawski, Director of ETF Product Development with VanEck. "With this fee reduction, OUNZ should be an even more attractive option for those investors seeking gold and for whom the ability to request possession of their gold is an appealing added benefit."
In addition to OUNZ, VanEck also counts among its funds the world’s largest gold miner ETF,2 the VanEck Vectors® Gold Miners ETF (GDX®), as well as the VanEck Vectors® Junior Gold Miners ETF (GDXJ®). Additionally, the firm also offers the actively managed VanEck International Investors Gold Fund (INIVX), which for more than 50 years has provided exposure to gold mining equities.
About VanEck
VanEck has a history of looking beyond the financial markets to identify trends that are likely to create impactful investment opportunities. We were one of the first U.S. asset managers to offer investors access to international markets. This set the tone for the firm’s drive to identify asset classes and trends – including gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 – that subsequently shaped the investment management industry.
Today, VanEck offers active and passive strategies with compelling exposures supported by well-designed investment processes. As of June 30, 2020, VanEck managed approximately $56.1 billion in assets, including mutual funds, ETFs and institutional accounts. The firm’s capabilities range from core investment opportunities to more specialized exposures to enhance portfolio diversification. Our actively managed strategies are fueled by in-depth, bottom-up research and security selection from portfolio managers with direct experience in the sectors and regions in which they invest. Investability, liquidity, diversity, and transparency are key to the experienced decision-making around market and index selection underlying VanEck’s passive strategies.
Since our founding in 1955, putting our clients’ interests first, in all market environments, has been at the heart of the firm’s mission.
About Merk Investments
Merk Investments is the Sponsor of the VanEck Merk Gold Trust and provides investment advice on liquid global markets, including domestic and international equities, fixed income, commodities and currencies and their respective derivative markets.
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>>> McEwen Mining: Q2 2020 Production and Exploration Results
GlobeNewswire
July 16, 2020
https://finance.yahoo.com/news/mcewen-mining-q2-2020-production-100010239.html
TORONTO, July 16, 2020 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (NYSE: MUX) (TSX: MUX) reports consolidated production for Q2 2020 was 15,700 gold ounces and 359,400 silver ounces, or 19,200 gold equivalent ounces(1)(“GEOs”), at the average gold:silver price ratio for the quarter of 104:1. Production was significantly impacted by temporary mine suspensions at all four of our operations as a result steps taken to stop the spread of COVID-19, along with operational issues at several mines.
Consolidated Production Summary
Q1 Q2
2019 2020 2019 2020
Gold (oz) 26,900 29,200 36,200 15,700
Silver (oz) 703,200 553,200 850,500 359,400
GEOs(1) 36,300 36,100 45,900 19,200
Black Fox Mine, Timmins, Canada (100%)
In Q2, Black Fox produced 2,200 GEOs. Mining was temporarily suspended at Black Fox from March 26th to April 13th due to health and safety concerns resulting from the COVID-19 pandemic. A progressive return to work was completed by the end of April. For the remainder of the quarter production was lower due to lower than expected grade and development work completed for establishing a greater number of mining areas in order to improve operational flexibility.
Development of the access to the Froome deposit is on track, having advanced 30% of the way to the orebody. The plan is to reach the orebody in Q2 2021, complete the necessary development and start production from Froome in Q4 2021.
At the Black Fox Mine, a total of 44,800 feet (13,650 m) of underground diamond drilling was completed between April 13th and June 30th, with 70% devoted to closely spaced definition drilling of gold mineralization within or adjacent to upcoming mining blocks (see Figure 1). Exploration is continuing on the upper west flank of the mine. During H1, this area has delivered some impressive high grade results. For details please refer to our news release dated June 17th, 2020 – Click here).
High-grade intercepts were generated from these ore definition holes, including:
42.2 g/t Au over 2.0 m from hole 660-F953-13
42.4 g/t Au over 2.5 m from hole 260-B242-07A
20.9 g/t Au over 4.8 m from hole 260-B249-09
Figure 1: Black Fox Mine – Longitudinal Section
http://mcewenmining.com/files/doc_news/archive/20200700/Jul2020_Fig1_BF.pdf
A complete summary of new underground drilling results from Black Fox is available here:
http://mcewenmining.com/files/doc_news/archive/20200700/Jul2020_ug_comp.xlsx
San José Mine, Santa Cruz, Argentina (49%(2))
In Q2, San José produced 5,500 gold ounces and 358,700 silver ounces, for a total of 9,000 GEOs. Mining was temporarily suspended from March 20th due to a nationwide mandatory quarantine imposed in Argentina to combat the spread of COVID-19. Although the mine was able to restart operations in late April, the operations remain below capacity due to government imposed travel restrictions that continue to pose significant challenges in mobilizing personnel to the site.
Gold Bar Mine, Nevada (100%)
In Q2, Gold Bar produced 6,100 GEOs. Mining was halted on April 1st due to concerns about the COVID-19 pandemic, and production ramp up started on May 4th. Throughout May and June the mine only operated on day shift as work progressed for the updated resource model, new mine plan and addressing engineering design deficiencies. Full operations on day and night shift are scheduled to start in August.
Pit optimizations are ongoing and detailed mine planning is underway. Completion of a new resource estimate, mine plan and 2020 forecast are being finalized in Q3. A new reserve estimate is expected towards the year’s end.
Drilling on Gold Bar South is testing for extensions of the deposit. Drilling on the south extension encountered significant mineralization, indicating the potential to extend the existing resource to the south (see Figure 2), including:
Two holes drilled 100 ft (30 m) from the latest mineralized drill fence returned: 1.2 g/t Au over 125 ft (Hole GBS079) and 0.9 g/t Au over 150 ft including 4.0 g/t Au over 10 ft (Hole GBS080); and
Partial results from drilling completed 100 ft (30 m) further to the south returned 1.5 g/t Au over 70 feet (Hole GBS113).
Figure 2: Gold Bar South – Deposit Plan View
http://mcewenmining.com/files/doc_news/archive/20200700/Jul2020_Fig2_GBS.pdf
A complete summary of new surface diamond and reverse circulation drilling results from Gold Bar South is available here: http://mcewenmining.com/files/doc_news/archive/20200700/Jul2020_GBS_Comp.xlsx
El Gallo Project, Sinaloa, Mexico (100%)
In Q2, El Gallo produced 1,900 GEOs from residual leaching of the heap leach pad. COVID-19 is an ongoing challenge in Sinaloa. We are saddened to report that some employees and contractors at the mine and regional office have contracted the virus. One of our employees, who seemed to be recovering well in hospital, passed away suddenly due to complications. We are supporting all the families in this difficult time and extend our sincere condolences on the loss of our valued team member. No severe symptoms have been reported among the other confirmed or suspected cases.
Financial Results
Operating costs for the quarter ended June 30, 2020 will be released with our 10-Q Quarterly Financial Statements.
Notes:
(1) 'Gold Equivalent Ounces' are calculated based on a gold to silver price ratio of 75:1 for Q1 2019, 88:1 for Q2 2019, 94:1 for Q1 2020 and 104:1 for Q2 2020.
(2) The San José Mine is 49% owned by McEwen Mining Inc. and 51% owned and operated by Hochschild Mining plc.
Technical Information
The technical content of this news release has been reviewed and approved by Peter Mah, P.Eng., COO of McEwen Mining and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Technical information pertaining to Black Fox geology and exploration contained in this news release has been prepared under the supervision of Ken Tylee, P.Geo. Mr. Tylee is Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Technical information pertaining to Gold Bar geology and exploration contained in this news release has been prepared under the supervision of Kevin Kunkel, CPG. Mr. Kunkel is a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Reliability of Information Regarding San José
Minera Santa Cruz S.A., the owner of the San José Mine, is responsible for and has supplied to the Company all reported results from the San José Mine. McEwen Mining’s joint venture partner, a subsidiary of Hochschild Mining plc, and its affiliates other than MSC do not accept responsibility for the use of project data or the adequacy or accuracy of this release.
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>>> McEwen Mining Operations and Exploration Update
GlobeNewswire
June 17, 2020
https://finance.yahoo.com/news/mcewen-mining-operations-exploration-202548389.html
TORONTO, June 17, 2020 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (MUX.TO) (TSX: MUX) is pleased to provide an update on our Gold Bar and Black Fox operations and mine exploration drilling.
Black Fox Mine, Canada (100% Interest)
Mining at Black Fox was suspended from March 26th to April 14th to allow time for management to evaluate and adapt to operating with the risks associated with the COVID-19 pandemic. Since April 14th the mine has been operating following corporate and provincial COVID-19 guidelines. We are pleased to relay that the local health unit indicates that no new cases of COVID-19 have been reported in the Timmins region since May 10th. The temporary suspension and subsequent staged ramp-up back into production impacted our mining plan for 2020 and we are in the process of adjusting production forecasts. Guidance for the second half of 2020 will be provided with our Q2 results. Development mining remains on target and focussed on increasing access to additional mining areas.
Underground exploration drilling along the upper west flank of the Black Fox mine (see Figure 1) encountered high-grade results within 400 feet (120 m) to the west of the nearest mining area. Infill drilling also returned very high grades close to existing workings. More underground development and drilling will be further required to demonstrate continuity of the mineralization on the west extension of the mine. The occurrence of high-grade gold intersections suggests the potential to define new gold resources to the west. Selected 2020 drilling intersections include:
Hole ID Hole Type From
(m) To
(m) Core Length (m) Estimated True Width (m) Au Grade
(g/t)
335-EX877-05 Exploration 167.70 171.00 3.3 3.0 11.4
Including 167.70 168.18 0.5 0.4 57.7
335-EX877-07 Exploration 180.90 183.77 2.9 2.6 79.2
Including 180.90 182.00 1.1 1.0 197.5
Including 183.00 183.77 0.8 0.7 11.8
335-EX877-26 Exploration 186.80 188.80 2.0 1.7 62.4
Including 186.80 187.66 0.9 0.7 145.0
300-B832-09 Infill 10.06 12.82 2.8 2.2 34.0
Including 10.06 10.65 0.6 0.5 14.0
Including 11.20 12.00 0.8 0.6 93.7
300-B890-04 Infill 21.00 24.15 3.2 2.5 162.3
Including 21.00 21.50 0.5 0.4 1,009.2
340-FR399-03 Infill 37.50 41.00 3.5 2.7 19.9
Including 38.50 40.00 1.5 1.2 37.5
And 68.70 71.00 2.3 1.8 13.7
340-FR399-06 Infill 27.10 29.10 2.0 1.7 54.1
Including 28.00 29.10 1.1 1.0 97.8
300-F888-32 Infill 40.00 44.00 4.0 3.8 40.6
Including 40.00 41.00 1.0 1.0 152.5
300-F888-40 Infill 54.10 57.00 2.9 2.4 776.6
Including 54.10 55.00 0.9 0.7 2,488.2
300-L828-37 Infill 38.77 50.86 12.1 10.9 5.3
Including 44.80 45.90 1.1 1.0 16.9
A complete summary of new underground drilling results from Black Fox is available here: http://mcewenmining.com/files/doc_news/archive/2020/20200600_drilling/Jun2020_Underground_composites_cog3_V2.xlsx
Figure 1: Black Fox Mine – Longitudinal Section
http://mcewenmining.com/files/doc_news/archive/2020/20200600_drilling/Fig_1_bf.pdf
Progress on the twin ramps to access the Froome deposit encountered a temporary delay in order to recondition the pit wall above the access portals. Priority work on the pit wall has been completed and ramp development resumed on June 16th. Gold production from Froome remains on target for late 2021.
The resource estimate for our Grey Fox target area, 2 miles (3.2 km) southeast of the Black Fox mine, was updated and increased by 43% (see news release from May 19th, 2020) to 888,000 gold ounces at 7.1 g/t in the Indicated category, with an additional 173,000 gold ounces grading 6.6 g/t in the Inferred category. Work on conceptual engineering and permitting is advancing, and we expect to commence an economic study later this year. Trade-off evaluations are expected to include open pit and underground mining scenarios with a production objective of at least 100,000 ounces of gold per annum from the existing Stock Mill. We plan to accelerate development of the Grey Fox Project to coincide with the completion of mining at the Froome deposit.
At the Stock property our exploration team is designing surface drilling to infill and evaluate the growth potential of the Stock West mineralized zone discovered in 2019 (see news release from October 28th, 2019). We are also assessing the potential of reopening the historic Stock mine in order to provide underground access to the Stock East and Stock West mineralized zones.
Gold Bar Mine, USA (100% Interest)
Mining at Gold Bar was suspended on April 1st and restarted May 6th at the Pick West deposit on a one shift per day basis. An updated resource estimate and mine plan is expected to be completed in early Q3. Fortunately, to date we have not had any COVID-19 cases among our workforce.
Infill and confirmation drilling conducted in and around the Pick pit since mid-March 2020 (see Figure 2) has increased our confidence in the revised geologic model and demonstrated potential near mine exploration opportunities to the southwest and northeast. Selected intersections from the infill drilling program in Pick West include:
Hole ID Hole Type From
(ft) To
(ft) Core Length (m) Core Length
(ft) Au Grade
(g/t)
GB650 Infill 90.0 235.0 44.2 145.0 1.2
GB651 Infill 10.0 100.0 27.4 90.0 3.4
Including 16.8 55.0 5.4
GB658 Infill 95.0 205.0 33.5 110.0 1.5
GB660 Infill 315.0 500.0 56.4 185.0 3.2
GB661 Infill 47.1 143.0 29.2 95.9 2.4
GB662 Infill 71.3 179.5 33.0 108.2 1.9
GB664 Infill 30.0 120.0 27.4 90.0 2.7
GB665 Infill 40.0 150.0 33.5 110.0 3.2
GB669 Infill 12.4 76.8 19.6 64.4 5.1
Including 5.2 17.2 11.3
GB670 Infill 180.0 290.0 33.5 110.0 1.5
GB672 Infill 60.0 290.0 70.1 230.0 1.4
GB676 Infill 266.9 349.0 25.0 82.1 2.9
Including 12.2 40.0 5.3
GB755 Infill 315.0 425.0 22.9 75.0 3.0
GB762 Infill 260.0 485.0 68.6 225.0 1.7
A complete summary of new surface diamond and reverse circulation drilling results from Gold Bar is available here: http://mcewenmining.com/files/doc_news/archive/2020/20200600_drilling/Jun2020_Gold_Pick_Composites_cog0_2_V2.xlsx
Figure 2: Gold Bar Mine – Gold Pick Deposit Plan View
http://mcewenmining.com/files/doc_news/archive/2020/20200600_drilling/Fig_2_gp.pdf
Drilling has started at the Gold Bar South satellite deposit to test extensions of the deposit and acquire samples for additional metallurgical testing and resource validation. Permitting for development and production from Gold Bar South is also in progress.
QUALIFIED PERSONS
The technical contents of this news release has been reviewed and approved by G. Peter Mah, P.Eng., COO of McEwen Mining and a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Technical information pertaining to Black Fox geology and exploration contained in this news release has been prepared under the supervision of Ken Tylee, P.Geo. Mr. Tylee is Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
Technical information pertaining to Gold Bar geology and exploration contained in this news release has been prepared under the supervision of Kevin Kunkel, CPG. Mr. Kunkel is a Qualified Person as defined by Canadian Securities Administrators National Instrument 43-101 "Standards of Disclosure for Mineral Projects."
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
This news release contains certain forward-looking statements and information, including "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements and information expressed, as at the date of this news release, McEwen Mining Inc.'s (the "Company") estimates, forecasts, projections, expectations or beliefs as to future events and results. Forward-looking statements and information are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, and there can be no assurance that such statements and information will prove to be accurate. Therefore, actual results and future events could differ materially from those anticipated in such statements and information. Risks and uncertainties that could cause results or future events to differ materially from current expectations expressed or implied by the forward-looking statements and information include, but are not limited to, effects of the COVID-19 pandemic, fluctuations in the market price of precious metals, mining industry risks, political, economic, social and security risks associated with foreign operations, the ability of the corporation to receive or receive in a timely manner permits or other approvals required in connection with operations, risks associated with the construction of mining operations and commencement of production and the projected costs thereof, risks related to litigation, the state of the capital markets, environmental risks and hazards, uncertainty as to calculation of mineral resources and reserves, and other risks. Readers should not place undue reliance on forward-looking statements or information included herein, which speak only as of the date hereof. The Company undertakes no obligation to reissue or update forward-looking statements or information as a result of new information or events after the date hereof except as may be required by law. See McEwen Mining's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and other filings with the Securities and Exchange Commission, under the caption "Risk Factors", for additional information on risks, uncertainties and other factors relating to the forward-looking statements and information regarding the Company. All forward-looking statements and information made in this news release are qualified by this cautionary statement.
The NYSE and TSX have not reviewed and do not accept responsibility for the adequacy or accuracy of the contents of this news release, which has been prepared by management of McEwen Mining Inc.
ABOUT MCEWEN MINING
McEwen Mining is a diversified gold and silver producer and explorer with operating mines in Nevada, Canada, Mexico and Argentina. It also owns a large copper deposit in Argentina. McEwen Mining’s goal is to create a profitable gold and silver producer focused in the Americas.
McEwen Mining has approximately 400 million shares outstanding. Rob McEwen, Chairman and Chief Owner, owns 21% of the shares.
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>>> Franco-Nevada Eyes $1 Billion Deals as Base Metals Lag Gold
Bloomberg
by Danielle Bochove
July 10, 2020
https://finance.yahoo.com/news/franco-nevada-eyes-1-billion-154244926.html
Franco-Nevada Eyes $1 Billion Deals as Base Metals Lag Gold
(Bloomberg) -- Franco-Nevada Corp. will do at least $500 million in streaming and royalty deals in mining this year, and a lot more if base-metal producers proceed with several larger financing deals in the $500 million to $1 billion range.
That’s the view of the Toronto-based company’s chairman, David Harquail. In an interview, he said there are “a number” of large base-metal companies considering selling big precious-metal streams on their assets.
“They’re serious enough that they’ve gone through processes with investment bankers to solicit interest,” Harquail said. “Whether they get over the transom, or they pull the trigger, that’s at the discretion of the seller.”
Streaming companies provide upfront payments to miners in exchange for the right to buy metals at a discount in the future. With a market value of about $27 billion, Franco-Nevada also does royalty agreements, tying portions of production to land titles.
The firm managed to secure a raft of big deals with producers of precious and base metals between 2014 and 2016, as the collapse of the commodities super cycle forced miners to sell streams on prime assets.
Although the current environment for streaming is nowhere near as good as it was back then -- because miners have done a better job managing their balance sheets -- there’s still a good pipeline of deals, Harquail said.
“The relative value of gold to copper is one of the most advantageous to precious-metals companies ever, so there’s a real financing opportunity for base metals companies, that may have a precious metals component,” to do streams, he said.
In May, Franco-Nevada struck a $100 million to $150 million deal with Brisbane-based SolGold Plc. Along with some smaller deals, the company has committed close to $200 million to date and expects to meet its average investment of $500 million to $600 million a year in 2020.
“Right now, on the precious metals side, we’re entering a bull market even for the junior companies,” Harquail said. “People are doing financings and they’re upsizing the financings.”
Franco-Nevada’s investors want the company to focus on precious-metal deals, he said, as gold continues its ascent. The pandemic has created some headwinds, mainly around doing on-site due diligence for new investments. But Franco-Nevada has been able to work around that with “installment deals” that are subject to doing that work once it’s safe.
The company’s biggest investment, in First Quantum Minerals Ltd.’s Cobre Panama mine, was shut for most of the second quarter but is now reopening.
Harquail said the possibility of supply interruptions in Chile or Peru is serious but that so far governments have treated mining as an essential industry. The company has a stake in Lundin Mining Corp.’s Candelaria mine in Chile.
So far, miners have been able to take advantage of their ability to control sites to contain the virus, he said. While Franco-Nevada doesn’t expect full production this year, he’s comfortable if assets are performing at 85% to 90% of optimal volume.
”I think the industry is going to be able to manage this quite well,” he said.
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Kerr Mines Announces Upsize to Bought Deal Offering
Investing News Network - July 15th, 2020
Kerr Mines Inc. is pleased to announce that it amended the terms of its previously announced offering of units of the Company.
Kerr Mines Inc. (TSX:KER, OTC:KERMF), (“Kerr” or the “Company”) is pleased to announce that it amended the terms of its previously announced offering of units of the Company. Under the amended terms of the Offering (as defined below), Haywood Securities Inc. (the “Underwriter”), has agreed to buy, on a bought deal basis, 35,720,000 units of the Company (the “Units”), at a price of C$0.14 per Unit (the “Offering Price”) for gross proceeds of $5,000,800 (the “Offering”). Each Unit will consist of one common share in the capital of the Company (a “Common Share”) and one half of one Common Share purchase warrant (a “Warrant”). Each whole Warrant will entitle the holder thereof to purchase one Common Share (a “Warrant Share”) at a price of C$0.22 for a period of 24 months following the Closing Date (as defined below).
The Offering is expected to close on or about August 4, 2020, or such other date as may be agreed by the Underwriter and the Company (the “Closing Date”), and is subject to the Company receiving all necessary regulatory approvals, including the approval of the TSX and applicable securities regulatory authorities. The Units will be offered by way of a short form prospectus in each of the provinces of Canada, excluding Quebec.
The Company plans to use the net proceeds from the Offering to further advance the Company’s high grade Copperstone gold project with a targeted drilling program for purposes of resource and reserve expansion while also testing further resource upside within its 50 square kilometre land position. Additionally, the proceeds will allow the Company to further advance detailed engineering and project optimization for purposes of the re-start of the Copperstone gold project and for general corporate purposes...."
https://investingnews.com/news/gold-investing/kerr-mines-announces-upsize-to-bought-deal-offering/
Positive news for Kerr Mines.... Bravo, Martin Kostuik, Giulio Bonifacio & Claudio Ciavarella https://kerrmines.com/corporate/
https://www.mining.com/haywood-lifts-gold-price-forecasts/
& Eric Sprott is investing mORE in https://www.newswire.ca/news-releases/eric-sprott-significantly-increases-investment-in-karora-resources-subscribes-for-26-million-shares-821219847.html
https://www.kitco.com/news/2020-07-14/Look-to-buy-gold-below-1-800-and-ride-it-to-new-highs-Blue-Line-Futures.html
>>> SilverCrest Metals Inc. (SILV) acquires, explores for, and develops precious metal properties in Mexico. It primarily explores for silver and gold properties. The company's principal property is the Las Chispas project that consists of 28 concessions totaling of 1400.96 hectares located in Sonora, Mexico. SilverCrest Metals Inc. was incorporated in 2015 and is headquartered in Vancouver, Canada. <<<
>>> Mining Stock News: SilverCrest Provides Corporate Update
June 23, 2020
https://www.marketwatch.com/press-release/mining-stock-news-silvercrest-provides-corporate-update-2020-06-23?siteid=bigcharts&dist=bigcharts&tesla=y
Jun 23, 2020 (Investorideas.com via COMTEX) -- Vancouver, British Columbia - June 23, 2020 (Investorideas.com Newswire) SilverCrest Metals Inc. (TSX: SIL.TO; NYSE American: SILV) ("SilverCrest" or the "Company") is pleased to provide a corporate update with respect to the Las Chispas Project ("Las Chispas") in Sonora, Mexico, and management changes.
N. Eric Fier, CEO, commented, "We continue to adjust to unprecedented COVID-19 conditions with the operation of a fully functional confined camp at Las Chispas. Health and safety of our people and surrounding communities are paramount as we move the project forward. The SilverCrest Team is back to operating eight exploration drills, advancing underground development at 10 to 15 metres per day, and working diligently on feasibility and engineering designs in preparation for potential major mine construction in 2021.
As of June 15, 2020, Mr. Nick Campbell, Executive V.P. of Business Development and Dr. Salvador Aguayo, V.P. of Mexico Development, have stepped down from their respective company roles. Nick has been an integral part of the SilverCrest success story and will be missed. We wish him all the best in his future endeavours. Salvador will be retiring after 40 years in the industry. He joined the predecessor company in 2007 and assisted with the success story, from discovery through production, of the Santa Elena Mine located 25 kilometres south of Las Chispas. He brought the same skills and excitement to Las Chispas. Dr. Aguayo will continue with the Company as consultant and advisor."
Las Chispas Updates
As of mid-June, the Company had constructed a fully confined camp at Las Chispas with a capacity for 160 essential persons to continue its exploration, underground development and construction of early works.
Before entering the confined camp, all persons are tested for COVID-19 (rRT-PCR test) and following receipt of negative tests, are transported to site using strict health and safety protocols. Once on site, all appropriate COVID-19 related protocols (see news release dated March 30, 2020) are enforced.
Currently eight (8) exploration drills are operating. The Company took advantage of the slow down (due to COVID-19) to further in-fill drill on the Babi Vista Vein for resource estimation and feasibility work.
Target drilling of an estimated 70,000 metres is planned in H2 focusing on high-grade resource expansion of the following veins: Babicanora (southeast and northwest, deep), Babi Sur (southeast to depth), Babi Vista (all directions), Babicanora Norte (southeast and northwest, deep), Las Chispas (southeast to depth), Giovanni (southeast to depth), William Tell (all directions), and Varela (all directions).
Underground development has resumed, with a target of 500 metres per month by Q3, 2020, under confined camp conditions. The first ventilation raise in the Babicanora area has been completed.
The feasibility study is progressing in parallel with the exploration and development efforts
Basic engineering was completed in May 2020;
Procurement of long lead equipment items are expected to start in H2, 2020;
Detailed engineering was initiated in June 2020 and will carry on to Q1, 2021; and
Feasibility study currently expected near the end of this year.
Communications with local communities and government continue to be paramount as we adjust our efforts to provide assistance with medical needs due to COVID-19. The use of a confined site camp is limiting physical exposure to the community.
SilverCrest is a Canadian precious metals exploration company headquartered in Vancouver, BC, that is focused on new discoveries, value-added acquisitions and targeting production in Mexico's historic precious metal districts. The Company's current focus is on the high-grade, historic Las Chispas mining district in Sonora, Mexico. The Las Chispas Project consists of 28 mineral concessions, of which the Company has 100% ownership and where all the known mineral resources of the Company are located. SilverCrest is the first company to successfully drill-test the historic Las Chispas Property resulting in numerous high-grade precious metal discoveries. The Company is led by a proven management team in all aspects of the precious metal mining sector, including taking projects through discovery, finance, on time and on budget construction, and production.
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>>> Gold Crosses $1,800 for the First Time Since 2011 Amid Record ETF Inflows
Gold Prices Surge Amid Record ETF Inflows
Investopedia
By DEBORAH D'SOUZA
Jul 8, 2020
https://www.investopedia.com/gold-crosses-usd1-800-for-the-first-time-since-2011-amid-record-etf-inflows-5070682?utm_campaign=quote-yahoo&utm_source=yahoo&utm_medium=referral&yptr=yahoo
The price of gold has risen past $1,800 psychological level
Spot gold up 17% in the first six months of 2020
Gold ETF net inflows in H1 2020 exceeds full year record set in 2016
COVID-19 uncertainty, central bank actions, weak dollar pushing price higher
SPDR Gold Shares and iShares Gold Trust see greatest inflows
This morning the gold spot price crossed the key $1,800 an ounce level for the first time since 2011. This comes against the backdrop of bullish forecasts. Goldman Sachs expects the metal could reach $2,000 in the next 12 months, and Bank of America sees it touching $3,000 an ounce in 18 months. Its all-time record of $1,921.17 was set in September 2011.
Gold has been surging this year, despite demand for jewelry, gold bars and coins declining in big markets like India and China, due to Western investors seeking safety in the asset. The global net inflows into Gold ETFs was $39.5 billion in the first half of this year, according to the World Gold Council. This already exceeds the record set for highest annual inflows set in 2016 ($23 billion). Even going by tonnage, in just six months it beat the previous full year record of 646 tonnes in 2009 by almost 100 tonnes. The demand has been so extraordinary, inflows in the first half of 2020 significantly exceeded multi-decade record levels of net gold purchased by central banks in 2018 and 2019.
As economies confronted uncertainty related to the pandemic and central banks introduced stimulus and cut interest rates, gold-backed funds have seen seven consecutive months of positive flows as of June. "Speculation over the potential impact of a second wave of COVID-19 infections on an already fragile global economy caused a renewed wave of fear and uncertainty. Meanwhile, ongoing asset purchases by central banks to mitigate the impact of the pandemic further reduced the opportunity cost of holding non-yielding assets such as gold," said the report. Also set to possibly push prices higher is the weakening U.S. dollar.
As the price of gold rose 17% over the first half of the year, global gold ETF holdings (in tonnage terms) increased by 25%. Global daily trading volumes reached a record $233 billion per day in March and was at $156.9 billion per day in June, comfortably above the 2019 daily average of $145.7 billion. By the end of June, gold-backed ETFs held 3,620 tonnes of gold worth $206 billion.
The SPDR Gold Shares and iShares Gold Trust funds lead the ranking of funds with greatest inflows in dollar/tonnes terms during H1. See the rest below.
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>>> McEwen Mining Closes the Refinancing of Its $50 Million Debt
GlobeNewswire
June 25, 2020
https://finance.yahoo.com/news/mcewen-mining-closes-refinancing-50-210141677.html
TORONTO, June 25, 2020 (GLOBE NEWSWIRE) -- McEwen Mining Inc. (MUX.TO) (MUX.TO) (“McEwen” or the “Company”) is pleased to announce that it has successfully refinanced its $50 million senior secured term loan facility (the “Term Loan”). As part of the refinancing, Sprott Private Resource Lending II (Collector), LP has replaced Royal Capital Management Corp. as a lender and the administrative agent for the Term Loan; and Evanachan Limited, a corporation wholly-owned by Rob McEwen, remains a lender (collectively the “Lenders”). The principal amount of the loan remains $50 million.
As part of the amendments, the maturity date of the Term Loan has been extended by two years to August 31, 2023. In consideration for the extension of the Term Loan and other amendments, the Lenders were paid one-time bonus interest of 3.75% of the principal amount of the Term Loan in the form of restricted shares of the Company. A total of 2,091,700 common shares were issued to the Lenders pro rata in connection with the refinancing.
The principal amount of the Term Loan will continue to bear interest at 9.75%, payable monthly. Principal payments of $2 million per month are now scheduled to begin two years later on August 31, 2022, and the final principal payment is due on August 31, 2023. The Term Loan can be retired in full or in part any time prior to December 31, 2021 upon payment of the principal and accrued interest plus a fee linked to the remaining life of the Term Loan, and after December 31, 2021 upon the payment of the remaining principal and accrued interest plus a fee equal to 3% of the remaining principal.
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>>> Why Is Franco-Nevada (FNV) Down 8.4% Since Last Earnings Report?
Zacks
June 5, 2020
https://finance.yahoo.com/news/why-franco-nevada-fnv-down-153103546.html
It has been about a month since the last earnings report for Franco-Nevada (FNV). Shares have lost about 8.4% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Franco-Nevada due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Franco-Nevada Q1 Earnings & Sales Top Estimates, Up Y/Y
Franco-Nevada Corporation reported adjusted earnings of 58 cents per share in first-quarter 2020, up 65.7% from the prior-year quarter. Additionally, the bottom line surpassed the Zacks Consensus Estimate of 55 cents.
The company generated revenues of $241 million in the reported quarter, reflecting a year-over-year improvement of 34%. Further, the top line beat the Zacks Consensus Estimate of $234 million. In the reported quarter, 89% of revenues were sourced from gold and gold equivalents (69.4% gold, 9.2% silver, 9.4% platinum group metals and 1% from other mining assets) and 11% from energy (oil, gas and natural gas liquids).
The company sold 134,941 Gold Equivalent Ounces (GEOs) in the quarter, up from 122,049 GEOs in the prior-year quarter. The year-over-year improvement of 10.6% was driven by higher contributions from Cobre Panama, Guadalupe-Palmarejo and Hemlo, offset by lower contributions from Candelaria, Antapaccay and Sabodala mines.
During the reported quarter, adjusted EBITDA climbed 36.8% to $193 million from the $141 million witnessed in the comparable period last year.
Prices
In first-quarter 2020, the average gold price was $1,583 per ounce, 21.4% higher than the year-ago quarter. Silver prices averaged $16.90 per ounce in the quarter, up 8.5% year over year. Platinum prices went up 9.7% year over year to $903 per ounce, while palladium prices jumped 59.2% year over year to $2,284 per ounce.
Financial Position
The company had $209.8 million cash in hand as of Mar 31, 2020, up from $132.1 million reported as of Dec 31, 2019. It recorded operating cash flow of $195.2 million in the reported quarter, up from the prior-year quarter’s $143.6 million.
Franco-Nevada is debt free and uses its free cash flow to expand its portfolio and pay dividends. The company’s board has announced a quarterly dividend of 26 cents per share, marking a 4% increase from the prior dividend of 25 cents per share. This marks the 13th consecutive annual dividend increase for the company’s stakeholders.
Suspension of Guidance
Franco-Nevada has withdrawn the GEO sales guidance for the current year as its mining operators have been facing the unfavorable impact of the coronavirus outbreak, which led to temporary suspension of operations and production curtailment. It has also revoked the current-year energy revenue guidance, given the sluggish oil and gas prices. Operations at Cobre Panama and Antamina have been temporarily suspended, while Antapaccay and Candelaria continue to operate at normal levels.
Franco-Nevada’s mining revenues are likely to be affected by the production curtailments across its mining portfolio. Energy is expected to be less than 10% of the company’s current-year revenues as energy assets have been impacted by a sharp drop in commodity prices and drilling activity. Weakness across the energy sector is expected to be more than offset by strength in gold equivalent assets.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -6.49% due to these changes.
VGM Scores
Currently, Franco-Nevada has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Franco-Nevada has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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