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Everybody loves copper - Rio Tinto should buy Turquoise Hill stake

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Markets don't like uncertainty because uncertainty equals risk.  For this reason and US dollar strength, we've seen metal prices plummet over the past few months.  This uncertainty stems from the escalating trade war situation between the US and China, the big fat pig with an insatiable appetite when it comes to metals consumption.

Ironically, despite the recent metal price weakness, large mining companies have never been so eager to acquire large new copper assets.  Lundin (TSX: LUN) is still looking to acquire copper assets, after it lost Nevsun (TSX: NSU) to Zijin.  BHP (ASX: BHP) just acquired a 6.1% equity stake in SolGold (LSE: SOLG), which is advancing a big copper porphyry discovery in Ecuador.

South32 (ASX: S32) is also looking for copper exposure.  South32 already has a $150M JV deal with Trilogy Metals (TSX: TMQ), the base metals spin out from NOVAGOLD (TSX: NG) that has two large copper assets in Alaska that are infrastructure-challenged.  The challenge in finding …

A little dump with the pump in the oil & gas sector - Perrison Petroleum

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Notice that there haven't been any egregious scams like West High Yield ("WHY") in the junior mining sector this year?  The reason for that is probably that the junior mining sector has been performing terribly in 2018.  The lack of investor enthusiasm in the sector and the absence of new dumb money attracted to hot sectors makes it tough to run a good scam.  Consequently, the junior mining sector still has its share of BS, over promotion, and low level scams, but the real egregious stuff is taking place where the suckers are.  Crypto/Blockchain and marijuana.

Today, however, I saw a news release for an oil & gas company that reminded me of WHY.  Perisson Petroleum Corporation (TSXV:POG) claims that they have an MOU with Lan Cheng Limited, a private investment fund comprise of "a network of wealthy individuals, associated institutions and private equity groups which invest in large diverse projects on a project-by-project basis."  Under the MOU, Lan Chen wi…

Trade tariffs create risks and opportunities in base metal stocks

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If you're not familiar with the Visual Capitalist, I highly recommend that you check out the website and signing up for the daily email.  Content is always visually stunning and covers a broad range of topics.  Yesterday's post - The Base Metal Boom: The Start of a New Bull Market? - by Nicholas LePan is an excellent one, although the timing was unfortunate.  Base metal prices took it on the chin overnight as The Donald announced that the US will potentially slap tariffs on another $200 billion of goods from China after August 31.

While I agree with the Visual Capitalist article that the electric vehicle boom and electrification of everything will drive the next metals boom, the immediate reality is that base metal consumption growth is totally driven by China.  This growth isn't from the Chinese making lots of EVs and installing solar panels everywhere; for the time being, it is still primarily from infrastructure growth and economic expansion.  The chart below, extracted…

Silver outperforms gold for a change

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There seems to have been increased talk about silver over the past few weeks.  Rather than rehashing the reasons why, here are a couple of good articles about how it may be silver's turn to shine:The Assay - Indicators Point to a Silver Rally Silver Seek - New Silver Bull Coming I'd also previously indicated on this blog that a gold-silver ratio of 80 has historically marked the bottoms for silver.
Interestingly, silver moved up 2.5% yesterday while gold was only up 0.2%.  Could this be the start of a mean-reversion trend that sees silver move back towards its more typical range of 1-to-65 versus gold?  That would imply that silver should be trading at $20.75/oz, based on the a gold price of $1,349.  I hope so, given the significant silver exposure in my portfolio.  However, I have a hard time believing that silver can have a significant rally without gold's participation.  If gold can break out of its range and trade above $1,370, then I think silver will do very well.

Whi…

Tin - no longer a boring metal!?!

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Tin is a boring metal.  It is used predominantly for solder (yawn!), and for applying a thin, corrosion resistant layer on metal (a.k.a. tin-plating) (double yawn!).  Or, so at least I thought.

Recently, Rio Tinto Ventures hired MIT to study which metals would be most impacted by new technologies such as autonomous and electric vehicles, renewable energy, energy storage, and advanced computing and IT.  Never in my wildest dreams would I have expected tin to come out at the top of that list, edging out lithium and cobalt.


We've all heard lots of hype about lithium, cobalt, nickel, and even vanadium being the hot metals associated with electric vehicles and batteries.  Lithium has lost some of its luster due to Tesla's struggles as well as potential that SQM could flood the lithium market.  I still like cobalt due to the supply concentration from the DRC, a hellhole of a country that, ironically, has amazing mineral endowment.  But, this is the first time I've seen or heard …

What did I learn at PDAC?

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The annual Prospectors & Developers Association of Canada, or PDAC, convention in Toronto has ended.  I was there, as were 25,000 other people.  While I actually didn't attend the convention much, here are a few things I learned and observed at this PDAC:

Some people can never have enough free pens or squishy toys.  I'd like to see a concerted effort by the mining industry to eliminate all the free junk that is given away at conferences like PDAC.  When you feed a pigeon, you'll get more and more pigeons that suddenly show up.  Ask yourself if you really want to attract pigeons pen collectors.  People who covet free trinkets are not who we want to attract to an investment conference.  On a side note, thanks to Lundin Mining (LUN.TO) for providing small chocolate bars that I gave to my kids so they would still love me after PDAC. Copper exploration is hot.  There are a lot of big mining companies looking for large scale copper projects. Since there are not a lot of those…

Hammer time! Friday's bullish market reversal

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Prior to being a junior mining IR consultant and blogger, I used to be in equities research and trading.  Back in those days, I studied the markets intensely looking for buying opportunities.  I used a variety of technical indicators, technical analysis, fundamentals, and intuition to guide my decisions.  As discussed in this post, I think there is a good chance that we saw a market reversal on Friday.  That sets up what could be a significant buying opportunity.

The equities market is constantly evolving and changing.  This bull market is quite different from the last, as there is a lot more computer-based trading, a lot more passive investing (i.e., investors buying ETFs instead of actively managed funds), and a remarkable lack of volatility.  Most investors have become accustomed to the low volatility, making the recent market pullback seem shocking when, in fact, it is quite normal (historical charts here). 

My belief is that we are in the latter stages of a bull market and that t…

ML Gold following the Garibaldi model, but without the egregious market cap

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I was tied up with a financing and not on top of the news, so I missed it last week when ML Gold (TSXV:MGL) announced that drilling at its Stars Property in central BC intersected 311 metres with visible chalcopyrite mineralization (link).  Thanks to reader DH for bringing this to my attention.

So, once again we have a junior mining company announcing a new discovery prior to releasing assay results.  Garibaldi Resources (TSXV:GGI) demonstrated last year how to send your share price skyrocketing this way without any assay results.  In my opinion, GGI over promised and under delivered, although the best example of failing to live up to the hype was New Nadina (TSXV:NNA).  That stock crashed in spectacular fashion at the beginning of 2018.  Somewhere out there is some poor sucker who paid $4.50 for NNA shares, which are now trading at $0.41.  Ouch!

While there are similarities between MLG and GGI, a big difference is that MLG is trading at a market cap of $19M while I was criticizing GG…

Crypto crash

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For some morbid reason, it gives me pleasure to see Bitcoin and other cryptocurrencies crashing.  Maybe it is because there is way too much talk about cryptos now or maybe I'm jealous of all those Bitcoin millionaires buying Lambos.  For their sake, I hope some of the fortunate ones did cash in and buy real assets because cryptos appear to be crashing...and I don't think we've seen capitulation yet when things will really crash.



Cryptocurrencies have not had a good year so far and the sell off has now accelerated due to rumors that China and South Korea may implement regulations that could go as far as banning trading in cryptos.

Below is the one month chart for Bitcoin.  Yep, that is almost a 50% drop in a month.  That is what happens when there is no real underlying value and price is set simply by supply and demand.  Bitcoin increased roughly 1500% in 2017 and it will be interesting to see how it fares in 2018.


Casey Report to blame for Aurania surge

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Further to yesterday's post, which speculated that James Dines caused the sudden surge in the price of Aurania Resources' shares (TSXV:ARU), it turns out that it was the Casey Report.  Author E.B. Tucker raised the "buy-up-to-price" for ARU to $15.  WTF E.B.?!?!  Why would you tell your followers to buy up to that ridiculous level?  Unless you think there is imminent news about a major discovery, why not recommend accumulation of stock at current prices and then to buy on dips?  You even state in your article that ARU shares are tightly held, with insiders controlling 70% of the stock. That does not seem like a good way to make your subscribers money.


In an interesting twist, Aurania issued a news release on Friday afternoon commenting on the increased market activity and linking it to the Casey Report article.  The "company is not aware of undisclosed material information" news releases are useless.  It is a breath of fresh air to see a company actually co…