What did I learn at PDAC?

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

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

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

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

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…

New year, same stupid investor behavior (Aurania Resources)

Happy New Year to all!  May 2018 bring us mining investors the joy that marijuana and cryptocurrency investors saw in 2017.  Despite no exposure to those sectors, I had a very good year in 2017 and will remember it fondly.

2018 is off to a good start for metal prices and mining stocks, thanks in large part to US dollar weakness.  I think this is going to be a good year, but then I usually start the year off with such wishful thinking.  We are getting into the latter part of this economic cycle, so the time is right for materials stocks to finally do well.  My favorite metals for this year are zinc and silver, but I also like copper.

Reflecting on my strengths and weaknesses, I often let fundamentals and my cynicism get in the way of making profits.  I didn't jump on the cobalt or lithium band wagon because I didn't understand those sectors/metals well enough, even though I could tell they were hot.  Duh, you don't need to understand the sectors when anything associated wit…

My simple quantitative approach to spec stocks like Garibaldi

I came across an interesting video of Eric Sprott recently.  Eric is a legend in the mining sector and I respect his knowledge and work ethic.  Eric has also been one of the supporters of Garibaldi Resources (TSXV:GGI), a company that has received significant scrutiny on this blog, IKN, and the Angry Geologist.  So, you would think that I disagree with Eric Sprott on Garibaldi.  However, that is not the case.

In the video, Eric indicates that he is looking for 10 and 20 baggers.  We all love those, don't we?  Eric has had a lot of them in his lifetime and is much wealthier than most of the rest of us.  Let's be clear, however, that investing in these types of stocks is probably not a core investment strategy.  I'm sure that Eric has also invested in many such stocks and lost money.  He is in the fortunate position that it won't have much of an impact on his overall wealth or quality of life.  My guess is that some investors in stocks like Garibaldi and Novo Resources (…

Would you rather...

Receive one of the following:

$16,000 US dollars1,000 ounces of silver13 ounces of gold500 pounds of cobalt5,400 pounds of copper or: 1 Bitcoin? Whatever your fancy, the valuations are all currently about the same.
The pullback in Bitcoin I noted a week ago, which looked substantial at that time, now looks like a minor blip on the chart.  Exponential action!

Was Thursday's high on Bitcoin the top?  Probably not.  People don't seem to learn, so history repeats itself again and again with bubbles (lots of bubbles documented here).  Below is a chart for one of the first documented bubbles, tulip mania.  One thing I've learned from bubbles and market crashes is that the decline in price when a bubble pops is typically several times faster than the exponential rise up.  So, when the Bitcoin/cryptocurrency bubble pops, it is likely going to be mind blowing!  If 20% daily gains and losses are normal for Bitcoin, a sharp selloff is going to look like 40 or 50% in a day.  You see, ma…

Garabaldi doesn't add up

Thanks to the BC Securities Commission, Garabaldi Resources (TSXV:GGI) has disclosed the drill hole coordinate and composite grade intervals that should have been in the drill results release.  Let's do a quick recap.  The company started making a lot of noise about a massive nickel discovery on September 1.  Assays were finally released on November 20 (more than 11 weeks after Sep. 1) in a news release that looked like it was hastily written and incomplete.  It then took another 9 days for the company to issue the full disclosure required by the BCSC.

Why would Garibaldi not want to be forthcoming with this information?  Perhaps, because the facts don't live up to the hype.  The Angry Geologist analyzes the data here and highlights that the massive sulphide intercepts are really quite small and appear to be confined to a small zone.  Stuff like this makes the Angry Geologist angry and you won't like him when he's angry!

I'd also like to point out some simple math.…

Vogogo says no material undisclosed information - seems legit

I usually keep an eye on streaming news headlines when at my desk.  One of the releases that caught my eye today was from Vogogo (TSXV:VGO) confirming no material undisclosed information.  Does the company really not have an explanation for the 20% move up in the stock today and fourfold increase in the past five weeks?  I call BS and decided to dig a little.

The company website suggests a dormant company with the contact person listed as (link).  News releases provide the following description of the company: "Vogogo has provided payment processing and related transaction risk services and continues to own certain rights and software with respect to such services."  Looking back, it appears that Vogogo had set up a Canadian bitcoin exchange that failed in mid-2016 (link), roughly a year after raising $12.5M through a brokered financing.

As of Sep. 30, the company still had $6.9M in cash and the MD&A indicates that: "In the latter half of 2016 …