Silver outperforms gold for a change

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.


Tin - no longer a boring metal!?!

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?

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…