American? Here’s How to Play the Upside of the Canadian Dollar

October 17, 2016         The Canadian dollar/U.S. dollar exchange rate has traded within a broad range for over 60 years [and at this juncture] would appear to have a lot more upside than downside potential. This articles illustrates that point of view with charts and puts forth suggestions on how to play the coming upside.  The comments above and below are excerpts from an article by Geoffrey Caveney (DrStrangeMarket.squarespace.com) which may have been enhanced – edited Short Term View The Canadian dollar/U.S. dollar exchange rate has traded in a very tight range for many months now remaining in a tight 0.75-0.78 range…and it hasn’t made a really big move since the rally from January to April [as illustrated in the chart below]: Medium Term View A look at the CAD/USD exchange rate on a longer time frame gives us a broader perspective: …Note in particular the capitulation selloff in January and the sharp rally … Continue reading

Seven Precious Metal Companies to Create Value for the Long Term

Tocqueville Asset Management invests in precious metals companies for the long term, looking for names that are innovative and creative in identifying properties and adding value to those properties, says Portfolio Manager and Senior Research Analyst Doug Groh. Geopolitical and financial concerns, as well as market fundamentals, favor gold over the longer term, he believes. In this interview with The Gold Report, Groh provides his analysis of the macro environment for precious metals and profiles seven companies with quality assets that he expects to create value.

The Gold Report: Doug, after the long run-up in the precious metals market for most of the year, October started off turbulently. What is your take on it?

Doug Groh: Gold has had a nice performance through the first nine months of the year, posting a 25% year-to-date appreciation. It’s not unusual for markets to correct in the fourth quarter, and we’re seeing that in gold.

There are a couple of developments to note. One is that gold did really well during the summer months after the Brexit vote. That was somewhat of a surprise to investors; they thought that gold was just a first-half phenomenon this year.

The concern markets have with regard to Federal Reserve policy is interesting since markets actually set interest rates, not the Federal Reserve. Be that as it may, markets are back and forth on their interpretation of comments from Federal Reserve officials.

MAG Silver Corp.’s Deep Zone discovery is likely to be one of the best this decade.

Gold has bounced around and was consolidating in August and September. Then British Prime Minister Theresa May’s recent comments that the government had set a deadline to initiate the Brexit process woke up a number of traders. It seems that whatever Brexit uncertainty was priced in the gold market was suddenly discounted. Currency markets shifted to a weaker yen and pound. We saw selling in the gold futures market in early October, causing gold to go through some technical support levels, down through $1,270.

Gold is around $1,260 per ounce ($1,260/oz), which is actually pretty interesting because that’s the year-to-date average, and it’s $100 more than the average for 2015. We can now look back and say that late 2015 was the bottom of the cycle. At that point, approximately $1,050/oz, the gold price basically broke through the industry’s average corporate cost of gold production.

Now, the gold price appears well supported at the mid-$1,200/oz level from the resurgence of interest in owning physical gold and gold ETFs. The demand for gold ETFs has been consistently strong throughout 2016, including the past few weeks. At this point, the gold mining industry is making some decent profits and good returns. Even though prices have come off recently, the sector is doing quite well.

TGR: What about silver?

DG: Silver follows gold to a large extent. It took a little while to get up its nerve and move strongly in late spring, primarily in response to the Brexit vote. Investors jumped on silver quickly and made that trade. Silver has come off with gold. I don’t know if I can make the same type of observation about silver being sensitive to monetary policy; silver seems to be more sensitive to gold action and industrial activity. But certainly there are opportunities in the silver market, since it generally trades in-line with gold.

TGR: Looking ahead in the precious metals market, what do you see?

DG: The fundamentals for gold exposure are still very sound. We have a lot of financial threats in the market and the global economy. There’s a tremendous amount of financial anxiety in various global markets, whether it’s economic issues with regard to trade or deficits, or concerns regarding foreign exchange policies and valuations. Certainly there is heightened political anxiety too, with the various populist movements gaining momentum around the world. The pound is hitting a new low. It is not clear yet how to resolve the European banking crisis and other related issues surrounding the Euro currency. Meanwhile, Japan struggles. And we are beginning to see OPEC come to a consensus on firming oil prices, which could initiate some more pronounced inflationary pressures in the coming year. So there are a lot of different aspects that should encourage investors to take advantage of the weakness in the gold price in this quarter.

NOVAGOLD’s Donlin Gold project offers investors not just a sizable resource but also a favorable jurisdiction where a mining company can operate.

Generally we see a soft October, and then a stronger November for the gold price—and this has been the pattern for the last 10 years—then a little bit of a weaker gold price for a brief period in December. We have observed in the past that investors seem to be taking profits for tax reasons or for reallocating their portfolios, but generally in November and December, they’re also rebuilding their positions for the upcoming year. So, now is a good time to pay attention to the gold price and gold stocks.

With the November elections in the United States, there’s going to be a lot of uncertainty in the marketplace. My sense would be investors are going to be somewhat sitting on the sidelines until the presidential election is over. But once that becomes clear, I think investors will be fortified in their commitment to gold, certainly by the results of the election, whichever way it turns out.

TGR: What criteria do you use to pick precious metal companies for your portfolio?

DG: We take the long-term view. Our approach is to find companies that we think are able to create value regardless of political circumstances or capital market situations or financial conditions. We’re primarily focused on good quality assets run by accomplished and thoughtful management groups. We are interested in mine management teams that have a well-thought-out strategy and are known for creating value and managing their financial positions prudently.

Going forward, as I mentioned earlier, a number of characteristics in the marketplace or in the economy would argue for gold—whether that’s monetary policy or rising inflation expectations on the back of higher oil prices and job growth. There’s also an important fundamental reason that gold prices should go higher. It’s the fact that the industry’s resources and mine lives are declining. Grades are down and resources are declining. So mining companies, if they want to stay in the business, have to replace their resources. They can either do that through the exploration process or acquisitions. We’ve seen a lot of acquisition activity year to date. Companies are beginning to position themselves to replace resources and seem to be more eager to do it in the market. We, too, are thinking about who might be the successful explorers and developers in this next cycle.

TGR: Let’s talk about some of the companies that fit that bill, starting with some of the larger developers.

DG: One is NOVAGOLD (NG:TSX; NG:NYSE.MKT). The company is in a unique position in that it has a 50% interest in a huge gold deposit in the Donlin Gold project, located in Alaska, that offers investors not just a sizable resource but also a favorable jurisdiction where a mining company can operate. Alaska is resource-development friendly. NOVAGOLD’s management has been very pragmatic and studious in its development of Donlin. I think it’s going to offer investors a very good return over the long term. We’re very much on board with its plans and activities as it goes through the process of permitting and developing Donlin.

TGR: NOVAGOLD recently released third-quarter results and a permitting update. Do you have any takeaways from that?

DG: NOVAGOLD is going through the permitting process for the Donlin Gold project in a very methodical way, while also making sure the community is informed and involved in the project. The U.S. Army Corps of Engineers is overseeing the process for the Environmental Impact Statement and is now reviewing the comments from the public comment period. Various permits are also being advanced with state and federal agencies—such as water discharge, wetlands, air quality, water use and fish habitat permits and other approvals that will give them right-of-way access.

Meanwhile, NOVAGOLD has been very engaged in community outreach among local stakeholders. The work and benefit from that effort cannot be underestimated. NOVAGOLD has made it a priority, and rightly so, to involve the local community from early on in the project. That’s a good thing for investors waiting to realize the tremendous value that resides in the Donlin Gold resource with its 39 million ounces. And while most of management’s effort to realize value is focused on the Donlin Gold project, it appears to us that investors have totally discounted NOVAGOLD’S 50% interest in Galore Creek, which could someday be one of Canada’s largest and lowest-cost copper mines.

TGR: Is there another larger-cap developer in your portfolio that you would like to discuss?

DG: There is MAG Silver Corp. (MAG:TSX; MAG:NYSE), which seems to have a deposit that keeps on giving. The company’s joint venture with Fresnillo Plc (FRES:LSE) has not only gained the market’s attention but, also, its partner’s full attention. Every time I speak to the company, the news gets better and better. In August the company confirmed an extension of high-grade mineralization from the Deep Zone discovery on the Juanicipio joint venture with Fresnillo. The deep Valdecañas vein now is offering further upside, great grades, great metal content, interesting geology. Its strike length has now been reported as exceeding 800 meters (800m) to a depth of 200m to 300m beneath the current resource estimate. Mineralized widths range from 5m to 30m of high-grade multimetal zones, including silver, gold, lead, zinc and copper. They report more consistent copper occurrences in the deeper levels. It is an amazing discovery and geologically fascinating as well. The Deep Zone discovery is still open in several directions and there is more to learn about the extent of that mineralization. There appear to be several veins that make up the broader zone, which has yet to be defined. It is the type of discovery that is likely to be one of the best this decade, if not beyond.

TGR: How about another larger developer?

DG: Pretium Resources Inc. (PVG:TSX; PVG:NYSE) is a very interesting developer. Over the last few years as the gold market turned down, it was up against the wind developing its deposit in the Valley of the Kings in northern British Columbia. There’s been a lot of criticism of the project, but I’m very hopeful and excited to watch as it goes into commercial production in the next year. It has identified amazing grades. I feel very comfortable that it is going to achieve its objectives. We might see sporadic production over the years because of the nature of that deposit and the nature of the high grade there, but I’m quite optimistic that it’ll work out well. I think the naysayers will be humbled in due course but there probably will be ups and downs along the way, which will make it exciting for investors if they like to trade.

TGR: Would you explain what you mean by sporadic production?

Pretium Resources Inc. has an amazing ore deposit, which in time should yield tremendous value.

DG: It’s my perception that the project, as a high-grade deposit that operates during the winter months, will face good as well as difficult periods of production. The project has the challenge of high country and weather as well as a relatively erratic ore body in the sense that the gold is high grade and located in relatively narrow veins. It is not so much a question of whether the gold is there, in my mind. The deposit has received extensive drilling to define the resource and as much as that is known, mining dilution is likely to occur from the narrower veins. I would expect that mining will encounter periods of relatively lower grade or dilution, and that might mean the mill will have to process lower grade ores for a period of time. It depends on the company’s ability to manage its ore stockpile for processing, to some extent. Pretium will face difficult weather conditions during the winter months at the Valley of the Kings, which has an elevation at over 1,300m and receives 10m to 15m of snowfall. It’s a challenging project, in terms of logistics and the nature of the ore body, so one can’t expect that it’s just going to go smoothly with a consistent outcome. As much as the mine management team is well prepared for operating in difficult weather conditions and mining a high-grade deposit with relatively narrow veins, there will likely be periods when operations don’t go as planned. And yet, it is an amazing ore deposit, which in time should yield tremendous value.

TGR: Could we turn to some of the smaller-cap names in your portfolio?

DG: Sure. Jaguar Mining Inc. (JAG:TSX) is a company that has been around a while but under new management in the last year. It has managed a significant turnaround at its Brazilian operations and is in a position to generate free cash flow. Jaguar is doing all the things that an investor expects a mining company to do, and that is generate cash flow, have a good sound balance sheet, add resources and look for opportunities in the marketplace.

Jaguar recently announced a joint venture on one of its properties. So it’s daylighting value, which is the thing that we’re trying to invest in—companies that have that knack for identifying value and can do it through a number of different avenues, whether it’s through property deals or through mining activities or through exploration. Those are all attributes that Jaguar Mining is exhibiting. So we’re pretty thrilled about Jaguar Mining.

Another company that we’re intrigued with is NuLegacy Gold Corporation (NUG:TSX.V; NULGF:OTCPK). It has a property in Nevada that it’s drilling on. The Iceberg was a discovery from several years ago but in the last month it has made another discovery, the Avocado deposit, which looks even better than the Iceberg.

That it is in Nevada is important to us because we’ve become more concerned about geopolitical risk. Its project is along a major trend just south of Barrick Gold Corp.’s (ABX:TSX; ABX:NYSE) operations at Goldrush, with geologic characteristics of a Carlin-style gold system. So we think NuLegacy is in the right place to make a major discovery. From the indications to date, it looks like it is onto something very significant. I think there’s quite a bit of upside in its story with the grades and mineralized widths it has encountered.

TGR: Any other companies you want to mention?

DG: We like Gold Road Resources Ltd. (GOR:ASX), an Australian company. It is developing the Gruyere deposit in Western Australia that has about a 6 million ounce resource. It’s east of Laverton, in the Yamarna Belt, a district that has not gotten attention. It’s a major new gold region not well recognized by the marketplace. Gold Road made the Gruyere discovery in October 2013 and announced a 3.4 million ounce resource in 10 months’ time, which has grown since then. While the company continues to find more gold zones in the district, it will have a feasibility study out in the next quarter on the Gruyere mine/mill project that is designed to produce 265,000 gold ounces per year for 12 years. Now the company is going through the process of financing and building the mine over the next two years. We think the project and Gold Road’s land position in the district offers some excellent upside for investors.

Another name that we’re excited about in Australia is Evolution Mining Ltd. (EVN:ASX). The company has done an excellent job of improving its balance sheet, trading its assets for higher-quality assets and reducing its costs. It’s doing all the things that we’re looking for to create value, whether it’s at the operating level or the financial level or exploration activity. Evolution is adding to its resource base, which is what gold investors are looking for, more resources at the end of the day, not just the mined output.

TGR: Do you have any parting thoughts for our readers?

DG: It’s an interesting time for gold. We often talk about the reasons for having exposure to gold, whether it’s for diversification or as an alternative asset class or as a hedge to monetary policy. Even with the solid performance for the year to date, we think there are a couple of other important fundamental reasons that adding gold exposure to a portfolio makes sense now. The gold sector has come out of a five-year downturn, having bottomed out early this year. Typically, a positive gold cycle can last four to five years. Supporting that observation is a dynamic not fully appreciated by the market and that is declining gold production. With the downturn over the last five years, with the exception of a few companies, re-investment or new investment in gold projects had been cut back significantly. It can take five, if not many more years, to find, develop and build a mine. Given the lack of development, it is likely in the next few years that gold production will decline by a substantial amount. Gold prices will need to rise to much higher prices to justify new mine projects and it will take time to respond to higher prices. So aside from the fact that the gold sector has started a new cycle, the fundamental scarce nature of gold and the fact that it will become more difficult to access a steady supply in coming years, argues a compelling case for gold exposure now.

As we go through a correction here in the fourth quarter, investors are presented with an interesting opportunity to reassess the long-term proposition for gold. Certainly, on a fundamental basis, the gold cycle looks very constructive as we see mining companies reduce their supply and look for new supplies either through mergers and acquisitions or through exploration. The industry’s exploration efforts for this new gold cycle have just begun.

I think there’s going to be a lot of interesting news that will bring more investors to the sector as a number of these companies either make discoveries or pursue their developments or expand their operations in a much better gold price environment. A lot of these companies are much better off than they were a year ago. They have a little bit more flexibility to create more value. In time, investors will recognize that opportunity. A downturn can be a relatively healthy thing for investors who have felt they missed much of the recovery year to date.

TGR: Thanks, Doug, for your insights.

Douglas B. Groh is a portfolio manager and senior research analyst at Tocqueville Asset Management and has 30 years of investment experience. Before joining Tocqueville in 2003, he was director of investment research at Grove Capital. While an analyst for JP Morgan and Merrill Lynch, he was recognized by Institutional Investor and The Wall Street Journal. He holds an MA in energy and mineral resources from the University of Texas at Austin and a BS in geology/geophysics from the University of Wisconsin—Madison.

Read what other experts are saying about:

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Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC. She provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this interview: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this interview: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: NOVAGOLD, MAG Silver Corp. and Pretium Resources Inc. The companies mentioned in this article were not involved in any aspect of the interview. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Doug Groh: I own, or members of my immediate household or family own, shares of the following companies mentioned in this interview: None. I am, or members of my immediate household or family are, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. Accounts managed by Tocqueville Asset Management hold shares of the following companies mentioned in this interview including: NOVAGOLD, MAG Silver Corp., Pretium Resources Inc., Jaguar Mining Inc., NuLegacy Gold Corporation, Gold Road Resources Ltd. and Evolution Mining Ltd. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.

( Companies Mentioned: EVN:ASX,
GOR:ASX,
JAG:TSX,
MAG:TSX; MAG:NYSE,
NG:TSX; NG:NYSE.MKT,
NUG:TSX.V; NULGF:OTCPK,
PVG:TSX; PVG:NYSE,
)

Production at Guanajuato and a Strong Balance Sheet Bolster Great Panther’s Q3 Numbers

Production numbers were lower than expected for Q3/16, but analysts following Great Panther Silver remain buoyed both by the company’s financial strength and silver output from its Guanajuato Mine Complex.

In an Oct. 13 research report on Great Panther Silver Ltd. (GPR:TSX; GPL:NYSE.MKT), Bhakti Pavani of Euro Pacific Capital wrote, “The silver recovery at GMC [Guanajuato Mine Complex] improved and returned to the historical levels primarily due to an increase in silver grade and an improvement in metallurgical procedures.”

“The company’s exploration program has successfully increased mineral resource estimate at both GMC and San Ignacio,” Pavani added, noting that San Ignacio, a “satellite mine located in GMC has consistently delivered higher grades and recoveries,” will be “the focus of development for the company in the near term.”

While Great Panther reported recoveries at GMC that were mostly in line with analysts’ expectations, a decrease in production at the Topia mine, which both Pavani and Heiko Ihle of Rodman & Renshaw commented on, “was mainly attributed to the two temporary plant shutdowns during the quarter,” according to the company’s Oct. 12 press release. “In addition, Q3 production was challenged by narrower veins, which increased dilution and decreased grade.”

“While Q3/16 production results were negatively impacted by two temporary shutdowns and lower grades, we feel it is important to maintain a long-term perspective,” wrote Ihle in an Oct. 13 research report. “To this end, management has executed on its goal of reducing costs in 2016, while positioning the firm well to meet its year-end production guidance of 4.0–4.2 million silver equivalent ounces.”

Rodman & Renshaw also continues to “like the firm’s strong balance sheet, with an estimated pro forma cash position of over $45 million and no debt,” Ihle wrote. “Given this, we expect the firm to evaluate opportunities to expand its existing portfolio of producing assets in the near term, and think 2017 could serve as a transformational year for Great Panther assuming an acquisition is made.”

Vancouver-based Great Panther operates two mines in Mexico, Guanajuato and Topia. In addition to silver, the company also produces gold, zinc and lead.

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Disclosure:
1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Great Panther Silver Ltd. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.

Additional Disclosures for this Content

( Companies Mentioned: GPR:TSX; GPL:NYSE.MKT,
)

Jack Chan: This Past Week in Gold and Silver

chan hui 10-15

Technical analyst Jack Chan charts the latest moves in gold and silver markets, noting COT data is showing signs of a bottom.

Our proprietary cycle indicator is down.

Gold sector is on a long-term buy signal. Long-term signals can last for months and years and are more suitable for investors holding for long term.

chan hui2 10-15
The gold sector is on a short-term sell signal as the buy signal has failed. Short-term signals can last for days and weeks, and are more suitable for traders.

chan spec 10-15
Speculation has reached the level of the previous bottom.

chancot10-15
Speculative longs have reached the level of the previous pullback bottom.

chansilver10-15
Silver is on a long-term buy signal.

chanslv10-15
SLV is on a short-term sell signal as the buy signal has failed, and short-term signals can last for days to weeks, more suitable for traders.

Summary
A bull market in gold and silver has been confirmed. The cycle is down and the trend is down; the correction continues. COT data is showing the first sign of a bottom; let’s wait for price action to confirm.

Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011.

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) Jack Chan: We do not offer predictions or forecasts for the markets. What you see here is our simple trading model, which provides us the signals and set-ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
3) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Charts courtesy of Jack Chan

How To Get A Passive Income From Gold & Silver!

Hi Fellow Investors,

If you’re planning on changing your financial situation for the better any time in the next 14 months, then I suggest you watch this webinar.
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They do not realise that the short cut is the long road in disguise, and the long road is the shortcut in disguise…

I made this mistake myself, and had to learn the hard way that the hardest thing about making money is simply hanging onto it.

This cost me millions to learn, and I really would like to help you avoid having to pay to learn it too.

But all I can do is point it out, you have to choose to look more carefully.

If you’d like to hang on to what you’ve already got.

If you’d like to grow it too.

Or if you’d just like to learn how to start thinking this way, then I recommend you don’t miss the last chance to watch this webinar.
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People often say to me, how do you do it, how do you make so much, and it’s not that I make so much, it’s that I have learnt how to hang on to what I make, and make lots more of it.

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Canadian Zeolite | Operations Ramp-Up at Bromley Creek Zeolite Quarry

zeolite


October 12, 2016
Vancouver, British Columbia, Canadian Zeolite Corp.
(the “Company”) (TSX.V: CNZ) (OTCQB: CNZCF) (FSE: ZEON) is pleased to report that crushing and screening equipment has arrived at the Company’s Bromley Creek zeolite quarry to crush and screen approximately 10,000 tonnes of zeolite from previous blasts at the present face of the quarry for shipment to the Kamloops facility where it will be processed and sized for specific customer markets and orders.

Canadian Zeolite’s CEO will meet with the Operator and their Qualified Person at the Bromley Creek quarry to lay-out a plan for an additional drill and blast. This will ensure sufficient inventoried zeolite will be available throughout the winter months to meet increasing customer demand.

Ray Paquette CEO of Canadian Zeolite states “the impact of natural zeolites in environmental applications is receiving global recognition. Products based on natural zeolites are applied in environmental fields including animal feed, composting odor control, water purification, fertilizer carrier, plant substrates, wastewater treatment and aquaculture. Our goal is to produce innovative products designed to solve environmental issues.”

Canadian Zeolite is an environmentally friendly Green Tech company. We are operational at the Bromley Creek quarry and have a competitive advantage in the world of zeolites given our product has been tested, applied, and exceeds the standards of specific markets.

Canadian Zeolite continues to move forward with the Bromley Creek quarry, which is fully permitted to extract up to 50,000 tonnes of zeolite on an annual basis. The Company is not basing its production decision on a feasibility study of mineral reserves demonstrating the economic and technical viability. As a result, there is increased uncertainty and economic and technical risk of failure associated with the production decision.

On behalf of the Board of Directors

“Ray Paquette”

President & CEO

604.684.3301

www.canadianzeolite.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the ability to complete contemplated work programs and the timing and amount of expenditures. Canadian Zeolite does not assume the obligation to update any forward-looking statement.

Tiptoeing Back into the Miners

Precious metals expert Michael Ballanger explains why he sees a “bottom in the cards,” and outlines a trading plan to capitalize on the turnaround.

Cutting directly to the chase, the correction in the gold and silver stocks and, more importantly for us, the miners (GDXJ) is rapidly coming to a close. Without embarking on a flight of verbosity and overstatement, here in a nutshell is why I see a bottom in the cards—and possibly a solid, tradeable bottom.

1. Sentiment: In January of this year, I couldn’t even get a meeting with any fund manager or investment banker, let alone secure an order for financing. By July, I had those same people begging me for a piece of ANY gold/silver-related financing I could offer. Mining brokers went from the outhouse to the penthouse in record time, and with unprecedented velocity by the summer of 2016. Today, in October, we are right back to where we were in January. Those big managers of other people’s money now own “too many issues,” the quality of which was noticeably suspect in the late stages of the January-July advance. When my phone stops ringing for at least two weeks, I know we are near the lows.

2. Relative Strength (“RSI”): Nothing more to say here other than “Observe the chart posted above.”

3. COT: The Commitment of Traders report for tomorrow is going to see another sharp improvement as gold open interest has shrunk to 500,328, and that is down from 544,824 on October 4. This is the large Commercials unwinding their massive short position in gold futures and is normally a precursor for a reversal. However, it is not to be used as a timing tool as the unwinding can take weeks to play out.

4. Deal Flow: The number of financings for the junior exploration companies has suddenly and sharply dropped off a cliff as the mania that engulfed the space in the spring and summer has evaporated into nervousness and despair. Declining deal flow is normal into any correcting market but the severity of the plunge is bullish.

5. Strong U.S. Dollar mantra: Everyone and their hairdresser has now assumed a rate hike in December, and that, combined with the crashing British pound and the surging dollar-yen, has sealed the fate of all currencies against the Almighty U.S. dollar. But it should be noted that the U.S. is the largest debtor nation on the planet and that its purchasing power continues to erode against everything. For a superb primer on the state of affairs in the good ol’ US of A, follow this link to yet another fabulous Michael Mahoney video called “USA’s Day of Reckoning,” where he talks about an economics term covered in this space numerous times over the past ten years—the velocity of money.

The vehicle of choice for me is the Gold Junior Miners ETF (GDXJ), and having completely missed the top in July-August above $50, I was stopped out two weeks ago at $41.43, triggering a lovely and very well-earned capital gain. Sadly, not having 75% of my net worth on the proverbial line every day was disturbing, and for the past three weeks, the lack of stress has transformed me into a slovenly “gentleman of leisure,” complete with weight gain and addictive behaviors. Accordingly, in an effort to restore my spouse-annoying, dog-harassing self to normalcy, I am going to tiptoe back into the GDXJ market by buying the opening this morning with 25% of allocated capital. I might be early or I might be dead on, but the only “technical” tool I am using is the RSI numbers. Every other technical “tool” is veritably useless, as are the geeks that read tea leaves from the bottom of the cup.

Now I have to go drag Fido out from under the shed and unscrew the bolt locks on the powder room door. We need normalcy in order to allow the Gold and Silver Gods bless us with $1,400 gold by Christmas.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger’s adherence to the concept of “Hard Assets” allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

All charts and images courtesy of Michael Ballanger.

Globex Mining Royalty Set to Produce Major Revenue Stream

Tennessee Mines

Ben Kramer-Miller, chief analyst at miningWEALTH, profiles Globex Mining Enterprises, which has a royalty on a zinc mine that has the potential to create a sizeable amount of cash flow.

Globex Mining Enterprises Inc. (GMX:TSX; GLBXF:OTCPK) is a recent miningWEALTH pick. It is a self-proclaimed “mineral property bank” that holds numerous claims and projects available to be optioned by exploration companies. Exploration companies pay Globex in cash/shares, and agree to do a certain amount of work over a given period of time in exchange for the right to earn the property, minus a royalty. Over the years the company has accumulated well over 100 projects and a couple dozen royalties.

Since our recommendation the stock has fallen, but the fundamentals have improved in a way that should propel shares higher: one of the aforementioned royalties is going to begin generating cash flow for Globex in the near-term.

Globex owns a gross metal royalty on the Tennessee Zinc Mines owned by Nyrstar. The royalty entitles Globex to a percentage of the revenue generated from metal sales from the mine. The percentage is 1% if the zinc price is $0.90–$1.09/lb. and 1.4% at or over $1.10/lb. Zinc currently trades at ~$1.06/lb.

The Middle Tennessee Zinc Mine is a small underground mine in Tennessee that is part of a larger mining complex in the area. The mine operates with just a few years worth of rolling reserves, though it has decades worth of resources in the “inferred” category.

In response to low zinc prices, Nyrstar shut down the mine in the middle of 2015. Up to that point the mine was producing ~40,000 tonnes of zinc per year, and at that production rate Globex would generate ~$1 million in royalty revenue per year. It generates nothing if the mine isn’t producing.

When we were assessing the company there was reason to be somewhat dismissive of this royalty. It had potential—it has resources to support 30 years of production, not to mention the infrastructure in place to support production—but there was little likelihood of the royalty generating cash flow in the near term. Not only had Nyrstar put the mine in “care and maintenance,” but the company had announced that it intended to sell all of its mining assets. It seemed as if we might have had to wait for Nyrstar to sell the mine and then for the new company to evaluate it before a restart of production would be a viable possibility.

Now, however, Nyrstar plans to bring the mine back into production during the first half of next year, meaning Globex will generate ~US$1 million per year in revenue, at no cost. This figure compares with a ~US$9 million valuation. Granted, this is a high-risk royalty in that there is no guarantee of a startup or the fact that it doesn’t pay out if the zinc price is under US$0.90/lb., but it has the potential to generate a sizable amount of cash flow starting in the first half of 2017. Furthermore, the US$1 million per year figure quickly jumps to ~US$1.5 million should the zinc price rise a few pennies to US$1.10/lb.

This is a big deal for a small company such as Globex, yet the market did not react. Royalty companies often trade at a price to operating cash-flow multiple that is in the high teens to mid-twenties. Thus even if you take into consideration the fact that Globex doesn’t have a diversified portfolio of producing royalties, and even given the risk that the royalty won’t pay out (should the zinc price fall sufficiently) the company’s current valuation seems appropriate, or even low relative to the value of this royalty.

This statement comes on top of the fact that Globex was attractive even when we thought that the mine could be in care and maintenance for much longer than we now anticipate. Globex has numerous projects that have substantial value relative to the company’s current market capitalization. The market doesn’t recognize this value, and this is probably due to the fact that the work on many of these projects is progressing slowly, if at all. Keep in mind that the company does little work on its own projects, and that only optioned projects will be meaningfully progressed. This passive approach comes with benefits (namely that Globex doesn’t have to spend the money to explore its properties) but it means that the companies project portfolio will be developed more slowly than if they were in the hands of more conventional exploration companies. Investors may also be frustrated by the number of properties and the company’s exposure to a wide array of commodities, including some that aren’t well understood such as talc, feldspar, manganese or silica.

Nevertheless, the company has several valuable properties that justify the current market capitalization on a stand-alone basis. The list is too long to go through all of them, but some of the most valuable include:

  • Magusi, which contains a high grade underground zinc/copper deposit in the Abitibi Greenstone Belt.
  • Duquesne (50% owned by Globex), which contains an underground gold deposit exceeding 850,000 oz. (425,000 attributable)
  • Timmins Talc and Magnesite, which is an advanced talc and magnesite project with a PEA estimating an after tax NPV (10%) of nearly $200 million.

A sum-of-the-parts valuation assessment would intuitively yield a result that is much higher than the current valuation. The news that Nyrstar will restart the Middle Tennessee Zinc Mine is a thick layer of icing on what is already an appetizing cake.

Ben Kramer-Miller is the chief analyst at miningWEALTH. He is well respected for his unique ability to find under-the-radar precious metals opportunities, as well as for his extensive research into rare earth elements and other critical materials. His research has been featured by Nasdaq, Kitco, Mining.com, The Financial Post, The Globe and Mail, Investing News Network and RealClearDefense, among others.

Want to read more Gold Report articles like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.

Disclosure:

1) Ben Kramer-Miller: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview/article until after it publishes.

( Companies Mentioned: GMX:TSX; GLBXF:OTCPK,
)

UPDATE: Upcycling and Recycling Lithium Ion Batteries

amy-header

Larry Reaugh, President and CEO. American Manganese Inc. aims to capitalize on its patented technology and proprietary know-how to become an industry leader in the recycling of spent electric vehicle lithium ion cathode material such as: Lithium-Cobalt, Lithium-Cobalt-Nickel-Manganese and Lithium-Manganese.

Listen to the complete podcast on HoweStreet.com

Canadian Zeolite ramps up operations at Bromley Creek

canadianzeolite
2016-10-12 10:38 ET – News Release

Mr. Ray Paquette reports

 

 


OPERATIONS RAMP-UP AT BROMLEY CREEK ZEOLITE QUARRY

Canadian Zeolite Corp. has provided the following update. Crushing and screening equipment has arrived at the company’s Bromley Creek zeolite quarry to crush and screen approximately 10,000 tonnes of zeolite from previous blasts at the present face of the quarry for shipment to the Kamloops facility, where it will be processed and sized for specific customer markets and orders.

Canadian Zeolite’s chief executive officer Ray Paquette will meet with the operator and its qualified person at the Bromley Creek quarry to lay out a plan for an additional drill and blast. This will ensure sufficient inventoried zeolite will be available throughout the winter months to meet increasing customer demand.

Mr. Paquette stated: “The impact of natural zeolites in environmental applications is receiving global recognition. Products based on natural zeolites are applied in environmental fields, including animal feed, composting odour control, water purification, fertilizer carrier, plant substrates, waste water treatment and aquaculture. Our goal is to produce innovative products designed to solve environmental issues.”

Canadian Zeolite continues to move forward with the Bromley Creek quarry, which is fully permitted to extract up to 50,000 tonnes of zeolite on an annual basis. The company is not basing its production decision on a feasibility study of mineral reserves demonstrating the economic and technical viability. As a result, there is increased uncertainty and economic and technical risk of failure associated with the production decision.

We seek Safe Harbor.

© 2016 Canjex Publishing Ltd. All rights reserved.