Columbus Gold Gains Attention with Montagne d’Or Takeover Potential and Nevada Upside

Experts are speculating that Columbus Gold’s Montagne d’Or project in French Guiana is a prime takeover target for Nord Gold, while the recently released maiden resource estimate for Eastside in Nevada underlines the potential for this early-stage development project.

A string of recent news from Columbus Gold Corp. (CGT:TSX; CBGDF:OTCQX) prompted several experts to comment on prospects for Montagne d’Or in French Guiana, and also on recent progress made at Eastside in Nevada.

Analyst Michael Curran, in his research note of Dec. 5, observed that the Montagne d’Or project “is in a joint venture with Nord Gold N.V. (NORD-LSE, not rated, not covered), a global mid-tier gold producer, who can earn a 50.01% interest by spending US$30MM and completing a feasibility study by March 2017. . .the Montagne d’Or deposit, which hosts just under 5MMoz of gold resources, is part of the Paul Isnard property located in west-central French Guiana.”

James Kwantes of Resource Opportunities stated on Dec. 13 that “Montagne d’Or has excellent infrastructure and would be one of the highest-grade open pit gold projects in the Americas. At a US$1,200 gold price, a PEA for Montagne d’Or modelled an NPV of US$450 million (5% discount rate), after-tax IRR of 23% and annual gold production of 273,000 ounces in the first 10 years at all-in sustaining costs of US$711/oz. Capex would be US$366 million, with a 3-year payback.”

Kwantes believes “JV partner Nordgold is the natural acquirer for Columbus’ 44.99% stake in Montagne d’Or. Nordgold is a fast-growing and acquisitive Russian-based producer listed on the London Stock Exchange. . .Nordgold’s latest financials paint a picture of a thriving mining company generating healthy cash flow. . .the company’s Gross mine in Russia is expected to go into production in the first quarter of 2018, after which Montagne d’Or will be the only major gold deposit in Nordgold’s pipeline.”

Thibaut Lepouttre concurs, stating in a Sept. 21 Caesars Report that, “if history repeats itself, Nordgold will try to acquire 100% of Montagne D’Or, and after checking up on the company’s financial health, we have no doubt the Russian company will be able to fund an acquisition of the remaining interest as the total price tag for the 44.99% stake will very likely be lower than the free cash flow Nord Gold generates in a semester.”

Columbus is further advancing the Montagne d’Or project, announcing this past summer that it had obtained “two Exclusive Exploration Permits on strike of the east and west extensions of Columbus Gold’s Montagne d’Or gold deposit.” In November, the company stated that an “exploration-focused drilling program is being planned for commencement in January, with the objective of assessing expansion potential. . . the program will consist of 41 core holes, for a total 6,750 meters, designed as a first pass investigation of exploration targets on strike of, and in very close proximity of the currently defined mineral resources that form the deposit.”

James Kwantes of Resource Opportunities noted that “two holes will test the depth of mineralization—little drilling has been done below 250 metres at Montagne d’Or. Drill permits are in hand and Columbus is building roads and drill pads and mobilizing drills this month. Columbus is fully financing the exploration program.”

Columbus Gold is also actively exploring in Nevada. The company announced on Dec. 5 the results of a maiden resource estimate for its early-stage Eastside gold-silver project: “At a cut-off grade of 0.15g gold per tonne and a US$1,300 gold price, Columbus Gold calculates from the estimated resources that Eastside contains pit-constrained Inferred resources of 35,780,000 tonnes grading 0.63g gold equivalent per tonne, for a total of 721,000 ounces of gold equivalent.”

Columbus also noted that “Eastside has outstanding infrastructure for mining and processing, and metallurgical testing indicates that gold and silver at Eastside are amenable to cyanide leaching, whether oxide or sulfide.”

Robert Giustra, CEO of Columbus Gold, commented: “Considering that only about one square kilometer of the large 58 square kilometer property has been drilled so far, and only 136 holes drilled, a maiden resource of 721,000 ounces constrained in a pit, is an excellent start.”

Michael Curran of Beacon Securities stated that “the company noted that perhaps another 50% of mineralized material from the 136 hole programme completed to date did not make it into the in-pit resource (suggesting the total project resource could have been closer to 1MMoz if not constrained by a pit shell).” Curran added that “an economic resource at Eastside needs to be materially bigger (+3MMoz?), thus while a decent starting point, CGT has plenty of work (and potential) left at Eastside.”

Two days later Columbus announced high-priority drill targets at Eastside, homing in on targets gleaned from “both geologic and alteration mapping combined with geochemical sampling.” The company noted, “this mapping has identified 41 separate rhyolite domes, which Columbus knows to be important for controlling gold mineralization from its drilling at the Original Target at Eastside.”

James Kwantes of Resource Opportunities stated that “the architect of value creation in Nevada is none other than geologist Andy Wallace of Cordex, Columbus’s exclusive exploration partner in Nevada. In a nutshell, Columbus has a Nevada discovery pioneer running their exploration programs in one of the world’s best gold mining jurisdictions.”

Columbus consolidated its land package in November at its Bolo project in Nevada by acquiring the Uncle Sam patented claim and by swapping its non-core Weepah asset in exchange for the elimination of an NSR royalty.

Curran summed up by stating, “we view Columbus Gold as an attractive speculative play for development success in French Guiana, with investors receiving exploration success potential in Nevada for free.”

Read what other experts are saying about:

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and 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 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: Columbus Gold Corp. 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: CGT:TSX; CBGDF:OTCQX,
NORD:LSE,
)

Adrian Day: Sell Yamana Rights, When You Can, For What You Can

Money manager Adrian Day shares his advice to Yamana shareholders on how to handle the Brio spinoff.

Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) has issued rights to shareholders to purchase shares in its Brio unit, which is being spun off. U.S. shareholders, other than “institutional investors,” are not allowed to exercise their rights (thanks, SEC, for protecting us). The rights, however, do trade in Toronto for the next couple of weeks.

We would not exercise the rights in any event. Brio consists mostly of marginal assets and is no bargain. We recommend you sell the rights when you can, for what you can.

Note, however, that this is a two-step process. First a notification of rights is put in your account, then a certificate is issued to the custodian who allocates the rights to clients. Most custodians have not yet completed the second part, so the rights cannot be sold yet, but should be within a few days. It will vary with each custodian.

One right is issued for each 16 Yamana shares held (with no fractional rights). The rights are trading on Toronto (symbol YRI-R) and have been extremely volatile, trading from 33 cents down to 9.5 cents. Thursday, they closed at 22 cents (with a high low today of 28 cents and 16.6 cents). You need to make sure that the proceeds from selling your warrants at least covers your commission (which varies by broker), and, of course, make sure you sell before they expire. Most brokers want instructions by the 16th.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

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Disclosure:
1) Adrian Day: 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. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Yamana Gold Inc. 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. 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: YRI:TSX; AUY:NYSE; YAU:LSE,
)

Jack Chan: This Past Week in Gold

chanhui112-10

Technical analyst Jack Chan charts the latest moves in the gold and silver markets.

Our proprietary cycle indicator is up.

The 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.

chanhui212-10
The gold sector is on a short-term buy signal. Short-term signals can last for days and weeks, and are more suitable for traders.

chanspec12-10
Speculation has now dropped below level of previous bottom.

changdx12-10
The trend remains down.

chanhui312-10
A top has been confirmed, and until resistance is broken, the trend is down.

chansilver12-10
Silver is on a long-term buy signal.

chanslv12-10
SLV is on a short-term buy signal, and short-term signals can last for days to weeks, more suitable for traders.

Summary
The gold sector is on major buy signal. The cycle is now up but the trend remains down. A counter-trend bounce is in progress. Caution is advised.

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.

Charts courtesy of Jack Chan

The Worst Thing to Happen to the U.S. Dollar Since 1913

The Worst Thing to Happen to the U.S. Dollar Since 1913 By Justin Spittler Financial freedom could soon be a thing of the past… At Casey Research, it’s our job to tell you about situations that threaten your financial well-being. Usually, these are direct threats to your wealth. Think a stock market crash or bond market collapse. But occasionally, we’ll tell you about other kinds of threats. Today is one of those days… In this issue, we’re going to talk about the “War on Cash.” As you may know, this is an ongoing effort by governments to eliminate paper money. This war is being waged across the world…and it’s picking up steam. Italy and France recently banned cash transactions over 1,000 euros. Spain has banned transactions over 2,500 euros. Uruguay banned cash transactions over US$5,000. But this upending of the global cash economy isn’t just a foreign affair. Former U.S. … Continue reading

What Will Happen to Cannabis Investments with Jeff Sessions as U.S. Attorney General?

Technical analyst Clive Maund charts movements in the cannabis sector after the Nov. 8 legalization votes and the appointment of anti-cannabis firebrand Jeff Sessions as U.S. Attorney General.

For those of you who have spent the past 6 months living in a cave, you are probably not aware of the fantastic gains that have been made in cannabis stocks. At clivemaund.com we had already figured out that the sector was set for huge gains ahead of the November 8th legalization vote as far back as April, and subscribers were directed to various stocks which went on to make spectacular gains. If you want to review what we achieved click here for a free download.

The cannabis sector has done pretty much as expected in recent weeks. After the huge gains into the multi-state vote on legalization on November 8th, this heavily overbought sector has started reacting back and may be forming a top. The votes on legalization went well (only Arizona voted no), which certainly augurs well for the sector over the longer-term, but this outcome was expected so the vote became a “sell on the news” event that triggered heavy profit taking, which even started to kick in several days before the vote.

The following charts, courtesy of marijuanaindex.com, are most interesting and make clear how the sector has topped out, at least for now, and the big question is whether the sideways pattern now forming is a top or a consolidation. Here it should be pointed out that we were long many stocks across the sector months ago, and sold out for massive profits around the time of the vote on November 8th.

The North American marijuana index shows a large top or consolidation pattern, which looks like a flat-topped broadening formation, which is normally bearish…

The U.S. marijuana index has fared somewhat worse, because of the effect of the Republican victory (the Republicans are not as well disposed toward marijuana as the Democrats) and latterly, the appointment of anti-cannabis firebrand Jeff Sessions as Attorney General…

The Canadian marijuana index, meanwhile, looks a lot better, because it is not blighted by U.S. Federal law, or the likes of Jeff Sessions…

Charts above courtesy of the THE MARIJUANA INDEX.

Although the multi-state vote had a largely positive outcome, it’s not necessarily plain sailing for the sector from here on in the U.S. This is because the Republicans won the general election, not the Democrats, and they are not so favorably disposed toward the marijuana industry as the Republicans, and here we should remember that at the Federal level, the industry remains illegal, even if approved at state level. A particular setback was the nomination of anti-cannabis firebrand Jeff Sessions as Attorney General, who may have the power to impede the industry and even roll back some recent gains.

The criminalization of cannabis actually has strong parallels with the era of “prohibition” when alcohol was banned in the US, a big difference being that unlike alcohol, marijuana has a wide range of important medicinal uses. Just as, in modern times, the abuse of alcohol by many young people, and some older people, is no longer seen as grounds to ban it, the abuse of cannabis by some young people, which is inevitable, should not and probably will not be seen as grounds to ban it. Up until recently, an underlying reason for the criminalization of cannabis has been the threat that medical marijuana poses to the profits of Big Pharma as an alternative to their expensive pills and potions, but they are now yielding to public pressure to permit it, aided by the knowledge that they can proceed to buy up much of the industry using their massive war chest and then administer it on their own terms. This is a big reason why resistance to the decriminalization of cannabis by the likes of Jeff Sessions, although potentially a significant problem over the medium-term, is likely to ease with the passage of time.

This Ride with Larry video, assuming it was not in some way faked, shows the dramatic effect of marijuana on a man suffering from Parkinson’s.

Translating all these fundamental considerations into their impact on the marijuana sector as a whole, and individual stocks, is the challenge facing analysts trying to assess the potential of the sector for investors going forward. Our assessment that the sector was likely to react back or at the least go into a period of lengthy consolidation after the vote, even if it was favorable, was based on the fact that it had risen so sharply ahead of it, and attracted rampant speculative interest. Thus far, this assessment has proven to be correct, but what now?

Given the potential of people like the new Attorney General to invoke Federal law to create problems for the industry over the medium-term, which might lead to the still-overbought sector reacting back further, a cautious and selective approach to the sector appears to be in order for now. There are still stocks within the sector that look well placed to advance further even if the sector as a whole corrects back, and these are the stocks that we will be focusing on at clivemaund.com going forward.

Disclosure:
1) Statements and opinions expressed are the opinions of Clive Maund and not of Streetwise Reports or its officers. Clive Maund is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Clive Maund 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.

Charts provided by Clive Maund

Gold to Explode After Second Rate Hike

goldman

Daniel Ameduri, founder of the Wealth Research Group, traces the correlation between Fed rate hikes and the trajectory of the gold markets, predicting a long-term bullish period for the precious metal.

Since launching Wealth Research Group at the beginning of 2016, I have dedicated a considerable amount of time understanding precious metals, and their relationship to other factors and assets.

From 1971, when gold began trading freely, there have been times of massive inflation, credit crises, deflationary periods, high interest rates and low ones, peace times and excessive wars, currency devaluations and even negative interest rates.

The economy went through so many situations and conditions the past 45 years that it’s easy to see why people have stopped doing research themselves blindly listen to mainstream media talking heads.

The narrative that investors are being fed with right now is that gold doesn’t produce yield, so rising interest rates would absolutely be problematic for gold prices, but that’s conventional wisdom, and everything I have learned about financial markets tells me that following it will surely lead to terrible results.

Bull markets end with euphoria!

Today gold mining shares represent only a fraction of global assets—compare that to 2013, and you will appreciate the enormous upside potential (see the chart above).

There are two important factors to keep in mind:

1. Inflation:
Interest rates are rising since the FED and the government see inflation starting to recede from historical lows, and with the proposed infrastructure plans, other construction metals have already began trading higher. What’s paramount to understand is that rates rise, but so does inflation, so real rates remain low and even negative.

In fact, Goldman Sachs turned bullish on commodities for the first time in years.

2. Tightening Periods vs. Gold:
Contrary to what the mainstream media is feeding the average “investor,” here’s what historically has happened during first and second rate hikes.

ratehike

Until today there have been three clear periods of rising rates—this will be the fourth.

The first time occurred between February 1972 and September 1973, when the Fed Funds Rate increased from 3.29% to a high of 10.78%. During this cycle, the price of gold increased from $47 to a high of $123.25—a full 162.23%.

fundsrate

As you can see, tightening periods aren’t favorable for the S&P 500, as interest rates act as a weight on stock prices.

But, it was the second rate hike period that caught investors unprepared. Between January 1977 and April 1980, the Fed Funds Rate increased by a total of 1,300 basis points from 4.61% to a high of 17.61%. During this cycle, the price of gold increased from $129.75 to a high of $850, a gain of 555.11%. Gold gained 46-fold more than the S&P 500.

fundsrate2

Speaking with Canadian fund managers, I can say that gold is underweighted in their portfolios. Most Canadian pension funds are 2% weighted in gold stocks and the TSX index is 8%, and this is going to continue until gold goes to new levels. There’s a whole surge of buying frenzy that hasn’t even scratched the surface.

The thing that nobody seems to mention is that gold has hit peak production.

goldproduction

There is currently 90M ounces mined annually, but only 40M are being discovered. That’s a 55% gap that is not coming back!

The long-term picture is very bullish, and I am personally making big moves to position.

Obama will be the first president to be at war for two full terms, and war spending is set to increase.

Gold prices respond to increased war spending and federal budget deficits.

wartable

Between 2001 and 2016, war-related appropriations totaled $1.7 trillion. Around 65% of this was spent during the height of operations in Iraq and Afghanistan, between 2006 and 2012.

The explosion in deficit spending derived by war costs absolutely decimated the U.S. dollar from 2001 to 2012, but it was a clear reason to own gold and part of the reason it rose higher.

In 2013, budget reductions in military spending caused gold to stabilize.

It’s now becoming increasingly clear that the top echelon of generals are requesting funds increase again, because equipment needs to be bought and soldiers are unprepared.

Bloomberg just published an investigative article on this and learned that service men and women are literally dying because of the corners being cut to keep aged equipment in service.

Gold is the ultimate form of money and the only type of money that governments cannot print. It is a core holding of the sound investor and contrary to what most expect, being a contrarian will again be the place to be.

Daniel Ameduri is the editor of the Wealth Research Group and the cofounder of Future Money Trends Letter, FMT Advisory and Crush The Street. After warning family and friends in 2007 about the coming market and mortgage collapse, Ameduri started his own YouTube channel, VisionVictory, which has received 10 million video views. On March 18, 2008, Ameduri called for Dow 8,000, the collapse of Lehman Brothers, AIG, and Washington Mutual. During the mortgage crisis, he helped people buy Put Options on Countrywide Mortgage; these Puts saw a gain of 1,400%.

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.

Disclosures:
1) Statements and opinions expressed are the opinions of Daniel Ameduri and not of Streetwise Reports or its officers. Daniel Ameduri is wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Daniel Ameduri 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.

Charts courtesy of Daniel Ameduri

Drilling Advances Pershing Gold’s Relief Canyon

Pershing Gold’s advancements in the Relief Canyon project in Nevada over the last month have caught the attention of several analysts.

Pershing Gold Corp. (PGLC:NASDAQ; PGCL:TSX) announced results of phase 1 of its 2016 drill program at Relief Canyon in Nevada on Nov. 9. “Phase 1 of our 2016 Drilling Program continues to successfully extend the in-pit mineralization at Relief Canyon,” stated Stephen D. Alfers, Pershing Gold’s chairman, president and CEO, in the news release. “Offsets further extend to the west the high-grade zone discovered in the North Target Area in 2015.”

Alfers also announced that the company had begun drilling phase 2 of the program. “Phase 2 will test targets to the south and east of the pits and has the potential for satellite discoveries that could be a source of future production at Relief Canyon’s existing state-of-the-art processing facilities,” he stated.

Bhakti Pavani of Euro Pacific Capital noted on Nov. 10 that “three of the eleven [phase 1] drill holes. . .have intersected high-grade intercepts. These intercepts are located within the oxide or mixed zones of the deposit and have cyanide leach gold values which indicate leachable material.” He observed that “the phase 2 drill program is primarily an exploration program focused towards exploring the satellite deposits on the land package. . . it is also the Company’s first drilling program that is targeted both towards development and exploration.”

Heiko Ihle of Rodman and Renshaw noted in a Nov. 10 company update that some of the phase 1 holes “were drilled in an effort to test the metallurgical potential of higher-grade zones which are currently excluded from the resource estimate. Management has indicated that initial metallurgical work in these areas has proven to be promising, leading us to believe that additional ounces could be added to Relief Canyon’s resource estimate in the future.”

On the phase 2 driling, Ihle stated that “the firm plans on drilling targets that have been identified during 1H16, leading us to believe that Phase 2 should be focused more on the discovery of new resources. . . given that we feel any potential discovery could be brought online in the first few years of Relief Canyon’s mine life, we expect to monitor results of Phase 2 closely.”

Heiko Ihle said he expected a catalyst-rich fourth quarter: “Going into the end of 2016 we expect strong news flow with respect to reaching a production decision. Most notably, we anticipate the release of a Pre-Feasibility Study (PFS) for Relief Canyon towards the end of 2016 or early 2017, at which point we expect to revisit our current model for the mine.”

CEO Alfers told The Gold Report that he expects the PFS to be released in January.

BMO Global Mining, in a Nov. 11 note from its Equity Sales and Trading Desk, stated the project is “a simple open-pit, heap-leach development story in Nevada, but one that stands out vs. peers as it has a full, new, process facility and infrastructure already in place, and therefore has very low remaining capital requirements and excellent economics.” The preliminary economic assessment, the BMO report noted, “outlined a robust open pit heap leach project producing ~90koz/yr at $709/oz AISC. With infrastructure / process plant already in place, capital costs are expected to be just $12-$22 Million.”

Concerning permitting, the BMO report observed that “a Phase I permit modification was approved in Q3/16 and expands the permitted pit boundary and drilling areas. A Phase II permit will be submitted in late 2016. Further permit changes/updates will likely be needed (as is fairly standard in Nevada), and we see this risk as low. We note a potential change in land ownership structure from the state into private hands could de-risk the area further.”

The BMO report also mentioned an upcoming Toronto Stock Exchange listing, noting, “the name is underowned in Canada and the company is now focused on improving its profile, adding research coverage, and targeting new institutional investors.” Trading on the TSX commenced on Nov. 17, and according to CEO Alfers, “the Company’s listing on the TSX is a keystone event that will allow us to continue to build liquidity for the Company and to diversify our strong shareholder base.”

Since the TSX listing, Pershing has signed a nonbinding commitment with Sprott Resource Lending for a $20 million credit facility and today announced the closing of a public offering of common stock. “The gross proceeds to Pershing Gold from this offering is approximately $7.5 million, before deducting the underwriter’s discount and other estimated offering expenses payable by the Company,” Pershing announced in the release.

Read what other experts are saying about:

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and 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 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: Pershing Gold Corp. 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: PGLC:NASDAQ; PGCL:TSX,
)

Major Royalty Companies All Good Buys Now

Adrian Day reviews recent results at some of his favorite gold and silver royalty and streaming companies and asserts that they represent, as a group, the lowest risk way to gain exposure to the sector.

Silver Wheaton Corp. (SLW:NYSE; SLW:TSX US$18.69) is a streaming company with approximately 55% of its revenues from silver, 45% from gold. The stock has been extremely weak since it reported good quarterly results. Depreciation hurt the bottom line, but quarterly “production” rose 17%, up over 50% from a year ago. Most mines on which it holds streams performed well.

Silver Wheaton Corp. is my favorite way to gain exposure to silver.

The problem is looking ahead. Production is essentially flat through 2020 after years of steady growth, though there is optionality on several nonproducing projects. The balance sheet, while reasonable, is a bit of a constraint on a major acquisition, with just $126 million in cash, and $1.35 billion drawn down on its line of credit. It could utilize the unused credit line for an acquisition, but a smaller transaction is more likely than a major producing one. The Canadian tax issue also hangs over the company.

Nonetheless, we like Silver Wheaton, and it is my favorite way to gain exposure to silver. The tax issue is priced into the stock for the most part, while there is good optionality on any gold or silver price increase. The stock is now undervalued relative to other major royalties and streamers (though part of that is justified given the differences in balance sheets). Silver Wheaton is a solid buy, under US$19.

Osisko pursues a different path

Osisko Gold Royalties Ltd. (OR:TSX US$9.99) is also undervalued relative to other royalty companies. All of its producing royalty mines are performing well. It has a very strong balance sheet, with $393 million in cash and no debt, though its costs are higher than the others due mostly to its “hybrid” model. Last quarter, $46 million was spent on investments in various companies. So far, these investments have performed reasonably well, but it is a departure from the pure royalty model and adds a layer of risk not found in the others.

Osisko has a strong growth profile, with attributable production going from about 35,000 ounces to about 45,000 by 2018. But the market is looking for Osisko to make a major new acquisition of a producing asset. It certainly has the firepower, including over $100 million in Labrador Iron Ore (LIF.UN:TSX) stock, which it indicated could be sold for a precious metal royalty. Osisko also has strong support from various Quebec government funds.

The company has indicated it is looking for a major producing royalty, and earlier indicated it expected a deal to take place this year. But it could also undertake two or three smaller transactions if the “big one” was not available.

Osisko is significantly undervalued relative to other large royalty companies, only partly justified by its “newness” and thus its smaller number of assets, and the higher risk from its more active investment approach. Osisko is a strong buy at this level.

The cream of the crop is a good buy again
Franco-Nevada Corp. (FNV:NYSE; FNV:TSX US$58.35) is the premier company in the sector. It continues to deliver, with a record quarter (on ounces, revenue and earnings), though revenue from its existing royalties in aggregate was down year-on-year. It has new assets, particularly from Antamina, that produced the record growth. Costs remain under control, with corporate costs stable at under 4% of revenue. With about $200 million in cash, no debt, and $1 billion available on its credit line, the balance sheet is strong.

Franco is the most diversified of the royalty companies. Some 94% of its revenue comes from precious metals (of which 66% is gold). It recently purchased an additional oil & gas royalty, in the Oklahoma shale play, its first in the U.S., for $100 million. The asset is already generating revenue, though that’s expected to grow significantly.

Recent stock weakness has brought Franco into a good buying level again. Though on a valuation basis it remains the most expensive of the major royalty and streaming companies, it has a very diversified production base, a strong pipeline of currently nonproducing assets, and a solid balance sheet. It is selling at its lowest valuations in over a year, when gold was at a far different price. Franco is a strong buy at the current level, particularly for investors who do not already own it.

Royal on path to its goals
Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX US$70.71) also continues to do well. Mt. Milligan now accounts for less than one-third of both NAV and revenue, diminishing the single-asset risk it posed only a year or so ago. Ideally, the company wants to bring it under 20%, and will do this by adding other assets over time. Royal recently added a “tuck-in” acquisition in the Cortez area of Nevada, where it got its start.

Royal has about half a billion in available liquidity (of which $133 million is cash), so we should expect another transaction (or two) in the near term, likely producing assets to further reduce dependency on Mt. Milligan.

Although Royal’s stock has appreciated from the $65 level less than a month ago, it remains a solid long-term buy at the current level. There’s no need to chase, however.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

Read what other experts are saying about:

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Franco Nevada, Royal Gold and Osisko Royalties. 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. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Franco Nevada, Royal Gold, Silver Wheaton and Osisko Royalties. 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: Silver Wheaton Corp. 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: FNV:TSX; FNV:NYSE,
OR:TSX; OR:NYSE,
RGLD:NASDAQ; RGL:TSX,
SLW:TSX; SLW:NYSE,
)

What Doug Casey DID NOT TELL INVESTORS In His Recent Interview

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December 3, 2016
By Dudley Pierce Baker
CommonStockWarrants.com

 

I love to follow and listen to the legendary newsletter writers and analyst and am amazed that they tell investors some of the facts, but rarely all of the facts which investors need to know to make the best decisions.

Doug Casey was recently interviewed by Peter Spina of GoldSeek.com and SilverSeek.com and the complete interview below is around 20 minutes.

What caught my attention immediately was comments on two of the companies that Doug commented on favorably. These two Canadian gold companies have long-term warrants trading.

Why the hell would you not bring this to the attention of investors?

Good chance that he doesn’t know either.

As a subscriber to my CommonStockWarrants.com you would have immediately asked the same question. If you didn’t already own the stock warrants in either of these companies you could have at least considered them and would have access to all the particulars, i.e., expiration date, exercise price, current valuation (Undervalued, Overvalued or Fair Value), etc.

Many newsletter writers and analyst are good at bringing out the Macro picture for investors, BUT, if you are looking for and considering new investments you need more details and ideas.

Something to think about….

blackcsw2-01.pngWelcoming new subscribers now to our exclusive database.

Dudley Pierce Baker
Founder-Editor
http://CommonStockWarrants.com

 

 

Jack Chan: This Past Week in Gold

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Technical analyst Jack Chan charts the latest moves in the gold and silver markets.

Our proprietary cycle indicator has turned up this week.

The 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.

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The gold sector is on a short-term buy signal. Short-term signals can last for days and weeks, and are more suitable for traders.

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Speculation has now dropped below the level of the previous bottom.

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The trend is down.

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Silver is on a long-term buy signal.

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SLV is on a short-term sell signal, and short-term signals can last for days to weeks, more suitable for traders.

Summary
The gold sector is on a major buy signal. The cycle is now up but the trend remains down. A counter-trend bounce is in progress. Caution is advised.

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