Drill Results Show Extending Mineralization with ‘Relatively High’ Grades

Source: Streetwise Reports 09/13/2018

An Echelon Wealth Partners report reviewed the initial assays from this gold explorer’s current drill program.

In a Sept. 5 research note, analyst Gabriel Gonzalez with Echelon Wealth Partners reported that results from the first three drill holes at Revival Gold Inc.’s (RVG:TSX.V) Beartrack South Pit “show a continuation of mineralization at depth over good widths and grades that compare favorably with resource grades.”

These findings are the first from the company’s 8,000 meter (8,000m) drill program to determine if the Beartrack resource can be expanded at depth and along strike. They are:

  1. Hole BT18-207D: 1.38 grams per ton (g/t) gold (Au) over 18.3m (10m true width) from 392.9–411.2m
  2. Hole BT18-208D: 1.38 g/t Au over 105.2m (62m) from 383.7–488.9m
  3. Hole BT18-209D: 1.89 g/t Au over 69.5m (36m) from 527.9–597.4m, including 2.48 g/t Au over 24.7m (15m) from 556–580.7m.

As for continuity, the three holes hit mineralization that covers a strike length of about 300m and extends below the resource estimate pit shell by 50–130m. With respect to grade, it is “relatively high” versus those of the resource, Gonzalez noted, which are 1.13 g/t for the Indicated and 1.41 g/t for the Inferred.

Gonzalez expressed optimism about Revival growing the resource even further. He wrote, “We believe that there is still potentially low hanging fruit for resource extensions, particularly at the North Pit along strike and toward the south along the South Pit to Joss where drilling is currently underway.”

Along with drilling at Beartrack, the company intends to conduct 2,000m of core drilling at its adjacent Arnett Creek property once it receives the necessary permits, likely this year. “Revival is ultimately targeting a 3 million ounce, Beartrack-Arnett Creek resource by 2019 before potentially beginning a preliminary economic assessment,” Gonzalez explained.

Looking forward, three catalysts are expected for the company this year: the release of further drill results and metallurgical test results from Beartrack and the launch of exploration drilling at Arnett Creek.

Echelon has a Speculative Buy and a CA$1.90 per share target price on Revival, whose stock is currently trading at around CA$0.81 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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 immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Revival Gold, a company mentioned in this article.

Disclosures from Echelon Wealth Partners, Revival Gold Inc., September 5, 2018

Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.

I, Garbriel Gonzalez, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that I have not, am not, and will not receive, directly or indirectly, compensation in exchange for expressing the specific recommendations or views in this report.

Important Disclosures:
Is this an issuer related or industry related publication? Issuer.

Does the Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer? No

Does the Analyst or household member serve as a Director or Officer or Advisory Board Member of the issuer? No

Does Echelon Wealth Partners Inc. or the Analyst have any actual material conflicts of interest with the issuer? No

Does Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer? No

During the last 12 months, has Echelon Wealth Partners Inc. provided financial advice to and/or, either on its own or as a syndicate member, participated in a public offering, or private placement of securities of this issuer? No

During the last 12 months, has Echelon Wealth Partners Inc. received compensation for having provided investment banking or related services to this …read more

From:: The Gold Report

Case Study: Pretium Short and Distort Attack

Macintosh HD:Users:Lobo:Documents:A Companies:1-LJ:1-Publications:1-SD:2018:01 September:180908 SDWR Screen Shot shortseller PVG Cleopatra slide.png

Source: Lobo Tiggre for Streetwise Reports 09/12/2018

Lobo Tiggre of Independent Speculator discusses an attack piece by short sellers against Pretium Resources.

On Thursday, September 6, 2018, a group of short sellers called Viceroy Research published an attack piece against Pretium Resources Inc. (PVG:TSX; PVG:NYSE). The stock dropped 10% on a day when gold was up. What follows is an analysis of what was said and why it’s wrong.

FULL DISCLOSURE: I own 1,377 shares of Pretium Resources (PVG), bought at an average price of $7.26 on April 13, 2018, at 12:59 p.m.

If you think I’d sell my soul and trash my reputation to protect a $10,000 investment, then you should discount everything I’m about to say. But if you do, you should keep the same skepticism in mind when you consider Viceroy’s claims, as they admit that they were short the stock at the time they published their attack.

As of the publication date of this report, you should assume that the authors have a direct or indirect interest/position in all stocks (and/or options, swaps, and other derivative securities related to the stock) and bonds covered herein, and therefore stand to realize monetary gains in the event that the price of either declines.

At the same time, Viceroy claims to be acting in the public interest—even though they say everything in their report might be wrong.

All expressions of opinion are subject to change without notice, and we do not undertake to update or supplement any reports or any of the information, analysis and opinion contained in them. We believe that the publication of our opinions about public companies that we research is in the public interest. We are entitled to our opinions and to the right to express such opinions in a public forum. …

Any investor interested in the truth should keep this in mind.

Meanwhile, I read all 47 pages of the report, trying to be as objective as I can.

I found one issue that seemed to require clarification.

A central thesis to the attack is that Pretium used the bonanza-grade Cleopatra vein within the Valley of the Kings zone to bias the bulk sample taken in 2013.

If true, the entire project was a fraud. The company would have to be desperately scrounging around for high-grade ore now to maintain the illusion, as the short sellers claim.

Before we get into that, it’s worth nothing that management couldn’t pull off a fraud like this on their own. They couldn’t sneak down into the mine when no one was looking and take a pick to some ultra-high-grade material lying around to skew the results. It would take hundreds of employees working for several different companies to join the conspiracy. It would take even more to keep the illusion going now that the mine is in operation.

That this could happen with no leaks over the last five years is very hard to believe. It’s also contradicted by the lack of significant insider selling (apart from exercising options) that one would expect to see if management was desperately trying to cash in before the fraud is exposed. And that’s not to mention a court examination of the issue that concluded that Pretium was right.

At any rate, this is the central thesis of the short sellers’ attack. They included one of Pretium’s slides as evidence in their report. It seems to show the 2013 bulk sample selectively following the super-high-grade Cleopatra vein. Without context, this looks bad. Here is the slide the short sellers used and marked up.

The yellow areas on the map are places where material was taken for the bulk sample. Blue areas were for access and exploration. Material from the blue areas was not included in the bulk sample. Note the blue tunnel at a different angle than the rest. It follows the Cleopatra vein, which seems to curve around and get included in the only yellow area that goes east-west instead of north-south. That exceptional orientation of the area sampled sure looks suspicious… unless you know that it was planned all along, well before Cleopatra was discovered.

Below is a diagram of the planned bulk sample area, published by Pretium on August 21, 2013.

Macintosh HD:Users:Lobo:Documents:A Companies:1-LJ:1-Publications:1-SD:2018:01 September:180908 SDWR Screen Shot PVG 130821 presentation sl 19.png

It shows the resource model blocks in green, orange, red and purple. This clearly shows Pretium’s intention to sample material from high-, low-, and no-grade areas to test its model. This was drawn before Cleopatra was discovered, which is why there are no purple blocks where we now know Cleopatra was. It’s hard to see, but the vital point is that the east-west sample area that looks so exceptional in the previous chart is already there in the plan. This next slide, from the same 08/21/2013 presentation, shows that east-west sample area more clearly.

Macintosh HD:Users:Lobo:Documents:A Companies:1-LJ:1-Publications:1-SD:2018:01 September:180908 SDWR Screen Shot PVG 130821 presetnation sl 17.png

As is clearly shown, the east-west sample was already planned. The drill traces on this slide also show some purple-coded hits that would later be seen as part of Cleopatra—but Pretium did not move the 615E sample area a bit to the east to try to capture more of this material. You can see that in the next slide taken from Pretium’s October 30, 2013, The Bulk Sample: Questions and Answers presentation. It shows the actual areas Pretium mined for its bulk sample.

Macintosh HD:Users:Lobo:Documents:A Companies:1-LJ:1-Publications:1-SD:2018:01 September:180908 SDWR Screen Shot PVG 131030 BSQA sl 20.png

This is busier than the previous slide, as it includes a lot of the underground drilling Pretium did once it got into the deposit underground. It shows all the bulk sample areas taken as planned, including the east-west zone highlighted by the short sellers—but only the eastern half of this area.

I understand that this was because the density of the rock mined for the bulk sample was higher than expected. If Pretium had …read more

From:: The Gold Report

Gold Explorer Features Projects at Opposite Sides of the Globe

Source: Maurice Jackson for Streetwise Reports 09/12/2018

Christopher McFadden, CEO of NxGold, discusses with Maurice Jackson of Proven and Probable his company’s two far-flung exploration projects.

Maurice Jackson: Joining us today is Christopher McFadden, the president, CEO, and director of NxGold where the focus is on high-grade gold in world-class districts.

Mr. McFadden, for someone new to the story, who is NxGold Ltd. (NXN:TSX.V) and what is the thesis you’re attempting to prove?

Christopher McFadden: NxGold is a relatively new junior gold explorer listed on the TSX. We are looking to make significant discoveries in good mining jurisdictions with large volumes of high-grade gold that we could eventually convert into mining operations to improve, and increase shareholder value.

Maurice Jackson: Let’s discuss NxGold’s project portfolio, beginning in Western Australia with Mt. Roe. Where in Western Australia is Mt. Roe located?

C. McFadden: Our projects in Western Australia are in a region called the Pilbara. Western Australia is obviously a very large state in Australia. The Pilbara is northern Western Australia, not quite all the way to the top. It’s about 1,500 kilometers north of Perth where not far from the coast there’s a fairly large rural town, called Karratha on the coast, and we’re 30 kilometers to the south of Karratha.

Maurice Jackson: Now, how many hectares is Mt. Roe, and what type of lithology is prevalent there?

C. McFadden: It’s a relatively small project area. We have two blocks; the total land package is 1,200 hectares. In terms of the lithology, there’s lots of different basalt flows, and in some cases some felsic flows that are being interpreted to be eroded and then covered with various sequences of the Roe style sediments and basalt flows.

What I say to people is this part of the world’s crust is some of the oldest rocks that are known on the planet. Some of these rocks I believe are two to three billion years old. That it’s perhaps a bit like a deck of cards that have been shuffled and moved, and changed over time and over geological history. So, it’s quite a complex geological setting on our project area.

Maurice Jackson: Maybe it is too early to determine, but would you define Mt. Roe as a placer deposit, and if yes, what does that mean for shareholders?

C. McFadden: I think it probably is too early to say. I think it’s fair to say the project area has potential for the paleo-placers style of mineralization, but it is too early to determine if it’s the dominant style on the property. An interesting point that will be of interest to shareholders is that our geologists have recently been focused on an older interpreted epithermal type vein mineralization on the property as well, that may have been the source of the recently announced stream sediments anomalies.

I think it was the 8th of August we put out a release showing some of the findings of some stream sediment work that we’ve done. We’ll probably talk about the nuggets later on in our discussion, but there we have found what we call hackly or rough textured gold nuggets on the property, which may have come from epithermal veins. So that, I think, is of great interest, and a strong potential for us on this project in that we possibly have a number of different types of nuggets, and therefore types of their potential sources of those nuggets.

Maurice Jackson: Speaking of those nuggets, do they appear to be generously sprinkled throughout Mt. Roe?

C. McFadden: What’s very interesting is that we’ve been able to find nuggets in a number of places. We’ve been collecting them in the northeast of the project area, and also down the northwest. Down the western side of a ridge, our project has a ridge line that passes down the length of the project area, and that ridge is probably two kilometers or a bit longer. And, we’ve been finding nuggets quite consistently along that ridge line, and in some pockets they seem to be a lot more concentrated, but as I mentioned previously, the number of the nuggets particularly those in the northern areas, are these flattened, what others in that area are calling melon seed like nuggets, and they are like watermelon seeds in terms of even their size and their shape, and that they’re squashed and they’re flat. And, if you look at them very closely, and look at them under a magnifying glass you can see little divots in them where they’ve been pressed and pushed against little grains of sand, and other material. And, they do look exactly like a watermelon seed.

What we’ve also got, and these are the nuggets we’ve been collecting along the western side of the project area, they tend to be rough and hackly. Very different style of nugget, where you can see that they haven’t been squished, they haven’t been squashed and rolled between this other material. So, that’s what making us think that perhaps that they’re coming out of epithermal veins, and we’ve been finding them hopefully close to their source.

Maurice Jackson: You alluded to the nuggets having the watermelon seed shape, which is alluvial. How does that factor into the thesis that this may be an extension of the Witswaterand?

C. McFadden: Well, that’s a very interesting academic argument that others in the area are leading. I mean, it would be wonderful if the Pilbara was the same as the Wits, and was able to produce the same levels of gold. That would be a magnificent result, but I think it’s probably too early to say that we have a similar area or similar geology, or the same style, or same size region. We’re aligned with the thinking of our peers in the area that the melon seed nuggets are part …read more

From:: The Gold Report

Mining Prospects in Newfoundland

56.jpg

Source: Ron Struthers for Streetwise Reports 09/12/2018

Sector expert Ron Struthers takes a trip to Newfoundland and reports on companies working in the province.

It was a wonderful day and perfect weather for the ferry ride from Sidney, Nova Scotia, to Channel-Port aux Basques, Newfoundland.

One thing I noticed strange on my first several days of travel in Newfoundland were all the high voltage electrical transmission lines. They seemed numerous and going everywhere, although nothing is really there. For the most part Newfoundland is barren land with only around 550,000 people across the whole province. And Newfoundland/Labrador is larger than New Brunswick, Nova Scotia, and Prince Edward Island combined, although you could eliminate half of it (Labrador) as there is little development other than resources. About 95% of the people live on Newfoundland, and the island has about 25% of the population of the other three eastern provinces I’ve mentioned.

As you know I have a keen interest in energy and alternate energy. I could not help but wonder, where is all this power going in a province where growth is stagnant and the population has been stuck in the 500-550,000 range for decades.

56.jpg

The most positive outcome is this new high voltage transmission line, which runs through the northern part of Zonte Metals Inc.’s (ZON:TSX.V)’s Cross Hills project. This picture is not from Zonte’s property but elsewhere, but it is the same transmission line.

Newfoundland’s Electrical Boondoggle

Electricity prices are a hot topic in Ontario, but Ontario folk may take some comfort that Newfoundland will soon join them and probably see rates way higher. Ontario has the third highest rates in Canada, and Newfoundland is about $0.01 per kilowatt hour (kWh) lower.

After several days speaking with locals and seeing local news I learned all the transmission lines were, in part, about a project called Muskrat Falls. About 3,200 transmission towers were built because the project is far away from where any power is required. In fact, all this power is not required in Newfoundland either.

In Newfoundland, Hydro is a provincial crown corporation under the umbrella of a company called Nalcor Energy, and is the primary generator of electricity in Newfoundland and Labrador, with an installed generating capacity of 1,637 megawatts (MW). In 2008, more than 80% of this energy was clean, hydroelectric generation. Hydro’s power-generating assets include nine hydroelectric plants, one oil-fired plant, four gas turbines, 25 diesel plants, and thousands of kilometers of transmission and distribution lines.

The diesel plants are small and for remote areas. Why would a province with no growth need a huge new 3,000 MW hydro-generator, almost twice current capacity? Just considering the first phase, at 824 MW, is about a 50% increase over current capacity. The answer: it is not needed.

Muskrat Falls is probably a bigger boondoggle than the likes we have witnessed in Ontario. Phase one at Muskrat Falls includes construction of an 824 MW hydroelectric-generating facility, over 1,600 km of transmission lines across the province, and the maritime link between Newfoundland and Nova Scotia.

The original Muskrat Falls deal was designed to supply the island with low-cost hydro power to replace power generated at the oil-fired Holyrood power station, and to sell Emera 20% of the output for use by its Nova Scotia Power subsidiary. The balance was going to be sold to “lucrative U.S. power markets.” There is no doubt the original projected cost, between $5 and $6 billion, was low-balled because of either engineering incompetence or political posturing—or some of both. The project got the go-ahead during the 2011 election campaign when Stephen Harper, desperate to win seats in the province, promised federal loan guarantees to get the dam and its lengthy transmission system from Labrador to the island, and on to Nova Scotia, built, despite an unconvincing economic case.

The latest estimate for the project completion is $12.7 billion, more than double the original. There are estimates between $0.22–0.24 per kWh for the cost of generation. This is about double current rates in Newfoundland and no doubt makes this the most expensive large electrical generation in Canada.

Muskrat Falls has actually become cheap power for Nova Scotia at Newfoundland’s expense. What a win for Nova Scotia. Think of it. Newfoundland said, “If you (Nova Scotia) connect to our grid, we will give you one-third of Muskrat Falls power free for 35 years.” Since there is no market for the rest of Muskrat Falls power, Nova Scotia is going to get another third at market prices of $0.03–0.04 per kWh. In essence, Nova Scotia will be getting two-thirds of Muskrat Falls power for a few pennies or less/kWh, while the cost to Newfoundland will be $0.22–0.24 per kWh. What a boondoggle.

This is very sad for a province already saddled with huge taxes. Provincial fuel taxes are more than double almost anywhere else in Canada. Practically everything costs 10% to 25% more because it has to be shipped to Newfoundland by sea, since not much is produced there. However, the beautiful scenery and laid-back way of life is free.

I love Newfoundland, and the people there are second to none. Mining discoveries and new mines would be very well received as the jobs are badly needed and the extra revenues to government coffers from the additional tax base are badly needed also.

That said, let’s get into the mining mania that is gripping the province. The best explanation is the graphic.

56.jpg

The circular structure outlined by the air magnetic in red is the intrusive outlining epithermal vein activity. Practically all the ground is now staked around this, and on the epithermal trend that continues to the northeast indicated by the red arrow, toward Zonte’s Wings project, and the arrow to the southwest, toward Marathon’s Valentine project.

I found most of the projects are early stage and private. There is a good private project that will …read more

From:: The Gold Report

Coverage Initiated on Gold-Silver Miner with ‘Significant Upside,’ ‘Compelling Investor Appeal’

Source: Streetwise Reports 09/11/2018

A CIBC report provided the rationale for adding this Canadian company to its covered stocks.

In a Sept. 5 research note, analyst Bryce Adams reported that CIBC initiated coverage on Osisko Mining Inc. (OSK:TSX) with an Outperformer rating and a price target of CA$2.50 per share. The company is currently trading at around CA$2.34 per share.

Adams reviewed the company’s high-quality merits. One, he said, is that the miner’s Windfall project offers “significant upside well beyond the conservative preliminary economic assessment (PEA)” and CIBC’s base case using spot prices, which offers a NAV5% of CA$318 million.

Upside at Windfall could come in the form of grade and/or tonnage, explained Adams, both of which are near-term catalysts. “Our NPV5% would increase by roughly 80% in our upside scenario,” Adams indicated.

The way the grade was estimated in the PEA “limited the area of influence of mineralized intersections.” Thus, the additional infill drilling that now is underway could result in a roughly 15% higher resource grade.

As for tonnage, the use of narrower, less than 3.5 meters wide stopes, which were excluded from the PEA, could “nearly double the mineable resource,” Adams noted. Further, exploration drilling would also likely increase its size.

Along with Windfall’s “significant resource upside potential,” Adams noted, its other “high-quality merits” are the moderate risk associated with it and the company’s strong management team and its chances of being taken out, all of which “offer compelling investor appeal.”

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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 immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclosures from CIBC, Osisko Mining Inc., September 5, 2018

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst’s personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

Important Disclosure Footnotes for Osisko Mining Inc. (OSK)

· CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from Osisko Mining Inc. in the next 3 months.

This company is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months.

CIBC World Markets …read more

From:: The Gold Report

Jack Chan’s Weekly Precious Metals Market Update

Source: Streetwise Reports 09/11/2018

In his weekly precious metals market update, technical analyst Jack Chan charts the latest moves in the gold and silver markets.

Our proprietary cycle indicator is down.


The gold sector is on a long-term sell signal. Long-term signals can last for months and years and are more suitable for investors.


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


Our ratio between gold and gold stocks is on short-term sell signal.


Speculation is now at net short for the first time since 2001.


Silver is now on a long-term sell signal.


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


Speculation is at net short again.


Our ratio between gold and stocks is now at the same oversold level as in July 2015, the start of the multimonth bottoming process before the 150%+ rally in early 2016.

Summary
The precious metals sector is now on a long-term sell signal, which is suitable for trading and not for long-term holding. Short-term is on mixed signals. The cycle is down. COT data is at extreme levels, which suggests that a recovery will occur soon. We are looking to exit our long-term positions upon a recovery rally.

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.

Sign up for our FREE newsletter at: www.streetwisereports.com/get-news

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

…read more

From:: The Gold Report

Kimberlite Intersected on Australia Diamond Project

Source: Streetwise Reports 09/10/2018

This is the first kimberlite discovery in the area in 20 years.

Lithoquest Diamonds Inc. (LDI:TSX.V; CWVWF.OTCPK) announced that the company has intersected kimberlite in the first drill hole at target 1804 on its 100%-owned North Kimberley Diamond Project in Western Australia.

“The discovery of kimberlite during the Company’s first drill program is a significant success given that no discoveries have been made in the area for 20 years,” said Bruce Counts, CEO of Lithoquest. “Results confirm the prospective nature of the North Kimberley Diamond Project and highlight the potential for additional discoveries in the area.”

The company drilled two holes into target 1804, according to the company.

“The first drill hole targeted coincident ground magnetic and gravity anomalies where indicator minerals, including diamonds, were recovered in historical loam samples,” noted the company. “The drill hole was oriented at an azimuth of 114° degrees and inclined at -75°. Extensively clay-altered basalt was intersected from the top of the hole at 5.7 meters to 100.5 meters, followed by kimberlite breccia to 124.3 meters. Immediately following the kimberlite intersection was a carbonatized basalt which grades to a fresh basalt at 138.4 meters. Fresh basalt was present to the end of the hole at 156.6 meters.”

The second hole at 1804 was drilled at an inclination of -50 degrees, and collared 10 meters from the first drill hole along the same 114° azimuth.

“”The second hole encountered sandstone from 6.9 meters to 11.1 meters followed by clay-altered basalt to 61.7 meters and fresh basalt to the end of the hole at 69.1 meters,” stated the company. “The kimberlite breccia is characterized by xenoliths of the local volcanic and sedimentary sequence. The core will be shipped to Canada for detailed observation, laboratory analysis and diamond testing. Diamond results are expected during Q4 of 2018.”

The results from ground geophysical surveys over target 1804 and textures observed in the kimberlite suggest the occurrence is a pipe. But additional drilling and petrographic work will be required to definitively determine the geometry and nature of the body.

No kimberlite was intersected in target 1805, which was also tested with one drill hole during the second phase of drilling. The drilling marks the completion of the current field program and field crews have been demobilized from the property.

“In addition to drilling, the 2018 field program included rock, loam and stream sediment sampling as well as ground geophysical surveys and mapping,” stated the company. “Field samples will be submitted for laboratory analysis with results expected in Q4. The next phase of work will be determined once laboratory results are received and the Company has analyzed the 2018 field data.”

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Disclosure:
1) John McPhaul compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Lithoquest Diamonds. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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 immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Lithoquest Diamonds, a company mentioned in this article.

( Companies Mentioned: LDI:TSX.V; CWVWF.OTCPK,
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…read more

From:: The Gold Report

Nevsun: Nearly There

Source: Adrian Day for Streetwise Reports 09/10/2018

Fund manager Adrian Day looks at the new offer for Nevsun and the possibility of another bid coming.

Nevsun Resources Ltd. (NSU:TSX; NSU:NYSE.MKT, US$4.40) announced an agreed take-over by Zijin Mining at C$6 per share, a meaningful premium over Lundin’s hostile C$4.75 bid. Zijin is the third-largest publicly traded gold miner in the world. Following its purchase of the Bor mine and smelter, it became a front-runner for Timok. The following day, Lundin said would not increase its bid for Nevsun.

This is a good offer, though we should have preferred one at least partially in shares in a good copper company, allowing us to continue to have exposure to Timok, as well as avoid the immediate tax bill.

Will there be another bid?

The probability now that there will be another bid is low, notwithstanding that Timok is one of, if not the best undeveloped copper projects in the world, and that there is a paucity of good copper projects in low-risk jurisdictions. However, the bid is over NAV, at the high end of a purchase of an undeveloped project. Zijin has a competitive advantage with its smelter, so another company bidding higher could not have the same rate of return as Zijin. And if another company made a higher hostile bid, there is always the possibility that Zijin would come back topping it, so a third party is unlikely to go to the time and trouble of a hostile bid they may not win.

But another higher bid is by no means out of the question, given the quality of the asset and the number of companies that have looked at it recently. We speculate that Nevsun’s somewhat unusual comments that “the board has preserved the ability to respond to unsolicited proposals”…and “optionality remains for us to consider a superior bid” mean that Nevsun knows other companies are still interested.

We are holding for a little longer:

  • The stock price is below the bid price (C$5.82 vs C$6).
  • The downside is minimal since this is an agreed acquisition.
  • There is still the possibility of another higher offer. The low break fee (of $50 million) could be interpreted that Nevsun is leaving the door open, with Nevsun management retaining the right to consider a superior bid.

On the other hand:

  • The bid price is in Canadian dollars, so currency fluctuations can affect what we receive.
  • There is always the risk (albeit low) that Zijin won’t complete, because, for example, it does not receive necessary Chinese approvals.
  • The possibility (as discussed) of a higher offer is low.

In short, we are holding for now. Once the bid circular is filled—by September 18 at the latest—the tender will remain open for 105 days, unless Nevsun shortens the bid period. Were this to occur, we would infer that no other bid was expected. But if you need the funds for something else—whether a holiday or to buy other resource stocks at bargain prices, then you can sell with low risk of foregoing meaningful upside.

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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: Nevsun Resources. 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: Nevsun Resources. 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 billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 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. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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 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 immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports (including members of their household) own securities …read more

From:: The Gold Report

For Gold, It’s All About the Dollar

Source: Rudi Fronk and Jim Anthony for Streetwise Reports 09/10/2018

Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, discuss the factors that they believe could cause a powerful rally in gold.

Positioning, sentiment and market structure favor a powerful rally in gold. The COTs released by the CME on September 7, 2018, show the gross speculative short position grew 1.3% to 213,259 contracts, just shy of the all-time record set two weeks ago. On a net basis, speculators are short 13,500 contracts, the largest short position since December, 2001.

The commercial net short position collapsed into negative territory for the first time since December, 2001 at -6,525 contracts. In other words, commercials are now net LONG, a very rare occurrence historically seen only at major turning points.

Nonetheless, gold continues to look weak, largely the result of a stronger dollar and market expectations of further dollar strength, which is putting pressure on gold, commodities and emerging markets currencies. Not surprisingly, speculators have been crowding into the dollar.

There are four main reasons why the dollar looks to go higher despite U.S. political uncertainty, growing deficit spending and a worsening trade balance. Each of those reasons may prove to be short-lived.

First, U.S. dollar-denominated debt offers higher interest rates than the debt of other developed economies, especially euro debt, which has attracted funds into the dollar. The key comparison here is the yield on the German 10-year note compared to its U.S. counterpart.

https://stockcharts.com/c-sc/sc?s=%24UST10Y-%24DET10Y&p=D&yr=1&mn=0&dy=0&i=t16735120979&a=511975499&r=1536424805784

Over the past year, the yield gap has widened in favor of the dollar until June when the trend has stalled, reflecting a 50% cut in bond purchases by the European Central Bank and an expectation that ECB buying will come to an end this December. If true, EU debt will fall (yields will rise) as the biggest and least price-sensitive purchaser stops bidding. We expect the yield gap will likely close.

The second main support for the dollar is the market’s perception of the U.S.-China trade war. In a nutshell, the market sees China and the Chinese economy as the losers while Trump and the U.S. economy are perceived to be winners before any serious damage is done to the U.S. economy and corporate earnings. Every time Trump implements a new set of trade sanctions, the dollar rises while the yuan, commodities and gold fall. This pro-dollar trade will unwind when markets begin to conclude there is no easy, early victory. We think this may be imminent. America’s largest companies are now warning that Trump’s trade policies are beginning to cut into their business prospects and many are reporting serious upward pressures in pricing due to the tariffs and their disruption to established supply lines.

Third, the U.S. has had the best performing stock market on the planet for the past two years, which has attracted global capital to the dollar. U.S. corporate earnings are up strongly, in part because of the magic of share buy-backs but also because of the pro-business policies of the Trump Administration. Regulations have been reduced and taxes have been cut. We think the tax cut has produced a “sugar high” but its effect is already wearing off. Meanwhile, mid-term elections are fast approaching and there is a real possibility that Republicans will lose control of the House to increasingly “progressive” Democrats, effectively ending the Trump effect. U.S. political uncertainty, growing deficit spending and a worsening trade balance may then begin to matter, all to the detriment of the dollar.

Fourth, in our view, the dollar still depends primarily upon one thing…the perception of Fed policy. The Fed is tightening, steadily raising short-term rates and selling assets into the market for dollars it then extinguishes. The latter initiative will shortly reach its objective of removing $50 billion per month, a level the Fed has said it will maintain for years to come.

The key question for the dollar is whether the Fed stays the course. The market assumes it will. We are less certain. We believe that Fed tightening will break the stock market and cause a reversal in Fed policy, which will have a dramatic impact on the dollar and gold.

Even now, while the stock market remains strong, the Fed is laying down markers that support the end of tightening. First, Fed Chairman Powell says he is not concerned about imminent inflation. The latest Fed statement noted that “market-based measures of inflation compensation have increased in recent months but remain low; survey-based measures of longer-term inflation expectations are little changed, on balance.” Second, the Fed has stated that it is watching to see if there is a negative economic impact from Trump’s trade policy and the stronger dollar. Third, the yield curve is only one 25 basis point increase away from inverting, a fact noted in the latest Fed minutes where some governors expressed concern that an inverted curve has reliably signalled oncoming recessions in the past.

But especially, watch the Emerging Market currency implosions that now threaten more than 20 countries ranging from Turkey, Argentina and South Africa to Poland and Brazil. This growing crisis is directly attributable to Fed tightening thanks to the fact that Emerging Markets have incurred more than US$3.7 trillion in dollar-denominated debt. None of these economies may be big enough to matter in a global context but their impact on the global banking system may be another matter.

Gold is sold out and should begin to rally. The obstacle is the dollar, but perhaps not for much longer.

This article is the collaboration of Rudi Fronk and Jim Anthony, cofounders of Seabridge Gold, and reflects the thinking that has helped make them successful gold investors. Rudi is the current Chairman and CEO of Seabridge and Jim is one of its largest shareholders. Disclaimer: The authors are not registered or accredited as investment advisors. Information contained herein has been obtained from sources believed reliable but is not necessarily complete …read more

From:: The Gold Report

Analytical Paralysis in the World of Interventions

Source: Michael Ballanger for Streetwise Reports 09/06/2018

Sector expert Michael Ballanger discusses the influences on market trading and the status of a pair of small-cap miners.

Another Labor Day has come and gone, and I sit here in the back of my boat typing yet another rambling, rancorous recount of forty-one years covering the financial markets, and I have to tell you—I am depressed.

Don’t get me wrong; this summer was yet another magnificent series of forays into northern Georgian Bay, and despite fierce forest fires and terribly dry conditions, there was just so much to explore that I come away damning Mother Nature for making Canadian summers so short.

Despite that, I look at the global fiscal situation and am constantly amazed that the world’s stock exchanges remain elevated. What is even more puzzling is that the only market celebrities left that are able to show their faces on CNBC these days are the thirty-something permabulls who forge ahead buying any and all dips because “the Fed has our back,” and who have never experienced crashes even vaguely resembling 1987, 1998, 2001, or 2008. All of the old stock market “gurus,” like Robert Farrell or David Stovall, have moved along and even the more recent superstars, like David Einhorn or Doug Kass, are hiding. Truly smart, experienced managers are being left behind in the performance race due to their unwillingness to ignore history in terms of both valuation and risk. Poor Dennis Gartman has flip-flopped from bull to bear to bull no fewer than a dozen times since 2008, each time admitting his errors but failing to explain why he keeps getting whipsawed.

As I explained a few weeks ago, we all look at the same data and read all the same headlines, all failing en masse to accept that the fuzzy-cheeked kids buying stocks on margin day in and day out are actually the “smart money.” With their thirty-something brethren manning the computer terminals, they are seen using trained algobots to decipher all the patterns and analyze all the word clouds before launching microbursts of buy orders through microwave transmission systems many nanoseconds faster than anything even remotely similar to the “Quotron” order execution terminals of the 1970s and 1980s. So when I see the S&P down 3% with an hour of trading left and leave for the day thinking that there is simply no way any human trader would step into a market this bad, my jaw drops through the floorboards when I see on the news that a “Late Rally Saves Stocks.” Therein lies the source of my angst (and anger).

Last Friday’s COT report has now been the focus of more than fifty breathless commentaries, complete with table-pounding and cymbal-clashing, as the anticipation of a proctologically challenging short squeeze resembles a “visions of sugar plums dancing in their heads” type of expectational nirvana. Yes, it was noteworthy in that in the futures and options portion, the Commercials are actually net long silver for the first time I can ever recall. They are also pretty close in gold, creating one of the most powerfully bullish set ups since the COT was introduced in 1986.

However, that was before the “machines” took over the trading floors. What I think we are going to get is a retest of the August 16 capitulation lows, both precipitated and engineered by Primary Driver #1 (algobots) at the prompting of Primary Driver #2 (Sovereigns and Central Bankers).

You see, this type of “trading action”is about as unnatural verging on the perverse as I have ever experienced. There is indisputable evidence that conditions similar to December 2015 have arrived, but the defining difference is that while the Commercials and the Large Speculators are still in battle, the market is still reacting to external factors rather than the bullish COT. It is beyond anything I have ever studied in all my years studying the back pages of the Wall Street Journal and Barron’s Market Lab section on a Sunday afternoon, while listening to Zeppelin (70s) and Supertramp (80s) and Nirvana (90s).

The maddening element in analyzing price action in gold and silver lies within the realm of consistency, which is totally absent. The same applies to stocks and bonds, where risk premiums should be skyrocketing due to the likelihood of default, given the debt loads associated with stock buybacks and, in the case of governments, the inability of the populace to generate enough tax revenue to meet interest payments.

I usually include charts in my missives because they provide a visual canvas upon which the analytical painting gains substance and form and allows my readers to glean a sense of purpose in the assessment of the next direction of whichever market I am viewing. However, irrespective of the identity of the perpetrator, someone or something is influencing the dollar-based prices of gold and silver.

In light of this, charts remain meaningless and ineffectual. Head-and-shoulders, cup-and-saucer, gravestone dojis, hanging drunkards, and whatever other technical formation, I absolutely refuse to make investment decisions on their interpretations. In this day and age, it is the double drivers of technology (algobots) and government (interventions) that have, as their sole mission, the protection of the reserve-currency-status of the U.S. dollar. This directive is indelibly etched into every facet of financial market warfare by the U.S., while combatting it remains the sole mission of Russia and China and a vast majority if the Islamic world.

Integral to all of this is the necessity of keeping a stranglehold on gold and silver prices while juggling the stock and bond markets like a one-eyed circus clown to maintain the status quo of how international money flows in favor of the Americans. Specifically, it does not matter whether the Commercials are long or short, or whether Large Speculators have amassed a short position, the notional amount of which is larger than total global mine production for the past year. The algobots …read more

From:: The Gold Report