Survival Secrets from Colorado Resource Investing Front Lines

Top experts and select companies traveled to Colorado last week for a pair of conferences focused on the survivors in the natural resource mining sector. The Gold Report reached out to some of the discerning voices there and asked whether the barrage of headlines from the Federal Reserve and China impacted the mood, and what companies they would be following up on when they returned to their offices. While the Precious Metals Summit was geared toward development-stage companies and the Denver Gold Forum was mostly populated by large, producing mining companies, everyone seemed fixated on survival. For those of us watching from home, experts we talked to were kind enough to name some of the standout companies they saw in boothland.

Institutional Investment Advisor Jayant Bhandari found both the Precious Metals Summit in Beaver Creek and the Denver Gold Forum useful. “While I follow and invest in junior mining companies, historically, my interest in big miners has been to get a feel for what kinds of projects miners look for, so that I could attune my investment decisions in junior mining companies accordingly. This is no longer the case. As is obvious to anyone who looks closely at the major gold mining companies, the longer it takes for the gold price to recover, the more their balance sheets will get damaged. They do not offer me enough margin of safety any more. Indeed, most of them are no longer capable of buying projects from junior mining companies. That is why right now the junior mining companies are more attractive. Their projects will likely be bought and put into production by entrepreneurial businessmen,” he said.

Chen Lin, author of the investing newsletter What Is Chen Buying? What Is Chen Selling?, saw the smaller crowds this year as a benefit because he was able to arrange one-on-one meetings with management and he liked what he heard. “Generally, it was quite positive. A lot of gold mining companies based in Australia, Canada and Mexico where the U.S. dollar buys more, are really putting their acts together, keeping their heads down and high grading for success. They are generating cash flow and paying back debt. A lot of companies actually are debt free or close to debt free. They will be the survivors. I was pleasantly surprised,” he said.

Lin had some dire predictions about the impact of companies that still have very high leverage, particularly the majors with share prices that are, in many cases, half of what they were a year ago. “If a company cannot generate real free cash flow and gold drops below $1,000 an ounce ($1,000/oz), we may see a lot of bankruptcies. If a major gold company goes under, that’s a great time to buy the survivors,” he said.

Headline Impacts—Positive, Negative and Non-Events

Lin is worried about the direction of gold in light of the news coming out of China. “An Asian crisis might lead to people selling gold. They have been known to sell extra kidneys. That is how desperate they are. When you have nothing to sell, you sell gold. That’s extremely bearish because the Chinese own a lot of gold. The other scenario is that people looking for an alternative to the yuan may flock to gold. That’s obviously very bullish. The bottom line is nobody knows what direction gold is going in the near term even though we all believe in the long run, gold will do very well. I suggest to my subscribers to be careful. Keep some powder dry. There are still a lot of opportunities in the gold mining companies,” he said.

Pretium Resources Inc. will have one of the greatest mines in the world.

The other headline that shook the crowd at Beaver Creek was the Volkswagen emissions cheating scandal. “People were outraged by the pollution cheating and this could lead many to stay away from diesel,” Lin theorized. “If people switch to gasoline, especially in Europe, where diesel cars can comprise 50% of the market, that will lead to an increase in demand away from platinum used in catalytic converters for diesel engines to palladium used in catalytic converters for gas engines. This is a fundamental shift that could take a few years. Already there is not enough palladium supply to meet demand because weak prices have squeezed producers of all the platinum group metals and some are close to shutting down.”

Lin’s choice for taking advantage of this special situation opportunity is Stillwater Mining Co. (SWC:NYSE). “Its palladium-platinum ratio is almost 4:1, which means it produces four palladium ounces for every one platinum ounce. It is based in the U.S., a safe jurisdiction. It has a very good balance sheet, a lot of cash, and it’s a low-cost producer, very big and respected in business. I think that company probably can take advantage of this downturn,” he said.

Lin was not worried about the Federal Reserve non-interest rate hike. “I think it’s built into the price. Gold went up, but it has been volatile. It’s the uncertainty that bothers the market more that the actual decision, and that has an impact on the gold market.”

Brent Cook, author of Exploration Insights, also saw the Federal Reserve Board news as a non-event. “I had expected that the Fed decision, and the adjustment of the unemployment rate numbers, would be non-events, and they were. The media buzz immediately shifted to whether the Fed would raise rates next time.”

OceanaGold, which is buying Romarco Minerals Inc., could be another low-cost producer with costs around $500/oz when Romarco’s Haile mine gets developed in 2017.

Bhandari was worried about the psychological impact of government monetary policies. “Fiat currency encourages short-termism. It seriously hurts not only the morality of the society, but also of the investors. Money manager bonuses are mostly geared toward quarterly performances. The result is that most people look at trends and headlines to make money, rather than by focusing on value—no wonder our economies are stagnating. Despite this, in the short term, as well as in the long term, the most confidence and most upside comes from focusing on value,” he said.

Companies Worth a Closer Look

Lin was on the lookout for ultra-low-cost producers with all-in sustainable costs around $500/oz that could conceivably survive to become the next Goldcorp Inc. (G:TSX; GG:NYSE), consolidating the other promising stories.

One that fit that criteria was Pretium Resources Inc. (PVG:TSX; PVG:NYSE). “Its all-in sustaining cost will actually be below $500/oz once it builds the mine in 2017. That will be one of the greatest mines in the world,” Lin said.

Another one that caught Lin’s eye was OceanaGold Corp. (OGC:TSX; OGC:ASX), which is buying Romarco Minerals Inc. (R:TSX). “This could be another low-cost producer with costs around $500/oz when the Haile mine gets developed in 2017,” he said. “You know those companies will survive. They both have good balance sheets. Development is almost fully funded. Those companies I feel comfortable holding, although I still warn my subscribers they have to prepare for the downside.”

Bhandari took advantage of the chance to make new friends and revisit old ones. “I was quite impressed with my meeting with Metals X Ltd. (MLX:ASX). CEO and Executive Director Peter Cook explained his investment philosophy to me in detail. This was not a usual sales pitch. He explained why he likes to focus mostly on Australia, and expressed his deep understanding of the culture there. He likes to start small, ensuring that the project has high profit on a percentage basis rather than on an absolute basis. While sacrificing some short-term profit, he prefers to minimize the risks. I left feeling that he thinks like a businessman, rather than like a bureaucrat or a mere professional manager. This was my first meeting with him and I might change my views on the company as I look deeper over the next few days.”

Two other companies that Bhandari has followed for a few years are Amara Mining Plc (AMA:LSE) and Caledonia Mining Corp. (CAL:TSX; CMCL:AIM; CALVF:OTCQX). “Both of these companies are in Africa. They seem to have managed their operations well. They have involved the locals in a win-win relationship,” Bhandari concluded.

Canaccord Genuity Senior Mining Analyst Joe Mazumdar found two names that he currently does not have under coverage that piqued his interest. “We are focused on lower risk producers generating cash flow in the current precious metal market and, as a result, we were positively disposed to the presentations by Silver Standard Resources Inc. (SSO:TSX; SSRI:NASDAQ/Not rated) and Mandalay Resources Corp. (MND:TSX/Not rated).”

Forward Looking Statements

Lin was heartened by the appearance of generalists at the conference who have started looking at the gold mining sector again. “Gold mining was the worst performer in the past four years. A lot of stocks went down 90–95%. Those generalists must think it’s time to rebalance, so they’re looking at the gold mining sector. When they pull the trigger is still an unknown, but it is good to see the interest is still out there,” he said.

Cook did not see the current situation as a marked bottom. “As I have stated a number of times in Exploration Insights, capitulation is coming one-by-one as investors and companies fall by the wayside as we trudge across this desert. I don’t expect a Capitulation Moment. One day we will look back and see things are very slightly better. We are closer, but I think there is a bit more pain to endure,” he warned.

Mazumdar was hoping for some more consolidation in the small-cap space of the sort seen by Oban Mining Corp. (OBM:TSX). “This would allow for a slower burn rate (lower G&A costs) to keep options alive on several long-term gold exploration and/or development plays. The combined liquidity and market cap would be more attractive for investors, as would the diversification in the asset base,” he said.

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DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Romarco Minerals Inc. and Pretium Resources Inc. Goldcorp Inc. is not affiliated with Streetwise Reports. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Chen Lin: I own, or my family owns, shares of the following companies mentioned in this interview: Stillwater Mining Co. and OceanaGold Corp. The following companies mentioned in this interview are advertisers on my website: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Jayant Bhandari: I own, or my family owns, shares of the following companies mentioned in this interview: None. The following companies mentioned in this interview are advertisers on my website: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
5) Joe Mazumdar: I own, or my family owns, shares of the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
6) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
7) The interview 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.
8) 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.

( Companies Mentioned: AMA:LSE,
CAL:TSX; CMCL:AIM; CALVF:OTCQX,
MND:TSX,
MLX:ASX,
OBM:TSX,
OGC:TSX; OGC:ASX,
PVG:TSX; PVG:NYSE,
R:TSX,
SSO:TSX; SSRI:NASDAQ,
SWC:NYSE,
)

These Six Gold Companies Could Create Exceptional Wealth Sooner Than You Think: Jeb Handwerger

jebcharrt1

The Gold Report: In your last interview with The Gold Report, you said that a Federal Reserve interest rate hike would be the best thing for gold. As we now know, the board decided to keep rates at almost zero. How does that impact your projections for precious metals?

Jeb Handwerger: It was almost a done deal that the Fed was going to raise interest rates in September, but then the Chinese market began to crash and just the threat of raising interest rates caused a price decline in the S&P 500, the likes of which we haven’t seen in a long time. It was a record drop, breaking a major four-year uptrend and forming a technical bearish pattern. The Fed announced on Sept. 17, when it was expected to raise interest rates for the first time since 2006, that it is uncertain about the economy, that the equity markets are too volatile, and that there are too many dangers of another recession. Now the Fed is doing whatever it can to prevent a recession.

The global stock markets are beginning to roll over, something I predicted in that same interview, due to fear of a rate increase before the end of 2015. The reality is we have a slowing global economy with the threat of higher interest rates, and that sparked a rally in the precious metals. The gold-Dow ratio is now beginning to turn in favor of precious metals, which are once again seen as a safe haven to preserve capital and protect against markets that are completely overinflated and experiencing record volatility. That is why I have always advocated for a diversified portfolio, including precious metals commodities and high-quality junior mining equities. I would not be surprised to see gold at $1,600/ounce ($1,600/oz) and the S&P500 at around 1,600 before the end of the first half of 2016.

The bottoming process for the juniors could be taking place now, after a seven-year decline. All of these factors make this a phenomenal time to find assets not correlated to the stock market, the bond market and the U.S. dollar. The best assets inversely correlated to those things are precious metals commodities and junior miners.

Now, the junior miners are even cheaper than they were in the late 1990s, when gold was below $275/oz. This could be a once-in-a-lifetime value proposition that may not last much longer. The safest havens during these periods of deleveraging are assets trading near their intrinsic values or at liquidation levels, which we’ve seen. Many of these miners are trading even below their cash values.

Integra Gold Corp. would be an attractive takeover target; it’s only a matter of time before a major wants to add this high-grade asset to its portfolio.

The U.S. stock market and the U.S. Treasury markets went straight up for more than four years, boosted artificially by record low rates. They could be due for a possible 30–50% decline. The recent decline was just about 10%. Any rally may be short-lived until the markets return to realistic levels. As soon as that uptrend in equities is broken, we will see a massive rotation into the inversely correlated sectors, which include precious metals commodities and the gold juniors.

TGR: You’re not the only one saying this. J.P. Morgan just called a bottom for gold. Are you watching the same indicators as the big investment banks?

JH: I’m not a fan of big-house reports. I usually look at them as a contrary indicator, but this could mean that the upturn has just become undeniable.

The key indicator I watch is the gold-Dow ratio. That is evidence that the trend may be changing. Investors need to look at the relationship between stocks and gold. When that ratio breaks down, it’s better to be in precious metals.

I also look at the cycles. The decline really began in 2007. This is one of the longer declines, even factoring the bounce after the credit crisis between 2009 and 2011. Over this seven-year period, a drastic reduction in mineral exploration and development due to capital chasing social media and biotech stocks has caused a major shortage of mineral supplies. The recent volatility and increase in the Chicago Board Options Exchange Index (VIX) will send investors back to the junior miners as a way to diversify out of overvalued stocks and bonds. That is why a portfolio of choice junior mining investments is more valuable than a statement might show today.

TGR: What kind of junior mining company can do well in this upward-turning environment you’re describing?

Pershing Gold Corp. is positioned for outperformance in the coming new bull market.

JH: I look for companies actively drilling. I don’t waste my time with companies that don’t really have a game plan for building fundamentals and creating value for shareholders. You have to know the management team, and it has to have clear, set goals with news flow and guidelines.

TGR: What are some top stocks you’re watching that fit those criteria?

JH: Integra Gold Corp. (ICG:TSX.V; ICGQF:OTCQX) recently announced a major $14 million ($14M) investment from Eldorado Gold Corp. (ELD:TSX; EGO:NYSE). Integra is getting impressive, high-grade results from its current drill program. It is getting validation from a major mining company and major investors during a bear market. That’s exciting.

TGR: Could Integra be a takeout target?

JH: The validation from Eldorado, plus the increased funds to advance this project and continue making discoveries, makes me think Integra would be an attractive takeover target. As this company develops, it’s only a matter of time before a major wants to add this high-grade asset to its portfolio to get rid of some of the crap causing problems to the bottom line. We’re already seeing a number of major mining companies doing that. They’re getting rid of their uneconomic projects in risky jurisdictions and they’re looking for lower capital expenditure, high-grade, extremely economic, robust projects like Integra and Pershing Gold Corp. (PGLC:NASDAQ).

TGR: What makes Pershing attractive to a major?

JH: Pershing is continuing to drill at a record pace. It has a huge, strong treasury. It is fast-tracking a great project that is continuing to build value in Nevada. This is an exciting time because this state has been ignored due to the strength of the dollar. Most investors like the Canadian assets because they can get better margins if their costs are in Canadian dollars and their sales are in U.S. dollars. People thought the dollar was going to go higher if the Fed raised interest rates. Now that the dollar is beginning to turn over, that might reignite interest in Nevada gold mining.

Pershing Gold has a fully permitted mine and mill at Relief Canyon. It is getting exceptional results with four drills currently on the property. It has a great shareholder base. The largest shareholder is the billionaire Dr. Phillip Frost. Pershing has a strong treasury, and has newly uplisted to the NASDAQ with a share rollback. It has a clean balance sheet and an excellent share structure. It is positioned for outperformance in the coming new bull market.

Red Eagle Mining Corp. is in construction of an extremely high-grade, underground and robust economic mine.

Another Nevada company, Corvus Gold Inc. (KOR:TSX), just received a $2M investment from Resource Capital Fund VI L.P. in a tough market. That tells you something about the credibility of exploration at the North Bullfrog project, located an hour’s drive from Las Vegas. Management came out with a preliminary economic assessment showing impressive numbers, but it’s trading at an all-time low. Corvus has Tocqueville Gold Fund, AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) and Van Eck Associates Corp. as major shareholders. That is a lot of institutional capital in this company, which is led by Jeff Pontius, who has decades and decades of exploration experience leading AngloGold Ashanti’s gold exploration team in North America.

Staying in Nevada, NuLegacy Gold Corporation (NUG:TSX.V; NULGF:OTCPK) has earned into the Iceberg project with Barrick Gold Corp. (ABX:TSX; ABX:NYSE). It is right next to Barrick’s Goldrush discovery. NuLegacy has hit some impressive holes over the past few months. Barrick will have to decide by the end of the year whether to take this forward or stay a minority partner. Barrick has had a lot of problems in other areas. Its best mines are in the Cortez Trend in Nevada, where NuLegacy is. I think the best move is to secure those assets before a midtier swoops down and picks up that position. That’s an exciting project that has seen some results in Nevada.

TGR: Is there another company that is well positioned?

JH: Red Eagle Mining Corp. (RD:TSX.V) owns the Santa Rosa deposit near Medellin; it is the first mine that’s been permitted in Colombia in over 20 years, a significant announcement. Red Eagle is in construction of an extremely high-grade, underground and robust economic mine that is coming into production over the next 12–18 months. That is an exciting project that should be on the radar of investors.

TGR: Is the market taking notice of that announcement?

JH: Red Eagle has outperformed the juniors. It’s still holding up there near its 52-week highs, but it hasn’t broken out. Nothing in the entire sector on the development side has been breaking out yet. But this is one to watch.

TGR: Can you leave us with one more name to put on our radar?

JH: Carlisle Goldfields Ltd. (CGJ:TSX; CGJCF:OTCQX) just announced an exciting discovery at the Lynn Lake gold camp in Manitoba. Carlisle is partnered with Alamos Gold Inc. (AGI:TSX) to develop a feasibility study. Alamos may consider Carlisle a takeout target, especially as the junior mining sector turns around. One of the things that I like about Carlisle is very few juniors have a major company like Alamos operating and funding exploration and development and drilling. It is kind of getting a ride on the development from Alamos, which took over AuRico Gold Inc. (AUQ:TSX; AUQ:NYSE). I expect to see more progress in the next few months.

TGR: Based on the macro-picture you have painted for us, how are you adjusting your portfolio for the rest of 2015? What is your strategy?

JH: I’m continuing to build positions in high-quality companies. I think now is an excellent time, especially when companies are offering three- to five-year warrants and financings. For accredited investors who haven’t yet had exposure to the junior mining sectors, that is an opportunity to diversify out of stocks and bonds and general equities.

We are already beginning to see the beginning of a bottoming process in the junior miners and a breakdown of the stocks. If you have a three- to five-year window, there could be an exceptional amount of wealth created.

TGR: Thank you for your time, Jeb.

Jeb Handwerger is an author, speaker and founder of Gold Stock Trades. He studied engineering and mathematics at University of Buffalo and earned a master’s degree at Nova Southeastern University. In 2014, Jeb was the first to highlight the top two performers of the Best OTCQX 50. Handwerger began investing in junior mining equities in the late 90s, avoiding the dot-com crash. In early 2009, at the depth of the credit crisis, Handwerger began the Gold Stock Trades website for investors to become more aware of exciting developments in the mining and natural resource sector. He has remained active in pursuing his professional career in TV, film and theater. He has performed in numerous award-winning Broadway/off-Broadway productions, several well recognized feature films and dozens of worldwide commercials. In addition to finance and acting, Handwerger is passionate about education, and taught business to lower socioeconomic students from seventh grade to adults in the Broward County Public School System.

Read what other experts are saying about:

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

DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Integra Gold Corp., Red Eagle Mining Corp., Pershing Gold Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Jeb Handwerger: I own, or my family owns, shares of the following companies mentioned in this interview: Integra Gold Corp., Red Eagle Mining Corp., Pershing Gold Corp., Carlisle Goldfields Ltd., NuLegacy Gold Corporation and Corvus Gold Inc. The following companies mentioned in this interview are advertisers on my website: Integra Gold Corp., Red Eagle Mining Corp., Pershing Gold Corp., Carlisle Goldfields Ltd., NuLegacy Gold Corporation and Corvus Gold Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview 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.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

( Companies Mentioned: CGJ:TSX; CGJCF:OTCQX,
KOR:TSX,
ICG:TSX.V; ICGQF:OTCQX,
NUG:TSX.V; NULGF:OTCPK,
PGLC:NASDAQ,
RD:TSX.V,
)

Sunridge Is Now Good to Go at Its Asmara VMS Project in Eritrea

Geotech Drilling at Debarwa

The Gold Report: Why did Sunridge Gold Corp. (SGC:TSX.V; SGCNF:OTCQX) choose to work in Eritrea?

Michael Hopley: We chose Eritrea because of the tremendous opportunity it presents. Members of our geological team had worked on Nevsun Resources Ltd.’s (NSU:TSX; NSU:NYSE.MKT) very large volcanogenic massive sulfide (VMS) Bisha deposit in western Eritrea. They were aware that there were several other large VMS deposits in Eritrea that had not been properly explored.

TGR: How big is your Asmara project?

MH: VMS occurrences appear in clusters, in districts that are tens of kilometers long and wide. Asmara is essentially a VMS district we’ve had to ourselves. We have so far defined six deposits all within a 30–45 minute drive from Eritrea’s capital, Asmara.

“Asmara is essentially a VMS district we’ve had to ourselves.”

The crown jewel and the center of gravity of the Asmara project is the Emba Derho deposit. This is a 70 million tonne (70 Mt) resource containing over 1 billion pounds (1 Blb) copper and 2.1 Blb zinc, 506,000 ounces gold and 19.5 million ounces silver.

There are two other small deposits within 7 kilometers of Emba Derho: Adi Nefas and Gupo Gold. Adi Nefas is a small deposit, just slightly less than 2 Mt, but it is very high grade: over 10% zinc and 1.8% copper. It also averages 3.3 grams per tonne (3.3 g/t) gold and 115 g/t silver. This would be the only underground mine at the project. Gupo Gold has an Indicated gold resource of 952,000 tonnes at 1.53 g/t and an Inferred resource of 1.8 Mt at 1.85 g/t.

Our fourth major deposit is Debarwa, 45 minutes to the south. It contains 3.3 Mt, with over 200 million pounds (200 Mlb) copper, 70 Mlb zinc and significant gold and silver. Debarwa is also significant because it hosts the DSO Zone—Direct Shipping Ore—which averages 16% copper with gold and silver.

Geotech Drilling at Debarwa. Photo courtesy of Sunridge Gold.

TGR: You have two pipeline projects as well, correct?

MH: Yes, these are Adi Rassi and Kodadu, which are not as advanced as the four in the feasibility study. Adi Rassi contains a 16 Mt resource at 0.5% copper and 0.3 g/t gold. Kodadu is a 1 Mt resource at 1.25 g/t gold and 1.6 g/t silver.

TGR: What is your experience in the mining business?

MH: I’m a geologist by training and have been in the business for more than four decades. I’ve been associated for the last 10–15 years with junior companies based in Vancouver, notably, Bema Gold Corp., Arizona Star Resources Corp. and Tournigan Energy Ltd. So I have extensive experience with running public companies, and I have been running Sunridge for 11 years.

TGR: Tell us about the qualities of your executive team.

MH: We have a lean, agile, multitasking team of which I’m quite proud. There are essentially four of us in Vancouver. Greg Davis, our vice president of business development, has been with us since 2007. He worked at Bisha for two years, so he understands Eritrea and VMS deposits. Scott Ansell, our vice president of project development, has been with us since 2009. He was a project manager at Bisha and was formerly director of engineering studies at Amac. David Daoud, our exploration manager and an expert on exploring VMS deposits, was part of the Bisha discovery team and joined us in 2005.

TGR: Asmara is owned 60% by Sunridge and 40% by the Eritrean National Mining Corp. (ENAMCO). How supportive a partner has the government of Eritrea been?

“We can now move forward to production next year.”

MH: We had lengthy negotiations regarding the structure of the joint venture company and what the government would pay for with its initial 30%. Now that we have agreed on terms and conditions, the government is very supportive and has delivered its promised money on time. It’s a good relationship.

TGR: Talk about the significance of your Sept. 11 agreement with the Eritrean Ministry of Energy and Mines.

MH: It’s hugely significant for us. Four very work intensive years of prefeasibility studies, feasibility studies, environmental impact studies and social engagement programs have culminated in this agreement, which permits Emba Derho, Adi Nefas, Gupo Gold and Debarwa. We can now move forward to production next year.

TGR: Asmara will be developed in phases. How will this work?

MH: Our feasibility study delineated a three-phase startup of Asmara. This is a rather excellent and unique way for a junior such as Sunridge to develop such a large project. Debarwa will be the catalyst. It has 116,000 tonnes DSO of 16% copper and 3 g/t gold just 20 meters beneath the surface. This DSO has the qualities that are highly coveted by smelters, and mining it will allow us to stage the startups for phases 1, 2 and 3.

TGR: So the earlier phases will pay for the later ones?

MH: To some degree. Phase 1A, the DSO, could pay for phase 1B, the gold heap-leaching operation at Debarwa. Whether we go ahead with phase 1B will depend on the gold price. In any event, 1A will generate $50–60 million ($50–60M), which will most likely be used to jumpstart phase 2, which has a capital expenditure (capex) of $200M+.

TGR: How much cash does Sunridge have?

MH: About $1.3M. That doesn’t sound like much, but we also have substantial credits from ENAMCO, our JV partner. Our expenses are small, and ENAMCO will fund the next $5.5M of the project. In addition, our partners owe us $13.3M, which we will begin receiving after phase 1 financing is finalized.

TGR: What about the capex for the rest of the Asmara project?

MH: Phase 2 and 3 capex combined will be ~$350M, and we will have various ways of financing that. We will have a cash component put away from phase 1, but phases 2 and 3 will be financed primarily through debt. Having phase 1 operating will make the financing of 2 and 3 that much easier and more tangible.

TGR: Are you considering offtakes?

MH: Everything is on the table. We are talking to various offtake companies and middle traders for phase 1. They have indicated a desire to be involved in phases 2 and 3 as well.

TGR: When will Asmara go into full production?

MH: Full production means phase 3, and that should begin in 2019. However, the first phase of DSO copper production is scheduled for late next year. Once full production is achieved, the project will average yearly production of 65 Mlb of copper and 184 Mlb of zinc, with 42,000 ounces of gold and 1 million ounces of silver.

TGR: How long is Asmara’s mine life?

MH: The feasibility study says 15 years, but as you know, once VMS mines go into production, they typically last twice as long as forecast. Particularly in the case of the Asmara project, which has significant exploration and expansion potential.

TGR: You called Asmara “a VMS district we’ve had to ourselves.” How prospective could it be?

“Eritrea has been a great place to work and operate.”

MH: It is hugely prospective, and with some more exploration dollars in the ground, I have no doubt we will find a lot more. You have only to look at Nevsun’s recent tremendous success in defining more ounces of gold and more pounds of copper and zinc. We understand the Eritrean geology and geophysics, and once we achieve production on the reserves we have already defined, we expect to resume exploration drilling.

TGR: What are your plans for Adi Rassi and Kodadu?

MH: They need more drilling. There are some very compelling targets on both, and expansion drilling when we resume exploration work.

TGR: Have Sunridge shares suffered from an “Eritrean discount”?

MH: Yes, the perception of Eritrea has been one of our major challenges. We feel it has been a great place to work and operate and Nevsun is a very good example of this, although Nevsun’s share price does not come close to reflecting the health of that company and the value of its deposit. In our case, we expect the discount to be reduced significantly when we begin production next year.

TGR: Would you describe Eritrea as a stable country and a good mining jurisdiction?

MH: Yes, it has been quite stable for the decade we have operated there. Many African countries have in recent years moved the goal posts and changed the rules of the mining game. Eritrea has not.

TGR: Nevsun has been the big Eritrean mining success. Could Sunridge be as successful?

MH: Yes, indeed. Our operation in full production is certainly on a similar scale to Bisha. However, our operations are much easier. We are a quarter of Bisha’s distance to the port facility for shipping the product, and we are not in remote Eritrea; we are near a major city, Asmara. This means our workforce is readily available and doesn’t have to live in mining camps.

Rotrainer Crane at MassawaRotainer Crane at Massawa. Photo courtesy of Sunridge Gold.

We have a major international airport essentially right on the project. We have roads, we have power, and we have water. The power is not sufficiently reliable for operations but is quite sufficient for the work we are doing now. We can stay at a really good hotel—a first-world hotel—get out of bed in the morning and go by taxi to any corner of our property within 30 minutes.

TGR: Since the Sept. 11 agreement was announced there’s been a significant uptick in Sunridge’s share price. Do you anticipate that continuing?

MH: Yes, I do. I think once people understand what we have in this mining agreement, things will only improve for our shareholders. We now are working to finalize the project capital for phase 1 through non-dilutive methods. We expect the market to view this as another major milestone for Sunridge Gold.

TGR: Michael, thank you for your time and your insights.

Michael Hopley is the president, CEO and a director of Sunridge Gold Corp. He has over 30 years of international experience as a geologist and exploration manager for resource companies in the precious metals and base-metal sectors with companies such as Gold Fields Mining, Bema Gold Corp. and Tournigan Energy Ltd. He was part of the team that discovered the large Refugio and Cerro Casale gold and gold/copper deposits in Chile. For the past 15 years, he has managed a number of publically traded junior resource companies and held a number of executive and board positions with companies conducting exploration in various parts of the world.

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DISCLOSURE:
1) Kevin Michael Grace conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.
2) Sunridge Gold is a sponsor of Streetwise Reports.
3) Michael Hopley had final approval of the content and is wholly responsible for the validity of the statements. Opinions expressed are the opinions of Michael Hopley and not of Streetwise Reports or its officers.
4) The interview 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.
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 until after it publishes.

( Companies Mentioned: SGC:TSX.V; SGCNF:OTCQX,
)

Two Signs We May Have Reached Capitulation from Common Stock Warrants Watcher Dudley Baker

The Gold Report: A lot has changed in the resource space since we interviewed you last. From your perspective in Mexico, how did we get to where we are today?

Dudley Baker: I stay abreast of the views of our friends—Rick Rule, Frank Holmes and many of the others in the business. Despite the toll low gold and silver prices have taken on companies and portfolios, I remain confident that those of us still invested in this sector will be greatly rewarded for our patience. It’s just a matter of time.

We are four years into this pullback right now, which means we have to be getting close to the end of this bottoming process. Two recent events stressed to me that we are near a bottom. One was the folding of our friends Casey Research into Stansberry & Associates Investment Research. Over the last decade Doug Casey has built an empire of services and expert newsletter writers. That he would join forces makes me think we must be near a bottom.

For a small company, Quaterra Resources Inc. has incredible upside potential.

A second one that hits even closer to home for me is that I recently received an email from my brokerage firm at market close on Friday that it was going out of business. This was a total shock. We have used Penn Trade for the last 10 years. The parent, Pennaluna & Company, is based in Coeur d’Alene, Idaho, and has been in business since 1926. Most of the firm’s client base included resource investors. That is a dramatic contrarian sign that maybe, just maybe, we are close to a bottom.

TGR: If that’s the capitulation that Rick Rule has talked about, what would the signs be that regular investors are starting to come back?

DB: Let’s face it. The average investor does not want to step in right now. For me, if I can find opportunities, I’m still going into this market. Is it premature? Perhaps. But I don’t want to miss all the upside coming. I’m afraid average investors are going to wait until we have one hell of a rally before they get their confidence back. It’s going to take something well north of $1,250 an ounce ($1,250/oz) gold before the generalist takes notice, and at that point there’s a high probability that it will be too late.

TGR: What if, as many have predicted, we end up with sub-$1,000/oz gold?

DB: It is always a possibility that we could go down from here. I do not want to see lower prices, but it could break down. If we break the previous low, $1,070/oz, there’s no support until we get to $1,000/oz gold. That could happen really quickly and the faster the better. Let’s get it over with. If we have to have a final cleansing, bring it on. Let’s not drag this thing out for months. Then we can get a fresh start on a new uptrend.

“I remain confident that those of us still invested in the gold and silver sector will be greatly rewarded for our patience.”

The more likely scenario is that we have already bottomed. Of course, no one knows for sure. That is why we have to make our own decisions and be prepared for whatever happens. It is scary to step into these markets right now, but this is the game you have to be playing today. You have to be a contrarian, even if that means being a little early.

TGR: During this bottoming process, where is it that you’re finding the best opportunities? What types of companies are best positioned to come back strongly?

DB: I have a whole basket of resource and non-resource companies in my portfolio. The challenge right now is timing. Who has good properties and the cash to survive this downturn? The ones that fit that description include New Gold Inc. (NGD:TSX; NGD:NYSE.MKT), Sandstorm Gold Ltd. (SSL:TSX; SAND:NYSE.MKT), Quaterra Resources Inc. (QTA:TSX.V; QTRRF:OTCQX), Starcore International Mines Ltd. (SAM:TSX) and Pilot Gold Inc. (PLG:TSX). These are companies that are going to weather this downturn and be great performers when the markets turn.

TGR: Quaterra recently announced that Freeport-McMoRan Copper & Gold Inc. (FCX:NYSE) is investing $7.1 million ($7.1M) over the next year that will be used to explore the Bear copper project in Yerington, Nevada. Is that an example of how some of these juniors are surviving by joint venturing with majors?

DB: I have followed Quaterra for over a decade and been in and out and made some really nice money. In 2006, the stock rose to over $4/share. The company has restructured to become more of a copper play and it is sitting with around $4M in cash, weathering the storm. It is headed up by Tom Patton, one of the legends in the business. For a small company, Quaterra has incredible upside potential. I’m always looking for a minimum 500–1,000% potential when I go into something. This could be one of those companies when the market starts heating up.

TGR: Are you looking for the same thing with Starcore International?

DB: Starcore is a small gold producer in Mexico. It is producing some 19,000 oz (19 Koz) gold equivalent per year and sitting on $5M in cash. This could be a sleeper now that it has purchased the Creston Moly assets in Mexico out of bankruptcy for $2M. Those assets were purchased for $195M just four years ago. Starcore management was savvy to pick that resource up for less than a penny on the dollar. When the market turns, Starcore is going to be an interesting little play.

“I’m afraid average investors are going to wait until we have one hell of a rally before they get their confidence back.”

TGR: Pilot Gold has been the exception to the rule and actually realized a share price increase when it released results on the Kinsley Mountain project in Nevada. We hardly ever see stocks go up on good news anymore. How did management accomplish that?

DB: The share price had been beaten down so badly to the low-CA$0.30s that it was due for a pop to the upside. This is also just another really interesting company. It has the Nevada property and a joint venture in Turkey with Teck Resources Ltd. (TCK:TSX; TCK:NYSE). Plus it’s sitting with around $12M of working capital. It is so important to me that we don’t wake up one morning and one of our companies disappears. Cash takes the worry out of the game.

TGR: Is New Gold well funded?

DB: New Gold has over $300M in cash in the bank. It has producing mines in Canada, the U.S. Australia and here in Mexico, plus a pipeline of development projects.

TGR: Sandstorm is a royalty streaming company. Is this a good time for the royalty companies to be investing, to be looking to the future?

DB: I would think so. Sandstorm just announced it is raising $150M+ to acquire new streams by financing junior mining companies. That will be something to watch.

With so many mining company share prices beaten down, if you’re not already in, you can step in at this price and build a really nice core portfolio of interesting companies that will help you sleep well at night.

TGR: If you were to pick one other company from the bargain basement we are now in, what would it be?

DB: Another interesting one that is definitely going to survive is Endeavour Mining Corp. (EDV:TSX; EVR:ASX). This company has been a favorite for quite a few years. It’s sitting in the mid-$0.50 range right now. It is a gold producer with four mines, all in West Africa. Currently, it is producing over 500 Koz of gold a year and it has $50M in cash. Just think, if gold goes up $100–200/oz or more, this is going to be a cash cow.

TGR: One way to take advantage of these opportunities is to buy stock. Another way is to buy stock warrants, and that is what your website is about. Can you explain the difference between those two?

DB: Once you’ve done your research and you know you like a company like New Gold or Sandstorm Gold, the next step is to see if the company has warrants trading. Common Stock Warrants is a complete database of all stock warrants trading in the U.S. and Canada for all industries and sectors. A lot of companies in the resource sector struggle to raise money in this environment. Many include stock warrants in transactions to make them more appealing. Management has to decide whether to make those available for trading. Every transaction that Sandstorm Gold has ever done has included trading stock warrants. The last Silver Wheaton Corp. (SLW:TSX; SLW:NYSE) warrant expired about a year ago, but for the last decade the company offered a long-term warrant that was really interesting. Today, we are focusing on the resource sector, but a lot of warrants are coming out in pharmaceuticals, biotechs, gaming companies and financial organizations as well. Several hundred companies now have stock warrants trading. And many of the biotech stocks have five-year windows. That is a wonderful opportunity.

“A warrant allows you to get in with less money, but in a rising market, you could end up making twice as much.”

Stock warrants are similar to options. They have an exercise price and an expiration date, both of which are very important. Both New Gold and Sandstorm warrants run around CA$0.20 as opposed to, say, $3 or for the common stock and they both expire in 2017. If the bottoming process takes another couple of years, you’re going to lose that $0.20. But that is better than buying a $3 stock that drops to $1. You’re going to lose less money with the stock warrants if you use proper money management. Each investor has to determine appropriate risk exposure. A warrant allows you to get in with less money, but in a rising market, you could end up making twice as much. What better time than now?

I’m always looking to make at least double what I could make by buying the common stock. If the common went up 100% in value, we’d like to think the stock warrant is going to go up 200%; that is 2:1 leverage. Otherwise, it’s not worth taking the risk to buy the warrants.

Another company that just announced a warrant is Dalradian Resources Inc. (DNA:TSX). This is a small exploration company with a gold project in Northern Ireland. One warrant already trading expires in 2017, but the company’s $35M offering could be an even better deal.

These are just a few examples of the opportunities that are available right now for those contrarians brave enough to act when the mainstream is holding back.

TGR: Thank for your time.

Dudley Baker worked for the IRS for 29 years, which gave him an extensive “numbers” background. He has 35 years of accumulated knowledge and experience in trading stocks, options, leaps, futures, options on futures and warrants. In March 2005 he founded and launched a new market data service, Precious Metals Warrants, which provided detail on mining and energy warrants trading on the U.S. and Canadian exchanges. The service was expanded in May 2013 to include all stock warrants trading in the U.S. and Canada and for all industries and sectors and the name changed to Common Stock Warrants.

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DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Silver Wheaton Corp., Quaterra Resources Inc. and Pilot Gold Inc. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Dudley Baker: I own, or my family owns, shares of the following companies mentioned in this interview: New Gold Inc. Wts, Sandstorm Gold Ltd. Wts, Quaterra Resources Inc., Starcore International Mines Ltd., Pilot Gold Inc. and Endeavour Mining Corp. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview 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.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

( Companies Mentioned: DNA:TSX,
EDV:TSX; EVR:ASX,
NGD:TSX; NGD:NYSE.MKT,
PLG:TSX,
QTA:TSX.V; QTRRF:OTCQX,
SSL:TSX; SAND:NYSE.MKT,
SAM:TSX,
)

Extra: Jeb Handwerger Predicts New Wave of Lithium and Graphite Winners in Wake of Tesla Deal

The Energy Report: The recent announcement that Tesla Motors Inc. (TSLA:NASDAQ) has signed an agreement to purchase lithium from Pure Energy Minerals Ltd. (PE:TSX.V) has created quite a bit of buzz in the mining world. How is this different than previous agreements with Bacanora Minerals Ltd. (BCN:TSX.V) and Rare Earth Minerals Plc (REM:LSE)?

Jeb Handwerger: The most significant difference is that this is in Nevada, where the Tesla gigafactory is being built. The battery and carmaker will need large quantities of lithium at a cheap price, and sourcing it in its backyard will be a smart move for the supply chain.

Years ago, I predicted the growth of the lithium-ion battery market and the need for a secure domestic supply of the critical materials used to make them. This is just the beginning. We’re in the early stages of a revolution in powering transportation and homes. This really is disruptive technology. Annual growth in the battery space could be around 20%, which means that demand could double every five years. These batteries make smartphones, laptops, tablets, electric cars and even solar energy practical.

While the TSX Venture Exchange has been crushed in 2015, our positions in junior lithium mining companies have continued to outperform in dramatic ways. The news out of Tesla to secure supply from Pure Energy Minerals is a huge validation for the concept of lithium in Nevada.

“Annual growth in the battery space could be around 20%, which means that demand could double every five years.”

In July, Pure Energy released an Inferred resource estimate of 816,000 metric tons of lithium carbonate equivalent on the Clayton Valley lithium brine project near Albemarle Corp.’s (ALB:NYSE) Silver Peak producing mine in Nevada. Now that Tesla has validated the project—and the investors that believed in the company—the company will be able to go to institutions and raise capital. There is still a lot more work to be done on the development, but Pure Energy is working with POSCO (PKX:NYSE) and Tenova Bateman to refine the plan. Like the gigafactory, production is probably two or three years out, and by that time, Pure Energy will probably have been bought out by a major like Albemarle. Once management comes out with a preliminary economic assessment (PEA) and shows the economics, this will be an irresistible takeout target. There is still a lot of upside there.

We believe this is the early innings of a great game in this lithium-ion battery market. This offtake agreement could affect the entire lithium space and, hopefully, spread to other junior mining companies.

TER: What other lithium mining companies do you think should be getting more attention in the wake of that deal?

JH: We’ve also followed the earlier-stage Dajin Resources Corp. (DJI:TSX.V; DJIFF:OTCPK), which has the Alkali Lake property and Teels Marsh property in Nevada. Both are earlier stage, but in the same area as Pure Energy. Dajin also has the Salinas Grandes in Argentina, but Argentina goes up and down. Nevada is always good. It is supportive of mining and a rule of law. That’s the ideal place if you’re looking to invest in mining.

A couple of years ago, I highlighted Western Lithium USA Corp. (WLC:TSX; WLCDF:OTCQX), which had a phenomenal run in 2014, even before Tesla chose Nevada. This company was No. 1 on the OTCQX in 2014. It has the Kings Valley deposit in northern Nevada, with a plan for production of 26,000 tonnes per year of lithium carbonate. Management raised $5 million ($5M) from major institutions and just merged with Lithium Americas Corp. (LAC:TSX; LHMAF:OTCQX) to create a significant lithium company.

TER: Lithium is just one of the ingredients in making a battery. Graphite is another. What does this deal mean for the graphite space? Are you anticipating more offtake agreements on the graphite side as well?

JH: I am. I think it’s very important to have a secure supply of graphite since the market continues to be flooded by the Chinese. It’s a critical mineral for lithium-ion batteries. Right now, the prices are extremely cheap because most of it is controlled by the Chinese, and the global economy has slowed down. But in the next three to five years, I expect more demand from the graphite sector in North America.

The key to success will be processing the graphite to meet the needs of the battery manufacturers. That is why I like Great Lakes Graphite Inc. (GLK:TSX.V; GLKIF:OTCPK; 8GL:FSE), which is developing a processing facility in Ontario at the Matheson project. It has secured the facility to process and to micronize graphite for specific industrial applications.

“In the next three to five years, I expect more demand from the graphite sector in North America.”

I also like Graphite One Resources Inc. (GPH:TSX.V), which has a massive deposit of large-flake, high-grade graphite in Alaska. The company is in the midst of a $1.5M financing that will enable it to quantify the economics of the processing operating costs, and take it closer to a PEA. It’s a potential secure supply of large-flake, high-grade graphite located in the U.S. that would be a natural fit for Tesla’s gigafactory.

TER: You also follow the uranium market. Are you more optimistic about prices now that Japan has announced it is restarting nuclear reactors?

JH: There will be a rebound in the uranium market, possibly within weeks. The reactor restarts in Japan will be a major turnaround for the sector. Japan was a possible seller of uranium over the past few years. It is going to become a buyer once again. China will soon announce major plans to fight pollution and build out its infrastructure, which will include building major nuclear power plants at a record pace. India is also committed to nuclear. The uranium sector must not be ignored.

There is going to be huge growth in the Athabasca Basin, which has been highlighted recently by the consolidation of Denison Mines Corp.’s (DML:TSX; DNN:NYSE.MKT) high-grade Wheeler River project on the east side of the basin with the massive Patterson Lake South (PLS) discovery controlled by Fission Uranium Corp. (FCU:TSX). That merger is going to create a new Denison, which is a potential blue chip company. Denison has been around for a long time, but now it can boast the lowest cost uranium projects in the world. When uranium prices turn around, Denison, which is trading now at pennies, could be trading at dollars and maybe tens of dollars.

TER: What juniors in the Athabasca could benefit from the scenario you describe?

JH: I’m watching the Fission 3.0 Corp. (FUU:TSX.V; FSIOF:OTC) group closely. This management team is developing a basket of exploration projects in the basin. One of the projects, Clearwater, is partnered with a company called Canex Energy (CVE:CSC), which is right next to PLS, and it has a drill hole only 330 meters away that Fission drilled. It seems that the anomaly goes right onto Canex’s Clearwater property. That’s one project that I’m excited about.

TER: You highlighted the increasing M&A activity in uranium surrounding Fission and Denison. What other activity is going on in the uranium space?

JH: The trend of the industry is to look for low-cost production that can make money even during periods of low uranium prices. I recently bought Uranium Resources Inc. (URRE:NASDAQ) as I like its recently announced merger with Anatolia Energy Corp. (AEK:ASX), a near-term, lower cost, in-situ recovery deposit in Turkey. There are huge cost savings and synergies between Uranium Resources and Anatolia, which could lead to improving fundamentals post-merger. Turkey has a long history of mining with many major Western producers in the metals industry. The country has eight nuclear plants under construction, and Anatolia’s Temrezli is the only advanced uranium asset with a prefeasibility study showing uranium cash costs around $30/pound, putting the asset in the lowest cost quartile. Uranium Resources’ largest shareholder, the Resource Capital Fund, recently announced its public support for the merger. The cost savings, personnel and synergies of the merger are too great to ignore. I believe the combined entity could fast-track low-cost uranium production, as it will be listed on both the U.S. and Australian exchanges, providing excellent visibility, liquidity and access to mine finance institutions.

“The lithium-ion battery could change how we produce and store energy, just as the shale revolution changed the trajectory of the oil sector.”

I also bought Plateau Uranium Inc. (PLU:TSX.V) after its recent share consolidation and name change. The company is working on an updated PEA on its large resource at the Macusani Plateau in mining-friendly Peru. With less than 41 million shares outstanding, I believe Plateau is in a position to possibly make impressive gains as the uranium mining market recovers.

TER: Where does oil fit into your risk assessment for the future of energy investing?

JH: This recent crash of oil from $100+ per barrel ($100+/bbl) to low-$40s/bbl in such a quick span has been a major crash. This crash may have been artificially manipulated to move lower by the shorts who want to take away market share from the U.S. and Canada. We haven’t invested in oil in years, but these crashes create huge opportunities for longer-term investors. Oil is not going to stay at these depressed levels. The Federal Reserve didn’t raise interest rates because it knows the global economy is in bad shape, and that could be a good thing for oil as governments around the world start injecting liquidity into the system.

TER: How are you approaching oil mining companies as an investment?

JH: I look for companies that have a strong shareholder base, lots of cash, no debt and are looking to get back into the oil business. They will be able to pick up assets for pennies on the dollar. Lithium in Nevada is big now, but a couple of years ago, these companies were trading for literally pennies. Right now, the Athabasca Basin stocks are trading at pennies, but two years from now, it’s going to be the buzz. That’s the way these markets work.

TER: Give me an example on the oil side of a company that could take advantage of this opportunity.

JH: One that I like because it has no debt and lots of cash and recently made acquisitions is a small company called Jericho Oil Corp. (JCO:TSX.V). I’m hoping that it can announce even more acquisitions, because as time goes on, these companies get more and more distressed. So if you have cash, you can buy these projects that other people put millions of dollars’ worth of work into. You don’t even have to drill. You just get it pretty much given to you for a song. The balance sheet and management team are worth watching.

TER: What words of wisdom do you have for those who are curious about the energy metals or the energy space?

JH: Don’t get caught up buying when it’s all over Twitter and USA Today, and it’s overbought. Look for things with good fundamentals that are trading for pennies, and then patiently wait.

There’s a huge amount of growth in whole new industries that people don’t even realize. At the turn of the century, no one thought the internal combustion engine would ever replace the horse and buggy. But it changed the entire 20th century. The lithium-ion battery could change how we produce and store energy, just as the shale revolution changed the trajectory of the oil sector. The Athabasca Basin could one day become the Saudi Arabia of the 21st century. You have to think about the megatrends first and then invest accordingly. And be patient. As commodity investors, realize that cycles take time to develop. Nevertheless, it’s better to be early.

Time is critical. It’s the most valuable commodity of all, so don’t waste it. Live every day to the maximum, because every day is a blessing.

TER: Thank you for your thoughts.

Jeb Handwerger is an author, speaker and founder of Gold Stock Trades. He studied engineering and mathematics at University of Buffalo and earned a Master’s degree at Nova Southeastern University. After teaching technical analysis to professionals in South Florida for over seven years, Handwerger began a daily newsletter, which grew to include thousands of readers from over 40 nations. In 2014, Handwerger highlighted the two top stocks on the Best OTCQX 50.

DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Fission Uranium Corp. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Jeb Handwerger: I own, or my family owns, shares of the following companies mentioned in this interview: Fission Uranium Corp., Great Lakes Graphite Inc., Graphite One Resources Inc., Western Lithium USA Corp., Fission 3.0 Corp., Canex Energy, Uranium Resources Inc., Plateau Uranium Inc., Energy Fuels Inc., Jericho Oil Corp., Denison Mines Corp., Dajin Resource Corp., Pure Energy Minerals Ltd. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company is paid by the following companies mentioned in this interview, as they are advertisers on my website: Great Lakes Graphite Inc., Graphite One Resources Inc., Fission 3.0 Corp., Jericho Oil Corp., Dajin Resources Corp., Pure Energy Minerals Ltd., Uranium Resources Inc., Plateau Uranium Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview 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.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

( Companies Mentioned: AEK:ASX,
DJI:TSX.V; DJIFF:OTCPK,
DML:TSX; DNN:NYSE.MKT,
FUU:TSX.V; FSIOF:OTC,
JCO:TSX.V,
PLU:TSX.V,
URRE:NASDAQ,
WLC:TSX; WLCDF:OTCQX,
)

Fallen Biotech Angels to Arise

Fallen Biotech Angels to Arise: John McCamant and Jay Silverman of the Medical Technology Stock Letter CBMG, NVAX, OGXI, MDCO, SGMO, ANTH Source: George S. Mack of The Life Sciences Report   (9/16/15) Editors Note: from Dudley Baker, this is a great write up on some of the biotech companies. At least one of the companies mentioned below has long-term stock warrants trading and should be on your radar screen, visit us at http://CommonStockWarrants.com to subscribe and get the complete listing of all stock warrants. It’s all about data for John McCamant and Jay Silverman of the Medical Technology Stock Letter, and right now it’s festival time as we approach the busy season of market-moving catalysts and milestones. From now until December, biotech investors will be focused on the press releases, webinars and scientific presentations that serve as a vitality tonic for the entire biotech industry. In this interview with The Life Sciences … Continue reading

Time to Invest in Gold? Consider These Four Factors First

by Sean Brodrick, Resource Strategist, The Oxford Club Thursday, September 17, 2015       The market expects gold to go lower as the Fed raises interest rates. That’s because gold pays no interest, unlike bonds. In fact, more than $2.6 billion was wiped from the value of gold exchange-traded products (ETPs) in just three weeks as investors awaited the Federal Reserve’s meeting. Ouch!And in all, since gold entered a bear market in April 2013, a whopping $54 billion in value has bled out of gold ETPs. Holdings in bullion products fell to 1,508.2 metric tons on August 11.That’s the lowest since 2009. As the saying goes, trying to catch a falling knife is a good way to end up with bloody fingers. But I don’t think that’s the case here. In spite of low prices and the threat of a looming interest rate hike, I’ll give you four good reasons why gold and … Continue reading

When Gold Escapes the Pork Belly Trap, Casey’s Louis James Wants to Own These Seven Companies

Chart 1

The Gold Report: You recently observed in your newsletter that gold has been acting more like a commodity, like pork bellies, than like a currency. That misclassification has discounted the value of precious metals, depressing the price. Why do you think that is?

Louis James: Commodities, as a group, tend to move together. We see it with copper and other industrial metals, and we see it in other commodities, including pork bellies. The commodities index is not just an average line. It actually is fairly representative of the sector as a whole. That matters right now because the trend for commodities is downward, plus the fundamentals are. . .scary. China’s slowdown is accelerating, for example. If gold were just another commodity used to make jewelry or fillings, it would be logical to lump it in with iron ore—and therefore be bearish. But it plays another role that is much more valuable. It is the currency of choice in an uncertain world.

The good news is that the perception seems to be changing. When China’s stock market tanked and the rest of the world hemorrhaged a month ago, gold prices jumped. Gold acted as a safe haven asset; it acted like money. It was where people went when they were scared. That was an important validation. That doesn’t mean everything is hunky dory now. But it is a reminder that with sufficient provocation, gold still does its job.

TGR: What are some of the things that cause the fear-o-meter to jump? Is it the Federal Reserve? Is it ISIS? Is it Russia? You mentioned the Chinese stock market. I know a lot of people think a presidential election is a scary thing. Are we going into a season of fear?

LJ: Financial fear trumps political fear when it comes to impacting precious metal prices. The China stock market crash was indicative of what we can expect in the future. Wall Street doesn’t really pay attention to what’s going on in Eastern Ukraine and President Putin’s macho posturing. Those sorts of events are important, and they certainly have financial consequences, but the markets react more to immediate stimuli. They tend to be pretty shortsighted about what is going to affect the bottom line this quarter.

TGR: The market seems hyper-focused on every twitch from the Federal Reserve and what it plans to do about interest rates. Brien Lundin recently said an interest rate increase is already priced in, and the actual event could be a good thing for gold because people can put that behind them. Do you agree with that?

Klondex Mines Ltd. is a high-grade gold story in Nevada.

LJ: The Fed may raise rates by some nominal amount, just so it has the option to lower them again later. Brien’s right that that’s largely been priced in, but the reality often comes as a shock to those who don’t believe it. Even a nominal change can have dramatic results. There are so many fragile points around the global economy today. Any jolt can cause follow-on crashes, collapses—all the volatility we have come to know and love since 2008.

I understand why some investors are largely in cash right now. I can’t blame them. But people going long things that do well in a crisis—like gold—are playing it smart. They should not panic: hold on. People who want to make new speculations need to be sure they know which way the Fed will go to go to place a bet. My general advice is to wait and see what happens. If you are absolutely convinced you know what the Fed is going to do, there might be some interesting options you can try, but don’t kid yourself about the nature of your gamble. For most investors, that’s just not wise.

TGR: If, as Rick Rule has said, we are getting close to capitulation and the metals prices will soon start to turn up again, what companies will benefit first—the majors, the junior producers, the explorers?

LJ: The majors are always the first line, the go-to money, when gold starts to shine. They are also, however, the least responsive. It takes a lot more to move a company with a $10 billion market cap 10% than one valued at $10 million, let alone double. But a highly prospective junior that has a rich discovery can easily move by that much just because of a turn in sentiment.

TGR: Is that true with both the explorers and the smaller producers?

LJ: The junior producers will benefit first along with the development stories. These are the people who have already made a discovery and are advancing toward production, or they’ve already gone into production and margins are high enough to endure the downturn. Those are the companies that will be best positioned when the market turns, the first magnets for new money coming back into the market.

“Gold is the currency of choice in an uncertain world.”

That said, if you really want to buy low and sell high, the maximum leverage you can get is if you invest before a discovery is made. To do that, you have to follow the competent prospect generators who have, can and will come up with the next discoveries. Those stocks will not be the first to respond to a market rebound, but for people who want absolute maximum gain, they offer the highest leverage with the best risk mitigation possible.

TGR: Is there a prospect generator that would be a good example of this strategy?

LJ: Renaissance Gold Inc. (REN:TSX) is Ron Parratt’s team. He’s been a multiple winner for us in the past. The company spun out of AuEx Ventures Inc. and has projects in Nevada and Utah.

I also like Almaden Minerals Ltd.’s (AMM:TSX; AAU:NYSE) spinout, Almadex Minerals Inc. (AMX:TSX.V). The original company has made a big discovery and now the same team is tasked with exploration on some 20 projects in Mexico, Nevada and Southern British Columbia.

Both of these teams are very strong. Both are stories that the market is yawning at right now, but if you believe in backing the jockey and not just the horse, these people deserve your attention.

TGR: What are some of the small producers with growth potential that fit that description?

LJ: One of my favorites is Klondex Mines Ltd. (KDX:TSX; KLNDF:OTCBB). It’s a high-grade gold story in Nevada. Klondex has actually been one of our best performers in the portfolio over the last year. It’s been up even while gold was down, because it is mining up to half an ounce per tonne. It is making money hand over fist, even at current prices. Obviously, that attracts a lot of attention.

TGR: Klondex recently announced that it discovered some new veins at the Fire Creek project, and it’s going to be doing a resource update. What are you looking for in that update?

LJ: I think it will get bigger, and I think it will get better. But the most important thing is that this is not just surface drilling on some prospect that may or may not be mineable at some point. This is underground exploration. These new discoveries are near existing underground development so they could be put into production quickly and easily. This is a company that already has a profitable, fully permitted plant in operation within trucking distance of these discoveries. That’s one reason why I think this story has done so well despite how poorly the market has done. You can see how close these high-grade discoveries are to hitting the bottom line.

TGR: Are there other companies with similar upside?

LJ: A similar story is Kirkland Lake Gold Inc. (KGI:TSX). It’s actually not so similar if you get into the technical details of the deposit, but it is a high-grade vein story. This one is in Ontario, Canada, another nice, mine-friendly jurisdiction. It is deep, and it’s more expensive mining than Klondex, but the company has many things going for it. Management has been retooled, and is cutting costs. Mining underground is going into increasingly higher-grade stopes. The company has growth already in its existing reserves, as well as lots of exploration potential. The great thing is that the mine plan works at current prices. Even if gold prices go down, Kirkland is mining into higher-grade ore, so the company could continue to do well—and it should do phenomenally well at higher gold prices.

TGR: Are there more companies with that kind of potential?

LJ: Two more are up-and-coming producers. One would be Guyana Goldfields Inc. (GUY:TSX) and the other is Rubicon Minerals Corp. (RBY:NYSE.MKT; RMX:TSX), which is in Red Lake. Both have just built world-class mines based on high-grade deposits. Rubicon’s is underground. Guyana Goldfields has an open-pit operation in Guyana. Both have poured their first gold.

“Financial fear trumps political fear when it comes to impacting precious metal prices.”

Guyana Goldfields has been doing better on the stock market. In fact, it’s gone up more than 300% since its low last year, a move that is common as a development story transitions into production. The market likes it when a company succeeds. Hats off to management and the whole team. I have high expectations. If it keeps going, I could easily see another double on that stock, even without higher gold prices. My only concern is political uncertainty. There have been troubles with the local government, nothing mining related, just internal political fighting. There’s also been some trouble with the psychotic regime in Venezuela, over the border. Anyone considering a company in Guyana needs to understand the political risk, but the project is doing great.

The next catalyst will be reporting how much money is going to the bottom line. It should be announced after the next quarter at the latest. If I were new to the story and the political situation remained calm, I would want to own that stock before it reports its first net income.

TGR: What is the story on Rubicon’s stock price?

LJ: Rubicon has reported some unexpected developments underground, which it is currently negotiating. The company has been taken out behind the woodshed and thoroughly thrashed over this. The share price is back where it was before it even started building its plant, and the plant is actually working better than expectations.

Of all the difficulties mining companies routinely face when they start up, problems with the plant are the most potentially fatal. It is really a very complicated chemistry set. You’re shoveling a bunch of dirt through it and if it doesn’t work right, it may never make money. Underground, if things are not quite as you expect, as long as they aren’t too bad, you can adapt your mine plan and usually get to where you were going. In fact, this happens to the biggest players in the field. Goldcorp Inc. (G:TSX; GG:NYSE) just announced that it has to revise its mine plan at Éléonore, one of the highest-profile, new underground gold mines in Canada. That’s a spare-no-expense, five-star mine, and it is still adjusting to the realities once it is in operation. Until we hear that Rubicon encountered a seriously fatal problem, I think it’s oversold and a real opportunity.

TGR: When gold prices increase, do you see silver prices following or leading?

LJ: They always vary together. They can, as you know, vary by larger or lesser amounts. Right now, it’s a relatively large amount. It’s not quite a record amount, but it is close. It’s about an 80:1 ratio last I looked. That’s pretty far from the recent norm of 50 to 60:1. That means it might move more quickly. If you push that elasticity, a rubber band wants to snap back.

TGR: That’s what Eric Sprott has told us.

LJ: He’s right, but never forget that silver, in addition to being a precious metal, is an industrial commodity. It is produced as a byproduct more than by pure silver mines. Actually, there are really no pure silver mines. Even silver primary mines are largely zinc or lead mines that have a lot of silver in them. The point is that silver production is largely determined by demand for other metals. Several mega-copper projects coming on line soon in places like Peru have very strong silver credits. So we could see supply exceeding demand on the industrial side and affecting the price, regardless of what gold does. Or it could go the other way, if Glencore International Plc (GLEN:LSE) and a lot of other companies do scale back operations. It is unpredictable short term. Long term, it has to come back.

TGR: Are there some silver companies you like?

LJ: My favorite right now in silver production is Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE). Fortuna’s main focus currently is the San Jose project in Mexico, where the credit is not lead or zinc, but gold. I like gold as a credit in my silver mine. Fortuna recently drilled off a new zone that’s even higher grade than what it’s mining now. Fortuna also has a cash cow called Caylloma in Peru that’s been mined on and off over 400 years. There’s some stability there, and there’s exploration potential in both camps. What I like most is this company is actually profitable at current prices, or lower.

TGR: You are going to be sharing more ideas at the Casey Research Summit in Arizona in October. What can attendees expect to take away from that conference?

LJ: This will be the first year we are putting on the conference as part of Stansberry & Associates family, so you know it will be a first-class experience for attendees. That means the speakers and the amenities will be top notch.

It’s also going to be the only opportunity I will have to answer questions directly from readers for the rest of this year. That’s because, for legal reasons, I am no longer able to correspond directly with them. But I can answer questions from the podium, so attendees will hear it all first-hand. This is also the one time a year investors can shake hands with Doug Casey, talk to him, ask him questions. He’s very easygoing and less restrained than I am.

This conference will cover a wide range of sectors, from metals, to energy, to technology, to water. On that last one, with El Niño gaining strength and all the environmental hype about water scarcity, this is a topical story. But there’s a lot of money to be made in all these sectors.

TGR: Thanks for your insights.

Louis James, Casey Research managing editor of the International Speculator, is fluent in English, Spanish and French. He has a background in physics, economics and technical writing, and travels the world, evaluating highly prospective geological targets and visiting explorers and producers at the far corners of the globe, getting to know their management teams.

Read what other experts are saying about:

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DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee. She owns, or her family owns, shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Guyana Goldfields Inc. and Klondex Mines Ltd. Goldcorp Inc. is not affiliated with Streetwise Reports. The companies mentioned in this interview were not involved in any aspect of the interview preparation or post-interview editing so the expert could speak independently about the sector. Streetwise Reports does not accept stock in exchange for its services.
3) Louis James: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: None. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I determined and had final say over which companies would be included in the interview based on my research, understanding of the sector and interview theme. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) Interviews are edited for clarity. Streetwise Reports does not make editorial comments or change experts’ statements without their consent.
5) The interview 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.
6) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

( Companies Mentioned: AMX:TSX.V,
FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE,
GUY:TSX,
KGI:TSX,
KDX:TSX; KLNDF:OTCBB,
REN:TSX,
RBY:NYSE.MKT; RMX:TSX,
)

No Fed Rate Hike Good for Gold, Bad Sign for Economy

Joe McAlinden, founder of McAlinden Research Partners and former chief global strategist with Morgan Stanley Investment Management, was disappointed that the Fed “blinked.” He called the decision irresponsible and attributed it to worries about China’s growth. The veteran investor saw the status quo as bullish for precious metals and oil, but warned, “As the Fed continues to postpone moving towards normalization of interest rates, the potential for future inflation from years of excessive stimulation increases with every delay of the end of the zero interest rate policy.”

He continued, “Based on today’s decision, we now need to watch economic data from China and the performance of the markets themselves. I do not believe that the Fed’s focus on those points is appropriate. Nonetheless, it is now clear that these will influence the timing of the next Fed move. Also, and more appropriately, we should be watching average hourly earnings, overall signs of strength or weakness in the U.S. economy, and the trend of the core PCE deflator.”

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

Frank Holmes, CEO and chief investment officer at U.S. Global Investors, called the decision combined with recent negative global Purchasing Managers Index (PMI) (51.10 for August compared to 52.7 in July) “a wash” for precious metals, oil and gas prices, as an increase would have increased the strength of the dollar compared with other currencies and accelerated an economic slowdown. He saw the inevitable decision coming, however, and used it as an opportunity to buy 2-year bonds in the lead up to the meeting. Shortly after the announcement, bond yields began to fall and prices went up. From the Precious Metals Summit in Beaver Creek where he was speaking about global trends, he blamed China’s blue skies, a smog clearing brought on by a lack of manufacturing output. “I anticipate a resurgence of exports as the renminbi becomes more competitive with the dollar,” he said. He will be watching the October and November PMI numbers for an increase in economic activity, which will be positive indicators for the love trade—gold as gifts and jewelry in China and India—and growth commodities—copper, oil and gas.

ShadowStats’ Publisher John Williams was expecting the Fed to raise interest rates, as he said in an interview with The Gold Report the first week of September, “to begin restoring some sense of normalcy in the monetary system.” The decision not to make even a token move up could be cause for concern, he warned. “Market concerns should shift now to looking at what circumstances really are scaring the Fed. The dynamics of intensifying shifts in global perceptions of U.S. economic activity and U.S. systemic stability rapidly should gain dominance over Fed policy in driving the U.S. currency and equity markets, irrespective of future Fed actions or lack of same,” he said in a note to subscribers moments after the announcement.

When asked for his reaction, John Mauldin, the man behind Mauldin Economics and author of “Bull’s Eye Investing: Targeting Real Returns in a Smoke and Mirrors Market,” quoted Peter Boockvar, managing director of The Lindsey Group, who lamented that because the Fed had punted again, we are all in for another six weeks of obsessing over when it will happen. “The Fed is implicitly acknowledging that its policy action over the past five years of putting the U.S. economy on a sustainable growth path has been a failure and now if their international concerns become more pronounced, they will also admit to the world that they have no tools to deal with it. I think today’s decision was a bad one. The dollar rally should be over and I’m bullish on precious metals (again), as I don’t understand at all what the bear case is in it anymore. Other commodities should benefit too from the weak dollar. Be cautious, the Fed did more damage to its credibility today.”

DISCLOSURE:
1) JT Long conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report and The Life Sciences Report, and provides services to Streetwise Reports as an employee.
2) The interview 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.
3) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Commodities Are Having A Good Day

Dudley Pierce Baker
September 16, 2015

VIVA MEXICO – This is Mexican Independence Day

Today we have commodities doing very well as we write:
Gold at 1120.50 up $18
Silver at 14.92 up .52
Crude at $47.05 up 2.46
Copper at 2.45 up .02

Perhaps it is time to get excited about finding opportunities?

We think so,

Visit our unique website: Common Stock Warrants
and explore the wealth of opportunities

Enjoy the day,

Dudley Pierce Baker
http://JuniorMiningNews.com
http://CommonStockWarrants.com