Despite Downturn, Silver Market Looks Positive

Technical analyst Clive Maund charts the recent downturn in silver, but also sees reason to be optimistic about the market going forward. Silver has reacted back as predicted in the last update about a month ago. On its 9-month chart, above, we can see that it broke down from an intermediate top, as expected, back toward the important support shown. But on Friday it had a good rally, which suggests that it may not drop that far, and could turn up again here. Overall this is a positive-looking chart and the main question is which uptrend channel it adheres to. As we can see, there has been a significant price/time correction since early July that has served to completely unwind the earlier overbought condition, so Friday’s turnaround could mark the beginning of the next up-leg. Even if it should head lower again soon, it is thought unlikely that it will … Continue reading

Three Large Miners That Are Still Inexpensive

Money manager Adrian Day profiles three large miners in his portfolio that have had success solving problems yet are still inexpensive. Goldcorp Inc. (G:TSX; GG:NYSE 16.02) has had a tough year. After reporting a year-end loss of $4.1 billion due to writing off and down various projects—a supposed clearing of the decks for the new CEO David Garofalo—the recent results were not so positive. Production was down year-on-year, due to shortfalls and problems at its two largest mines, Peñasquito and Cerro Negro. There are some positives, however. Éléonore, which had had some early production setbacks, improved performance. And the pipeline remains strong, with numerous studies expected over the next 12 months; Goldcorp recently acquired Kaminak and its high-grade Coffee project. The company is forecasting flat production for the next three years, so the hurdle it has set itself is not so high, and we are likely to see the company … Continue reading

What to Consider as Gold Correction Continues

With a correction in progress, technical analyst Jack Chan charts the indices precious metals investors should be watching. GLD is on sell signal. SLV is on sell signal. GDX is on sell signal. XGD.TO is on sell signal. CEF is on sell signal. USD is on buy signal. Summary Long term: on a major buy signal. Short term: on sell signals. Gold sector cycle is down. Investors should consider accumulating gold stocks/ETFs at the next cycle bottom as a correction is in progress. Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the … Continue reading

Pullback in Precious Metals Stocks Offers Opportunities

Adrian Day provides an overview of recent developments at three resource companies on his list. The recent pullback in precious metals stocks has provided opportunities to add to positions, and there is one buy. Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) continues to be a mixed bag. Operations are on track at most mines, other than Chapada; despite the Chapada shortfall, the company says it remains on track to meet its production guidance around 1.3 million ounces. The company is taking steps to reduce its debt, selling a small mine, Mercedes. It is also looking at selling part of its Aqua Rica mine. Exploration, particularly around existing mines, has been promising, while its Argentinean properties could see some advance, given the change in government. If Yamana can deliver, the stock could see a rerating, since on many metrics it is undervalued relative to its peer group. But there always seems some … Continue reading

Rye Patch Jump-Starts Florida Canyon Mine Production with New Heap Leach Facility

Construction has begin on a new heap leach facility at Rye Patch Gold Corp.’s Florida Canyon Mine in Nevada, a move that Dundee Capital Markets’ analyst Ron Stewart believes could add value for investors over both the long and short terms. Rye Patch Gold Corp. (RPM:TSX.V; RPMGF:OTCQX) announced the construction start in an Aug. 29 press release. Since completing the Florida Canyon mine purchase on July 29, the company states it has “crushed the under-liner material for the South Heap Leach facility; prepared the primary crusher for the move from the Standard Gold mine located 6 kilometres to the south to its new home adjacent to the South Heap Leach facility; completed maintenance on the mining fleet; and is now breaking ground for the ponds and pad of the South Heap Leach facility.” “We believe RPM offers a compelling value creation opportunity over the next 6 to 12 months as … Continue reading

Millennial Lithium Becomes Major Player in Argentina’s ‘Lithium Triangle’

Caesars Report editor Thibaut Lepouttre profiles Millennial Lithium, a company that just reinvented itself by acquiring a project in Argentina’s ‘Lithium Triangle.’ Lepouttre explains why he believes Millennial may be poised to take off. Last week, Millennial Lithium Corp. (ML:TSX.V) started its first trading day after a true metamorphosis that changed the company from being an empty shell—when it was still called Redhill Resources—to one of the more promising lithium juniors out there. Millennial Lithium originally acquired a lithium project in Nevada, but boosted its plans to become a major player in the lithium space by acquiring the Pastos Grandes project in Argentina. Located just over 150 kilometers from Salta at an altitude of 3,800 meters, this salar has been explored by a previous operator (a joint venture of two French conglomerates), but these companies decided to pursue another salar, and this land package became available. The company acted quickly … Continue reading

Redstar: High-Grade Gold in Alaska

On the back of one of the biggest rallies in resource history, many junior resource shares are up hundreds of percent. Bob Moriarty of 321 Gold profiles Redstar Gold, a company he believes is still cheap in this bull market. Finding diamonds in the rough isn’t difficult. What is difficult is finding diamonds in the rough that are not fully priced if not overpriced given this stage of a new bull market in gold and silver. What is still cheap in this new bull market? Redstar Gold Corp. (RGC:TSX.V) hit a high of $0.68 in the late summer of 2011 just as gold was about to peak. With financing out of the question, the company pretty much went into hibernation as the share price dropped to a low of $0.025 in December of 2015 as gold bottomed. The action since then pretty much shows the potential of penny dreadfuls as … Continue reading

Few Buys in Global Markets After Rallies

Money manager Adrian Day provides an update of his non-resource holdings and his interpretation of the Federal Reserve’s activities. All of the Business Development Companies have moved up strongly in recent months from their grossly oversold year-end levels, in line with many other “dividend” plays, such as utilities. In general, we are holding, given the still-high yields and improvements at the companies, but not buying given the strong recent stock movement as well as yields that are coming down to historical norms. Dividends still in high single digits American Capital Ltd. (ACAS:NASDAQ) continues to report strong operations, with operating income up and strong originations. The company also continues to repurchase shares, about 11.5 million in the latest quarter. With the rally in the share price, the discount to the purchase offer from Ares has narrowed; we now call ACAS a “hold.” Ares Capital Corp. (ARCC:NASDAQ) continues to deploy capital, as … Continue reading

Hot Chili’s Hot Chilean Gold and Copper Prospects

Exploration at Hot Chili Ltd.’s Productora copper project, located in Chile, has uncovered a gold resource at Sierra Zapallo, prompting analyst Trent Barnett of Hartleys to upgrade the company to a Speculative Buy. Though Hot Chili Ltd.’s (HCH:ASX) Productora is a copper project—Hot Chili lists resources at the site at more than 1 million tonnes copper—exploration at Sierra Zapallo has “revealed very attractive dimensions and grades demonstrating the potential for significant open pit resource” at the site, the company announced on Aug. 24. This is based on “a systematic surface mapping and sampling programme across thirteen high grade gold reefs exposed at surface within the historical Sierra Zapallo gold project,” according to the company. The upgrade by Hartleys is based in part on the Sierra Zapallo gold prospect, according to Barnett. “If HCH can define a small high grade gold deposit, it would materially change the investment proposition from being … Continue reading

Late-August Calm a Breeding Ground for Bullion Bank Shenanigans

Precious metals specialist discusses the recent correction in the gold market and the moves by bullion banks behind them. I have been writing these missives since mid-1986 when I was able to hide under the cloth of “client service” rather than “investment research” because the management of brokerage firms will NEVER allow their names to show on any piece of research that isn’t BOUGHT and PAID FOR by the issuer being covered. To wit, if I had done two and one-half weeks of study on the balance sheet of Russell Metals (a 1978-era steel fabricator) and delivered a scorchingly accurate analysis of the severity of its balance sheet erosion, the management of my firm would thank me for my good work, buy me seven draughts and a Broiled Pork Hock at the Nag’s Head Tavern for lunch and then give me the day off with a few Borden’s in my … Continue reading