Gold Miners Will Become the Next Proxy for Gold Price

Gold Price Discovery of Post-QE Infinity: Gold Miners Will Become the Next Proxy for Gold Price

March 25, 2020
Interview with Peter Spina
http://GoldSeek.com
http://SilverSeek.com

“It’s a very unique time and period in history but it’s good to take some action right now and don’t wait. I don’t think this is a time to be waiting for everyone else to take action because when they do you see how supplies get raided very quickly and disappear.” – Peter Spina

Don't miss our in-depth interview with Peter Spina, President and CEO of Goldseek and Silverseek, ranked in the top, most visited gold and silver investor websites in the world. Hear his insights on today's global economy and the current state of the dollar and the precious metals market."

 

How the Global Financial System Could Shut Down, According To Jim Rickards


We are potentially entering an “Ice-9” situation where the entire world may “freeze” over economically, said Jim Rickards, best-selling author of “The Road to Ruin” and “Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos.”

Rickards is using a metaphor, alluding to a Kurt Vonnegut book, “Cat’s Cradle.” In the book, a vial of “Ice-9”, a liquid that has a freezing point of room temperature, leaks into the streams and rivers and turns all water into ice, effectively covering the planet in an ice age and wipes out all life.

Something similar may be underway, financially, when markets halt trading activity, he said.

“If you shut down the New York stock exchange, and I can’t sell stocks and get cash, I’m going to sell my money market funds or redeem my money market funds. Then you’ve got to shut down the money market funds industry, and then people say ‘ok, I’ll go to the banks or the ATMs,’” he said. “And then you’ve got to shut down the banks so the point is, it spreads from exchange to money markets, to brokerage accounts, to banks, and you end up shutting down the entire system.”

At the end of an Ice-9 scenario, the entire global financial system shuts down, and any Federal Reserve intervention may no longer be effective.

Rickards noted that contrary to conventional economic thinking, now is not a bad time to own gold.

“People say that gold does well in inflation, and you don’t want to have gold in deflation, and we may be looking at deflation, that may be coming, but the point I make is the greatest period of sustained deflation in U.S. history was 1927 to 1933 and in that period, gold went up 75%,” he said.

Gains in gold in today’s condition would be even higher, Rickard said, since gold was fixed in 1933, which is no longer the case today.

Additionally, Rickards said investors should store their gold “a bicycle ride” away so that in the worst case scenario, it would become accessible should people need to evacuate cities by bicycle, which would be more effective during a gridlock than cars.

Stop the Bailout Rip-Off – Kerry Lutz

 

by Kerry Lutz
Financial Survival Network

Dear Readers,

As usual, the American Taxpayer is getting the short end of the bail-out stick. Since we’re already running trillion-plus deficits, the taxpayer won’t be directly picking up the tab for the latest round of corporate welfare transfer payments. Rather currency holders, savers, bond holders and society will at the cost of seeing their assets debased by inflation. And for what? Flashback to 2008, when the nation’s banks and investment houses were caught flat-footed by the mortgage meltdown, a crisis of their own making. They were given trillions in cash with virtually no strings attached. Large portions of the bailout went towards these unworthy titans to finance bonuses.

The very same scam is happening yet again. This time the Congress intends buy middle class votes and acquiescence to this fraud by doling out $1200 or more per person. They’ve learned their lessons from the universal outrage at the 2008 financial crisis and resulting bailout. Wall Street got its rescue package and the middle class was left to twist in the breeze. Worst of all, none of the banksters ever had to account for their malfeasance. They kept their jobs and their escalating bonuses and the public be damned. Unfortunately for Congress, this pittance or crumbs as Nancy Pelosi would call it, is not nearly enough. We estimate that they will wind up giving at least $3500 each in an effort to buy us off.

Boeing, among many other companies and industries, is currently seeking $60 billion in loan guarantees and other benefits from Uncle Sam. If they had had sound management, they would be swimming in cash and wouldn’t require a bailout. Since 2012 Boeing has spent over $45 billion buying back its shares. Share buybacks benefit no one but management and its Wall Street lackeys. They squander company cash, increase interest expense when borrowed funds are used and weakens the company balance sheets. It artificially increases a company’s per share profitability, thereby helping management achieve earnings per share targets that trigger massive bonus payouts. In the case of IBM, this happened even though top line revenues cratered and net profit was in serious decline. For nearly a decade the country’s largest and most distinguished businesses have been engaging in this massive fraud.

Boeing was so busy buying back their shares that they forgot how to build quality reliable aircraft. Boeing’s major blunder came earlier in the decade, when it chose to upgrade the 1960’s vintage 737(MAX), instead of replacing it with a plastic or composite successor. The billions saved were then applied to share buybacks. All the while management was raking in overly generous compensation. Fired CEO Muilenberg, who was ultimately responsible for the 737MAX fiasco, received a golden parachute valued at $80.7 million, after earning $30 million in 2018 and $18.5 million in 2017. Let’s keep rewarding incompetence and self-dealing, what can possibly go wrong.

The airlines are clamoring for their piece of the bailout pie. Since 2012 they have squandered $43.7 billion buying their shares. This took place at the same time they were cramming more seats into their planes, nickel & diming the public with unfair fees, charging for food, dramatically increasing management’s already obscene pay and generally treating their customers like Covid 19 victims.

According to Wolff Richter from 2012 the S&P 500’s cumulative share buybacks topped $4.5 trillion. When I attended college (a very long time ago I confess), we were taught that a company’s surplus cash should first be reinvested in the company to improve its products and competitive position. Any remaining surplus could then be paid out in a special dividend. As a rule, a company’s shares would never be bought back, unless they were trading well below book value.

We can quibble over the extent of the bailout and the eventual payments to average Americans, but we can’t allow a 2008 repeat performance. Here’s a running list of strings that need to be attached to any company bailout, whether by the US Congress or the Federal Reserve. Please feel free to add to this list and pass it on to your corrupt congressman or senator and anyone else who you think might care.

The Taxpayer Bailout Bill of Rights

Any company receiving a government or Federal Reserve Bailout must agree the following:
1 – Immediate termination of top five members of management (who presumably got them into this mess;
2 – Perpetual prohibition on all stock buybacks;
3 – Permanent ban on all lobbying of Federal, State and Local governments;
4 – Termination of all golden parachutes to senior management;
5 – Withholding of management bonuses for 5 years;
6 – Prohibition on linking management compensation to stock price;
7 – Bonuses only allowed on increases in company profitability and free cash-flow, the way Warren Buffet does it;
8 – Cessation of all social welfare programs and benefits by company until loans are repaid;
9 – 50% claw back of past three years of management bonuses.
10 – No contribution or sponsorship of any political activities and a complete prohibition on payments to PACs.

We find ourselves in the current economic situation because our leaders have endorsed and benefitted from policies that not only accept, but encourage misbehavior by corporate management and Wall Street. While no one could have predicted the exact occurrence of the Coronavirus and the ensuing havoc it’s exacted upon the global financial system, the past decade saw red flags popping up all over the place. While many of us were out there like Paul Revere sounding the warning (see www.FinancialSurvivalNetwork.com) we were often laughed at and dismissed as doomers and financial Cassandras.

Now is the time to rethink our entire government, economic and legal systems, before the next meltdown, which may well be the final one. For nearly a century, we have been following a policy who’s end result is economic doom. If we don’t turn back soon, any semblance of our great country will surely be lost.

Regards,
Kerry Lutz

The Coronavirus Hoax

 

 

 

 

 

March 17, 2020
By Dr. Ron Paul

Governments love crises because when the people are fearful they are more willing to give up freedoms for promises that the government will take care of them. After 9/11, for example, Americans accepted the near-total destruction of their civil liberties in the PATRIOT Act’s hollow promises of security.

It is ironic to see the same Democrats who tried to impeach President Trump last month for abuse of power demanding that the Administration grab more power and authority in the name of fighting a virus that thus far has killed less than 100 Americans.

Declaring a pandemic emergency on Friday, President Trump now claims the power to quarantine individuals suspected of being infected by the virus and, as Politico writes, “stop and seize any plane, train or automobile to stymie the spread of contagious disease.” He can even call out the military to cordon off a US city or state.

State and local authoritarians love panic as well. The mayor of Champaign, Illinois, signed an executive order declaring the power to ban the sale of guns and alcohol and cut off gas, water, or electricity to any citizen. The governor of Ohio just essentially closed his entire state.

The chief fearmonger of the Trump Administration is without a doubt Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases at the National Institutes of Health. Fauci is all over the media, serving up outright falsehoods to stir up even more panic. He testified to Congress that the death rate for the coronavirus is ten times that of the seasonal flu, a claim without any scientific basis.

On Face the Nation, Fauci did his best to further damage an already tanking economy by stating, “Right now, personally, myself, I wouldn’t go to a restaurant.” He has pushed for closing the entire country down for 14 days.

Over what? A virus that has thus far killed just over 5,000 worldwide and less than 100 in the United States? By contrast, tuberculosis, an old disease not much discussed these days, killed nearly 1.6 million people in 2017. Where’s the panic over this?

If anything, what people like Fauci and the other fearmongers are demanding will likely make the disease worse. The martial law they dream about will leave people hunkered down inside their homes instead of going outdoors or to the beach where the sunshine and fresh air would help boost immunity. The panic produced by these fearmongers is likely helping spread the disease, as massive crowds rush into Walmart and Costco for that last roll of toilet paper.

The madness over the coronavirus is not limited to politicians and the medical community. The head of the neoconservative Atlantic Council wrote an editorial this week urging NATO to pass an Article 5 declaration of war against the COVID-19 virus! Are they going to send in tanks and drones to wipe out these microscopic enemies?

People should ask themselves whether this coronavirus “pandemic” could be a big hoax, with the actual danger of the disease massively exaggerated by those who seek to profit – financially or politically – from the ensuing panic.

That is not to say the disease is harmless. Without question people will die from coronavirus. Those in vulnerable categories should take precautions to limit their risk of exposure. But we have seen this movie before. Government over-hypes a threat as an excuse to grab more of our freedoms. When the “threat” is over, however, they never give us our freedoms back.

Dudley Comments On The Market Collapse

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

The last week to 10 days has been devasting for many investors and particularly those of us in the precious metals sector. Many would have believed that gold, silver and miners would have performed well but we have been subjected to massive selling and no one is happy, unless you have lots of cash.

Cash has been king and the selling of stocks, gold, silver, etc. has been a flight to safety and that has lead to the rise in the U.S. Dollar at the expense of virtually everything else with the exception of bonds.

I want to share with you my weekly audio which I send out to my paid subscribers on March 14, 2020. I share some personal stories as well as frank market comments and encourage you to listen and if not a current subsciber, consider a subscription to my services.

Dudley's Weekly Audio - March 14, 2020

Other Great Articles For Your Reading:
Frank Holmes - Should You Buy The Panic?
Sprott Money - Global Monetary And Fiscal Authorities Are About To Open The Floodgates Of Liquidity
Peter Schiff - Fed Stimulus Will Light 'Fire Under Hard Assets'
Rick Rule - Sprott Media - Gold Stocks Are Stocks; In A Panic, All Stocks Sell Off

We will all get through this turmoil, so make sound decisions and not panic out of quality positions is my advice.

Dudley

Newfoundland Gold Project Zone ‘Showcases District Scale Potential’

Source: Streetwise Reports 03/07/2020

New drill results from Marathon Gold are reviewed in a Haywood report.

In a March 2 research note, Haywood analyst Mick Carew reported that recent drilling at Marathon Gold Corp.’s (MOZ:TSX; MGDPF:OTCMKTS) Valentine gold project “continues to demonstrate the potential for another gold mineralized zone away from the four deposits that comprise the current resource.”

Carew explained that the new results are from the first eight holes of Marathon’s 2020 exploration program at the Central Newfoundland project. The holes specifically targeted quartz-tourmaline-pyrite-gold veining over a 200 meter (200m) long strike length, where they demonstrated the emergence of a potential new ‘Main zone’ sequence in mineralization in a new area the company has recently named the Berry zone,” he wrote.

The first eight holes were part of an overall 32,000m program of drilling in the 6 kilometer long Sprite corridor, situated between the Marathon and Leprechaun deposits.

Carew provided some highlight assays. Hole VL-20-799 is notable for its width of 55m, he noted, given most of the other widths were between 2m and 6m. This hole intersected 55m of 2.24 grams per ton (2.24 g/t) gold from a downhole depth of 113m, including 3m at 15.17 g/t gold, 3m at 10.96 g/t gold and 1m at 9.25 g/t gold.

Hole VL-20-801 intersected 8m at 3.92 g/t gold from a 146m downhole depth, including 2m at 9.63 g/t gold.

“The recent results are encouraging,” commented Carew.

However, more drilling is needed, he indicated, to assess the continuity of the mineralization encountered thus far and determine whether the grade at Sprite is as consistent as that of the Leprechaun and Marathon deposits.

Haywood has a Buy rating and a CA$2.50 per share target price on Marathon Gold, the stock of which is trading now at around CA$1.33 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Haywood Securities, Marathon Gold Corp., Radar Flash, March 2, 2020

Analyst Certification: I, Mick Carew, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

Of the companies included in the report the following Important Disclosures apply:
▪The Analyst(s) preparing this report (or a member of the Analysts’ households) have a financial interest in Marathon Gold Corp. (MOZ-T).

▪ Haywood Securities, Inc. has reviewed lead projects of Marathon Gold Corp. and a portion of the expenses for this travel have been reimbursed by the issuer.

▪ Haywood Securities, Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Marathon Gold Corp. in the last 12 months.

Other material conflict of interest of the research analyst of which the research analyst or Haywood Securities Inc. knows or has reason to know at the time of publication or at the time of public appearance: n/a.

Research policy is available here.

( Companies Mentioned: MOZ:TSX; MGDPF:OTCMKTS ,
)

Calibre Has Some Safety in the Storm

Source: Bob Moriarty for Streetwise Reports 03/01/2020

Bob Moriarty of 321gold discusses a company he sees as a safe haven amid economic chaos.

Last week provided a glimpse into the future of the stock market. Only a glimpse. It is going to get a whole lot worse.

On January 1, I said in an article I titled Beware the Stock Market, “As the Everything Bubble pops, the financial system will destroy most investors because they are unprepared.” Lest my readers misconstrue what I meant, I followed that up with another article on January 27 where I repeated, “Now would be a great time to be prepared for a disaster bigger than any in history.”

The two biggest measures of metals stocks would be the XAU and HUI. Both peaked on the 24th of February and began to tumble. I wrote another piece a couple of days later and said, “The Greatest Depression is going to have negative effects on everyone. No one will escape entirely no matter how well prepared you are.”

When the metals shares fell out of bed I got fifty emails essentially asking why I hadn’t warned my readers.

Sigh!!

One of the smartest people I follow thinks the stock market is going to drop by 50%. I like David Collum a lot but this time he’s dead wrong. Another very bright financial investor named John Hussman believes not only that the Fed is powerless, he says the stock market is going to collapse by 67%. Both predictions are interesting but basically absurd.

Those guys are way too optimistic.

The Dow topped on September 3rd, 1929, at 381.17 before starting to tumble. The decline continued until July 8, 1932, when the Dow measured at 41.22. That’s in excess of an 89% decline. On January 21st, 1980 silver touched $50.25 an ounce on the Comex. By early February of 1993 the price of the metal touched $3.53, a fall of 93% in thirteen years.

Do I believe the stock market will drop by 50% or 67%?

Yes.

On the way down to the bottom that will be far lower.

Readers should remember back to 2008 when gold was up $100 one day after being down $150 the day before. These are the most dangerous markets I have ever seen and most investors are going to screw it up by listening to the people who tell them what they want to hear.

I’ve written two books and hundreds of articles about what I see in progress. And I’ll say I get it right a lot more often than I get it wrong. If you haven’t spent the $12 or so each costs, you are being penny-wise and pound-foolish. Would you spend a few cents to make dollars?

They are great books filled with important advice. We are in totally uncharted waters. The Fed is clueless. Their chance of fixing the problem is zero; they caused the greatest bubble in world history. The Chinese just nuked the Everything Bubble and if you believe it’s because of the coronavirus, you are missing what is right in front of you.

In the best case, a bad flu season might last 4-6 months into the summer when they usually die off naturally. If we are exceptionally lucky, this virus will do the same. That’s a giant IF. While it continues, the Just in Time manufacturing just stopped for the 4-6 months minimum to get over the virus. Everything in China just stopped. We in the West are but a month behind China. Auto manufacturing is stopping. The cruise industry just died. Airline crews are refusing to fly. Shortages of medicines using 90% of their ingredients from China are happening already. The world’s economy is dying.

China is going to lose more people to starvation than to the virus and the world’s economy just came to a screeching halt. I don’t know how many other people than me see that so far. They will in another month or so.

There are some safe havens. Or relatively safe havens.

While so far the baby has been tossed out with the bathwater as margin clerks sharpened their quills, mining and resource stocks will lead the way out at the end of the carnage. The safest now and most resilient will be the producers.

I wrote of a young company that picked up two gold mines from B2 in November. That would be Calibre Mining Corp. (CXB:TSX.V; CXBMF:OTC.MKTS). Read what I wrote then. It was a brilliant move on the part of B2 to hand the mines over and it was brilliant of Calibre to pick them up.

But Calibre just announced another giant step forward. It’s no secret that the majors have been consuming their young and each year have less in reserve. And it’s not secret that they have stopped exploration almost entirely.

Well, Rio Tinto sees the potential in Nicaragua as well as in Calibre. On the 24th of February the two announced a partnership in the country to the benefit of both. Rio entered into a deal with Calibre where Rio will invest as much as $45 million to partner with Calibre in their Borosi gold project in the Northeast of Nicaragua. The venture will also include a strategic exploration alliance where the two companies will work together to identify and acquire concessions in the country.

I see this as the near term future for mining. Newmont is doing something similar with Irving in Japan. Barrick is partnering with Japan Gold as well.

The investing horizon is the most dangerous I have seen in my lifetime. Banks are at risk; the entire financial structure may well come tumbling down. Resources are a form of safe haven but investors must learn to buy cheap and sell dear. The prices of rhodium and palladium went supernova in the past month as gold open interest blew past all the records yet most investors refused to take profits while they could. I can write all the good advice in the world, if investors have no sense, they will have no cents.

Gold production stories offer safe haven and Calibre has both excellent management and projects. I bought shares in the private placement (the one with zero warrants) and they are an advertiser. Please take responsibility for your own investment decisions, it’s your money, after all.

Calibre Mining Corp.
CXB-T $0.83 (Feb 28, 2020)
CXBMF-OTCBB 310.3 million shares
Calibre Mining website.

Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.

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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Calibre Mining and Irving Resources. My company has a financial relationship with the following companies mentioned in this article: Calibre Mining and Irving Resources are advertisers on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Irving Resources and Newmont Goldcorp, companies mentioned in this article.

( Companies Mentioned: CXB:TSX.V; CXBMF:OTC.MKTS,
)

Texas Energy Company’s 2020 Exit Rate ‘Surprises to the Upside’

Source: Streetwise Reports 03/01/2020

Matador Resources’ Q4/19 performance and its 2020 guidance are reviewed in a Raymond James report.

In a Feb. 25 research note, Raymond James analyst John Freeman reported that Matador Resources Co. (MTDR:NYSE) ended 2019 with a beat on both volumes and EBITDA in Q4.

Freeman relayed that the Dallas-based company’s quarterly volumes exceeded the Street’s expectation by 7%, driven by shorter-than-expected shut-in times, improved well performance and accelerated turned in lines (TILs). Whereas the early TILs increased capex, 2% above consensus’ forecast, the outperformance in volumes more than made up for it. EBITDA in Q4/19 surpassed the Street’s forecast as well, by 12%.

Freeman reviewed expectations for Matador in 2020. The energy company intends to maintain, through the year, the six rigs it has working now in the Delaware Basin. It intends to complete 69 gross, or 58 net, operated wells and participate in a significant number of non-operated wells.

Matador’s guidance for 2020 production is 75,500 barrels of oil equivalent per day, higher than that of 2019 and 3% higher than the Street’s projection. Exit rate guidance is “massive,” 87,000 barrels of oil equivalent per day, 9% above consensus’ forecast, the analyst noted. These achievements should more than offset expected capex during the year of $815 million, which is 2% higher than consensus’ projection. “The extremely strong Q4/20 run rate (oil volumes up 22% over Q4/19) should set Matador up with strong momentum into 2021,” commented Freeman.

As for the spending gap, Freeman indicated that Matador intends to work toward narrowing it by achieving further efficiencies, divesting of additional non-core assets and monetizing mineral interests.

Raymond James has an Outperform rating but no target price on Matador Resources. Its stock is trading at around $9.64 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures from Raymond James, Matador Resources Company, February 25, 2020

ANALYST INFORMATION

Analysts Holdings and Compensation: Equity analysts and their staffs at Raymond James are compensated based on a salary and bonus system. Several factors enter into the bonus determination, including quality and performance of research product, the analyst’s success in rating stocks versus an industry index, and support effectiveness to trading and the retail and institutional sales forces. Other factors may include but are not limited to: overall ratings from internal (other than investment banking) or external parties and the general productivity and revenue generated in covered stocks.

The analyst John Freeman, primarily responsible for the preparation of this research report, attests to the following: (1) that the views and opinions rendered in this research report reflect his or her personal views about the subject companies or issuers and (2) that no part of the research analyst’s compensation was, is, or will be directly or indirectly related to the specific recommendations or views in this research report. In addition, said analyst(s) has not received compensation from any subject company in the last 12 months.

RAYMOND JAMES RELATIONSHIP DISCLOSURES
Certain affiliates of the RJ Group expect to receive or intend to seek compensation for investment banking services from all companies under research coverage within the next three months.

Raymond James & Associates, Inc. makes a market in the shares of Matador Resources Company.

Additional Risk and Disclosure information, as well as more information on the Raymond James rating system and suitability categories, is available here.

( Companies Mentioned: MTDR:NYSE,
)

All About Private Placements: Check Off the Boxes to Protect Your Investment

Source: Maurice Jackson for Streetwise Reports 03/01/2020

Proven and Probable’s Maurice Jackson and Sprott USA financial advisor Tekoa Da Silva discuss the common mistakes investors make in securing private placements.

Maurice Jackson: This is one interview in a special four-part series entitled All About Private Placements. Joining us for conversation is Tekoa Da Silva. He is an accomplished licensed financial advisor for Sprott USA, the preeminent name in the natural resource base. Full disclosure, the following is not a Sprott USA-endorsed product, and it is for educational purposes only.

Tekoa, what are the most common mistakes you see when people buy private placements?

Tekoa Da Silva: Boy, what a wonderful question. The first one that comes to mind is buying a private placement when an individual’s legally, technically, not qualified to be able to do so. What comes to mind is a young man that I spoke with once who was looking for someone to assist him with depositing his private placement securities. There is contract that you have to complete in order to buy the private placement. We discussed his net worth and I found that he was not an accredited investor. And I asked him how he was able to buy those securities not being an accredited investor, because the issuers, at least from a North American context—these natural resource mining share companies—in most instances [have] to verify in the subscription agreement there. The issuing company asks you to check off all the boxes indicating that you’re an accredited investor. And if you don’t check off those boxes, they don’t sell you these securities. They don’t sell you the private placement.

But somehow this young gentleman—he had these securities. So I thought that somewhere in the process, maybe the issuer made a mistake or maybe he made a mistake, but he somehow bought these things not being accredited. And my understanding was that he couldn’t find any broker—any specialist, a resource broker who could do your private placement deposits—who could help him. So he was trapped. His money was stuck inside the security because he was unaccredited.

So that’s the first mistake, I would say. Confirm with the issuer. Do we have to be accredited? And if they say yes and someone’s thinking, “Well, what proof needs to be provided indicating that I’m an accredited investor?”

Do you need bank statements? Do you need any proof? The issuer says, “No,” and the person may think, “Oh well,” maybe fudging the documents or something like that just to be able to buy it. Don’t do it. Don’t do it. Tell the truth, because you don’t want your capital to get stuck inside of security that can’t be liquidated. So always confirm and don’t make that mistake.

The next mistake that I would say is pretty common that a person could make is buying into a private placement, obtaining a. . .physical security, without first having a destination, a home with which to deposit the security. I came across a gentleman who is based in a country, a wonderful country that I’ve traveled in and visited; it’s a great place. But from a banking standpoint, there are some North American clearing firms or broker dealers that don’t want to do business with certain regions or residents in those regions.

And so this gentleman said, “Hey, I’ve got this private placement security, can you deposit it for me?” I said, “Well, I can’t; maybe another broker can.” Not because I don’t want to, but because the clearing firm doesn’t want to because that country is not within their grouping of accepted jurisdictions.

So you want to double check with the broker that you use. After you open the account, say, “Hey, I’m a resident of this country. Is there going to be any problem?” Double check this before you put your money up to buy the security. So that’s the second most common mistake that I’ve seen.

The next common mistake that I’ve seen [happens when] they really like a company, and they want to support it multiple times by private placement over the course of a couple of years. So let’s just say that they keep their shares. They don’t deposit them in a broker dealer account every time they do the private placement, but they just keep them at home in a safe deposit box or something like this. They do multiple product placements, and in each of the product placements, they buy the exact same share count.

So, let’s say you do three private placements in the company. Let’s say an individual bought their private placement there three times, and every time they bought 50,000 shares. That’s wonderful. They’ve got a great position of 150,000 shares and hopefully 150,000 warrants. But what happens is, if a person rushes then to go deposit all three of those private placements at the exact same time with their broker dealer, the administrative staff—they get these three deposits all matching of 50,000 shares. And what they need to do is they need to build a legal case for every single one of them. They have to find the proof of purchase, they have to have copies of the original subscription agreements. And if every single one of these has matching share accounts, the administrative staff cannot easily identify between all three of the private placements without reading out long numbers of saying something like yes, private placement number one, which is the security number XQZTY5000, and that’s having to communicate with each other all day long.

So I would suggest instead of doing three private placements for 50,000 shares each, do three private placements and number them this way: 50,100 shares, 50,200 shares, 50,300 shares, so the administrative staff can quickly identify amongst each. Because they’ll have three to four employees at each of the layers—each of the financial organization layers are going to be touching this thing and communicating with each other. If you number them that way, they can say, “Oh yeah, placement that’s marked number 150,100.” Boom. They can pull up all the old paperwork and help you faster, because the last thing you want is administrative staff in some part of the processing, saying “You know what, this is just. . .I’ve got to push this aside and do some other work right now.”

Maurice Jackson: Well, it also raises eyebrows, does it not? Because it could be there’s a question of, is this an illegal certificate I’m receiving, is this something counterfeit? And you referenced something else I don’t think we’ve covered so far. And that is you do have to have proof of purchase?

Tekoa Da Silva: Your broker dealer can walk you through the legal package that you need to assemble every time you deposit private placement, obtaining security. And just for reference, that’s going to be your subscription agreement. It’s going to be your proof of purchase and it’s going to be the access security itself along with anything else that they have, that they ask for.

Maurice Jackson: We’ve covered companies predominantly on the Toronto Stock Exchange that are public companies. Are we able to participate in private placements through companies that are pre-IPO?

Tekoa Da Silva: I would say that this is an extension of that question of what are some of the worst mistakes the person can make when participating in a private placement. . .still assuming natural resource exploration, development-stage companies, [and that is] participating in a private or pre-IPO entity and being a nonprofessional, or participating in a company in which you don’t have a high level of assurance from the issuer or from the broker that this company is actually going to go public someday. If a person is a busy professional, and they’re not working with real pros in terms of the issuer that they’re working with, like skilled entrepreneurs, where they’re good for their word. And then also, a broker dealer [is] the same way, where they know how to handle private and pre-IPO private placements.

If they don’t have those two things involved and someone solicits them with an opportunity like that, I would say be very careful. Because if they don’t go public, you may never get your capital out back from that security; it’s stranded on an island. And then also, it could take longer than expected.

One example comes to mind of a company that I observed in 2014 that said, “We’re going to be going IPO public sometime soon, when we get a little bit of recovery in the market.” That same company—now it’s five years later and they’re still private. And the person that participated in that private placement, along with others that I’ve seen, is still waiting. And then, in the meantime, anything could be going on with that company. Personnel could be coming and going, their financial situation could be deteriorating. And then the person who owns the stock certificate bought by the private placement could have changes going on in their own personal life.

The next common mistake that I see people make—this one is so huge—and that is, losing your supporting documents that you obtained when you did your private placement at the beginning. Your supporting documents [are] your [copies] of the executed subscription agreement—that 30- to 40-page document that you filled out. It’s going to have your signatures and information on here, and [it’s] going to have the company’s, the issuing company’s signature on there, too. You can’t lose that document. Because these days, if you lose that document, you may have a broker say, “Well, according to anti-money laundering laws, we can’t deposit this from you, because we don’t know that this came from a legitimate source.

And in the same thing, if a proof of purchase—if you can’t prove that you got a bank statement or a wire receipt, some other transference of money documented by a real bank—the broker dealer could say, “Well, we can’t document or we can’t prove to our compliance department that you didn’t pay for this private placement with a suitcase full of cash obtained from some strange circumstances.”

So. . .never lose your supporting documents. . .Keep a scanned copy in your records, keep a physical copy if you need to. And then if there’s a third party, such as your broker, you could e-mail them copies of all the information, and they’ll have archived email records. At least they should, which will keep a permanent copy in your records to see you don’t lose them.

Another common mistake here too is losing your security certificate or your stock certificate, your debenture, your warrant certificate. You want to try not to lose those things. It’s not the end of the world if you do, but guess what? Getting a new copy, it’s a hassle. It could take anywhere [up] to 10 weeks dealing with the issuer and with the transfer agent, getting that security reproduced. And it could cost you money. . .though the $600 is a good budget for third-party administrative fees.

But in the meantime, through that 4 to 10 week process, anything could be going on with the stock. It could be exploding, it could be collapsing, there could be all types of things going on, and you just don’t want to do that to yourself. So make sure to keep the certificate in a safe place. If you’re going to keep it in your possession, I would suggest having a pretty good system in place for possession of those, or immediately get them to your broker dealer. Because they’ll have a bolting system, or at least they should, with their clearing firm keep them really safe and secure.

The next common mistake that I see people make in private placements is buying in a registration name that is different from a brokerage account name that they may use after broker. Okay: What does the registration name? Registration name or registrant, that’s simply the name that gets printed on your security. So if you’ve got a security, Maurice, in let’s say Novo Resources Corp. (NVO:TSX.V; NSRPF:OTCQX), a private placement says Maurice Jackson, the registration name is Maurice Jackson. But if a different name is printed on that security. . .

Maurice Jackson: Let’s use Proven and Probable. . .

Tekoa Da Silva: Proven and Probable. . .that’s a different registrant. It’s legally a different party. So if we were to talk to a broker about it, with a brokerage account that matched your personal name or my personal name or the name of a business, they may say, “Whoa, we understand that you own both, but they’re not compatible with each other.”

So, in order for a person to deposit the private placement security that’s in your name or the business into the vice versa brokerage account they have, they may say, “Well, we could do it for you, but first you’re going to have to send that placement security back to the transfer agent and you get it reissued, get everything printed, and get the opposing name printed on the certificate.” And then someone says, “Okay, sure, it sounds nice and easy. How long is that going to take?” Four to six weeks. So two weeks sending it both directions. It’s four to six weeks, reprinting it and then another, potentially—who knows how long—two to four, six weeks of a deposit process that the brokerage account, the broker firm, may have redepositing that security again.

So be careful. Check with your broker first. What’s the exact legal name of my brokerage account? Does my private placement, my registration name for the private placement, need to match exactly and precisely? I just want to have this confirmed before I do it. That way you can avoid costly time errors that come in down the road.

Maurice Jackson: And another option would be—which is not one that people really want, because you don’t want open up a second account—but the other option may be then just open up a personal name account with that broker and a business name. And then you can toggle between the two, whichever is appropriate for the name on the actual share certificate.

Tekoa Da Silva: Yes, sir. That’s another route that a person could take. But I’ll tell you, in some crazy market conditions, and resource markets, they can oftentimes can be exploded, or they can be completely dead. But when you’re moving in a period of explosive market conditions, if you’re working with a small, specialist, resource firm, all their staff [is] inundated with paperwork, with phone calls, with just things going haywire. And you don’t want to be caught in a situation like that unprepared, with having a wrong account. So way in advance, doing what you just said, having an extra account already created if needed—I think it’s a very good idea.

Maurice Jackson: So timing and being prepared are the two components here that are intangible, [and] really you’re sharing words of wisdom, the experience you’ve been there. You’ve seen it; you’ve heard the profanity on the other end of the line, I’m sure. Do you have another example for us?

Tekoa Da Silva: Oftentimes the junior resource space companies are going through mergers and acquisitions, or need changes, or the share structure changes, where there may be a 10-for-1 rollback or a 100-for-1 rollback. And if you’ve got that share certificate in your possession—the name of the company and the number of shares or security, a quantity on a certificate—it can’t immediately be produced for you unless the company takes it on their own to send you a new certificate immediately in the mail.

So what happens is, the change happens but your certificate stays the same and your broker may say, “Oh well, you could send it in when it’s convenient for you, and we’ll just make that adjustment when it gets here.” But what happens if six months down the line, the company makes another change, another share structure adjustment, or another M&A, and then another and then another.

Maurice Jackson: These do happen. This is a realistic scenario that you’re providing here.

Tekoa Da Silva: Yeah. You know, we saw this happen with a very successful company and successful management team. I think it was Equinox Gold in its early years; I believe it was Trek Mining, and then JDL Gold. So they had multiple changes down the road. And I, just off the top of my head, can’t recall if they had share structure changes along the way, too.

What I’m saying is when you see that name change or the share structure change, get that security deposited and update it as fast as you possibly can. Because if it’s two, three and four changes down the road, the administrative staff, the legal review department, what they’re going to do is they’re going to say, “You know what, in order for us to verify all this, it may take a month or longer.” So they may just say, “Hey, we’ll get it done when we get it done.” And it could just be a much more time-consuming process than it otherwise could be the case if you immediately moved when you saw that change happen.

Maurice Jackson: And if I can interject here, but then you miss out on what could potentially be an arbitrage opportunity. And they’re not long, but you have to be prepared, and that’s something we’re emphasizing here. It’s timing and being prepared and having a plan.

Tekoa Da Silva: Another common mistake that I see made during private placements is if a person is of the opinion that at some time in the future they may be passing on their securities to their heirs, that that time has come, and they own physical certificates of companies. I think that could be a smart idea, in consultation with their managers, to consider getting those securities deposited and put in a digital format in the individual’s name or in the name of a trust or whatever entity is in question. Because if a person passes away and the securities are still in that person’s name that passed away, you have a period of time where that can be so fairly quickly handled and I think one wants to move quickly in that circumstance.

Because what happens if one doesn’t move quickly? Well, you may have an M&A, you may have a restructuring change, you may have another change with any structure of errors, or another manager coming in to manage the estate, or simply time passes. I saw circumstance where a person had securities decades old and the various people that I talked to in that circumstance, simply had no idea how to assist that individual. And various industry people that I spoke to with circumstances like that say, “Well, you may have had people out there who own securities from the ’30s, the ’40s, the ’50s. And what happens is, you have to research the ownership chain, all the entities that came and went throughout that process, in order to recover that money.

And if you don’t have a person or a group that’s willing to go through the legal history review, the capital could be permanently lost. . .I see is if you have a change in the living parties, or the heirs share certificates. If you see that’s coming, immediately get them deposited, put into a digital format, maybe convert them into cash or something like that so you can conveniently pass along those assets to the heirs so that you can avoid them being permanently lost.

Maurice Jackson: These are wonderful gems that you’re sharing with us. I should say, golden nuggets of wisdom, because it really makes a difference for someone if they’re not aware in thinking the entire process out.

And you have to respect the process because it is a process. The market doesn’t move when we want it to move. And when I say the market, it’s not just the prices of shares, but it’s also behind the scenes. What we’re discussing here in this format is the process to take it from that certificate format to direct registration to street name. It is a process and if you don’t respect the process, you will get stressed out. You will be upset, and if you understand what’s coming before you, you can be better prepared. And that’s exactly what we’re trying to do here.

And again, this is not legal advice. This is not financial advice. This is simply an education format that we want to provide to you regarding the value proposition of private placements. Did you have another one for us, sir?

Tekoa Da Silva: No worries. Those I would say pretty much cover the most common mistakes that I’ve seen in regards to private placements.

Maurice Jackson: Well, Tekoa, we’ve covered a lot of material here. What are your closing thoughts or words of wisdom that you’d like to share with anyone regarding private placements?

Tekoa Da Silva: Well, I’d think about it very carefully before doing it. I think understanding that the process of participation is probably a one- to three-year commitment. Going about thinking of trying it out for one to three months to see if it fits may not be too helpful. Within the one- to three-year period, one really needs to find the right people to work with. Find the best sources of information for the pipeline of opportunities, the best people to work with in terms of depositing the securities and handling the cash—people who are competent at that and who can also help you vet those deals that you may find on their own.

Those individuals, from an administrative standpoint, can really help you, step-by-step guide you through the process, to help protect you from losing your money. I think that’s what I would say. Definitely [don’t] not be shy about mapping out the entire process and talking to all those parties, talking to multiple sources within those different groups, so that you can have the whole thing [thought] out, even if you decide not to do it. I think that’s probably the best advice that I would suggest.

Maurice Jackson: Ladies and gentlemen, this concludes our series All About Private Placements. If you wish to have a conversation with Mr. Da Silva, e-mail tdasilva@sprottglobal.com. If you want to find out which private placements have our attention at Proven and Probable, simply visit www.provenandprobable.com. Place your correspondence in the subscribe box and let us know that you are accredited. Subscription is free and we do not share your correspondence with third parties.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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