Copper May Be Entering a Golden Moment

Source: McAlinden Research for Streetwise Reports   07/23/2020

McAlinden Research examines the investment opportunity afforded by copper in the evolving pandemic and post-pandemic economy.

The coronavirus has disrupted copper mines and delayed new builds, throttling current and future supply. Meanwhile, demand is bouncing back as the world's biggest consumers of copper reboot their economies. Stimulus packages being unleashed across the world also promise to transform the long-term outlook, particularly with spending on copper-intensive green energy infrastructure.

Related Exchange-Traded Funds (ETFs): iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC); Global X Copper Miners ETF (COPX)

Copper has been on a roll in recent months. Today, the commodity is trading at a price of $2.87 per pound in the spot market, marking a 36% increase from March 22, when copper's price plunged to a five-year low of $2.10 due to a collapse in demand. In the securities market, the copper ETF (JJC) has gained 39% since stocks bottomed on March 23, while the copper miners ETF (COPX) has actually doubled.

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Following these impressive gains, we are right back to where we were at the start of the year. Copper's spot price is just 2% higher than on January 1, 2020, while JJC is up 3% and COPX is down 3%. In comparison, the S&P 500 is flat year-to-date. When looking at performance over a two-year horizon, the copper ETFs still lag the broad market. Over the past two years, JJC returned has +4%, COPX has returned -15%, while SPY returned +15%.

The big question now is whether further outperformance is possible after copper's recent gains. The answer is yes, based on three factors.

I. Post-Pandemic Recovery of the Global Economy

Industrial production is on the rise globally, as businesses resume their operations. [The July 15] data release from the Fed showed that U.S. industrial output surged 5.4% in June, the most since December 1959, beating market expectations. Factory production jumped 7.2%, and even more so in the beleaguered auto industry, where production of cars and auto parts surged 105%. Though U.S. capacity utilization increased 3.5 percentage points to 68.6% in June, that rate is below its long-run (1972–2019) average 80.1% and below January's level of 76.9%, so there's plenty of room for production expansion. The June ISM Manufacturing PMI index also suggests that factory output will rebound further.

A similar comeback in industrial production is taking place in China, and in the European Union. China's industrial production rose by 4.8% from a year earlier in June 2020, marking the third back-to-back month of expansion and the largest increase in six months, as factory activity picked up.

This is all positive for copper demand, as those three markets—China, the EU and the U.S.—account for 80% of the world's annual copper consumption.

II. Global Transition to Low Carbon Economy

From a longer-term perspective, copper stands to be a big beneficiary as the world transitions to a low-carbon economy. That's because renewable systems use about five times more copper than conventional energy systems. Electric vehicles (EVs) also require 2-4 times more copper than internal combustion engine vehicles. EV sales and the switch to renewables are only set to grow as many countries, especially in Europe, place the green recovery at the center of their stimulus packages.

Accordingly, copper should experience huge demand in coming years given its potentially expanding role in a green economy. The metal is considered a critical component in practically all green tech, from electric vehicles to wind- and solar-power technology.

III. The Supply Picture

On the supply side, analysts are projecting shortages in the future due to a dearth of investments in new mines. More recently, the pandemic's rapid spread across Latin America and worker strikes have led to supply disruptions in key producing nations like Chile. That's likely to result in lower production this year.

With output from some mines limited and demand picking back up, global copper stockpiles have been dropping since March. Inventories of copper in warehouses monitored by the Shanghai Futures Exchange stood at 137,336 tonnes on Friday, which is 64% lower than the peak of 380,000 tonnes reached around March 13. In LME-registered warehouses, copper inventories have fallen to 197,850 tonnes, down about 28% since March 13.

The Bottom Line

As an industrial metal with a wide variety of applications—from manufacturing to electronics and construction—copper is considered a cyclical commodity whose price fluctuates in tandem with economic cycles, rising when the economy grows and falling when the economy slows. As the world's biggest economies go into recovery mode, and given its potentially expanding role in an increasingly green global economy, copper's medium-term and long-term outlook appears increasingly positive.

As such, investing in copper now can perform triple duty in an investor's portfolio. It can serve as a bet on the 2020/2021 global economic recovery, a play on the secular shift from fossil fuels to renewables and a potential hedge for inflation, since copper typically rises when inflation is accelerating.

How to Gain Exposure

Investors can gain exposure to copper's rise through ETFs that track the metal's price in the futures market or by investing in copper producers, since the latter stand to benefit from higher prices.

The Global X Copper Miners ETF (COPX) invests in a diversified basket of about 30 copper miners. Meanwhile, the iPath Series B Bloomberg Copper Subindex Total Return ETN (JJC) and the United States Copper Index Fund (CPER) offer exposure to fluctuations in the price of the physical commodity by investing in copper futures contracts. While JJC is structured as an exchange-traded note, CPER is structured as a commodity pool.

 McAlinden Research Partners McAlinden Research Partners (MRP) provides independent investment strategy research to investors worldwide. The firm's mission is to identify alpha-generating investment themes early in their unfolding and bring them to its clients' attention. MRP's research process reflects founder Joe McAlinden's 50 years of experience on Wall Street. The methodologies he developed as chief investment officer of Morgan Stanley Investment Management, where he oversaw more than $400 billion in assets, provide the foundation for the strategy research MRP now brings to hedge funds, pension funds, sovereign wealth funds and other asset managers around the globe.

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2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until 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.

McAlinden Research Partners:
This report has been prepared solely for informational purposes and is not an offer to buy/sell/endorse or a solicitation of an offer to buy/sell/endorse Interests or any other security or instrument or to participate in any trading or investment strategy. No representation or warranty (express or implied) is made or can be given with respect to the sequence, accuracy, completeness, or timeliness of the information in this Report. Unless otherwise noted, all information is sourced from public data.

McAlinden Research Partners is a division of Catalpa Capital Advisors, LLC (CCA), a Registered Investment Advisor. References to specific securities, asset classes and financial markets discussed herein are for illustrative purposes only and should not be interpreted as recommendations to purchase or sell such securities. CCA, MRP, employees and direct affiliates of the firm may or may not own any of the securities mentioned in the report at the time of publication.

In Honor of Silver’s Epochal Breakout

Source: Clive Maund for Streetwise Reports   07/23/2020

Technical analyst Clive Maund charts the start of the "biggest silver bull market in history."

The purpose of this update is to celebrate and mark silver's powerful breakout from a giant base pattern that started to form as far back as 2013–2014, a breakout which has only happened during the past few days, July 21 and July 22, with Wednesday's advance finally seeing it break clear above the resistance at the upper limits of the base pattern. While this doesn't mean it can't drop back again, it makes it less likely, and even if it does, it is likely to soon turn up again.

Quite clearly, when you are only two days into a bull market that is starting after the completion of a six-year-long base pattern, the probabilities are very high that it has much further to go, both in respect to time and magnitude of advance.

Wednesday's breakout may very well have been triggered by the bellicose actions of the U.S. with respect to China in closing its embassy, or whatever it is, in Houston, which is a continuation of an increasingly hostile attitude to China, based on the U.S. attempt to tear down what it views as its main rival for global dominance.

Now, with its economy getting ever closer to imploding completely, the U.S. is looking to direct the mounting anger and frustration of its population toward a manufactured external enemy, which is what politicians always seek to do when their backs are against the wall.

Wednesday's action was another step on the road to a major war, which is a normal consequence of economic depression. In addition to that, we had the ludicrous and laughable assertion that Russia has been trying to hack coronavirus research secrets, which is just another irrelevant distraction.

Regardless of what actually triggered the breakout, it was a valid and powerful breakout, as we can see on the charts set out below.

silver13year220720

Not surprisingly, the effect of silver's breakout on all things silver was electrifying, with a good example being shown below, Kootenay Silver Inc. (KTN:TSX.V), which is a silver stock we went for back in May because its charts looked so strong, and which is already up 50%.

With the prospect of hyperinflation in the not too distant future due to relentless and increasingly desperate and extreme money-printing by central banks, the prospects for silver and silver investments have never been brighter as one thing we can look forward to is the biggest silver bull market in history by far.

This is a very good juncture at which to watch Mike Maloney's interesting and insightful new video on silver entitled Silver Soars–Where to Next?

Originally published on CliveMaund.com on July 22, 2020.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

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Disclosure:
1) Clive Maund: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. CliveMaund.com disclosures below. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
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) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their 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.

Charts provided by the author.

CliveMaund.com Disclosure:
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.

( Companies Mentioned: KTN:TSX.V, )

Short Updates on Benchmark, TriStar Gold, Precipitate Gold and Lion One

Source: Bob Moriarty for Streetwise Reports   07/23/2020

With gold and silver "climbing to the moon," Bob Moriarty of 321gold discusses four juniors.

My readers may be shocked to hear that I have been exceptionally busy lately, as the metals seem to be climbing to the moon. Naturally the stories I follow are trying to make hay while the sun shines so I am forced into ganging some of those stories together else I will never catch up. There are probably 1,500 juniors in Canada all clamoring for attention and I can only type so fast.

These are all companies I have written about in the past and if you want to reread what I have said, go to my archives page and do a search for their name.

Benchmark Metals Inc. (BNCH:TSX.V; CYRTF:OTCQB) is in the midst of a 50,000-meter drill program at their Lawyer's gold/silver project in the Golden Horseshoe district in Northern BC. To date they have completed 10,500 meters of drilling this year. Results will start to come out in the next couple of weeks. They have added a third core rig to make a total of five drill rigs working. Expect a lot more gold and silver.

TriStar Gold Inc. (TSG:TSX.V) just closed a $9.2 million bought deal financing about two weeks ago. That will fund the exploration portion for their prefeasibility study scheduled for release early next year. Meanwhile they will begin a major drill program shortly.

Investors are going to have to read between the lines for the meaning of the latest press release from Precipitate Gold Corp. (PRG:TSX.V; PREIF:OTCBB) but I will give you a big hint. This is exactly what you want to see if you want to find another Pueblo Viejo gold deposit. With a $25 million market cap, PRG is a giant sleeper. Naturally the truth detector will be the drill rig but the company is coming up with the ground survey results that you want to see in a big deposit. Pueblo Viejo is the largest gold mine in the Americas and the 8th largest in the world. All shares in juniors are lottery tickets but the Precipitate lotto has a giant potential payoff.

Like Benchmark and TriStar, the market understands the potential and is willing to pay up for Lion One Metals Ltd. (LIO:TSX.V; LOMLF:OTCQX) with a market cap of about $220 million today. But Lion One owns a whole alkaline gold system in a region where such deposits are measuring 10-20 million ounces. Their latest report on drilling from the company just out a couple of days ago suggests they have found the feeder structure they have been looking for. Drilling is continuing and assays are pending.

I own shares in all of these companies and have participated in prior private placements. All are advertisers so I am biased. Do your own due diligence.

Benchmark Metals Inc.
BNCH-V $0.76 (Jul 23, 2020)
CYRTF-OTCBB 118.5 million shares
Benchmark Metals website

TriStar Gold Corp.
TSG-V $0.38 (Jul 23, 2020)
TSGZF-OTCBB 182 million shares
TriStar Gold website

Precipitate Gold Corp.
PRG-V $0.255 (Jul 23, 2020)
PREIF-OTCBB 105.7 million shares
Precipitate Gold website

Lion One Metals
LIO-V $1.88 (Jul 23, 2020)
LOMLF OTCQX 117.5 million shares
Lion One website

Bob Moriarty
President: 321gold
Archives
321gold

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: Benchmark Metals, TriStar Gold, Precipitate Gold and Lion One. Benchmark Metals, TriStar Gold, Precipitate Gold and Lion One 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: Lion One. 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.

( Companies Mentioned: BNCH:TSX.V; CYRTF:OTCQB, LIO:TSX.V; LOMLF:OTCQX, PRG:TSX.V; PREIF:OTCBB, TSG:TSX.V, )

Stocks Disconnect from Economy, Gold Responds

Source: Adrian Day for Streetwise Reports   07/21/2020

Given the current uncertainties and recent market moves, money manager Adrian Day offers some thoughts on the macroeconomic environment.

Global stock markets zooming ahead amid historic unemployment and economic contraction is surreal. Half of the U.S. has been locked down, with economies virtually shut, a second virus wave appears underway and yet the stock market is almost back to February's all-time highs.

And this is not only in the U.S.; stock markets have rallied strongly around the world. We know that central bank money creation is the primary cause, but this dichotomy cannot continue indefinitely, at least without a meaningful correction. Meanwhile, gold—for sounder reasons than stocks—has outperformed and, notwithstanding anticipated volatility, will, we think, continue to do so.

The economic outlook is uncertain

The keyword for the economic outlook is uncertainty. The economy cannot resume the level of January after months of closures, not in anything like the near term. Some sectors will do well, but others will be very slow to recover—office space, for example, or malls. Many small businesses, such as restaurants, will try to do the job with fewer people.

Real unemployment is probably higher than the headline numbers suggest, as furloughed workers are counted as "employed." And it will get worse as restrictions from layoffs in the government payroll protection loans end. There's uncertainty about a second wave of the virus and potentially resumed restrictions on businesses. Already, over half of the U.S. population is seeing announced reopenings on hold or reversed.

There is as much uncertainty on the supply side of the equation as the demand. Both will shrink, which is why I do not think we shall see deep and sustained deflation as much as a shrinking economy, with the possibility of inflation later.

Fed policy will destroy the capitalist economy and more

One cannot discuss the economic outlook without discussing the Federal Reserve and other central banks. The dramatic decline in short-term interest rates; the huge explosion in the Fed's balance sheet, moving from $3.8 trillion to $7.1 trillion over the past year; and the moves by the Fed in rapid succession to buying investment-grade bond funds, then junk bond funds, then individual bonds, raise the question of what comes next. Are negative rates ahead on the next downturn? Where does QE (quantitative easing) Infinity take us? And is the Fed going to start buying equities next? And then we shall start to see selective "debt jubilees," with the government forcing different lenders to forgive certain types of debt.

The Federal Reserve is buying bonds of companies such as Coca Cola, Apple and Berkshire Hathaway. Why does the government need to lower Warren Buffett's cost of capital? And they are buying bonds of some foreign companies, including Daimler. Why? This unprecedented—and illegal, by the way—move by an arm of the government into the private financial markets is not receiving sufficient attention, in my view. It is the beginning of a very slippery and dangerous slope indeed.

More and more credit needed to sustain the boom

As with the drug addict who needs ongoing and increased injections to keep the high going, so too with a market dependent on easy money. The longer this continues the more devastating will be the consequences. Fed apologists will say the epidemic was unforeseen and they had to respond. But the truth is that the Fed was already boosting credit recklessly when Corona was just a Mexican beer. From September to February, Fed credit was growing at the fastest rate ever. We would have reached the current state eventually. When thinking of the Fed, one is put in mind of nothing as much as the saying, "When you are a hammer, everything looks like a nail."

Each Fed easing, never cut back in the good times, leads to the next crisis. The housing bubble was fueled by the easy money of the early 2000s, just as surely as the easy money policy following the credit crisis—and the failure to pull back after the recovery—led to the bubble in bonds and equities that greeted the start of the year. It was a bubble in search of a pin, and had the virus not come to these shores, there surely would have been another crisis and the Fed would surely have reacted similarly.

And if the Fed was unable (or unwilling) to return to normal after the dot-com bust, and despite pledges as early as 2014 to "return to normal," pitifully unable to do anything like that after QE1, 2 and 3, how can we possibly think they will do so after QE Infinity, and after buying bond funds and junk bonds, without causing massive distortions if they tried?

MMT fuels unrest and leads to chaos

All of this has dramatic effects not only on the economy and investments, but on society itself. It will lead to reduced economic activity and eventual inflation; further erosion of the value of the dollar and destruction of savings; a further explosion in debt. More and more the economy will be dependent on government spending, and individuals on government transfers. Monetary policy will distort prices, and therefore distort asset allocation, lead to excess risk taking and further debt. It increases government power, and with it the tendency to abuse that power, and reduces individual freedoms.

And it will, as it has in the decade after the credit crisis, further exacerbate the wealth gap, leaving behind a growing underclass and destroying the middle class, leading to protest, radicalized politics and social unrest. "Modern Monetary Theory"—not modern, not purely monetary, and not much of a theory—which is now firmly ensconced as government and Fed policy, leads ultimately to social division, violence and chaos. In extreme cases, it ends in war—either a war of aggression, or (by so weakening a society) by invasion, or (by so dividing a society) by civil war. Extreme debasement of the currency always, and everywhere throughout history, has done so, from the last Roman emperors, to the Jin Dynasty, the Stuart Kings and the aftermath of the Weimar Republic.

Reduced economic activity everywhere

The U.S. is not alone. Around the world, economies have experienced reduced economic activity on the different restrictive measures introduced. East Asia generally has fared better than the rest of the world. In Europe, the impact of the virus has varied widely among countries; Europe has the weakest banking sector of any major region while the single-currency Eurozone reduces flexibility. In Latin America, where different countries have their own problems, the virus has been particularly virulent.

In most countries, governments have responded with aggressive monetary and fiscal stimulus. Programs differ, but everywhere governments have introduced measures that are extreme by that country's standards.

Why are stocks ignoring the economic damage?

The market (per S&P) had the fastest 30% drop in history, followed by the strongest 50-day move ever, back very close to all-time highs. The dichotomy between a contracting economy—with high unemployment and business closings—and the zooming stock markets around the world is stark. The reasons are clear:

  • With interest rates so low around the world, traditional places to put money for safety and income, such as bank CDs and bonds, do not look attractive; stocks benefit.

  • Some are looking ahead and see a recovering economy. They think the worst is behind us. Stocks are forward looking.

  • And most importantly, when central banks create excess liquidity (by definition, liquidity in excess of the requirements of the economy) that money must go somewhere; there is excess liquidity beyond the wildest dreams of Greenspan and Bernanke. It has gone largely into equities.

Arguing against higher stock prices are two simple related issues. We will see weak economic news for the second quarter, and the economy, particularly employment, may not recover to where it was at the start of the year any time soon.

And stock market valuations are high. They were already high in February, but, despite reduced analysts' expectations, the U.S. market (per S&P) is selling at 26 times forward earnings. That would be a high number in the strongest of economies, but now, with sharp declines likely to be reported in coming weeks, with sluggishness for the next several months and with a great deal of uncertainty, that number is extreme.

The market decline we saw in March, though rapid, is mild compared with declines in periods of economic contraction in the past. And even at the March lows, the market was by no means cheap. It is possible that central bank liquidity trumps all other considerations. That may be true over the medium term. But it is almost inconceivable to think that the decline we saw in mid-March is all we are going to experience.

We agree with Mohamed El-Erian, astute chief economist for Allianz, who says, referring to central bank money printing, "I don't feel comfortable investing on that basis."

Near-term volatility expected

The truth is that the market has been very dependent on Fed stimulus for years now, both expecting and demanding it. Each attempt, however timid, at tightening has been met by a market hissy fit and more stimulus. In the near term, second-quarter corporate earnings season, coming soon to a theater near you, could produce some shocks and provoke a sell-off in stocks. At minimum, we expect individual stocks to be hit hard, and we anticipate volatility over this period.

And further out, we would not be surprised to see further, more protracted declines to new lows, perhaps after a year or more. This is not an unusual pattern after very sharp short-term rallies, as experienced most notably following the 1929 crash.

Resources have been hurt by shutdowns

Not surprisingly, most resources took it on the chin from the contraction in economic activity following the lockdowns and restrictions. Oil was the most hard hit, as demand was slashed amid a glut in production. Copper, "the metal with a PhD in economics," has not been as weak as one might have thought looking only at the economy. Prices did drop to their lowest level in three years, but for the year to date are down only 3%. The main reason has been the significant supply interruptions, particularly from Chile.

Gold, however, is a different story. Completing a seventh consecutive quarterly gain, concluding with the best quarter in four years, gold is above $1,800 for the first time since 2012.

Gold is undervalued—relative to the money supply, and relative to financial assets—and it is underowned. Given that gold is a very small market relative to global stocks and bonds, even a small move by investors into gold will have a significant effect on the price. That is what we are beginning to see now, with emphasis on "beginning." As more and more investors, small individual investors and large institutions alike, decide to put a part of their assets into gold, the price will move up significantly.

Gold stocks are still cheap; corrections are to be bought

As gold is undervalued, gold shares are undervalued against gold itself. And, despite the recent strong rally, they remain in the lowest 25 percentile in terms of price and valuations. As gold moves up, especially in an environment of low oil prices and generally low currencies (the two largest cost inputs in a mining operation), much of that increase flows to the bottom line. Mining companies, with a newfound discipline and a more favorable environment, are generating free cash flow for the first time in many, many years.

We remain somewhat concerned about the possibility of a pullback in the price of gold. I do not anticipate that such a correction would be particularly deep or long-lasting, but a pullback in gold itself would see meaningful corrections in the mining stocks, particularly after such strong short-term appreciation.

Will gold stocks fall if the broad market does?

Certainly, if we see a broad stock market decline in coming weeks, the gold stocks could initially fall with the market. Generally, gold stocks have been more vulnerable when the following conditions are present: the market drops sharply in a short period of time; there is a liquidity panic; gold drops; and the stocks are expensive entering the correction.

Generally, gold stocks have been less vulnerable when the broad market decline is slow and protracted; when it is more selective; when gold does not decline; and when gold stocks are not overvalued.

Based on those criteria, we may see a relatively short and shallow pullback, but it will be neither a crash nor the start of a long period of lower prices. Our list of "Current Recommendations" already emphasizes gold and silver stocks, but we would use any near-term pullback to add to positions.

Buy now? Sell now? It all depends

A newsletter provides one-size-fits-all recommendations: "buy this"; "sell this". (We try to differentiate by saying X is appropriate for conservative investors, Z for speculators.) But money management is not like that, whether you have an outside manager or are doing it yourself. One investor might say he has sufficient exposure to gold and silver even if there never is the opportunity to buy any more, whereas another investor, new to the sector, should step up now and at least take initial positions.

Buying this week

This week we are buying very little. For investors who do not own, we would buy Lara Exploration Ltd. (LRA:TSX.V) (0.76), which has corrected after a very strong move; and Kingsmen Creatives Ltd. (KMEN:SI) (0.205), which remains inexpensive. Some of the stocks on our list are expensive and ahead of themselves, such as Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), but we are not going to try to be clever and trade our position. An investor, however, will take many factors into consideration: the allocation to any single stock, whether it is held in a tax-exempt account (if he has a lot of tax losses) and so on.

Originally posted on July 19, 2020.

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

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Lara Exploration, Kingsmen Creatives, Franco-Nevada. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: All. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until 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 Lara Exploration and Franco-Nevada, companies mentioned in this article.

Adrian Day's Global Analyst disclosures: Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor's opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2020.

( Companies Mentioned: FNV:TSX; FNV:NYSE, LRA:TSX.V, )

Blackrock Hits Bigly Silver in Nevada

Source: Bob Moriarty for Streetwise Reports   07/21/2020

Bob Moriarty discusses the company's off-the-charts drill results at its Nevada silver project.

Blackrock Gold Corp. (BRC:TSX.V; BKRRF:OTCMKTS) announced the first drill results from their latest program at their 100% controlled Tonopah West silver project in Nevada.

Hole TW20-001 showed two massive silver intercepts. The highest grade was the 2,198 g/t Ag over 3.04 meters.

Silver

Another layer that was the actual target of the drill hole reported 29 meters of 965 g/t Ag where it intersected the Victor silver vein.

Silver

No wonder the shares were up 102% on the day.

The company has about 20 million warrants outstanding with an average exercise price of $0.25 and some warrants can be forced so the company can count on having another $5 million brought it.

It might be time to change the name of the company from Blackrock Gold to Blackrock Silver because they just brought the Tonopah silver district back to life in a bigly way.

Blackrock is an advertiser. I have participated in several private placements so naturally I am biased. Their website is pretty good and presentation excellent.

Blackrock Gold Corp
BRC-V $0.87 (Jul 20, 2020)
BKRRF-OTCBB 69.4 million shares
Blackrock Gold website

Bob Moriarty
President: 321gold
Archives
321gold

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: Blackrock Gold. Blackrock Gold is an advertiser 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.

( Companies Mentioned: BRC:TSX.V; BKRRF:OTCMKTS, )

Genesis Metals Builds High-Grade Ounces at Chevrier

Source: James Kwantes for Streetwise Reports   07/21/2020

James Kwantes of Resource Opportunities profiles a company with a project in Quebec's Abitibi Greenstone Belt.

Genesis Metals Corp. (GIS:TSX.V; GGISF:OTC) is building ounces and grade at its Chevrier project in Quebec's Abitibi Greenstone Belt, as Phase 1 drill results outline growing zones of higher-grade material within the existing Main Zone deposit. The drill results are changing the profile of the deposit, which hosts current indicated mineral resources of 395,000 ounces (8.5 Mt averaging 1.45 g/t gold; cutoffs 0.5 g/t open pit and 0.95 g/t underground) and inferred mineral resources of 254,000 ounces (5.9 Mt averaging 1.33 g/t gold; cutoffs 0.5 g/t open pit and 0.95 g/t underground).

The latest drill intercepts are well above those average grades, with highlights including:

  • GM20-63: 9.71 g/t Au over 3.65 meters (within 76 meters of 1.93 g/t)
  • GM20-64: 9.73 g/t Au over 4.5 meters (within 84 meters of 1.65 g/t)
  • GM20-64: 9.64 g/t Au over 2.3 meters
  • GM20-64: 14.4 g/t Au over 2.2 meters
  • GM20-65: 5.57 g/t Au over 3.2 meters

Those intercepts were part of the second and final batch of assays from the 2,500-meter drill program at Chevrier that focused on southwest and northeast portions of the Main Zone. Most of the current resource estimate is contained within the Main Zone, with the East Zone hosting a small Inferred resource. Genesis used a new 3D model to better understand distribution and controls on high-grade gold mineralization.

Genesis CEO David Terry and his team are now reviewing the drill hole data as they evaluate the best targets for follow-up drilling, which is fully funded. The next drill program will likely take place in late summer or early fall; a further 5,500 meters of drilling is planned for the remainder of 2020.

Each of the Phase 2 intercepts above starts within 200 meters of surface, and holes 63 and 64 hit high-grade within wider mineralized envelopes. That bodes well for future inclusion in the pit-constrained resource once Genesis updates the Chevrier resource estimate. Hole 65 also hit deeper gold mineralization: 5.14 g/t Au over 3.95 meters from 213.3 meters downhole, and 7.88 g/t Au over 3.1 meters from 227.5 meters downhole.

Those assays followed Phase 1 drill results from Chevrier announced on June 2 that included:

  • 8.92 g/t Au over 1.0 meters (within 1.79 g/t over 7.35 meters)
  • 3.99 g/t Au over 3.0 meters
  • 10.2 g/t Au over 1.15 meters (within 1.36 g/t over 19.7 meters)

"We look forward to additional drilling to better define this new high-grade component of the deposit, and to results from the ongoing surface exploration program focused on advancing priority targets elsewhere on the large Chevrier project," Terry stated.

Likely targets include further definition of higher-grade shoots within and below the existing Main Zone deposit, as well as several high-priority targets elsewhere at Chevrier identified through last year's property-wide glacial till survey. Ground prospecting to further refine those targets continues.

The biggest beneficiaries in this emerging gold bull market are juniors that can hit meaningful drill results containing high-grade gold. The Phase 1 drill program has delivered that for Genesis, with several hits that are multiples of average grades at the existing deposit. The company's $15-million valuation—less than many pre-drill juniors—is backstopped by Chevrier's existing gold resource and now, growing higher-grade zones.

The widths and grades of Genesis's Phase 1 drill program compare favorably to the mineralization at well-known Canadian gold deposits including SSR Mining's Seabee underground gold mining operation in northern Saskatchewan. Seabee's average reserve grades are just above 10 g/t gold and the company is underground mining widths of 1-2 meters.

GIS drill core
Chevrier Drill Core

Genesis, of course, is an earlier-stage play. But the company's shares remain under the radar, with the stock trading at or below where it spent most of 2019. That's despite the developing high-grade zones as well as these positive features:

  • Backing of the serially successful Discovery Group;
  • Located on a highway and near rail lines in the eastern Abitibi greenstone belt in a thriving mining district (Chibougamau) with other high-grade discoveries;
  • More than $2 million in the treasury for further drilling later this year.
  • Fresh approach under the leadership of Dr. David Terry and property-wide investigation and analysis, starting with soils.

Chibougamau is a rich gold mining district of high-grade discoveries and historical mines. More than 6.7 million ounces of gold has been mined in the area and there are plenty more ounces in the ground—including at high grades. Just southwest of Chevrier is the Monster Lake JV, where IAMGOLD and JV partner TomaGold have delineated 433,300 ounces of gold at 12.14 g/t Au.

Team, backers, project and neighborhood—it all matters. So does price of entry. There's a lot of money chasing a small number of hot junior stocks that have been running hard. But the big money is made positioning in promising plays that have yet to move. Genesis's current valuation may spell opportunity for investors confident that this top team will identify more high-grade gold, both within the existing deposit and through discoveries elsewhere on the 290-sq-km property.

James Kwantes is the editor of Resource Opportunities, a subscriber supported junior mining investment publication. Kwantes has two decades of journalism experience and was the mining reporter at Vancouver Sun, the city's paper of record.

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Disclosure: Genesis Metals is one of three Resource Opportunities sponsor companies and James Kwantes owns Genesis Metals shares, which makes him biased. This article is presented for information purposes and is not investment advice. All investors need to do their own due diligence.

Streetwise Disclosure:
1) James Kwantes' disclosures are listed above.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) 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.

Resource Opportunities Disclaimer: Readers are advised that this article is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. The information is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data.

( Companies Mentioned: GIS:TSX.V; GGISF:OTC, )

Quinton Hennigh Advises NuLegacy

Source: Bob Moriarty for Streetwise Reports   07/20/2020

Bob Moriarty of 321gold discusses the upside he sees to this company with a gold project in Nevada's "Elephant Country."

I do hope my readers by now understand that we have entered the Greatest Depression. In fourteen weeks some 51.3 million Americans filed for unemployment. Many will not be returning to their original job as it no longer exists as airlines, major chains, restaurants and cruise ships entered bankruptcy. This is not the beginning of the end of the depression; indeed it is hardly the end of the beginning.

As a result of the Federal Reserve and an out of control Congress hurling money at the problem eventually Americans will wake up to the fact that the US is functionally bankrupt as both the bond market and the dollar evaporate into hyperinflation. As the debt snowball careens down the mountain gathering speed as it declines as 40% of Americans fail to pay their rent or mortgages the end result will be the banks closing.

We will have a debt jubilee since there is no other possible solution. It would be a very good time to own all resources along with gold and silver.

In May of 2020 CEO Albert Matter of NuLegacy Gold Corporation (NUG:TSX.V; NULGF:OTCQB) announced the appointment of Quinton Hennigh as a technical advisor to the company. To most people, that would seem a minor matter. Every company has technical advisors. But not every company has Quinton Hennigh as an advisor.

Albert Matter was one of the first people I dealt with when we began 321gold almost twenty years ago. He started and ran Alamos Gold until it was sold. Matter started NuLegacy in the dismal days of March 2009 and did a 70% option on the Red Hill project with Barrick. By early 2016 they had increased their ownership of Red Hill to 100%.

To suggest that NuLegacy is in the middle of elephant country would be to understate the obvious. They are in the Northern Nevada Rift and sit next to Barrick's Goldrush Mine and Cortez Hills Mine. So far the company has drilled 54,000 meters of core. Significant hits of 9.6 g/t Au over 5.1 meters, 16.9 g/t Au over 8.7 meters and 11.0 g/t Au over 12.2 meters say they are close to hitting the mother lode.

Quinton Hennigh has talked to Albert Matter and given him his interpretation of where they need to poke. NuLegacy just raised $5 million to help fund this year's program. They will submit their drill plan and permitting application to the BLM this month with the expectation that approval will be in hand by September with a 16 hole deep drilling program commencing in mid to late October.

I've known Quinton for a dozen years now. He is a bit of a magician with rocks. I think that with some simple changes to where and how NuLegacy drills, they are on to something giant in potential.

Albert Matter made it clear right up front with Quinton that he was valued and if NuLegacy succeeds, so will he.

NuLegacy is an advertiser. I participated in the latest private placement. As such that makes me biased. But I have known this story for years and I think they are going to hit. They do a great job of telling their story but as always, you must do your own due diligence.

NuLegacy Gold
NUG-V $0.13 (Jul 20, 2020)
NULGF-OTCQB 482 million shares
NuLegacy Gold website

Bob Moriarty
President: 321gold
Archives
321gold

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: NuLegacy Gold. NuLegacy Gold is an advertiser 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.

( Companies Mentioned: NUG:TSX.V; NULGF:OTCQB, )

August Approaches: Accumulation, Conversation and the Promise of Silver

Source: Michael Ballanger for Streetwise Reports   07/20/2020

In this week's advisory, sector expert Michael Ballanger reviews the most recent market news, celebrates old-school communication techniques and offers strategies for investing in the dog days of summer.

As the month of July moves into its final ten-day stretch, I see NASDAQ records falling left and right as the drivers of fear that dominated in March are now "yesterday's news." Rising second waves of infection and death have been shunted aside in favor of a reborn optimism surrounding "vaccines" and "V-shaped data" and "added stimulus" and just about anything imaginable that can drive money into stocks.

However, the truth remains that this four-month rally in stocks and gold and bonds is the direct result of counterfeit cash finding its way into the hands of the desperately unemployed and will only end when the liquidity punch bowl is taken away.

accum1

As an aside, for the past thirty-three years, since 1987, I have always used August as an accumulation month, after learning of this technique from the finest mining broker I have ever known, the late George Milton, a huge stock salesman (in all ways) out of Edmonton who made more money for his clients than any advisor around at the time. He would call his clients in May and ask them what plans they had for the summer and then proceed to give them firm instructions to not (as in never) try to call him before Aug. 1. Then, during the first week of August, he would pick up the phone and tell them exactly what they were buying between then and the end of the month.

You see, back in the days of rotary phones and daily mail delivery, where letters from friends generated excitement, you communicated with your clients in one of three ways: face-to-face, telephone and mail. You didn't "shoot them an e-mail" or "text them a stock pick," you actually had a conversation with them and learned of all sorts of career, family and community news that actually had a big bearing on how you advised them.

Today's impersonal world of search engines and Facebook and Twitter have replaced the art of conversation and the beauty of verbal communication and salesmanship. I mourn the loss of face-to-face meetings, where body language can tell you whether clients are happy or sad, cocky or frightened, and whether they plan to increase their investments in the near term. Few clients ever tell their advisor that they are "wiring another million" by e-mail. That should happen at the end of an awfully expensive lunch the advisor was more than pleased to cover. Then again, and as always, I digress.

Circling back to the August strategy, it was originally developed by the old mining brokers on Bay St. when retail customers preferred drill hole plays to ponies at Woodbine. It was noticed that due to weak markets in June and July, when wealthy stock buyers were at their cottages rather than trading penny miners, many investors came into August with a bunch of bills coming up, like back-to-school shopping or tuition fees. In order to come up with the cash, they would be forced to sell their positions in the weeks leading up to Labor Day. Hence, stocks would typically swoon in August under the weight of unexpected supply, but most importantly, with a paucity of bids as liquidity usually stayed quiet until well after Labor Day. Every August since 1987, there has always been bargains to be had and "stink bids" to be placed.

This year, however, because of the pandemic and the ensuing print-fest by the central bankers, distortion after distortion have altered the road map. No longer can I count on the Ballanger Playbook handed down to me by the likes of Bob Farrell and Richard Russell and Marty Zweig. The legacy of rules-based trading was first vanquished by Greenspan; openly distorted by Bernanke; mollified in matronly fashion by Yellen; only to be finally obliterated in repeating waves of prevarication, deceit and intervention by the best (and worst) of them all, current Fed chairman Jerome Powell.

Last week I read a tweet from one of the Fed governors that denied any knowledge of, nor agreement with, the concept that Fed policies since 2000 have contributed to wealth and income inequality. Powell actually stares us directly in our faces and says, with nary a stammer nor blink, that the moves made by the Fed to rescue hedge funds and large holders of junk bonds and people offside on a stock trade do not represent any form of moral hazard nor favoritism. To that I say, with fully deserving vitriol, "Hogwash."

The last chart was from July 1, 2019 until now, and I had to use the one-year because the year-to-date chart is unfair to Aftermath Silver Ltd. (AAG:TSX.V), one of my largest holdings, because the stock closed out 2019 at the 52-week highs at CAD$0.54/US$0.42 per share, and then proceeded to crash back to within a few pennies of my original entry point (CA$0.08). I tripled the GGA Portfolio allocation to AAG back in March to get the average cost lowered, and have since traded it once (out at CA0.40, back in at CA$0.30 a few days later). It has always been my top silver proxy for the inevitable move to new highs in silver prices. We are ahead over 363% since I first tweeted out my "Initiating Coverage" on AAG at CA$0.085 in July 2019, and fully expect to see a print north of CA$1.00 before the end of 2020. Subscribers will receive revised target prices after their next news release.

accum2

As many of you know, I have a "love-hate" relationship with silver. I love owning in the good times (when I get it right) but I hate the duress I must go through every time I put on a trade. There will be a point in time (as happens in all rigged markets) where the scam blows up and the perps get pilloried in a barrage of margin calls, forced liquidations and massive losses from naked shorting. The problem remains that there is never a starter's pistol that goes "bang!" and tells you to go all in. Managing the risk in a silver position is difficult due to volatility and illiquidity.

As this is being written, I see a weekly close for the September silver contract at new, multiyear highs and that is unarguably bullish. However, I also see a weekly RSI (relative strength index) at 64.78, so if this continues for another couple of weeks, we will be faced with a dilemma. Do you stay long an overbought market, or do you stick with positive seasonal trends and look for a momentum-driven moonshot, as the Millennials finally come "over the wall" and replace Tesla Inc. (TSLA:NASDAQ) with silver?

The other issue that is troubling me is that there appears to have developed a broadening narrative that has silver as logical heir to the throne of social media stock promotion. Just as telephones were the primary communication tool fifty years ago for the investment industry, it was the gold seminars and conventions that were the primary promotional medium. I can recall a rush of dozens of audience members bolting for the pay phones after legendary newsletter guru Bob Bishop mentioned a certain junior explorer as his "new top pick." You always knew because it would happen in the morning of an investment conference, when the volume of some penny dreadful would explode, making it one of the day's volume and price leaders.

Fast forward to 2020; grown men rushing for pay phones is knives-and-bearskins compared to the speed and depth of today's social media promotional pipeline. One tweet from a well-regarded day trader can send these junior miners up 50–100% in a day, and therein lies my concern. The definition of "long-term" for many of these fledgling traders is about the length of time it takes them to down a Ritalin tablet, washing it down with an extra hot, no foam Starbucks mocha java grande Americano. They buy and sell anything with nary a worry as to a) earnings, b) cash flow, or c) what the company does. They only know the ticker symbol and rarely know the name, and as such, care only about direction and amplitude. This is the dream of the junior mining dinosaur that missed the cryptocurrency mania and missed the cannabis mania and can only cry huge crocodile tears when colleagues at the country club brag about their winnings, gained only because their grandsons had tipped the off to the "next big trade."

My point is that, as one of those reptilian creatures who stayed well away from cannabis and crypto, I am caught with mixed emotions when I think of the prospect of ten million kids piling into Getchell Gold Corp. (GTCH:CSE) or Aftermath Silver. I am sure I would welcome such an event, but how does one stay invested when you know full well that the buy-side volume that just spiked the stock is totally capable of turning on you like a rabid dog, sending your shares into a downward death spiral.

The second thing on my radar is that more and more long-term silver bulls are joining this narrative, and are actually promoting the idea that "you better own silver before those kids get the text!" They are assuming that this passing of the mantle is a done deal. Well, know this: it is anything but a done deal and with the ways silver acted last week, it is almost as if it had better see $21, and quickly, for many of these gains to extend themselves.

accum3

The last chart for your review is the principal reason that professional investors are looking to hard assets, including gold, silver, and the industrial materials: the U.S. dollar. The serial printing of debt to preserve and extend the 2009-20?? bull market in stocks in the name of "defending the U.S. economy from the effect of the pandemic" has now crossed the line of rational thought and entered the Twilight Zone of the theater of the absurd. How the American electorate can allow a former investment banker—a stock salesman—to debase the purchasing power of their sovereign currency is a "riddle, wrapped in a mystery inside an enigma" (apologies to Sir Winston).

However, no one ever says "No" to free anything, including government handouts, so as long as Tesla stays above $1,400 and the S&P above 3,000, the pitchforks and torches will remain idled and the legions of the "desperately unemployed" will remain sanguine, subdued and sedated.

For now.

Originally published July 17, 2020.

Follow Michael Ballanger on Twitter @MiningJunkie.

Originally trained during the inflationary 1970s, Michael Ballanger is a graduate of Saint Louis University where he earned a Bachelor of Science in finance and a Bachelor of Art in marketing before completing post-graduate work at the Wharton School of Finance. With more than 30 years of experience as a junior mining and exploration specialist, as well as a solid background in corporate finance, Ballanger's adherence to the concept of "Hard Assets" allows him to focus the practice on selecting opportunities in the global resource sector with emphasis on the precious metals exploration and development sector. Ballanger takes great pleasure in visiting mineral properties around the globe in the never-ending hunt for early-stage opportunities.

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Disclosure:
1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: Getchell Gold, Aftermath Silver. My company has a financial relationship with the following companies referred to in this article: Getchell Gold, Aftermath Silver. I determined which companies would be included in this article based on my research and understanding of the sector. Additional disclosures are below.
2) The following companies mentioned in this article 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. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports 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 Tesla, Getchell Gold and Aftermath Silver, companies mentioned in this article.

Michael Ballanger Disclaimer:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: AAG:TSX.V, )

Fremont Awaiting Drill Results at Griffon Gold Mine

Source: Bob Moriarty for Streetwise Reports   07/17/2020

Bob Moriarty of 321gold discusses a junior that is exploring a past-producing gold mine in Nevada.

Alta Gold went bankrupt in April of 1999 due to low gold prices. They had an existing gold producing mine near Ely in Nevada they called the Griffon Mine. Nevada Sunrise picked up the project almost twenty years ago but didn't move it forward. Nevada Sunrise was bought out by Pilot Gold. Pilot changed their name to Liberty Gold.

Liberty entered into an option agreement with Fremont Gold on Griffon in December of 2019. The agreement calls for Fremont to pay $325,000 over four years and to issue 9.9% of their shares to Liberty in exchange for a 100% ownership in Griffon.

Fremont Gold Ltd. (FRE:TSX.V;FRERF:OTCQB;FR2:FSE) began a ten-hole drill program at Griffon in late June. They have completed three holes and those were sent off for a rush assay. Jamie Robinson, the former VP Exploration for Alta who discovered the Hammer Ridge deposit at Griffon, has been a technical advisor to Fremont for the drill program. If anyone knows where the gold is at Griffon, it should be him.

In May the company staked an additional 90 claims at Griffon to double the project area. That's about 15 square kilometers.

The drill results will be out soon, a week to ten days. At $0.15 the company has a market cap of about $12 million with around $1 million in the bank. That seems fairly priced to me so it will take good drill results to move the shares. But the company is young and aggressive. They have enough cash on hand to get cranking and the market will judge them on results.

Fremont is an advertiser and I participated in the last private placement. Do your own due diligence.

Fremont Gold
FRE-V $0.15 (Jul 17, 2020)
FRERF-OTCBB 81.4 million shares
Fremont Gold website

Bob Moriarty
President: 321gold
Archives
321gold

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: Fremont Gold. Fremont Gold is an advertiser 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: Fremont Gold and Liberty Gold. 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 Liberty Gold, a company mentioned in this article.

( Companies Mentioned: FRE:TSX.V;FRERF:OTCQB;FR2:FSE, )

Fremont Awaiting Drill Results at Griffon Gold Mine

Source: Bob Moriarty for Streetwise Reports   07/17/2020

Bob Moriarty of 321gold discusses a junior that is exploring a past-producing gold mine in Nevada.

Alta Gold went bankrupt in April of 1999 due to low gold prices. They had an existing gold producing mine near Ely in Nevada they called the Griffon Mine. Nevada Sunrise picked up the project almost twenty years ago but didn't move it forward. Nevada Sunrise was bought out by Pilot Gold. Pilot changed their name to Liberty Gold.

Liberty entered into an option agreement with Fremont Gold on Griffon in December of 2019. The agreement calls for Fremont to pay $325,000 over four years and to issue 9.9% of their shares to Liberty in exchange for a 100% ownership in Griffon.

Fremont Gold Ltd. (FRE:TSX.V;FRERF:OTCQB;FR2:FSE) began a ten-hole drill program at Griffon in late June. They have completed three holes and those were sent off for a rush assay. Jamie Robinson, the former VP Exploration for Alta who discovered the Hammer Ridge deposit at Griffon, has been a technical advisor to Fremont for the drill program. If anyone knows where the gold is at Griffon, it should be him.

In May the company staked an additional 90 claims at Griffon to double the project area. That's about 15 square kilometers.

The drill results will be out soon, a week to ten days. At $0.15 the company has a market cap of about $12 million with around $1 million in the bank. That seems fairly priced to me so it will take good drill results to move the shares. But the company is young and aggressive. They have enough cash on hand to get cranking and the market will judge them on results.

Fremont is an advertiser and I participated in the last private placement. Do your own due diligence.

Fremont Gold
FRE-V $0.15 (Jul 17, 2020)
FRERF-OTCBB 81.4 million shares
Fremont Gold website

Bob Moriarty
President: 321gold
Archives
321gold

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.

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

Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Fremont Gold. Fremont Gold is an advertiser 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: Fremont Gold and Liberty Gold. 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 Liberty Gold, a company mentioned in this article.

( Companies Mentioned: FRE:TSX.V;FRERF:OTCQB;FR2:FSE, )