Jack Chan: This Past Week in Gold

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Technical analyst Jack Chan charts the last week’s movements in the gold and silver markets.

Our proprietary cycle indicator remains down.

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

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

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Speculation has reached level of previous bottom.

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Trend remains down.

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Silver is on a long-term buy signal.

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

SummaryA bull market in gold and silver has been confirmed. The cycle is down and the trend is down, but that can change very soon. COT data is showing the first sign of a bottom. Let’s wait for price action to confirm.

Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011.

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Disclosure:
1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) Jack Chan: We do not offer predictions or forecasts for the markets. What you see here is our simple trading model, which provides us the signals and set-ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
3) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Charts courtesy of Jack Chan

Recommended Reading: ‘When Money Dies: The Nightmare of the Weimar Collapse’

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Precious metals expert Michael Ballanger discusses his favorite investing books and reviews the landscape for gold and the U.S. dollar between now and the end of the year.

Since entering the hallowed halls of that venerable, old private Jesuit university, Saint Louis University, that sits near the banks of the equally-venerable-and-old man river, the “Mighty Mississippi,” I have kept a number of books in my library that shall remain as “life textbooks,” tomes upon which to refer in times of confusion, despair, joy and victory. Because of my background in hockey as a (much) younger man, I have always enjoyed re-reading sports books and one of my favorites was Ken Dryden’s “The Game” because he described a team and league that had many members familiar to me in the 1970s. Thomas Hauser’s “Muhammad Ali: His Life and Times” was another superb book about the singular, most-globally-recognized athlete of all time and, again, an athlete from the era in which I was raised.

However, the REAL text books were books like “The Four Agreements” by Don Miguel Ruiz, “The Power of Now” by Eckhart Tolle, and “Conversations with God, Book 1” by Neale Donald Walsch, all of which dealt with the human spirit and personal struggle. However, in the world of business and markets, the books which are always within arm reach are, in order of least-to-most importance, “The Battle for Investment Survival” by Gerald M. Loeb (1935), “Reminiscences of a Stock Operator” by Lefevre and Lowenstein (1923), “Boomerang: Travels in the New Third World” by Michael Lewis (2011), “Atlas Shrugged” by Ayn Rand (1957) and finally “When Money Dies: The Nightmare of the Weimar Collapse” by Adam Fergusson (1975).

As a snapshot of the societal impact of the Great Keynesian Experiment through which are currently traversing, “Atlas Shrugged” tells you EXACTLY where we are today complete with gutted-out American manufacturing and massive corruption, intervention, and interference brought about by the odious partnership between government and the elite 1%. The one book that describes the probable outcome of all of the money-printing ($57 trillion) of the post-2008-meltdown era is “When Money Dies: The Nightmare of the Weimar Collapse” and it is this book that is sitting under the desk phone in my office. The last paragraph sums it all up with the following ghastly summary: “In hyperinflation, a kilo of potatoes was worth, to some, more than the family silver; a side of pork more than a grand piano. A prostitute in the family was better than an infant corpse; theft was preferable to starvation; warmth was finer than honour; clothing more essential than democracy, food more needed than freedom.” THAT paragraph is like “The Ghost of Christmas Yet-To-Come” in Lewis Carroll’s “A Christmas Carol,” and it is truly frightening.

The use of history books is, for me, a necessity and the following two quotes are the reasons why:

“History never repeats itself but it rhymes.” – Mark Twain .

and,

“Those who cannot remember the past doomed to repeat it.” – George Santayana

In the bigger picture concerning the global capital markets, I see enormous changes coming and it is all laid out in front of us like those little solar lights that illuminate the path from my deck down to the water on a very dark night. In “Atlas Shrugged,” Ayn Rand describes what America would look like when the business “elite” finally own the government and legislature and the justice system. Nothing is more relevant than looking at the events that have transpired since the Financial Crisis of 2008 that didn’t “nearly” take down the financial system; it DID take it down but criminal collusion manufactured the bail-out mechanism that allowed it to continue to function in “Walking Dead” fashion.

All you need to do is look at Deutsche Bank to witness all of the same insanity, greed and aberrant behaviors that were so very prominent among the bankster crowd of 2004–2008 being replayed here in 2016 by the German’s beloved DB. In “Boomerang”, Michael Lewis walks us through the mindsets of the European bankers and politicians and especially the citizenry, whose contempt for the former two is most acute in Ireland, where one might have thought a few of them might have been carted off to jail.

However, nothing can send chills up and down your spine more than the last of my list, “When Money Dies.” We have all heard stories about the Weimar hyperinflation and how the indiscriminate albeit well-intended printing of “Reich marks” sent post WWI Germany into chaos and bedlam and unimaginable human suffering.

“Atlas Shrugged” describes the environment created BY the crime; Michael Lewis walks us through the incredible sense of entitlement among the populist movement responding TO the crime; but Adam Fergusson paints a horrific portrait of the outcome OF the crime. It is a “must-read” for everyone that is playing around with stocks and bonds or trying to manage “Cash” these days. Can’t happen here in “the modern world”? Well, it is happening right now as we speak in Venezuela where prison inmates have been resorting to cannibalism due to dire food shortages and government corruption.

I write all of this nonsense because as a former resident of the U.S., I was there for the Watergate hearings; I watched Nixon resign; I watched Jimmy Carter have his legacy tarnished by an Arab oil embargo, 12% inflation, massive line-ups at the gas pumps and a hostage crisis. I watched Presidential campaigns in 1972 and 1976 first-hand and have always paid a great deal of attention since. The bare facts behind this year’s race are ugly; you have two candidates that are equally annoying, unequivocally flawed and universally repulsed by the vast majority of voters. What hits me between the eyes is that for the first time in history, we are witnessing a race so thoroughly “un-presidential” that it resembles a WWF wrestling match complete with enough “smackdowns” and “whup-ass” remarks to put Vince McMahon to shame. The global champion of democracy and capitalism, apple pie and Apple Computer now has the entire world looking on in fear and disbelief that either one of these two candidates could have access to the launch codes that could vaporize the entire planet in a heartbeat all because of a bad meal or a particularly stressful day. The days of Ronald Reagan running the country as Chairman of the Board are now over. And that, my friends, is not only sad; it is outright disturbing.

So the U.S. dollar continues to roll higher and the gold market struggles to right itself against FOREX headwinds. The U.S. dollar responds to the pre-election tape-painting and the broadly-based consensus that once the election is over that the Fed will hike rates and send the USD index to 105. However, given that I don’t care a great deal for technical analysis, here is a Wiki snapshot of a classic “Gravestone Doji” that indicates that a trend may be coming to an end.

Now take a look at the chart of the U.S. dollar index ($USD) that has finally turned up with a big Gravestone Doji to cap the current rally off the May, June and August lows, setting things up for another metals advance into year-end. Now, we saw a Gravestone Doji a few months back in the HUI (NYSE Arca Gold BUGS Index) around 175 but it decided to advance another 100 points before correcting, so don’t get too excited (or committed) with this one for the USD. I only mention it because the USD is not as illiquid as the global gold market because the Americans have printed TRILLIONS of USDs since 2008 so it is not nearly as easy to manipulate FOREX as it is gold. Ergo, technical analysis works for the USD and it is useless for gold—period.

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I reported to you all that I had re-entered the GDXJ (VanEck Vectors Junior Gold Miners ETF) position on October 13th and added more on Friday the 14th when I suddenly realized that I was far too complacent with the decaying currency sitting in my trading account. I was growing miserable, snarly, inattentive, and argumentative without my beloved GDXJ position and it was truly difficult to function. Those around me were so happy to see me take my enormous profit on GDXJ and were more than happy with the new drapes and the new leash and the Gourmet Alpo and the “designer doggie bags,” but I now know that they thought of me as “seriously depressed.” I am now no longer upset and I am no longer depressed as I now own every single wonderfully decadent share of the GDXJ that I owned back in late 2015 when the junior miners were being shorted and sold by every HFT algorithm and every desk trader and every CNBC-following doorknob on the planet.

Now, for the traders out there? I have a sell order in for 50% of the GDXJ position at $45.00. If filled, we will own the remaining 50% at new breakeven cost of $32.20 at which point I sit back and chill. No reason to particularly worry with such a wonderful adjusted cost.

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Now, most of you are dying to know how a) Stakeholder Gold Corp.’s (SRC:TSX.V) Ballarat RAB drilling program is progressing and b) when the Canuc Resources Ltd. (CDA:TSX.V)/Santa Rosa RTO will be completed. Last update for the Yukon was yesterday and the first seven RAB holes are now en route to the assay lab in Whitehorse where the turnaround should be 10-14 days. SRC CEO Chris Berlet and V.P. Exploration John Nebocat are in Dawson City today travelling to the property for a day full of comprehensive interpretation and analysis. I would expect a drilling update upon their return. I could talk all day about the large intercepts of quartz sericite alteration and the density of the rock they are encountering but until the assays are back from Whitehorse, it is pretty much meaningless.

I have been asked about the seasonality effect and the lack of news flow during the long Yukon winter and whether or not it will affect the stock price performance. The fact that SRC will have a full treasury after all 2016 exploration bills are paid allows a generous amount of working capital to be allocated to marketing. Since getting the story “out” is crucial to the survival of all junior miners, SRC has already secured a booth at the January 2017 Vancouver Resource Investment Conference and will be doing the same for PDAC in Toronto in March. While that is all fine and dandy, it is obviously imperative that SRC has a decent tailwind from positive assay results coming off the 2016 program.

As for the Canuc/Santa Rosa RTO, all I can say is that every RTO to which I have been privy over the years takes longer than first thought and this one is no different. Between the lawyers and the regulators, it seems that just when you think you are getting the green light, they come up with something ridiculous like translating a document that is 15 years old from Spanish to English “in order to protect the poor minority shareholders of Canuc Resources.” In reality, all that needs to happen is for Canuc shareholders to vote on the transaction. It is they that are getting absorbed by the private company (Santa Rosa Silver Mining Corp.) so why not just ask them if they are OK with the terms of the deal and drive on? Alas, despite the delay, I simply cannot stand the wait as the Santa Rosa project will be a beauty. (If anyone wants to have a look at the old PowerPoint presentation that was used back in 2015, email me at mballanger@rogers.com.)

Only two more weeks until the elections are over and then it should be a “Sell the news” scenario for the USD and that should provide the impetus for a sizzling year-end rally in the metals. Then, as 2016 ticks down, and with so many money managers having missed the gold rally, it wouldn’t surprise me if there is a mid-December scramble for the mining shares and/or physical gold and silver as year-end window dressing is applied to “modern portfolio management.”

Right. . .

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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.

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

Disclosure:
1) The following companies mentioned in the article are sponsors of Streetwise Reports: None. The companies mentioned in this article were not involved in any aspect of the article preparation or editing. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
2) Michael Ballanger: I own, or members of my immediate household or family, directly or indirectly own shares of the following companies mentioned in this interview: Canuc Resources Ltd., Santa Rosa Silver Mining Corp. and Stakeholder Gold Corporation. My company Bonaventure Explorations Ltd. has a relationship with Stakeholder and Canuc via Santa Rosa. I determined which companies would be included in this article based on my research and understanding of the sector.
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.
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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview/article until after it publishes.

Charts provided by Michael Ballanger

( Companies Mentioned: CDA:TSX.V,
SRC:TSX.V,
)

Alkane Signs MOU with Siemens to Advance Dubbo Zirconium Project

Alkane Resource’s flagship Dubbo Zirconium Project moved closer to production after the company announced a Memorandum of Understanding (MOU) between its wholly owned subsidiary Australian Zirconia Ltd. and German engineering and technology giant Siemens AG.

The MOU, a nonbinding and nonexclusive agreement for three years, “details Alkane’s and Siemens’ joint intention to enter into separate agreements for the purpose of progressing and implementing business opportunities such as offtake agreements for DZP product (e.g., rare earth products, specifically those related to the production of NdFeB permanent magnets, as well as the rare metals niobium, zirconium, and hafnium in oxide, alloy or finished form),” stated Tom Hayes in an Oct. 25 research report on Alkane Resources Ltd. (ALK:ASX; ANLKY:OTCQX) for Edison Investment Research.

For its part, Alkane will have access to Siemens’ “advanced infrastructure management systems, process automation solutions, power solutions, mechanical plant and services and product lifecycle management (including asset management, service and maintenance of systems supplied),” Hayes wrote.

According to an Alkane press release issued Oct. 25, “This agreement presents another substantial step forward in the development of the world-class Dubbo Zirconia Project, which can become a significant non-Chinese supplier of several critical metals.”

Alkane is working in the Central West region of New South Wales, Australia, where it has two projects, the Tomingley gold project and the Dubbo project. According to the company’s release, “financing is in progress [for Dubbo] and this project will make Alkane a strategic and significant world producer of zirconium, hafnium and rare earth products when it commences production in 2018.”

Read what other experts are saying about:

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

Disclosure:
1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Alkane Resources Ltd. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.

Additional Disclosures for this Content

( Companies Mentioned: ALK:ASX; ANLKY:OTCQX,
)

New PEA for Seabridge’s KSM Is a Game-Changer

Calling the new preliminary economic assessment for Seabridge Gold Inc.’s (SEA:TSX; SA:NYSE.MKT) KSM “a big improvement for a unique massive Au-Cu project,” Paradigm Capital believes the company will continue to build value for investors.

“We believe Seabridge provides investors with ownership in one of the most strategically compelling and prolific copper‐gold projects in the world, the KSM project in BC, at one of the lowest market caps per ounce to the investor,” analyst Don MacLean wrote in an Oct. 26 research report.

Seabridge announced the new PEA for KSM in an Oct. 6 press release. The company also announced discovery of “a previously unknown deposit with initial gold and copper grades among the best found to date on the KSM Project” in an Oct. 18 press release, and on Oct. 26 announced it has identified “a prospective new porphyry copper-gold system with a potentially intact epithermal precious metals zone at its top” at its wholly owned Iskut project, also in British Columbia.

Following release of the new PEA on KSM, Paradigm did a “full model rebuild” of its investment thesis for Seabridge, according to MacLean, noting, “Over the past 3 years, Seabridge has continuously improved its massive KSM project in Northwestern B.C., finding deeper and higher-grade mineralization, derisking it with permitting and operational redesign.”

The new PEA, MacLean wrote, “outlines further game-changing improvements.”

Among improvements in the economics of the KSM project, as outlined in the Paradigm report, is a boost in the “after-tax IRR from 8.0% to 10.0%. . .a substantial uplift for a mega project.” MacLean also noted that KSM’s “life-of-mine total cash costs dropped sharply to $179/oz from $277/oz, mostly because Deep Kerr’s higher proportion of copper boosts project copper credits to $1,328/oz from $795/oz.”

In addition, MacLean wrote that, “the shift from 70% open-pit mining (tonnes) to 78% underground block caving [is] transformational.”

Arguing that investors should consider owning Seabridge “sooner rather than later,” the Paradigm analyst cited the “current gold price setback” as a “buying opportunity,” a shortage of “large new undeveloped gold and copper project in safe jurisdictions with attractive economics,” and an expectation that 2017 will “offer potentially exciting exploration into a new higher-grade target at KSM.”

MacLean also commented on developments at Iskut, stating, “We like the exploration thesis underlying the investment.”

Read what other experts are saying about:

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

Disclosure:
1) Tracy Salcedo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Seabridge Gold Inc. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.

Additional Disclosures for this Content

( Companies Mentioned: SEA:TSX; SA:NYSE.MKT,
)

Santacruz Silver Mining: The Market Still Doesn’t Get It!

Ben Kramer-Miller, chief analyst at miningWEALTH, notes that Santacruz Silver Mining has been a top pick since March, and while shares have risen ~70%, he still believes there is substantial upside ahead.

Santacruz Silver Mining Ltd. (SCZ:TSX.V; SZSMF:OTCQX; 1SZ:FSE) is focused right now on two projects. The first is Rosario in San Luis Potosi, Mexico. The company has been operating this underground mine for a couple years now, and it is currently mining at a rate of ~1 million silver-equivalent ounces per year (mostly silver with zinc and lead as coproducts). Rosario contains a mill with capacity that exceeds the mining rate, and as a result management has acquired the right to mine on another property 40 km away—Cinco Estrellas—where it mines mostly gold with some silver.

The second is Veta Grande, which is less than 200 kilometers away from Rosario in Zacatecas. The company doesn’t own the project, but has an exclusive right to explore and mine it from owner Minera Contracuña. Santacruz receives 60% of the profits for its trouble (55% should the silver price rise above $22/oz). The company has not declared commercial production here yet, though the mine and mill are fully operational. Long term, the company is very ambitious with respect to its production targets at Veta Grande.

Management has shifted its focus to these two projects, though it still controls two interesting late-stage exploration projects—Gavilanes and San Felipe. These are “back burner” projects that provide in-ground optionality to metal prices (silver and zinc, mostly).

The company is inexpensive relative to its in-ground silver and its productive capacity, and there are likely a few reasons for this:

  • In Q1/15 there was a tailings dam rupture at Rosario, which caused a stop in production. The problem is fully resolved now.
  • In 2014 the company sold silver forward in order to finance the development of San Felipe. The project did not move forward and these forward silver payments had to come from Rosario. This happened right before the tailings dam rupture—talk about bad luck!
  • Veta Grande does not have a NI-43-101-compliant resource estimate or a mine plan, yet management expects it to generate most of the company’s production. Cinco Estrellas doesn’t have a resource estimate either, meaning most of the company’s production is from projects without resource estimates.

The first two issues are largely in the past and the fallout (e.g., unwanted dilution, punitive debt payments) has already impacted the company. However, the third issue continues to be a big deal. Not only does it add to the perceived risk (e.g., what if the company’s informal/internal projections are overly optimistic?), but due to the regulatory environment Santacruz is prohibited from discussing several of the positive aspects of its Veta Grande and Cinco Estrellas projects.

The latter concern is purely a cosmetic one, though it is a big deal because it means that the company cannot promote its story to the market in the same way as its competitors can. With respect to management’s confidence level in the project, we note a few things that make management’s knowledge of Veta Grande relatively robust:

  • The three producing Veta Grande veins are all past-producers.
  • Santacruz has processed tens of thousands of tonnes of ore from Veta Grande veins. In fact, it had processed ore from Veta Grande prior to its arrangement with Minera Contracuna. This ore was analyzed for composition and grade in the company’s lab. While the company’s work doesn’t fit the NI-43-101-compliant feasibility study mold, it is arguably more extensive than what one would expect to find for a typical project at this level of development.
  • There are similar projects in the area currently in production, notably Capstone Mining Corp.’s (CS:TSX) Cozamin Mine.

Investors should also note the amount of time and effort it takes to compile a resource estimate. Oftentimes this is worthwhile as it provides valuable information. But Santacruz already has critical pieces of this information, and the added confidence that would come from compiling an NI-43-101-compliant resource estimate or feasibility study isn’t worth the lost time.

So where does Santacruz stand now?

Santacruz is currently processing ~300 tpd at its Rosario mill. This includes production from Rosario and Cinco Estrellas. This mining rate is lower than previous expectations of 350–400 tpd, and the reduced mining rate is a function of the company reducing production at the Rosario mine and replacing it with production from Cinco Estrellas. Note that the latter project contains a wider vein that is easier to mine at a faster pace. Once the normal production rate is reached we expect annualized production from the Rosario mill to be just over 1 million silver equivalent ounces.

At Veta Grande the company has not yet declared commercial production, though based on discussions with management and my recent trip to visit the mill it appears the company is close to doing so. Upon doing so the company will be officially producing ~450 tpd (270 tpd attributable) with grades that are slightly lower than at Rosario/Cinco Estrellas. Attributable production should be ~600,000 silver equivalent ounces per year. With publicly announced plans to bring production up to 1,500 tpd (900 tpd attributable) by mid-late 2017, Santacruz is positioned to produce nearly 2 million attributable silver equivalent ounces per year at Veta Grande, making it a 3-million-ounce-per-year producer. We anticipate production costs to be ~$12-13/oz, meaning that the company can comfortably exceed $10 million in annual operating cash flow assuming a flat to slightly lower silver price. That’s pretty good considering the company’s ~$45 million valuation! And we haven’t even considered the company’s non-producing assets!

In addition to this production, we expect the company to release some more technical information to the market. For instance, management hopes to release a resource estimate on some of the veins it acquired from Golden Minerals Co. (AUM:TSX; AUMN:NYSE) earlier this year (Golden Minerals had done exploration work but did not compile it, and Santacruz is working on this now). We expect, as the company begins to generate more cash flow, that it will have the resources to compile more formal reports on its Veta Grande veins, along with those at Cinco Estrellas.

The combination of growing production and cash flow along with this additional information should generate market enthusiasm for the shares, and we expect them to trade substantially higher long-term.

Ben Kramer-Miller is the chief analyst at miningWEALTH. He is well respected for his unique ability to find under-the-radar precious metals opportunities, as well as for his extensive research into rare earth elements and other critical materials. His research has been featured by Nasdaq, Kitco, Mining.com, The Financial Post, The Globe and Mail, Investing News Network and RealClearDefense, among others.

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Disclosure:
1) Ben Kramer-Miller: 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. 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 sponsors of Streetwise Reports: None. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. 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.
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 families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview/article until after it publishes.

( Companies Mentioned: SCZ:TSX.V; SZSMF:OTCQX; 1SZ:FSE,
)

Canadian Zeolite Announces National Distribution Deal with Bella Turf for their Artificial Turf Installation and Product Line

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October 25, 2016
Vancouver, British Columbia (FSCwire)Canadian Zeolite Corp. (the “Company”) (TSX.V: CNZ) (OTCQB: CNZCF) (FSE: ZEON) is proud to announce an exclusive national distribution deal with Bella Turf, Canada’s leading distributor of Artificial Turf Landscape Grasses. The Company has agreed to supply its zeolite to Bella Turf for the Synthetic Turf Industry. Bella Turf has established distribution channels and dealers throughout Canada and will now have the ability to distribute the Company’s zeolite to their established customers.

Bella Turf states, “the Artificial Turf industry has been growing by 20% per year globally for the last decade. It is a 1.71 billion dollar industry while North America makes up 28% of the market. This growth is fueled primarily by environment conscious consumers who are aware of what watering, mowing, and chemicals are doing to our environment.“ For more information please visit www.bellaturf.ca

Mr. Ray Paquette CEO adds “We’re very pleased to announce this new national distribution deal with Bella Turf. We have worked with Bella Turf and Absorbent Products Ltd. to test, process and size our natural zeolite to address their specific industry requirements. Bella Turf incorporates 1.5 – 2 lbs of zeolite per square foot in their installations of Artificial Turf and will be launching their own infill product nationally this quarter. Bella Turf is an ideal fit with Canadian Zeolite as we strive to develop “green-tech” products and relationships. These relationships are instrumental in expanding our national sales presence and increasing awareness around the multiple uses of natural zeolite in “green-tech” industries. It is an exciting time for the Company and its shareholders as we are now commercializing our natural zeolite. We anticipate 2017 will be a major year of growth and accomplishment. This is the first of many expected agreements as our markets expand and we introduce our natural zeolite into the composting and animal feed industries, agriculture, water treatment and aquaculture markets.”

Canadian Zeolite has a competitive advantage in the world of zeolites given our product has been tested, applied and meets the standards of specific end-users. We are currently working on certifications and creating new technologies such as zeoponics and zeolitic substrates for greenhouse and outdoor growing mediums.

On behalf of the Board of Directors

“Ray Paquette”

President & CEO

604.684.3301

www.canadianzeolite.com

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

Some statements in this news release contain forward-looking information. These statements include, but are not limited to, statements with respect to future expenditures. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the ability to complete contemplated work programs and the timing and amount of expenditures. Canadian Zeolite does not assume the obligation to update any forward-looking statement.

 

To view this press release as a PDF file, click onto the following link:
public://news_release_pdf/CanZeoliteOct252016.pdf

Source: Canadian Zeolite Corp. (TSX Venture:CNZ, OTCQB:CNZCF, FWB:ZEON)

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Maximum News Dissemination by FSCwire. http://www.fscwire.com

 

Copyright © 2016 Filing Services Canada Inc.

Cycle of Low Crude Prices Nearing an End, Says Saudi Oil Minister

Saudi Arabia’s Oil Minister Khalid al-Falih declared the cycle of low crude prices is nearing an end as the oil market strengthens in recent weeks.

“Market fundamentals, in terms of supply and demand, have begun to improve,” Falih stated on Sunday at a press conference with Russian Energy Minister Alexander Novak, adding: “We are optimistic that oil prices will continue to improve in the future.”

Novak was meeting with OPEC ministers to discuss closer cooperation between Russia and OPEC to support the market.

Last week WTI Crude was trading at nearly $52/barrel, a 15-month high. It has slipped somewhat since, to about $50.50, after comments from Iraq’s Oil Minister Jabar Ali al-Luaibi indicating his country wanted to be exempt from any output cuts that OPEC might impose, saying Iraq needed the revenue to fight the Islamic State.

Energy trader Mark Fisher is advising investors to buy crude oil and natural gas on dips. “In my opinion, the most likely course is for the market to gradually establish a new base someplace in the $55 to $65 range barring some kind of geopolitical problem,” he told CNBC.

“It used to be that in natgas, every time the market rallied you could just close your eyes and sell it. I think those days are long over. I think now the time has come that you can basically buy every dip,” he said.

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

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
2) 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.

Former Goldman Insider Says Price of Gold Could Double

Former Goldman Insider Says Price of Gold Could Double By Justin Spittler The price of gold should be a lot higher… At least, that’s what Raoul Pal thinks. Pal is one of the world’s top “big-picture” investors. He used to work at Goldman Sachs and run a giant hedge fund, until he made so much money that he retired. Today, Pal writes The Global Macro Investor, a research letter read by some of the world’s biggest money managers. Recently, Pal came out in defense of gold. You see, gold has cooled off after climbing 25% over the first six months of the year. It’s down 8.5% since August. And it’s coming off seven straight down days, its worst losing streak since 2013. Gold’s recent selloff has many investors worried. But not Pal. He thinks investors could soon take shelter in gold…which could cause the price to double from current levels. Today, we’ll explain … Continue reading

A Conversation With Louis James – The International Speculator

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This past week, I had the opportunity to exchange emails with one of the best in the business, Louis James, Senior Investment Strategist for Casey Research. Louis travels the world putting boots on the ground, investigating opportunities for those who subscribe toThe International Speculator. His boots-on-the-ground approach and detailed analysis of the companies that he investigates set him apart from the crowd. Not to mention, he has the ear of one of the legends of junior mining stock speculation, Doug Casey!

Before getting to the interview, I just wanted to share with you a rich source of information that I guarantee you won’t find anywhere else. I’m referring to the books, Totally Incorrect, and Right on the Money, which are collections of past conversations between Louis and Doug.

I can remember waiting eagerly for the Wednesday release of Conversations with Casey, where Louis and Doug discussed speculation, philosophy, and really, just about everything. I found the conversations extremely insightful and learned a lot from their exchanges. In fact, even though I had already read most of them for free in Conversations with Casey, I purchased both books when they were released.

My outlook on the world was influenced by these two men and I’m very grateful for the wisdom that they impart.

Now, without further ado, a conversation with Louis James:

Brian: “Turmoil seems to be the norm at this point in history, so how do you navigate the politicized economy and position The International Speculator portfolio to profit?”

Louis: “Turmoil and the politicized economy are related, but not the same things… There are many sources of turmoil, but whatever the source, it’s generally a bad thing for most investors—and a good thing for speculators. Quick reminder: a speculator is not simply a gambler who throws darts at a stock chart and hopes to get lucky, but a rational observer of the trends in the world, who pits his or her wit against the momentum-chasing masses. That means buying valuable assets that are oversold, and selling assets that are overbought. It’s rational contrarianism (as opposed to ornery contrarianism). So, we watch for ‘turmoil’ to create divergences between price and value, and then act accordingly.

As for the politicized economy, it is both a source of turmoil, and often highly predictable. As Doug Casey likes to say, the one thing you can usually count on governments to do, it’s the wrong thing—not just the wrong thing, but the exact opposite of the right thing. Like taking interest rates negative, punishing the savers who would otherwise accumulate the capital needed for a real renaissance. These actions are bad, in and of themselves, in the sense of being destructive to economies and civilization itself. But they are predictable, and that enables speculators to position themselves for the trends to be their friends.

This is how we choose which commodities and other resources to invest in. As for picking specific stocks, that comes down to due diligence, which is my area. I’ve flown more than a million miles on just the major carriers as I’ve travelled the world to evaluate specific speculative opportunities for our readers.”

Brian: “From the gold price high in 2011 to the end of 2015, the gold market was hit with a historical bear market, dropping the gold stocks from their highs by roughly 90%, in nominal terms. For me, personally, buying companies during this time period felt like catching a falling knife, but I knew I needed to buy what wasn’t popular yet still had value. Now in October, well into the gold market turn around, how does one know when and what to buy, considering some companies are up multiple times from their lows?”

Louis: “I know the feeling. But you did the right thing, especially in 2015 — as everyone can now see. Contrarian investing indeed. As for what to do now that all of the best gold stocks are up strongly, I have two answers. The first is that our old friend turmoil—volatility—has put many of these stocks back on sale again. Not as low as at the bottom in late 2015, but still, there are excellent entry points to many of the clear winners in our space right now, thanks to some entirely normal (after such a rapid rise) consolidation in the gold space.

The second answer is that the 2001 – 2011 bull run was one for the record books, so it’s not surprising that we got a record correction as well. If the current super-cycle were to prove analogous to the great bull market of the 1970s, then 2011 – 2015 would be like the mid-‘70s correction, in which gold retraced 50% and the stocks cratered, just as we’ve seen in the last few years. In this scenario, we’re now heading into the second phase of the bull, which will rise for a number of years, and then go vertical into a true market mania, the likes of which we’ve never seen.

Now, I’m not claiming to know the future. No promises here. But if you think this is what’s coming, then any correction like the one we’re having at present has to be seen as a gift, a great buying opportunity ahead of the mania, even if prices are not as low as at the end of 2015.

But it’s not all or nothing. Gold is a ‘safe haven asset.’ Our world is awash in turmoil, as you say. That means that demand for safe haven assets may fluctuate, but it’s not going away any time soon. And that’s as solid a trend as any today. So I’m a buyer on market weakness, whether or not we get the gold mania Doug Casey has predicted.”

Brian: “Warren Buffet says, ‘you must learn from mistakes, but they don’t have to be your own.’ Generally speaking, when investors or speculators lose money in the junior market, do you think there’s a commonality in their approach? If so, where are they going wrong?”

Louis: “I could write a book on this. The short version would be that most investors are too emotional to buy low and sell high. They buy because everyone else is buying—the asset is in the news, it’s exciting—and pay way too much. Then the market turns, and panic, selling because prices are falling drastically, which means they get terrible exit prices and lock in losses. They end up buying high and selling low.

You can’t just buy something because it’s cheap, of course. Buying ‘pet rocks’ after the market for them crashed in the 1970s was a bad idea. But if some necessary good, like copper, say, and it’s selling for less than the cost of production, you know that prices will rise, sooner or later, no matter how hated copper might be as a commodity. That was the case 15 years ago. It’s the case for uranium today, by the way. It’s not the case for gold, but all the fundamentals that Buffet doesn’t understand (because he sees gold only as a regular commodity, like pork bellies or coffee, and doesn’t see its function as a financial asset) point towards higher gold prices for years to come.

But I digress. The point is that successful speculation takes a great deal of courage. Frankly, most people just don’t have it. And that’s a good thing. If it were easy, everyone would do it and there would be no profit in it, no such thing as a contrarian opportunity, in fact. So the biggest mistake is actually to fail to get a good measure of one’s self. One must know one’s tolerance for risk and one’s ability to stay a difficult course. Ignorance or misjudgment in this area is fatal.”

Brian: “Generally speaking, what can speculators do to set themselves up for success in the junior resource sector?”

Louis: “Readers may not like it, but the best answer is self-education. I’ve just argued that speculation takes a great deal of courage. Where does one find such courage? Well, apart from one’s character to begin with, courage comes from condition—from knowledge. The more one studies and understands the sector one is speculating in, the more confident one can be of one’s reasoning and speculations. Great speculators like Doug Casey and Rick Rule never stop learning.”

Brian: “Personally, I feel that investors need to pick financial products that fit with their investing personas. Meaning, you have to match your risk appetite to the type of product you’re purchasing. In your opinion, what type of persona is well suited for The International Speculator? For those with a lower than average risk appetite, does Casey Research offer any products that would be beneficial? What about a higher than average risk appetite?”

Louis: “Yes indeed. There are as many personalities as there are people, so it’s hard to answer. In general, people who are bullish on precious metals, but can’t afford to risk much on wealth generation and are therefore more focused on wealth preservation (with exposure to the upside in gold) would likely be better off subscribing to the Casey Resource Investor. CRI focuses on the bigger, more stable companies in our sector. The typical International Speculator reader is more interested in wealth generation than protection, and is willing to take risks to do so.

Oddly enough, the ‘higher risk’ International Speculator delivers high average gains, but only for those who have the courage to see the trades through. Those who panic and sell during the fluctuations can lose a lot more than if they went with the safer companies in CRI.”

Brian: “Finally, I’m an avid reader and often have several books on the go at any given time. Right now, I’m reading The Black Swan, by Nassim Nicholas Taleb, and Titan: The Life of John D. Rockefeller Sr., by Ron Chernow. Do you have any favourite titles that you’d like to share, or maybe some that you’re reading now while travelling?”

Louis: “Right now, I’m reading Red Notice by Bill Browder. It’s a fascinating and very well written account of very Casey-like contrarian investing in Russia, after the fall of communism. And speaking of Casey, I have to say that Doug’s new novel, Speculator came out (frankly) much better than I expected. It’s a great page-turner, but based on Doug’s experiences as a speculator, and as educational as it is entertaining. For those of a more philosophical bent, Neal Stephenson’s Anathem is the best book I’ve read in decades.”

NOTE: Red Notice, Anathem and Speculator are available on our Amazon affiliated book store right now, check them out here

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Jack Chan: This Past Week in Gold

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Technical analyst Jack Chan charts recent movements in the gold and silver markets. With COT data showing signs of a bottom, Chan is waiting for price action to confirm.

Our proprietary cycle indicator is down but can be bottoming.

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

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

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Speculation has reached the level of the previous bottom.

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GDX is testing resistance.

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The Canadian gold stock ETF is also testing resistance.

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Silver is on a long-term buy signal.

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

Summary
A bull market in gold and silver has been confirmed. The cycle is down and the trend is down, but that can change very soon. COT data is showing the first sign of a bottom; let’s wait for price action to confirm.

Jack Chan is the editor of simply profits at www.simplyprofits.org, established in 2006. Chan bought his first mining stock, Hoko Exploration, in 1979, and has been active in the markets for the past 37 years. Technical analysis has helped him filter out the noise and focus on the when, and leave the why to the fundamental analysts. His proprietary trading models have enabled him to identify the NASDAQ top in 2000, the new gold bull market in 2001, the stock market top in 2007, and the U.S. dollar bottom in 2011.

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

Disclosure:
1) Statements and opinions expressed are the opinions of Jack Chan and not of Streetwise Reports or its officers. Jack Chan is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation or editing so the author could speak independently about the sector. The author was not paid by Streetwise Reports LLC for this article. Streetwise Reports was not paid by the author to publish or syndicate this article.
2) Jack Chan: We do not offer predictions or forecasts for the markets. What you see here is our simple trading model, which provides us the signals and set-ups to be either long, short, or in cash at any given time. Entry points and stops are provided in real time to subscribers, therefore, this update may not reflect our current positions in the markets. Trade at your own discretion. We also provide coverage to the major indexes and oil sector.
3) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
4) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview until after it publishes.

Charts courtesy of Jack Chan