Trendline Obsession

Source: Michael Ballanger  (1/30/23) 

Michael Ballanger of GGM Advisory Inc. shares his thoughts on the S&P 500, the outlook of Gold and Silver, and specifically why he believes you should be interested in Norseman Silver Ltd. 

In my career, there have always been areas of the world where the risk premium is elevated either due to the absence of the Rule of Law, infrastructure deficiencies, or domestic politics. In recent years, populist movements around the globe have shifted the winds of foreign investment in many different directions and in some cases, surprisingly hostile from the most unexpected of countries.

Mexico was once the favorite playground for Canadian miners as it was part of the NAFTA accord, so the free trade statutes were always there to protect the foreign investor. That has now changed with the news that Fortuna Silver has had its San Jose mine in southern Oaxaca shuttered due to environmental concerns. Civil unrest and local community protests have shut down countless operations in Peru recently, and for Peru, where over 40% of national taxes are generated by miners, that is a striking development.

I have a dear friend from the U.S. Midwest whose uncles are all worldly entrepreneurs whose contacts monitor foreign investment flows as a means of practicing the “Follow the Money” school of due diligence. He tells me that there are absolutely massive investment dollars being channeled into three South American countries in the fourth quarter of 2022 and again in January of 2023, with Paraguay and Ecuador the two lesser recipients. However, the primary focus of these enormous capital investments is the one country least likely in the past to enjoy such good fortune — Argentina.

The reality is that when governments erect roadblocks to exploration and development, vast regions that contain potential district-scale mining camps fall into the category of “underexplored” and, therefore, by default, “underdeveloped,” and therein lies the opportunity.

When I think of Argentina, all I can recall is that it has a massive inflation problem (94% in 2022) and that it has tended historically to be decidedly anti-mining and anti-foreign in its treatment of investors.

As an example, in 2009, Pan American Silver Corp. (PAAS:TSX; PAAS:NASDAQ) bought the Navidad Silver deposit through the acquisition of Aquiline for US$630 million, only to discover that the province of Chubut disallowed the use of cyanide in mining operations thus preventing commercial exploitation of one of the world’s largest and richest undeveloped silver deposits.

However, recent legislation began to move in the opposite direction, as “limited development” is now possible in 2023. The reality is that when governments erect roadblocks to exploration and development, vast regions that contain potential district-scale mining camps fall into the category of “underexplored” and, therefore, by default, “underdeveloped,” and therein lies the opportunity.

The Navidad silver deposit was discovered in a geological setting in Patagonia known as the “Gastre Fault” structural corridor, which also contains the Calcatreu Gold Mine. It is a vast region largely untapped, but if a foreign entity can enlist the right person or group to navigate the permitting waters successfully, they will have earned the “first mover advantage,” and that is exactly what Norseman silver has accomplished with their acquisition of the Taquetren Project, a land package of some 145,000 acres located in the Navidad-Calcatreu Mining District.

Gold Ridge

Of even greater importance is that the prospector-geologist and Argentinian national that discovered Navidad, Daniel Bussandri, is now Norseman’s country manager and is completely in charge of all operations, including exploration and permitting, for Taquetren. To have a local with a proven track record as a mine-finder at the helm is an asset that is hard to assess, but the one thing I know for sure is that the risk premium that one would normally assign has now been mitigated by the presence of Daniel Bussandri.

Press releases in 2022 have revealed mineralized outcrops of major copper-silver credits and some minor gold occurrences, but that last one from January 23^rd was a game-changer.

Buy Norseman Silver.

It detailed the discovery of a 2 km long, 0.5 km wide mineralized vein structure where sub-crops yielded values as high as 12.2 g/t Au with this “Gold Ridge” zone lying within a larger 5 km long corridor hosting the Martha, Neta Nueva, Irma, and Veta Juan targets.

I have learned that the most recent sampling results at Gold Ridge are attracting the eyes and interest of more than a few of the consulting geologists, including 82-year-old crusty veteran geo Ron McMillan, who carries the reputation of being “unexcitable” about anything to do with early-stage exploration. Well, apparently, Mr. McMillan is “noticeably excited” about Gold Ridge, and given that it is located 20 km NW of Calcatreu and in the same mining district, I deem that as significant.

Norseman is completing a fast CA$750k funding in order to pay for the geophysical survey ordered last week, so with the existing CA$600,000 working capital position, the company is fully-funded to commence drilling once targets have been identified and permits received.

In sum, we have what might be a new gold discovery in a known gold-bearing region located in a largely-underexplored part of the world where for the first time in recent memory, large investment flows are suddenly and impressively showing up. We have a country manager with a proven track record and voluminous local relationships in order to facilitate the needs of the local politicians as he tries to capture the Navidad lightning in the junior exploration bottle once again. Remember, Navidad was sold for US$630 million.

At a CA$6.3m market cap, Norseman Silver Inc. appears ready to assume a dominant role in the Patagonia region as a first-mover with strong management at all levels and with a large land package in a mine-bearing region.

Buy Norseman Silver.

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.

Disclosures:

1) Michael J. Ballanger: I, or members of my immediate household or family, own securities of the following companies mentioned in this article: All. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: My company, Bonaventure Explorations Ltd., has a consulting relationship with: None.

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As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Allied Copper Corp. and  Norseman Silver Ltd., companies mentioned in this article.