By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime
Stock markets across Asia tracked Wall Street higher today following upbeat data from the US and early positive results from Pfizer’s first phase of its Covid-19 vaccine trial.
Investors seem to be focusing on the half full portion of the glass and not the other way round. That is evident in Hong Kong where the Hang Seng index is leading today’s rally by rising more than 1.5% after China’s national security law came into effect.
Higher appetite to risk has pressured safe haven asset classes like the US dollar, Treasury bonds and Gold. This has come in part due to the ADP jobs report released yesterday, which showed that 2.37 million private jobs were added in June and May’s figures, which have been dramatically revised with a gain of 3.07 million as opposed to 2.76 million jobs losses.
Investors will be awaiting today’s US non-farm payrolls report for confirmation, but even if we get a figure above 3 million, that won’t necessarily imply the US economy is going through a V-shaped recovery or sustainable economic improvement. One reason for this is that some jobs may be artificially created as companies want to benefit from the fiscal incentives created by the government’s Paycheck Protection Program (PPP). While jobs hit directly due to the lockdowns imposed over the past three months, such as restaurants and bars, will show a significant rise, other key sectors of the economy will likely continue to suffer. The headline number by itself won’t give the full picture. That’s why we need to look into how many jobs are supported by short-term government incentives, which won’t last long if companies’ revenues don’t improve. The other category to focus on is the permanent unemployed number that will take longer to bounce back.
The President of the Federal Reserve Bank of St Louis, James Bullard warned that we’re still in the middle of the crisis. He believes that without proper health policy risk management, we could get a wave of corporate bankruptcies that could feed into a financial crisis. However, with the number of infections rising to a record 50,000 on Wednesday, health policy management does not seem to be effective. The risk now appears to be reversing previous action to ease lockdowns and go back to square zero. Any news of a vaccine being developed will only have a short-lived impact on markets, until it becomes available to the entire population.
The 200-day moving average on the S&P 500 proved to be strong support and the index has bounced back on a number of occasions since June. Now we need to clear 3,155 (the triple top seen over the last two weeks of June) and 3,223 (the gap created on June 11) for the bulls to take the index to higher levels. Otherwise, the chances increase that bears can take control as we come into seasonal trends which have proven tough for stocks in the past.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
US economic data in the last couple of weeks were better than expected on balance. US Institute for Supply Management (ISM) report yesterday showed its manufacturing index climbed to 52.6 from 43.1 in May and from an 11-year low of 41.5 in April, when a reading of 49.5 was forecast. Any reading above 50 represents an expansion in economic activity. A day before Standard & Poor’s reported that the Case-Shiller house price index of selling price of single-family homes in 20 metropolitan areas rose 4% on an annual basis in April when a decline to 3.8% was expected after 3.9% increase in March. And while the ISM-Chicago reported Chicago area business activity contraction continued at above-expected rate in June the contraction slowed compared with May. At the same time the Automatic Data Processing Inc. reported private sector employment added 2.37 million jobs in June, and May’s statistics was revised: instead of a loss of 2.76 million jobs the US added 3.06 million jobs! And on the monetary front Federal Reserve chair Powell pledged on Tuesday to keep doing whatever it takes to support the US economy. Better than expected economic data are bullish for DJI. On the other hand Labor Department employment report will be released today and official data painting a picture weaker than the one ADP reported is an immediate downside risk for DJI.
Markets will be focusing on the latest US employment data that will be released later Thursday, ahead of the three-day weekend. US markets will be closed on Friday due to the 4th of July celebrations.
Here’s what markets are forecasting for today’s key figures:
The non-farm payrolls report to show over three million jobs added last month
The unemployment rate to fall by 0.8 percentage points to 12.5 percent
Initial jobless claims to moderate further to 1.35 million, far fewer than the over six million jobless claims registered per week in late March/early April. Despite the slowdown in these initial claims, the numbers remain far higher compared to pre-pandemic levels of around 200,000 per week.
Continuing jobless claims at 19 million, which is 500,000 less than the week prior, as it continues climbing down from the near-25 million peak in early May
The numbers, when released, could trigger some confusion in the markets, which could potentially lead to heightened volatility. This is due to attempts by the US Bureau of Labor Statistics to fix misclassifications from previous months’ reports.
Still, equity bulls would need the report to maintain that same optimistic narrative generated from the other US economic data released so far this week. Pending home sales saw a mammoth jump, consumer confidence is recovering, while the ISM Manufacturing print returned to expansion for the first time since February.
It’s also important to note that the data points to be released today are backward-looking, with market expectations already priced in. Should today’s job report fail to live up to expectations, any negative surprise that shows that the US economic recovery is faltering may end up eroding gains in US equities.
In the lead up to today’s data releases, investors have been content keeping the S&P 500 minis above the psychologically-important 3,000 level, while also supported by its 200-day simple moving average.
The Dollar index (DXY) will also be in focus amidst the jobs data release. Having climbed down a leg lower, the DXY has been confined to the mid-90s range, with its 50-day simple moving average threatening to cross below its 200-day SMA to confirm the downward trend. As long as the US economy can continue its post-lockdown recovery unhindered, coupled with the cautious mood among investors amid the global recession, such factors should keep the Greenback relatively supported.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
Equity markets are trading in risk on mode currently with US data expected to show almost four million Americans returned to work in June while the declining trend for new unemployment benefits applications persisted last week. Stock markets traded mixed yesterday in light of rising new coronavirus cases globally.
Forex news
Currency Pair
Change
EUR USD
-0.48%
GBP USD
+1.94%
USD JPY
-0.04%
The Dollar weakening is intact today ahead of US Labor Department report expected to show 1.3 million Americans likely sought unemployment benefits over the last week. At the same time the non-farm payrolls are expected to rise by about four million in June as many Americans returned to work. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.2% Wednesday despite an Institute of Supply Management report its manufacturing purchasing managers index climbed to 52.6 from 43.1 in May. Readings above 50 indicate an expansion in economic activity. EUR/USD reversed its sliding yesterday while GBP/USD continued climbing as German state statistics office reported lower than feared increase in unemployed in May. Both pairs are higher currently. USD/JPY reversed its rising yesterday while AUD/USD continued its climbing with both up currently.
Stock Market news
Indices
Change
Dow Jones Index
+0.93%
GB 100 Index
+0.17%
Nikkei Index
-1.56%
Hang Seng Index
+1.89%
Futures on three main US stock indexes are advancing today after a mixed session on Wednesday. Stock indexes in US ended mixed as minutes from the Fed’s June 9-10 meeting showed policy makers agreed to provide clarity in future communications on when the central bank could move rates away from close to zero currently. The three main US stock indexes recorded returns ranging from -0.3% to 1.0%. Late Wednesday the House passed a bill extending Paycheck Protection Program which had received $670 billion in funding, sending it to President Trump for signature. European stock indexes are extending gains currently after an uptick Wednesday despite a warning by German Chancellor Angela Merkel there was a possibility that no deal would be agreed between the European Union and Britain. Asian indexes are higher today led by Hong Kong’s Hang Seng ahead of a US Senate vote on a House bill that targets police units that have cracked down on Hong Kong protesters as well as Chinese Communist Party officials responsible for imposing a strict “national security” law on Hong Kong.
Commodity Market news
Commodities
Change
Brent Crude Oil
+1.95%
WTI Crude
+1.52%
Brent is extending gains today. Prices advanced Wednesday after the US Energy Information Administration report that US crude oil inventories fell 7.2 million barrels last week, the largest weekly decline in domestic crude inventories so far this year. The US oil benchmark West Texas Intermediate (WTI) futures gained: August WTI added 1.4% and is up currently. August Brent crude closed 1.8% higher at $42.03 a barrel on Wednesday.
Gold Market News
Metals
Change
Silver
+0.03%
Gold prices are edging higher today. August gold slid 1.1% to $1779.90 an ounce on Wednesday.
Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.
Peter Epstein of Epstein Research digs into recent news from Portofino Resources, which now has prospects on four gold properties in Canada and two lithium brine assets in Argentina.
Note: Au = Gold, Ag = Silver, Cu = Copper, Zn = Zinc, Cu Eq. = Copper Equivalent at spot prices
But first an update on Portofino’s South of Otter (SOT) property in the Red Lake mining district of northwestern Ontario. Although SOT is a priority, all four properties will likely see exploration this year.
South of Otter: ~9 kilometers (~9 km) from Great Bear’s Dixie project
The 5,207-hectare SOT project is 40 km southeast of Red Lake, Ontario, and about 9 km east of Great Bear Resources Ltd.’s (GBR:TSX.V; GTBDF:OTCQX) very high-grade Dixie project. In the past, SOT was the subject of large-scale geophysical surveys designed to target base metals. However, in 2001 Goldcorp completed a property-wide compilation and interpretation of prior ground and airborne magnetic data to assess the potential for gold. Due to a lack of outcropping rocks, minimal follow-up work was done.
Management just completed a field program of prospecting and geological mapping along strong conductors identified in the company’s winter electromagnetic (EM) ground survey. A total of 32 samples were collected to test various styles of mineralization, lithologies and alteration.
The work program included prospecting, detailed structural mapping and outcrop channel sampling based on conductors found in the geophysical survey announced on May 14. A lack of detailed historical work enables Portofino to undertake meaningful programs, guided in part by the successes of neighboring exploration companies.
In addition to the collection of 32 samples, significant semi-massive to massive sulfide mineralization was discovered along a newly identified, 1.6-km-long fault zone. This zone is located ~500 meters (~500m) south of previously identified gold soil sample anomalies and EM conductors. A total of 12 samples were collected along this (deformation) zone to test for the presence of Au, Ag, Cu and Zn.
Notice in the image below that drill holes (DH)/historical resources include: DH: 1.5% Cu + 6.3% Zn (3.7% Cu Eq.) over 3.4 m; 110,000 tonnes @ 0.5% Cu + 12.5% Zn (4.9% Cu Eq.); DH: 1.4% Cu + 7.3% Zn (4.0% Cu Eq.) over 9.5 m; 100,000 tonnes @ 1.0% Cu + 10% Zn (4.5% Cu Eq.).
Further prospecting and geological mapping on the margins of this fault zone identified alteration in the volcanic wall rock. Many gold deposits in Ontario are either directly hosted in this type of mineralization or exist in close relationship to it and a fault zone. Other projects containing this signature, along similar deformation zones, include GBR’s Dixie and the Uchi Lake gold mine. Once additional permits are received, Portofino will proceed to trenching / drilling.
Three new gold properties secured in past month
These are exciting times for Portofino. Management had an opportunity to pick up additional low-cost properties with gold showings, so they did. All three properties are located in historical and current mining districts with ample infrastructure and easy access. In addition to Red Lake, management expects activity in the Atikokan area to heat up this summer. A number of companies are increasing their exploration there.
Portofino began negotiating and planning to lock up gold properties in Ontario when gold was around US$1,400/ounce (oz). Today (June 24), August gold futures are at US$1,786/oz, a gain of ~28%. Therefore, without a single new drill hole on any of its four controlled properties, I argue that the value of the company’s assets has meaningfully increased.
On June 11, Portofino announced the execution of a binding agreement to acquire six claims (869 hectares) in the Atikokan district, also in northwestern Ontario. The Melema West property is located 28 km northeast of Atikokan, and 5 km north of the Quetico Fault. Agnico Eagle Mines Ltd.’s (AEM:TSX; AEM:NYSE) Hammond Reef gold deposit is ~19 km northwest of Melema West. Hammond Reef hosts a large, near-surface Measured and Indicated resource of 4.5 million ounces of gold.
Grab samples taken in 2019 assayed as high as 10 g/t gold. The Young-Corrigan vein system ranges in width from 1 to 15m and was mapped over a strike length of at least 170m. Positive gold values demonstrate that an additional undocumented gold-bearing structure potentially exists on the Melema West property.
CEO David Tafel of Portofino commented on the Melema West property: “The gold-bearing structures in this area are extensive, well documented and traceable for >30 km. Recent land acquisitions by Agnico Eagle, contiguous to Melema West, supports the idea that Portofino is strategically well placed. The undocumented and unexplored Young-Corrigan Shear Zone is a compelling exploration target.”
On May 27, Portofino executed a binding agreement to acquire three claims totaling 1,147 hectares. The Sapawe West property is 9 km northeast of Atikokan, just north of the Quetico Fault, and 2.5 km west along strike of the past-producing Sapawe Gold mine. Portofino has initiated the compilation and reinterpretation of all available historic data on the property and is proceeding to develop exploration targets for a summer field program.
Hammond Reef, located ~13 km north of the Sapawe West property, is in a structurally active portion of the Steep Rock Greenstone Belt. Similar to the structure associated with Hammond Reef, Sapawe West hosts a possible northeast trending splay from the Quetico Fault.
CEO Tafel commented on the Sapawe West property: “We are excited to acquire this strategically located property. The nearby past-producing Sapawe Gold mine, the visual results from Falcon Gold’s drill program along the same geological corridor, and the lack of drilling on the property, makes for a compelling exploration target. We look forward to commencing initial field work.”
This news came just a week after executing a binding option agreement for the right to acquire a 100% interest in the Gold Creek property. The block comprises three mining claims, is easily accessible by road, and covers ~1,010 hectares.
Historical activity at Gold Creek included:
· From 1967 to 1973, prospecting, mechanical stripping/trenching and rock sampling of quartz vein occurrences in the district.
· In 1983, geological mapping, magnetic and VLF-EM surveys further assessed the area.
· In 1985, and from 1987 to 1989, Noranda Exploration conducted extensive work, [exploring] the area with an airborne magnetic and electromagnetic survey, ground magnetic and electromagnetic surveys, selective radiometric and gravity surveys, geochemical sampling, geological mapping/overburden stripping, and rock sampling.
Inco Gold conducted an exploration program in 198990, which consisted of grid line cutting, magnetic, VLF-EM and geological mapping surveys, trenching, rock sampling and two diamond drill holes. Two grab samples assayed 13.2 g/t and 64.2 g/t gold.
Significant gold mineralization has been traced along a 1.5 km strike length, with grab samples returning values up to 759 g/t = 24.4 ounces/tonne (from an OGS property visit), and diamond drill intersections in 2008 of up to 2.3 g/t over 8.3m.
CEO Tafel commented on the Gold Creek property: “This transaction allows us to continue to build our gold portfolio within the easily accessible, active and historic gold mining area of northwestern Ontario. Multiple visible gold occurrences reported by previous operators is very encouraging, and gives our technical crew a head start in planning initial exploration activities.”
Gold Creek is characterized by geology similar to that documented in the Kirkland Lake area, where numerous gold showings occur in a broad range of lithologies. Visible gold sometimes occurs within the mineralized veins. Management has initiated the compilation and re-interpretation of all available historic geochemical and geophysical data at Gold Creek to develop exploration targets for summer field work.
Conclusion
Portofino is up +225% from its three-year low, but its market cap is only CA$3.2M. In addition to the four properties described above, the company has two lithium brine assets in Argentina that could be worth millions of dollars (Canadian) once energy metals regain popularity. If management could farm out one or more gold/lithium properties, it could reduce already low cash burn to virtually zero. Shareholders would have a free option on the remaining controlled properties.
In looking at peer Red Lake properties (and companies with nearby Atikokan area properties), the average gain from three-year lows is +1,640%. Even excluding GBR’s staggering performance, the average gain is 2.5 times that of Portofino’s. Perhaps not Great Bear, but others listed on the above chart could be interested in acquiring companies like Portofino to gain additional regional gold exposure.
Another thing to watch for is a potential takeout of Great Bear or Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE). That event would generate even more excitement in the region, shining a light on the dozen or fewer remaining juniors that have all, or substantially all, of their precious metals properties in northwestern Ontario. In British Columbia’s Golden Triangle, there are three times as many names to choose from. Portofino Resources offers a compelling risk-reward proposition.
Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.
Epstein Research Disclosures/Disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about Portofino Resources, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market making activities. [ER] is not directly employed by any company, group, organization, party or person. The shares of Portofino Resources are highly speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making any investment decisions.
At the time this article was posted, Portofino Resources was an advertiser on [ER] and Peter Epstein owned shares and warrants in the company.
Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.
Streetwise Reports Disclosure: 1) Peter Epstein’s disclosures are listed above. 2) The following companies mentioned in the 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.
Bob Moriarty of 321gold discusses the latest developments in Japan with this company.
In February when I was writing about Irving Resources Inc. (IRV:CSE; IRVRF:OTCBB) I put in some pictures of rocks from Irving that Quinton sent me. I polished them and had a jeweler friend make buckles out of them.
I did the polishing. Maurice put up the gold. I am way too cheap to be buying gold buckles for him.
I’ve known Quinton for over a dozen years now. He’s smarter than me. Hell, he’s smarter than Barb was and she was smarter than me. Because Quinton tends to dress in Goodwill basic, people underestimate him.
Quinton’s playing 3-D Chess when everyone else thinks it’s Chinese Checkers. It’s not. There is purpose in everything he does. He and Akiko Levinson have the perfect relationship. She Captains the boat and he adjusts the sails now and again. I know a lot about the background, we talk constantly.
When you create a mining company or put a mine into production, you need to make sure you haven’t painted a bulls-eye on your back with a sign on your head saying, “I’m stupid.” Many a poor young lad has believed he has made his fame and fortune only to find out someone snatches it away for cents on the dollar while he was setting up his marbles ready to play.
Quinton is always thinking about the future. He wants to help create Japan’s leading gold mining company but not to see it snatched away by someone with deep pockets. So he keeps thinking about how he can balance one side off by another. He needs to be making alliances where everyone is marching in the same direction.
And to a large extent the market doesn’t understand the importance of Akiko being Japanese and understanding the nuances of Japanese culture. This is really simple. No Canadian company is going to come in and let the Japanese know how things are done. The Canadian company either becomes Japanese or thinks Japanese or they fail.
Irving has released two press releases that if the market actually understood what they mean over the long term, the shares would be in double digits.
A week ago Irving announced they are in discussion with Shimadzu Ltd about doing something with them on the Yamagano Mining License. Those mines have been held for almost four hundred years by one of the most important families in Japan, the Shimadzu Clan. It is the nearest mine to the famous Hishikari gold mine. It has never had a drill hole or any modern exploration.
The Shimadzu family is not about to go into the gold exploration business. They are in other areas of Japanese business. But them agreeing to talk about terms on advancing Yamagano is nothing short of incredible. And pretty much ignored by the market.
On June 26th after the market closed, Irving dropped news of another stupendous coup, that of inviting Sumitomo in as a strategic investor for $2.5 million USD. Irving doesn’t need the money. And for Sumitomo it is not even chump change; chump change is a lot bigger.
What it is represents a three-way deal between Sumitomo, Newmont and Irving. That’s not unlike an eight-year-old prodigy being invited to the World’s Cup of Chess. But even child prodigies grow up one day.
I’ve participated in a lot of private placements in Irving. I’ve bought shares in the open market and they are an advertiser. Right now they are my largest position. Naturally I am biased so I encourage all potential investors to do their own due diligence.
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.
Disclosure: 1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Irving Resources. Irving Resources 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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Irving Resources, a company mentioned in this article.
Bob Moriarty of 321gold discusses why he believes this new company can succeed with this gold mine while its predecessor could not.
Yesterday I promised I would be boring so here it is. We are in a depression. The Fed is doing the opposite of the right thing. They are destroying the currency. Their stupidity will take down the stock market as well as the bond market and leave most of the 99% broken. We will see the banks close. We will have hyperinflation.
You can still protect yourself and it’s not by buying Hertz shares on RobbingTheHood. I promised I would be writing about low cost high potential resource stocks.
Magna Gold Corp. (MGR:TSX.V; MGLQF:OTCQB) is a newly formed company headed by Arturo Bonillas. He has done a deal with Alio, the new company name for what was Timmins Gold, former operator of the San Francisco Gold Mine in Sonora, Mexico.
Timmins put the mine back into production but got a little carried away with drilling and trying to advance the mine. They managed to spend all the profit on exploration. Arturo Bonillas managed the mine and can solve the real issues created by prior management. Under the agreement for Magna to take over the mine, Timmins will receive about 18% of the stock. In addition there were legal issues with former contractors who weren’t paid. Those issues have been sorted.
The mine has and can make money. Magna has about $10 million in cash with an M&I 43-101 of 1.484 million ounces of gold. The company is leaching now and expects to be stacking ore in a little over a month. In a recent press release the company announced production of 2,350 ounces of gold in May at a cash cost of $1,121 an ounce USD.
The San Francisco Mine could have been profitable for Timmins except for some poor operational decisions. The mine is now in the hands of someone who knows it better than anyone. Arturo Bonillas knows both the problems and how to solve them.
Magna plans on restarting the San Francisco mine and getting to stable low cost production. First year production should be about 70,000 ounces moving to 100,000 ounces in a year. Management has plans for expansion and picking up new projects with an objective of annual production of 200,000 ounces gold with a 5 million ounce resource by 2023. It can be done and they will have a far higher market cap when they achieve that.
I have bought shares in the open market. Magna is an advertiser and naturally that makes me biased. Do your own due diligence.
Magna Gold MGR-V $1.16 (Jun 29, 2020) MGLQF-OTCQB 84.5 million shares Magna Gold website.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
Disclosure: 1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Magna Gold. Magna 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.
Sector expert Michael Ballanger breaks down the Canadian government’s monetary policies, and offers an anecdote drawing correlations between positioning in gold now and positioning in gold in the 1970s, before the commodity’s “parabolic” ascent.
As I sit here on a Thursday evening, contemplating the logic behind my most recent additions to a highly tentative short position on the SPY:US (the exchange-traded fund [ETF] tracking the S&P 500), I am doing everything in my power to not take my quote machine and project it into the watery abyss of lovely Lake Scugog.
If there were a number of politicians or central bankers lined up on the shoreline, I would not hesitate to fire off a volley of quote machines, cellular phones, portable chargers, paperweights, ash trays and medicine balls all in a concerted effort to decapitate the singular most useless collection of heads ever assembled on any shoreline, notwithstanding the fact that the bodies would only float on a one-inch layer of water, while the weeds, algae and flotsam exist in the four feet to the lake bottom (not that anyone can see it after June 10).
The venerable Justin Trudeau, son of Pierre, the current prime minister of Canada and the son of the most treasonous politician in Canada’s history, has now officially assumed the role as the most incompetent human being ever to have been elected to public office in any jurisdiction north of the 49th Parallel. Not only is he the most incompetent, he is arguably the most malleable elected official in the history of post-Magna Carta politics, kowtowing to every liberal cause that surfaces while carefully turning a blind eye to corporate malfeasance in order to protect donations.
Under the stewardship of Monsieur Trudeau, Canada has finally forfeited its AAA rating by the bond market handicappers. Layer upon layer of government debt has been added to the already burgeoning household debt figures, and thanks to the Canadian banking industry’s shameless practice of laundering illicit Asian money in order to pump up the real estate bubble, young citizens are taking on massive mortgage exposure just to get a roof over their heads close to the workplace.
Canada is now rated alongside Portugal, Italy and Greece in terms of credit “worthiness.” This is not because it is without natural resources or a sophisticated, educated labor force; the country is rated like a banana republic for two reasons. The first is the sub-par quality of its leadership and the second is its educators, the incredibly powerful Canadian Teachers Federation, is actively promoting the idea that liberal is “good,” conservative is “bad,” and that “Modern Monetary Theory” can be implemented to remove all financial responsibility as an obligation of success.
Job losses due to shrinking global trade are replaced with government paychecks because, after all, it was not the fault of the worker loading pallets onto trucks that the employer could not afford to use him anymore. Justin and his band of spendthrifts throw money at the unemployed pallet loader and then backstop the employer’s junk bond issue with yet another bailout, thus covering both ends of the voting spectrum with money printed in a manner most popular with Federal Reserve Chairman Jerome Powelldigitally.
The percentage of household debt to disposable income is today approaching 180%, and that is a meaningless number to most until one sees that at the peak of the U.S. housing bubble in 2007, that number peaked at 140%. The U.S. is certainly no ideal model of sound money practices either, at the household or the federal level, but one can see that the trend in the U.S. is down while Canada (at least as of two years ago) was accelerating. With the insanity of the liberal government reaction to the pandemic and economic collapse, the Canadian numbers are certainly no better today.
The Canadian currency has been on a roller coaster ride since the lows of 2009, and has been almost perfectly correlated to oil prices. But for Canadians, the significance of the CAD/USD relationship lies in how gold has responded since 2009, in light of the fact that neither the Bank of Canada nor the Canadian treasury owns as much as a single ounce of gold.
At the lows of Q1/2009, had the average Canadian sold all bonds and stocks and simply bought gold, he/she would be ahead 171.06% in that time frame. In the same period, the TSX is up a hair below 7%. The S&P 500 is up 133.27% in U.S. dollar terms, but a striking 215% when the currency gain is calculated.
Nevertheless, the point I make is that for a country that has just seen its credit rating slashed and whose household finances are, on a per capita basis, simply dreadful, its citizens have an urgency to place a significant portion of their investible net worth into gold. Currencies of countries that get downgraded tend to experience sustained and significant drawdowns in purchasing power, so Canadians that are ten to twenty years from retirement should not be relying on traditional sources of capital (like one’s residence) to make up the shortfall.
Foreign investors need not worry about Canadian markets as long as they stick to precious metals producers and developers, because any domestic currency risk will be offset by the domestic hedge that Canadian gold producer/developers hold through ounces in the ground. In fact, valuations could be accentuated because of rising cash-flows and increased dividend payouts.
As we approach the end of June and move into the seasonally strong period of August-to-May for precious metals, I deem it important to relate a story from the 1970s, when I was a trainee for a big Canadian brokerage firm (McLeod Young Weir Ltd.).
There was an Irishman named “Jimmy” who, in the early ’70s, before gold exploded, was one of the “marginal” producers in the Toronto branch. He came in every morning with a brown paper bag full of sandwiches and a cookie and quietly went about his business of calling his clients and discussing his strategy for the next five years. Not too many people paid any attention to Jimmy because he had little to say about stocks and nothing to say about bonds; he never bought any of McLeod’s underwritings and he never read any McLeod research.
Many around me wondered why he was still employed but somewhere around 1977 (shortly after I entered the training program), I got to know him because he would give me these European reports on a group of companies called the “South African golds,” and they absolutely fascinated me. Why, I thought, was this man accumulating all these 10-cent and six-cent and 15-cent South African gold miners? Was South Africa not a risky place to do business? Was apartheid not attracting the scorn of the world with increasing frequency?
One afternoon in 1978, I saw the brokerage rankings for the firm, and Jimmy had inexplicably vaulted from back-of-the-pack to the Top Five in the entire firm. I raced over to congratulate him and asked him how he did it. The story he told me changed my life for many years.
He began to doubt the U.S. dollar’s role as the world’s reserve currency after listening to a 1969 European speech by former French President Charles De Gaulle, in which he told a group of French business leaders that France would no longer accept American dollars as payment for bonds that were maturing. Instead, they would choose to receive gold, because back then the U.S. dollar was exchangeable for gold at a predefined ratio.
As this trend accelerated due to Vietnam War costs and other profligate spending by the U.S., it became apparent to President Nixon that if it continued, Fort Knox would be stripped of its gold. Shortly thereafter, the gold exchange “window” was closed, and the Bretton Woods agreement was shelved, thus allowing the gold price to freely float as opposed to the U.S.-imposed “peg” at US$35 per ounce.
Jimmy saw this and started to put all clients into a group of South African gold miners (“ADRs”), but his top pick was a stock called “Vaal Reefs,” which he was buying at around US$1.00 per share. He explained to me that it had a dividend at $0.20 per annum, so while other brokers were buying the Canadian banks at 5% yields and long Canadas at 8% yields, Irish Jimmy was buying this obscure gold miner at a 20% yield, with gold then at US$200 per ounce.
By 1979, gold had moved from US$200 to $500, but what turned out to be “the wonder of commodity price leverage” was that Vaal Reefs management, in keeping with their dividend payout policy, had been steadily increasing that dividend. By the time gold started its parabolic ascent to US$857 in 1980, that $0.20 dividend had grown to $1.00, which was the original price Jimmy had paid for his shares! Needless to say, by 1980, Vaal Reefs had something like a $2 dividend and traded north of US$30.
Jimmy had started his career in the investment business in 1968 with a $5 million book of clients, but by 1980, his wizardry during the Great Inflation of the Seventies, focusing on the leverage of rising dividends during a commodity boom, grew his book to over $300 million. After that, he sold all positions in the South Africans, sent his clients all of their money, and promptly retired.
That is precisely what I envision in the coming months and years, as a direct result not of “profligate wartime spending,” as in 1968, but of the total disrespect by central banks the world over for the sanctity of currency purchasing power. I urge all of you to remember the story of Irish Jimmy, who placed faith and trust in gold as a bastion of financial prudence and was rewarded by clients and the fates for his efforts.
We are in the early stages of a Seventies-style enrichment event, and the vehicle of delivery is gold. I see another month of sideways action, and then all hell is going to break loose.
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.
Disclosure: 1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger 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) 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. 3) 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.
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.
As third quarter trading kicks off following a tumultuous first half of the year, investors are hoping for an auspicious July.
Both stocks and precious metals posted impressive advances in the second quarter. The S&P 500 finished the April-June period with a gain of nearly 20%, its best quarterly performance since 1998. The Dow Jones Industrials, meanwhile, posted its best quarter since 1987.
It’s worth noting that in 1998 – and more famously in 1987 – the stock market also suffered a sharp 20%+ decline during the second half of the year.
In a volatile trading environment for equities, a big move in one direction tends to beget a big move in the other. We’ve already seen a big move lower earlier this year – and a subsequent move higher that was nearly equal in magnitude.
The bull run has seen the shares of leading tech giants, including Amazon, Apple, and Microsoft, hit new all-time highs. Smaller brick-and-mortar companies tied more directly to the fortunes of the real economy haven’t fared so well.
The question going forward is whether the broad stock market will correct to reflect a hollowed-out economy that remains partially locked down… or whether stocks will continue to move higher in response to artificial fiscal and monetary stimulus.
Until the Chinese virus stops spreading (and politicians stop constricting economic activity in response), we will likely see the above-mentioned divergences persist and market volatility remain heightened.
Conventional fundamental analysis should be thrown out the window.
In this environment, it is quite possible that Wall Street will be celebrating the S&P 500 hitting a new record in the second half of 2020 at the same time as economic misery on Main Street hits a new low – and major U.S. cities descend into chaos amid violent protests and de-policing.
These are strange and scary times. While investors can hope for a return to normalcy in the months ahead, they shouldn’t count on it.
“These are the times that are the times that try men’s souls,” wrote American Revolutionary Thomas Paine (“The American Crisis,” December 19, 1776). He added, “Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph.”
In order for investors to triumph during a period characterized by a deadly pandemic, economic despair, unhinged markets, unlimited Quantitative Easing, social unrest, and deepening divisions, they need to be prepared for the next big shoe to drop. A crisis in the U.S. banking or political system – or in the U.S. dollar itself – could be coming.
These are the times that call for gold (and silver). Owning financial insurance may never have been more important.
Gold and silver markets racked up impressive gains of their own in the second quarter. Gold in particular finished on a high note – closing Tuesday at $1,789, its highest level since 2012.
If gold’s recent upside breakout garners immediate follow through, a new all-time record high may be only a few days away.
A new all-time record high for gold may be only a few days away.
Gold is up 18% year to date, far outperforming the stock market. Despite rallying strongly off its lows, the Dow is still down 9% for 2020. The tech-heavy Nasdaq is up 12% for the year, but even it is underperforming gold.
Regardless of whether artificial stimulus injections propel stock market averages higher in nominal U.S. dollar terms, they could continue to lose value in terms of sound money (gold and silver).
When economic and political fears are running high and the Federal Reserve’s printing press is running on overdrive, that combination is like rocket fuel for precious metals markets.
To quote Thomas Paine once again, “What we obtain too cheap, we esteem too lightly.”
A flood of Federal Reserve Notes pumped into the banking system, the Treasury bond market, the junk bond market, and directly into Americans’ pockets through “stimulus” checks is cheapening the value of the currency and severing the link between economic productivity (i.e., work) and reward.
It’s much harder to mine gold or silver out of the ground than it is to expand the supply of fiat currency.
That makes hard money less convenient from the standpoint of politicians and bankers. But it also ensures that, unlike paper or digital representations of money, gold and silver coins will always be esteemed for their intrinsic value.
The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.
Shares of sustainable electric vehicles maker Workhorse Group reached a new 52-week high after company’s shares were added to the Russell 3000® Index beginning June 29, 2020.
Workhorse Group Inc. (WKHS:NASDAQ) today announced that “its shares were added to the broad-market Russell 3000® Index at the conclusion of the annual reconstitution of the Russell indexes, effective after the U.S. market opens today, June 29, according to the FTSE Russell website.”
The firm stated that “annual Russell indexes reconstitution captures the 4,000 largest U.S. stocks as of May 8, ranking them by total market capitalization. Membership in the U.S. all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the large-cap Russell 1000® Index or small-cap Russell 2000® Index as well as the appropriate growth and value style indexes.”
The company’s CEO Duane Hughes commented, “Our inclusion into the Russell 3000 Index represents another milestone for Workhorse as a public company in a year where we expect to make additional landmark achievements in the electric vehicle industry…The Russell Indexes are a widely known and well-respected benchmarking standard. We appreciate being a part of this select group and will look to leverage this platform to generate further interest and awareness in our business within the investment community and beyond.”
The firm noted that Russell indexes are widely and frequently used by investment managers and institutional investors and that around $9 trillion in assets are benchmarked against Russell’s U.S. indexes.
Workhorse Group Inc. is a technology company based in Cincinnati, Ohio, that provides electric vehicles to the last-mile delivery sector. The firm is an original equipment manufacturer (OEM) that designs and builds high performance, battery-electric vehicles including vans, trucks, drones and aircraft. The company advised that “it also develops cloud-based, real-time telematics performance monitoring systems that are fully integrated with our vehicles and enable fleet operators to optimize energy and route efficiency.”
The firm stated that the FTSE Russell indexes cover 98% of the investable markets serving institutional and retail investors globally and that about $16 trillion is currently benchmarked to various FTSE Russell indexes.
Workhorse Group started off the day with a market capitalization of around $699.2 million with approximately 70.63 million shares outstanding and a short interest of about 14.1%. WKHS shares opened 23% higher today at $12.20 (+$2.30, +23.23%) over Friday’s $9.90 closing price and reached a new 52-week high price this morning of $15.41. The stock has traded today between $11.00 to $15.41 per share and is currently trading at $14.04 (+$4.14, +41.79%).
Disclosure: 1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
