Cashed-Up Explorer Set to Drill Gold-Copper Porphyry

https://lh6.googleusercontent.com/X3X7ZKN6ljpVM4EpXo46Z6Tx5d9WDyR4ItKbwXlOvutAFFC-VU_66ssW6jgpS-NAVodfMyUpbtVRSidkDriKpAj9K60P4TCJe-6QHJFbi6URBaS_RUfkbKeIOaE2Em4nizBi6wtP

Source: James Kwantes for Streetwise Reports 08/20/2019

James Kwantes of Resource Opportunities profiles an explorer with projects in British Columbia and Chile.

Speculating in junior mining equities is a dangerous—and sometimes extremely lucrative—game. Some of the key qualities that lay the groundwork for shareholder value creation in an exploration play are:

Serially successful management
High-quality projects
Stable jurisdictions
The right commodity, at the right time
Tight share structure

Discovery drill plays carry both the most risk and potential reward. A discovery can create tremendous—even life-changing—shareholder value. But it’s only the drill—aka the “truth machine”—that will determine whether an economic ore body lurks beneath the surface. Orestone Mining Corp. (ORS:TSX.V) is funded to drill two large porphyry targets in British Columbia and Chile and has positioned itself for success by ticking the above boxes.

Next comes a drill program at Orestone’s Captain property, which is host to a large gold-copper porphyry target near Centerra’s Gold’s Mount Milligan copper-gold mine northwest of Prince George. Orestone plans to drill between 1,000 and 1,250 meters in five holes at its Admiral target. The project is located on flat terrain and accessible via logging roads, making it suitable for year-round exploration.

Mobilizing the drill at the Captain project.

I initiated coverage on Orestone at 7 cents in Resource Opportunities on Sept. 26, 2018, and the stock has since traded as high as 25 cents. Shares now trade at 12.5 cents, giving the company a market capitalization of about $3 million—very modest compared to other cashed-up, high-potential drill plays. Orestone has about $700,000 in the treasury and is raising another $500,000 in flow-through funds to drill Captain. The company is selling 16-cent units, each of which includes one flow-through share and half a warrant (one-year, 22-cent).

Orestone has a clean share structure, with a serially successful management team advancing two high-caliber projects in neighborhoods that host very large mines. Let’s take a closer look.

MANAGEMENT

Orestone’s chairman and CEO David Hottman and Gary Nordin, an Orestone director and senior consulting geologist, have deep industry experience with successful companies including Bema Gold, Eldorado Gold, Nevada Pacific Gold and Polaris Materials. All of those companies were acquired by larger companies except for Eldorado Gold.

Nordin, a co-founding director and VP of Bema, has been directly involved in several multi-million-ounce gold discoveries, including Refugio in Chile (6–8M oz). He was also a co-founder, director and VP of Eldorado, where he was involved in the Kisladag discovery in Turkey (12M oz) and La Colorada in Mexico (1M oz). Hottman owns about 5.3% of Orestone’s outstanding shares; Nordin owns 4.2%.

The latest team member is Bruce Winfield, appointed president on June 3, and I recently stopped by Orestone’s modest Vancouver offices to meet him. Winfield is a Spanish-speaking geologist who got his first taste of Latin America working on the Cerro Colorado porphyry deposit in Panama for Texas Gulf. He later spent three years working in Spain, including opening a Boliden office in Madrid.

Orestone …read more

A Summer Epiphany: Carpe Sanctum

Source: Michael Ballanger for Streetwise Reports 08/20/2019

Sector expert Michael Ballanger compares safe harbor on the water to safe harbor in the financial and precious metals markets.

“Destroyers seize gold and leave to its owners a counterfeit pile of paper.”– Ayn Rand

Twelve days ago, we were forced by gale force winds to seek safe harbor in the lovely northern Ontario town of Britt, located on the north shore of the Magnetawan River, approximately fifty miles south of Sudbury. As I was growing increasingly less patient with Mother Nature’s petulance, I found myself drawing an intuitive parallel between the good fortune in avoiding the ravages of the Georgian Bay rollers (big waves) and the pecuniary good fortune of having taken a very large physical and paper position in silver.

Riding out a dangerous and violent midsummer Great Lakes tempest in the sanctuary of Wright’s Marina alongside dozens of equally thankful-yet-exasperated mariners was analogous to watching your incompetent boss drive your new Porsche off a cliff: You are filled with mixed emotions, angry that your voyage has been delayed yet ecstatic that you are safe from harm.

Similarly, being overweight silver in today’s confused and catatonic financial world has been at once both a blessing and a damnation: Purchases at the lows in early July have been countermanded by the many earlier attempts, since December 2015, that had to be aborted due to the criminal interference and intervention covered countless times in this publication (and, invariably, to the point of launching quote monitors out the ninth-floor window in search of a bullion bank skull).

Since the tops in 2011, it has not been a pleasant voyage for those aboard the silver ship, but nothing quite as painful as the period of December 2015 until June 2019, as the precious metals nadir that I nailed on December 4, 2015 gave us a brief nine-month rally. Maddeningly, after August 2016, the bullion bank behemoths mercilessly punished all technical traders by selling all breakouts, flooding the Crimex with counterfeit paper “gold” and paper “silver.” I came out in late 2016 with the “Sell breakouts, buy breakdowns” strategy, which was precisely the correct chart to follow, gingerly avoiding the treacherous rocks and shoals of drawdowns as I successfully navigated around the perhaps $400 per gold ounce and $5 per silver ounce of systemic “shipwreck” brought about “regulatory undersight,” giving way to total bullion bank control. And all I could do was sit back and watch.

The landscape all changed in June, not so much by the advance through the six-year cap at $1,375 per ounce but more so by the content and quality of the advance. How many times have you read my thoughts on the importance of the prototypical sequence required by true precious metal bull markets? Silver outperforms gold; miners outperform physical; and junior miners outperform senior miners. As the chart below would suggest, we have a classic “phoenix-style” bull …read more

Adrian Day: Stay with the Royalties in a Bull Market

Chart

Source: Adrian Day for Streetwise Reports 08/20/2019

Money manager Adrian Day explains why he is a believer in holding royalty company shares in a bull market.

There is a common perception that the royalty—and streaming—companies are defensive in a bear market, but that you don’t want to own them in a bull market since they lack leverage. We disagree, and think the major royalty companies should continue to form cornerstones of a precious metals portfolio in a bull market.

No doubt, we do not expect any of the major royalty companies to be the very top-performing stock in a precious metals portfolio during a bull market. But:

Royalty companies have plenty of leverage from expansions at existing mines and new mines coming into production on higher gold prices; the royalty company contributes no additional capital to see a dormant asset start generating revenue.

Royalty companies continue to exhibit, on balance, the lowest risk of any precious metals sector, second only to bullion itself.

Royalty companies tend to pay dividends above the PM universe average, and with tremendous free cash flow generation, have the ability to increase dividends.

The royalty companies will attract new money in the gold space; generalists will go to Franco, U.S. retail investors to Royal Gold.

If not necessarily the best performing stocks in a bull market, the returns from royalty companies will be more than satisfactory.

In short, I will put a portfolio of four or five royalty companies against four or five miners any day.

Franco remains the crown jewel

Franco-Nevada Corp. (FNV:TSX; FNV:NYSE, US$92.78) is the crème of the crop; its shares have outperformed the index about 10 times since its re-listing in 2008. It has top management, innovative and conservative; a solid balance sheet, with modest debt only twice in that time frame; a willingness to act counter-cyclically; strong diversification in its portfolio; a low cost structure; and a deep pipeline of assets.

Only two of its assets contribute more than 10% of its revenue, and the top operator is responsible for only 12%. This diversification is broader than for other companies, and means Franco is not at risk from a failure either of an operator or an asset.

As for costs, its G&A is not much higher today than it was a decade ago, despite the tremendous growth in revenue, representing today less than 5% of its revenue.

Strong quarter and stronger year

Franco reported strong revenues, above estimates, in its latest quarter, with oil and gas revenues offsetting slightly weak metals sales. The company expects metals sales to be at the higher end of guidance for the rest of the year, as Cobre Panama, its latest major asset, ramps up. And oil and gas revenues are expected to continue strong as well, including from the recent Marcellus shale acquisition.

First deliveries from Cobre Panama came in July, a little later than expected, and therefore are not contributing to first-half revenues at all. …read more

Blackrock Swings for the Fences at Silver Cloud

Source: Bob Moriarty for Streetwise Reports 08/19/2019

Bob Moriarty of 321 Gold discusses this company’s exploration efforts at its Nevada gold project.

I first talked about Blackrock in March of last year. They had done a deal with Carl Pescio on what they call the Silver Cloud gold project. The project is next to the high-grade Hollister Gold Mine and near the high-grade Midas mine in Northern Nevada.

The district is well known for bonanza grade intercepts in vein systems. 8,000 meters of prior drilling fifteen years ago by both Teck and Placer Dome generated intercepts of 1.5 meters of 157 g/t gold and 12 meters of 5.5 g/t Au but were never followed up with.

Blackrock applied for and received permits for a 2,000-meter drill program starting a month from now. A drill ready anomaly was discovered only this summer by both geophysics and geochemical testing with surface vein outcropping at surface on the 40 square kilometer project.

New technical work suggests a 2 km strike potential with primary orientation running East/West rather than the North/South direction suggested by historic drilling.

An indication of the interest in participation in the recent placement at $0.16 for $150,000 from Carl Pescio himself should show potential investors the level of confidence the claim owner feels about both Blackrock and the pending drill program.

The million dollars being raised will fund the planned exploration program and Blackrock has about $2.5 million in warrants priced between $0.10 and $0.20 so any indication of success should generate the money for a follow-up program.

Blackrock is an advertiser. I am participating in the current pp. I did participate in the last pp and I’d love to be able to exercise my warrants. Naturally that makes me somewhat biased. Do your own due diligence.

Blackrock Gold Corp.
BRC-V $0.16 (Aug 19, 2019)
BKR-OTCBB 49.2 million shares
Blackrock website.

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

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Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Blackrock Gold. My company has a financial relationship with the following companies mentioned in this article: Blackrock Gold is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Statements and opinions expressed are the opinions of …read more

Bob Moriarty: Resource Companies to Look at in Times of Financial Turmoil

Source: Maurice Jackson for Streetwise Reports 08/19/2019

Bob Moriarty of 321 Gold explains why he believes the financial outlook is dismal and discusses a handful of resource companies that are on his radar.

Maurice Jackson: Joining for us for a conversation is Bob Moriarty, the founder of 321Gold and 321Energy.

Glad to have you back on the program and long overdue, I might add, sir. We have a number of topics to address, so let’s get right to it. Earlier, you wrote a musing entitled “We Should Let The Banks Burn Down.” Ladies and gentlemen, this is a must read. If you’re trying to make some sense of the dire global financial situation and the direct implications it will have on you and your family, Bob, you’re a big thinker and you have a unique ability to condense a complicated subject into any easy, concise reading. You’re also very strategic, so I know there’s a method to your genius. Readers could literally take that narrative into 18 different subjects. What compelled you to write this musing right now?

Bob Moriarty: I started thinking about the banks and I started thinking about 2008. We had a chance to fix the system in 2008, but we needed to let AIG collapse. We needed to let the banks collapse. We needed to start all over. Now, where this idea came from that you have to keep the crooked banks going is just beyond me. Let me give you an example, and I can’t give you the exact numbers, but Bank of America was going to buy Merrill Lynch, and Merrill Lynch handed out something like $2 billion in year-end bonuses on the 12th of December, 2008. On the 15th of December, 2008, they came out and announced $15 billion in losses. It was a total shock to everybody.

Now, think about that for a minute. The whole concept of giving people bonuses is for doing good work. Why would you give bonuses to people who are losing money hand over fist? It’s beyond me that we have let AIG steal, we’ve let Soros steal, we’ve let Warren Buffett steal, and that’s all it is. Mainstream, the average guy is getting none of the benefit, but they have to pay all the taxes. Now, the 20 Democrats are agreed on only one thing, and that is the student debt should be forgiven to, I think, $50,000, but the whole student debt thing is corrupt. The banks literally bribed Congress and pass a law passed that said you can’t discharge college loans. As a result, the colleges said, “Gee whiz, we can charge anything we want,” and the banks said, “We can give loans to everybody. It doesn’t make any difference whether they are creditworthy or not because we’ve got them in handcuffs for the rest of their life.” Now, the number of people over 60 who are still …read more

Coverage Initiated on 'Unique Silver Exploration Story'

Source: Streetwise Reports 08/17/2019

The rationale for investing in this Canadian mining company is given in this BMO Capital Markets report.

In an Aug. 13 research note, analyst Ryan Thompson reported that BMO Capital Markets initiated coverage on New Pacific Metals Corp. (NUAG:TSX.V; NUPMF:OTCQX) with an Outperform (Speculative) rating and a CA$3.75 per share target price. The stock is currently trading at around CA$2.64 per share.

Thompson presented the company highlights.

One, Silver Sand, New Pacific’s flagship project in Bolivia, could become a “very large, profitable project,” he wrote, based on the scale of the land package, the mineralization already discovered at the main Silver Sand area and the prospective mineralized zones. “These projected zones show characteristics similar to Silver Sand, as evidenced by artisanal mining and represent several additional drill targets to be tested,” added Thompson.

Two, silver majors Silvercorp Metals and Pan American Silver invested in Silver Sand, which BMO interprets as a “vote of confidence” in the project.

Three, New Pacific is on the cusp of completing a resource estimate for Silver Sand. The report is expected by year-end 2019 with a preliminary economic assessment to follow in 2020.

Four, Silver Sand is a rarity in that few silver developments projects exist in the world. As such, it is a “scarce deposit with a high amount of leverage to the silver price,” Thompson commented.

Five, New Pacific signed a mining production contract (MPC) with Bolivia’s state mining entity, COMIBOL, the first ever between it and a private company. The MPC “outlines a less onerous set of conditions compared to laws that were established previously,” Thompson explained. “We note that the MPC must still be passed through parliament to be ratified into law.”

Despite the MPC, country risk remains, Thompson pointed out. That and Silver Sand’s early stage warrant the Speculative in BMO’s rating on New Pacific.

The bottom line, Thompson noted, is that “as Silver Sand continues to advance, we see the potential for shares to rerate higher if the market gains a better understanding of the potential scale and economics of the project via delivery of an NI 43-101 resource estimate at year-end.”

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The …read more

Improved Recovery Rate Spurs Target Price Increase on Gold Developer

Source: Streetwise Reports 08/17/2019

The metallurgical result and its implications are addressed in a ROTH Capital Partners report.

In an Aug. 14 research note, ROTH Capital Partners analyst Jake Sekelsy reported that the final results from the metallurgical work done at Vista Gold Corp.’s (VGZ:NYSE.MKT; VGZ:TSX) Mt. Todd gold project in Australia were positive. Accordingly, ROTH increased its target price on the gold company to US$1.60 per share from US$1.40. The current share price, in comparison, is US$0.86.

Sekelsky highlighted that testing resulted in recoveries in the low-90% range, “a significant increase” over the 86.4% outlined in the prefeasibility study. This recovery rate was determined from 71 samples of various grades from the main Batman deposit at Mt. Todd, “which we believe provides a representative sample of the deposit as a whole.”

Next for Vista Gold, the analyst indicated, is updating the prefeasibility study, specifically the costs and foreign exchange rates within it, and incorporating the metallurgical results as well. “In short, we expect the updated prefeasibility study to feature enhanced economics relative to the existing prefeasibility study,” Sekelsky added, noting such an updated study would be the “largest” short-term catalyst for the company.

Based on the recent metallurgical results, ROTH adjusted its model on Vista Gold, increasing, but remaining conservative on, the estimated average recovery rate at Mt. Todd to 90% rather than 87%, wrote Sekelsky. Also, “we believe additional upside remains via an update to foreign exchange rates utilized in the prefeasibility study.”

ROTH, which considers Vista Gold a Buy, expects the Mt. Todd project “to continue to provide investors with strong leverage to higher gold prices,” Sekelsky concluded.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports …read more

The State of the Financial Union

Source: Bob Moriarty for Streetwise Reports 08/16/2019

Bob Moriarty of 321 Gold makes available the first two chapters of his most recent book that delve into the current state of the economy.

After being bugged unmercifully by a couple of my so-called friends, I finally sat down in early January to write a tome about investing in resource stocks. It took me sixteen days to write. And another four weeks to get the cover and layout right. I had some important charts in it that couldn’t be shrunk and still understood.

A couple of days ago I was reaching for a quote that I thought I remembered from the book so I picked up one of my test copies.

I read through the first two chapters and thought to myself, “Damn, this guy got it exactly right.” That was before I realized I was the person who wrote it eight months ago.

One of the great advantages of getting old, other than just getting old, after all the alternative is far worse… One of the benefits of getting old is that you get to hide your own Easter eggs. That is if you can still remember when Easter is.

I never did find the quote. But I did realize that what I wrote in January could have been written twenty minutes ago and not be more timely. So I thought it would be a nice idea to share it with you. This isn’t a sale pitch. If you have read the book you, too, will have already read it but have forgotten. If you haven’t and think it might be worth finishing, you are just going to have to figure out how to buy it by yourself.

These two chapters can be read in ten to fifteen minutes. This could be the most important thing you read this year. Or any.

Chapter 1: State of the Financial Union

ON AUGUST 15, 1971, President Richard Nixon broke gold’s last tie to the world’s financial system. The dollar went from being as good as gold to being as good as paper, literally overnight. Since that time governments of all sorts have engaged in a frenzy of printing and spending money they didn’t have. It was as if Nixon granted the world an unlimited supply of paper and ink and told them it was possible to print wealth out of thin air.

To spend now reduces our ability to make future purchases. Borrowing in order to spend now does nothing more than bring consumption forward and lays a burden of debt on future generations. True prosperity never comes from consumption but rather from saving for an unknowable future. When you have already spent your own future, it’s foolish. When you have spent the futures of your children and grandchildren, it’s criminal. Thomas Jefferson said, “It is incumbent on every generation to pay its own debts as it goes.”

In the developed world …read more

Gold Project in Brazil Offers 'Simplicity and Potential Scale'

Source: Maurice Jackson for Streetwise Reports 08/14/2019

Nick Appleyard, CEO of TriStar Gold, talks with Maurice Jackson of Proven and Probable about advancing his company’s gold project in Brazil.

Maurice Jackson: Joining us for a conversation is Nick Appleyard, the president, director and CEO of TriStar Gold Inc. (TSG:TSX.V). Glad to have you discuss the value proposition before us, TriStar Gold, which is focused on developing gold and delivering value. Before we delve into project specifics, Mr. Appleyard, please introduce us to TriStar Gold and the opportunity you present to the market.

Nick Appleyard: TriStar Gold [has] a project called Castelo de Sonhos, which is reasonably early stage. We’ve got a scoping study we published last year—great results—and now we’ve just financed through the end of feasibility, which we’re starting now. This is what we’re here to talk about, and that’s what’s going to show the value to our shareholders, de-risk and move this very exciting project forward through the feasibility and into production in the next few years.

Maurice Jackson: TriStar Gold’s projects portfolio is located in the Para state of Brazil. Take us there, and provide us with some historical context on the region.

Nick Appleyard: Para state is one of the major mining locations within Brazil. There are two states in Brazil, Minas Gerais and Para, that receive 80% of the mining investment into Brazil. The government of Para has said its goal is to become the main source or main recipient of mining investment in Brazil, so it is a very pro-mining state. The area that TriStar Gold is in has a history of logging, informal mining, agriculture, and it’s now being developed for soybeans, so the infrastructure is going into the soybean industry. That’s sort of what’s been opening this part of Paraa up. It’s a mining area, but it’s now getting the infrastructure coming in through the agriculture, which makes it a real win-win for us.

Maurice Jackson: That certainly will help out with the capital expenditures as we delve into that later. Why does TriStar Gold have full confidence that they have the next great discovery in Para?

Nick Appleyard: I think we already have the discovery, and I think what gives us the confidence is a word I’ll probably repeat a few times through the interview is, it’s simple. We have a very shallow ore body. We only drill 120-meter-deep holes. We have very simple metallurgy. We have very simple geology, simple open pits, a simple processing technique, no deleterious materials on the environmental side, so we have a simple tailings facility. As a mine developer, historically over the last 20–25 years, I know that mining projects get complex and as they get complex, they get expensive and difficult. The simpler I can keep it the better. I think that’s what makes this project so special, the simplicity and the potential scale that it already has.

Maurice Jackson: Let’s …read more

Explorer Secures $90M from Sprott to Build Gold Mine in Red Lake

Source: Streetwise Reports 08/12/2019

The terms of the financing package and the company’s plans for the rest of 2019 are described in an Echelon Wealth Partners report.

In an Aug. 8 research note, Echelon Wealth Partners analyst Ryan Walker reported that Pure Gold Mining Inc. (PGM:TSX.V; PUR:LSE) negotiated a $90 million financing package with Sprott Resource Lending to fund development of an underground mine at the explorer’s Madsen gold project in Red Lake, Ontario.

Composed of a $65 million credit facility and a $25 million callable gold stream, the financing will fully cover building the mine. Pure Gold plans to start development work immediately and anticipates pouring first gold there by year-end 2020. The company already started hiring and is currently formalizing plans for detailed engineering and procurement.

Walker explained the terms of the credit facility and callable gold stream. The credit facility is for seven years and collects interest at a rate of three month LIBOR plus 5.5% during construction, which increases to three month LIBOR plus 6.75% during construction, post completion (defined by successfully completing an agreed completion test).

Sixty-five percent of the total amount advanced must be paid before the facility matures. The principal is to be paid in quarterly installments starting in September 2022. There is the option to repay the outstanding principal and interest without incurring a penalty after August 2022.

As for the callable gold stream, noted Walker, it constitutes 5% of gold production (up to 50,000 ounces) and decreases to 2.5% afterward in return for $25 million upon closing. “The stream includes ongoing payments of 30% of the prevailing spot gold price.” Pure Gold may buy back the stream for $35 million on June 30, 2021 or for $38 million on June 30, 2022.

Sprott also will receive a fixed $10 per ounce payment on the first 500,000 ounces of production. Pure Gold may do away with that payment at any time by paying an early termination fee.

Walker highlighted that while the Canadian gold company advances Madsen, it also intends to continue exploring elsewhere on the property until this December, highlighted Walker. It will concentrate its activities on the Wedge discovery to upgrade Inferred resources there and test along strike and downplunge extensions. It plans limited drilling at Fork and Russet South, including initial drilling at the Fork EXT Target, which is downplunge of Fork. Further, Pure Gold will “continue to advance another 24 high-priority exploration targets across the property,” added Walker.

Echelon trimmed its target price on Pure Gold, which it rates Buy, to CA$1 per share from CA$1.05, primarily to reflect the “higher than previously modelled interest on the recently arranged credit facility plus the introduction of the gold stream,” Walker indicated. Shares are currently trading at around CA$0.65 per share.

Walker concluded his report by noting, “We continue to highlight Madsen’s high-grade nature, potential for solid near-term, high-margin production, and substantial exploration potential—all situated in …read more

Invasive Species

Source: Michael Ballanger for Streetwise Reports 08/12/2019

Sector expert Michael Ballanger draws connections between nefarious non-native species in the natural world and in the world markets.

Invasive species: Any kind of living organism—an amphibian (like the cane toad), plant, insect, fish, fungus, bacteria, or even an organism’s seeds or eggs—that is not native to an ecosystem and causes harm. They can harm the environment, the economy, or even human health.

In the 1830s, a creature called the “sea lamprey” was first detected in Lake Ontario after it was able to migrate from the Finger Lakes of upstate New York by way of the Erie Canal, which was constructed in 1825. In the 1800s the Great Lakes fishing industry harvested over 100 million pounds of fish for both domestic consumption and export before this incredibly creepy creature laid virtual waste to the fishery stock. Within one hundred years, the harvest had dwindled to approximately one-third of its peak as the absence of natural predators allowed it to feast on the Great Lakes fisheries with reckless abandon and unopposed execution.

As ugly a species as it was, the sea lamprey was especially efficient in its mission, as tens of millions of pounds of succulent freshwater nutrients was eliminated from the Great Lakes yield because of its unchallenged status as a free-range aggressor.

The first time I saw the famous illustration of Rolling Stone magazine’s famous “vampire squid,” with “its blood funnel attached to the face of humanity” (in reference to Goldman Sachs), I thought of the sea lamprey, attached to the sides of Lake Ontario trout and further thought of the Canadian and American banking cartel, whose influence over Canadian government policy is indisputable.

Then there is the case of the “zebra mussel,” another of the invasive species that are now covering a massive portion of the Great Lakes floors, and that filter most of the phytoplankton from the water. As well as starving the fisheries from the oh-so-vital nutrients that have lived in microscopic freedom since the vast saltwaters dissipated thirty million years ago, they spawned another new form of invader in the form of the “goby,” a fish that was equipped to crack shells of the zebra and quagga mussels, thus enabling a natural predator to arrive. The problem is that both goby and quagga are foreign,and they simply do not belong in these lakes, the largest natural source of fresh water in the world.

It is not only ecosystems that find themselves endangered by invasive species. The global system of finance, commerce and trade used to function largely unencumbered by government policy, which tolerated and, in fact, promoted interference in the ebb and flow if the free market system. The Working Group on Capital Markets, established during the Reagan-Greenspan regime, has metastasized into a massive interventionalist tumor spreading its cancerous reach into all markets foreign and domestic. This is the zebra mussel of the late twentieth …read more

Senior Gold Miner Is On Track for a 'Strong H2/19'

Source: Streetwise Reports 08/12/2019

The company’s Q2/19 operational and financial results are reviewed in a BMO Capital Partners report.

In an Aug. 8 research note, BMO Capital Markets analyst Andrew Kaip reported that AngloGold Ashanti Ltd. (AU:NYSE; ANG:JSE; AGG:ASX; AGD:LSE) is “well positioned for the remainder of 2019.”

He explained that “increasing production and demonstrated free cash generation in Q2/19 have set the stage for a strong H2/19 that is getting even stronger at prevailing gold prices.”

Kaip reviewed the company’s Q2/19 numbers. Generally, production was in line, costs were higher than expected and cash flow was a miss. H1/19 earnings per share (EPS) also did not meet expectations.

Specifically, AngloGold’s reported headline H1/19 EPS was $0.29 and its reported adjusted headline EPS was $0.25. These compare to ROTH’s forecasted EPS of $0.29. Slightly higher operating costs drove the miss that lower depreciation offset somewhat.

Cash flow from operations in Q2/19 came in at $343 million, significantly lower than ROTH’s $495 million projection. About $146 million of it was attributed to “a negative working capital adjustment related to a build in accounts receivable and inventory,” indicated Kaip. “We expect the bulk of the negative working capital build to reverse through H2/19.”

The “build” also impacted free cash flow in Q2/19, which amounted to $50 million versus ROTH’s projection of $111 million. Capital spending of $293 million during the quarter, which was lower than the $384 million ROTH forecasted, partially offset the free cash flow deficit.

As for Q2/19 gold production, AngloGold’s prereported total was 801,000 ounces (801 Koz), a near match to ROTH’s estimate of 801.7 Koz. Gold production during H1/19 was 1,554,000 ounces (1.554 Moz), slightly below ROTH’s forecast whereas H1/19 gold sales of 1.577 Moz were in line. Production from Iduapriem and Cerro Vanguardia was stronger than anticipated whereas production from Geita was weaker than expected.

“AngloGold is tracking well relative to 2019 production guidance of 3.25–3.45 Moz of gold,” Kaip highlighted.

Regarding costs, all-in sustaining costs in Q2/19 amounted to $996 per ounce, slightly higher than ROTH’s estimate of $959 per ounce.

The miner lowered 2019 capex guidance to $850–920 million from $910–990 million, “owing to the timing of spending at Obuasi,” explained Kaip, who added that Obuasi is still slated for initial production by the end of this year.

In terms of asset divestiture, AngloGold’s management noted that strong interest has been shown for its South African operations. “The sales processes for both Cerro Vanguardia in Argentina and Sadiola in Mali continue,” Kaip added.

BMO has an Outperform rating on AngloGold Ashanti.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned …read more