Seven Resource Picks in Precious Metals, Uranium and Lithium

Source: Maurice Jackson for Streetwise Reports   04/24/2018

Gerardo Del Real, editor of Resource Stock Digest, sits down with Maurice Jackson of Proven and Probable to discuss some of his resource picks.

Maurice Jackson: Gerardo, please share your background and tell us about Resource Stock Digest.

Gerardo D.: I’ve been involved in the resource space in one way or another for just a little over a decade, about 11 years now. And so it’s truly a passion of mine, and Resource Stock Digest was launched a couple of years ago. It’s absolutely free, and we really take pride in providing quality exclusive content. So every week, if you go to the site, you can count on exclusive interviews with analysts, CEOs, geologists, and some of the top minds in the junior resource space.

Maurice Jackson: One of the virtues that I enjoy about this industry is that it is people driven. You and I are friendly competitors and have a mutual respect for one another, because our ultimate goal is to share the value proposition for our subscribers. So that being said, I want get your take on the precious metals market. Are you currently buying? And if so, what and why?

Gerardo D.: Maurice, I have been as aggressive in the junior space this year as I have been the past seven or eight years, and allow me to explain why. I believe that when it comes to the gold price, we need to breech that $1,365 level, and then get through the $1,374 level before we see a real breakout. I think once we do that, and we get that $1,400 gold price, we’re going to see some sector rotation, back into the junior resource space, specifically the gold stocks, and so there’s a time to buy and a time to sell, and I’ve been trying to preach for the past year and a half or two, that this is the time to buy. Personally, every month I’m adding the best names with the best teams, at what I feel are absolutely depressed prices. So I view 2016, 2017, and the first part of 2018 as opportunities to really get the pick of the litter per se, and get some of the best names in the portfolio at prices that, I don’t think after this year, we’re going to see again.

Maurice Jackson: Speaking of the best names, let’s discuss some issuers that have your attention at the moment.

Gerardo D.: Let me backtrack a bit and explain my process a bit. I’m big on share structure, I’m big on people. You mentioned this is a people business. It’s a relationship business. It’s not a coincidence that the top 5% of management teams outperform the other 95%. That is not a coincidence. So I’m big on teams, I’m big on share structure. Then, of course, once we get past those two, we can definitely look at assets.

One company in the gold space, in the gold/silver space actually, that I find pretty compelling right now is Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE). It’s run by a gentleman by the name of Morgan Poliquin. He is among the best geologists in the space. Has a track record of making discovery after discovery in eastern Mexico. He and his father, Duane Poliquin, actually pioneered exploration for mineral deposits in that part of Mexico, in eastern Mexico. They have a database that’s about three decades ahead of everybody in the space, and why do I think Almaden is a compelling proposition at these levels?

Well, Almaden had a prefeasibility study on the Ixtaca deposit that outlined an after-tax net present value of about $310 million, and an internal rate of return of 41%. That was using a $1,250 gold price, and $18 an ounce silver, which we’re higher there on the gold price, we’re lower on the silver price, but the market cap is about CA$104 million, and by the way, the company also owns a mill that shaved about $70 million off of the initial capital. And so, you have a $70 million mill, you have a polymetallic deposit, great community support, and it has excellent exploration potential in upside, so that’s a company I think is a bargain at these levels, and one that I continue to buy at these prices.

Maurice Jackson: And equally just as well as Almadex Minerals Ltd. (AMZ:TSX.V), which is basically the same ownership, and coincidentally, Duane was actually one of the pioneers for the Project Generator Model, is that correct?

Gerardo D.: That is absolutely correct.

Maurice Jackson: And Rick Rule’s very high on them. Anyone else?

Gerardo D.: You mentioned Almadex, we can talk about it. The company is at a very important juncture in the company’s history; the company made a discovery in Vera Cruz, Mexico, called the El Cobre Project, and that recently attracted the attention of Newcrest. In exchange for 19.9% of the company, Newcrest invested $19 million I believe in Almadex. Almadex is spinning out the remaining exploration portfolio, and royalty portfolio, which is robust, and creating a new company. So shareholders here at the end of May, will have one share of Almadex, which hosts the El Cobre deposit, which will see significant and aggressive drilling this year, and they’ll spin out that new spin co.

All of the other assets will go into a new company, and believe me, that exploration portfolio should not be underestimated. This is the same thing that happened with Almadex, when Almaden spun out Almadex, and so I think if you look at the history there, it’s a pretty compelling opportunity.

Maurice Jackson: And speaking of that, that ended up being a tenbagger when Almadex was spun out of Almaden. For speculators out there that are looking for a company that’s a good steward of capital in your portfolio, Almaden, Almadex, these are some quality names. How about some other sectors?

Gerardo D.: Let’s switch gears a little bit, let’s talk about the lithium sector. Morgan Stanley put out a note two or three weeks ago that basically scared a lot of the lesser informed investors and speculators in this space. The premise was that there would be an oversupply of lithium here within the next couple of years. A lot of the better names, quality names, really took a beating, and I personally, I’ve added to my positions here recently.

In my opinion, the most advanced quality compelling proposition in the junior space has to be Advantage Lithium Corp. (AAL:TSX.V; AVLIF:OTCQX). The company has a project in the Cauchari basin; it owns 75% of it. Advantage’s partner, Orocobre, is already producing and frankly, I think they’re a take-out target within the next 12 months. The company trades at about a CA$1. Quality team, advanced stage asset. We should have an updated resource estimate here within the next month or two that I think is going surprise to the upside, and I think the stock’s a bargain at these levels.

Maurice Jackson: How about uranium? You and I have a mutual interest in a company that is a sponsor for both of us, and that is Fission Uranium Corp. (FCU:TSX; FCUUF:OTCQX; 2FU:FSE).

Gerardo D.: I’ll give you four names that are at different stages in their company’s history. Fission Uranium, what can you say? Quality team, world-class asset, world-class exploration potential, large strategic investors; when you buy it you put it away to have as a great long term. I think one of the more advanced stage companies has to be Fission.

In the U.S, there is Uranium Energy Corp. (UEC:NYSE.MKT), UEC, which is run by a gentleman by the name of Amir Adnani, who is among the brightest and most active CEOs in the space. It has quality assets here in Texas, quality assets in the U.S., and with the recent news coming from the Russian Parliament that they may cut off uranium and titanium exports to the U.S., it is actually going to be debating this on May 15, the stock has been up about 20 or 30 % in the last few days, in large part because of the safety that the assets provide jurisdiction wise. So two advanced-stage companies that I really like, UEC and Fission Uranium.

Two lesser advanced, but quality names, are Skyharbour Resources Ltd. (SYH:TSX.V), and URZ Energy Corp. (URZ:TSX.V; URZZF:OTC). Both of those have a lot of runway here, in what I view as a coming bull uranium market. And for readers who are familiar with uranium bull markets, they are violent. They always surprise to the upside, and I think we’re right on the cusp of another one of those.

Maurice Jackson: It’s as Rick Rule says, it’s the other yellow metal. What is your position on physical metals?

Gerardo D.: I’m a big fan of buying gold every month, regardless of what the price does, a little bit at a time. There are some coins that I prefer, some older Mexican coins, the centenarios, they’re beautiful coins. But whatever your preference is, you buy a little bit and you just put it away. If you look at monetary history in this country and throughout the world, you can look back, pick a chart, pick 100 years, pick 50 years. Let’s go back 5,000 years if you want to take it on a more macro stage. The one thing you can always count on is governments taking money away from productive citizens, through taxation, misallocating it, and then debasing the currency. Anybody who is familiar with the history on this planet should be able to track the fact that there should be a place in everybody’s portfolio when it comes to gold. That’s the strategy that I take. I buy it, I put it away. If it goes up, if it goes down, it really doesn’t bother me much.

Maurice Jackson: It’s just a common theme I know in this industry, with those that are serially successful, so thank you for sharing that. Gerardo, last question here. What did I forget to ask?

Gerardo D.: I think we covered a lot of bases. I would preach to investors to really do your due diligence. The junior resource space is among the riskiest in the entire world, and it’s high risk, high reward for a reason. You can really do yourself a favor and minimize the risk if you get familiar with quality management teams, if you learn how to vet share structures, and if you never, never, ever buy a junior with money you can’t afford to lose. So I would caution to minimize the risk, and when the reward part works itself out, everybody’s really smart and everybody pats themselves on the back, but you should start by minimizing the risk in this sector. It can be very rewarding, I love it. I’m privileged to do this for a living, and those are some of the lessons I’ve learned here in the last 11, 12 years.

Maurice Jackson: Gerardo, how do we subscribe to Resource Stock Digest?

Gerardo D.: You can go onto the site. It’s resourcestockdigest.com if you want exclusive content direct to your inbox. You fill out your email, you click the subscribe button there on the homepage, and we’ll send out every single interview that we do. We’ll make sure that you get a weekly recap at the beginning of each week, and I encourage everybody to go to resourcestockdigest.com and the outsiderclub.com. I write a free editorial for the Outsider Club every week, and you can catch some of my ranting and raving there as well.

You can reach me directly by email at delrealgerardo@gmail.com.

Maurice Jackson: Please visit our website www.provenandprobable.com, where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.

Gerardo Del Real, of Resource Stock Digest, thank you for joining us today on Proven and Probable.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. He brings his extensive experience to the public through Outsider Club, Resource Stock Digest, Junior Mining Monthly, and Junior Mining Trader.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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

Disclosure:
1) Gerardo Del Real: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Almaden, Almadex, Advantage Lithium, Fission, URZ Energy, Skyharbour and Uranium Energy Corp. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Almaden, Almadex, Advantage Lithium, Fission, URZ Energy, Skyharbour and Uranium Energy Corp. are sponsors.
2) Maurice Jackson: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Fission Uranium is a sponsor of Proven and Probable. Proven and Probable disclosures are listed below.
3) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Fission Uranium. Click here for important disclosures about sponsor fees.
4) 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.
5) 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.
6) 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 one week after the publication of the interview or article. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Almaden Minerals, Almadex Minerals, Advantage Lithium and URZ Energy, companies mentioned in this article.

The information presented on Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The information is not intended to be, and does not constitute financial, investment, or trading advice, or any other advice. You should not make any financial investment or trading decision, based on any of the information presented without first undertaking independent, due diligence, and consultation with a professional broker, or competent financial advisor.

( Companies Mentioned: AMM:TSX; AAU:NYSE,
AMZ:TSX.V,
FCU:TSX; FCUUF:OTCQX; 2FU:FSE,
SYH:TSX.V,
UEX:TSX,
UEC:NYSE.MKT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/24/seven-resource-picks-in-precious-metals-uranium-and-lithium.html

Advertisements

Bonterra Reports Stunning Recoveries

Source: Bob Moriarty for Streetwise Reports   04/24/2018

Bob Moriarty of 321 Gold discusses Bonterra’s latest gold recovery tests.

The value of gold as an insurance policy grows with each passing day.

The idiots in Washington, London and Paris known well for their gnashing of teeth and wailing while generating gallons of crocodile tears over a false flag attack in Syria are rolling the dice on a game of World War III. And while that’s not going to be any fun, it might be nice to have an insurance policy you can hold in your hands. In case something bad happens. Such as China and Russia defending themselves.

Meanwhile on the Gaza border our brave, courageous, stalwart warrior friends in the IDF are practicing their shooting skills on live targets to the tune of 30 unarmed protestors killed and 1500 more shot in the last month. It takes a very special kind of person to lay behind a rifle and shoot an unarmed fourteen-year-old kid in the head at a range of one hundred meters as he runs in terror from you.

U.S. taxpayers are paying for the bullets and no one gives a damn. After all, they are just subhuman Palestinians. One Zionist fingernail is worth the lives of ten thousand Palestinians. Not a single crocodile tear is shed. The world has gone insane. London, Paris and Washington have a broken moral compass. Perhaps Wal-Mart will have a special sale soon.

It’s hard to understand the price of gold and silver when bonds are about to bust loose as inflation rears its ugly head. We had visitors over the weekend from my high school days 53 years ago. We talked about a lot of things including the price of real estate and the value of tangible products. My friend looked up the value of the three bedroom, one bath house my parents bought in 1962 for $12,000 in Fort Worth. Now it’s a $308,000 house, up 2400%.

For the last two years of school I lived there with two stepsisters, a sister and a wicked stepmother. The teachers at school were quite impressed with me. I was the first student to arrive and the last to leave. They believed I valued an education highly. Actually I wanted to pee, I never saw the inside of our solitary bathroom in two years.

I love being able to tell my readers, “I told you so.” It’s the most wonderful feeling to get it right now and again. In December of 2016 I talked about a gold company in Canada named Bonterra Resources Inc. (BTR:TSX.V; BONXF: US; 9BR:FSE) selling for $0.22 with a $20 million market cap.

Naturally they have issued shares to raise money and are now up to a $113 million market cap. The shares have been as high as $0.72 in November and have corrected back to about half a buck. They have issued so many drill results reporting high-grade intersections that it has become boring. 4 meters of 10 g/t Au at Gladiator, 3.6 meters of 12.7 g/t Au, 3.8 meters of 12 g/t Au in Quebec, a new zone of 2.7 meters of 4.7 g/t Au and 44.6 g/t Ag at Coliseum 5 km west of Gladiator, 3 meters of 10.4 g/t Au at Gladiator, 9.4 meters of 8.2 g/t Au at Gladiator, 1.9 meters of 22.2 g/t Au at Gladiator, 4 meters of 18.5 g/t Au in the South Zone. I could continue but they have gotten really boring with their high-grade wonderful intercepts.

Until last week the results were boring, boring, boring. But finally they woke the market and naturally the results were enough to make the rest of the industry green with jealousy. They reported metallurgical studies showing gravity-cyanide tests with recoveries of 99.0% to 99.4%. If they used gravity-flotation they still got 96.8% to 97.3%. The results give me a great chance to discuss gold recovery in simple terms.

In general gravity is simple and cheap. A gravity circuit would cost under $1 million. Gravity will only recover the free gold. Since gravity circuits are cheap and easy to install, any recovery is good because it is gold you can throw in a furnace and pour into a doré bar and peddle at once. But Bonterra has to go first class. Their free gold recoveries measured 76.1% and that is nearly off the chart. They could install a gravity only circuit and crushing plant and go into production for a few peanuts. Save the fines and run them through a cyanide or flotation plant down the road. That’s an alternative.

Any open pit heap leach mine with 76.1% recovery would think they have died and gone to heaven. Those are wonderful numbers. But it gets worse, or better depending on how you look at it.

In general cyanide plants take longer to permit and cost more than either gravity (very cheap) or flotation (kinda cheap). Yes, a 99% gold recovery for Bonterra using a combination of gravity and cyanide is nothing short of brilliant but everyone loves to hate cyanide. It’s a handy target for all the tree huggers whining, “Not in my back yard.” Cyanide is best for very fine gold, actually it’s often the only alternative for microscopic gold but as the size of the gold increases, cyanide becomes less effective.

So just for fun and to rub everyone’s nose in it, the Bonterra boffins set up a gravity-flotation circuit. Given the 76.1% recovery from gravity, the process already had a head start and it came in at 96.8% to 97.3% using both. Every other company running a mine would beg for results like that.

Bonterra will continue to report more results. They have another 4,000-6,000 meters of drilling planned and paid for. At the end of the program when all the assays are back the company will begin the resource modeling. An up to date 43-101 is predicted for 2h of 2018. It may be as early as September or as late as November.

Bonterra has Quebec’s next gold mine. I’m guessing between 2 million and 4 million ounces of gold. I think the surprises will be on the high side. If you assume 2 million ounces, they are getting less than $45 an ounce for gold in USD. If you assume 4 million ounces you are talking $22.50 an ounce in USD. A takeover bid is probably going to be in excess of $300 an ounce so there is a lot of upside potential. The stock is not going up 20 fold as we all hope we do with a stock someday but it’s like holding a AAA bond paying 50%.

Bonterra is an advertiser and I have bought shares in the open market. Naturally that makes me biased. Do your own due diligence. Their website does a great job of communication.

Bonterra Resources
BTR-V $0.495 (Apr 24, 2018)
BONXF OTCBB 226.5 million shares
Bonterra Resources 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.

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

Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Bonterra Resources. Bonterra 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 one week after the publication of the interview or article.

( Companies Mentioned: BTR:TSX.V; BONXF: US; 9BR:FSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/24/bonterra-reports-stunning-recoveries.html

Is a New Gold Rush On in Brazil?

Source: Streetwise Reports   04/23/2018

With a project located on the site of a massive gold rush, this explorer is attempting to find the hard-rock source of the region’s placer gold, and an updated resource is expected any day.

The land that Cabral Gold Inc.’s (CBR:TSX.V; CBGZF:OCT) Cuiu Cuiu gold project sits on was once the territory of garimperos, migrating miners who came during the massive Brazilian gold rush of 1978-1995 and panned for gold. It’s believed that the garimperos mined some 2 million ounces of placer gold in the area which would make it the largest placer camp in the entire region. The hard-rock source of all that gold has never been identified, but Cabral Gold Inc. is focused on fixing that.

Last month, Cabral came one step closer with the announcement on March 21 that it has identified several new high-grade targets on the Cuiu Cuiu property in northern Brazil.

The company explained that the “initial 2018 campaign of work involves trenching, mapping, auger sampling, soil sampling, and rock sampling in areas of recent and abandoned artisanal workings.”

Cabral highlighted the following results:

  • Select results from reconnaissance rock sampling on new targets include:
  • 264.0 g/t gold from the Germano target.
  • 80.1 g/t gold from the Vila Rica target
  • 17.7 g/t gold from the Belisca Lua target
  • Initial channel sampling returned:
  • 0.5m @ 43.3g/t gold at the Vila Rica target
  • 5m @ 3.16g/t gold at the Jerimum de Cima target

The only area of that five that has seen historical drilling is the Jerimum de Cima target. Cabral noted that among the 13 holes drilled there included results of 39m @ 5.13g/t gold and 18m @ 1.17g/t gold.

Back in 2011, a previous operator of the project identified an Indicated resource of 0.1 million ounces gold and an Inferred resource of 1.2 million ounces. Cabral noted that it is updating that resource estimate to include drilling performed after 2011 and expects to release it soon.

The company expects to begin drilling in June.

The region has grabbed the attention of other miners. Cuiu Cuiu is near Eldorado’s Tocantinzinho’s project, which has Measured and Indicated resources of 2.1 million ounces.

Neighboring Mato Grosso state has seen a staking rush recently, with Anglo American and Nexa Resources acquiring more than 3 million hectares of land in September and Altamira Gold announcing the additional acquisition of 52,000 hectares. According to Altamira Gold, “the catalyst for this staking rush is a rumored porphyry copper discovery in the eastern part of the Juruena Belt.”

Cabral has caught the attention of industry observers. Brien Lundin, in the April issue of Gold Newsletter, finds that Cabral has a “near-ideal combination of near-term and long-term price catalysts.”

On the new resource estimate that is expected shortly, Lundin states, “Just how much this new estimate will grow the resource is unknown, but the underlying data suggest it will be substantial. If so, the estimate’s release could be a short-term catalyst for a higher valuation for Cabral.”

And longer term, Lundin believes that “there’s plenty of room for optimism that Cuiu Cuiu can grow via the drill bit. The property encompasses an 18-kilometer gold-in-soil anomaly. It also lies within the Tapajos region of Para State, which hosted the world’s largest ever gold rush between the 1970s and 1990s.”

Cabral “is trading at bargain levels, given Cuiu Cuiu’s current resource. Add in the potential resource expansion due in the coming days and the extensive exploration program planned for this target-rich project, and you have the makings of an outstanding vehicle to leverage rising gold prices,” Lundin concluded.

Gwen Preston also highlights Cabral’s potential. Writing in Resource Maven on March 23, she notes that Cuiu Cuiu is in “an area that produced millions of ounces of placer gold and placer riches like that don’t come from low-grade deposits.”

The new resource estimate “will almost double the drill meters in the model and almost certainly increase the count notably,” Preston states. In addition, “there are eight zones outside of the resource with gold drill intercepts that deserve the follow up they will now get. Outside of those, Cabral is extending soil sampling and prospecting across the license area—for the first time.”

Preston highlights the improving infrastructure in the Tapajos region, “A new highway runs past Cuiu Cuiu to the east, there are new hydroelectric power plants throughout the region, and the neighbouring deposit is nearing construction.”

She stresses that the management team has a lot of experience in Brazil: “In 20 years working in the country they have made four gold discoveries, including the 2-million-oz. Tocantinzinho deposit next door to Cuiu Cuiu, where Eldorado Gold (TSX: ELD) is primed to make a construction decision.”

Cabral has 31.4 million shares issued and 8 million warrants. The stock is closely held; board and management control around 45% of the shares.

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

Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. 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: Cabral Gold. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Cabral Gold.
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 one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Cabral Gold, a company mentioned in this article.

Disclosures from Gold Newsletter, April 2018

The publisher and its affiliates, officers, directors and owner actively trade in investments discussed in this newsletter. They may have positions in the securities recommended and may increase or decrease such positions without notice. The publisher is not a registered investment advisor. Authors of articles or special reports are sometimes compensated for their services.

Disclosures from Resource Maven, Mar. 23, 2018

Companies are selected based solely on merit; fees are not paid.

The publisher, owner, writer or their affiliates may own securities of or may have participated in the financings of some or all of the companies mentioned in this publication.

( Companies Mentioned: CBR:TSX.V; CBGZF:OCT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/23/is-a-new-gold-rush-on-in-brazil.html

Urban Mining Twins Update

Source: Clive Maund for Streetwise Reports   04/23/2018

Technical analyst Clive Maund discusses two companies that have developed a process to extract minerals from E-waste.

On 15th March it was decided it was best to step aside from Enviroleach Technologies Inc. (ETI:CSE) and Mineworx Technologies Ltd. (MWX:TSX.V; MWXRF:OTCQB), because it looked like the correction that was already well underway by then would continue and result in us being able to buy them back at a better price. This has since proved to be the case, although we are “slow off the mark” with Enviroleach, which could have been bought back late in March at a very good price just above C$1.00. Nevertheless they are looking very good again now, for the reasons we will briefly look at. There is no reason to talk about the positive fundamentals of these stocks because they were discussed earlier.

Starting with Enviroleach, an 11-month chart enables us to view the entire price track from last May–June, and to delineate its strong uptrend, which is believed to remain in force for good reason—because the volume pattern continues to be strongly bullish, which is why the Accum-Distrib line continues to make new highs. This is very bullish and points to a new upleg dead ahead, and in fact it has already started, even though the price has yet to break out of the corrective downtrend channel—it started right after what is believed to be the low for the correction late in March. Other bullish factors to observe are momentum (MACD) turning higher and the bullishly aligned moving averages.

The 6-month chart for Enviroleach enables us to see recent action in more detail, and in particular that Friday’s candlestick, because of its position, looks like a bull hammer, especially as most of the volume was upside volume, which is why the Accum line advanced further. This chart also makes direct comparison with the Mineworx chart lower down the page more easy, because it is for the same timeframe.

On the 6-month chart for Mineworx we see that we have a somewhat better entry point to buy back than with Enviroleach, because it is still not far above the low of its corrective downtrend. This is a good point to pick it up again, because it is just above a zone of support which itself is just above its rising 200-day moving average. Momentum (MACD) has just turned higher indicating that a new uptrend should now start, and we have a bullish volume pattern with recent light volume indicating that the correction is done and a strong Accum line making new highs, suggesting that another upleg is in the works.

Conclusion: it’s a good time to buy back both Enviroleach and Mineworx in the reasonable expectation of a new upleg getting underway soon, which should be sizeable and result in good gains.

Enviroleach Technologies website.

Enviroleach Technologies Inc, ETI. CSX, EVLLF on OTC, closed at C$1.54, $1.29 on 20th April 2018.

Mineworx Technologies website.

Mineworx Technologies Ltd, MWX.V, MWXRF on OTC, closed at C$0.19, $0.166 on 20th April 2018.

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

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

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

Charts provided by the author.

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

( Companies Mentioned: ETI:CSE,
MWX:TSX.V; MWXRF:OTCQB,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/23/urban-mining-twins-update.html

Diamond Stock Set to Put in a Sparkling Performance

Source: Clive Maund for Streetwise Reports   04/23/2018

Technical analyst Clive Maund charts a diamond company that he rates a strong speculative buy.

If you are a speculator or trader who doesn’t like to wait weeks or months for an investment to pay off and wants to see results within days or even hours, this one is for you.

Lithoquest Diamonds Inc. (LDI:TSX.V) blasted higher around the start of the month with a gap move on massive volume, due to news of a discovery, as we can see on its latest 6-month chart below, and after continuing higher for a few days to become extremely overbought short-term, the usual reaction set in, which brought it back towards what is now strong support in the C$0.44–C$0.47 zone. This reaction has the classic signature of a countertrend reaction in a fast moving market, as it has been accompanied by a rapid die back in volume and a convergence of the price oscillations into an increasingly tight range—in other words it is a fine example of a bull Flag or Pennant within a powerful uptrend, which means it should lead to another sharp upleg very soon. Another bullish indication on this 6-month chart is that both of its volume indicators have remained elevated as the correction has occurred.

The 3-month chart enables us to see what is going on in a little more detail, and gives us an opportunity to append the RSI and MACD indicators to the chart. The former has already almost completely neutralized and while the latter, the MACD, has a long way to go before it has, its histogram has already corrected all the way back to the zero line and in a fast moving situation like this, that is enough to create the conditions for another upleg.

This bull market in Lithoquest began with a large gap on massive volume, and the rule is that the bigger the gap and the higher the volume, the more bullish it is. It is most unusual for a move like that to lead to a “flash in the pan” advance—normally it leads to a bull market that lasts for many months and sometimes years. This is another big reason why it is likely to advance from here.

Lithoquest is rated an immediate strong speculative buy, and risk may be limited by placing a stop below the apex of the outer Pennant—outer because a breakdown from the inner one would not spoil the pattern, and we can see that there is strong support at and above C$0.50. Lithoquest trades in hopelessly light volumes on the U.S. OTC market where for this reason it should be avoided. There are 45.9 million shares in issue.

Many years ago the Diamond Marketing Board or whatever they called themselves did an excellent job of connecting diamonds with the proposal of marriage, so that young men intent on this would scrape together their usually meager funds to buy a diamond engagement ring, which women have always had a marked tendency to keep if things didn’t turn out so well, and of course they may have been a driving force behind songs such as “Diamonds are a girl’s best friend.” There is just one problem with this video—the gender ratio is incorrect, instead of 10 men to 1 woman, it should be 10 women to 1 man.

Lithoquest Diamonds website.

Lithoquest Diamonds Inc., LDI.V, closed at C$0.59 on 20th April 18.

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

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

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

Charts provided by the author.

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

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/23/diamond-stock-set-to-put-in-a-sparkling-performance.html

Whither Silver from Here?

Source: Michael Ballanger for Streetwise Reports   04/22/2018

Precious metals expert Michael Ballanger describes why he thinks the upcoming week will be “favorable” for silver investors.

First, this has been a spectacular month for me in that I was fortunate enough to have parlayed the profits from the UVXY trade successfully, having bought a whackload of call options in the Physical Silver ETF (SLV:US) and a 300-lot of the Fortuna Silver Mines Inc. (FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE) May $5 calls. As I wrote earlier in the week, I think we are seeing the biggest dislocation between any two assets in decades with the current ratio of gold to silver. For gold to be threatening a multiyear breakout of the $1,375 resistance while silver atrophies in the mid-$16s was , at least to me, absurd.

And absurd it was, as the GTSR (gold to silver ratio) hit 86 late last week and now resides at slightly above 78. I placed a rather large bet on silver outperforming gold on Tuesday, with the ratio at 82.3:1, so at 78.06 to close out the week and the SLV calls up 80% with RSI still only 63.25, it feels like we are going to ring the register shortly despite the modest setback today.

As bullish as I might like to think that silver is, I have been forced to look the creature called “greed” straight in the eye and deal with him. Painfully, embarrassingly, over the years, I have learned that it is exactly at the point where the PMs appear to be ready to “explode” that I have committed the greatest of human errors by letting hope override common sense. When hope overrides common sense, you are immersed in “hopium,” the most insidious of all narcotics found in bloodstreams of failed traders.

You will recall when I analyzed the gold sector at the end of January and warned that the Commercials were going to “allow” the gold price to briefly “break out,” only to entrap the Large Specs and then disembowel them. That is exactly what they did. At that time I was long NUGT and JNUG and a boatload of calls, and I was looking to make a huge score with NUGT moving to the 2016 highs around $50.

Well, the COT structure was suspect and there was just too much chirping from the gold newsletter writers about the “200-dma” (all in CAPS and with numerous exclamation marks), and sure enough, I sold my calls when the NUGT first popped through the 200-dma around $32. It was a decent “pass” but by no means a “life-changer,” and I was thoroughly ready to do an on-purpose alcohol overdose to end all pain when the NUGT proceeded to $37 and the calls I just sold for a double became a quadruple.

The angst in late January was unbearable because I made the “call” in December and was at risk of leaving the spoils of victory on the table, so to speak, but when I finally emerged from the self-medicated stupor of self-recrimination, the market responded exactly as I had theorized and proceeded to collapse. I must tell you that there is no solace in being right on a prediction if you haven’t monetized it. However, there is solace if you have lived to fight another day—and I did and I have.

Which brings me to the point of the current silver trade. First of all, silver is going a great deal higher over the longer term and as a haven against currency destruction and wealth depravation, it remains not “as good as gold.” But it is first subordinate to my beloved gold. It is a shiny little metal and when buffed up, carries a luster of amusing intensity and intrigue. However, there is nothing on the planet that carries the refined beauty and regal magnificence of gold, and as much as I use gold as the ultimate store of value, there are indeed times in the trading arena—not the investing arena—that one must seize the advantage. Gold is going to surge through $1,400 before we have our swimsuits on, but between now and that moment (where you see that the “L” on the suit has morphed to an “XXL”), we are going to be handed a final wicked attempt by the cretins to crush sentiment and advance to status quo of “long stocks and short gold.”

In the interim, I have to manage my trade. I have liquidated 50% of the Fortuna position (agonizingly) because of the RSI, which is at 77.50 but was over 80 yesterday. I owned only May expiry call options on FSM, so I also blasted every option I owned in the $0.50s when they went $1.00 bid yesterday. Fortuna is my favorite proxy for silver as it is a great little company with miners (as opposed to “money men”) at the helm, and they really know how to exploit the two best locales in the world for silver deposits (Peru and Mexico).

However, with RSI and MACD threatening to blow the chart borders to smithereens, FSM is severely “overbought.” Hence, I have taken profits in the call options because May expiry is just too close. I keep 50% of the shares because while I may be able to replace the shares I sold at $6.03. If I am wrong and it powers ahead to $7.50-8.00, I am still a shareholder.

The chart I am presenting below is the COT structure (for silver) for last week, and while it is not a “current” chart, look the optics. At the extremes (in the middle), there was a superb opportunity to short the silver market. Now, there is zero opportunity to do the same. It is the singular most powerful set-up I have seen in any market—ever.

OK, I have been nattling far too long about “trades,” so now I remove the warm-up jacket and get down to business. The chart shown below is the TIPS (Treasury-Inflation-Protected-Securities) chart measured against the price of gold going back to 2013, and you can see the near-perfect correlation between the 10-year TIPS Breakeven Inflation and the gold price. I also threw up the chart of the 30-year Treasury yield, indicating that the bond market has definitively sniffed out the return of higher inflation rates and now we have gold, bonds, and the TIPS marching forward with sirens blaring and red lights blinking.

The S&P and NASDAQ have decided to ignore this since 2016, but recent volatility spikes are again proof positive that stocks are starting to smell inflationary trouble. The attendant flattening (soon to be inverting) yield curve is confirming.

The greater question for precious metals enthusiasts revolves around the possibility of the metals being sucked downward into a liquidity squeeze, as in 2008, to which I respond “not a chance.” In 2008, gold mining stocks and silver and gold bullion were over-owned and overbought after a five-year vertical ascent. The hedge funds had levered up on gold and silver with massive net long positions that had to be reversed once the subprime bubble was pricked.

Here in 2018, as seen in the recent COT report, the Large Speculators in silver are actually net short, which is a historical anomaly and the first ever of its occurrence. Gold at 163,000 net longs, held by the same, is a relative modest number when matched off against the 185,000 Commercial short position. In 2008, at or near the peak, those numbers were north of 300,000. I therefore am going to assume that an equity market drawdown will not impact gold to any great degree. Interestingly, I think it might actually cause a spike in silver, as the offsetting trade that will reduce exposure for the Large Specs will be net purchases of silver (to remove their shorts). (Forgive the pun.)

As my graphics below show, the silver pop from the low $16s to $17.25 in the past several days has seen that big Large Spec net short position pared down, but they are still net short 87 contracts as of last Tuesday. The April 24 COT will be interesting, especially if we see that both the Commercials and the Large Specs have shorted more into the move. I say no.

All in all, I would classify last week’s metals action as favorable, but there seems to be that “invisible hand” keeping gold from ascending through the much publicized $1,365-1,375 resistance band. When I say “much publicized,” do a scan of all of the gold websites and in every single commentary (including this one) the authors reference this resistance zone. I find it amusing that every technician out there is alluding to the ultimate bullish breakout as a “given,” but nobody will put their innards on the line and tell us “when.”

Except me. I am carrying overweight positions in silver (shares, calls and physical), and am short the GTSR at 82.35. I am planning for gold to be in the $1,400s by June, which takes the GTSR under 70—which means that silver prints $20 and the percentage move in the silver miners and silver itself is the high-octane play to start off the summer.

To give you an idea of just how bullish the silver COT is historically, look at the 20-year COT shown below, and pay particular attention to 2001, when silver was under $4 per ounce. I am not going to jinx my precious silver positions by even uttering “that word” that describes what I am expecting to see in the next few weeks. But I will give you all a hint: It rhymes with “sneeze;” it is what you are not supposed to do to the Charmin; and it is how a boa constrictor kills its prey.

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

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

Disclosure:
1) Michael Ballanger: Through my company Bonaventure Explorations Ltd., I own shares of the following companies mentioned in this article: Fortuna Silver. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Additional disclosures are below.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports 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 one week after the publication of the interview or article.

All charts and images courtesy of Michael Ballanger.

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

( Companies Mentioned: FSM:NYSE; FVI:TSX; FVI:BVL; F4S:FSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/22/whither-silver-from-here.html

Cobalt and Nickel: Two Essential Elements for EVs

Source: Maurice Jackson for Streetwise Reports   04/20/2018

As electric vehicles grab a larger share of the automotive market, the sourcing of raw materials becomes increasingly important. Sam Broom of Sprott Global Resource Investments, in this conversation with Maurice Jackson of Proven and Probable, discusses the supply and demand equations for two essential elements in EV batteries, nickel and cobalt.

Maurice Jackson: Welcome to Proven and Probable, where we focus on metals, mining, and more. We are speaking with Sam Broom, an investment executive at Sprott Global Resource Investments. Today, we will discuss nickel and cobalt propositions for his portfolio.

Sam, you’ve truly carved out a niche for yourself in the nickel and cobalt space. Many speculators don’t hear much about these metals and the value propositions that they may present. Let’s begin with nickel. At the 10,000-foot level, share with us the supply and demand fundamentals for nickel.

Sam Broom: Nickel is actually quite an interesting market. It was a darling back in the early to mid-, even to late 2000s, up until about 2007–2008, where the price rose dramatically. A lot of people and a lot of speculators made a lot of money in the nickel market in the 2000s.

What happened was the Chinese came up with a new way of producing largely stainless steel, which was the main use for nickel. Formerly, Chinese companies used refined nickel to produce stainless steel. Nickel is a fairly rare metal. There’s not a lot of high-quality deposits out there, but the Chinese figured out a way to turn ferronickel, which was basically an iron-rich nickel dirt, a withered rock. You could now use that as a replacement for refined nickel in creating stainless steel.

That truly was almost like a shale oil moment for the nickel market, and drastically changed the cost structure of the industry. It also coincided with the global financial crisis in 2008, and then nickel promptly fell off a cliff. It was trending at about $54,000–55,000 a ton. It was as low as almost $7,000 a ton about a year ago. So that’s we’re talking an 80% decline over the last 10 years, in terms of the nickel price.

What resulted was all of a sudden you hit this flood of nickel, or iron-rich nickel, nickel pig iron, or ferronickel, that flooded into the market from places like Indonesia and the Philippines. It basically destroyed the price of nickel. If you look at a long-term chart of nickel, the refined nickel stores on the LME, you’ll see exactly what happened. Basically, supply went through the roof, and then we saw this huge accumulation of nickel. The nickel market was in a huge surplus for years and years.

To this very day, there are still huge amounts of nickel on the LME, compared to historical norms. That’s why a lot of people still steer clear of the market. One key thing to note, though, is for the last few years, the nickel market or the refined nickel market has been in a deficit. If you look at that very same chart, you’ll notice that stock piles have been starting to draw down, and that’s initially what got my attention. That’s a key thing for investors and speculators to keep an eye on.

The draw down has actually been in excess of what I was expecting at this point in the cycle, so clients of mine will know that I’ve been talking about nickel for the better part of about 6 to 12 months as being a commodity I think could be one of the best performing commodities over the next few years. The tide is turning, and it’s actually exceeding my expectations so far.

Maurice Jackson: You made two interesting points here. You have a supply deficit and an 80% reduction in price. That really prompts some unique opportunities. Do you foresee a catalyst that will constrain supply in the future, or add to the demand?

Sam Broom: The main driver that I see moving the nickel price is it’s a very crucial ingredient in just about every type of lithium-ion battery there is out there. If you look at all the various chemistries, most of them are very nickel-rich.

What we’re seeing or just starting to see is increased buying from those getting set in the electric vehicle space where they don’t actually need refined nickel, nickel metal. The EV industry uses nickel sulfate, which is basically a nickel salt, but you can make that. You can process refined nickel into nickel sulfate. We’re starting to see a little bit of an impact from that.

Nickel is also what I would term a kind of an affluent commodity. Stainless steel is obviously something that an increasingly wealthy population consumes in greater quantities as they become affluent. Global growth in places like China and in the developing world is driving this nickel drawdown at the moment, but I do foresee that in the near future, probably not in the next 12 months, but maybe 18 to 24 to 36 months down the track, the growth of the electric vehicle industry is going to be what drives refined nickel demand.

The key thing to note here is that all of that additional supply that came onto the market back in the late 2000s with the invention of nickel pig iron is completely unsuitable and unusual in the electrical vehicle space. So basically, that can go towards servicing demand from stainless steel fabrication and production, but it cannot be used at all to create electric vehicles and to go into the cathode of lithium-ion batteries.

In a nutshell, that EV demand is going to directly impact on what we term “class one nickel,” which is what the LME stock piles represent.

Maurice Jackson: You hit on some very key points here, and that’s a lot of ambiguity that I heard regarding the nickel space. There’s excess supply that can be used, and you just addressed it cannot be used. For our readers, please do take note here. But I want to stick with this theme here for the supply deficit. Where is current production coming from and will that remain for the future?

Sam Broom: There are two very different classes of nickel supply here. The pig iron and the ferronickel that’s getting fed into the Chinese furnaces, this is the supply that can’t be used by electric vehicle fabricators and manufacturers. It’s coming from primarily from places like Indonesia and the Philippines.

Basically, what they do is they literally just dig it up, and put it on a ship, and ship it to China, and it’s a iron nickel-rich dirt that goes over there. That’s where that supply largely comes from. There’s a little bit coming out of Australia, but mainly places like New Caledonia, Indonesia and the Philippines.

Class one nickel, or refined nickel, comes from a whole host of other places around the world. A major producer is Russia, with Norilsk Nickel, one of the larger mining companies. Outside of that, another major name you’ve probably heard of is Voisey’s Bay in Canada. Outside of that, there’s very little in the way of primary nickel production. It’s primary nickel sulfide production, I should say; so, sulfide mines.

We won’t get too much into the weeds here, but they are the type of mines that can easily produce refined nickel. They’re very rare, and there has been next to no major discoveries, at least in the last five years. The last one I can think of was Sirius Resources, which was run by a legendary Australian prospector, Mark Creasy. It discovered Nova Bollinger back in 2012. That’s the last major nickel sulfide discovery that I can think of, so that was over five years ago now.

That gives you an idea about how little nickel exploration there has been and how many new high-quality class one nickel discoveries and new projects are in the pipeline. It’s basically non-existent.

Maurice Jackson: Sam, with the exclusion of Canada, how mining friendly are these jurisdictions?

Sam Broom: I guess Russia’s pretty topical at the moment with all the sanctions that are going on at the moment. The Norilsk company, the Russian company I mentioned, its share price got smashed 20% yesterday on the news. So, Russia’s kind of self-explanatory. I personally think Russia’s very cheap right now, but it does come with a high degree of geopolitical risk, given the tensions there.

The ferronickel and the pig iron producers, I would say have a moderate to high degree of geopolitical risk. For those of you who aren’t familiar, the Philippines has been doing all sorts of things. There is a lot of talk about cracking down on its mining industry, and banning all sorts of open-pit mining because of the damage that these nickel laterites mines have been causing to the countryside.

I would say there’s a relatively high degree of risk and potential disruptions to supply from that side. Outside of that, you’re looking at places like Australia, Canada, the U.S., parts of Africa. There’s potential around the world, but it’s just finding these deposits, because they are so rare and so hard to find that we’re just seeing next to nothing come through in terms of new, high-quality sulfide deposits that are capable of cheaply producing class-one nickel.

Maurice Jackson: Give us some numbers here. What are the global costs for production versus the all-in sustained costs on nickel?

Nickel Production Costs

Sam Broom: It’s hard to give an exact number, but last I checked I would say industry-wide cash costs average somewhere around $4-5 a pound. If you take in all-in sustaining costs, you’re probably looking at above $6.50 a pound. If you take into consideration the true cost of production, including capital costs, which you should always do, it’s probably above $7 or $8 a pound. Nickel’s currently trading at $6.50 a pound, or about $13,000 to $14,000 a ton. By and large, the industry is underwater at these prices.

Maurice Jackson: Switching gears, let’s delve into cobalt. At the 10,000-foot level, share with us the supply and demand fundamentals for cobalt.

Sam Broom: Cobalt’s completely different to nickel, even though they’re often found together. By far and away, the main producer in terms of a jurisdiction of cobalt is the Democratic Republic of Congo, which I would probably describe as a country with the highest geopolitical risk of almost any that I know right now. There’s a whole lot of strife in terms of what’s happening with the government there. The formerly democratically elected president has failed to step down as he is constitutionally mandated to. That was over a year ago now, so there’s a lot of shenanigans going on, a whole lot of conflict, the potential for civil war, and that type of thing. I don’t know whether that will happen or not, but some not good things are going on over there.

Cobalt Supply and Demand

On top of that, it’s a very poor country. There are a lot of historical conflicts between different tribes within the country, and issues like that. It’s not a very safe place to have one of the key ingredients for electric vehicle lithium-ion batteries. Some 65% of global supply comes from the DRC, so that’s what initially got me interested in cobalt well over a year ago. Here’s information that I have put out that explains the situation there.

https://www.youtube.com/watch?v=sVt8kfhqGEk

http://www.mining.com/web/why-cobalt-not-lithium-could-be-the-battery-booms-big-commodity-winner/

http://www.mining.com/web/base-metal-breakout-industrial-commodities-threaten-decade-long-downtrend/

Basically, we’ve got huge amounts of supply coming out of a single country that has extremely elevated geopolitical risk. On the demand side of the equation, the main driver moving forward is going to be the growth of electric vehicles. Now, cobalt, along with nickel and a few other elements, is one of the key ingredients in the cathode component of electric vehicles. It is the ingredient that controls or has a large impact on both the stability and the amount of energy a battery can store. It greatly affects the range of electric vehicles.

Cobalt

I can’t see it being replaced any time soon, and I can see a huge increase in demand coming as electric vehicles proliferate. Given we’ve got an extremely high-risk geopolitical supply backdrop, with an exceptional growth outlook on the demand side, it’s a very interesting proposition. Obviously, the cobalt price has already gone up dramatically in the last 12 to 18 months. We’re already well into the cobalt price re-rate.

Maurice Jackson: You’ve already answered part of my question here. The current production is coming from the DRC, and as a speculator, your eyes light up when you have this geopolitical turmoil. Will that change in the future? Do you foresee other production countries coming with production?

Sam Broom: Cobalt’s a really interesting one, because it’s rare but it’s relatively pervasive in very low quantities in rocks around the world. What is really rare is cobalt in economic concentrations. There are many places around the world that have cobalt in economic quantities that it can be mineable. Basically, the main source of cobalt that I see outside of the Congo moving forward is likely to be laterite, the very same type of deposit as the nickel pig iron we talked about earlier; it often has economic quantities of cobalt. The one key jurisdiction I’ve been focusing on is Australia, because it has the same type of deposits as the Philippines Indonesia and New Caledonia that we’ve talked about. Yet it’s obviously a fair safer jurisdiction.

There are a handful or more of these nickel-cobalt laterite plays in Australia, and that’s where I’ve largely been focusing my attention, because I think that the electric vehicle industry is going to value security of supply over price in the mid- to long term. In other words, they’ll be willing to pay up for their nickel and their cobalt, cobalt in particular, if it’s been mined in a jurisdiction they’re not worried about blowing up into a civil war and losing that supply in six months’ time. These companies are spending billions of dollars in capex building these factories. The last thing they need is a supply crunch when it comes to cobalt.

I’m keeping a very close eye on the Australian nickel cobalt play. I will say, though, that these types of plays are more of a speculative investment than an investment-grade proposition. I view them as being almost at the money at current prices. They do require higher prices, nickel in particular, to actually pay off in the long run.

Maurice Jackson: Talk to us about the global costs for production versus the cash costs and the all-in sustaining costs for cobalt.

Cobalt Production Costs

Sam Broom: It’s very hard to say because probably 97% of cobalt is produced as a byproduct. There isn’t really a cost curve out there for cobalt that you can examine. Usually it goes as either a credit towards nickel or copper production. Looking at it in terms of the cost to produce cobalt, I don’t really have any good figures out there.

What I would say is look at cobalt as a way to render nickel and copper projects economic. For example, there’s a company I watch that just put out a feasibility study that the nickel all-in sustaining costs per pound are something like $5 to $6. With the cobalt credits, that drops to about $1. That goes to show you how much the cobalt credits it’s getting from its project go towards making these projects economic. Basically, this project would be completely uneconomic at current nickel prices, moderately economic at current prices, and extremely economic at say, $20,000 a ton of nickel.

Maurice Jackson: Thank you for a very comprehensive interview regarding cobalt and nickel. Does Sprott Global Resource Investment still provide a free grading of one’s natural resource portfolio at no cost and obligation?

Sam Broom: Absolutely. If you want me to take a look at your portfolio, particularly those with an EV metal and material focus, I’d be more than happy to give you a no obligations ranking of your portfolio. Bear in mind that this is wouldn’t be investment advice or anything. It’d be a one to ten ranking. But if you would like to take me up on that offer, my email is sbroom@SprottGlobal.com. I’d be more than happy to receive your request and give you a no obligations ranking there.

You can either attach an Excel attachment, or simply just list your portfolio in bullet point form in the email. With the subject line: Proven and Probable

Maurice Jackson: Do we have a contact phone number for you at Sprott?

Sam Broom: You can reach me at 800-477-7853.

Maurice Jackson: For our readers, we want to remind you to register for the Sprott Natural Resource Symposium, which will be conducted July 17-20 in Vancouver, British Columbia. Just click on the registration tab on our website for free tickets. Featured speakers will be Rick Rule, Doug Casey, Jim Rickards, Jim Grant, just to name a few. We will be present and we look forward to meeting you. Sam, let me ask you this as well, will you be in attendance?

Sam Broom: I am certainly planning on being there. I have my first child due in early August, so as long as that doesn’t happen ahead of schedule, I will certainly be there.

Maurice Jackson: All right, look forward to seeing you there. Last but not least, please visit our website, ProvenAndProbable.com, where we interview the most respected names in the natural resource space. You may reach us at Contact@ProvenAndProbable.com.

Sam Broom of Sprott Global Resource Investments, thank you for joining us today on Proven and Probable.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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

Disclosure:
1) Statements and opinions expressed are the opinions of Sam Broom and Maurice Jackson and not of Streetwise Reports or its officers. They are wholly responsible for the validity of the statements. Streetwise Reports was not involved in the content preparation. Sam Broom and Maurice Jackson were 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.

Images provided by the author.

Proven and Probable LLC receives financial compensation from its sponsors. The compensation is used is to fund both sponsor-specific activities and general report activities, website, and general and administrative costs. Sponsor-specific activities may include aggregating content and publishing that content on the Proven and Probable website, creating and maintaining company landing pages, interviewing key management, posting a banner/billboard, and/or issuing press releases. The fees also cover the costs for Proven and Probable to publish sector-specific information on our site, and also to create content by interviewing experts in the sector. Monthly sponsorship fees range from $1,000 to $4,000 per month. Proven and Probable LLC does accept stock for payment of sponsorship fees. Sponsor pages may be considered advertising for the purposes of 18 U.S.C. 1734.

The Information presented in Proven and Probable is provided for educational and informational purposes only, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any particular purpose. The Information contained in or provided from or through this forum is not intended to be and does not constitute financial advice, investment advice, trading advice or any other advice. The Information on this forum and provided from or through this forum is general in nature and is not specific to you the User or anyone else. YOU SHOULD NOT MAKE ANY DECISION, FINANCIAL, INVESTMENTS, TRADING OR OTHERWISE, BASED ON ANY OF THE INFORMATION PRESENTED ON THIS FORUM WITHOUT UNDERTAKING INDEPENDENT DUE DILIGENCE AND CONSULTATION WITH A PROFESSIONAL BROKER OR COMPETENT FINANCIAL ADVISOR. You understand that you are using any and all Information available on or through this forum AT YOUR OWN RISK.

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2018/04/20/cobalt-and-nickel-two-essential-elements-for-evs.html