All posts by Bianka Weaver

About Bianka Weaver

There are a lot of ways to invest your hard-earned money that are very successful and could turn reasonable amount of profit over time. One of them is investing through gold, silver and other precious metals. Over the years, these precious metals has grown their value, which makes it one of the best options for long term investment.

Streaming Company’s ‘Attractive Valuation’ Is Behind Analyst’s Outperform Rating

Source: Streetwise Reports   11/16/2017

BMO Capital Markets reviewed this company’s Q3/17 financial results and an impending deadline pertaining to one of its streams.

A Nov. 9, 2017, research note indicated that Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) reported “an in line Q3/17 despite lower-than-expected sales,” wrote Andrew Kaip, an analyst with BMO Capital Markets.

This company’s deliveries of gold and silver “were a beat relative to our expectation,” Kaip said. Gold deliveries were 95,900 ounces (95.9 Koz) versus BMO’s 92.1 Koz estimate. For silver, they were 7.6 million ounces (7.6 Moz) relative to BMO’s 6.9 Moz estimate.

The streaming firm’s sales of 82.5 Koz of gold and 5.8 Moz of silver were a miss in Q3/17 due to “concentrate build-up at a number of operations,” Kaip explained. This resulted in lower-than-projected operating cash flow. That came in at $129 million ($129M), which compares to BMO’s $150M projection.

During Q3/17, the company’s Penasquito and Salobo streams outperformed. In contrast, the San Dimas stream underperformed and “is at risk of missing delivery guidance of 4 Moz,” the analyst noted. Wheaton, however, reiterated 2017 overall guidance of 28 Moz of gold and 340 Koz of silver.

Adjusted EPS was $0.15, which was as expected “despite the revenue miss on lower sales,” reported Kaip. BMO anticipated EPS of $0.14, and consensus estimated $0.15.

On the balance sheet at quarter’s end, Wheaton Precious Metals had $70M in cash, $854M in debt and $1.1 billion available under its $2 billion revolving credit facility. On that obligation, the company repaid $99M during Q3/17.

Of near-term significance, on Nov. 23, Wheaton’s guarantee on the Primero Mining credit facility will expire. One of two possibilities could occur by that date: a resolution takes place or Wheaton extends the deadline, Kaip suggested. BMO believes the latter is more likely, that Wheaton will “provide additional time for interested parties to assess a number of variables, including potential stream restructuring and associated payment, Mexican tax risk, etc., that will factor into valuation for San Dimas,” which Primero operates.

“Clarity on San Dimas” will be positive for Wheaton, Kaip deduced. It should catalyze upward movement of its stock, “given that shares of the company have underperformed peers by 40% since operational issues emerged this time last year.”

Wheaton is currently trading at $26.11, which compares to the $28 target price BMO Capital has on it, along with an Outperform rating. “A positive outlook for shares of WPM is predicated on the view that investors are already imputing a CRA discount, and on the company’s attractive valuation relative to peers,” wrote Kaip.

“As a lower-risk investment opportunity, we expect WPM will become increasingly attractive to generalists re-entering the sector and looking for exposure to precious metals,” Kaip stated.

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) 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 sponsors of Streetwise Reports: Wheaton Precious Metals. Streetwise Reports does not accept stock in exchange for its services. 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) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their 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 Wheaton Precious Metals Corp., a company mentioned in this article.

( Companies Mentioned: WPM:TSX; WPM:NYSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/16/streaming-companys-attractive-valuation-is-behind-analysts-outperform-rating.html

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Three Resource Companies; One Good Buy

Source: Adrian Day for Streetwise Reports   11/16/2017

Adrian Day of Adrian Day Asset Management reviews the current news and prospects at three resource companies, and comes up with at least one good buy.

Lack of News Sees Stock Slip Even as Project Progresses

Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE, US$0.92) plans to deliver a bankable feasibility study by midyear—a delay on the previous Q1 schedule—with much of the technical work already done in the prefeasibility study. The company expects permitting to be complete by the end of next year, with the critical Environmental Impact Study (EIS) filed by the end of this year. There will be a community consultation on the EIS, probably some questions, with a decision within six to 12 months after filing. If all goes well, the project would be ready for a production decision by early 2019.

My expectation, however, is that once the full feas study has been published and permits received, Almaden’s Ixtaca would become a target for a midsize producer, and probably a silver one, given that 50% of Ixtaca’s production will be silver and given the paucity of good silver projects.

Why is the stock down?
The stock has fallen significantly, from trading above $1.20 most of the time in September and early October. (It hit a peak of $1.72 earlier in the year, briefly.) Why? First, most juniors have declined over the past several weeks. Second, this period in a mine’s life is often a boring one, with lots of detailed work but few exciting news releases. Third, the slippage in the anticipated publication of the feasibility study could be an added reason. And fourth, a U.S. expatriate, claiming to represent the indigenous peoples of the region, is trying to stir opposition to the mine. He lacks credibility, but some potential investors could stand back to see if anything develops.

This provides us with a great opportunity to buy into this quality deposit, run by a company with a solid balance sheet and technically strong and ethical management. Given the last week’s trading, you’ll likely pick it up at 0.93.

Is a Turnaround Finally Underway at Yamana?

Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE, US$2.68) just might be beginning its turnaround. Another good operating quarter saw, in particular, increased production from two of its major mines, Chapada and El Penon, with the company now on track to exceed its full-year production forecast. Malartic should see increased production ahead (as discussed when we reviewed Osisko recently). Yamana also said it would pay $75 million to Brazil under its tax amnesty program, with possible smaller payments for the next several years. This was not unexpected.

Yamana has been trading at a justified discount to its peers. If it can exceed its production target for the year; if Cerro Morro, commencing production in Q2/18, can have a smooth start up; and if the balance sheet improves (which it should as a capital spending phase comes to an end)—if we can see this without another negative surprise from the company—then the stock could start to narrow the discount. Investors remain somewhat cautious, in a “show-me” mood. We are holding.

Troubles Continue for Freeport, Even as Operations Solid

Freeport-McMoRan Inc. (FCX:NYSE, US$14.41) has reported strong operations, with costs down, as it continues to improve its balance sheet, redeeming two notes for $617 million. It is slowly bringing back some capacity cut earlier, and is even considering some development projects for bringing into production. With the sound news all round, and the copper price over $3/lb, Freeport would be trading in the mid-$20s but for one thing.

That one thing, of course, is Indonesia. As the company talks of progress in its “complex” talks with the government, and both parties saying a detailed, final agreement is possible by the end of the year, new issues arise.

What to do with Rio’s stake?

One complication is the stake held by Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK). The agreement was struck in the 1990s at a very difficult time for Freeport. Rio has to contribute to the big capital spend—up to $850 million. What Rio owns is somewhat complicated—at least it complicates the talks between Freeport and government. It owns a 40% share of production over a certain level from the existing mine and a call over 40% on all production from certain trigger point, commencing in 2022. Rio has the right to approve any contract changes, but Freeport says the company will have to divest some of its interest, and says the government agrees.

I don’t think Rio will want to continue contributing capital for a small interest. It has more than hinted that it wants out. The CEO calls Grasberg “a world-class deposit but maybe not a world-class investment.” But it would surely want compensation for giving up its interest.

And beyond all this are the as-yet-not-agreed terms of the divestiture of an additional 42% to Indonesian interests. Reportedly, Indonesia has agreed that the sale can be done in stages over the next few years, as Freeport prefers, but the precise terms need to be set now and that is unclear. Meanwhile, the time for massive investment to expand the mine is fast approaching.

To add further difficulties, separatists have now occupied several villages near the mine, with an avowed aim of disrupting operations. Freeport shut the main road to the mine after a shooting incident, and the Indonesia army is preparing to storm the villages.

We are not buying until the future is clearer, and indeed, would look for a good opportunity exit and stand on the sidelines.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

 
 

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Disclosure:
1) Adrian Day: 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. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Almaden, Yamana and Freeport McMoRan.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Wheaton Precious Metals. Streetwise Reports does not accept stock in exchange for its services. 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.
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 interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Almaden Minerals, a company mentioned in this article.

( Companies Mentioned: AMM:TSX; AAU:NYSE,
FCX:NYSE,
RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK,
YRI:TSX; AUY:NYSE; YAU:LSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/16/three-resource-companies-one-good-buy.html

The Holiday Season Comes Early After an Updated PEA Brings In a Bundle Full of Buy Ratings for Precious Metals Explorer

Source: Streetwise Reports   11/14/2017

Five analysts explain why “several significant improvements” led to their Buy recommendations and highlight what investors need to know.

In a Nov. 7 announcement, MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) released the results of its 44%-owned Juanicipio project preliminary economic assessment (PEA). “We are very pleased to see the strong positive impact of the enhanced project scope on the already remarkable economics of the Bonanza Zone,” said George Paspalas, MAG Silver’s president and CEO. “The upside to higher metal prices is obvious, but equally important, the project even shines brightly at significantly lower metal prices: At $8/oz silver and $0.75/lb zinc, the project still delivers an after-tax IRR of 15%,” Paspalas stated.

Bhakti Pavani, an analyst with Euro Pacific Capital, pointed out in a Nov. 9 report that “the new PEA on the Juanicipio project is robust with a significant increase in the mineral resource estimate, in our opinion.” She highlighted that “while the mineral resource estimate has increased 64% from its previous resource of 15.2MM, the majority of the increase is in the Deep Zone, where the Company has been actively drilling since 2015. We believe the new PEA economics are robust and have increased significantly despite the lower metal prices.”

Pavani also noted that “despite the increase in the throughput (from 2,650 tpd to 4,000 tpd), the mine life of the project has increased from over 15 years to over 19 years following an increase in the mineral resource estimate. Also, the key to note is the improvement in metal recoveries. For instance, the recovery of silver, gold, and zinc has improved from our estimate of 90% Ag, 69% Au and 87% Zn to 95% Ag, 82% Au, 90% Zn, respectively. The improvement in recoveries should significantly increase in the Net Asset Value of the project, in our opinion.”

She noted that Euro Pacific has updated its “financial model for the new resource estimate, mine life, recoveries and operating cost estimate following which the NAV of the project has increased from $1.2 billion to $1.3 billion. Accordingly, we reiterate the ‘BUY’ rating on the stock but are increasing the PT from US$15.70 to US$17.50.”

Another Nov. 9 report, released by PI Financial analyst Philip Ker, stated that “with Juanicipio now set to turn into a more aggressive story, we continue to believe Juanicipio is one of the leading development projects on the planet.” He highlighted that “the economic study integrated an updated resource which included the discovery and expansion of the Deep Zone which contains a more base metal rich component of the high grade epithermal system. The PEA is quite conservative whereby only 17Mt of the 24.5Mt resource was used along with below average payable rates, higher than market TC/RC charges and operating costs well above what is being realized at the Saucito operation. Despite the conservative efforts MAG still reports a robust after-tax IRR of 44.5%.”

Ker concluded “that with further project advancement, increased value opportunities will emerge and continue to support our valuation.” Ker reiterated a Buy recommendation with a target price of CA$24.85.

Raymond James analyst Chris Thompson released a “Strong Buy” recommendation with a target price of CA$25 in a Nov. 8 report. Thompson pointed out that the “CA$25.00 target price is derived by applying a 1.5x multiple on our minesite NAV estimate for Juanicipio with a 1.0x multiple on the company’s other assets.” He explained that the “target implies a 1.4x Adj. P/NAV multiple which we feel is justified given MAG’s position holding 44% of one of the highest grade undeveloped silver mines in the world, and exploration upside.”

Analyst Joe Reagor with ROTH Capital Partners stated, in a Nov. 7 report, that “the PEA confirmed our prior views on the company and we have updated our model to reflect the new PEA. Additionally, we note that we continue to believe there is significant resource expansion potential at the project. Thus, we are reiterating our Buy rating and US$22 price target.”

Reagor highlighted that “one of the most important aspects of the Juanicipio project is its significant exploration potential, in our view. We note this as the new PEA does not reflect this potential and thus, excludes significant value, in our opinion.”

He concluded that “although we made a number of changes to our mine model for MAG, there was not a significant impact on our DCF based valuation. Most notably, we included a capital raise in 2018 to cover the increased initial capital estimate. However, this added dilution was more than offset by the inclusion of four additional years of mine life and the increase in average annual throughput.”

In a Nov. 7 report, BMO Capital analyst Andrew Kaip rated MAG an “Outperform” with a target price of CA$20. Kaip highlighted that “the new study provides an updated foundation for the scope of the project and underscores Juanicipio’s robust economics.” Kaip estimated that “MAG will need to raise $50-75M to fund its share of the project. MAG looks to be funded through 2018. In our view, the company should not have issues gaining access to additional capital given Juanicipio’s strong economics.”

MAG Silver is currently trading at US$10.44 on the NYSE and CA$13.30 on the TSX.

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) Melissa Farley 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: MAG Silver Corp. Streetwise Reports does not accept stock in exchange for its services. 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) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their 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.

Additional disclosures about the sources cited in this article

( Companies Mentioned: MAG:TSX; MAG:NYSE.MKT,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/14/the-holiday-season-comes-early-after-an-updated-pea-brings-in-a-bundle-full-of-buy-ratings-for-precious-metals-explorer.html

Two ‘Low-Risk’ Gold Companies Present Opportunities to Buy and Hold

Source: Adrian Day for Streetwise Reports   11/13/2017

In his latest dispatch, Adrian Day of Adrian Day Asset Management reflects on the prospects and performance of a pair of gold companies.

Advancing the Next Major Project for Franco

Franco-Nevada Corp. (FNV:TSX; FNV:NYSE, US$83.99) had another outstanding quarter, and has outperformed its peers handily this year. Significant development: It has invested for an additional 10% interest in Cobre Panama, the large copper deposit under construction by First Quantum, with commissioning scheduled for the second half of next year. The financing was in syndication with a unit of CK Hutchison of Hong Kong. Although the syndication was small, Franco used the deal to work through the details of such financing so it is prepared for a larger deal.

Cobre now represents nearly 15% of Franco’s NAV, its largest single asset. The next two represent around 10% each; oil & gas in total is nearly 17% after the addition of two more relatively small assets. It has a total of 47 producing royalties and streams.

Franco also said it was confident in the structure it uses for offshore transactions, commenting (without names) on the dispute Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) has with the Canadian tax authorities. Assuming the same fact pattern, it would owe $10 million to $15 million for existing deals, an insignificant amount for Franco, though any negative ruling going forward would hit future revenues meaningfully. The company has $630 million in working capital, with available capital of $1.6 billion and no debt.

This is the one to own

We repeat what we have said many times: If you are to own only one gold company and hold it for a while, Franco is that company without question. While clearly demonstrating growth potential, it also has one of the lowest risk profiles of any gold stock. One analyst headed its recent report on the company “Commanding the safe-haven bid”. While we would not see today’s price—up from under $70 in early July—as a particularly bargain price to add to positions, nor for a trade, if you do not own, it’s as good as any.

Mixed Results at Osisko

Osisko Gold Royalties Ltd. (OR:TSX; OR:NYSE, US$12.13) is the fourth largest of the “big four” royalty and streaming companies. It had mixed results in its latest quarter. Malartic (its largest royalty) was up, and will increase in the medium term following a successful expansion. Eleonore, however, will decline longer term on a reduction in its reserve estimate, though there will be a major increase in Q3/18 as the ramp-up continues. The newly acquired Renard Diamond mine had a rough first quarter for Osisko, on lower production.

The company is achieving exploration success at several of the companies in its “accelerator program,” including Osisko Mining (in which it acquired an additional royalty). Under the program, Osisko funds exploration companies in return for shares and a royalty; the current investment portfolio is worth around $420 million.

Well Financed with Upside

Following a $300 million convertible debenture financing, Osisko will end the year with around $405 million in cash, plus access to credit, so has a solid balance sheet even after the large Orion acquisition.

Osisko also announced that its dividend reinvestment plan is now available to U.S. residents. Shares are either bought in the market, or—as this month—issued from treasury at a discount and without any commission.

Osisko remains the most “speculative” of the big four, but that is very much a relative assessment. A solid balance sheet, entrepreneurial management, aggressive exploration, and two large, long-life gold royalties as the foundation of the company, it’s a relatively low-risk gold stock with plenty of upside. If you do not own, buy now.

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

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) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Franco-Nevada and Osisko Mining. 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. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Franco-Nevada and Osisko Mining.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Wheaton Precious Metals. Streetwise Reports does not accept stock in exchange for its services. 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.
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 interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Franco Nevada, Osisko Mining and Wheaton Precious Metals, companies mentioned in this article.

( Companies Mentioned: FNV:TSX; FNV:NYSE,
OR:TSX; OR:NYSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/13/two-low-risk-gold-companies-present-opportunities-to-hold-and-buy.html

Jack Chan’s Weekly Precious Metals Market Update

Source: Streetwise Reports   11/11/2017

Technical analyst Jack Chan charts the latest moves in the gold and silver markets.

Our proprietary cycle indicator is down.

chanhui111-11
The gold sector is on a long-term buy signal. Long-term signals can last for months and years and are more suitable for investors holding for long term.

chanhui211-11
The gold sector is on a short-term sell signal. Short-term signals can last for days and weeks, and are more suitable for traders.

chanspec11-11
Speculation favors overall higher gold prices.

chanusd11-11
A pullback on the dollar is supportive for the metals.

chansilver11-11
Silver is on a long-term buy signal.

chanslv11-11
SLV is on a short-term buy signal, and short-term signals can last for days to weeks, more suitable for traders.

chansilverspec11-11
Speculation favors overall higher silver prices.

Summary
The precious metals sector is on major buy signal. The cycle is down, as consolidation continues. COT data is supportive for overall higher metal prices. We are holding gold-related ETFs for long-term gain.

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

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

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

Charts courtesy of Jack Chan

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/11/jack-chans-weekly-precious-metals-market-update-1.html

Gold and Base Metal Companies Are on This Expert’s Shopping List

Source: Adrian Day for Streetwise Reports   11/11/2017

Adrian Day of Adrian Day Asset Management reports on news at three resource companies, calling each company “different” and “on the shopping list.” 

Prepared for the Next 20 Years

Altius Minerals Corp. (ALS:TSX.V, CA$12.40), one of my top non-gold resource companies, just celebrated its 20th anniversary. Base metals—primarily zinc and copper—now account for over 45% of the company’s revenues, a pleasing change from the earlier coal-heavy allocation. A copper spinoff is in the works, following a successful zinc spinoff. In these spinoffs, Altius retains a share interest, which it tends to subsequently sell down to raise capital, while retaining a royalty interest.

Altius continues to pay down debt, nearly $5.5 million this year, as well as buying back shares, 154,000 in the last quarter. CEO Brian Dalton said he was frustrated that he could not buy back more shares, but they are limited by the rules based on the number of shares traded.

Well positioned for iron ore

Interestingly, Dalton also indicated he was “certainly optimistic” now on an iron ore recovery and noted that Newfoundland and Labrador ore sells at a premium to Australian ore. The company is very well positioned in iron ore, with several joint ventures, exploration land and royalties.

Altius’ stock has moved strongly through the summer and autumn from lows around $10. With strong management, a solid balance sheet and financial backing, numerous royalties as well as development and exploration land, Altius is one of our handful of top companies in any sector. At the current price, it is not fundamentally expensive, but given the recent move and that the stock can be volatile, we would look to buy on a pullback.

Strong Report on Timok

Nevsun Resources Ltd. (NSU:TSX; NSU:NYSE.MKT US$2.35) released its preliminary economic assessment (PEA) on the Timok upper zone, acquired from Reservoir Minerals a year ago. With a 15-year mine life, it is scheduled to produce 1.1 billion pounds of copper in its first four years, and 2.1 billion for the life of mine. (Grades decline significantly toward the end of the mine life.)

The economic projections are strong: The project has a net asset value of $1.5 billion, after tax, at an 8% discount rate. Nevsun bought Reservoir for the equivalent of $365 million. The project, with an initial capex of $360 million and a payback of less than 1.5 years, it has a very robust IRR of 50%. The numbers are based on $3/lb copper and $1,300/oz gold; copper is currently just above, and gold just below these prices. The capex number excludes two payments that have to be made to Freeport, $45 million on a build decision and $50 million on achievement of commercial production.

Significantly, Nevsun believes there is potential for expansion of the resource, including more high-grade mineralization (“geologically, there should be,” said CEO Peter Kukielski).

Looking ahead to next steps

The next step is to further define the costs and execution plan in order to lower the execution risk. Already, the company says it is using conservative numbers; “we don’t feel that there’s a lot of risk that the numbers might change in a negative fashion,” said Kukielski. A preliminary feasibility study (PFS) is scheduled for the first quarter of 2018, with production to start sometime in 2021.

This was a very strong, though not unexpected, PEA. Otherwise, Nevsun reported an increase in volume and decline in costs for zinc, but weak copper production at its Bisha mine in Eritrea. The company has $150 million in cash.

We are holding Nevsun. If we did not own, we would be looking for opportunities to buy.

Vista Is Changing, But Market Doesn’t Recognize It Yet

Vista Gold Corp. (VGZ:NYSE.MKT; VGZ:TSX, US$0.70) reported progress at its Mt Todd deposit in Australia, advancing toward an updated PFS, expected in the first quarter. The updated study should be strong, with CEO Fred Earnest telling investors “to expect improved recovery, sorting, power savings, and an improved currency exchange rate,” which will combine to produce “a compelling rate of return at today’s gold price.”

This is significant because Mt Todd has a reputation as a deposit that requires a higher gold price to be economic. Earnest said Vista is “no longer just a call option on the price of gold, but owners of a large-scale, economically viable gold project.” Indeed, Mt Todd is the largest undeveloped gold project in Australia and the third-largest reserve package in that country. It could be among the top five producing mines in Australia, with costs in the lowest quartile.

Property sale for cash, royalty, and option

Separately, Vista optioned its Guadalupe de los Reyes deposit to Minera Alamos for four payments totaling CA$6 million, with Vista retaining a royalty and the right to a 49% interest in any future underground mine. It is a very attractive deal for Vista in my mind, and, being Vista’s last significant asset outside of Mt Todd, further focuses the company on that asset.

Vista has CA$21 million cash, which can be supplemented by the completion of the Guadalupe sale; and the sale of its mill and Midas shares. In all, it is a very strong balance sheet.

Despite the progress and very optimistic comments about the upcoming revised PFS, the stock hardly moved. For various reasons, it seems to be a “show-me” story. The updated PFS, however, if it confirms the optimistic assessment, should finally make the stock move, giving us an opportunity now to buy the stock (and Mt Todd) at a bargain level. Once the PFS is out, we suspect the company (or the deposit) will be a most attractive target. Vista is a strong buy.

Somebody Save Me

A tiny, unknown magnesium explorer with the appropriate ticker symbol WHY soared over 1,000% when it announced it was selling its property to another unknown private company based in that center of the mining sector, Swanton, Maryland—a company so low key it doesn’t even have a website. The transaction would have been the fourth-largest mining deal this year. Needless to say, all was not what it seemed. Now “investors” who drank the Kool-aid are wanting the exchange to reverse all trades. One bright spark said he put 60% of his portfolio into the stock. There may well be fraud; there may recompense from the company. But what on earth happened to personal responsibility? Did anyone actually do any diligence before buying this?

Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Altius, Nevsun. 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. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article:  Altius, Nevsun, Vista.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. 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.
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 interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Altius Minerals, Nevsun Resources and Vista Gold, companies mentioned in this article.

( Companies Mentioned: ALS:TSX.V,
NSU:TSX; NSU:NYSE.MKT,
VGZ:NYSE.MKT; VGZ:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/11/gold-and-base-metal-companies-are-on-this-experts-shopping-list.html

Gold Producer Posts Q3 Beat on Lower Costs

Source: Streetwise Reports   11/09/2017

BMO Capital Markets reported the Q3/17 financial and operating results for this international, mid-tier gold miner.

A Nov. 7 BMO Capital Markets research note indicated that IAMGOLD Corp. (IMG:TSX; IAG:NYSE) achieved a Q3/17 headline earnings per share (EPS) of $0.07, which was a beat due to costs being lower than estimated, according to analyst Andrew Kaip. BMO and consensus expected an EPS of $0.02.

The Canadian company’s operating cash flow of $77 million ($77M) was exactly in line with BMO’s estimate, Kaip noted. Free cash flow of $36M was three times the expected $12M, “as capital spending came in below expectations ($41M versus BMO at $65M).” On this result, IAMGOLD lowered capital guidance for 2017 by $25M to $225M (+/-5%).

Production in Q3/17 of 217,000 ounces (217 Koz) was a slight miss, coming in below BMO’s estimate for 223 Koz, “on lower-than-expected production from Rosebel,” wrote Kaip. Yet, the company reiterated 2017 production guidance of 845–885 Koz gold.

All costs during the quarter were lower than anticipated. Total cash costs were $771 per ounce ($771/oz) versus the $797/oz estimate. All-in sustaining costs (AISCs), excluding royalties, were $969/oz and compared to the projected $1,059/oz. Consequently, “AISC guidance was narrowed to $1,000–1,040/oz (was $1,000–1,080/oz),” relayed Kaip.

As of Sept. 30, 2017, Kaip added, IAMGOLD had “cash and short-term investments of $810M and long-term debt of $389M, for net cash of $422M.”

In other news, a near-term catalyst for IAMGOLD—”by H1/18″—is completion of both a preliminary reserve estimate for and permitting work at the Saramucca deposit, Kaip said. The company “is working towards advancing the project toward production in 2019.”

BMO Capital has an Outperform rating and a $5.75 per share target price on IAMGOLD, whose stock is currently trading at around $8 per share.

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) 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 sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. 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) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their 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.

Additional disclosures about the sources cited in this article

( Companies Mentioned: IMG:TSX; IAG:NYSE,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/09/gold-producer-posts-q3-17-beat-on-lower-costs.html