Precious Metals Company Shows ‘A Good Start’ to New Fiscal Year

Source: Streetwise Reports   11/07/2017

BMO Capital Markets reported the Q1/18 financial results of this streaming and royalty corporation.

A Nov. 1 BMO Capital Markets research report indicated that in Q1 FY18, Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX) announced “headline earnings per share (EPS) of $0.44 on gold equivalent deliveries of 88 thousand ounces,” wrote analyst Andrew Kaip. “After adjusting for stock-based compensation, adjusted EPS of $0.48 came in above our estimate for $0.37 and consensus of $0.38.”

Kaip explained the reason for Royal Gold surpassing expectations: “The beat is related to lower depreciation, taxes, and general and administrative expenses offset by lower revenue on royalty sales.”

Total revenue in Q1 FY18 was $112.5 million, $78.8 million from streams and $33.7 million from royalties. Operating and free cash flow was “in line with our estimate,” noted Kaip. It was $71.6 million whereas BMO’s estimate was $72 million.

Costs of exploration at the company’s Peak Gold joint venture in Alaska were “slightly below our estimate” at $3.2 million versus $3.5 million, Kaip wrote.

Royal Gold had $88.4 million in cash and equivalents at the end of the quarter, indicated Kaip. It had “$800M available on its $1B revolving credit facility after repaying $50M during the quarter.”

In the report, following review of the company’s performance during the quarter, Kaip provided a brief update. Royal Gold recently added a stream to its portfolio, this one from New Gold’s Rainy River, which declared commercial production in October. Royal Gold’s interest from gold from the project is 6.5%, dropping to 3.25% after 230 Koz are achieved. For silver, it’s 60%, decreasing to 30% after 3.1 Moz are reached.

BMO Capital has an Outperform rating and $105 per share target price on Royal Gold, whose stock is currently trading at around $88.62 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are 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: RGLD:NASDAQ; RGL:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/07/precious-metals-company-shows-a-good-start-to-new-fiscal-year.html

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Metalla Royalty & Streaming: The Way to Play Gold and Silver?

Source: Peter Epstein for Streetwise Reports   11/06/2017

Peter Epstein of Epstein Research interviews the newly appointed chairman of Metalla Royalty and Streaming, Lawrence Roulston, for an update on the company.

This interview of Lawrence Roulston, newly appointed non-executive chairman of Metalla Royalty & Streaming Ltd. (MTA:CSE; EXCFF:OTCQB) was conducted by phone and email in the week ended November 5th. Lawrence has 35 years of diverse hands-on experience. He recently founded WestBay Capital Advisors, providing business advisory and capital markets expertise to the junior and mid-tier sectors of the mining industry.

From 2014 to 2016, Roulston was president of Quintana Resources Capital, which provided resource advisory services for U.S. private investors, focused primarily on streaming transactions. Before Quintana, he was a mining analyst and consultant, as well as the editor of “Resource Opportunities,” an independent investment publication focused on the mining industry. He has graduate-level training in business and holds a B.Sc. in geology.

Regarding the appointment, detailed in a press release dated October 6, 2017, CEO Brett Heath commented as follows,

“Lawrence’s extensive knowledge of the resources industry, finance, and listed company governance makes him exceptionally well qualified to lead the Metalla Board in helping to deliver long-term, sustainable returns for the Company’s shareholders.”

Metalla has a lot going on, without further ado, here’s a timely update on the company.

Peter Epstein: Can you please give readers a high-level overview of what Metalla Royalty & Streaming does, and what assets it owns?

Lawrence Roulston: Metalla acquires royalties and streams on gold and silver deposits. A royalty is a fixed percent of the revenue produced from a mine; a stream is the right to purchase a portion of the metal output from a mine at a fixed price. Royalties and streams both offer upside exposure to increases in the metal prices, and to exploration success (they are typically for the life of the mine). Importantly, because royalties and streams are based on revenues, they do no expose investors to operating costs and to capital costs.

Metalla1.png

Metalla currently owns three cash-flowing assets, including a royalty on a gold mine in Ecuador; we have part of a stream that involves all the silver produced at a gold mine in Tanzania, for a fixed price of 10% of the silver spot price. We also have the right to buy all the silver byproduct from a big zinc mine in Australia, for a price of about $6 an ounce. We also hold gold-silver royalties on three development-stage projects, two of which are in Canada.

We expect those development projects to generate cash in the next one to five years: Two involve extensions of existing mines and one development asset that will have ore trucked to a nearby processing plant. All of them are operated by large producers. We own another dozen royalties on earlier stage projects, mostly in Canada.

PE: How did you find Metalla Royalty & Streaming, or did MTA find you?

LR: I had known two of the directors for several years. In addition to being very familiar with the mining industry, I had particular experience in royalties and streaming, most recently as President of Quintana Resources Capital. In that role, I helped a Texas oil family and another big private investment group to set up an investment vehicle that was aimed at streaming. So, it was a good fit.

PE: Please tell readers about other key members of your team, including Brett Heath, E.B. Tucker and Charles Beaudry?

LR: E.B. is editor of the Casey Report. He has 15 years of experience in fund management and security analysis. Charles is a Canadian P.Geo. with over 30 years of experience in project generation, business development, exploration and project management. Brett, the CEO, has many years of experience in putting deals together in the mining industry. He did an outstanding job to buy the royalty package from Coeur Mining Inc. (CDE:NYSE), which made the major our largest shareholder. He is now working with other large mining companies on similar deals.

PE: The latest FY quarterly earnings (as of August 31st) were released on October 26th; can you hit upon the highlights? When will Metalla be cash flow positive?

LR: Metalla is now cash flow positive. When including all production (and inventory) for June, July and August, the company produced 115,667 ounces of silver with an average cash margin of over US$10. We expect next quarter to be even better as the Endeavor operation ramps up.

PE: How can a company with a market cap of only [~C$ 42 M = ~US$ 33 M] operate in the Royalty & Streaming business alongside billion-dollar companies like Franco-Nevada Corp. (FNV:TSX; FNV:NYSE), Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE) and Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX)?

LR: Those larger companies, with values from U$5 to U$15 billion, are focused on larger deals. Wheaton’s last deal, for example, was a year ago and involved the acquisition of additional 25% gold stream on the Salobo mine in Brazil for total upfront consideration of $800 million. There aren’t a lot of deals around of that size, and so the deals that do come along are intensely competitive. We are looking at deals that are under the radar of the larger companies. The purchase price on the Coeur deal, for example, was US$13 million. That size of deal is of no interest to the larger players, but by putting a few of them together, we are well on our way to building a company.

metalla2.png

PE: As a highly experienced investor and research analyst in natural resource companies, how does Metalla stack up against other precious metals juniors?

LR: It is one of the very few juniors that is cash flow positive. Metalla is diversified, with 18 separate precious metals royalties or streams, most of which already have a resource outlined. With the deals now in hand, Metalla has a solid base of cash flow from 3 mines, and a very strong organic growth pipeline, with 3 other projects already in the development stage. Those assets put the company in a very strong position to make further acquisitions and continue to grow.

PE: Can you comment on your company’s acquisition pipeline? What kinds of deals, in what metals, in what jurisdictions, are you looking at?

LR: We have great relationships with majors, mid-tiers and juniors regarding their non-core royalties. The majors specifically grew over the past decade through mergers and acquisitions. Along the way, they picked up a lot of assets that are now non-core. With Coeur, for example, they looked at the value of what to them were small assets, and compared that to the value of owning a piece of Metalla. They elected to convert the steady cash flow to a stake in a company that they saw as having potential to greatly appreciate in value. We expect to be able to repeat that success.

PE: Do you care to comment on precious metals prices, where they might be headed? Does Metalla need the gold and silver price to move higher for its share price to perform well?

LR: Deep down, we believe in higher precious metal prices. But, we are very pragmatic. Anything we do has to make good sense at the current metal prices. Our plan is to create substantial shareholder value based on current prices. We are continuing to add to our inventory of gold and silver ounces that we have access to via royalties and streams. We are committed to enhancing the cash flow that we generate. In that way, we will increase shareholder value, aside from whatever happens to the metal prices. Any gain in the gold or silver price will add to what should already be an attractive investment.

metalla3.png

PE: Do you have a view on the cryptocurrency craze (bitcoin/ethereum, etc., a view on if that market is pulling investors away from junior metals and mining stocks?

LR: A lot of investors in precious metals are attracted by the tangible nature of gold and silver; hard assets, if you will. Those folks aren’t likely to give that up for the abstraction of block chains. There are some junior mining speculators who may take an interest, but those are not the people we are targeting to invest in a cash-flowing company based on gold and silver.

PE: When your team acquired the assets from Coeur Mining this summer, there was talk about the possibility of extending the mine life of the Endeavor mine. Can you update readers on the status of that initiative?

LR: The Endeavor zinc mine is a small unit of a big Japanese metals smelting and refining group, so there is little news about the mine itself. As part of the due diligence process, I visited Endeavor and toured the underground mine and the processing facility. I had meetings with the onsite management, the geological, engineering and processing teams, as well as senior corporate management of the mining division.

They are very committed to extending the mine life. Management is presently evaluating a target zone just below the current mining area. There is clearly a lot of metal down there and they are conducting a Feasibility Study aimed at developing that zone. When I was there, they were quite positive on the potential. At that time, the zinc price was $1.10/lb. Today, the zinc price is nearly $1.50/lb. One would have to believe that if it was attractive at $1.10, it would be even more so at nearly $1.50. That zone could add several years to the mine life. And, they are continuing to explore the property for additional deposits.

metalla4.png

LR: We valued this deal on the basis of a 2-yr mine life. Anything beyond 2 years is a bonus, and it is now looking highly likely that the mine life will extend well into the future. That would be huge, as investors are giving us no value for anything beyond the initial mine life.

PE: There have been indications by CEO Brett Heath that a cash dividend could be in the works. Can you comment about the potential of Metalla paying a dividend? Does it even make sense for a high-growth company to distribute cash to shareholders?

LR: Given that the majority of our counter-parties prefer to hold Metalla shares instead of receiving cash, it allows the company to grow exponentially with much less financing risk compared to peers. We feel linking a portion of cash flow to dividends is necessary to give shareholders true exposure to gold and silver prices. There are plenty of small cap resource companies that will never return any capital to shareholders. We want to stand out among this group. We also plan to reinvest a portion of the cash into more accretive transactions. An announcement will be coming before year-end.

PE: To sum things up, why should readers take the time to do further due diligence on Metalla Royalty & Streaming? Is there a reason to consider buying shares sooner, rather than later?

LR: Metalla offers shareholders exposure to gold and silver, without operating cost and capital cost risk. We are cash flowing, with excellent prospects for further acquisitions, which would add substantial value in the near term. We are now working hard to put together that next deal.

This story is not well known, and is not well understood. (For example, we get no credit for an extended mine life in Australia.)

So far, we have only had a single quarter of cash flow. The next quarter will confirm that we are generating cash flow, and that the cash flow from the existing deals is growing. Enhanced investor awareness and the potential for another deal should see the share price begin to move in the near term.

PE: Thank you, Lawrence, this was very interesting. I look forward to following events unfold over the next few months.

Disclosures: The content of this interview is for illustrative and informational purposes only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research, [ER] including but not limited to, commentary, opinions, views, assumptions, reported facts, estimates, calculations, etc. is to be considered implicit or explicit, investment advice. Further, nothing contained herein is a recommendation or solicitation to buy or sell any security. Mr. Epstein and [ER] are not responsible for investment actions taken by the reader. Mr. Epstein and [ER] have never been, and are not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and they do not perform market making activities. Mr. Epstein and [ER] are not directly employed by any company, group, organization, party or person. Shares of Metalla Royalty are speculative, not suitable for all investors. Readers understand and agree that investments in small cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they consult with their own licensed or registered financial advisors before making investment decisions.

At the time this article was posted, Peter Epstein owned shares in Metalla Royalty and the company was an advertiser on [ER]. By virtue of ownership of the company’s shares and it being an advertiser on [ER], Peter Epstein is biased in his views on the company. Readers understand and agree that they must conduct their own research, above and beyond reading this article. While the author believes he’s diligent in screening out companies that are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. Mr. Epstein and [ER] are not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article. Mr. Epstein and [ER] are not expected or required to subsequently follow or cover events and news, or write about any particular company or topic. Mr. Epstein and [ER] are not experts in any company, industry sector or investment topic.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis, and he is a Chartered Financial Analyst (CFA). He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

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Streetwise Reports Disclosure:
1) Peter Epstein’s disclosures are listed above.
2) The following companies mentioned in the article are billboard sponsors of Streetwise Reports: 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) 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 or interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Metalla Royalty and Streaming and Wheaton Precious Metals, companies mentioned in this article/interview.

Charts and graphics provided by author

( Companies Mentioned: MTA:CSE; EXCFF:OTCQB,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/06/metalla-royalty-streaming-the-way-to-play-gold-and-silver.html

Yukon Gold Project Now in Full Construction Mode

Source: Streetwise Reports   11/07/2017

Construction is ramping up rapidly at this Yukon mine that one analyst calls a “strategic asset.”

The process of developing an economic mine is sometimes equated to a frantic army of baby turtles scurrying across the beach to the ocean. Most of them are picked off by seagulls. Only 1% of junior explorers will morph into a producing mine.

A career fair at Yukon College in Whitehorse has attracted job-seekers to fill positions at Victoria Gold Corp.’s (VIT:TSX.V) Eagle Gold Mine project north of Mayo, Yukon.

Mine Construction

The Eagle Gold Project in Yukon Canada hosts an NI 43-101 reserve of 2.7 million ounces of gold (123Mt @ 0.67 g/t). The project is fully permitted for production. Construction is underway. According to the company, Eagle Gold is expected to produce about 200,000 ounces of gold per year for 10 years at a cost of $550 per ounce.

As construction begins, Victoria Gold continues an aggressive drill program, expanding the potential resource beyond the scope of the registered mine plan.

October 17, 2017, drill results include 1.9m @ 14.65g/t Au at the Catto Zone and:

  • 24.4 m of 1.64 g/t Au in drill hole DG17-867C from 33.5 to 57.9 m
  • 21.4 m of 0.99 g/t Au in drill hole DG17-892C from 138 to 155 m
  • 7.4 m of 1.19 g/t Au in drill hole DG17-888C from 119.6 to 127.0 m
  • 1.4 m of 4.51 g/t Au in drill hole DG17-873C from 160.0 to 161.4 m

According to the press release, “these latest results are from the 11 exploration drill holes completed on the Catto Zone. Located between the Eagle Gold Mine and the Olive-Shamrock Deposit, the Catto Zone was the location of historic high-grade gold mines and has seen only cursory contemporary mineral exploration.”

Other recent results include 146m @ 0.67 g/t Au; including 14m @ 4.87 g/t Au trench results at newly discovered Bluto Target, Dublin Gulch, Yukon.

“Bluto has been a high-priority target on the Potato Hills Trend for many years,” stated Victoria CEO John McConnell. “The fact that a high-grade gold vein was discovered early in this campaign demonstrates that our Potato Hills Trend mineralization model is working.”

On October 30, 2017, PI Financial published a corporate update on Victoria Gold.

PI Financial commented on the remaining two drill results of Victoria Gold’s four-hole drill program targeting areas below the existing pit.

“Results verify the continuity of mineralization at depth and have increased the strike length of the Eagle Deep target by an additional 400m as compared to the previous two holes,” stated PI Financial analyst Gary Sidhu in the report. “The resulting grades are well above the Eagle Deposit resource cut-off of 0.15 g/t Au and allow for the potential of relatively simple mine life additions in the future.”

Sidhu stated that “Victoria controls what we consider to be a strategic asset: a sizeable gold development project (~200koz/y), which can be developed for a reasonable initial capital expenditure (~C$400m), located in a top-tier political jurisdiction (Yukon), with full permits for construction in hand (received December 2015). We expect Victoria will garner interest from a variety of gold producers as an M&A target.”

Project Financing

PI Financial gives Victoria Gold a Buy rating and price target of CA$1.10—about double the current share price.

Victoria Gold is one baby turtle that made it all the way.

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Disclosure:
1) Lukas Kane compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Victoria Gold 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: VIT:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/07/yukon-gold-project-now-in-full-construction-mode.html

Portfolio Review on Two Major Gold Companies and a Renewable Energy Company with a Purchase Offer

Source: Adrian Day for Streetwise Reports   11/06/2017

Adrian Day of Adrian Day Asset Management discusses three companies in his portfolio: one renewable energy company and two precious metal companies.

Alterra Power Corp. (AXY:TSX, 7.83) has agreed to be acquired by Innergex, a Canadian renewable energy company. Investors will receive C$2.06 cash and 0.4172 of an Innergex share. As always occurs, the acquirer’s stock price fell on the news (from $15 to $14.11); at today’s price, the acquisition equates to C$7.95.

We are often saddened to see a long-term holding go, even at a nice premium, and especially so in this case, where after a long difficult period, the company had turned and was generating operational profits, cut its debt, and instituted a dividend with a view to becoming a cash-flowing, high-yielding vehicle. Founder and Chairman Ross Beaty, in fact, noted that the company “was just hitting our stride” when the offer from Innergex was made. We had recommended it as a buy in our last newsletter at C$5.33.

We do not intend to hold Innergex on our list for the long term. What we know about the company appears positive enough: it has a good balance sheet, a diversified portfolio, it pays a dividend equating to a 4.7% yield (and will continue its payout policy), and combining the companies will reduce the cost of capital for Alterra’s projects, a significant drawback to a standalone Alterra. Certainly some of you may wish to hold this company, but we will not be following it.

So for us, we will be selling Alterra and booking a gain. Where and when to sell? The current price is below—though only marginally—the purchase price. It is more so below the value on the day of the bid, C$8.21. On the other hand, apart from the discount being modest, there is also some risk—unquantified—in Innergex stock and in the Canadian dollar. (They could both appreciate as well, of course.)

Let’s place a sell on Alterra at C$7.90 and sit there for a while. We may reduce that limit at some point if it doesn’t fill, but do not see a rush.

Execution on worthy goals yet to be seen

Goldcorp Inc. (GG, NY, 13.10) has underperformed; we bought looking for a recovery that has yet to come. The company’s new 20% goals are fine—20% growth in production and reserves, 20% decline in costs—but we have yet to see significant movement on any of these yet, except perhaps on the reserve goal. It has certainly purchased some reserves and resources with the acquisition of an interest in two mines in the high Andes, but buying reserves is a lot easier than increasing production and cutting costs. It is debatable whether these new deposits will come into production any time in the reasonably distant future. The deposits are uneconomic today and their projected costs keep increasing in every study that has been performed.

But overall operations are improving, particularly at two relatively new mines, Cerro Negro and Eleonore. These took longer to ramp up to nameplate rates, and Eleonore in particular still has problems (production up but reserves cut). The company also saw the completion of a new production circuit at its large Penasquito mine in Mexico a year earlier than expected.

The company must stop value-eroding M&A—it had indicated that the period of major new acquisitions was over immediately before buying Caspiche and Cerro Casale, and needs to improve its balance sheet. Given it no longer trades at a meaningful discount, we are holding but not buying.

Strong cash flow, but problems at major mine

Royal Gold Inc. (RGLD, Nasdaq, 85.95) had a mixed quarter. Most of the news ranged from positive to very positive: solid cash flow with earnings meaningfully higher than expectations, and continued debt reduction. New Gold’s Rainy River is ramping up and first revenue contributions are expected in the current quarter, becoming Royal’s 40th producing asset. The pipeline is strong, with, following Rainy River, Cortez Crossroads commencing production next year. Currently, 87% of revenue comes from precious metals, of which 77% is from gold.

Currently, all cash flow—over $70 million last quarter—is going to debt reduction and dividends. It has $88 million in cash and around $900 million of liquidity. The company is still looking at (and bidding on) new assets, although such would more likely be in the $100 million to $500 million range rather than the half to one billion of 18 months ago.

Difficulties at major asset

The one negative, but a very significant one, is the ongoing operations difficulties at Mt. Milligan, at which operator Centerra Gold just reduced full year guidance. It does not appear that the difficulties are yet resolved, so we can expect lower production (and revenue to Royal) for the time being. This is significant since that single mine represents 27% of Royal’s Net Asset Value.

We like Royal Gold for its reasonably diverse asset portfolio, strong geographic risk profile, solid cash-flow, and good management, but there is an ongoing risk with Mt. Milligan and valuations remain somewhat rich. The stock is down from over $94 in late August primarily on Mt. Milligan; we will look to buy but on any addition pullback.

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: Royal Gold. 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: Alterra Power, Royal Gold and Goldcorp. 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 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 Goldcorp, a company mentioned in this article.

( Companies Mentioned: AXY:TSX,
G:TSX; GG:NYSE,
RGLD:NASDAQ; RGL:TSX,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/06/portfolio-review-on-two-major-gold-companies-and-a-renewable-energy-company-with-a-purchase-offer.html

Hypocrisy Most Foul. . .

Source: Michael Ballanger for Streetwise Reports   11/06/2017

Precious metals expert Michael Ballanger examines why gold and silver have been stagnant while bitcoin and blockchains have taken off.

As you all know by now, I have absolutely zero knowledge of anything related to the “blockchain” technology, which translates into “I don’t own Bitcoin and would not touch HIVE Blockchain Technologies Ltd. (HIVE:TSX.V; PRELF:OTC) with a barge pole.” That also means that I am constantly being reminded, primarily by those considerably younger than me, that geriatric anchoring is costing me (and my readers) a great deal of money by avoiding the space which, as you can see from the chart below, has been absolutely true.

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Now, in the past 48 hours, the CME has reversed its stance on Bitcoin embracing it with open arms and offering a cash settlement feature as well as a “familiar venue.” Nothing that I have read in the past six years could have ever blown me away more than the quote highlighted in yellow shown below:

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“Transparency”? Looking at the chokehold the CME allows in silver implemented by the JP Morgans of the world begs the question, “Is THAT “transparency?”

“Price discovery?” You have the bullion banks selling 75% of annual gold production by way of paper contracts during a ten-minute interval in the middle of the night back in April 2013 and that is “price discovery”???

“Risk transfer capabilities?” Now THAT is easy; the CME allows the cartel members the capability to transfer risk from themselves to the investing public. Beautiful!

Perhaps collusion and corruption are overly strong words to using but it just illustrates the point that if the exchange members think there is a buck to be made in fees and order flow, the validity, veracity and the risk to investors are totally irrelevant.

ballanger3.png

And how about that new HIVE blockchain deal? HIVE was having a very difficult time raising money in the junior mining space so it reverse-engineered its business plan by implementing a name change that would allow it easier access to capital and MUCH easier access to the wallets of the average retail stock jockey. It will NEVER fail to astound me how incredibly shrewd the Vancouver crowd is when it comes to marketing junior start-up companies—errr—”FAIRY TALES.” Make no mistake—Frank Guistra was a master broker/promoter in his day back in the 1980s and 1990s and remains so today (minus the “broker” role).

What amazes me is that people piling into “the next Bitcoin” story with reckless abandon is reminiscent of the days of “the next Hemlo” or “the next Eskay Creek” or “the next DiaMet,” when fortunes were made in the early-going and lost tenfold in the late-going. The pretenders harvested their bounties on the backs of the greed-infected public. Is this truly the embodiment of “sour grapes” having completely missed the moves in rare earth metals in 2004–2008 and lithium in 2013–2015 and weed and blockchain deals in 2016–2017? The answer is “Absolutely!” because of the next graphic courtesy of The Visual Capitalist, and it is a gripping image of a world so totally broke NOW and even more so considering the legacy issues of Social Security, Medicare and pension deficiencies.

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Graphic Courtesy of The Visual Capitalist

What the above graphic really explains is the reason why Bitcoin and HIVE are in play. You see, the psyche of traders has been infected with a Pavlovian virus of incalculable magnitude; they understand what we in the GATA camp have preached since the late 1970s, that Debt = currency debasement = decreased local currency purchasing power = reduced living standards = social unrest. However, just as the barometer of lower standards of living have been historically measured by currency exchange and interest rates, the “New Normal” would have you all believe that because STOCKS are screaming higher and BECAUSE gold and silver are underperforming and BECAUSE cryptocurrencies and marijuana deal are all collectively ON FIRE that we should all follow the accepted mantra that ALL IS OK. It is not “OK” and as the debt chart above would indicate, the largest perpetrator of the debt felony is the mighty U.S.

Investors actually do “GET IT” these days; they know that this global Ponzi Scheme where crushing debt levels have their private “days of reckoning” pushed well out into the future by political coordination amongst these Champagne Socialists, so why worry about it now? As Chuck Prince said so eloquently back in 2007, “But as long as the music is playing, you gotta get up and dance,” and dancing is exactly what they are doing as blockchain, lithium and pot deals are dominating the space while gold and silver are nowhere to be found. Nowhere is that better illustrated than in the TSX Venture Short Report shown below. Not one North American gold or silver company to be found with top place the domain of none other than HIVE.

2Ballanger5.png

HIVE now has 15.9% of all issued capital sold short and with the momentum players (including the machines) all jumping on board this Bitcoin “wannabe,” the table was set for a massive squeeze the result of which has been a double as of noon hour Friday but which has now turned into a selling panic as the shorts are pressing hard for an outside reversal day and a subsequent crash. Friday’s wild ride saw an intra-day high of $6.75 punctuated with a trading halt and news release that a “pooling agreement” is to be terminated and 24 million shares held presumably by the insiders is being released early in order to provide “market liquidity.” (As in, the insiders couldn’t stand these prices so they wanted to add “liquidity” to their personal net worth.)

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As stated above, this week’s COT Report was a non-event as was the week’s action in gold and silver which encompassed a $16 range for the entire week. Not to beat a proverbial horse or sound like a broken record, but the competition for order flow is fierce right now and just as the Russell 2000 has failed to surpass the 1,515.94 all-time high recorded in early October, not everything out there is technically sound. However, readers of this missive are sick and tired of reading about “big evil banksters” and “corrupt traders” and “interventions” because working day and night to prove the aforementioned conditions simply puts zero dollars in my (or your) pockets. In fact, the most feedback I get is when I fire off a trading idea on the JNUG (Direxion Daily Junior Gold Miners Bull 3X ETF) or the UVXY (ProShares Trust Ultra VIX Short-Term Futures ETF) and/or gold and silver because that actually DOES (or doesn’t) at least provide what we used to call back in my brokerage days an “actionable idea.” What the brokerage house managers used to NOT say was that an “actionable idea” was a “commission-generating idea” and was one that clients would fall over. And we KNOW how brokers love to jam those commissions, don’t we?

Listen, a great many of you out there are feeling rather glum these days. You’re afraid to show your wife the monthly E-Trade statement and you cannot show your face at the country club after you got quite drunk back in August and bragged about shorting Bitcoin at $5,000. Adding insult to injury you bet your boss that stocks were going to crash in October and now you owe him a dinner at the chic-est restaurant in the city. Topping it all is that your Gen-X-er brother-in-law with the 115 I.Q. with the used car lot in Rexdale that bought the marijuana deal at $0.05 and just sold it at $13.50 is now offering his sister (your wife) an all-expenses-paid holiday for her and your kids in Barbados on the condition that you stay behind and mind the dog. I GET IT. Times are tough out there for the true believers in gold and silver we have had our noses rubbed in the proverbial latrine of human folly for far too long now. The financial history of our planet Is RIFE with stories that forecast how this will all end. And NO, I will not give you that “markets can stay irrational longer than. . .” BS but what I WILL say is simply this: Gold and silver are cheap relative to every other asset class on the board and they will have their days in the sun very shortly.

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.

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Disclosure:
1) Michael Ballanger: 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. 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 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.

Charts courtesy of Michael Ballanger.

( Companies Mentioned: HIVE:TSX.V; PRELF:OTC,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/article/2017/11/06/hypocrisy-most-foul.html

Jack Chan’s Weekly Precious Metals Market Update

Source: Streetwise Reports   11/04/2017

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

Our proprietary cycle indicator is down.

chanhui111-4
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.

chanhui211-4
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.

changoldspec11-4
Speculation favors overall higher gold prices.

changoldbugs11-4
Gold stocks relative to gold have reached the most oversold level in a year.

chansilver11-42
Silver is on a long-term buy signal.

chanslv11-4
SLV is on a short-term sell signal, and short-term signals can last for days to weeks, more suitable for traders.

chansilverspec11-4
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/2017/11/04/jack-chans-weekly-precious-metals-market-update.html

Yukon Gold Project Now in Full Construction Mode

Source: Streetwise Reports   11/07/2017

Construction is ramping up rapidly at this Yukon mine that one analyst calls a “strategic asset.”

The process of developing an economic mine is sometimes equated to a frantic army of baby turtles scurrying across the beach to the ocean. Most of them are picked off by seagulls. Only 1% of junior explorers will morph into a producing mine.

A career fair at Yukon College in Whitehorse has attracted job-seekers to fill positions at Victoria Gold Corp.’s (VIT:TSX.V) Eagle Gold Mine project north of Mayo, Yukon.

Mine Construction

The Eagle Gold Project in Yukon Canada hosts an NI 43-101 reserve of 2.7 million ounces of gold (123Mt @ 0.67 g/t). The project is fully permitted for production. Construction is underway. According to the company, Eagle Gold is expected to produce about 200,000 ounces of gold per year for 10 years at a cost of $550 per ounce.

As construction begins, Victoria Gold continues an aggressive drill program, expanding the potential resource beyond the scope of the registered mine plan.

October 17, 2017, drill results include 1.9m @ 14.65g/t Au at the Catto Zone and:

  • 24.4 m of 1.64 g/t Au in drill hole DG17-867C from 33.5 to 57.9 m
  • 21.4 m of 0.99 g/t Au in drill hole DG17-892C from 138 to 155 m
  • 7.4 m of 1.19 g/t Au in drill hole DG17-888C from 119.6 to 127.0 m
  • 1.4 m of 4.51 g/t Au in drill hole DG17-873C from 160.0 to 161.4 m

According to the press release, “these latest results are from the 11 exploration drill holes completed on the Catto Zone. Located between the Eagle Gold Mine and the Olive-Shamrock Deposit, the Catto Zone was the location of historic high-grade gold mines and has seen only cursory contemporary mineral exploration.”

Other recent results include 146m @ 0.67 g/t Au; including 14m @ 4.87 g/t Au trench results at newly discovered Bluto Target, Dublin Gulch, Yukon.

“Bluto has been a high-priority target on the Potato Hills Trend for many years,” stated Victoria CEO John McConnell. “The fact that a high-grade gold vein was discovered early in this campaign demonstrates that our Potato Hills Trend mineralization model is working.”

On October 30, 2017, PI Financial published a corporate update on Victoria Gold.

PI Financial commented on the remaining two drill results of Victoria Gold’s four-hole drill program targeting areas below the existing pit.

“Results verify the continuity of mineralization at depth and have increased the strike length of the Eagle Deep target by an additional 400m as compared to the previous two holes,” stated PI Financial analyst Gary Sidhu in the report. “The resulting grades are well above the Eagle Deposit resource cut-off of 0.15 g/t Au and allow for the potential of relatively simple mine life additions in the future.”

Sidhu stated that “Victoria controls what we consider to be a strategic asset: a sizeable gold development project (~200koz/y), which can be developed for a reasonable initial capital expenditure (~C$400m), located in a top-tier political jurisdiction (Yukon), with full permits for construction in hand (received December 2015). We expect Victoria will garner interest from a variety of gold producers as an M&A target.”

Project Financing

PI Financial gives Victoria Gold a Buy rating and price target of CA$1.10—about double the current share price.

Victoria Gold is one baby turtle that made it all the way.

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) Lukas Kane compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Victoria Gold 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: VIT:TSX.V,
)

from The Gold Report – Streetwise Exclusive Articles Full Text https://www.streetwisereports.com/pub/na/17817