Tag Archives: mining stock research

Northern Dynasty Could Go To Zero

Many of my subscribers asked my view on Northern Dynasty (NAK), developer of the Pebble copper-gold-moly-silver deposit in the Bristol Bay are of southwest Alaska.  I figured newsletters were pumping it.  I owned NAK for brief period in 2004 before I decided I didn’t like the way it “smelled.”  Thirteen years later it smells just as bad.

I found out the Stansberry/Casey marketing juggernaut team was pimping NAK, as well as Martin Katusa and Rick Rule.  Upon a closer look, I could not find one redeeming reason to own NAK.  If I had looked at it when it was trading at $3.40 at the end of January, I would have put it in my Short Seller’s Journal (NAK is now at $1.61 and likely headed toward zero).  I also knew Kerisdale Capital recently slammed NAK, but after the firm’s highly misleading and incorrect hatchet-job on First Majestic, I don’t trust Kerisdale.

Over the years, I have learned the hard way that “holy grail” projects in geographically difficult areas enveloped with an extreme degree of political risk have a high probability of ending with a bad result for my investment. NAK is one of these situations that I am recommending that subscribers avoid.  – Excerpt from the latest issue of the Mining Stock Journal

In this week’s issue of the Mining Stock Journal, I present several compelling reasons why NAK is likely nonviable.  You can read my analysis plus receive all of the back-issues using this link:  Mining Stock Journal

Your review of NAK is quite timely, given a class action lawsuit, a Seeking Alpha analysis, and the fact it was highly promoted at the 2015 Silver Summit in SF which I witnessed personally. The NAK website has Stansbury and others refuting the Seeking Alpha article. On Tuesday of this week, I got the bright idea to buy a few shares after it was beat up 50%, but now realize it may be a falling knife. I got the information on this company two years ahead of time, but never bought until Tuesday just because I thought it must have value as Casey, Rule and others put so much faith in the idea, and the fact Trump has been favorable to mining permits in Alaska. Keep up the magnificent work!  –  from subscriber “James”

Major Silver Bounce – Can It Last?

The bullion bank gold cartel pulled out all of its stops last week in order take down the price of gold and silver. Particularly useful was selling by longs connected to fear over the week-long closure of China in observance of the Chinese New Year’s celebration (Year of the Rooster). Interestingly, last year gold was volatile during the Chinese New Year week off but traded sideways, not lower.

In addition, this upcoming week features the FOMC meeting and the January employment report. On average and in general, both of these events typically are accompanied by a take-down in the price of gold. On Friday, however, after the obligatory smashing of gold and silver associated with Comex options expiration (Thursday), gold snapped back sharply $9 from its Thursday low of $1181 and silver soared nearly 50 cents from its Thursday low.

Eric Dubin and the Doc invited me onto Silver Doctors’ weekly Metals and Markets Report to discuss the factors behind last week’s gold and silver trading activity and the reasons why gold and silver could turn in a better 2017 than 2016:

If you agree with the views in the above podcast, the Mining Stock Journal offers great junior mining stock ideas to help you take advantage of the next move higher in the precious metals sector. You subscribe using this link:   Mining Stock Journal subscription link.   As subscription includes all the back-issues and superior customer service.

Hi, i really like your mining stock newsletter. I am fairly new to the mining sector and i did start investing in last febuary pretty much at the lows  –  recent new subscriber “Thomas”

 

“Buy” Signals Are Appearing Everywhere In Gold

The prediction I presented in the last Mining Stock Journal to subscribers about gold is developing even before the new year.

Although it seems like the precious metals sector has experienced another down year, the
HUI index is still up 48.6% from its 12/31/15 close and it’s up 65% from its low on January
19th this year.

The technicals in the gold market never been set up better than they are now for a contrarian move higher. On the assumption that gold closes on Friday lower for the week than last week, it will mark seven straight weeks in which gold has closed lower on a weekly basis. This has never happened before.

The premiums for physically delivered gold in China have never been higher. Egon Von Greyers, in Switzerland, reported in his latest King World News interview that there are reports that Swiss refiners have been paying a premium to buy gold. My suspicion is that the Chinese are willing to pay $30+ premiums to world gold in order to keep the supply from Swiss refiners flowing, which is why Swiss refiners are willing to pay premiums to acquire dore bars and scrap.

This illustrates the growing disconnect between the price of gold being paid by the markets in which physical delivery is a requirement vs. the price being paid by the paper gold markets (NYC, London) in which physical delivery (i.e. removed from the exchange and received into private hands) is highly limited, if not outright discouraged or considered a peculiarity.

The above analysis is an excerpt from the latest issue of the  Mining Stock Journal.  In thi s issue, I present several technical indicators which suggest gold is poised for a big move higher.  The mining stocks have been telegraphing this since late November – I detail this point in the MSJ

The MSJ is a bi-weekly subscription-based newsletter delivered to your inbox every other Thursday. The focus is primarily junior exploration mining companies, which have provided the best upside returns since January. Bloomberg featured an article – LINK – which explained that in-ground reserves at the large gold producers are dwindling. This will make small exploration companies with demonstrated gold/silver resource in the ground a lot more valuable going forward. You can access the MSJ here:  Mining Stock Journal Subscription Info.

I am a subscriber to both of your journals.  I just want to say “WOW” to this post on your site. Thank you for all your work.  As a financial professional of 28 years’ experience, I can tell you why there is no churn in your journal subscriptions. Your work is extremely sound and well done even in a massively manipulated environment.  – Kevin B.

New subscribers receive all of the back-issues (via email) plus a glossary of terms which help explain mining technicals.  The latest issue, released yesterday, has a junior explorer that has a proved resource on the largest copper-gold deposit discovered in recent years. This stock is worth at least twice it’s current market price based on the fundamental value of the deposit.

FOMC No Rate Hike: Gold, Silver, Miners Pop – Stocks Drop

We’re very bullish on gold, which is the anti–paper money, of course, and is underowned by investors around the world.   – Paul Singer, Elliot Management Corp

Predictably, the Fed did not raise the Fed Funds rate by a piddly one-quarter of one percent today.  It’s not because the economy is crashing – which it is – but because the foundation of the massive, money-printing inflated asset bubble in the U.S. and globally rests on the teetering foundation of zero-percent interest rates.

Negative rates rates presents another dilemma:  a western financial system that is completely dysfunctional from over eight years of bombarding the western economies with ZIRP and money printing.  At least most of the eastern hemisphere countries have Central Bank lending rates well above zero.  China’s is 4.35%;  Russia’s is 10.5%.

This blog unequivocally said three weeks ago, when the usual Fed clowns began their routinized interest-rate hike threat that the FOMC would whiff again.  What the heck happened to today’s meeting be in “live,”  John (SF Fed’s John Williams)?  Now that the Fed balked once again at nudging rates 25 basis points closer to China’s overnight Central Bank lending rate, does that mean that today’s meeting was not “live?”

Interestingly, stocks were pushed higher overnight and gold was pushed lower.   When I saw it at 5:30 a.m. EST, gold was down $7 from where it opened the overnight CME Globex electroning session (6:00 p.m . EST).

After the “not live” meeting was over and the results hit the tape, both gold and the stock market popped.  But the stock market apparently saw through the transparency of Yellen’s smoke-blowing and interpreted another “dead” meeting to mean the economy is indeed dead.  While gold ramped up toward $1300, the S&P 500 plunged 11 points in the last 28 minutes of trading.

I have been suggesting to my Short Seller’s Journal subscribers that the S&P 500 is starting to tip over – finally.  I think there’s a better that 50/50 chance that the S&P 500 repeats the same kind of cliff dive it took in August 2015 and the beginning of 2016.

On the other hand, it seems that a lot of western money – wealthy individuals and smart hedge fund managers – are beginning to plow a lot of money into physical gold.  Why? Because the price-movement of paper gold relative to the size of the Comex open interest is running in higher in defiance.   This is something that has not occurred in the last 15 years and it’s caught a lot of market analysts wrong-footed.

The character of the market has changed.  I don’t know how much leverage the Fed/bullion banks have to push gold a lot lower at these levels.  We’ll find out as gold challenges $1300 again and we get closer to BREXIT.  The Fed/ECB/BOE are making it clear that they will do their best to manage the price of gold into this potential event.

For anyone interested in opportunities to profit from getting in on the early stage of this next leg of gold’s bull market, check out my Mining Stock Journal.  I present long term view ideas on high potential junior micro-cap mining stock ideas.

I present the views. My service is research-based, not trading-based. Everyone has to
buy/hold/sell according to their own risk/return preferences and tolerances.  I buy LONG term core positions in my ideas and trade in and out of maybe 20% of the position but not very often.  You don’t get rich trading the market. You get rich finding very undervalued ideas and holding them until they are overvalued. We are 90% away from juniors being overvalued.   You can subscribe using this link:  Mining Stock Journal.  You will start with the current issue plus get all of the back-issues (it’s bi-monthly).

 

Gold: Welcome To The Weimar Death Spiral

For starters, I want to re-emphasize the importance of getting your money OUT of fiat currency and OUT of U.S. banks.  If you read this article and do not come to that conclusion, you will end up getting what you deserve:  Commerzbank To Hoard Euros  The Fed is devaluing the dollar every day.   My solution for day to day cash management is Bitgold.  I am not an “ambassador” or “affiliate.”  But I am convinced that it’s the best viable means of managing money that requires “fungability” – i.e. that you need for daily expenses.  You can sign-up for Bitgold here:   Gold-Backed “Checking” Account.  Bitgold operates OUTSIDE of the global Central Banking system.

Second, a colleague of mine told me he knows why the stock market is up today – because it’s open.   That’s not entirely a joke.  But what is a joke is the underlying cause:  rampant global money printing disguised as “quantitative easing  – or Central Bank asset monetization.”

Goodbye Keynes, hello Havenstein.  The Fed and the ECB have resorted to Weimar-style money printing.   The lack of transparency makes it easy for them to impose various forms of disguise to hide the outright money printing.   Today the ECB rolled out its program to buy corporate bonds.  It prints money and buys the bonds of U.S. and European corporations.  The disguised name is “quantitative easing.”

It’s a meaningless description.  It’s printing money and giving that money to banks and corporations to spend.   It may not increase the official tabulation of the money supply, but effectively it balloons the supply of money.   After all, money is spending or lending power.   That money sitting on bank balance sheets translates into “high powered” reserve credit.  It multiplies the spending power by 10.  That’s the real supply of “money” in the system.

The precious metals market understands this truth.  The move in gold is “quantitative price appreciation.”   It’s gold’s response to “quantitative easing.”  For the last five years, the Fed and the ECB – and with help from China, I suspect – has been able to further disguise its money printing by using paper derivative forms of gold – OTC derivatives, Comex futures, LBMA forwards, Central Bank lease agreements and hypothecation – to hold down gold’s quantitative price appreciation.

But that ability to keep a lid on the price of gold may well be measurably fatigued.  The demand for deliverable physical gold and silver is starting to offset the price dilution that has been imposed on the precious metals market with printed derivative forms of gold and silver.  GATA – on the foundation of the research done by Frank Veneroso in the mid-1990s (he visited several Central Banks and discovered that they were leasing gold in large quantities to help hold down the price) – predicted that eventually the physical market would overwhelm the paper market and lead to a huge parabolic move in the price of gold.

It’s taken a lot longer than any of us could have imagined.   But something different is occurring in the gold market right now, because all the technical indicators over the last 15 years that have foreshadowed a massive take-down in the price of gold are betraying their promoters.  While the price-rigging schemes may not have completely run out of energy, as John Embry said yesterday:  “I’d much rather be playing our hand than theirs.”

I took profits (265%) on a call option trade on a high quality mining stock that I presented to the subscribers of the Mining Stock Journal in the debut issue.  It was a low-risk proposition.  I rolled the profits into shares of the stock.   I currently am sitting on a 25% gain in a short term trade idea presented to MSJ subscribers less than two weeks ago (a high quality junior stock).  I am looking to make 30-40% in total within another week and then take the profit.  Again, another low-risk trade idea.  In the next issue published tomorrow, I am presenting a high-risk, high-return junior silver mining stock idea.  You can subscribe and get all the back-issues (email delivery) with this link:   Mining Stock Journal.

One more note:  I presented a brand new silver explorer to subscribers of the Short Seller’s Journal on Jan 10th.  That stock is up 663% since then and still has room to double from here.

Is It Time To Buy More Junior Mining Stocks?

That is an impossible question to answer with any degree of conviction because the extreme degree to which the precious metals market is manipulated.   I think now is a good spot to add to positions or start new positions.  As an example, in my latest issue of the Mining Stock Journal, I recommended a high quality junior that had almost pulled back to its 200 dma.  I said I was buying it for what I thought would be a “low risk” 25-40% bounce if the pullback cycle in  the sector is over.  That stock bounced 7% today.

A good way to protect yourself somewhat is to find high quality junior mining companies that are exceedingly cheap to their underlying “intrinsic” value.  I presented a company in the latest MSJ issue that, despite a big move already, has the potential to be a 5-bagger from here.  Insiders control 44% and put in millions of their own money over the last 5 years to keep the Company going.  This Company is on its way to becoming very significant mining company.

Today I sent around to subscribers an update of a stock previously presented because the Company announced an acquisition of an existing operational mine and is paying roughly $20/oz for proved gold in the ground.  This company is “off the radar screen” but Goldcorp just paid over $100/oz in the ground for Kaminak.  This acquisition will be the catalyst that enables management to build a 200-250k oz gold producing operation by 2019.  It’s market cap is mining-stock-journal-bannerwell under $100 million.  Companies that produce 200-250k ozs/year trade in the $200 million to $400 million market cap range.  You do the math on this Company…

You can subscribe to the Mining Stock Journal and get the current issue, the current update and all the back-issues (March 4th debut) by clicking here:   MSJ Subscription.

The Daily Coin Guest Appearance: Junior Mining Stocks

Rory Hall, my co-host and producer of the Shadow of Truth series invited me onto his Daily Coin interview show last week:

I sat down with Dave Kranzler, Investment Research Dynamics, to discuss the miners and investing in mining stocks. Over the past couple of months I have interviewed CEO’s and other executives with some of the best junior mining companies on the market. Before you turn away answer this one question – how much free gold and silver would you like to add to your stack? That’s right, free physical gold and/or silver…The Daily Coin – Mining the Miners

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Gold And Silver Continue To Scaling The Wall Of Worry

At the beginning of this week, almost every so-called gold market analyst was predicting a wash-out in precious metals because of the huge bullion bank short being reported in the COT report.  A few of us believe that character of the market has changed and paper market price manipulators are losing traction – for a lot of reasons.

This week shows that the banks covered a portion of their shorts and the hedge funds and little guys sold down longs and increased their shorts.  This information may be largely irrelevant.  Interestingly, in data I’ve parsed and presented in a previous blog post,  the beginning of two of the best gold/silver rallies since 2001 occurred at a time when the bullion banks held their biggest short position in gold futures (expressed as a ratio of total open interest).

The latest issue of the Mining Stock Journal was released last night.  In it I discussed the use of JNUG (the 3x junior mining stock index ETF) and I explain why we could be on the cusp of the best move yet in the sector.   And of course I present a remarkably undervalued junior mining company (a royalty company) in which insiders bought a boat-load of shares in January and now control over 30% of the equity.  You can access the MSJ here:   Mining Stock Journal.  

A subscriber had an interesting question that is a common question I get currently:    I really enjoyed this latest edition of your newsletter. I find myself getting less and less nervous about a price smash as it feels that the powers that be can no longer stem the tide of reality. One question I do have is whether you think a massive asset deflation event (similar or greater than 2008-09) will have a negative or positive impact on the shares

My reply:   I think there’s is going to be a collapse in all “assets” that have been inflated in price by the use of debt:  housing, NYSE stocks, bonds, etc.  That is different than general price deflation.  We may see a LOT more money printing as the Fed/Government attemptsUntitled to prevent a debt-driven asset collapse.  This will could drive the price of necessities up a lot.  But this  will really fuel the entire precious metals sector, especially the junior miners which have proved gold/silver/poly-metallic deposits.  (click in image to enlarge).

Any asset valuation collapse because of debt implosion will act like a heavy dose of Viagra on the value of mining stock shares.  Look at what happened in the 1930’s to stocks like Homestake Mining when the Dow was crashing.  When the initial stock plunge occurs, the miners might correlate lower for a bit but then they’ll do a life-style changing moonshot.

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Is The Fed Preparing For The Next Financial Earthquake To Hit?

The Fed announced a series of three “expedited procedure, closed” meetings Monday thru Wednesday this week:  FRB Board Meetings.  The Monday meeting was allegedly “a review and determination by the Board of Governors” of the advance and discount rates charged by the Fed.   This is somewhat an absurd waste of time as both of those bank funding mechanisms have become antiquated and rarely used.  The discount window collects dust until a specific bank’s credit profile has collapsed to an extent that prevents it from accessing the interbank-lending market.  It’s seen as an act of desperation.  It’s doubtful that the meeting was convened to discuss the discount rate.

The announced subject matter of the two subsequent meetings are perhaps of more interest:  “bank supervisory matter” (Tuesday) and “periodic briefing and discussion on financial markets, institutions, and infrastructure” (Wednesday).

I find the latter two topics in the context of the fact that it appears that the European banking system – to which the U.S. Too Big To Fail Banks are inextricably tied – appears to be melting down.

For me the “tell tale” for the western financial system is Deutsche Bank.  Deutsche Bank has emerged as a “rogue” bank of sorts that had taken on a catastrophic amount of Untitled1 (2)reckless credit market risks.  Nothwithstanding its literal financial nuclear portfolio of derivatives, DB thrust its balance sheet into every sector of the global economic system that has been melting down over the past 12-24 months including energy, commodities, “Club Med” European banks and junk bonds.  It also began to choke to death on bank debt loans to companies like Glencore and Volkswagen.

The trading action in DB’s stock price has been unable to mask the underlying melt-down going on at the Company:

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As you can see, DB’s stock price has been significantly underperforming the BKX bank financial index since mid-July. Coincidentally, or perhaps not coincidentally, the S&P 500 suffered an 11% drop in mid-August.

Bloomberg News released a report about three weeks that surprisingly received little to no commentary in the alternative media world. It was reported that Goldman and JP Morgan were in discussions to buy $1.1 gross “notional” amount of DB’s distressed credit default swaps (LINK). That in and of itself was not necessarily interesting, but the article reported that DB had already sold off two-thirds of its distressed CDS swap book to since October 2015 to Citicorp. The CDS securities were “single-name” direct (not cleared thru DTC) OTC derivatives, meaning they are of the riskiest, most unregulated and most toxic variety.

If you notice on the graph above, around the time that DB was engaged in selling some of its toxic waste to Citi in October, the stock began take a dive and it began to diverge negatively from the rest of the big bank stocks.

I would suggest, and have been suggesting, that there’s been a series of mini-melt downs that have been occurring in the western financial system since late last summer.  I also have written analysis which has connected these melt-downs to Deutsche Bank and has connected the “stick saves” in the markets to the Fed.

I’m suggesting here that the Fed is behind the Citi, Goldman and JP Morgan CDS transactions with Deutsche Bank as means of preventing DB’s collapse.  After all, the TBTF fail banks in the U.S. are catastrophically tied to Deutsche Bank – and  the entire European financial system – via derivatives.

Last week Deutsche Bank’s stock began to sell-off hard again.  On Monday and Tuesday DB’s stock dropped 6.6% and was down as much as 9%, significantly underperforming its peers.

It’s my view that the Fed has been conducting an ongoing de facto bailout of Deutsche Bank since mid-summer, using the balance sheets of Citi, Goldman and JP Morgan as its proxies.  In the context of the behavior of DB’s stock recently, and in the contex of what is now blatant market intervention in the stock market by the Fed, and in the context of the news of the bank bail-in Austria plus the collapsing Italian banks,  I would suggest that “expedited rule, closed door” meetings held by the Fed this were convened in order to discuss the a western financial system which is obviously beginning collapse again.

I would also suggest that the Fed is inching closer to implementing more drastic monetary easing policy measures, which could include taking short rates negative and will likely include more money printing – either overt or cleverly disguised.

This is why gold and the mining stocks have been somewhat “melting up” despite the recent flood of anti-gold propaganda pouring from Wall Street and the mainstream media. It is likely that the “melt-up” in the precious metals space has a lot more “melting up” to do…

I’m finishing up my work on the mining stock that will be presented in the next issue of the Mining Stock Journal (released Thursday).  This is an undiscovered Company that trades under 50 cents and it worth several times it’s current market cap just on its royalty properties.  Oh by the way, it’s in the midst of drilling what appears to be a massive copper/gold porphyry in an area that has been previously ignored.  Click here to access the Mining Stock Journal.

Junior Mining Stocks: A New Bull Market On Steroids

Apparently that imbecilic Goldman Sachs commodities analyst, Jeff Currie, was on CNBC’s Power Lunch urging viewers to short gold.  He’s been wrong since his initial $800 target on gold he set about 2 years ago.   In fact, using Currie as a contrarian indicator for buying gold has become possibly more reliable that the legendary “Cramer” and “Gartman” contrarian indicators.

What you won’t hear discussed on CNBC, or Bloomberg or Fox Biz for that matter, is the powerful move that’s being made in the mining stocks, especially the junior mining stocks. Since hitting a low of 100 on January 19, the HUI is index is up 94% as I write this.  If the SPX or Dow went up 94% in 2 1/2 months, Maria Bartiromo and Liz Clayman would be doing naked cartwheels on tv.

GDXJ 1yrThe junior miners as represented by the GDXJ ETF since January 19th is also up 94%.  But the GDXJ is not a true junior mining stock index.  Many exploration stocks are up 300-400% YTD.  And they are still substantially below the highs they reached in 2010 and early 2011.  I pointed out earlier this year that the HUI index doubled from late October 2008 to December 31, 2008 – and then it more than doubled again over the next 2 1/2 years.  I suggested that not only could it do that again, but this time around the move would be even more more powerful and produce an even bigger rate or return ultimately.

Why?  Over the last 4 1/2 years the valuation of mining stock sector relative to price of goldHUI reached its lowest point in history.  I don’t time to dig up the graphs illustrating this that have been published recently, but the HUI graph on the right somewhat demonstrates this point.  The HUI index closed on April 7 at 186 with gold around $1230.   As the graph shows, the HUI hit 186 in early 2003 with gold at $350.  In other words, in the early years of the emerging secular gold bull market, in relation to the price of gold the larger cap mining stocks were valued at nearly 3 1/2 times greater than their current level of valuation.

The beat down in the junior miners over the last four-plus years was even worse.  Many of them with proved gold/silver in the ground were trading at valuations below the amount of cash they held on their balance sheet.   The good quality exploration juniors had become insanely cheap.

The current trading action in the miners, especially the juniors, reminds me of the 2002-2003 period, when the sector was largely ignored by the entire market other than a contingent of crazy “goldbugs.”  Back then – like now – stocks would take turns jumping up 20-30% in one day, often on no event news.   I likened the action to that of watching popcorn pop:  you didn’t know when an individual kernel might pop but you knew that at some point almost all of them would.

The market action currently is quite similar to back then.  The juniors have been beaten down to the point at which no one except hardcore precious metals participants are GDXJweeklybuying them and idiots like Jeff Currie are running around advising everyone to short the sector.  The graph of GDXJ on the left (click to enlarge)shows how minor the recent move has been relative to the upside potential.  The move in the juniors has barely started. We have a stock in our fund that was up 37% yesterday on no news (Almaden Minerals).  It’s up another 17% today.  I spoke to management, who attributed the action to a U.S.-based newsletter but noted that the stock is playing “catch up” to comparable companies with $200-million market caps.  AAU’s market cap even with today’s move is still around $85 million.

I will be explaining to the subscribers of my Mining Stock Journal in the upcoming issue (next Wed or Thurs) why AAU is worth at least as much as its comparable companies.  I’ll also be presenting another mining stock that has moved up almost 500% from its 52 week low and is still 300-400% undervalued just in the context of the current prices of mining-stock-journal-bannergold/silver. This company has a hidden asset that is not even contemplated by the market right now.  In the current issue I presented a junior gold stock that has been almost completely ignored by investors.  This particular stock is one of the best risk/return ideas I’ve come across in 15 years of focusing on this sector.  You can subscribe to the Mining Stock Journal by clicking on the graphic to the right or by clicking here:   Mining Stock Journal.