Archive for Metals

Gold Is Consolidating After Growth

Author: Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Early in the third week of April, Gold is consolidating not far from $1737 per troy ounce. It’s not bad especially given the March prices and investor’s attitude towards the precious metal.

From the fundamental point of view, the current market conditions are rather neutral for Gold. The physical demand is low: major economies are in no hurry to completely remove lockdowns and quarantine restrictions although they allow their citizens to have freedom of movement, which, in its turn, has a positive effect on consumer demand. In the future, when social restrictions are finally removed, consumer interest in goods made of Gold will improve. As for the influence of the USD rate, which is oppositely correlating to the Gold price, everything is quite calm right now. EUR/USD is trading at 1.1890 and looking rather inactive in anticipation of new catalysts.

In the long-term, Gold is supported by the demand from the car manufacturing industry but it will increase when the industry gets back to its normal pre-COVID-19 times – not earlier than the second half of 2021.

As we can see in the H4 chart, XAU/USD is growing with the target at 1840.00 Today, the metal may grow to break 1758.00 and then continue moving upwards to reach 1785.30. After that, the instrument may return to 1758.00 to test it from above and then resume its growth towards the above-mentioned target. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0 outside the histogram area, thus implying a correction towards 1731.20. After the line re-enters the histogram area, the price chart will boost its growth.

In the H1 chart, XAU/USD is consolidating above 1731.20. If the price breaks this range to the downside, the market may correct to reach 1720.00; if to the upside – resume trading upwards with the target at 1785.30. From the technical point of view, this scenario is confirmed by the Stochastic Oscillator: its signal is moving to break 50 to the upside and then continue growing towards 80.

Disclaimer

Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

COT Metals Futures Charts: Gold, Silver, Palladium, Platinum & Copper

By CountingPips.comReceive our weekly COT Reports by Email

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday April 06 2021 and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.


Gold Comex Futures: Futures:

The Gold Comex Futures: large speculator standing this week recorded a net position of 189,509 contracts in the data reported through Tuesday. This was a weekly boost of 21,981 contracts from the previous week which had a total of 167,528 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 58.1 percent. The commercials are Bearish with a score of 41.5 percent and the small traders (not shown in chart) are Bearish with a score of 44.8 percent.

Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 59.5 21.2 10.0
– Percent of Open Interest Shorts: 18.6 67.5 4.5
– Net Position: 189,509 -214,799 25,290
– Gross Longs: 275,703 98,196 46,301
– Gross Shorts: 86,194 312,995 21,011
– Long to Short Ratio: 3.2 to 1 0.3 to 1 2.2 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 58.1 41.5 44.8
– COT Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -6.7 9.0 -26.2

 


Silver Comex Futures: Futures:

The Silver Comex Futures: large speculator standing this week recorded a net position of 32,315 contracts in the data reported through Tuesday. This was a weekly increase of 3,345 contracts from the previous week which had a total of 28,970 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 57.4 percent. The commercials are Bearish with a score of 43.5 percent and the small traders (not shown in chart) are Bearish with a score of 47.4 percent.

Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 43.5 32.0 18.7
– Percent of Open Interest Shorts: 22.6 64.7 6.9
– Net Position: 32,315 -50,585 18,270
– Gross Longs: 67,245 49,415 28,893
– Gross Shorts: 34,930 100,000 10,623
– Long to Short Ratio: 1.9 to 1 0.5 to 1 2.7 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 57.4 43.5 47.4
– COT Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -14.3 17.2 -27.3

 


Copper Grade #1 Futures: Futures:

The Copper Grade #1 Futures: large speculator standing this week recorded a net position of 43,010 contracts in the data reported through Tuesday. This was a weekly decline of -857 contracts from the previous week which had a total of 43,867 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 73.3 percent. The commercials are Bearish with a score of 22.6 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 92.8 percent.

Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 45.2 29.6 9.1
– Percent of Open Interest Shorts: 27.5 51.7 4.8
– Net Position: 43,010 -53,629 10,619
– Gross Longs: 109,985 72,136 22,246
– Gross Shorts: 66,975 125,765 11,627
– Long to Short Ratio: 1.6 to 1 0.6 to 1 1.9 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 73.3 22.6 92.8
– COT Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -23.3 22.6 -3.1

 


Platinum Futures: Futures:

The Platinum Futures: large speculator standing this week recorded a net position of 32,748 contracts in the data reported through Tuesday. This was a weekly lift of 2,142 contracts from the previous week which had a total of 30,606 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bullish with a score of 56.2 percent. The commercials are Bearish with a score of 43.0 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 82.3 percent.

Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 64.0 14.8 15.6
– Percent of Open Interest Shorts: 16.0 75.0 3.5
– Net Position: 32,748 -40,981 8,233
– Gross Longs: 43,621 10,080 10,620
– Gross Shorts: 10,873 51,061 2,387
– Long to Short Ratio: 4.0 to 1 0.2 to 1 4.4 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 56.2 43.0 82.3
– COT Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -2.8 3.2 -6.3

 


Palladium Futures: Futures:

The Palladium Futures: large speculator standing this week recorded a net position of 2,538 contracts in the data reported through Tuesday. This was a weekly boost of 195 contracts from the previous week which had a total of 2,343 net contracts.

This week’s current strength score (the trader positioning range over the past three years, measured from 0 to 100) shows the speculators are currently Bearish-Extreme with a score of 15.3 percent. The commercials are Bullish with a score of 78.8 percent and the small traders (not shown in chart) are Bullish-Extreme with a score of 96.1 percent.

Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 50.9 28.0 15.3
– Percent of Open Interest Shorts: 26.8 60.4 7.0
– Net Position: 2,538 -3,411 873
– Gross Longs: 5,361 2,952 1,612
– Gross Shorts: 2,823 6,363 739
– Long to Short Ratio: 1.9 to 1 0.5 to 1 2.2 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 15.3 78.8 96.1
– COT Index Reading (3 Year Range): Bearish-Extreme Bullish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 14.6 -13.8 -3.9

 


Article By CountingPips.comReceive our weekly COT Reports by Email

*COT Report: The COT data, released weekly to the public each Friday, is updated through the most recent Tuesday (data is 3 days old) and shows a quick view of how large speculators or non-commercials (for-profit traders) were positioned in the futures markets.

The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

Gold Terra Hits 12.35m @ 5.77g/t And 4.35m @ 10.85g/t Gold on Campbell Shear Target at Yellowknife City Gold Project

Source: The Critical Investor for Streetwise Reports   04/07/2021

The Critical Investor delves into Gold Terra’s most recent drill results at its Northwest Territories project.

The much anticipated phase 1 drilling program, testing the southern extension of the Campbell Shear of the Yellowknife City Gold Project (1.2Moz Au Inferred resource), is well underway now, and the results are pleasing management of Gold Terra Resource Corp. (YGT:TSX.V; YGTFF:OTC; TXO:FRANKFURT) as it confirms historical drilling results. As a quick reminder, the Campbell Shear produced approximately 5 of the 6 million ounces of gold produced at the former Con Mine (1938–2002), is the main reason Executive Gerald Panneton (of Detour Gold fame) joined the company, and is the priority target for management. To date, Gold Terra has completed 13 holes for a total of approximately 5,700 meters along the Campbell Shear to vertical depth of 400 meters below surface.

Afbeelding met kaart

Automatisch gegenereerde beschrijving

Drill results of the first six holes were released in two batches recently, one batch on March 23, 2021, and another one on April 6, 2021. The first news release mentioned the results of the first three holes, totaling 1,714m. The first two holes (GTCM21-001 and 002) were drilled south of the in-house historical Yellorex deposit and the third hole (GTCM21-003) was drilled on the Yellorex portion of the Campbell Shear. The second batch returned an additional three holes totaling 1,900.51 meters. Holes GTCM21-004 and 006 were drilled south of the Yellorex deposit and hole GTCM21-005 was drilled 100 metres underneath hole GTCM21-003. The following section illustrates the targeted zones of these holes:


Longitudinal section showing drill holes GTCM21-001 to GTCM21-006

The absolute highlights of the drill results were holes GTCM21-003 and GTCM21-005, returning the following intercepts:

  • Hole GTCM21-003 intersected 10.85 g/t Au over 4.35 meters including 25.4 g/t Au over 1.55 meters, from 223.2m
  • Hole GTCM21-005 intersected 5.77 g/t Au over 12.35 meters including 14.09 g/t Au over 4.65 meters, from 280.65m

Especially hole GTCM21-005 generated an impressive high grade result over substantial width. As can be seen in the longitudinal section, holes GTCM21-003 and GTCM21-005 were targeting Yellorex, an envelope of previously defined in-house historical mineralization, composed by JV partner Newmont/Miramar, of which no public records exist.

On an important side note, another observation I already pointed out in my first article is the deep location of the adjacent Con Mine mineralization, which could imply Gold Terra might have to drill much deeper before massive, multi-million ounce type pay dirt could be hit. Therefore, I asked President and CEO David Suda what his expectations and strategy are regarding this subject. According to him and Panneton, they are currently drilling shallower depths targets as they feel there is a lot of potential to add ounces, and phase 2 drilling will test deeper targets.

The other four holes were step-outs, and although they didn’t return the same kind of results, management deems especially holes GTCM21-004 and GTCM21-006 to be important as they confirm the trajectory of the Campbell Shear, not only by intercepting mineralization but also by showing alteration that is very anomalous in gold and strong gold markers like antimony. Full results can be seen in the following table:

Afbeelding met tafel

Automatisch gegenereerde beschrijving

Looking a bit further into the best results, hole GTCM21-003, although with narrow mineralization, was important in establishing the mineralization styles that host high-grade gold. According to management, this hole shows that high-grade gold occurs within wider alteration zones with pervasive anomalous gold values. These characteristics act as vectors to high-grade gold which will assist future drill programs on the Campbell Shear. Holes GTCM21-001 and 002, while intersecting the Campbell Shear, did not display the favorable gold vector characteristics of smoky quartz and sericite alterations likely due to local variations in the zone.

According to management, hole GTCM21-005 conforms to the historically identified geological controls in the Con Mine, which consists of strongly sericitized and sheared mafic volcanic rock associated with arsenopyrite, pyrite and stibnite mineralization with the highest-grade gold in smoky quartz veins. The combination of finding so-called sericitic alteration halos (also containing antimony and arsenic) and wide intersection of anomalous gold values encountered in hole GTCM21-006 suggest proximity to higher grade gold, and it will be followed up by drilling the area of this strong alteration halo.

Management was excited about the completed drilling, as President and CEO David Suda stated: “We are very pleased with the continued success of the drilling results on the Newmont Option ground. Drill results from the Yellorex zone demonstrate good continuity and the extension of the gold mineralization from historical holes, which may potentially add ounces to a future resource calculation. The latest results add confidence to our program to outline high-grade gold mineralization. With our recent financing completed in early March, we are planning to drill more than 20,000 meters this year along the prolific Campbell shear target which remains open at depth and along strike to the south.”

The assays of the remaining seven drill holes are expected by management to be released over the course of the next several weeks.

Conclusion

The first six holes targeting the Campbell Shear at the Yellowknife City Gold Project returned interesting results, with two very good intercepts through hole GTCM21-003 and 005. As the best holes have been verifying the historical mineralized Yellorex envelope relatively near surface, I am curious how management is contemplating the next steps in order to track the highly anticipated multi-million ounce potential of the Campbell Shear, in the shadows of the former Con Mine, of which the deposit was located at significant depth. It will be interesting to watch how management will try to unravel this very interesting, high stake puzzle, being comfortably backed by a 1.2Moz Inferred gold resource already.

Afbeelding met natuur, buiten, lucht, zonsondergang

Automatisch gegenereerde beschrijving

I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website www.criticalinvestor.eu, in order to get an email notice of my new articles soon after they are published.

The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.

Disclaimer: The author is not a registered investment advisor, and currently has a long position in this stock. Gold Terra Resource is a sponsoring company. All facts are to be checked by the reader. For more information go to www.goldterracorp.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.

Streetwise Reports Disclosure:
1) The Critical Investor’s disclosures are listed above.
2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.

4) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Gold Terra, a company mentioned in this article.

Charts and graphics provided by the author.

Gold Bottom?

Peter Krauth, editor of the Gold Resource Investor, explains why the action in gold prices is starting to look bullish for the first time in months.

Source: Peter Krauth for Streetwise Reports   04/06/2021

Enthusiastic gold investors everywhere are wondering has gold finally bottomed?

The short answer is I think so.

That’s because, from a number of perspectives, that seems the most likely scenario. Right now, most of the evidence points in that direction.

A dramatic rip higher from March to August last year caused gold to soar by 40% in just five months. It also allowed gold to establish a new nominal all-time record high at $2,070.

Since then, gold’s been retracing, giving up about half of those gains. Two major drivers led to this: sentiment and the dollar. At this point, however, it seems both factors may have run their course, setting up gold and gold stocks for a new rally.

Let’s examine the current outlook to formulate what’s most likely ahead.

Negative Gold Sentiment Exhausted

Markets ebb and flow, and gold is certainly no exception. The dramatic rise last spring and summer was likely driven by fear as the impact of the COVID-19 pandemic was being assessed.

One of gold’s biggest attractions is obviously as a safe haven, a role it’s played for thousands of years. And last year was an excellent example. But as the world grew accustomed to its new reality, that meant other drivers took center stage.

It was also natural for gold to start ebbing. Naturally, large numbers of investors became enamored with gold and gold stocks as they chased them higher. That meant lots of buying near the early August peak. But that buying soon became exhausted.

Savvier investors then started to take profits while the late buyers eventually capitulated after buying high. Their lack of understanding, and lack of conviction, made them victims. It looks like that final capitulation happened in late March, as the sentiment pendulum swung to an extreme.

But fundamental drivers worked in conjunction with sentiment to help mark a turning point.

I have detailed before the effect of rising long term bond yields. Consider that the U.S. 10-year Treasury yield bottomed at 0.51%, just two days before gold peaked. Since then, the 10-year yield has soared, peaking on March 31 at 1.75%. That’s a 240% spike in yields. Massive global fiscal and monetary stimulus on a record scale caused investors to start pricing in much higher expected inflation.

10-Year Treasury Chart

This hurt gold prices in two ways. Higher yields compete with gold, which pays no yield. It also meant a higher U.S. dollar index, as foreigners likely converted to dollars to buy those long-term bonds. Of course, a stronger dollar is a natural headwind for gold, which is priced in dollars.

USD Chart

But as we can see in both previous charts, this upleg appears to have run its course. Prices have retreated, and momentum indicators suggest a recent peak.

And the action in gold prices is starting to look bullish for the first time in months.

Gold’s Technical Outlook is Positive

Technical action in the gold price is beginning to look bullish. We may have a double bottom, wherein the recent low established a bullish higher low. And both the RSI and MACD momentum indicators are rising, confirming the rising trend.

Gold Chart

The action in gold stock prices is similar. Using the VanEck Vectors Gold Miners ETF (NYSE:GDX) as a proxy, we see several bullish signals. GDX has recently closed above its 50-day moving average and broke out above its falling trend channel. It too has established a higher low with rising buying volume. And both the RSI and MACD here are confirming upward momentum.

GDX chart

My upside price targets for GDX are $38.50 and $41.

And lastly the Gold Miners Bullish Percent Index (BPGDM) is also providing a bullish signal. This indicator is most bullish when it dips below 30 then reverses higher. And in the last week that’s exactly the signal it provided.

BPGDM chart

So, given a likely reversal in sentiment, combined with positive price action in gold, gold miners, and their momentum indicators, odds are very good that we’ve seen the bottom for gold and we’re starting a new upleg in this sector.

Oh, and one more thing. Gold stocks are cheap. The average stock in GDX trades at a P/E of just 20 and at less than 10 times cash flow. By comparison, the S& 500 index currently trades at a P/E of 28 and over 16 times cash flow.

And according to U.S. Global Investors, gold producers had their most profitable year ever in 2020. The average profit per ounce mined was $828, which is well above the previous high in 2011 at $666. Part of this record profit level has been due to cost discipline.

Gold Miners Margins

Put it all together, and the indicatorsósentiment, technical and fundamentalóall point to higher gold and gold stocks over the near and medium term.

In the Gold Resource Investor newsletter, I provide my outlook on which stocks offer the best prospects as this bull market progresses. I recently added a low-risk, deep value gold royalty company to the portfolio, which I believe has exceptional potential to outperform its peers in the next 12 months.

Of course, it’s impossible to know for certain that gold has bottomed. But given the outlook for this sector as I’ve just laid out, it makes sense to layer into gold positions over the next several weeks.

In all likeliness, those who do will be amply rewarded.

After all, it’s a gold bull market!

–Peter Krauth

Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in precious metals, mining and energy stocks. He is editor of two newsletters to help investors profit from metal market opportunities: Silver Stock Investor, www.silverstockinvestor.com and Gold Resource Investor, www.goldresourceinvestor.com. In those letters Peter writes about what he is buying and selling; he takes no pay from companies for coverage. Peter has contributed numerous articles to Kitco.com, BNN Bloomberg, the Financial Post, Seeking Alpha, Streetwise Reports, Investing.com, TalkMarkets and Barchart, and he holds a Master of Business Administration from McGill University.

 

Disclosure:
1) 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. Streetwise Reports was not involved in any aspect of the article preparation. 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) 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.
3) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

PEA for Ontario Lithium Project Projects US$8.52 Billion Life of Project Revenue

Source: Streetwise Reports   04/06/2021

Frontier Lithium’s high-quality material has met the glass industry’s stringent requirements.

Frontier Lithium

Frontier Lithium Inc. (FL:TSX.V; LITOF:OTCQX; HL2:FRA) is a mineral and chemicals company focused on the development of its 100%-owned PAK Lithium Project in Ontario.

With increased emphasis on local supply chains FL’s objective is to become a strategic domestic supplier of battery-grade lithium hydroxide and other chemicals to the growing electric vehicle and energy storage markets in North America.

Lithium chart

With its high-purity raw ore product, Frontier has qualified its material to high-quality glass manufacturers. The specifications required by this industrial market are more stringent than the chemical industries also requiring concentrate feedstock for the battery industry. This is important in an industry where quality material is likely to be in short supply in the future and is likely to demand a premium.

Frontier aims to complete final permitting, metallurgical test work and definitive feasibility in 2023 to construct and mine, mill and downstream chemical plant to produce lithium chemicals by 2026.

With this tailwind of development momentum, FL’s stock price has risen 400% since September, 2020.

Production Plan

Last month, Frontier released results from a Preliminary Economic Assessment (PEA) which reported a pre-tax Internal Rate of Return (IRR) of 27%.

A PEA answers the question, “How best can this deposit be exploited to maximize its profits for investors?” Unlike more advanced studies, a PEA can use Inferred resources for its operational and financial modeling.

A positive PEA will typically create an upward re-valuation of the company, unless the spot price of the targeted mineral is falling—which is unlikely given the growing global demand and shrinking supply for high-purity lithium mineral concentrates and chemicals.

The IRR is a metric used in financial analysis to estimate the profitability of investments.

The metric is ideal for analyzing capital budgeting projects to understand and compare potential rates of annual return over time.

The PEA anticipates a mine-to-lithium hydroxide chemical/hydromet plant facility in the Great Lakes Region of North America, assuming a hydromet plant that would convert spodumene concentrate feedstock sourced from open-pit mining and a milling facility at the PAK Lithium Project.

Highlights (in $USD unless otherwise stated):

  • Life of Project Revenue of $8.52 billion over 26-year total project life;
  • Total initial capital expenditure estimate of $685 million with a contingency of 22.5% included.
  • Sustaining Capital of $117 million;
  • Post-tax NPV8 of $974.6 million and IRR of 21%
  • Annual Average EBITDA (steady-state) of $225 million.
  • Chemical plant producing 23,174 tonnes of battery-quality Lithium Hydroxide Monohydrate (LiOH-H2O) per year with an average selling price of $13,500 per tonne.
  • A total of 556,200 tonnes of LiOH has been contemplated being produced from open pit mining only at the PAK and Spark deposits
  • PAK and Spark deposits are open in all directions and could provide potential resource expansion for a newly commenced Preliminary Feasibility Study
  • All-in operating cash costs of $4,083 per tonne of LiOH; and
  • After-Tax Pay Back of Capital Expenditures is 4.5 years after the start of commercial operations.
  • Life of Project Revenue of over 26-years total project life
  • Sustaining Capital of Pre-tax NPV at an 8% base case discount rate of .62 billion and Internal Rate of Return (IRR) of 27%
  • Post-tax net “undiscounted” Cash Flow (before initial capital expenditures) of Post-tax NPV of and IRR of 21%

“The fully Integrated Project PEA demonstrates the economic and strategic benefits of developing lithium chemical production of lithium hydroxide in the Great Lakes Region of North America, with skilled labour, exceptional infrastructure, low carbon sources of energy, prime intermodal transportation access and low operating costs,” stated Trevor Walker, president & CEO of Frontier Lithium.

Streetwise Reports spoke at length with Walker about the significance of the PEA and the milestones to production.

“The PEA is really that first step to say ‘we’ve got a resource—can we do something with it?'” stated Walker, “The PEA gives you a sense of what the economics are, based on a resource. In our case we have two deposits, the Spark and PAK deposits.”

The PAK deposit contains a pit constrained mineral resource in the Measured and Indicated categories of 5.4 million tonnes averaging 1.99% Li2O and an Inferred mineral resource of 0.60 million tonnes averaging 1.97% Li2O, hosts a rare technical/ceramic grade spodumene with low very low iron content.

The Spark deposit is located only 2km northwest of the PAK deposit and contains a pit constrained mineral resource estimate of 3.3 million tonnes averaging 1.59% Li2O in the Indicated category and a mineral resource of 15.7 million tonnes averaging 1.31% Li2O in the Inferred category.

“With that type of operation, based on that resource size, we have a projected 26-year-mine-life year, just in those two open pits and it drives some really compelling economics,” added Walker.

“Strip Ratio” refers to the amount of waste that must be removed to release a given ore quantity. 20:1 strip ratio, means you have to remove 20 tonnes of waste to generate 1 tonne of ore.

In open pit mines, grade and stripping ratio are key metrics to better understand the potential economic value of a mine. A high lithium grade deposit has less impurities in the ore and drives a higher lithium yield (ore input/finished product ratio).

Removal of waste is a significant production cost; in addition, a large stripping ratio increases the probability of further ore dilution and impurity introduction—which will reduce revenue potential. The lithium business is a chemical business, whereby quality is paid a premium.

Under Frontier’s PEA, the two open pits project an encouraging stripping ratio of 3.6 to 1.

Computer-generated modeling of the two pit-constrained deposits provides a visual explanation of why the ratios is so low. The deposits are at surface, and wide (in excess of 50m).

The open pits will be mined using a standard fleet of off-road mining trucks and hydraulic excavators at a rate of approximately 2,900 tonnes of ore per day.

Map

“We’re really conservative by nature here at Frontier,” states Walker in relation to the PEA numbers, “So we see a lot of room for improvement as we advance to the next level—which is a Pre-Feasibility Study (PFS).

Frontier will need to raise $685 million to build its mine, mill and chemical plant—they anticipate paying it all back in 4.5 years.

Even for the notoriously conservative banking industry, that may not be a hard sell.

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. His company has a financial relationship with the following companies referred to in this article: None.
2) The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: Frontier Lithium. 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) The interview 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.
4) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Frontier Lithium, a company mentioned in this article.

March Malevolence, Lessons from a Hockey Great, and Precious Metals

Source: Michael Ballanger for Streetwise Reports   04/06/2021 

Sector expert Michael Ballanger advises investors they should never rest on previous successes.

“You’re only as good as your last shift.” —NHL legend Gordie Howe

In the business of writing a weekly letter, my expressed intention is to communicate a raft of opinions on the precious metals, junior and senior mining issues, and opportunities deemed as “special situations,” where obscurity reigns and uncertainty rules. In this unruly sector of the investment landscape, strewn with volatility and risk, I have learned over the years is that there is really only one character attribute that counts—humility.

The reason for this lies in a story told to me by a former university teammate who went on to try out for the Houston Aeros of the old WHA back in 1976. He was in an exhibition game with the Aeros in Indianapolis, along with the Howe Family (Mark, Marty, and Papa Gordie), when a certain rookie, playing left wing on a line with Gordie, learned a valuable (and painful) lesson. The night before, the rookie enjoyed a particularly good night, scoring a hat trick (all assisted by Gordie), after which he went out on the town and celebrated heartily, which resulted his having a particularly bad time of it the following night. Dragging his hungover backside up and down the ice in a miserable display of offensive ineffectiveness and defensive dilapidation, upon returning to the bench, a perturbed Gordie began counseling the youngster as to his lack of effort, to which came back a flurry of excuses, with the final one being, “I scored three last night, so I think I deserve a night off!”

Now, anyone that has ever shaken hands with Gordie Howe will tell you that he had the largest, most powerful hands in the history of sports. Not only would they crush your grip; his fingers would actually engulf your entire hand, palm, knuckles, and all. After hearing the final retort of the gasping, whining young rookie, Mr. Hockey put his left hand around the back of the neck of the kid and ever-so-slowly began to squeeze. The rookie’s face went from red to blue to white and just before he let out an ungodly wail, Gordie uttered the immortal lesson for the ages: “Son, you’re only as good as your last shift.”

If you are immediately filled with questions surrounding the relevance of that story to market “karma,” you will recall that I put out a “buy” on gold at US$1,680/ounce on March 8, after which it rallied over $70, during which I took profits on a few GLD call options and sat back in hopes of a retest. Last Tuesday, I re-issued the “buy” on gold, as it did indeed get a retest of the US$1,680 level, after which I found myself once again owning a pile of GLD call options and sitting on a very nice profit, with the weekly and monthly close above US$1,730.

Accordingly, and in full sympathy with the story of “Gordie and the Rookie,” I did not and do not go out on the town to celebrate my trading prowess, because I know full well that the moment you think you have it all mastered, you are directly in the crosshairs of the market gods who, wearing Detroit Redwings sweaters with number 9s on the backs, are an inch away from inflicting severe neck pain upon you. Nowhere is the phrase “you’re only as good as your last shift” more relevant than the world of trading and investing.

Alas, for those of you that have listened to my boring diatribes over the years, you know that when I get the sense that gold has bottomed, I tend to proceed tentatively until I feel that prices have moved “out of the woods,” meaning into an uptrend unlikely to be thwarted by subliminal technical weakness and “lurking” non-confirmations. I offer as evidence the above chart, which shows the Fibonacci retracement levels dating back to December 2015, when gold bottomed at $1,045 after four years of root canal surgery “sans novocaine.” The March 9 low of $1,673 and the March 30 low at $1,678 were at a hair’s breadth below the 38.2% retracement level at US$1,685.32, so given the amplitude and rapidity of the reversal, I feel sufficiently confident in the arrival of a tradable bottom. This translates, at least for me, into a “Buy the dip” versus “Sell the Rip” tactical agenda with which to proceed.

Also encouraging is the performance of the gold mining stocks, where the HUI index had a higher low in late March than the early March low (248 versus 258).

By contrast, the same Fibonacci study for silver leaves me considerably less confident that the “silver superior” performance requirement for positive confirmation of the near-term trend is in place. I will simply say that for me to proceed with reckless abandon and Howe-like ferocity, I want to see a close above US$28, at which point I will breathe a great deal easier.

As I wrote about last week, the month of March is a particularly malevolent period for the junior gold and silver miners, developers and explorers, with aggravating pullbacks serving to both undermine hubris and enhance humility. However, the uranium space is absolutely on fire with GGM Advisory favorite Western Uranium & Vanadium Corp. (WUC:CSE; WSTRF:OTCQX) (CA$2.10/US$1.66) closing at a multiyear high and ahead 89.90% year to date.

The reasons for the advance are varied, but the most obvious was the late month inclusion of the company into the North Shore Global Uranium Index. With a paltry 30,000,000 shares issued, any increase in the on-balance-volume numbers is bound to have a positive impact on such a tiny float and the ensuing share price performance, but having a 55,000,000-pound uranium resource in the Sunday Mine Complex in Colorado cannot be discounted, especially with the U308 closing above US$30/pound for the month of March. (CFO Rob Klein has been a very reliable and highly professional member of that team, and is more than eager to speak with shareholders.)

The other major driver for uranium juniors is the virulence of the Biden Administration in its infrastructure rebuilding plan and its commitment to the carbon-free energy environment. If “electric” is the way the world is moving (and it certainly appears to be the case), planet Earth is going to need a lot more electricity. Since the cleanest electrical energy provider with the largest capacity is nuclear, uranium as an energy source is going to be front and center. Those two drivers also dovetail wonderfully into the “bullish copper” scenario.

Speaking of copper, I am currently working on a story that is going to be out as one of my featured “Special Situation” ideas shortly. Earlier this morning, I tweeted out a link, thanks to subscriber “Jordan,” that I am now forwarding on to all subscribers (click here). Global copper trading giant Travigura Group PFE Ltd. is calling for a US$15,000 per tonne (US$6.80 per pound) price tag for the red metal within the next ten years. Unlike gold and silver, which have limited industrial demand, copper is used literally everywhere, and whereas gold and silver debates are always polarized with extremist views, copper is completely mainstream and responds to global supply and demand without the controversies created (and promoted) by central banking and the bullion bank cartel.

Owning a commodity whose price performance is actually appreciated by the global central banking cartel is somewhat of a departure to which I have grown accustomed in recent decades, as they look at rising copper prices as corroboration of their expertise in managing the world economy. What these “champagne socialists” fail to acknowledge is the deleterious effects that rising copper prices will have on living standards, which will contribute to rising generational and demographic disparities. The Millennial stock trader relying on his or her iPhone will reject the price increase in the new model that arrives as a classic case of “cost-push” inflation, due primarily to the copper component of the iPhone. Alas, the rising price of copper will be much more with which to boast than a rising price of the iPhone, with the result that policymakers exalt rising copper prices while ignoring rising iPhone prices. Typical …

As a card-carrying member of the Precious Metals Fan Club, it is not a violation of the Oath of Gold and Silver Allegiance to put on positions in either uranium or copper, just as it is no sin to own Bitcoin or any other non-fiat asset that turns one’s crank. After all, the U.S. government turned the crosshairs on gold and silver over fifty years ago, when French President Charles De Gaulle decided to take gold in lieu of U.S. dollars every time a U.S. Treasury bond matured. That consistent drain on the U.S. gold reserve in Fort Knox prompted Richard Nixon’s termination of the Bretton Woods agreement, after which they instituted the Bernie Madoff Maneuver, which still exists to this day—a gargantuan Ponzi scheme of unfathomable scale and dimension.

To repeat a theme that I have used over the past few years, but with greater frequency since our illustrious political leaders decided to micromanage the human immune system by flooding humanity with alchemist cash and ill-conceived rules, the most reliable trade one can make in all countries around the world is this: “Go short cash.” Sell savings accounts, money market funds, and all retirement annuities invested in negative-yielding securities. If you come across a mattress stuffed with $100 bills, drag it out to the street next to your garbage bins and sell it for wampum, too.

Back in the days when markets were organic chessboards, as opposed to preprogrammed algorithms, the phrase “cash is king” was especially useful. This was when risk management reigned supreme and tools like “the Buffett Indicator” mattered. Today, however, the only phrase that matters is the one that stares at me from above my quote monitor that reads “Cash is trash,” as a constant reminder of what our central planners think of my pool of retirement funds, which provides sufficient purchasing power to own a tarpaper shack north of the Arctic Circle. Thank you so much.

Originally published April 3, 2021.

Follow Michael Ballanger on Twitter @MiningJunkie. He is the Editor and Publisher of The GGM Advisory Service and can be contacted at [email protected] for subscription information.

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.

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

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

Charts and graphics provided by the author.

Bringing Back a Former Mine in Idaho’s Silver Valley, with a Focus on a Rapid Restart

Source: Streetwise Reports   04/05/2021

Bunker Hill Mining lays out its plans to transition to a 50% silver mine from base metals, and operate a mine on the leading edge of sustainability.

Bunker Hill Drilling

Bunker Hill Mining Corp.’s (BNKR:CSE; BHLL:OTCMKTS) eponymous mine in Idaho’s Coeur d’Alene mining district has a long and storied history. First discovered in 1885, the Bunker Hill Mine produced silver and base metals from 1885 until 1991, and accounted for some 42% of the lead, 41% of the zinc and 15% of the silver produced in the district. A combination of low metal prices and expensive infrastructure investment to be in compliance with newly enacted environmental regulations led to the mine’s closure.

But now Bunker Hill is working to bring the mine back into production, with world-class environmental management and vigorous community engagement being central to the company’s strategy.

Helmed by an experienced team—Executive Chairman Richard Williams is a former COO of Barrick Gold Corp., CEO Sam Ash served as executive general manager of Barrick’s Lumwana copper mine in Zambia and its VP Sustainability Brad Barnett ran and optimized Barrick’s large portfolio of closed mine sites—management looked around the world to find a cornerstone asset for a new company.

It needed to have four things, Williams told Streetwise Reports. “First, it needed to have the potential of having a very long life, a mine life of more than 30 years.”

The next criterion was being in the lower half to lower quartile of the cost curve. “Commodity cycles look generous for a period of time, and then they come back and hit you pretty hard,” Williams explained. “We needed a foundational asset that could make real money when times are hard. Without that, the regeneration of the mine would never be sustainable.”

The third aspect was “we wanted to make sure it was in a safe jurisdiction with an intact mining permit and somewhere that we understood well and supported those that believe in sustainable mining. Idaho is as near to perfect a place for this as you could find.” Williams said.

Last, the project “needed to have the infrastructure, the outlet, the foundation, so it could be run at the front end of the best environmental, sustainability, social and governance standards possible, and produce metals that would support a greener global economy,” Williams emphasized. “We, and a regenerated and transformed Bunker Hill and its local mining community, wish to play our part in the ongoing move towards a cleaner and more sustainable mining industry.”

The Bunker Hill Mine met these criteria, “even though when you first look at it, it was incredibly distressed. The Clean Air and Clean Water acts of the 1970s and the Superfund CERCLA act of 1980 devastated the mines in the region because the old mining practices were very dirty and dangerous,” Williams explained. “Between 1981 and now, most of the operations in the area either closed down and stayed closed, or closed down and were tidied up.”

The mine’s lead and zinc smelters were disbanded, “but vast amounts of known metals still existed in the ground, accessed by well-built infrastructure, on patented private ground, and covered by an intact mining permit,” Williams said. “It became clear to me, Sam and the team that the mine held the potential for a very long life and a low cost operation; if we applied modern mining techniques we could turn it around ESG-wise, and it was probably in one of the most favorable jurisdictions for mining in the world.”

Bunker Hill Mining

The team leaped into the project in March of last year and raised money to digitize 95 years of mine data, study and evolve their understanding of the geology and then start a value-focused drilling and sampling campaign. “By September of last year this had delivered 9 million tonnes of Inferred resource based on the old reserves that were going to be mined as the mine closed in 1981,” Williams explained. “As a next step we allocated new capital to explore the asset for the highest grade silver so that our future mining could produce as much silver as possible, as well as upgrading part of the Inferred resources into the Indicated category to support our restart plans.”

Restarting the mine has been a priority. “There is a community that needs jobs, and a state that values regeneration. We also have mine discharge water that has to be treated in an Environmental Protection Agency (EPA)-run facility before it flows into the local river and that costs us about $1 million a year. Our experience has taught us that the best way to secure sustainable value in a closed asset with an intact mining permit, and faith in our new company and its regeneration mission, is to get it operating. We are therefore focused on generating sustainable cash flow early so that we can reinvest that cash and to develop the mine in stages,” Williams said.

To that end, the company is moving quickly. It just released an updated resource estimate, increasing the resources by 15% and converting Inferred resources to the Indicated category, so that 43% of the resource is now Indicated. It expects to release a preliminary economic assessment (PEA) in early Q2 of 2021. “The PEA will take the restart plan to the provisional economic analysis level. A couple of months after that we plan to release a prefeasibility study having finalized the design for our new processing plant. After that, we will seek finance so we can be in production 18 to 24 months later,” Williams said.

“When we took over the mine last year, we had an enormous amount of data, but no useful information,” CEO Sam Ash explained. “We digitized the historical information and created a working 3D geologic model that’s at the forefront of what’s technologically possible. This informed a 9,000-foot drill and channel sampling program focused on proving the historical resources to 43-101 standards, whilst we conducted a detailed survey of the existing mine infrastructure and the mine’s water system.”

The recently released updated resource estimate consists of an Indicated resource of 4.4 Mt containing 3.03 Moz of silver, 487 Mlb of zinc, and 176 Mlb of lead and Inferred resource of 5.6 Mt containing 8.3 Moz of silver, 548 Mlb of zinc, and 312 Mlb of lead.

The company is taking a two-pronged approach to drilling, the first is development drilling to support the restart PEA that will be released shortly.

The second prong is to focus on silver exploration. “We looked at the right way to unlock the long-term value and we believe that is via the exploitation of its considerable silver potential,” Ash said. “Historically Bunker Hill was mined for its base metals, primarily lead and zinc, which fed the on-site high-margin, but environmentally toxic smelting operation. But what’s often forgotten is that it was also one of the largest and shallowest silver mines in the Silver Valley, producing 165 Moz of silver as a byproduct.”

“Historically, half of the Bunker Hill Mine’s revenue was from the sale of silver,” Williams explained, “and we believe that we can re-establish that profile, in ways that not only ensure the highest operating margins, but also provide the maximum amount of that valuable metal to the electronics and green-energy industries.”

The company has initiated a silver-focused exploration effort and drilling program in parallel with the PEA drilling. “We want to rebalance the revenue stream where silver becomes over time the dominant revenue stream going forward,” Ash explained. The company has a full exploration program planned for this year focused on silver. “As we explore deeper into the mine, there are indications that the silver grades will increase.”

Recent drill results have backed up Williams and Ash’s claims. Chip sampling has returned 10 separate high-grade silver mineralization results greater than 900 g/t silver equivalent in the Deadwood vein. Plus, drilling has uncovered high-grade silver, lead and zinc, including an assay that measured 3.8 meters at 197 g/t silver, 21.2% lead and 2.7% zinc, totaling 996.6 g/t AgEq.

These results “confirm high grade silver mineralization in two distinct areas of the upper mine close to existing infrastructure,” the company reported. “Firstly, we have confirmed the silver potential of the Deadwood vein through ten separate high-grade channel samples. Secondly, our systematic targeting methodology allowed us to confirm the presence of high-grade silver mineralization on the 5-level through drilling, within an area where no historical mining was conducted. Both of these areas, along with others, will be followed up and developed over the coming weeks.”

With its focus on sustainability, the company also worked to understand the mine’s water system and devise interventions to immediately improve the quality of the water being discharged from the mine. “We discovered that a small internal stream is causing most of the problems, so we were able to reduce the amount of metal in the discharge water by 70% by building and operating a pre-treatment facility within the mine,” Ash explained.

Bunker Hill’s management sees a focus on sustainability as essential to the creation of value. “There’s a couple of things that we’re going to be doing that are on the leading edge of sustainable mining,” Ash explained. “We envision the new mine as being a fully electrified, digitally enabled mine; our vision is to be net zero direct emissions, with no diesel equipment and minimal surface expression, and an active partner with the community in enhancing the quality and beauty of the local environment.”

In support of this, the company plans to do all the ore processing and tailings deposition underground. “We’re not going to have a tailings dam; we’re not going to create surface disturbance. There is a ski resort on the mountain above the mine and our goal is to have our impact so small that the ski resort operates without people knowing that there is a mining operation taking place underneath them,” Ash said.

Independent financial analyst Matt Badiali follows Bunker Hill and wrote on March 30, “This looks like a huge opportunity for investors looking to add a new silver name to their portfolio because Bunker Hill isn’t just upgrading their existing resources, they have new tools to find more of the high-grade material that made the mine famous in the past.

“Today, Bunker Hill is a C$54.4 million company. That means we can buy its current resources for 3¢ per pound of lead and zinc…and get the silver for free. This can’t last. As we get closer to the PEA, shares will continue to creep upward. Particularly if they put out more positive drill results over the next three months.”

Badiali concluded, “This little silver company is worth a whole lot more than its current price. It looks like a fantastic speculation for folks looking to play the junior silver space.”

Bunker Hill has about 163 million shares outstanding, with approximately 7% closely held by management and approximately 50% is represented by long-term institutional shareholders.

Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: Bunker Hill Mining. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Bunker Hill Mining. Please click here for more information.
The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) The interview 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.
4) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Bunker Hill Mining, a company mentioned in this article.

Additional Disclosure:
Matt Badiali: 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. I determined which companies would be included in this article based on my research and understanding of the sector.

COT Metals Futures Charts: Palladium, Gold, Silver, Copper & Platinum

By CountingPips.comReceive our weekly COT Reports by Email

Here are the latest charts and statistics for the Commitment of Traders (COT) data published by the Commodities Futures Trading Commission (CFTC).

The latest COT data is updated through Tuesday March 30 2021 and shows a quick view of how large traders (for-profit speculators and commercial entities) were positioned in the futures markets.


Gold Comex Futures:

Gold Comex Futures

Gold Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 56.4 24.0 10.5
– Percent of Open Interest Shorts: 20.5 65.4 4.9
– Net Position: 167,528 -193,726 26,198
– Gross Longs: 263,453 112,072 48,980
– Gross Shorts: 95,925 305,798 22,782
– Long to Short Ratio: 2.7 to 1 0.4 to 1 2.1 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 52.5 46.6 47.1
– COT Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -17.2 19.8 -34.0

 


Silver Comex Futures:

Silver Comex Futures

Silver Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 42.9 33.8 18.2
– Percent of Open Interest Shorts: 24.2 62.9 7.7
– Net Position: 28,970 -45,161 16,191
– Gross Longs: 66,502 52,310 28,192
– Gross Shorts: 37,532 97,471 12,001
– Long to Short Ratio: 1.8 to 1 0.5 to 1 2.3 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 54.2 48.2 34.8
– COT Index Reading (3 Year Range): Bullish Bearish Bearish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -19.5 22.7 -32.4

 


Copper Grade #1 Futures:

Copper Grade #1 Futures

Copper Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 45.6 30.3 8.9
– Percent of Open Interest Shorts: 26.5 53.7 4.6
– Net Position: 43,867 -53,819 9,952
– Gross Longs: 104,500 69,345 20,508
– Gross Shorts: 60,633 123,164 10,556
– Long to Short Ratio: 1.7 to 1 0.6 to 1 1.9 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 74.0 22.5 88.6
– COT Index Reading (3 Year Range): Bullish Bearish Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -21.6 21.9 -11.2

 


Platinum Futures:

Platinum Futures

Platinum Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 60.8 17.4 14.3
– Percent of Open Interest Shorts: 15.4 74.2 2.8
– Net Position: 30,606 -38,376 7,770
– Gross Longs: 41,017 11,725 9,632
– Gross Shorts: 10,411 50,101 1,862
– Long to Short Ratio: 3.9 to 1 0.2 to 1 5.2 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 53.5 46.2 75.4
– COT Index Reading (3 Year Range): Bullish Bearish Bullish
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: -7.5 8.4 -12.9

 


Palladium Futures:

Palladium Futures

Palladium Futures Statistics SPECULATORS COMMERCIALS SMALL TRADERS
– Percent of Open Interest Longs: 50.5 29.0 15.1
– Percent of Open Interest Shorts: 27.8 59.2 7.4
– Net Position: 2,343 -3,135 792
– Gross Longs: 5,227 3,000 1,562
– Gross Shorts: 2,884 6,135 770
– Long to Short Ratio: 1.8 to 1 0.5 to 1 2.0 to 1
NET POSITION TREND:
– COT Index Score (3 Year Range Pct): 14.0 80.6 91.4
– COT Index Reading (3 Year Range): Bearish-Extreme Bullish-Extreme Bullish-Extreme
NET POSITION MOVEMENT INDEX:
– 6-Week Change in Strength Index: 9.0 -9.8 9.1

 


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The CFTC categorizes trader positions according to commercial hedgers (traders who use futures contracts for hedging as part of the business), non-commercials (large traders who speculate to realize trading profits) and nonreportable traders (usually small traders/speculators).

Find CFTC criteria here: (http://www.cftc.gov/MarketReports/CommitmentsofTraders/ExplanatoryNotes/index.htm).

$100 Silver Ahead

Source: Peter Krauth for Streetwise Reports   03/30/2021 

– Peter Krauth, editor of Silver Stock Investor, discusses the macroeconomic environment for silver and why he is embracing the metal’s volatility.

Being a silver investor over the last few weeks has become more psychologically challenging.

That’s true even for us die-hard silver enthusiasts.

After all silver had a standout 2020, having gained about 47% in its best year since 2010. That easily outpaced gold’s own impressive 25% return.

But the reality is that so far in 2021, silver is down 9%. And meanwhile, nearly all the fundamental market drivers have remained intact. It seems the pressures on silver prices are likely from two angles. The first is after such an impressive 2020, it was due to correct. That’s what bull markets do.

The second pressure point is a rising U.S. dollar index, likely thanks to rising long-term bond yields. However, it’s important to consider that this trend will also run its course and exhaust itself. That could happen naturally, or the Fed could intervene by imposing Yield Curve Control.

But higher yields are a sign of soaring inflation expectations and burgeoning economic activity. And a stronger U.S. dollar, which favors imports over exports, is probably not a favored outcome for central planners.

So patience is the best approach at this point. In my view, the end of this silver correction is nigh.

Embrace Silver Volatility

In a recent report, Bank of America’s commodity analysts indicated they expect to see silver prices averaging $29.28 this year. That’s based on their expectation for a modest supply deficit of 281 Moz. They also point out, “While we expect a rebound in supply this year, output should remain below the peak levels seen a short while back, also because the project pipeline is relatively empty.”

The push for green energy combined with massive infrastructure spending, and stalwart investment demand, should keep a bid under the silver price and help it rise again this year.

Although silver is down 9% in 2021, and has retreated 19% since its August peak near $30, that’s certainly well within historical bull market corrections.

The point is silver corrections come with the territory. Investors need to embrace them, and use them to their advantage.

Between 2002 and 2006, silver dropped 10% or more four separate times.

Then, between 2006 and 2011, more short but sometimes deep corrections came, with silver dropping 13% or more three separate times.

The point is to look at what silver did after those corrections. In nearly every case, it went on to establish new bull market highs.

Now let’s look at what silver has done in multiple currencies.

20 Years of Worldwide Silver Gains

As you can see from the following chart, over the past 21 years silver has produced an average annual return between 8% (Swiss franc) and 16.48% (Chinese yuan). In USD, silver averaged 11.43% per year.

Of course, that came with considerable volatility as well as a number of down years. But the world average is 11.93% gains annually over the last two decades. So the overall trend is undeniably up: we’re in a silver bull market.

Now let’s zoom out for a longer-term perspective.

If we account for inflation, and that’s massively understated “official inflation,” then silver prices peaked at $120 in 1980 and around $57 in 2011. Today’s price near $24 is still well below those levels, suggesting a lot of upside remains ahead.

In fact at $24 today versus the inflation-adjusted $120 in 1980, silver is currently about 80% below that peak. And yet, current economic fundamentals like debt, deficits, spending, interest rates and supply/demand outlook are so much more bullish that the 1980 $120 level is likely to be easily surpassed.

Looking at silver from a technical perspective, in my view we are either at or near a final bottom for this correction.

The $23 and $24 levels acted as support multiple times between late September and mid-December. I think any further weakness is likely to be limited near $23.

If you hold or you’ve been buying silver and/or silver stocks over the past several months, two approaches make the most sense to me right now. Either sit tight if you feel you have sufficient exposure to this sector, or gradually add to some of your positions if you feel they’ve simply gotten too cheap.

Investors should emphasize how to be properly positioned in this market, with balanced exposure to physical silver, silver producers and royalty/streamers, as well as silver developers and even high-octane junior silver explorers.

In the Silver Stock Investor newsletter, I provide my outlook on which silver stocks offer the best prospects as this bull market progresses. I recently added a junior explorer that’s up 40% in just eight weeks despite current weakness, with scores of others ripe for buying now.

It’s time to be a silver contrarian. History has rewarded us repeatedly.

$100 silver is well within reach.

–Peter Krauth

Peter Krauth is a former portfolio adviser and a 20-year veteran of the resource market, with special expertise in precious metals, mining and energy stocks. He is editor of two newsletters to help investors profit from metal market opportunities: Silver Stock Investor, www.silverstockinvestor.com and Gold Resource Investor, www.goldresourceinvestor.com. In those letters Peter writes about what he is buying and selling; he takes no pay from companies for coverage. Peter has contributed numerous articles to Kitco.com, BNN Bloomberg, the Financial Post, Seeking Alpha, Streetwise Reports, Investing.com, TalkMarkets and Barchart, and he holds a Master of Business Administration from McGill University.

Disclosure:
1) 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. Streetwise Reports was not involved in any aspect of the article preparation. 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) 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.
3) 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

With Acquisition, Explorer ‘Consolidates Property as a Major Area Play’

Source: Streetwise Reports   03/29/2021

The transaction and the implications for Troilus Gold are discussed in a Haywood Securities report.

In a March 23 research note, Haywood Securities analyst Pierre Vaillancourt reported that Troilus Gold Corp. (TLG:TSX; CHXMF:OTCQB) agreed to acquire, for CA$19 million in an all-share deal, all of the shares of UrbanGold Minerals Inc. (UGM:TSX.V) that it does not already own. The transaction is expected to close at the end of May 2021.

“The acquisition of UrbanGold complements the existing land position at Troilus and establishes Troilus Gold Corp. as a major area play in the Frôtet-Evans Greenstone Belt in the Chibougamau camp,” Vaillancourt wrote.

Haywood has a CA$4 per share target price on Troilus Gold; it is trading now at about CA$1.03 per share.

Vaillancourt described terms of the agreement. Troilus Gold will issue about 17.2 million Troilus Gold shares to UrbanGold. Its shareholders will receive 0.3 of a Troilus Gold common share for every UrbanGold share, or about CA$0.30 per UrbanGold share. UrbanGold’s management and board, which owns 6.59% of the company’s shares, favor the transaction.

“The exchange ratio represents a premium of 35% based on the 20-day volume-weighted average price of the UrbanGold shares,” Vaillancourt noted.

Dilution to Troilus Gold shareholders is an estimated 11.5%, he added.

Vaillancourt also highlighted how the acquisition benefits Troilus Gold by “adding optionality.” For one, it expands Troilus Gold’s land package in the Frôtet-Evans Greenstone Belt by 33%, or 35.1 hectares, taking the company’s total to 107.3 haectares, the largest amount of mineral claims held in the region by any company.

Some prospective targets have been identified, and minimal drilling has been done on this UrbanGold property, but no resource estimate has been established for it.

Two, Troilus Gold may be able to extend the Southwest zone into this new land area. Thus, it is expected the company will drill there, in the Cressida block, in the future.

Three, “the acquisition also adds blue sky opportunities to the southeast of the Southwest zone, near Troilus Gold’s Testard target,” the analyst indicated.

“We expect the addition of the UrbanGold property will add to the potential of the Southwest zone, ultimately expanding the resource,” Vaillancourt wrote.

Looking forward, he added, once the transaction closes, Troilus Gold will revisit its planned 2021 drill program and potentially revise it to encompass some of its new property.

“For now, plans remain for completion of a prefeasibility study in Q4/21, but the timeline could be extended, depending on drill success,” Vaillancourt pointed out.

Haywood has a Buy rating on Troilus Gold.

Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Troilus Gold and UrbanGold Minerals. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports 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 decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of UrbanGold Minerals, a company mentioned in this article.

Disclosures from Haywood Securities, Troilus Gold Corp, March 23, 2021

Analyst Certification: I, Pierre Vaillancourt, hereby certify that the views expressed in this report (which includes the rating assigned to the issuer’s shares as well as the analytical substance and tone of the report) accurately reflect my/our personal views about the subject securities and the issuer. No part of my/our compensation was, is, or will be directly or indirectly related to the specific recommendations.

Important Disclosures

Of the companies included in the report, the following Important Disclosures:
▪The Analyst(s) preparing this report (or a member of the Analysts’ households) have a financial interest in Troilus Gold (TLG-T).

▪ Haywood Securities, Inc. has reviewed lead projects of Troilus Gold (TLG-T) and a portion of the expenses for this travel have been reimbursed by the issuer.

▪ Haywood Securities, Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for Troilus Gold (TLG-T) in the last 12 months.

▪ Haywood Securities, Inc. or one of its subsidiaries currently provides market making services to Troilus Gold (TLG-T), for which Haywood is compensated by the issuer on a monthly basis.