Archive for Opinions

Silver: the HARD Look

By The Gold Report

Source: Michael Ballanger for Streetwise Reports   12/10/2019

Precious metals expert Michael Ballanger takes a look at the factors behind silver’s recent price decline.

In this week’s commentary, I am going to respond to the rash of end-of-the-world emails and terror-stricken texts that bombarded me after the BLS reported a better-than-expected Non-Farm Payrolls number Friday that sent stocks screaming higher and the precious metals into a nosedive. I must confess that to the extent that the jobs number can be trusted (hint: it can’t), it nevertheless sent the algobots into apoplectic response mode with the worst-hit of the markets residing with my beloved silver.

The CNBC bobbleheads blamed the spike in the U.S. dollar as the culprit but one glance at the chart below disputes that brilliant “theory” without argument. Silver rallied from $14 in July with the dollar index at 96.00 to over $18 with the dollar index over 99.00, so take the “strong dollar” rationale and bung it into the waste bin.

The reaction to the number was sharp and swift and more of a classic response by money managers betting on a repeat of last year’s debacle all sitting with far too many hedges (like gold and silver) and far too few momo stocks. The 337-point vault in the Dow Jones further highlighted just how alpha-starved these poor chaps are, so over the starboard bow went gold and silver and the VIX and tens of thousands of underwater put options, all the result of bearish capitulation. Nevertheless, my long- term picture for silver remains bullishly intact but certainly not yet prepared to resume the assault on $20 that culminated on September 4 as the Millennial Latecomers did their best to replicate the FOMO mentality so prevalent in the crypto stocks in 2017 and the weed deals in 2018. Silver broke out above the 10-year downtrend line back in July and despite the current corrective phase coming down off the US$19.75/oz. late summer peak, the long-term trend is still positive, albeit nerve-wracking beyond words.

Now, the short-term trend is another matter as it looks to me that we are still locked in that pennant formation I wrote about in very early November. In fact, we came very close to breaking below the 50-dma back then but quickly turned and rallied back to the top of the channel just under $18. If by some ungodly act of Divine Intervention, those two big red candles from Wednesday and Friday turn out to be the retest of the bottom of the channel, then $16.30 followed by the 200-dma at $16.23 are “lines-in-the-sand” of technical support. If they BOTH buckle, then September 4 was THE top and it’s bombs away until $15. My prediction calls for a recovery rally from here this week but no major upside until the new year.

As a matter of housekeeping, I was stopped out of the March futures contracts at $16.70 after the jobs report shenanigans took hold, taking a relatively small $0.35/ounce haircut on the “punt” from last weekend. I am holding on to the SLV Jan $16 calls, which are under water but due to their relatively small exposure to the trading account P&L, I will continue to hold on, relying heavily on Haitian chicken bones and Irish cloverleafs for tailwind support.

In reality, the near-term silver market is fighting through an acute bout of indigestion, having swallowed every morsel of food in its path in that May-to-September moonshot from US$14.56 to US$19.75. Now, the term “indigestion” is a loosely crafted excuse for “interference” and “intervention” because the action leading up to the advance last spring was abnormal, as if a large anvil were placed on its shoulders during each and every trading session. It appears that this “abnormality” has returned, which has pressured the gold-to-silver-ratio (GSR) to over 88 last week and in order to have confidence in the entire precious metals family of futures, options, leveraged and unleveraged ETFs, and senior and junior mining shares, I need the miners outperforming the metals (which they are) and silver outperforming gold (which it is not).

The above chart comparing the relative performances of physical silver to the silver miners is significant. Years ago, I learned that the most impactive signal for confirming the strength or weakness in the gold market was the action in gold mining shares. By example, if a short-term upward probe in spot gold to a new reaction high was confirmed by an accompanying new high in the gold miners’ index, the HUI, then it was to be seen as a “confirmation.” In contrast, a new reaction low in spot gold not accompanied by a similar low in the miners was to be seen as a “non-confirmation,” suggesting that the very near-term trend was coming to an end. Now, a short-term downtrend in the spot price accompanied by an UPTREND in the miners was to be seen as a “screaming, pound-the-table BUY.” Look carefully at the chart posted above; the silver miners ETF (SIL:US) is making year-to-date highs while spot silver probes the lower edge of the pennant. While this might be seen as “aberrative behavior” demanding that I consume copious quantities of muscle relaxants and hallucinogens washed down with bourbon, the probabilities favor a simple and quite BULLISH non-confirmation of recent silver price weakness (and no need for medicinal relief).

The conclusion is that silver remains locked within in the downtrend of the current and very bullish pennant formation. The correct set-up from a trading stance is to continue to buy any and all dips BUT if you are attempting to use leverage by way of options or futures or leveraged ETFs (USLV:US), you absolutely MUST use stop-losses (on futures) and leveraged ETFs while buying only options with a six-month fuse (or longer).

Lastly, because I titled this missive with the descriptive “the Hard Look,” let’s really bear down and look deeply into the mirror and ask, “What would force me to change my outlook from bullish to bearish?” Repeating my earlier comments: If we take out US$16.30 (the lower edge of the pennant) and then the 200-dma at US$16.23, and if price cannot reclaim those levels within seventy-two hours, I would take corrective action and reduce exposure. I would also probably launch my quote monitor OUT of the ninth-floor window in the immediate vicinity of anyone vaguely resembling a bullion bank trader (which would include shaved heads, designer spectacles, bulbous noses and liver spots).

While I remain convinced that a global reset is on the 2020 horizon collateralizing debt by re-pricing gold, we all need to view these markets with appropriate degrees of apprehension, objectivity and mistrust. The most dangerous of all creatures is one that is both trapped and wounded and that perfectly describes this insidious global alliance of politician and banker. As investors we take on the role of “matador” while the bull is the politico-financial cartel. A famous quote by Tara Brach best describes the challenge we face day after day in the 2019 version of “managed markets”:

“When he (the bull) finds his querencia (safe place), he gathers his strength and loses his fear. From the matador’s perspective, at this point the bull is truly dangerous, for he has tapped into his power.”

Herein lies the key to survival in not just silver but all markets: the wounds inflicted by outrageous money-printing and debt creation around the world are verging on near- fatal to the current financial system. Knowing that, they will stop at nothing in order to preserve the corrupt integrity of the status quo. As investors, we have to recognize that rules that held true in prior regimes have minimal impact today so our trading strategies must carry capital preservation as the primary objective. Failure to accept this as the reality of the day will invite an inhospitable outcome.

Ergo, trade accordingly.

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

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Disclosure:
1) Statements and opinions expressed are the opinions of Michael Ballanger and not of Streetwise Reports or its officers. Michael Ballanger is wholly responsible for the validity of the statements. Streetwise Reports was not involved in any aspect of the article preparation. Michael Ballanger 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 interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Charts provided by the author.

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.

ArQule Shares Double on Proposed $2.7 Billion Tender Offer from Merck

By The Life Science Report

Source: Streetwise Reports   12/09/2019

ArQule Inc. shares traded more than 100% higher today after the company entered into definitive agreement to be acquired by a Merck subsidiary company for $20 per share. The deal is valued at $2.7 billion and is expected to close in the early part of Q1/20.

This morning, biopharmaceutical company ArQule Inc. (ARQL:NASDAQ), which is engaged in the research and development of therapeutics to treat cancers and rare diseases, and Merck & Co. Inc. (MRK:NYSE) announced that the companies have entered into a definitive agreement under which Merck will acquire ArQule through a subsidiary company for $20 per share in cash for an approximate total equity value of $2.7 billion. Merck believes that the purchase will serve to further diversify its oncology pipeline with expansion into targeted therapies that treat hematological malignancies.

ArQule is focused on kinase inhibitor discovery and development for the treatment of patients with cancer and other diseases. The firm indicated that “its lead investigational candidate, ARQ 531, is a novel, oral Bruton’s tyrosine kinase (BTK) inhibitor currently in a Phase 2 dose expansion study for the treatment of B-cell malignancies.”

Under the terms of the acquisition agreement, Merck will initiate a tender offer through a subsidiary to acquire all outstanding shares of ArQule. The tender offer, which has not yet commenced, will be subject to certain conditions including the tender of shares representing at least a majority of the total number of ArQule’s outstanding shares along with other customary and regulatory requirements. The transaction is expected to close in Q1/20.

ArQule’s CEO Paolo Pucci commented, “We are proud that Merck has recognized the contributions that ArQule, together with its scientific collaborators, has made to the field of precision medicine in oncology with ARQ 531 for the treatment of B-cell malignancies and with the rest of our clinical-stage pipeline…With this agreement, ArQule’s pipeline will benefit from Merck’s vast capabilities and determined engagement to benefit the patients who we have always strived to serve.”

Dr. Roger M. Perlmutter, president of Merck Research Laboratories, remarked, “ArQule’s focus on precision medicine has yielded multiple clinical-stage oral kinase inhibitors that have novel and important properties…This acquisition strengthens Merck’s pipeline with the addition of these strategic assets including, most notably, ARQ 531, a compelling candidate for the treatment of B-cell malignancies.”

In a separate release today, ArQule announced final results from the phase 1 study for ARQ 531 at the American Society of Hematology 2019 Annual Meeting & Expo in Orlando, Fla. The firm explained that “ARQ 531 is an orally bioavailable, potent and reversible dual inhibitor of both wild type and C481S-mutant Bruton’s tyrosine kinase (BTK) in patients with relapsed or refractory hematologic malignancies.”

Dr. Brian Schwartz, the company’s chief medical officer, commented, “The final phase 1 data set confirms the potential utility of ARQ 531 for the treatment of these heavily pretreated CLL patients. We were excited to observe such deep and durable responses at a well-tolerated dose in this highly refractory population…In addition, the three responses we observed in Richter’s Transformation patients were a welcome outcome and allowed several patients to transition to potentially curative therapies.”

Principal investigator of the study, Dr. Jennifer Woyach, associate professor of medicine at The Ohio State University, added, “ARQ 531 was selected and extensively tested preclinically to address the emerging therapeutic needs of patients who have become resistant to covalent BTK inhibitors in a broad set of hematologic malignancies…It is tremendously gratifying to witness the emergence of a potential therapeutic for patients with such a high degree of unmet need, such as C481S-mutant CLL and Richter’s Transformation, and beyond. The data presented in this poster provide compelling proof-of-concept for this novel class of reversible BTK inhibitors.”

ArQule is a biopharmaceutical company headquartered in Burlington, Mass., engaged in the research and development of targeted therapeutics to treat cancers and rare diseases. The company states that its mission is “to discover, develop and commercialize novel small molecule drugs in areas of high unmet need that will dramatically extend and improve the lives of our patients.” The firm’s clinical-stage pipeline consists of four drug candidates, which the company indicates are all in targeted, biomarker-defined patient populations.

Merck is a global healthcare company based in Kenilworth, New Jersey. The firm has market cap of more than $225 billion and has customers and operations in more than 140 countries. The company states that it is committed to bringing new hope to people with cancer and that it is driven to support accessibility to its cancer medicines. The firm focuses on providing vaccines and medicines that treat cancer, cardio-metabolic diseases, emerging animal diseases, Alzheimer’s disease and infectious diseases including HIV and Ebola.

ArQule Inc. started the day with a market capitalization of about $1.2 billion with approximately 120.7 million shares outstanding, and a short interest of around 16.8% . The stock set a new 52-week price this morning of $19.72. ARQL shares opened today at $19.62 (+$9.955, +103.00%) over Friday’s $9.665 closing price. The stock has traded today between $19.58 and $19.72/share and is currently trading at $19.70 (+$10.04, +103.78%).

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Disclosure:
1) Stephen Hytha 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.
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3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

( Companies Mentioned: ARQL:NASDAQ,
)

R.I.P. Paul Volcker, the Last “Good” Central Banker

By Money Metals News Service

The last true enemy of inflation the Federal Reserve has seen died earlier this week.

Paul Volcker

Paul Volcker, former chairman of the Federal Reserve from 1979-1987, has passed away.

Credited with tampering incredibly high levels of inflation during the Carter and Reagan administration by jacking up interest rates to unpleasant levels, Volcker’s passing harkens back to a time when central bankers weren’t afraid to make tough choices.

Volcker instinctively knew that central planning of the economy by tugging on monetary policy levers was not only a tall order, but also wouldn’t ultimately succeed.

In an interview the former chairman said about the Keynesian “religion,” “…I was a bit turned off by the precision and certainty that these people attached to the doctrine. The analytical framework was very convincing but this feeling they had, that they could press the right buttons and manage the economy pretty exactly, for some reason it turned me off.”

Tall Paul (Volcker was reportedly 6’7”) was also the last chairman of the Federal Reserve who maintained plausible political independence, publicly butting heads with President Carter and President Reagan.

Though Volcker was one of the main architects of closing the gold window and once declared that “gold was the enemy,” he nevertheless seemed at least to understand the severe damage that inflation causes.

In an interview with PBS, Volcker said, “inflation is thought of as a cruel, and maybe the cruelest, tax because it hits in a many-sectored way, in an unplanned way, and it hits the people on a fixed income hardest. And there’s quite a lot of evidence, contrary to some earlier thinking, that it hit poorer people more than rich people…”

At a lecture in Singapore in 2008, when asked about a return to fundamentals of the Austrian school of economics as a response to the Great Recession, Volcker acutely answered, “you know, they [Austrian school economists] have some insights that maybe we have forgotten about…The idea of credit creation being important as one symptom of what is going on has certainly been vindicated.”

Volcker continued, “[Financial firms, investment banks, and commercial banks] all built up the balance sheet on the liability and asset side because of a sense of easy credit and no problems. That’s what’s come home to roost because suddenly they haven’t got enough capital to support the credit, which wouldn’t surprise most Austrian economists, I suspect.”

Former Chairman Paul Volcker wasn’t an Austrian economist – or even a strong proponent of sound money, despite including the term in the title of his memoir. But he understood the perils of inflation and the harm wrought by technocratic manipulation of the economy.

Volker’s approach stands in sharp contrast to that of current Fed Chairman Jerome Powell and his ilk. Far from fighting inflation, they are openly engaging in a campaign to push it higher.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Young Company Plans to Bring Mexican Gold Deposit to Market in Two Years

By The Gold Report

Source: Maurice Jackson for Streetwise Reports   12/09/2019

Andrew Bowering, president of Prime Mining, talks with Maurice Jackson of Proven and Probable about his company’s plans to fast track its gold project.

Maurice Jackson: Joining us for conversation is Andrew Bowering, the president, director and CEO of Prime Mining Corp. (PRYM:TSX.V). Glad to have you on the program to share the value proposition before us in Prime Mining, which is an advanced stage exploration company. Focused on delivering high-grade gold at a low cost and set for production in two years. Prime Mining offers a number of virtues to the market. Before we delve into company specifics, Mr. Bowering, please acquaint us with Prime Mining and share the opportunity the company presents to the market.

Andrew Bowering: Prime Mining is a relatively new company that’s come to the market with the plan of bringing a well-established, well-studied gold deposit in western Mexico into production. In the next 24 to 36 months producing a profitable gold mining company. We’re a collection of professional mining executives who have built mines in the past, some capital markets personnel who have funded some pretty significant projects. In addition, we have local Mexican operators who are very familiar with the region and know how to get it done. Collectively, we’re going to build a mine and pay it back to shareholders.

Maurice Jackson: One of the virtues I like in a company are the complementary combination of astute geological and business acumen, which Prime Mining has been successfully demonstrating. Mr. Bowering, take us to Sinaloa State, Mexico, where the company recently acquired its flagship Los Reyes project. Where exactly is the project located and provide us with some historical context on the region?

Andrew Bowering: Los Reyes is in western Mexico, in the southern part of Sinaloa, about three and a half hours north by car, off Mazatlán, a famous beach destination for tourists. It’s in the Sierra Madre Mountains, very famous for gold and silver exploration from the time of the conquistadors all the way up to the current. The region hosts numerous public company-operated mines such as Chesapeake Gold, American Silver and McEwen Mining, along with numerous others in the region. Los Reyes is nestled in the middle of a number of active producing mines; it sits about 30 kilometers away from a 9,500 population town called Cosala. The project itself is about 6,500 hectares with approximately $20 million U.S. in exploration development spent on it since the 1990s. The project itself was initially discovered in the 1600s and had historical production of several hundred thousand ounces of gold and millions of ounces of silver. Probably wasn’t touched again until the late 1980s, early 1990s, when modern exploration took over.

Maurice Jackson: For current and prospective shareholders, can you please answer the multi-million dollar question that Prime Mining presents to the market? That is why Los Reyes?

Andrew Bowering: Los Reyes is a well-established, well-studied asset that was available for us to pick up at a great time in the market. To really answer that, I need to take you back a little bit. I need to tell you where this asset was and how it got to where it is. So in the 1990s, a company called Northern Crown had it and put 493 drill holes into it. Then it took it through PFS pre-feasibility at a $325 gold price as an open-pit heap leach.

In 1999, gold was as low as $250 an ounce; the project got shelved in 2000, Northern Crown went bankrupt. Vista Gold came along and picked up the asset but it was busy with a project called Mt. Todd in Australia. By the time 2011 had rolled around, gold was $1,900 and Vista needed to have a look at this asset then. So they drilled a bunch of holes into it. They studied it, calculated a new resource, ran a PEA on it, engaged Tetra Tech to do the work. Tetra Tech delivered a PEA that suggested they build up a CIL plant, full grind, gravity circuit, tailings compound. Yes, recoveries were high, but it was $150 million cap-ex to build and about a $30-some odd million sustaining cost. During the course of that whole study, about two and a half years, the price of gold dropped by $300 some odd dollars an ounce. Vista was busy shoveling money into Mt. Todd. So they mothballed the project and looked for a way to recoup the $8 million they had put in to do that study.

Along came a company called Corex, cut a deal on the property for payments of a million and a half dollars to own it outright with a 1% NSR. Corex merged with Minera Alamos and there’s three projects in their company. 2017 comes along, they make an initial payment of a $1.5 million on the property. 2018 comes, they don’t have the money to make that second $1.5 million payment. They extend it for six months by a $150,000 cash payment. That’s where Prime Mining enters the picture. In February of 2019, Minera Alamos had a bank balance of about $1.8 million Canadian and $1.5 million U.S. payment due to Vista in 30 days.

We cut the deal with Minera Alamos at that point in time and we got the project. So now we have bought a project for $6 million that has a well-studied 530,000 ounce, high-grade oxide deposit, and we know what to do with it. Our plan is to take all that work that’s been done in the past and move it forward into production in the next couple years. What’s important to note is that Mexico is one of those regions where you don’t have to have a mining plan to get a mining permit. Evidenced by SilverCrest this year where they announced their PEA in May of this year and their mining permit in July. Minera Alamos who announced their mining permit at Santana just three months ago, still has not announced the drill resource. Point is you can get a permit to mine in Mexico within 12 to 14 months.

We know that we’ve got a resource, it well studied. It’s already had a lot of met work done on it; it’s already had a bunch of rock engineering done on it. Consequently, we can short track it to production that meets our operating plan.

Maurice Jackson: This was a wonderful demonstration of the business acumen that I was referring to on the use of optionality here to acquire the project. You alluded to the mineral resource at Los Reyes. When was that conducted?

Andrew Bowering: Well, there’s a few different resources that were calculated. But the most current resource was calculated in 2012–2013 By Tetra Tech. It is 43-101 current, it’s about 530,000-ounces of gold and about 10 million ounces of silver. If you look at the grades of it but keep in mind, this is all oxide, there is no transition zone, no sulfide zone. It’s never been drilled deeper than 180 to 200 meters. It’s a 1.7-gram oxide deposit. In addition, there’s a 500,000-ton starter pit that’s at 3.4 grams. The grade of this deposit is twice the average operating grade of an open-pit heap leach in Mexico and maybe three times the grade of that which you would find in Nevada.

We put together 25 open-pit heap leaches operating in Mexico and the average of them is half this grade. It’s that robust and it’s been calculated on the back of 493 drill holes and considerable surface work. It’s ready to mine and it’s in a place where it’s right to mine.

Maurice Jackson: Mr. Bowering, you have our attention. Open-pit heap leach offer simplicity and the low cap-ex equals a potential for generous profits. But there’s more to the story. What can you share with us regarding exploration potential?

Andrew Bowering: That’s the interesting part about Los Reyes. There are those out there that tell you it can be a 1.5 to 2 million ounce deposit and that we should focus on some exploration rather than development. Okay, fair enough. But your drilling off ounces costs $8 to $12 US an ounce to drill them off historically. So to drill off another half million ounces might cost Prime Mining $5 to $7 million US. I would rather pay for that exploration out of cash flow, so get it operating and then explore it. What I will say is that only seven kilometers of known strike length of 17 kilometers have been drilled. If you just take the percentage of shoots that are mineralized, the average thicknesses, the average width, the average depth, and the length and model that all. That tells you there’s about 1.5 million potential ounces there. There are several surface showings that have never been drilled but grade from three-quarters of a gram all the way up to 15 grams on surface. So a lot of upsides in explorations but simply, we’re going to build a mine first, we’ll get it operating and we’ll use those cash flows to build it bigger later.

Maurice Jackson: Speaking of cash flow, the company has ambitious plans to be in production in two years. How did management determine the timeline?

Andrew Bowering: Well, we’ve looked at several other operations that have a built-in the region and that makes the most sense to us. So we came public September 3, we’ve been working to calculate a new resource and deliver a current resource that we understand. We would like to have that done by the end of this year. Then we will model it around an open-pit heap leach and deliver a PEA to PFS levels by April of next year.

Now when I say deliver that PEA to PFS levels, I mean we’re going to have to contractor bids for every piece of equipment we need to buy. At least two quotations on every process that we plan to employ in the operation of the mine. Once we have that document, we can make a production decision on it. We’re pretty sure that we’re going ahead with this just because of its grade and its size. But once we do, then we have to wait for that mining permit. Now, we started the process of applying for the mining permit this week. That’s about a 12- to 14-month process. When that’s completed, we can start the construction. Construction of an open-pit heap leach like this will take about eight months in the region. The only thing that would slow us down would be the rainy seasons, September and October. If we get caught at a certain part of the build during that time, we could be slowed down by a few weeks. Effectively, that’s about a two-year process then from start until finish. At that point, we would be employing mining operations, crushing, and stacking on our leach pad. Latency and the pad might lead you 60 days to 90 days before you recover gold, which will put you in that 24 to 30-month period. That’s pretty well the timeline for the whole process.

Look, we’re optimistic but there’s a lot going on in this company as we speak. There are four crews on the ground itself, doing surface geology. There is a team of two geologists, one in Vancouver and one in Tucson, Arizona, doing modeling of all the drill hole and all the data we have right now. There is a team in Boise, Idaho, that’s doing the engineering. So I’m talking about the haul road design, the leach pad design, the waste dump design, and the pit design, and then the operating equipment. So there are teams all over working together. I failed to mention there’s a team in Mazatlán that’s working on the environmental and the engineering to get the permitting completed. So in summary, you got to look at the people in this company and understand how we think that we can do this in a short period of time.

Maurice Jackson: We’re going to address that here shortly. I’m intrigued. Can you please provide us with a tour of the conceptual site plan?

Andrew Bowering: So keep in mind that Los Reyes was on track to be an open-pit heap leach back in the late 1990s, when the price of gold and bad market conditions totally derailed it. But it’s a short time to get that done. Now, our plan is not to buy our own rolling stock. There are several contract miners that operate in Mexico. So we’re going to employ contract miners to do the mining and the crushing. We will take that crushed rock, agglomerate it with cement and cyanide. Stack it on our leach pads, operate our own carbon recovery circuit and then we will harvest a pregnant carbon and ship that off out of country for stripping. That’s a common practice down there. McEwen Mining ships carbon out of country to have it recovered, so does Argonaut. We want to do that so that we don’t spend that extra time and extra capital cost and building an ADR plant to recover our own gold. We will look to pay a third-party to strip it or potentially sell it as that offtake.

Maurice Jackson: Now, Mr. Bowering, what type of activity is being conducted currently on-site?

Andrew Bowering: One of the interesting things about Los Reyes is that when they first did all the drilling on it, they looked for adits, where the old miners had gone underground and simply mined. They drilled out from those. So you have these 493 drill holes that pierce the structures between 80 meters and 180 meters below surface. Interestingly though, there was never a coordinated surface trenching program done on the property. Since we’re planning an open-pit, we want to know exactly where all the structures are at surface. Now, all of the structures, at least in the first three deposits that we plan on mining on the property, sit on the dip slope, you can stand on them, they outcrop. But as I mentioned, the drill holes don’t pierce them higher than about 80 meters below surface. That means that the model is out there right now that was 530,000-ounces that we referenced earlier, either has some inferred on the surface or it’s considered waste rock. We are doing a massive 5,000 meters surface trenching program on the property. To fill in all those surface data points of the deposits.

There are four crews on that property. A crew is made up of one geologist, four diggers, and three samplers. There are four crews like that working on that property as we speak. That’s on-site. In addition, on-site, we have a couple of Caterpillar D6s opening up the drill roads and the trails that have gone around the property because no one’s been actively working there at over six years. So we’re cleaning it all up, getting it ready to run new LIDAR surveys and get everything ready to finalize our plans.

Maurice Jackson: Let’s discuss some important topics germane to the project, beginning with reversionary interests. Are there any on the project?

Andrew Bowering: There is an NSR due to Vista Gold of 1% of all production on the property. Then there are some other royalties on claims. Overall, there’s about a 3% royalty on the whole project. That’s very typical as most projects in Mexico have about a 3% royalty. That’s all in our models and doesn’t change any of our economics. Aside from that, the only other thing that’s out there is Vista Gold has a back-in right to a participating 49% in an underground operation. Now, keep in mind that we are planning an open-pit heap leach.

So there’s no ability for Vista to back into that. But if somewhere along the line we said that we want to start an underground operation based on an economic study or an engineering study that we’ve done, they have a 60-day right of first refusal to back in and pay 49% of the cost to enter that. It’s kind of a crazy short-circuit, I’m not even sure the words I want to use for it. It really doesn’t make any sense for them. I guess they thought that at the time that this agreement was written up, that if somebody did find a 5 or 10 million ounce deposit that they would want to be able to back into it. But 60 days doesn’t really give you enough time to determine anything. Quite honestly, if there’s a big underground mine found there, we’d probably be thrilled to have a partner.

Maurice Jackson: We’re going to get into some numbers later in this discussion. But from a capital expenditure standpoint, let’s remind audience members about the existing infrastructure. Why is this paramount to the value proposition?

Andrew Bowering: We’re planning on building up an open-pit heap leach. There are already sort of several roads established on the property. The pits have already been and deposits have already been established. So for us, it’s a relatively simple job. We’ve looked at three or four different models for this property and the plan. But I can tell you that we’re going to keep it simple. I mentioned earlier that we’re going to employ contract miners to mine it for us. We’re going to operate an open-pit at about 4,000 to 4,500 tons a day planned operation. That will be mined, hauled to our central facility on the west of the property. It’ll be two-stage crushed, agglomerated and then stacked on our leach pads. The cost of doing all that’s about a $14 million US build. We’re not buying rolling stock, we’re not buying our own crushers, we’re contracting that out. So effectively, we’re running a simple agglomerater, stacking on our leach pad and then running a simple carbon recovery circuit. Probably, no more than four carbon columns and then shipping carbon off. To have it stripped, Idaho’s one possibility. So no ADR plant, saving another $3 or $4 million in cap-ex there alone.

The operation is simple. There is enough water in the region. There may be two months, current water balance studies indicate that there’s two months of dry season. There’s enough power in the region for all of our operations with the exception of the crushing. We will have to generate power for the crushing. But other than that it’s a relatively simple operation, no milling, no tailings compound and we have a lot of concrete being poured. You’ve effectively got three concrete pads being poured. One for a crusher, one for the contractors to change oil on their vehicles. Then one for your agglomeration region. That’s about it. So relatively a simple easy build.

Maurice Jackson: What is your relationship with the community and are they on board with Prime Mining?

Andrew Bowering: That’s probably one of the greatest things about this whole deal. We’ve got to get into some of the management of this. So our executive chair is a gentleman named Dan Kunz. Dan has a storied career. He was CEO of Ivanhoe Mines, he was CEO of MK Gold. MK Gold was a Morrison-Knudsen spin-out that built Castle Mountain and American Girl in Southern California. But in addition, Dan Kunz was a founding director of Chesapeake Gold. Chesapeake Gold is 90 kilometers away with their Metates Project. A 20 million ounce gold deposit. Dan Kunz has a very good relationship with the locals in this community. Dan was able to get us a meeting with the mayor of Cosala the day after we went public. She got us in touch with the president of the local Ejido. Now, Ejido is the communal group that controls the surface access rights. Much like many parts of the world where you have First Nations that control surface access rights or various landholders, the Ejido is the group in Mexico. Without the Ejido on your side, you’re not building a mine.

Anyway, we were able to, two days after going public, have a meeting with 17 members of the Ejido. They granted us instant access to the surface rights on the property and voted in favor of building a mine. They wanted a small annual payment and they wanted us to fix their roads so they could get in and out of their communities better. And they wanted us to help them with water during the dry period. Very simple, easy propositions and it was looked after. We will be saying more about the Ejido shortly in public disclosure but suffice to say that we have the access agreement with the local Ejido. We have a very good relationship with the mayor of the closest community, Cosala. We have good relations with the governor of the state. We have excellent relations with the federal government. Our legal counsel for this company was number two in the Ministry of Mines federally. So all in all, very good operating status in the region.

Maurice Jackson: Are you fully permitted?

Andrew Bowering: No, we are not fully permitted yet but we are working towards that. We will start the permitting process this month. We have engaged a firm out of Mazatlán to start that process. It’s about a 12 to 14-month process, based on two other companies that we know operating in the region. So we don’t suspect that’s going to be a significant difficulty. It’s a very mining-friendly region. There are several members of the community that really want to work, rather than having to drive 250 or 300 kilometers to work in the mines there. They’re looking forward to an operation here at Los Reyes.

Maurice Jackson: We’ve discussed the good, let’s address the bad. What can go wrong and what is your action plan to mitigate that wrong?

Andrew Bowering: That’s a tough one. This project has got a lot of things going for it. It’s had a lot of money spent on it. We know the resource is there, we know the metallurgy is good on it. It’s had column tests run. We know that recoveries are good. I don’t think there’s anything geologically that sets this company back. Permitting might take a little longer. We’ve seen companies do it in 12 months, we’ve seen companies do it in 14 months. Could we get a little delayed with permitting? Maybe. Other than that, I guess the only difficulties may be in funding. Markets can get tough, it can be hard to finance projects. But our company’s currently funded all the way through the resource we’re going to deliver, the PEA that we will deliver next April or thereabouts. Sometime next year, we’re going to have to raise about $20 million to take this through to production. That’ll be our tallest order raising the $20 million to put into production.

Now, having said that we’ve already talked to a couple of Mexican banks. I just came back from a trip to London; I was with several funds and bankers there. Everybody seems to really like this project. So I don’t see too many difficulties there. I really can’t think of anything that stands out, as being a showstopper here. We’ve been working on this day in, day out for months now. I don’t think anybody in the company would tell you that there’s anything here that stands out as worrisome at this point in time. The one last thing I’ll add to that is that go through our management, have a look at the depth of the people in here. Our COO’s built for mines in Mexico alone.

Maurice Jackson: Well, let’s get into the people right now. We’ve covered the project, let’s cover the virtue that Prime Mining offers to the market equally important, which are the people. Sir, your team has a proven pedigree of success. Let’s discuss the people responsible for increasing shareholder value. Mr. Bowering, please introduce us to your board of directors.

Maurice Jackson: Let’s get into some numbers. Sir, please share the capital structure for Prime Mining.

Andrew Bowering: Prime has about 58.7 million shares out. It has never had a share issued on it I think lower than 20 cents a share. There was a very small financing of about a million and a quarter units at 20 cents. The last financing round before this deal was done at 26.6 cents. We currently financed at 30 cents. We went out to raise six million, we ended up raising $8.7 million brokered through friends and insiders. I’m one of the largest investors in the company. I have $3.5 million of my own money tied up in the company. I do not take a salary from the company nor do I accrue one. I work for my equity position. Aside from me, anybody that did take a salary or deserves a salary, swapped out their first-year salary into equity of the company at 30 cents a share. We are all in this to build something successful and return it back to shareholders. There are a couple other mining engineers that have a couple of percent stake in the company and then there are a couple of funds worldwide that came into our financing.

Aside from that, 58.7 million shares issued in outstanding, there are 22 million warrants or thereabouts exercisable at 50 cents for two years. If those warrants were to come in due to a strong market, that’d be all the money we need to get this thing to the finish line.

Maurice Jackson: How much cash and cash equivalents do you have right now?

Andrew Bowering: Now, we have about just under $4 million in cash right now and are fully funded to deliver that new resource to the investors at the end of the year and the PEA mid-first-half next year.

Maurice Jackson: How much debt do you have?

Andrew Bowering: Right now, there’s $1 million in debt in the company that is a note payable to me. In March of this year when we first put this deal together with Minera Alamos there was that $1.5 million US payment due to Vista. I made that with two other parties. We put up $2 million Canadian to make that payment. On the financing closing August 30 this year, we paid back those two arm’s length investors and I agreed to keep my $1 million loan in the company at the direction of the board for conversion later or payment later when it was in the company’s better interest to do it.

Maurice Jackson: What is your burn rate?

Andrew Bowering: Now, that’s an interesting question because it really varies on what tasks we have going on. We’ve been buying a couple of trucks and little bits and pieces here and there and paying for surveys this. Different parts of the property and engineering services here in there. But I’m going to suggest it’s around $200,000 a month right now.

Maurice Jackson: Who are the major shareholders?

Andrew Bowering: I’m one of the largest shareholders and my family and I control well over 15% of the company. Minera Alamos owns 17% of the company, our board controls about another 10% of the company. A fund out of Australia called Terra Capital owns 4% of the company. Commodity Capital of Luxembourg owns 6% or 7% of the company. Then a bunch of our supporters, our friends, some mining engineers that recognize what we have own 3% or 3% of the company. It’s over 50% owned by our supporters.

Maurice Jackson: That addresses one of my next question, which is what is the float? I know you have a lot of capital invested in the company. But when was the last time you purchased shares and at what price?

Andrew Bowering: The last time I guess I purchased shares was in the financing that closed August 30. I would think one of my family members has purchased stock in the company within the last two or three weeks.

Maurice Jackson: Are there any redundant assets on the books that we should know about?

Andrew Bowering: Yes, there are a couple other assets. There are six or seven grassroots properties in Sinaloa State in Mexico that are in the company. We’re just trying to determine what to do with those now. We have Grupo Mexico looking at one of them and I have to get back to them shortly on a potential disposition cost. They’re looking to see what we would want for it. There’s also we have a 50% ownership in a gold-cobalt prospect in Idaho, that sits next to Jervois Idaho cobalt project. We have to determine what to do with that as well. But I think we will be divesting of it at some point.

Maurice Jackson: Are there any change of control fees? If yes, what is the compensation?

Andrew Bowering: No, there’s none. I’m really opposed to those sorts of things. As I mentioned earlier, I don’t take a wage from the company and I don’t believe in those fancy golden handshakes that really penalize shareholders because management did something successful. I’m just not in favor of them, so there aren’t any.

Maurice Jackson: Quite impressive. Is management charging a consultant fee for any services?

Andrew Bowering: I do not. Dan Kunz does not directly either. Dan Kunz takes no pay. But we do hire two of Dan Kunz’s engineers. I believe that we are saving the shareholder’s money by doing that because I think that they’re making things much easier for us when it comes to hiring the independent engineer to vet our final PEA. I think that the cost savings will be significant.

Maurice Jackson: In closing, multilayered question, what is the next unanswered question for Prime Mining? When can we expect the response and what determines success?

Andrew Bowering: Well, we’re going to deliver a resource to the market sometime in the next 30 days, I believe. The resource that’s out there now at 530,000 ounces of gold and 10 million ounces of silver. That’s a Tetra Tech resource calculated in 2013, re-papered or re-plated in 2018 by Minera Alamos. We need to be satisfied that all that work is correct, that it’s accurate and that it’s right. A whole bunch of new results from the property are coming over the next two months. Then a PEA coming shortly thereafter, that talks about this whole plan as an open-pit heap leach. What it’s going to look like, what the costs of it are going to be, what it looks like it’s going to be able to make, what its operating costs are going to be? It’ll be a very good statement for shareholders and we hope to have that delivered by about April. Then it will be simply waiting for that production announcement decision.

Maurice Jackson: Quite exciting times for Prime Mining, I look forward to the press releases here in the near future. Andrew, what keeps you up at night that we don’t know about?

Andrew Bowering: Just running companies, just running this company. I like to work, Maurice, I’ve worked hard all my life. I’m 60 now, I love doing this and I can’t let it go. So I lie in my bed and I think about what about this, what about that? What it’s going to look like when this data comes in? The success of this company is what keeps me up at night.

Maurice Jackson: Well, I can vouch for that, you and I’ve been corresponding here in the last month. We’re talking in all hours of the night, no matter where you are geographically. You’re on the task and you’re trying to increase shareholder value. I can vouch for that. We’ve had some discussions offline here. Mr. Bowering, last question. That is what did I forget to ask?

Andrew Bowering: That’s a good question, Maurice. You asked me about what keeps my mind up at night. Well, I can continue in that, I can think of things all the time. But you know what? I think you’ve done a really good job picking the main points of this thing and getting out of me what needs to get out. There’s really nothing else we need to go over right now. I am required to give you my answers sort of in the context of 43-101. But what I would like to do at a future date is I’d like to actually get into how that mining plan looks and talk about seven-year mine life and up. How many ounces of annual production and things like that as our relationship grows a little more.

Maurice Jackson: Well, we look forward to having you share that with our subscribers here. Mr. Bowering, for someone listening that wants to get more information about Prime Mining, please share the website address.

Andrew Bowering: Our website is www.primeminingcorp.ca.

Maurice Jackson: For direct inquiries, contact Jeremy Ross at 604-428-6128 or you may email [email protected]. Prime Mining trades on the TSX.V, symbol PRYM.

Before you make your next bullion purchase make sure you call me. I’m a licensed representative for Miles Franklin Precious Metals Investments. We provide a number of options to expand your precious metals portfolio. From physical delivery, offshore depositories, precious metal IRAs and private blockchain distributed ledger technology. Call me directly at 855-505-1900 or you may email [email protected]. Finally, please subscribe to www.provenandprobable.com for mining insights and bullion sales.

Andrew Bowering of Prime Mining, thank you for joining us today on Proven and Probable.

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

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Gold ETF Holdings Surge… But Do They Actually Hold Gold?

By Money Metals News Service

Gold-linked exchange-traded products are growing in popularity with investors. Assets held by gold ETFs have grown 38% globally in 2019.

In October, according to the World Gold Council, gold ETFs attracted $1.9 billion in net inflows to reach a new record high total gold holding of 2,900 tonnes – at least on paper.

There is good reason to be skeptical of whether all these “gold” vehicles actually hold physical metal sufficient to back their market capitalizations on a 1:1 basis. Some of them very well might; others almost certainly don’t.

In fact, many of these gold instruments hold futures contracts and other financial derivative products that merely “track” the gold price.

The biggest of them all – SPDR Gold Shares (NYSE:GLD) – purports to have 100% backing of its $42 billion market capitalization in physical bullion. But it’s practically impossible to achieve around the clock since the fund’s assets are a moving target.

As an open-ended fund, GLD doesn’t hold a fixed quantity of gold. A close inspection of its prospectus reveals that it relies on layers of financial intermediaries to create shares and manage its gold inflows and outflows.

Counterparty Risk

That creates a tremendous amount of counterparty risk, including the risk that some of the gold claimed in vaults by GLD may be rehypothecated, or simultaneously owned by another party. Rehypothication is defined by Investopedia as “the practice by banks and brokers of using, for their own purposes, assets that have been posted as collateral by their clients.”

According to Chris Powell of the Gold Anti-Trust Action Committee, “The custodian of the vault holding GLD’s gold is the investment bank HSBC, perhaps the biggest short in the gold market… the bank is the beneficiary of a new New York Commodities Exchange rule apparently allowing the bank to inject more ‘paper gold’ into the futures market.”

Banking and gold don’t go well together – not for gold investors, anyway. The whole point of owning a hard asset is to have wealth outside of the financial system!

Chris Powell continues, “GLD itself facilitates the shorting of real metal through the borrowing and conversion to metal of its shares and the sale or lease of that metal by enormously well-funded brokers executing central bank market-rigging policy.”

It’s clear that a great bulk of GLD owners aren’t paying particularly close attention to what they’re investing in. If they were, why they would prefer GLD (which levies annual expenses of 0.40%) over lower-cost rivals that do the same thing?

Why would they prefer GLD over more secure closed-end funds that hold a fixed amount of metal? Why would they prefer cash-out-only GLD over instruments that allow for physical redemption above certain quantities?

The only reason seems to be that GLD is always presented as the Wall Street stand-in for gold on CNBC and in mainstream financial publications.

Are Rising ETF Inflows a Bullish Signal for Gold?

Despite all of the foregoing drawbacks to precious metals ETFs, their rise isn’t necessarily a bad sign for the physical market. More people are wanting exposure to gold and silver. That’s good news for bulls.

It’s easier for billionaires and institutional investors such as hedge funds to move millions of dollars into gold via an ETF rather than through the purchase of gold coins. Some “smart money” may be moving into gold via this route.

Owning gold indirectly through financial instruments obviously isn’t the smartest strategy for obtaining true diversification out of financial assets. But people who have made fortunes in financial markets tend to perceive it as the only game in town.

Declined Trust

And that’s the way Wall Street brokers and analysts tend to pitch precious metals investing to the public. If it doesn’t trade like a stock, it doesn’t even register.

That so much demand is being diverted into Wall Street products instead of bullion products has certainly suppressed buying of bullion to some extent. That, in turn, may be working to keep a lid on spot prices as well.

The opportunity is that tens of billions of dollars parked in gold and silver derivatives meant to represent precious metals may create something of a force majeure on one or more of the bullion banks – or the futures market itself. If one link in the system fails or is exposed as fraudulent, then confidence could collapse in all forms of paper gold.

Paper/IOU gold may be “convenient” but it is inherently untrustworthy as compared to the real thing. When fear grips markets, convenience considerations go out the window, and wealth preservation becomes paramount.

When the next financial crisis comes, physical gold can be expected to trump paper gold.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Lumber is about to rally and how to play it with this ETF

By TheTechnicalTraders.com

WOOD, one of the Ishares ETF symbols related to the Real Estate and Construction sectors may become the next hottest instrument for skilled technical traders.  Over the past three years, Wood has rallied over 110% between a $40 to $84 range and the trading volume of WOOD has been relatively consistent near an average of about 140k shares per week.  Let’s dig into the opportunities that may present themselves over the next 6 to 12+ months in WOOD.

First, you can get more information about this iShares ETF here.

Second, the WOOD ETF is relatively closely correlated to the US Real Estate and Construction sectors. Thus, when economic data is announced that supports growing Real Estate and Construction activity, traders can easily translate that into forward expectations in price in the WOOD ETF.  For the purposed of this article, we’ll stick with a simple example of New Private Housing Unit Building Permits data from the St. Louis Federal Reserve.

Before you continue, take a couple of seconds and join our free trend signals email list.

New Housing Building Permits

As you can see from the chart below, since the bottom of the housing market crisis in 2009, an extended bottom to place between 2009 and 2011.  Early in 2012, the housing market began to uptick with an increase in housing permits.

This increase continued until a peak in 2015 rattled the markets (right before the 2016 Elections).  The post-2016 recovery and rotation in housing permits are very clear to see through the end of 2018 and we can see an uptick in new building permits in 2019 as the US Federal Reserve change focus fairly early in 2019 to reduce the Fed Funds Rate and ease economic concerns globally.

This uptick in the housing permit data presents a fairly clear picture that builders are expecting a moderate increase in activity over the next 12+ months related to new home sales, inventory, and activity.  How can you learn to profit from these trends?

WOOD Weekly Price Chart

This Weekly WOOD chart highlights the trends that correlate to the housing permit chart above.  Notice how the growth from 2013 to 2015 was more moderate compared to the growth between 2017 and 2018?  This reflects the investor sentiment related to real economic activity and expectations.

In the 2014/2015 period, housing prices were still recovering well, yet the US Fed was also starting to raise interest rates from extreme lows and the US was headed into a very contentious election cycle.

You can see how WOOD contracted in 2016 as rates crept higher and the US election took hold of the markets – causing uncertainty and fear in the consumer market.  This fear translated to a slowdown of activity and expectations in the housing market that reflected a price decline in WOOD in 2016.

The rally, after the November 2016 US presidential elections, clearly illustrates that investors and consumers believed the new US President would usher in an economic boom cycle – no matter what the US Fed did (for the most part).

Currently, WOOD has retraced from $84 to levels near $54.  The current uptick in housing permits suggests builders and construction are ramping up expecting a bump in housing activity over the next 12+ months.  It could be that builders are expecting the US Fed to continue easing or a more positive business/political climate for consumers and wages.  Either way, the uptick in building permits suggests forward expectations are positive at this time.  If WOOD breaks above the $67/68 level, a new price rally may continue towards the $76 level.

Daily WOOD Price Target Chart

One of our favorite measures of price activity is the “100% Fibonacci Measured Move”.  This Fibonacci price theory suggests that price typically legs higher or lower in 100% (or near 100%) legs/moves.  By taking a look at a previous price advance/leg, we measure that move and apply that range to a recent pullback to determine where the next 100% Measured Move may target.

In this case, the $76.40 level becomes the new 100% Fibonacci Measure Move target if the upside breakout happens as we expect.  This represents a 15%+ upside price move potential for skilled technical traders.

If wood starts to collapse in price, it could be the start of the next real estate crash we explain here.

We’ve been warning our followers and members that 2019 and 2020 are going to be excellent environments for technical traders.  Price rotation, trends and volatility should continue throughout the next 12+ months and well past the 2020 US elections.

Following wood/lumber may be new to you and that’s great because its another angle to profit from an asset class, not many traders talk about. We will also go into more detail in a future article on how we use the wood to gold ratio to help predict stock market direction. This may sound strange but, but this ratio plays a powerful roll in knowing when the big and smart money is rotating into the risk on/off asset classes.

In fact, both WOOD and Gold have bullish price patterns and one of them will fail, the question is which one? A couple of days ago we posted our analysis about what is happening in gold right now.

In short, rotations in ETFs, such as this potential move in WOOD, will continue to set up and rotate throughout the 2020 election event and beyond we’ll keep you informed as this plays out with Wealth Building & Global Financial Reset Newsletter. Join us with the 1 or 2-year subscription to lock in the lowest rate possible and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own during the next financial crisis. Get a Free 1oz Silver Round or Gold Bar Shipped To You as a Bonus!

As a technical analysis and trader since 1997, I have been through a few bull/bear market cycles. I believe I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

Chris Vermeulen
Founder of Technical Traders Ltd.

TheTechnicalTraders.com

Cassava Sciences’ Shares Trade Up 20% on Updated Phase 2a Alzheimer’s Data

By The Life Science Report

Source: Streetwise Reports   12/06/2019

Shares of Cassava Sciences traded 20% higher after the firm presented additional data from the Phase 2a study of its investigational drug candidate PTI-125 for Alzheimer’s disease to the Clinical Trials on Alzheimer’s Disease conference in San Diego, Calif.

Neurodegenerative disease focused clinical-stage biopharmaceutical company Cassava Sciences Inc. (SAVA:NASDAQ), today announced additional positive clinical data from a Phase 2a study of PTI-125, its investigational Alzheimer’s disease drug candidate. The company’s scientists presented the new data during an oral presentation today at the International Conference on Clinical Trials on Alzheimer’s Disease (CTAD), in San Diego, Calif.

The late-breaking oral presentation by Cassava’s Lindsay H. Burns, PhD, Vice President of Neuroscience to the CTAD conference was titled, “One-Month Oral Treatment With PTI-125, A New Drug Candidate, Reduces CSF and Plasma Biomarkers of Alzheimer’s Disease.” The company stated that it expects to publish a manuscript of the new clinical data in a peer-reviewed medical journal. Cassava outlined the results and noted that the new data show clinical evidence of PTI-125’s mechanism of action and drug-target engagement.

The company’s President & CEO Remi Barbier commented, “Today’s data milestone is exciting because it provides additional support for the clinical benefits of slowing down both neurodegeneration and neuroinflammation in patients with Alzheimer’s…We’re eager to gain more insight on the effects of PTI-125 in Alzheimer’s after we conclude, in 2020, an on-going Phase 2b study.”

The company indicated in the release that “PTI-125 targets both neurodegeneration and inflammatory components of Alzheimer’s disease, and as previously reported in a Phase 2a study funded by the National Institutes of Health, open-label treatment with PTI-125 significantly improved key CSF biomarkers of Alzheimer’s pathology, neuroinflammation and neurodegeneration.” Cassava advised that it is now evaluating PTI-125 in a confirmatory Phase 2b randomized study of approximately 60 patients with mild-to-moderate Alzheimer’s disease and that Top-line results from this study are expected in 2020.

The company explains in the report that “the target of PTI-125 is an altered form of filamin A (FLNA), a scaffolding protein….Cassava’s lead drug candidate, PTI-125, is a small molecule that restores the normal shape and function of FLNA in the brain. This action improves the function of certain receptors in the brain, which slows neurodegeneration and exerts powerful anti-neuroinflammatory effects.”

Cassava Sciences further advised that it is also developing an investigational diagnostic program called PTI-125Dx to detect Alzheimer’s disease with a simple blood test.

According to the company, “Alzheimer’s disease is a progressive brain disorder that destroys memory and thinking skills. Currently, there are no drug therapies to halt Alzheimer’s disease, much less reverse its course. In the U.S. alone, approximately 5.8 million people are currently living with Alzheimer’s disease, and approximately 487,000 people age 65 or older will develop Alzheimer’s in 2019.”

Cassava Sciences Inc., formerly Pain Therapeutics Inc., is a clinical-stage biopharmaceutical company based in Austin, Tex. The company states that its mission is to detect and treat neurodegenerative diseases, such as Alzheimer’s disease. The firm indicates that “it has combined state-of-the-art technology with new insights in neurobiology to develop novel solutions for Alzheimer’s disease, and owns worldwide development and commercial rights to its research programs in Alzheimer’s disease, and related technology, without royalty obligations to any third-party.”

Cassava Sciences began the day with a market capitalization of $31.0 million with approximately 17.22 million shares outstanding and a short interest of around 9.9%. SAVA shares opened more than 20% higher today at $2.17 (+$0.37, +20.56%) over Thursday’s $1.80 closing price, and later this morning set a new 52-week intraday high price $2.55. Since the open, the stock has traded between $2.03 to $2.55 per share on very high relative volume and is currently trading at $2.12 (+$0.32, +17.78%).

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Congress Still Covering for the Fed’s Bailouts

By Money Metals News Service

Wall Street owns Washington DC – figuratively speaking. In literal terms, the largest banks in the nation own the Federal Reserve. They also bought and paid for a great number of DC politicians as evidenced by campaign contributions, Congressional voting records and sham oversight.

Bailout

This was on full display at last week’s Committee on Financial Services hearing. “The Honorable Randal Quarles,” Vice Chairman of Supervision at the Fed, was among three people called to report for purposes of “oversight.” A memo outlining the topics of discussion was published by the committee.

The discussion ranged from a proposed rule change which would allow individuals with “certain minor criminal offenses” to get a job at a bank to foster “Diversity in Banking.” Virtue signaling Congresspeople would arbitrarily like to see more women and minorities running banks.

They should worry more about the overrepresentation of sociopaths in boardrooms and executive suites. Among other things, they should ask the “Honorable” Mr. Quarles exactly why the Fed is once again shoveling hundreds of billions of dollars into banks via the repo market. This latest swindle isn’t anywhere on the committee’s agenda.

Committee members should be embarrassed, but we doubt they are. The financial press isn’t really covering the story, and most Americans don’t mind.

Americans are left to guess about the purpose of the program. Fed officials were lying when they characterized the program as very temporary and designed to address a routine cash crunch at the end of the third quarter.

Congress isn’t asking any hard questions, even though “who is borrowing all this cash?” and “why?” are the biggest mysteries in the financial markets right now.

The repo market giveaway smells an awful lot like another bailout. The repo market froze up when banks started smelling trouble and rates for overnight, collateralized loans spiked north of 10%.

Many speculate that a major bank was on the verge of collapse – perhaps the long-struggling Deutsche Bank or HSBC.

Of course, it is possible that there is no crisis. The hundreds of billions might be just be simple charity for the nation’s wealthiest institutions. Perhaps the Fed is printing and lending money at less than 2% to bankers who want it to speculate, pay bonuses, and/or lend it forward at much higher rates.

It sure would be nice to know. Next time the Committee meets for oversight we suggest some tougher questions, such as:

  • The original characterization of the Fed’s intervention in repo markets was clearly a fabrication. Can you explain the program’s real purpose?
  • Is it appropriate for the Fed to print hundreds of billions and lend it to unspecified banks at far below market rates, and do it under false pretenses?
  • Is the Fed propping up one or more banks that would otherwise be in default? If so, please explain why “Too big to fail” remains the policy at the Fed and how well that policy is working out for Americans at large.
  • Is the Fed bailing out an international bank? Please lay out how it serves Americans’ interest to send hundreds of billions of dollars to foreign companies.
  • The Federal Reserve Bank is not a federal agency. It is a quasi-private organization, and its shareholders are the largest banks on Wall Street. Does that have anything to do with why the answer to every problem in the financial markets seems to be “print money and hand it to the banks”?
  • And, is it appropriate for an organization which is wholly owned by banks to be the primary regulator of the banks?

While it would be wonderful if a principled Congressperson asked these sorts of questions, we aren’t holding our breath.

The last time the Fed performed an overt bailout for bankers in 2008, Congress went along even though it was terribly unpopular. This is probably why Fed officials are lying and why Congress isn’t challenging them for it.

 


The Money Metals News Service provides market news and crisp commentary for investors following the precious metals markets.

Trader predicts Assets direction with this forward-looking indicator

By TheTechnicalTraders.com

Great traders are often the result of dedication to principle, theory, price study, and a solid understanding of Intermarket market dynamics.  The one thing that can’t be taught, though, is experience behind the screens and with the markets.

The longer a trader spends working with the charts, trading the markets and studying the trends/indicators, the more knowledge, experience, and capability that trader has in being able to see and predict future price moves.

We believe it is the same way with other professions in life – a professional race car driver, a professional pilot or ship captain.  Any profession where an individual is “at the helm” of some vehicle, instrument or live-action event, that individual will, over time, hone his/her skills to be able to foresee and manage certain aspects of the live operation better than someone without the experience.

One might want to call this a “sixth-sense”, but we believe it is simply applied knowledge and experience.  These individuals see and feel things that others simply miss or brush off as unimportant.

Trading is the same way and traders will become better and more skilled by following the charts very closely and watching how price reacts to geopolitical and regional economic events.

One of our primary price modeling tools is what we call the V10.  It has gone through a number of revisions over the years and is capable of running on almost any chart, in any time-frame.

What we learn from using this tool is when and how price rotates, confirms trend changes, sets up new triggers and more.  It also helps us to identify price cycles, when we should add-to positions, trim profits or expect a new market rally or correction.

Before you continue, take a second and join my free trend trade signals email list.

V10 Trend Trading Strategy – Average Trade 45 Days

As we expand the use of the V10 price modeling system into other markets, you’ll see how changes in price trends can assist us in seeing into the future and preparing for price rotation that others may miss completely.

Natural Gas V10 Chart Analysis

This NG chart highlights a number of price trend rotations (from RED to ORANGE to GREEN, or from GREEN to ORANGE to RED).  Each time the color leaves a primary trend color (GREEN OR RED) we have an early warning signal that price rotation is setting up.

You can see the initial uptrend in late August we set up by a RED to ORANGE trend change.  The same thing happened in late October.  Now, a GREEN to ORANGE trend change setup near mid-November warning us that NG was going to move lower in the future.

These types of setups appear in all types of charts, asset classes, and time-frames and soon we will make different versions available so we have long term investing, trend trading, swing trading, and momentum trader signals.

The Power of Cycles Within Price Action

When attempting to interpret price modeling systems or indicators with cycle analysis utilities, it is important to understand that cycles don’t drive price moves.  Price moves drive cycle rotations.  Knowing when price cycles are topping or bottoming can assist traders in understanding where and when new trade setups are viable and when to trim profits off existing trades.

If we know when the most active and relevant cycle is trending, topping or bottoming and the expected cycle length for a potential price trend, then we can make a more informed determination about the viability of the trade setup and risk factors.

We are also able to use the price modeling systems and cycle modeling systems to better understand how far price may move, when we may begin to see price weakness in the trend and other important factors to help us manage our trade properly and reduce risks.  This is where things get really interesting and exciting.

Example SP500 Predicted Price Move

How I Predict Future Price Movement

This last chart shows you the price of Natural Gas futures.  We have overlaid our proprietary Cycle Modeling tool onto it so you can clearly see how the price has moved in alignment with the cycles.  Follow the LIGHT BLUE cycle line on the chart and try to understand that the range/height of the cycle lines does not correlate to price levels.  They represent the “intensity” of the cycle peak or trough.

A higher peak on the cycle line suggests this upside cycle peak has a higher intensity/probability than a lower cycle peak.  We gauge these rotations as a measure of intensity or amplitude.  Lower cycle troughs suggest a price bottom may have more intensity/amplitude in price than a moderately higher cycle trough.

Follow the three-cycle lows starting near early October on this chart.  Each of them resulted in deeper Cycle troughs on our Cycle modeling tool.  Yet, the real price reaction was to set up a small inverted Head-n-Shoulders bottom pattern.  The last cycle trough low didn’t result in a deeper price level, but it did result in the completion of the bottom pattern that prompted an immediate upside price rally – more intensity.

We’ve also highlighted some of our most recent trades related to our analysis using the V10 and our Cycle modeling tool.  +35% over the past 4 months on three successful trades – we’re pretty happy about that.

Also, keep in mind that we are not showing you what the cycle modeling tool or the V10 is predicting for the future.  We reserve that for our valued subscribers/members.  We know where the cycle and other predictive modeling systems are telling us the price will go, but we can’t share it with you (yet).

Concluding Thoughts:

Since 2001, our focus has been on learning and mastering the tools we have developed and use as well as the Cycle Modeling tools so that we can follow the markets more closely, learn to provide better opportunities and attempt to identify the highest probability trades for our members.

What we never expected was that our efforts to study, learn and apply these tools would provide us with that “sixth-sense” ability to attempt to see into the future and to attempt to predict 10 to 20+ days into the future.

Our modeling tools share opportunities with us all over the markets and across multiple instruments and time-frames.  We recently posted our gold and gold miners price/cycle forecast here. We focus on Daily and 30-minute intervals for our members, but we see these opportunities across all levels intervals – from 1 minute all the way to monthly/quarterly.

The one thing we are certain of is that our members continually write to us about how important it is to them to have us explain the setups, trends, cycles and future market implications to them in our daily market videos.  They don’t have to try to learn to do this type of cycle research on their own, we give them the details every morning before the markets open and any trade signal we have for SP500, gold, oil, nat gas, bonds, and more.

Visit my website at TheTechnicalTraders.com

Chris Vermeulen
Found of Technical Traders Ltd.

 

 

Junior Explorer Moves Forward in ‘Prime Gold Real Estate’

By The Gold Report

Source: Jay Taylor for Streetwise Reports   12/05/2019

Jay Taylor of J. Taylor’s Gold, Energy & Tech Stocks examines the prospects of a company working in the exploration and development of Larder gold deposits along the Cadillac-Larder Lake Fault in Ontario.

Gatling Exploration Inc. (GTR:TSX.V; GATGF:OTCQX)

Trades Toronto: GTR
US OTC: GATGF
Shares Outstanding: 47.5 million
Price 10/25/19: US$0.356; 12/5/19 US$0.32
Market Cap: ~US$17 million
Cash: ~$4 million
Gold Resource (All NI-43-101 Categories): 960,800 ounces (The current gold resource calculation is broken down in the following chart)
Progress Rating: A3
Phone: 604-678-5308
Web: Gatlingexploration.com

Mining, like any business, is all about people. For success in the junior exploration business, you obviously need to start with good, competent exploration geologists. Gatling Exploration is strong in that regard, with Dale Ginn leading that task. He and Nav Dhaliwal (the President and CEO) have proven their ability to succeed in the exploration business with a huge amount of success at Bonterra. But few stories covered in this letter have been as disappointing tome as Bonterra. The downturn came after a monetary infusion brought in a merger and management company that not only killed the upside that was to be had thanks to the successful exploration efforts of Ginn and his team, but after a merger with Metanor, the stock dropped like a rock.

But there is good news! The Larder Project located on the Ontario/Quebec border and owned by Bonterra was spun off to shareholders into what is now Gatling Exploration. And the successful Dhaliwal/Ginn team left Bonterra to head up this very promising project located along the prolific Cadillac-Larder Lake Fault in Ontario. By the looks of things, Ginn and Dhaliwal have picked up where they left off with the same kind of success on the Gladiator Gold Discovery as when they were at Bonterra.

As you can see from the map above, the company’s Larder Project is located along the Cadillac-Larder fault zone in prime gold real estate. Along that fault zone, lies the 24-million-ounce Kirkland Lake mine to the west. And just a few kilometers to the east of the Larder mine is the 10.5-million-ounce Kerr Addison gold mine. In fact the gold mineralization on the Larder Project is exactly identical to the Kerr Addison Mine.

By no means is this a new discovery. What management is very sure about is that these various zones that were drilled by different companies in the past are all continuously gold mineralized. Having locked up the area noted above that makes up the Larder Project means that Gatling is free to fill in these gaps. A very important fact is that some 31,000 meters of drilling was carried out in the past by such well-known senior mining firms as Teck and Goldfields. None of that data has been factored into the resource of nearly 1 million ounces, nor have the significant meters of drilling this year been factored into the resource. With success, management has expanded an earlier 10,000-meter drill program this year into a 20,000-meter program and then lastly 35,000 meters of drilling to be completed by year end.

In speaking with Dale Ginn, I’m told that mining widths are very good with a minimum of about 3 meters but can swell out to 40 or more meters. Mineralization is structurally controlled and according to Dale it is relatively easy to identify those structures for drilling. The have been hitting their targets on a high percentage basis. Generally, the narrower widths are of higher grade but with widths like these it would seem mining dilution should be quite low. I’m told the metallurgy is simple and non-refractory and that the two kinds of mineralization at the Kerr Addison Mine (an ultramafic and an altered basalt) are identical on the Fernland, Cheminis, and Bear deposits. The company has two drill rigs working on the Larder Project now with most of the attention currently on the Bear. There has been a considerable amount of underground exploration on the Cheminis, where mineralization starts on surface but the underground workings were used mostly for exploration rather than production. As you can see from the illustration above, the Bear mineralization starts below surface. It is my understanding that the Fernland is a relatively new discovery with mineralization identified right on surface. What is important to keep in mind is that these gold deposits located in the Greenstone Belts of Quebec and Ontario generally run to very considerable depths. The Kerr Addison, for example, ran to a depth of over 1,000 meters. So the bottom line for me here is that the Larder Project has the potential to host many millions of ounces of gold. For obvious cost-related reasons, the attention near term will be along strike more than at depth. Also keep in mind that this is a brownfield project with several hungry mills in the immediate area. Therefore, to my way of thinking, the level of speculative risk for these shares is a lot lower than for many other companies in the junior resource space.

The Kir Vit Target

In April of this year, Gatling announced that it expanded its land position by picking up1,274 hectares known as the Kir Vit Claim Package, which is the area within the redlines shown on this map. (The initial Larder claims are within the yellow boundaries.)With this acquisition, the Larder Project as a whole covers a contiguous land position of 3,370 hectares.

The new property hosts several near-surface drill-ready target areas that trend onto proven zones such as Agnico Eagle’s Upper Beaver deposit that has an indicated mineral resource of 1,461,000 ounces gold at 6.62 grams per tonne Au with 56,006,000 pounds copper at 0.37 per cent Cu (6.87 million tonnes) and an inferred resource of712,000 oz Au at 4.85 g/t Au with 32,218,000 lb. Cu at 0.32 per cent Cu (4.57 million t).

The addition of the Kir Vit property opens up new exploration opportunities within intrusion related gold targets and Timiskaming sediments—geology that is consistent with hosting gold mineralization similar to the Larder gold project and elsewhere in the region. Also along with the acquisition came Teck’s database of recent exploration activities on the property, including geophysics and surface sampling. That data will be reviewed and compiled for future targeting.

Near surface gold mineralization has been identified with surface sampling completed at new property has returned gold values up to 7.9 g/t Au. Management has identified multiple new drill targets. The acquisition opens new exploration potential in intrusion related gold targets, along trend of the Upper Beaver deposit and geophysics has identified additional potential targets. A 3-D induced polarization survey was completed by Teck in 2017 on the property that identifies a number of targets.

While this project is early exploration and thus early drilling will be much riskier than drilling between known gold-bearing structures between the Bear, Cheminis, and Fernland deposits, a read of management’s August 27 press release discussing exploration plans paints a very exciting picture of the potential for Kir Vit, as the following highlights of early exploration work reveal.

  • High-grade gold at surface: Gatling’s 2019 surface exploration program has been primarily focused on the Kir Vit zone. The program has collected samples from historical trenches, pits and multiple exposed outcrops. High grade gold has been recovered along the altered volcanic contact with both the syenite intrusion and conglomerate units. Sample values include 7.0 grams per tonne gold and 6.7 g/t Au.
  • Geological understanding of the Kir Vit: The historical work completed on the property was reportedly well documented and aided in Gatling’s 2019 surface program. From this comprehensive work completed thus far, Gatling has been able to establish that both intrusive-style mineralization and Timiskaming conglomerate mineralization are present at the Kir Vit zone. Proximal to both mineralized trends are altered mafic volcanic rocks that also show indication of late-stage mineralization as well as hydrothermal alteration.
  • Large hydrothermal footprint: Multiple alteration assemblages have been identified in the field indicating a large hydrothermal footprint. Alteration encountered thus far includes sericite, albite, epidote, silica, hematite and carbonate.
  • Proximity to existing resources: The Kir Vit zone has displayed multiple similarities to nearby deposits including the porphyry-style mineralization at Agnico Eagle’s Upper Beaver deposit. The current exploration target is approximately 10 kilometers southeast of Agnico Eagle’s Upper Beaver deposit, which has an indicated mineral resource of 1,461,000 ounces of gold at 6.62 grams per tonne Au with 56,006,000 pounds copper at 0.37 per cent Cu (6.87 million tonnes) and an inferred resource of 712,000 ounces Au at 4.85 g/t Au with 32,218,000 pounds of Cu at 0.32 per cent Cu (4.57 million t).

The drilling program is now under way. Gatling is using all of the collected data to help with planning of the current 3,500-meter drill program at what is named the Kir Vit Zone. Initial drilling has exposed heavily altered syenites, altered volcanics, quartz-carbonate breccia patches and multiple lenses of conglomerate. Gatling will provide assay results as they come in, which is expected in a couple of months. Of course we will report in this letter and, as with all news releases for companies we cover, you can find those releases as they are published at www.Miningstocks.com.

Management

Nav Dhaliwal, President and CEO: Mr. Dhaliwal is an experienced executive, leader and team builder. He was the founder and CEO of Bonterra Resources and has a track record of success in the mining sector. Mr. Dhaliwal is particularly adept at nurturing early stage companies through their critical phases of evolution. He also brings valuable business relationships with international analysts, brokers and investment bankers throughout Canada, the United States, Europe and Asia.

Dale Ginn, COO: Dale Ginn Executive Chairman and Director Mr. Ginn is an experienced mining executive and geologist of nearly 30 years. He is the founder of a number of exploration and mining companies and has led and participated in numerous gold and base metal discoveries, many of which are in production today. Mr. Ginn has led or was part of the discovery teams for the Gladiator, Hinge, 007, 777, Trout Lake, and Tartan Lake deposits and received the Quebec Discovery of the Year Golden Hammer award in 2018 for the Gladiator deposit. His experience has included both senior and junior companies such as Goldcorp, Harmony Gold, Hudbay, Westmin, San Gold, Bonterra, Gatling Exploration and others. While specializing in complex, structurally controlled gold deposits, he also has extensive mine operations, development and startup experience.

Nathan Tribble, VP Exploration: Mr. Tribble, P.Geo. (ON) has over 13 years of professional experience in exploration and mining, with a particular focus on gold and base metal exploration and project evaluation. Past experience includes Senior Principal Geologist for Sprott Mining, Senior Geologist for Bonterra Resources, Jerritt Canyon Gold, Kerr Mines, Northern Gold, Lake Shore Gold and Vale Inco. He was also part of the exploration team that discovered the 8.2 million ounce Côté Lake gold deposit for Trelawney Mining and Exploration Inc. Mr. Tribble is registered as a Professional Geoscientist in Ontario and holds a Bachelor of Science degree in Geology from Laurentian University.

Peter Dickie, Director: Mr. Dickie has over 35 years of experience in the public and private corporate environment, with over 25 years spent in management positions. He is the former President, CEO and director of NioCorp Developments Ltd., a company developing the largest super-alloy mineral deposit in North America (niobium, titanium and scandium). During his six years with NioCorp, Mr. Dickie developed key relationships with property owners and all levels of government in the project area, built a team of internationally recognized senior executives, raised tens of millions of dollars and graduated the company to the TSX. During this time, NioCorp’s market capitalization grew from under $5million to over $200 million.

Richard Boulay, Director: Mr. Boulay has over 40 years of experience in the exploration and mining industries in Canada and internationally, including 15 years of mining and infrastructure financing experience gained with Bank of Montreal, Royal Bank of Canada and Bank of Tokyo. He has extensive experience in the management and financing of public companies in Canada and the United States. He is also a Director of Moneta Porcupine and Latin American Minerals Inc.

Jason Billan, Director: Mr. Billan is a seasoned strategy, corporate development and valuation professional with an accelerating career in the mining industry. Following the completion of an MBA at the Richard Ivey School of Business at the University of Western Ontario in 2009, he spent roughly three years in equity research covering the precious metal sector, at Salman Partners and RBC Capital Markets, with a coverage universe ranging from small to large caps. In 2012, he joined Nevsun Resources as the sole Corporate Development professional reporting into the senior executive team. After several years of evaluating hundreds of gold and copper opportunities, Nevsun acquired the world-class Timok copper-gold project in Serbia for over US$500M. Last year, Mr. Billan’s comprehensive skill set in capital markets, valuation, and transaction experience was further strengthened as he evaluated the hostile bid of Nevsun by Lundin Mining and later evaluated numerous strategic alternatives leading to the successful CA$1.9B acquisition of Nevsun by Zijin Mining. Mr. Billan also brings a strong network of corporate and institutional representatives in the mining industry to support Gatling’s objectives.

Peter Damouni, Chairman of the Board: Mr. Damouni has over 17 years of experience in senior executive positions in investment banking and capital markets, with expertise in mining and oil and gas. Throughout his career, Mr.Damouni has worked on and led equity and debt financings valued over $5 billion for companies at different stages from exploration, to development, permitting and construction to production. He has comprehensive experience inequity financing, restructuring and mergers & acquisitions. Mr. Damouni is a graduate of McGill University, Canada. He is a Canadian and British citizen, residing in the United Kingdom.

Carrie Cesaronem, Director: Ms. Cesarone has worked in the public company sector for 30 years. She worked as a paralegal for well-known Vancouver securities lawyers for 11 years and following that, has worked as an independent contractor for both public and private companies for the past 13 years. She has served as a director, Corporate Secretary and CFO for a number of listed companies and continues to serve a Corporate Secretary for Pacton Gold Inc. and BlueBird Battery Metals Inc. Ms. Cesarone holds a Bachelor of Arts degree from Simon Fraser University.

Joseph Meagher CFO and Corporate Secretary: Mr. Meagher became a Chartered Professional Accountant (CPA,CA) in 2008, and obtained the Chartered Director (C. Dir.) designation from The Directors College (a joint venture between McMaster University and The Conference Board of Canada) in 2017. Mr. Meagher currently serves as the Chief Financial Officer and a Director for several publicly listed companies. Previously, Mr. Meagher worked at Smythe CPA as a manager. Mr. Meagher also holds a Bachelor of Commerce from the University of British Columbia.

The Bottom Line

Gatling’s Larder Gold Exploration Project has without a doubt very considerable exploration potential starting with drilling between the Bear, Cheminis, and Fernland deposits. With nearly 1 million high-grade ounces already identified, it’s not a stretch in my view to anticipate 2 or 3 times those levels at relatively shallow depths between those three known zones. Though it’s at an earlier stage of exploration and hence represents riskier drilling, the Kir Vit Project looks to be an exceptional exploration target. We should be receiving early drill results from that project. Early results could be good but keep in mind deposits are not usually made on early drill holes that serve to educate and guide geologists to drill more perceptively in the next phase of drilling. On the other hand, I believe probability of continued very attractive drill results should be expected along the Cadillac-Larder Break.

Also adding to the attractiveness of this story is the excellent infrastructure of the area in terms of access, water, power, and nearby mills, which could conceivably come in handy in the early stages. With some 31,000 drill hole data not factored into the existing resource plus another 35,000 meters drilled this year, it is not unreasonable to anticipate the nearly 1 million ounces of high-grade gold is likely already much larger. I’m not expecting an updated resource right away. Rather, step-out drilling makes more sense as the extent of mineralization along several kilometers is established. Then will come infill drilling to allow for a resource calculation that as noted above should be a factor of at last 2 to 3 times larger than the existing resource. Last but most important of all, I have confidence in the ability of Nav Dhaliwal and Dale Ginn to carry out the business plan and in this portion of their careers to avoid the kind of destructive relationships in their last experience.

Originally published in J. Taylor’s Gold, Energy & Tech Stocks on October 25, 2019.

As he followed the demolition of the U.S. gold standard and the rapid rise in the national debt, Jay Taylor’s interest in U.S. monetary and fiscal policy grew, particularly as it related to gold. He began publishing North American Gold Mining Stocks in 1981. In 1997, he decided to pursue his avocation as a new full-time career—including publication of his weekly J. Taylor’s Gold, Energy & Tech Stocks newsletter. He also has a radio program, “Turning Hard Times Into Good Times.”

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Disclosure:
1) Jay Taylor’s disclosures are below.
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( Companies Mentioned: GTR:TSX.V; GATGF:OTCQX,
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