Archive for Opinions

Natural Gas Breaks Lower Towards Our $3.00 Target

By TheTechnicalTraders.com

Just about seven days ago we alerted all of our followers to a massive breakdown move that was about to unfold in Natural Gas.  At that time, we predicted the price of Natural Gas would break below $4.30 and fall quickly towards the $3.00~3.20 level. Taking a look at that call now, with the price below $3.60, it seems our analysis was perfectly timed.

This Daily Natural Gas chart highlighting our predictive Fibonacci price modeling system shows the downside price targets that are waiting to confirm price support and a potential “deep V bottom formation”.  If you recall from our earlier research, we believe this downside move will end rather quickly with a deep V type of price bottom setting up near the end of 2018.  This means we expect the price of Natural Gas to begin to rally into 2019 after reaching the $3.00~3.20 level soon.

 

This is an incredible move for skilled traders.  We are watching a $2.50 price move in Natural Gas unfold right before our eyes – and it appears this rotation will complete before the end of February 2019.  -$1.40 to the downside, then +1.20 to the upside.  Just follow the predictive modeling systems and ride it out.

We’ll alert you when the bottom sets up and when the upside move it about to unfold, but for now, we are watching for NG to move into the support zone (near $3.20).  Once that level is reached, a technical price bottom should start to set up and the new rally back towards $4.00 will likely start in early January 2019.

Want to learn how our advanced price modeling tools can make calls like this weeks and months in advance?  Visit TheTechnicalTraders.com to learn about our research, services, daily videos, and more solutions to help skilled traders stay ahead of these market moves.  Our advanced predictive modeling solutions and years of market research provide our members with a clear advantage you won’t find anywhere else.  Consider joining our services as a Christmas Gift to yourself!

Chris Vermeulen
Technical Traders Ltd.

 

 

Disappointing Drilling, But Don’t Give Up on This Company

By The Gold Report

Source: Adrian Day for Streetwise Reports   12/14/2018

Fund manager Adrian Day discusses the recent drill results announced by a prospect generator.

Evrim Resources Corp. (EVM, To., 0.32) released on December 6 very disappointing results from its eagerly anticipated initial drilling at its Cuale project in Jalisco, Mexico. To call drilling a complete dud might be an exaggeration, but certainly there was nothing that lived up to the expectations engendered by the extraordinary trenching results from the spring. The stock collapsed.

Most recent buying was founded purely on this property and this drilling, so clearly many shareholders simply sold the shares regardless of price. (Pre-open, the stock had over a million shares on the offer at 25.) We think this is a mistake. Indeed, Evrim is good value here, although the near-term stock movement is unknown, as more investors learn of the disappointing drilling results and tax-loss season hits peak selling.

Is it so bad?

Over 1,100 meters of drilling has been completed and assays of four out of five holes received and released. There was some gold (and copper), but nothing comparable with the trench results. A drill has been turning at nearby North Dome target. The company will finish that drilling and release the results, including from holes already completed. But clearly there are now low expectations. The company is re-evaluating its program, and more broadly its approach. It is unlikely to complete the second part of the planned drill program (after current holes) without further pre-drilling work and evaluation. It will also consider its participation. Evrim is a prospect generator, who drilled this project itself because of the potential and because funds could be raised (with Newmont buying 19% of Evrim shares at a premium). That may change.

The market has exaggerated the decline (no doubt because those who purchased recently purely for this project are selling without regard to the price). First, drilling did hit some gold (including, for example, 14 meters of 1.92 grams from the surface), as well as some copper in different holes. This represents a significant hydrothermal system, and clearly the gold in the trenches had to come from somewhere. There are other targets (from geochem and magnetics) on the property. It is possible another company might be interested.

A solid company, with cash, strong team, and multiple projects and partners

Second, without any consideration for Cuale, the current price discounts other assets in the company. The market cap is now C$26 million. Evrim has cash of about C$11 million (my estimate), plus a royalty on Ermitano (which I estimate has a value of up to $30 million). It also has numerous joint ventures and earn-ins, including some with drilling underway (including at the high-grade Cerro Cascaron project in Chihuahua State, which we have discussed before). Partners include Antofagasta, Newmont and Yamana, and include two regional alliances. If Cuale had never entered the picture, we would be buying Evrim at this price.

You might want to pick up more shares at this level, and perhaps trim your holding from any high-cost shares over the next month or two for a tax loss. Evrim is a buy, though not for the same reason we were buying a month ago.

Lastly, we must commend the Evrim team for exemplary disclosure all the way along, including in recent release. The episode is a reminder that, however compelling a target, however proficient and thorough the team, exploration is still a difficult business without guarantees.

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

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Disclosure:
1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Evrim. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Evrim. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports 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. As of the date of this article, officers and/or employees of Streetwise Reports (including members of their household) own securities of Evrim, a company mentioned in this article.

( Companies Mentioned: EVM:TSX.V,
)

With Weaker Climate Consensus, Expect Elevated Climate Change

By Dan Steinbock       

As the UN climate conference concluded with the expected dissension, efforts to contain global climate change are weakening at the worst historical moment. Emerging and developing countries will pay much of the bill.

As representatives from more than 100 countries debated climate change in the COP24 – the 24th UN climate change conference – held in Katowice, Poland, the outcome could only be divisive.

In the past, collective consensus by major economic powers – U.S., the EU, Japan and China – fueled success. Now the planned withdrawal of the U.S. from the Paris Accord resulted in a hollow consensus, supported by big-oil opposition.

Like the recent G20 Summit, which welcomed trade but did not reject protectionism that undermines trade, Katowice agreed on a “compromise,” which welcomed the alarming climate UN (IPCC) report, but not its actual findings. The price could be the virtual extinction of small island states as seas rise, followed by soaring costs of climate change in emerging and developing economies.

Katowice’s “administrative” compromise virtually ensures that the extreme urgency required by the “rule book,” which would allow countries to implement the Paris Agreement, will be ignored.

The planned Trump exit from Paris Accord

Risks have escalated since June 1 2017, when President Trump announced his decision to withdraw the U.S. from the Paris Climate Agreement – an international pact intended to reduce the effects of climate change by maintaining global temperatures “well below 2°C above pre-industrial levels.”

The Accord was negotiated by almost 200 parties and adopted by consensus in December 2015. Based on the UN convention on climate change, it focuses on greenhouse gas emissions mitigation, adaptation and finance starting in 2020.

However, Trump calls the pact a “bad deal” for the U.S. and sees the withdrawal as a key piece of the “America First” stance. The White House began to pave the exit path in March 2017, when Trump signed an executive order to start the formal process of repealing President Obama’s climate agenda.

The withdrawal split the White House, the Congress, and the nation. A few powerful lobbying groups, energy giants and billionaires effectively hijacked the fight against climate-change, which most Americans and U.S. cities support.

More recently, the White House ignored a new government report, which concluded that, in the absence of significant steps to subdue global warming, U.S. economy will take severe hits and cause the death of thousands of Americans by 2100.

It is within the U.S. president’s constitutional authority to withdraw from the Paris deal without first receiving congressional or senatorial approval. But legal questions linger as to how the Trump White House can execute the withdrawal and what role the U.S. can play in future international climate meetings.

The role of China, emerging and developing economies

Since the early 2010s, it has often been said that China is the “world’s greatest polluter.” That’s true but only in aggregate terms. By default, big nations pollute more than small ones.

Moreover, emerging economies that are still industrializing generate relatively more pollution than advanced nations, which industrialized over a century ago.

The simple fact remains that, on per capita basis, the U.S. and major European economies remain the greatest polluters by far, however.

According to research, China contributes barely 10-12% of human influence on climate change. That figure has remained fairly steady over the industrial period. It is lower than might be expected for the world’s largest aggregate emitter.

As the major advanced economies, including the U.S. and Europe, have been emitting far longer, their net contribution on climate change remains relatively far higher. Climate change is not just cumulative but accumulative.

If the U.S. exit will materialize, global climate risks will intensify dramatically, particularly in emerging and developing economies.

The 10 countries most affected by climate risk

Between 1998 and 2017, Puerto Rico, Honduras and Myanmar ranked highest among the countries that have been most affected by climate change. Less developed countries are generally more affected than industrialized countries. Yet, even, high income countries feel climate impacts more clearly than ever before.

Regarding future climate change, the new Global Climate Risk Index can serve as a red flag for already existing vulnerability that may further increase in regions where extreme events will become more frequent or more severe due to climate change. The 10 countries most affected in the past two decades feature mainly poorer economies in Asia (Myanmar, Philippines, Bangladesh, Pakistan, Vietnam and Thailand) and Americas (Honduras, Haiti, Nicaragua and Guatemala) (Figure).

Figure  Long-Term Climate Risk *

* Annual averages, 1998-2017: Climate Risk Index 2019, GermanWatch; Difference Group

 

The Index measures long-term global risk as a function of death toll, deaths per 100,000 inhabitants, absolute losses in US$ millions, losses per unit GDP in percentage and total number of climate events from 1998 to 2017. In this regard, there are differences among the most affected countries.

In the case of Puerto Rico, the top rank was driven by a very high death toll and costly economic losses, but the number of events was low relative to other countries. In Myanmar, the high death toll explains the score. In Dominica, Puerto Rico and Haiti, the losses per unit GDP drove high rankings.

In international comparison, the Philippines death toll has been relatively high in the past two decades, while its economic losses were among the highest. But it is the number of total events in the Philippines (over 300) that was the highest among the top-10 countries.

Only Vietnam and Bangladesh come close, but even they had just two-thirds of the climate events in the Philippines. And in the top-ranking Puerto Rico and Honduras, total events were less than a 10th and 5th of those in the Philippines.

Toward accelerated climate change

Since the 1980s typhoons that strike East and Southeast Asia have intensified by 12–15%, with the proportion of storms of categories 4 and 5 having doubled, even tripled. Under increasing greenhouse gas forcing, the projected ocean surface warming pattern suggests that typhoons striking Asia will intensify further.

Ironically, global climate change will penalize particularly those economies where living standards remain low and that are most vulnerable to collateral damage. The more poor economies will lose lives, the more that will bespeak about the effective indifference of advanced nations toward real human rights.

Timing matters. Under the agreement, the earliest date of the U.S. withdrawal is November 2020 – the last month of the Trump presidency, in the absence of a prior impeachment. That’s when Americans have to decide whether they really prefer energy profits, at the expense of future generations in the U.S. and elsewhere.

Furthermore, time is running out. According to estimates, current climate policies virtually ensure that the increase in global temperatures is on pace for somewhere around 3.3 degrees Celsius.

That does not bode well for the future.

About the Author:

Dr Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore). For more, see http://www.differencegroup.net/ 

 

 

Political Theater Goes into Overdrive as Shutdown Looms

By Money Metals News Service

The Democratic party will be moving back into the control room in the House of Representatives.

Congress may commemorate the return to split government with a partial shutdown. The feud over construction of a border wall looks like it will not be resolved in time. It could be the first of many political dramas in 2019.

The debate over funding for the wall is theater, make no mistake.

Mexico Border Wall Taxes

Securing the border may be a worthwhile effort. However, the $5 billion the President is requesting is but a small down payment on what is needed to build a wall along the full length of the border.

And Republicans have had total control of Congress under Trump’s presidency so far, meaning if they really wanted to get serious about a wall, they would have done it by now.

Most likely the shutdown will not amount to much more than some additional paid time off for certain federal employees. It will, however, set the tone for the next couple of years. Washington runs on strife.

Republicans in the House will probably remember they care about deficits when they are out of power again. Expect them to start wailing about spending when Congress and President Donald Trump start wrangling over next year’s budget.

Mexico Border Wall Taxes

The President will almost certainly make concessions and jack up deficit spending in order to get Democratic support for some of his other agenda items. Next year’s budget deficit could be a whopper — particularly if there is an infrastructure program with bipartisan support.

Another surge in spending could frustrate the President’s conservative base, who urge him to reject bloated budgets for the Deep State that fund everything but the wall.

The battle over healthcare is back in the headlines. A federal judge in Texas just declared Obamacare unconstitutional. The entitlement program could return to the Supreme Court, where it previously weathered attacks in 2012 and 2015.

This time, however, the makeup of the Court has changed significantly and the justices recently appointed by Trump may get an opportunity to show off their conservative bona fides.

Under Investigation

The Mueller investigation should be winding down in 2019, but that will hardly be the end of the investigation free-for-all, which is just getting started. The militant Democrat officials coming back to power are promising a host of new inquiries.

On the other side, there are investigations directed at the FBI and Justice Department, the Clinton Foundation, the crooked Uranium One deal and more.

Partisan political weaponizing of hearings and investigations could degenerate into a Constitutional crisis. With Trump’s presidency in jeopardy and trillion-dollar deficits looming, political risk looks set to accelerate in the months ahead.


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

Mackie Analyst Sees Supercharged Revenue Growth for Energy Storage Firm

The Energy Report

Source: Streetwise Reports   12/13/2018

Energy storage manufacturer opens up global distribution channels as long-standing partner Mercedes Benz Energy endorses product.

This spring, Eguana Technologies Inc. (EGT:TSX.V; EGTYF:OTCQB), a small-cap Canadian firm that designs and manufactures grid interactive energy storage solutions based on its proprietary power control technology, received an product endorsement from long-standing partner Mercedes Benz Energy, which has since exited residential energy storage markets to focus on its core automotive battery segment.

The company has turned this into a significant advantage. Mercedes had extensively tested Eguana’s technology prior to the endorsement and, upon exiting the marketplace, Eguana recruited and hired their top sales and marketing talent. The net affect was an immediate jump in sales, as well as getting the company positioned as one of three approved equipment providers in the lucrative, subsidized South Australia market.

“We believe as quarterly revenue starts to approach and consistently exceed ~$2–3 million, the stock could rapidly rerate.” – Nikhil Thadani, Mackie Research

With respect to Mercedes exiting the marketplace, Eguana CEO Justin Holland told Streetwise Reports, “the company received a public endorsement of our technology along with further credibility in the form of a full scale engineering report, access to Mercedes’ distribution channel, and the recruitment and hiring of its sales team in Europe.”

Eguana also hired Mercedes Benz Energy’s director of business development for North America, Livio Filice, and within the first 100 days, Holland told Streetwise Reports, “the team brought in over $5 million in new and recurring orders. The Mercedes sales team was familiar with and has confidence in our product, so we were able to attract a very dynamic and proven team.”

Prior to Mercedes Benz, Filice set up the distribution network in the United States for Sonnen, which is currently the global leader in residential stationary storage.

Eguana’s system has advantages over others, Filice told Streetwise Reports. “First, the company has a very strong history in power electronics, which is the most complicated part of an energy storage system. The capabilities of our power control systems have been proven with many different battery technologies.”

“Second, one of the macroeconomic trends is that electric vehicle demand has accelerated, which has created supply constraints in the stationary storage sector. Larger battery manufacturers are struggling to meet the outstanding demand. Eguana, however, has a long-standing partnership with battery giant LG Chem, which has a strong supply chain, so we have not faced supply constraints,” said Filice.

“Additionally, our system, which can be installed either indoors or outdoors, is modular in design, and storage capacity can easily be expanded by adding additional batteries, which makes us unique in the industry. With other products, an entire new system needs to be added to increase capacity. This all comes at a very competitive price point.”

Eguana’s reach goes well beyond North America. Eguana has hired Mercedes Benz Energy’s sales team for Europe, “who have the contacts and the distribution channels; we expect them to bring in European sales early in Q1 2019,” Holland stated.

And in Australia, Eguana, through partnering with national distributors AC Solar Warehouse and Baywa r.e., is positioned to take advantage of South Australia’s Home Battery Scheme (HBS), which, according to the South Australia state government, aims to outfit 40,000 households with Virtual Power Plan (VPP) ready integrated battery systems by providing access to a $100 million in state government subsidies to pay installations. Eguana is one of three companies whose equipment is approved for the HBS.

“Eguana looks like a strong buy here.” – Technical analyst Clive Maund

“Strategically we are on track to become the dominant supplier of energy storage in South Australia,” stated Brent Harris, Eguana’s chief technology officer. “Our SA order book has crossed the $1.5 million mark in less than two weeks and as we establish our System Provider partner network in the market we recognize they require capable distribution partners to support their growth.”

“The South Australian government’s Home Battery Scheme is accelerating residential energy storage growth in the world’s highest penetration rooftop solar PV market. Coupled with the government grant, consumers that purchase registered systems will also have access to CECF’s A$100 million for additional financing. Eguana’s Evolve residential energy storage system is ideally suited for the market with its VPP capable AC coupled format supporting backup operation with solar charging ensuring that both new and retrofit customers can get the maximum value out of their energy storage purchase,” Eguana noted.

All this activity is fueling revenue growth. In FY/2016, which ended September 30, Eguana reported revenues of CA$700,000; followed by revenues of CA$800,000 in 2017. Eguana has not yet released FY/2018 revenues, but it has announced more than CA$3 million in orders during the period.

“In Q1/2019, the quarter we currently are in, our order book is approaching CA$7 million,” Holland told Streetwise Reports.

Eguana has caught the attention of Mackie Research, and is covered by analyst Nikhil Thadani. Discussing Eguana’s inclusion in the South Australia program, Thadani wrote on November 19, in a report titled “Australian Program Inclusion Should Supercharge Revenue Growth by Adding Exposure to Largest Demand Market,” that Eguana “has been approved for both the South Australia ‘Home Battery Scheme’ and CEFC home battery financing providing direct access to A$100 million in subsidies and low interest loans for residential battery storage.”

The “Australia news bodes well for additional order intake, following what appears to be an existing step up in orders in H2 C2018. We expect EGT’s positive South Australian program inclusion could lead to additional order intake of ~$5 million in early C2019, i.e., double EGT’s existing order book,” Thadani stated.

“We believe as quarterly revenue starts to approach and consistently exceed ~$2–3 million, the stock could rapidly rerate. We’re optimistic on starting to see order-revenue conversion in Q2 (Mar) F2019. 9M F2018 (Jun) revenue has been ~$4 million vs. the previous revenue high water mark of ~$6 annually in F2015 (Sept), we believe the company is approaching the revenue inflection point,” Thadani concluded.

Mackie Research has a CA$0.70 target on Eguana; shares are currently trading around CA$0.18.

Technical analyst Clive Maund analyzed Eguana Technologies and wrote on December 10, “Eguana Technologies is now extraordinarily cheap considering the huge strides it is making. . .Eguana looks like a strong buy here. . .There is now considered to be a yawning gap between the company’s low stock price and its rapidly improving fortunes that should be closed by the stock advancing.”

Eguana has approximately 222 million shares issued and outstanding and about 245 million fully diluted. About 55% of the shares are closely held.

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Disclosure:
1) Patrice Fusillo compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an employee. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Eguana Technologies. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Eguana Technologies. Please click here for more information. An affiliate of Streetwise Reports is conducting a digital media marketing campaign for this article on behalf of Eguana Technologies. Please click here for more information.
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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Eguana Technologies, a company mentioned in this article.


Disclosures from Mackie Research, Eguana Technologies Inc., Management Update, November 19, 2018

RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.

ANALYST CERTIFICATION
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

 

Clive Maund disclosures
I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None.

( Companies Mentioned: EGT:TSX.V; EGTYF:OTCQB,
)

Five Companies to Consider in These Volatile Times

By The Gold Report

Source: Streetwise Reports   12/13/2018

Despite turbulence in the markets, investors should not be pessimistic because there are plenty of good markets to allocate to, posits Samuel Pelaez, chief investment officer and portfolio manager with Galileo Global Equity Advisors, who discusses trends in the markets and companies he believes are at attractive entry points right now.

Streetwise Reports: Oil has been declining over the last two months or so. Would you talk about some of the factors behind this decline?

Sam Pelaez: We can split the most interesting factors between, on one hand, the demand side, including the macroeconomy, the Purchasing Managers Indexes (PMIs) and the slowdown in emerging markets and in China. The other would be the supply side. I think it’s a convergence of those two concepts that’s caused some of this most recent weakness.

On the demand side, the PMIs are one of the factors we like to look at the most because they give some predictability as to what may come next for resources. The PMI in China particularly has come down all the way to 50 points. The 50 line is the line between expansion and contraction. We are not in a contraction in any of the major economies, but we’ve lost that big tailwind and momentum that we had last year and earlier this year with PMIs in the high-50s.

So, naturally, that has a very high correlation with demand for crude and we’re seeing that slowdown on that side.

On the supply side, since August the U.S. became the largest crude producer in the world. It’s larger than Russia, and it’s larger than Saudi Arabia. That obviously has major implications for the global market and the supply/demand balance.

The U.S. is not a part of the Organization of the Petroleum Exporting Countries (OPEC); it’s not part of any of these agreements to curtail production. U.S. producers have been able to use technology to their favor and use the excellent conditions, especially in Texas, to really grow that asset base and those production volumes, which indirectly are also helping the U.S. trade balance very positively.

So now we have the issue of emerging markets slowing down, a trade war in the headlines, and the U.S. continuing to pump more crude and now becoming a big exporter to the world. I think those are the big elements.

The smaller elements that have come into play are on the geopolitical side. Saudi Arabia, as well as other OPEC members, have been pumping more crude, partly to appease a critical Donald Trump, thus driving volumes to pre-cap levels.

SWR: Did it break the OPEC agreement to do this?

SP: The agreement hasn’t been dissolved. But OPEC is pumping above the agreed quotas, so it is essentially in violation of the agreement. The news here is the outcome of the recent meeting in Vienna. OPEC and allies agreed to cut 1.2 million barrels per day, taking October volumes as a base. In reality, it’s virtually not a cut because OPEC is only slashing the volume growth pumped over the summer months—which coincides with peak seasonal production.

It is a great outcome; members publish on news media about a cut, while simultaneously maintaining an elevated production volume. And I think this helps Saudi Arabia and others gaining favor with the U.S. by pumping more crude and driving prices lower. Lower crude prices are a major benefit to all the policies of Donald Trump. I think Trump has made it very clear that he doesn’t want OPEC to conspire to get the prices of crude higher. The U.S. is a major crude oil producer, but it has ±350 million people who are consumers of gasoline and other refined products. In Trump’s mind, lower crude prices are beneficial for his economic prospects and the prospects of the country. And I think behind the scenes, Saudi Arabia understands that, and that’s the reason why it has been pumping more crude.

At the same time, Russia also has an incentive to pump more crude because its currency has weakened this year even though crude prices have rallied. So that’s created a very profitable window for it to boost production and capture that spread that’s generally not open to it. Normally, when crude rises, so does the Russian ruble, so it doesn’t get that alpha from the cost bases being in ruble and the international prices being set in U.S. dollars.

I think oil prices, where they sit today, are very comfortable for U.S., Russian and Saudi Arabian producers. And as a result, they’ll be happy to just maintain, range bound, somewhere around these levels.

SWR: Does this put the screws on other countries that are higher-cost producers?

SP: Not really. I think the pressure points that we’re seeing right now in certain countries don’t have a lot to do with international prices. There’s the political situation in Venezuela that’s been unfolding for years, where there’s a lack of capital expenditures and aging infrastructure that will continue to erode the volumes coming out of the country.

In Canada, we have a very different issue, which is the wide differentials because of the difficulty of getting the crude to the international markets. As a result, the realized price by Canadian producers is far lower, and obviously that would affect some of the production. But it has nothing to do with the international prices, I would say, or at least not directly.

SWR: What is your outlook for oil in the near to middle term?

SP: I think these prices, as I mentioned, are very comfortable for a lot of the major participants in the markets. It’s enough for the U.S. shale producers to continue allocating capital to grow or at least to maintain the current production levels. And it’s comfortable for Russia because Russia is a very natural low-cost producer with ruble cost-basis. As for Saudi Arabia, I think the majority of OPEC members will continue to make nice profits at these levels. So there’s no real reason to try to push it higher by instituting new cuts or curtailing supply any further.

Going back to the demand side, we have to monitor the macro data, especially going into this winter season. Year-end is generally a big season for China demand, then it tends to slow very sharply in January and February, and it comes back after Chinese New Year. We have to monitor the PMIs because any slowdown or further decline from there should be very concerning, not just for the crude oil market but for the global economy as a whole.

SWR: A number of firms have been very bullish on commodities. How do you view this and which commodities do you see as more likely to rise than others?

SP: It’s almost in unison now that the “bulge bracket” banks like Goldman Sachs, Morgan Stanley and Citi have all come out with either very positive comments for commodities as a complex, or very positive comments for specific subindustries or sectors within the commodities universe. Some of them prefer industrial metals. Some prefer base metals. Some prefer the energy sector. But the message is very clear. The ratio of the valuation of the overall market relative to these sectors is at an extreme low point.

I was reading a paid subscription report a month ago that said the materials sector in the S&P 500 has never been smaller than it is today, and not smaller in absolute terms but as a percentage of the S&P 500. It’s not the same for energy, but energy still is in a very depressed position when it comes to its percentage weight to the overall market.

I’ve used this chart many times before, and I still continue to use it. It’s a 50-year or so chart, starting in the early 1970s, and it shows the S&P commodities index, not commodity stocks index, just the commodities index, divided by the S&P 500. It’s a ratio to show you how overpriced or underpriced the commodities universe is relative to the market as a whole, if you take the S&P 500 as a good proxy for the market as a whole.

Equities vs. Commodities

And the reality is that it has never been lower. We’ve been at these troughs three times before. And it’s obviously very cyclical. Every 10 years or so, we get these big, sharp rebounds and rallies. But we’ve never been lower for longer. So commodities are long overdue to outperform the market as a whole.

But the message is the same as that of the banks. There are big opportunities in the commodities universe right now. There are producers that are making substantial amounts of free cash flow at these prices, which are not bull market prices by any measure. So in general, I am very optimistic.

The next overlay that you can put on that chart of that ratio is the correlation with the Federal Reserve rates. And interestingly, I think there’s been about seven Fed rate hiking cycles over those 50-odd years, and all but one of those cycles have coincided with the commodities outperforming the market. At first, it’s difficult to reconcile that rates going up correspond with a cyclical market taking off. But generally, I think the Fed rates are catching up to inflation, and that inflation is the driver of the cycle.

Fed Funds Rate

So the Fed has been hiking rates, and we haven’t seen any response on this chart. Part of that could be attributed to the trade war talks. But I think the message is very clear. We’re very long overdue for a commodities rebound. The charts are telling you, and I think the fundamentals of some of the producers—some of which we can talk about in a minute here—are also telling you that this is a very good time to start allocating out of the sectors that have worked over the past few years, some of the technology sectors, some of the healthcare areas, and start looking at the most depressed and undervalued sectors right now, which are both energy and materials.

SWR: Would you talk about some companies that you see as undervalued at this point?

SP: Those two sectors, materials and energy, are very attractive right now. When you look at the multiples, for example, the explorers and producers in the U.S. are trading at about five times EBITDA. Historically they trade at six, maybe seven times. If you look at specific names, you can find them as low as two or three times EBITDA. Those are not market multiples consistent with profitable companies. Those are market multiples that you would see in bear markets or markets where there’s a complete lack of confidence that the producers can deliver any profit. So I think there’s a unique opportunity with some names to get involved.

Essentially these sector—and especially in Canada but also in the U.S.—are trading at emerging market multiples. So if you go back to 2011, some of these sectors were trading very close to the multiples in the overall market. Now, they’re trading at half the multiple of the market, so they’ve lost about half of the value just from the multiple compression.

And if you go back to the ratio we were talking about before, there is reason to believe that the gap has to be compressed, that those multiples have to converge sometime in the next three years. I can’t tell you that it’s going to be next quarter or two. It could be as soon as then. But the opportunities have been laid, and we shall take profit from them.

On specific names that I like, there is a Canadian oil services company that has most of its operations in the U.S., CES Energy Solutions Corp. (CEU:TSX; CESDF:OTCMKT). It’s one opportunity where you can benefit from a company that’s been pummeled by the relationship to the Canadian oil market when in fact the majority of its assets and its operations are in Texas. Here you can get a company that’s exposed to a very profitable market with lots of activity and is trading at a Canadian energy multiple. It’s based in Calgary, but the majority of its operations and its focus is in the Permian Basin.

This is a U$1.0- billion valuation. It’s a company that makes U$120 million a year in EBITDA, so pretty attractive valuation relative to its peers. If you look at its chart, you’ll see the value destruction that’s occurred. I think most of it is attributed to the fact that it moves in sync with the Canadian energy space, which has been under substantial pressure due to the inability to get enough infrastructure built for the export of the crude. But, in fact, CES is an energy services company, it’s not a producer, and most of its assets and operations are in the U.S.

Switching over to the base metals sector, one of the companies that I’ve been paying attention to is HudBay Minerals Inc. (HBM:TSX; HBM:NYSE). This one trades both in Canada and the U.S. As a Canadian base metals producer, the stock is down about 40% year to date. There is now an activist fund that has got involved. The stock has rebounded some from there.

But this is another company where I think the valuation is completely disproportionate to the operations. This is a company that trades at 4x next year’s EBITDA. Normally, these companies, with the profit generation that they can deliver, should be trading 8x. Just from the multiple alone, at these commodity prices, you should still see a very nice revaluation. And now that we have an activist fund involved, perhaps it may come sooner rather than later.

A precious metals story we also follow closely is Dundee Precious Metals Inc. (DPM:TSX; DPMLF:OTCMKT). This company has phenomenal owners, a top class operating team, and more importantly fully funded organic growth. The stock trades at 4x this year’s EBITDA, but should see a significant bump in next year’s EBITDA due to the commissioning of its fully funded new mine in Bulgaria. Essentially, you are picking up all of this growth for free at this valuation.

We’ve been looking elsewhere, and we’ve found some pretty attractive opportunities in other places, but perhaps they’re not accessible for most readers. Some of the Russian companies trading in London are profitable companies and are offering spectacular dividends. I’ll just mention one name.

EVRAZ Plc (EVR:LSE; EVRZF:OTC) is an industrial metals company and pays a dividend close to 15%, It’s a very highly profitable company. And it’s just been shunned by negative perceptions about Russia when, in fact, this is a very well-run company with very high margins, and it’s a historical, consistent dividend payer. That gives you confidence that it can maintain the dividend.

SWR: Would you like to talk about one more company?

SP: On the same dividend note, there’s a Canadian renewable energy producer that has substantial growth and is very profitable, Polaris Infrastructure Inc. (PIF:TSX). It has stable operations in emerging markets and pays a very nice dividend.

Its current operation is a geothermal facility in Nicaragua. This is contracted to the central utility. It’s connected to the grid, has a multiyear contract in U.S. dollars. Polaris is a very good corporate citizen in the country and never has had any issues.

The stock is paying about an 8% dividend. It recently made an acquisition in Peru, partly to diversify the geopolitical risk. But it also was a single-asset company, and now it’s a multiasset company. It’s now in the hydropower business in Peru, based on the same idea: long-term contracts with the government in U.S. dollars and hugely profitable on an operating basis. Now that it did the acquisition—which actually carried very little principal or capital expenditure, so not to affect the dividend payouts—we may even see dividend hikes as the Peruvian assets come online.

SWR: Thank you, Sam. Do you have any parting comments?

SP: I’d like to end with a positive note. While there’s been turmoil in the U.S. markets only very recently, most of the world has been in complete turmoil for nearly a year now since the trade war conversation was started. It’s created opportunities in the market that I’ve never seen before in the time that I’ve been participating in the markets.

There are companies trading at valuations that would be inconceivable in a normal market situation. Investors can take advantage of these opportunities to lock-in quality assets at very attractive valuations, and ride with them as the commodities sector rebounds.

The markets never run out of exciting opportunities. It doesn’t matter what the macro environment is or how turbulent it looks.

SWR: Thanks for your insights, Sam.

Samuel Pelaez is chief investment officer and portfolio manager with Galileo Global Equity Advisors. Prior to that he was an investment analyst at U.S. Global Investors, a boutique U.S.-based investment management firm. Pelaez graduated from the Schulich School of Business with Distinction in 2012. He also holds a Masters in Finance degree from The University of Cambridge. He is a CFA charter holder and member of the Toronto CFA Society.

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Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this interview are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Samuel Pelaez: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: N/A. I, or members of my immediate household or family, are paid by the following companies mentioned in this article: (N/A). My company has a financial relationship with the following companies mentioned in this interview: (N/A). Funds controlled by Galileo Funds own securities of the following companies mentioned in this article: CES Energy Solutions Corp., HudBay Minerals Inc., Dundee Precious Metals Inc., EVRAZ Plc, and Polaris Infrastructure Inc. I determined which companies would be included in this article based on my research and understanding of the sector. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
4) The interview does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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.

( Companies Mentioned: CEU:TSX; CESDF:OTCMKT,
DPM:TSX,
EVR:LSE; EVRZF:OTC,
HBM:TSX; HBM:NYSE,
PIF:TSX,
)

U.S. Renewable Energy Solutions Provider Lands Two Contracts

The Energy Report

Source: Streetwise Reports   12/13/2018

These new projects represent growing interest in the Philippines for the company’s offerings.

UGE International Ltd. (UGE:TSX.V; UGEIF:OTC) announced in a news release it signed two financed contracts with packaging firm Philippine Aquapak Industries Inc. Together, the projects have an upfront value to UGE of about $300,000.

UGE is to provide this company in the Philippines with a solution for 233 kilowatts of renewable energy at one of its production facilities and for 49.5 kilowatts at its headquarters. Construction is planned for 2019. According to the news release, these systems should result in a 50% energy cost savings over their lifetime to Philippine Aquapak.

“2018 has seen our revenues grow exponentially in the Philippines,” Tyler Adkins, UGE’s regional director for the Philippines, said in the release. “Throughout the year we’ve introduced our ‘no cash-out’ financed product which has gained significant traction. We are looking forward to installing many financed systems in the country throughout 2019.”

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Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: UGE International. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the 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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of UGE International, a company mentioned in this article.

( Companies Mentioned: UGE:TSX.V; UGEIF:OTC,
)

U.S. Pressure Pumping Company Lowers Q4/18 Revenue Guidance

The Energy Report

Source: Streetwise Reports   12/13/2018

A Stifel report explains the reasons behind the guidance revision and shares its 2019 outlook for the oilfield services firm.

In a Nov. 30 research note, analyst Stephen Gengaro reported Liberty Oilfield Services Inc. (LBRT:NYSE) lowered its Q4/18 guidance, and Stifel revised its Q4 numbers accordingly. However, he expressed optimism for next year, adding, “We continue to expect improvement in Q1/19. Our 2019–2020 estimates are unchanged.”

Gengaro explained that two Liberty customers had chosen to take equipment offline sooner than expected. As a result, the company’s Q4/18 revenue will sequentially decline from previous guidance by about 10%, according to management estimates. That equates to about a mid-single-digit drop.

In addition, due to customers delaying planned activity until Q1/19 for budgetary purposes, Liberty’s Q4/18 annualized EBITDA per fleet also is expected to sequentially decrease by about $5–6 million versus the previously guided $3 million.

Liberty attributed the Q4/18 weakness to “transitory takeaway issues and year-end budget management concerns,” which Gengaro noted was consistent with Stifel’s expectations.

To reflect changes to Liberty’s Q4/18 forecast, Stifel reduced its estimates for Q4/18 earnings per share to $0.33 from $0.43 and Q4/18 EBITDA to $86.3 million from $101.8 million, the analyst pointed out. The investment banking firm, however, left all of its current numbers for 2019 unchanged, given that it expects a “ramp-up in activity throughout the next year on higher budget resets and the resolution of Permian takeaway constraints,” noted Gengaro.

Stifel also maintained its Buy rating and $25 per share target price on Liberty, whose current share price is about $16.17.

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Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
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.

Disclosures from Stifel Nicolaus & Company, Liberty Oilfield Services Inc., November 30, 2018

I, Stephen Gengaro, certify that the views expressed in this research report accurately reflect my personal views about the subject securities or issuers; and I, Stephen Gengaro, certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. Our European Policy for Managing Research Conflicts of Interest is available at www.stifel.com.

For a price chart with our ratings and any applicable target price changes for LBRT click here.

Stifel or an affiliate expects to receive or intends to seek compensation for investment banking services from Liberty Oilfield Services Inc. in the next 3 months.

Stifel or an affiliate is a market maker or liquidity provider in the securities of Liberty Oilfield Services Inc..

The equity research analyst(s) responsible for the preparation of this report receive(s) compensation based on various factors, including Stifel’s overall revenue, which includes investment banking revenue.

As a multi-disciplined financial services firm, Stifel regularly seeks investment banking assignments and compensation from issuers for services including, but not limited to, acting as an underwriter in an offering or financial advisor in a merger or acquisition, or serving as a placement agent in private transactions.

( Companies Mentioned: LBRT:NYSE,
)

Mining Company Boasts ‘Good Deposit Moving Quickly Toward Development’

By The Gold Report

Source: Streetwise Reports   12/13/2018

An iA Securities note reviewed the latest news about drill results and financings for this firm’s Canadian project.

In a Dec. 6 research note, analyst George Topping reported that Barkerville Gold Mines Ltd. (BGM:TSX.V) announced “more high-grade hits” at its Cariboo project’s Cow Mountain, however, recent financings have been dilutive to the share price. As such, iA Securities lowered its target price on the Buy-rated company to CA$1.05 per share from CA$1.40. Barkerville is currently trading at around CA$0.34 a share.

Topping reviewed results from the 63,000-meter (63,000m) drill program at Cow Mountain. Infill drill holes returned averages of 14.1 grams per ton (14.1 g/t) gold over 1.3m beginning 180m deep. “Today’s results bring the overall raw average at Cow Mountain to date to 11 g/t Au over 1.4m at a depth of 218m before dilution ( about 6.5–7 g/t post mining dilution),” Topping indicated.

As for specific assays, one hole, CM-18-124, demonstrated 10.5 g/t gold over 7.8m starting at 209m down. This was down dip of a prior hole, CM-18-034, that showed 9.3 g/t gold over 2.7m. A second highlight hole, CM-18-128, intersected 24.1 g/t gold over 6.5m beginning at a 94m depth.

Topping explained the results also exhibit continuity of high-grade mineralization at Cow Mountain in the quartz veins and extensions down dip and down plunge, with vein corridors remaining open. “Continued infill drilling and a higher cut-off grade (4 g/t) should push the resource to a profitable roughly 7 g/t,” Topping noted.

The analyst pointed out that despite the positive drill results, Barkerville’s stock has been negatively impacted by the cumulative, dilutive effect of two recent financings. The newest of those transactions, which took place in November, was a CA$25 million capital raise. Earlier, in September, Osisko Gold Royalties (OR:TSX; OR:NYSE) acquired another 1.75% net smelter royalty (NSR) on Cariboo for CA$20 million, taking its total NSR to 4%.

Barkerville, however, remains focused on advancing the project, now working on updating its mineral resource. That is expected to be ready in Q1/19, followed by a feasibility study in Q2/19. Both reports “should be positive,” wrote Topping.

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Disclosure:

1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: None. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees.
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. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Osisko Gold Royalties, a company mentioned in this article.

Disclosures from iA Securities, Barkerville Gold Mines Ltd., Research Update, December 6, 2018

Conflicts of Interest: The research analyst and or associates who prepared this report are compensated based upon (among other factors) the overall profitability of iA Securities, which may include the profitability of investment banking and related services. In the normal course of its business, iA Securities may provide financial advisory services for the issuers mentioned in this report. iA Securities may buy from or sell to customers the securities of issuers mentioned in this report on a principal basis.

Analyst’s Certification: Each iA Securities research analyst whose name appears on the front page of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst’s personal views about the issuer and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst’s compensation was, is, or will be directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Analyst Trading: iA Securities permits analysts to own and trade in the securities and or the derivatives of the issuer under their research coverage, subject to the following restrictions. No trades can be executed in anticipation of coverage for a period of 30 days prior to the issuance of the report and 5 days after the dissemination of the report to our clients. For a change in recommendation, no trading is allowed for a period of 24 hours after the dissemination of such information to our clients. A transaction against an analyst’s recommendation can only be executed for a reason unrelated to the outlook of the stock for the issuer and with the prior approval of the Director of Research and the Chief Compliance Officer.

The analyst has visited the issuer’s operations. No payment or reimbursement was received from the issuer for the associated travel costs.

In the past 12 months, neither iA Securities, its officers or directors, nor any analyst involved in the preparation of this report have provided services to the issuer for remuneration other than normal course investment advisory or trade execution services.

( Companies Mentioned: BGM:TSX.V,
)

COT Report: Speculators cut USD Index, Crude Oil bets. Raise Gold, VIX & S&P Mini bets

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Here are this week’s links to the latest Commitment of Traders data changes that were released on Friday.

  • Currency Speculators trim US Dollar Index bets for 4th week. Yen bets rise.
  • WTI Crude Oil Speculators once again cut their bullish bets for 11th week
  • 10-Year Note Speculators strongly raised their bearish bets
  • Bitcoin Speculators trimmed their cryptocurrency bearish bets for 3rd week
  • Gold Speculators pushed their bullish bets higher this week
  • S&P500 Mini Speculators bullish bets rebound after 2 down weeks
  • VIX Speculators boosted their volatility bets after 2 down weeks
  • Silver Speculators sharply lifted their bets into a new bullish position
  • Copper Speculators reduced their bullish bets for 3rd week running

Currency Speculators trim US Dollar Index bets for 4th week. Yen bets rise.

Large currency speculators decreased their net positions in the US Dollar Index futures markets this week, according to the latest Commitment of Traders (COT) data released by the Commodity Futures Trading Commission (CFTC) on Friday. See full article.


WTI Crude Oil Speculators once again cut their bullish bets for 11th week

The large speculator contracts of WTI crude futures totaled a net position of 309,506 contracts, according to the latest data this week. This was a change of -20,640 contracts from the previous weekly total. See full article.


10-Year Note Speculators strongly raised their bearish bets this week

Large speculator contracts of the 10-Year Bond futures totaled a net position of -393,802 contracts, according to the latest data this week. This was a change of -100,616 contracts from the previous weekly total. See full article.


Gold Speculators pushed their bullish bets higher this week

Large precious metals speculator contracts of the Gold futures totaled a net position of 60,499 contracts, according to the latest data this week. This was a change of 11,498 contracts from the previous weekly total. See full article.


Bitcoin Speculators trimmed their cryptocurrency bearish bets for 3rd week

Cryptocurrency speculator contracts of the Bitcoin futures totaled a net position of -913 contracts, according to the latest data this week. This was a change of 63 contracts from the previous weekly total. See full article.


S&P500 Mini Speculators bullish bets rebound after 2 down weeks

Large stock market speculator contracts of the S&P500 mini futures totaled a net position of 174,179 contracts, according to the latest data this week. This was a change of 70,103 contracts from the previous weekly total. See full article.


VIX Speculators boosted their volatility bets after 2 down weeks

Large stock market volatility speculator contracts of the VIX futures totaled a net position of 40,097 contracts, according to the latest data this week. This was a change of 29,080 contracts from the previous weekly total. See full article.


Silver Speculators sharply lifted their bets into a new bullish position

Large precious metals speculator contracts of the silver futures totaled a net position of 11,256 contracts, according to the latest data this week. This was a change of 11,891 contracts from the previous weekly total. See full article.


Copper Speculators reduced their bullish bets for 3rd week running

Metals speculator contracts of the copper futures totaled a net position of 7,247 contracts, according to the latest data this week. This was a change of -3,436 contracts from the previous weekly total. See full article.


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

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

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