The Mining Play

Other Mining Stocks

NOVO continues to impress. Hard to imagine just how high this one will eventually go when they start production. https://thewest.com.au/business/public-companies/novo-adding-more-nuggets-to-pilbara-conglomerate-play-c-615365

RNX seems to have broken out as well as they have become a 100K ounce per year miner.

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Hah! I was just going to post the same article and make a similar comment on NOVO. Quarter-by-quarter, the risk factors seem to be diminishing and the reward factors increasing. In addition, they just added Sumitomo’s General Manger of the Non-Ferrous Metals Business Department to their BOD. Sumitomo is in a JV with NOVO’s Egina project.

They seem to be clicking on all cylinders. I will be looking to confidently to dollar-cost average to my NOVO position with my current average price of $2.71.

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Many here already listen to Eric Sprott’s weekly blog, but for those who may have lost the link or may be interested, here is today’s audio clip.

52 week high on NOVO today…nice close!

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Been pretty happy with my old standby; Hecla.

Congrats on Hecla! HL is a proven company that has been around a long time. It has done well since bottoming this past spring and broke through it’s MA 50 late in summer crossing the MA 200 mid Oct. It has a nice history and chart doing very well when the PMs do well. Many of the Gold and Silver miners have done particularly well recently in the face of current economic and political uncertainty. The producing miners are much more predictable and cyclical in nature than the speculative miners that may have spectacular breakouts on occasion. Charts are very useful for both producing and speculative miners. The caveat with charts is that everyone should do exhaustive research (Due Diligence) before investing in anything. That’s a hard learned lesson for most that have ventured to post on this forum, including me. There is no denying that there have been far too many bumps on the road to prosperous investing in the PM miners.

Commodity markets tend to run largely in economic and seasonal cycles, but PM trend cycles are much less predictable, a good reason to diversify investments. Favorable times to be a buyer or seller is the responsibility of each individual based on their own DD and risk/reward decisions.

Producing miners with mineable mineral reserves and economic viability will do well over time. The longer-term charts are very useful for determining trends, but they do not tell the whole story.

I debated whether to post this on the main thread, but decided this was a better forum for those who may be interested. I decided to do some reading, perhaps learning something of value along the way, rather than watching paint dry on the main thread. The long article referenced applies to the mining sector in general. The various parts of the article discuss factors affecting the Junior Miners, and more specifically of interest the speculative exploration stage miners. Perhaps a few on this thread would benefit by applying information gleaned from reading the article to more profitable future investments.

In an ROI Roundtable titled “ Mistakes of the Past ” the following quote (pg10) exemplifies what is discussed and shown in the table that follows:

More specifically, they selected as the two drivers that most significantly lowered ROI in recent years as, “over-optimistic commodity price predictions over the life of a mine” and “capital expenditures underestimated."


Also of interest are a couple of quotes extracted and appearing on page 9, 12 & 13 for those investing long and short term in MUX, FWIW. I do hold a sizeable core position in MUX as I have disclosed earlier in this this forum’s thread.

ROB MCEWEN

There is a lot of mystery in all the metrics. But there’s the excitement the industry offers investors when there’s a stronger metal market and this industry roars. And then no one is really sitting on the sidelines and looking at ROI.

The cyclical nature is one element, but there’s also the ease of entry of getting into the industry. It doesn’t take a lot of money to get in, and so we have a lot of entrants at various points when money’s plentiful. And so we’ll get a boom/bust mentality.

Right now we’re capital constrained, so that’s adding the discipline to the market. I think the investment dealers seduced the industry into believing there was an endless source of money and they’d give it to you on a handshake almost, and you’d go build.

But I don’t think we had the project management skills because as the money owed in, it just begged for bigger and bigger operations and there weren’t a lot of people that had built a billion-dollar mine. And then there are all sorts of moving parts that if someone delays you by a day, suddenly you have trouble.

MODERATOR

Some clever person should hold on to some of their bullion Is this pie in the sky, Rob, or is this
feasible? How long do you go without tselling your gold?

ROB MCEWEN

It’s possible, but it depends on your operating budgets. At Red Lake we had 67% gross margins, 34% net margins. And we were rivalling pharmaceutical companies at that point. But not a lot of the industy is in that position.

And thresholds are important, those barriers. You don’t make yourself popular with investment bankers. If you’re exercising this discipline in not pushing out a lot of stock, you might not get as much following in the marketplace.

There are several additional quotes from Rob McEwen that occur in the finishing pages of the report. I’ve already made this post much longer than intended, so I’ll finish with one last quote in the final chapter of the report titled The Way Forrward (pg 20):

Our survey respondents said the best paths for mining management to follow to significantly increase ROI are: better financial discipline in deciding which projects to develop (47%); better cost estimation in feasibility studies 20%); and better financial discipline in mergers and acquisitions (10%).

Our Roundtable participants point with some urgency to human resources issues in the years ahead, especially with regards to proper succession planning; better recruitment and training of new graduates; and creating a more welcoming work culture for women, aboriginals and young people.

I’ll end the quotes here. I know this post may not interest many looking for the next “hot stock” to invest in. Personally, I found the discussion in the research report to be quite useful and informative in allowing me to better influence informed decisions as I rebalance my portfolio for the year ahead. It is my wish that all here enjoy a happy and prosperous future in the years ahead and avoid the mistakes of past investments. The entire report may be found here:

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From Outlook 2020 Friday December 27, 2019:

Eric Sprott now owns 9% of Prophecy.

TORONTO, ON / December 30, 2019 / JMN Wire / Prophecy Development Corp. (TSX: PCY) (OTCQX: PRPCF) Executive Chairman Mr. John Lee discusses recent developments at the Company’s 100% owned high-grade Pulacayo Silver-Lead-Zinc Project located in Bolivia’s Silver Triangle.

Thanks to a recently completed $3.9 million private placement backed by Eric Sprott, who now owns 9% of the Company, Prophecy has commenced a Phase II diamond drill program. The 5,000 meter drilling campaign will focus on high-priority step out targets located up to 1.5 kilometers west of the current N.I. 43-101 mineral resource at Pulacayo. The objective is to further delineate the continuity of the mineralized system at Pulacayo, which historical records suggest could extend along a strike length of up to three kilometers and to a depth of as much as 1,000 meters. Lee believes that based on the historic production results at Pulacayo, in which the richest ores were discovered at the deepest depths, this next round of drilling could uncover significant mineralization not previously outlined.

The sector is heating up and if anyone missed this, take a look. it was quite good.

https://www.gowebcasting.com/events/precious-metals-summit-conferences-llc/2019/11/12/crikey-what-s-going-on-with-gold-by-grant-williams/play/stream/28893

Here is link to all of presentations.

https://www.gowebcasting.com/conferences/2019/11/11/precious-metals-summit

It all makes sense but it’s not the same world as 1929, 2000, and even 2008.

If Grant is right! It may pull our MDMN out of the 6ft grave but not filled in yet, is the way I see it. I have a large portion of my 401k in a Precious Metals Funds. It’s up 50%, and I sleep at night.

This is as I have watched the broader market go up, down, and then way up when the FED juiced it UP again since Sept. from action in Repo market; although it has settled down end of year. See what comes in Q1 2020.

MDMN has made me severely gun shy in individual stocks.

Basket of mining stocks or maybe better the Trust funds like Franco Nevada and Royal Gold Trust is what I am eying now. Here are those compared to to GDX/GDXJ with MUX.

I was going to buy some of MUX and glad I did not. But it is recovering as of late. Bottom line, I am gun shy unless I have the time to time to do my own DD; as I have learned dearly. I am too busy at work as to help rebuild from my losses on MDMN. Bonus potentials and build up my resume.

But maybe I will get lucky and Hochschild Mining Plc will pull a rabbit out of its hat and help us all recover.

On another note, Wolf Richter from Wolfstreet has shorted the whole market. It’s fun to read the comments post vowed never to short the market again. Some agree, some say too soon.

But if he’s right, it should help the mining resource sector.

TDK
PS-Happy New Year everyone. Good luck.
Easymillion, special Happy New Year to you, we should chat some time in the new year.

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On my weekly S&P500 futures chart going back a year this is the first time the Relative Vigor Index didn’t peak with each peak in the 500 index. Time to stock up on TVIX ??? And NUGT too ??? Next week should give us the answer as to whether or not a downturn is imminent.
Maybe it’s just a coincidence but the last time we had the market drop over 20% was back on Oct. 1, 2018. It started dropping 8 weeks after the RVI peaked on Aug. 1. This time around the RVI peaked 8 weeks ago. We’ll see. This isn’t a prediction on my part. Most of my predictions are wrong. It’s just an observation. :face_with_monocle:

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IVS.T has been creeping up some on a little more volume than usual. Took some money off the table :wink:

I’m wondering if someone is pushing it up in order to exercise stock options that can be exercised at .15.

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Adding dividends can make it even better.

TDK

Inventus Mining Completes Private Placement Financing

Heavy insider buying, including Rob McEwen with this placement - the size which increased twice before completion.

“Certain insiders of the Company, including officers, holders of 10% or more of the issued and outstanding common shares of the Company and directors of 10% holders, have agreed to acquire an aggregate 4,666,529 Units, for gross proceeds of $489,986.”

“Evanachan Limited, a company owned and controlled by Rob McEwen has acquired 2,381,000 Units for gross proceeds of $250,005. Immediately prior to the closing of the Offering, Mr. McEwen beneficially owned 23,035,833 Common Shares and 1,200,000 Common Share purchase warrants of the Company (representing approximately 20.9% of the total issued and outstanding Common Shares on a non-diluted basis, or approximately 21.7% of the total issued and outstanding Common Shares on a partially diluted basis) and, accordingly, is an “insider” of the Company.”

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Prophecy Drills 10 Meters Grading 539 g/t AgEq within 35.5 Meters grading 230 g/t AgEq, Starting 31.5 Meters Downhole at first Pulacayo step-out hole

ELY Gold Royalties (ELGF) breaking out - I got lucky for once, but I ain’t selling as I think this is a great long-term play for years to come, will be adding. I ain’t thinking Franco-Nevada numbers, but one of the company’s goals this year is to start paying a regular dividend. Maybe that is coming earlier in the year than expected … we’ll see.

This is kinda of fun if you are looking for some new juniors:

https://insidexploration.com/top-20-of-2020-part-1-of-2-junior-mining-companies-to-add-to-your-watchlist/

https://insidexploration.com/top-20-of-2020-part-2-of-2-junior-mining-companies-to-add-to-your-watchlist/

ELYGF up 3.9 cents today! Rule and Sprott own about 49% of this company - hmmm …

Royal Nickel news released this morning.

http://www.rncminerals.com/2020-01-23-RNC-Minerals-Provides-2020-Production-Cost-Guidance-and-Strong-Operational-Update

FWIW: Steady progress towards becoming a long term play. Sustained production guidance of 90-95 kOZ for current year. AISC is still high, but expanding exploration of high-priority targets with good drill results in open pit areas. Does not say much about Beta Hunt (reference back to Jan 8 PR). Focused on growing gold production and reducing costs in newly acquired properties. PR is detailed 2020 guidance.

Here’s a really good article on where gold is headed into March.
https://www.gold-eagle.com/article/gold-price-forecast-target-1700-march

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