Monday, 22 April 2019

Selecting Precious Metal Miners and Explorers

Searching for excellence

Precious metal explorers as investment vehicles have a long standing track record of extreme volatility. As Rick Rule of Sprot Asset Mgt. USA uses to formulate it: “We have known both the thrill of victory and the agony of defeat”.
It is obvious that the success of precious metal explorers goes together with both the exploration talent of a small team of geologists and with their broader management skills. Add just a grain of luck in picking among the promising geological anomalies the successful drilling locations. To end this introduction with another quote of Rick Rule: “Profitable miners ultimately will see their share price reflect increased cash flows from mining operations, but you can’t count on a gold bull market to bail you out of a dumb decision on an explorer investment.”


Saturday, 9 March 2019

Prospectors & Developers Association of Canada - PDAC 2019

PDAC is the world’s premier mineral exploration & mining convention. In addition to meeting over 1,000 exhibitors, 3,500 investors and 25,600 attendees from 135 countries, you can also attend technical sessions, short courses and networking events. The four-day annual convention held in Toronto, Canada, has grown in size, stature and influence since it began in 1932 and today is the event of choice for the world’s mineral industry.

Tuesday, 5 March 2019

Gold Stock Analyst Investor Day

Gold StockAnalyst (GSA) is the market's most respected and successful source of insight and guidance for gold stock investors. The title of GSA's flagship newsletter — GSA Top10 — also sums up its unique investment approach that has an amazing — and verified track — record. Future results cannot be guaranteed, but we promise the GSA Top10 is unlike any stock research you've ever seen.
GSA has been founded by John Doody, an Economics Professor for almost two decades. Doody became interested in gold due to an innate distrust of politicians and concern over their habit of debasing the currency via inflationary economic policies. Other than the Top10 list, John Doody also publishes a full coverage GSA_PRO list covering a universe of about 60 gold miners and developers (near producers). Pure exploration is out of scope. Since 2012, there equally is a Top5 silver miners list (only 5 since there are fewer to choose from).

Monday, 4 March 2019

Credit Suisse Global Investment returns Yearbook 2019

By end February the investment community is eagerly waiting for the publication of the new Global Investments Yearbook. This publication is a continuation of "Triumph of the Optimists: 101 Years of Global Investment Returns" (Princeton University Press, 2002) by Elroy Dimson, Paul Marsh and Mike Staunton.

Saturday, 26 January 2019

Miners will continue to disappoint

Last Friday we witnessed a magnificent miner rally as gold broke above $1300 for the first time since mid June 2018.  However, miners have been disappointing for most of the past 18 months. There is no obvious reason why this dire situation would suddenly improve. 

Saturday, 29 December 2018

Precious metals mining in 2018: a dark cloud with a silver lining & 2019 outlook

Short 2018 mining review

Early last year we witnessed gold rallying rapidly to what was to be its 2018 high. Till about mid May, the yellow metal managed to uphold $1300. Miners however have mostly been lagging the advance of gold, with the HUI/Gold ratio in decline and bottoming early September, after gold made its low by mid August.

Friday, 30 November 2018

Diverging price trends among precious metals

Diverging price trends among precious metals

Precious metals in a downtrend over 2018 is a story of the more obvious. The failing gold rally early in the year and the breakdown of silver leading to a gold/silver ratio now over 86. Platinum is another horror story: longs were lured in a failing rally of this denser precious metal. Yet by mid August, platinum plunged to $767.  Even during the four year gold bear market, platinum had not seen such price level. Today (30 Nov), Platinum again is to close below $800/Oz, making the Gold/Platinum ratio rise to 1.533. Two ounces of gold now buy over three ounces of platinum. 

Wednesday, 31 October 2018

Miners once more lagging precious metals

The Randgold - Barrick merger lifted enthusiasm within the mining sector. As the metal turned up with gold breaking and holding above $1200/Oz (despite a rising USD and interest rates creeping up), miners seemed ready for a lengthy rally, especially after HUI/Gold completed an inverted head and shoulders pattern.

Saturday, 29 September 2018

The HUI/Gold ratio: what's left in Pandora's box?

With the yellow metal stubbornly quoting below $1200/Oz, miners suffered badly. The HUI index is closing 2018 Q3 at 141.1. Earlier, n September 10, the HUI closed at a low of 134. We need to look back to early Feb 2016 to find a lower close.

Sunday, 26 August 2018

Recovery rally doesn't cure the disease

Mid August, the HUI miner index plunged to 139: beneath both the Dec 12, 2017 bottom (175) and the Dec 15, 2016 bottom at 163.5. After Friday's rally HUI now posts at 146.8, which still is well below said bottoms. The recovery rally merely alleviates the pain but it doesn't cure the disease.