Tuesday 25th September 2018

Resource Clips


January, 2018

January 26th, 2018

Is another housing crisis on the horizon? Equities.com
Geology fundamentals—veins, dykes and sills Geology for Investors
Another positive year ahead for gold, says the World Gold Council Stockhouse
The gold cartel, sex scandals and GATA GoldSeek
Strong momentum for Chinese new energy vehicle industry Industrial Minerals
As junior mining rebounds, so does “froth and hype,” says Rosseau Asset Management CEO Warren Irwin SmallCapPower
Melt-up, up and away Streetwise Reports
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

Visual Capitalist looks inside Warren Buffett’s brain

January 26th, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist | January 26, 2018

What springs to mind when you think of legendary investor Warren Buffett?

For some, it’s his humble Omaha origins or his long-lasting obsession with Coca-Cola. For other people, it’s Buffett’s impeccable investing track record and extraordinary wealth that make a lasting impression.

While these are all legitimate connections to make with the Buffett name, perhaps he is most synonymous with the discipline of value investing—the style and mindset Buffett has made famous over the decades.

This infographic provides a deep dive into Warren Buffett’s brain and it explains everything about his investing philosophy, along with the framework he uses to evaluate potential opportunities.

It’s the second part of the Warren Buffett Series, which Visual Capitalist has done in partnership with finder.com, a personal finance site that helps people make better decisions—whether they want to jump on the cryptocurrency craze or follow Buffett’s more traditional path to financial success.

 

Visual Capitalist looks inside Warren Buffett’s brain

 

Note: New series parts will be released each month. Stay tuned for future parts with Visual Capitalist’s free mailing list.

Warren Buffett’s investment philosophy is well known. He famously focuses on the intrinsic value of companies and he buys stocks when they are “on sale.” Buffett’s not afraid to accumulate big positions in companies he likes—and his favourite holding period is “forever.”

While this formula may seem simple on paper, it’s extremely nuanced and complex in practice.

How does Buffett’s brain work?

Buffett has said that he borrows 85% of his investing style from Benjamin Graham and 15% from Phil Fisher.

Benjamin Graham:
The godfather of value investing gave Buffett a framework for finding undervalued assets and companies.

Phil Fisher:
The famous growth investor showed Buffett the importance of investing with good management teams. According to writer Robert Hagstrom, Buffett applies these ideas by focusing on four key principles of investing:

1. Analyze a stock as a business
Have the priorities of a business owner and look at the company from a long-term perspective. Is it increasing its intrinsic value? Would you want to own the entire company?

2. Ensure a “margin of safety”
Buffett considers “margin of safety” the three most important words in investing. In other words, does a company have more intrinsic value than book value?

3. Manage a focused portfolio
Concentrate on a few stocks that will provide above-average returns over time. Buffett suggests investors think of this as owning a “punch card” with just 20 investment choices that can be made over a lifetime.

4. Protect yourself from Mr. Market
Mr. Market can be speculative and emotional, and he should not be relied upon as a predictor of future prices. Instead, take advantage of Mr. Market periodically, whenever there is a fire sale.

Buffett’s investment criteria

Here are 12 key factors Buffett considers when looking at potential opportunities:

1. Simplicity
Is the business easy to understand?

2. Operating history
Has the business been around for a long time, with a consistent operating history?

3. Long-term prospects
Is there reason to believe that the business will be able to sustain success in the long term?

4. Rational decisions
Is management wise when it comes to reinvesting earnings or returning profits to shareholders as dividends?

5. Candidness
Does the management team admit mistakes? Are they honest with shareholders?

6. Resisting the “institutional imperative”
Can the company resist temptations created by institutional dynamics, such as imitating peer companies, or resist changes in direction?

7. Profit margins
Does the company have high profit margins?

8. Return on equity
What is the return on equity (ROE) of the business?

9. Owners’ earnings
What is the company’s ability to generate cash for shareholders, who are the residual owners? This is technically defined as free cash flow to equity (FCFE).

10. One-dollar premise
For every dollar retained from net income, does the company create at least one dollar of market value?

11. Intrinsic value
What is the value of the future owners’ earnings, discounted back to the present?

12. Margin of safety
What’s the chance you’ll lose money on the stock, in the long run, if you buy it at today’s price?

Or to sum all of these ideas up succinctly, here’s a quote from the man himself.

My strategy is to find a good business—and one that I can understand why it’s good—with a durable, competitive advantage, run by able and honest people, and available at a price that makes sense.
—Warren Buffett

Credits: This infographic would not be possible without the great biographies done by Roger Lowenstein (Buffett: The Making of an American Capitalist) and Alice Schroeder (The Snowball), as well as numerous other sources cataloguing Buffett’s life online.

Posted with permission of Visual Capitalist.

Gianni Kovacevic sees greater potential for copper than any other energy metal

January 26th, 2018

…Read more

January 25th, 2018

Another positive year ahead for gold, says the World Gold Council Stockhouse
The gold cartel, sex scandals and GATA GoldSeek
Strong momentum for Chinese new energy vehicle industry Industrial Minerals
John Mauldin’s five economic predictions for 2018 Equities.com
As junior mining rebounds, so does “froth and hype,” says Rosseau Asset Management CEO Warren Irwin SmallCapPower
Melt-up, up and away Streetwise Reports
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

The VRIC verdict

January 24th, 2018

A bull market’s coming but this one differs from its predecessors, the Vancouver Resource Investment Conference hears

by Greg Klein

The bull’s coming but this market differs from its predecessors, the Vancouver conference hears

Overflow crowds paid rapt attention to keynote speakers, panels and debates.

 

Okay, so over 8,000 people attended this year’s event, where over 300 companies set up shop on a sold-out exhibit floor and speakers drew SRO audiences. But how best to describe the enthusiasm? In a sector where bull or bear often depends on mood, any ursine trespassing on this event risked getting horns-gored into raw and bloody shredded beef. If anything, that would have marked an appropriate finale for the January 21 to 22 Vancouver Resource Investment Conference 2018.

But if the bull’s back, it’s not necessarily a repeat performance. These are unprecedented times, according to some speakers.

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Marin Katusa, Rick Rule, Joe Martin, Doug Casey and
Frank Holmes exchange barbs during a panel discussion.

“For the first time in my lifetime, the gold mining industry has actually decided to become an industry rather than a floating abstraction,” declared Rick Rule. “The insanity of the industry, the stupidity of the industry has meant that the opportunities for attractive capital deployment are better than they have ever been.” He now sees an industry focused on economic results. That, combined with investors’ performance expectation, “which is nil, is going to yield surprise after surprise after surprise in 2018, damned near all of those surprises being good.”

Commodities, he said, “are unloved, under-owned, undervalued and in an uptrend.” But he attributes price recovery not so much to renewed demand as to “damaged supply” during the bear market. The time lag to build new mines means “price response in the market can be very messy, and the consequence of that can be very pleasant.”

With majors and intermediates facing a “really threadbare” development pipeline, Rule expects a five-year exploration boom and a busy M&A cycle that’s “more rational than in the past.”

He suggests investors size up companies’ people before scrutinizing the assets. Looking back on his own exploration investments, he credited project generators for an outsize proportion of success.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Animated crowds expressed keen interest, optimism and excitement.

“I’m not saying to ignore successful efforts in sole-risk exploration. What I am saying is to participate in the boom that is coming in exploration in the next five years by constructing a portfolio of prospect generators.”

Gold price discussion also drew observations of unprecedented circs.

Kitco Metals’ Peter Hug noted a break from a consistent 40-year trend. “Retail tends to sell at the bottom and buy at the top. What we’ve noticed in the last year, though, is a phenomenon that I have not seen, and that is retail is selling into strength.”

He sees $1,365 as a barrier to breach. “If we break through that resistance level, we’ll see $1,425 this year.”

For Rule, “gold did what I asked it to do in 2017, which is preserve my purchasing power, and interestingly it preserved my purchasing power at a time when confidence in the overall economy was fairly high. Gold stocks did not do what I asked them to do in 2017 and I suspect gold stocks will pick up pace in 2018.”

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

With 56 seconds to go, a director readies participants to close the TSX.

As for 2018 prices, “I wouldn’t be surprised to see gold at $1,500, but I wouldn’t be disappointed to see it stay at $1,350.”

Author/economist/lawyer James Rickards said we’re at “the beginning of the third great bull market in my lifetime,” following 1971 to 1980 and 1999 to 2011. He sees $1,400 gold possible this year. Even if that doesn’t happen, “I expect this to be a multi-year bull market that could go five, six, seven years and eventually go to $10,000 an ounce.”

He sees unprecedented actions among the Fed, which “is not just raising rates, they’re destroying money. They’re reducing their balance sheets. When you reduce your balance sheet, you make money go away. This is the opposite of QE. We call it QT, quantitative tightening.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

With just one second to go, the crowd’s excitement builds.

“And by the way, this has never happened before…. We’re in an unprecedented experiment. We’re all guinea pigs in this experiment.”

He added that the world holds enough gold to back a gold standard. “It’s just a matter of price.”

Cryptocurrencies placed high on VRIC’s agenda, maybe at the expense of energy and critical minerals. But a debate between gold bug Rickards, crypto bug Teeka Tiwari and crypto-hater Peter Schiff largely became an argument between Tiwari and Schiff, the latter sounding angry enough to bust an aneurysm.

Investment opportunities weren’t VRIC’s sole excitement. A near-stampede broke out with the announcement that free booze was available in the four corners of the Speakers Hall. But the tumult was quelled just as suddenly by the next announcement—Joe Martin’s induction into the Resource Hall of Fame.

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Jay Martin looks on as Joe Martin accepts
the 2018 Resource Hall of Fame honour.

The tribute followed more than 20 years of successful conferences staged by the Cambridge House International founder. Yet it wasn’t the first time he’s won an award that he created himself, pointed out his son, Cambridge House president Jay Martin. “If you think that’s weird,” Jay emphasized, “Joe Martin does not give a shit what we think about Joe Martin.”

Even if he did, he needn’t have worried about the heartfelt remarks that pre-empted a proper roasting by panel members. An appreciative audience heard about Martin giving the mining industry a forum through good times and bad, helping to educate investors, building a community within the industry and, outside of business, putting his fundraising acumen to work for charities.

Cambridge House heads to Toronto for the Cantech Investment Conference 2018 on January 31, then returns to Vancouver to host the International Metal Writers Conference 2018 from May 15 to 16, billed as the “largest gathering of investment newsletter writers from around the world.”

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Overlapping with VRIC, the Association for Mineral Exploration
Roundup 2018
took place right next door. Native music proved
to be an Exhibit Hall attention-grabber.

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

At Roundup’s MineralsEd exhibit, teacher/writer Patty Kiloh sold copies
of Never Rest on Your Ores. Proceeds from Norman B. Keevil’s
history of Teck help MineralsEd encourage tomorrow’s expertise.

 

The bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

A Yukon Dan team member imparts some
traditional but still-practical skills at Roundup.

 

A bull market’s coming but this one differs from its predecessors, the Vancouver conference hears

Prior to next year’s VRIC, Cambridge House presents Vancouver’s
International Metal Writers Conference 2018 on May 15 and 16.

U.S. defence lobbyist and former air force commander Jeff Green welcomes America’s move towards a critical minerals strategy

January 24th, 2018

…Read more

January 24th, 2018

Another positive year ahead for gold, says the World Gold Council Stockhouse
The gold cartel, sex scandals and GATA GoldSeek
Strong momentum for Chinese new energy vehicle industry Industrial Minerals
John Mauldin’s five economic predictions for 2018 Equities.com
As junior mining rebounds, so does “froth and hype,” says Rosseau Asset Management CEO Warren Irwin SmallCapPower
Melt-up, up and away Streetwise Reports
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

Earn-in brings Far Resources into 92 Resources’ NWT lithium project

January 23rd, 2018

by Greg Klein | January 23, 2018

High-grade sampling and positive Phase I metallurgy have drawn tangible interest to a Northwest Territories hard rock lithium property. In a deal announced January 23, Far Resources CSE:FAT may earn up to 90% of 92 Resources’ (TSXV:NTY) Hidden Lake project 40 kilometres east of Yellowknife. The full 90% would cost Far $50,000, $1.45 million in shares and $2.3 million in spending. 92 would get the cash and $500,000 of the shares on closing, while Far would put $500,000 into the project during the first year to earn an initial 60%. Far would act as project operator.

Earn-in brings Far Resources into 92 Resources’ NWT lithium project

Grab and channel samples from outcropping
pegmatite reveal Hidden Lake’s high lithium grades.

92 stated it would “benefit from bringing in a financially and technically strong partner to further develop the project and, in the process, will become a substantial shareholder of Far Resources with the ability to share in the project’s success.”

With seven known pegmatites, the 1,849-hectare Hidden Lake property has shown grab sample grades up to 1.86% Li2O. Channel sample results include 1.58% Li2O over 8.78 metres, 2.57% Li2O over 0.75 metres and 233 ppm Ta2O5 over 1 metre.

Phase I metallurgy conducted for 92 used conventional methods to produce a high-grade concentrate of 6% to 6.5% Li2O, with recovery rates between 80% and 85%.

The earn-in leaves 92 free to pursue other projects and acquisitions. Its current portfolio includes the Golden frac sand project in eastern British Columbia, adjacent to Northern Silica’s Moberly silica operation, as well as three recently acquired lithium properties in Quebec. A brief site visit to one of them scored a 7.32% Li2O grab sample.

92 closed an oversubscribed private placement of $1.14 million earlier this month.

Read Isabel Belger’s interview with 92 Resources CEO Adrian Lamoureux.

Resource update precedes PEA for Golden Dawn Minerals’ newest B.C. gold-polymetallic project

January 23rd, 2018

by Greg Klein | January 23, 2018

Update: On February 6, 2018, Golden Dawn Minerals reported that Huakan International Mining, which optioned J&L to Golden Dawn, faced a lawsuit from Armex Mining, which claims it has a valid letter of intent with Huakan concerning J&L. Huakan intends to defend the Armex action, Golden Dawn added.

Calling it one of western Canada’s “largest undeveloped gold mineral resources,” Golden Dawn Minerals TSXV:GOM released a new estimate for J&L, a southern British Columbia project acquired just last month. The company now expects to finish a preliminary economic assessment within five to eight months for a project that will be developed separately from the Greenwood portfolio farther south, where Golden Dawn plans to revive three former mines and a nearby mill.

Totals for four zones at J&L showed:

  • measured and indicated: 5.16 million tonnes averaging 4.59 g/t gold and 55.6 g/t silver for 761,000 ounces gold and 9.23 million ounces silver

  • inferred: 4.8 million tonnes averaging 4.35 g/t gold and 60.6 g/t silver for 672,000 ounces gold and 9.37 million ounces silver
Resource update precedes PEA for Golden Dawn Minerals’ newest B.C. gold-polymetallic project

The highway-accessible property came with a rail siding and loading facility 35 kilometres south in Revelstoke, as well as a 40-person camp, maintenance buildings, workshops and underground mining equipment.

Incorporating lead and zinc grades, the company attributed 1.35 million gold-equivalent ounces to M&I and another 1.07 gold-equivalent ounces to the inferred category.

The four zones comprise Main, Yellowjacket, Hanging Wall and Footwall. Main extends over 1.5 kilometres along strike and 850 metres down dip, remaining open for expansion, the company stated.

Meanwhile the Greenwood revival continues as Golden Dawn prepares to begin trial mining at the Lexington gold-copper past-producer within months. The company’s busy, multi-project activities are summarized here.

Read more about Golden Dawn Minerals.

January 23rd, 2018

You’ll want to read this living legend’s thoughts on copper Stockhouse
The gold cartel, sex scandals and GATA GoldSeek
Strong momentum for Chinese new energy vehicle industry Industrial Minerals
John Mauldin’s five economic predictions for 2018 Equities.com
As junior mining rebounds, so does “froth and hype,” says Rosseau Asset Management CEO Warren Irwin SmallCapPower
Melt-up, up and away Streetwise Reports
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal