Monday 23rd April 2018

Resource Clips


Posts tagged ‘gold’

Silver supply deficit fails to boost price, Silver Institute study finds

April 16th, 2018

by Greg Klein | April 16, 2018

Notwithstanding a decline in production, silver fell slightly in price and lost further ground to gold last year, according to the World Silver Survey 2018. Prepared by Thomson Reuters for the Silver Institute, the 28th annual study reported total supply of 991.6 million ounces in 2017, compared with physical demand of 1,017.6 million ounces. The 26-million-ounce deficit grew to 35.2 million ounces when ETP and exchange inventory increases were factored in.

Silver supply deficit fails to boost price, Silver Institute study finds

But at $17.05, the average price represented a 0.5% year-on-year drop. The metal ended the year at $16.87, having traded between $15.22 and $18.56 during 2017.

While recycling provided most of the remaining supply, the year’s global mine production came to 852.1 million ounces. That represented a 4.1% decline attributed largely to “supply disruptions in the Americas,” most notably Guatemala, where Tahoe Resources TSX:THO had its Escobal mining licence suspended, and the U.S., where a strike beginning in March 2017 forced Hecla Mining NYSE:HL to slash production at its Lucky Friday mine. Australia and Argentina also showed considerable declines.

Canada, ranking 14th for silver production, extracted 12.7 million ounces last year, compared with 13 million in 2016.

Meanwhile, gold has been leaving silver behind. Year-end prices for 2016 showed the yellow stuff selling for 71.4 times the price of its poorer cousin. The 2017 gold:silver ratio averaged 73.9:1, hitting 77:1 by year-end, “a high level that perhaps suggests that the market is trying to tell us something,” Thomson Reuters stated. “We suspect the high gold:silver ratio indicated that the market had been expecting another major crisis could be looming, or at the least that it was about time for equities correction, and therefore investors had been accumulating physical gold in the market.”

Another precious metal also paled in comparison with gold, which ended 2017 at an historical high of 1.4 times the price of platinum.

But investors looking at silver and platinum’s catch-up potential should consider “gold’s role as a safe haven and that some smart money has been hedging against geopolitical risks and potential correction in equities,” the study added.

New in numismatics: Ovoid-shaped black light coin commemorates Manitoba UFO sighting

April 4th, 2018

by Greg Klein | April 4, 2018

The story was weird enough to elicit disbelief, possibly all the more because the source was a prospector. But something very odd must have caused the burns Stefan Michalak suffered in the Manitoba woods one day in 1967. His explanation was a UFO. Now the Royal Canadian Mint has commemorated the Falcon Lake Incident with a rather weird item of its own—an unevenly elliptical glow-in-the-dark $20 one-ounce silver coin.

New in numismatics Ovoid-shaped black light coin commemorates Manitoba UFO sighting

For dramatic effect, as the Mint explains, “photo-luminescent outlines of the UFO, its beam-like blast and the silhouette of an injured Michalak, glow in the dark under black light. This phenomenal keepsake, and many other new arrivals, are now available for purchase.” A small black light flashlight’s included.

But, as Michalak’s son emphasized to the CBC last year, Stefan never claimed to have seen anything from outer space. He simply described what he did see. He even speculated that it might have been a secret U.S. military vessel. UFO researcher Chris Rutkowski called it “possibly Canada’s best-documented UFO case.”

Just 4,000 copies of the coin have been minted. With a face value of $20, it costs only $129.95.

New in numismatics Ovoid-shaped black light coin commemorates Manitoba UFO sighting

(Images: Royal Canadian Mint)

Taking unusual contours to an even more unusual level, the Mint also released a set of two yin-yang-shaped pieces that fit together to form a one-ounce silver circle. Suggesting “harmony and balance among opposing forces,” yin and yang each have a $10 face value. But the set will cost you $164.95.

Among the more striking designs recently struck is “an ultra-high relief engraving” of the Kwakwaka’wakw Thunderbird image, likely to send chills down the spine of anyone not already shivering in the West Coast rainforest’s lingering winter. Another one-ounce silver coin, this one sells for $149.95.

Some imaginative February releases included a $250 gold coin embedded with 17 rubies and platinum plating to evoke the Queen’s Burmese Tiara. Limited to 175 copies, it costs $6,999.95 with three- or four-month payment plans available. February also saw the Mint’s first five-ounce curved or convex coin, the silver $50 Maple Leaves in Motion. It goes for $579.95 but 99% of the 2,000 coins have been sold.

Each of the collector’s items comes with a 30-day money-back guarantee.

Canada’s coin-casting Crown corporation credits itself as “one of the largest and most versatile mints in the world.”

“Gold, sir—gold!”: Peter Munk 1927-2018

March 28th, 2018

by Greg Klein | March 28, 2018

“He was the greatest gold miner of the modern age, a silvery, immaculate, dashing, and indefatigable tycoon with the menacing aplomb of a Florentine prince.” Matthew Hart’s 2013 description presaged the tributes that poured in after Peter Munk died in Toronto on March 28 at the age of 90.

Gold, sir-gold Peter Munk 1927-2018

Peter Munk 1927-2018

Saying “much nonsense has been written about Munk,” Hart profiled the celebrated miner in Gold: The Race for the World’s Most Seductive Metal. It was a bribe of cash and gold that bought 16-year-old Munk and his family out of wartime Hungary, but he didn’t return to the yellow metal until much later, and that followed a few spectacular business failures.

“We needed to find a business before it became popular, a business that was so unfashionable no one wanted to get into it,” said Munk. Such was the state of gold in 1983. Such was Munk’s eureka moment, which came not through a mineral discovery but a realization:

“Gold, sir,” Munk declared. “Gold! It carried the highest multiples. Gold shares sell at a very high value in relation to their earnings because a gold share is perceived to be not just a share but an option or a call on gold as well. If you buy Swatch watches, if you buy Nestlé, you buy the earnings. If you buy gold shares you buy it because, hey!— this company has 2 million ounces of gold and I think that gold will go up in five years!”

But the newly minted miner “had no patience for rummaging in the bush,” Hart continues. “Barrick’s strategy would be to buy reserves, not find them. Growth would mean rapid growth. Munk built his company like Lego, snapping gold mines into place after deciding what would fit. He bought some mines for their gold and others for their people.”

He did rather well, allowing him to donate nearly $300 million to good causes. He’s survived by his wife of 45 years, five children and 14 grandchildren.

Read some of the tributes to Peter Munk here and here.

Infographic: The five biggest market risks that billionaires hedge against

March 23rd, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist | March 23, 2018

If you’ve studied the history of markets, you know that sentiment can turn on a dime.

Whether it is an unexpected wake-up call like the collapse of Lehman Brothers, or simply the popping of a bubble that’s blown too big, the tides can shift in a matter of hours or days.

No one knows this better than the world’s most elite investors—and that’s why billionaires like Warren Buffett, Ray Dalio, Bill Gross, Paul Tudor Jones II and Carl Icahn take the necessary precautions available to protect themselves from these big and unexpected market swings.

Five risks that keep billionaires up at night

This infographic comes to us from Sprott Physical Bullion Trusts and it highlights some of the potential market risks that could move markets, as well as how these elite investors are hedging to protect their fortunes.

The five biggest market risks that billionaires hedge against

 

While these are all market risks that billionaires are concerned about, it’s worth mentioning that these kinds of events are almost impossible to predict or forecast.

Despite the unlikelihood of them occurring, they all have the potential to impact markets—and that’s why elite investors are always active in hedging their investments.

A note on net worth

Why are billionaires so concerned—after all, don’t they have lots of cash to protect themselves?

It’s worth noting that on a relative basis, billionaires often aren’t very liquid at all. In fact, most of their net worth is usually tied up in business interests or other investments, and the value of these assets fluctuates with the market.

That means a big market movement could wipe out millions or billions of dollars in the span of hours. For an extreme example of this, just look at Mark Zuckerberg, who saw his net worth plunge $6 billion in just one day in the wake of his company’s most recent privacy crisis.

The five big market risks

Here are the risks keeping the world’s most elite investors up at night:

1. The return of inflation
Have central banks mastered monetary policy or is there a chance that inflation could come back with a vengeance? After trending down for decades, billionaire Carl Icahn says that creeping inflation could lead to higher interest rates, which he thinks would be “difficult to deal with for the market.”

2. Record-high debt
The most recent number for global debt is $233 trillion, and about $63 trillion of that is central government debt.

Bill Gross, the Bond King, says that our system is dependent on leverage, and the critical values that affect this are debt levels, availability and the cost of leverage. He said in a recent interview, “When one or more of these factors deteriorates, the probability of the model’s success and stability go down.”

3. Bond market worries
Last year, 84% of investors said that the corporate bond market was overvalued—and 82% said that the government bond market was overvalued.

In a recent interview, hedge fund billionaire Paul Tudor Jones II predicted a price plunge, saying that “bonds are the most expensive they’ve ever been by virtually any metric. They’re overvalued and over-owned.”

4. Geopolitical black swans
Elite investors continue to worry about geopolitical surprises that could impact markets, such as a trade war with China. We looked at this broad topic in depth in our previous infographic on geopolitical black swans.

5. Overzealous central banks
Lastly, many world-class investors are also concerned about the unintended after-effects of massive central bank programs in recent years. With $13 trillion in total QE pumped into global markets since 2008, investors are worried about how much room central banks have left to manoeuvre in a situation where the central bank “tool kit” is needed.

Posted with permission of Visual Capitalist.

Pistol Bay Mining begins drilling its expanded zinc-copper-polymetallic Ontario VMS project

March 22nd, 2018

by Greg Klein | March 22, 2018

With about 3,500 metres planned, Pistol Bay Mining TSXV:PST has drilling now underway at northwestern Ontario’s VMS-rich Confederation Lake greenstone belt. Three holes of about 500 metres each will supply material from the project’s Arrow zone for preliminary metallurgical tests. From there the rig shifts roughly eight kilometres west to the Fredart zone, aka the Copperlode A zone.

Pistol Bay Mining resumes drilling at its expanded zinc-polymetallic Ontario VMS project

Last year the company released a 43-101 resource for Arrow that used a base case 3% zinc-equivalent cutoff for an inferred category showing:

  • 2.1 million tonnes averaging 5.78% zinc, 0.72% copper,19.5 g/t silver and 0.6 g/t gold, for a zinc-equivalent grade of 8.42%

Contained amounts come to:

  • 274 million pounds zinc, 34.3 million pounds copper, 1.33 million ounces silver and 41,000 ounces gold

Obviously overdue for renewed attention is Fredart. The zone has conflicting historic, non-43-101 estimates of 386,000 tonnes averaging 1.56% copper and 33.6 g/t silver, or 219,500 tonnes averaging 1.95% copper and 41.8 g/t silver.

A January option agreement expands Pistol Bay’s Confederation Lake package by 3,700 hectares, for a total of about 20,700 hectares. The new turf comprises part of last year’s VTEM-Plus survey, the area’s first state-of-the-art regional geophysics. Some of the available, non-43-101 past intercepts from the acquisition’s Wasp Lake trend include 2.96% zinc and 0.04% copper over 2.79 metres, as well as 1.12% zinc and 0.04% copper over 7.19 metres. The same trend showed a strong conductive response on the VTEM-Plus results, Pistol Bay reported.

Another positive geophysical response came from the acquisition’s Fly Lake zone, where historic, non-43-101 assays reached as high as 1.36% zinc and 0.17% copper over 11.5 metres, along with 1.51% zinc and 0.08% copper over 8.9 metres. The zone appears to remain open along strike and at depth, the company stated. Nine other geophysical anomalies, meanwhile, appear to lack previous drilling.

The January option follows 5,860 hectares of staking last September that covers multiple conductors and IP anomalies identified in the airborne survey, as well as parallel conductors or extensions of known conductors.

Last month the company announced an amended agreement with a Rio Tinto NYSE:RIO subsidiary which will increase its hold on the C4, C5 and C6 uranium properties in Saskatchewan from 75% to 100%. The deal will bring Pistol Bay $1 million.

In January the company also announced progress with its PB Blockchain subsidiary as it builds “a suite of blockchain products to address needs that are particular to the data management and security of mining/oil and gas companies.”

Read more about Pistol Bay Mining here and here.

Selected bulk sample hits 2.46% cobalt, 6,173 g/t silver for Canada Cobalt Works’ Ontario project

March 16th, 2018

by Greg Klein | March 16, 2018

High grades continue as Canada Cobalt Works TSXV:CCW conducts underground bulk sampling at the past-producing Castle mine in eastern Ontario. A pulp assay on a 35-kilogram sample released March 16 showed 2.46% cobalt, 1% nickel and 6,173 g/t or 198.5 ounces per tonne silver.

Selected bulk sample hits 2.46% cobalt, 6,173 g/t silver for Canada Cobalt Works’ Ontario project

Visible cobalt mineralization can be seen
in the former Castle mine’s first level.

A metallic screen fire assay on a 66-gram native silver sample not included in the previous assay brought “a head grade of 818,254 g/t (26,307 ounces per tonne),” Canada Cobalt stated. The samples were selective and not representative, the company emphasized.

Samples came from the historic mine’s first level, where rehab engineers have observed cobalt mineralization in the stopes, Canada Cobalt added. In operation off and on between 1917 and 1989, Castle’s underground workings extend through 11 levels totalling about 18 kilometres.

Last month the company reported two mini-bulk samples, with one assaying 2.47% cobalt, 23.4 g/t silver, 0.68% nickel and 1.83 g/t gold, and the other showing 0.91% cobalt and 460 g/t silver. That followed two mini-bulk samples of 3.124% and 1.036% cobalt released in December. The company also has assays pending from a 2,405-metre surface drill program conducted last summer.

As for the former Beaver mine in Ontario’s Cobalt camp 80 kilometres southeast of Castle, in December Canada Cobalt released three composite samples averaging 4.68% cobalt, 3.09% nickel and 46.9 g/t silver.

Canada Cobalt appointed Ron Molnar as an adviser on the company’s proprietary Re-2OX process for extracting cobalt and lithium from used Li-ion batteries. “Molnar has designed, built and operated over 60 pilot plant circuits extracting, separating and purifying a wide range of metallic elements from cobalt to rare earths,” the company stated.

Canada Cobalt also plans to build a 600-tpd gold processing facility to be financed by Granada Gold Mine TSXV:GGM, which holds a project near Rouyn-Noranda, Quebec. The two companies share overlapping management and directors.

Canada Cobalt closed a private placement of $1.03 million in January.

Rick Rule takes an unconventional approach to spotting opportunities in gold mining

March 15th, 2018

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Visual Capitalist: Why investors turn to copper as an inflation hedge

March 6th, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist | March 6, 2018

Why investors turn to copper as an inflation hedge

 

Every year, a vast amount of copper is used by the global economy to manufacture a wide variety of goods.

It’s a major ingredient in big-ticket consumer goods like autos, appliances, electronics and new homes. Simultaneously, copper is also gobbled up for many industrial uses including telecommunications, utilities, construction and industrial machinery.

An economic bellwether

This infographic comes to us from Kutcho Copper TSXV:KC and it shows the red metal’s important role in the economy, as well as why it has become a famous economic bellwether.

Rising demand
When the economy is doing well and new things are being made, demand soars for the red metal.

Rising price
When demand goes up, it drives the price of copper higher.

All eyes on copper
Because of this historic relationship, analysts around the world watch the price of copper closely.

Dr. Copper
Copper’s long history of predicting economic movements has famously earned it a nickname as the metal “with a PhD in economics.”

In other words: when construction and manufacturing are growing, so do sales of copper products. But this link as an economic gauge has other important implications, especially to investors looking to build a robust portfolio.

Rising prices, rising copper

While copper’s link to economic trends is interesting, its power to shield a portfolio from inflation is even more compelling.

Rising prices come from an overheating economy with strong consumer spending—the same factor that is an influence on copper prices. As a result of this connection, for every 1% annual increase in consumer prices since 1992, copper’s price jumped almost 18%.

In an analysis by Bloomberg Intelligence, copper outperformed every major asset class aside from energy as an inflation hedge—and during periods of rising consumer prices, copper had triple the 5.2% gain logged by gold.

A threat to portfolios

Inflation can absolutely kill an unprotected portfolio.

Why? If inflation is higher than the portfolio’s rate of return, then that portfolio is actually producing a negative real return. (Example: 2% growth – 3% inflation = -1% return.)

In other words, inflation can be a “stealth” threat that chips away at returns, especially for fixed income portfolios. The good news: holding copper or other commodities can protect against rising prices.

Copper is more sensitive to inflation and the dollar because of its uses and its growth with the economy.—Jodie Gunzberg,
S&P Dow Jones Indices

Copper: The inflation hedge

At the end of the day, other industrial metals are very specialized in their use, and precious metals tend to be driven by investor sentiment.

Copper, on the other hand, is used in a vast array of industrial and technological uses, which makes it a proxy for the economy as a whole.

Posted with permission of Visual Capitalist.

B.C. explorers boost spending for first time since 2012

March 5th, 2018

by Greg Klein | March 5, 2018

Despite a bad year for wildfires, it’s British Columbia’s first mineral exploration spending increase in four years and a substantial increase at that. The sector spent over $41 million more in 2017 than the previous year, a 20% jump to total $246 million province-wide. Most of the activity took place in two regions, with the northwestern Golden Triangle accounting for more than $11 million of the $41-million increase, showing a regional total of $82 million. In the southern Interior’s Cariboo, exploration increased by $19 million, 70% more than in 2016.

The data comes from the second annual British Columbia mineral and coal exploration survey released at PDAC on March 5 by EY, B.C.’s Ministry of Energy, Mines and Petroleum Resources, and the Association for Mineral Exploration. Twenty prospectors and 175 companies contributed responses.

“Although still considerably down from the peak years of 2011-12, there is cause for optimism that the upward trend will continue given the outlook for continued price stability, an overall strengthening of global market sentiment towards exploration, improvements in the capital markets for financing mineral and coal exploration, and a more favourable future market outlook,” the report stated.

The 2017 bleak spot was the province’s northeast, where exploration plunged 75% to $2.4 million last year, mostly due to diminished demand for Peace district coal.

Diamond drilling in B.C. more than doubled from 300,000 metres in 2016 to over 600,000 metres last year, accounting for 37% of total exploration spending.

Although the report cautions that it’s too early for a conclusion, the results seem to indicate the province has set a “reset” button on the mining cycle, as projects advance through the early stages. Grassroots work accounted for 41% of activity in 2016 but only 23% in 2017. Instead, last year saw an increase to 60% of exploration at the early and advanced levels, described by the report as the two stages following grassroots and preceding stages four and five: mine evaluation and mine lease.

The quest for gold accounted for 87%, or $37 million, of the province’s $41-million increase. Silver exploration spending more than doubled to $9.8 million, while zinc saw a nearly 50% leap to $8.2 million.

“It’s reassuring to see exploration spending returning to B.C., particularly as resource depletion returns to the list of industry risks,” commented AME director of corporate affairs Jonathan Buchanan. “We’re also encouraged to hear survey respondents remain committed to working with First Nations when sourcing new resource deposits to ensure benefits extend to the local or surrounding communities.”

Noting that the province’s mining revenues are “expected to approach $9 billion annually,” Gordon Clarke of the B.C. Mineral Development Office added, “It’s important to identify new development opportunities and encourage the continued development of a robust exploration industry.”

Among other encouraging signs for the sector, a November PricewaterhouseCoopers report pronounced an increase in market caps, financings, M&A and IPOs for TSXV-listed mining/exploration companies.

Download the British Columbia mineral and coal exploration survey 2017.

GATA’s Bill Murphy foresees a time when bullion manipulation comes to mainstream attention

March 5th, 2018

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