Robert Sinn –Technical and Fundamental Outlook On Gold, Silver, Copper, PM Producers and Developers, Recent Takeover Transactions, and Three High-Quality Explorers
Cory and Shad at the KE Report invited me on for a Friday afternoon chat, I was thoroughly surprised how much they were able to get me to talk on an otherwise somber Friday.
Cory and Shad at the KE Report are really good at asking the right questions and getting me to talk a lot more than I otherwise would. We started the conversation discussing my annual Tax Loss Silly Season Shopping List, and some of the big moves stocks like Kingfisher Metals (TSX-V:KFR) and GSP Resource Corp (TSX-V:GSPR) had during January.
Shad also made a great point that gold is only two weeks removed from an all-time high weekly close at $5,278/oz:
Gold (Weekly)
Gold finished last week at its low for the week, however, the $5,022/oz weekly closing price still represents the 5th highest weekly close in history for gold.
A summary of the conversation via the KE Report:
We opine what aspects are important with regards to contrast in PM producers margin expansion versus their more recent share price corrections
Robert highlights a few P/NAV considerations for producers and developers, that have changed over the last year
The discussion then shifts to why we aren’t witnessing a bigger string of M&A transactions and why the valuations aren’t higher?
The conversation on gold stocks ranges from valuations in large producers like Newmont and Agnico Eagle down to quality developers like Banyan Gold and best-in-class advanced explorers like Snowline Gold.
We also dissect the nuance around ounce-in-the-ground valuations, and the other criteria that can affect market perceptions, using the Fresnillo takeover of Probe Gold as a case study.
Next we dive into the copper market, and how this is where we are actually seeing more merger and acquisition deals.
Robert highlights the recent takeover of Arizona Sonoran’s Cactus Project at all-time highs by Hudbay Minerals as the more ideal type of acquisition that we’d like to see more of in this space.
We also note the Eldorado Gold acquisition of Foran Mining, and the Faraday Copper acquisition of BHP’s San Manuel Project as 2 other recent copper M&A deals.
He also highlights the lack of quality tier-1 gold and silver development projects, and that this may be why more of the senior gold producers are focused on getting strategic positions into copper assets.
With regards to the explorers, Robert is focused on exciting mineral belts that may host a string of new discoveries in US states like Idaho, Nevada, and Arizona or Canadian provinces like British Columbia or the Yukon.
Robert highlights 3 explorers with compelling news catalysts on tap that have his attention this year in Kingfisher Metals Corp. (TSX-V:KFR, OTCQB:KGFMF), StrikePoint Gold Inc. (TSX-V: SKP, OTCQB: STKXF), and Hercules Metals Corp. (TSX-V: BIG, OTCQB: BADEF)
Wrapping up, Robert provides some best practices regarding navigating the trading volatility, when to raise cash in one’s portfolio, when to considering trimming or selling, and how to rotate funds based on fundamental or technical factors.
Disclosure: I own shares of Kingfisher, Hercules, and StrikePoint at the time of this interview and may choose to buy or sell shares at any time without notice.
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