Market Moving Trends Bullish For Gold And Other Metals
In addition to talking about market moving trends I also discuss mining stocks featured in recent reports from this week here at Rocks And Stocks News
A key driver for gold, silver, copper and other commodities is the US dollar. The USD index has gone through a Death Cross in the early trading of 2023. The angle that the 50 day moving average (50 DMA) has crossed the 200 day moving average (200 DMA) is very steep. The 50 DMA has fallen off a cliff since November, 2022.
The CPI data early today has caused another drop as it indicates the Federal Reserve is at the end of its relentless interest rate hiking campaign to fight inflation. The CPI data was bullish for gold. With gold, it is now within a day or two of going through a Golden Cross happening in early 2023.
Another important indicator I follow is the January Effect which is an excellent indicator of what will happen for trends in various asset classes. If an asset, like the USD has a bearish January Effect it is likely to have a bad year. Conversly, if an asset like gold has a bullish January Effect it is likely to have a good year.
The reason for the January Effect being so important is that during this time of the year, institutional investors are looking at things from a yearly perspective. Therefore they often position themselves for what they see happening throughout the year. I’m very impressed with the Death Cross the USD is experiencing and the Golden Cross coming for gold. The January Effect is indicating the USD will have a bearish year and gold a bullish year.
This week I put out some content that I would like to highlight.
I’m the CEO of Advance Lithium (AALI.V), on Monday I did a video presentation to highlight an exciting gold and silver project we have in close proximity to SilverCrest’s Las Chispas mine and First Majestic’s Ermitano mine. Our Sarape project has two large epithermal veins that have only seen minimal drilling. Both Las Chispas and Ermitano are epithermal vein systems that are exceptional mines as they have high-grade, low cost production and high margins.
Ermitano had a surface outcrop of the vein with low grades, they drilled 150 metres below it and that was the discovery hole that hit exceptional grades. This success led to the discovery and building of a very profitable mine.
At our Sarape project there are several vein outcrops along the 5000 metre strike length of the Sarape vein. Below is an example of one of those outcrops.
We will present images of various different vein outcrops and then move to drilling all of them, to hit them at around 150 metres below surface. No sense reinventing the wheel, when First Majestic has shown us the path to success.
On Tuesday, I published a report on Galantas Gold (GAL.V), they have a remarkable orogenic gold system in Northern Ireland. I only ever recommended one other company in Northern Ireland, Dalradian Resources. I covered Dalradian early in their success, reported on them multiple times as their discovery evolved and ultimately they were taken over at several multiples of the valuation they had when I first started covering them.
Galantas Gold is on the same path to success. They have an orogenic gold project that has the same geological characteristics as Kirkland Lakes, Fosterville mine, an orogenic gold system. When they mined the Swan Zone it made them one of the lowest cost gold miners, that also made them one of the best performing gold stocks and led to them being taken over and they were a huge winner for shareholders.
Galantas Gold is at an exciting juncture in the evolution of exploring an orogenic gold system as their near surface drilling is leading them deeper. They currently have a very undervalued valuation and plenty of catalysts to drive their stock price much higher.
Also on January 10, I interviewed Paddy Nicol, he is the CEO of Orogen Royalties (OGN.V). They are the only royalty company that I follow as they are in the very early days of the cash flowing phase for a royalty company.
Earlier in this report, I mentioned the Ermitano mine owned by First Majestic. Ermitano is one of First Majestic’s best performing mines. Orogen generated this project and optioned it to First Majestic. At approximately 150 metres below a surface outcrop they hit the discovery hole and continued to drill it and ultimately turned it into a very profitable mine. Orogen has a 2% royalty on the mine and it is generating significant royalties for them.
Another flagship asset is their 1% royalty on the Silicon project, being explored by AngloGold Ashanti in Nevada. The maiden resource recently published is 3.4 million ounces of gold, they are aggresively drilling and it looks to get much bigger.
My hope is that Sarape, which I discussed earlier, turns into another flagship asset as they have a 1.5% royalty on it.
I see Orogen Royalties at an important juncture for a royalty company, they are receiving royalty payments from the Ermitano mine, they have another flagship asset at Silicon that will generate excellent news flow. Another fantastic endorsement of the quality of their project and team is that a much bigger royalty company, Altius Minerals owns approximately 16.5% of Orogen.
On January 11, I wrote a post about Amex Exploration (AMX.V) highlighting some key images that help tell their story. They have an advanced orogenic gold system in Quebec. The key discovery is their High Grade Zone (HGZ).
The HGZ has remarkable high-grade gold continuity that starts near the surface and extends for over 1000 metres at depth where it remains open. They have several other gold zones that are tightly packed into a small area.
It is my belief that these are all part of a big and powerful gold mineralizing system at depth. They have a game plan to continue expanding the known zones and also look for more gold.
To the east of the known gold deposits, they plan to drill several holes to test the eastern end of the project. I’m really excited about these holes to the east as I think it could result in the discovery of more gold deposits and possibly the source of the entire gold mineralizing system.
They have a modest valuation and plenty of near term catalysts to unlock shareholder value.
Also on January 11, I interviewed Don Hoy, VP Exploration for Golden Lake Exploration (GLM.V). We discussed the companys highly prospective ground near the spectacular exploration successes their neighbours Paycore Minerals and i-80 Gold are making near Eureka, Nevada.
All three companies have drilled into exceptional CRDs that contain high-grade silver, lead and zinc, and also have high-grade to bonanza grade gold overprinting the CRDs. To emphasize how impressive these CRDs are, one can look at the in situ metal values in rock. They are off the charts.
These remarkable CRDs are found in a network of structures, with the right kind of rock that extends from i-80 Gold’s ground, through Paycore Minerals and Golden Lake Exploration’s ground. Most importantly, they all contain extreme high value of metals in the rock.
They are checking the boxes of what is needed to make impressive CRD deposits. The structural story are the cracks that allow the metals bearing fluids to make their way to surface, then you need the right kind of rock (sort of to act like a sponge) to allow those metals bearing fluids to spread out and ultimately you need the high-grade mineralization.
All three companies are finding the right stuff. They are making it so that Eureka, Nevada is emerging as an important exploration region in Nevada. Led by i-80 Gold’s spectacular success, this camp is shaping up to be the most important exploration region in Nevada.
Golden Lake is well positioned in this camp, has drill hits similar to its neighbours, yet has an extremely cheap valuation. Catalysts include; a stronger market for gold and metals stocks, good news from their neighbours and additional work to advance their own project.
Earlier today, I had the pleasure of interviewing Rob McEwen from McEwen Mining (MUX.T and MUX.NYSE). He is well versed in the gold and copper markets, we opened discussing bullish trends for these metals.
Then we discussed the exceptional value proposition in McEwen Mining. They have a world class copper project in Argentina. It is one of the top 10 largest undeveloped copper deposits in the world that has excellent economics as revealed in their preliminary economic assesment. It has shown to be a potential copper mine of the future with a long mine life measured in decades and lowest quartile of costs of production.
Their copper project is exactly what the copper mining sector needs to feed the demand coming from modernizing southeast Asia and for electrical vehicles. It is the kind of project that the largest copper miners in the world would like to develop into a future mine.
In addition, they are making excellent progress at their gold mines to bring down costs of production and increase grades. Their copper project and operational improvements at their gold mines make for a compelling investment opportunity.
They are a very undervalued company with a cheap valuation and plenty of catalysts to unlock shareholder value.
Today, I also had a chance to interview Robert Boyd from Endurance Gold (EDG.V), the interview will be out before the market opens in the morning. They had excellent news out today from their orogenic gold project in the province of British Columbia.
They announced drill results that continue to help them advance their project. They are at an important juncture when it comes to the exploration of an orogenic gold system.
Their near surface drilling has found a large area of high-grade gold, which will help them understand the system and drill deeper with confidence. Orogenic gold systems like the Swan Zone at Fosterville, can have extreme high-grade, but they are small bodies that due to their bonanza grades make for low cost, high margin mines that generate impressive free cash flow.
The Swan Zone helped Kirkland Lake become one of the lowest cost gold miners, with very high margins that made them outperform their peers and led to them being bought out for a big win for their investors.
Considering what Endurance Gold has found, and their cheap valuation and many catalysts to unlock shareholder value throughout 2023, they are an attractive investment opportunity for gold exploration stock investors.
I would like to take this opportunity to welcome a new sponsor, Dynasty Gold (DYG.V). A couple days ago, they annouced the best drilling results they have ever had on Thundercloud project in Ontario near Dryden.
Highlights from the news are drill hole DP22-02 included 43.47 g/t gold over 3 m. Drill hole DP22-03 included 246 g/t gold over 1.5 m. Drill hole DP22-04 included 25.1 g/t gold over 1.5 m. Definetly attention grabbing numbers that the market liked a lot, rightfully so.
They are onto something impressive and I look forward to an upcoming interview with Dr. Roman Shklanka. He has had a distinguished career in mining which included his induction into the Canadian Mining Hall of Fame in 2009.
Considering the quality of these results and their team they still have a very modest valuation. As a new sponsor I look forward to a series of interviews with the company management to introduce it to my audience and closely follow their developments as the Thundercloud project evolves.
In Closing
You can find past interviews I’ve done with management of most of the companies included in this reports you can find on my Youtube channel.
As always my reports are for research purposes only, before making any investment decisions you should speak with your financial advisors and do your homework. A good place to start your homework is on my Youtube Channel. Then check out their websites where you should look at their news releases and corporate presentations.
All the best,
Allan Barry Laboucan
Founder
Rocks And Stocks News