Thursday, March 26, 2020

Gold Trade: Refuge in a Time of Crisis

The raging liquidity vortex seriously impacted the gold price, which retreated more than 10% from its recent peak. We note that the price of gold is always vulnerable when sentiment is overextended and it is over-bought based on technical measures such as RSI (relative strength index) and net commercial versus speculative positions. USD strength last week hurt as well. As usual, the trading of gold was likely dominated by margined entities trading "paper" as opposed to physical transactions, usually by a factor of 100:1 or more.

Most importantly, we believe that gold provided what it should during times of crisis, a form of insurance to cash in when liquidity was required. Gold has lousy margin rates for levered funds and is, by default, one of the first assets to be cashed in when leverage is reduced. We are comforted that throughout this "policy payout," it has mimicked its performance in the GFC, during which it was first sold down by holders requiring funds for other purposes and then skyrocketed once liquidity was rebalanced and QE began in earnest. We believe that long-term investors, not subject to margin pressures, will be similarly rewarded by owning gold at this time.

Liquidity concerns also played a prominent role in gold producer equity trading. Gold funds, of which the largest are ETFs, were sold aggressively by margined investors and computer-based traders. The largest gold mining ETFs, the GDX2 and GDXJ,3 were so oversold that they diverged from their closing NAVs by wide margins (see Figure 5). Small- and mid-cap gold stocks lost their bids entirely and fell further from already depressed levels. In our opinion, many now trade under their liquidation values. We remind our clientele that gold producers are enjoying healthy, increasing margins and that their earnings performance should handily outperform other industries in this environment.

Figure 5. Forced Liquidations Causing Dislocation in Gold ETFs

Source: Bloomberg. Data as of 3/18/2020.

Our position on gold is unchanged, which is that it should become a preferred currency and liquidity position for investors, with an essential utility as an insurance policy for more difficult markets to come. Artificially-sponsored negative real rates are already severely damaging purchasing power within portfolios. Permanent government debt "monetization" began in 2019 and will now need to accelerate. In the long term, we are convinced that this process of unabated money printing will eventually spur inflation. Admittedly, it is challenging to see beyond the short-term deflationary event and the government-doctored CPI statistics to the eventual reflationary process. Fortunately, either way, this environment is nirvana for gold as a real asset with purchasing power protection.

Sprott's Business and Strategy

In my opinion, the past two weeks have highlighted the importance of Sprott and our mission to help our clients preserve wealth in uncertain times. We are brave, contrarian and committed to providing our clients with the best investment opportunities in our sector. Nothing has changed in this strategy save for the pricing of the opportunity.

Sprott, as a company, has never been in better health. Our employees are safe and accustomed to working collaboratively from remote locations. Our margins are strong, our assets and client base are growing and we have multiple opportunities for expansion. We are committed to our dividend policy, which provides our shareholders with a healthy yield and to maintaining a strong balance sheet. We liken Sprott to a management company that earns a royalty from our assets under management and as such, we believe our shares are undervalued and are actively repurchasing them for cancellation.

We advise our clients to add to their gold positions over the coming weeks and to use periods of short-term weakness as buying opportunities.

Be safe, this too shall pass and we will get through this challenging period together.

- Source, Peter Grosskopf, CEO Sprott Inc

Monday, March 23, 2020

More Quantitative Easing to be Unleashed, Debt to GDP Now Unsolvable

It has been a very difficult couple of weeks for the precious metals complex, the financial markets and the general population. No doubt that the impacts of the coronavirus outbreak will be shouldered by many over both the short and long terms. Some industries, such as travel and hospitality, will require assistance while others, such as medical and long-term care, will need massive investment. I trust that our collective resilience and determination will prevail and that the vast majority of us will be safe and more grateful than we were before 2020.
Sprott is Well Positioned

Sprott is well positioned for these uncertain times. As our clients and shareholders are aware, our firm has been at the forefront of the notion that systematic risks in the markets have been building for years. We believed that there was bound to be some event that served as a catalyst to a sea-change in the perception and pricing of those risks (see This Tide Will Turn, December 2019).

Our thesis has been underpinned by one central premise: that the $250+ trillion build-up in global debt was serving to unnaturally extend the business cycle and asset prices in the same misguided way as during prior bubbles. And, that the economy was no longer growing enough or large enough to support this massive debt balance. We believe it was already, prior to this crisis, an unsolvable equation that had reached its Minsky Moment (see Figure 1).

Figure 1. Debt to GDP Equation No Longer Solvable

Source: Bloomberg. Data as of 3/18/2020.

Concurrently, central banks have become influenced by their political masters and now serve widely to provide the financing and stimulus required to hold the equation in abeyance. Negative interest rates never made sense to us and neither do seemingly permanent budget deficits after a 10-year bull market. Sadly, the coronavirus pandemic has now provided the pin which has burst the bubble.

Long-Term View Unchanged

From the perspective of Sprott and the positioning of our clients and firm, nothing has changed over the last two weeks. Our clients have co-invested with us in gold and related assets to protect their wealth from the current global reset, a strategy that has historically always paid dividends. We are now several giant steps further into the process of financial repression which is required for the "books to balance".

Clearly, more quantitative easing ("QE") needs to be unleashed, no matter what you call it, in order to provide the liquidity the system desperately requires. Interest rates cannot rise without making the situation much worse, so central banks will do what is necessary to keep a lid on rates. Fiscal stimulus is also on the way because even after 10 years of recovery, the economy is nowhere near strong enough to handle the stresses of a coronavirus slowdown. In summary, more low rates, more printing, more budget deficits. Nothing we weren't expecting, just more severe than we anticipated...

- Source, Peter Grosskopf, CEO of Sprott Asset Management

Friday, March 20, 2020

Eric Sprott: Collapsing Global Markets and it's Impact on Precious Metals

Eric Sprott discusses the collapsing global markets and the impact this having on gold, silver, and the mining shares.

- Source, Sprott Money

Wednesday, March 11, 2020

Novo Agrees to Acquire Significant Stake in New Found Gold Corp.

Novo Resources Corp. (Novo” or the “Company”) (TSX-V: NVO; OTCQX: NSRPF) is pleased to announce that it has subscribed for 15,000,000 common shares of New Found Gold Corp. (“New Found”), a Canadian private exploration company with the largest mineral claim package in the Province of Newfoundland and Labrador. The subscription price will be paid by the issuance of 6,944,444 common shares of Novo (the “Acquisition”). The Acquisition is subject to TSX Venture Exchange approval.

Upon closing of the Acquisition and assuming no further share issuances by New Found or Novo, Novo will own approximately 15.97% of the issued and outstanding shares of New Found and New Found will own approximately 3.73% of the issued and outstanding common shares of Novo. The Acquisition gives Novo a significant stake in yet another promising new gold field and, coupled with the Company’s recent investment in ASX-listed Kalamazoo Resources Limited, further diversifies the Company’s passive exposure to potentially significant discoveries worldwide.

New Found is focused on exploring its wholly-owned Queensway project (the “Queensway Project”) located near the town of Gander, Central Newfoundland. The first hole from its late 2019 drill program (NFGC-19-01) on the Queensway Project intersected 92.86 g/t Au over 19.0 metres including 285.2 g/t Au over 6.0 metres. This intercept is near surface, starting at 96 m down hole depth. The true width of this intercept is estimated to be 70% based on drill core angles and correlation with historic drilling. The information in this paragraph and the next has been provided to Novo by New Found and has not been verified by Novo.

The Queensway Project comprises 85 km of prospective strike length with strong geological indications that much of the property falls within the prospective high-grade epizonal orogenic regime. In addition to the impressive gold intercept encountered in hole NFGC-19-01, historic work has yielded numerous high-grade surface rock chip and float samples along approximately 20km of strike length on the Appleton and JBP fault zones. An historic gold resource is situated approximately two kilometres from hole NFGC-19-01.

The Province of Newfoundland and Labrador is a favorable exploration and mining jurisdiction. The Province recently launched the “Mining the Future 2030” initiative which envisions five new mines, direct employment of a diverse workforce of more than 6,200 people, CAD $4 billion in annual mineral shipments, and CAD $100 million in exploration expenditures by 2030 (please see and bodes well for the future of the Queensway Project.

Eric Sprott, a director of Novo, currently holds 16.79% of the issued and outstanding shares of New Found immediately prior to the Acquisition. As such, New Found is considered a non-arm’s length party to Novo pursuant to TSX Venture Exchange policies.

Pursuant to the terms of the Acquisition, the Company also has the right to appoint a director to the board of directors of New Found at any time for a period of three years from the Acquisition Date provided that the Company holds no less than 10% of New Found’s issued and outstanding shares. The Company has also agreed to certain voting restrictions for a period of three years.

“We at Novo think the Queensway Project represents a very promising new high-grade gold discovery,” commented Dr. Quinton Hennigh, President and Chairman of Novo Resources. “It appears the Queensway Project encompasses an area highly prospective for high-grade epizonal orogenic gold mineralization. We are very pleased to have the opportunity to be part of this exciting discovery and, upon completion of the Acquisition, look forward to supporting New Found as they advance work around hole NFGC-19-01 and the many other high grade showings across the Queensway Project.”

“We are thrilled to welcome Novo as a significant stakeholder in New Found,” commented Collin Kettel, Executive Chairman and Director of New Found. “Following strategic investments in New Found by Eric Sprott and Rob McEwen last year, we are excited to receive further validation of our team’s discovery at the Queensway Project in Newfoundland. We look forward to working with Dr. Quinton Hennigh and the entire Novo team as we continue to advance the Queensway Project.”

- Source, Yahoo Finance

Saturday, March 7, 2020

Eric Sprott, Terry Lynch: Protect Retail Investors, Let Them Make Money

At the Prospectors & Developers Association of Canada convention, the Investing News Network got an update from Terry Lynch and Eric Sprott on the Save Canadian Mining initiative.

Tuesday, March 3, 2020

Coronavirus Concerns, Protests and More

The coronavirus was in focus of day one of PDAC, with resource sector heavyweights like Eric Sprott and Rick Rule providing commentary on its effect on the gold price. 

The Investing News Network also took to the floor (and Twitter) to poll attendees on whether Canada is still attractive as a mining jurisdiction.

- Source, Investing News

Monday, February 24, 2020

What Kind Of Shareholder Appears On The Bonterra Resources Inc.’s Shareholder Register?

If you want to know who really controls Bonterra Resources Inc. (CVE:BTR), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Bonterra Resources is a smaller company with a market capitalization of CA$123m, so it may still be flying under the radar of many institutional investors. In the chart below, we can see that institutions own shares in the company. Let’s take a closer look to see what the different types of shareholder can tell us about Bonterra Resources.

What Does The Institutional Ownership Tell Us About Bonterra Resources?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Bonterra Resources already has institutions on the share registry. Indeed, they own 21% of the company. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. When multiple institutions own a stock, there’s always a risk that they are in a ‘crowded trade’. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Bonterra Resources’s historic earnings and revenue, below, but keep in mind there’s always more to the story.

TSXV:BTR Income Statement, February 16th 2020

It would appear that 16% of Bonterra Resources shares are controlled by hedge funds. That worth noting, since hedge funds are often quite active investors, who may try to influence management. Many want to see value creation (and a higher share price) in the short term or medium term. Looking at our data, we can see that the largest shareholder is Wexford Capital LP with 16% of shares outstanding. Kirkland Lake Gold Ltd. is the second largest shareholder with 11% of common stock, followed by Eric Sprott, holding 6.7% of the stock.

On studying the facts and figures more closely, we found that 7 of the top shareholders account for 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

- Source, Simply Wall St.

Saturday, February 22, 2020

Sprott Weekly Wrap Up: A Week of Tough, Tough News for Gold and Silver Investors

“First of all, just to remind the listeners, I think the first time you and I mentioned this was two weeks ago. At that time, there were two hundred cases—in the world. 

There is thirty-one thousand now. That’s one hell of a big increase in two weeks’ time. And I’ve seen artificial intelligence numbers that suggested that by March 15 we could have 2.5 billion cases and 53 million deaths. 

That’s just an extension of numbers, that’s not my prediction.”

- Source, Junior Mining

Wednesday, February 19, 2020

Argo Gold Announces C$1 Million Financing

Toronto, Ontario--(Newsfile Corp. - February 4, 2020) - Argo Gold Inc. (CSE: ARQ) ("Argo Gold" or the "Company") is pleased to announce that it intends to complete a private placement offering of up to 11,200,000 units ("Units") at a price of $0.09 per Unit, for gross proceeds of up to $1,008,000 (the "Offering"). Eric Sprott has indicated his intention to take up all of the Offering.

Each Unit will consist of one common share (a "Common Share") of the Company and one common share purchase warrant (a "Warrant") with each Warrant entitling the holder thereof to purchase a Common Share at an exercise price of $0.12 for a period of thirty-six (36) months following the closing of the Offering. All securities issued under the Offering are subject to a four-month and one day statutory hold period.

The closing of the Offering is anticipated to take place on February 7, 2020. The closing is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Canadian Securities Exchange.

Sunday, February 16, 2020

Canadian Palladium Closes Non-Brokered Private Placement

Canadian Palladium Resources Inc. (CSE: BULL) (OTCQB: DCNNF) (FSE: DCR1) (formerly 21C Metals Inc.) (the "Company") has closed the non-brokered private placement previously announced on January 20, 2020. The private placement raised gross proceeds of $4,000,403 through the issuance of 33,336,698 units (each, a "Unit") at a price of $0.12 per share. Each Unit consists of one common share and one common share purchase warrant exercisable at a price of $0.18 for a period of 12 months from the date of grant.

Mr. Eric Sprott, through 2176423 Ontario Ltd., a corporation which is beneficially owned by him, acquired 12,500,000 Units for a total consideration of $1,500,000. Following the completion of the private placement, Mr. Sprott beneficially owns and controls 12,500,000 Common Shares and 12,500,000 Warrants of the Company representing approximately 12.6% of the issued and outstanding Common Shares of the Company on a non-diluted basis and approximately 22.2% of the issued and outstanding Common Shares on a partially diluted basis. Prior to the Financing, Mr. Sprott did not beneficially own or control any shares of the Company.

The Units were acquired by Sprott for investment purposes. Mr. Sprott has a long-term view of the investment and may acquire additional securities of Canadian Palladium including on the open market or through private acquisitions or sell securities of Canadian Palladium including on the open market or through private dispositions in the future depending on market conditions, reformulation of plans and/or other relevant factors.

A copy of Sprott's early warning report will appear on Canadian Palladium profile on SEDAR and may also be obtained by calling Mr. Sprott's office at (416) 945-3294 (200 Bay Street, Suite 2600, Royal Bank Plaza, South Tower, Toronto, Ontario M5J 2J2).

The Company has issued 1,314,099 finder's units (the "Finder's Units"), 230,042 finder's warrants (the "Finder's Warrants") and issued $27,605 in cash as finder's fees to eligible agents who arranged for subscriptions of Units under the private placement. Each Finder's Unit consists of one common share and one Finder's Warrant. Each Finder's Warrant entitles the holder thereof to purchase one additional common share at a price of $0.18 for a period of 12 months from the date of issuance.

The Company intends to use the proceeds of the financing to advance its East Bull palladium project and for general working capital.

All of the securities issued under the private placement are subject to a four-month resale restriction and may not be traded until May 29, 2020.

Friday, February 14, 2020

Four Junior Resource Stocks with Big Name Insider Buying

The junior resource stocks we’ve unearthed have received significant insider buying from legendary investor Eric Sprott over the past three months.

Insiders are defined as any person with access to key company information before it is released to the public, or someone who owns more than 10% of a company’s shares. Insiders include individuals such as management, officers, and directors. 

Government bodies require companies to report this information, in a timely manner, giving investors a sense of insider activity within a company. One of the wealthiest investors in the mining sector is Eric Sprott, the billionaire founder of Sprott Inc. The junior resource stocks we have discovered today have received a significant insider investment from Eric Sprott during the past three months.

Amex Exploration Inc. (TSXV:AMX) – $1.50
Gold exploration

Amex Exploration is a Canada-based mining exploration company focused on exploration activities conducted in Canada and Mexico. Its properties include the Perron Property, Normetal Property, Cameron Property, Lac Indicateur property, Eastmain Centre property, Eastmain North Property, Natora Property and Nueva Escondida property. 

The Company’s flagship asset, the Perron Property, consists of approximately 120 mining claims covering an area of over 4,510 hectares in northern Quebec. Amex’s summer drilling program found high-grade gold intersected on the Gratien gold zone at Perron, with results up to 16.48 g/t Au over 14.6 m, including 315.4 g/t Au over 0.5 m and 102.96 g/t Au over 0.7 m. Eric Sprott added 2M shares at $1.00/share last November, bring his total ownership up to 6.7M shares.
Market Cap: $99.6M
30-Day Return: +6.4%
90-Day Return: +50.0%
30-Day Average Trading Volume: 63,540
90-Day Average Trading Volume: 58,030

Benchmark Metals Inc. (TSXV:BNCH) – $0.405
Gold and silver exploration

Benchmark Metals is a mining company focused on exploring and developing its Lawyers Gold and Silver project located in the prolific Golden Triangle of northern British Columbia. The Lawyers Property and formerly producing Cheni Gold and Silver Mine is located 45 km northwest of the Kemess Gold and Copper Mine. 

The Property contains an existing Mineral Resource and hosts at least 16 gold and silver occurrences that were never fully mined, developed or explored. Eric Sprott added 2.3M shares at $0.30/share last December, following 13.3M shares added at $0.30/share in September, bringing his total ownership to 15.6M shares.

Market Cap: $39.1M

30-Day Return: +9.5%
90-Day Return: +12.5%
30-Day Average Trading Volume: 281,900
90-Day Average Trading Volume: 161,090

Discovery Metals Corp. (TSXV:DSV) – $0.65
Silver Mining

Discovery Metals focuses on discovering and advancing high-grade polymetallic deposits in a land package of about 150,000 hectares in the historic mining district in Coahuila State, Mexico. 

The Company’s portfolio consists of three large-scale, drill-ready projects and several earlier-stage prospects. Currently, the land holdings contain numerous historical direct-ship ore workings with several kilometers of underground development, however no modern exploration or drill testing on the properties has occurred before the work of Discovery Metals. 

As well, Discovery is currently exploring one the world’s largest silver resources at its 100% owned 37,000-hectare Cordero Project in Chihuahua State, Mexico. Eric Sprott added 3.3M shares at $0.45/share in December, following 7.8M shares added at $0.45/share in November, bringing his total ownership to 41.3M shares.

Market Cap: $137.5M

30-Day Return: +10.2%
90-Day Return: +31.3%
30-Day Average Trading Volume: 268,160
90-Day Average Trading Volume: 191,070

Dolly Varden Silver engages in the acquisition, development, exploration, and evaluation of mineral properties in Canada. The Company explores for gold, silver, and copper deposits. It holds 100% interests in the Dolly Varden project, covering an area of 8,800 hectares, as well as the Musketeer property located in northwestern British Columbia; and the Big Bulk porphyry copper-gold project located in Canada. Eric Sprott added 5.7M shares at $0.235/share in September, bringing his total ownership to 10.7M shares.

Market Cap: $19.2M

30-Day Return: -28.1%
90-Day Return: -33.8%
30-Day Average Trading Volume: 166,570
90-Day Average Trading Volume: 126,900

Wednesday, February 12, 2020

Could Benchmark Metals Investor Composition Influence the Stock Price?

The big shareholder groups in Benchmark Metals Inc. (CVE:BNCH) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.

Benchmark Metals is a smaller company with a market capitalization of CA$39m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s delve deeper into each type of owner, to discover more about Benchmark Metals.
What Does The Institutional Ownership Tell Us About Benchmark Metals?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Benchmark Metals does have institutional investors; and they hold 7.0% of the stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It’s therefore worth looking at Benchmark Metals’s earnings history, below. Of course, the future is what really matters.

TSXV:BNCH Income Statement, January 27th 2020

Hedge funds don’t have many shares in Benchmark Metals. Looking at our data, we can see that the largest shareholder is Eric Sprott with 16% of shares outstanding. Sprott Asset Management, LP is the second largest shareholder with 7.0% of common stock, followed by James Greig, holding 2.2% of the stock. James Greig also happens to hold the title of Member of the Board of Directors.

A deeper look at our ownership data shows that the top 8 shareholders collectively hold less than 50% of the register, suggesting a large group of small holders where no one share holder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. Our information suggests that there isn’t any analyst coverage of the stock, so it is probably little known.

- Source, Simply Wall St

Monday, February 10, 2020

Sprott puts millions of dollars into proposed palladium project

"One of Canada’s long-time mining moguls has given a proposed palladium mine on Marathon’s doorstep a big shot in the arm.

Generation Mining announced Wednesday that billionaire investor Eric Sprott has invested $5 million into the project, which calls for an open-pit operation near the town’s airport.

Sprott’s investment is to give him a stake in the company worth nearly nine per cent, said a Generation Mining news release."

Friday, February 7, 2020

Ontario Claiming Global Stake in Palladium Sector with Latest Deal

Junior explorer Sienna Resources (TSXV:SIE,OTC Pink:SNNAF) has acquired the Marathon North palladium property in Northern Ontario, which is adjacent to Generation Mining’s (CSE:GENM) Marathon palladium project.

Interest in the area has peaked in recent months, with global platinum-group metals (PGMs) producer Impala Platinum (OTC Pink:IMPUY,JSE:IMP) merging with North American Palladium in December to create Impala Canada, which now manages the Lac des Iles palladium mine near Thunder Bay.

Increased activity in the palladium exploration and mining sector has likely been a result of the metal’s breakthrough performance in 2019. The commodity was the most expensive traded precious metal last year, and has climbed 17 percent so far in 2020.

And palladium’s price surge doesn’t seem to be over yet. After breaking its previous record highs in 2019 and again in the first few weeks of 2020, the metal, which is used to reduce emissions in vehicles, broke the US$2,550 per ounce threshold to trade for US$2,577.27 on Monday (January 20).

It slipped from its new all-time high shortly after; currently palladium is priced at US$2,296.

Sienna Resources President Jason Gigliotti explained how PGMs prices motivated the company to acquire the package, which will complement the firm’s platinum, palladium and nickel project in Sweden, where a drill program concluded in October.

“Platinum and palladium prices have been some of the best performing metal prices recently, especially palladium, which is right near an all-time high,” he said in a media release.

“The timing for our new platinum-palladium project acquisition could not be more opportune … We feel that there is a massive demand and appetite for platinum and palladium assets and Sienna’s goal is to be a significant player in this arena in 2020.”

Shares of the explorer skyrocketed 80 percent following the announcement.

Even though it is only the third top palladium-producing country, Canada’s palladium projects have dominated the news cycle lately due to their potential, grade and jurisdiction.

Impala’s Lac des Iles mine, which has been in production for more than two decades, has been called a world-class orebody, while Generation Mining’s Marathon project has been dubbed “the largest undeveloped palladium deposit in North America.”

Shares of Generation Mining also climbed this week, shooting up 28 percent following the news that Canadian billionaire Eric Sprott was investing C$5 million to acquire 8.8 percent of the company.

This is the second time in three months the investor has bought into a Canada-listed palladium company.

In late October, shares of precious metals junior Palladium One Mining (TSXV:PDM) climbed 14 percent after word spread that Sprott was going to participate in its C$3.2 million private placement.

Palladium One is currently developing the Läntinen Koillismaa palladium project in Finland, where it plans to spend the bulk of its newly acquired investment capital.

By midday on Thursday (January 23), shares of Sienna Resources were up 90 percent, trading for C$0.09.

- Source, Investing News

Wednesday, February 5, 2020

Sprott Weekly Wrap Up: Fear Behind Rising Gold and Silver Prices

This week, host Craig Hemke catches up with intrepid traveller Eric Sprott as he drives down the freeway—but what’s driving precious metals prices? In this edition of the Weekly Wrap-Up, you’ll hear all the gold and silver news you need, including:
  • The fears spurring demand for precious metals
  • What to watch Sunday evening (hint: it’s not the Super Bowl)
  • Plus: Eric’s thoughts on the shares
“As I mentioned last week, you’re dealing with mathematics here. And the rate of growth is just incredible. And probably the best way to start off in terms of having the listeners understand: I think this time last week, we had 200 cases [of coronavirus]. 200. 

We added 2,000 today! And we’re up to pushing 10,000 cases here. And I’ve seen some numerical studies—they’re just numerical—that would suggest that by Feb 20th, we could have something like 500 million occurrences and a million deaths. Now, it’s just something on a piece of paper, but this thing is effectively out of control.”

Tuesday, February 4, 2020

Generation Mining Brings on Eric Sprott as Investor

Shares of Generation Mining (CSE:GENM) soared 28 percent higher for the week after announcing Canadian billionaire Eric Sprott was making a C$5 million investment and acquiring an 8.8 percent stake in the firm.

As quoted from the press release:

"Gen Mining is pleased to announce that Eric Sprott has agreed to purchase C$5,000,000 of the offering. On completion of the offering, Eric Sprott will own approximately 8.84 percent of the company on a non-diluted basis and approximately 12.70 percent on a partially diluted basis. 

The company has granted the underwriters an option to purchase up to an additional 25 percent of the offering in units, exercisable in whole or in part at any time up to 48 hours prior to the closing date. 

The net proceeds from the sale of the Units will be used for exploration and development of the company’s Marathon palladium project, as well as working capital and general corporate purposes. The Offering is expected to close on or about February 13, 2020 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Canadian Securities Exchange and the applicable securities regulatory authorities. 

The Units to be issued under the offering will be subject to a hold period in Canada expiring four months and one day from the closing date of the offering."

- Source, Investing News

Sunday, February 2, 2020

Gran Colombia raising $40 million

Gran Colombia Gold Corp. [GCM-TSX; TPRFF-OTCQX] said Monday January 27 that it is raising $40 million from a non-brokered private placement of 7.14 million units priced at $5.60 each. The company said the net proceeds will be used for general working capital and corporate purposes, including repurchases of the company’s listed warrants under its normal course issuer bid.

Each of the private placement units consists of one common share and one common share purchase warrant exercisable into a full common share at $6.50 per share for a period of three years from the date of issuance.

On Monday, Gran Colombia shares eased 2.5% or 15 cents to $5.79. The shares are currently trading in a 52-week range of $3.01 and $5.97.

Gran Colombia is a Canadian-based gold and silver producer with a focus on Colombia, where it is currently the largest underground gold and silver producer in that country, with several underground mines in operation at its Segovia and Marmato operations. The majority of the company’s production comes from the Segovia Operations, which are located in the Segovia-Remedios mining district in Antioquia, roughly 180 km east of Medellin, northwest Colombia. Segovia produced 214,241 ounces of gold in 2019.

The company met its 2019 production guidance by producing 240,000 ounces of gold, an increase of 10% over 2018. That figure includes production from the Marmato assets which are being spun out into a new publicly listed vehicle, to be named Caldas Gold Corp. The existing underground mine at Marmato produced 25,750 ounces of gold in 2019. However, production at Marmato is expected to increase to 150,000 ounces annually between 2024 and 2027.

“We see the increased interest from strategic and institutional investors in Gran Colombia as a continuing endorsement of our successful turnaround of the company and the potential for further appreciation in our share price, which doubled in 2019 and is up by almost 300% over the past three years, as we execute our strategy to unlock value in our portfolio of quality assets,” said Serafino Iacono, Gran Colombia’s Executive Chairman.

“We have ramped up our near-mine and regional exploration programs at our high-grade Segovia Operations for the coming year and we are unlocking value in our Marmato Project through the spin out to Caldas Gold Corp., which we anticipate will be completed within the next couple of weeks.”

Back in November, 2019, Gran Colombia said it had closed a $15 million strategic investment by Bay Street financier Eric Sprott.

The company said Sprott agreed to purchase 3.26 million units of Gran Colombia in a non-brokered private placement at $4.60 per unit. Each unit consists of one common share and one common share purchase warrant exercisable into a full common share at $5.40 per share for a period of four years after the date of issuance.

Proceeds were earmarked for general working capital and corporate purposes.

- Source, Resource World

Friday, January 31, 2020

Behind The Victorian Gold Revival

For the best part of 50 years Victoria’s historically fecund gold fields have been a basket case, given lack of government support and disastrous big-ticket attempts to revive the underground Bendigo and Ballarat mines.

Now, the region is in the midst of a latter day gold rush, thanks to the efforts of Canadian miner Kirkland Lake Gold ((KLA)) at developing the Fosterville mine into a 600,000 ounce a year, 46 grams a tonne monster.

“There’s never been a better time to be in gold right now in Victoria,” says Kalamazoo Resources’ ((KZR)) executive chairman Luke “Sco-Mo” Reinehr. “Kirkland Lake changed everything.”

Fosterville was considered a low grade and difficult mine until legendary Canadian mining investor Eric Sprott got involved with Kirkland Lake, resulting in an aggressive drilling program that uncovered riches much deeper than expected.

Reinehr notes that at Fosterville the lustrous stuff is also being produced at an “all in” cost of $318 an ounce, which with a circa $2100 an oz Aussie gold price implies the mine is spitting out more than $1 billion of free cash flow annually.

How good is that!

Can Kalamazoo emulate the Kirkland Lake miracle? Well, Sprott himself thinks so, this month taking up $4m of Kalamazoo shares in a placement. The TSX listed Novo Resources, of which Sprott is a director, took up a further $4m.

Enthusiasm for Victorian gold among deep pocketed folk is proving more infectious than the mysterious coronavirus in a Chinese transit lounge.

Last year, fellow Victorian explorer Navarre Minerals ((NVR)) raised $9m in a share placement to Canadian fund manager 1832 Asset Management, which became a 7% shareholder.

Other notable investors along for the Navarre ride are Kirkland Lake (with 10% of the register) and the Victor Smorgon Group (9%).

Gina Rinehart’s Hancock Prospecting has invested $7.9m in Catalyst Metals ((CYL)) which now bears a chunky $250m market cap.

Meanwhile Chalice Gold Mines ((CHN)) is 17% owned by exec chairman Tim Goyder, brother of erstwhile Wesfarmers and AFL supremo Richard.

Founded by “proud Victorian” Luke and Matt Reinehr, Kalamazoo had its roots in the Pilbara.

But they had closely monitored their own turf and cottoned on that Castlemaine Gold – the operator of a Ballarat mine acquired from Lihir Gold in 2008 – was being forced to relinquish its ground because it was not fulfilling it minimum exploration spending commitments.

Castlemaine Gold paid $10m for the Ballarat mine, after Lihir (now Newcrest) sunk $700m into it.

Reinehr says Castlemaine Gold’s new owner, Lion Gold had been “sucking every dollar out of Castlemaine and that means ending exploration.”

Not only did Kalamazoo win the ground for no more than an application fee, but the friendly Castlemaine also bestowed a database with 300 million pieces and the results of an 80,000 metre diamond core program.

“If someone were to buy that today I would hate to think what it would cost, the diamond samples have a $20m replacement value,” Luke Reinehr says.

Similarly, the unlisted Centennial Mining gave up its South Muckleford tenements (also known as South Maldon) and Kalamazoo hoovered these up as well.

“We now control the third largest and seventh largest historical gold fields in Victoria,” Reinehr declares.

Kalamazoo’s 445 square kilometres of prospects are in the greater Bendigo zone, which historically has produced 60 million ounces at an average 15 grams a tonne – 100 times higher than the global average

Castlemaine hosts Forest Creek: “site of the world’s richest shallow alluvial goldfield ever.” There’s even a plaque to prove it.

The company isn’t interested in the alluvial stuff, but is dead keen on finding the source of the gold in the ground.

Reinter acknowledges that to find “the next Fosterville”, the company has to spend some serious dollars. The starting point is a 10,000 metre program using diamond drilling, at a cost of $2.5m.

Just before Christmas, the company reported “exceptional” results at its Mustang prospect, including a 1.42 metre intersect grading 261 grams a tonne (with a sniff of visible gold at 1916 g/t).

The Sprott news sent Kalamazoo shares up as much as 45%, with the placement struck a 24% premium (40c a share).

Earlier, Kalamazoo raised $7m by selling a sold a WA prospect called Snake Well to former Asciano chief Mark Rowsthorn and his business partner Nathan Mitchell.

Given the fancy headline number, Kalamazoo has been allowed to pay in instalments.

Dual-listed on the Frankfurt exchange, Kalamazoo shares remain tightly controlled by the Reinehrs, who hold 32% post placement (the Sprott and Novo camps each hold 8%).

In the meantime, the Victorian government is due to announce the winner of a new tenement grouping called Block 4, which abuts the Fosterville mine. To describe the tender as hotly competed is somewhat of an understatement, with all of the key players expected to have competed in the Dutch auction process.

“We are going in hard we think we have a good chance,” Reinehr says.

- Source, FN Arena

What Does The Lack Of Institutional Ownership Tell Us About dynaCERT?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of dynaCERT, for yourself, below.

TSXV:DYA Income Statement, January 22nd 2020

Hedge funds don’t have many shares in dynaCERT. Eric Sprott is currently the largest shareholder, with 8.3% of shares outstanding. The second largest shareholder with 2.1%, is Raymond Hoffman, followed by Elliot Strashin, with an ownership of 2.1%. Elliot Strashin also happens to hold the title of Member of the Board of Directors.

Our studies suggest that the top 10 shareholders collectively control less than 50% of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

- Source, Simply Wall St, read the full article here

Tuesday, January 28, 2020

Galleon Gold Closes Shares for Debt Settlement for Interest Owed to Eric Sprott

Gold Corp. (TSXV: GGO) (the "Company" or "Galleon Gold") announces that it has closed its previously announced debt settlement agreement (see press release January 17, 2020). Eric Sprott, through 2176423 Ontario Ltd., a corporation that is beneficially owned by him, agreed to settle an aggregate amount of $82,177 for interest earned on a Galleon Gold Debenture (the "Debt Settlement"). The Debt Settlement was settled by the issuance of 1,027,218 common shares at a deemed price of $0.08 per share.

The securities issued pursuant to the Debt Settlement will be subject to a four-month hold period commencing on the date of issuance.

Mr. Sprott now beneficially owns and controls 71,248,950 shares of the Company representing 27.9% of the outstanding common shares.

Friday, January 24, 2020

Generation Mining Announces $8 Million Private Placement of Units Including a $5 Million Investment from Eric Sprott

Generation Mining Limited (CSE:GENM) ("Gen Mining" or the "Company") is pleased to announce that it has entered into an agreement with Haywood Securities Inc. and Mackie Research Capital Corporation as co-lead underwriters and joint-bookrunners on behalf of a syndicate of underwriters including PowerOne Capital Markets Limited and Raymond James Ltd. (collectively, the "Underwriters"), pursuant to which the Underwriters have agreed to purchase, on a "bought deal" private placement basis, 15,385,000 units of the Company (the "Units") at a price of C$0.52 per Unit (the “Issue Price”), for total gross proceeds of C$8,000,200 (the "Offering"). Each Unit will consist of one common share (a “Common Share”) in the capital of the Company and one-half (1/2) of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”) of the Company. Each Warrant shall be exercisable to acquire one Common Share (a “Warrant Share”) at a price per Warrant Share of C$0.75 for a period of 24 months from the closing date of the Offering.

Gen Mining is pleased to announce that Eric Sprott has agreed to purchase C$5,000,000 of the Offering. On completion of the Offering, Eric Sprott will own approximately 8.84% of the Company on a non-diluted basis and approximately 12.70% on a partially diluted basis.

The Company has granted the Underwriters an option to purchase up to an additional 25% of the Offering in Units (the "Underwriters’ Option"), exercisable in whole or in part at any time up to 48 hours prior to the closing date.

The net proceeds from the sale of the Units will be used for exploration and development of the Company’s Marathon Palladium Project, as well as working capital and general corporate purposes.

The Offering is expected to close on or about February 13, 2020 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Canadian Securities Exchange and the applicable securities regulatory authorities. The Units to be issued under the Offering will be subject to a hold period in Canada expiring four months and one day from the closing date of the Offering.

In connection with the Offering, the Underwriters will receive: (i) a cash commission of 6.0% of the gross proceeds of the Offering, excluding gross proceeds from the issuance of Units to Eric Sprott for which a commission of 4.0% of such gross proceeds is payable by the Company to the Underwriters; and (ii) that number of non-transferable compensation options (the “Compensation Options”) as is equal to (a) 6.0% of the aggregate number of Units sold under the Offering, excluding those Units sold to Eric Sprott, and (b) 4.0% of the aggregate number of Units sold under the Offering to Eric Sprott. Each Compensation Option is exercisable into one Common Share of the Company at the Issue Price for a period of 24 months from the closing date of the Offering.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

Tuesday, January 21, 2020

Eric Sprotts Take on the Recent Gold and Silver Trading Action

Eric Sprott takes time out of his South American fishing trip to discuss the week’s gold and silver news with host Craig Hemke.

Friday, January 17, 2020

Eric Sprotts Assessment on Initial Gold and Silver Trading Action in 2020

Eric Sprott joins us from Antarctica and offers his assessment of the initial gold and silver trading action as we begin 2020.

Saturday, January 4, 2020

Eric Sprott Updates Viewers About the Mining Sector

Eric Sprott the economic events of the past week while also providing updates on a few, key mining companies.

- Source, Sprott Money