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CEO.CA members discuss high-risk penny stocks which can lose their entire value. Only risk what you can afford to lose.
@Excelsior$AR$ARNGF Argonaut Gold Announces Three-Year Production Outlook; Provides Updated Mineral Reserves and Resources - February 16, 2017
Three-Year #Production Outlook
"Based on life-of-mine planning at December 31, 2016, the Company anticipates it will achieve production growth on a #Gold Equivalent Ounce (“GEO”) basis as its San Agustin and La Colorada projects ramp up and lower the overall cost profile. The Company’s goal is to achieve annual all-in sustaining costs per gold ounce sold at or below $950."
* Three-Year GEO Production Outlook
2017 115,000 – 130,000 ounces
2018 155 ,000 – 170,000 ounces
2019 170,000 – 185,000 ounces
* San Agustin Construction Progress
“The Company is pleased to report its San Agustin project is currently tracking on schedule and budget with #construction approximately 26% complete and first #gold#production anticipated during the third quarter of 2017. The crusher pad, leach pad and pond construction are well underway and the Company anticipates it will commence laying leach pad liner and begin relocating the west crusher from El Castillo prior to the end of the first quarter.”
@Excelsior@nicholaslepan - How about just putting it in an ETF in a sector you like?
It depends on if you want a high torque micro-cap, or just some appreciation on the money, and if you want to just set it and forget it or trade with it. Based on your comments that you had all your investments in for the year, it doesn't sound like you are trading it.... however, you said "to play with" so maybe you are considering doing some high risk/ high reward swing trading. What is your goal with the investment? Time horizon? Any specific sector?
@ExcelsiorETFs don't have the upside potential of an individual stock, but they don't have as much downside risk either. They're just a group of stocks in one basket. If you like a sector, there are probably a few ETFs that service it, from Gold and Silver to Agricultural Stocks to Biotech. Just pick your pleasure and let that company manage the weightings and allocation for you.
Of course, personally, I'm building up a portfolio of so many resource stocks that I'm building and actively managing my own ETF (ha!)
@Excelsior@speculator - You may have heard of he smear campaign that #KerrisdaleCapital did on $AG First Majestic last year. They are widely followed for their ability to short stocks (often on quite speculative and negative opinions).
It is also enlightening to see the kind of people working at their firm:
Prominent "Up And Coming" Hedge Fund Exec, Sahm Adrangi, Busted For Hamptons DUI, Cocaine Possession
Aug 15, 2016 7:13 AM
"One of the prominent "up and coming" managers in the hedge fund industry, which recently has been best known not for star names or outsized returns, but quite the contrary - lack of alpha creation and redemptions - noted short-seller Sahm Adrangi of #KerrisdaleCapital, got into hot water over the weekend, when he was reportedly busted in the Hamptons on charges of drunken driving and cocaine possession over the weekend after getting into a crash."
@ExcelsiorI decided to grab a small position in $P during this over-reaction to the strike news, and because it's so totally bombed out on a longer term chart.
Primero is still a Mid-Tier #Gold#producer, and the news on Jan 18th seemed constructive enough for the production guidance this year. I've never really been a huge fan, but the current valuation is just a bit too tempting here. If it sells off a bit more due to strike jitters then I'll keep adding.
@Excelsior@Bimbeebop - I agree that the increase of the #Uranium price from below $18 to $25-$26 has been a noteworthy percentage increase, as was the US/Russian agreement to quit dumping so much #Nuclear fuel into to the spot markets from a program that was supposed to have ended a few years ago and completely disregarded the metrics of that program, as it relates to limits and the amount sold and pricing. This had further tanked the spot price the last few years and trashed many of these mining companies share prices. In 2015, 86% of uranium supply came from mines and 14% came from decommissioned nuclear warheads and other secondary uranium production sources.
There was some misplaced elation from Trumps tweets, but in contrast, the Kazakhstan reduction of output of 10% was a valid sentiment and price driver. So when people say it was an unwarranted move up, they clearly are not following the space or following the macro drivers.
Lastly, the longer-term offtake agreements will be getting negotiated from 2017-2020 and this will only drive prices higher, as no companies are making money at $25 and need #Uranium closer to $50-$60. Let's get real, spot pricing can't camp out here for years or there won't be any Uranium mining companies left.
Anyone that seriously believes U will be stuck at this same level flat for 3 years doesn't understand how these off-take agreements will be adjusting pricing up when power and utility companies come back to the market.
So a short term sideways to down consolidation wouldn't surprise me at all, and a pullback of 20% should be bought, but a 2-3 year stall would be the end of the industry as we know it, so odds are pricing will head higher moving into 2020 and the Uranium mining stocks will be rerated accordingly.
@Excelsior@barracuda - good point on the disconnect in the pricing reality and where the futures are trading as a projection.
$URG$URE Ur-Energy and $UUUU$EFR Energy Fuels both have off-take agreements in the $40's & $50's and I can't see them renegotiating at $26. ;-)
@Wannabeinvestor@Excelsior, @barracuda, these agreements that $EFR and $URE have are mostly legacy agreements. I keep in touch with a nuclear industry consultant who advises nuclear utilities for a living. his take on term contracts is that over the past couple of years term contracts have increasingly been based on spot + margin to cover for cost of capital primarily. he also says graphs with supply gaps are rubbish, there is plenty of U3O8 available. his summary for 2016 is primary production of ca 60k tons, secondary supply off ca 16k tons and reactor requirements of ca 61.5k. he thinks the flow of secondary material into the spot market will carry on for the foreseeable future. he also tells me UxC and TradeTech do not actually have access to term contracts, so whatever they report as term prices are just a speculation. he thinks up to 10 reactors online in Japan by the end of 2018 and about 25 by 2023. the man is rather conservative in his outlook. putting the above in perspective may explain why U3O8 producers have not seen much of a rally as opposed to some developers/ explorers.
@Excelsior@Wannabeinvestor - Thanks for those updates and insights from the nuclear industry consultant. Those are good projections on the production and secondary supply figures.
Agreed that the market is still working through oversupply at present, and that there is no shortage of U308 (hence no supply gaps). However, there have been a few reports put out that most of the power and utility companies have not been that active purchasing in some time as a result.
That is interesting about his comments on UxC and TradeTech not having access to the term contracts, but their websites claim to track purchases and longer duration prices by the power companies, and I can't see them just pulling numbers out of their rear ends. :-)
As more reactors are built in Asia and the Middle East over the next few years, there will be more buyers coming into the market. Nobody can really predict where prices will be other than they will be moving up.
When the off-take agreements are negotiated, the point was that they won't be at current spot prices, and over time these will nudge the longer term prices higher. Good stuff and much apprecited.
@Excelsior@Pon - It's hard to imagine #Uranium going back below $18 again (although anything is possible in resource investing); but it would appear that the bottom was the end of 2016.
Will it be a rapid rise up in pricing? Not likely, due to the oversupply situation, and while pricing may muck around in the $20's for a while, the trend will be heading up going into 2018 and beyond.
Could the uranium market be getting a bit ahead of itself at current levels? I recommend investors pull up a 5 year or 10 year chart and look at the recent move up coming out of late last year. It's just a little blip, and needs to be put into perspective.
The average investor (even the gold & silver investors that thought their bear market was bad) just don't realize just how extreme the move down in these miners has been since 2011.
For the miners to have clawed back a little bit is encouraging, and for those invested it seemed like a big move (and it was), but relative to the increases that will happen to many of these miners, this wasn't even the first inning of the game.... it was just the first base hit. ;-)
This chart that goes back to 2011 should at least put things into perspective of where we are today with #Uranium Miners, and how the recent rally factors into the big picture.
@Excelsior“Pump & Dumps” happen when tons of liquidity and share price appreciation pours into a previously illiquid stock that has been floundering, when little has changed in it’s narrative other than massive promtion. Then after the stock goes up in a parabolic way, gravity takes over and it comes crashing back down, because there was no real fundamental driver ….. only speculation.
If people want a prime example of a “Pump & Dump” that just occurred, they need to look no further than $NAK$NDM Northern Dynasty.
That stock was getting way ahead of itself, and many worried with some of those involved (Doug Casey, Stanberry, Marin Katusa) that it may turn into a real pump and dump. First clue was that there was no real progress made on getting the permit, and all the promotion was predicated on the idea that Trump was going to reign in the EPA and make them change their decision on that project.
That has all been PURE speculation and there were no fundamental reasons for that stock to have taken off, gotten all the attention, and had the huge liquidity / share price appreciation except from pure pumping from a group of newsletter writers.
Northern Dynasty #PumpNDump#Chart:
@Goldfinger@Excelsior That's right, all predicated upon speculation they would now be able to get through environmental permitting due to Trump. Would have never gotten as high as it did without a massive concerted pump effort by Katusa etc. $NAK$NDM
@ExcelsiorAbitibi Royalties Update on Canadian Malartic Mine Royalties Plus Two New #Royalties Acquired Near the Rainy River Mine & 777 Mine
(Marketwired – Feb. 21, 2017) – #Gold~royaltiesandstreams
Abitibi Royalties Inc. $RZZ$ATBYF is pleased to provide an update on the Company’s various assets, including its net smelter royalties #NSR at the Canadian #Malartic Mine, near Val-d’Or, Québec. In addition, the Company has acquired two new royalties, which are located near $NGD New Gold’s Rainy River Mine and $HBM Hudbay’s 777 Mine.
> Malartic CHL – Odyssey North Zone (3% #NSR)
a) Initial Resource Estimate Odyssey Property
b) New Internal Zone
> Update on Barnat Extension and Jeffrey Deposits (3% #NSR)
> Possible Production Near Pit Zones 2018-2020 (2-3% #NSR)
** Abitibi “Royalty Search” – Two New #Royalties Acquired
– The Company has acquired two additional NSRs near existing mines in Canada through the Royalty Search. The first agreement, in partnership with $AMI$ARCTF AuRico Metals Inc., gives each company a 0.75% #NSR on 9 exploration properties located throughout the Rainy River district in Ontario, located near New Gold’s Rainy River Mine.
– The second NSR is an additional 1% royalty on Nordic Minerals Ltd. exploration property located approximately 5 kilometres southwest of Hudbay Minerals Inc.’s 777 mine in Manitoba.
*--- > Obviously this is also great news for Golden Valley Mines $GZZ$GLVMF as they own half of Abitibi Royalties $RZZ. 😄
@Excelsior@90bigpicture - There has been a lot of attention on the rise of #Zinc prices, but few are mentioning the gradual rise in #Lead prices. They are often found together, and so a 10%+ rise in #Lead prices seems reasonable to me, and this could be a nice boon to #Silver miners that often have both Lead and Zinc as contributing metals credits.
@zadman@Leon@excelsior@highheat you guys think this is trading soft on fears of some sort of trump action against mexico? Really tempted to add here, afraid the share price is confirming something I don't know. Anyone with insight on the recent weakness vs the group as a whole? Tia..... $SCZ
@Excelsior@zadman - I believe the reason $SCZ is trading soft, relative to some of the other Silver miners is that they haven't put out any news since December, and that was to announce they were terminating the sale of San Felipe.
They've offered little in the way of clarity as to what they are doing since then and market doesn't like uncertainty. They mentioned it was non-core so they may end up selling it still, but they said they couldn't agree on the payment schedule. (honestly, it may be better for them to just hang onto that property as a development optionality).
In addition, they don't have a great deal of money in their warchest, and they are still paying down some debt. However, on the plus side, their AISC is $15.88 Silver, so they'll be doing fine here in the $17-$18 range and should keep making measured progress (especially with Zinc & Lead moving higher as well).
Another positive is that in October of last year they did get their Veta Grande Project into commercial production, so that should be a help moving forward.
Santacruz Silver seems on the cusp of finally starting to break out, and if Silver were to make it back towards $19-$20 later in the year, then I see their stock doubling back to the $.60 level again.
$SCZ really is still severely undervalued, but until they put out a press release updating the markets on what their strategy is moving forward, then the upside may stay more muted. Having said that, once more clarity is there, then confidence return and show up in the share price appreciation. In the longer term, this one will be fine though.
@Excelsior@MiningBookGuy - Great points on $ARL.AX and giving investors the option of diversifying out of riskier jurisdictions like #DRC for #Cobalt exposure. I wish Ardea all the success in the world and personally have some exposure to them through their mother company $HER Heron Resources.
Heron has a nice share position since they were the ones that just spun out these projects to create Ardea. This was the wise move for Heron, so they could strictly focus on their Woodlawn #Copper#Zinc project, and because these other #Cobalt and other #BaseMetals projects were not getting properly valued by the marketplace anyway under Heron's umbrella.
Now these projects that Ardea holds separately have a chance to advance, and the focus of Heron can stay on taking Woodlawn into #production. Fun times!
@ExcelsiorThanks @PamplonaTrader for the #Uranium candleglance charts. Overally many of them have started pulling back down below their 50 day EMAs, which is bearish in the shorter term, however the 200 day EMAs seem to be holding as support.
If we get a little more of a pullback in the sector, then it will be time to deploy some dry powder.
@Excelsior$PPP$P Primero Achieves 2016 Revised Production and Cost Guidance
- marketwired on January 18, 2017
“While Primero faced a number of significant challenges in 2016, I believe the changes we have already made, and will continue to make, will result in a considerable improvement in our 2017 results,” stated Ernest Mast, President and Chief Executive Officer.
“We have recently strengthened our management team with the addition of an experienced C.O.O. and C.F.O., and expect to see marked improvement in the near-term as we work to reduce costs, increase production and simplify the way we mine. These key steps will lay the foundations of Primero’s return to sustainable profitability.”
Streamlined Operations Expected to Generate Significantly Improved Cash Flows in 2017
"Primero has streamlined its operations, focusing on productivity improvements, right-sizing of operations, and strong adherence to mine plans. Furthermore, the Company is implementing broad cost-control measures at both mines in 2017."
"The Company expects to provide 2017 production and cost guidance in mid-February."
"Primero anticipates 2017 production levels will be in-line with 2016 but at reduced unit costs. Total capital expenditures are also expected be reduced on an overall basis, but year-over-year spending will increase in specific focus areas such as mine development and near-mine exploration.
Primero Reports Year-End 2016 Mineral Reserves and Resources
“Our 2016 exploration program substantially replaced our depleted Mineral Resources,” stated Damien Marantelli, Chief Operating Officer. “However, our Mineral Reserve estimate was affected by mining depletion and improvements we made to our geological controls and modelling methodologies. We believe these important changes will set up our mines for future successes through improved planning, predictability and deliverability.
Primero has traditionally had a strong history of replacing Mineral Reserves and we remain confident in the significant mineral endowment of our mining districts. In 2016, our exploration programs identified additional Resources but not yet at a confidence level to convert to Reserves. This can be demonstrated by the recent discovery of an extension to the high-grade Victoria vein at San Dimas in late 2016.
In an effort to increase our Mineral Reserve base going forward, at a rate closer to historical levels, our 2017 San Dimas exploration budget is approximately double the expenditure of 2016, with a focus on defining additional mineralization on known favourable structures located close to existing infrastructure. We also look forward to continuing our exploration of San Dimas’ greenfield southern concessions, which exist outside the silver purchase agreement.”
“The Company has applied a two-pass cut-off grade at San Dimas. Firstly an all-in sustaining cost cut-off grade was applied to highlight areas for inclusion in the Mineral Reserve, followed by the application of an operating cost cut-off grade to highlight additional incremental material for potential inclusion. The all-in sustaining cost cut-off grade applied was 3.22 g/t gold equivalent (“AuEq”) and considers direct operating costs and sustaining capital costs.
The operating cut-off grade next applied was 2.22 g/t AuEq and considers direct operating costs only. For the December 31, 2015 estimate, a one-pass estimate methodology was applied with a cut-off grade of 2.50 g/t AuEq.
Additional factors affecting the cut-off grade include reduced expected throughput rates following the deferral of the 3,000 tonnes per day expansion plan, and lower expected metallurgical recoveries of 95% for gold and 92% for silver. The Company believes that these are more appropriate recovery rates to use due to improved metallurgical accounting practices implemented as the mill processes lower grade ore.”
“As previously disclosed, Primero’s short-term 2017 operating plan will focus on the high quality veins at San Dimas (Roberta, Robertita, Jessica, Victoria, Santa Gertrudis), veins accounting for approximately 49% of contained gold ounces in Mineral Reserves at San Dimas. Proven and Probable Reserves contained in the 5 veins total 1.6 million tonnes with an average grade of 5.0 g/t gold and 323 g/t silver. Primero believes that this specific focus on mining higher quality veins will improve productivity and achieve necessary cost-reductions.”
@Picsou - As you mentioned, the good news for now is that with workers on strike they aren’t depleting their ore bodies (ha!).
I’m not worried at all and $P Primero is a large company that has weathered many storms and cycles, and they are going to get their production optimized, have a better drilling campaign to correct the sins of 2016, the strike will get resolved, and we are able to pick up stock here at the lows.
Primero is a prime example here of “buying when there is blood in the streets.” It is going to be one of the better turn-around stories for this year by the look of things.
*** It’s time to add $PPP or $P while it's on firesale.
Friends Of P. (Video)
@Picsou@Excelsior Agreed the $P$PPP strike reaction seemed overdone. Actually started looking at it seriously the day it was announced as I always pay attention to your consistently well documented and insightful posts. However, with falling knives, my policy is to hold off a day or two (fighting my own impatience), but given the drop off today it was an opportunity to enter at a lower price than @Excelsior himself, thus I did and concur to your analysis wholeheartedly. The R&R statement is not that concerning as it has to be put in the context of what comparable firms have achieved, that is not much as the focus remains on deleveraging rather than investment...which is beyond me but anyway!
@ExcelsiorAbsolutely. It is risky to catch the falling knife and I averaged down a bit more today into the position on the further weakness.
I see $PPP$P as being one of the better #TurnAround stories setting up for 2017.
Keep in mind that the $PPP share-price was a $7.60 back in 2010, $7.37 back in 2012, and as high as $8.29 back in 2014.
At the current $PPP share price at $.69 it is hardly expensive :-)
@ExcelsiorThat also means $UEC does't have any longer term off-take agreements. That is why they haven't been #producing the last few years. They are good at spinning that as a positive though so they can focus on permitting their hub & spoke deposits.
Still, $UUUU$EFR and $URG$URE have been selling much of their #Uranium in the mid $40s- to mid $50s - not all at spot prices.
@zadman@Excelsior mgmt always seems to find new and creative ways to disappoint. Lol. With that being said, I got significantly longer today. We are at levels where odds are, more can go right than wrong. At least I hope.... $P$PPP
@chatyak@Excelsior - is it really a bad thing though? If they dont' have any long term offtake agreements - is it by choice? Maybe they don't want to even for $50 when they know they could possibly do $70 in a few years (UEC)
@ExcelsiorNice. Tomorrow may be a hell of a rally in $NAK$NDM on this news about the EPA veto being reconsidered.
I picked up some shares at the end of the day and added in the after-hours trading to play the dead-cat bounce, based solely on the share price approaching the 200 day EMA. #Meow
The news could not have been more perfectly timed to synch up with technical support here. #Synchronistic
@Excelsior@chatyak & @FundamentalAnalysis - great discussion. I've followed both $UEC and $EFR$UUUU for a number of years, and have positions in them both. My only point earlier was that $UEC failed to lock in longer term off-take agreements a few years back, and that is why they are not currently producing and working on their permitting and development instead. It's just funny how they turned a lemon into lemonade and how they have spun things.
$UEC may have timed it out perfectly, as many thought the recovery in U308 prices would have already occurred in 2015, 2016 and 2017. I wasn't a fan of the financing that $UUUU did last year but it's done now, and they are a solid company with a far larger profile of production and development projects than any other US based company. Moving forward both companies are pretty safe bets in this tiny #Uranium mining sector.
@ExcelsiorGreat thoughts and series of posts here from @Jayfire . You actually made too many good points to respond to them all about playing explorers versus developers or mid-tier producers....so I'll leave it at - "Well said". #mbgtrends
@FundamentalAnalysis@Excelsior Yup $UEC have spun it out as preserving their uranium in this low price environment :). But its stories like that which keeps the price propped up, $EFR unfortunately has been quite broken from a valuation perspective and that occurs due to poor communication/pr. I.e raising money at a discount where the money raised was only 10% of the market cap, shouldn't have led to the price falling to the placement price initially, then blowing straight through it before uranium spot prices were capitulating. I hold both, but trimmed both over the last month to take profits. $UEC due to valuation, and $EFR because it just doesn't move properly at all. If I was on the board....I would be instructing $EFR to really sort their PR out, because its not working. They also don't hold enough equity.....which means our interests are not aligned, and a discount placing isn't something they lose sleep over. I'm glad I bought Goviex $GXU near the bottom. I see that as my dependable position over the next cycle, large properties, good PR, good backing.
@Excelsior@FundamentalAnalysis - great points there and I agree with them for the most part regarding both companies. They've been in survival mode though, and had to make some tough calls.
I trimmed a bit in Jan and Feb on both $UEC and $UUUU$EFR just to take a little off the table, and have nibbled a bit at buying both back at reduced prices, but would like a little more pullback to deploy more funds into the sector.
Yes, $GXU has been on a tear, and I have exposure to them through $DNN$DML because Denison owns about 1/4 of their shares, and they are the ones that spun those properties out to them.
I'd encourage anyone to listen to the David Cates (form Denison) interview on Palisade recently to sum up the #Uranium sector on a macro level and what they are doing to move things forward, but there a nice section on their outlook for GoviEx as well.
@MiningBookGuy@jayfire - great stuff! i've only skimmed so far, but i second @Excelsior! @vaughan, thanks for responding to make it a conversation...i'll have some more to say soon, hopefully tomorrow.
@chatyak - yeah, there are still plenty of laggards around! btw, SWA was absolutely a laggard last year, and then seemed to take off. i can think of a few more right now...but i'll write more tomorrow because i have to run! #mbgtrends