I am back in South Florida after spending 72 hours in the Big Easy attending the New Orleans Investment Conference. Even though New Orleans is affectionately known as "The Big Easy," it's not so easy to come away with simple soundbites and insights from this year's conference.
As I pointed out yesterday on the CEO.ca index channel sentiment among conference attendees felt exactly neutral; calm, but neither optimistic nor pessimistic. In fact, on one of the mining share panels the consensus among the panelists was not bullish on precious metals and mining shares over the short term (1-3 months). However, there was unanimous optimism regarding 2018. Conference organizer Brien Lundin of the Gold Newsletter even offered that he expects a tremendous buying opportunity in precious metals mining shares in the final two months of 2017, before a strong rebound in Q1 2018.
Chris Martenson of Peak Prosperity delivered a thought provoking and insightful presentation on exponential growth and ended with a concise list of 4 bullet points which investors should do:
1. Get out of debt (productive debt is ok)
2. Invest in yourself
3. Get some gold, oil, real estate and other forms of primary and secondary wealth
4. Invest whatever wealth remains very carefully (invest with people who understand the context of the new economy)
This list is simple enough, yet i'm sure that there are plenty of people who will read it and still keep 5-digit credit card balances while holding relatively minuscule amounts of primary wealth assets such as precious metals and real estate. "Investing in yourself" is also an interesting concept which is probably not clear to most people - for me it's a reminder that I am my most important asset and I get to continue watering the soil (my brain and knowledge base) which feeds me; take trainings, talk to people smarter than you, read, grow your expertise and expand your knowledge base.
Brent Cook's presentation may not have had a ton of new information in it, however, that doesn't make it any less important. The fact is that senior gold producers face a major challenge over the next 12-24 months as their reserves continue to deplete, AND more importantly, the number of new discoveries globally which could turn the needle for a senior producer (Barrick, Goldcorp, Newmont etc.) can be counted on one hand (Midas Gold's Stibnite Gold Project and Sabina's Back River Project were mentioned as two projects which DO make the cut as potential acquisition targets for a senior producer).
The question which many gold mining investors are asking themselves is "when will the next M&A cycle really kick off?" After talking to 25-30 junior mining execs and tossing it around in my brain for the last few days i've come up with an answer - it's going to take copper rallying above $3.50/lb and gold to surpass last year's high (let's call it $1400 for good measure) to raise the excitement in the metals mining sector, AND more importantly, to increase the urgency for M&A to take place on a large scale in the sector.
The market dynamic in copper is intriguing and it will be really interesting to see what happens over the next couple of years as a looming supply crunch begins to bite:
Trilogy Metals (TMQ.TO) and Western Copper & Gold (WRN.TO) are two massive North American projects which hope to move forward as this copper supply crunch motivates senior producer partners to alleviate their concerns around sizable capex bills (multi-billion dollar numbers for each project), and move forward with projects that would be marginal at best at lower metals prices. WRN has also been given a recent vote of confidence from the Canadian government in the form of a C$130 million road project which will see a road built connecting the Casino Project to the main highway.
Some of my favorite stories from the New Orleans Conference are (in no particular order) Adamera Minerals (ADZ.V), Banyan Gold (BYN.V), Genesis Metals (GIS.V), Sabina Gold & Silver (SBB.TO), Jericho Oil (JCO.V), Osprey Gold (OS.V), Western Copper & Gold (WRN.TO), and Midas Gold (MAX.TO).
Jericho Oil and Banyan Gold are two stocks which I wish I owned more of before shouting their praises this weekend, oh well. Jericho continues to execute its strategy of growth through acquisition to perfection, however, given the strong price of oil JCO is also beginning to drill its first wells. I am excited for what the next several months will bring for JCO.
Banyan Gold is an under the radar story which I doubt many have even heard of. After speaking with President & CEO Tara Christie I am intrigued by this story and the value proposition which BYN shares offer at a sub-C$6 million market cap. The next year could be powerfully transformative for Banyan and Mrs. Christie is a top notch CEO who probably knows the Yukon at least as well as anyone else in the junior mining sector.
Disclosure: I own shares of ADZ.V, BYN.V, SBB.TO, JCO.V, and OS.V. I may buy or sell any of the stocks mentioned at any time without notice. JCO.V and OS.V are also sponsors of Energy & Gold and I have been compensated for writing about both companies in the past. I am biased. Do your own due diligence, it's your money and your responsibility.
DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.
