Nov 27, 2018 10:57 am Eric Sprott: All Asset Classes Are Plunging
Renowned investor Eric Sprott truly cannot pass up a bargain. But before heading out for some Black Friday discount shopping, the founder of Sprott Inc. checked in with Craig Hemke of Sprott Money News for an update on the market. A DIFFERENT MARKET ENVIRONMENT
“We have a different market environment and people should adapt to that,” said Sprott, referring to the general deterioration of asset classes.
“All asset classes are pretty well plunging here … Oil and gas are very weak. We see the stocks are weak.”
And even as the broader market rallies out of correction territory, the weakness is evident. Both the S&P 500 and Dow Jones Industrial Average have wiped out their gains for the year, while the NASDAQ clings to a 2% year-to-date gain (down roughly 15% from its high).
In addition to the technology sector, energy has been particularly hard hit with WTI crude hovering in the $51 per barrel range.
“[Cheap oil] is great for the consumer, of course, because he’s saving money.”
“But it’s certainly not good for corporate earnings in the sense that the oil companies have now lobbed off 30 bucks a barrel, and it’s not as though they were making much in the way of profit anyway. So we could see a bit of carnage there.”
Indeed, we already have. With oil prices down significantly from the October peak, the yield on the high-yield energy index jumped to a 24-month high of 7.99% earlier this month. Meanwhile, the State Street SPDR Energy Select Sector ETF (XLE) is down roughly 10% for the year.
“People are just waiting for a time to sell.” THE COST OF RISING INTEREST RATES
Of particular concern are the effects of rising interest rates on consumer behavior.
“The things that interest rates are affecting are the worst performing stocks. Look at the whole housing thing and now autos. You don’t have to be a genius to know that people are kind of tapped out.”
The data seem to agree. With rising mortgage rates and home price growth hurting affordability in many markets, sentiment among the nation’s homebuilders has dropped to its lowest level since August 2016.
The case for automakers is no better. Amid slowing sales, General Motors recently announced a major global restructuring that includes a plan to cancel numerous car models and cut production at five assembly plants. The move affects 15% of its salaried workforce.
“These increases in interest costs — they dent your budget … [M]ortgage rates are up 150 bp off the bottom and an increase of something like 40%.”
“How many people can afford to pay [an extra] 40% on their mortgage and still afford to buy food and pay their power bills?”
“The Fed has gone this route because they had to get back to some kind of normalcy, financially. And getting back to normalcy is resulting in economic carnage.” THE GOLD BULL IS NOT ALONE
Despite a rising interest rate environment and a 6% year-to-date decline in the gold price, Sprott remains bullish on the metal and the associated mining companies.
“There tends to be a rally beginning in the middle of December. That will coincide with the rate decision, and normally, even when they’ve raised rates, gold has tended to go up. So, I think we’re probably in a good spot here,” said Sprott, before adding, “We usually see fireworks once we get through that big [COMEX] delivery month in December.”
According to Sprott, he is not alone in his interest in gold and the gold miners.
“Anecdotally, I’ve heard that there’s been some major institutional accounts asking various gold companies to come in and present their case.”
“Why wouldn’t they be looking around for something that could survive in a crash?”
“That’s one of the beauties of gold — that’s why I got into gold back in 2000. I was a long-only fund manager and thought, ‘My God, I’ve got all this money for people, what am I going to do?’”
“It finally dawned on me that gold lets you survive … and, quite frankly, I was only trying to survive. I didn’t know the stocks would go up 1,700% from when I bought them.” Click here to listen to Craig’s interview with Eric Sprott. Read in browser »
Vancouver, British Columbia, November 27, 2018 (Globe Newswire) – Irving Resources Inc. (CSE:IRV) (“Irving” or the “Company”) is pleased to announce the closing of the non-brokered private placement announced on November 20, 2018. The Company raised $2,083,802 by the issuance of 1,894,365 units (the “Units”) at a price of $1.10 per Unit (the “Private Placement”). Each Unit is comprised of one common share of the Company and one-half of a share purchase warrant (the “Warrants”). Each whole Warrant is exercisable for one common share of the Company at a price of $1.75 per share for a period of two years from the date of issue, subject to an accelerated expiry provision.
The Company plans to use the net proceeds of the Private Placement to fund matters related to property exploration in Japan and for general working capital purposes.The securities issued under the Private Placement are subject to a four month hold period. About Irving Resources Inc.:
Irving is a junior exploration company with a focus on gold in Japan. Irving also holds, through a subsidiary, Project Venture Agreements with Japan Oil, Gas and Metals National Corporation (JOGMEC) for joint regional exploration programs in the United Republic of Tanzania, the Republic of Malawi and the Republic of Madagascar. JOGMEC is a government organization established under the law of Japan, administrated by the Ministry of Economy, Trade and Industry of Japan, and is responsible for stable supply of various resources to Japan through the discovery of sizable economic deposits of base, precious and rare metals.
Additional information can be found on the Company’s website: www.IRVresources.com. Akiko Levinson,
President & Director
For further information, please contact:
Tel: (604) 682-3234 Toll free: 1 (888) 242-3234 Fax: (604) 641-1214 info@IRVresources.com THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE. Forward-looking information
Some statements in this news release contain forward-looking information (within the meaning of Canadian securities legislation) including, without limitation, the statement as to the planned use of the net proceeds of the Private Placement. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, without limitation, customary risks of the mineral resource industry as well as the performance of services by third parties. The securities of the Company have not been registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”)) or any U.S. state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, a “U.S. Person” (as such term is defined in Regulation S under the 1933 Act) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act and applicable U.S. state securities laws.
Not for distribution to United States newswire services or for dissemination in the United States
TORONTO, Nov. 27, 2018 (GLOBE NEWSWIRE) — Gowest Gold Ltd. (“Gowest” or the “Company”) (TSX VENTURE: GWA) announced today that it intends to issue, on a non-brokered private placement basis, units of the Company (the “Units”), at a price of $0.05 per Unit, for aggregate gross proceeds of up to $5,000,000 (the “Private Placement”). Each Unit will comprise one common share and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”), with each Warrant being exercisable to acquire one common share of the Company at a price of $0.07 for a period of 24 months following the closing date of the Private Placement.
The proceeds of the Private Placement will be used by the Company for the continued development of its 100% owned Bradshaw Gold Deposit (“Bradshaw”), and for working capital purposes. At the same time, now that the Company has secured a toll-milling agreement (see news release dated October 30, 2018) and expects to be in a position to start processing material from Bradshaw, Gowest is also pursuing a more significant, long-term strategic investment (see news release dated November 15, 2018).
Certain insiders of the Company may participate in the Private Placement and the Company may pay a finder’s fee to registrants who assist the Company in connection with the Private Placement. Completion of the Private Placement is subject to receipt of TSX Venture Exchange approval.
All of the securities issuable in connection with the Private Placement will be subject to a hold period expiring four months and one day after date of issuance. The Private Placement may be closed in one or more tranches.
The securities offered have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This release does not constitute an offer for sale of securities in the United States.
It is anticipated that the closing of the Private Placement will occur on or before December 31, 2018.
About Gowest
Gowest is a Canadian gold exploration and development company focused on the delineation and development of its 100% owned Bradshaw Gold Deposit (Bradshaw), on the Frankfield Property, part of the Company’s North Timmins Gold Project (NTGP). Gowest is exploring additional gold targets on its +100‐square‐kilometre NTGP land package and continues to evaluate the area, which is part of the prolific Timmins, Ontario gold camp. Currently, Bradshaw contains a National Instrument 43‐101 Indicated Resource estimated at 2.1 million tonnes (“t”) grading 6.19 grams per tonne gold (g/t Au) containing 422 thousand ounces (oz) Au and an Inferred Resource of 3.6 million t grading 6.47 g/t Au containing 755 thousand oz Au. Further, based on the Pre‐Feasibility Study produced by Stantec Mining and announced on June 9, 2015, Bradshaw contains Mineral Reserves (Mineral Resources are inclusive of Mineral Reserves) in the probable category, using a 3 g/t Au cut‐off and utilizing a gold price of US$1,200 / oz, totaling 1.8 million t grading 4.82 g/t Au for 277 thousand oz Au.
Forward-Looking Statements
This news release may contain certain “forward looking statements.” Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Any forward-looking statement speaks only as of the date of this news release and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
For further information please contact:
Greg Romain
President and Chief Executive Officer
Tel: (416) 363-1210
Email: info@gowestgold.com
Soil grids completed over Swan, Eagle and Hawk target areas
Larger target area developing through systematic exploration
VANCOUVER , Nov. 26, 2018 /CNW/ – NxGold Ltd. (“NxGold” or the “Company“), (TSXV: NXN) is pleased to provide an update on its exploration program at the Mt. Roe Project located in the Pilbara region of Western Australia . The Company has recently completed a follow-up phase to the initial anomalous stream sediment samples continuing its systematic approach to target area identification and drill target refinement at the Mt Roe Project. This follow-up work included additional stream samples, gridded soil samples and rock (grab) samples.
View photos
Figure 1: Stream sediment sample results compiled with Gridded Soil Sample locations from the Mt. Roe Project (CNW Group/NxGold Ltd.)
A total of 47 stream silt samples (see Figure 1 and Table 1) were collected following up on the initial encouraging results which identified numerous target areas including an approximately 1.2 km long section of the Sholl ridge, host to the Eagle, Kangaroo and Bulldog target areas and coincident with a large magnetic high feature identified from the detailed UAV-magnetics survey (details of which are described in the News Release dated 15 October 2018 ). As a result of this recent sampling, the target areas have been further refined to approximately a 500m , 350m and 250m section of the Eagle, Bulldog and Kangaroo target areas, respectively. Assay results from gridded soil samples from the Eagle area are pending. The Eagle area is expected to be a primary focus for drill targeting given the presence of the magnetic high anomaly, coincident stream anomalies and high-grade rock (grab) samples.
The Hawk , Swan and Sun target areas were expanded by the additional stream samples. Results from the gridded soil samples are pending from the Hawk and Swan areas. Additional work is required to better understand controls of the anomalous stream sample distribution.
The areas chosen for grid-based soil sampling utilised an 80 m line spacing and 40 m sample spacing with lines oriented to the north-west with a total of 139 soil samples being collected (Figure 1). The target areas of initial interest include the Hawk area (26 samples) located near the known “80oz” prospector’s patch, the Eagle area (86 samples) where earlier trenching programs exposed a gold bearing structure, and the Swan area (27 samples), which hosts numerous gold nugget patches and structures exposed in trenching that returned anomalous gold and copper values (see the News Release dated September 10, 2018 ). Assay results from this work program are pending.
Christopher McFadden , Chief Executive Officer commented, “In a relatively short period of time since acquiring the property this year, our team has evaluated the property for different mineralisation styles and advanced to the drill target delineation stage through the systematic exploration of the Mt Roe tenements. This approach will also be used to evaluate the Prinsep tenements and the pending tenements on Mt. Roe which are expected to be granted shortly. The identification of vein structures in the Eagle, Hawk and Swan areas among others, supports the existence of primary gold mineralisation on the property. “
UAV Orthophotography and Magnetics Survey Images from this survey are available on the Company’s website (www.nxgold.ca).
Initial program on Prinsep tenements
A total of 7 stream sediment samples were collected and a soil grid with 80 m line spacing and 80 m sample spacing was sampled for 60 samples collected. This was an initial work program focused on historical areas worked by prospectors using metal detectors. Results from this program remain pending.
Next Steps Upon compilation of all the work completed this year-to-date, NxGold believes it will be in a position to complete a target prioritisation review to prepare for scout-drilling that will test the continuity of known conglomerate and prospective gold target areas.
Neither TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
About NxGold
NxGold is a Vancouver-based exploration company. The Company owns 80% of the Mt. Roe gold project located in the Pilbara region of Western Australia. The Company has also entered into an earn-in agreement with Meliadine Gold Ltd. to earn up to a 70% interest in the Kuulu Project (formerly known as the Peter Lake Gold Project) in Nunavut .
Technical Disclosure
The on-going sampling programs of stream sediments, soils, rocks and chip samples involve a quality assurance and quality control (QA/QC) program that includes the collection of field duplicates and insertion of certified reference materials at frequency of roughly one in ten samples. Rock samples, stream samples and some chip samples are selective in nature and are not representative of mineralisation on the property. All samples have been sent to Intertek Genalysis in Perth , WA for preparation and analysis. Rock and chip samples were analysed using a 50g fire assay for gold and a 10g aqua regia, 32-element inductively coupled plasma optical emission spectroscopy (‘ICP-OES’). Samples with visible gold or returning >10 g/t gold by fire assay are subject to a screen fire assay analysis. Stream sediment samples were analysed using 1000g bulk leach extractable gold analysis with Leachwell accelerant followed by ICP-MS with a 10g sample split for aqua regia 32 element ICP-OES analyses.
Stream samples were field screened fine fraction (minus 80 mesh) with a collected mass of 10-12kgs. Soil samples were field screened to minus 4mm with a collected mass of approximately 4kg. All samples were split by a two-tier riffle splitter in a secure storage facility into a laboratory sample and a retained reference sample.
NxGold advises that the Mt Roe Gold project is an early stage exploration project utilising an evolving gold deposit model for a paleo-placer style of mineralisation. Abundant exploration work is required to understand the previously unrecognised sedimentary geology and confirm if the source(s) of the coarse gold is located within NxGold Ltd.’s tenements. There is no certainty of the discovery nor definition of a mineral resource.
The scientific and technical information in this news release has been prepared or approved by Darren Lindsay , P.Geo., Vice President Exploration and Development, of the Company, a “qualified person” within the meaning of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Cautionary Statement Regarding “Forward-Looking” Information
This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. “Forward-looking information” includes, but is not limited to, statements with respect to activities, events or developments that the Company expects or anticipates will or may occur in the future including whether the proposed acquisition will be completed. Generally, but not always, forward-looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof.
Such forward-looking information and statements are based on numerous assumptions, including among others, that general business and economic conditions will not change in a material adverse manner, that financing will be available if and when needed and on reasonable terms, and that third party contractors, equipment and supplies and governmental and other approvals required to conduct the Company’s planned exploration activities will be available on reasonable terms and in a timely manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate.
Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual events or results in future periods to differ materially from any projections of future events or results expressed or implied by such forward-looking information or statements, including, among others: negative operating cash flow and dependence on third party financing, uncertainty of additional financing, no known mineral reserves or resources, reliance on key management and other personnel, potential downturns in economic conditions, actual results of exploration activities being different than anticipated, changes in exploration programs based upon results, and risks generally associated with the mineral exploration industry, environmental risks, changes in laws and regulations, community relations and delays in obtaining governmental or other approvals.
Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements or information. The Company undertakes no obligation to update or reissue forward-looking information as a result of new information or events except as required by applicable securities laws.
We as humans, I am sure want to believe this is not all there is to life. Many assume that when the body dies the spirit goes somewhere. The general belief is you are going up or down. To paradise or a place that would be eternal torture… kind of like having to hang out with the Kardashian family for eternity. Where will this discussion lead ??? … climb aboard and see where this takes us but first we are going to a place I named … Heaven’s Gate.
I am a shareholder and big fan of Newrange Gold. I have toured the Pamlico Property twice and most importantly have spent quality time with the crew and have grown to admire and most importantly trust them implicitly with my investment dollars. I have gotten to know the key members of the crew while in the field and primarily at the BBQ pit. My goal is to share my valid opinion and beliefs and share that with my readers and give you a feel for the crew of NRG and why I believe this company has so much upside potential.
I met Nate Tewalt, the GEO of the property at the entrance of the Pamlico property by a gated fence. I jokingly called it “Heaven’s Gate”… as that is what all investors hope they are entering, when they put their hard-earned dollars into this casino… known as Jr. Miners. Nate laughed when I called it Heavens’ Gateand he said it jarred a fond long tucked away memory from his youth.
Nate Tewalt, was living near the town of Coeur d’Alene, Idaho in 1980, he was a fun-loving typical teen enjoying the summer break. Out of the blue he was approached by a casting crew to appear as an extra in a local movie. He was assigned the part of an elegant gentleman. His role consisted of dancing and romancing young starlets as an extra. Little did he know at the time but he was part of the biggest box-office bomb ever, the infamous film called Heaven’s Gate.
The Oscar winning director, Michael Cimino was fresh off his blockbuster Academy Award winning film, The Deer Hunter. He was deemed a genius and was given carte blanche to create another cinematic wonder. To say he dropped the ball is a colossal understatement. This waste of precious film and acting talent, has been dubbed the worst movie ever made. Cost overruns were astronomic and thousands of reshoots were all for naught. The film cost over $40 million and took in a paltry $3.5. This debacle caused the collapse of United Artist Studio and destroyed many a thespians dream.
Nate Tewalt’s best acting was mostly left on the cutting room floor. (Third from the right on the roller skates ?)
While it was a fun summer fling, Nate realized he was going to say goodbye to fleeting Hollywood dreams and proceed with his true passion … a career in geology and mining in which he would thrive. Tinseltown’s loss was Newrange Gold’s gain.
Graduating from Colorado State with a degree in Geology, Nate has gone on to prosper and be a founder or consultant of no less than 10 successful projects and mining companies in his 30 plus year career. Meridian Gold, Great Basin Gold and Standard Uranium among them. He has been a part of discovering three working mines. That my friend is a sure sign of his success so far. He is applying those skill sets to the Pamlico project outside Hawthorne, Nevada. Nate considers this his most challenging and possibly biggest discovery yet.
Nate is an old school geologist, hands on, boots on the ground… grime and sweat the norm of each day. He is not one to stay in an air-conditioned cushy office and peruse drawings and maps. He is out getting sunburned, wind-whipped and hammered by the Nevada heat and he would have it no other way. He insists on doing his own mapping and charting as he says he is way too picky and a stickler for accuracy and consistency in his analysis. He said many a project fails from sloppy record keeping and misinterpretation of the data. Nature puts the Gold where it is, the geologist must solve the puzzle as to where it is hidden. He feels data must be consistent and standardized to be of any use. There is no one better to do it than someone he trusts …yup one Nate Tewalt.
Along his career path Nate was fortunate to befriend a like-minded, kindred soul, Tom Chadwick who is considered to be the one of the best mappers in the country. The quality of his work is impeccable. Tom has visited and charted almost every major discovery in the West and he is especially familiar with the Nevada region. He along with Nate believes that Pamlico is very special and could be an absolute beast when it is all said and done. The problem (which is a good problem to have) is the land package is so massive it is hard to get one’s hands around it. It must be systematically and methodically interpreted before it is understood.
The great news it is in the capable hands, a stickler for perfection and details … none other than the Elegant Gentleman full of dirt and grime … Mr. Nate Tewalt.
In previous articles I have covered the attributes and experience of the CEO of Newrange, Bob Carrington. I have gone underground with him and witnessed his dogged determination and passion for trying to turn Pamlico into a mine. I could only wish I could somehow bottle this and allow shareholders to see how much blood, sweat & tears go into his pursuit for the Mother Lode. Bob and crew work grueling untold hours pursuing their dreams in sweltering heat and sometimes bitter cold. Most shareholders have no clue how dedicated this team is.
Another famous twist on Heaven’s Gate is none other than another all-time debacle and absolute tragedy. This would be none other than the warped vision of an absolute madman … Marshall Applewhite. This kook convinced 38 poor souls that if they followed him, he could take them to paradise by catching a ride on Haley’s Comet. While I won’t go into gory detail, the reason why it is so entrenched in my mind is that it occurred less than 10 miles from my home. These poor souls had their last meal at our favorite pancake house. Needless to say, that put the kibosh on that family dining treat My kids were horrified of the place never to be enjoyed again. Sad how one mans horrific actions can affect so many.
How does that relate to Newrange ??? Let me try to explain. As I stated earlier investing in Junior miners is in a way like going to a casino. There are many charlatans, carpet baggers and scoundrels that run these companies. There are many con artists trying to separate you from your money. Fortunately, the business is such is there are also some absolute solid well-run companies that work hard for their shareholders. Newrange Gold in my opinion is one of these diamonds in the rough. They have a potentially awesome property with highly skilled
leadership. These are honorable, hard-working men that are passionate to make a world class discovery. It does take time and much blood, sweat and tears along with fantastic mapping and clear interpretation of the data. Having three of the best in the business, Bob, Nate & Tom working one project is a rarity but a sure blessing for NRG shareholders. Patience is paramount and the only way to make money. Buy Right & Sit Tight !!!
The price recently took a big hit when drill results weren’t eye popping, which the market anticipated from the previous stellar drill results. They were also released during an absolutely dismal time for the price of Gold. Nate explained to me when we were at Pamlico, the drill results they were more focused to strategically understand the mineralization rather than try to improve existing grades. This is a marathon play not a sprint !!! Any weakness in share price should be viewed as a gift. It’s not when you buy that matters but when you sell. Investing in Juniors is a crap shoot but the risk/reward ratio can be stunning when entering by way of the Right Gate !!! … the Pamlico Gate just outside Hawthorne, Neveda.
NEWRANGE GOLD NRG
STOCK PRICE .11
52 WEEK .10 – .62
MARKET CAP $8.5 M
This is my opinion on a company that I have invested in. It is not to be construed to be investment advice. Due your own due diligence when making your own investment decisions. Kevin Dougan owns and runs a contract marketing company for Jr. Miners, Blue Sky Marketing www.kdblueskymarketing.com
I have not been compensated for this article and it is my opinion alone based on sight visits and spending quality time getting to know management and 15 years of investing in this sector
To state that Oil has been through some tough sledding in recent sessions would be a colossal understatement. After recently hitting the skids for an unprecedented twelve consecutive sessions, this decline represents a rout never before witnessed.
chart courtesy of Stockcharts
Looking at this chart, you’d think global demand had fallen off a cliff.
Aside from Trump telegraphing warnings to OPEC not to cut production, there seems to be a perception out there that oil is fast becoming obsolete, that it’s going away, that the global shift toward a greater reliance on EV’s (electric vehicles) will render it a useless commodity overnight.
Not true. Not by a highway mile. The Big Three automakers continue to crank out traditional gas-powered vehicles, producing more in a single day than Tesla will in an entire year. Global oil consumption could top 100 million barrels per day going into 2019.
This next oil chart depicts the last five years of trading. The $50 level looks as if it could represent a fairly decent support zone. It’s also a big round number.
The market often succumbs to these big round numbers as if by some powerful gravitational pull.
My take of this support zone (horizontal line drawn in blue): a decent bounce from here, if not a bottom, could be in the cards short term.
chart courtesy of Stockcharts
For sure, the rumblings coming out of the Whitehouse and OPEC will continue in the weeks and months to come. For sure, the volatility we’ve witnessed recently will have made its masterpiece by year-end (Bill Shakespeare voice). But this current situation could represent a rare opportunity to back up the truck on asset rich companies at deeply discounted prices.
The evolution of an aggressive small-cap oil company…
Jericho Oil Corp (JCO.V), a micro-cap in the oil space, is one of those rare company’s that had the foresight to stoke up its treasury while the going was good, before the market imploded several years back. With roughly $13M in the company coffers, it went looking for the right opportunity.
That opportunity came along in the mid-continent of the US – Oklahoma. Today, the company boasts an enviable land position of some 55,000 acres, including 16,000 acres in the Anadarko basin STACK play of Oklahoma.
If you are small – relative to the size of the true giants in the industry – you need to be focused. You need to appreciate the opportunity-set in front of you. And you need to know the marketplace you plan to execute in.
By focusing on Oklahoma, they’ve completely mitigated the risk of any sudden systemic governmental shift that could take away their business. Local and state governments are more apt to move Heaven and Earth to see that wells get drilled, and assets get developed.
Nearby communities are tied to oil production. They’re immersed in the culture and fully appreciate the many dividends oil production can generate.
Jericho acquired their position in the STACK for an average of $2,300 per acre. Today, those acres are fetching better than $15k per.
All of the these acquisitions have been drilled in the past. Jericho know there’s a significant resource there. They know the field is productive. They know the oil is extractable.
While the company was in the process of picking off properties on the cheap, they gained the support of three significant shareholders, each taking down a > 10% interest in the company. The names include the likes of…
The Breen Family Trust, with patriarch Ed Breen, former president of Motorola, ex-Chairman, CEO and liberator of Tyco International, current CEO DuPont… you get the idea.
Make no doubt about it, this 10% plus club represents solid votes of confidence in Jericho’s underlying fundamentals. They represent long-term shareholders, smart money, and strong hands.
Another benefit of engaging these strategic shareholders: No investment banks. No finders fees. With this management team, every penny is a prisoner.
The STACK…
Named after the counties of Sooner, Trend, Anadarko, Canadian, and Kingfisher, the STACK has evolved into a premier North American horizontal development play.
The acronym also represents the multiple, stacked productive formations present in the area:Chestermanning, Meramec, Osage, and Woodford.
This a prolific hydrocarbon system. The STACK’s hallmark: high oil and liquids-rich natural gas content, multiple horizontal target horizons, extensive production history, and historically high drilling success rates.
It’s important to understand that the area is dominated by a handful of large producers – Continental Resources, Devon Energy, Marathon Oil, Alta Mesa Resources, Newfield Exploration, and Chesapeake Energy. These companies have poured billions of dollars into developing their STACK assets. Jericho has positioned itself in the land of giants.
The recent takeover involving Newfield’s assets pound home the intrinsic value here – the price producers are willing to pay for these STACK assets.
The chart below helps demonstrate why these assets are so damn desirable…
The STACK is among the lowest cost basins on the entire continent. The region is flush with infrastructure. The area has good takeaway capacity – there are good pipes in the ground. Good takeaway capacity means exacting the best possible price for extracted oil.
Another factor driving investment in the region: your typical 1-mile horizontal well produces approximately 500,000 to 1,000,000 barrels of oil equivalent with rates of return greater than 75%. These are serious numbers.
The shift…
The pennies-on-the-dollar bargains Jericho scooped up in 2015 thru 2017 are not there today. As the market for acres shifted from dirt cheap to overpriced, so has the company’s focus. There have been no acquisitions since September of last year. The company’s focus is now on development. And they have heaps of development runway.
Developing a well is not an overnight process. From a scientific POV, a lot of thought and methodical planning need to go into it. Be that as it may, the company has two wells in the bag and two more coming on.
The wells…
Producing Operations:
Wardroom (Meramec formation):
Jericho holds a 47.5% Working Interest.
currently producing at 220 Gross BOE per day (40% oil; 227 days since first oil production)
Swordspear (Osage formation):
Jericho holds a 47.5% Working Interest.
currently producing at 351 Gross BOE per day (50% oil; 128 days since first oil production)
Drilling operations:
Trebuchet (Operator: Armor Energy; Major County – Osage formation)
Jericho holds a 48.0% Working Interest.
Drilling ahead and building the curve from vertical to lateral section.
Valkyrie (Operator: Staghorn Petroleum; Blaine County – Meramec formation)
Jericho holds a 23.5% Working Interest.
Drilling ahead and nearing total measured depth of approximately 13,500 feet
The company also has a small working interest in two additional Osage formation wells, Ula and Hilltop, operated by ExxonMobil and Alta Mesa Resources respectively. Jericho’s participation in these wells is primarily to gain a greater understanding of the underlying subsurface geology.
Here, the company reported progress on the drilling, completion, and flowback of their most recent Osage and Meramec wells:
The highlights from this news release are as follows…
Drilling Operations:
Trebuchet (Operator: Armor Energy; Major County – Osage formation):
Jericho holds a 48.0% Working Interest.
Drilling ahead in the lateral section – ~90% of the planned total measured depth.
To date, the company has seen tremendous strides in the rate-of-penetration (“ROP”) on the Trebuchet relative to their first Osage formation well (the Swordpear) attributable primarily to an improved drilling-bit set-up and specific lateral geo-steering.
The ROP in the lateral on the Trebuchet is approximately 1.6x-1.8x the Swordspear at the same measured depth putting downward pressure on total rig days for the well.
The fracture stimulation of the well is expected to begin in late-November / early December.
Flowback Operations:
Valkyrie (Operator: Staghorn Petroleum; Blaine County – Meramec formation):
Jericho holds a 23.5% Working Interest.
35 fracture stimulation stages successfully performed and currently in flowback.
After only a few days onflowback, the company is extremely pleased with the resulting downhole pressures and total fluid flowback.
Brian Williamson, CEO of Jericho Oil, had this to say regarding these recent developments:
“The Company continues to deliver on its two-pronged strategy of delineating and de-risking our STACK acreage for the Meramec and Osage formations,” adding, “our second Meramec and Osage formation wells have given our team the added knowledge and confidence in our world-class acreage position. We continue to learn from each well and have put forth best practices on our Trebuchet well to decrease drilling costs in the lateral section. We are excited to provide further updates on the production of these wells by year-end.”
Though Jericho’s current focus is in de-risking and proving-up its 16,000 acres in the STACK, significant upside also exists within the company’s asset portfolio – some 40,000 acres – outside of the STACK. Their drill ready Osage Extension play in northeast Oklahoma is the only one example of a project with significant upside potential.
Equity Guru’s Chris Parry, during a recent conference call with the company, offered this take on the company, its assets, and development strategy. To paraphrase Chris…
‘Jericho has taken a MONEYBALL approach. They got in when everyone else was getting out. They got some nice assets on the cheap. They saved themselves the trouble and expense by purchasing assets that had already been explored and tapped into. They have competitors coming into the area and purchasing assets next door at significantly higher valuations to the prices they paid. They’re treating their money like it’s valuable. All of the above lowers the risk and sets up a nice growth play, even if the price of oil doesn’t cooperate.’
Nice summary. Accurate too.
With 128.7 million shares outstanding and a sub-fifty cent share price, Jericho has an extremely modest market-cap of $61M. This price weakness is unlikely to last.
The company could be on the verge of dramatic production growth. Newsflow should be strong going forward.
Ultimately, Jericho’s goal, via a systematic and methodical approach to development, is to build a world-class blue-chip energy company.
We stand to watch.
END
~ ~ Dirk Diggler
Full disclosure: Jericho Oil is an Equity Guru client.
Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
TORONTO , Nov. 26, 2018 /CNW/ – Treasury Metals Inc. (TSX: TML) (“Treasury Metals” or the “Company“) is pleased to announce the Company has entered into a binding term sheet with Extract Capital Master Fund Ltd. and Extract Lending LLC (together “Extract”) to extend the maturity date of the Company’s existing convertible term loan (the “Term Loan”) for three years (the “Loan Amendment”).
The Loan Amendment will amend the maturity date of the Term Loan, extending it for a period of three years from the effective date of closing that is anticipated to be on or about November 30, 2018 . As part of the Loan Amendment, Extract has also agreed to assume the US$2.2 million portion of the US$4.4 million facility previously held by Loinette Company Leasing Ltd. which has agreed to an early payout without penalty. The terms of the Loan Amendment will be subject to TSX approval.
Pursuant to the terms of the Loan Amendment, the Term Loan shall be convertible at the election of Extract into common shares in the capital of the Company (the “Common Shares”) at a conversion price of C$0.36 per Common Share, representing approximately a 50% premium to the closing price of the Common Shares ( November 23, 2018 ), which is the closing date of entering into the binding term sheet.
All other terms of the Term Loan will remain unchanged.
As consideration to Extract for entering into the Loan Amendment, the Company will pay Extract the following: (a) an extension fee of US$110,000, and (b) issue to Extract an aggregate of 600,000 common share purchase warrants (the “Warrants”), entitling Extract to purchase Common Shares at an exercise price of C$0.40 per Common Share for a three-year term. The Company may compel Extract to exercise the Warrants if the volume weighted average price of the Common Shares of the Company is C$0.60 or greater for thirty (30) consecutive trading days.
Exploration Agreement for Weebigee Gold Project
In addition, Treasury Metals is pleased to announce that its wholly owned subsidiary Goldeye Explorations (“Goldeye”) and Sandy Lake First Nation (“SLFN”) have entered into a one-year extension of its Exploration Agreement (the “Exploration Agreement Extension”) on its Weebigee Gold Project to continue exploration activities. The Exploration Agreement has been in effect since November 2013 .
The Weebigee Gold Project is 100% owned by Goldeye/Treasury and subject to an earn-in agreement with current operator Sandy Lake Gold Inc. (“SLG”) effective since April 15, 2015 .
The Weebigee Gold Project is located 227 kilometres north of Red Lake in Northwestern Ontario . In 2014, a 21 drill hole program completed by Goldeye in the western part of the claim package returned significant near surface results, including high grade gold intercepts of 12.86 Au g/t over 6.85 meters and 12.17 Au g/t over 6.2 meters. Further details regarding SLG’s earn-in option agreement and Weebigee are available at Treasury’s website www.treasurymetals.com.
The Exploration Agreement Extension reflects the ongoing collaborative relationship between Treasury Metals and SLFN, within whose Traditional Territory the Project is located. The parties are committed to ongoing meaningful engagement and dialogue with a view to ensuring that the SLFN community participates and benefits as the Project progresses. The Exploration Agreement Extension does not pertain to the additional mineral claims staked by SLG which are outside Goldeye’s Weebigee Gold Project area.
To view further details about the Treasury Metals, please visit the Company’s website at www.treasurymetals.com.
About Treasury Metals Inc.:
Treasury Metals is a gold focused exploration and development company with assets in Ontario, Canada and is listed on the Toronto Stock Exchange (“TSX”) under the symbol “TML”. Treasury Metals Inc.’s 100% owned Goliath Gold Project in northwestern Ontario is slated to become one of Canada’s next producing gold mines. With first-rate infrastructure currently in place and gold mineralization extending to surface, Treasury Metals plans on the initial development of an open pit gold mine to feed a 2,500 tonne per day processing plant with subsequent underground operations in the latter years of the mine life. Treasury Metals is currently in the mine permit process on the Goliath Gold Project.
Follow us on Twitter @TreasuryMetals
Forward-looking Statements
This release includes certain statements that may be deemed to be “forward-looking statements”. All statements in this release, other than statements of historical facts, that address events or developments that management of the Company expect, are forward-looking statements. Actual results or developments may differ materially from those in forward-looking statements. Treasury Metals disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, save and except as may be required by applicable securities laws.
You can have the best tax strategy in the world and it wouldn’t matter if your tax return isn’t properly filed. Your tax return is THE place to capture your tax savings.
For this reason…
Your tax advisor should always be involved in your tax return preparation.
If someone other than your tax advisor prepares your tax return, then it is very likely the tax savings identified in your tax strategy will not be fully captured in your tax return.
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Many of you are thinking about starting a particular investment strategy or a business and you just aren’t sure if you should do your tax strategy before or after you start your investing or business.
I always recommend getting your tax strategy done before you start your investing or business because then the foundation can be in place and ready for your new venture. Plus, in most cases, it is possible to keep the foundation flexible enough so if your venture takes you in a different direction, your tax strategy can adapt to these changes.
Best of all, by doing your tax strategy before, you can get a jump start on the rules you need to know as an investor or business owner to legally maximize your tax savings. This is one area that most people neglect to focus on early and by the time they do focus on it, it is a huge project that requires a ton of catch up. In fact, most people in this situation never get caught up. As a result, they aren’t able to maximize their tax savings.
If you don’t have a tax strategy, my recommendation is to get one in place beforeyou file your next tax return. Waiting to file your tax return until your tax strategy is created can provide more flexibility and opportunity.
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Consider this scenario:
Pierre files his tax return claiming his home office as a deduction. He calculates the area of his home office to be 10%. After developing his tax strategy, Pierre learns that his home office area is actually 20%.
If Pierre has not filed his tax return, he can claim the larger deduction. If Pierre has filed his tax return, then claiming the larger deduction could be more challenging because when it comes to tax returns, consistency is very important. If Pierre files his tax return using 10% and then changes it to 20%, he will have more explaining to do.
Keep in mind that it is not only how a deduction is calculated that may change, but where a deduction is claimed. Your tax strategy identifies these key positions.
Keep Your Tax Strategy Up-to-Date
If you already have your tax strategy in place, be sure to review it at least once a year with your tax advisor. Tax strategies evolve and the tax law changes so it’s critical to update your tax strategy regularly to make sure it is still minimizing your taxes.
A good time to do this is when you prepare your tax return. You can make sure your tax savings are properly captured and identify opportunities for the future.
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Vancouver, British Columbia, November 20,2018 (Globe Newswire) – Irving Resources Inc. (CSE:IRV) (“Irving” or the “Company”) announces that it intends to conduct a non-brokered private placement to raise approximately $2,083,000 by the issuance of approximately 1,894,000 units (the “Units”) at a price of $1.10 per Unit (the “Private Placement”). Each Unit will be comprised of one common share of the Company and one-half of a share purchase warrants (the “Warrants”). Each whole Warrant will be exercisable for one common share of the Company at a price of $1.75 per share for a period of two years from the date of issue, subject to an accelerated expiry provision.
The Company plans to use the net proceeds of the Private Placement to fund matters related to property exploration in Japan and for general working capital purposes. About Irving Resources Inc.:
Irving is a junior exploration company with a focus on gold in Japan. Irving also holds, through a subsidiary, Project Venture Agreements with Japan Oil, Gas and Metals National Corporation (JOGMEC) for joint regional exploration programs in the United Republic of Tanzania, the Republic of Malawi and the Republic of Madagascar. JOGMEC is a government organization established under the law of Japan, administrated by the Ministry of Economy, Trade and Industry of Japan, and is responsible for stable supply of various resources to Japan through the discovery of sizable economic deposits of base, precious and rare metals.
Additional information can be found on the Company’s website: www.IRVresources.com. Akiko Levinson,
President & Director
For further information, please contact:
Tel: (604) 682-3234 Toll free: 1 (888) 242-3234 Fax: (604) 641-1214 info@IRVresources.com THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE. This press release does not constitute, and the subject matter hereof is not, an offer for sale or a solicitation of an offer to buy, in the United States or to any “U.S Person” (as such term is defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “1933 Act”)) of any equity or other securities of the Company. The securities of the Company have not been registered under the 1933 Act and may not be offered or sold in the United States (or to a U.S. Person) absent registration under the 1933 Act or an applicable exemption from the registration requirements of the 1933 Act.
Which to those who have been following the precious metals markets comes as little surprise. In fact to most who have been following the monetary policy of the Federal Reserve over the past decade, in some ways it’s shocking that it’s taken this long.
Just as the Austrian Economic theory clearly states, while easy cheap money is flowing, the financial asset markets get propped up as the money looks for a home. Yet as the theory also states, when the easy money is removed, the malinvestment and misallocation of capital is exposed.
So now as interest rates have risen, the stock markets are declining. While signs of slowdown in the real estate market are there for anyone who does a simple Google search. Let alone does further research or takes note of the stories that continue to emerge evidencing the stress in the market.
And if Donald Trump thinks the Fed is being too aggressive in raising interest rates up to 2.25% after a decade of near 0% rates and unprecedented quantitative easing, how is he going to feel if the Fed even approaches any sort of normal interest rate?
Which God could only imagine what that would be. Although keep in mind that back in 1980 Paul Volcker raised the Fed’s short-term rate to 20%. And following one year of 1% interest rates, Alan Greenspan raised rates as high as 5.25% before reversing course when the mortgage bubble started to pop. And now both the government debt load and central bank money supply are both substantially larger.
Which means that for those who invested in precious metals and have had their faith shaken, every single reason you initially invested is not only still intact. But also playing out at this moment exactly as expected.
The markets did get inflated with all of the printed money. And now as that money is being taken away (albeit at an incredibly slow and minuscule pace), the exact problems that the Austrian Economists forecast are manifesting as expected.
And while many have grown tired of hearing about the manipulation and wondering if it was just conspiracy theory, now that has been confirmed as well. So despite that the break-point has not yet occurred, the exact reasons why you invested in gold and silver are now demonstrating their influence on the markets.
I watched The Big Short again this past weekend. Perhaps because during the times when I wonder if there’s something I may have missed, the movie helps remind me about how when markets get out of line, sometimes it just requires time before nature, supply, and demand re-exert their influence.
Could gold and silver trade lower from here? It’s only appropriate for me as an analyst and trader to factor in that anything is possible. And in an environment where investors are panicking and selling, it’s a good idea to expect that any sort of chaotic outcomes can happen.
Yet given how Deutsche Bank, UBS, HSBC, the Bank of Nova Scotia, and J.P. Morgan have now all been caught manipulating gold and silver, verifying that those who have asserted that the prices are being distorted by illegal behavior were indeed correct, it makes a lot more sense to own precious metals that are at their lows instead of stocks that are in a bubble that’s collapsing. And which current conditions indicate have every reason to continue declining further.
Perhaps what The Big Short also points out is that making large gains in chaotic situations requires understanding what’s happening. And also then having the fortitude to stay with your trade. Which is exactly how I see the current market for gold and silver.
I certainly understand this is a challenging time for investors. Which is why if you have any questions about the contents of this article, or buying or selling gold or silver, as always you’re welcome to email me at cmarcus@milesfranklin.com.
The last note I’ll mention is that when I was recently at the Silver and Gold Summit, as well as the New Orleans Investment Conference, all of the folks I spoke with like Rick Rule, Doug Casey, and Peter Schiff mentioned how their most successful trades have been by buying assets that are cheap and out of favor. And then having the courage of their convictions to be patient until the inevitable plays out.
Miles Franklin was founded in January, 1990 by David MILES Schectman. David’s son, Andy Schectman, our CEO, joined Miles Franklin in 1991. Miles Franklin’s primary focus from 1990 through 1998 was the Swiss Annuity and we were one of the two top firms in the industry. In November, 2000, we decided to de-emphasize our focus on off-shore investing and moved primarily into gold and silver, which we felt were about to enter into a long-term bull market cycle. Our timing and our new direction proved to be the right thing to do.
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