Category: Precious Metals

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PRECIOUS METALS | Stuck in the Twentieth Century

October 24 2018
The Miles Franklin Newsletter
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From The Desk Of David Schectman
David’s Commentary:
For the last 35 years hardly a day has gone by that I didn’t spent time reading about the economy, precious metals, the dollar and much more. I learned to process the information through a “doom and gloom” filter. Fortunately, although there have been some bumps along the road (stock market crash in 1987, dot com crash in 2001 and the stock market crash in 2008), things have worked out much better than I thought they would. And that’s a good thing. All that silver I purchased at $6 and all that gold I purchased at $300 as “insurance” look just fine today – even though I never had to “cash in.” The stock market and the global economy are doing just fine – we are told.
The “kick the can down the road” policies are still working. We have yet to hit the wall, that is surly out there. I am amazed that the mountains of debtand deficits we’ve created haven’t taken their toll yet.
Where is the inflation that should have accompanied all the money and debt creation since I got into the precious metals business 35 years ago?
Oh, it’s there all right. All you have to do is look for it and you’ll find it. It’s easy to spot in luxury goods like expensive cars and watches and at fancy restaurants and sporting events. Speaking of which – my son Andy and Bill Holter attended the World Series opener in Boston last night. They had poor-boy seats in the left field bleachers and they paid $1,600 a ticket. Susan and I went to a Timberwolves (NBA) game on Monday and the seats cost $350 each. There was a family of four sitting directly in front of us and the were all eating burgers and fries and soft drinks and I couldn’t help wonder how can a family of four afford an evening out to a ball game like this that must have cost them over $1,500?
Since most of the new wealth has gone to the top third of the population, the things they purchase will show the largest increases. They have the cash to pay for it. The bulk of the new money has gone into financial assets, which is the playground of the well-to-do. The rich get richer and the rest struggle.
But what goes up must come down. The only question is when?
The one thing that is constant is my undying belief in gold and silver in spite of the price performance of the last six years. I constantly remind myselfthat I didn’t buy my precious metals to make a profit. It was my financial insurance, the base of my asset pyramid. The gold and silver was always there, just in case. Now I did sell up to half of my gold and some of my silver on the way down from the peak a few years ago, but I never touched my “core” position. Recently I started to build up my gold and silver reserves again. I purchased four mint boxes of Silver Eagles and 50 Gold Buffalos. My doom and gloom outlook is flashing a big red warning sign. It’s telling me that this time could be “the big one.” I felt the same way in 2007. We came close to a total collapse, but the Fed came to the rescue with a massive dose of money and credit and saved the banks and the economy – for a while. But the Fed is withdrawing liquidity from the market (they are selling tens of billions of dollars worth of bonds from their portfolio which soaks up liquidity). They are raising interest rates and we are getting dangerously close to a repeat of 2007. But this time it will be worse.
My views are very “Twentieth Century.” I am taking the liberty to include the first decade of the Twenty First Century in that statement. That’s one of the nice things about writing my own newsletter. I get to “take liberties.” I have never abandoned my Twentieth Century views on gold, silver, inflation, debt and money creation. I don’t care what the price of gold is or where the Dow is, as the longest bull market in stocks on record comes to an end, my Twentieth Century views will serve me well.
Yes, I am stuck in the Twentieth Century down to my world-class collection of WWII firearms and aviation art, my audio system that is based on a reel to reel tapes, tube amplifiers, LPs, CDs and my “antiquated” belief in gold and silver.
On that note, I love the following article by Simon Black goes back a bit further and Looks at how well gold has retained its value from 1,000 years ago.
Simon Black
Look at how well gold has retained its value from 1,000 years ago
On October 12, 929, roughly 1100 years ago, Abd-ar Rahman III of the Umayyad Dynasty was proclaimed ruler of Cordoba– the Islamic kingdom that comprised most of Spain at the time.
Rahman was just 21 when he ascended to power, and he remained there for nearly 50 years as one of the wealthiest and most powerful monarchs in Europe.
Historians Denis Cardonne and Edward Gibbon calculate his annual tax revenue at approximately 12 million gold dinars… which was a LOT. READ MORE HERE
David’s Commentary:
We are facing the worst of both worlds. Expect falling asset inflation (housing and the stock market) and rising cost inflation (rising oil and tariff-induced price increases).
Here is another “It’s So Like The Twentieth Century” article. That’s a century when gold was cool.
John Rubino
The sentiment shift is still subtle, but it’s both real and widespread…
The sentiment shift is still subtle, but it’s both real and widespread. After a few years of being ignored and/or dismissed as basically useless, gold is cool again, attracting positive comments in the media and increasing accumulation by big investors.
India, for instance, imported less gold than usual in the first part of this year but lately has ramped up its buying, with August imports more than double the year-earlier amount. READ MORE HERE
David’s Commentary:
According to John Williams (Shadowstats), There are two forces bearing down on the economy. Oil price-driven inflation and Federal Reserve rate hikes.
Faltering Consumer Liquidity Clobbered September 2018 Retail Sales and New Residential Construction.
Most of our GDP is based on debt. Spending is slowing because so many consumers (retail is 68.5% of GDP) are already strapped with too much debt. This is a bad time to get smacked with the double whammy of rising oil and rising interest rates. Those are forces that can topple the economy.
Ted Bauman
U.S. GDP Is Riddled With Debt
A year ago, the billionaire founder of Bridgewater Associates, Ray Dalio, said that most of what we think we know about the economy is wrong.
That’s setting us up for a big, unwelcome surprise.
Dalio’s point is one I make often. If you only pay attention to averages, you’ll miss the most important things about the economy.
And it’s likely to cost you a lot of money.
Every day we’re bombarded with statistics. Gross domestic product (GDP). Unemployment. Inflation.READ MORE HERE
David’s Commentary:
In a conference call with Jim Sinclair and Bill Holter it was impossible to miss the enthusiasm they both had for gold in 2019. Jim says the coming bullmarket in gold will surpass anything we have yet seen. $3,000 to $5,000 gold is baked in the cake. How could one not be excited? The forces that propel a gold bull market are knocking at the door – rising inflation, rising interest rates (which will slow the economy and derail the stock market) and the loss of the Petro Dollar standard, which will punish the dollar. The Black Swans are circling.
This article focuses on one of my favorite topics, the Petro Dollar. If Saudi Arabia abandons the dollar and starts trading oil in Yuan prepare yourself for a falling dollar (due to reduced DEMAND) and rising prices. This is a very favorable environment for gold.
Zero Hedge
China Will ‘Compel’ Saudi Arabia To Trade Oil In Yuan — And That’s Going To Affect The US Dollar
October 11, 2017
China will “compel” Saudi Arabia to trade oil in yuan and, when this happens, the rest of the oil market will follow suit and abandon the U.S. dollar as the world’s reserve currency, a leading economist told CNBC on Monday.
Carl Weinberg, chief economist and managing director at High Frequency Economics, said Beijing stands to become the most dominant global player in oil demand since China usurped the U.S. as the “biggest oil importer on the planet.” READ MORE HERE
David’s Commentary:
This is why you need to hit a grand slam home run with gold and silver. It’s one of the sure ways to build up your nest egg to be able to deal with theballooning cost of living we all face.
Lance Roberts
F.I.R.E.’d Up – A Million Ain’t What It Used To Be
The FIRE (Financial Independence Retire Early) Movement is literally on “fire” after Suze Orman recently suggested that one would need $5 million if they wanted to retire early.
“You need at least $5 million, or $6 million. … Really, you might need $10 million,” she said — short of that, it’s just not going to be enough for most people.
“You can do it if you want to. I personally think it is the biggest mistake, financially speaking, you will ever, ever make in your lifetime. I think it’s just ridiculous. You will get burned if you play with FIRE.”READ MORE HERE
Archived Newsletters
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About Miles Franklin
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.
We are rated A+ by the BBB with zero complaints on our record. We are recommended by many prominent newsletter writers including Doug Casey, Jim Sinclair, David Morgan, Future Money Trends and the SGT Report.
For your protection, we are licensed, regulated, bonded and background checked per Minnesota State law.
Miles Franklin
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
Copyright © 2018. All Rights Reserved.
Miles Franklin801 Twelve Oaks Center DriveSuite #834Wayzata, MN 55391
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Precious Metals

PRECIOUS METALS | Another Day Older and Deeper in Debt

The Miles Franklin Newsletter
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Gary Christenson-Contributing Writer For Miles Franklin
Another Day Older and Deeper in Debt
Miles Franklin sponsored this article byGary Christenson. The opinions are his.
Official US national debt exceeds $21 trillion. National debt increases over $3 billion per day.
Another day older and $3 billion deeper in debt!
The U.S. government pays the interest by issuing new debt. But that new debt increases total debt and (eventually) drives up interest rates, which requires more borrowing to pay the annual interest payments. Another year older and deeper in debt! A reset will occur when the debt load becomes too heavy.
WHY DEEPER IN DEBT?
Governments spend currency units, corporations demand their payoffs, the warfare and welfare lobbies own congress and the “borrow and spend” circus performs.
“The real story is we made a significant investment in the military which is very, very important, and to get that done we had to increase non-military spending.”
The Deep State extracted its share of the swag, participants collected their payoffs and debt expanded. Borrow and spend is the lifeblood of the Wall Street and D.C. circus.
But it extends beyond Washington D.C. Consider these massive debt burdens in the U.S.:
·     Sub-prime auto loans. Defaults will rise in the coming recession.
·     Over $1 trillion in credit card debt. More defaults coming.
·     Over $10 trillion in mortgage debt. The 2008 recession hammered mortgage debt and related derivatives. The next recession could be worse.
·     About $1.5 trillion in student loan debt, much of which is deferred or in default. The next recession will illuminate the lunacy in this program.
·     Public and private pension liabilities are underfunded by many $trillions even though stock markets trade near all-time highs. The next recession will push many pension plans over the abyss.
·     U.S. government has unfunded liabilities of $100 – $200 trillion. Those liabilities increase every day and will be defaulted or paid in mini-dollars.
Summary: Congressional promises and boondoggles push the U.S. deeper into debt.
From David Stockman:
“That’s how the Warfare State-Welfare State system works, greased by the Deep State and its fetid ecosystem of bureaucrats, “think-tanks,” lobbyists, lawyers, pundits, carnival-barkers, grifters and other thieves.”
Another government contract, weapons system, wars, expanded welfare, free cell phones, ethanol subsidies, food stamps (SNAP), foreign aid to buy US weapons… and the circus descends deeper in debt.
BUT LET’S NOT TAKE IT TOO SERIOUSLY:
The Treasury Department issues bonds and sells them to the Fed. The Fed creates the dollars and buys the bonds. Insiders collect their swag, the government pays off corporations and voters, and those new dollars devalue existing dollars. Prices rise and the circus rolls down the road toward debt-ruin.
The game works until confidence in the currency and/or the Fed breaks. That confidence has not broken yet, but it will.
The dollars are mostly illusory. They are debts of the Federal Reserve. Bonds are promises to repay future mini-dollars by a government that can only repay via additional borrowing or printing. In a better world using real money, not fiat debt-based pretend dollars, the government would be a poor credit risk—a large chance of default.
That realization is coming. The U.S. needs a return to asset backed money that the banking cartel can’t create from nothing. This option is not politically viable in 2018.
Tennessee Ernie Ford sang about the plight of coal miners decades ago. Coal miners were often paid in company script which bought food and supplies at inflated prices in the company story. The “script” had no intrinsic value and was backed only by management promises. Silver coins – real money with intrinsic value—circulated in the United States while mining companies issued script. But script created more profit for mine owners.
“You load sixteen tons, what do you get?
Another day older and deeper in debt.
Saint Peter don’t you call me ‘cause I can’t go I owe my soul to the company store.
Today we use “script” called Federal Reserve (digital and paper) Notes (debts), which have no intrinsic value and are backed only by promises from the Fed and the U.S. government. Labor is exchanged for debts from the Fed—the “Company Store.”
We use a flawed system that benefits the banker cartel, big corporations and the government. The system will not change without trauma. “I owe my soul to the company store.”
Our economy runs on low interest rates, credit and ever-increasing debt – auto loans, corporate loans, credit cards, mortgages, etc. Most retail transactions use plastic cards. The banking cartel takes their cut. Confidence holds the game together. But rising interest rates cut profits, increase debt service, and bankrupt marginal companies and households!
Another day older and deeper in debt. $21 trillion plus unfunded liabilities and rising $billions every day. If credit dries up, like in 2008, the piper will be paid in blood and bankruptcies.
Protect yourself from the coming reset:
a)  Reduce your debt load.
b)  Some retirement promises will not be paid.
c)  A reset is inevitable.
d)  Debt must be paid, defaulted or inflated away.
e)  Much of the debt can’t be paid.
f)    Default creates immediate and devastating consequences.
g)  Inflation and hyper-inflation are destructive but delay the consequences. Politicians like delayed consequences.
h)  Congress, the Administration and the banking cartel prefer inflation. Borrow and spend created inflation has worked for decades. The political and financial elite are unlikely to want change.
i)    Read Chris Marcus: Is the Price of Silver About to Explode?
Gold and silver are real money. They will retain their value and purchasing power as dollars are devalued, and will be safe assets during the coming reset, regardless of when or how it occurs.
Another day older and silver prices are low! Call Miles Franklin at 1-800-822-8080.
BRIEN LUNDIN | the Fed, the Dollar and Precious Metals
BRIEN LUNDIN | the Fed, the Dollar and Precious Metals
Brien Lundin, publisher of Gold Newsletter, sat down with Maurice Jackson of Proven and Probable to discuss precious metals and their relationship with recent Fed actions and the dollar.
Visit our website for more detailshttp://proven.flinnwestsolutions.com/.
Archived Newsletters
International Storage
Private Safe Deposit Boxes
Unencumbered / Segregated Storage
Market Report 10/22/2018
About Miles Franklin
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.
We are rated A+ by the BBB with zero complaints on our record. We are recommended by many prominent newsletter writers including Doug Casey, Jim Sinclair, David Morgan, Future Money Trends and the SGT Report.
For your protection, we are licensed, regulated, bonded and background checked per Minnesota State law.
Miles Franklin
801 Twelve Oaks Center Drive
Suite 834
Wayzata, MN 55391
1-800-822-8080
Copyright © 2018. All Rights Reserved.
Categories
Precious Metals

JUNIOR MINING | Pacton Acquires Calidus Conglomerate Gold Rights

VANCOUVER , Oct. 23, 2018 /CNW/ – Pacton Gold Inc. (TSXV: PAC, OTC: PACXF, FSE: 2NKN) (the “Company” or “Pacton“) is pleased to announce that it has entered into a definitive agreement (the “Agreement“) to acquire the conglomerate gold rights (“Gold Rights“) of Calidus Resources Limited (ASX:CAI) in both the Marble Bar sub-basin, and the Northeast Pilbara sub-basin of Western Australia’s Pilbara craton. (Figure 1).

Figure 1. Pacton Pilbara Gold Exploration Projects (CNW Group/Pacton Gold Inc.)

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Figure 1. Pacton Pilbara Gold Exploration Projects (CNW Group/Pacton Gold Inc.)

Subject to TSX Venture Exchange acceptance, the conglomerate gold rights will be transferred to Pacton within 50 days.

The acquisition of the Calidus conglomerate gold rights is strategically significant for Pacton, and is consistent with Pacton’s directed strategy of acquiring Fortescue Group exploration conglomerate gold assets in parallel with its equally growing portfolio of Mesoarchean and Paleoarchean orogenic “mother lode” exploration projects.

Calidus is exploring for orogenic shear hosted gold deposits at its Warrawoona Gold Project south of Marble Bar in the Paleoarchean “basement rocks” of the Pilbara craton, which is excluded from the Agreement with Pacton (Figure 2).

Pacton’s Agreement with Calidus allows it to explore and exploit any conglomerate or transported gold deposits in the sedimentary rocks overlying the basement rocks in the Calidus holdings, which are scattered from the town of Marble Bar to the Nulllalgine-Beaton Creek area. The Fortescue Group formation that overlies the basement rocks on the tenements covered by the Calidus Agreement are composed entirely of outcropping Mount Roe Basalt.

Figure 2. Location of Calidus tenements subject to Calidus-Pacton Agreement. (CNW Group/Pacton Gold Inc.)

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Figure 2. Location of Calidus tenements subject to Calidus-Pacton Agreement. (CNW Group/Pacton Gold Inc.)

Pacton is currently conducting field exploration in the Mallina Basin, on its Egina area properties, located approximately 200 km west of the Marble Bar sub-basin. Field exploration will commence on the Calidus project immediately following the transference of the conglomerate rights to Pacton.

Three areas of the Calidus conglomerate gold right tenements have already been targeted for exploration. Two areas are located near the town of Marble Bar. The third area, an immediate priority, consists of a portion of a north-pointing, 10 km long “spear” of Mount Roe basalt, which is the northern extension of the Mount Roe formation that underlies the Novo Resources Corp (NVO:TSXV) conglomerates at Nulllagine and Beaton Creek , located approximately 20 km to the south. The Pacton portion of the “Spear”, with a combined edge strike-length of about 15 km,  covers an area of 20 km2, approximately the same area as the Mount Roe surface exposure on Novo’s Beaton Creek tenements. This is due to the fact that the Mount Roe Basalt surface footprint at Novo’s Beaton Creek project is covered by the overlying Hardey formation conglomeratic members.

The preliminary targeting of the Calidus conglomerates is unusually precise due to the favourable weathering characteristics of the Pilbara and the differential silicification of known conglomerate units. In other words, Pacton has recorded the signatures of known Pilbara conglomerate deposits and has prioritized similar signatures on its Calidus conglomerate targets, including the “Spear”.

A preliminary estimate of mapped Mount Roe Basalt in all Calidus tenements includes approximately 50 linear km of Mount Roe edge exposure and downhill talus slope, covering a total area of approximately 90 square km. (Figures 3, 4, 5 & 6 showing selected Mount Row features).

Conglomerate target planning will continue and field operations will commence immediately following the transference of the conglomerate gold rights from Calidus to Pacton.

Figure 3. Section of distinct contact between Mount Roe Basalt and basement rocks. (CNW Group/Pacton Gold Inc.)

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Figure 3. Section of distinct contact between Mount Roe Basalt and basement rocks. (CNW Group/Pacton Gold Inc.)
Figure 4. Magnification of inset shown in Figure 3 above. (CNW Group/Pacton Gold Inc.)

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Figure 4. Magnification of inset shown in Figure 3 above. (CNW Group/Pacton Gold Inc.)
Figure 5. 300 m wide erosional edge and talus slope falling away from the Mount Roe high area in upper left of air photo. (CNW Group/Pacton Gold Inc.)

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Figure 5. 300 m wide erosional edge and talus slope falling away from the Mount Roe high area in upper left of air photo. (CNW Group/Pacton Gold Inc.)
Figure 6. “Tip of the Spear”. Mount Roe Basalt showing resistant, steep edges (left). Further down the 10 km spearhead, the Mount Roe silicified edges are still prominent. Note the drainage dissection winding across the spear (right). This will assist stratigraphic sampling at surface. (CNW Group/Pacton Gold Inc.)

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Figure 6. “Tip of the Spear”. Mount Roe Basalt showing resistant, steep edges (left). Further down the 10 km spearhead, the Mount Roe silicified edges are still prominent. Note the drainage dissection winding across the spear (right). This will assist stratigraphic sampling at surface. (CNW Group/Pacton Gold Inc.)

Agreement Terms

Under the terms of the Agreement, the Company through its wholly-owned Australian subsidiary, will acquire the Gold Rights by issuing Calidus or its nominees 7,000,000 common shares. The Agreement includes a right to deferred compensation whereby Calidus may receive up to 3,000,000 additional common shares of Pacton on the first anniversary of completion of the transaction based on the 30-day VWAP of Pacton’s shares on the date of such issuance.

The Company will be seeking TSX Venture Exchange acceptance of the transaction forthwith.

About Pacton Gold

Pacton Gold (PAC: TSXV; PACXF: US) is a well-financed Canadian junior with key strategic partners focused on the exploration and development of conglomerate-hosted gold properties located in the district-scale Pilbara gold rush in Western Australia.

The technical content of this news release has been reviewed and approved Peter Caldbick , P.Geo., a director of the Company and a Qualified Person pursuant to National Instrument 43-101. The qualified person has not yet verified the data disclosed, including sampling, analytical, and test data underlying the information or opinions contained in the written disclosure.

On Behalf of the Board of Pacton Gold Inc.

Alec Pismiris
Interim President & CEO

This news release contains or refers to forward-looking information based on current expectations, including, but not limited to the Company completion of the proposed transaction described herein, the prospect of the Company achieving success in exploring its properties and the impact on the Company of these events, including the effect on its share price. Forward-looking information is subject to significant risks and uncertainties, as actual results may differ materially from forecasted results. Forward-looking information is provided as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances.

Neither TSX Venture Exchange, the Toronto Stock Exchange nor their 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.

Pacton Gold Inc. (CNW Group/Pacton Gold Inc.)

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Pacton Gold Inc. (CNW Group/Pacton Gold Inc.)
Cision
Cision

View original content to download multimedia:http://www.prnewswire.com/news-releases/pacton-acquires-calidus-conglomerate-gold-rights-300736242.html

SOURCE Pacton Gold Inc.

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View original content to download multimedia: http://www.newswire.ca/en/releases/archive/October2018/23/c3238.html

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Precious Metals

BOB MORIARTY | Irving Delivers, Market Yawns

Original Source: http://www.321gold.com/editorials/moriarty/moriarty102318.html
Investors are funny. You can go to the chat boards and read about Novo Resources that had an incredible run in 2017 and read about how unhappy investors are that the price of shares has gone down. It’s my entire fault or it’s Quinton’s fault or it’s Eric Sprott’s fault. It’s everyone’s fault except the investors who wanted to wait until Novo went up to buy.
Well, screw them and the horse they rode in on. I was writing about Novo when it was $.45 a share, not telling people to buy at $8. Maybe if investors actually want to make money they should buy my book and learn to buy cheap and sell dear. It works for me and I am certain it will work for them.

(Click on image to enlarge)

Irving reported samples showing $23,400 rock in 2016 and investors ignored them. I’ve written the company up half a dozen times yet I was able to buy shares for $1 not long ago. And just the other day they reported more absurdly high-grade assays.
If you add up the gold assays from the 13 samples, you come to an average of over 46 grams of gold per ton. Irving is going to have the highest grade gold mine in the world and those samples represent exactly what they are going to find when they drill.
They are going to drill someday. A drill is on the way over but finding drilling assistants in Japan is a problem. Drilling might be in late November or be put off until spring but someday they will drill. When they do, I am going to hock the family jewels and buy more Irving shares. I own a lot now but not like I’m going to when they actually announce drilling.
Don’t bother whining to me about how you bought Irving shares after results came out and the price went down eventually. I don’t care. Whine to Quinton, I’m sure he gives a shit. Or better yet, whine to Eric Sprott, he loves holding the hands of investors who want to buy at the top and dump at the lows.
Irving is an advertiser. They are not as cheap as they were when I bought at $1.00 in August but they are a whole lot cheaper than they are going to be a day after they release the first drill results. I own shares. Do your own due diligence.
Irving Resources
IRV-C $1.33 (Oct 22, 2018)
IRVRF OTCBB 40.6 million shares
Irving Resources website
###
Bob Moriarty
President: 321gold
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321gold Ltd

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Exclusive Interviews Precious Metals

BRIEN LUNDIN | the Fed, the Dollar and Precious Metals

Brien Lundin, publisher of Gold Newsletter, sat down with Maurice Jackson of Proven and Probable to discuss precious metals and their relationship with recent Fed actions and the dollar.
VIDEO

AUDIO

TRANSCRIPT
http://www.streetwisereports.com/article/2018/10/22/brien-lundin-the-fed-the-dollar-and-precious-metals.html
Maurice Jackson: Joining us for a conversation is Brien Lundin, the president of Jefferson Financial, helping to protect your world.
Please tell us about Jefferson Financial and what type of services you provide.
Brien Lundin: We are essentially a provider of investment information. We publish Gold Newsletter, which is the oldest precious metals advisory in the world, having been started by Jim Blanchard in 1971 as a way for him to advocate for the return of gold ownership, legalized gold ownership to American citizens. And I also produce the New Orleans Investment Conference, an annual event that Jim Blanchard also started in 1974 after he was successful in helping to get gold legalized. He had an investment conference to teach American investors how to buy gold, how to invest in the gold markets, and silver, and it’s been going on ever since. We have the oldest, and I believe the most respected investment event out there.
Maurice Jackson: We brought you on today to get your insights on a number of topics, and I would like to begin our discussion with the Federal Reserve and its commitment to increase interest rates and reduce its debt obligations on its balance sheet. I have to begin by asking you, is that even possible for the Fed to unwind its balance sheet?
Brien Lundin: Well, it can unwind its balance sheet, I think the key question is at what pace it can simply let the obligations run off as they mature, which would take quite literally decades for that to happen. But the key is, can the Fed do it without unforeseen, or dangerous consequences to the U.S. economy and stock market. And frankly I don’t think it can, as it increase its balance sheet as it was the buyer of last resort to keep interest rates low. And as the Fed had, as you know, an unprecedented program called Quantitative Easing, which was just money printing, all of this to support the market. We saw the effects in not retail price inflation as many of us feared, but in financial assets inflation, which to be fair, was their goal all along.
On the way up, as the balance sheet was rising and as quantitative easing was hitting its stride, the correlation between the Fed’s balance sheet and the S&P 500 was around 97%, so the Fed inflated the stock market, bull market. It was directly behind it.
And the question now is, if they had that much of a correlation on the way up, well, now that they’re on the way down, are we going to have a similar correlation? And I think the events of the week when the DOW lost over 1,400 points over a couple of days is powerful evidence that the Fed won’t be able to get away with it without some dire consequences in the equity markets.
Maurice Jackson: Speaking of those dire consequences, from a macro perspective, what type of impact are the Fed’s decisions having on global markets? And should we be concerned about contagion and capital flight from peripheral markets?
Brien Lundin: Well, it’s actually attracting some money to the U.S. because you have, on a relative basis, higher rates in U.S. treasuries than you have in similar instruments in Europe and elsewhere. So it is attracting money and helping to support the dollar, but I don’t think it’s making the dollar strong. If anything, it’s preventing the dollar’s decline because the Fed wants rates to rise now, it really can’t do it much longer for a number of reasons.
First , the Fed is going to crater the economy if it gets rates to high. Second, we can’t, because of the large debt loads we have right now; the U.S. simply cannot bear the burden of higher interest rates while we have this kind of a debt burden. If interest rates got to historic levels, and by historic levels, I’m talking of 10, 15 years ago where the interest rate burden on the Federal debt was on the order of 5–6%. If we got to those levels again, then the interest burden on the federal debt would be on the order of $1.2 trillion. And that’s far greater than the whole deficit is right now.
So, I just don’t think that’s politically possible. So if we’re looking at interest rates of 5–6% on the Federal debt, we’re talking about a Fed funds rate that probably around 3%. I think that’s the upper limit.
Maurice Jackson: You referenced the U.S. currency’s decline. You know the U.S. for all intents and purposes is in a trade war. And President Trump recently shared he’s not in favor of the Fed’s recent rate hikes. Is the Fed jeopardizing his position in discussions with his adversaries in the trade war?
Brien Lundin: I don’t think his trade war really affects that so much. I think one of the reasons why Trump is out there bemoaning and belittling the Fed so vociferously is because he’s looking for an excuse in case the economy starts downward. Or in case there’s a serious stock market decline. He wants to be able to blame it on someone except himself, and the Fed will be the obvious target. So he’s kind of setting the table for that, I believe. Plus he’s obviously in favor, and his administration is in favor, of low interest rates and debt. I think that’s what we’re going to keep getting.
Maurice Jackson: Now when do you foresee the Fed’s rate hikes ending? And what may be the effects upon the conclusion, long term?
Brien Lundin: Well, if the upper limit is around 3%, that means we have about three more quarter-point rate hikes ahead of us. If the Fed does one in December, which everybody expects, then that means it will only need a couple more to get to 3%, and that could happen in the first half of next year.
I don’t think that’s a widely understood or appreciated fact right now. I think there’s some spark money that’s been seeing that for some time, in realizing that the Fed is in the back half of its rate hike campaign, while other currencies, other central banks, like the ECB and the Bank of England, have yet to begin their rate tightening. But they are on schedule to do so very soon. So I think there’s already been a shift in large money allocations from the dollar into the euro and the pound. And I think we’re going to continue seeing that, and I think that’s the reason why the dollar has not been able to, say, break out of the 95 range on the dollar index and why I believe the dollar will be headed lower over the next six months or so.
Maurice Jackson: Speaking of smart money, we like to remind our audience that we refer to money as physical gold and physical silver. Talk to us about the recent price movement in gold.
Brien Lundin: What’s really been interesting about gold is that it has risen on a number of occasions recently when the stock market was crashing and yet the dollar was strong. Now typically that would argue that the buying is safe haven related. And, Maurice, I never like that as a driver for gold. I’m never in favor of that as a reason for gold to go up for any sustained period because these, the safe-haven type buying, these geopolitical political issues, these little flash crises, they come and go, and they don’t provide a sustained driver for gold. What really drives gold over the longer term are concerns over monetary issues, concerns over debt and currency depreciation and the like, and inflation.
So when you see the dollar going up along with gold, that’s a sign that the buying is safe haven related and probably not lasting. However, at the same time, and even on those days when the stock market was crashing, the gold stocks were rising. They were very strong and that argues for a more of a long-term approach to the gold buying. That’s an indication that people are buying gold because they see longer-term monetary based factors at play. So it’s a little bit of both right now, and I find it very interesting. It’s going to shake out one way or the other, but what’s encouraging is that we’re seeing indications of both types of demand for gold. But both are contributing to higher gold prices. And in fact, if we can get enough of a gain in gold to spark a short covering rally, by all the short speculators out there, then I’ll take that. That’s fine with me. That could be enough to really start a longer-term rally in metals.
Maurice Jackson: I have to ask this as well. What prudent action should someone take, based on today’s discussion regarding physical precious metals?
Brien Lundin: Well, they need to own physical precious metals. That’s what I tell everyone; if you’re a newbie to the sector, make sure you have your physical precious metals component, the foundation of your precious metals allocation. Make sure you have that in place, make sure you have it accessible. Don’t put it in bank safe deposit boxes. Make sure you have access to it. I’m a big fan of small denomination silver coins that are junk, you know, old junk silver. As an important component of what somebody should own, but they need to get the physical component in place. That’s the first thing, and even some experienced gold and silver bugs to the sector, they like to play around in the mining stocks, but a lot of them don’t have that physical component in place.
And you really need to, that’s your insurance, it’s something everyone needs. And has to have an insurance against not the unforeseen, but against the inevitable.
Maurice Jackson: You said a lot of information there. I’d like to just recover there for a second. Number one you referenced not to have it in a safe deposit box. Could you please expand on that for a little bit?
Brien Lundin: One of the things you’re insuring yourself against or hedging against by owning physical metals is a bank holiday. So if they lock the banks, how are you going to get to your precious metals? Now that limits your storage options, but there are still a number of options out there, including some in a personal safe, some in other security centers. And then if you’re going to have a fairly large allocation of physical, you can have some in storage facilities both domestic and international.
I tell people that I have very good friends in the precious metal storage business. Yet, I still recommend that if you’re going to have a substantial physical bullion investment, to spread your storage around, because you just never know. You never know what’s going to happen in each specific company or facility. And that’s a risk that you can easily diversify and really should.
Maurice Jackson: You know another fact that a lot of people aren’t aware of, is the safe deposit boxes at your banks, are they FDIC insured?
Brien Lundin: No, they’re not a deposit. So they’re not insured.
Maurice Jackson: That is very important for for our audience to understand.
Brien Lundin: And they’re not insured. The authorities have access to those with a subpoena. Interestingly, one of the things we discovered here in New Orleans during Katrina is that you should also not have a safe deposit box on the first floor of a bank. Because there are a number of safe deposit boxes in the New Orleans area that were under 12 feet of water for a weeks at a time after the hurricane. And they are not waterproof by the way, so a lot of these things you need to consider when looking to store precious metals and valuable documents.
Maurice Jackson: Another point you made was regarding mining stocks. I think a lot of individuals who are investors, particularly in the secondary market, are not aware that they can own physical metals, so they’re under the impression that they own mining company that owns gold and that is incorrect. You are only basically a company that is mining, but they don’t provide you the physical metal. When you purchase the stock, you’re going to get back cash, you’re not getting back the metal. Very important for us to understand here. If I may ask you this sir, we all have our favorites, of the big five, which are gold, silver, platinum, palladim, and rhodium, which ones have your attention and why?
Brien Lundin: Gold and silver primarily; the other three have large industrial components to them. So there are other factors, and they make good investments and good speculations in certain times, but gold and silver are the pure monetary metals. A lot of people talk about the industrial component to silver, but quite frankly, if silver was only valued on its industrial value, it would be $5 an ounce or less right now. So the rest of that margin or premium in its price is really monetary value. If you like gold, you have to love silver because silver is going to follow gold, but it’s going to move more than gold in the same direction. So it offers kind of an innate leverage to the gold price. If gold’s rising in terms of the fiat currency, silver’s going to also rise but to a greater degree.
Now there’s the downside of that as well; it’s going to go more quickly to the down side in a down market. But it is something that I tell people they really need a hold, a blend of the two. But for your hedging against financial catastrophe or a steady devaluation of the dollar, you really need to own gold and silver primarily.
Maurice Jackson: May I ask you this as well? The gold-silver ratio, how does that factor in your decision on purchasing?
Brien Lundin: Well, I think it determines the health of a market more so than timing, perhaps a little bit about value, or the relative value of the metals. But when the gold-silver ratio is falling, that means that silver is outperforming gold to the upside. And that is the hallmark of a good, strong, consistent, sustainable bull market in gold. And when the opposite is in effect, then it’s not positive, it doesn’t reflect on strength in the metals in general. I don’t don’t recommend that people trade the gold-silver ratio, because if you say sell gold and buy silver because the ratio is falling, then you’re mitigating your potential gains because they’re both going to rise, or they’re going to head in the same direction.
So if they’re both rising and you’re selling gold, you’re cutting a good portion of your potential gains out of the equation. So I don’t like trading your ratio, I like to look at it as a signal of the relative strength of the trend in one direction or the other.
Maurice Jackson: Interesting perspective, and thank you for sharing that. Switching gears, the New Orleans Investment Conference will be conducted November 1-4 in beautiful downtown New Orleans. Mr. Lundin, tell us about the world’s greatest investment event? Who are some of the featured speakers and discussion topics?
Brien Lundin: Well, I touched on it a bit earlier. The conference has been around since 1974 when Jim Blanchard started it, and Jim was a fairly flamboyant kind of a guy. He really went over the top with inviting big name speakers to the conference, so we’ve inherited that legacy and try to burnish as best we can. And so we get speakers here that you won’t see elsewhere, in general the line-up of speakers that we bring to our attendees is higher quality I believe than you’ll find anywhere else.
This year we have Robert Kiyosaki, we have political commentators Mark Steyn and Jonah Goldberg. We have James Grant who is one of the most eloquent advocates for gold in particular, most eloquent commentators on the financial markets out there. We have Doug Casey, of course, who’s always a big fan favorite. We have Peter Schiff, we have Dennis Gartman, Rick Rule. We have Guy Adami from CNBC who’s a really interesting guy. We have Ben Hunt who writes a blog, and doesn’t speak very often at conferences, but he has a blog that’s widely read by some really smart people in the markets.
And then we’ve got dozens upon dozens of other speakers, experts in just about every sector, but with a particular emphasis on metals and mining stocks.
Maurice Jackson: What type of attendees usually attend the New Orleans Investment Conference?
Brien Lundin: Well, they are smart, number one, because you have to be smart to pick this event to come to it, because it caters to really smart investors. It also caters to self-directed investors; these are people who are independent thinkers, maverick thinkers, they’re information hungry. They may have a large portion of their portfolio with money managers, but a large portion of their portfolio is directed by them, and according to the views that they have.
And the conclusions that they have after a lot of investigation of the markets and trends and listening to a lot of people. So it’s a smart group. It’s a successful group. One of the things I tell our attendees every year is that, yeah, we have great people, top of the line experts on the stage, but look around you. There are literally hundreds of very successful investors around you at this event. And I’ve never seen one of them who wasn’t willing to share his ideas and strategies, you know? And best thoughts on the markets and where they’re heading. So there’s a lot of fantastic market intelligence just within the crowd at our event.
Maurice Jackson: There’s a number of intellectual capital there at the conference. And speaking of the attendees, this will be my third year in attendance, and I have to admit I’m looking forward to meeting the attendees equally as I am to the guest speakers. The networking opportunities with some of the best minds all in one place is priceless. If you do not have your tickets, we welcome you to visit our website, provenandprobable.com and on the right hand column of the website you will see an image for the New Orleans Investment Conference. Click on the image, and you will be taken directly to the registration page.
Before we close, tell us about the gold newsletter and how we can retrieve your information on a regular basis.
Brien Lundin: Well, Gold Newsletter, as I mentioned, before is the oldest and I would say one of the most respected and successful newsletters or advisories on precious metals and mining stocks out there. Jim Blanchard started it in 1971, literally the day that Nixon closed the gold window. And it’s an important history in the hard money movement in advocating for the very legalization of gold in America. So we have a long, illustrious history. We’re trying to build on that every day, and we cover not only the economy, geopolitics and the kinds of things that affect all of the asset classes, but we do specifically focus on precious metals and what’s driving them and we cover a number of mining stocks. Typically junior mining stocks that have the potential to rise when precious metals prices rise or on discovery of new deposits. So that’s kind of our casino as, or where we have a number of high potential, higher risk for sure, but much higher potential investment opportunities.
Maurice Jackson: You know, Mr. Lundin, for someone that wants to get more information regarding Jefferson Financial, please share the contact details.
Brien Lundin: Well, for Gold Newsletter you can go to GoldNewsletter.com very simply, and for the New Orleans Investment Conference, NewOrleansConference.com, although I believe you’ll have some links as well, Maurice, that will get people some special opportunities to the conference.
Maurice Jackson: I certainly will sir. And as a reminder for our audience, we are licensed brokers to buy and sell gold, silver, platinum, palladium and rhodium, off shore storage accounts, and precious metals IRAs. To have conversation, please email Maurice@MilesFranklin.com, or call 919-274-5680.
And last but not least, please visit our website ProvenandProbable.com, where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.
Brien Lundin of Jefferson Financial, thank you for joining us today on Proven and Probable.
Brien Lundin: Great to be with you.
With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Precious Metals

SPROTT’S THOUGHTS | Brinkmanship

Brinkmanship

Oct 19, 2018 06:02 pm
By Trey Reik, Senior Portfolio Manager, Sprott Asset Management USA, Inc.
Over our two decades following global monetary affairs, we have often marveled at default confidence awarded the Federal Reserve. Don’t misinterpret us — the Fed’s power borders on surreal. Seven governors and twelve regional bank presidents set the price of money not only for the world’s largest economy, but through auspices of the dollar standard system, for the entire globe. No matter how practical “don’t fight the Fed” logic has proven over time, it does not diminish the folly that 19 capable and well-supported individuals might possibly price the world’s reserve currency more efficiently than free markets.
Record valuations for U.S. financial assets have inured investors to the daunting risks of unwinding eight years of QE and ZIRP. Because such radical monetary policy has never before been deployed, our 19 monetary mandarins, by definition, command no special insight into broad implications of Fed policy normalization. Into this unprecedented monetary vortex steps new Fed Chairman Jerome Powell, a seemingly low-key and forthright communicator bent on rational steps to normalize Fed policy. In this report, we share our perspective that the Fed’s dual policy agenda of simultaneous rate hikes and balance sheet reduction, rather than constituting some sort of scientifically-formulated policy elixir, amounts to little more than glorified brinkmanship — the Fed’s signature policy tool. Events of the past few weeks only serve to support our contention that Fed tightening is pinching global liquidity to a degree which threatens reigning valuations of traditional financial assets.

EMERGING MARKETS

In our June report, we highlighted a May 8, 2018 speech delivered by Fed Chairman Powell at an IMF-sponsored conference at the Swiss National Bank in Zurich. At the time, we observed that Chairman Powell made specious claims in suggesting “the role of U.S. monetary policy is often exaggerated,” especially with respect to its impact on emerging market [EM] economies. Among his most curious assertions, Chair Powell alleged,

“Monetary stimulus by the Fed and other advanced-economy central banks played a relatively limited role in the surge of capital flows to EME’s in recent years. There is good reason to think that the normalization of monetary policies in advanced economies should continue to prove manageable for EME’s. Fed policy normalization has proceeded without disruption to financial markets…”

It was in reading these patently disingenuous assessments that we first recognized our seemingly mild-mannered Fed Chair is actually on a determined crusade to roll back (what he perceives as) over-zealous accommodation of his predecessors, hell or high water. Chair Powell even noted in his Zurich speech that Fed policy normalization is likely to break a few things along the way.

“All that said, I do not dismiss the prospective risks emanating from global policy normalization. Some investors and institutions may not be well-positioned for a rise in interest rates, even one that the markets broadly anticipate.”

As recently as October 8, 2018, St. Louis Fed President James Bullard weighed in to ratify the Powell doctrine that EM disruptions in the wake of Fed tightening will be exceptions to the rule of better preparedness.

“We do want to take into account international developments. However, I think that what has happened, let’s say in 2018, has been limited to countries that have special circumstances attached to them.”

Well, through October 12, 2018, EM currency declines (versus USD) now measure 49.24% for the Argentine Peso, 35.33% for the Turkish Lira, 14.71% for the South African Rand, 13.19% for the Indian Rupee, 12.86% for the Russian Ruble and 12.50% for the Brazilian Real. While the Fed may attribute these FX performances to “special circumstances,” we would counter that these six countries total roughly 10% of global GDP and 25% of the world’s population. For a quarter of the world’s population, we suspect the “special circumstances” most top-of-mind are significant hits to collective purchasing power and quality of life now being inflicted by the Fed’s latest policy reversal.

NEUTRAL RATE

In mid-September, Fed stewards began to float the possibility that the FOMC’s short-term neutral rate might exceed its long-term neutral rate (3% in current dot plot). In a September 12, 2018 speech, entitled “What Do We Mean by Neutral?” Fed Governor Lael Brainard opined,

“It appears reasonable to expect the shorter-run neutral rate to rise somewhat higher than the longer-run neutral rate. These developments raise the prospect that, at some point, the Committee’s setting of the federal funds rate will exceed current estimates of the longer-run federal funds rate.”

Governor Brainard cited fiscal stimulus (tax cuts) and heightened risk appetite (rich financial asset valuations) as economic conditions potentially supportive of a higher short-term neutral rate. Following Governor Brainard’s lead, Chair Powell espoused the temporarily-higher thesis in his September 26, 2018 FOMC press conference remarks, “Maybe we’ll be raising our estimate of the neutral rate and we’ll just go to that, or maybe we’ll keep our neutral rate here [making a precise gesture with both of his hands] and then go one-or-two rate increases beyond that.”
Why would Fed Governors suddenly propose temporarily hiking rates above long-term targets so painstakingly established in prior dot plots? We contemplate two opposing explanations. Perhaps the Fed fears fiscal stimulus and tight labor conditions are combining to spur steeper-than-desired inflation. Alternately, the Fed may be recognizing that its dual policy agenda is pinching global dollar liquidity to an unacceptable degree, and, in preparation for imminent policy downshift, is jawboning markets to accomplish desired long-end tightening the Fed has so far failed to engender. While only time will tell, we view probabilities of these opposing interpretations far differently than current consensus!

NEW SHERIFF

Displaying escalating self-confidence typical of Fed Chairs, Mr. Powell raised a few eyebrows in a speech to the National Association for Business Economics in Boston. In his prepared remarks, Chair Powell credited “better conduct of monetary policy over the past few decades” for having greatly reduced the impacts of tight labor markets on inflation. [Huh?] In the same speech, Mr. Powell asserted that the Fed’s balance sheet runoff is “working very well.” The following day, in an interview with PBS’s Judy Woodruff, Chair Powell stumbled into a classic central-banker trap in proclaiming, “There’s no reason to think this cycle can’t continue for some time, effectively indefinitely.”
Then, in response to a question about the FOMC’s removal of the phrase “accommodative” from its September assessment of monetary conditions, Chair Powell may have finally jumped the shark in proclaiming,

“Interest rates are still accommodative, but we’re gradually moving to a place where they will be neutral. We may go past neutral, but we’re a long way from neutral at this point, probably.”

Whoa! With this much global debt outstanding, “a long way from neutral,” equates to, “a bridge too far,” for financial asset prices. Immediately following Chair Powell’s October 3, 2018 comments, 10-year Treasury yields popped to seven-year highs (3.234% on October 5, 2018) and the S&P 500 Index slumped 6.7% in six trading sessions (to a October 11, 2018 close of 2,728.37).

WHAT JUST HAPPENED?

On Wednesday, October 10 and Thursday, October 11, the Dow Jones Industrial Average shed 1,377 points. What the heck? Did anyone see this coming? Well, just as February’s equity-market dislocation was dismissed as ill-fated gamma at a handful of inverse VIX ETF’s, October’s air pocket is now being pinned on “computer-driven option gamma hedging.” The good news is that by Friday (October 12, 2018), JP Morgan Chase global derivatives analyst Marko Kolanovic saw clear to proclaim “the majority (70%) of the systematic selling is behind us.” Unfortunately, Barclays Capital’s Maneesh Deshpande quickly countered that “volatility-control and risk-parity funds may need to sell billion of equities over the next couple of days,” on top of a likely billion in sales by exchange-traded-fund investors. At the risk of self-impeachment, we wonder, “Exactly which tea leaves are these guys reading?”
Conceding our limited grasp of Greek variables in contemporary markets, we proffer two pedestrian explanations for this past week’s equity-market swoon. First, following a well-established pattern, October weakness occurred directly in the middle of the Q3 blackout for share buybacks (generally two weeks prior to quarter-end through two days after earnings release). It is getting tough to ignore the fact that equity markets are increasingly vulnerable to dislocation when the undiscerning spigot of share-buybacks is turned off.
Second, Fed policy may simply be too tight to maintain current financial-asset valuations. As we have suggested, with this much debt in the global financial system, reigning asset prices cannot withstand rising interest rates (of either the long or short variety). Perhaps President Trump summed things best (October 10, 2018):

“The Fed is making a mistake. I think the Fed has gone crazy. The Fed is going loco and there’s no reason for them to do it.”

In our estimation, a cogent analytical framework for evaluating the impact of Fed tightening on global dollar liquidity is maintained by Sprott colleague, Andy Lees (Macro Strategy). On a daily basis, Andy calculates the U.S. dollar value of global money supply. In the context of the dollar-standard system, especially with .5 trillion in offshore dollar-denominated debt, it is the dollar value of global money supply which truly matters in evaluating global liquidity conditions. As Andy logically explains,

“In a 2-country world, say Europe and the States, if Europe doubled its money supply, then all other things being equal, as the euro would halve, there would be no change in the dollar value of world money supply. On the other hand, if Europe doubled its real GDP, again all other things being equal, then as its dollar purchasing power would rise, the dollar value of world money supply would rise by 50%.”

In the wake of this past week’s market volatility, the dollar value of world money supply has now declined .691 trillion or 4.29% from its April 2, 2018 high. Perhaps more relevant, a 60/40 portfolio of the MSCI World Net Index and JP Morgan Global Aggregate Total Return Bond Index has now declined an annualized 1.89% over the past six months and an annualized 5.36% over the past three months. The 60/40 allocation peaked slightly later than the dollar value of global money supply, but is clearly following the same path. In Andy’s words,

“The fall [in the 60/40 global portfolio] highlights what is happening at the real economy level, inferring that U.S. rates are too strong for the world, and that the world’s ability to service its dollar debt or buy oil and other dollar goods is falling. It would appear therefore that President Trump is correct to say that the Fed has over tightened, at least in the context of global growth…”

We may be talking our own book, but it is interesting to note that analysts of Andy’s pedigree are beginning to focus on the April 2018 period as a potential tipping point for the impact of Fed tightening on global liquidity. We wholeheartedly agree!

U.S. AS BASKET CASE?

A topic of current financial market debate is a fundamental assessment of the recent back-up in 10-year Treasury yields (from an August 24, 2018 low of 2.81% to a October 5, 2018 high of 3.23%). At the risk of oversimplifying, we would suggest Treasury prices are under pressure because there are not enough buyers to absorb exploding Treasury supply. At some point (perhaps already), Chair Powell’s bravado about levitating neutral rates will run smack into global disenchantment with the rapidly deteriorating U.S. fiscal position. It is one thing for our foreign creditors to pitch-in to bridge our gnawing federal budget deficit, but quite another to do so while the Fed is actively promoting a rising U.S. rate structure.
U.S. gross national debt rose by .27 trillion during the 2018 fiscal year to .52 trillion (105.4% of GDP). This increase was 33% higher than billion average-annual-growth between 2011 and 2017. Including fixed-rate, intra-governmental obligations, total 2018 interest on the U.S. federal debt measured billion, or roughly .5 billion every calendar day. As shown in Figure 1, the floating interest burden on the public portion is beginning to surge geometrically on the heels of relatively modest interest rate increases.

Figure 1: Average Interest Rate on U.S. Public Debt vs. Trailing Twelve Month Sum of Total Interest on U.S. Public Debt.  Source: Meridian Macro. Date: January 31, 1984-September 30, 2018.
Despite recent upticks in GDP, the U.S. Treasury reported on October 15, 2018, that the 2018 federal budget deficit surged 17% during fiscal 2018 to $779 billion. Even more troubling, current Treasury estimates peg the 2019 deficit at .85 trillion! In a mid-September report, Bank of America Merrill Lynch ranked 45 global economies by the quality of their domestic finances, measuring twin deficits (current account deficit plus federal budget deficit) as a percentage of forecast 2019 GDP. Among the 45 ranked countries, the U.S ranked fifth from worst, with domestic finances in better shape than only Argentina, Turkey, Brazil and Pakistan. Treasuries anyone?
With all due respect to the gallantry of our crusading Fed Chair, global capital flows are signaling Fed policy is already too tight, and by extension, the U.S. dollar’s tepid 3.4% YTD 2018 performance is actually too strong to facilitate overseas U.S. funding needs. Morgan Stanley currency strategist Hans Redeker nails these points in a September 23, 2018 Bloomberg interview:

“Widening dollar-supportive yield differentials should be seen in the context of rising capital import needs. We believe the current yield compensation offered by the U.S. is no longer adequate to attract sufficient foreign funds to cover U.S. capital import needs. The dollar has to decline to attract international funds to the U.S.”

BINGO!

In our addenda, we update a chart we have shared in the past, outlining the tight historical correlation between the U.S. dollar and the federal budget deficit. Tying into Mr. Redeker’s comments above, we reproduce in Figure 2, the even tighter correlation between the exploding federal budget deficit and the sinking percentage of U.S. dollar-denominated global FX reserves. Foreigners are generally proved prescient when first jumping ship.

Figure 2: U.S. Federal Budget Deficit versus U.S. Dollar Percentage of Global FX Reserve.  Source: Meridian Macro. Date: January 1, 2005 – October 15, 2018.

We offer a final visual we feel best captures the Sisyphean task Chair Powell faces in his quest to roll back eight years of FOMC largesse. Ironically, the petrol of Trump tax cuts is now fueling GDP growth which the Fed is interpreting (we believe mistakenly) as sufficient cover to normalize policy. Figure 3 dramatizes the resulting anomaly that the Fed is tightening directly into the teeth of an exploding federal deficit. It is literally only a matter of time before one of the two forces depicted in Figure 3 reverses course with a vengeance. We would suggest wagering on the sudden reversal of the surging federal deficit is the losing proposition.

Figure 3: U.S. Federal Budget Deficit versus Federal Funds Target Rate. Source: Meridian Macro. January 1, 1996 – October 15, 2018.

WHAT ABOUT GOLD?

During the next few months, we expect asset markets to come to terms with grossly misplaced investor faith in the sustainability of the Fed’s dual policy agenda of simultaneous rate hikes and balance sheet reduction. Should our suspicions prove correct, it is interesting to note that not only is consensus positioning diametrically opposed to our views, this positioning is also off the charts in terms of its unanimity. As shown in Figure 4, aggregate spec short positions in spot gold, VIX, and 2-, 5- and 10-YR Treasuries are completely unprecedented. What could possibly go wrong here?
 

Figure 4: Aggregate Net-Short Speculator Positioning on COMEX for Gold, VIX Index, 2-, 5- and 10-YR Treasuries. Source: Meridian Macro. Date: January 1, 2005 – October 12, 2018. 

A common institutional apprehension over gold’s portfolio merits is fear that gold and gold equities will prove vulnerable to any sharp downdraft in U.S. asset markets, so why bother with gold in the first place? This logic no doubt stems from “what happened last” reasoning tied to the 2008 market experience. In the fall of 2008, gold succumbed to broad financial asset deflation. We would suggest market conditions for gold in 2018 bear little resemblance to those in play back in 2008. Commodities were perhaps the hottest hedge fund theme on the planet during 2008, exceeded only by ubiquitous shorts in U.S. financials. Complicating matters, the hedge fund community was wildly leveraged on London-based (non Reg-T ) “total return swap” platforms, routinely extending 4-to-1 credit for standard portfolios. Most forget that on September 19, 2008, the SEC stunned the world in enacting a “temporary emergency action to prohibit short selling in [U.S.] financial companies to protect the integrity and quality of the securities market and strengthen investor confidence.” Translation being, hedge funds which were correctly and massively short U.S. financials were forced to cover these shorts and, by way of risk management, liquidate offsetting long positions across the commodity spectrum.
Given the brutal and sustained collapse of broad commodities since 2014, we would suggest commodity positioning in 2018 is virtually opposite that of 2008. Further, when proverbial “detritus” next hits the monetary “fan,” the U.S. dollar is unlikely to enjoy anywhere near the safe harbor bid it commanded in 2008, when the Fed’s balance sheet measured a svelte billion, or just 22% of its currently bloated profile.
Interestingly, during the 1377-point, 5.2% decline of the Dow Jones Industrial Average on October 10 and 11, spot gold rose 2.9%. Even more impressively, the venerable Philadelphia Stock Exchange Gold & Silver Index (XAU) soared 7.84% over the two-day span. Suffice it to say, these divergent performances herald far different market conditions for precious metals in 2018 than those existing in 2008.
 
 

Addenda


Figure 5: DXY Dollar Index vs. 12-Mos. Federal Budget Deficit.  Source: Meridian Macro. Date: January 1, 2009 – October 15, 2018.

 
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MILLROCK RESOURCES | POGO JORC RESOURCE IS 4.15MOZ AT 14.7GPT

Original Source: https://www.nsrltd.com/wp-content/uploads/2018/10/Pogo-Resource-Update-Final-16-10-2018.pdf
Millrock Resources shareholders should note the following press release by Northern Star Resources regarding the Pogo Gold Mine.  Millrock Resources has assets in line with the mineral trend of the Pogo Gold Mine, which may be of significance with the new press release issued by Northern Star Resources.  The value proposition for Millrock Resources continues to reward committed shareholders.  We have been active buyers that current share prices of TSX-V: MRO | OTQCX – MLRKF.
For Information Contact:
Melanee Henderson
Investor Relations
Direct: 604-638-3164
Toll Free: 877-217-8978
Email: mhenderson@millrockresources.com

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Precious Metals

JUNIOR MINING | Pacton Expands the Gold Nugget Discovery Potential at its South Egina Project in the Pilbara

VANCOUVER, Oct. 19, 2018 /PRNewswire/ – Pacton Gold Inc. (TSXV: PAC, OTC: PACXF, FSE: 2NKN) (the “Company” or “Pacton“) is pleased to announce the first discovery of gold nuggets on the Golden Palms property (E 47/3810), (Figures 1 & 2). The nuggets were discovered by a prospecting crew working in advance of a geological exploration and mapping team.

This gold nugget discovery, within a 300 meter by 300 meter area, is significant in that it represents the first gold discovery on the Golden Palms tenement and has greatly expanded the known nugget-bearing potential of the South Egina area. This new discovery is located approximately 2.5 km northwest of the recently announced Friendly Creek gold nugget discovery (Pacton News: Oct 15, 2018), and occurs across the regional structural and stratigraphic fabric of the underlying bedrock geology.

Figure 1. Location map of Pacton tenements in the Egina Area. (CNW Group/Pacton Gold Inc.)

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Figure 1. Location map of Pacton tenements in the Egina Area. (CNW Group/Pacton Gold Inc.)

The gold nuggets, which show various morphological shapes and textures, and which appear to be eluvial remnants liberated from the underlying bedrock by weathering, were collected in an area that is underlain by mafic to ultramafic volcanoclastic rocks. The basaltic rocks are described as similar to the basalts underlying the recent nugget discovery at the adjacent Friendly Creek tenement, except that the Friendly Creek basalts are massive, thick units, while the basalts underlying the recent Golden Palms tenement nugget discovery are mapped as being stratigraphically thinner, and are sparsely interbedded within a massive chert and limestone sedimentary package. Within the sedimentary package, the basalts do outcrop, but are usually covered by a layer of weathered colluvium, as occurs at the sites where the Golden Palms nuggets were discovered.

The prospective geological gold nugget area covered by Pacton’s South Egina project is large, poorly explored, and consists of an 8 km thick volcano-sedimentary system which extends for approximately 10 km along strike, in a NE-SW orientation, across the adjacent Golden Palms, Friendly Creek and Hong Kong tenements, (Figure 2).

Figure 2. Golden Palms and adjacent Pacton tenements. Mineralized Mesoarchean basal unit, Western Australia MINEDEX gold occurrences, and location of recent gold nugget discoveries (circle). (CNW Group/Pacton Gold Inc.)

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Figure 2. Golden Palms and adjacent Pacton tenements. Mineralized Mesoarchean basal unit, Western Australia MINEDEX gold occurrences, and location of recent gold nugget discoveries (circle). (CNW Group/Pacton Gold Inc.)

The nuggets and/or mineralization shown in Figure 2 are selected samples and are not necessarily representative of mineralization hosted on the Property.

About Pacton Gold

Pacton Gold (PAC: TSXV; PACXF: US, FSE: 2NKN) is a well-financed Canadian junior with key strategic partners focused on the exploration and development of conglomerate-hosted gold properties located in the district-scale Pilbara gold rush in Western Australia.

The technical content of this news release has been reviewed and approved by Peter Caldbick, P.Geo., a director of the Company and a Qualified Person pursuant to National Instrument 43-101. The qualified person has not yet verified the data disclosed, including sampling, analytical, and test data underlying the information or opinions contained in the written disclosure.

On Behalf of the Board of Pacton Gold Inc.

Alec Pismiris
Interim President and CEO

This news release may contain or refer to forward-looking information based on current expectations, including, but not limited to the Company achieving success in exploring its properties and the impact on the Company of these events, including the effect on its share price. Forward-looking information is subject to significant risks and uncertainties, as actual results may differ materially from forecasted results. Forward-looking information is provided as of the date hereof and we assume no responsibility to update or revise such information to reflect new events or circumstances. References to other issuers with nearby projects is for information purposes only and there are no assurances the Company will achieve similar results.

Neither TSX Venture Exchange, the Toronto Stock Exchange nor their 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.

Pacton Gold Inc. (CNW Group/Pacton Gold Inc.)

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Pacton Gold Inc. (CNW Group/Pacton Gold Inc.)
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ABEN RESOURCES | Canadian Explorer Reveals Year-Round Plan to Maintain Momentum

James Pettit, CEO of Aben Resources, in conversation with Maurice Jackson of Proven and Probable, discusses his company’s summer exploration in the Golden Triangle and how the company plans to keep the momentum going throughout the year.

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Original Source:
http://www.streetwisereports.com/article/2018/10/19/canadian-explorer-reveals-year-round-plan-to-maintain-momentum.html

Canadian Explorer Reveals Year-Round Plan to Maintain Momentum 
Contributed Opinion

Source: Streetwise Reports  (10/19/18)

James Pettit, CEO of Aben Resources, in conversation with Maurice Jackson of Proven and Probable, discusses his company’s summer exploration in the Golden Triangle and how the company plans to keep the momentum going throughout the year.

Maurice Jackson: Joining us today is James Pettit, the president, CEO and director of Aben Resources Ltd. (ABN:TSX.V; ABNAF:OTCQB).
In our last interview, we discussed the next unanswered question for Aben Resources and that would be drill results. This week Aben Resources issued a press release conveying some intriguing results. Before we begin, for someone new to the story, who is Aben Resources and share with us the names and location of your three projects beginning with your flagship.

James Pettit: Aben Resources is a gold exploration company based out of Vancouver listed on the TSX Venture Exchange. Our flagship property is the Forrest Kerr property. It’s in the Golden Triangle, which is a region of northwestern British Columbia, which has got a tremendous history for high-grade discoveries, the likes of the Snip mine and the Eskay Creek mine discovered 30 some odd years ago. Eskay at the time was one of the highest grade mines in the world. Since then, there’s been a lot of discovery that’s happened over the years in terms of more gold, silver and copper. These are still in the development stage.

Many of them are waiting for possible higher prices for the commodity, but they’re probably the largest untapped development projects in the world, especially the copper projects. Now specifically with us, with the Forrest Kerr Project, we acquired that ground three years ago, and started assembling it. I put three claim groups together. We chose those because they’re on a major structural feature, which we look at as one of the controlling structural features in that whole Golden Triangle area. It’s called the Kerr Fault and it’s a big, big fault that you can see from space.

That is an area you want to be near for discovery potential and then there’s other geologic features that you want to be coincidental to that, and we’re right in between them. We’re in a good area. We’re getting a lot of attention. The market’s certainly paying attention to everything that goes on up there. The most recent new production up there is Pretium Resources’ Brucejack Mine, which is a very high-grade gold mine. That really brought about $2 billion in value to its investors. There’s lots of potential there. We’re excited about it.
That’s why we’ve been so concentrated on it. This year we’ve drilled now I think just short of 40 holes. We’ve got 24 to be released still. That’s going to take us through the rest of the year almost. We have another project that’ll get us through the winter because the weather in the Golden Triangle is pretty severe. It’s coastal mountain range right beside the panhandle of Alaska and gets a tremendous amount of rain or snow. It becomes almost impossible to work up there for the winter, unless you’ve got just a huge amount of money and resources to do it. That whole area will be going quiet soon.
We have another project called the Chico Project, which is in Saskatchewan, just south of what used to be called the Claude Resources gold mine. It’s been bought by Silver Standard for $337 million. Silver Standard is now called SSR. It acquired the ground between the Chico property and its property, which it bought from Claude Resources. Basically we think we’ve got an extension of what SSR is looking for because SSR’s interest now is to expand the known resource. To keep that mine alive for the next 20 years, it needs to find more of a resource.
https://www.abenresources.com/site/assets/files/4301/abn_chico_location_and_highlights.514x0-is.jpg
SSR has got a good resource to start with that itbought, but I think it has probably got five to seven years left. SSR wants to take this further. It’s drilling on the ground between them and us now. It has acquired all the ground. It’s giving us a good model to work with. We’ll go in there in the winter. It’s the best time to drill in Saskatchewan because it’s flat, it’s frozen. The lakes are frozen, so we can access an egress very easily. Essentially, we just put up the camp, bring in the rig, and move the rig with a helicopter if need be, or we skid it. We’ll be going in there in February. That’ll keep momentum going for the company.
Then we’ve also got a project up at the Yukon called the Justin, which is tied right on to Golden Predator’s ground, what it calls 3 Aces. We’re right on strike to the 3 Aces structure. We’ve done a little bit of work there this year in terms of trenching with the mechanical backhoe. We’ve got that up to the site by helicopter, and we’re waiting on assays. We’ve spent 10 days doing this. We think we’re sitting right on top of something very similar to 3 Aces, which is a very high-grade epithermal or hydrothermal quartz vein system. It’s very rich.
https://www.abenresources.com/site/assets/files/4303/justin_location.567x0-is.jpg
We’ll know when we get the assays. If they come back the way I think, we’ll be setting up a program for next year. That’s a good project to have in the shoulders between the Forrest Kerr or before the Chico mine’s down in the winter. We can’t really get into the Forrest Kerr until June-July, so we can get up into this region in the interim and keep moving them forward. We’ve got three really good projects to work on, but our flagship is definitely Forrest Kerr because the audience is there. It’s an area play. We all love area plays. That’s where we stand right now.
Maurice Jackson: Well, speaking of the Forrest Kerr, let’s focus our discussion today on the Forrest Kerr. We have some exciting news; what can you share with us?
James Pettit: We have a new zone. We’ve been working and concentrating on the North Boundary Zone, but this season we drilled three holes to the south of the North Boundary Zone. It was a kilometer and a half south. We put in these three holes because we’re trying to buy time, so we could get more assays back because our concentration is the North Boundary Zone and we needed guidance from some of the assays. We did do that, but we decided to drill where we did because there is a geochem anomaly and target that we wanted to test and it was coincidental with an old geophysical survey that showed something promising.

Geophysical anomalies are interesting, but certainly not like a geochem where you actually get the gold in the sample and that’s why you’re there. You have a good geophysical and geochem target to work with, and it turned out that we did the right thing. We’ve hit something there. It’s not as high-grade as the North Boundary appears to be, but it’s broad and it’s mineralized. I’ll use the best of the three holes, hole 21. You’ve got almost 380 meters in that hole is well mineralized, primarily gold, from trace level of 0.1 all the way up to 5 grams every interval.


The way we set it up, it’s almost like a graph. You very rarely see that much continuous mineralization like that. Well, it’s a lot of important information about the tenure of mineralization in that region. That’s definitely has our attention. We need to drill more holes there. We’ll get to it next year. The season’s definitely winding down up there right now, but it’s going to give us a lot of info.
Plus, we have now flown the entire valley using an EM geophysical survey, which encompasses both boundary zones to the north and south. We’re actually just waiting for the results and the interpretation of the survey. We’ll take that information at increased amount of geochem sampling that we’ve done, as well as all the assay results that we’ll have for the season. We’ll use that and compile some significant information for next year and work up our next series of targets.
Maurice Jackson: This is quite intriguing, exciting, any adjective you like to associate with it. Congratulations, sir. Now prior to this week’s press release, Aben Resources was able to successfully complete a financing and secured a major shareholder. Share the details with us, sir.
James Pettit: The first hole we put out this year was spectacular. It had an interval of 10 meters of roughly 38 grams. I mean that’s spectacular in itself, but within that was six meters of 62 grams gold. That’s like two ounces. Spectacular results. That got the market’s attention. The stock really moved up. The interest for financing was immediately apparent. We did announce a $4.2 million financing and half of it was taken by a fellow named Eric Sprott, who is a bit of a gold legend.
He started Sprott Securities, which now has a big presence in Toronto and also a big presence in Carlsbad, California. He is the consummate and ultimate gold bug. He loves gold and is not afraid to take a big stand in an early-stage deal like this. This is the exploration phase. This is potentially where you can absolutely make the most. You’re in at a price that seems very cheap and the market cap is low and you have this discovery. From that point on, you want to keep it growing and the market reacts correspondingly. He’s well aware of that. He’s not afraid to take a shot. He does it with a number of companies.
But when he gives his blessing to it, it’s pretty substantial. Then we also raised another million dollars after that largely because his name was now attached to the original financing, so we raised another just short of a million dollars flow through. The company now has just over $7 million. We’ve basically got next year’s program paid for.
Maurice Jackson: That leads to my next question, what is the burn rate and does Aben Resources plan to return to the market in the foreseeable future for another financing?
James Pettit: Well, the second question’s answer is no, we won’t. We don’t need to. Our burn rate varies from where we are in the area if we’ve got things on the go, the drill program, etc., our burn rate, and I’m just talking about basically our G&A and marketing burn rate, that can grow to $200,000 a month. Then the field work is always budgeted. This year we had budgeted about $1.5 million and we increased it by about $1 million. This year all in all we spent about $2 to 2.2 to 3 million. I haven’t got the finals number in. That’s all in for that project. We doubled the size of the drilling program.
We’re getting really close to shutting down, but I don’t see it going over that. For the G&A side, the operations of the office in Vancouver in marketing because we do. It’s important to spend money on marketing. We travel a lot marketing this project. That runs about $200,000 and varies up to $250,000 a month. Then when we aren’t working, everything obviously slows down, but then we are still marketing because we want people to know what we achieved. We always have goals. We want the market to understand we’re achieving the goals. I think that’s quite important.
Maurice Jackson: Indeed it is. Switching gears onto management. Aben’s management team has a proven pedigree of geological and business acumen. I want to focus on potential amalgamations in the sector should this occur. Share some of the past successes of management rewarding their shareholders on previous arbitrage successes.

James Pettit: Sure. Well, our chairman Ron Netolitzky, he’s like a serial M&A guy. The market really watches what he does. In the past, for example, he was in on the discovery of Snip and Eskay Creek up in this area. He’s got a very, very big following of people all over the world who have followed him through his career and starting there. He’s also very successful in Saskatchewan as well, specifically in M&A, Eskay and Snip. Snip was sold to Cominco way back and then Eskay ended up in Barrick’s hands.
Since then, there’s Copper Canyon, which he and Tim Termuende, who’s also on the board, sold that to Novagold and that became part of the Galore Creek Project, which is now in the hands of Teck and Newmont. My background, even though I’m not a geologist, is I started a company called Bayfield Ventures and eventually sold it in 2014 to New Gold as part of its Rainy River Project. The three of us have a pretty good background of what’s required. We’re always in contact. We maintain contact with majors all the time. I think given what’s happening in the Golden Triangle, majors are coming back. They’re starting to look again.
Last year Goldcorp did a deal with Colorado Resources just on a financing basis, $7 million. That was a surprise move, but it shows the interest I think. Osisko’s looking around there. Kinross is looking in the area. Barrick has showed its interest again. I think they actually have a buy back into the Snip deal because Skeena has got their hands on it and they’ve been working on it and trying to resurrect another zone in the Snip Mine. That’s our background. I think it stands out to be honest with you with the amount of M&A that’s been done between the three of us.
Maurice Jackson: Talk to us about the share price. The market is rewarding value speculators.
James Pettit: Absolutely. This is the level to enter in this market. Speculators want to be involved with a company that’s active, has good projects, good people, etc. Then take a position and wait for them to do what they say they’re going to do. In our case, last year was the discovery of the North Boundary Zone. This year was the reaffirmation of it with a tremendous hole that you could really say is the discovery hole. We need to make it bigger now. That’s our job. That’s where you get this big appreciation in stock price based on speculation.
Then going forward as you put out more and more results, the market will go up and down and follow the results. I’m seeing that this year as opposed to last year, which was as soon as you finished drilling or came out with results and you got too late into September going into October, that market’s sold off. It just sold off because tax loss season is coming and they just wanted to be out of whatever they were doing. Because once you’re finished, it’s a long cold winter to get through and you’re sitting on a stock. Like last year, we went back down to $0.10.
That’s not going to happen this year because I’ve got two other projects that are good and we’ve got a really good shareholder base now. We have so much liquidity this season. We ran from roughly $0.10, maybe $0.12 up to $0.50. Now it’s settled back in the low to mid $0.20s now. It’s trading good volume. I think probably since July or beginning of August we’ve traded 150 million shares. That’s fantastic.
Maurice Jackson: That’s quite impressive actually. Yes.
James Pettit: It’s really very impressive. We put out a bunch of holes before this most recent one around that discovery zone. They were less impressive. They were really good. They’re all very well mineralized. They just weren’t 30 some odd grams. Those that wanted that to be repeated sold out and that just meant there’s a whole lot of people who came into the market that they sold out, other people bought it. We’ve got a really good floor here, the $0.20 to $0.25 range. I think basically it’s a buy all day long. We still got 24 holes to put out.
Maurice Jackson: Yeah. We’re one of those other buyers. Speaking of the stock price, if I may just interject here, Warren Buffett and Rick Rule, they’re noted for sharing how the market rewards speculators that are prepared. In particular, and I’m going to paraphrase them, that you should not purchase a stock if you weren’t willing to see the price reduce 30% or more and be willing to purchase more. Now we’re on record, we purchased Aben Resources at $0.42 and we’re active buyers at current prices and we’re confident that the value proposition in our opinion continues to increase.
Mr. Pettit, before we close, multilayered question here, what is the next unanswered question for Aben Resources, when should we expect results, and what determines success?
James Pettit: The next unanswered question really would be how big is this and how robust is this boundary zone, including north and south. So far we’ve tapped into two zones. The very first priority target we had was the North Boundary Zone. Well, it generally was the boundary zone and we started in the north end and boom, hit it right away. When we prioritized the target zone, this overall property, the Forrest Kerr, we did it based on a compilation study of all the historic data. We came up with about 12 areas we want to go test. We’re still on the first one. Two years later we’re still in the first one. This boundary zone is four kilometers long and two kilometers wide.
It’s all based on geochem. There’s a big geochemical survey that’s been done there. We’ve added to it now and now we’ve completed the airborne. We could be there for a while. I think we’re just touching on it now. We’ve hit a few sweet spots. One’s confirmed as a sweet spot, the South Boundary Zone. I think by next year when we do some more holes we’re going to be surprised, but I think there’s going to be a lot more sweet spots there. We’re going to focus and vector in on where did this mineralization come from. That’s really what our job is. Figure it all out, get the structure identified and where it came from.
We know there’s at least three mineralizing events in the area, and we know there’s at least four ages of rock. That tells us there’s been four major events that have happened. With three of them, in came the fluids that brought the gold. Let’s find some of those feeders.
Maurice Jackson: Well, Mr. Pettit, we’ve covered the good. What keeps you up at night that we don’t know about?
James Pettit: Keeps me up at night? Well, being a good sleeper, not much keeps me up at night. Being in this business so long, I’m used to it. There’s always risks. What would scare me is we hit nothing for the rest of the holes. That would be a concern. I don’t foresee that. As long as everything stays on course, we’re good. I don’t really have a concern that would keep me awake at night.
Maurice Jackson: The last question I have for you, sir, is what did I forget to ask?
James Pettit: Most people ask me where do I think we’re going to go with what’s remaining this season? Obviously, I don’t have results. I don’t know, but I think we’re going to be pleasantly surprised. I think things are looking good. I think we’re in the right area for sure. Absolutely the right area. This is a very robust mineralizing system that we’re looking at. We’re right between the two big structural systems that we want to be in. I think for a discovery profile, we’ve got a really good one.
Maurice Jackson: Mr. Pettit, for someone listening that wants to get more information on Aben Resources, what is the website address, sir?
James Pettit: The website address is www.abenresources.com.
Maurice Jackson: As a reminder, Aben Resources trades on the TSXV symbol ABN, and on the OTCQB symbol ABNAF. For direct inquiries, please contact Don Myers at 604-639-3851. That number again is 604-639-3851. He may also be reached at info@abenresources.com.
As a reminder, Aben Resources is a sponsor of Proven and Probable and that we are proud shareholders of Aben Resources for the virtues conveyed in today’s message.
Last but not least, please visit our website www.provenandprobable.com where we interview the most respected names in the natural resource space. You may reach us at contact@provenandprobable.com.
James Pettit of Aben Resources, thank you for joining us today on Proven and Probable.
Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.
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Precious Metals

JUNIOR MINING | Irving Resources Samples High-Grade Float at its Omu Gold-Silver Project, Hokkaido, Japan

October 19, 2018
Vancouver, British Columbia, October 19, 2018 (Globe Newswire) – Irving Resources Inc. (CSE:IRV) (“Irving” or the “Company”) is pleased to report it has sampled high-grade quartz vein float at its 100%-controlled Omu gold-silver project, Hokkaido, Japan (Figures 1, 2 and 3).
While following up stream sediment anomalies (please refer to Irving’s news release dated January 3, 2018 for further details), Irving geologists identified banded quartz vein and other pieces of mineralized float along recently constructed logging roads in areas around the historic Hokuryu mine. Logging roads often provide the only geologic exposure in this heavily vegetated terrain. Inquiries made by Irving with the Hokkaido prefectural forestry agency and local logging road constructors confirm no exotic material was placed on these roads and all road base material is locally derived. Therefore, Irving believes quartz vein float material reported in this news release is derived from nearby bedrock.
Samples of quartz vein float collected along a one-kilometer long west-northwesterly trend beginning approximately 700 meters west of Hokuryu mine are particularly noteworthy. Results include:
Quartz vein float samples from Hokuryu West-

Sample ID Au (gpt) Ag (gpt) Au (opt) Ag (opt)
OM-HT003 35.2 568 1.13 18.26
OM-HT004 3.5 102 0.11 3.28
OM-HT005 59.8 1245 1.92 40.03
OM-HT006 36.3 1000 1.17 32.15
OM-HT007 155 617 4.98 19.84
OM-HT009 138.5 500 4.45 16.08
OM-HT010 2.9 180 0.09 5.79
OM-HT011 8.5 53 0.27 1.7
OM-RH028 39.7 708 1.28 22.77
OM-RH030 20.3 342 0.65 11
OM-RH032 39.5 671 1.27 21.58
OM-RH044 8.2 47 0.26 1.51
OM-RH046 21.6 457 0.69 14.69
31.1 gpt = 1 opt
Samples in this table are of select float and not necessarily representative of mineralization at Hokuryu West

In addition, Irving geologists collected seven samples of variably altered and silicified volcanic rock and breccia with gold values ranging from 0.14-0.53 gpt and silver values ranging from 3-19 gpt.
Irving believes the “West Hokuryu” area may host extensions of the Hokuryu vein system. Hokuryu mine, owned by Nihon Mining Company, Ltd., operated briefly beginning in around 1928 until it was shut in 1943 due to the Gold Mine Closure Act near the end of WWII. It produced approximately 2.8 tonnes Au and 11.5 tonnes Ag during its short life. (MMIJ. 1990. Japanese Gold Mines Vol. 2 Hokkaido. The Mining and Materials Processing Institute of Japan (MMIJ)).
In an area approximately 2.5 km southwest of Hokuryu mine, a sample of quartz vein float returned 20.8 gpt Au and 59 gpt Ag and two samples of silicified and quartz-veined volcanic rock returned 1.78 and 0.68 gpt Au and 19 and 24 gpt Ag. One sample of quartz vein float collected approximately one km northeast of Hokuryu mine returned 7.14 gpt Au and 41 gpt Ag. Six samples of variably silicified and quartz-veined volcanic rocks from areas north, northeast and east of Hokuryu mine returned 0.03-2.50 gpt Au and 0.5-57 gpt Ag. Samples discussed above are of select float and not necessarily representative of mineralization in this area.
Irving is currently conducting further prospecting in vicinities around Hokuryu mine and to the north where there are historic reports of high-grade veins. Follow-up soil sampling and geophysical work is currently being planned at Hokuryu West.
“We are encouraged by results from select float samples collected around the historic Hokuryu mine,” commented Akiko Levinson, President and Director of Irving Resources Inc. “Right now, we are conducting further prospecting, sampling and baseline soil sampling at Hokuryu West. Next season, we plan to conduct more advanced exploration including soil sampling and geophysical work similar to that done at our Omui mine and Omu sinter target areas.”
Drill contract signed
Irving recently signed a diamond drilling contract with Rodren Drilling Ltd., Winnipeg, Manitoba (“Rodren”), to undertake diamond drilling at its Omu project. A diamond drill is currently being mobilized to Hokkaido and is expected to reach Omu in approximately two weeks. Although necessary permits are still awaited, Irving, Mitsui Mineral Development Engineering Co., Ltd. (MINDECO) and Rodren are concurrently working on necessary staffing for a drill program. Further information about timing of commencement of drilling will be made available when more information is in hand.
All samples discussed in this news release were collected by Irving geologists from float, loose rock in soil, believed derived from subcropping bedrock and veins. They are not necessarily representative. Irving submitted rock samples to ALS Laboratory, Vancouver, BC, for analysis. Au and Ag were analyzed by fire assay with gravimetric finish. Multielements were analyzed by mass spectrometry following three acid digestion. Lab standard and blank samples were utilized for quality assurance and control.
Quinton Hennigh (Ph.D., P.Geo.) is the Qualified Person pursuant to National Instrument 43-101 responsible for, and having reviewed and verified, the technical information contained in this news release. Dr. Hennigh is a technical advisor and director of Irving Resources Inc.
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
Forward-looking information
Some statements in this news release may contain forward-looking information within the meaning of Canadian securities legislation. Forward-looking 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 exploration industry as well as Irving having sufficient cash to fund any planned drilling and other exploration activities.
THE CSE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ACCURACY OR ADEQUACY OF THIS RELEASE.
(Figure 1: Map showing the location of recently sampled areas around the historic Hokuryu mine.)

(
Figure 2: Gold assays from recently collected float samples around the historic Hokuryu mine. A one-kilometer long west-northwest trend of high-grade quartz vein samples is particularly noteworthy and may represent a significant extension of the Hokuryu vein network.)


(Figure 3: Silver assays from recently collected float samples around the historic Hokuryu mine. A one-kilometer long west-northwest trend of high-grade quartz vein samples is particularly noteworthy and may represent a significant extension of the Hokuryu vein network.)

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