Sunday, 8 December 2019

Gold In The USA And The Gold Mining Reserve Crisis: Global Gold Mining M&A Activity To Continue After $30 Billion Worth Of Deals In 2019.




As we have discussed yesterday, investors seeking to increase their historically low allocations to Gold will be competing with Central Banks who are buying a record amount of Gold in their own preparation for a reset if the entire financial system collapses. 




This rush into Gold to escape from the negative real interest rates for wealth preservation will be facing the Gold mining industry battling its own demons. Years of the brutal bear market have left very deep scars on the industry. The massacre in the mining sector has affected not only the mental state of investors and mining executives fighting for survival. 




Years of underinvestment in Gold exploration and development has brought the real crisis to the state of mining reserves ready to be mined and converted in the highly sought save heaven and the ultimate hedge during the ongoing madness in the financial world. McKinsey has called it: "The Gold Mining Reserve Crisis". 




Today we have the opportunity to study in more details this process when the Gold mining industry is readjusting to this sober reality. The wave of M&A allows majors to acquire so needed for the stable growth reserves when the exploration is still cheaper and more certain on the Exchanges than on the ground. This time will not last for long. 




Deals are driving up the valuations already and next leg up in this Gold Bull market will bring the sweet Gold and Silver memories back from the early 2000s. The article by David Irfle on Kitco provides a great overview of the recent M&A developments. These deals are only redistributing the already known and developed reserves. 




The industry needs new major discoveries like Donlin Gold, but such giants are coming only a few and far between. Resource nationalism should put even higher premiums on the companies which are operating in stable mining jurisdictions like the great state of Alaska, which is rising in the ranks of the safest mining jurisdictions. As always, people with real money are the ones to follow. When billionaires are joining Central Banks and buying Gold you should take notice. 




When mining legends like Rob McEwen and Eric Sprott are partnering with Electrum Group on the quest for the next Donlin Gold in the Alaskan elephant country you should start doing your homework. The tax loss Christmas sale will not last forever and smart money will find its way in the most promising stories. The next wave should come as a tsunami after the earthquake following FED, ECB and all other Central Banks reversing their policy and engaging in the full-blown QE4.


Chart by Holger Zschaepitz @Schuldensuehner 


This flood should finally reach the junior mining sector who has the real resources and blue sky potential to build new reserves for the industry.  As always, do your own research and you will have to pick up the winners.

"News about Electrum Group partnering in the new venture with gold mining legends Rob McEwen and Eric Sprott for exploration in Alaska will ignite the new wave of interest to the juniors operating in Alaska. Alaska jumped to the 5th place among safe mining jurisdictions and giant 39 Moz Donlin Gold project is getting more and more attention. Electrum Group is the major shareholder of Nova Gold which is developing Donlin Gold in JV with Barrick Gold."





Gold In The USA Alaskan Elephant Country: TNR Gold Shotgun Gold Project Presentation.




"The Company's strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR Gold ("TNR") is actively introducing the project to interested parties," commented Kirill Klip, Executive Chairman of TNR. "We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time."






Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.




Kitco:

Miner M&A Monday's big return to the gold space

David Irfle

Speculation about asset divestitures among global miners after recent M&A deals began to come to fruition on Monday, November 17th, when Barrick Gold (GOLD) sold its 50% stake in the Kalgoorlie Super Pit gold mine to Saracen Mineral Holdings for $750 million. Trendsetter and high-profile Barrick CEO Mark Bristow has been quite adamant recently about selling off assets that it does not own 100% of, along with projects that do not produce over 500,000 ounces per year for at least 10 years.
The following Monday, Australia’s Evolution Mining Ltd agreed to buy the Canadian gold mining complex Red Lake from the world’s largest gold miner Newmont Goldcorp (NEM) for US$375 million in cash plus a US$100M contingent payment tied to new resource discoveries. The Red Lake mine has an incredible mining history and was the foundation of Goldcorp, but does not move the needle much for a company the size of Newmont Goldcorp. This is the second Canadian asset bought by Australian miners this year (Junior developer Atlantic Gold was taken over by Aussie miner St. Barbara in May) and I expect the trend is likely to continue due to a valuation gap between the two different markets.
Additionally, Kirkland Lake Gold (KL) announced on the same day that it had agreed to buy Detour Gold (DGC.TO) for $4.9 billion in an all-share deal, whereby Detour shareholders will receive 0.4343 shares of Kirkland. Although Kirkland sold down over 17% on the announcement, long-term investors have since bought the weakness as the deal offers excellent optionality to the gold price once the market has priced in a solid $1500 floor in bullion.
Then, on Monday this week, Chinese company Zijin Mining agreed to buy Continental Gold, a Canadian-listed company with interests in Colombia, in an all-cash deal worth $1 billion. But a top executive with the target company said elevated security concerns in Colombia pose a risk to the deal, reported Reuters. “Zijin doesn’t have any experience in Colombia, and we have obviously had some incidents in the past,” Continental Chief Financial Officer Paul Begin told Reuters. “But if a major security incident happened at any project, it would be considered a material adverse change and they would have an out if they wanted to,” he said. Zijin’s cash offer of C$5.50 per share represents nearly a 13% premium to Continental’s last Friday close.
Moreover, British gold miner Centamin Plc on Tuesday rejected a hostile US$1.9 billion all-stock takeover proposal from Canada’s Endeavour Mining (EDV.TO), saying it did not offer enough value to Centamin shareholders. The offer was proposed at a 13% premium to Centamin's closing price on Tuesday evening and its stock shot up by just shy of 15% after the announcement. The firm’s only operating Sukari mine lies 560 miles to the southeast of Cairo and is slated to become one of the world's biggest 10 gold deposits. The Toronto-listed Endeavour, which owns four West African mines, said Centamin had rejected several attempts to engage in talks.
The increased M&A activity should not come as a major surprise, with the spotlight being pointed towards the gold mining sector lately for being immensely fragmented around the world, along with fewer gold discoveries taking place. Since the larger deposits that have not already been found are located in harder to reach places, and/or in more risky jurisdictions, production costs are rising. It makes sense for larger companies to gobble up smaller ones, as it is cheaper for a gold miner to acquire new reserves by buying a rival, rather than by investing in exploration.
Moreover, there are numerous mid-sized gold miners whose production costs are higher than those of the larger global miners. Shareholders of such companies have been lobbying for mergers to take place, with high-profile activist investor John Paulson putting together a coalition of shareholders in gold mines, the Investors Gold Council, to petition for change.
Global Miners are also trying to bring back generalist investors into the mining space. The retail market abandoned the sector in droves post-2012 after the price of gold plummeted, along with many other failed M&A deals which were secured mostly by diluting shareholders to acquire large, uneconomic deposits.
Global gold mining companies are set to continue M&A activity into 2020 after sealing a record $30 billion worth of contracts this year, latest data show. This burst of sector consolidation marks the most valuable merger and acquisition binge since gold prices hit their highest peak almost 10 years ago, exceeding the previous $25.7 billion deal spree high set in 2010.
There have been close to $8 billion in gold buyouts during the past three weeks alone, along with a $1.9 billion proposal for another. Back in May, I penned a missive (M&A Heats Up – Here are a Few More Takeover Candidates) suggesting two junior gold stocks for speculators looking for takeover candidates to consider. 
With many quality juniors being discounted the past few months, I expect mid-tier and major miners will continue to be in a buying mood into next year. And at some point, we can expect these producers to look further down the food chain to junior developer/explorers who control large, established resources with blue sky potential. This will be a natural progression of the recent deal flow, as the majors are running low on economic reserves for future production. The strategy of buying a basket of the best in breed resource-rich juniors at this low point of the cycle makes sense and the sector is presenting excellent buying opportunities for informed speculators.
If you require assistance in choosing the best quality juniors to invest, please stop by my website and check out the subscription service at https://juniorminerjunky.com/subscribe. The service provides members with a Top 8 Take-Over Candidate List that contains junior developers boasting large-scale gold and/or silver deposits that are at, or near, the finance stage. Although the JMJ service has reached capacity of 250 members, 6 spaces will be opening up next week and there is a waiting list if you are interested in becoming a member.
By David Erfle 
Contributing to  kitco.com"

Saturday, 7 December 2019

Gold In The Alaskan Elephant Country: Central Banks Gold Buying Set For New High In 2019.



A lot of investors are being caught in the market manipulation of the historic proportions with trade wars coming on and off literally a few times daily. It is very easy to miss the big picture waiting every day for "the greatest deal ever with China". 




Here is where our conversation can help maybe to some of you. Bloomberg reports about the new record high for Central Bank Gold buying being set already in 2019. QE4 has pushed all markets to the new all-time highs and now we can visually track the record expansion of the central banks' balance sheets which are pushing markets climbing like balloons after being pumped with hot air. 




Only this time the same Central Banks are buying gold like there is no tomorrow. They know too well how it all going to end. Reuters reported that there is a growing concern about European banks being adequately capitalised and able to meet the requirements of the real stress test. 




The same banks in Europe are charging their wealthy clients for depositing their cash already, pushing more of them to seek increased allocations to Gold. Gold has been mocked for years for the lack of yield, but not anymore. Needless to say, that Deutsche Bank going "Lehman" can put the sobering warning from Dutch Central Bank in the totally new light: "World will need Gold if the entire system collapses": 

"A statement from the bank’s website describes gold as “the trust anchor for the financial system.”  
“If the entire system collapses, the gold stock provides a collateral to start over. Gold gives confidence in the power of the central bank's balance sheet. That gives a safe feeling,”

Other Central Banks are following this advice, as we can see today. Repatriation of gold is going globally and very soon we will see whether bullion banks can create gold from the thin air as well as they are printing their worthless paper to meet their "paper gold" obligations. The game of musical chairs has begun in the Gold rehypothecation market. 




The whole game is spiced by the overextended business cycle stretched in the election season, there is no doping control anymore. FED is announced to be "the enemy of the state" for not allowing negative rates in the USA "as they have in Europe already". 




How long FED can resist the Commander-in-chief? After the election, this questing will become purely rhetorical. All these factors will drive the demand for Gold further, as we are discussing here in-depth





Investors seeking to increase their record low allocations to Gold will be competing with Central Banks buying Gold and declining production from Gold miners. It will create new opportunities, as a wave of Gold M&A is showing the last few weeks. 





McKinsey calls it "The Gold Mining Reserve Crisis". Combination of these historical tectonic shifts in the demand and available supply can easily take out any question marks left about the new secular Gold Bull market as early as in the next few months. 




Nobody knows the future and you all will have to do your own research and pick up the winners. We at TNR Gold are very encouraged with all these recent developments in macroeconomy supporting the very healthy Gold Bull market for years to come and our position with Shotgun Gold project development in the great state of Alaska. All brave scientific observations must be confirmed by people who can put some money on the table to prove it in real life. I am personally following very closely billionaires who are not only buying Gold now but are coming to our Alaskan elephant country in a quest for the next Donlin Gold. You can find this story on the links below.




Gold In The Alaskan Elephant Country: Kirill Klip GEM Royalty TNR Gold Presentation November 2019.




"The Company's strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR Gold ("TNR") is actively introducing the project to interested parties," commented Kirill Klip, Executive Chairman of TNR. "We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time."








Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.





"Gold Exploration Vital For Future Supply": Gold In The USA - Alaskan Elephant Country.






Wood Mackenzie brings attention to the unfolding "Gold Reserves Crisis" as McKinsey calls it. The growing demand for gold from Central Banks, institutional investors and retail is facing the peak gold production and collapsing gold reserves of the major mining companies. Everything is being set for "The Perfect Storm" in the gold market:

"Exploration budgets were slashed following the fall in the gold price from the highs that were reached in 2011/2012 and they have since failed to recover. The slight rebound in exploration spend we have seen over the past couple of years has largely been focused on brownfield projects and near-mine development. This has not been sufficient to replenish mined ounces and as such peak gold supply is now a very real possibility. Wood Mackenzie."



M&A activity will only redistribute the well known and already developed reserves. The industry needs new major discoveries which are very few and far between. Years of the Gold Bear market have not only burnt alive the whole generation of investors but made mining companies extremely cautious with any exploration and investment activities. All exploration budgets were cut to the bone. The industry suffered not only dramatically reduced exploration budgets, but the return on the money invested in exploration produced very few major discoveries.




After the recent wave of M&A activities among the major gold miners, mining companies are increasingly entering into the JVs with junior miners in order to develop the new resource base:

"To secure their longevity as pillars of the gold industry, we have seen heightened M&A activity and miners focusing on their core assets. Whilst this may help to bolster balance sheets through improved operational performance and realised “synergies”, it seemingly does little to address the problem the industry is facing with regards to how to sustain current production levels. We have, as of late, noticed an uptick in some majors opting to increase their footholds in a select few juniors with promising exploration opportunities.
Agnico Eagle, AngloGold Ashanti, Kinross and Newcrest are actively investing in, or entering into joint-ventures with junior gold companies to create long-term value. Wood Mackenzie"



News about Electrum Group partnering in the new venture with gold mining legends Rob McEwen and Eric Sprott for exploration in Alaska will ignite the new wave of interest to the juniors operating in Alaska. Alaska jumped to the 5th place among safe mining jurisdictions and giant 39 Moz Donlin Gold project is getting more and more attention. Electrum Group is the major shareholder of Nova Gold which is developing Donlin Gold in JV with Barrick Gold.




With gold prices reaching new highs this year some mining analysts are starting to apply the old metrics to value "gold in the ground" when comparing juniors and their projects. Nova Gold was trading as high as $2.4B reflecting its 50% stake in Donlin Gold. It gives more than $120 valuation per oz in the ground. All projects are different, but previous Gold Bull market valuations started at $20 per oz of the inferred resources - the very initial level of resources. New mining deals will give us a better sense of the valuations. Eric Sprott and Rob McEwen will make sure that Alaska is shining bright on the radars of investors now. Increased gold prices are making the great state of Alaska as one of the most attractive in the industry: "leverage in the place where you can keep the rewards". And their own gold price projections can bring real fireworks to the exploration opportunities. As always do your own research and you will have to pick up the winners.





TNR Gold is developing the Shotgun Gold project in the Alaskan elephant country near Donlin Gold mining district. On the links below you can find more information. Barrick Gold received crucial permits to advance Donlin Gold and this new developing mining district in the US can make the promise of "Gold In the USA" providing stable supply feasible again and it can become that solution to "The Gold Mining Reserve Crisis" McKinsey is talking about:
"The Company's strategy with the Shotgun Gold Project is to attract a partnership with one of the major gold mining companies. TNR Gold ("TNR") is actively introducing the project to interested parties," commented Kirill Klip, Executive Chairman of TNR. "We may be at the beginning of a great discovery. There is a clear path on how to move this project forward using the geological and geophysical research currently available to target drilling to expand the resource and form the basis of a preliminary economic analysis. The next step is to acquire a partner that shares our vision and recognizes the growth potential and value to be added to the Shotgun project over time."




Sunday, 1 December 2019

Powering Tesla Energy rEVolution: TNR Gold Royalty With McEwen Mining - Los Azules And Top 10 Copper Mining Projects In The World.



Mining.com published a very interesting for our conversation here article about top 10 copper mining projects in the world. Now you can see better the potential magnitude of the Los Azules copper project and its place among peers. Rob McEwen rightfully calls it "Our Sleeping Giant" and now you can see why. Further development will advance the resources to the more proven reserves categories and Los Azules can grow even more with further exploration. 




TNR Gold is holding NSR Royalty on the entire project and plugged into Energy rEVolution with our Copper and Lithium Royalties. Below you can find more information on the red metal which is going green during Tesla Energy rEVolution, state of the copper market which is facing "Severe Deficit" as Goldman Sachs calls it, largest copper deposits and Barrick Gold's quest for growth with "Strategic Copper".



"Even if not all our dreams will come to materialisation with this Barrick Gold strategic announcement, Los Azules is getting on the radar screens of the major financial players and we have another very important confirmation of our strategy in building green energy metals royalty holdings for TNR Gold. As always, do your own research and you will have to pick up the winners. On the links below you can find a lot of information which can help you with your homework."


Tesla Energy rEVolution And The Golden Age For Copper: Kirill Klip GEM Royalty TNR Gold Copper Presentation November 2019.




"Always do your own research - I do not honestly know how to prepare to that sad end. In all other potential cases, I can only point out to my personal experience of making the best investments by buying when "blood was almost literally on the streets" like with Tenke Mining starting my acquisitions at CAD 40 cents during the civil war in DRC and following Lukas Lundin with his motto: "politics will change, resources in the best projects will stay". Later, Lukas made a lot of investors of Tenke Mining very happy during his buy out by Lundin Mining at CAD$20 dollars. I have followed him and found TNR Gold many years ago - now we have Los Azules Copper NSR Royalty among our other assets and building The Green Energy Metals Royalty and Gold Company."







Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.




TNR Gold Los Azules Copper NSR Royalty Holding With McEwen Mining Presentation.





Red Metal Goes Green During Energy rEVolution: Growing EV Infrastructure To Drive Copper Demand For Decades Says Wood Mackenzie.





Energy rEVolution And The Big Picture For Copper During A Mexican Standoff In The Trade War Against The USA: Barron's - Copper Prices May Take Off As Supply Tightens.






Building The Green Energy Metals Royalty And Gold Company: The Northern Miner - Canada’s Top 10 Royalty And Streaming Companies.






Mining.com:

RANKED: Top 10 copper mining projects in the world

"According to the US Geological Survey to date, roughly 700 million tonnes tons of copper have been produced around the world. 
This would fit into a cube measuring about 430 meters on a side and at today’s price would be worth more than $4 trillion. Around 21 million tonnes of copper is mined each year.
The USGS estimates identified deposits contain an estimated 2.1 billion tonnes of copper with porphyry deposits accounting for 1.8 billion tonnes. That brings the total amount of discovered copper to 2.8 billion tonnes. This would fit into a cube measuring 680 meters on a side. 
Of the identified copper that has yet to be taken out of the ground, about 65% is found in just five countries: Chile, Australia, Peru, Mexico, and the United States. 
MINING.COM and sister company MiningIntelligence compiled a list of the the top 10 largest copper deposits currently under development and ranked them according to Proven and Probable Reserves, a measure of economically mineable ore occurring in the mineral deposit." 

Saturday, 23 November 2019

Elon Musk Unveiled Tesla Cybertruck - The Ultimate Hedge Gold Carrier For All Matrix Blade Runners Escaping The Gravity Of The Black Holes In The Crypto Universe.



Elon Musk is brilliant as usual. I must admit that I was depressed with the look of that door stopper built around an incredible spec of the Tesla powertrain before I saw the big picture. In the next few short hours, bitcoin resumed its collapse diving below $7,000 and crashing all cryptocurrencies into the Black Hole of the Crypto Universe with it. China has implemented its favourite weapon from "The Art of War" arsenal and applied "The Panda Squeeze" to the Crypto Universe. 




Something was lost in translation for a lot of hodlers, as after embracing blockchain technology for the State, it came as a surprise for many that China will crack down on all illegal trade of cryptocurrencies facilitated by any Chinese citizens globally. For a lot of crypto enthusiasts who are learning Austrian economics on Twitter, it must be new that CPC means the State in China and any means of competition with the power of the State, including the issuance of any FIAT currency digitalized in order to mascarade its purpose, will not be tolerated. Welcome to the brave future of the real freedom of choice powered by the solid Centralised Digital Yuan put on a blockchain and backed by Gold to finally unite the divided libertarian crowd.   




Then I suddenly get it. Genious. Elon Musk can see the future and truly front-running AI which must be running all the crypto sh$tcoins show. No surprise here - he is definitely has been plugged in with Neurolink already for quite a bit of time.




Tesla Cybertruck brave design is taken directly from the Matrix for the coming Mad Max times when bitcoin will hit the Moon and life will change forever. No more romantic nights. Pure utility to survive and drive away from zombies. Unbelievable specs make all sense for this Ultimate Hedge Gold Carrier




Cybertruck pricing points for different options are mindblowing and will make it fly for the generation grown up inside of the video games. They have their ultimate electric supercar now. Every respectful hodler will buy one at least. Bitcoin will go up and down, Cybertruck will stay. 




Some analysts are still missing this brilliant marketing strategy. Reservations are already more than 150,000 in less than couple of days after the "smashing" unveil. It can really establish Tesla leading position catering to the cyberpunks community without any competition. Whether they all became millionaires with their cryptocurrency holdings remain to be seen, but twitter is full of the success stories, so the market is huge according to this powerful trend at least. Please do not forget, that Tesla Cybertruck can be the new base for the military vehicles and an ultimate Police car as well.




Rivian will get some more traction now as the real challenger to the Range Rover crowd, but as I do really believe: the more competition for the electric cars - the merrier. Hopefully, the backing and order of delivery trucks from Amazon will help Rivian to build up the mass production of these beautiful trucks. 




Plus not everything lost for all those in the Tesla crowd who are still depressed like I was after this unveil, windows will be changed and I will not be surprised if the less radical design on this incredible powertrain will be introduced by Tesla. 




As always, do your own research, but maybe advice following the genius vision of Elon Musk will be very logical here: diversify a little bit before China will put Centralised Digital Yuan backed by Gold on the blockchain which will be run by the State and before all bitcoin whale hodlers they can find will be put for re-education programs in gold mining camps. If bitcoin will go to $1,000,000 before hitting the Moon, you all have enough already, if not - you will have Tesla Cybertruck left with Gold. If you would like to consider how to play this scenario from both sides of the rising Tesla Cybertrucks sales and demand for the Ultimate Hedge to carry in them, you are welcome to my blog and links below for your homework.





Lithium Will Power Us For The Next 50 Years And Then Robots: Kirill Klip GEM Royalty TNR Gold Lithium Presentation October 2019.





"Kirill Klip, Executive Chairman of the Company commented, "We are very pleased to see that Ganfeng Lithium is advancing the Mariana Lithium project in Argentina towards further pre-feasibility studies. The Mariana Lithium preliminary economic assessment ("PEA"), as announced in our news release of January 28, 2019, was the first PEA on the project that provided a potential value for the total NSR Royalty from Mariana's life of mine cashflow. TNR Gold does not have to contribute any capital for development of Mariana Lithium and our NSR Royalty does not depend on the size of ILC's share in Mariana Lithium. The 1.8% Mariana NSR Royalty is an important part of TNR Gold's portfolio. The essence of our business model is to have industry leaders like Ganfeng Lithium as operators on the projects that will potentially generate royalty cashflows to contribute significant value for our shareholders."







Please always read legal disclaimer. There is NO investment advice on any Kirill Klip feeds and blog. Always consult a qualified financial adviser before any investment decisions. Do Your Own Research.





Oil Is Still Big, Actually, It's Very Big. But Thanks To rEVolution Energy Security Is Not Only About Oil Anymore.