Chart by Northstar
Coronavirus is breaking out in China and, finally, gold is reacting last Friday by breaking out from its brief consolidation on the base of Summer 2019 high. I would never wish that all our fundamental picture which is supporting much higher valuations for gold will be manifested by this brutal trigger of the threat of a very serious Coronavirus epidemic outbreak. But it's happening and affecting many dozens of millions of people already.
Chart by Northstar
I will leave the coverage of this ongoing tragedy for all people involved in China and all over the world to professional journalists. On my part, I will mention only a few very important points. I do hope that we all will be blessed to escape the global pandemic scenario this time which can bring this tragedy very fast to the stage of the catastrophe. This is a very serious matter, stay safe and well protected. As a minimum, we should expect quarantine in China being expanded and affecting even more population than over 60 million people now. As very well-known virologist has stated already: "the only really effective measure to slow the spread of this epidemic outbreak is for all people to stay at home for the next two weeks". If the reported numbers are not exactly reflecting the real situation in the Wuhan, then the closing of all air travel from China becomes the only option to deal with this situation.
Chart by Northstar
Needless to say that even in the case when, hopefully, this outbreak will be contained in the nearest future, economy in China will be negatively affected. Three major ports in China deserve your attention: Shanghai, Shenzhen and Ningbo-Zhoushan - and in case of closing, we will face the global level of economic shock. The only way to deal with this blow for the election cycle and overextended bull market will be a further massive injection of liquidity from all Central Banks all over the world, basically bringing steroids into our fundamental analysis. Maybe, even POTUS dream about negative rates in the US can become not so far stretched after all.
Chart by Northstar
Gold Bull is ready for the explosive release of its energy after accumulating it for years during the ongoing paper market manipulation and artificial price suppression. Northstar is providing us with his brilliant roadmaps which are pointing out to the potential future destinations. NovaGold is going vertically already reflecting the sudden realisation of only a few in the investment crowd of converging megatrends for gold miners and developers.
Investors rushing to increase their exposure to gold are facing competition from Central Banks and gold miners themselves are facing "The Gold Mining Reserve Crisis" - as McKinsey calls it. Let's all hope that this situation will not get much worse before it gets better. At least one more outcome is certain now. Millions of investors will be educated in a very brutal way, that external shocks to the financial system are real.
There is nothing which is growing straight to the sky without very serious consequences when gravity will take charge and that the risk is real. Gold is the ultimate hedge and billionaires and Central Banks have been buying gold and frontrunning all retail investors who were still chasing the market. TNR Gold is very well positioned with our Shotgun Gold project to successfully implement our strategic plan of development. And now you have a lot of information for your own due diligence and research playing with your own valuation metrics.
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 mining analysts are applying higher metrics to value "gold in the ground" when comparing juniors and their projects. Nova Gold is trading as high as USD $3 Billion market cap reflecting its 50% stake in Donlin Gold. It gives more than $154 valuation per oz in the ground. This is an increase of almost 30% compared to the valuation in July 2019. 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. Now, these charts from AuCu Consulting are showing different Averages starting from $42/oz for different stages of resource definition for Exploration Companies.
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.
As we discussed before, the industry is facing "Gold Mining Reserves Crisis". The 1970s and 1980s were the golden years for gold exploration. "There was at least one 50 MOZ Au discovery each decade and at least ten 30 MOZ Au discoveries. From 2000 industry failed to find any 50 MOZ Au deposits or any 30 MOZ Au deposits." M&A deals are only redistributing the already well-known resources, the industry needs new major discoveries, but giants like Donlin Gold are only a few and far between.
M&A deals are driving up gold in the ground valuations already and experts are forecasting the further consolidation in the industry. TNR Gold is developing Shotgun Gold project in the Alaskan Elephant country near the giant Donlin Gold project and is looking for a strategic partner to grow together. You can find more information about our Company 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.
No comments:
Post a Comment