Guest post:
TNR Gold | Copper and Lithium's New Chapter of Business
A mighty global consumer pull towards EVs and a breakneck international policy push of renewable utilities/macro size batteries is a magical moment for lithium & copper. While the former shows strength so far only in Far East M&A’s, western equity markets are much more open to a traditional metal like Cu and it has been rising hard as a leading indicator of inflation & speculation.
Copper remains Goldman’s favourite commodity based on cyclical and structural support. For good reason, too - China unveiled that it had set aside $900 billion to be spent over the next five years towards developing a familiar infrastructural mix of mass ultra-high voltage power transmission installations, vehicle charging systems and also deploy “new digital infrastructure”.
The EU & US have their own answer to China’s infrastructure plan. The global(ist) Build Back Better mantra finally has the green light to show some financial teeth. And these are fiscal fangs, not monetary, and the kind that have been severing the jugulars of committed short sellers so far while monetary institutional herbivores grimace and grind their teeth to the best of their negative interest rate ability.
“Fiscal policy is the big game in town now,” said Stephen King, senior economic adviser to HSBC Holdings Plc. “As a central banker, you have to accept in that sense you’ve lost a bit of power to the political process.”
An internal audit for the International Monetary Fund expressed lamentation for the decision to call for austerity in the wonderful years of 2010 & 2012 when the economy was still crippled by the global ‘self-automated’ car crash. A new message is affirmed by the IMF: Print Now ‘Till 2025, Consequences for the Balance Sheet be Damned.
German officials say there’ll be no return to balanced budgets in their own country anytime soon. Yoshihide Suga, Japan’s new prime minister, has said debt consolidation will have to wait until growth is back — and suggested there’s no hard limit to how much his government can borrow.
The West is fully encouraged now by regulatory institutions to flood irrigate investment and stimulate - without relent - their way out of the current recession. Maybe this is the right decision - sometimes the drinking water is to put the house fire out, and the audit comes later.
We must point out that there does lie an alternative to The Way of the Fed. Looking, as we now so frequently do, to China we see that the state ruled out indiscriminate "flood irrigation" stimulus early on in the pandemic. It not only recognized but countered desperate financial engineering by both government and market participants and actively avoided balance sheet expansion and the monetization of its budget deficit. Rewarded for its discipline, China's 10 year bond yield is now weightier than it was pre-covid.
We're not complaining, though. Gold's reputation as a counterweight hedge against stock market performance eclipses an important caveat to an otherwise inverse relationship. When monetary bovines start bleating and interest rates go negative, when real bond yield flop, gold will rise regardless of green market performance, because participants must still hedge and buying Fed IOU's in deflation no longer makes sense. And this is the part of the class we all forgot back in April, back when we were wondering if gold would break $1700. Going forward, ask yourself what has changed now.
TNR’s CEO, Kirill Klip, commented: “Recent M&A Royalty deals in Argentina are elevating the entirety of TNR Gold’s portfolio towards legitimately positive re-evaluation. Rob McEwen called Taca Taca Copper deposit as a very good proxy towards the true value of giant Los Azules Copper. This month, Nova Royalty paid USD $12.75 for 0.24% of NSR Royalty on Taca Taca. In comparison, TNR Gold holds 0.36% NSR Royalty on the entire Los Azules Copper project. This deal by Nova Royalty provides an excellently favourable benchmark for the potential valuation of TNR Gold Corp’s Los Azules Copper NSR Royalty Holding”.
Stubbornly rising gold prices are a favorable seasoning to projects nestled in safe, ready to go jurisdictions. Bank of America projects a $3,000 shoreline in the near vicinity of the elections. We can see our own justifications for that below with a healthy cup (with a handle holding at current prices) and a resolution that's double the depth.
The lockdown days have shown that the Company benefits from skyrocketing gold, while not being subject to its own corrections; flotsam on a rising tide it is not. TNR Gold (TNR.V) has Gold in the ground for the pessimists and royalties levered to a bullish trend for the optimists. Eric Sprott sees the market buying into sustained gold prices, makes a positive revision of double his own price-per-ounce estimates; from $50 to ‘$100per oz in the ground’.
Don’t wait for the big players to reorient your portfolio within the energy & meals sector. For as BP’s Bob put it, “If someone said, ‘Here’s 10bn to invest in renewables,” we wouldn’t know how to do it.”
TNR Gold is fully plugged into the reality of the times. From the release of practical & popular EV mobility systems to the mass uptake of ancillary battery storage for rising renewable grids, a bet on copper and lithium is a bet on the new chapter of business. TNR Gold is plugged in via copper and lithium royalty holdings with industry leaders McEwen Mining and Ganfeng Lithium.
Kirill continued: “TNR Gold shareholder NovaGold is moving forward developing the giant Donlin Gold project together with their JV partner Barrick Gold. CEO Mark Bristow has confirmed that Donlin is a key project for Barrick. They are conducting the largest drilling program at Donlin Gold to-date and, apparently, like what they see. TNR Gold has found Gold at our Shotgun Gold Project located near Donlin Gold as well.
Very limited drilling has allowed us to produce NI 43-101 report identifying initial inferred resources of 705,960 Au Oz. We are now very well positioned for further development in-line with our strategy. Valuations for the Gold in the ground are rising already as well. NovaGold was trading as high as USD $205 per Au Oz this year, Eric Sprott is applying his “mental valuation” of USD $100 per Au Oz for different projects and Ronald Stewart from AuCu Research is tracking the increase in valuations from USD $50 to $70 per Au Oz in the ground for exploration companies this year already.”
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.
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