The major currency pair weakened pretty much at the end of last week. Early in the last full trading week of the year, EURUSD is trading at 1.1084.
Several reports published by the USA last Friday provided great support to the American currency. First of all, it’s the final GDP reading in the third quarter of 2019, which showed the same 2.1% q/q as expected without any surprise. Secondly, numbers on the Personal Income and Spending in November were quite impressive.
The Personal Income showed +0.5% m/m after adding 0.1% m/m in the previous month and against the expected reading of +0.3% m/m. Meanwhile, the Personal Spending was +0.4% m/m, the same as expected, after being +0.3% m/m the month before.
The Revised University of Michigan Consumer Sentiment increased up to 99.3 points in December against the expected reading was 99.2 points. The actual number is much higher than the November one.
Stay tuned to the RoboForex Blog for exclusive financial forecasts, professional expert analysis, how-to articles and more.
As we can see in the H4 chart, EUR/USD has reached its downside target at 1.1066. After breaking the previous descending wave’s channel, the pair may start a new rising impulse with the first target at 1.1133. Later, the market may start another correction towards 1.1099. From the technical point of view, this scenario is confirmed by MACD Oscillator: its signal line is moving above 0. The indicator is expected to leave the histogram area and grow to break 0. After that, the instrument may boost its growth on the price chart.
In the H1 chart, EUR/USD is growing with the first target at 1.1097. Later, the market may start another start a new correction towards 1.1080 and then form one more ascending structure with the short-term target at 1.1111. in fact, the price is expected to form a five-wave ascending structure. From the technical point of view, this scenario is confirmed by Stochastic Oscillator: its signal line is moving directly upwards above 50 to reach 80.
Disclaimer
Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.
German import prices rose 0.5% over month in November after 0.1% decline in October. Will the EURUSD continue rising?
The price chart on 1-hour timeframe shows EURUSD: H1 is in uptrend. The price is rising above the 200-period moving average MA(200) which is rising. The RSI oscillator is rising to 50 level.
The EUR/USD currency pair went down. The trading tool has updated local lows. The demand for USD rose after optimistic US GDP data came out. Currently, EUR/USD quotes are consolidating in the range of 1.10650-1.10900. The American currency has the potential for further growth. This week, trading activity and volatility may be reduced due to the Christmas holidays. Investors expect up-to-date information regarding trade negotiations between Washington and Beijing. We recommend opening positions from key levels.
The Economic News Feed for 23.12.2019:
– Data on orders for durable goods (US) – 15:30 (GMT+2:00);
– New Real Estate Sales (US) – 17:00 (GMT+2:00);
Indicators signal the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone but above the signal line, which gives a weak signal to sell EUR/USD.
The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates bullish sentiment.
Trading recommendations
Support levels: 1.10650, 1.10300
Resistance levels: 1.10900, 1.11100, 1.11300
If the price consolidates below 1.10650, expect the quotes to fall further toward 1.10400-1.10200.
Alternatively, the quotes could grow toward 1.11200-1.11400.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.30083
Open: 1.30007
% chg. over the last day: -0.01
Day’s range: 1.29865 – 1.30245
52 wk range: 1.1959 – 1.3516
The GBP / USD currency pair stabilized after a significant drop last week. The pound lost in price against the US dollar more than 340 points. Currently, GBP / USD quotes are consolidating. The local support and resistance levels are: 1.29900 and 1.30650, respectively. In the near future, technical correction is not ruled out. We recommend keeping track of current information on the Brexit issue. Open positions from key levels.
The Economic News Feed for 23.12.2019 is calm.
Indicators do not give accurate signals: the price is testing 50 MA.
The MACD histogram is close to the 0.
The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates a bearish sentiment.
The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates a bearish sentiment.
Support levels: 1.29900, 1.29500
Resistance levels: 1.30650, 1.31350, 1.32100
If the price consolidates below 1.29900, expect the quotes to drop toward 1.29500-1.29300.
Alternatively, the quotes could grow toward 1.31200-1.31400.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.31210
Open: 1.31463
% chg. over the last day: +0.16
Day’s range: 1.31400 – 1.31604
52 wk range: 1.3014 – 1.3664
On Friday, December 20, the USD / CAD currency pair retreated from local lows. Looney is currently consolidating. The technical picture is ambiguous. The key range is 1.31450-1.31750. Participants in financial markets expect the release of important statistical data from the United States and Canada. We also recommend that you pay attention to the dynamics of prices of black gold. Open positions from key levels.
At 15:30 (GMT+2:00) a report on Canada will publish a GDP report.
The price has fixed above 100 MA, which signals the power of buyers.
The MACD histogram is in the positive zone but below the signal line, which gives a weak signal to buy USD/CAD.
The Stochastic Oscillator is near the overbought zone, the %K line crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.31450, 1.31250, 1.31050
Resistance levels: 1.31750, 1.32000
If the price consolidates below 1.31450, USD/CAD is expected to fall toward 1.31000.
Alternatively the quotes could grow toward 1.32000-1.32200.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 109.364
Open: 109.402
% chg. over the last day: +0.05
Day’s range: 109.366 – 109.539
52 wk range: 104.45 – 113.53
The USD/JPY currency pair continues to trade in a long flat. There is no defined trend. At the moment, the following local support and resistance levels can be distinguished: 109.300 and 109.500. Participants in financial markets expect additional drivers. A trading instrument has a downside potential. We recommend you to pay attention to the dynamics of the yield of US government securities. Open positions from key levels.
The Economic News Feed for 23.12.2019 is calm.
Indicators do not give accurate signals: the price crossed 50 MA and 100 MA.
The MACD histogram is close to the 0 mark. There are no signals at the moment.
The Stochastic Oscillator is in the neutral zone, the %K line crossed the %D line. There are no exact signals.
Trading recommendations
Support levels: 109.300, 109.200, 109.000.
Resistance levels: 109.500, 109.700, 110.000
If the price consolidates below 109.300, expect the quotes to fall toward 109.000-108.800.
Alternatively, the quotes could grow toward 109.700-110.000.
On Friday, the EURUSD pair fell 45 points (0.4%), to 1.1075, amid a general strengthening of the US dollar and decline in the EURGBP pair. Friday’s data showed that the US economy has accelerated in the third quarter, and there are signs that the economy will maintain growth in the fourth quarter. GDP increased by 2.1% (year-on-year).
The Ministry of Commerce submitted a report concerning income and expenditure. In November, personal income rose by 0.5% after rising by a revised 0.1% in October (a 0.3% increase was forecast). Personal expenses grew by 0.4% after increasing by 0.3% in October (this indicator justified the forecast).
Today’s news (GMT+3):
16:30 Canada: Gross Domestic Product (MoM) (Oct).
16:30 USA: Durable Goods Orders (Nov).
18:00 USA: New Home Sales (MoM) (Nov).
Current situation:
Expectations surrounding the weakening euro were fully justified. The price slumped to the 90th degree – 1.1069. After a long consolidation, bears were able to bring the price down. The slide accelerated once the support at 1.1110 was breached, and came to a stop on the bottom line of the downwards channel. The Gann reversal level is at 112th degree – 1.1043. In theory, today we should consider movement to counter that seen on Friday, but the cycles indicate the formation of a spike. For today’s forecast, we’ll go out on a limb to predict a fall to 1.1043, followed by a rebound up to 1.1090. For now, the value is consolidating, and we are missing the required down-wave necessary to see an upwards correction.
We also want to remind you that on Tuesday, exchanges are working on a shorter schedule. Their work will resume on Thursday. Now, before Christmas, the market has low liquidity, so unpredictable fluctuations in any direction are possible without the need for any fundamental and/or technical reasons.
By Hussein Sayed, Chief Market Strategist (Gulf & MENA), ForexTime
Asian equities mixed as US indices ended last week on record highs
China announced it will lower tariffs on 850 products
Currency markets trading in tight ranges
Asian equities traded mixed on Monday, holding near their 2019 highs as volumes dropped with traders and investors preparing to celebrate the holiday break.
Optimism over trade and improving economic activity sent US stocks to new record highs on Friday. The S&P 500 rose 0.5%, while the Dow Jones Industrial Average and Nasdaq Composite advanced 0.3% and 0.4%, respectively.
President Trumps’ tweet on Friday that he had “a very good talk” with China’s President Xi concerning the trade deal contributed to the rally. along with better than anticipated consumer spending data, which showed that the main engine of the US economy remains in a healthy state.
The 2-year/10-year US Treasury yield curve has steepened the most since November 2018, indicating that investors are much more optimistic than they were several months ago.
The positive news continued to flow today with China’s finance ministry announcing that it will lower tariffs on more than 850 products, starting on January 1.
Historically, equities in the US climb in the final five trading days of the year in addition to the first two trading days of the new year, in what is termed a “Santa Rally”. Whether Santa will be generous enough this year remains to be seen. However, investors have had a phenomenal 2019 so far with the S&P 500 gaining 28.5% in what will be one of the best years in decades.
In currency markets, the Dollar retreated slightly against its major peers, but currencies overall are trading in very tight ranges. Nevertheless, traders need to be aware that low liquidity doesn’t prevent markets from shocks. For example, on January 3 this year, USDJPY plummeted almost 400 pips after Apple slashed its first-quarter guidance. When liquidity is thin, shock news can see highly volatile market moves.
This week, the data flow will slow, with only US personal consumption expenditure due on Friday expected to cause some volatility, if we get any surprises in the reading.
Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.
US stocks booked fresh records on Friday after announcement of a phase one trade deal. The S&P 500 rose 0.5% to new record 3221.22, adding 1.7% for the week. Dow Jones industrial added 0.3% to 28455. The Nasdaq gained 0.4% to 8924.96. The dollar weakening reversed as data showed personal spending and income rose more than expected in November. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.3% to 97.66 but is lower currently. Futures on US stock indices point to higher openings today.
FTSE 100 lags European indexes gains
European stock markets ended higher on Friday. EUR/USD joined GBP/USD’s continued slide on Friday with both pairs gaining currently. The Stoxx Europe 600 Index gained 0.7%. The DAX 30 added 0.8% Friday to 13318.90. France’s CAC 40 advanced 0.8% and UK’s FTSE 100 edged up 0.1% to 7582.48 as UK third-quarter GDP was upgraded to 0.4% quarter-on-quarter from 0.3% preliminary reading.
Shanghai Composite Index leads Asian Indexes losses
Asian stock indices are mixed today in subdued trading ahead of Christmas holidays. Nikkei ended 0.02% higher at 23821.11 as yen resumed climbing against the dollar. China’s markets are mixed as Beijing promised more private access to oil, telecom and power markets: the Shanghai Composite Index is 1.4% lower while Hong Kong’s Hang Seng Index is up 0.04%. Australia’s All Ordinaries Index lost 0.5% as Australian dollar slowed its climb against the greenback.
Brent futures prices are extending losses today. Prices fell on Friday as Baker Hughes reported that the number of active US rigs drilling for oil rose by 18 to 685 last week, a second straight weekly rise in rigs: Brent for February settlement lost 0.6% to $66.14 a barrel Friday. Saudi Aramco shares extended their losses for a fourth session on Sunday. Shares closed 0.6% down at 35.30 Saudi riyals. Saudi Aramco started trading publicly on December 11. It became the world’s largest corporation, worth just under $2 trillion. Foreign investment is limited yet as it trades on the Tadawul, Saudi Arabia’s exchange, which limits foreign investment. The IPO was structured so that retail investors can get one share for every 10 shares they hold, up to a hundred shares if they hold their shares for 180 uninterrupted days. Retail investors have represented one third of the offerings.
Gold rises as dollar slips
Gold prices are recovering today. Prices retreated on Friday as dollar resumed strengthening: February gold lost 0.26% to $1480.90 an ounce Friday.
Note: This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.
The Critical Investor sits down with Joe Grosso, CEO of Golden Arrow Resources, to discuss the company’s exploration plans for the new year.
1. Introduction
At a time when tax loss selling is at its peak, Golden Arrow Resources Corp. (GRG:TSX.V; GARWF:OTCQB; G6A:FSE) seems to have bottomed, and is regrouping after the sale of its interest in the Puna operation. New exploration projects have been acquired and exploration is on its way, and with a new focus on gold this time combined with a robust gold price, and by owning a large amount of SSR Mining Inc. (SSRM:NASDAQ) shares, the company seems ready to generate interesting news starting in Q1 2020. Who else than President and CEO Joe Grosso to ask about proceedings and plans at Golden Arrow Resources, as I will do in the interview below.
All pictures are company material, unless stated otherwise.
All currencies are in US dollars, unless stated otherwise.
Share price; 1 year time frame (Source tmxmoney.com)
2. Argentina in general
The Critical Investor (TCI): Thank you for taking the time, Joe. Let’s start with the Argentina situation. The newly elected President Fernandez appears to be mining friendly, as he wants to set up a dedicated Ministry of Mines. Have you seen progress on this front, are you in contact with government officials about this, what is your opinion?
Joe Grosso (JG): Thank you for this opportunity. We are in continuous contact with the newly elected government. Our group was invited about a month ago to a meeting with the president where we were reassured of the government’s dedication to the maintenance and support of mining in Argentina. Our organization has been active in mining in Argentina for 26 continuous years and has seen many different elected governments. If the past would serve as our guide, our opinion is that the present government will be very supportive of mining in that country.
TCI: As I see GRG branching out seriously to other jurisdictions outside Argentina for the first time in many years (Chile, Paraguay); was this done out of fear for a return to Kirchner politics, which shut down foreign interest almost completely? If not, what was the reason for this? Why Paraguay and Chile in specific?
JG: Absolutely not, Golden Arrow’s foray into Chile and Paraguay is a natural extension of our expertise in Argentina. Well-known mining trends that occur along the borders of Argentina lead one to logically ask the question: does this geological trend cross the border and into the neighboring country? Our technical team has pointed Golden Arrow to promising projects in these countries so our company will follow through with our investigation.
3. Financial
TCI: The dust has settled around the sale of the Puna interest to SSR Mining, and everything has been said and done around this transaction, I guess. However, I had one question: why didn’t you retain a royalty on Chinchillas, as you usually do when selling projects?
JG: Retaining a royalty on Chinchillas was a matter of negotiation with SSR Mining. While we would have liked to have one, we still negotiated a great deal with SSR. The $26 million worth of SSR shares gives our shareholders exposure to not only Chinchillas, but also to SSR’s other, well-performing gold mines. In essence, it is an improvement on a royalty.
TCI: The 4-month hold period for the SSR shares is ending at January 18, 2020, if I’m not mistaken. What is your current cash position, and what is your expected needed budget for 2020, and could you break it down for us?
JG: At the end of the 3rd quarter, Golden Arrow had $1.3 million in the treasury. Our exploration plans are still being finalized, in the first quarter of 2020 we plan approximately $1.6 million in exploration. The follow-up work is dependent on the results, so it would not be meaningful to contemplate at this stage.
TCI: How are you planning to monetize the SSR shares for this year? Are you hoping for a higher precious metals price and sell bits and pieces when needed, or do you want to have a solid amount of cash in the treasury?
JG: We would materialize a small amount to ensure that our exploration programs are sufficiently funded. Our shares of SSR provide the company with great exposure to a rising mining marketwhich we feel is forthcoming in 2020.
TCI: For how long do you expect not to have to raise money in the markets?
JG: We have sufficient cash and cash equivalents to be able to take a project to a Pre-Feasibility stage. A market financing would only be considered if Golden Arrow shares were considerably higher and fully reflected the value of the company’s assets.
TCI: Do you expect to acquire/option more assets in 2020?
JG: Given the current state of the mining market, there are many quality assets that are available at significant discounts. We are always reviewing new submissions and assessing if they fit our acquisition criteria.
TCI: If so what kind of assets are you looking for, early stage, and/or with a (historical) resource? In which jurisdictions and why?
JG: We typically seek advanced assets that have exceptional potential to expand any existing resource. The jurisdictions we typically focus on are Argentina and surrounding countriesregions where we have sufficient experience so that we can ensure effective management of these assets.
TCI: According to the presentation, a payment decision on Indiana will be made this month. Are there other deadlines on decisions for other projects in 2020?
JG: We are in negotiation with the vendor of Indiana to adjust the terms so that they are more reflective of current mining market conditions, prior to the next payment. Our other projects have very modest payment commitments in 2020.
4. Company
TCI: Before the sale of Puna, there were plans to spin out the new exploration arm called New Golden Explorations. Now the presentation doesn’t mention New Golden anymore. As Golden Arrow has turned into a full time explorer again, it doesn’t make sense anymore to have a separate exploration arm. Could you tell us what happened to this subject?
JG: Your observation is correct. Now, there is no need for a spin out, as Golden Arrow will conduct all the exploration work.
5. Paraguay project
TCI: The news release of October 10 indicated the following about the Tierra Dorada project:
“the team has been busy with the logistics of setting up in a new jurisdiction, including establishing an office, contracting local staff and acquiring equipment. Goals for the next six months include completing surface access agreements, developing detailed targets via mapping, surface sampling, a ground IP/magnetic geophysical survey, and trenching.”
Could you give us a status update on all these subjects? When can we expect results?
JG: As announced on December 5th, we have commenced the work program at Tierra Dorada and already started publishing results from surface sampling. Mapping and sampling at the Alvaro target area identified a new quartz vein prospect 250 meters northwest and parallel to a known prospect, and returned a chip sample with over 47 g/t gold.
TCI: I suppose exploration permits have to be applied for before drilling can start. Could you give us information about the status of this, what the permitting process is like in a nutshell in Paraguay (timelines, etc., how long a permit is valid, large areas at the same time or a few holes at the time, etc.)?
JG: Our current permits allow shallow drilling (up to 20 meters depth) and are valid for one year, with an additional year extension available. We have commenced the process of acquiring a full exploration permit, which will include deeper drilling. As with any jurisdiction, the timelines are not set in stone, but our first stage went relatively smoothly so we are optimistic that there will be no undue delay. In the meantime we have a lot of detailed surface and near-surface work to complete to define targets.
TCI: What is the budget for this reconnaissance exploration, when are you planning to start drilling and with what budget? What is the cost per meter of diamond drilling?
JG: The planned budget at this point is $1.3 million for 2020. Of course this will depend largely on what we find with our sampling, trenching and geophysics. This first phase is about $300k. We plan to start drilling in Q2. We are budgeting $300 per meter for diamond drilling.
TCI: Information so far indicates outcropping vein systems, but also near-surface mineralization; what do you expect the exploration strategy will be, will it be limited drilling in order to kill it asap, or are you planning on drilling a lot? Looking for high and/or low grade mineralization, open pittable or underground?
JG: We have a large land package that offers a lot of opportunity but also needs to be systematically reviewed. The amount of drilling will be decided by the targets as our program progresses. The geology indicates the potential for high-grade orogenic style deposits, but that does not preclude the opportunity for lower grade bulk-tonnage style deposits as well. With a land package this large, we will keep an open mind! Whether anything we may discover develops into an open pit or underground operation will depend on the depth and style of mineralization as well as the grades.
TCI: The project is described as a district-scale high-grade gold opportunity based on sampling, but when I look at historical drill results it seems more like a low-grade near-surface opportunity:
6.1m @ 1.12 g/t Au, including 1.5m @ 3.32 g/t Au in SM-H3 starting at 12.2 meters depth
3.05m @ 2.87 g/t Au, including 1.5m @ 3.74 g/t Au in SM-H4 starting at 19.8 meters depth
4.57m @ 1.72 g/t Au, including 1.5m @ 2.85 g/t Au in SM-H5 starting at 9.2 meters depth
3.05m @ 1.35g/t Au, including 1.5m @ 3.6g/t Au in SMH6 starting at 27.5 meters depth
What is your comment on this?
JG: There are numerous high-grade occurrences at surface, including those we have reported recently. Those drill results were from one prospect area and part of only a six-hole reverse circulation program, so clearly the area was not fully tested. There really has been very little work done on the existing prospects, and in the district.
TCI: Do you have a deadline in mind as you have set for Indiana, for example, which involves the $1 million option payment this month?
JG: We have very modest payment requirements in the next three years, which gives us a good amount of time to do a systematic review and delineate resources.
6. Argentina projects
TCI: Flecha de Oro is at the same stage as Tierra Dorada, and reconnaissance exploration is ongoing here as well, so my questions revolve mostly around the same subjects:
“The Company now has a program underway that has been planned to include mapping at both properties, surface sampling, and additional ground magnetic surveys, with follow-up trenching budgeted, in order to delineate and prioritize targets.”
Could you give us a status update on all these subjects here as well?
JG: As detailed in the December 3rd news release, ground magnetic surveying, surface mapping and sampling are underway and will be followed by detailed mapping and trenching in the new year. We have reported our first results from the Esperanza property including 24.0 g/t Au over 2 meters, 4.16 g/t Au over 2 meters, and 4.21 g/t Au over 1 meter in samples collected across individual veins.
TCI: I noticed results at the Flecha De Oro Project Puzzle property indicated a brecciated vein structure; could you explain why this is positive?
JG: Hydrothermal breccias can be the result of an epithermal event that carries mineralization, which is often of greater widths than in veins and structures.
TCI: When can we expect further results on the Flecha De Oro Project?
JG: These will be announced in Q1 2020.
TCI: I suppose exploration permitting in Argentina is no issue for the Grosso Group with their multi-decades long experience. Notwithstanding this, could you inform us about the needed permitting in the Rio Negro province, and more in general if there are consequences with the election of the new president, the new ministry of mines etc?
JG: Permitting for exploration work in Rio Negro requires “environmental impact reports” to be submitted, which are routine reports that give an overview of the type of work to be completed. Our group is adept at completing these (our sister company Blue Sky Uranium has worked in Rio Negro for years) and they are generally approved expeditiously. We have not seen any changes to the process since the recent election.
TCI: What is the budget for this reconnaissance exploration, when are you planning to start drilling and with what budget? What is the cost per meter of drilling?
JG: Reconnaissance exploration prior to drilling is $160k; with good results we plan to start drilling around the end of Q2. Total budget for the year is $1.1 million. Diamond drilling is estimated at $280 per meter.
TCI: What is the exploration strategy for Tierra Dorada?
JG: We are using the Cerro Vanguardia district as an exploration model, high grade veins and vein clusters, which can contain up to 1 million ounces. Our strategy is to find several of these, adding up to a multi-million ounce target.
7. Chile projects
TCI: What was the reason not to continue with one of the Atlantida projects, especially as the one relinquished had the historical resource? Be as specific geologically as possible, in terms of expectations and potential vs. exploration results.
JG: The historical resource was in a porphyry with associated skarns. It is deep and needed additional higher-value resources to realistically provide future value. Our work programs focused on finding higher grade, near-surface mineralization that would provide an appropriate sweetener, with expansion potential. After completing the program the appropriate action was deemed to be relinquishing those areas. Continuing would have required large payments to vendors which we felt could be better used elsewhere
TCI: What was the reason to stake the new claims to the south, historical sampling results?
JG: The area itself has a lot of potential, and it is rare to have opportunities for direct staking arise, so we took advantage of the opening. This area in particular has old workings that caught our interest.
TCI: I see the Indiana project as the flagship project at the moment because of the potentially very economic but still historical near-surface resource of 607koz @6g/t AuEq. Do you concur with this? If not what is the flagship project for GRG and why if you have one?
JG: Our work on Indiana was limited this year because of lack of funding so we did not complete the work needed to confirm the resource. We hope to be doing that in Q1 2020. Indiana is a different type of target, which has the potential of early production. Golden Arrow’s success in the past has been in exploration where there may be huge upside potential. Flagship status will be defined in Q2 when we see the results of the exploration work we completed.
TCI: What are the plans to convert the historical resource into an NI 43-101 compliant resource (timeline, budget, amount of infill drilling needed)?
JG: We are looking at a 2,500 meter program in Q1 to provide additional detail to validate the resource potential in the area of the Bondadosa vein; this could define a viable mining target. This will be followed by a 3,000-meter resource definition program and could form the basis of an NI 43-101 resource. The timing of the first phase of drilling is Q1,2020, and we have budgeted $1 million.
TCI: What is the overall strategy for drilling at Indiana, first try to make it as large as possible before converting into NI 43-101, or drill it until you reach a certain threshold, for example 1 Moz?
JG: We optioned the property with the belief that it is indeed a 1 million ounce gold equivalent target. There are many veins on the project that have never been drilled.
TCI: Are you looking at underground drilling from the ramps?
JG: Not for the first phase of drilling. They will likely be used in the future
TCI: Can you buy out the 25% option by MSA, and if so for how much?
JG: As previously stated, we are currently renegotiating the terms but in fact we would be looking to be a minority partner at the mining stage, the 25% could be purchased for $7 million under the original contract.
TCI: The aerial pic in the presentation shows hilly terrain; does this complicate setting up rigs, increasing costs? What are the drilling costs per meter?
JG: For Chile this terrain is almost flat! So no, setting up drill rigs is not an issue, also vertical veins can work to your advantage with tunneling and drilling angle holes. At Indiana we estimate $200 per meter for diamond drilling.
8. General
TCI: I view this stock as very undervalued, as the enterprise value at the moment is almost double the market cap. The shares of SSR Mining are trading strong, and are liquid with an average daily volume of 285k shares, so a discount on selling potential seems unwarranted. Why do you think there still is such a discount, after initial disappointment about Puna should have subsided by now, as we have progressed three months since then?
JG: The reason is partly the current market and partly because we have been unable to carry out any exploration programs in the last year (as a condition to receiving a credit facility from SSR). We believe that as Golden Arrow continues to announce result from our work programs in Argentina, Paraguay and Chile, the market will begin to attract investors again.
TCI: Do you have catalysts for 2020?
JG: The ongoing work programs will quickly generate drill targets which will serve as catalysts for potential multiple discoveries. As we are fully funded to carry out all this work, we hope to be at drilling stage by the first quarter of 2020. We have three projects all with programs underway so there will be multiple value catalysts at each as we progress. At Tierra Dorada and Flecha de Oro this will start with more surface sampling results. We have hit some great grades at both projects and all indications are we will continue. That could lead to the announcement of drill programs at both projects by the end of Q1. For Indiana, drill results in Q1 and Q2 will be key drivers. Positive results could be followed by the announcement of resource update and the start of a Pre-Feasibility program.
TCI: On a closing note, are there any other subjects of interest for the investing audience, or things you would like to tell us?
JG: Yes, keep in mind that while we have the projects and the funds to carry out our exploration programs, the people behind this company deserve special mention. Golden Arrow, managed by the Grosso Group, has over a quarter of a century of experience in Argentina where it has made three world-class discoveries. There are few management teams that can tout such a track record. With all the above, we feel we have all the ingredients required for the next discovery (or two) from this organization.
9. Conclusion
This concludes the interview with President and CEO Joe Grosso. I view the Golden Arrow stock as undervalued, as it currently trades at almost half the enterprise value, by owning very liquid SSR Mining shares and assigning no value to the exploration assets whatsoever. If exploration will be successful, I especially view Indiana as a future potential 1 Moz Au flagship project, and when gold remains robust, this could generate a pretty economic project. It is still early days, but it seems the potential is there, and 2020 looks like it could be a busy and revealing year.
I hope you will find this article interesting and useful, and will have further interest in my upcoming articles on mining. To never miss a thing, please subscribe to my free newsletter on my website, http://www.criticalinvestor.eu in order to get an email notice of my new articles soon after they are published.
The Critical Investor is a newsletter and comprehensive junior mining platform, providing analysis, blog and newsfeed and all sorts of information about junior mining. The editor is an avid and critical junior mining stock investor from The Netherlands, with an MSc background in construction/project management. Number cruncher at project economics, looking for high quality companies, mostly growth/turnaround/catalyst-driven to avoid too much dependence/influence of long-term commodity pricing/market sentiments, and often looking for long-term deep value. Getting burned in the past himself at junior mining investments by following overly positive sources that more often than not avoided to mention (hidden) risks or critical flaws, The Critical Investor learned his lesson well, and goes a few steps further ever since, providing a fresh, more in-depth, and critical vision on things, hence the name.
Disclaimer: The author is not a registered investment advisor, currently has a long position in this stock, and Golden Arrow Resources is a sponsoring company. All facts are to be checked by the reader. For more information go to www.goldenarrowresources.com and read the company’s profile and official documents on www.sedar.com, also for important risk disclosures. This article is provided for information purposes only, and is not intended to be investment advice of any kind, and all readers are encouraged to do their own due diligence, and talk to their own licensed investment advisors prior to making any investment decisions.
Streetwise Reports Disclosure: 1) The Critical Investor’s disclosures are listed above. 2) The following companies mentioned in the article are sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own shares of Golden Arrow Resources, a company mentioned in this article.
For the asset, Premier Health will issue to Livecare shareholders up to 4.5 million common Premier Health shares at $0.40 per share, subject to adjustment. Premier Health will assume all of Livecare’s outstanding liabilities and its subsidiary.
Livecare is a Canadian telehealth company founded and operated by physicians. Since inception, it provided more than 27,000 telemedicine visits and serviced more than 500 independent health practitioner accounts. The firm uses secure, encrypted, face-to-face video and messaging as well as the electronic medical records system, kindredPHR.
“With a track record providing health solutions to rural communities, remote work camps and First Nations communities, Livecare’s technology has proven to be a key enabler for sustainable health in geographically disperse populations,” the release noted.
Premier Health CEO Essam Hamza said in the release that “key aspect of integration will be Livecare’s workflow for video consults, specializing in real-time assessments with devices like Bluetooth-enabled stethoscopes and otoscopes for physical examination of patients remotely.”
Disclosure: 1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Premier Health Group Inc. Please click here for more information. Within the last six months, an affiliate of Streetwise Reports has disseminated information about the private placement of the following companies mentioned in this article: Premier Health Group Inc. 3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Premier Health Group Inc., a company mentioned in this article.
Bob Moriarty of 321gold describes the investment opportunity in this company.
Aurania Resources Ltd. (ARU:TSX.V) has 2 million warrants at $3 due to expire on Dec. 29. Typically, as warrant expiration approaches, warrant holders who are short of cash will sell the shares to exercise the warrants. In anticipation, shareholders have dropped the price of shares from $4.50 on Dec. 4 to $3.40 on Friday, Dec. 20.
With less than a week remaining, shareholders who happen to be scant could drop the price to as low as $3.10 and still make a few pennies on their warrants. This is a short-term sale on the shares and will be over in a week.
I would not be surprised to see Aurania go right back up to where it was in early December before the artificial supply began to hit the market.
Aurania is an advertiser. I have participated in two private placements and will participate in more. I am biased, do your own due diligence.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
Disclosure: 1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Aurania Resources. Aurania is an advertiser on 321gold. I determined which companies would be included in this article based on my research and understanding of the sector. 2) The following companies mentioned are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Money manager Adrian Day looks at two top royalty companies, both with a changing of the guard at the top, both with other important developments, plus he lists some companies he sees as buys.
Royal Gold Inc. (RGLD:NASDAQ; RGL:TSX, US$115.82) (115.82) is facing uncertainty on its main asset, the Mount Milligan copper-gold mine in British Columbia, whose stream accounts for nearly 30% of the company’s revenue and its book value. The mine has experienced lower recovery and higher costs, as well as water issues, leading the operator Centerra Gold Inc. (CG:TSX; CADGF:OTCPK) to take a 30% write down on the mine’s value and announce a review of the long-term plan, including mine reserves.
This year will be OK In the short-term, heavy rainfall enabled Centerra to store twice as much water as last year and announce that there would be no need to cut production over the winter as it did last year. This announcement, as well as steady stream revenue for the mine in the latest quarter, saw Royal’s stock price stabilize after an initial drop on Centerra’s announcement; it was $138 at the beginning of September.
But the story is not over. The publication of the long-term mine plan will be an important milestone for Royal, given the asset’s overwhelming importance to the company. Royal has only said that “it is unclear at this point what impact, if any, this will have on the value of the company’s interests in Mount Milligan.” A negative report by Centerra would undoubtedly have a further impact on Royal’s stock price. It is not clear when the study will be completed.
In the meantime, overall ounces for Royal declined in the last quarter, with the now-ended blockade at Penasquito as well as the strike at Andacollo, which ended last week, the main factors. Higher prices, however, saw revenue up. Royal continues to cut debt and increased the dividend again with the higher revenue.
A new CEO Separately, long-time CEO Tony Jensen will be retiring in January, stepping down after 16 years with the company, 13 as CEO. Mr. Jensen has always been one of the top CEOs in the industry, straightforward, open and, above all, a gentleman. He is replaced by William Heissenbuttel, who has been at the company since 2006, and chief financial officer and vice presidentstrategy for 18 months. We are holding Royal, but waiting for more clarity of Mount Milligan’s long-term future before buying more.
Changes at the Top for Franco
Franco-Nevada Corp. (FNV:TSX; FNV:NYSE, US$98.50) has also seen a changing of the guard, with CEO David Harquail becoming chairman of the board in May, while founder Pierre Lassonde becomes chairman emeritus. Paul Brink, president and chief operating officer, will become CEO. The appointment is not a surprise, since Mr. Brink has been groomed as next CEO for a number of years, and was the key business development officer for 11 years ending 2018. Notwithstanding the very special skills and reputation in the industry of Messrs. Lassone and Harquail, we expect the transition to be smooth. I have known both for many yearsdecades indeedand both are extraordinary men, with character, integrity and insight. Mr. Brink has certainly proven himself over the years, while one of the key attributes of Franco is that the company has its own “DNA,” its own way of doing things, embedded in the company. This will not change.
In its latest quarter, Franco generated another record, with GEOs (gold equivalent ounces) up 22%, with both Stillwater and Sudbury up, and, significantly, Franco’s newest and largest stream investment, Cobre Panama, making its first deliveries after announcing commercial production Sept. 1, ahead of guidance. This removes lingering caution on the large, new investment. Franco has a strong balance sheet, with $1.2 million of available liquidity.
They don’t give up easily A negative development came with an update from Franco on the Canadian tax authorities review of its offshore streams, with the Canada Revenue Agency (CRA) now asserting that the majority of income generated by Franco’s offshore structures should be taxed in Canada. This covers the years from 2012 forward. Despite the precedent set by their loss to Wheaton Precious Metals Corp. (WPM:TSX; WPM:NYSE), CRA is become more assertive on Franco. Though the bill for past streaming revenue would be relatively modest should CRA prevail, it would have a significant dent on Franco’s revenues going forward, as much as 7% of net asset value (NAV) according to one analyst. We doubt CRA will prevail in full, but their pursuing the case in the light of their loss on the Wheaton case is surprising.
Franco remains a core holding, one of the very few truly “sleep-well-at-night” investments around, in any industry. We are holding.
Adrian Day, London-born and a graduate of the London School of Economics, heads the money management firm Adrian Day Asset Management, where he manages discretionary accounts in both global and resource areas. Day is also sub-adviser to the EuroPacific Gold Fund (EPGFX). His latest book is “Investing in Resources: How to Profit from the Outsized Potential and Avoid the Risks.”
Disclosure: 1) Adrian Day: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Royal Gold, Franco-Nevada, Evrim Resources, Midland Exploration and Lara Exploration. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: None. Funds controlled by Adrian Day Asset Management hold shares of the following companies mentioned in this article: Midland Exploration, Lara Exploration, Evrim Resources, Royal Gold, Franco-Nevada, Almadex Minerals, Ares Capital. I determined which companies would be included in this article based on my research and understanding of the sector. 2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. 3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy. 4) This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports. 5) From time to time, Streetwise Reports and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Evrim Resources, Midland Exploration, Franco-Nevada, Almadex and Lara Exploration, companies mentioned in this article.
