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Kaiser Media Watch Blog - September 1, 2021 to September 30, 2021


KRO Blog Overview
The KRO Blog is where unrestricted content of a time sensitive nature is posted. It includes the Kaiser Media Watch Blog which features content involving John Kaiser produced by third parties such as the Discovery Watch series by HoweStreet.com, interviews by outfits such as Investing News Network, SDLRC related commentary, the KRO Monthly Summaries, and just about anything else John writes that is not intended exclusively for the fee based KRO Membership.


Posted: Sep 29, 2021JK: Discovery Watch September 29, 2021 with Jim Goddard and John Kaiser
Published: Sep 29, 2021HSC: Discovery Watch September 29, 2021: What’s Cooking at Cooke Mountain?
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
Endurance Gold Corp (EDG-V)





Reliance Canada - British Columbia 3-Discovery Delineation Au Sep 29, 2021 - 0:00:01

Adamera Minerals Corp (ADZ-V)





Buckhorn 2.0 United States - Washington 2-Target Drilling Au Sep 29, 2021 - 0:11:02

Disclosure: JK owns Endurance Gold; Adamera is a Fair Spec Value rated Favorite, Endurance is a Good Spec Value rated Favorite

Posted: Sep 23, 2021JK: MIF Presentation September 16, 2021: Why the Resource Junior Hesitancy?
Published: Sep 23, 2021MIF: MIF Presentation September 16, 2021: Why the Resource Junior Hesitancy?

Direct YouTube link for John Kaiser MIF Talk

MIF Company Presentation and Backstage Interview Video Links
Consolidated Woodjam Copper Corp (WCC-V)
Presentation

Interview
Nevada Exploration Inc (NGE-V)
Presentation

Interview
Sonoro Gold Corp (SGO-V)
Presentation

Interview
Vanstar Mining Resources Inc (VSR-V)
Presentation

Interview

The September 2021 MIF presentation Why the Resource Junior Hesitancy? dwells on the question, why in the face of strong precious and non-precious metal prices have the resource juniors performed so poorly since Q1 of 2021? After the 2008 financial crisis resource majors and juniors underwent a surprisingly strong recovery in 2009-2010. But although gold did not peak until August 2011, gold producers and developers peaked in December 2010 and their price trend diverged from the gold price trend. As it turned out the market correctly anticipated a decade long bear market for metals. Once the Republicans gained control of the House in November 2010 they blocked all efforts by the Obama administration to use fiscal stimulus to help the American economy recover. The area where fiscal stimulus would have been most productive would have been to fund renewal of infrastructure, ideally in a transformational manner that supported a shift toward a clean energy base. It was left to the Federal Reserve to use monetary policy in the form of quantitative easing to prevent the US economy from fading back into a recession, the primary effect of which was to create a long running general equity bull market that rivals that of the roaring twenties before the 1929 crash and ensuing decade long depression. Even when Trump became president in 2017 with a promise to renew infrastructure the Republican controlled House and Senate refused to help Trump keep his infrastructure promise. They happily expanded the US debt through an unfunded corporate tax cut with bogus predictions about trickle down effects, but they supported nothing that would materially Make America Great Again. Not surprisingly the resource sector did not participate in the equity bull market until first gold took off in mid 2020 as the covid pandemic escalated, and then in Q1 of 2021 when other metals soared on the prospect that the new Biden administration would push for both a clean energy transformation and infrastructure renewal.

During the second quarter the market's enthusiasm for resource stocks stalled as it became apparent that the Republican Party had turned the covid vaccine into a political opportunity to sabotage a post-pandemic economic recovery in the hope that the Democrats would lose their razor thin control of the House and Senate in the November 2022 mid-term elections. The market tends to remember the most recent past and as far as the resource sector is concerned, it fears another lost decade as the United States stumbles onwards, fretting about the rise of China and adopting an End Timer fatalism toward climate change. The conditions and arguments are present for not just growing metal demand beyond existing supply capacity, but also for diversification of supply which is of particular importance to resource juniors not focused on gold.

The growing importance of ESG considerations, especially with regard to blockchain supported verification of raw material ESG credentials, and including the "Governance" concern about a company's long term vulnerabilty created by "just-in-time" supply chain strategies geared to secure short term profitability, is creating an opportunity for juniors to find and develop deposits that aren't just the "biggest and best" in the world. China grew into the second biggest economy on the back of globalized trade, but it is now engaged in a great power rivalry with the United States whose path is clouded with uncertainty. This represents the strongest case for higher real gold prices that are not just an adjustment for inflation. The financing boom of the past 12 months has left resource juniors in the best financial shape since the bear market began in 2011. Copper is above $4/lb, and gold at $1,750-$1,800 represents a significant real price increase not explained by recent inflation. Almost every metal is trading at higher prices, and if the IMF's projection that the global economy will grow 30% to $28 trillion over the next 5 years becomes reality, the increased raw material demand will not be met if prices sag back to 2011-2020 levels. If the market were truly concerned that the twenties will skip a roaring pandemic comeback and skip straight to a thirties style depression, we would already have seen a 15%-30% pullback in general equity markets. So why does the audience for resource juniors appear to have vanished?

In the case of gold juniors part of the problem is that the traditional audience for gold stories has had a free market, libertarian mindset, but that may always have been an illusion. Trump looked into the heart of what makes a Republican tick and saw a craving for a master-slave relationship that legitimizes coercion inflicted by "slaves" on others within an autocratic political structure. The only freedom this type seeks is freedom from having to make choices such as taking a vaccine that might have a side effect and may not work as well as hoped. Better to have things like catching covid and being hauled off to an ICU and ultimately the morgue just happen to oneself. It is this fatalism of the End Timer mindset that stands in the way of a full-blown post pandemic economic recovery that also deals with the cascading consequences of climate change.

Every Boomer is now over the age of 55, and by 2030 the last one will have hit the 65 retirement age. This generation controls most of the world's wealth but it to a large degree seems to see itself as a Last Generation that is very reluctant to secure a future for younger generations it will not live to experience. The traditional gold bug did not think like this; the traditional gold bug saw gold as a means to navigate beyond whatever misery governments inflict on the world. Although the gold bug was prone to apocalyptic hand-wringing, there was always the assumption of surviving, if not oneself, then at least one's children and grandchildren. But now, oh Gold, why have they forsaken thee?

Worrying about the disappearance of the traditional audience for resource juniors is probably a waste of time. The more important challenge is, what does it take to attract the younger generations to the resource junior sector? The problem is that the younger generations are hooked on momentum gambling for which resource juniors are only suitable during brief periods such as when a major new discovery is breaking out or the metal of which the junior has ounces or pounds in the ground is skyrocketing. But outside those moments of frenzy all that a resource junior, thanks to the finite valuation limit of a future mine, can offer is an opportunity for fundamental outcome gambling.

Gambling on a resource junior is tied to the exploration-development cycle for a project, which unfolds over time, with "events" punctuating key milestones along the way which reshape what the future fundamental outcome might look like. Visualizing a potential outcome and establishing a fair price to pay now for a bet on that outcome is not easy. Unlike momentum gambling where you don't need to know anything except the principle that the "trend is my friend" (until it isn't), fundamental outcome gambling is hard work. The junior resource sector needs to teach the younger generations how to visualize potential outcomes and it must also provide the information audiences need to construct their fundamental outcome bets. The 43-101 rules do severely restrict the amount of arm waving resource juniors can do compared to the winner-take-all stories of non resource juniors. This will not be an easy challenge and it requires the help of third parties such as myself.

In the case of the four companies in my MIF session I have constructed visualizations of plausible outcomes that allow me to see what sort of gain is possible if the bet pays off. Fundamental outcome gambling is not the same as trading which is just market direction gambling. Bitcoin is popular because it doesn't represent anything except itself. There are no real world grounded limits to the value of a Bitcoin because it serves no purpose. Unlike money it does not facilitate price discovery. If the plug were pulled on all the computers facilitating Bitcoin transactions, it might trigger mental health crises that suck up physical resources such as is happening now when anti-vaxxers end up hogging all the ICU units at the expense of ordinary people who get medically unlucky, but the world would otherwise not notice. In contrast buying a resource junior is to place a bet on the value of whatever the junior may discover through exploration, or, in the case of an existing deposit, what it will end up being worth when it has been walked through all the feasibility demonstration stages. Unless the younger generations learn how to place fundamental outcome bets on resource juniors, this sector will disappear.

The images below are a graphical presentation of the rational speculation model applied to outcome visualizations created for the flagship project of each company in John Kaiser's MIF session. All 4 companies are currently KRO Favorites. Each graphic is a link to an unrestricted version of the Outcome Visualization which updates nightly to reflect current stock and metal prices as well as the USD:CAD exchange rate. It also shows the impact on the future value at different metal prices. The more detailed OV Report that includes the OV assumptions is restricted to KRO members.


Posted: Sep 22, 2021JK: Discovery Watch September 22, 2021 with Jim Goddard and John Kaiser
Published: Sep 22, 2021HSC: Discovery Watch September 22, 2021: Why Sonoro Gold Lost a Third of its Value
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
Sonoro Gold Corp (SGO-V)





Cerro Caliche Mexico - Other 7-Permitting & Feasibility Au Ag Sep 22, 2021 - 0:00:01

Nevada Exploration Inc (NGE-V)





South Grass Valley United States - Nevada 2-Target Drilling Au Sep 22, 2021 - 0:13:45

Disclosure: JK owns Nevada Expl Inc; Nevada Expl Inc is a Bottom-Fish Spec Value rated Favorite, Sonoro Gold is a Fair Spec Value rated Favorite

Posted: Sep 9, 2021JK: Discovery Watch September 9, 2021 with Jim Goddard and John Kaiser
Published: Sep 9, 2021HSC: Discovery Watch September 9, 2021: What Is Driving Forum Energy Metals Higher?
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
Forum Energy Metals Corp (FMC-V)





Love Lake Canada - Saskatchewan 2-Target Drilling Ni Cu Pd Pt Sep 9, 2021 - 0:00:01

Colonial Coal International Corp (CAD-V)





Huguenot Canada - British Columbia 6-Prefeasibility CM Sep 9, 2021 - 0:15:23

Disclosure: JK owns none of the companies mentioned; Forum Energy is a Fair Spec Value rated Favorite; Colonial Coal is Fair Spec Value rated

Posted: Sep 2, 2021JK: Discovery Watch September 2, 2021 with Jim Goddard and John Kaiser
Published: Sep 2, 2021HSC: Discovery Watch September 2, 2021: What Caused NuLegacy Stock Plunge?
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
NuLegacy Gold Corp (NUG-V)





Red Hill United States - Nevada 2-Target Drilling Au Sep 2, 2021 - 0:00:01
New money continues to shun the resource junior sector which does not lend itself well to momentum gambling unless gold is trending higher, with capital inflows slowing when the gold price stalls and reversing whenever gold suffers a pullback. Even then the momentum crowd is attracted mainly to juniors with advanced projects undergoing feasibility demonstration because investors can see the valuation impact of a future higher metal price. But this fundamental valuation basis for a mine also limits momentum gambling compared to "tradeables" like Bitcoin and "winner take all" concept stocks because it is too easy for shareholders and short-sellers to see when a future mine's valuation is too high. Momentum gambling does kick in when a junior makes an exploration discovery that appears to have lots of size potential. Novo's Pilbara Wits 2.0 discovery achieved this characteristic, but fizzled when the measurement problem could not be solved. The initial uncertainty about how big the size of the prize can become triggers what is called S-Curve activity, which is the tendency of a junior to achieve a peak valuation during the discovery delineation stage that matches what the discovery ends up being worth after it has been marched through all the feasibility demonstration stages of the exploration-development cycle. Until a junior delivers a discovery hole whose implications are immediately evident, the market has to treat the junior as a vehicle for fundamental outcome gambling. This means coming up with a potential plausible outcome, quantifying it in monetary terms, and understanding the milestones and associated timelines needed to validate the potential outcome. NuLegacy Gold Corp and Nevada Exploration Inc are KRO Favorites because they are chasing world class scale Carlin type discoveries in Nevada based on well thought out targets. NUG dropped sharply on Friday after reporting that the first 3 core holes along a 3.5 km target failed to intersect a Goldrush Clone, namely a long, fat brecciated cigar loaded with gold mineralization. Although assays for 5 holes within the Rift Anticline are still pending, the market is expecting more of the same, hence the harsh reaction. My NuLegacy Goldrush Clone Outcome Visualization showed the valuation upside for the stock if drilling yielded evidence of a Goldrush scale discovery. NUG is now where NGE ended up after completing 10 core holes at South Grass Valley in 2018-2019. Both started out as geologically blind targets. In the case of NGE the target under basin gravel cover was generated by a groundwater sampling program. Drilling revealed that the gravels were hiding a highly altered Lower Plate window at bedrock, unlike the outcropping unaltered Lower Plate rocks to the south that had received unsuccessful exploration attention in the past. But investors were not rewarded with a bi, fat Goldrush cigar, just lots of Carlin pathfinder smoke and whiffs of ppb gold here and there but not enough to convince anybody that this Carlin system was fertile with gold. NGE followed up with a shallower RC program in 2020 which indicated the direction of the fluid flow and led them to the East Golden Gorge target along a 3.5-4.0 km structural feature they call the Water Canyon Corridor. This target is deeper than the layer cake tested by the core and RC holes because the layer cake plunges into the WCC. NGE completed one hole (#12)at the northeastern end of the grid which confirmed their structural model for the western side of the WCC and delivered a long very arsenic juiced up interval in the CLM formation, which is this region's likely Wenban equivalent. Assays are due and may even be in hand. At this point they do not need to yield an ore grade interval, just proof that the SGV hydrothermal system is fertile with gold. A second hole (#13) was started at the southern end of the WCC but it has been stranded in gravel just above bedrock for more than a month after the drill crew bolted for a better job elsewhere. Hole #13 is arguably in a much better location than #12 because it will test where the CLM plunges into the WCC on the eastern flank of a Jurassic intrusion which would have crackled the layer cake a lot more than 3.5 km to the north. For NGE's East Golden Gorge target I created a North Carlin Deep OV which imagines finding smaller very high grade zones such as Deep Post, Meikle and Rodeo. This is a much higher value potential outcome than a Goldrush Clone, and it is the type of outcome NuLegacy will likely refocus towards once it has all the assays and constructed a geochemically contoured 3D geological model of what is going on at Rift Anticline. That means a 2-3 month wait before we find out where NUG's team thinks the sponges that soaked up ore grade gold are located. The market's negative reaction reflects the realization that Rift Anticline is no longer about shooting a Goldrush koi in a barrel, but fishing for much harder to catch smaller but fancier fantail goldfish.
Discovery Harbour Resources Corp (DHR-V)





Caldera United States - Nevada 2-Target Drilling Au Sep 2, 2021 - 0:11:02
I'm giving Discovery Harbour more attention because they are half way through their 6 hole Caldera drill program that targets the boiling zone at a 300-500 m vertical depth below modest gold zones at surface in the hope that Sleeper style bonanza grades evolved in this low sulphidation epithermal system. All historical drilling has been shallow with the most recent efforts killing off the potential for another open-pittable disseminated Round Mountain deposit. The program will be done by the end of September, with assays arriving from mid October through November. They already know Caldera is fertile with gold but what they do not know is if bonanza veins that piled up gold evolved within the untested deeper boiling zone. Sleeper is an LSE system found under gravel in northern Nevada which is a linear structurally controlled high grade deposit surrounded by an envelope of considerably lower grade disseminated mineralization. Because the depth of such a system at Caldera will be beyond open-pit mining, I have created a Caldera 1,500 tpd UG Sleeper Clone Outcome Visualization that just assumes the high grade portion of the Sleeper system. What intrigues me about Discovery Harbour, is that Newcrest, which has optioned up to 75% of the Fortuity 89 project out on the gravel flats to the west of Caldera, hopes to mount a similar 7 hole RC program testing 300-500 m beneath the LSE style altered outcrop in October, provided it can get hold of a drill rig and crew. I have applied the same Sleeper deposit and cost assumptions to create a Fortuity 89 1,500 tpd UG Sleeper Clone OV to demonstrate the difference net interest makes for the upside stock price potential. If Newcrest gets its drill program underway in October, which will liekly also take two months to complete, Discovery Harbour shareholders will be in a position to benefit from a discovery hole well into Q1 of 2022. S-curve style momentum gambling, as with NGE and NUG, will not erupt until a clear cut discovery hole is delivered. But Discovery Harbour is now in the timeline zone to justify fundamental outcome gambling.
Disclosure: JK owns Nevada Expl Inc; Nevada Expl and NuLegacy are Bottom-Fish Spec Value rated Favorites; Discovery Harbour is Bottom-Fish Spec Value rated

 
 

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