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KRO Weekly Summary: August 25 to August 31, 2019


KRO Weekly Summary: August 25 to August 31, 2019
The KRO Summary lists all Trackers and Blogs published during the designated weekly or monthly period so that so readers can easily catch up on what they may have missed. We no longer notify KRO members by email about new material except in special circumstances. When a Tracker is posted at KRO we notify members through the KaiserResearchOnline Slack Workspace. If you are an active KRO member and not registered on Slack, please let us know and we will send the invite. We will email the link to the KRO Summary to all KRO members when it is published. We will also Tweet the link so that Twitter followers can catch up at their leisure. The title links to the Tracker or Blog, the charts in the Discovery Watch Blog link to the YuoTube audio segment for that company, and the Tracker charts link to the free Corporate Profile. On occasion we may include commentary on the state of the market.
Although gold seems to have established a new trading range above $1,500 there has been some consternation among observers of the resource junior sector that a bull market has not clearly gotten underway. In my view, the slower the turnaround, the better for the sustainability of a bull market for the junior. A harmful aspect of the past two decades has been a strong linkage between market enthusiasm for juniors and the daily gold price movement. It will take time for the damage done by the horribly wrong predictions by gold bugs about hyper-inflation and fiat-currency debasement to be cast off. The US annual deficit is now $1 trillion and the US dollar is strong against currencies from other nations which have had to cut interest rates to cope with a slowing global economy created by Trump's trade war, which escalates against China to a new level on September 1. While US treasury debt is still yielding above 1% for all maturity terms, the amount of Japanese and European government debt with a negative yield stands at $17 trillion and growing. Some Swiss banks are now starting to charge a fee on individual customer deposits. The gold bug argument for higher gold prices never made any sense for resource juniors sitting on sub-economic deposits or exploring for new discoveries in a world that has been hit hard by exploration since gold stabilized at $400 after 1980. My recollection of the eighties and the nineties was that this was a very good time for discovery focused juniors and for those which looked at deposits in third world frontiers that had been forgotten because of the constraints created by Cold War geopolitics. When the price of gold is looked at on a 50 plus year time scale, the current rally looks very similar to what was observed in 2011, which stopped short of $2,000 and retreated almost to the $1,000 level. Since the most recent past guides future expectations, the fear is that gold may shoot above $2,000 but will struggle to establish a range in the $2,000-$3,000 range which offers not just excellent optics for the resource juniors, but if accomplished in the absence of serious inflation, will be economically profound for gold exploration and development.
The chart above shows how daily TSXV value traded is split between resource and non-resource listings. In the past 10 days the TSXV resource listing traded value cross above 50% for the first time since the summer and fall of 2017 when Novo's Pilbara conglomerate gold discovery caught the market's imagination. The Pilbara play has since stalled because Novo has been unable to measure the distribution and grade of nugget gold in the conglomerate unit, which may prove below the threshold needed to support large scale mining. The TSXV resource listings managed to command more than 50% of traded value for five straight days before dropping below 50% on Thursday and Friday. Total traded value has increased modestly, so much of the crossover is due to the dying cannabis bubble. But this is all just a beginning. Consider the chart below for the GLD Gold Trust which is backed by physical gold. The ounces held by the GLD are still not as high as they were in 2016 when a gold price rally supported a surge in TSXV resource junior trading value between January and August before the gold rally failed. But when you stand back and look at the GLD trading activity during the past few months, it's starting to resemble H2 of 2009. But unlike 2009 when the enthusiasm behind gold was based on skepticism about the US led effort to save the world from a global depression, this time around the enthusiasm will focus on the US led effort to create a global depression everywhere except in America.
Aug 26, 2019 - Tracker - Tracker: Market still unhappy about navigating Stardust's progress through the rearview mirror
Sun Metals Corp released a new batch of results for the Stardust project on August 26, 2019 which sparked another negative reaction as the market grappled with the junior's "conservative" strategy of not making it easy to understand what is going on with the evolving geometry of the 421 Zone. Sun Metals included only 2 graphics with the news release, a large scale plan view with an insert showing the location of the 3 drill pads from which all the reported holes were drilled, and a section of Li...
Aug 27, 2019 - Blog - KRO Weekly Summary: August 18 to August 24, 2019
Aug 30, 2019 - Tracker - Tracker: Game on again at Shovelnose beyond the fault that appeared to limit the South Zone
Westhaven Ventures Inc announced on August 27, 2019 that drill holes testing the upper portions of Vein 1 and 2 near the northern end of the South Zone had intersected a third parallel vein with high gold and silver values. The stock, which has been trending gently higher since early May, had a muted market reaction because the news release made no mention about any drilling outside the 400 m South Zone which appears to be cut off at the southern end by an up-thrown fault. While the discovery of...
Aug 30, 2019 - Tracker - Tracker: Spec Value Rating for Orestone Mining Corp (ORS-V)
Orestone Mining Corp has a Bottom-Fish Spec Value rating because it is the relaunch vehicle for key people involved in the early Refugio copper-gold discovery years of Bema who are first tackling unfinished business at the Captain copper-gold porphyry project in British Columbia before moving on to the Resguardo copper project in Chile where the goal is to find the porphyry system associated with a high grade copper skarn mine. Orestone went public in 2008 with the Captain project where the goal...
 
 

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