It’s Deja vu for gold miners as market near final puke in gold miners, plus another surprise.
Deja vu For Gold Miners
July 8 (King World News) – Fred Hickey: Gold rallies 6 consecutive days and miners do nothing. Today, gold declines a minor $5 (-0.3%) and miners sink 3% (on a day US$ drops and with negative real yields -3.7% – great conditions for gold). Investors holding miners can’t take it any more and puke (capitulate). Deja vu January 2016.
In Dec. ’15 gold double-bottomed near $1050. Gold rallied in fits and starts in first few weeks of January ’16 and miners ignored the rally. Even though gold had bottomed weeks earlier, miners didn’t bottom until 3rd week of January (final puke). Frustrating. Miners then doubled in 3 months. Not saying this a repeat (2016 was a deep bear market low). Just saying it feels similar with fundamentals so good (miner margins near $800 an ounce, cash flows great) – yet investor negativity for miners is so high, ignoring the recent rally in gold – assuming it won’t continue…
Billionaire Eric Sprott bought a 20% stake in a mining company
to find out which one click here or on the image below
Graddhy out of Sweden: One needs to have confidence in the precious metals bull in order to play it right. If you do not have that, you risk messing things up. And confidence comes from knowing the macro fundamentals and from understanding the price movements.
Interest Rates Set To Plunge
Albert Edwards, Former Global Strategist at Société Générale: Key development this morning is US 10year at 1.275%. That looks to me like a clear break of resistance at 1.32% (see chart below). Looking at that chart there ain’t much now to stop a move down to test the Aug 2020 low of 0.5% (maybe dallying briefly at the 6 May 2020 spike to 0.9%).
US 10-Year Yields Set To Plunge To 0.5% Lows
Also of importance…
One Of The Greatest Opportunities In The Royalty Sector
Eric King: “Ryan, your company is now paying a 1% dividend and your PE is under 20, which is astonishing for a royalty company with tremendous growth in revenue and cash flow ahead of it. As an example, Franco Nevada is paying a .80% dividend, and their PE is 48, so your stock is way undervalued and is mostly likely set to double in price.”
Increased Dividend And A Major Deal With Pan American Silver
Ryan McIntyre: Yes, Eric, and a lot has happened at Maverix since we last spoke. We continue to have many catalysts that should drive the share price higher. In May we increased our dividend by 25% to a yield that is much better than you can get in a bank or with short-term Treasuries. Other recent big news is the acquisition of a royalty portfolio from Pan American Silver, where we acquired six new royalties for just under $10 million in cash and shares.
So Pan American Silver continues to express faith in management’s ability to execute and remains a large shareholder by owning roughly 8% of Maverix shares outstanding. By the way, these six royalties from Pan American Silver add royalties on two projects in Canada each with over two million ounces of gold resources, a royalty on a historical mine in Peru that is now ramping up, and three other royalties on exploration properties with excellent land positions. So this will give us additional exposure to production and a lot of exploration potential.
An Even Bigger Increase In Revenue And Free Cash Flow
But we are also very excited by the organic growth that we are seeing in our existing royalty portfolio. It was just announced last week by Karora Resources that they are going to double the Beta Hunt gold production in the next few years. And, Eric, as a reminder we’ve got a 4.75% gold royalty on that asset. What that means is that will add about 10% to our revenue base going forward. So that is very big news for us. The other big news is the Kone Gold Project, which is run by Montage Gold that just completed a PEA that showed it would add somewhere on the order of 14%-15% revenue growth for Maverix when it’s developed.
The Bottom Line
The bottom line is we are generating a lot of revenue and free cash flow. And given that we’ve got 121 royalties and streams, 13 of which are paying, we see a lot of potential for our existing portfolio to continue to create a lot of value for Maverix shareholders going forward. Maverix Metals, symbol MMX in Canada and the US.
Also Released: There Is Growing Concern Governments Will Confiscate Gold, But Now There Is Even More To Worry About CLICK HERE.
Also Released: Multi-Billionaire Hugo Salinas Price Just Warned “Enormous Suffering Lies Ahead” CLICK HERE.
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