Latest / Financial Survival Network / Mining for Opportunity: The Gold Sector's Bright Future - David Erfle #6110

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Mining for Opportunity: The Gold Sector's Bright Future - David Erfle #6110 · Financial Survival Network

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  We did have a breakout to an all time I recently, but it was
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  only a daily breakout, and then the gold price came right back down into
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  that three month consolidation. So it's building a stronger base here. Gold bounced
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  off. It's a rising eighteen week moving average has been pretty strong support for
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  the past year or so. You were listening to Carrie Letz's Financial Survival Network
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  where you get valuable information. You just can't find anywhere else to thrive in
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  today's trying times. You need the Financial Survival Network now more than ever.
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  Go to Financial Survivalnetwork dot com and get your free newsletter and gift. Financial
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  Survival Network now more than ever, And welcome you are listening to and watching
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  the Financial Survival Network. I'm your host, Carrie lets Hey, what's going
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  on with the price of Goal silver? Silver's under thirty dollars? It's not
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  a huge bargain. Is it going up the three hundred? Like Eric Sprout
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  predicts, Well, let's find out with David Earfley, Junior minor junkie with
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  a y dot com and has got a question for David myself. Email kl
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  Kerrie. Let's go out David, how are you doing there, Ron Grey
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  Kerry, how are you always nice to see it? Oh? Lece so
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  go Like, we haven't been able to break twenty five hundred yet, so
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  we're getting closer, closer, closer, not quite there. Every time it
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  gets closed, something seems to happen. Yeah. What Well. Since we
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  had that monumental breakout of that thirteen year cup and handle pattern above twenty one
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  hundred back in March, gold's been making higher highs and higher loads. You
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  know, we had a four hundred and fifty dollars move in the space of
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  about nine weeks, and that's that move's been consolidating for about three months now,
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  but it's making higher highs and higher lows in that consolidation. We did
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  have a we did have a breakout to an all time high recently, but
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  it was only a daily breakout up and then the and then the gold price
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  came right back down into that three month consolidation. So it's building a stronger
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  base here. Gold bounced off. It's a rising eighteen week moving average has
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  been pretty strong support for the past year or so, so it came down
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  to test that, which at the time was around twenty three hundred, and
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  silver has just tested, it's eighteen We move a average here this past week,
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  I think it was this week, and it's tried to it's it's trying
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  to stay in its consolidation as well, So you know, it's all it's
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  all good as far as the metals are concerned. I mean, they're they're
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  at a bull market. They're making higher highs and higher lows. So question
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  it is, do we go buy silver now? Is it worth doing it?
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  Do we this the run? What are you there? Well, you
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  know, silver's got a long way to go as far as catching up to
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  the gold price. You know, the inflation adjusted gold CPI inflation adjusted gold
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  prices around twenty six ninety something like that, which which you know we're not
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  too far away from that, but and that's from nineteen eighty. But when
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  the Hunt Brothers tried to corner the silver market in nineteen eighty, the the
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  you know, the silver price got up to fifty bucks and the inflation adjusted
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  price for silver CPI inflation adjusted price for silver is around one hundred and fifty
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  hundred and sixty dollars. So silver is still massively undervalued in relation to the
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  gold price, and as well as the gold stocks. You see, you
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  know, the goals mining sector and silver both have been underperforming gold for quite
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  some time. Where do you get more leverage with the stocks or with silver?
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  I mean, if it's going to go up to one hundred and fifty,
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  that's that's a five bagger if it goes up that high. What did
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  the stocks do? Are they one hundred five hundred beggars? Yeah? Well,
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  I mean you said your question was you go with silver or the stocks?
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  How about silver stocks? But there's really not that many that I think
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  are worth investing in. You got you got to get a hold of a
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  basket of the right ones, and all that's going to take is just a
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  one or two of them to fly, and you're going to do really well.
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  I mean, this is what happened with me. Fortunately, back in
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  the two thousand and eight to twenty eleven run up. I got into a
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  couple of silver stocks. At the time, they were relatively unknown. One
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  was First Majestic Silver and the other one, yeah, and the other one
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  at the time was Wheat and was wheatn yeah, over called silver Wheaton then
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  and I got into those really heavy and you know, they were multiple,
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  you know, ten fifteen to twenty baggers for me. Yeah, heya.
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  You know, I really cleaned up on the first Majestic. They hadn't listed
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  warrants back then, and I loaded up of it. I mean I didn't
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  put enough money in it, unfortunately, but it was like a twelve bagger
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  in like two weeks. Yeah, yeah, I think there, Yeah,
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  warrants you get. You got to get the time being on those and you
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  get to do really well. Yeah. So but now there aren't, like
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  you said, it's not any silver pure plays that you want to touch,
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  right, yeah, absolutely, You just you've got to really do your homework
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  and get into the right ones at the right time, and then be very
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  patient. And with what's going on in the world, it seems to me
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  like we're looking all over the world for this stuff, but the jurisdiction or
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  risk is increasing by the day, right it is. And then you have
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  these top tier jurisdictions also in North America, where you know, they're fabulous
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  jurisdictions to operate in. But as far as getting the getting your your project
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  permitted, that could take a really long time. So for for instance,
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  and you know in Canada and in the US, it might take you know,
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  seven eight, nine years to finally get your your proud year project permitted
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  once you get close to to the feasibility stage and you've got to wait several
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  more years to get it permitted. But then the flip side of that,
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  you've got some of these West African companies cut countries where the governments own you
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  know, a portion of the mind and they want to get you permitted quickly.
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  So you know, you could go from discovery to construction within three or
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  four years in some of these West African countries. That's like the only place
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  really in the world where you can do that, right absolutely, yeah,
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  but you just you but but then you know you've got to deal with with
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  with with the West African risk as well. Yeah, so you've got to
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  governments come and go like forget it, right, Yeah. I mean there's
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  you know in a place like Burkina Faso where there's you know, there's a
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  coup every couple of months, there's you know, but as far as the
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  but as far as the country is concerned, you know, these these mines
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  get permitted quickly. A lot of gold mines have been built in Burkina Faso
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  in the past twenty years, and their discoveries are made and then permits are
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  given quickly and the mind is constructed. Uh and and the company does really
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  well, but still not as well as a top tier jurisdiction because uh,
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  investors see that it's West Africa. They feel, okay, this is this
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  is a risky place to do business, even though the mine is doing well,
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  the company is doing well. That you've got it. You've got you
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  know, a discount on the share price, and of course you got productivity
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  issues once you get outside if you get it so called top tier jurisdicitions,
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  right right exactly, Yeah, wild, yeah, I mean it's it's yeah,
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  it's it's funny because you know, during the last major bowl market in
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  the mining sector from two thousand and one to twenty eleven, especially towards the
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  end there, permitting really wasn't an issue. Uh. You know, investors
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  they were just clamoring for more ounces. They were, they were there,
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  they were you know, they were they were telling their the majors that they
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  were owning, Hey, we need more ounces golds flying you know, care
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  we needed at any price. So they invested in you know, these low
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  grade bulk tonnage projects just to get ounces on their books, and permitting wasn't
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  it wasn't even issue. Nobody even looked at that at them. So when
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  we last spoke, we talked about a little company probably remember called Numat,
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  Yes and Numat at the time I believe was forty one or two. It's
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  now hit forty eight, and that's anticipating blockbuster earning. It's coming up.
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  I was planning to buy options, but in the account where I wanted to
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  buy them, I didn't have options. Authorization didn't. But I knew it
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  was going to happen because we said they're doing like a couple of million ounces
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  a quarter, and you multiply that time it's three four hundred dated right,
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  hidden that's like right, And they had already written everything off. They were
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  smart, Like year two years ago, they said we're getting rid of all
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  this stuff. They wrote off everything but the kitchen, saying they took their
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  it because they knew this was coming right, smart, right, Yeah,
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  absolutely, I mean, and now they're you know, they're basically in a
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  league by themselves after they gobbled up New Crest and they're they're producing nearly twice
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  as much as the number two gold miner, which is now a Nico Eagle.
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  You know, Eric keeps keeps getting getting lower and lower as they're they're
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  not jumping on the M and A bandwagon. But as far as Neumon is
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  concerned, you know, it's interesting you bring them up because they're going to
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  be kicking off Q two earning season after the bell today here on Wednesday,
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  and I expect their profits to be record breaking, monster profits because if you
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  take a look at what happened with them in Q one, you know,
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  they they they had they had blowout profits and the stock went up twelve and
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  a half percent the day they announced earnings, and it was by far the
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  largest gainer on the S and P five hundred. And by the way,
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  Numon is the only gold miner on the five hundred, and we're going to
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  have these they're there their Q two announcement after the bell today, like I
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  said, and the gold price back then averaged around twenty seventy to twenty ninety
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  that announce back in Q one, and in Q two the gold price averaged
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  two hundred and fifty dollars higher, and the oil price, which is probably
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  about fifty to sixty percent of Newmont's costs. Because you know, they have
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  these huge open pit diesel guzzling gold mines, right, and that the oil
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  price went down sixteen per sixteen dollars during Q two, so their costs are
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  probably going to be either flat or a little lower, while the gold price
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  went up two hundred and fifty dollars. So I expect numont is probably going
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  to be announcing another monster quarter. And nobody's really paying attention as far as
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  the street's concerned. You take a look at the at the at the volume
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  and GDX and GDX j ever sets it ever sets gold hit another all time
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  high here a couple of weeks ago. The volume has been decreasing down,
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  down, lower and lower as everybody's still concentrating on the stock market, right,
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  So nobody's really expecting what new mas Is is about to announce, I
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  think, and you know, once if they if they come out with another
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  blowout quarter, that's back to back quarters. They're going any fund managers and
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  been big money traders there, they're they no longer can ignore this sector.
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  You know, they've been ignoring the gold mining sector for the past decade.
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  I mean in twenty thirteen, twenty twelve, twenty thirteen, when the gold
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  price lost fifteen hundred dollars an ounce. That's when the bottom fell out of
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  the mining sector and the generalist investor left in mass and they've yet to return.
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  And you and the evidence of that is just looking at the volume of
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  GDX and GDXJG just keep sitting lower and lower and lower. And the old
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  adage never short a dull market comes to mind. You know, we've got
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  today, We've got the stock market is rolling over and gold and the gold
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  stocks are going higher. They're starting to decouple. That's not a trend,
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  you know, that's that this is this is just day one. I don't
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  know if that's going to continue, but I know the Magnificent seven stocks lost
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  about a one point three trillion in value in one week recently. They went
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  to a to a total market cap of seventeen trillion down to fifteen trillion recently
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  here. So I think there's going to see You're going to start to see
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  some sector rotation coming into the gold mining stocks, especially if you see back
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  to back blowout quarters from these miners. Yeah, well, look got a
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  nimock was an easy one. And the best thing was even in Q one
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  they had some write offs there that kind of artificially the press, right,
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  and they announced divesting their their by divesting some non core astes, they're going
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  to pay off some debt. So their ballant sheet is getting stronger and stronger.
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  And that's happening with a lot of these gold companies, right, I
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  mean, that was the thing right back during the last full market. Their
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  balance sheets were crap, and they took on all these projects that needed higher
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  gold prices and they did it with stock. So it kind of kind of
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  ruined the industry for a decade. But now they've come back strong and they've
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  got really they got really strong ballot sheets. They're paying dividends. I mean
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  back when I got into this sector twenty years ago, it was unheard of
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  that a minor paid a dividend. Definitely, So they're paying dividends, they're
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  doing stock buybacks, their ballot sheets are healthy. Now they've got to start
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  concentrating on growth. So that's where the juniors coming because the reserves are declining.
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  We know exactly the resources they're declining, and they got to be looking
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  for they discoveries and that's where the high quality not an oxy war on jiniors
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  come in. And you know there's about ten percent of them out there that
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  have something. But you know, I've been in the business long enough,
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  like you. I was looking at a list of companies from It's Ticket was
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  back in like twenty eleven or maybe it was twenty thirteen that one of the
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  conferences, and you know what covered there were some old dogs that just never
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  die. But most of those companies they've been I don't know if they've been
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  rebranded, they didn't exist anywhere, but they've been gobbled up or they've gone
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  under. Yeah, I mean there's yeah, the turnover is is you know,
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  could be large. You know, there's there's a lot of lifestyle companies
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  in the junior sector. I mean, I'm with Rick Rule, you know.
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  I mean that eighty eighty five percent of them are uninvestable. So you
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  know, really got to get you got to you got to sharpen your pencil
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  and do your due diligence and make sure you're getting into the right one because
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  you know, you want to you want to make sure to to to accumulate
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  a basket of them because like I said before, you know you're gonna have
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  You're gonna have some dogs. It's gonna happen. Yeah, you know,
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  it's it's like a it's like a hitter in baseball, right, you're in
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  the Hall of Fame if you if you go twenty years and you have a
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  battering, you average over three hundred. Well, it's the same thing in
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  picking junior stocks. You have you know, if you get three out of
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  ten, you're doing well, like any think. So all right, that's
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  obviously why people need to subscribe to Junior minor Junkie and just tell us what
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  you do and just let me stay up front. What I'm like best is
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  when you give a buy reco or a settle, you wait before you execute
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  your own trade to let your subscribers get in, which is the utmost of
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  them. Heygardie in an area where it's sometimes lacking. Absolutely, Yeah,
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  when I started my newsletter back and now back in April of twenty seventeen,
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  it doesn't seem like it was long ago. But I wanted to make sure
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  that I was completely transparent and that basically, you know, I'm whatever I
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  invest whatever I'm I'm recommending others invest in that I'm going to invest in also,
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  and I want to want to give them the opportunity to get in.
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  At the same time, I do. So what I do is I if
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  I'm if I'm about to purchase a a position in a junior, I'll do
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  a detailed company report on the stock and I'll send it out to my subscribers
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  the day the day before I plan on beginning to accumulate the stock, so
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  we could kind of all try to get in it together and hold it and
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  hold it for a period of time to where it's going to make us at
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  least three to ten times our money. I won't touch a junior unless I
• 16:17
  see at least three times potentials three times upside potential in the stock. So
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  basically, it's a completely transparent service. I let everybody know what my trades
• 16:26
  are, what I buy, what I sell, how much I made,
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  how much I lost, and it's it's done really well. I got a
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  great subscriber base, and I work very hard. You know. The the
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  newsletter comes out every week. It's a weekly newsletter, and even if I'm
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  on vacation, it's sure it's a scale down one. But I still put
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  out of weekly newsletters because that's because I love I love my job and I
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  love helping people make money in the sector. Hey, all right, so
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  we've got a cross over, David or myself she meet emailed Kate el at
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  Caerrie Loves dot com. The link to junior writer Junkie dot com is in
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  the show notes of this interview on Financial Survival Network dot com. While you're
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  there, sign up for your free newsletter. David, It's going to be
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  interesting and be interesting to see how long this ride lasts. Absolutely, yeah,
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  I think the second half of the year is going to be really is
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  going to do really well for investors in the in the junior sector. Thanks
• 17:22
  for listening to Carrie Letz's Financial Survival Network, your solution to today's trying times.
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  For the latest, go to Financial Survival Network dot com. Financial Survival
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  Network now more than ever,