Category: Natural Resources

Wednesday, April 1, 2020

Sierra Metals (SMTS)

Full Year 2019 Results In Line; SMTS Positioned to Weather Near-Term Challenges

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico. Yauricocha is an underground polymetallic mine using the sublevel block caving and cut-and-fill mining methods. Bolivar is a copper-silver-zinc-gold underground mine using room-and-pillar mining method. The majority of the revenue is earned by selling of the mineral concentrates to its customers in Peru.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Full year earnings in line with expectations. Sierra Metals reported 2019 earnings per share of $0.03 which was in line with our estimate. Full year adjusted EBITDA amounted to $65.3 million. Operationally, the company executed well during the year and increased metals production reflected successful capacity expansions at each of the company’s mines.

Updating estimates. We have lowered our 2020 EPS and EBITDA estimates to $0.21 and $109.5 million, respectively, from $0.24 and $124.9 million. Our revised estimate reflects lower copper prices and higher treatment and refining costs. While we have lowered near term estimates, we think the long-term outlook remains favorable. We forecast 2021 EPS and EBITDA of $0.28 and…






Click here to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Paper Gold, Physical Gold, and Miners

(Note: companies that
could be impacted by the content of this article are listed at the base of the
story [desktop version]. This article uses third-party references to provide a
bullish, bearish, and balanced point of view; sources are listed after the
Balanced section.)

When countries finance their way around a problem, they open the door to inflation. The current global “stay at home” economic environment has caused the U.S. and countries across the globe to find creative financing to help soften the financial burden on their citizens. In most cases, this involves “creating money.” Countries recently began creating money in many different forms, and they are creating a lot of it.

This increase in currency circulating means there is a much larger supply. Basic economics says when the supply of something goes up, unless it’s met with an equal increase in demand, its value goes down. In this case, the demand for what we purchase with cash is not expected to rise substantially. This could lead to a devaluing of currencies, which means it buys fewer goods and services. This is the definition of inflation.

During periods when the forecast of a currencies value is down, investors often hold a portion of their money in gold. This increased demand pushes gold prices higher. Therefore, when inflation remains high over a more extended period, there’s increased demand as gold becomes a tool to hedge against inflationary conditions.

We had seen this scenario begin to take place earlier this month and then reverse. According to a recent industry report by Noble Capital Markets, Inc., “ Year-to-date through March 23, the gold futures price increased 3.0% from $1,529.30 per ounce at year-end 2019 to finish at $1,575.55. During the same period, the Van Eck Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) were down 25.1% and 35.9%, respectively, while the S&P 500 index was down 30.8%.” the report goes on to describe, “ On March 9, gold reached a high of $1,704.30 before reaching a low of $1,450.90 on March 16.”

Considering the monumental uncertainty in other asset classes, the continued low-interest rate environment, and inflationary ingredients, one would ordinarily expect gold to have not backed-off its March 9 highs. Some forecasts were for the metal to continue upward. The decline from its high has been attributed to institutional investors who held paper representing gold. This paper could include futures contracts, ETFs, or any other contractual certificate backed by physical gold. The traders were selling their paper to meet liquidity needs, reduce leverage in their portfolios, or take profits. Demand for gold actually was increasing, but there was a problem. The reason for physical gold to have dipped was likely the ability to physically deliver. Unlike wireable securities or shares in a fund, gold can’t be “zapped” into your account via any type of wire or electronic transmission. The problem with transacting in physical gold then is availability, finding it in the place, and the form, that the investor requires. All indications are that there is ample gold. The problem lies in buying a bar, or settling a futures contract with so many industries on lockdown; this created a new hurdle. Recent demand is up significantly, the Noble Report states, “Total U.S. Mint gold sales in March 2020 increased to 120,500 ounces compared with 7,000 ounces in February and 60,000 ounces in January.” Compared with the previous year, “In 2019, gold sales amounted to 65,000 ounces in January, 13,000 ounces in February, and 11,500 ounces in March.”  

Although not back to it’s high,
gold (GDX as proxy) has rebounded as the stock market has rebounded.

An article in Forbes magazine dated March 26, 2020, points out that the stocks of gold miners, which went down with the overall market, rather than track gold investments more closely, should rebound. “…the fact that the miners got crushed when gold didn’t is an unusual event and one that could be a useful moment for investors who want gold stocks in their portfolio.” There are two other considerations that investors who are looking at the mining sector should consider. ETFs of gold miners are designed to hold a broad array of companies, including some with operations shut down temporarily. Investors are forward-looking and should not necessarily shy away from companies presently idle due to CoVID-19; however, being aware of what is in any ETF is essential. An alternative is to develop a portfolio with individual stocks designed to minimize this issue. This may take more time plowing through research reports and company investor websites but may yield better results.

The price swings of mining stocks (GDX-ETF) have been
more pronounced than gold itself.

For mining companies, an increase in gold prices translates to more revenue per ounce, at the same time lower fuel costs per ounce decreases production costs. In an economic environment with less noise, this would be considered very bullish for miners.

Uncertainty leads to less interest in equities and a movement
toward safe harbor assets such as cash, gold, and US treasuries.

The price of gold and share price of companies mining precious metals have certainly not escaped volatility. As with other asset classes, the pandemic provides its own unique set of headwinds. At the same time, they do stand to benefit from talk of inflation and concern investors have surrounding the overall markets.

Long after the current turmoil is over, investors will have vivid memories of what could happen, they should consider owning gold investments as part of the core of their portfolio.

Suggested Reading:

What’s
going on with Gold

Current
Efforts to Combat Coronavirus Pandemic

Will
Interest Rates Test Negative for Coronavirus?

 

Sources:

What’s going on with Gold

Want
to buy gold coins or bars? Good luck finding any

Crushed Gold
Miners Could Be About To Shine

Monday, March 30, 2020

Ely Gold Royalities (ELY:CA)

A Golden Opportunity to Invest in an Emerging Gold Royalty Company

Ely Gold Royalties Inc is an emerging royalty company with producing and development assets focused in Nevada and the Western US. It offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term gold royalties.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating coverage. Ely Gold is an emerging gold royalty company with a growing asset portfolio that includes 43 royalties, including three that are producing. Thirty-three are deeded royalties, while 10 are on leased property. Additionally, the company has 19 properties optioned for sale to third parties that provide a source of revenue under option/sale agreements. Lastly, the company has 35 properties available for sale and/or option. Ely Gold has made several significant transactions during the past six months which are expected to accelerate revenue and cash flow growth beginning in 2020 and potentially support the initiation of a dividend in 2021. The company is well-capitalized to fund its growth initiatives.


Attractive mining jurisdictions. The company’s projects are in favorable mining jurisdictions in the United States and Canada, including Nevada, Idaho and Quebec. Most of Ely’s properties are in Nevada, which ranked third among 76 mining jurisdictions in investment attractiveness in the 2019 Fraser Institute Annual Survey of…





Click here to get the full report on Channelchek desktop.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Monday, March 30, 2020

Ely Gold Royalities (ELY:CA)

A Golden Opportunity to Invest in an Emerging Gold Royalty Company

Ely Gold Royalties Inc is an emerging royalty company with producing and development assets focused in Nevada and the Western US. It offers shareholders a low-risk leverage to the current price of gold and low-cost access to long-term gold royalties.

Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Initiating coverage. Ely Gold is an emerging gold royalty company with a growing asset portfolio that includes 43 royalties, including three that are producing. Thirty-three are deeded royalties, while 10 are on leased property. Additionally, the company has 19 properties optioned for sale to third parties that provide a source of revenue under option/sale agreements. Lastly, the company has 35 properties available for sale and/or option. Ely Gold has made several significant transactions during the past six months which are expected to accelerate revenue and cash flow growth beginning in 2020 and potentially support the initiation of a dividend in 2021. The company is well-capitalized to fund its growth initiatives.


Attractive mining jurisdictions. The company’s projects are in favorable mining jurisdictions in the United States and Canada, including Nevada, Idaho and Quebec. Most of Ely’s properties are in Nevada, which ranked third among 76 mining jurisdictions in investment attractiveness in the 2019 Fraser Institute Annual Survey of…





Click here to get the full report on Channelchek desktop.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, March 24, 2020

Minerals Industry Report

What Is Going on With Gold?

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Listen To The Analyst

Refer to end of report for Analyst Certification & Disclosures

• Year-to-date gold returns have been lackluster.   Year-to-date through March 23, the gold futures price increased 3.0% from $1,529.30 per ounce at year-end 2019 to finish at $1,575.55. During the same period, the Van Eck Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) were down 25.1% and 35.9%, respectively, while the S&P 500 index was down 30.8%. On March 9, gold reached a high of $1,704.30 before reaching a low of $1,450.90 on March 16.
• Institutional investors seek liquidity. While gold had performed reasonably well up until the recent market meltdown, the recent weakness in the gold price has been attributed to institutional investors selling positions to raise cash, deleverage and/or to offset other losses. This seems supported by March data from the Commodity Futures Trading Commission. Interestingly, physical demand for gold has increased. Total U.S. Mint gold sales in March 2020 increased to 120,500 ounces compared with 7,000 ounces in February and 60,000 ounces in January.
• Deficits, debt and interest rates. In our view, a combination of rising U.S. government deficits, debt and lower interest rates are supportive of gold prices. Investors typically buy gold as a store of value and with interest rates expected to remain low for the foreseeable future and negative-yielding debt in some countries, investors may increase their exposure to precious metals. Additionally, while stimulus is required to mitigate the coronavirus’ negative economic impact, it could lead to inflationary pressures down the road which are generally supportive of gold prices.
• Outlook for gold prices remains favorable. While gold prices and precious metal mining equities have not escaped volatility, we think the outlook for gold prices and precious metals equities remain favorable. While cash is king now, we believe institutional interest in gold may increase as dislocations in the markets stabilize and both retail and institutional investors seek exposure to gold for diversification.

Despite a Rough Start, Outlook for Gold Prices Remains Constructive

Year-to-date through March 23, the gold futures price increased 3.0% from $1,529.30 per ounce at year-end 2019 to finish at $1,575.55.  During the same period, the Van Eck Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) were down 25.1% and 35.9%, respectively, while the S&P 500 index was down 30.8%.  On March 9, gold reached a high of $1,704.30 before reaching a low of $1,450.90 on March 16. 

While Institutional Traders Seek Liquidity, Retail Demand for Physical Bullion is Strengthening

While gold had performed reasonably well up until the recent market meltdown, the recent weakness in the gold price has been attributed to institutional investors selling positions to raise cash, deleverage and/or to offset other losses.  This seems supported by March data from the Commodity Futures Trading Commission.  Interestingly, physical demand for gold has increased.  Total U.S. Mint gold sales in March 2020 increased to 120,500 ounces compared with 7,000 ounces in February and 60,000 ounces in January.  In 2019, gold sales amounted to 65,000 ounces in January, 13,000 ounces in February and 11,500 ounces in March.

Rising Deficits, Debt and Lower for Longer Interest Rates

In our view, a combination of rising U.S. government deficits, debt and lower for longer interest rates are supportive of gold prices.  Investors typically buy gold as a store of value and with interest rates expected to remain low for the foreseeable future and negative-yielding debt in some countries, investors may increase their exposure to precious metals.  Additionally, while stimulus is required to mitigate the coronavirus’ negative impact on global economies, it could lead to inflationary pressures down the road.

As of March 20, the U.S. government’s public debt approximated $23.5 trillion.  According to the U.S. Treasury Department, the deficit amounted to $624.5 million through February of fiscal year 2020, compared to $544.2 million during the prior year period.  Recall the government’s fiscal year begins in October.  Increasing government deficits and debt could act as a drag on economic growth, support lower interest rates and weaken the U.S. dollar.  To mitigate the economic impact of the coronavirus, Congress continues to hammer out a $2 trillion stimulus bill.

On March 23, the Federal Reserve Open Market Committee announced plans to undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to ¼ percent.  The Fed will use its “full range of authorities to provide powerful support for the flow of credit to American families and businesses.â€?  These include purchasing Treasury securities and agency mortgage-backed securities, establishing new programs to provide up to $300 billion in new financing to support the flow of credit to businesses and consumers, expanding money market mutual fund liquidity and commercial paper funding facilities to facilitate credit to municipalities and a potential Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses. 

Bottom Line

While gold prices and precious metal mining equities have not escaped volatility, we think the outlook for gold prices and precious metals equities remain constructive.  While cash is king now, we believe institutional interest in gold may increase as dislocations in the markets stabilize and both retail and institutional investors begin to focus on gold’s favorable long-term fundamental drivers and seek exposure to gold for diversification.  In our opinion, mining stocks may be an attractive way to gain exposure to precious metals given the disproportionate percentage impact higher commodity prices may have on a company’s bottom line and valuation for a given percentage increase in the commodity itself.  While the virus may have varying degrees of impact on mining operations, any near-term disruption to production would be supportive of gold prices.  In our view, the fallout from the coronavirus has only intensified many of the factors that are already supportive of gold prices, including lower interest rates, worries about global economic growth and increased government spending.

 

GENERAL DISCLAIMERS

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results. Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.
The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.
Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis.
Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.”
FINRA licenses 7, 24, 63, 87

WARNING

This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of
transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc..

RESEARCH ANALYST CERTIFICATION

Independence Of View
All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS	% OF SECURITIES COVERED	% IB CLIENTS
Outperform: potential return is >15% above the current price	86%	25%
Market Perform: potential return is -15% to 15% of the current price	14%	2%
Underperform: potential return is >15% below the current price	0%	0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same. Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
225 NE Mizner Blvd. Suite 150
Boca Raton, FL 33432
561-994-1191

Noble Capital Markets, Inc. is a FINRA (Financial Industry Regulatory Authority) registered broker/dealer.
Noble Capital Markets, Inc. is an MSRB (Municipal Securities Rulemaking Board) registered broker/dealer.
Member – SIPC (Securities Investor Protection Corporation)
Report ID: 11342

Tuesday, March 24, 2020

Minerals Industry Report

What Is Going on With Gold?

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Listen To The Analyst

Refer to end of report for Analyst Certification & Disclosures

• Year-to-date gold returns have been lackluster.   Year-to-date through March 23, the gold futures price increased 3.0% from $1,529.30 per ounce at year-end 2019 to finish at $1,575.55. During the same period, the Van Eck Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) were down 25.1% and 35.9%, respectively, while the S&P 500 index was down 30.8%. On March 9, gold reached a high of $1,704.30 before reaching a low of $1,450.90 on March 16.
• Institutional investors seek liquidity. While gold had performed reasonably well up until the recent market meltdown, the recent weakness in the gold price has been attributed to institutional investors selling positions to raise cash, deleverage and/or to offset other losses. This seems supported by March data from the Commodity Futures Trading Commission. Interestingly, physical demand for gold has increased. Total U.S. Mint gold sales in March 2020 increased to 120,500 ounces compared with 7,000 ounces in February and 60,000 ounces in January.
• Deficits, debt and interest rates. In our view, a combination of rising U.S. government deficits, debt and lower interest rates are supportive of gold prices. Investors typically buy gold as a store of value and with interest rates expected to remain low for the foreseeable future and negative-yielding debt in some countries, investors may increase their exposure to precious metals. Additionally, while stimulus is required to mitigate the coronavirus’ negative economic impact, it could lead to inflationary pressures down the road which are generally supportive of gold prices.
• Outlook for gold prices remains favorable. While gold prices and precious metal mining equities have not escaped volatility, we think the outlook for gold prices and precious metals equities remain favorable. While cash is king now, we believe institutional interest in gold may increase as dislocations in the markets stabilize and both retail and institutional investors seek exposure to gold for diversification.

Despite a Rough Start, Outlook for Gold Prices Remains Constructive

Year-to-date through March 23, the gold futures price increased 3.0% from $1,529.30 per ounce at year-end 2019 to finish at $1,575.55.  During the same period, the Van Eck Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) were down 25.1% and 35.9%, respectively, while the S&P 500 index was down 30.8%.  On March 9, gold reached a high of $1,704.30 before reaching a low of $1,450.90 on March 16. 

While Institutional Traders Seek Liquidity, Retail Demand for Physical Bullion is Strengthening

While gold had performed reasonably well up until the recent market meltdown, the recent weakness in the gold price has been attributed to institutional investors selling positions to raise cash, deleverage and/or to offset other losses.  This seems supported by March data from the Commodity Futures Trading Commission.  Interestingly, physical demand for gold has increased.  Total U.S. Mint gold sales in March 2020 increased to 120,500 ounces compared with 7,000 ounces in February and 60,000 ounces in January.  In 2019, gold sales amounted to 65,000 ounces in January, 13,000 ounces in February and 11,500 ounces in March.

Rising Deficits, Debt and Lower for Longer Interest Rates

In our view, a combination of rising U.S. government deficits, debt and lower for longer interest rates are supportive of gold prices.  Investors typically buy gold as a store of value and with interest rates expected to remain low for the foreseeable future and negative-yielding debt in some countries, investors may increase their exposure to precious metals.  Additionally, while stimulus is required to mitigate the coronavirus’ negative impact on global economies, it could lead to inflationary pressures down the road.

As of March 20, the U.S. government’s public debt approximated $23.5 trillion.  According to the U.S. Treasury Department, the deficit amounted to $624.5 million through February of fiscal year 2020, compared to $544.2 million during the prior year period.  Recall the government’s fiscal year begins in October.  Increasing government deficits and debt could act as a drag on economic growth, support lower interest rates and weaken the U.S. dollar.  To mitigate the economic impact of the coronavirus, Congress continues to hammer out a $2 trillion stimulus bill.

On March 23, the Federal Reserve Open Market Committee announced plans to undertake open market operations as necessary to maintain the federal funds rate in a target range of 0 to ¼ percent.  The Fed will use its “full range of authorities to provide powerful support for the flow of credit to American families and businesses.â€?  These include purchasing Treasury securities and agency mortgage-backed securities, establishing new programs to provide up to $300 billion in new financing to support the flow of credit to businesses and consumers, expanding money market mutual fund liquidity and commercial paper funding facilities to facilitate credit to municipalities and a potential Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses. 

Bottom Line

While gold prices and precious metal mining equities have not escaped volatility, we think the outlook for gold prices and precious metals equities remain constructive.  While cash is king now, we believe institutional interest in gold may increase as dislocations in the markets stabilize and both retail and institutional investors begin to focus on gold’s favorable long-term fundamental drivers and seek exposure to gold for diversification.  In our opinion, mining stocks may be an attractive way to gain exposure to precious metals given the disproportionate percentage impact higher commodity prices may have on a company’s bottom line and valuation for a given percentage increase in the commodity itself.  While the virus may have varying degrees of impact on mining operations, any near-term disruption to production would be supportive of gold prices.  In our view, the fallout from the coronavirus has only intensified many of the factors that are already supportive of gold prices, including lower interest rates, worries about global economic growth and increased government spending.

 

GENERAL DISCLAIMERS

All statements or opinions contained herein that include the words “we”, “us”, or “our” are solely the responsibility of Noble Capital Markets, Inc.(“Noble”) and do not necessarily reflect statements or opinions expressed by any person or party affiliated with the company mentioned in this report. Any opinions expressed herein are subject to change without notice. All information provided herein is based on public and non-public information believed to be accurate and reliable, but is not necessarily complete and cannot be guaranteed. No judgment is hereby expressed or should be implied as to the suitability of any security described herein for any specific investor or any specific investment portfolio. The decision to undertake any investment regarding the security mentioned herein should be made by each reader of this publication based on its own appraisal of the implications and risks of such decision.

This publication is intended for information purposes only and shall not constitute an offer to buy/sell or the solicitation of an offer to buy/sell any security mentioned in this report, nor shall there be any sale of the security herein in any state or domicile in which said offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or domicile. This publication and all information, comments, statements or opinions contained or expressed herein are applicable only as of the date of this publication and subject to change without prior notice. Past performance is not indicative of future results. Noble accepts no liability for loss arising from the use of the material in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Noble. This report is not to be relied upon as a substitute for the exercising of independent judgement. Noble may have published, and may in the future publish, other research reports that are inconsistent with, and reach different conclusions from, the information provided in this report. Noble is under no obligation to bring to the attention of any recipient of this report, any past or future reports. Investors should only consider this report as single factor in making an investment decision.

IMPORTANT DISCLOSURES

This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or discussed to another party, without the written consent of Noble Capital Markets, Inc. (“Noble”). Noble seeks to update its research as appropriate, but may be unable to do so based upon various regulatory constraints. Research reports are not published at regular intervals; publication times and dates are based upon the analyst’s judgement. Noble professionals including traders, salespeople and investment bankers may provide written or oral market commentary, or discuss trading strategies to Noble clients and the Noble proprietary trading desk that reflect opinions that are contrary to the opinions expressed in this research report.
The majority of companies that Noble follows are emerging growth companies. Securities in these companies involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Noble research reports may not be suitable for some investors and as such, investors must take extra care and make their own determination of the appropriateness of an investment based upon risk tolerance, investment objectives and financial status.

Company Specific Disclosures

The following disclosures relate to relationships between Noble and the company (the “Company”) covered by the Noble Research Division and referred to in this research report.
Noble is not a market maker in any of the companies mentioned in this report. Noble intends to seek compensation for investment banking services and non-investment banking services (securities and non-securities related) with any or all of the companies mentioned in this report within the next 3 months

ANALYST CREDENTIALS, PROFESSIONAL DESIGNATIONS, AND EXPERIENCE

Senior Equity Analyst focusing on Basic Materials & Mining. 20 years of experience in equity research. BA in Business Administration from Westminster College. MBA with a Finance concentration from the University of Missouri. MA in International Affairs from Washington University in St. Louis.
Named WSJ ‘Best on the Street’ Analyst and Forbes/StarMine’s “Best Brokerage Analyst.”
FINRA licenses 7, 24, 63, 87

WARNING

This report is intended to provide general securities advice, and does not purport to make any recommendation that any securities transaction is appropriate for any recipient particular investment objectives, financial situation or particular needs. Prior to making any investment decision, recipients should assess, or seek advice from their advisors, on whether any relevant part of this report is appropriate to their individual circumstances. If a recipient was referred to Noble Capital Markets, Inc. by an investment advisor, that advisor may receive a benefit in respect of
transactions effected on the recipients behalf, details of which will be available on request in regard to a transaction that involves a personalized securities recommendation. Additional risks associated with the security mentioned in this report that might impede achievement of the target can be found in its initial report issued by Noble Capital Markets, Inc.. This report may not be reproduced, distributed or published for any purpose unless authorized by Noble Capital Markets, Inc..

RESEARCH ANALYST CERTIFICATION

Independence Of View
All views expressed in this report accurately reflect my personal views about the subject securities or issuers.

Receipt of Compensation
No part of my compensation was, is, or will be directly or indirectly related to any specific recommendations or views expressed in the public
appearance and/or research report.

Ownership and Material Conflicts of Interest
Neither I nor anybody in my household has a financial interest in the securities of the subject company or any other company mentioned in this report.

NOBLE RATINGS DEFINITIONS	% OF SECURITIES COVERED	% IB CLIENTS
Outperform: potential return is >15% above the current price	86%	25%
Market Perform: potential return is -15% to 15% of the current price	14%	2%
Underperform: potential return is >15% below the current price	0%	0%

NOTE: On August 20, 2018, Noble Capital Markets, Inc. changed the terminology of its ratings (as shown above) from “Buy” to “Outperform”, from “Hold” to “Market Perform” and from “Sell” to “Underperform.” The percentage relationships, as compared to current price (definitions), have remained the same. Additional information is available upon request. Any recipient of this report that wishes further information regarding the subject company or the disclosure information mentioned herein, should contact Noble Capital Markets, Inc. by mail or phone.

Noble Capital Markets, Inc.
225 NE Mizner Blvd. Suite 150
Boca Raton, FL 33432
561-994-1191

Noble Capital Markets, Inc. is a FINRA (Financial Industry Regulatory Authority) registered broker/dealer.
Noble Capital Markets, Inc. is an MSRB (Municipal Securities Rulemaking Board) registered broker/dealer.
Member – SIPC (Securities Investor Protection Corporation)
Report ID: 11342

Thursday, March 19, 2020

InPlay Oil (IPOOF)

Results in line but dark clouds growing

InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQZ Exchange under the symbol IPOOF.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Operational results strong. The company met production guidance with 7% year over year growth. Operating costs continue to decline (2019 LOE of $14.36/BBL vs $16.02). Reserves are being replaced (120% reserve replacement) even as the company limits cap exp to a level below operating cash flow. All in all, this was a good year for the company on an operational side as positive trends that have developed in recent years continued.


Financial results slightly below expectations. Realized oil and gas prices were near expectations (oil slightly below and gas above) leading to revenues being near expectations. Operating netbacks (sales less royalties, transportation and operating costs) were generally in line for the quarter and year. The same can be said for adjusted fund flow for the quarter and year which came in at $7.9 and $32.5 million versus our $8.2 and $34.2 million estimates. EPS of $(0.28) and $(0.39) were well below our $(0.01) and $(0.12) estimates. We speculate that interest expense and income taxes were greater than expected. Indeed, net debt levels…






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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, March 19, 2020

Gevo, Inc. (GEVO)

Supply Agreements Bolster Financing Discussions.

Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Narrower 4Q2019 loss in line with expectations. No change in 2020 estimates. Adjusted EBITDA of $(4.0) million was down from $(4.9) million in 4Q2018 as higher hydrocarbon more than offset lower ethanol production.


Solid progress on Phase 1 goal to lower carbon intensity. The startup of wind energy and the upcoming move to renewable natural gas (RNG) use are signs of progress on Phase 1. Contracts with three dairies support RNG buildout to lower carbon intensity. Added hydrocarbon production is…


>




Click here to Get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, March 19, 2020

InPlay Oil (IPOOF)

Results in line but dark clouds growing

InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQZ Exchange under the symbol IPOOF.

Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Operational results strong. The company met production guidance with 7% year over year growth. Operating costs continue to decline (2019 LOE of $14.36/BBL vs $16.02). Reserves are being replaced (120% reserve replacement) even as the company limits cap exp to a level below operating cash flow. All in all, this was a good year for the company on an operational side as positive trends that have developed in recent years continued.


Financial results slightly below expectations. Realized oil and gas prices were near expectations (oil slightly below and gas above) leading to revenues being near expectations. Operating netbacks (sales less royalties, transportation and operating costs) were generally in line for the quarter and year. The same can be said for adjusted fund flow for the quarter and year which came in at $7.9 and $32.5 million versus our $8.2 and $34.2 million estimates. EPS of $(0.28) and $(0.39) were well below our $(0.01) and $(0.12) estimates. We speculate that interest expense and income taxes were greater than expected. Indeed, net debt levels…






Click here to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Thursday, March 19, 2020

Gevo, Inc. (GEVO)

Supply Agreements Bolster Financing Discussions.

Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Narrower 4Q2019 loss in line with expectations. No change in 2020 estimates. Adjusted EBITDA of $(4.0) million was down from $(4.9) million in 4Q2018 as higher hydrocarbon more than offset lower ethanol production.


Solid progress on Phase 1 goal to lower carbon intensity. The startup of wind energy and the upcoming move to renewable natural gas (RNG) use are signs of progress on Phase 1. Contracts with three dairies support RNG buildout to lower carbon intensity. Added hydrocarbon production is…


>




Click here to Get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, March 18, 2020

Orion Group Holdings (ORN)

New Marine Awards Support Current Outlook.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Two Marine jobs awarded for total of $24 million. Energy infrastructure related work along the Gulf Coast begins shortly and should finish by year-end 2020. Positive sign given the sharp drop in crude oil prices.

New work moves total announced YTD 2020 awards to $111 million. Marine awards total $71 million and Concrete awards total $40 million. Additional awards seem likely since other low bids pending awards from…









Get the full report on Channelchek desktop.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Wednesday, March 18, 2020

Orion Group Holdings (ORN)

New Marine Awards Support Current Outlook.

Orion Group Holdings, based in Houston, Texas, is a specialty construction company within the Marine and Industrial Construction sectors, with operations focused in the continental United States and Caribbean. Revenue is split roughly 50/50 between a Marine Construction segment that provides marine facility, pipeline and structural construction services and a Commercial Concrete segment that provides turnkey concrete services in the light commercial and structural construction markets.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Two Marine jobs awarded for total of $24 million. Energy infrastructure related work along the Gulf Coast begins shortly and should finish by year-end 2020. Positive sign given the sharp drop in crude oil prices.

New work moves total announced YTD 2020 awards to $111 million. Marine awards total $71 million and Concrete awards total $40 million. Additional awards seem likely since other low bids pending awards from…









Get the full report on Channelchek desktop.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Tuesday, March 17, 2020

Grindrod Shipping (GRIN)

Weaker Operating Results, But 2H2020 Recovery Expected

Grindrod Shipping, originated in South Africa with roots dating back to 1910. The company is based in Singapore, with offices around the world including, London, Durban, Cape Town, Tokyo and Rotterdam. Its primary listing is on Nasdaq and secondary listing on the JSE.
Grindrod Shipping owns and operates a diversified fleet of owned, long-term chartered and joint-venture dry-bulk and liquid-bulk vessels across the globe.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Reported adjusted EBITDA of $39.7 million was a sharp improvement over the 2018 number of -$0.1 million. Adjusting for IFRS 16 adoption, we calculate that adjusted EBITDA was $24.2 million in 2019, which was below expectations due to dry bulk market weakness late in the year.


Adjusting estimates to reflect 2019 operating results and current dry bulk market weakness. Our 2020 EBITDA estimate drops to ~$40 million from $59 million. Starting with 1Q2020, operating results will be reported quarterly. While the dry bulk market is currently weak due to seasonality and havoc wreaked by the spread of the coronavirus, we believe that supply growth is muted and…





Click to get the full report.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst
certification and important disclosures included in the full report. 
NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision.