Mining Archives - Page 3 of 8

Can the Factors Pushing Gold Higher Continue?

Posted on April 4, 2023April 4, 2023 by phoffman@channelchek.com

Image Credit: Michael Steinberg (Pexels)

Are Safe Haven Investments Just Beginning Their Rise?

Gold is continuing to move up. Fueled by global tensions, rising prices, a weakening dollar, and new wariness of the banking system, gold seems to have regained its place as a safe haven portfolio allocation. Over the past five calendar days, the precious metal has gained $84 per ounce or 4.3%. In recent days price movement has been helped by lower yields on U.S. Treasuries and OPEC+ oil production cuts which can be expected to increase inflationary pressures as the cost of transportation and production rises for the majority of new goods.

Physical gold, priced in $USD, as seen on the chart below, is up 10.62% on the year. But that does little to tell the recent story. The investments in the yellow metal had gone negative on the year until two days before the Silicon Valley Bank’s problems became widely known in early March. This means much of the current increase on the year has occurred in under a month’s time. And the mindset that is driving the rise seems to be lingering.

Technicians point out that the $2020 level was an area of resistance that traders easily pushed through on Tuesday. Are there also fundamental reasons for it to continue its upward climb?

Global Tensions

Global tensions and geopolitical events can have a significant impact on the price of gold. Uncertainty surrounding the war in Europe, U.S. enemies forming closer alliances with each other, and a former U.S. President being indicted are providing heightened tensions. Gold has remained a safe-haven asset historically because investors turn to in times of political or economic uncertainty – it is perceived to be a store of value that is less vulnerable to fluctuations in currency values and stock markets.

We are in times of political and economic certainty now, this can continue to increase the demand for gold and drive up its price.

Inflation

Gold is often considered a hedge against inflation, so as inflation rises, the price of gold tends to increase. Recent reports in the U.S. have shown inflation, especially core inflation (net of food and energy price changes), has resumed an upward move. The spike in oil stemming from recently announced production cuts should increase both core and overall inflationary pressures.

When inflation is running high, the value of the U.S. dollar erodes. Investors gravitate to alternative stores of wealth that can maintain their purchasing power. Gold is seen as a safe-haven asset that can protect against inflation and currency devaluation. As a result, investors tend to buy more gold, driving up its price.

Watch the replay of the Channelchek Takeaway of the PDAC mining convention

Weaker Dollar

As mentioned above, a weakening U.S. dollar can have a significant impact on the price of gold expressed in U.S. dollars. Precious metals are typically priced in terms of U.S. dollars globally. When inflation runs higher than safe-haven U.S. Treasury yields than assets move toward alternatives like gold, real estate, or cryptocurrencies.

As a result, when the U.S. dollar weakens, the demand for gold may increase, driving up its price.

Systemic Risk

The risk of bank failures can impact gold prices in several ways. In times of perceived financial instability and/or economic uncertainty, investors’ confidence in banks and other financial institutions weakens. This often leads to a shift to safe-haven assets like gold.

In addition, if there is a continued risk of bank failures. If it happens, central banks could take steps to stabilize the financial system by injecting liquidity into the markets and lowering interest rates. These actions weaken currency which increases inflation. Inflation expectations, as mentioned earlier, support higher gold prices.

Gaining Exposure

The chart shows the correlation between gold, and mining stocks since the beginning of the year. As a reference, the performance of the VanEck gold mining ETF (GDX), and the junior gold mining ETF (GDXJ) are charted against the S&P 500 (SPY), and an S&P mining index (XME). The XME is designed to track changes across a broad market-cap spectrum of metals and mining segments in the U.S.

The mining stocks have been moving in the same direction and pivoting at the same time as gold (XAUUSD). The difference is the moves have been more pronounced (up and down) for the mining stocks.

Investors expecting gold to continue to increase and considering increasing their exposure to safe-haven precious metals, ought to do their due diligence and determine if gold mining stocks are a better fit for what they are trying to accomplish.

In his Metals & Mining First Quarter 2023 Review and Outlook (April 3, 2023) Mark Reichman, Senior Research Analyst, Natural Resources, at Noble Capital Markets provides various potential scenarios to his outlook for gold and other metals. The report (available at this link) is a good place to start to weigh this industry expert’s considerations with your own.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.channelchek.com/news-channel/metals-mining-first-quarter-2023-review-and-outlook

https://www.fxempire.com/forecasts/article/gold-price-forecast-gold-markets-continue-to-pressure-the-upside-2-1328755

https://www.kitco.com/news/2023-04-03/OPEC-oil-cuts-won-t-drive-inflation-high-enough-to-stop-gold-s-run-above-2-000.html

https://www.channelchek.com/videos/noble-analyst-takeaways-channelchek-takeaway-series-pdac-convention-2

Garibaldi Resources Corp. (GGIFF) – Right Jurisdiction, Right Metals, Right Time

Posted on April 3, 2023April 3, 2023 by cpereira@noblefcm.com

Monday, April 03, 2023

Garibaldi Resources Corp. is an active Canadian-based junior exploration company focused on creating shareholder value through discoveries and strategic development of its assets in some of the most prolific mining regions in British Columbia and Mexico.

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

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

A look back at 2022. The 2022 drill program at Garibaldi’s 100% owned E&L nickel-copper-cobalt massive sulphide project tested targets from the 2021 Geotech deep penetrating Z-Axis Tipper Electromagnetic (ZTEM) survey. Of four holes drilled, two were successful, including Hole EL-22-97b, a deep hole which intersected two intervals of E&L gabbro more than 200 meters down plunge from previous drilling and intersected nickel-bearing disseminated and semi-massive sulphide mineralization. Hole EL-22-97b targeted the down plunge extension of the eastern zone of the E&L intrusion, coincident with a large-scale low resistivity/elevated conductivity ZTEM anomaly identified in 2021. The two successful drill holes are lined with polyvinyl chloride (PVC) and Garibaldi intends to conduct a geophysical borehole electromagnetic (BHEM) survey to refine holes to be drilled in 2023.

Upcoming drill program. Drilling in 2023 will test for mineralization associated with broad ZTEM low-resistivity anomalies identified by the property wide Geotech ZTEM survey. The 2023 drill program will likely commence in June and entail three to four holes at the E&L target, two holes of approximately 500 meters depth at the B1 target, and two holes at the Palm Springs property. Drilling at E&L will focus on areas within the ZTEM anomaly tested in 2022.

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*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.

Alliance Resource Partners (ARLP) – Lowering Near-Term Estimates; Cash Flow Story Remains Favorable

Posted on March 29, 2023March 29, 2023 by cpereira@noblefcm.com

Wednesday, March 29, 2023

ARLP is a diversified natural resource company that generates operating and royalty income from coal produced by its mining complexes and royalty income from mineral interests it owns in strategic oil & gas producing regions in the United States, primarily the Permian, Anadarko and Williston basins. ARLP currently produces coal from seven mining complexes its subsidiaries operate in Illinois, Indiana, Kentucky, Maryland and West Virginia. ARLP also operates a coal loading terminal on the Ohio River at Mount Vernon, Indiana. ARLP markets its coal production to major domestic and international utilities and industrial users and is currently the second largest coal producer in the eastern United States. In addition, ARLP is positioning itself as an energy provider for the future by leveraging its core technology and operating competencies to make strategic investments in the fast growing energy and infrastructure transition.

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

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

Lowering estimates. We have lowered our 2023 EBITDA and earnings per share estimates to $1.09 billion and $5.50 from $1.14 billion and $5.90, respectively. While we lowered our first half revenue expectations, our full year revenue estimate was increased based on greater contributions from the coal segment and expectations for an improved commodity price environment in the second half of the year. Notably, we refined and increased our operating cost estimates to reflect higher labor costs, sales-related expenses, and operational costs related to longwall moves within the mining segment.

First half challenged by declining commodity prices. Prices for crude oil and natural gas have declined throughout the year. While coal prices have softened in recent weeks, 34.7 million tons of the partnership’s 2023 planned coal sales, or 94% at the mid-point of guidance, were committed and priced as of the date of ARLP’s fourth quarter conference call. Year-to-date through March 28, crude oil and natural gas futures prices averaged $76.33 per barrel and $2.84 per thousand cubic feet (Mcf) compared to $80.47 per barrel and $4.48 per Mcf at the end of 2022 and $73.38 per barrel and $2.16 per Mcf as of March 28. As a result, we lowered our expectations for the oil & gas royalty segment.

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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).

Five Reasons to Get Excited About Mining Stocks

Posted on March 28, 2023April 3, 2023 by phoffman@channelchek.com

M&A Trends Could Drive Mining Stocks Much Higher?

The building wave of M&A deals in at least two of the mining sectors, is difficult to ignore. This week, lithium miner Albemarle (ALB) disclosed it had submitted a proposal to acquire Liontown Resources (LTR.Australia). Last month Newmont Mining’s proposed acquisition of Newcrest Mining, highlighted the rising interest in M&A in the gold sector. To date, both proposals have been shunned, but as companies look to increase production, inflation increases producers capital outlays, plus long permitting processes, a case could be made that growth by acquisition, friendly or not, is becoming more appealing in the sector.

Typically growing demand to buy smaller companies in a sector puts upward pressure on valuations.

The gold and lithium sectors have mostly lead over the past six months in terms of deal-making. For gold, the largest driver is these miners remain undervalued by historical levels. The trend for lithium producers in the years ahead, as battery production ramps up to meet surging demand for electric storage and green technology, is expected to continue to accelerate.

The Price of lithium, key to batteries found in most EVs, over the years has risen. This created a situation where car manufacturers themselves have realized that the best way to ensure a key ingredient to their product is to own all or part of a large enough producer. Lithium producers are looking for ways to increase yield and own more production facilities. These factors could unfold into a situation where the stock prices of companies producing either of these two metals, and even other mined minerals with growing demand, could outperform other sectors.

Five Reasons to Explore Small Mining Companies

While the real heat is on producers of minerals used to make batteries and gold miners, the below supply/demand concepts may apply to an increased need for other miners to involve themselves in M&A as well.

New List of Acquirers – The big car companies, energy companies, and other additional industrial consumers are in need of reliable supply.
Cheaper to Buy than Find – M&A is a solution to the increased costs of growing organically. It also helps circumvent what could be permitting delays and supply chain problems that prevent headway.
Scale – Gold companies normally try to extract synergies when seeking to size up, while lithium producers seek pure scale.
Big Picture Economics – The economic environment favors miners if inflation remains elevated; the companies’ production is more likely to sell for more. The cost of money, on an opportunity cost basis, especially net of inflation (real interest) favors mining.
Finding Value – Informed stock selection is key to discover and invest in companies best positioned to benefit from swelling M&A in the sector.

The fifth on this list is less of a reason to explore mining companies and more a common sense reminder. Last week the Channelchek Take Away Series brought to viewers a live in-depth presentation of 12 mining companies that were just coming off the huge PDAC mining conference in Canada. These presentations are being replayed and may be just the place to begin to hear from company executives, and a highly respected senior natural resources analyst. Audience questions and answers follow.

The information on these on-demand replay videos is current, and as you’ll see by clicking here, the list of video presentations includes a diversified mix of producers and explorers.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.barrons.com/articles/how-to-handle-an-uncertain-market-buy-weakness-sell-strength-f145c306

Channelchek Takeaway Series – PDAC Minerals Exploration & Mining Convention

Posted on March 21, 2023March 28, 2023 by cpatches

Takeaways from PDAC Minerals and Mining Convention

Replays Now Available on Channelchek!

This annual event in Toronto, Canada is known for attracting up to 30,000 attendees from over 130+ countries for its educational programming, networking events, and outstanding business opportunities. Since it began in 1932, the PDAC Convention has grown in size, stature and influence. Today, it is the event of choice for the world’s mineral industry hosting more than 1,100 exhibitors and 2,500 investors.

The Noble team attended meetings, networking events and interviewed c-suite executives. We captured it all on video and featured their collective takeaway exclusively on Channelchek. The next best thing to being there. And at no cost. Replays coming to Channelchek March 28, exclusively for registered members.

Replays are available exclusively to Channelchek members. It’s totally free to join the community, just click the join button at the top of the page.

Agnico Eagle Mines Limited (AEM)

IR Jean-Maire Clouet

Watch the Replay

Digging into Mining Stocks “Need-to-Knows”

Posted on March 20, 2023March 20, 2023 by phoffman@channelchek.com

Image: 12,000 feet above sea level, the Salar de Uyuni is rich in copper and lithium – Elias Rovielo (Flickr)

A Look at Mining Stocks and Where to Find Opportunity

Look around the room you’re in, with the exception of your cup of coffee and whatever you may be eating; almost everything came out of the ground at some point. This includes the wires you can’t see in the walls, the ring on your finger, and the minerals in the battery of your phone. Demand for these elements isn’t going away. And it’s no secret that the need for many is growing. This includes minerals used for power storage, gold purchased by cautious investors, and uranium which is expected to fuel modern reactors.

From an investor’s standpoint, this provides opportunity. But the mining sector is a bit different than others, especially the smaller, high-potential mining stocks. Stock selection relies on an understanding of the company, its opportunity, and also what minerals it is involved in. The demand for these materials, which make everyday modern life possible, does rise and fall with new inventions and global demand for growth. But, demand is never expected to dry up. In fact, it could be said that with each passing day, there’s an incremental but growing scarcity of natural resources.

Just back from the PDAC minerals and mining convention in Toronto, Noble Capital Markets Sr. Natural Resources Analyst discusses his take aways from the huge event and interviews 12 select mining companies, and provides his insights and takes your questions. More information available here for March 21^st online event.

Precious Metals

Gold and silver have traditionally been stores of value. The flood of newly minted money as stimulus during the pandemic, and the difficulty central banks are having reducing the expanded supply of money, have caused inflation. As world currencies lose value, gold and silver tend to go up in value versus traditional money. For mining stocks, a rule of thumb is as long as it costs less to pull the metal from the ground, than the value of the element, company value is inclined to move in the same direction as the element. Silver, for its part, is also considered important in manufacturing many solar panels and is an industrial metal as well as decorative.

Base Metals

Base metals are essential for building infrastructure, the value of the metals and often the mining stocks associated with these building blocks rise and fall with economic activity. Iron ore, for steel, is the most mined metal. It’s critical for bridges, buildings, and pipelines.

Aluminum is second on the list of most mined metal; while we are familiar with household uses such as foil and beverage cans, its light weight, strength, and rigidity make it critical for aerospace, automotive, and marine applications.

Copper is also considered a base metal, critical in infrastructure growth because of its conductive properties.

Base metal mining stocks are often looked at when world economies are committing to growth, or when they have come out of a period of low growth and are expected to return to a more normal pace.

Battery Metals

Renewable energy is creating more demand for copper and some non-base metals. This has been a big recent driver of interest in mining stocks. The renewable energy sector will continue to grow demand for storage and transmission of power.

Image Credit: Mark Reichman (Sr. Analyst, Noble Capital Markets)

The expected demand makes sense, but in terms of numbers it is very compelling. For example, to build a wind turbine with a capacity of three megawatts it will takes 335 tons of steel, 4.7 tons of copper, 3 tons of aluminum and more than 700 pounds of rare earth minerals – plus other materials such as aggregates.

A conventional power plant requires fewer metals, about one ton of copper is used in a facility that can continuously produce one MW of power. The trade off being the non-renewable fuel used to generate electricity traditionally. But, for now renewable energy sources require more metals, the sector is experiencing planned growth, this accelerates demand for these materials.

Electric vehicle production also uses a significant amount of materials from the mining sector. For example, an electric car requires four times the amount of copper to build. Lithium (used in electric car batteries) is being consumed at a pace near the capacity to pull it from the ground and process the mineral. By 2050, analysts predict that consumption may be up to 170% above currently known lithium reserves. This assumes no change in technology. There is a lot of speculation about how this will be handled and where the raw materials will come from.

If the reasons listed above have not yet convinced you to focus some of your exploration on investing in mining stocks, then let’s see what additional benefits may come from select companies and summarize them below.

Why Investors Allocate to Mining

Goods that will continue to be required, even in times of crisis will always have some level of demand. Those that are looked at as important to the future growth of the world economy have an even stronger underlying argument.

If one is looking for exposure to the EV market and expected growth, selecting a car company out of the dozens that are popping up both from the traditional automakers, and new entrants could cause a watered-down investment in the new demand for the building blocks. While an investment in mining companies may not seem as sexy as one in a company that makes state of the art vehicles, the underlying building blocks are what will be in most demand.

Stocks allow the possibility of capital gains not possible from investing directly in gold or a gold ETF. Depending on the stock there may even be the opportunity for dividends or royalty payments.

There is the ability to diversify into stocks that cover different parts of the economy. In addition to what was mentioned above, there are coal miners, uranium miners, cobalt, and pretty much everything else that comes out of the ground.

Each March there is a large mining conference that takes place in Toronto. The Senior Natural Resources Analys from Noble Capital Markets was there a few weeks ago and is presenting on some of what he learned. At the same time he’s meeting with a dozen mining companies that were in attendance.

Whether you are a veteran investor in this sector, or new and wishing to absorb as much as you can from Sr. Management of mining companies, register for free here to attend this online discovery event.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://www.consumerreports.org/cars/hybrids-evs/why-electric-cars-may-soon-flood-the-us-market-a9006292675/

https://www.ifminvestors.com/docs/default-source/insights/ifm-investors—what-we-look-for-in-miners-and-explorers.pdf?sfvrsn=31e2305_2

https://www.investopedia.com/ask/answers/040815/what-criteria-classify-company-junior-gold-miner.asp

https://www.tsinetwork.ca/reports/best-canadian-mining-stocks-tsx-plus-gold-stocks-canadian-diamond-mines-and-more/

Energy Fuels (UUUU) – Financial Results – Initial Take

Posted on March 9, 2023March 9, 2023 by cpereira@noblefcm.com

Thursday, March 09, 2023

Energy Fuels is a leading U.S.-based uranium mining company, supplying U3O8 to major nuclear utilities. Energy Fuels also produces vanadium from certain of its projects, as market conditions warrant, and is ramping up commercial-scale production of REE carbonate. Its corporate offices are in Lakewood, Colorado, near Denver, and all its assets and employees are in the United States. Energy Fuels holds three of America’s key uranium production centers: the White Mesa Mill in Utah, the Nichols Ranch in-situ recovery (“ISR”) Project in Wyoming, and the Alta Mesa ISR Project in Texas. The White Mesa Mill is the only conventional uranium mill operating in the U.S. today, has a licensed capacity of over 8 million pounds of U3O8 per year, has the ability to produce vanadium when market conditions warrant, as well as REE carbonate from various uranium-bearing ores. The Nichols Ranch ISR Project is on standby and has a licensed capacity of 2 million pounds of U3O8 per year. The Alta Mesa ISR Project is also on standby and has a licensed capacity of 1.5 million pounds of U3O8 per year. In addition to the above production facilities, Energy Fuels also has one of the largest NI 43-101 compliant uranium resource portfolios in the U.S. and several uranium and uranium/vanadium mining projects on standby and in various stages of permitting and development. The primary trading market for Energy Fuels’ common shares is the NYSE American under the trading symbol “UUUU,” and the Company’s common shares are also listed on the Toronto Stock Exchange under the trading symbol “EFR.” Energy Fuels’ website is www.energyfuels.com.

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

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

Report full of future promise. UUUU’s press release was full of previously announced news items: Rare Earth Element (REE) progress, signed uranium sales contracts, vanadium inventory sales, Alta Mesa sale, etc. At the same time, production levels have been lagging behind expectations for a variety of reasons including economic conditions, supply issues, etc. Management is clearly focused on developing REE separation operations which it sees as a late 2023/early 2024 event. It is also prepping uranium mines for eventual production.

Production not there yet. The company has yet to resume mining uranium. It signed sales contracts to deliver uranium but is meeting those obligations with inventory or uranium purchases. We initially had hoped uranium operations would have resumed by 2023. REE Carbonate sales to the NEO plant in Estonia are being completed but at levels below initial expectations due to limited Monzanite supply issues. We had also hoped to see vanadium production resume by the end of the year.

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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).

Will Canada’s New Policy Weigh Heavy on Some Mining Investors?

Posted on March 6, 2023March 7, 2023 by phoffman@channelchek.com

The PDAC Mining Conference has a New Discussion Item for 2023

As analysts, investors, financiers, manufacturers, and others with a high interest in natural resources converge on the Prospectors and Developers Association of Canada (PDAC) conference this week, some of the conversations will revolve around the risks of having investments that may later be divested under a new Canadian policy enacted late last year. The Policy is intended to protect strategic minerals, especially those deemed critical to a greener energy future. The conference, which is expected to have close to 30,000 attendees, comes just four months after the enactment, which falls under the Investment Canada Act (ICA).

Background

Late last year, the Canadian Minister of Innovation, Science and Industry, in conjunction with the Minister of Natural Resources, issued a new policy relating to the treatment of foreign state-owned enterprise (SOE) investment in Canada’s critical minerals sector under the ICA.

The Policy which is now in effect identifies 31 minerals that the Canadian government says are essential to Canada’s prosperity in the emerging low-carbon and technology sectors, or that contribute to Canada’s national defense and security. At the same time, it works to not undermine the Canadian Critical Minerals Strategy, designed to position the natural resource-rich country as the preferred global supplier of critical minerals.

The Policy applies to any direct or indirect investment of any size by a foreign SOE in a Canadian business involved in the “critical minerals” supply chain. Under the ICA, any investment that is a foreign SOE will be reviewed by the Investment Canada Act (ICA). The Policy states that the Minister is required to determine whether an investment is of “net benefit to Canada.” This is expected to be a high hurdle. What’s more, all foreign SOE investment in the critical minerals sector, regardless of size or value, will be subject to enhanced scrutiny under the national security review provisions.

Days after the Policy was issued, the Minister announced that the Canadian government ordered the divestiture of three separate investments in Canadian critical mineral companies involved in (among other things) lithium mining activities, both within and outside of Canada.

The Policy does not impact the ability for individuals or funds and companies not meeting the definition of SOE or directly influenced by an SOE. However, it may lower the number of potential financiers and investors for Canadian companies involved in procuring the 31 minerals shown in the graphic below. Dean McPherson, head of global mining at the Toronto Stock Exchange has been quoted saying, “No doubt the implications of a decision to restrict a major avenue of capital flow needs to be supplemented by capital that is similar in size and timely.”

Canada’s 31 Critical Minerals and Uses

Source: Canada Critical Minerals Strategy (canada.ca)

As it relates to national security considerations, the Policy states that all investments by foreign SOEs (or foreign-influenced investors that involve a Canadian business or entity operating in a critical minerals sector in Canada will form the basis for a finding that the investment could be “injurious to national security”.

The changes are viewed as a defensive measure against China, which has invested $7 billion in Canada’s base metals sector in the past 20 years. Canadian officials last fall ordered Chinese companies to sell stakes in three Toronto-listed lithium companies, two of which are developing mines outside Canada.

When analysts, investors, financiers, manufacturers, and others with a high interest in natural resources converge on the Prospectors and Developers Association of Canada (PDAC) conference this week, some of the conversations will revolve around the risks of having investments that may later be divested of under a new Canadian policy enacted late last year. The Policy is intended to protect strategic minerals, especially those deemed critical to a greener energy future. The conference, which is expected to have close to 30,000 attendees, comes just four months after the enactment, which falls under the Investment Canada Act (ICA). — Not all investors and analysts can make it to the PDAC Mineral Exploration and Mining Conference in Toronto. In order for our subscribers to stay in the loop, Noble Capital Markets will be attending PDAC conference meetings and then interviewing select executives. This will be captured on video for the exclusive benefit of Channelchek subscribers (no cost). Learn more about the Channelchek Takeaway Series at PDAC.

PDAC and Impact

The conference which takes place in Canada this week will be the first forum of its size where questions surrounding the Ministers policy under the ICA can be discussed, and parties of varied interests on all sides can discuss there expectations of how this will impact financing, partnerships, and investments among important global producers and consumers of raw materials.

However, the hurdle that Canada has put in place for some investors and investing could cause some less-than-welcome investors from gaining too much control over a company and the resources it produces. Whether it also weighs heavily on the value of company’s based out of Canada will be discussed at the conference and remains to be seen. At present, after four months, the demand for some of the many protected resources has only increased. This is a positive sign for investors.

Paul Hoffman

Managing Editor, Channelchek

Endeavour Silver (EXK) – All Eyes on Terronera

Posted on March 3, 2023March 3, 2023 by cpereira@noblefcm.com

Friday, March 03, 2023

Endeavour Silver is a mid-tier precious metals mining company that operates two high-grade, underground, silver-gold mines in Mexico. Endeavour is currently advancing the Terronera mine project towards a development decision, pending financing and final permits and exploring its portfolio of exploration and development projects in Mexico, Chile and the United States to facilitate its goal to become a premier senior silver producer. Our philosophy of corporate social integrity creates value for all stakeholders.

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

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

Fourth quarter and full year 2022 results. Endeavour reported fourth quarter and full year 2022 adjusted earnings per share of $0.04 and $0.04 per share, respectively, compared to fourth quarter and full year 2021 adjusted EPS of $(0.00) and $(0.05). We had forecast fourth quarter and full year EPS of $0.07 per share and $0.10, respectively. Fourth quarter and full year adjusted EBITDA were $23.4 million and $56.5 million, respectively. While revenue was largely in line with our estimates, costs were higher. At year-end, Endeavour held 530,250 ounces of silver and 1,707 ounces of gold in bullion inventory.

Updating estimates. We now forecast 2023 EBITDA and EPS of $59.0 million and $0.09 compared to our previous estimates of $59.2 million and $0.11, respectively. Our estimates are based on silver and gold production of 6.1 million ounces of silver and 38,402 ounces of silver.

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

What Mining and Metals Investors Learned from Tesla’s “Investor Day”

Posted on March 2, 2023March 2, 2023 by phoffman@channelchek.com

Tesla’s “Investor Day” Reveals that Opportunities Exist in Ancillary EV Businesses

Investors may have absorbed more ideas from Elon Musk at Tesla’s Investor Day about related opportunities outside of Telsa (TSLA) than in the company itself. The founder was not as forthcoming as expected; however, he did confirm Tesla’s plans to build a fifth car assembly plant in Mexico. He also made reference to a next-gen vehicle and rolled out a $ 1-a-day subscription for owners in some regions for unlimited charging. Autonomous driving updates along with safety numbers were revealed, and how and why Tesla is going to solidify its supply chain and provide itself uninterrupted battery-grade lithium was of particular interest to investors in the metals and mining industries.

Musk on Metals and Mines

It was thought that both those attending in person and those streaming would be treated to a Tesla plan to acquire a mining operation in North or South America amid rampant demand for the material crucial to battery EVs. To respond to the speculation, Musk said the EV manufacturer is “mulling” the takeover of a miner. The miner most often discussed in relation to Tesla is Sigma Lithium Corp. (SGML).

What was more concrete on the battery manufacturing supply chain issue, is it was made clear Tesla is more focused on refining lithium than on mining it. The CEO of the most valuable car company in the world said the “limiting factor” is refining lithium, not actually finding it, as no country has a monopoly on deposits.

Not all investors and analysts can make it to the PDAC Mineral Exploration and Mining Conference in Toronto. In order for our subscribers to stay in the loop, Noble Capital Markets will be attending PDAC conference meetings and then interviewing select executives. This will be captured on video for the exclusive benefit of Channelchek subscribers (no cost). Learn more about the Channelchek Takeaway Series at PDAC.

Tesla has already broken ground on what will be a lithium refinery in Texas, it plans to start output within 12 months. According to a presentation by Drew Baglino, SVP of Tesla’s Powertrain and Energy Engineering department, the EV giant wants to process lithium concentrates into battery-grade lithium chemicals at the refinery in Texas.

As for the EV battery metal nickel, it’s only needed for “aircraft, long-range cars or trucks,” Musk said. “The vast majority of heavy lifting” of EV batteries will be iron-based batteries, and there’s plenty of iron in the world, he said.

The EV Industry Unfolding

Automakers are increasingly pushing into partnerships and ownership of the mining of commodities needed for their end product. Those that vertically integrate early will have their pick among the miners that are a better fit – and potentially priced before demand accelerates. Recently the car company Stellantis took a 14% stake in a subsidiary of McEwen Mining (MUX) that produces copper. And General Motors is said to be negotiating a stake in Vale SA’s base metals unit. In January, GM conditionally okayed a $650-million pact with Lithium Americas (LACCA) to develop a US lithium deposit.

Take Away

Telsa’s Investor Day included updates on autonomous cars and presentations that showed off the company executives, but it didn’t leave a buzz in the EV industry.

It was confirmed that EV manufacturers are eying companies that produce the ingredients they need for their cars to have power. Investors may want to explore producers of lithium, copper, cobalt, and nickel. Especially those closest to EV battery manufacturing facilities.

Paul Hoffman

Managing Editor, Channelchek

Sources

https://livestream.tesla.com/

https://www.barrons.com/livecoverage/tesla-investor-day/card/tesla-will-offer-30-a-month-home-charging-to-some-customers-OUnvtbeNsJwqN5PuBYTZ

https://www.miningweekly.com/article/musk-tamps-down-speculation-that-tesla-will-mine-lithium-2023-03-02

https://www.prnewswire.com/news-releases/sigma-lithium-commences-trading-on-nasdaq-301375052.html

https://www.opb.org/article/2023/02/01/gm-lithium-americas-thacker-pass-investment/#:~:text=Feb.,of%20lithium%20in%20the%20U.S.

Maple Gold Mines (MGMLF) – Will 2023 Be the Year that Maple Gold Goes Viral?

Posted on February 8, 2023February 8, 2023 by cpereira@noblefcm.com

Wednesday, February 08, 2023

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

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

Deep drilling program at Douay. A 10,000-meter drill program is underway at the Douay project, a joint venture with Agnico Eagle. Two additional drill rigs were mobilized at Douay and the company expects progress to accelerate with five rigs turning throughout the first quarter of 2023. A total of six drill holes are planned, several of which are expected to be drilled to at least 2,000 meters downhole. Mines in the Abitibi gold belt are known for vertical continuity and higher grades at depth. Deep drilling will test beneath the current mineral resource and across the Casa Berardi North Fault corridor.

Nearing the target. In January, deep drilling at Douay commenced with Hole DO-23-331, collared approximately 400 meters southwest of the conceptual pit limits at the 531 Zone, currently approaching 1,100 meters downhole. Previous drilling at the 531 Zone returned some of the highest-grade and largest accumulations of gold at Douay based on grade and thickness. The primary target is roughly 1,900 meters downhole where it is expected to intersect the projection of the defined mineralized zone at the 531 Zone significantly down plunge. Hole DO-23-331 will also test the width of the mineralized corridor in this area.

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Alliance Resource Partners (ARLP) – Growth from a Position of Strength

Posted on February 6, 2023February 6, 2023 by cpatches

Monday, February 06, 2023

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

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

Updating estimates. While our 2023 earnings per unit estimate is unchanged at $5.90, we have made several adjustments in our model resulting in a modest reduction in EBITDA to $1.14 billion from $1.18 billion. Operating, depreciation, depletion and amortization, and general and administration expenses were increased, while net interest expense and income tax expense were lowered. Estimates for certain line items are now more aligned with management guidance.

Attractive total return potential. In our view, the stock price did not respond in line with the partnership’s outstanding fourth quarter and full year 2022 financial results, along with the 40% increase in its quarterly cash distribution per unit to $0.70 or $2.80 on an annualized basis. The indicated distribution rate represents a 12.6% yield based on the recent closing price and an 8.75% yield based on our price target of $32 per unit implying total return potential of greater than 50%.

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LithiumBank Resources (LBNKF) – Transitioning from Exploration to Development

Posted on February 3, 2023February 3, 2023 by cpereira@noblefcm.com

Friday, February 03, 2023

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

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

Alberta projects are front and center. Boardwalk and Park Place are both district-scale lithium brine projects with significant potential for commercial development. LithiumBank established Canada’s first indicated mineral resource of lithium brine at its Boardwalk project and assayed wells up to 82.0 milligrams per liter lithium at Park Place. LithiumBank intends to complete a preliminary economic assessment (PEA) for Boardwalk in the first quarter of 2023 and a preliminary feasibility study (PFS) in the second half of the year. At Park Place, a mineral resource estimate is expected in the first half of the year, followed by a PEA in the second half of 2023. LithiumBank expects to conduct detailed hydrogeological modeling and brine sampling at both Boardwalk and Park Place to expand and upgrade the classification of their lithium resources to measured and indicated categories.

Brine processing pilot plant. LithiumBank intends to further de-risk Boardwalk and Park Place by commissioning a brine processing pilot plant in the second half of 2023 to produce a concentrated lithium chloride solution. LithiumBank is working with several direct lithium extraction (DLE) technology providers to enhance recovery, lower power consumption, and reduce project capital expenditures. This work and subsequent reservoir sampling is expected to be incorporated into the Boardwalk PEA and Park Place resource estimate.

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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).