The world is at an interesting junction. Awash in debt caused by promises that governments cannot possibly fulfill, civil disorder takes place in at least fourteen different countries. The U.S. political system has tied itself into partisan knots in an effort to replay the 2016 election with a President dodging and weaving getting thrown out of office on the basis he used the Presidency for political purposes to affect an election. Those intent on tossing Trump out of office are of course using their office for political purposes to affect an election. But truth stopped being part of the political process a long time ago.
The U.S. Congressional-Military-Industrial-Complex (CMIC) managed to convince Trump to assassinate a high government official in a sovereign nation thereby setting an interesting precedent that almost certainly just painted a bulls eye on the butts of every U.S. high government official who would ever dream of setting foot in the Middle East. Does anyone in this administration even understand where the word "assassin" comes from? Iran invented the concept while many are hoping that one day Trump will cotton on to the interesting concept of telling the truth.
We were told at first that the U.S./Israel tag team needed to whack Soleimani on the legal basis that there was some "imminent" threat to the U.S. Our beloved president would have a nose the size of a California redwood like Pinocchio if that fairy tale represented the real world. In "Trump World" imminent means planned for many months. Those who believe that a country at constant war with enemies of all sorts located everywhere conveniently have forgotten that the U.S. declared war on seven countries in five years sometime prior to 911.
So now if the U.S. tells you that they are going to war with you and will invade you and kill your family and rape your dog, if you defend your country, your wife and children, you are called a terrorist. Soleimani didn't start a war with the U.S. or attack the U.S. first; the US declared war on Iran. Eighteen years ago!!
Sigh!!!!!
That can't end well.
In other places, South Africa, home of the mining of 78% of platinum and 39% of palladium the government determined that continuing to supply cheap electricity to potential voters, below the cost of production, was more important than providing well paid jobs to their citizens. Industry, primarily mining, is being throttled. Someday South Africa will be just as much an example of economic wisdom as is Zimbabwe today. Regardless of demand, the supply of PGMs is going to decline.
In 2017 having read the words on the wall, a South African company named Sibanye bought the Stillwater Mining Company in Montana for $2.2 billion and have counted an incredible 80 million ounces of platinum/palladium.
Group Ten Metals Inc. (PGE:TSX.V; PGEZF:OTCQB; 5D32:FSE) owns the other half of the Stillwater complex. They just announced some of the best PGM drill intercepts I have ever seen. I wrote about Group Ten back in July. It's something that everyone interested in PGM stocks should read. The PGMs are going to go into permanent shortage. There are few PGM companies to choose from.
Group Ten announced a drill program for the 2019 season back in June. At the end of October they put out a press release saying they had completed the program for the year. Assay results came out the week before Christmas. The market yawned and even while the price of palladium continues to hit a new all time high day after day, the market yawns. On the day the release came out, the shares were $0.175. Today they are $0.19.
Be still my beating heart.
Clearly the market doesn't get it. These results were world class, some of the best I have ever seen. Face it; most investors are as clueless as I am about the value of one hole compared to another. These intercepts have copper, nickel, platinum and palladium. Who can do that math in their head? But I've come up with a way where it is easy to compare one assay to another. The TSX has a hissy fit every time I use it because they would like to control all the information investors have access to. And you just know in your heart of hearts that your government has only your best interests in mind. Yea, right.
Let's take the example of the highest-grade hole first. Group Ten talked about a 1.90 g/t Pt equivalent intercept of 272 meters. Imagine for the sake of visibility that this hole is a cube. It's 272 meters deep and 272 meters on each side, and we will use a rock density of 2.5 for our math.
There is no such cube. It doesn't exist for Group Ten or anyone else. But if you pretend such a cube exists, you can compare one hole to another.
We cube the hole by multiplying the length by the width by the depth. Then we multiply that by 2.5 because there are 2.5 tons of rock in a cubic meter then we multiply that number by the gross metal value of the Pt equivalent of $59.07. Of course no mine extracts all of the rock or mills all of the contained metal but we aren't doing a 43-101, we are trying to understand what one hole means to the next.
If such a cube existed of 272 meters of 1.9 Pt equivalent it would have a gross metal value of $2.971 billion USD. Now that's a nice hole.
When you decrease both the length of the hole and the grade of the rock, what does that do to our mythical value? So we will do a cube of 175 meters times 2.5 times a rock value of $46.63. That gives us a gross metal value of a tiny $625 million in USD but both length and grade went down.
Where this technique for comparing holes gets interesting is when you increase either length of intercept or grade but not both. You can come up with a surprise. So we will take the 327 meter hole of 1.21 g/t Pt equivalent and multiply it times the rock density of 2.5 and gross metal value of $37.62 to come up with a drill hole value of $3.288 Billion in USD. That's billions with a capital B. B being a very large number for any drill hole. Now I can't tell you if a $37.62 a ton intercept is economic but a $3.288 billion dollar hole should be worth something.
The world is about to fall off an economic cliff into a debt sinkhole and that's true regardless of if the Donald manages to ignite WW III or not. All the fools investing with the use of the FOMO tool in "Bitcon," weed or the S&P are about to get a rude awakening. It might be nice to have some investments in real assets when that happens.
Group Ten is an advertiser and naturally that makes me biased. I do own shares bought in the open market. Do your own due diligence.
Group Ten Metals
PGE-V $0.19 (Jan 14, 2020)
PGEZF OTCBB 81.1 million shares
Group Ten website.
Bob Moriarty founded 321gold.com, with his late wife, Barbara Moriarty, more than 16 years ago. They later added 321energy.com to cover oil, natural gas, gasoline, coal, solar, wind and nuclear energy. Both sites feature articles, editorial opinions, pricing figures and updates on current events affecting both sectors. Previously, Moriarty was a Marine F-4B and O-1 pilot with more than 832 missions in Vietnam. He holds 14 international aviation records.
[NLINSERT]Disclosure:
1) Bob Moriarty: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Group Ten Metals. My company has a financial relationship with the following companies mentioned in this article: Group Ten Metals is an advertiser on 321 Gold. I determined which companies would be included in this article based on my research and understanding of the sector.
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