The Gold Report: Gold has been trading between $1,200 and 1,300 for a while. What's your sense of where it is going in the near and middle term?
Brien Lundin: There is this belief in the industry that summer is a down time for precious metals. I went back and analyzed every summer since 2000 to see how gold performed during those summers.
It's somewhat arbitrary because you can pick your beginning and end points for the summer season. But using June 1 through Labor Day Weekend, early September, as a proxy for the summer, gold more often than not, and in fact in a majority of the cases, ended the summer higher than it began. Within that period, though, it was not uncommon for gold to experience a steep drop and then a recovery. Typically, that drop has occurred during the month of July. So, what we've seen so far this summer really conforms to the historical record. And, in fact, there's a good chance that gold will end up higher at the end of the summer if it continues the rally it's currently in.
With that said, the metal has, in recent days, come back a little bit, thanks to an easing of tensions in the North Korea conflict. Still, I get the feeling that gold has some legs underneath it here and has a positive bias, in fact a bull market bias, wherein investors will continue to interpret new news as bullish for the metal. I think we're on a slow but steady uptrend going into the fall from this point. Therefore, it's a great opportunity for investors to use the next season's typical strength to their benefit.
October 25-28, 2017
TGR: What the trend for mining companies in the summer?
BL: The mining companies, in particular the junior explorers/developers, are typically working away during the summer. In the Northern Hemisphere, it's really the exploration season of the year. So a number of these junior companies are releasing news during the summer and actually enjoying increases in their share prices if they're releasing good news. And the good news there is that many of them are getting positive drill results this summer because they finally had the budgets to go out and properly explore their prospects.
TGR: Do you have companies that you'd like to talk about that fit the bill?
BL: One company that's made headlines recently is GT Gold Corp. (GTT:TSX.V)—"GT" standing for Golden Triangle—a company that had a quite exceptional gold-in-soils anomaly that it started drilling late this spring. It's a company that I started recommending in February because of that very strong gold anomaly. I was confident that it was going to hit something and, sure enough, it did. It got some significant high-grade hits at shallow depths over fairly large intersections and has really been the darling of the exploration season so far.
Its share price has about tripled since it made the news, and it's up nearly four times since our recommended entry price in Gold Newsletter. That has stolen the headlines and created a lot of excitement, not only for gold exploration plays in general but, also, exploration companies focused in the Golden Triangle area of British Columbia.
Another company that has released some good results but has not yet gotten the kind of reaction that GT has is Klondike Gold Corp. (KG:TSX.V). That's another company that I've been very positive on that has been drilling and is getting bulk tonnage-type drill hits. It has, in the past, hit high-grade gold intersections on its property in the Yukon, but they were very narrow intersections. The company was searching for a lower-grade but larger-tonnage type of deposit on its property position, which is located, of all things, in the Klondike and for which it is looking for a lode source for a lot of the gold that was discovered in the streams of the Klondike region.
It has, in fact, begun to hit this large-tonnage, lower-grade resource in its drilling. The target that it has is potentially kilometers in length. So it has the potential to make a lot more news going forward, and I think the investing public will start to appreciate the significance of what it has hit as it continues to deliver these kinds of drill results.
TGR: Because the project is so far north, would its costs be prohibitively high, dealing with the area's extreme climate?
BL: That's usually a concern for the Yukon, but the infrastructure in the Yukon has been improving and is set to improve over time, as some new roads and powerlines are put in for various other mining projects.
But for Klondike Gold in particular, infrastructure is not a problem. It gets to drive into its site from Dawson City. It actually has an auto parts store within easy driving distance from its camp. So infrastructure is actually a positive for Klondike Gold.
TGR: What other companies would you like to talk about?
BL: One of the things we've been focusing on in Gold Newsletter has been exploration plays. For our July issue, we focused on about a half-dozen companies that were finally able to raise enough money, thanks to the recovery in gold in 2016, to get mobilized and perform decent drill programs on some outstanding targets. We recommended five or six of these companies in our July issue, and the news is starting to come in from a number of them. As I mentioned, GT Gold and Klondike made some news.
But we also like Tower Resources Ltd. (TWR:TSX.V), which is in British Columbia and is currently drilling one of three projects. At its Rabbit North project, it's hitting porphyry mineralization and seems to have figured out the mineralizing system there, and is more easily and accurately able to target the mineralization. So I expect more and better news to come out of Tower. And as I mentioned, it also has two other projects that it will be exploring this summer, one of which should be drilled as well.
Another company that I like is Adamera Minerals Corp. (ADZ:TSX.V), which is drilling right now in Washington state. It has a number of prime geophysical and geochemical anomalies that are coincident with each other. Interestingly it also flew geophysical surveys over producing mines in the area and got identical results to the surveys over its drill targets. So it's hitting these targets right now with the drill bit, and I expect really good news from it as well.
Another company that's drilling right now that I like is Precipitate Gold Corp. (PRG:TSX.V). It turned out its first drill hole results this season came from one of its lower-priority targets, primarily due to drill logistics. Therefore, those results came out first, and they weren't nearly as spectacular as one might hope. Decent, but not spectacular. So the share price took a hit.
However, the next target that Precipitate is drilling right now is a higher-priority target, and I have a feeling that the company is going to surprise the market with really good drill results from that program. So that's another one that I like.
Precipitate's project is next to the holdings of GoldQuest Mining Corp. (GQC:TSX.V) in the Tireo Belt of the Dominican Republic, a newly developing gold trend that's not quite understood just yet by geologists. But it's apparent from the Romero discovery by GoldQuest, the hits by both GoldQuest and Precipitate on other targets and the geological work that's been done that this is an area of the earth that's, for lack of a better term, quite messed up. There's a lot going on there, and at least one world-class deposit has been discovered in the region so far. It's very likely that there are one or two others lurking.
TGR: Have you seen some positive results from any other companies?
BL: There's a company that I just recommended this month called Ashanti Gold Corp. (AGZ:TSX.V), which put out some outstanding drill results from its project in Mali. The key here is that it has drilled only a couple of pods of this mineralization. It has about six such pods identified. So, if it gets the similar results on the next four pods of mineralization, this is a company that could develop well over 1 million ounces of gold in an area that's surrounded by very large mines and great infrastructure. It's a company with a market cap under $15 million, that I think is going to make a lot of news going forward.
TGR: Is the jurisdictional risk in Mali an issue?
BL: I think it's something that has been put behind it. There were some issues a couple of years ago with Mali, but there are a number of very large gold mines operating in the area. I don't see it as a big issue going forward or one that isn't balanced by the commensurate potential rewards from a big discovery in the area.
TGR: Brien, every October you run the New Orleans Investment Conference. Can you tell us about your plans for this year?
BL: It's going to be a great year for the New Orleans Investment Conference, which will be held Oct. 25-28. This will be our 43rd anniversary. It is the big annual event for investors in the resource industry, particularly precious metals. As a result of the strength since 2016 in the precious metals, we've seen a lot more response from both exhibiting companies and attending investors to this year's event. We sold out of our hotel last year, and we anticipate that the same will happen this year. So there is a sense of urgency for investors to register.
We think this year's conference is going to be one of the most rewarding events in our long history. We're featuring Tucker Carlson as a new speaker. We also are featuring Charles Krauthammer again. He's been a regular for the last five years or so and always comes and shares his views personally with our attendees.
We have an exciting new speaker this year, Robert Kiyosaki, who has a huge following in the investment and self-help communities. We have Jonah Goldberg from National Review and FOX News. We have Judy Shelton, who is a longtime gold advocate and an economist who's on the shortlist from the Trump Administration to be on the Federal Reserve Board. So we're getting ahead of the game, as it were, on that score. Judy will provide an opportunity to give attendees an inside look into what could be a new and important force on the Federal Reserve Board.
We also have Doug Casey, Peter Schiff, Dennis Gartman, Rick Rule, most of the big-name experts in precious metals and resources from the world over. We also cover economics and geopolitics, as you can tell from our speaker list. And if there's a one-stop shop for getting the most powerful strategies and the hottest tips in precious metals and mining stocks, this is the place to go.
TGR: Thanks, Brien.
New Orleans Investment Conference information and registration is available here.
With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, a highly regarded publisher of market analyses and producer of investment-oriented events. Under the Jefferson Financial umbrella, Lundin publishes and edits Gold Newsletter, a cornerstone of precious metals advisories since 1971. He also hosts the New Orleans Investment Conference.
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Disclosure:
1) Patrice Fusillo conducted this interview for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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3) Brien Lundin: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Klondike Gold, Tower Resources, Adamera Minerals and GoldQuest Mining. I, or members of my immediate household or family, are paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this interview: Precipitate Gold is an exhibitor at this year's New Orleans Investor Conference. I determined which companies would be included in this article based on my research and understanding of the sector. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.
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