Tuesday, March 28, 2017

Eric Sprott - This Presidency Should Be VERY GOOD FOR GOLD!


This week, Eric Sprott assesses how the new Trump Administration in the U.S. might affect gold and silver prices in 2017.

- Source

Thursday, March 23, 2017

Eric Sprott On Trade Wars With Mexico & China: It’s Scary


Eric Sprott Analyzes Trump’s Trade War With Mexico (and likely China Next): “It’s scary to be honestYou could see Russia, China, even the EU stop buying US bonds… ” How Will This Affect Gold and Silver?

- Source

Sunday, March 19, 2017

Silver Just Did Something That “Shocked” Billionaire Investor Eric Sprott


Eric Sprott Has Good News For Silver Bugs: It Looks Like 2016 All Over Again – It’s A Great Time To Be In the Game! The Billionaire Explains Silver Just Did Something That “Shocked” Him.

- Source

Tuesday, March 14, 2017

Sprott Asset Management’s 2017 Outlook For GOLD

During the past three months, market sentiment has shifted on fundamentals dominating short-term trading in gold markets. Consensus views have gravitated towards further Fed tightening, rising Treasury yields and a strengthening U.S. dollar. In the body of this report, we have outlined our reasoning as to why each of these assumptions may be short-sighted.

In our view, cumulative and immutable imbalances (debt levels, valuations, dollar liquidity) will soon test recent sentiment shifts, we expect decidedly in gold’s favor. While we are not stocking canned goods, oiling muskets, or bottling water, we are suggesting that a modest portfolio allocation to gold has never been more prudent.

A consistent theme at investment conferences during 2016 has been the compression of investment returns. Especially in the pension and endowment world, very few institutions are achieving chartered rates of return. While institutions might have expected historically to achieve real rates of return of 5% on equities and 2 ½% on bonds, the realities of achieved returns during the past several years are tracking (at the high end) roughly half these historical levels.

We believe the root cause for compressed returns is far simpler than much of the sophisticated quantitative analysis we have encountered. The United States has a structural debt problem, and the Fed has employed ZIRP for eight years to forestall rationalization of this untenable debt load. As every student of economics is aware, marginal returns gravitate towards marginal costs.

The longer the U.S. economy operates in a ZIRP environment, the closer to zero will migrate the sum-profit-total of U.S. economic agents. Recognizing this, the Fed has telegraphed for years a desire to normalize rate structures. Consensus has recognized the Fed’s poor track record in achieving rate normalization but, in our view, has failed to grasp the true impediment to higher rates.

It is not popular to suggest U.S. debt levels cannot sustain higher rates, but we believe these are the root facts. During the past decade, global productivity has collapsed to its lowest level in the modern financial era. Optimists shrug off these statistics as outdated and unreflective of vast productivity enhancements enabled by the internet, I-Phones and social media. We cite this example (which we will develop further in our February report) as a metaphor for a broader condition in global asset markets.

Most investors sense that there are looming risks in financial markets and troubling impediments to healthy global growth. Yet, the relentless performance of the S&P 500 Index has reinforced the inclination to ignore these nagging concerns. In the institutional arena, excessive bearishness or even adoption of defensive and hedged strategies can handicap performance and introduce career risk. To us, an allocation to gold is a powerful tool to help insulate portfolios from potential dislocations in a complicated financial world. In essence, a gold allocation can provide a bit of cheap insurance to any ongoing investment program.

We continue to marvel at gold’s lack of sponsorship in the institutional arena. During the past hundred years, even a modest portfolio commitment to gold has been proven to push total portfolio returns further to the right along return frontiers for any reasonable asset mix, generating equal returns with less risk and standard deviation, or superior returns with equivalent risk and standard deviation, versus identical portfolios without a gold investment component (World Gold Council).

During the past 16 years, gold’s non-correlated and market-leading returns have provided invaluable portfolio alpha in an increasingly challenging investment environment. During the next several years, mounting monetary, economic and financial imbalances, which appear to be approaching important tipping points, suggest gold is a portfolio-diversifying asset worthy of serious consideration.

We view corrections in gold markets during the fourth quarter of 2016 as fairly standard retests of early 2016 breakouts from established downtrends. To us, underlying fundamentals suggest significantly higher gold prices during the next several years.

Gold’s Prospects in 2017 and Beyond

Trumponomics

Over the long run, we believe the gold investment thesis rests squarely on monetary, economic and financial imbalances which continue to be resolved to the measurable benefit of investors choosing to denominate a portion of their wealth in assets which can neither default nor be debased. Over the short run (one-to-two years), gold’s performance can be impacted by consensus views on a wide array of market variables.

We would highlight five such variables as motivating the lion’s share of trading patterns in gold markets: Fed policy, the U.S. dollar, 10-year Treasury yields, U.S. economic performance and U.S. equity risk premiums. It is unusual for any single event to impart significant impact on all five of these variables simultaneously. The Trump election has certainly proven to be such an event!

Trump’s victory has unleashed one of the strongest expressions of business and financial optimism in history, starkly affecting variables central to gold’s short-term trading patterns. While optimism is never a bad thing, we suspect financial markets are reflecting classic emotional blow-off.

Investors, admittedly parched for a more normalized economic world unfettered by QE and ZIRP, have, in our view, temporarily lost sight of immutable realities such as debt, valuation, debasement and mathematics.

Should our suspicions bear out that reigning euphoria proves short-lived, recent market dislocations will provide excellent entry points for a wide array of investment assets. Given our confidence in underlying fundamentals relevant to precious-metals, we view the Q4 back-up in gold markets as a rare opportunity to achieve a significantly discounted entry point in gold’s unfolding advance.

- Source, Sprott

Thursday, March 9, 2017

Silver Soars Through $18/oz As Trump Meets With Abe


A Mini Squeeze Has Sent Silver Prices Up 50 Cents This Morning. Billionaire PM Investor Eric Sprott Breaks Down The Action.

- Source

Sunday, March 5, 2017

With Gold & Silver Surging, Billionaire Eric Sprott Warns It’s Off the Scale!


Eric Sprott Warns “It’s Off the Scale!” Is THIS About To Drive the Mainstream into Buying Gold and Silver?

- Source

Thursday, March 2, 2017

Eric Sprott - Gold & Silver ROAR As Option Expiry Ends


Early Stages of a Short Squeeze? With Options Expiry Over, the Naked Shorts Have Released Gold and Silver to ROAR HIGHER.

- Source

Saturday, February 18, 2017

Eric Nuttall's Top Picks

Market Outlook:

Despite being in a multi-year bull market for oil, herd mentality has taken over as fears around a potential Border Adjustment Tax by the Trump administration have led to the pummelling of Canadian oil stocks with many falling by 15 per cent+ this month. We do not believe the U.S. president will push through a BAT that includes oil, as it would increase the average household’s gasoline expense by $300-$400/year and would be highly politically unpopular and counterproductive to his re-industrializing of the American economy. As such, we view the risk-reward as extremely favourable for aggressive capital deployment. We are “all in” and believe we own stocks that have the potential to appreciate by over 60 per cent over the next 18 months. This month reminds us of January 2016 when people were panicking, stocks were imploding, and our will was tested from being fully invested. How did it turn out? The Sprott Energy Fund rallied by over 140 per cent from the lows seen in that month. Now is not the time for panic; it is the time for disciplined investment and a

SPARTAN ENERGY  – 

We believe a very large U.S. seller has been responsible for the stock falling by 16 per cent this month and is the poster child for what has happened to Canadian oil stocks due to worries around the Border Adjustment Tax. The stock now trades at 4.9X 2018 EV/CF on our commodity assumptions versus formerly trading at 8.0X. We see over 65 per cent upside in the stock over the next 18 months. SPE is a very low-risk way to play our multi-year bullish view on oil.

BIRCHCLIFF ENERGY – 

Birchcliff Energy is at the beginning of a multi-year internally-funded ramp in production as it grows its core Montney production and explores a new liquids-rich zone. The company has never been in a better position to create long-term shareholder value given a much improved balance sheet, strengthened inventory, and exploration upside. The stock trades at 5.3X 2018 EV/CF at $3/mcf gas and we have an 18-month $13.30 target which equals over 60 per cent upside.

TRICAN WELL SERVICES -

Trican Well Services is benefitting from the beginning of the inflection in pressure-pumping pricing. Prices are up 20 per cent from the bottom and we believe could go up another 30 per cent to 40 per cent by year-end. They also monetized a portion of their interest in a U.S. pressure pumper called Keane which the street is mispricing. Giving a mark-to-market valuation on Keane, which we believe is worth $2.10/share, TCW is trading at 4.3X 2018 EV/EBITDA when a mid-cycle valuation is 7.5X. This would imply upside of over 50 per cent.it of patience. The Sprott Energy Fund is the #1 Energy Fund in the country on a one- and three-year basis as of December 30, 2016.


Tuesday, February 14, 2017

Eric Sprott to acquire a strategic interest in Northern Superior Resources

Northern Superior Resources Inc

* Eric Sprott to acquire a strategic interest in Northern Superior Resources, Northern Superior initiates concurrent financings

* Northern Superior Resources Inc - has agreed to make a $2 million investment in Northern Superior

* Northern Superior Resources Inc - company is undertaking concurrent financings to raise up to an additional $2.5 million

* Northern Superior - proceeds from ft offering are intended to be used to support exploration programs on Ti-Pa-Haa-Kaa-Ing gold- silver- copper property.

- Source, Rueters

Tuesday, January 24, 2017

Eric Sprott 'driving the bus' on Kirkland Newmarket merger

Kirkland Lake Gold (KLG.TO) has agreed to join forces with Newmarket Gold (NMI.TO) in an all-stock deal worth about $1 billion.

Retail and institutional investors are likely to take a shine to both the deal and the new gold company, according to Andrew McCreath, BNN Markets Commentator and founder of Forge First Asset Management.

“This is a deal that is trying to make a stock more interesting to more shareholders … and also to lower the cost of production of the combined entity with a higher production base,” he said on Thursday.

Kirkland Lake Gold shares will be exchanged at a ratio of 2.1053 Newmarket shares per Kirkland share, the companies announced in a press release. Once the deal closes, Newmarket shareholders will receive 0.475 shares of the combined company for each share held. Kirkland’s shareholders will emerge with 57% ownership of the merged company. The transaction is expected to close in the fourth quarter of this year, pending approvals.

Newmarket Gold has been on an aggressive expansion spree with the help of Eric Sprott – the noted gold bug. Sprott holds more than nine per cent of Newmarket’s shares and is also the chairman of Kirkland Lake Gold. “Clearly, Eric Sprott is driving the bus on making this transaction work,” said McCreath.

Newmarket CEO Douglas Forster has been trying to build the company into a mid-tier gold producer for the past year. Shares of Newmarket are up more than 250 per cent over the past year – that surge will likely dissuade another company from trying to make a competing bid for the company, according to McCreath, who thinks the popularity of the stock will likely make the deal appealing for traders. “I think this will be a nice little feast day for the merger arb funds out there that like these kind of deals.”

The higher production and lower cost profile will also make the deal appealing to a broader share of gold investors, added McCreath, whose Forge First doesn’t hold shares in either of the merging companies.

The new company will have total gold production of about 500,000 ounces per year from Kirkland’s flagship Macassa Mine in Northern Ontario as well as the Holt, Holloway and Taylor gold mines – all in northeastern Ontario. Newmarket currently operates three gold mines in Australia.

“Macassa is not exactly an easy mine,” McCreath pointed out. “There’s probably not a lot of upside unless gold goes way the heck up from here.”

- Source, BNN