2020: A Breakout Year?

Written by Gerardo Del Real
Posted November 18, 2019

As we work through tax-loss selling season, there are signs everywhere that 2020 could finally be a breakout year for the precious metals space and the beaten-down juniors that are in position to be active.

Money is finally starting to trickle back into the exploration side of the sector.

Kai Hoffman noted that last week total financing dollars offered was just shy of C$100 million, which is a 15-week high.

Integra Resources (TSX-V: ITR) (OTCQX: IRRZF) recently secured a strategic investment from Couer Mining as part of a larger financing package totaling C$22 million.

Even Cordoba Minerals (TSX-V: CDB) (OTCQB: CDBMF), a company with good assets, but share structures that leave something (a lot) to be desired, just managed to secure an C$11 million, 19.9% strategic investment at a premium of over 100% from Chinese company JCHX Mining Management.

The cash infusion implies a C$55 million valuation for Cordoba and despite the 100% jump in share price, the current valuation still falls well short of that number.

On the macro front, gold continues to be resilient, the major U.S. indices continue to make new record highs (as I’ve told you repeatedly they would), and the dollar is still poised for one last run that breaks the back of those not expecting it (more on that another time).

Nearly 34,000 contracts (over 3 million ounces) traded hands last week in just under a half an hour, sending the gold price down to towards the $1,450 level only to see the gold prices recover and close the week just shy of the $1,470 level.

Millrock Resources (TSX-V: MRO) (OTCQB: MLRKF), which has been able to execute favorable strategic deals that include large expenditures for exploration on its massive, district-scale land package in Alaska, has been rewarded with a tripling of its share price in just under a quarter.

The Millrock deal will provide an abundance of news flow in 2020 and provide shareholders with a significant opportunity to retain a meaningful percentage of any material discoveries and yet the share price is still 50% off where it was two years ago.

That’s the opportunity.

Could gold see one more leg down? Absolutely. Do we still have another month-plus of tax-loss selling? Yes.

But we should all be taking a cue and doing what the Couers and JCHXs of the world are doing: buying meaningful positions at depressed prices to ride out for the next cycle.

Pick a sector, define your timeline and risk tolerance, pick a few of your favorite names, and put some speculative capital to work in companies positioned to be able to deliver in 2020.

It’s called buy low, sell high. Look at the charts. This is the buy low part of that equation.

To your wealth,

gerardo-sig

Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

*Follow Outsider Club on Facebook and Twitter.

Investing in Marijuana Without Getting Burned