The KE Report KE Report

Welcome to The KE Report Weekend Show! On this Weekend Show we feature two well respected newsletter writers focused on investing in metals stocks (Joe Mazumdar) and energy stocks (Dan Steffens).
 
While commodities prices pulled back this week there are a number of developments within the equities that we discuss. For comments on the pullback in commodities prices be sure to check out the Daily Editorials we posted throughout the week.
 
Segment 1 and 2 - Joe Mazumdar, editor of Exploration Insights, discussing the resource market, metal prices, and M&A activities. Joe shares insights on high metals prices, merger activities, and investment opportunities in metals like silver, gold, and copper. The discussion also touches on financing news, the significance of advanced exploration and development assets, and how royalty companies fit within a portfolio.
Click here to learn more about Exploration Insights.
Segment 3 and 4 - Dan Stephens, President of the Energy Perspectives Group. The discussion covers the significant rise in natural gas prices, oil stability just under $80 per barrel, and a major merger between SilverBow Resources and Crescent Energy. Key drivers behind the natural gas price spike are analyzed, including increased demand from power plants and AI data centers, and its impact on the market and stock valuations. The details and synergies of the Silver Bow and Crescent Energy merger are explored, along with the potential for more M&A activity in the energy sector.
Click here to learn more about the Energy Prospectus Group.
 
 

Joel Elconin, Co-host of the Benzinga PreMarket Prep Show and Editor of the PreMarket Prep website joins us to discuss this week's dramatic market movements, notably Thursday's significant drop in markets despite Nvidia's impressive earnings. By Friday, markets showed resilience, with the S&P 500 nearly neutral for the week.
 
Key marker trends continue to be the 'buy the dip' mentality and the influence of Fed comments. We also focus on natural gas, gold, copper, and Bitcoin's trading patterns. Additionally, analysts re-ratings of First Solar caused a major jump in price.
 
Click here to visit the PreMarket Prep website.

David Wolfin, President and CEO of Avino Silver and Gold Mines (TSX;ASM – NYSE:ASM), joins me to recap the key takeaways from the Q1 2024 financials and operations, and then takes a deeper dive into the Company’s 5-year production growth plan, to become an intermediate silver producer, in Mexico.
 
David outlines the consistent silver, gold, and copper production coming from the Avino Mine, the upcoming development of the La Preciosa Project later this year, with commercial production expected early in 2025, and then the Oxide Tailings Project a few years out that all contribute to the 5-year production growth plan. We spend some time having him outline all the historic drilling, met work studies, community engagement, and scoping work that has already been completed on La Preciosa, making it shovel-ready now.  The Company is simply waiting on the final permits later this summer, to then begin putting in the decline and several months after that to start mining ore and shipping it over to the Avino processing plant. We also discuss the exploration upside at both the Avino Property and at La Preciosa for further potential to expand resources and mine life.
 
If you have any follow up questions for David or would like further information on any of the topics we discussed please email them to me at  Shad@kereport.com.
 
In full disclosure, Shad is a shareholder of Avino Silver & Gold at the time of this recording.
 
Click here to follow along with the latest news from Avino Silver and Gold

Marc Chandler, Managing Partner at Bannockburn Global Forex and Editor of the Marc to Market website joins us to recap the Fed minutes, currency market moves and the commodities pullback this week.
 
We start by diving deeper into the recent Fed minutes, analyzing the hawkish tone and market expectations regarding rate cuts. We discuss how rate cut expectations impact the U.S. equity markets, and the balance between market moves and economic resilience. Additionally, we discuss the influence of central banks in the EU, Japan, and Great Britain on currency trends and the importance of U.S. interest rates in driving market dynamics.
 
Commodities are up next, including insights on gold, oil, and copper. We tie in economic trends in China and the ongoing U.S.-China relations. Lastly, we reflect on the current state of the U.S. markets and the potential implications of the evolving global economic landscape.
 
Click here to visit Marc's website - Marc to Market.

Jayant Bhandari, a private strategic resource investor that consults many high-net-worth investors, joins me to review the trends he is seeing in the gold and silver stocks, some arbitrage opportunities in ongoing merger and acquisition deals, and some companies that should have nice upside torque based on their work programs or optionality to defined ounces in the ground.
 
Jayant believes we are in a sweet spot in the resource space where finally people can start deploying more capital into the junior side of the market, as it starts to catch up to the moves we already seen in the mid-tier and senior producers.   We talk about producers finally being more profitable and in the position to acquire smaller companies, and that some juniors are merging to mass up in size. Another topic that comes up is jurisdiction risk and jurisdiction diversification, and how investors and larger companies have been more amenable to going into more exotic locations the end of last year and into this year.  We cover a lot of topics and Jayant shares a lot of companies in his portfolio or on his radar for various reasons.
 
The companies discussed are:  Base Resources (BSE.AX) (BSE.L), Energy Fuels (EFR.TO) (UUUU), Blackwolf Copper and Gold (BWCG) (BWCGF), Treasure Metals (TML.TO) (TSRMF), OreCorp (ORR.AX), Perseus Mining (PRU.TO) (PRU.AX), Silvercorp Metals (SVM), Adventus Mining (ADZN.V) (ADVZF), Aztec Mining (AZT.V) (AZZTF), Newcore Gold (NCAU.V) (NCAUF), Montage Gold (MAU) (MAUTF), Irving Resources (IRV.CN) (IRVRF0, O3 Mining (OIII.V) (OIIIF), Stellar Gold (STLR.TO) (STLRF), Aris Mining (ARIS.TO) (ARMN).
 
In full disclosure, Shad holds shares in Energy Fuels and Silvercorp Metals at the time of this recording.
 
Jayant is hosting his annual Morality and Capitalism conference in Vancouver on Saturday June 1st, and information can be found here for attending the event:
https://jayantbhandari.com/capitalism-morality-2024/
 
Click here to visit Jayant’s website.

Justin Reid, CEO of Troilus Gold Corp. (TSX: TLG) (OTCQX: CHXMF), joins me to take a deep dive into the key metrics and takeaways on the Feasibility Study released to the market on May 14th on the gold-copper Troilus Project located in northcentral Quebec, Canada.  The Study incorporates an initial mineral reserve estimate that supports a long life, large scale, 50,000 tonnes per day open-pit mining operation; a project in a tier-one mining jurisdiction that stands out in the Quebec and Canadian mining landscapes.
 
This is a wide-ranging discussion where Justin addresses head on some of the questions or potential concerns that have been raised by the market about the lower IRR number, drop in grade from the PEA to the FS, and large capex to build the project, and puts these numbers in context with several other large open-pit bulk tonnage projects built in Canada like Detour Lake, Malartic, Cote’, Magino, and Greenstone.   These are the kinds of mines that actually get built and become key contributors in the gold space, and having the copper and silver exposure, as well as the 70% institutional partners and stakeholders, gives the company a number of levers to pull for raising the capital stack needed in a non-dilutive manner. 
 
Justin encourages listeners to think beyond the typical flashier headline numbers from higher-grade underground mine economic studies that regularly hit the markets from other companies, and take a closer look at the details and look under the hood of this study.  For example, he notes how the grade and economics ramp up in years 3-8, and then are stead for more than another decade.  The value  extends far beyond the typical 10 years a company gets in a discounted cash-flow scenario, as this is a 22 year mine life at present and growing.  Justin points out that with only half of the 13 million gold equivalent resources included in the reserves at this point, that the mine life will eventually extend well beyond 30 years, with more definition and infill drilling to upgrade categories of the resources into the reserves.  We also discuss the dichotomy between how retail investors reacted and commented, versus how the Company's institutional investors responded to this study.
 
Strong Economic Results
Base Case after-tax NPV5% of USD$884.5 million and IRR of 14%, reflecting long-term forecast prices of US$1,975/oz Au, $4.05/lb Cu, $23/oz Ag and $0.74 USD/CAD exchange rate.
After-tax NPV5% of USD$1.55 billion and IRR of 19.5% at April 2024 average metal prices (Au: $2,332/oz; Cu: $4.30/lb; Ag: $27.50/oz).
Cumulative after-tax cashflow of $2.2 billion on base case assumptions; increasing to $3.4 billion using average metal prices for April 2024.
 Open pit mine life of 22 years with the potential for future underground development.
Life-of-mine  average payable gold production of 244,600 ounces annually, 17.3 million pounds of copper and 446,700 ounces of silver annually.
Peak annual payable gold production of 456,100 ounces, 31.8 million pounds of copper and 613,600 ounces of silver in year 7.
Open pit mine, processing 50,000 tonnes-per-day (“tpd”); a 43% larger scale operation than the 35,000 tpd processing rate contemplated in the Preliminary Economic Assessment (“PEA”) from 2020.
An economical and energy-efficient process to produce a desirable gold-rich copper concentrate for sale to smelters, with a cyanide-free gravity concentration circuit to produce doré after Year 1.
Supported by an initial Mineral Reserve estimate of 380Mt grading 0.59 g/t gold equivalent (“AuEq”) (0.49 g/t Au, 0.058% Cu and 1.0 g/t Ag) for a contained 7.26Moz AuEq (6.02 Moz Au, 484 Mlbs Cu and 12.2 Moz Ag).1
LOM total payable gold of 5.4 million ounces, 382 million lbs of copper and 9.9 million ounces of silver.
Average LOM strip ratio of 3.1:1.
Low-Cost Production
All-in sustaining cash operating costs (“AISC”) of $1,109/oz.
Average operating costs of $19.06/t milled ore.
Attractive Capital