Silver Miners being hammered recently... even if not hammered as hard as some other sectors...
I poked at the bloodbath in the Pot stocks over the weekend... where there's some serious ugliness occurring... some of the stocks there already going to zero... as the ugliness there only seems likely to get worse, "soon" for most of them... if with one or two potential silver linings... more about that later...
Among the issues that comes with the territory... when a sector is out of favor: no news is bad news, bad news is amplified, and good news often serves to remind investors they still own shares in some bad news story... so even good news can induce shares in an out of favor industry to decline. A lot of that has been apparent in the miners recently... which, in spite of global systemic risks spiking off the charts, including (although, given markets are manipulated... perhaps only more because of) monetary systemic risks being as bad as they have been in my lifetime... and in spite of (them lying about) inflation "cruising" now at a mere 12% annual rate recently... with that BEFORE the entire energy sector suddenly surged higher, ensuring more inflation is on tap ? Still, the inflation risks being realized or not, the miners have suddenly resumed their prior trend... with a steep descent since June, taking them back down into bear market territory, which it now seems they'd only briefly been diverted from between April and June.
Energy prices soaring, today... are in large part a function of that same effect... that gross mismanagement of that part of the economy that works in cutting off investment in the development of resources... as Biden has done since January, impacting now in all forms of energy... is an approach that pretty quickly means you get fewer resources. And then you pay more for them... or go without. Some clearly do intend: "you will go without". And, that, too contributes significantly to systemic risks... as the cult of crazies rules the roost.
As is true of resources, so it s true of the stocks...
Biden's hostility to drilling and pipelines, and coal and... anything to do with energy... means you will pay more for energy... while higher energy costs... doesn't make "green" energy work better... or make it cost competitive... it only means the status quo prevails... lower cost energy is still lower cost, at higher prices... and that means you will also pay quite a lot more than before for the already higher cost alternatives to high cost energy... assuming the wheels stay on the economy long enough to enable manufacturing anything...
What else comes with that trend in the markets... is that share prices have almost nothing to do with what happens in mining and mining exploration companies on a day to day basis. And, as time passes and share prices decline... those companies that got a brief taste of what markets are like for most others all of the time... who used the brief opportunity to raise a bit of cash... simply press ahead with the business of mining or exploring. Progress made over time... has the companies improving in value over time... as the market values them less. Don't think that's not a part of the plan... in the manipulations of the markets ?
But, its also true in every market that there are outliers... an explorer that makes a big find in a large and valuable deposit of minerals... will still have some very good days in the market... whether or not their ultimate valuation in the long term is suppressed relative to what it should be.
Given that as a "big picture" input...
I'm addressing all of those issues, now, by tracking events in Newfoundland... where a big new discovery is ongoing... and proving the entire region has more potential, when properly understood, than was understood before. For a value shopper... a big gold find sparking off a gold rush that is occurring during a mining stock market meltdown... is perhaps as good as you could hope for ?
I posted recently about one such "potential" I am following... Sterling Metals... that has mostly proven disappointing, thus far. I'd not totally write them off, yet... as perhaps they have simply not yet figured out how best to proceed in finding what they're looking for... But, the point I'm getting to... is that they've been addressing their potentials by comparing themselves, geologically, to the known world class Keno Hill deposit.
I've followed that deposit, and others like it, for decades, too... and often been disappointed... not because "they don't have anything"... but because the markets haven't well enabled the companies doing the work required to expand, develop and realize the value. Many historically important mining districts exist that have good potential... but, over the years... the fragmented nature of claims structures, and the too many small (lifestyle ?) companies with overly small parts of the pie... haven't totally stopped progress... but have mostly stopped it from mattering. Where those issues can be overcome... there are lots of interesting potentials in mining... where mines have lain dormant since being shutdown... as prices fell and the market put them underwater during prior declines.
Today, the Keno Hill deposit is one that, unlike some others, is well consolidated... and work continues improving it. As Sterling aspires to find a resource like that at Keno Hill... Keno Hill already has one ?
As the markets give the opportunity... I'll continue looking for the best new finds... and try to keep track of the best known values as historic producers become feasible, again... taking time to consider them fully, now... while they are still on sale... rather than trying to learn all about them quickly, only as they are doing what CDEV and GTE are doing this week... ?
Here's the actual Keno Hill... at $1.53 today, currently selling at 50% off what it sold for in June... which has it now very close to its 5 year average... if still twice what it sold for at the bottom in November of 2018... and five times higher than the $0.31 is sold for in 2015, at the final end-game in the last major bear market for miners... when almost no one wanted to own mining stocks... But, also, now six times lower than it was at the prior (Basel III truncated) bull market peak in 2011...
I'm not declaring the bottom in silver, yet... or, "the end of the current round of fraud in the ongoing manipulation of gold, silver and the miners" so "wait for it" seems prudent...
Alexco Announces 22% Increase to Silver Reserves; Updated Technical Report Demonstrates Robust Economics at Keno Hill
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