By Archie Faber
Trump loves gold. The White House decor is now a shrine to the precious metal, and there’s enough gold adorning Mar-a-Lago to fill the central bank coffers of your average country.
Even his private plane boasts gold-plated seatbelt buckles, gold bathroom fixtures, and gold silk wallpaper.
Gold loves Trump, too …
It’s been a banner year for the world’s number one safe-haven asset.
Gold has experienced a meteoric rise, hitting a record in August when it was up 40% on the year.
The fear index is at an all-time high, and it’s poised to get worse.
Investors are terrified of a contested presidential election.
Wall Street giants, most recently UBS–are telling clients to flee the markets and buy up gold.
Trump, for all his love of gold, is spurring the precious metal on by pumping the fear index further with suggestions that his defeat might be the result of a fraudulent vote.
In times like these, gold isn’t just a safe haven, it’s a massive opportunity.
But here’s what gold loves even more: The transition from Trump to Biden.
Why? Because Trump put in play a crisis situation in which investors have been fleeing to their favorite safe haven.
And now Biden is likely to push gold even further by unleashing another substantial monetary stimulus—one of gold’s favorite things.
Amid this perfect setup, the most rewarding potential opportunities are often found among the junior mining stocks, some of which are set to outperform the market in this environment.
But the biggest prize is the junior miner that’s made the next major gold discovery—a discovery that could add billions of dollars to its market cap.
We recently saw a stunning high-grade gold discovery by Amex Exploration in one of the most prolific venues in the world–Quebec.
You probably missed the massive 7,000% upside on that one.
But another company is hoping for a repeat, and even several Amex directors and shareholders are piling into it.
As influential gold voices predict $3,000 or even $5,000 per ounces prices in our uncertain future, there’s no better place to be than on the edge of the next big discovery in a venue that is both prolific and largely untapped.
And there’s not much time left before Starr Peak finds out more about what it’s got in the ground, and Starr Peak’s stock has already gained 600% this year.
Want to Ride the Gold Train? Head to Quebec
Quebec is already home to at least 30 major venues and 160 exploration projects.
Yet, only some 40% of the province’s mineral potential is known today.
The province’s Abitibi Greenstone Belt is where Amex Exploration recently hit very high-grade gold in its Perron Gold Project.
In a perfectly timed move, Starr Peak swooped in and scooped up the land adjoining Amex right before Amex’s big discovery.
From then on, Starr Peak has been aggressively making acquisitions to expand its position.
After buying up land next to Amex, and then some more … Starr Peak bought up the past-producing gold mine on the other side. Now, it’s got 74 miner claims on some 2,280 hectares in the world’s hottest new gold venue.
Here are some of Starr Peaks recent additions:
- The NewMétal Property contains 53 mineral claims covering 1,420 hectares of highly prospective ground adjacent to the AMEX discovery.
- The Normétal Mine is a past-producing mine from which approximately 10.1 million tonnes grading 2.24% Cu, 5.41% Zn, 0.526 g/t Au, and 44.45 g/t Ag were extracted periodically between 1937 and 1975.
- The Normetmar mine shows a historic resource of 306,000 t grading 11% zinc, of which only ~48,000 t has been mined since 1990. It also shows several gold intersections.
- Rousseau is a bloc of 12 claims covering over 470 hectares in the Rollmac gold zone of 31,298 tonnes grading 11.99 g/t Au (historical) …
- Turgeon Lake gives Starr Peak two more claims covering almost 113 hectares with samples at the water line assaying up to 168.3 g/t Au, 30.2 g/t Au and 23.7 g/t Au (GM 52490) and a drill hole assaying 18.7 g/t Au over 3.09 m, including 68.9 g/t Au and 10.48 g/t Ag over 0.4 m. (historical).
From there, it’s easy to follow what could come next:
Right now, Amex is drilling with a vengeance. And it’s drilling closer and closer to Starr Peak’s property line. In fact, the most recent set of drill results announced by Amex came from a drill hole less than 1km away from the Starr Peak property line. With each drill, the results are showing higher grade the closer they get to Starr Peak.
In other words, Amex is drilling closer and closer to Starr Peak and each time it announces new results, Starr Peak looks like it’s sitting on an even sweeter gold play. That’s why the stock bounces every time Amex makes an announcement.
Fully Funded to Drill
Right now, Starr Peak is identifying targets.
In August, the company signed on top geological consulting firm Laurentia Exploration–the same firm behind the Amex discovery.
In early September, Starr launched VTEM (Versatile Time Domain Electromagnetic) system surveys on the main block of its NewMétal property. It also launched high-resolution drone mag geophysics surveys over the entire property, including its new plays of Rousseau and Turgeon Lake Gold.
Small-Cap Companies Behind Supermajor Discoveries
After years of cost-cutting, gold miners are now ready to spend, spend, spend on exploration – globally.
But not in the way you would expect …
This isn’t a supermajor game anymore.
Mining majors don’t really explore these days. Instead, they let the junior miners do all the heavy lifting and then buy them up when they make a major discovery, or when they prove it up in the development phase.
That’s why there’s so much risk/reward to junior miners–so much so that Wall Street is expecting them to outperform the market and even short-sellers are now giving them a wide berth.
The upside is found in some very simple math: When you’re a junior miner with a tiny market cap sitting on a potentially massive gold discovery, and then it proves out, your stock is headed for gains that are out of this world. This is where millionaires are minted in the end.
In this case, we’re looking at a small-cap miner sitting right next to another gold discovery. That miner has moved fast to expand its position in a flanking movement.
And now, Amex–which has already announced high-grade gold discoveries–is drilling closer to Starr Peak, and the winds of discovery could be blowing in its favor.
Other companies looking to ride the gold wave:
Legendary investor Warren Buffett finally changed his his long-held negative stance on gold on this year when Berkshire Hathaway disclosed a massive stake in Canadian Barrick Gold (NYSE:GOLD, TSX:ABX) at a time when gold was soaring. Berkshire Hathaway bought more than $560 million in Barrick Gold shares. Buffett often referred to gold as useless for the most part. But with COVID-19 pandemic taking its toll on the economy, even if the dollar makes a few temporary comebacks, gold is on track for a 90% increase in a very short time frame. That makes gold one of the biggest opportunities in the past few months.
Barrick Gold, for its part, is on track to produce as much as 4.6 to 5 million ounces of gold and between 440 to 500 million pounds of copper this year alone. At current prices, that could equate to as much as $1.5 billion in revenue from just its gold and copper assets.
Just recently, Barrick Gold posted its third-quarter earnings, and boosted its dividends for the third time this year. CFO Graham Shuttleworth explained, “The Board believes that the current dividend increase is sustainable and is reflective of the ongoing robust performance of our operations and continued improvement in the strength of our balance sheet, with total liquidity of $7.7 billion, including a cash balance of $4.7 billion, and a debt net of cash position of just $0.4 billion as of the end of the third quarter, as well as no material debt repayments due before 2033.”
Newmont (NYSE:NEM, TSX:NGT) is the largest gold company on the planet, but that doesn’t mean it doesn’t still have upside potential. Founded in 1916, and based in Greenwood Village, Colorado, Newmont is a veteran miner with one of the top executive teams in the business, and its operations span 11 countries, including gold mines in Nevada, Colorado, Ontario, Quebec, Mexico, the Dominican Republic, Australia, Ghana, Argentina, Peru, and Suriname.
The big news for the company last year was its acquisition of Goldcorp. Though it was controversial at the time, the $10 billion acquisition has paid off in a big way. As gold climbed to record highs thanks to investors piling into gold due to the COVID pandemic, Newmont has seen a boom in its share price. This year, gold has soared from $1282 to over $2000 at one point, and Newmont’s stock rose with it, earning investors as much as 90% returns on their original purchase.
Like Barrick, Newmont posted incredible third-quarter results, smashing records and more-than-doubling its net income from last year. CEO Tom Palmer explained, “Capitalizing on the strength of our portfolio and higher gold prices, we delivered record third quarter adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of US$1.7 billion and free cash flow of US$1.3 billion,” adding, “This was the best quarterly financial performance in Newmont’s history.”
Yamana Gold (NYSE:AUY, TSX:YRI) is another giant making all of the right moves. It’s been on an absolute tear this year. Since March, Yamana has seen its share price climb by as much as 145%, and it could be heading even higher. That’s great news for investors looking to jump on board the gold rally. Though it weighs in with a modest $5.3 billion market cap, Yamana’s $5.56 per share price is accessible for all types of investors. And if that wasn’t enough, it also has a long history of increasing its dividends which gives investors even more incentive to grab a few shares and hold on for the long haul.
Recently, Yamana signed an agreement with Glencore and Goldcorp to develop and operate another Argentinian project, the Agua Rica. Initial analysis suggests the potential for a mine life in excess of 25 years at average annual production of approximately 236,000 tonnes (520 million pounds) of copper-equivalent metal, including the contributions of gold, molybdenum, and silver, for the first 10 years of operation. The agreement is a major step forward for the Agua Rica region, and all of the miners working on it.
In its third-quarter earnings report, Yamana beat expectations, posting its best operating cash flows since 2015, up by more than 300% year over year. And thanks to its tremendous cash flow, it joined other gold majors in raising its dividend.
Kinross Gold Corp. (NYSE:KGC; TSE:K) may not be as established as some of its century-old peers, but it’s quickly become a heavyweight in the industry. With operations across the globe, its big picture approach is paying off. The $11 billion gold giant has mines in Brazil, Ghana, Mauritania, Russia and the United States, and it’s looking to expand even further.
Since 2015, Kinross has seen its share price rise by as much as 400%. In fact, this year alone, it’s already up by as much as 85%. And Kinross is showing no signs of slowing. With a healthy balance sheet, favorable earnings reports, and governments, banks, and retail investors piling into safe haven assets, it’s likely to continue climbing.
Like its peers, Kinross posted stellar third-quarter earnings, with revenues rising 29 percent year-over-year. Though production was down slightly from 2019 due to COVID-19 forced mine closures, higher gold prices helped Kinross’ numbers significantly.
Kirkland Lake Gold (NYSE:KL; TSX:KL) is another heavy hitting gold giant coming out of Canada.. Though not quite as massive as Barrick or Newmont, Kirkland is no stranger to striking headline grabbing deals in the industry. In fact, just recently, Kirkland and Newmont signed a $75 million exploration deal that could wind up being a game-changer for the industry.
This alliance will provide Kirkland with cash flow to evaluate new alternatives for the future of the mining complex, dive deeper into its existing properties, and weigh other opportunities where the two gold companies may be able to find common ground in the future.
According to a joint press release on August 18th, “Newmont has acquired an option from Kirkland on the mining and mineral rights subject to a royalty payable by Newmont to Royal Gold, Inc. (the Holt Royalty) in exchange for a $75 million payment to Kirkland Lake Gold. Newmont can exercise the Option only in the event Kirkland intends to restart operations at the Holt Mine and process material subject to the Holt Royalty”
By. Archie Faber
**IMPORTANT! BY READING OUR CONTENT YOU EXPLICITLY AGREE TO THE FOLLOWING. PLEASE READ CAREFULLY**
This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements. Forward looking statements in this release include that prices for gold will retain value in future as currently expected, or could rise based on political considerations; that Starr Peak can fulfill all its obligations to acquire its Quebec properties; that Starr Peak’s property can achieve drilling and mining success for gold; that historical geological information and estimations will prove to be accurate or at least very indicative; that high-grade targets exist; and that Starr Peak will be able to carry out its business plans, including timing for drilling. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to fruition include that politics don’t have nearly the strong effect on gold prices as expected; the Company may not complete all the property purchases for various reasons; it may not be able to finance its intended drilling programs; Starr Peak may not raise sufficient funds to carry out its plans; geological interpretations and technological results based on current data that may change with more detailed information or testing; and despite promise, there may be no commercially viable minerals or ore on Starr Peak’s property. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.
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