Posted by AGORACOM
at 6:35 PM on Monday, April 20th, 2020
SPONSOR: Gratomic Inc. (TSX-V: GRAT) Advanced materials company focused on mine to market commercialization of graphite products, most notably high value graphene based components for a range of mass market products. Collaborating with Perpetuus, Gratomic will use Aukam graphite to manufacture graphene products for commercialization on an industrial scale. For More Info Click Here
“The execution of this LOI is part of NextSource’s downstream growth plan and brings together one of the best global processors of graphite anode material and one of the most prominent suppliers of graphite anode material to automotive OEMs globally,†says NextSource Materials president and CEO Craig Scherba.
“This letter of intent to partnership on a SPG plant with such established partners positions NextSource to be a significant and dominant future supplier of high-quality flake graphite to major battery anode customers globally and simultaneously gaining an immediate foothold into the high-growth markets for electric vehicles, as well as the burgeoning energy storage market that will be reliant on graphite anode material,†he adds.
As announced in October 2018, NextSource Materials signed a 10-year offtake agreement with an unnamed Japanese trading company to purchase 20 000 tpa of Molo’s trademarked SuperFlake graphite for use in battery anode applications for electric and hybrid vehicles.
NextSource’s Japanese partner is a major supplier of SPG for anode material in lithium-ion batteries for electric vehicle and hybrid vehicle applications. Its electric vehicle and hybrid vehicle automotive anode customers are global and currently supply graphite anode material to the majority of Japanese automotive OEMs.
Since 2018, NextSource Materials and its Japanese partner have been in discussions regarding potential supply chain collaboration to supply value-added graphite material using SuperFlake graphite concentrate.
Meanwhile, NextSource Materials’Chinese partner is one of the top processors of spheronized and purified graphite for the electric vehicle and hybrid vehicle markets and has verified that NextSource’s SuperFlake graphite concentrate meets or exceeds all quality requirements for SPG material for electric vehicle and hybrid vehicle automotive applications.
Its electric vehicle and hybrid vehicle anode customers are global, including the North American market and its interest in the partnership with NextSource and the its Japanese partner is to have an additional SPG facility located outside of China and close to a high-quality mine source of flake graphite to supply international automotive OEM customers.
The Molo graphite project is a fully permitted, feasibility-stage project that ranks as one of the largest-known and highest quality flake graphite deposits in the world and is the only project with SuperFlake graphite.
Treaty Creek Project is Fully Funded for the 2020 Exploration Season
Last year Eric Sprott became the largest external investor in Treaty Creek in B.C.’s Golden Triangle. He stated “Treaty Creek has a great shot at having 20 million ounces of gold.†A very successful program was run hitting wide intervals of gold in every drill hole. This year we’ll see if Eric is right as the objective of this year’s program is to develop a resource calculation.
The Goldstorm Zone will host a significantly larger drilling program in 2020
18,000 to 20,000 Meter Drill Program
7-10 Drill Platforms
Four Diamond Drill Rigs
The drill program is designed to extend and to explore the limits of Goldstorm System
The current conceptual model for Goldstorm is 1 billion tonnes at close to 1 gram of gold
The system remains open in all directions and to depth
The best mineralization encountered to date is from the two consecutive 150m step-out holes to the Northeast:
GS-19-42 yield 0.849 g/t Au Eq over 780 m with 1.275 g/t Au Eq over 370.5m
GS-19-47 yield 0.697 g/t Au Eq over 1,081.5m with 0.867 g/t Au Eq over 301.5m
The best Southeast extension:
GS-19-52 yields 0.783 g/t Au Eq over 601.5m
Includes 1.062 g/t Au Eq over 336.0m (NR dated March 3rd, 2020)
The Treaty Creek Project is a Joint Venture with Tudor Gold owning 3/5th and acting as operator. American Creek and Teuton Resources each have a 1/5th interest in the project. American Creek and Teuton are both fully carried until such time as a Production Notice is issued, at which time they are required to contribute their respective 20% share of development costs. Until such time, Tudor is required to fund all exploration and development costs while both American Creek and Teuton have “free ridesâ€.
Treaty Creek Background
The Treaty Creek Project lies in the same hydrothermal system as Pretium’s Brucejack mine and Seabridge’s KSM deposits with far better logistics.
American Creeek Responds to Shareholder Questions Re: COVID-19:
American Creek has received numerous messages from our investor base asking similar questions. We’ve compiled the most common questions with their answers for you below:
Q: Has Covid 19 affected the ability of the office to keep running and will it affect the company’s ability to run programs this year?
The Canadian Minister of Public Safety and Emergency Preparedness has deemed exploration and mining essential services during the current COVID-19 outbreak. This specifically includes mineral exploration and development. At the same time, explorers, miners and those in related businesses need to be in compliance with local regulations with regard to health and safety practices in order to protect workers and others from the COVID-19 virus.
Both American Creek and its JV Partner Tudor Gold are following these guidelines and fully expect to carry on operations in the office and in the field.
Q: Does American Creek have enough money to carry on operations or will it have to raise money this year?
The company raised sufficient money in 2019 to carry on operations through 2020. This currently includes an exploration / drill program on the Dunwell Mine property and may include work on Gold Hill and other properties as well.
Q: How will Covid 19 and the resulting drop in the stock market and economy affect the precious metals industry?
As the stock market and the economy drop there are institutions, brokerage houses, and individuals who will sell everything right across the board to cover themselves. Precious metals or stocks in precious metal companies are no exception. We’ve already seen this taking place. However, gold served its purpose in retaining value as its drop was very minimal compared to the stock markets. It’s governments reactions to the falling stock markets and economy that will have a profound effect on Gold. We are reading that more money has been created out of thin air in the last few weeks than in any time in history. All the gold in the world is worth approximately $9.5 trillion dollars and just the United States alone is creating $2 trillion, plus $4 trillion from the Fed, plus another $2 trillion plus in infrastructure spending (and that’s not counting the $2.5 trillion put into the repo markets). The rest of the world is acting similarly. Inflation (an increase of the monetary supply) does have a direct effect on gold (especially once money velocity increases). We are already seeing the very early stages of this upward pressure as gold futures spiked to a 7.5-year high of $1,742.60 an ounce in overnight trading (April 6-7, 2020). Gold will continue to be volatile but will have greater upward pressure the more governments try to help the economy.
Q: Why should people invest in American Creek when there are so many gold plays out there?
While there are a number of excellent projects out there, even within the Golden Triangle, I’m not aware of one with as much potential poised to be realized over the next two years. Since he’s the expert I’ll refer to Eric Sprott’s comments concerning the Goldstorm on Treaty Creek: “They have a good shot at having 20 million ounces of gold.â€â€œSo that’s the sort of play that I like where man, if the price of gold goes to $1,700 or $2,000 these plays will look so economically viable and the stock will go up so much, and the analogy I use is Seabridge back in 2000. I remember buying it at a dollar…and Seabridge went from $1 to $35 dollars! That is what we are looking for – a dollar to $35 dollars, set you up for life!†American Creek investors benefit through the development of Goldstorm while having no associated costs and while retaining a 1:3 ownership ratio with Tudor Gold. The timing couldn’t be better for a project of this scale and quality. Add to that the development of the Dunwell Mine along with the possibility of programs on our other high potential projects and we feel that we offer people the best possible investment. American Creek is in a position of strength as it has the ability to continue developing core assets and bring value to its shareholders amidst a world of economic uncertainty. We will continue to do all we can to help our shareholders prosper.
Q: What opportunity do you see for the company moving forward?
While this pandemic, and our governments responses to it, will do irreparable damage to each of our finances and liberties, we are extremely optimistic about precious metals, the precious metals production and exploration industry, and specifically American Creek Resources. Rick Rule, CEO of Sprott US Global, was recently quoted saying:
Get ready for a “rip your face off†gold market.
Industry Experts Have Already Pointed Out That:
The drop in oil will lower the costs for producers at the same time that gold is going up.
As gold goes higher and producers start producing tremendous amounts of cash…they are going to want to deploy it back in their own sector…there will be a competing FEEDING FRENZY amongst the producers to go buy the best assets and eventually the worst assets of the gold sector
We believe that the Goldstorm deposit at Treaty Creek is quickly becoming one of most significant assets in the gold industry and will be highly sought after.
About American Creek
American Creek is a Canadian junior mineral exploration company with a strong portfolio of gold and silver properties in British Columbia. Three of those properties are located in the prolific “Golden Triangleâ€; the Treaty Creek and Electrum joint venture projects with Tudor Gold/Walter Storm as well as the 100% owned past producing Dunwell Mine.
For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Corporation is available on its website at: www.americancreek.com
Treaty Creek Project is Fully Funded for the 2020 Exploration Season
Last year Eric Sprott became the largest external investor in Treaty Creek in B.C.’s Golden Triangle. He stated “Treaty Creek has a great shot at having 20 million ounces of gold.†A very successful program was run hitting wide intervals of gold in every drill hole. This year we’ll see if Eric is right as the objective of this year’s program is to develop a resource calculation.
The Goldstorm Zone will host a significantly larger drilling program in 2020
18,000 to 20,000 Meter Drill Program
7-10 Drill Platforms
Four Diamond Drill Rigs
The drill program is designed to extend and to explore the limits of Goldstorm System
The current conceptual model for Goldstorm is 1 billion tonnes at close to 1 gram of gold
The system remains open in all directions and to depth
The best mineralization encountered to date is from the two consecutive 150m step-out holes to the Northeast:
GS-19-42 yield 0.849 g/t Au Eq over 780 m with 1.275 g/t Au Eq over 370.5m
GS-19-47 yield 0.697 g/t Au Eq over 1,081.5m with 0.867 g/t Au Eq over 301.5m
The best southeast extension:
GS-19-52 yields 0.783 g/t Au Eq over 601.5m
Includes 1.062 g/t Au Eq over 336.0m (NR dated March 3rd, 2020)
The Treaty Creek Project is a Joint Venture with Tudor Gold owning 3/5th and acting as operator. American Creek and Teuton Resources each have a 1/5th interest in the project. American Creek and Teuton are both fully carried until such time as a Production Notice is issued, at which time they are required to contribute their respective 20% share of development costs. Until such time, Tudor is required to fund all exploration and development costs while both American Creek and Teuton have “free rides”.
Treaty Creek Background
The Treaty Creek Project lies in the same hydrothermal system as Pretium’s Brucejack mine and Seabridge’s KSM deposits with far better logistics.
American Creeek Responds to Shareholder Questions Re: COVID-19:
American Creek has received numerous messages from our investor base asking similar questions. We’ve compiled the most common questions with their answers for you below:
Q: Has Covid 19 affected the ability of the office to keep running and will it affect the company’s ability to run programs this year?
The Canadian Minister of Public Safety and Emergency Preparedness has deemed exploration and mining essential services during the current COVID-19 outbreak. This specifically includes mineral exploration and development. At the same time, explorers, miners and those in related businesses need to be in compliance with local regulations with regard to health and safety practices in order to protect workers and others from the COVID-19 virus.
Both American Creek and its JV Partner Tudor Gold are following these guidelines and fully expect to carry on operations in the office and in the field.
Q: Does American Creek have enough money to carry on operations or will it have to raise money this year?
The company raised sufficient money in 2019 to carry on operations through 2020. This currently includes an exploration / drill program on the Dunwell Mine property and may include work on Gold Hill and other properties as well.
Q: How will Covid 19 and the resulting drop in the stock market and economy affect the precious metals industry?
As the stock market and the economy drop there are institutions, brokerage houses, and individuals who will sell everything right across the board to cover themselves. Precious metals or stocks in precious metal companies are no exception. We’ve already seen this taking place. However, gold served its purpose in retaining value as its drop was very minimal compared to the stock markets. It’s governments reactions to the falling stock markets and economy that will have a profound effect on Gold. We are reading that more money has been created out of thin air in the last few weeks than in any time in history. All the gold in the world is worth approximately $9.5 trillion dollars and just the United States alone is creating $2 trillion, plus $4 trillion from the Fed, plus another $2 trillion plus in infrastructure spending (and that’s not counting the $2.5 trillion put into the repo markets). The rest of the world is acting similarly. Inflation (an increase of the monetary supply) does have a direct effect on gold (especially once money velocity increases). We are already seeing the very early stages of this upward pressure as gold futures spiked to a 7.5-year high of $1,742.60 an ounce in overnight trading (April 6-7, 2020). Gold will continue to be volatile but will have greater upward pressure the more governments try to help the economy.
Q: Why should people invest in American Creek when there are so many gold plays out there?
While there are a number of excellent projects out there, even within the Golden Triangle, I’m not aware of one with as much potential poised to be realized over the next two years. Since he’s the expert I’ll refer to Eric Sprott’s comments concerning the Goldstorm on Treaty Creek: “They have a good shot at having 20 million ounces of gold.â€â€œSo that’s the sort of play that I like where man, if the price of gold goes to $1,700 or $2,000 these plays will look so economically viable and the stock will go up so much, and the analogy I use is Seabridge back in 2000. I remember buying it at a dollar…and Seabridge went from $1 to $35 dollars! That is what we are looking for – a dollar to $35 dollars, set you up for life!†American Creek investors benefit through the development of Goldstorm while having no associated costs and while retaining a 1:3 ownership ratio with Tudor Gold. The timing couldn’t be better for a project of this scale and quality. Add to that the development of the Dunwell Mine along with the possibility of programs on our other high potential projects and we feel that we offer people the best possible investment. American Creek is in a position of strength as it has the ability to continue developing core assets and bring value to its shareholders amidst a world of economic uncertainty. We will continue to do all we can to help our shareholders prosper.
Q: What opportunity do you see for the company moving forward?
While this pandemic, and our governments responses to it, will do irreparable damage to each of our finances and liberties, we are extremely optimistic about precious metals, the precious metals production and exploration industry, and specifically American Creek Resources. Rick Rule, CEO of Sprott US Global, was recently quoted saying:
Get ready for a “rip your face off†gold market.
Industry Experts Have Already Pointed Out That:
The drop in oil will lower the costs for producers at the same time that gold is going up.
As gold goes higher and producers start producing tremendous amounts of cash…they are going to want to deploy it back in their own sector…there will be a competing FEEDING FRENZY amongst the producers to go buy the best assets and eventually the worst assets of the gold sector
We believe that the Goldstorm deposit at Treaty Creek is quickly becoming one of most significant assets in the gold industry and will be highly sought after.
About American Creek
American Creek is a Canadian junior mineral exploration company with a strong portfolio of gold and silver properties in British Columbia. Three of those properties are located in the prolific “Golden Triangle”; the Treaty Creek and Electrum joint venture projects with Tudor Gold/Walter Storm as well as the 100% owned past producing Dunwell Mine.
For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Corporation is available on its website at www.americancreek.com
Posted by AGORACOM
at 9:40 AM on Tuesday, April 14th, 2020
SPONSOR: Gratomic Inc. (TSX-V: GRAT) Advanced materials company focused on mine to market commercialization of graphite products, most notably high value graphene based components for a range of mass market products. Collaborating with Perpetuus, Gratomic will use Aukam graphite to manufacture graphene products for commercialization on an industrial scale. For More Info Click Here
Graphene is only one-atom thick in its monolayer form and approximately 0.32 nanometers in the Z-axis. This means that the third dimension is eliminated, and it is classed as a 2D, all-surface material. Put into perspective, a stack of three million graphene sheets would only be 1 mm thick
Graphene in its monolayer form is the strongest material ever tested despite being extremely thin, a strength that comes in part from its flexibility which means it is also the most stretchable crystal material measured to date. It is also 97.7 percent transparent and has an extremely low permeability rate, with even helium atoms being unable to penetrate it.
Graphene also boasts the highest thermal conductivity ever recorded, standing at 10 times higher than copper. Further adding to its advantages as a material is the fact that it has the highest intrinsic electron mobility that is approximately 100 times greater than silicon. This property, in particular, has intrigued electronics applications for the last 15 years.
Engineered Properties Applications
Table 1. Graphene’s Properties and Associated Applications.
Source: Graphene Frontiers, Ruoff.
Altogether, these properties make graphene the latest “wonder material†in advanced materials science and technology. This has resulted in research on other 2D materials that are analogous to graphene, from hexagonal boron nitride (h-BN), Molybdenum Disulfide (MoS2), transition metal dichalcogenides (TMDCs) and black phosphorus, to silicene, germanene, and others.
The wider group of 2D materials is significant in relation to graphene as it exhibits a wider spectrum of electronic properties when compared to metals, semimetals, and semiconductors that all have different gaps in their energy bands, as well as insulators.
Additionally, combining the materials in this wider 2D group through layering results in heterostructures that possess unique physical properties of their own. This range of 2D materials and the heterostructures that can be formed when these 2D materials work in combination have a broad spectrum of applications, including electronics, optoelectronics, sensors, flexible and wearable devices, catalysis, and more.
This information has been sourced, reviewed and adapted from materials provided by The Graphene Council.
Posted by AGORACOM
at 9:54 AM on Friday, April 3rd, 2020
SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged 0.683 g/t Au over 780m in a vertical intercept. 2020 drilling plans 18,000 to 20,000 metres from 7-10 drill platforms with four diamond drill rigs. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits and is fully funded for exploration in 2020. Click Here For More Info
The nations of the world had 34,700 tons of gold reserves, as of January 2020.
Countries maintain gold reserves to stabilize currency against hyperinflation, particularly in the event of a major crisis like the one many economies worldwide currently face as a result of the coronavirus pandemic. Relatively few countries, however, have large gold reserves. In fact, over 80% of the world’s national gold reserves is held by the central banks and finance ministries of just 25 countries.
To determine the countries that control the world’s gold, 24/7 Wall St. reviewed data on gold reserves by country in tonnes – or metric tons – as of January 2020 from the World Gold Council. Data on gold as a share of a country’s total foreign exchange reserves also came from the WGC and is current as of January 2020.
The value of a country’s gold reserves in U.S. dollars was calculated using exchange rates current as of March 13, 2020. GDP and GDP per capita figures in 2018 are from the World Bank and are in constant 2011 international dollars. Data on population is also from the World Bank and is for 2018 or for the most recent period available.
Many, but not all of the countries on this list, are among the wealthiest nations on Earth, as these countries are able to buy up substantial gold reserves. These are the 25 richest countries in the world.
While some countries on this list have obtained gold reserves by purchasing from other countries, many of the nations with the biggest gold reserves, such as China, the United States, and Russia, are also the top gold-producing countries. China, the largest producer of gold in the world, alone accounted for 14% of global gold production in 2016.Â
25. Venezuela
• Gold reserves as of January 2020: 161.2 tonnes
• Gold reserves in USD as of January 2020: $8.1 billion
• Gold as % of total foreign exchange reserves: 81.0%
• GDP: $271 billion ($9,402 per capita)
• Population: 28.9 million
24. Algeria
• Gold reserves as of January 2020: 173.6 tonnes
• Gold reserves in USD as of January 2020: $8.7 billion
• Gold as % of total foreign exchange reserves: 11.6%
• GDP: $580 billion ($13,737 per capita)
• Population: 42.2 million
23. Philippines
• Gold reserves as of January 2020: 197.9 tonnes
• Gold reserves in USD as of January 2020: $9.9 billion
• Gold as % of total foreign exchange reserves: 11.2%
• GDP: $847 billion ($7,943 per capita)
• Population: 106.7 million
22. Belgium
• Gold reserves as of January 2020: 227.4 tonnes
• Gold reserves in USD as of January 2020: $11.4 billion
• Gold as % of total foreign exchange reserves: 39.5%
• GDP: $498 billion ($43,582 per capita)
• Population: 11.4 million
21. Poland
• Gold reserves as of January 2020: 228.6 tonnes
• Gold reserves in USD as of January 2020: $11.5 billion
• Gold as % of total foreign exchange reserves: 9.3%
• GDP: $1.1 trillion ($28,786 per capita)
• Population: 38 million
20. Austria
• Gold reserves as of January 2020: 280.0 tonnes
• Gold reserves in USD as of January 2020: $14.1 billion
• Gold as % of total foreign exchange reserves: 56.1%
• GDP: $409 billion ($46,260 per capita)
• Population: 8.8 million
19. Spain
• Gold reserves as of January 2020: 281.6 tonnes
• Gold reserves in USD as of January 2020: $14.1 billion
• Gold as % of total foreign exchange reserves: 19.1%
• GDP: $1.6 trillion ($34,831 per capita)
• Population: 46.7 million
18. Lebanon
• Gold reserves as of January 2020: 286.8 tonnes
• Gold reserves in USD as of January 2020: $14.4 billion
• Gold as % of total foreign exchange reserves: 27.3%
• GDP: $79 billion ($11,607 per capita)
• Population: 6.8 million
17. United Kingdom
• Gold reserves as of January 2020: 310.3 tonnes
• Gold reserves in USD as of January 2020: $15.6 billion
• Gold as % of total foreign exchange reserves: 9.3%
• GDP: $2.7 trillion ($40,522 per capita)
• Population: 66.5 million
16. Saudi Arabia
• Gold reserves as of January 2020: 323.1 tonnes
• Gold reserves in USD as of January 2020: $16.2 billion
• Gold as % of total foreign exchange reserves: 3.2%
• GDP: $1.7 trillion ($49,101 per capita)
• Population: 33.7 million
15. Uzbekistan
• Gold reserves as of January 2020: 333.7 tonnes
• Gold reserves in USD as of January 2020: $16.8 billion
• Gold as % of total foreign exchange reserves: 56.7%
• GDP: $250 billion ($7,592 per capita)
• Population: 33 million
14. Portugal
• Gold reserves as of January 2020: 382.5 tonnes
• Gold reserves in USD as of January 2020: $19.2 billion
• Gold as % of total foreign exchange reserves: 76.8%
• GDP: $298 billion ($28,999 per capita)
• Population: 10.3 million
13. Kazakhstan
• Gold reserves as of January 2020: 386.5 tonnes
• Gold reserves in USD as of January 2020: $19.4 billion
• Gold as % of total foreign exchange reserves: 67.1%
• GDP: $452 billion ($24,738 per capita)
• Population: 18.3 million
12. Taiwan, province of China
• Gold reserves as of January 2020: 422.4 tonnes
• Gold reserves in USD as of January 2020: $21.2 billion
• Gold as % of total foreign exchange reserves: 4.3%
• GDP: N/A
• Population: N/A
11. Turkey
• Gold reserves as of January 2020: 428.7 tonnes
• Gold reserves in USD as of January 2020: $21.5 billion
• Gold as % of total foreign exchange reserves: 21.8%
• GDP: $2.1 trillion ($25,358 per capita)
• Population: 82.3 million
10. Netherlands
• Gold reserves as of January 2020: 612.5 tonnes
• Gold reserves in USD as of January 2020: $30.8 billion
• Gold as % of total foreign exchange reserves: 70.2%
• GDP: $858 billion ($49,787 per capita)
• Population: 17.2 million
9. India
• Gold reserves as of January 2020: 635 tonnes
• Gold reserves in USD as of January 2020: $31.9 billion
• Gold as % of total foreign exchange reserves: 7%
• GDP: $9.3 trillion ($6,888 per capita)
• Population: 1.4 billion
8. Japan
• Gold reserves as of January 2020: 765.2 tonnes
• Gold reserves in USD as of January 2020: $38.4 billion
• Gold as % of total foreign exchange reserves: 2.9%
• GDP: $5 trillion ($39,294 per capita)
• Population: 126.5 million
7. Switzerland
• Gold reserves as of January 2020: 1,040.0 tonnes
• Gold reserves in USD as of January 2020: $52.3 billion
• Gold as % of total foreign exchange reserves: 6.2%
• GDP: $505 billion ($59,317 per capita)
• Population: 8.5 million
6. China
• Gold reserves as of January 2020: 1,948.3 tonnes
• Gold reserves in USD as of January 2020: $97.9 billion
• Gold as % of total foreign exchange reserves: 3.1%
• GDP: $22.5 trillion ($16,182 per capita)
• Population: 1.4 billion
5. Russia
• Gold reserves as of January 2020: 2,279.2 tonnes
• Gold reserves in USD as of January 2020: $114.5 billion
• Gold as % of total foreign exchange reserves: 20.6%
• GDP: $3.8 trillion ($24,791 per capita)
• Population: 144.5 million
4. France
• Gold reserves as of January 2020: 2,436.0 tonnes
• Gold reserves in USD as of January 2020: $122.4 billion
• Gold as % of total foreign exchange reserves: 63.6%
• GDP: $2.6 trillion ($39,556 per capita)
• Population: 67 million
3. Italy
• Gold reserves as of January 2020: 2,451.8 tonnes
• Gold reserves in USD as of January 2020: $123.2 billion
• Gold as % of total foreign exchange reserves: 69.3%
• GDP: $2.2 trillion ($35,828 per capita)
• Population: 60.4 million
2. Germany
• Gold reserves as of January 2020: 3,366.5 tonnes
• Gold reserves in USD as of January 2020: $169.1 billion
• Gold as % of total foreign exchange reserves: 74%
• GDP: $3.8 trillion ($45,936 per capita)
• Population: 82.9 million
1. United States
• Gold reserves as of January 2020: 8,133.5 tonnes
• Gold reserves in USD as of January 2020: $408.7 billion
• Gold as % of total foreign exchange reserves: 77.9%
Posted by AGORACOM
at 12:26 PM on Monday, March 30th, 2020
SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged 0.683 g/t Au over 780m in a vertical intercept. 2020 drilling plans 18,000 to 20,000 metres from 7-10 drill platforms with four diamond drill rigs. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits and is fully funded for exploration in 2020. Click Here For More Info
Gold continues to deliver strong relative
performance and was up 7.31% on a year-to-date basis through Friday’s
close. This compares to -20.96% for the S&P 500 Total Return Index.1
Asset
YTD
1 YR
3 YR*
5 YR*
Gold Bullion
7.31%
24.33%
9.07%
6.32%
S&P 500 TR Index
-20.96%
-7.58%
4.82%
6.42%
* Average annual total returns. Bloomberg. Data as of Friday close, 3/27/2020.
Gold and precious metal equities have been collateral damage during
this most recent market correction. The broader markets had become a
tinder box with grossly elevated valuation metrics never seen before,
coupled with an economy burdened by record amounts of leverage
(government, corporate, personal) and widespread investor complacency.
All that was required was a spark — enter COVID-19. The speed of the
correction was historical. The February to March 30% drawdown was the
fastest 30% drawdown of all time (Figure 1).
For us at Sprott, the corresponding selloff in gold bullion and
precious metal equities was not surprising. During violent broader
market corrections, liquidity is priority number one. This time was no
different as broader markets gapped down in response to the greatest
demand shock in modern economic history. This resulted in many entities
selling gold bullion to meet liquidity requirements that surfaced
because of margin calls, and the shuttering of both credit and debt
markets. This pattern is similar to what the market witnessed as the
Global Financial Crisis (GFC) unfolded in 2008-2009.
Figure 1. Feb.-Mar. 2020 Selloff was the Fastest 30% Drawdown in History Measured by Number of Days
Source: BofA Global Research, Bloomberg.
Gold Serves its Function as Portfolio Insurance
Before hypothesizing where we will go from here, it is important to
highlight that gold bullion has served its function as portfolio
insurance. Year to date through March 27, 2020, gold bullion has
appreciated 6.84%, while the S&P 500 Index1 has declined
20.96%. At the same time, gold mining equities have not fared as well
gold bullion, because during the early stages of a correction, gold
stocks are first and foremost stocks; GDX2 was down 10.45% YTD.
The GFC as Playbook
As we are seeing today, there was a material demand shock as the GFC
unfolded, with demand across economies declining suddenly and sharply.
Although not a perfect analog, the GFC can serve as a playbook. As
liquidity became paramount for many market sectors during the GFC, gold
bullion was sold to meet liquidity requirements. From the beginning of
2008 to November 12, 2008 (gold bullion’s low price), the S&P 500
fell 41.11%, gold equities (GDX2) cratered 60.60% and gold
bullion depreciated by a relatively modest 16.94%. Once the U.S. Federal
Reserve (“Fed”) stabilized liquidity conditions, gold bullion and
precious metals stocks generated superior absolute and relative returns.
From November 12, 2008 to the end of 2009, gold bullion rallied 54.02%
and GDX rebounded 138.20%. The S&P 500 declined another 20.62% from
November 12, 2008, to its bottom in March 2009 and then appreciated
64.83% to year-end 2009.
Fed Announces Unlimited QE on March 23
This time around, the Fed and the U.S. federal government are pulling
no punches. Initially the Fed said it would undertake various
operations to provide market liquidity that could total $1.5 trillion.
This would include purchases of treasuries across all maturities and
repo market operations. President Trump then announced interest on
student loans would be waived in addition to a moderate $50 billion
emergency aid package. The Fed then announced another $700 billion
quantitative easing program which would include purchases of municipal
bonds.
This past week, the biggest bazooka of all time was pulled out of the
Fed’s arsenal as it amended its previously announced QE program by
removing limits on its asset purchases and adding corporate bonds to its
list of eligible securities it can purchase. Finally, the U.S.
announced a $2.3 trillion fiscal package. The package equates to 10.6%
of US GDP. The total budget deficit is expected to widen to at least
11.5% of GDP, which are levels not seen since WWII. The package includes
grants (hundreds of billions) and direct payments to taxpayers ($290
billion), both of which are forms of helicopter money.3
This is very good news for gold bullion and gold equities. There is
an 80% correlation between the Fed’s balance sheet and the price of gold
bullion. Similar to what occurred during the GFC, gold bullion should
move first followed by gold equities (see Figure 2).
A Tailwind for Gold and Gold Stocks
This response has not been limited to the U.S. Globally, we are
seeing central banks and governments deploying unprecedented amounts of
monetary and fiscal stimulus in response to the economic fallout caused
by Covid-19. All these actions should debase fiat currencies while
providing a tremendous tailwind for gold bullion and gold equities.
We believe the table is set for a move in gold bullion and gold equities that could dwarf the second half of 2008.
Figure 2. Fed Balance Sheet vs. Price of Gold Bullion and Gold Equities
Source: Bloomberg. Data as of 3/27/2020. The red
line represents reserve credit outstanding in $ trillions ($5.125
trillion as of 3/27/2020). The yellow line is the gold spot price based on GOLDS Comdty Index. The blue line is the price of gold mining equities represented by GDX.3
Posted by AGORACOM
at 2:13 PM on Thursday, March 26th, 2020
Ministry of Mines is prepared to grant Mining License 215 (ML215) for its Aukam Graphite Property in Namibia.
Gratomic can now produce a concentrate of up to 98% Cg
Management has subsequently decided to build a 20 000 tonne per annum processing plant.
Gratomic Inc. is pleased to announce, supplementary to its February 21, 2020 Press Release, that it has received a Notice from the Ministry of Mines and Energy of Namibia that the Minister is prepared to grant Mining License 215 (ML215) for its Aukam Graphite Property in Namibia. The License area falls within the proximity of the Aukam Processing Plant and the Graphite bearing shear zone for a total of 5002 hectares (5002 ha). Securing the mining license is a critical step towards moving the Aukam Mine into commercial production.
The
Company has completed 8 months of pilot testing on historically mined
product and conducted an internal study on the efficiency of the pilot
processing facility on this material. Through rigorous testing and
adjustments to the plant, Gratomic can now produce a concentrate of up
to 98% Cg. Management has subsequently decided to build a 20 000 tonne
per annum processing plant. To date, 90% of construction is complete.
Upon completion of the remaining 10%, the Company will initially start
processing material from historical workings left at the surface when
the mine last operated in 1974.
The
Company has recently appointed Dr. Ian Flint to complete a preliminary
economic assessment on the Aukam Processing plant. The study, its
recommendations, and their subsequent implementation, will ensure the
scale up of the existing pilot plant to a commercial scale processing
facility that will provide the desired concentrate grades and production
rates.
With
respect to site exploration, in the coming months diamond drilling will
resume at Aukam Graphite. The drilling will be conducted utilizing
Company owned drilling equipment, focusing on areas proximal to graphite
mineralization, depicted by previous diamond drilling, underground
excavation and surface outcrop sampling. The drill targeting will be
systematic with the expectation of producing an NI 43-101 resource
estimate.
Arno
Brand, President and CEO of the Company stated that “the Company will
be able to satisfy all of the conditions in the Notice and proceed to
commercialization of its Aukam Graphite Mine. This marks a significant
milestone for the Company.”
Risk Factors
No
mineral resources, let alone mineral reserves demonstrating economic
viability and technical feasibility, have been delineated on the Aukam
Property. The Company is not in a position to demonstrate or disclose
any capital and/or operating costs that may be associated with the
processing plant.
The
Company advises that it has not based its production decision on even
the existence of mineral resources let alone on a feasibility study of
mineral reserves, demonstrating economic and technical viability, and,
as a result, there may be an increased uncertainty of achieving any
particular level of recovery of minerals or the cost of such recovery,
including increased risks associated with developing a commercially
mineable deposit.
Historically,
such projects have a much higher risk of economic and technical
failure. There is no guarantee that production will begin as anticipated
or at all or that anticipated production costs will be achieved.
Failure
to commence production would have a material adverse impact on the
Company’s ability to generate revenue and cash flow to fund operations.
Failure to achieve the anticipated production costs would have a
material adverse impact on the Company’s cash flow and future
profitability.
Steve
Gray, P. Geo. has reviewed and approved the scientific and technical
information in this press release and is the Company’s “Qualified
Person” as defined by National Instrument 43-101 – Standards of
Disclosure for Mineral Projects.
About Gratomic Inc.
Gratomic
is an advanced materials company focused on mine to market
commercialization of graphite products most notably high value
graphene-based components for a range of mass market products. We have a
Joint Venture collaboration with Perpetuus Carbon Technology, a leading
European manufacturer of graphenes, to use Aukam graphite to
manufacture graphene products for commercialization on an industrial
scale. The Company is listed on the TSX Venture Exchange under the
symbol GRAT.
For more information: visit the website at www.gratomic.ca or contact:
Posted by AGORACOM
at 10:56 AM on Thursday, March 26th, 2020
SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged 0.683 g/t Au over 780m in a vertical intercept. 2020 drilling plans 18,000 to 20,000 metres from 7-10 drill platforms with four diamond drill rigs. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits and is fully funded for exploration in 2020. Click Here For More Info
If you think gold GC00, +1.85% has jumped about 10% in a couple of days to $1,638 an ounce, the official price quoted on Wall Street, think again.
The real price? Nearer $1,800. If you can get it.
“There’s no gold,†says Josh Strauss, partner at money manager Pekin
Hardy Strauss in Chicago (and a bullion fan). “There’s no gold. There’s
roughly a 10% premium to purchase physical gold for delivery. Usually
it’s like 2%. I can buy a one ounce American Eagle for $1,800,†said
Josh Strauss. “$1,800!â€
Major gold dealers have sold out of coins and gold bars amid panic
buying as the U.S. economy plunges and the government agreed to a record
$2 trillion emergency lifeline.
Kitco, the Canadian gold dealing giant, reported Wednesday that it was out of almost all standard one ounce gold coins.
American Eagles and Buffaloes, issued by the U.S. Mint, were out of
stock, it reported. Ditto Canadian “Maple Leafs,†issued by the Royal
Canadian Mint, “Britannias†issued by the Royal Mint of Great Britain,
and “Kangaroos†issued by Australia.
It was out of Krugerrands, issued by the South African government.
Those are by far the most widely traded gold coins in the world.
Kitco did not immediately return an email for comment.
“Due to extreme order volumes, please expect shipping delays of 15+ business days,†warned gold dealer JM Bullion.
Giant U.S. dealer Apmex admits Krugerrands are also out of stock.
Deliveries of other coins, including Maple Leafs and Eagles, are
delayed “due to extreme demand.†And it is charging a hefty premium for
physical gold.
For a one ounce American Eagle: $1,788.
Meanwhile, over at the U.S. Mint, customer service reports they have
Eagles available but to buy them direct will cost you $2,175. The media
relations team could not immediately be reached.
Almost nobody on Wall Street has noticed the full price surge for
actual gold bars and coins. That’s because financial traders mostly just
deal in paper “contracts†for gold. Those are basically gold IOUs—a
mere promise to deliver gold if the buyer ever wants.
Gold is among the most contentious financial topics around. It pits
passionate true believers against total skeptics. People get heated and
angry on both sides. Some say it is “the only true money.†Others call
it little better than an unproductive superstition. The late British
economist John Maynard Keynes called the gold standard, which pegged
paper currency to the value of gold, a “barbarous relic†of a bygone
age.
What should the average investor make of it? More critically, right
now: Is there a case for putting holding some of your retirement account
in gold? If so, how and how much?
“We’ve sold most of our gold as interest rates are rising and gold
hasn’t liked that for a long time,†says Dennis Nolte, a financial
adviser at Seacoast Bank. He adds: “As an asset class gold does best in
certain environments, like declining interest rates. We like to own it
tactically but not “all weather†as a core ETF (exchange-traded fund) or
mutual fund holding.â€
“We don’t view gold as a building block when constructing
portfolios,†says Rob Greenman, a financial planner at Vista Capital
Partners. “The hopes of appreciation are rooted in speculation—perhaps
somebody is willing to pay more per ounce in the future versus the price
per ounce today. Gold doesn’t produce any interest or earnings. We
believe in building portfolios with mix of productive asset classes like
stocks, real estate, and bonds around the globe.â€
On the other hand, Thomas McCarthy, a financial planner at McCarthy
& Cox, a firm that specializes in retirement planning and estates,
says putting some of your retirement portfolio into gold isn’t crazy.
“Gold can be a hedge against fear and holding a small 5% position of
gold in an IRA or 401(k) (very few offer it) is not a bad hedge,†he
says. “For clients looking to do so, we use a gold [exchange-traded
fund] as opposed to actually buying the physical gold because its
significantly less costly and easier to trade.â€
But, he warns, “Investors in gold need to remember that gold doesn’t
pay interest, doesn’t earn dividends and you make money only if the
demand pushes the price higher. Many gold bugs who invested heavily in
gold at its peak are still waiting many years later just to break even.â€
There is no perfect answer because investing in gold ultimately
requires someone else to want to buy it from you. It goes not generate
income, like a stock or bond. And it’s not useful either—like food or,
as people recently discovered, toilet paper.
Gold requires faith.
The good news? In this crisis you don’t have to choose one side definitely. You can be agnostic and keep your options open.
The events of the past month have upended the financial system. The
Federal Reserve—and central banks overseas—have promised to print as
much money as is needed to keep economies alive. The U.S. government has
agreed to spend $2 trillion propping up the economy, and unless the
crisis dissipates quickly that may not be the end of it.
Ordinarily, investors who wanted to protect their accounts from the
twin perils of depression and inflation would look to appropriate
Treasury bonds. But they are already extremely expensive by any historic
measure, so they may offer limited protection. So-called “nominal†or
regular Treasury bonds, the type most people own, now sport minuscule
interest rates. Even the longest dated, 30 year Treasurys, yield just
1.4%. That is below most expected rates of inflation. Meanwhile Treasury
inflation-protected securities or TIPS, a type of Treasury bond that is
designed specifically to protect your money against any rise in
consumer prices, now offer inflation-adjusted yields that are actually
slightly negative. In other words, you’re almost guaranteed to lose a
small amount of purchasing power over the life of the bond.
In these circumstances, gold ceases to look quite so crazy as portfolio insurance. There is genuine debate
about whether gold offers a “long term hedge†against inflation. And no
one actually knows what gold is “really†worth, if it is “really†worth
anything. Intelligent, sane financial experts can make plausible cases
for a range of values from a few hundred dollars an ounce to many
thousands.
But gold makes more sense when viewed, not as an investment, but as a
type of currency. It doesn’t produce anything, but it can be used as a
medium of exchange. And history strongly suggests that it has a low correlation with other assets. In other words, it tends to “zig†when everything else zags.
It’s certainly done that under the current administration. Gold has
risen by 38% since Donald Trump’s inauguration. Meanwhile the S&P
500 SPX, +3.85% index of large U.S. companies is up 13%, and the Russell 2000 RUT, +4.32% index of small U.S. companies is down 8%.
“The case for gold is simple,†says Strauss. “You want to own gold in
times of financial dislocation and or inflation. And that’s been the
case since time immemorial. And gold behaves well in those cases. In
those cases stocks behave poorly. It’s a great portfolio hedge. Gold
does poorly when you’ve got strong economic growth and low inflation.
Tell me when that’s going to happen. Gold held its value during 2008 and
after all that money printing it tripled over the next three years.â€
Strauss recommends Sprott Physical Gold, PHYS, +1.41%
an exchange-traded fund where shares are matched to actual bullion in a
vault. He says he holds 25% of his personal wealth in gold. For those
who are agnostics? “I think it’s criminal to go below 10%,†he joked,
“but start with 5%.â€
Posted by AGORACOM
at 9:11 AM on Wednesday, March 25th, 2020
Cardston, Alberta–(Newsfile Corp. – March 25, 2020) – American Creek Resources (TSXV: AMK) (the “Corporation”
or “American Creek”) is pleased to announce its partner Tudor Gold
Corp. (TSXV: TUD) (FSE: TUC) (“Tudor Gold”) has sufficient funds to
execute a significantly larger drilling and exploration program, than
the 2019 program, on the Goldstorm Zone at Treaty Creek project this
year. With the capital raised in December 2019, as well as the recent
warrants exercises, the Tudor Gold has a good cash position to execute a
fully funded and very ambitious drill program at Treaty Creek this
year. Tudor Gold is currently in the final stages of finalizing all
preparations needed for the upcoming 2020 drill program at Treaty Creek.
Tudor
Gold’s Vice President of Project Development, Ken Konkin, P.Geo.,
states: “The Goldstorm system is currently open at depth and along the
northeast axis of the mineralized body. The drill program is designed to
extend and to explore the limits of Goldstorm system to the southeast
as well as to the northeast and to depth. We anticipate drilling
approximately 18,000 to 20,000 metres of HQ and NQ diameter core from
7-10 drill platforms with four diamond drill rigs. Compared to the drill
program last year (14 diamond drill holes over 9,781.8 meters), the
planned 2020 drill program will be much larger.”
The current known
length of the northeast axis of the Goldstorm System is over 850 meters
long and the southeast axis is at least 600m across. The system remains
open in all directions and to depth. The best mineralization
encountered to date is from the two consecutive 150m step-out holes to
the Northeast: GS-19-42 yielded 0.849 g/t Au Eq over 780 m with 1.275
g/t Au Eq over 370.5m and GS-19-47 yielded 0.697 g/t Au Eq over 1,081.5m
with 0.867 g/t Au Eq over 301.5m.
The best southeast extension
came from GS-19-52 which yielded 0.783 g/t Au Eq over 601.5m intercept
with 1.062 g/t Au Eq over 336.0m intercept. (results from the company’s
NR dated March 3rd, 2020).
Tudor Gold response to COVID-19:
Tudor
Gold has introduced additional precautionary steps to manage and
respond to the risks associated with COVID-19 virus. This includes, for
example the cancellation of all non-essential global travel and the
reducing in person meetings and transitioning to teleconferencing where
possible. Vancouver office staff are now working from home until
government advisories change.
Tudor Gold is regularly monitoring
the situation and following local and national health authority
requirements and recommendations.
Walter Storm, President and CEO of Tudor Gold stated:
“We are taking all appropriate measures to protect the safety, health
and well-being of our people and all those who interact with our
business. Tudor Gold is following guidance and directives as updated by
federal, regional and provincial health authorities in respect of
general and drill-site specific protocols. We are very fortunate to have
a strong balance sheet amidst the volatile market created by COVID-19.”
Qualified Person
The
Qualified Person for this news release for the purposes of National
Instrument 43-101 is the Company’s Vice President of Project
Development, Ken Konkin, P.Geo. He has read and approved the scientific
and technical information that forms the basis for the disclosure
contained in this news release.
Treaty Creek JV Partnership
The Treaty Creek Project is a Joint Venture with Tudor Gold owning 3/5th and acting as operator. American Creek and Teuton Resources each have a 1/5th
interest in the project. American Creek and Teuton are both fully
carried until such time as a Production Notice is issued, at which time
they are required to contribute their respective 20% share of
development costs. Until such time, Tudor is required to fund all
exploration and development costs while both American Creek and Teuton
have “free rides”.
Treaty Creek Background
The
Treaty Creek Project lies in the same hydrothermal system as Pretium’s
Brucejack mine and Seabridge’s KSM deposits with far better logistics.
American
Creek is a Canadian junior mineral exploration company with a strong
portfolio of gold and silver properties in British Columbia. Three of
those properties are located in the prolific “Golden Triangle”; the
Treaty Creek and Electrum joint venture projects with Tudor Gold/Walter
Storm as well as the 100% owned past producing Dunwell Mine.
The
Corporation also holds the Gold Hill, Austruck-Bonanza, Ample Goldmax,
Silver Side, and Glitter King properties located in other prospective
areas of the province.
For further information please contact Kelvin Burton at: Phone: 403 752-4040 or Email: [email protected]. Information relating to the Corporation is available on its website at www.americancreek.com
Posted by AGORACOM
at 11:49 AM on Friday, March 20th, 2020
SPONSOR: American Creek owns a 20% Carried Interest to Production at the Treaty Creek Project in the Golden Triangle. 2019’s first hole averaged of 0.683 g/t Au over 780m in a vertical intercept. The Treaty Creek property is located in the same hydrothermal system as the Pretivm and Seabridge’s KSM deposits. Click Here For More Info
Credit Deflation and Gold
Gold and precious metals mining shares are casualties of panic
selling across all financial markets. The scenario is similar to what
happened in 2008 during the global financial crisis (GFC). When the
general selling exhausted itself in late 2008, gold and mining shares
delivered superior absolute and relative performance for the following
three years. We believe that this pattern is likely to repeat following
this sell-off.
While COVID-19 outbreak is grabbing the headlines, the far bigger
story is the deflation of financial assets that it has triggered and the
resulting loss of investment confidence. Markets that had been priced
for perfection must now reckon with a likely recession, soaring fiscal
deficits and the very real possibility of a sustained bear market.
In our opinion, even though the economy will recover from the
downturn and the health scare will prove to be temporary, financial
asset valuations are unlikely to return to pre-crash manic levels. In
mid-February, the Wilshire 5000 Stock Index1 traded at approximately
145% to gross domestic product (GDP),2 its second highest level since
1950, and only slightly below the 2000 peak (see Figure 1). At this
writing, the ratio has fallen to 114% (as of 3/17/2020), which is still
very expensive by historical standards. Valuations are driven by
investor psychology, leverage and the liquidity necessary to support
leverage. All three may have been critically impaired for the near to
intermediate term.
Figure 1. Total U.S. Corporate Equities and U.S. GDP (1950-2020)
If financial assets struggle, interest in gold is very likely to
widen. Gold may have been caught up in the recent stampede for
liquidity, but it has delivered good relative performance on a
year-to-date basis; gold bullion is up 0.73% as of March 17, compared to
-25.17% for the S&P 500 Index.3 The 12-month figures (as of
3/17/2020) are even more impressive: gold has returned 17.19% vs. -8.54%
for the S&P 500.
On a peak-to-trough basis for the last few weeks, gold has declined
roughly 12%. Other safe haven assets have experienced the same pressure.
For example, the yield on 30-year U.S. Treasury bond rose from less
than 1.0% to 1.5% in only a few days, a drawdown of more than 30%. What
this shows is that quality assets will be sold by portfolio managers
desperate to reduce leverage. Low-grade assets cannot be sold quickly
enough to meet margin calls.
It was leverage that inflated valuations, not fundamental economic
growth and strong year-over-year earnings. In fact, corporate pre-tax
profits have been declining since Q3 2014. Figure 2 shows pretax profits
on a quarterly basis since 2014.
Figure 2. U.S. Corporate Pre-Tax Profits Have Been Declining ($Billions)
The illusion of earnings growth that has captivated investor
psychology was achieved through share buybacks and increased leverage.
Growth of earnings per share, not the same as profit growth, has been
juiced by financial engineering. The same can be said for returns on
financial assets. The amount and location of leverage within the economy
and financial markets is opaque but may well have reached high tide for
many years. A post-recession economic recovery will not necessarily,
and does not have to, translate into strong returns from investing in
financial assets.
Global Debt Has Increased +100% Since 2007
In popular thinking, the current U.S. administration, or the one that
follows it, will pull every trick out of the bag to stimulate the
economy. This belief will likely excite investors from time to time in
anticipation of a rebound. Unfortunately, the financial markets are
experiencing a deflationary bust that could spread to general economic
activity. Public policy has all but exhausted the potential benefits of
resorting to traditional monetary and fiscal solutions. The marginal
benefit to economic growth from heaping on new layers of debt is capped
by the law of diminishing returns, as shown by Figure 4 from Rosenberg
Economics. Since 2007, global debt increased 110% vs. 46% for global
GDP:
Figure 3. Global Debt vs. Global GDP ($ Trillions)
Source: Rosenberg Economics. Data as of 12/31/2019.
Central banks have few conventional tools remaining to combat credit
deflation. An impotent response can be expected from new rounds of
monetary stimulus, rate reductions or central bank balance sheet
expansion. Global debt, public and private, measures 287% vs. global GDP
($244 trillion divided by $85 trillion). The debt burden will most
assuredly grow, a post coronavirus rebound notwithstanding. The world’s
debt structure is already incapable of withstanding even a minute rise
in rates. More debt relative to GDP will only make matters worse. All
that remains is currency destruction.
Gold has been rising for the past eighteen months side by side with a
strong stock market and no inflation. Conventional wisdom said that
wasn’t supposed to happen. As shown in Figure 4, gold has outperformed
equities and bonds since 2000, the dawn of radical monetary
experimentation by central bankers. We think gold has been sensing the
endgame for Keynesian policy prescriptions, mainstream economic thinking
and hyper-leveraged investment practices.
Figure 4. The Modern Era of Gold Gold Bullion vs. Stocks, Bonds, Oil, USD (2000-2020)
For the period from 12/31/1999 to 3/16/2020, gold has provided posted
an average annual return of 8.55%, compared to 5.44% for U.S. bonds,
4.44% for U.S. stocks, 0.57% for oil and -0.19% for the U.S. dollar.
Source: Bloomberg. Period from 12/31/1999 –3/16/2020.4
Gold Miners are Poised to Perform
During the 1930s credit deflation, gold and gold mining stocks
performed well in relative and absolute terms. When credit deflates, and
counterparties cannot be trusted, gold is the ultimate safe asset. In
the 1930s, the metal price rose, costs of producing gold declined and
the miners generated strong earnings and paid handsome dividends. We
believe that this is a sequence that will repeat.
At the moment, mining company valuations appear extraordinarily
cheap. It is one of the few industries that will report solid
year-over-year earnings gains for the remainder of this year and perhaps
into the next.
Buying low is never easy but now is the time to do it.
