Posted by AGORACOM-JC
at 5:00 PM on Wednesday, March 11th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
The most expensive metals and where they are mined
Palladium is the most expensive of the four major precious metals – gold, silver and platinum being the others.
It is rarer than platinum, and is used in larger quantities for catalytic converters.
In the near-term, the demand for metals used in catalytic converters is expected to be steady, buoyed by growing automotive sales in Asia.
Rhodium’s little brother palladium also did well out of the
Dieselgate scandal. After sales of diesel vehicles slumped and petrol
alternatives came back into fashion, platinum – used primarily in
catalytic converters for diesel vehicles – took a tumble, while
petrol-friendly palladium rose.
Palladium is the most expensive of the four major precious metals –
gold, silver and platinum being the others. It is rarer than platinum,
and is used in larger quantities for catalytic converters. In the
near-term, the demand for metals used in catalytic converters is
expected to be steady, buoyed by growing automotive sales in Asia.
However, the increased uptake of battery-electric vehicles – which do
not use catalytic converters – could see palladium demand take a hit.
Russia00n mining company Nornickel is the top global palladium producer, pulling up 86 metric tons of the metal in 2019.
Rhodium
Relatively unknown to the layperson, rhodium is quietly one of the
hottest trades right now, after a price surge of more than 30% this
year. Rhodium previously peaked – and quickly crashed – in 2008 at more
than $10,000 per troy ounce (ozt), but the metal is now trading above
that 2008 high on the back of a swell in demand from the automotive
industry.
Rhodium is used in catalytic converters, a part of vehicle exhaust
systems that reduce toxic gas emissions and pollutants. According to S&P Global Platts,
almost 80% of demand for rhodium and palladium comes from the global
automotive industry. Fortunately for South Africa at least, around 80%
of all rhodium is mined within its borders.
Part of the reason for the metal’s price leap is its rarity. Annual
rhodium production sits at around 30 tonnes – to place that in context,
gold miners annually dig up between 2,500 and 3,000 tonnes of the
precious metal. Rhodium also benefitted from the Volkswagen emissions
scandal, or Dieselgate,
the 2015 emissions scandal that rocked the automotive industry. With
major economies including China and India tightening emissions rules,
platinum group metals (PGM) miners are anticipating good times ahead for
rhodium.
Gold
Part durability, part tradition, gold is among the most versatile
commodities. Primarily used in jewellery, but also having significant
applications across electronics and aerospace due to its durability and
conductivity, gold is, to put it plainly, everywhere.
Tags: CSE, palladium, PGM, PGM Demand, stocks, tsx Posted in New Age Metals | Comments Off on The most expensive #metals and where they are mined #Palladium SPONSOR: New Age Metals $NAM.ca $WG.ca $XTM.ca $WM.ca $PDL.ca $GLEN
Posted by AGORACOM-JC
at 5:40 PM on Thursday, March 5th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
Palladium, rhodium demand to remain, despite virus outbreak: analyst
Though the coronavirus outbreak may affect near-term automobile demand, long-term demand for palladium and rhodium will remain unchanged
Washington — Though the coronavirus outbreak may affect
near-term automobile demand, long-term demand for palladium and rhodium
will remain unchanged unless automakers substitute for other metals,
managing director Frederic Panizzutti of MKS Dubai said.
“If I was a carmaker, I would definitely stock palladium while the
price is lower, and I believe this is going to keep palladium strong,
even if the demand goes down in China, the UK, or the demand for parts
decreases,” Panizzutti said in an interview this week.
Rhodium and palladium, along with platinum, are used in automobile
catalytic converters to control emissions of certain greenhouse gases
and pollutants.
“It’s a bargain for car manufacturers to be able to acquire palladium
if it goes lower; it’s been a one-way street for months now,”
Panizzutti said, referring to the recent rallies in palladium and
rhodium.
NYMEX palladium has risen nearly 25% since the start of the year to
reach an intraday high of $2,789.80/oz on February 27. NYMEX palladium
for June delivery closed at $2,469.40/oz on Thursday.
Rhodium, which is not traded on major exchanges, has risen nearly
114% since the start of the year. The Platts New York Dealer rhodium
price was assessed at $12,700-$13,000/oz on February 27.
Analysts have attributed the sharp price increase to automakers
trying to secure enough metal for catalytic converters that meet new
emissions standards in China, India and Europe, as well as the US and
UK.
Further spread of the coronavirus outbreak globally could reduce
automobile demand, along with the projected 1 million oz supply deficit
in palladium, Panizzutti said.
The China Passenger Car Association on Wednesday said new car sales
in China had plummeted 80% in February from a year ago, the biggest
monthly decline on record, though it declined to provide a figure.
Analysts attributed the declining sales to government restrictions to
limit the spread of the coronavirus in China, where it began in Hubei
Province. Hubei is a major auto manufacturing hub in China.
But even if the coronavirus outbreak becomes a global pandemic,
governments and businesses will have to adapt as they do nearly every
year with widespread influenza outbreaks, Panizzutti said.
Automobile production, and by extension palladium and rhodium demand, would continue, though possibly at a lower rate, he added.
PLATINUM SUBSTITUTION
“I believe the palladium price now is far over the threshold that automakers are willing to accept,” Panizzutti said.
But substituting platinum for palladium in catalytic converters takes time due to design and testing procedures, he noted.
“In my opinion, it should happen, whether it takes several months or
longer because the palladium situation is unsustainable. And I see no
reason why the situation should change if nothing changes in the
supply/demand balance,” Panizzutti said.
“And the only way to change the supply/demand balance is to switch
partially or totally from palladium to platinum. If there is no switch,
the situation will be the same and will remain a struggle for
manufacturers to get hold of material,” he said.
Posted by AGORACOM-JC
at 2:23 PM on Wednesday, February 19th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
Palladium Surges to Record Despite Slowdown Concerns in China
Palladium prices have surged on high demand from automakers seeking to meet stricter emission standards as world governments look to combat climate change and growing pollution levels.
The palladium ETF rallied Tuesday, with palladium prices hitting
record highs, even as the coronavirus outbreak threatens to shutdown
carmakers and delay industrial plants in China, the world’s biggest
consumer of the precious metal.
Palladium prices have surged on high demand from automakers seeking
to meet stricter emission standards as world governments look to combat
climate change and growing pollution levels.
Meanwhile, the coronavirus outbreak has disrupted normal car
production in China as factors were forced to stop operations to curtail
the spread of the contagion, the Wall Street Journal
reports. For example, Germany’s Volkswagen AG postponed production at
some of its Chinese-operated plants until next week as the quarantine of
nearly 60 million people limits transportation of both parts and
workers.
While the work has diminished short-term demand, palladium prices
still jumped to record highs on ongoing supply constraints, with miners
producing less of the precious metal.
“It’s the most dysfunctional market I’ve ever seen in my life,â€
Michael Widmer, an analyst at Bank of America, told the WSJ, adding that
car manufacturers could be forced to electrify their vehicle fleets
faster than previously planned if palladium keeps getting more
expensive.
Palladium demand has surged in recent years as the European Union and
China implemented stricter car emission standards, amid concerns over
the impact of certain pollutants on public health. Consequently,
palladium, which applied to catalytic converters that are fitted to
gasoline-driven cars, is in high demand as a highly effective way to
convert toxic gases like carbon monoxide into substances that are less
toxic to inhale.
Almost all gasoline cars manufactured in China this year will be held
to the new emissions standards, or up from two-thirds in 2019.
Consequently, U.K.’s Johnson Matthey calculated that this will increase
the average amount of palladium required in each catalyst and could lift
global demand for the precious metal in the auto sector above 10
million ounces.
On the other hand, supply has not been as quick to meet the rise in
demand. Palladium is typically produced as a byproduct of palladium, and
miners don’t want to inundate the weak platinum market with even more
supply.
Consequently, Anglo American Platinum Ltd projected that global
demand for palladium will exceed production by 1.9 million ounces in
2020.
Posted by AGORACOM-JC
at 4:51 PM on Tuesday, February 18th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
David Jensen: As Palladium Continues To Soar, Is Platinum Next…
Chris Marcus, Arcadia Economics
Most
in the Wall Street mainstream have yet to notice that the price of
palladium has more than doubled in the past 2 years. As the market
continues to show signs of a shortage, with no easy resolution in sight.
Which David Jensen of Jensen Strategic has been far ahead of the
markets in forecasting.
So
I was fortunate to have David join me on the show and explain what’s
happening. Explain how the imbalance is going to have to be resolved.
And share what he’s now seeing in the platinum market, where the lease
rate indicates a similar pattern might soon be underway.
Of
course this does have the potential to filter over to the other
precious metals markets like gold and silver. So to find out what’s
happening from the man who forecast it over a year in advance, click to
watch the interview now!
Posted by AGORACOM-JC
at 12:18 PM on Friday, February 14th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
Don’t expect a U-turn in palladium’s epic rally
The silver-white metal, used to remove toxic emissions from the exhaust fumes of petrol and hybrid cars, has surged more than 200 per cent over the past five years and last month hit a record of more than $2,500 an ounce
Correlation may not be proof of causation but it is difficult to see
any other explanation for London’s catalytic-converter crime wave than
the record-breaking rally in palladium prices. The silver-white metal,
used to remove toxic emissions from the exhaust fumes of petrol and
hybrid cars, has surged more than 200 per cent over the past five years
and last month hit a record of more than $2,500 an ounce. At the same
time, thefts of catalytic converters in the UK capital jumped — from 867
in 2015 to 8,248 in 2019, according to the Metropolitan Police.
The force has urged car owners to be vigilant and consider buying
protective sleeves for their catalytic converters. After nearly a decade
of undersupply, the world is now critically short of palladium and its
sister metal rhodium. In part, this reflects sluggish supply. Production
of these metals is constrained because they are mined as a byproduct of
platinum and nickel — commodities where new projects have been few and
far between.
At the same time, demand is booming. Tougher emissions legislation
and stricter vehicle-testing regimes in the wake of Germany’s
“Dieselgate†scandal saw the automotive industry buy a record 9.7m
ounces of palladium last year, according to Johnson Matthey, a producer
of catalysts. That is why industry executives say talk of a palladium
bubble is misplaced. “I don’t want to mention a name but there has been a
senior car company that has experienced a real shortage in rhodium,â€
Neal Froneman, chief executive of producer Sibanye-Stillwater, told the
Financial Times last week. “You can’t run deficits and consume surface
stockpiles and inventories for ever and a day.
At some point that turns into a real shortage. And that’s what
happened in rhodium and I dare say it could happen in palladium.â€
Johnson Matthey reckons demand outstripped supply by 1m ounces last year
and says a further rise in automotive demand will push the 11.5m
ounce-a-year palladium market deeper into deficit. While a
coronavirus-induced slowdown in the Chinese car sector could reduce the
size of the shortfall, most analysts expect the market to remain
undersupplied. Standard Chartered estimates China’s car production would
have to plummet 28 per cent before the market deficit is eroded by
declining demand. Assuming that does not happen, prices look set to push
higher unless there is a sudden mobilisation of stockpiles. These
include a stash of the metal owned by Russian miner Norilsk Nickel.
It was purchased from the country’s central bank many years ago and
Johnson Matthey reckons 1m ounces there might be available, but no one
is really sure. For nervous car owners, a protective device for their
catalytic converters still looks like a sound investment.
Posted by AGORACOM-JC
at 3:19 PM on Thursday, February 13th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
It is a well-known rule of thumb that the safe haven asset class
which includes gold typically trades with an inverse correlation to
equities. There is an exception to that rule, and that is when the
Federal Reserve eases their monetary policy with low rates and the
accumulation of assets on their balance sheet to provide liquidity. This
is because that action is considered bullish for both gold and U.S.
equities. It seems that in this instance there is a unique divergence in
the way gold and U.S. equities have reacted to statements made today by
the Federal Reserve’s Chairman Jerome Powell.
In the run-up of 2008 to 2011 we had both U.S. equities and gold
running to all-time record highs in unison as the Federal Reserve began
their quantitative easing programs. Statements made by Chairman Jerome
Powell up until today have been emphatic in his explanation of the slow
and steady accumulation of $60 billion in assets each month not being a
new round of quantitative easing.
That defensive posture and explanation by the chairman changed today
when Chairman Powell said that the “central bank would use quantitative
easing as a tool against the next economic downturn.†Although he did
not go as far as saying that the recent asset accumulation was in any
way a form of quantitative easing, today’s statement opens the door to
increase asset accumulations aggressively if needed.
According to MarketWatch, “In testimony before the Senate Banking
Committee, Powell said the Fed had two recession-fighting tools; buying
government bonds, known as QE, and communicating clearly with markets
about interest-rate policy, routinely considered as “forward guidance.
We will use those tools — I believe we will use them aggressively should
the need arise to do so.â€
His testimony occurred on the same day that the U.S. Treasury
announced that they recorded a $33 billion budget deficit in January.
Analysts at Reuters forecasted that the deficit would only increase by
11.5 billion last year. More alarming than the underestimate by analysts
was the fact a year ago the treasury announced a budget surplus of $9
billion.
U.S. equities all traded in record territory today is a direct result
of data suggesting that there is a slowdown in the number of new cases
of the coronavirus, now labeled as COVID-19 by the CDC. The Dow Jones
Industrial Average gained 275 points today, and closed at a new all-time
record high of 29,55.42. The NASDAQ composite also surged to a new
all-time high of 9725.96, and the S&P 500 get a new record high at
3379.75.
At the same time, we saw gold trad fractionally lower on the day. As
of 5 PM EST is currently trading down $1.30 and fixed at $1569 per
ounce. With the exception of palladium all the other precious metals did
close lower. However once again palladium was able to buck the trend as
it gained over $63 in trading today and is currently fixed at $2329.
According to a report by Johnson Matthey one of the largest precious
metals refiners in the world said that the palladium market “was in a
supply/demand deficit of more than 1 million ounces in 2019, and the
shortage is expected to be even worse in 2020.â€
If the report by Johnson Matthey is accurate it could signal much
higher prices and the possibility of palladium reaching as high as $2700
per ounce this year.
For those who would like more information, simply use this link.
Tags: clean energy, CSE, palladium, PGM, PGM Demand Posted in New Age Metals | Comments Off on #Palladium rising while gold remains flat – SPONSOR: New Age Metals $NAM.ca $WG.ca $XTM.ca $WM.ca $PDL.ca $GLEN
Posted by AGORACOM-JC
at 10:46 AM on Wednesday, February 12th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
PGM demand, prices likely to remain high this year
After resurgent demand pushed the platinum market into deficit in 2019, with the total volume of platinum under investment coming in at a record 3.4-million ounces at the start of this year, speciality chemicals company Johnson Matthey says the platinum market could move back into surplus this year unless investor appetites are sustained.
Last year, more than one-million platinum ounces were added to
exchange-traded fund holdings, outweighing a contraction in global
industrial and automotive demand, as well as a double-digit drop in the
Chinese platinum jewellery market.
Johnson Matthey notes in its latest ‘Platinum Group Metals (PGM)
Market’ report that demand for platinum this year will be supported by
rising PGM loadings on heavy-duty trucks in China and India, where
stricter emissions legislation is due to be implemented.
However, it notes that this will be offset by a further erosion in
platinum jewellery demand and a drop in purchases by the glass sector.
“With weaker primary supplies balanced by further growth in
autocatalyst recycling, investment will again be the primary factor
which determines the direction of market balance.
Platinum supplies in 2020 could fall below six-million ounces for the
first time in six years, reflecting the impact of ongoing
rationalisation programmes in South Africa, a lower contribution from
the release of excess pipeline stocks and the depletion of PGM-rich
surface materials that have supported PGMs output at Norilsk Nickel’s
operations in recent years.
AUTOCATALYST DEMAND
Johnson Matthey explains that while autocatalyst recycling is
expected to rise again this year, it will, at best, offset the decline
in primary supplies.
Recent growth in platinum recoveries reflects the dramatic expansion
in platinum use in diesel catalysts that occurred between 2000 and 2007.
Platinum consumption in light-duty vehicles peaked at around
3.5-million ounces in 2006 and 2007, but fell steeply during the global
financial crisis in 2008; thereafter demand was also affected by falling
diesel vehicle registrations and increased use of palladium in diesel
catalyst systems.
Platinum recycling volumes are expected to reach a plateau in the next few years.
Combined platinum demand in the autocatalyst, industrial and
jewellery sectors is not expected to change much this year. On balance,
Johnson Matthey believes combined demand in these “consumingâ€
applications is more likely to fall than to rise, but this will depend
on factors such as vehicle production volumes and the timing of
industrial platinum purchases for new chemical, glass and petroleum
refining plants.
“In the light-duty diesel market, production volumes will be the
principal factor determining the direction of platinum demand,†Johnson
Matthey notes.
THE CASE FOR PALLADIUM
All-time highs were recorded in the palladium price last year as the
market deficit widened to more than one-million ounces – demand reached
an all-time high of 9.7-million ounces, despite demand for palladium
falling in industrial applications.
Johnson Matthey says that intensifying use of palladium in gasoline
cars in Europe and China pushed auto demand to a record level, despite
lower vehicle output. It adds that the tightening emission legislation
and stricter vehicle testing regimes are driving up the PGMs content of
three-way catalysts in most major vehicle markets.
The palladium deficit is likely to deepen this year, as an increasing
number of Chinese and European vehicles meet China 6 and Euro 6D
legislation, respectively. This is expected to drive up global average
loadings on gasoline catalysts and could lift world automotive demand
above ten-million ounces.
Although secondary recoveries from spent catalytic converters will
continue to rise, primary supplies may fall slightly, reflecting
rationalisation at South African mines and the depletion of
palladium-rich surface materials at Norilsk Nickel.
Johnson Matthey notes that while the market remains in significant
deficit, prices are likely to remain strong, stimulating efforts to
thrift and substitute palladium where possible, and incentivising the
mobilisation of market stocks.
RHODIUM
Rhodium moved into a modest deficit last year, as a small rise in
combined supplies was not enough to meet a 10% increase in total demand.
Global consumption of rhodium on autocatalysts leapt by nearly 15% in
2019, following a step-change in loadings in Chinese vehicles.
Johnson Matthey says car companies in other regions also used more
rhodium, in response to tighter emissions standards and more stringent
testing.
“These gains offset a sharp fall in rhodium use in the glass
industry, as capacity expansion slowed after two years of exceptionally
strong activity.
“Although combined primary and secondary supplies rose by 2%, this
was not enough to prevent the market moving into deficit,†the chemicals
company explains.
The outlook for 2020 is a deepening market deficit with further
strong gains expected in autocatalyst demand, albeit at a slower rate
than last year.
Tags: clean energy, CSE, palladium, PGM, PGM Demand, stocks Posted in New Age Metals | Comments Off on #PGM demand, prices likely to remain high this year #Palladium #Platinum SPONSOR: New Age Metals $NAM.ca $WG.ca $XTM.ca $WM.ca $PDL.ca $GLEN
Posted by AGORACOM-JC
at 12:15 PM on Tuesday, February 11th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
Palladium, Tesla and the Imposition of Electric Vehicles
What underlies the tremendous runup in the price of Palladium and now the giant spike in Tesla stock? They are connected.
Tesla stock has spiked despite its self-driving cars doing strange things like running people over and spontaneously combusting.
By: Clive P. Maund
What underlies the tremendous runup in the price of Palladium and now
the giant spike in Tesla stock? They are connected. Tesla stock has
spiked despite its self-driving cars doing strange things like running
people over and spontaneously combusting. The reason for this is the
relentless drive towards electric cars which will result in a massive
increase in demand for palladium and electric car manufacturers like
Tesla becoming mainstream.
The elites have a Master Plan to push ordinary motorists off the road
and back onto public transport, and they will realize this by using the
environmental scare to effectively outlaw petrol driven cars and force a
transfer to expensive electric cars, which will be out of reach of many
motorists because of their cost. Greta is a pawn in this game. The
means by which they will outlaw petrol (and diesel) driven cars is to
class carbon dioxide as an emission, which they have already done, and
then make the emissions standards tighter and tighter until petrol
driven cars are forced off the road. Since anything that burns anything
creates carbon dioxide, which is essentially an inert natural gas, it is
clear that petrol driven cars cannot reduce their carbon dioxide
emissions to zero, so their fate is already sealed. You may be asking
what is the motivation for doing this. There are a number of reasons.
One is to reduce the profligate consumption of oil by the masses for
their personal transportation and the resulting pollution. Another is
control – a public who lack personal transportation and the freedom it
brings are of course easier to control and direct. Lastly it will free
up the roads for the elites, who will suffer less from delays caused by
traffic congestion resulting from the masses on the move, since they,
the elites, will always be able to afford private vehicles, no matter
what they cost. The masses will not resist this transformation of their
lives. First of all they are ignorant and have no idea of the plans for
them that are already at an advanced stage. Secondly, they are too cowed
and docile to do anything about it even if they did know. Now that you
know what is set out above, you should be able to readily appreciate why
the price of palladium, and of Tesla stock, have been soaring. Let’s
now proceed to look at their extraordinary charts. Starting with
palladium, we see on its long-term 20-year chart that after essentially
tracking sideways for many years, the phase of accelerated advance
really didn’t begin until mid-2018, and it was only later in 2018 that
it broke out above its highs way back in 2001. So the dramatic
acceleration in its rate of advance has been going on for 18 months or
less.
We can see the period of accelerated advance in more detail on
the 5-year chart, and how the point of origin of the accelerating
parabolic uptrend is at the start of 2016. The price only cleared the
resistance at the 2001 highs in the $1080 area as recently as late 2018
and it is only over the past 6 months or so that we have seen dramatic
acceleration. This chart makes clear that as the price has now run way
ahead of its parabolic supporting uptrend, there is plenty of room for
it to correct back or consolidate without breaking down from the
uptrend, although it could well spike even higher from here, with
speculation now rampant.
On the 6-month chart we can see that at the recent peak volume
became really heavy, which puts us on notice that even if this wasn’t
the top for this run, a top may not be far off.
Turning now to Tesla, we can see that it has suddenly gone
vertical in recent weeks, which implies that the age of the electric
vehicle is almost upon us. Even so, this move looks extreme, especially
on long-term charts and suggests that a reaction back or period of
consolidation is now likely over the short-term.
Modern cars have become a nightmare of over-regulation and
control and it’s going to get a lot worse. They got rid of ignition keys
so that you now have a push button start and have to pay for very
expensive key fobs. All modern cars look the same because of draconian
regulations regarding impacts and safety, and they are all designed in
the same wind tunnel. For unknown reasons – probably bigger profits for
the manufacturers – most cars are the same standard colors. “You can
have any color you like sir, as long as its black, red, silver or
white.†The core of the car is too heavy for safety reasons and is
compensated for by flimsy bodywork, in order to meet fuel consumption
targets. Bumpers, which used to be designed to take impacts with no
damage or resulting cost, are now made of delicate painted structures
which cost a fortune to fix after even the slightest impact, but that’s
no problem because the insurance covers it, except that this means
raised insurance premiums. You can’t turn the engine off and open the
door and listen to the radio on a hot day, because either it switches it
off or starts making stupid bleeping noises. Some new cars switch the
engine off every time you come to a stop, and you have to be at a dead
stop to put it in gear etc. Your location is always known because the
car is computerized and online, which incidentally means that it is
theoretically possible to hack the car remotely and cause it to crash,
by say, locking the brakes. For this reason also you can never be sure
that any conversation you have in the car is private – they could be
broadcasting it live in the Superbowl stadium. Even for a 100 meter trip
down the road the baby or child has to be strapped into a child seat.
The list is endless and the future is going to be even worse. Rear view
mirrors are going to be swapped for cameras that display on the central
screen, so if anything goes wrong with it you have an expensive
replacement of the entire system. There are going to be cameras mounted
on /in the dash that monitor your facial expressions and if you look
drunk or tired, the onboard computer will seize control of the car and
force it to pull over. Likewise your days of breaking speed limits are
over, since the car won’t let you. No wonder teens are not interested in
cars anymore – you won’t hear any of them saying told my girl I had to forget her, rather buy me a new carburetor.
Posted by AGORACOM-JC
at 4:58 PM on Monday, February 10th, 2020
SPONSOR: New Age Metals Inc.
The company owns one of North America’s largest primary platinum
group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral
Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an
additional 1,059,000 PdEq Ounces Inferred. Learn More.
Palladium Wave Analysis 10 February, 2019
Palladium reversed from support area
Likely to rise to 2400.00
Palladium recently reversed up from the support zone located between
the key level 2155.00 (low of the previous short-term correction 4),
lower daily Bollinger Band and the 38.2% Fibonacci correction of the
pervious upward impulse 3 from December.
The upward reversal from this support area created the daily Japanese candlesticks reversal pattern Hammer.
Palladium is likely to rise further toward the next resistance level 2400.00 (top of the pervious impulse waves 3 and (i)).
Posted by AGORACOM
at 3:00 PM on Friday, February 7th, 2020
SPONSOR: New Age Metals Inc. The company owns one of North America’s largest primary platinum group metals deposit in Sudbury, Canada. Updated NI 43-101 Mineral Resource Estimate 2,867,000 PdEq Measured and Indicated Ounces, with an additional 1,059,000 PdEq Ounces Inferred. Learn More.
Summary
The palladium market will remain tight and pressure prices higher.
Sibanye Gold with the Stillwater Mine has plunged back into SA.
The Aberdene palladium ETF and Canadian palladium juniors are the best proxies.
Palladium has been the best performing commodity in the past two
years or so, jumping over 100% and there is more to go. This palladium
bull market is much different than the last one. The bull market from
1997 to 2000 was about 3 years and then palladium dropped giving up most
of the gains in less than a year. There was a nice bump up from the
2008 crisis and then the price traded sideways for several years. The
price bottomed at the end of 2015 with the severe bear market in
precious metals. Since then, the price has been going steadily higher
with a major break out in 2016. This bull market is not going to end
anytime soon for the reasons below.
Palladium is mostly used in the auto industry for pollution control
with catalytic converters. Electric vehicles will be a long time coming
to replace any significant amount of gasoline/diesel driven vehicles.
Meanwhile, pollution standards are being tightened that will keep demand
high. China has been gobbling up palladium since their China 5
pollution standards took effect in 2013. China 6 will now be coming into effect that will increase loads per vehicle of palladium. Many analysts have been commenting that China has been secretly stock piling the metal and is driving prices.
Palladium demand by Sector
There is no doubt the demand will remain strong, but the real
story is on the supply side. This next graphic illustrates the supply
deficit since 2016.
It is obvious to expect an increased demand from China as pollution regulations are tightened with ‘China 6’.
This next graphic of global mine production is very important because of the palladium supply is in a very unstable region.
The Russian supply from Norilsk Nickel has always been quite stable
and is of no concern, but as investors, we cannot participate there.
South Africa is the other big producer and that country is becoming very
unstable and more worrisome, that is where most of the future reserves
are.
The world’s largest PMG reserves are in South Africa, precisely in
the Bushveld Complex (in the central-Northern part of the country) which
alone accounts for about 50% of the world’s palladium resources, but,
overall, South Africa has reserves of 63 million kilograms which
represent over 91% of the worldwide availability.
South African (SA) mines have always been plagued with labour issues,
strikes, and high costs. To make matters worse, the country is now
facing an energy crisis with rolling blackouts shutting down mines. The country will probably become much more unstable, with unemployment hitting 10-year highs.
Half of their youth are unemployed and the company that provides 95% of
the electricity (when it can) is reporting record financial losses.
This is a country teetering on the brink of chaos that will likely be
very disruptive to PGM mine supply. I am avoiding palladium and platinum investments there.
With all the issues in SA, Sibanye Gold (SBGL)
began diversifying out of the country and acquired the Stillwater PGM
mine in the US. That use to be my favourite stock to play palladium bull
markets. However, they jumped right back into the fray, acquiring
Lonmin in 2019, a struggling SA, PGM producer. They promptly cut 5,000
jobs at the mine and it now appears Sibanye is moving more into PGMs
from gold. According to what was released in the acquisition news,
Sibanye PGM production will increase from around 1.7M ounces per year
to 2.8M ounces/year. This compares to about 600,000 ounces/year at the
US Stillwater complex plus about 700,000 ounces produced through the
recycling unit, noted from the 2018 annual report.
SA PGM production was 627,991 ounces (this will increase significantly with Lonmin acquisition)
SA gold production was 344,752 ounces (this amount is well below normal because of mine strike)
US PGM production was 284,773 ounces
US PGM recycling was 421,450 ounces
The stock has done well with the rising palladium price, but at these
stock prices and the move back to SA, it has become too risky. I would
suggest selling at these prices.
To highlight risks further, the Q1 2019 financial report highlights a -63% decline in SA gold production in Q1 2019 compared to Q1 201 because of the labour strike. This news out on February 2nd
states that 19 attacks on SA gold facilities nearly doubled from last
year. On December 15, 2019, attackers took hostages and plundered the
smelting plant at Gold Fields Ltd.‘s South Deep mine. “Mining companies are being attacked by thugs and armed gangs and there is a lack of police response,” said Neal Froneman, CEO of Sibanye Gold Ltd., which repelled an attack on its Cooke mine two weeks ago. “It eventually has a knock-on impact into society, it’s lawlessness, it’s anarchy.”
There is the Aberdeen Standard Physical Palladium ETF Trust (PALL).
The investment objective of the Trust is for the Shares to reflect the
performance of the price of palladium, less the expenses of the Trust’s
operations. The ETF Trust physically holds palladium in JPMorgan vaults
in London and Zurich. PALL tracks the movements in palladium spot prices
fairly well and is the best direct exposure to palladium. Aberdeen
purchased the fund effective October 1, 2018, from ETF Securities. The
Aberdeen website is terrible, it just diverts you to something else they
are trying to sell. You can find some more info at etf.com.
One disadvantage, as a Trust it will often trade at a discount to NAV, so short term may not always reflect palladium movements precisely.
The chart of PALL reveals quite a jump in volume on the last rally. I
do not find this alarming, but shows it is really the first time the
palladium market has caught retail interest.
If we compare to the short-term chart on palladium below, it is easy
to see that PALL has tracked the palladium price very well. After a
needed correction, the price jumped higher on Monday. This is probably a
start to the next rally.
There is also Sprott Physical Platinum and Palladium Trust (SPPP), but it is split 50/50 between the two metals.
Canada is the third-largest producing country, so an obvious place to
look. A lot of the palladium production comes from major miners in the
Sudbury nickel/copper complex as a byproduct. Obviously, this is a good
area to look and there was an excellent proxy for investors called North
American Palladium that was operating the Lac Des Isles palladium mine.
Unfortunately, for us, investors, it was bought out last year by SA producer Implats.
The area had a number of discoveries back in the last bull market
around the year 2000, and I visited a number of those projects back
then. I believe the best one in this area is Canadian Palladium that acquired the East Bull project last year. There is also Palladium One that is not Canada but not in SA either.
Palladium One Mining (OTC:NKORF) – PGM project is in Finland.
Shares outstanding 111 million, 185 million fully diluted
Their LK project is located in north-central Finland, approximately
40 km north of the company’s exploration office in the town of
Taivalkoski. The property is 160 km (by road) east-southeast of
Rovaniemi and 190 km northeast of the port city of Oulu. Finland is a
very stable jurisdiction and has a viable mining sector.
The company is run by CEO/President, Derrick Weyrauch, CPA, CA who is
an experienced mining executive and corporate director. Mr. Weyrauch’s
background includes finance, risk management, corporate restructuring
and turnarounds, coupled with M&A strategy development, execution
and post transaction integration. He is the co-founder of Magna Mining
Corp. and is a former corporate director of a number of companies
including Eco Oro Minerals Corp., Jaguar Mining Inc., and Banro Corp.
and is a former CFO of Jaguar Mining Inc. and Andina Minerals Inc.
Currently, he is a non-executive director and at Cabral Gold Inc.
The LK Project is 100% owned by Palladium One Mining Inc.
Palladium One released a mineral resource estimate for the Kaukua deposit within the 100-per-cent-owned Lantinen Koillismaa (LK) project.
Highlights:
An optimized pit-constrained mineral resource, at a 0.3-g/t palladium cut-off;
635,600 PdEq (palladium equivalent) ounces of indicated resources grading 1.80 g/t PdEq contained in 11 million tonnes;
525,800 PdEq ounces of inferred resources grading 1.50 g/t PdEq contained in 11 million tonnes.
Significant potential exists to expand the historic Haukiaho
deposit along strike both to the east and west. For example, 1960s-era
historic drilling by Outokumpu about two km east of the historic 2013
Haukiaho inferred resource returned up to 36.36 m grading 0.20 per cent
Cu and 0.19 per cent Ni from 1.64 m to 38.00 m downhole in hole R692 (no
PGE analysis was conducted). Reconnaissance prospecting by Palladium
One in the vicinity of this historic drill hole returned up to 0.51 per
cent Cu, 0.33 per cent Ni, 0.19 g/t Pt, 0.56 g/t Pd and 0.21 g/t Au
(0.96 g/t PGE) (see press release dated Aug. 12, 2019). Palladium one
recently applied for the Haukiaho East reservation (see press release
date Sept. 5, 2019), which, if approved, the company would control about
24 km of the favourable Haukiaho basal contact.”
The company plans to conduct
a 75-line-kilometre induced polarization (IP) geophysical program,
along with a diamond drilling program of up to 5,000 metres, at the LK
project. Both drilling and geophysics contractor are expected to be
mandated soon.
The Tyko Ni-Cu-PGE project, i65km northeast of Marathon Ontario, Canada.
The Tyko project is an early stage, high sulphide tenor, nickel
focused project with recent drill hole intercepts returning up to 1.06 Ni over 6.22 m including 4.71% Ni over 0.87m in hole TK-16-010 (see press release dated June 8, 2016). On January 21, 2019, Palladium One reported prospecting samples with assay results of up to 0.74% Ni, 4.09% Cu, and 2.51g/t PGE
on the Tyko Nickel-Copper-PGE Property. This project has some
palladium, but if it is developed to a resource, it will be more like
the Sudbury copper and nickel mines with PGMs as a byproduct.
The company is well financed, closing a C$3,786,180 private placement
at C$0.06 per unit issuing 63,102,999 units. Eric Sprott took down
20,000,000 units. While funding is required, this is quite a bit of
dilution.
Currently, the stock is priced around $0.18 so all the warrants and
options are well in the money. So is appropriate to use the fully
diluted shares outstanding for valuation.
Market cap – $20 million. Market cap fully diluted Cdn $33.3 million
Subtracting $3.8 million financing from the market cap, it values
their 635,600 PdEq indicated resource at C$25 per ounce and fully
diluted at C$46 per ounce. This is a quite low valuation.
The stock mostly trades on the TSXV symbol (PDM), so I used the C$
chart. Support is around 16 cents and 12.5 cents. If 16 cents holds, the
stock could begin a leg higher.
Canadian Palladium
Shares outstanding 100.3 million approx.
All warrants and options are at 30 cents and higher.
What I consider one of the most important highlights is the company
is run by Wayne Tisdale. In the last 10 years, he has advanced three
juniors and sold them for large profits for their shareholders. He
helped start and finance the Rainy River project which was sold to NewGold in 2013 for $310 million. He developed US Cobalt and, in 2018, sold it to First Cobalt in a transaction worth $150 million to his shareholders’ delight. Going back further, he helped finance oil & gas company Ryland Oil that was bought out by Crescent Point in 2010 for a $121.8 million
valuation. Mr. Tisdale has a keen eye to find projects that can quickly
be advanced further to make them prime acquisition targets. Canadian
Palladium only has a market value now of about C$20 million, and I have
little doubt that Mr. Tisdale is going to do it again with Canadian Palladium.
Highlights:
Company run by Wayne Tisdale
Low market valuation – C$31 per ounce
East Bull with 43-101, 523,000 inferred palladium equivalent resource
East Bull can open to depth and along strike
Widely spaced drilling only needs infill drilling to upgrade and expand resource
Close to Sudbury complex where ore can be processed
Projects – East Bull, Ontario Canada
East Bull was drilled by Freewest and Mustang Minerals back in the
2000 era and now has a 43-101, 523,000 ounces inferred palladium
equivalent resource. A private company, Pavey Ark Minerals had the
property and in 2017 they twinned old drill holes and completed the work
to bring the project to 43-101 standards. Canadian Palladium (formerly
21C Metals) acquired a 100% option on the project last February.
This graphic from their presentation is a good summary and shows the location
In the 1999, 2000 period, Freewest drilled 27 holes for a total of
2,902 meters and carried out extensive surface trenching. Work by
Mustang on the eastern part of the Property (claim 1227910) included 11
drill holes for a total of 1,766 meters. The work by Freewest and
Mustang forms the majority of the data for the current resource
estimate. Additionally, Pavey Ark reviewed and re-sampled drill core
from the 27 BQ and NQ holes from the Freewest drilling program. Pavey
Ark’s exploration results in 2017 included;
hole EB17-01 that intersected 12.0 m at 2.87 g/t PGM+Au, 0.23% Cu and 0.13% Ni and
hole EB17-03 that intersected 7.0 m of 3.21 g/t PGM+Au, 0.16% Cu and 0.07% Ni.
(Note: Au = gold, Cu = copper, and Ni = nickel.)
In 2019, BULL completed their initial exploration program at East Bull and reported results Sept. 17, 2019.
These are highlights from the first sampling program on the East Bull
palladium project and field program on the Agnew Lake project:
Seventy-three grab samples were selected to help identify the
palladium-bearing rock types of the mineralized trend. Grab samples are
used to determine the presence mineralization and may not be indicative
of the overall grade of the zone
Sampling successfully defined locations for channel sampling and the
higher grades could indicate potential zones within the mineralized
zone for higher-grade starter pits
Range of palladium assay sample results were 37 samples below 0.1
g/t palladium, 17 between 0.1 and 0.5 g/t with 14 above 1 g/t. Nine of
these ran between 2 and 6.5 g/t
Geological mapping and review of the Freewest diamond drilling in
2000, indicates the northeast-trending faults are composed of multiple
intrusions of mafic to diabase dikes. Left lateral movement on the dikes
is measured to be up to 100 metres
This graphic gives a good snapshot of the current resource and
expansion potential. Mineralization starts at surface and the system
appears to be about 30 meters wide. This would be an open-pit operation.
Agnew Lake property
It is located 80 kms. west of Sudbury, Ont., home of Glencore and
Vale’s Canadian nickel-copper-platinum-group-elements mining and
smelting operations. The Agnew Lake property comprises over 260 claims
(about 6,000 hectares) and is part of the larger East Bull Lake-Agnew
Lake mafic-ultramafic complex.
The Agnew Lake magmas have major element compositions that are very
similar to the model parent liquids proposed for the mafic portions of
the Stillwater and Bushveld complexes. The Agnew intrusion and the East
Bull Lake intrusion are also considered to host significant PGE-Cu-Ni
mineralization in marginal rock units (Peck & James, 1990; Peck et
al., 1993a, 1993b, 1995; Vogel et al., 1997).
Financial/Summary
Last financial statements show just over $400,000 cash. The company
just closed a $4 million financing at 12 cents per share. Eric Sprott
bought 12.5 million shares of that financing.
Wayne Tisdale has been successful in financing and increasing the
value of properties and dealing them off for large profits. I believe he
will do it again and also has a loyal following of shareholders from
his past success. BULL just acquired the property last year and there
has been little exploration and no drilling so it has been under the
radar until the recent financing. The discovery is on the surface, so
will be cheap to mine and is close to the Sudbury complex where refiners
can recover PGMs. There is a couple other palladium exploration plays
in Canada, but they are mostly old stale stories and I believe none have
the short-term potential that the East Bull project has.
The current market cap is $20.1 Million less the $4 million financing
gives an enterprise value of C$31 per ounce on their 523,000-ounce
Pd-eq inferred resource. Part of the reason for the low value is the
resource is only inferred. If drilling success starts to prove larger
potential and the resource moves up to the measured and indicated
category it could easily increase the value potential.
Only exploration news last year was sample results that came out last
September just when the junior market started heading south. The stock
made a decent move higher than just drifted lower until a typical
year-end bottom. The stock took off when it hit 12 cents on good volume.
This is when they began marketing a financing that was way
oversubscribed in one day. Probably spill over buying drove the stock up
to the 23-cent level. The stock then came back to support around 16
cents and bounced off higher. Drill news will likely cause the next move
higher with the old highs around 27 cents last year as the first major
resistance.
Conclusion
A recent update on palladium by TD Securities
highlights tightening emission controls and South Africa as I have, but
most interesting is the lack of speculative trading positions. TD
comments positions held by traders are below average. This rally has
room to move and if excessive speculation builds it could go way higher.
Regardless of whether palladium is $1,200 or $2,400 per ounce,
palladium discoveries and deposits will be worth premium valuations,
especially in stable jurisdictions. The potential for discoveries in
South Africa is very good but the political risks are rising. Ivanhoe
Mines (OTCQX:IVPAF), Eastplats, and Platinum Group Metals (PLG)
have projects in SA, and if I had to pick one there, it would be
Platinum Group Metals because they have the most leverage to platinum
and palladium prices.
The best direct related investment to palladium is the PALL ETF, but
it does not offer any leverage. There are not any 2 times or 3 times
palladium ETFs. This leaves the best leverage to junior palladium
companies and there are few. I prefer those outside of SA like Canadian
Palladium and Palladium One. I prefer Canadian Palladium because of the
CEO’s track record, their resource is on surface, near PGM smelters and
likely cheaper exploration costs in Canada vs Finland. For
diversification, owning more than one palladium play is not a bad idea.
Disclosure: I am/we are long DCNNF. I wrote
this article myself, and it expresses my own opinions. I am not
receiving compensation for it (other than from Seeking Alpha). I have no
business relationship with any company whose stock is mentioned in this
article.
Additional disclosure: Canadian Palladium is a paid advertiser at affiliate playstocks.net
