Global political tensions have not been this palpable since 9/11, when gold prices jumped 32.87% in a single day, and the amount of uncertainty being ushered in for 2017 promises to be great for the precious metal—our age-hold hedge against chaos and instability.
For a fully-funded junior gold miner backed by heavy hitters in one of the world’s hottest venues--Fiore Exploration Ltd (TSXV–F.V) the timing is brilliant, the production costs fantastic, and the future golden.
What we have right now is a situation in which gold prices are stable, but mining and exploration, which has been all but halted, is very cheap, leaving all kinds of fantastic plays up for grabs.
Combine this with the fact that an unpredictable and inflation-bent Trump is preparing to take office in the U.S., the British prime minister is set to trigger a ‘hard Brexit’, China’s economic problems are mounting and most of the world is explosively tense, and you have a situation in which gold is set for a premium.
Gold is the ultimate safe-haven and the ultimate means of payment when all else fails, or when the uncertainty is high enough to fear this failure.
(Click to enlarge)
The transition is where billions are made—and the turning point in this story is upon us.
Here is where you look for the small-cap that defies all the risky norms of this class of precious metals miner.
This is exactly where you find Fiore, a company that is backed by a miner so big that raising capital is as easy as snapping your fingers; a company that has chosen a prime jurisdiction right next to an operating gold mine; a company whose management team knows gold better than anyone.
Here are 5 reasons to keep a close eye on this small-cap, heavy hitter:
1. Precious Again: Are you Ready for the Gold Rebound?
Americans are buying gold like never before. U.S. demand for gold bars and coins was up a massive 207% in Q3 2016.
According to the World Gold Council, this surging demand signals a level of interest in gold investment “not seen since the global financial crisis.”
Gold is being rendered even more attractive for Americans amid economic uncertainty most succinctly expressed by billionaire investor Warren Buffett, of Berkshire Hathaway Inc. (NYSE:BRK.A), who noted that the U.S. is “less well equipped to handle a financial crisis today than we were in 2008.”
Central Banks the world over have also been stockpiling the precious metal since 2008, at levels not seen since before 1970.
One of the world’s biggest legends in mining, Canadian billionaire Frank Giustra, who is also the founder of Lionsgate Entertainment Corporation (NYSE:LGF), is pouncing on gold voraciously, and where his gold money goes, markets tend to follow. He’s also the heavy hitter backing Fiore.
Still, gold is under a bit of pressure, and the U.S. presidential elections certainly didn’t help. After climbing back up during the first three quarters of this year to be one of the best performing assets of the year, gold experienced a volatile few days, taking a dive on the ‘surprise’ victory of Trump, with a few unexplained ups and downs, largely because no one could quite figure out what the President-elect would mean for the precious metal.
Finally, during the last week of November, prices stabilized and are presently up about 10% year to date. It’s a solid price for miners—particularly for Fiore—but it’s only the beginning of a new era.
What comes next is what makes billionaires, because gold stocks are still cheap while the fundamentals are fantastic. Kinross Gold (NYSE:KCG), Newmont Mining (NYSE:NEM), Barrick Gold (NYSE:ABX) and IAMGold (NYSE:IAG) are all trading at less than 10 times cash flow from operations per share.
Even with the modest recovery in prices this year, we saw TSX Venture gold stocks create millionaires over night by tripling and quadrupling in value. So imagine what will happen when Trump’s inflationary policies set in, and the world reels from a geopolitical uncertainty that is palpable…
While Election Day and the day after had markets in a state of panicked confusion, the jury now seems to have deliberated, and the verdict is that Trump will be good for gold in two very specific ways:
• Inflation—gold loves it. More to the point, Trump’s build, build, build infrastructure plans and ambitious defense spending visions are phenomenally inflationary. But it is also possible that these policies will not lead to any long-term sustainable growth, which would in turn lead to stagflation, which is an even better friend to gold.
• Geopolitics—gold prices feed on risk, and there will be plenty of it. Even just a change in government creates geopolitical uncertainty, but in this case the situation is more extreme. Trump has indicated he will take an aggressive stance on issues central to West Asia, and in general, we’re looking at a world in which the U.S. may meddle much less and cooperate much less. The power vacuums that ensue are where the uncertainty lies. From the victory of a very divisive U.S. president and the rise of right-wing parties in Europe, to Brexit, China’s economic challenges and Russia’s warmongering, this is the uncertainty that gold loves. Gold is always put on a premium pedestal in times of geopolitical uncertainty, even when it’s not chaos.
Right now, gold is massively oversold, and historically, these are levels that always lead to a major rally. It’s the calm before the storm. Some analysts believe we could be looking at gold prices of $1600 or higher this time next year already.
This is the brilliantly timed scenario in which Fiore is diving very aggressively into Latin America’s gold bonanza.
2. Heavy Hitters Mean Easy Capital, Strong Cash Flow
Fiore breaks the mold when it comes to small-cap gold miners. There’s nothing an investor likes more than a company with positive cash flow and the ability to raise capital with the snap of its fingers.
The company is backed by miner extraordinaire, Giustra, the Canadian business mogul who really needs no introduction as he has financed countless high-level natural resource deals. Giustra’s mining prowess is nothing short of legendary, and capital follows him around automatically.
This is what most everyone in the industry refers to as the “Giustra Premium”, which is exactly why Fiore has a higher market capitalization than one would expect for a company at this stage.
And the company is nicely cashed-up, with $13.5 million in the treasury, thanks to $11 million in financing, in part from its two major shareholders, Giustra and Brian Paes-Braga.
The dream team here extends beyond Giustra, to include some major players with very serious track records:
• Brian Paes-Braga, another heavy hitter
• Advisor Paul Matysek, who has created shareholder value of well over $2 billion in gold, lithium, potash and uranium
• CEO Tim Warman, a sought-after geologist with a string of successful, high-grade gold projects behind him
Fiore, then, is not your average drill play. It can raise, and has raised, capital easily so it can drill at will. And it’s also positioned itself in the sweet spot of the gold world, which brings us to Chile …
3. Welcome to a Prolifically Golden Opportunity
Fiore’s property in Latin America is the right in the heart of Chile’s main mining center. There is absolutely no better location right now.
Here, at the Pampas El Penon project, Fiore has been drilling on an 8,000-meter RC drill program since October, and it’s right next to Yamana Gold’s (NYSE:AUY) producing El Penon gold mine. Which we already know is a sweet spot.
What they’re looking for—and on track to find very quickly—is the high-grade gold veins that Yamana is already mining next door.
In the industry, this is called ‘closeology’, and it doesn’t get any closer than this.
(Click to enlarge)
Or does it? Well, in fact, it does. The five-year bear market for gold has led to some amazingly low production costs. This means that Fiore is drilling for less than $100 a meter. Even better, the infrastructure is already in place, and drilling can continue year round.
4. The Gold Deal of 2016
As soon as Fiore sees drilling success, it can expand its drilling program without going back to the market. It’s brilliantly financed for this. That means that when it wants to earn in to 100% of Pampas El Penon, it will take $1.8 million worth of work, and one payment of a half million dollars—all of which the company is already set up to handle.
And it won’t stop with Pampas. The plan is to add at least one new asset before the end of this year, maybe more.
These are first-movers parked right next to a major producing gold mine, and they’re ready to take on more—Pampas is just a starter project, but a big one backed by heavy hitters.
Backed by big money, Fiore is taking advantage of a huge exploration vacuum in Latin America. Exploration has almost completely come to a standstill, and exploration budgets are down by 60% over the past five years. There are massive projects out there that have been orphaned, and Fiore has stepped in with the money and expertise at a time when things are about to change.
5. Gold Mining Stocks Have the Advantage, Fiore Has Even More
Owning gold mining stocks is a brilliant move right now. Gold mining stocks are leveraged to the price of gold, while production costs are way below market price. This means that any small increase in the market price is a bonanza for the mining stock holder.
Here’s where Fiore rules the first-mover day in Latin America. While some gold miners are drowning in debt, Fiore has none and it’s managed by a dream team of value-creators who know geology, know gold and are hungry to drill and expand.
By James Burgess of Oilprice.com
PAID ADVERTISEMENT. This communication is a paid advertisement and is not a recommendation to buy or sell securities. Oilprice.com, it’s owners, managers, employees, and assigns (collectively “The Company”) has been paid by a third party to disseminate this communication. This compensation is a major conflict with our ability to be unbiased, more specifically:
This communication is for entertainment purposes only. Never invest purely based on our communication. Gains mentioned in our newsletter and on our website may be based on end-of- day or intraday data. If we own any shares we will list the information relevant to the stock and number of shares here. We have been compensated cash via bank wire by a third party, to conduct investor relations advertising and marketing for [VBIO]. Oilprice.com receives financial compensation to promote public companies. This compensation is a major conflict of interest in our ability to be unbiased. Therefore, this communication should be viewed as a commercial advertisement only. We have not investigated the background of the hiring third party or parties. The third party, profiled company, or their affiliates will liquidate shares of the profiled company at or near the time you receive this communication, which has the potential to hurt share prices. Any non-compensated alerts are purely for the purpose of expanding our database for the benefit of our future financially compensated investor relations efforts. Frequently companies profiled in our alerts experience a large increase in volume and share price during the course of investor relations marketing, which often end as soon as the investor relations marketing ceases. The investor relations marketing may be as brief as one day, after which a large decrease in volume and share price is likely to occur. Our emails may contain forward looking statements, which are not guaranteed to materialize due to a variety of factors.
We do not guarantee the timeliness, accuracy, or completeness of the information on our site or in our newsletters. The information in our communications and on our website is believed to be accurate and correct, but has not been independently verified and is not guaranteed to be correct. The information is collected from public sources, such as the profiled company’s website and press releases, but is not researched or verified in any way whatsoever to ensure the publicly available information is correct. Furthermore, The Company often employs independent contractor writers who may make errors when researching information and preparing these communications regarding profiled companies. Independent writers’ works are double-checked and verified before publication, but it is certainly possible for errors or omissions to take place during editing of independent contractor writer’s communications regarding the profiled company(s). You should assume all information in all of our communications is incorrect until you personally verify the information, and again are encouraged to never invest based on the information contained in our written communications.
DISCLOSURE. The Company does not make any guarantee or warranty about what is advertised above. The Company is not affiliated with, any specific security. While the Company will not engage in front-running or trading against its own recommendations, The Company and its managers and employees reserve the right to hold possession in certain securities featured in its communications. Such positions will be disclosed AND will not purchase or sell the security for at least two (2) market days after publication.
NOT AN INVESTMENT ADVISOR. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.
INDEMNIFICATION/RELEASE OF LIABILITY. By reading this communication, you agree to the terms of this disclaimer, including, but not limited to: releasing The Company, its affiliates, assigns and successors from any and all liability, damages, and injury from the information contained in this communication. You further warrant that you are solely responsible for any financial outcome that may come from your investment decisions.
FORWARD-LOOKING STATEMENT. As defined in the United States Securities Act of 1933 Section 27(a), as amended in the Securities Exchange Act of 1934 Section 21(e), statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense.
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. Investing is inherently risky. While a potential for rewards exists, by investing, you are putting yourself at risk. You must be aware of the risks and be willing to accept them in order to invest in any type of security. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell securities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR- OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
All trades, patterns, charts, systems, etc., discussed in this message and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using the methodology or system will generate profits or ensure freedom from losses. The testimonials and examples used herein are exceptional results, which do not apply to the average member, and are not intended to represent or guarantee that anyone will achieve the same or similar results.
AFFILIATES. Some or all of the content provided in this communication may be provided by an affiliate of The Company. Content provided by an affiliate may not be reviewed by the editorial staff member. Our affiliates may have their own disclosure policies that may differ from The Company’s policy.
The information contained herein may change without notice.