Will Silver Continue to Outperform Gold?

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“JP MORGAN: SEES GOLD, SILVER PRICE FOR 2025 AT $2,600/OZ, $34/OZ RESPECTIVELY”

-- Reuters

Opening Thoughts

As we have indicated in the last few updates, we expect both gold and silver to establish trading ranges during the summer months, with a slight bias to the downside. This forecast is because both metals need some time to digest the recent gains, provide enough uncertainty that the sellers above the $30 level feel good, and worry those investors still holding. In other words, the wall of worry must be climbed, and the pauses in a bull market should not be very long in duration, but long enough to cast doubts.

This means our prediction of gold remaining under $2500 and silver trading no lower than ~$26 remains. This should be the case through the summer and after that we expect gold and silver to continue moving upward. As you can see from this month’s quote that one of the biggest banks is forecasting higher precious metals prices, although it is for next year, we think those levels can be achieved this year.

This “signal” from Wall Street and the mainstream financial press reminds us of how the same type of information was broadcast about the crypto market, and we wrote it was almost guaranteed that that sector was going to run higher because Wall Street was supportive.

It seemed that this month it might be interesting to provide insights into what crosses my desk in each month or two. Many ideas, projects, “investments”, adverting offers, and other items find themselves in the mailbox, email, or phone.

The past couple of months we have seen a few new ideas in the crypto space with coins or tokens backed by gold, silver or both. Many members have followed my lead into the Lode project, which we report upon each month in the Blockchain section.

I had a conference call with David Roy Newby, who is the CEO of Gold Coin Plus. I had the impression that the team I met with were sincere and honest. Their idea is different from others because they plan to tokenize gold that is in the ground. They argue that this mitigates the environmental and logistical strain associated with mining the precious metal. Simply, a project would be purchased and with a verified resource it would be tokenized and put on the blockchain, or alternatively, an exploration project could be started with drilling taking place and once a measured and indicated resource was defined, the asset would be tokenized.

The mission statement reads as follows: “Our mission can be described in quite a simple way. The aim is to combine the safety and stability of gold to preserve people’s purchasing power while reducing the challenges associated with owning and storing gold in its physical form.”

According to Gold Coin Plus, this idea offers a way for resource-rich but monetarily poorer countries to monetize their gold reserves and, in doing so, provide greater liquidity to their economies in a stable, sustainable way.

As an aside, for nearly a year now I have been hearing about this concept of leaving the gold in the ground and tokening the asset, so this is not a recent idea.

After listening to the team, I interjected my association with the Lode project and the numerous hurdles and rule changes, compliance issues, wallet and technology problems, and costs. It was my perception that the team was grateful to learn just how difficult entering the crypto space can be but also that the length of time may go well beyond what investors consider to be reasonable.

The company is raising money for the project and of course that is the primary reason they contacted me, to see if there was any interest.

Someone sent me a copy of Quantum Money, a web based system of money and credit. The book makes the assertion that in the Information Age, fractional reserve banking is a legacy system and commercial banking can be eliminated from the economy using Information Technology. The book goes further and states that algorithms can carry out the monetary functions of the gold standard.

The book can be downloaded for free at www.bartex.org.

This reaches me at an interesting time because, as most of you know, I have been working on the documentary film, Silver Sunrise (see:SilverSunrise.tv), which explores the whole concept of money and what a transition to the next monetary system may look like.

In these pages we have addressed what the banking elite have in mind, but in this book and touched upon in the documentary, we want to separate money from the state. Stabilize the monetary unit, eliminate poverty, reduce inequality, reduce government interference, and establish principles that are as fair as humanly possible.

These are perhaps pie-in-the-sky ideas, but I have devoted my life to “solving the money problem.” The book was useful, and I will read it again. My main issue with the book is it is purely monetary based. As I have been emphasizing for a few years now, though, the world runs on energy, not on money.

In the documentary, one of the most important points is that some ideas outside of the norm energy system have been proven and suppressed. Dr. Steven Greer makes the claim that the Deep State within the U.S. has been hiding zero-point energy sources and their associated data from the people.

This one may be hard to swallow for most of us, but in the film Dr. Greer does show several “proven” systems that worked, had prototypes, and the ideas/patents were purchased, but the advancements never made it to the public. There are enough examples in the film to stir the imagination of the viewer to be forced into thinking about the possibility of having superior forms of transportation and electrical power while being ecologically friendly. The problem is that the big energy conglomerates could be replaced, and this would decimate the current power structure.

If interested, you can check out the Kawai magnetic motor, Floyd Sweet, Joseph Newman, Henry Moray, Howard Johnson, or other inventions/inventors listed on this site, including in-depth documentation, papers, patents, etc.

In my film we have a clip of Harald Kautz-Vella speaking about an experiment teaching apes to use money. The experiment did not last long because the social structure broke down quickly. We have mentioned this clip in the past, but if you would like to see it you can find it at www.themorganreport.com/monkey.

We certainly have more questions than answers but are convinced at this point that energy holds the key to our abundance.

The problem with the current system is usury. One definition is “the illegal action or practice of lending money at unreasonably high rates of interest.” There is no such thing as the “correct” amount of interest. Here is the proof: If you took a penny at the time of Christ and compounded it at a nominal 2%/year, that penny would be worth 2.18 x 10^17, or nearly 2.18 trillion trillion. This is the equivalent of six planet Earths. Naturally, this is more than all the money on the planet by several orders of magnitude. Governments don't know what they are doing, central banks are digging deeper and deeper financial holes, and the inevitable outcome based on thousands of years of history will be the collapse of the monetary system. Fiat currencies have an average lifespan of 38 years because governments always topple when they become too overbearing. We see a Jubilee in the Bible and as I continue to learn more it seems reasonable to me that the Jubilee was a time every 50 years to cancel debts, free slaves, and redistribute land. My thinking is a primary reason was the usury can work for a 50-year period, but as the interest compounds further, the numbers get to be ridiculous.

Can we run a system with usury? The debate has gone on for a long time. In many traditional societies and religions, usury has been condemned or strictly regulated due to concerns about exploitation, economic inequality, and social harm. Some argue that usury can lead to debt traps, financial instability, and increased inequality by transferring wealth from the poor to the wealthy.

Among the highlights in this month’s issue is the valuation after Equinox acquired the remaining stake in its flagship assets, which recently saw its first gold pour and expected to achieve commercial production in Q3/Q4. This asset alone will reduce companywide AISC by $200-$210/oz from 2025.

The Big Crunch to One Zero-Day
By PETER PHAM

Imagine a game of dominoes.

 

Setting up a domino run involves aligning the pieces and toppling the first to unleash a chain reaction. This analogy resonates with the current economic landscape, impacting sectors from commercial real estate (which constitutes 50% of global GDP) and municipal governments to community banks, residential housing (400% of global GDP), commercial banks, and central banks with assets totaling 50% of global GDP. Similar to the Global Financial Crisis that originated in Iceland, a comparable scenario is unfolding globally, marked by initial signals:

1. China, 2021:

Evergrande, the real estate giant, faces critical straits with $310 billion in debt, including $37.3 billion due within a year but only $13.5 billion in cash. Legal proceedings in Hong Kong have ordered its liquidation amid major restructuring challenges. Severe lockdowns have exacerbated Evergrande’s problems by slowing property sales and reducing cash flow, making debt management even harder.

2. United States, 2022:

New York Community Bancorp (NYCB) grapples with declining loan portfolio quality, selling over $6 billion in Flagstar Bank mortgages to boost liquidity. By 2024, heightened credit loss provisions, leadership shifts, and credit rating downgrades lead to a sharp decline in stock value.

3. Japan, 2023:

Aozora Bank reports substantial losses from large U.S. commercial property loans post-GFC, resulting in a fiscal year-end net loss of ¥49.9 billion due to increased loan allowances, exceeding earlier forecasts.

4. United States, 2023:

Major real estate firms like Vornado Realty Trust and SL Green Realty Corp face significant challenges as office vacancies soar and property values plummet. Urban markets witness occupancy rates below 90%, with property values down by double digits.

5. Germany, 2023:

German banks struggle in both domestic and U.S. real estate markets, resorting to high-quality mortgage-backed bonds for fundraising amidst crisis. They raised a record €40 billion, responding to what’s termed the “greatest real estate crisis since the financial crisis.”

6. United Kingdom, 2024:

London’s prime office districts experience a downturn, with property values dropping up to 25%. Major developers like Land Securities and British Land write down portfolios by £3 billion, incurring significant losses.

The dominoes click and clack as they crash and crunch, setting the stage for a global economic countdown towards what we term the Big Crunch.

Crunchy Roll:

Globally, ominous signs point to a zero-day scenario, with a single tipping point potentially leading to systemic financial collapse. Amid uncertainties, one fact stands: the economy is undergoing profound changes, with only a few poised to emerge unscathed. Post-pandemic transitions and global monetary policies set the stage for the ‘Big Crunch.’ Attempts to downplay pandemic impacts cannot ignore unintended consequences. It’s crunch time.

In physics, the Big Crunch envisions the universe collapsing catastrophically, its expansion inverting until the cosmic scale factor hits zero. This analogy mirrors our societal shift towards a centralized banking system, foreshadowing a reset in the ‘new world order.’

Based on detailed analysis, here is a summary of the game theory probabilities and key factors for the economic “Big Crunch” scenario:

• Commercial Real Estate (CRE) faces a 70-80% likelihood of a significant downturn due to high vacancy rates, declining property values, and $4.4 trillion in global CRE loans maturing by 2027.
   
• Widespread bank failures have a 30-40% chance, particularly affecting smaller banks despite stress test results favoring larger institutions. This is driven by challenges in commercial mortgages.
   
• State defaults due to unfunded pension liabilities and underperforming Pension Obligation Bonds (POBs) appear to be significant, estimated in the range of 30-40% based on the analysis. However, the potential for Federal government intervention could help mitigate the risk of outright defaults.
   
• Government intervention to stabilize the market has a 60-70% probability, drawing on historical responses to similar crises. This indicates likely action by governments and central banks to prevent a complete financial collapse.
   
• The intervention is expected to facilitate banking consolidation and asset base accumulation for banks like JPMorgan Chase, with a 70% probability that JPM’s stock will rise within 3-12 months following a “Big Crunch” scenario, alongside strong performance anticipated for American Express as well.

The Domino Effect:

7. New York City, 2024:

McDonald’s franchisee owners face increasing rents, leading to higher vacancies and driving up taxes needed for city social programs and infrastructure. Commercial real estate firms are scrambling for refinancing amid economic turmoil. Price hikes, exacerbated by rising minimum wages since COVID-19, have pushed McDonald’s meal prices up by approximately 40%, contributing to a downturn in revenues. This economic strain has transformed dining areas into gathering spots for marginalized groups, underscoring broader global economic challenges and the looming ‘big crunch’. Currently, McDonald’s stock reflects these concerns, trading near its 52-week low amidst slowing same-store sales growth and consumer price sensitivity issues.

Cap’n Credit Crunch:

The commercial real estate sector in the United States faces historically high interest rates and declining asset values. The potential fallout could result in staggering losses, with high estimates suggesting up to $1 trillion in losses from office property revenues alone. The ‘Great Office Exodus’ triggered by shifts to remote work has amplified these challenges, prompting companies to relocate from urban cores to outer suburbs. This trend has driven office delinquency forecasts for the U.S. significantly upward, nearing 11% by 2025—surpassing even the peak rates observed during the Global Financial Crisis. Across the Americas, Europe, and Asia-Pacific, building occupancies remain stubbornly below pre-pandemic levels, further straining the commercial real estate sector. 

Globally, the pressure mounts with approximately $4.4 trillion in commercial real estate loans set to mature by 2027, with the U.S. alone facing around $2.2 trillion due in the next two years. Already, office property values have plummeted by 25-35% from their peak, posing daunting refinancing challenges. The sector now faces a dismal 50% refinance success rate over the last 22 months, with predictions pointing towards further declines in office and retail valuations—potentially triggering a wave of defaults. The situation is exacerbated by the need for borrowers to inject significantly more equity (25-40%) to secure refinancing, highlighting an estimated $180-360 billion of high-risk loans maturing by 2025.

In major cities like New York City, Chicago, Philadelphia, Houston, and Portland, the cumulative loss of 2.5 million tax-paying residents since 2021 reflects a shift in commercial real estate dynamics. Hybrid work models and downsizing during COVID-19 lease renegotiations have reshaped urban landscapes, with remote-friendly industries such as San Francisco’s tech sector experiencing pronounced impacts. Municipalities now face daunting challenges in maintaining public infrastructure and services, often requiring state and federal assistance. For instance, New York City’s receipt of over $28 billion in COVID-19 relief funds underscores the interconnectedness between state finances and municipal resilience. However, this financial lifeline is precarious, given the staggering $1.49 trillion in unfunded pension liabilities across states, coupled with $266.5 billion in pension funding shortfalls across 75 cities.

These financial pressures have prompted some state and local governments to issue Pension Obligation Bonds (POBs), despite their significant investment risks. The assumption underlying POBs—that bond proceeds invested alongside pension assets will yield higher returns than bond interest rates in a historically high-interest rate environment—adds another layer of risk (30-40%) and complexity to an already fragile commercial real estate market. For instance, pensions invest heavily in POBs, deploying over $1.4 trillion in commercial property. As property values decline, especially in the office sector, regional bank write-downs exceeding $500 billion have already been triggered, heightening the risk that investment returns will fall short of POBs’ borrowing costs amidst an imminent credit crunch.

House Arrest: Lay of the Land:

The ‘office exodus’ exacerbates this situation, impacting commercial real estate and residential sectors disparately. Heavily taxed urban centers are grappling with inflationary pressures in goods and services, particularly housing costs, which comprise about one-third of the CPI. Recent CPI data also highlights a resurgence in service costs influenced by urban developments that allocate essential services such as healthcare, education, and transportation in urban areas.

These patterns are creating a stark divide in the residential real estate market. Existing home prices are soaring to record highs in areas close to services due to severe supply constraints, while newly constructed homes experience price declines due to oversupply. Investor demand remains robust, contrasting with a dwindling number of first-time homebuyers, which bolsters rental prices. This imbalance is underscored by new construction maintaining an 8.3-month supply compared to just 3.2 months for existing homes—a factor that significantly contributes to housing inflation while limiting overall economic productivity.

One Bank to Rule Them All:

Bankers globally face a quandary with residential housing inflation at $287.6 trillion, nearly three times global GDP, surpassing the $50.8 trillion crunch in commercial property. This disrupts dovish monetary policy, prompting the financial sector to brace for potential small bank failures due to mounting troubles in commercial mortgages. The regional banking industry’s ‘extend and pretend’ strategy seems unsustainable, with many office building owners offering fire sales and default on mortgages, risking inevitable losses and threatening community bank earnings. However, large commercial banks and credit card issuers appear better positioned in terms of pre tax net income contraction stress test below.

*Estimates are for the nine-quarter period from 2024:Q1 to 2026:Q1 as a percent of average assets.

The Fed stress tests large U.S. banks based on total assets, assessing their resilience in a volatile economic environment. The scenario involves a severe global recession: a 6.5% to 10% rise in U.S. unemployment, a 36% house price decline, and a 40% drop in commercial real estate prices.

Results indicate that the 32 big banks might lose about $77 billion from commercial real estate loans, similar to last year. Despite more predicted losses for offices, some hotels and shops perform better. This stress alters banks’ corporate portfolios, reducing loans to companies with high credit ratings. Commercial and industrial loans comprise over 60% of bank lending, with lower-rated loans three times more likely to default than higher-rated ones. The outcome projects $142 billion in defaults relative to big banks’ robust balance sheets meeting double the Fed’s minimum capital requirements and strong tier 1 capital ratios.

The Last Crunch

JPMorgan Chase, the largest U.S. bank, is well-positioned to absorb smaller banks in crisis, expanding its $3.9 trillion asset base through Fed mandates and strategic acquisitions. This strategy has proven effective, as seen in its acquisitions of Bear Stearns and Washington Mutual during the 2008 financial crisis, adding over $900 billion in deposits and expanding the branch network across 20 states, which contributed 50 cents to EPS in 2009. The acquisition of First Republic Bank in 2023 is expected to add $500 million to net income annually. By acquiring distressed banks at discounted prices, JPMorgan Chase strengthens its market position during economic downturns.

These strategic moves during economic downturns have significantly expanded JPMorgan Chase’s market presence and asset base. Its success is attributed to a “fortress balance sheet” strategy, maintaining high cash levels and strong capital ratios, such as a CET1 ratio of around 15%. Considering these factors, there is a 70% probability that JPMorgan Chase stock will rise within 3-12 months, even during a “Big Crunch” scenario. This assessment is based on the bank’s strong financial position, history of strategic acquisitions, and potential benefits from market conditions and consolidation. Additionally, rapid rate cuts would likely benefit JPMorgan Chase.

Crunching the Numbers

Using game theory and statistical analysis, I developed predictive models similar to the Evergrande case study. These models identify key variables and thresholds to assess crisis probabilities globally. This approach combines quantitative modeling with expert judgment to evaluate complex, interconnected risks in the global financial system.

Analyzing the potential “Big Crunch” scenario involves evaluating strategies of key players: Commercial Real Estate (CRE) firms deciding between loan defaults and refinancing amidst declining values; banks, both large and small, considering extending loans, acquiring distressed assets, or foreclosing; and government and central banks weighing interventions to manage systemic risks and ensure market stability. Investors must decide whether to buy distressed assets, divest from risk, or proceed cautiously.

Probability assessments reveal significant risks: a 70-80% chance of a CRE downturn driven by high vacancy rates and maturing $4.4 trillion in CRE loans by 2027; a 30-40% likelihood of widespread bank failures, with smaller banks at higher risk despite stress test results favoring larger institutions like JPMorgan Chase; and a 60-70% probability of government intervention to aid states at risk 30-40%. These systemic risks include fluctuating interest rates affecting borrowing costs, liquidity challenges in selling CRE assets, rising loan defaults, and overall market declines amidst operational complexities.

The scenario also faces vulnerabilities from black swan events such as financial collapses, geopolitical shifts, impacts of remote work on office demand, natural disasters, or cyberattacks, which could trigger the “Big Crunch.” Therefore, strategic decisions amidst market volatility and regulatory adjustments are crucial, highlighting the need for rigorous risk management and adaptive strategies to navigate upcoming economic uncertainties.

The unfolding economic scenario, characterized by a cascade of failing dominoes across various sectors, points to a potential “Big Crunch.” The interconnected nature of global financial systems means that shocks in one area, such as commercial real estate, can have far-reaching impacts on banks, governments, and other economic entities. Predictive models and game theory analyses suggest significant risks, underscoring the critical need for strategic, well-informed decision-making to mitigate the risk of a personal zero day.

Fed Chair Powell Risks “Icarus Moment” if Rates Are Held for Too Long
by Ted Butler

In the most recent FOMC meeting on June 12, Fed Chair Jerome Powell opted to hold the Federal Funds Rate at 5.25–5.5%, marking the tenth consecutive meeting to leave the rate untouched. As part of his rationale, Powell showed an awareness of the risks of holding rates too long. However, he also cited the need for U.S. inflation to move more sustainably toward the Fed’s 2% goal, in order for a rate cut to be deemed appropriate.

Jerome Powell: “We understand that if we wait too long [to cut interest rates], that could come at the cost of economic activity, of employment, of expansion. We [also] understand that, if we move too quickly, we could end up undoing a lot of the good that we’ve done and have to then start over. This could be very disruptive, so we are extremely aware of both of these risks.”

Still, an awareness of the risks is useless if the correct action is not taken in a timely fashion. In other words, if Powell is stubborn enough to hold rates when the right decision is to cut, his recklessness could plunge the U.S. economy into recession. In this sense, Powell is in danger of succumbing to the same fate as Icarus—the ancient Greek who defied conventional wisdom, flew too close to the sun, and wound up meeting his downfall.

Frankly, if the Fed follows through with its plans for just one rate cut this year (likely in December), the chances that Powell, and the U.S. economy, endure a downfall are materially higher. In fact, taking this course of action would be going against the consensus of market participants, 64.1% of whom expect a rate cut of at least 25 bps by September, and 65.4% of whom expect the Fed to have cut rates by at least 50-100 bps by December.

Clearly then, Powell would be ignoring the wisdom of Mr. Market if he holds rates until December. Not to mention, by failing to cut sooner rather than later, he would also be turning a blind eye to the global economic picture, which has already seen rate cuts initiated by Switzerland, Canada, and 20 of the 37 central banks tracked worldwide by JP Morgan.

Of course, it could be argued that the superior strength and size of the U.S. economy provides it with a greater propensity to hold rates for longer. However, there is no denying that there are pockets of visible weakness in the U.S. economy at present. Incidentally, these also serve as reasons why we believe Powell should renege on his December target, and bring forward the first rate cut to September.

Serving as the first “big picture” indicator for why Powell should cut is U.S. GDP growth, which has declined for the previous three quarters, going from 4.9% in Q3 2023, to 3.4% in Q4 2023, and finally to 1.3% as of Q1 2024. Meanwhile, the U.S. yield curve has now been inverted since July 2022—the longest inversion in history. Both indicators suggest that a hard landing is brewing if the current direction of interest rate travel persists.

At the same time, employment data is nowhere near as “robust” as Powell and the mainstream media would lead you to believe. For one, the jobs that are being “created” are increasingly government roles, thus giving less weight to the narrative being pedalled about a thriving private sector. Moreover, U.S. jobless claims spiked to a 10-month high of 243,000 for the week ending June 8 and have now established a rising trend.

As for the U.S. consumer, things are not exactly looking rosy either. Overdue credit card debt is the highest it’s been in more than a decade and the latest reading from the consumer confidence index dipped to 100.4 in June from a downwardly revised level of 101.3 in May. Simultaneously, Walgreens is cutting prices on 1500 items. Flanked by Amazon, Walmart, and Target, this is a sign that U.S. households are struggling to make ends meet.

Furthermore, there is also the concern about the long-awaited impact of commercial real estate (CRE) losses finally being inflicted on the market. With over $900 billion of CRE loans maturing in 2024, sustained higher interest rates would translate to a higher cost of borrowing, which could create all sorts of cash flow issues when proprietors start refinancing.

Of course, if these issues rear their ugly head in the near-term, private credit and the banking sector would be the first to know about it. According to consulting firm Klaros Group, 282 U.S. banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates. Notwithstand­ing this, there is also the fact that four megabanks are responsible for over 80% of the trillions of dollars in risky derivatives exposure.

Despite these red flags, we are of the view that the Fed will foolishly wait until December before it cuts rates, at which point, it will be too late to avoid a recession. For one, this will be due to Powell’s unhealthy obsession with bringing down inflation to 2% before cutting rates—an economic nirvana that is wholly unrealistic in light of what is likely now stagflation. Second, the Fed will cut too late because history shows that is what it does!

Mohammed El Erian, Allianz Chief Economic Advisor – “I look back to different hiking cycles, followed by cuts, and the one that soft landed in my lifetime—and I’m old!—is 1995. And there, the Fed cut pretty early. All the others have ended up in bad news because the Fed tends to be late. This data-dependent Fed is so backward looking, so reactive in its function, that it risks being really late [to cut].”

As for what this means for TMR readers, the critical takeaway is that whenever this elusive rate cut takes place, the opportunity cost of holding gold and silver will trump that of holding cash or bonds, provided that inflation returns to the extent that real rates reach near zero. Put differently, if the Fed cuts rates to 3% by this time next year, and inflation rises to 5%, investors would sooner hold gold and silver than get a -2% real rate return.

Importantly, while we are yet to reach this threshold, the moment in which we do will be characterized by the rotation of capital, away from money market funds and into real assets that preserve one’s purchasing power. For context, Jake Manoukian, JP Morgan U.S. Head of Investment Strategy, recently stated that their clients have around 30% of their portfolios in cash—up from an average of 25% when interest rates were at 0%.

Therefore, even if a fraction of that 5% ends up in gold and silver, it won’t take much to move the spot market. Not to mention, there is also the backdrop of relentless central bank gold purchases from the East, combined with a ravenous appetite for silver on the industrial side. Consequently, investors who position themselves in gold and silver now will be rewarded for doing so, especially when Powell finally pulls the trigger on rate cuts.

Uranium Outlook: The Beginning of the End or Just Getting Started?
by Ted Butler

Uranium speculators have enjoyed an impressive bull market over the last few years, culminating with a peak spot price of $106 per pound in January 2024. Since then, there has been a correction to around $84 per pound, leading us to question if now represents a further buying opportunity for investors in uranium and uranium equities.

When looking at the fundamentals, the uranium market remains attractively poised, with a prevailing supply deficit that dates back to 2016. In 2024, this annual deficit is expected to persist, amounting to around 30 million pounds, according to John Ciampaglia, CEO of Sprott Asset Management. This will be based on a primary demand of 180 million pounds, and a mine production of 150 million pounds.

Of course, the market has already priced some of this in, as is evidenced by uranium’s rise, from $56 per pound at this time last year, to its newly established trading range between $80 and $90. However, if the deficit widens for any reason, further upside in the uranium spot price and associated equites could soon be in the horizon. Incidentally, deciphering this will be the focus of the following article.

On balance, it appears highly likely that the uranium demand will further exacerbate the current supply deficit. Namely, the sheer amount of electricity required for the rollout of data centers and AI means that uranium will be increasingly sought after, so as to power the nuclear facilities that form some 18% of the U.S. electricity grid. In fact, this has been somewhat underestimated by U.S. utilities.

Take the U.S.-based utility company, Dominion Energy, as an example: In 2021, they announced a plan that forecasted a single-digit increase in its electricity demand across the next 15 years. However, given the very recent realization of how much electricity AI will consume, they have since revised this projection and are expecting their electricity demand in Virginia to rise 100% over the next 15 years.

Already equipped with this awareness, high profile visionaries are betting on nuclear energy as the principal way to satiate this AI-driven electricity demand. For one, OpenAI CEO Sam Altman chairs the board of the advanced nuclear fission startup, Oklo, and has been highly vocal about the challenge in scaling up the electricity grid, claiming, “I don’t see a way for us to get there without nuclear.”

By the same token, last month saw Bill Gates invest a hefty $1 billion into a nuclear power plant in Wyoming. The new facility, engineered and designed by the Gates-founded TerraPower, will be smaller and, at least in theory, safer than traditional fission nuclear power plants because it will use sodium instead of water to cool the reactor’s core.

Not to mention, the venture is also expected to be pioneering in terms of its relatively low cost of construction. This is because TerraPower estimates the plant could be built for up to $4 billion, which would be a bargain when compared to other nuclear projects recently completed in the U.S.  For context, two nuclear reactors built from scratch in Georgia are purported to have cost nearly $35 billion.

And yet, notwithstanding the U.S.’ plans to triple domestic nuclear capacity by 2050, a large uranium buying interest pertains in other countries too. For example, France just secured low cost funding from the EU to life extend 32 of their reactors that were built in the 1970s. At the same time, the South Koreans are life extending another 10 reactors and are well on their way to building another 3.

In this sense, the global appetite for nuclear energy, and the uranium required to power it, remains the strongest it has been since the 1970s. Although, the problem for those rolling out the infrastructure for nuclear energy is that uranium production is fraught with supply challenges. Simultaneously, this serves as the basis for the investor interest in the uranium space.

Starting with the most recent supply development, the U.S. Government signed the “Prohibiting Russian Uranium Imports Act” into law May 13, 2024. Motivated by escalating tensions deriving from the Ukraine War, this act “prohibits the import of Russian uranium products into the United States as of August 12, 2024, while enabling a waiver process through January 1, 2028.”

Reading between the lines, what this actually means is that imports of Russian uranium to the U.S. are not officially banned yet. However, if the lobbying power yielded by the U.S. utility companies proves insufficient in its efforts to force amendments to the act, then the U.S. will be devoid of Russia’s (highly reliable, efficient, and relatively cheap) uranium services in just over three years’ time.

With Russia accounting for a 40% share of the world’s uranium enrichment and conversion services, which are required for uranium to be transformed into its correct form for nuclear power, this signifies a hammer blow to the uranium supply chain. As such, a worst-case scenario could see U.S. utilities have to pay up to 3x more for uranium delivery, according to the Uranium Insider, Justin Huhn.

Notwithstanding the effect that this may have on the uranium spot price, there are further supply bottlenecks in the form of resource nationalism in uranium-producing countries. For example, Niger’s military junta just revoked the uranium mine permit of French firm, Orano. This could leave France short of the uranium it needs to power its electricity grid, which is some 60% dependent on nuclear.

All things considered; the convergence of these factors will likely result in new highs in the uranium spot price before year end. This is made all the more likely by the fact that only 28 million pounds of uranium contracts have been secured this year, compared with 55 million pounds by Q1 of last year. Scarred by the uranium price plunge in 2007, this year’s tentativeness could leave utilities scrambling.

That being said, an increase in the uranium spot price should not be viewed as a prerequisite for the continued attractiveness of uranium equities. Firstly, this is because a uranium spot price between $80 and $90 per pound is already highly profitable for the most economical uranium producers, whose AISC can be as low as $25. Secondly, this is due to the rising prominence of the terms market.

“(Thanks to) the rising prominence of the term market… uranium producers will be able to lock in contractual pricing and volume contracts for as long as 20 years. The certainty around the price that producers can receive for the product means that over the next 5 years, the cost of capital for uranium producers relative to other commodity producers will be lower.” –Rick Rule

With this wisdom in mind, it is evident that the clarity derived from these long-term contracts will serve as an incentive for investment-grade credit to pour into the uranium space. Over time, this means that capital investment—which has already been devoted by credible financiers such as Tokyo Electric Power, China General Nuclear, and Duke Energy—should continue in due course.

In a scenario where the uranium price increased for the reasons discussed above, this will provide the support that would enable uranium equities to produce at higher profit margins, generating attractive returns for shareholders. However, even if the uranium price falls from current levels, some producers will have already secured contracts at $80–$90 per pound, boasting stronger balance sheets to boot.

Therefore, while there are of course outstanding risks with investing in uranium—such as a Chernobyl-esque disaster that would flush investors out of the industry—there is still money to be made in the uranium space going forward. Moreover, as the appetite for nuclear ramps up globally, and as supply chains become more fragmented, the incentive to invest is strengthened even further.

Blockchain Brief
by Elaina Rushing

This brief examines various elements of the blockchain market, covering legal concerns, cryptocurrency policies, the LODE project, and other significant events in the crypto industry.

Crypto Market Overview

On June 24, Bitcoin’s (BTC) price slipped below $60,000 for the first time in seven weeks but quickly rebounded above $62,000 within 24 hours. Traders are grappling with whether current crypto market challenges signal a prolonged bear market or temporary panic from miners covering expenses amid lower profitability and potential large sell-offs by major holders.

Uncertainty stemming from the upcoming U.S. presidential elections in November, coupled with inflation data and various other factors, continues to exert a notable influence on the market. The possibility of an impending recession could also prompt investors to seek refuge in cash holdings and short-term U.S. Treasuries for security.

Ether (ETH) experienced a significant drop to $3,250 on June 24, its lowest level in over a month, before recovering to $3,400 the next day. Analysts are cautious about the imminent launch of Ethereum spot exchange-traded funds (ETFs), believing they may not attract substantial inflows given current market conditions. Eric Balchunas and James Seyffart from Bloomberg project initial inflows between $1 billion and $2 billion, while Stephen Richardson of Fireblocks anticipates lower figures. Moreover, with Ethereum’s revenue challenges and stagnant demand growth in its ecosystem, macroeconomic concerns persist, casting doubts on ETH’s short-term price prospects despite a favorable regulatory environment for cryptocurrencies in the U.S.

LODE Update

Your publisher was on the finance committee call on Friday June 28, 2024. The current prospects for moving forward with a debit card and more investment was discussed.  Further, it seems Tether is interested in having their stable coin have the option to incorporate gold into the mix. It was announced that Lode is a likely candidate for this to take place. Whether any of this materializes remains to be determined, but my efforts will continue to offer whatever is possible to see this project fulfill the mandate. 

The Legal Landscape

On June 12, Terraform Labs and its former CEO, Do Kwon, agreed to settle with the U.S. Securities and Exchange Commission (SEC) for $4.5 billion in disgorgement, prejudgment interest, and civil penalties. The agreement, which requires approval from U.S. District Court Judge Jed Rakoff, would permanently ban Kwon and Terraform Labs from buying or selling crypto asset securities.

This settlement follows a New York jury’s finding in April that Kwon and Terraform Labs were liable for civil fraud related to the $40 billion collapse of the Terra ecosystem in May 2022. Kwon, currently detained in Montenegro and awaiting extradition decisions, must personally pay over $204 million as part of the settlement. Terraform Labs, under Chapter 11 bankruptcy, reportedly has about $150 million in remaining assets.

Although there are no recent updates regarding the SEC v. Coinbase case, in a recent interview with Cryptonews.com, former Department of Justice Attorney Seth Goertz discussed the potential implications of the ongoing case. The court denied Coinbase’s attempt to dismiss the case, allowing the SEC’s claims, which assert that specific cryptocurrencies on Coinbase qualify as securities under the Howey Test, to proceed.

Goertz highlighted that a ruling against Coinbase could subject all traded cryptocurrencies, including Bitcoin, to SEC regulation, impacting platforms like Binance and OKX. This could increase regulatory scrutiny and compliance requirements for crypto exchanges, reshaping market dynamics. Conversely, a ruling favoring Coinbase could support cryptocurrencies’ decentralized nature, distinguishing them from traditional securities. He also noted that regulating cryptocurrencies like Bitcoin and stablecoins similarly to traditional assets could undermine their distinct advantages. While major cryptos might fall under the same regulatory framework, novelty coins like Dogecoin would likely require different treatment due to their unique characteristics.

On June 13, Ripple cited the SEC’s settlement with Terraform Labs to request a penalty of no more than $10 million from Judge Analisa Torres. The SEC responded on June 14, arguing that its $4.5 billion settlement with Terraform Labs, which included a $420 million civil penalty, was made under different circumstances. The SEC dismissed Ripple’s comparison of Terraform’s $420 million penalty to its $33 billion gross sales as inaccurate. Instead, the SEC calculated Terraform’s penalty against the gross profit from violative conduct, resulting in a nearly 12% ratio. Applying this same method to Ripple’s $876.3 million gross profits, the SEC argued that Ripple’s penalty should be $102.6 million. The SEC contended that such a low penalty would not fulfill the purposes of civil penalty statutes. The SEC’s proposed penalties for Ripple total nearly $2 billion, including $198.2 million in prejudgment interest, $876.3 million in civil penalties, and another $876.3 million in disgorgement.

Ripple’s legal challenges extend beyond the SEC case. CEO Brad Garlinghouse is involved in a separate lawsuit in California over statements he made about his investment in XRP and the utility of other digital assets. The judge dismissed several allegations, including those suggesting Ripple violated federal securities laws, but one state law claim will proceed to trial. This claim is based on a 2017 statement by Garlinghouse, although the plaintiff did not buy directly from Ripple and cannot confirm hearing the statement before trading. Ripple’s chief lawyer highlighted the dismissal of federal securities law allegations as a significant win, noting that the N.Y. ruling, which determined XRP is not a security, remains intact. Garlinghouse reiterated his support for his past statements and considered the recent legal decisions a significant victory for Ripple.

On June 18, Consensys announced that the SEC had concluded its investigation into Ethereum 2.0. Despite this closure, the SEC’s position on whether Ether, Ethereum’s native token, qualifies as a security remains unclear. The investigation began last year, and Consensys sued the SEC earlier this year, asserting that Ether is a commodity and that the SEC lacked jurisdiction. While SEC Chair Gary Gensler has not definitively labeled Ether a security, the Commodity Futures Trading Commission (CFTC) considers it a commodity. The closure of the investigation might suggest the SEC leans toward this view, though future actions are uncertain.

Consensys’s legal conflict with the SEC continues, particularly concerning the SEC’s scrutiny of MetaMask, a crypto wallet owned by Consensys. The SEC argues that MetaMask’s token-swapping capabilities and staking access involve unlicensed brokerage activities of unregistered crypto asset securities. Consensys acknowledges that the closure of the Ethereum 2.0 investigation is a win but does not resolve the broader regulatory issues.

Ethereum Exchange-Traded Fund (ETF) Approvals

The SEC approved eight applications for spot Ethereum ETFs on May 23. Substantial strides were made during June, causing some optimism that spot Ether ETFs could launch soon.

The potential launch date of Ethereum ETFs is still under speculation, with Bloomberg ETF analyst Eric Balchunas predicting a possible launch date of July 2. During a recent one-on-one interview at the Bloomberg Invest Summit, Mr. Gensler mentioned that the approval process for several Ethereum ETFs was progressing smoothly. However, he could not specify a launch date. Previously, Gensler indicated that Ethereum ETFs might go live this summer.

On June 21, seven spot Ethereum ETF applicants, including Franklin Templeton, VanEck, Invesco Galaxy, BlackRock, 21Shares, and Fidelity, made significant progress by amending their registration statements with the SEC. Grayscale also updated its registrations for its Ethereum Trust and mini Ethereum Trust, while Bitwise did not amend its statement. On June 25, VanEck filed a Form 8-A, also moving closer to final approval.

In a report on June 24, Bitwise chief investment officer Matt Hougan predicted that Ether (ETH) spot ETFs are expected to attract $15 billion in net inflows within their first 18 months. The report suggests estimating potential inflows by comparing the market caps of Bitcoin and Ether. Currently, Bitcoin accounts for 74% of the combined market value, indicating that investors will likely allocate funds to Bitcoin and Ether ETFs in similar proportions. U.S. investors have already invested $56 billion in spot Bitcoin ETFs since their introduction in January, with this figure projected to grow to $100 billion or more by the end of 2025.

Mt. Gox Repayments

Mt. Gox was once the leading crypto exchange, managing over 70% of all BTC transactions. In early 2014, it suffered a massive hack, losing approximately 740,000 bitcoins (worth $15 billion at current prices). Following years of postponed deadlines, Mt. Gox recently announced it will begin repaying assets stolen from clients during the 2014 hack starting in the first week of July 2024. A repayment plan has been in development for several years and was given an October 2024 deadline by a Tokyo court.

Following the repayment announcement, Bitcoin prices fell from over $62,300 to under $62,100, reflecting concerns about potential market pressure from the impending repayments. As per the Rehabilitation Plan, payments will be made in Bitcoin (BTC) and Bitcoin Cash (BCH). The repayments are expected to add selling pressure to the BTC and BCH markets, as early investors might sell their assets, which are now significantly more valuable than their initial purchase price.

LockBit Data Breach

On June 23, LockBit, a cybercriminal group, claimed to have infiltrated the Federal Reserve, compromising 33 terabytes of sensitive banking information. They demanded an undisclosed ransom by June 25, threatening to release the data if unpaid. However, subsequent information revealed that LockBit had targeted “crypto-friendly” Evolve Bank & Trust, not the Federal Reserve.

On the Evolve Bank & Trust website, they stated that they are actively investigating a cybersecurity incident involving a “known cybercriminal group,” however, they do not directly name the LockBit group. The bank also stated that the compromised information varies by individual but may include names, Social Security numbers, dates of birth, account details, and other personal data.

As of June 26, LockBit’s claim of infiltrating the Federal Reserve appears unsupported, with only loose references to the Federal Reserve through mid-June press releases. During this period, the U.S. Federal Reserve Board penalized Evolve Bancorp, Inc. and Evolve Bank & Trust of West Memphis, Arkansas, for deficiencies in their risk management, anti-money laundering (AML), and compliance practices. These deficiencies were highlighted by 2023 examinations revealing inadequate risk management frameworks, especially in partnerships with financial technology companies. Evolve is mandated to enhance its policies and programs in these areas, focusing on improved oversight, recordkeeping, and consumer compliance measures. This enforcement action is carried out in collaboration with the Arkansas State Bank Department, which oversees Evolve’s operations.

The incident involving LockBit highlights ongoing vulnerabilities in personal data security, particularly within the crypto sector, which remains a prime target for frequent cyberattacks.

In summary, the crypto market continues to be driven by many factors, such as ongoing legal disputes shaping regulatory policies, the imminent launch of Ether ETFs, and the SEC’s conclusion of its Ethereum 2.0 investigation. Investors are also closely monitoring the potential effects of Mt. Gox repayments on Bitcoin prices. Meanwhile, the LockBit cyberattack highlights the vulnerabilities in personal data security, particularly within the highly targeted crypto sector.

Equinox Gold: Cash Flow Set to Kick into High Gear
by Chris Marchese

As promised, we have provided an updated valuation of Equinox Gold. This is solely an updated valuation as we have already published an in-depth report on the company. With recent events and downward pressure on the stock price, Equinox had become a value play, albeit one with more leverage given its high cost-structure, which will trend down later this year and more substantially next year in 2025.

Following the acquisition of the remaining 40% interest in Greenstone it didn’t already own, Equinox has one of the highest four-to-five-year production CAGRs. While Equinox did have to pay up for the remaining interest in Greenstone, it is more than worth it from a valuation perspective (despite the fact the NPV7%/share didn’t increase by a material degree, at least when looking on the surface). This is because of several factors:

• It lowers the companywide AISC profile by an additional $80–85/oz (from 2025) and reduces total AISC by $200–$210/oz in 2025.
• Fifty-one percent of its NAV is located in Canada, and combined with Castle Mountain Phase II and Mesquite, the company now has 68% of its NAV in Tier-I mining jurisdictions.
• It maximizes future NAV/NPV creation through the development of an underground mine, likely to run concurrently with the O/P, maximizing future companywide production, cash flow.

While underground drilling is likely to be accelerated and increase total underground resources (once the Greenstone Mine has achieved commercial production), the current resource stands at 1.2m oz Au @ 3.93 g/t Au (Indicated), and 3.1m oz Au @ 3.87 g/t Au (Inferred). Equinox will undertake an economic analysis of the underground mine in 2024/2025. Further, there is a near-term opportunity to increase mill throughput (via power and equipment available) to 30k tpd vs. 27k tpd, or an 11% increase. Upon execution, this would allow sustained annual production of 400k oz Au p.a. vs. 360k oz Au p.a. The underground component combined with the 11% higher throughput could increase sustained production upwards of 500k oz Au p.a., although for our target case, we will assume sustained production is no higher than 400k oz Au p.a.

We will look at two valuation cases, one being the base case and the other being the upside case. It is important to do so in this scenario because all of Equinox Gold’s properties have moderate to very substantial exploration upside. For example, Greenstone has immense exploration potential (regionally and of course underground) and in our view, reminds us of the Island Gold Mine, operated by Alamos.

Aurizona will likely have a multi-decade mine life through the continued discovery of satellite deposits, both open-pit and underground (to be developed beginning as early as 2025). Los Filos also has substantive underground exploration potential, in the highlight-prospective Guerrero Gold Belt. Lastly, ongoing exploration in the Bahia District, along the 70km-long Greenstone Belt that hosts Equinox’s Fazenda and Santa Luz mines, has identified the potential to establish a mining district with the opportunity to truck mineralization to either Fazenda or Santa Luz for processing based on the ore’s metallurgy. Should this come to fruition, significant cost synergies will be realized. 

Following the acquisition of the remaining 40% of Greenstone that Equinox didn’t already own, companywide AISC will fall nearly $200/oz in 2025. This trend will continue through the development and commencement of production from Castle Mountain Phase II, the Aurizona Underground, and Los Filos (CIL).

Assumptions: (Base Case)

Gold Price: $2,125/oz @ 7.05%

Greenstone: 15-year mine life and LOM production of 360k oz Au @ AISC $980/oz

Aurizona: 16-year mine life (exploration costs of $205m to extend the mine life)

Castle Mountain (Phase II): 14.5-yr mine life, 220k oz Au p.a. @ AISC of $1,135/oz

Mesquite: 10-year mine life ($70m of exploration expenses incurred to extend LOM); Average annual production of 95k oz Au @ AISC $1,500/oz

RDM/Santa Luz/Fazenda: 14-year mine life (combined), average annual production of 185k oz Au @ AISC $1,635/oz (which will trend toward $1,550/oz)

Los Filos: 14-yr mine life, 294k oz Au p.a. (average over LOM) @ AISC of $1,160–$1,180/oz (once the CIL plant is built)
 

Target Case: In our target case, the mine lives of Greenstone, Aurizona, Castle Mountain, Los Filos, and Santa Luz + Fazenda are longer. Greenstone has a five-year longer mine life and the inclusion of the underground component goes into the mine plan in year 7 and increases production (on average) by 50k oz Au p.a. (for initial capital costs of $160m), with $310m of exploration expenses incurred. This also assumes throughput will not increase to 30ktd from 27ktpd, again remaining on the conservative side.

Aurizona has a mine life, which is three years longer with $185m of exploration expenses incurred. Los Filos and Castle Mountain have a mine life that is two-and-a-half years longer (and an additional $100m of exploration expenses incurred for each project). Lastly, Fazenda/RDM/Santa Luz have a mine life that is two years longer but for a six-year period, production is a combined 25k oz Au higher, and AISC is $75/oz less, for capital costs of an additional $50m and additional exploration costs of $45m. In other words, even our target case tends to be on the conservative side.

Along with Artemis Gold and K92 Mining, Equinox is another mid-tier producer that should undergo a significant re-rating once Greenstone is on-line running at nameplate capacity. Equinox provides the most leverage to the gold price of the three as its cost structure is the highest but will start trending down in the 2H of the year and over the next five years.

 Letters to the Editor

As a reminder for all members, WE CANNOT GIVE INDIVIDUAL INVESTMENT ADVICE. If you ask: What do you think of this company? Which stock do you like best? Out of these stocks, which one would you buy? Should I sell now or wait? or anything along these lines, we will not answer because, according to SEC regulations, we are restricted from providing individual advice.

Further, all members are limited to two questions per month, except for Mastermind & Insider members. Finally, please use the Members-Only Portal to send your email to us.

Question #1

This is an important commentary on what basically will replace lithium batteries. Those investing in lithium, cobalt, etc. may want to reconsider this considering the superiority of sodium ion battery tech. You will immediately grasp the importance of this. The commentary starts at about 32 minutes. I have provided a link here.

This probably should known by all members. I am sure some are invested in what soon will be obsolete battery tech.

Dan

Comment: Thanks Dan, we will put this into the July issue. We agree our members will benefit from this information.

Question #2

See quotation from the Weber Report below. This has raised my concern with my Mexican silver miners.  I saw your interview video on the matter you provided to the membership, and my concern is a large increase in taxes at the very least here. Thoughts?

“This statement in particular, attributed to Secretary Gonzalez, has raised concerns:

A esta luz, declaramos que el pueblo de México ha sido oprimido y explotado por intereses corporativos extranjeros, particularmente… It translates to:

In this light, we declare that the people of Mexico have indeed been oppressed and exploited by foreign corporate interests, particularly from the United States and Canada, which have extracted Mexico's rich natural resources like silver and gold for their own profit rather than for the benefit of the Mexican people.

Comment: First, anyone that has not watched the video on this topic please do so. Andres Robles is at this point a friend and quite connected to the Mining Industry in Mexico. The way I saw his thoughts on the topic is any ongoing producer in Mexico is probably safe. Any open pit situation for the future may be in trouble.  Political talk is cheap, and implementation is difficult. The International Court could get involved if Mexico decided to break or alter the NAFTA agreement.

I think your idea about increasing taxes is the most logical, but I must point out that Mexico is NOT the only region that has had minerals extracted for the bankers’ profit and not the people. This is true of South America, Africa, and other jurisdictions.  We have made mention of the book ‘Resource Wars’ years ago with this exact theme as the basis for the book. Countries around the world will at some point demand that resources in their location need to be beneficial to the locals and not the corporate/banking interests. 

We could go on and on, the industry has gotten better in almost all jurisdictions as far as being “fair” is concerned. Yet it could be much better. One problem with silver mining is that the margins are so poor or non-existent that better wages/conditions for the locals cannot be improved further because the margins are not there.

We like to remain focused on the royalty and streaming companies in several jurisdictions first for safety, mitigating inflation risks, and diversification. If the government were to increase taxes if would make its way to the press and we would evaluate it for our readers. In the meantime, the miners are still undervalued, and the correct mix as outlined for all members should still provide a suitable risk to reward profile. 

Final Thoughts

The world seems to become more hostile as the days pass.  Yet, I cannot stop thinking about the idea that all the ill will that is present has peaked and sanity is slowly returning. It is always difficult to pick a top, but the citizens of the world seem fed up with the political class worldwide and are demanding change.  Nation states are starting to look after their own, and globalism is taking a back seat.

The one remaining thread that largely holds the control mechanism together is the international banking system, but this too is being challenged with financial innovations. People have been pushed too far and they are pushing back. Perhaps the pendulum is swinging back toward freedom, time will tell.

Until next month, wishing you health above wealth and wisdom beyond knowledge.

David Morgan

Asset Allocation

Company	Symbol CAD (US)	Initial Date	Initial Price		Profit (Loss)	Comments
TOP-TIER PRODUCERS
Hecla Mining	(HL)	11/26/2018	US	$2.46	97%
Endeavour Mining	EDV.TO (EDVMF)	8/4/2017	US	$17.90	17%
Wheaton Precious Metals	WPM.TO (WPM)	10/1/2005	US	$4.00	1211%
Pan American Silver	PAAS.TO (PAAS)	9/1/2001	US	$2.00	894%
Franco Nevada	FNV.TO (FNV)	1/1/2001	US	$17.60	573%
Agnico Eagle	AEM.TO (AEM)	Early 2001	US	$8.00	718%
MID-TIER PRODUCERS
Triple Flag	TFPM.TO (TFPM)	5/2/2022	US	$12.54	24%
New Found Gold	NFG.V (NFGC)	10/26/2021	US	$8.46	-67%
Equinox Gold	EQX.TO (EQX)	2/28/2019	US	$4.60	14%
MAG Silver	MAG.TO (MAG)	9/3/2018	US	$7.65	53%
Osisko Gold Royalties	OR.TO(OR)	4/30/2018	US	$9.76	60%
Fortuna Silver	FVI.TO (FSM)	2/7/2011	US	$3.46	41%
JUNIOR PRODUCERS
AYA Gold & Silver	AYA.TO (AYASF)	9/30/2023	US	$5.36	84%	Buying in Tranches
Calibre Mining	CXB (CXBMF)	5/1/2023	US	$1.16	14%
Electric Royalties Ltd.	ELEC (ELECF)	1/2/2023	US	$0.24	-28%
Osisko Development	ODV.V (ODV)	3/28/2022	US	$10.17	-82%
SilverCrest Metals	SIL.TO (SILV)	10/1/2019	US	$5.75	42%
Energy Fuels Inc.	(UUUU)	3/7/2016	US	$2.96	105%
SPECULATIONS (These are highly speculative investments. Only commit funds you can afford to lose.)
Canter Resources	CRC (CNRCF)	11/16/2023	US	$0.56	-73%
Silver Valley Metals	SILV.V (SVMFF)	7/3/2023	US	$0.11	-63%
Lion One Metals	LIO.V (LOMLF)	9/9/2022	US	$0.78	-56%
Kraken Energy Corp.	UUSA (UUSAF)	5/2/2022	US	$1.25	-94%
American Pacific	(USGDF)	9/7/2021	US	$0.68	-82%
Ethereum	ETH	12/7/2020	US	$591.84	471%	Crypto Asset
Ripple	XRP	12/7/2020	US	$0.61	-22%	Crypto Asset
enCore Energy	EU.V (EU)	10/2/2020	US	$0.81	386%
Omineca Mining and Metals	OMM.V (OMMSF)	3/2/2020	US	$0.12	-45%
EnviroMetal Technologies	ETI (EVLLF)	6/2/2017	US	$0.32	-95%
Minaurum Gold	(MMRGF)	3/6/2017	US	$0.17	-2%

 

Changes for This Month: There are no changes for this month. Keep a tight stop on your Uranium stocks.

Portfolio updated June 28, 2024 — Please note the following:  We use the price of the Friday close prior to publication as our basis. Your basis will vary depending upon market conditions. The trailing stop loss of 15% will be used on this basis; however, we encourage everyone to use stop-loss discipline on their own individual basis.

Top-Tier Producers: This section is for serious money. Our suggestion is for retirees or fund managers to focus on this section; it could contain up to 90% of the money allocated to precious metals mining stocks. This list changes to the strongest each month, but once a stock hits this list, it remains a HOLD unless we state it is a sell.

Mid-Tier Producers: These are serious companies with a higher growth rate but more risk than the Top Tier. Our suggestion is that those working with good incomes focus on this list and own two or three from the Top Tier for safe growth.

Junior Producers: These are companies that are producing, and in most cases, can grow revenues by both an increase in production rate and bringing more resources by expanding exploration. Less risk than speculations but higher risk than the mid-tier.

Speculations: High Risk/High Reward, only money you can afford to lose. You MUST put equal dollar amounts into EVERY suggestion to diversify properly. No one can pick only one company and expect consistent results. Read “How to Use TMR” and set stop losses!

How to Use The Morgan Report: Read here now. Use the stop loss settings as described! Please keep in mind that The Morgan Report is published on the first Monday of the month.

Information contained herein has been obtained from sources believed to be reliable, but there is no guarantee as to completeness or accuracy. Because individual investment objectives vary, this Summary should not be construed as advice to meet the needs of the reader. Any opinions expressed herein are statements of our judgment as of this date and are subject to change without notice. Any action taken because of reading this independent market research is solely the responsibility of the reader.

The Morgan Report is not and does not profess to be a professional investment advisor, and strongly encourages all readers to consult with their own personal financial advisors, attorneys, and accountants before making any investment decision. The Morgan Report and/or independent consultants or members of their families may have a position in the securities mentioned. Mr. Morgan consults on a paid basis, both with private investors and various companies. Investing and speculation are inherently risky and should not be undertaken without professional advice. By your act of reading this independent market research letter, you fully and explicitly agree that The Morgan Report will not be held liable or responsible for any decisions you make regarding any information discussed herein.

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