{"id":21660,"date":"2020-05-18T11:53:02","date_gmt":"2020-05-18T15:53:02","guid":{"rendered":"https:\/\/capital10x.com\/old\/?p=21660"},"modified":"2020-11-26T09:47:17","modified_gmt":"2020-11-26T14:47:17","slug":"the-gold-metals-navigator-may-18th-2020","status":"publish","type":"post","link":"https:\/\/capital10x.com\/old\/the-gold-metals-navigator-may-18th-2020\/","title":{"rendered":"The Gold &#038; Metals Weekly Navigator (May 18th, 2020)"},"content":{"rendered":"<h2>Gold &amp; Gold Miners &#8211; A Haven of Safety<\/h2>\n<p>Gold miners continue to deliver strong returns relative to paper gold (NYSE: GLD) and the S&amp;P 500. Last week the market was spooked by iconic investors <a href=\"https:\/\/www.thenational.ae\/business\/money\/billionaires-wall-street-s-rich-guys-say-us-stocks-are-vastly-overpriced-1.1019872\">Stan Drukenmiller and David Tepper<\/a> sounding the alarm about overvalued equity markets.<\/p>\n<p>Gold is one of the primary beneficiaries of the recent bearish sentiment on Wall Street.\u00a0 Market exuberence was muzzled during the week with the S&amp;P 500 down -2%, while gold and gold equities rallied meaningfully. The VanEck Vectors Gold Miners ETF (NYSE: GDX) and the VanEck Vectors Junior Gold Miners ETF (NYSE: GDXJ) were up 5% and 7% respectively vs. the SPDR Gold ETF +2%.<\/p>\n<p>Investors in gold mining equities need to get compensated for the operational and financial risk they take, that compensation is translated into beta vs. the gold price.<\/p>\n<h4>Gold &amp; Gold Equities Performance May 11th-15th, 2020.<\/h4>\n<figure id=\"attachment_21662\" aria-describedby=\"caption-attachment-21662\" style=\"width: 1755px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-21662 size-full\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3.png\" alt=\"\" width=\"1755\" height=\"1024\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3.png 1755w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-300x175.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-1024x598.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-768x448.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-1536x896.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-696x406.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_GDXJ_SPY_chart-3-1392x812.png 1392w\" sizes=\"auto, (max-width: 1755px) 100vw, 1755px\" \/><figcaption id=\"caption-attachment-21662\" class=\"wp-caption-text\">Source: YCharts<\/figcaption><\/figure>\n<h2>Gold Miners Have Lagged Gold Bullion Significantly Over the Last Decade<\/h2>\n<p>Gold miners have been structural underperformers relative to gold since 2008, most institutional fund managers have left the sector entirely as a result of the abysmal returns.<\/p>\n<p>It&#8217;s clear the gold equities have now put in a bottom relative to gold, there is a significant catch up trade here.<\/p>\n<figure id=\"attachment_21663\" aria-describedby=\"caption-attachment-21663\" style=\"width: 1677px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-21663 size-full\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart.png\" alt=\"\" width=\"1677\" height=\"1024\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart.png 1677w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-300x183.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-1024x625.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-768x469.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-1536x938.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-696x425.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/GLD_GDX_chart-1392x850.png 1392w\" sizes=\"auto, (max-width: 1677px) 100vw, 1677px\" \/><figcaption id=\"caption-attachment-21663\" class=\"wp-caption-text\">Source: YCharts<\/figcaption><\/figure>\n<h2>Copper &#8211; The Last Remaining Pocket of Deep Value in the Market<\/h2>\n<p>Mark Bristow, the CEO of Barrick Gold (TSX: ABX, NYSE: GOLD) is one of the mining industry&#8217;s legendary operators who has a great nose for unrecognized value. Last week in an <a href=\"https:\/\/www.ft.com\/content\/0437bc9f-ee67-4505-ab82-45b8f641ba88\">interview with the FT<\/a> he stated that he was looking to take advantage of the downturn in copper prices to make an acquisition in the sector.<\/p>\n<h4>Copper Miners vs. S&amp;P 500<\/h4>\n<figure id=\"attachment_21665\" aria-describedby=\"caption-attachment-21665\" style=\"width: 2000px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-21665\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart.png\" alt=\"\" width=\"2000\" height=\"1167\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart.png 2000w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-300x175.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-1024x598.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-768x448.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-1536x896.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-696x406.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/COPX_^SPX_chart-1392x812.png 1392w\" sizes=\"auto, (max-width: 2000px) 100vw, 2000px\" \/><figcaption id=\"caption-attachment-21665\" class=\"wp-caption-text\">Source: YCharts<\/figcaption><\/figure>\n<p>Copper consumption remains invariably linked to global economic growth, particularly as we move to a world where transport is driven by electrification.\u00a0 When the economy recovers from COVID-19 so will the global demand for copper.<\/p>\n<h4>Global Copper Consumption: 1900-2019<\/h4>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-21640\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-scaled.jpg\" alt=\"\" width=\"1400\" height=\"1082\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-scaled.jpg 1400w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-300x232.jpg 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-1024x791.jpg 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-768x593.jpg 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-1536x1187.jpg 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-2048x1583.jpg 2048w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-696x538.jpg 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/copper-consumption-1392x1076.jpg 1392w\" sizes=\"auto, (max-width: 1400px) 100vw, 1400px\" \/><\/p>\n<h2>Sierra Metals &#8211; A Well Positioned Copper Recovery Play Trading at a Deep Discount<\/h2>\n<p>Sierra Metals (TSX: SMT, NYSE: SMTS) released <a href=\"https:\/\/capital10x.com\/old\/sierra-metals-smt-q1-2020-results\/\">solid Q1 2020 results<\/a> last week, with mining and financial results well ahead of consensus estimates.\u00a0 On a year-on-year basis, the company increased copper equivalent production by 43% and grew EBITDA by 33%.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-21650\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/sierra-earnings-charts.png\" alt=\"\" width=\"800\" height=\"295\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/sierra-earnings-charts.png 800w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/sierra-earnings-charts-300x111.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/sierra-earnings-charts-768x283.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/sierra-earnings-charts-696x257.png 696w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><\/p>\n<p>Since announcing results after market on May 14th, the stock has rallied 14% in the subsequent two trading days.\u00a0 We believe the company&#8217;s attractive copper, silver and gold exposure will attract interest from investors looking for value opportunities in the market.<\/p>\n<p>On a year-to-date basis Sierra has sold off more than it&#8217;s peers, offering a compelling entry point for value orientated mining investors.<\/p>\n<h4>Base Metal Mining Stocks Have Sold Off Year-to-Date<\/h4>\n<figure id=\"attachment_21651\" aria-describedby=\"caption-attachment-21651\" style=\"width: 1755px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-21651\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart.png\" alt=\"\" width=\"1755\" height=\"1024\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart.png 1755w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-300x175.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-1024x598.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-768x448.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-1536x896.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-696x406.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SMT.TO_CMMC.TO_TKO.TO_CS.TO_chart-1392x812.png 1392w\" sizes=\"auto, (max-width: 1755px) 100vw, 1755px\" \/><figcaption id=\"caption-attachment-21651\" class=\"wp-caption-text\">Source: YCharts<\/figcaption><\/figure>\n<h2>SSR &amp; Alacer Gold Gain Big on Merger of Equals<\/h2>\n<p>On May 11th, SSR Mining (TSX: SSRM) <a href=\"http:\/\/ir.ssrmining.com\/investors\/news\/press-release-details\/2020\/SSR-Mining-and-Alacer-Gold-Announce-At-Market-Merger-of-Equals-to-Create-a-Free-Cash-Flow-Focused-Diversified-Gold-Producer\/default.aspx\">announced<\/a> that it had agreed to buy Alacer Gold (TSX: ASR) in an all-stock, zero premium deal. Alacer shareholders will receive 0.3246 SSRM shares for each ASR share.<\/p>\n<p>Both stocks rallied nearly 20% on the back of the deal announcement, this is a very positive development for the gold mining sector.<\/p>\n<p>Mergers of equals are typically shrugged off by the market, but in the current environment investors are viewing this as the prudent corporate move.\u00a0 In a merger of equals no new capital is infused into the company and therefore the the merged entity must choose the higher ROI projects in both of their development portfolios.<\/p>\n<h4>Market Welcomes Merger of Equals: SSR Mining &amp; Alcer Gold<\/h4>\n<figure id=\"attachment_21668\" aria-describedby=\"caption-attachment-21668\" style=\"width: 2000px\" class=\"wp-caption alignnone\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-21668\" src=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart.png\" alt=\"\" width=\"2000\" height=\"1167\" srcset=\"https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart.png 2000w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-300x175.png 300w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-1024x598.png 1024w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-768x448.png 768w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-1536x896.png 1536w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-696x406.png 696w, https:\/\/capital10x.com\/old\/wp-content\/uploads\/2020\/05\/SSRM.TO_ASR.TO_chart-1392x812.png 1392w\" sizes=\"auto, (max-width: 2000px) 100vw, 2000px\" \/><figcaption id=\"caption-attachment-21668\" class=\"wp-caption-text\">Source: YCharts<\/figcaption><\/figure>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A weekly review of the most important news impacting the gold and metals industry. This week: Gold miners remain supercharged and copper miners offer value.<\/p>\n","protected":false},"author":7,"featured_media":15920,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1755,59],"tags":[217,1615,179,686,103,76,1600,1521,1591,104,1614,846,847,1617,1267,372,376,1616],"class_list":{"0":"post-21660","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-growth_navigator","8":"category-metals","9":"tag-abx","10":"tag-alcer-gold","11":"tag-asr","12":"tag-asr-to","13":"tag-barrick-gold","14":"tag-copper","15":"tag-gdx","16":"tag-gdxj","17":"tag-gld","18":"tag-gold","19":"tag-gold-miners","20":"tag-sierra-metals","21":"tag-smt","22":"tag-smt-to","23":"tag-smts","24":"tag-ssr-mining","25":"tag-ssrm","26":"tag-ssrm-to"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Gold &amp; Metals Weekly Navigator (May 18th, 2020) | Capital 10X<\/title>\n<meta name=\"description\" content=\"A weekly review of the most important news impacting the gold and metals industry. 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