Gerardo Del Real,
Editor
Oct. 21, 2024
This is your Resource Stock Digest editor Gerardo Del Real here with some Monday coffee talking points.
What am I watching this week?
All eyes are currently on silver, which is right around US$33.75 per ounce at last check. The precious metal broke through the US$34 level earlier this morning before pulling back slightly. It seems like US$33 is the new floor. And if that is indeed the case, I expect a test of the US$35 per ounce level imminently. And if it holds US$35, I think we’ll see a quick run up to the US$38 level.
There’s a lot to like in the silver exploration space. I’m personally a big favorite of one larger company and one micro-cap.
First, that junior micro-cap is Kingsmen Resources Ltd. (TSX-V: KNG)(OTC: KNGRF), which is advancing the flagship Las Coloradas silver-gold project, representing the consolidation of a historic mining district in northern Mexico covering numerous silver-gold-lead-zinc-copper mines.
It's underground mining on private land. It’s drill-permitted and has strong community support. Drills should be turning in December-January wherein I’m expecting blockbuster results. KNG boasts a tiny market cap of ~C$5.5 million in what is turning out to be a precious metals bull market for the record books. It’s a company that could potentially multiply its market cap by 10, 20, 30-fold in very short order.
That larger firm I mentioned — and one of the best pure plays in silver with a heck of a gold discovery to boot — is Dolly Varden Silver (TSX-V: DV)(OTC: DOLLF).
Dolly Varden is a vehicle managed by CEO Shawn Khunkhun who’s one of the best in the industry. Shawn is very industry-sharp, knows how to market, tells the story well, and has done a phenomenal job bolstering the company’s balance sheet and getting aggressive exploration done during what was previously a soft market.
As we all know, that soft market has now become a very strong one with Shawn playing his hand exceptionally well by positioning the company and shareholders to continue to profit from the positioning that was done during that softer market.
What else am I watching?
Gold is now firmly above US$2,700 an ounce. We’ll be looking to see if the yellow metal is able to make a run towards US$2,800. I wouldn't mind seeing a prolonged few more weeks in the US$2,700 range before the next leg up, which will benefit one of our top picks from the space that’s currently speeding toward a Record of Decision on its flagship gold-antimony project in Idaho.
Copper is currently flirting with the US$4.30 per pound level with Chinese stimulus being the impetus there.
The dollar index has gone from strong to stronger in recent trade. Commodities remain impressive given the dollar index at 104 today. I think there are broader-index market jitters that are continuing to drive capital to the United States. Geopolitical tensions are contributing to that as well. Thus, despite commodities being very strong, we’re still seeing robust capital inflows into the greenback.
Last but not least, uranium had a heck of a week as major tech companies like Google, Amazon, and Microsoft continue to strike deal after deal for nuclear power to meet the rising energy demands of their massive AI data centers.
I'm looking forward to seeing how that megatrend materializes in the junior uranium explorers going forward. Already, many of the top names in the space are trekking toward new 52-week highs, which, if you ask me, is just the start of what will soon prove to be a much longer-term profit-ride.
Folks, that's what I'm watching this week. Have a great one out there.
Let’s get it!
Gerardo Del Real
Editor, Resource Stock Digest