More Essential Commentary from Excelsior at Kereport Excelsior says:
My main Zinc exposure is through (TV) Trevali – they have been in the midst of a turnaround the last year and been paying down massive amounts of debt using their 4 mines in production, but the market has not seemed to pick up on this yet, or how things will move forward once that debt is paid off and they become profitable.
In addition (USAS) Americas Gold & Silver and (SVM) Silvercorp have had very large Zinc/Lead components to their production profiles the last 2-3 years, as they conserve their higher grade Silver stopes for a better pricing environment.
My Zinc positions in (TK) Tinka, (VTT) Vendetta, (CNX) Callinex, and (ZNX) Zinc X all have sold off over the last year 1/2. It’s a very odd dynamic considering the low Zinc inventories at the Comex and supply that came off-line the last few years in old mines slowing or shutting.
Recently, I just started a punt on (CD) Cantex – Silver/Lead/Zinc explorer as a few industry pundits have noted they may really have something significant, and the stock had run up to nose-bleed levels earlier in the year, but finally has returned to Earth with a much more rational valuation now. I plan on building the position larger if they can prove the thesis a bit more on the next few exploration campaigns and news releases.
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On November 17, 2019 at 11:50 am,
Wolfster says:
Yeah I’m with you on the zinc positions that are underwater with Tinka Callinex and Trevali and completely confused by it based on the supply issue and low inventories……Cantex I think I owned 10 years ago. Lol……..I’m really dumbfounded by the whole undervaluation of near term producers like Excelsior in copper and USA with gold production soon. I’m actually hesitant to take my profits from my clean energy play and buy more Trevali and Excelsior cuz I feel like I’m missing something. Took a huge hit on Donner when they went belly up as they were hitting production cuz I didn’t see the flaw in their structure. Thought Glencore was a trustworthy backer but really had deal setup so they scoped up the play for pennies on the dollar right before production
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On November 17, 2019 at 12:21 pm,
Excelsior says:
Yeah, the Zinc sector has been beyond disappointing and dismal for most of 2018 and 2019, and eventually something has to give regarding the low inventories, lack of oncoming supply, and old tired mines that the majors hold.
Trevali has their act together now, finally, and I’m going to continue adding down here, as they’ve made steady progress the last few quarters on working down their debt overhang, and should be making money in 2020.
Cantex was way overhyped earlier in the year, and then got it’s rear-end spanked when reality of what they’ve found so far was contrasted against their bloated valuation. They have crashed from a valuation over $300 Million down to $45 Million, and are looking much more sane down here, so I’ll be adding at these levels or if it continues to break down just a little further.
I’m also interested to see what will happen with (HER) Heron in 2020, as they completely missed their guidance in 2019 to be in commercial Zinc/Copper production, but did just have their first Zinc concentrate sales in October, and just did a big $91 Million capital raise. It would seem that where they are now, is where they thought they were in late 2018, and the market punished them accordingly, but it seems as if “All systems are go…” now for Heron, so I’m interested to see if 2020 ends up being their breakout year.
Excelsior mining, like most Copper stocks, got stomped in 2019, but the slowing global economy and trade wars have not helped the Base Metals cause.
I’m going to be layering into a few more Base Metals plays over the next few months, but am more interested in making some cake in the Precious Metals and Energy Metals (Uranium & Lithium) for the short term, and maybe dumping some profits from these over into Base Metals as things progress.
I’d also like to see what the US Dollar is going to do (top and drop) or (break out) to determine the effects of inflation and pricing on the commodities.