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Kirkland Lake Gold: BMO Reiterates Price Target After Massive Resource Improvement

On September 2, Kirkland Lake Gold Ltd. (TSX: KL) announced that their measured and indicated mineral resource at their Detour
The post Kirkland Lake Gold:…

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This article was originally published by The Deep Dive

On September 2, Kirkland Lake Gold Ltd. (TSX: KL) announced that their measured and indicated mineral resource at their Detour Lake Mine. They announced a 216% increase of the prior resource, or 10,061,000 ounces, to 14,718,000 ounces at an average grade of 0.80 grams per tonne. The new results come from a total of 365 holes over 185,000 meters and the company says they are targeting a further 100,000 meters of additional drilling by the end of the year.

Kirkland Gold currently has 12 analysts covering the stock with an average 12-month price target of $66, or a 29% upside. The street high sits at $80 from M Partners and the lowest comes in at $49. Out of the 12 analysts, 5 have strong buy ratings, 5 have buys, 1 has a hold rating and 1 analyst has a strong sell rating.

BMO Capital Markets reiterated their outperform rating and $72 price target saying that this news is positive for the stock. They add that these drill results come from the Saddle Zone, which is what BMO calls a “super-pit.”

BMO talks more about this “super-pit” saying that Kirkland, “is working towards an expanded and optimized plan for Detour Lake.” They expect that resource definitions in the Saddle Zone between the main pit and west may “underpin an expanded operation at Detour Lake,” and coupled with the additional drilling to be done in 2021, will drive mineral reserve growth which is expected to be present in the December 2021 R&R estimates.

BMO calls Kirkland Gold, “A Long-Life, Low-Cost, Tier-One Jurisdiction Asset.” With BMO not raising their price target, the Detour Lake asset now accounts for 2/3rds of BMO’s estimated net asset value.

Below you can see BMO’s 2021-2023 full-year estimates.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Kirkland Lake Gold: BMO Reiterates Price Target After Massive Resource Improvement appeared first on the deep dive.

Precious Metals

What Is Congress Doing To Retirement Accounts?

What Is Congress Doing To Retirement Accounts?

Via SovereignMan.com,

What happened:

In the proposed infrastructure bill, as well as the…

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What Is Congress Doing To Retirement Accounts?

Via SovereignMan.com,

What happened:

In the proposed infrastructure bill, as well as the proposed tax increases to fund it, Congress is messing with retirement accounts.

Here are some of the worst proposals currently on the table.

IRA accounts will not be allowed to invest in anything based on account holder’s status.

That applies to investments that require “accredited investor” status, certain financial credentials, or a minimum net worth, such as many private investments (i.e not publicly listed companies). You have two years to get out of current investments that violate this rule.

The IRA will also be prevented from investing in anything in which the owner has 10% or larger ownership, or is an officer.

This is terrible for Self-Directed IRAs — more on these below. Fortunately, it does not currently apply to 401(k)s.

Restrictions on Roth funding and conversions

The Roth structure allows after-tax contributions to retirement plans which then grow tax free. Since you paid taxes up front, you do not owe taxes on distributions, even if the value has grown substantially from good investments.

Congress is proposing to prohibit any after-tax contributions to Roth structures in workplace plans, and ban converting after-tax money paid into a regular plan into a Roth plan (this tactic can currently help avoid Roth contribution limits).

It would also ban ALL Roth conversions for workplace plans for singles who make over $400,000 per year, and couples who make more than $450,000 — but this would not go into effect until after December 31, 2031.

Converting to Roth triggers a taxable event, meaning you pay the taxes on the account now and not on distributions. This can be preferable if you think your investments will grow enough that you would owe more taxes later on distributions than you would owe currently if the account value was taxed today.

Contribution Limits and Minimum Required Disbursements

According to the House Ways and Means summary, “the legislation prohibits further contributions to a Roth or traditional IRA for a taxable year if the total value of an individual’s IRA and defined contribution retirement accounts generally exceed $10 million as of the end of the prior taxable year.”

This applies “to single taxpayers (or taxpayers married filing separately) with taxable income over $400,000, married taxpayers filing jointly with taxable income over $450,000, and heads of households with taxable income over $425,000 (all indexed for inflation).”

Under those circumstances, the owner of the account would be forced to take a 50% distribution of the combined value of all applicable plans over $10 million (i.e. if the accounts have $11 million total, the minimum required distribution is $500,000).

It becomes even more restrictive if the accounts exceed $20 million in value.

What this means:

This all translates into less choice and flexibility for individuals planning their retirements.

But it does not eliminate the benefits of the two main self-directed retirement structures that can benefit the self-employed, and people with side income.

What you can do about it:

For a long time we have presented self-directed retirement accounts as a good way to plan for retirement.

A Self-Directed IRA owns one, and exactly one, asset: a limited liability company (LLC) that you manage. That’s why they are called “Self-Directed”. And through that LLC, you can invest your retirement savings in a wide array of assets — precious metals, real estate, cryptocurrency, private businesses*, and much more, in the US, or overseas.

It’s a fairly straightforward setup: you establish an account with the custodian, then establish an LLC in a zero-tax state (like Wyoming or Florida) where the IRA is the owner (member) of the LLC, but YOU are the manager.

You’ll also want to open a bank account for the LLC. Afterward, the custodian transfers your retirement funds to the LLC, putting you in the driver’s seat for determining how the funds are invested.

The contribution limits for the Self-Directed IRAs themselves are not that high, however — only $6,000 (under age 50) or $7,000 (50 and older), so the earlier you start contributing to it, the better.

*If this legislation passes in its current form, the main change to the Self-Directed IRA is that you will no longer be allowed to invest in private companies which require an investor to be accredited, hold certain credentials, or have a minimum net worth.

That is really unfortunate, but it does not entirely negate the benefits of this retirement structure.

Plus, this restriction does NOT currency apply to Solo 401(k)s.

Solo 401(k) is an option to consider if you’re self-employed, or if you generate “side hustle” income.

With a Solo 401(k), you wear BOTH the employer and the employee hats, so you contribute in both roles. A Solo 401(k) allows for contribution levels ranging from $58,000 to $64,500 per year in 2021, depending on your age — offering incredible flexibility, and the ability to significantly lower your personal income tax burden.

Just like a Self-Directed IRA, a Solo 401(k) gives you a much wider array of investment options — real estate, precious metals, private businesses, etc. — that can help maximize your return.

Of course, none of this is definite yet. This is how the legislation currently looks, but there is no guarantee that it will pass in its current form. This is a heads-up about what changes could soon be coming for your retirement accounts.

Keep in mind that we are not tax or investment professionals, and this is not tax or investment advice. You should always consult with a trusted professional, familiar with your particular situation.

Tyler Durden Sun, 09/19/2021 - 20:00
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Precious Metals

Metalstech encounters visible gold at Sturec drilling

 
The drill program on its fully owned Sturec gold project in Slovakia is now in full swing and although it is too early to expect assay results, Metalstech…

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The drill program on its fully owned Sturec gold project in Slovakia is now in full swing and although it is too early to expect assay results, Metalstech (MTC.AX) already provided a quick interim update after the drill bit intersected visible gold in hole 17. This hole is an infill drill hole meant to follow up on hole 14 where Metalstech encountered 10 meters of almost 17 g/t gold within a broader interval of 43 meters of 4.88 g/t gold and 11.8 g/t silver.

Hole 17 is an underground drill hole, drilled from Drill Chamber 2, and the hole is located close to the pit outline used in the 2021 mineral resource update As you can see on the image above, the location of hole 17 is important as it will basically be able to validate the findings in hole 10, 13, 14 and perhaps even hole 5 which ended at the bottom of the pit outline.

We will obviously have to wait for the official assay results from the lab which could be expected in a few weeks.


Disclosure: The author currently has no position in Metalstech. Metalstech is a sponsor of the website. Please read our disclaimer.

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Precious Metals

Inca One Gold: Gold Prepayment Facility Expected To Continue To Drive Results

When it comes to the gold market, presently, headwinds are rather less than exciting. With the metal currently unable to
The post Inca One Gold: Gold Prepayment…

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When it comes to the gold market, presently, headwinds are rather less than exciting. With the metal currently unable to return to new high’s that were hit last summer, the sector has, understandably, been hit with the doldrums. But that’s not to say that good opportunities don’t exist within the space as it stands today.

One such example, would be Inca One Gold (TSXV: INCA). A metal processor based in Peru that is focused on working with artisanal miners, the firm has been hit with two negative tailwinds over the the last several months, despite neither of those tailwinds actually having an impact on the firm operationally. The first, the loss of interest in the gold market by investors, is well known across the sector, and has been felt by any operator touching the metal. The second, is the election cycle that saw a less than favourable candidate elected to helm the country.

In terms of these two headwinds, the first hardly has to be acknowledged at this point. Despite endless money printing globally, gold and silver are perhaps the two commodities that have stopped moving to the north, and instead have sputtered over the last several months. How long this continues is a gamble at best – but that isn’t to say that the present pricing is tough on producers by any stretch, with record or near-record revenues constantly being announced every quarter by operators.

The second, headwind, the election in Peru, is more specific to Inca One than other players in the global metals market. Earlier this year, the country elected Pedro Castillo as President, the seventh President in the last decade, and the fourth President in a matter of twelve months. He won with just 50.13% of the popular vote.

A left-winger, Castillo lists his careers as a schoolteacher, and union leader, along with being a politician. With political views so far left that he has had to emphasize that he is not communist, its fair to say that certain sectors in the country were reasonably worried about their future. However, on the topic of mining, he supports the industry “where nature and the population allow it,” however he desires to increasing taxation where possible. Effectively, he has come to the realization that the industry is a major driver in the country for employment.

Despite these two headwinds, the operations of Inca One appear to be thriving – the company has produced record results this year in terms of monthly production, with production set to only increase as a result of recent events.

The month of May for the company saw some of the strongest production figures in history for the company, with 3,538 tonnes of ore being processed, resulting in an average of 118 tonnes per day, and a total of 2,219 ounces of gold produced, with the latter being a 94% month over month increase.

Production in June faired even better, marking a new record for the company – 5,183 tonnes of ore processed, beating a prior record set in December 2019 of 5,177 tonnes. The average per day processing during the month meanwhile worked out to 173, more than double the 86 tonnes per day processed in March 2021.

The significant scaling of production is largely attributed to what the company refers to as a US$2.45 million gold prepayment facility, which it received in March. The facility effectively enabled the firm to acquire the working capital required to purchase the ore needed for processing, resulting in significant growth for the operation. While that loan was shorter-term in nature with repayment occurring this past summer, the notable aspect is that such a low figure was able to drive production in a meaningful way.

Fast forward a few months to August 2021, and the company has secured a much more meaningful gold prepayment facility – US$9.0 million – with much more favourable terms. The arrangement provides for up to $6.0 million in initial capital, which the firm can use to scale its operations immediately, through the purchase of further ore to be processed.

The company as a result has indicated that it intends to maintain production at a range between 175 to 225 tonnes per day, thereby providing consistency to its results, with the target of achieving profitability.

This level of production is significant. In the prior fiscal year, the firm averaged around 100 tonnes per day of production beginning in the second quarter. For the full year, the firm processed 31,656 tonnes of ore, which ultimately translated to revenues of US$30.1 million for the year ended April 30, 2021. The firm is well on the path to improving these figures for fiscal 2022, having produced 27.5% of this annual figure in just two months this year.

From a valuation perspective, things appear to be slightly “out-of-whack,” if you will. With a market capitalization of C$12.59 million as of Friday’s close, and 2021 revenues of C$38.8 million, the gold processor is trading at 0.32x topline revenues – an anomaly in a market so focused on stretched valuations based on topline results.

If history is any indication, the multiple on Inca One may become even more wild if the latest prepayment facility continues to deliver for the company.

Inca One Gold last traded at $0.34 on the TSX Venture.


FULL DISCLOSURE: Inca One Gold Corp is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Inca One Gold Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.

The post Inca One Gold: Gold Prepayment Facility Expected To Continue To Drive Results appeared first on the deep dive.

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