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Precious Metals

The Bottom Is in for These 3 Stocks? Analysts Say ‘Buy’

Markets are down, but not collapsing. Investors remain worried about the coronavirus, and Tuesday’s election remains up in the air. Uncertainty rules the day, exacerbated by recent market losses. Wall
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Markets are down, but not collapsing. Investors remain worried about the coronavirus, and Tuesday’s election remains up in the air. Uncertainty rules the day, exacerbated by recent market losses. Wall Street, however, expects that the bulls will start running again after next week’s results – who wins will be less important than having a result.

In the meantime, market declines and low share prices make for a prime time to buy in – if you judge the bottom correctly. Do that, and the rest is just ‘buy low and sell high.’ And to that end, Wall Street’s analysts have been pointing out stocks that may have hit bottom.

Using TipRanks database, we pinpointed three such stocks. Each is down significantly, but each also has a Strong Buy consensus rating and at least 30% upside potential for the coming months.

Fury Gold Mines (FURY)

Gold – just the precious metal asset – has grown popular during the course of 2020. The coronavirus crisis and investors’ desire for a stable store of value pushed it above $2,000 earlier this year, and one ounce of gold is still selling for over $1,800. For those who haven’t got that kind of resource, however, buying stock in gold miners may be the next best thing.

Fury Gold Mines is a small-cap mining company headquartered in Toronto and focused on exploiting the vast resources of the Canadian North. With mines in British Columbia, northern Quebec, and the far-north territory of Nunavut, Fury has large gold reserves in both open pit and underground mines. World gold production dropped by 1% in the last 12 months, giving the first hint that we may be at ‘peak gold,’ and prices will soon increase further.

That development would bode well for Fury, which operates at a net loss. The company formed earlier this year, as a restructure of Auryn Resources that involved a merger with Eastmain and the divestment of Peruvian mines. The result is a company that is focused on Canadian development, able to take advantage of Canada’s stable work environment.

The stock saw sharp declines recently, when the new FURY ticker started trading, taking Auryn’s place in the market and keeping the older company’s trading history. The drop saw Fury shares shed 67% this month.

Covering the stock for Cantor, analyst Matthew O’Keefe sees plenty of upside ahead. The analyst noted, "Based on a combined gold equivalent resource of 3.9Moz, Fury is trading $43/oz versus peers at $60/oz. We expect that, as the new management makes its mark with new drill results (towards the end of 2020 and throughout 2021) and demonstrates advancement of its projects, the stock should move up."

But how much up? O’Keefe’s $2.60 price target on FURY suggests a 126% upside potential for the coming year and supports his Buy rating. (To watch O’Keefe’s track record, click here)

The Wall Street analyst consensus on Fury is a Strong Buy, based on 4 Buy ratings with no Sells or Holds. The stock is selling for $1.13 and its $3.37 average price target suggests it has room to nearly double in the next 12 months. (See FURY stock analysis on TipRanks)

Star Bulk Carries (SBLK)

Next up, Star Bulk Carries, is a Greece-based shipping company specializing in the dry bulk ocean carry trade, the backbone of the world’s shipping industry. Star Bulk operates a fleet of 116 carriers, ranging in size from ~50,000 tons to giant Newcastlemax bulk haulers rated over 200,000 tons.

The trade disruptions caused by corona were hard on the industry, and SBLK was no exception. The stock is down 47% year-to-date.

However, the company’s financial performance this year has been in line with its historical pattern – the first half of a calendar year sees a net loss, while the second half sees net gains. The losses in 1H20 where normal for SBLK’s pattern – and the outlook for Q3 is a return to net profits, with EPS projected at 30 cents.

Covering this stock for Deutsche Bank, analyst Amit Mehrotra notes a series of related points: “[We] think the company’s net debt position should improve by about $50M vs. 2Q levels, reflecting cash flow generation in excess of >$40M of debt paydown in 3Q. We also expect the company’s prospective breakeven to reduce to under $11k per day… While we remain frustrated by the lackluster performance of SBLK shares in the context of above-mentioned improving fundamentals...we remain very comfortable that the intrinsic value of SBLK’s equity value is improving in the current environment…”

Mehrotra sums up his view of Star Bulk succinctly: “On the whole, we’re encouraged by the fundamental trajectory of the company…”

The analyst rates SBLK a Buy, while his $15 price target implies an upside potential of 143% from current levels. (To watch Mehrotra’s track record, click here)

With 3 recent Buy reviews, SBLK holds a unanimous Strong Buy rating from the analyst consensus. The stock is currently trading at $6.18 and has an average price target of $12.09, making the one-year upside 96%. (See SBLK stock analysis on TipRanks)

Heritage-Crystal Clean (HCCI)

Pollution is a problem, no matter what. We all want a clean environment to live in, and we should all care about how modern industrial pollutants are disposed of. Heritage-Crystal Clean inhabits that clean-up niche, providing environmental cleaning services, including vacuum services for street cleaning, light industrial and mechanical parts cleaning technology, and a variety of waste recovery services including recovery and disposal of oil and oil products, antifreezes, and general industrial liquid waste. It’s an important, often overlooked, and vital niche in a modern technological society.

After a dip into negative territory in Q2, HCCI reported stronger results for Q3. Revenues gained sequentially from $74 million to $82 million, and EPS swung from a 31-cent loss to an 18-cent gain. Despite the positive results, both earnings and revenues remain depressed compared to the year-ago quarter, and the stock has failed to regain traction after last March’s decline. HCCI is down 49% year-to-date.

Roth Capital’s Gerry Sweeney, in his comments on this stock, notes that “Revenue continues to rebound as economic activity improves from COVID shelter in place orders... The highlight in the quarter was a faster than anticipated rebound in margins. While margins are still down from last year’s pre-pandemic level of 25.7%, they are up from 2Q margins of (28.2%). The improvement was driven by higher labor utilization and leverage of assets, lower solvent costs, and the internalization of waste disposal…”

Sweeney rates the stock a Buy. His $21 price target indicates confidence in a solid 32% upside for the next year. (To watch Sweeney’s track record, click here.)

Over the past three months, three other analysts have thrown the hat in with a view on HCCI. The three additional Buy ratings provide the stock with a Strong Buy consensus rating. With an average price target of $20.75, investors stand to take home a 30% gain, should the target be met over the next 12 months. (See HCCI stock analysis at TipRanks)

To find good ideas for beaten-down stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post The Bottom Is in for These 3 Stocks? Analysts Say ‘Buy’ appeared first on TipRanks Financial Blog.

Precious Metals

Aya Gold & Silver Produces 338,624 Silver Ounces In Q3 2021, Increases 2021 Guidance To 1.55 Million Ounces

Aya Gold & Silver Inc. (TSX: AYA) shared today its quarterly production results for Q3 2021 at the Zgrounder Silver
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Aya Gold & Silver Inc. (TSX: AYA) shared today its quarterly production results for Q3 2021 at the Zgrounder Silver mine in Morocco, recording silver production of 338,624 ounces. This is a decrease from Q2 2021’s silver production of 439,149 ounces but an increase from Q3 2020’s silver production of 113,655 ounces.

The quarterly silver production had an average grade of 242 g/t silver, compared to last quarter’s 297 g/t silver and last year’s 217 g/t silver.

“The better than anticipated operational performance and execution gives us the confidence to increase Zgounder’s production guidance by 29% to 1.55 million ounces for the year,” said Aya Gold & Silver CEO Benoit La Salle.

The mining company also noted a dip in the silver recovery rate, reaching 81% this quarter from 82% last quarter. The firm said this is primarily due to due to lower freshwater intake and excess evaporation in the tailings dam during the summer months. The plant availabilities for the flotation and cyanidation plants are at 87% and 89% this quarter, respectively.

Aya Gold & Silver Inc. last traded at $9.12 on the TSX.

Information for this briefing was found via Sedar and the companies mentioned. 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 Aya Gold & Silver Produces 338,624 Silver Ounces In Q3 2021, Increases 2021 Guidance To 1.55 Million Ounces appeared first on the deep dive.

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Precious Metals

Endeavour Silver Beats BMO’s Production Estimates By 30%

Last week, Endeavour Silver Corp. (TSX: EDR) announced their third quarter production highlights. For the third quarter, ending September 30th,
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Last week, Endeavour Silver Corp. (TSX: EDR) announced their third quarter production highlights. For the third quarter, ending September 30th, 2021, the company produced 1,305,399 silver ounces and 10,541 gold ounces, up 39% and 3% year over year respectively. Third quarter 2021 throughput also increased by 8% to 222,461 tonnes.

The company also increased management production guidance for 2021 to 7.7 to 8.0 million ounces of silver equivalents due to higher than expected grades and tonnage milled, saying that “Silver equivalent production at each mine is on track to meet or exceed 2021 production plans.”

Endeavour Silver has 7 analysts covering the stock with an average 12-month price target of C$7.05, or a 33% upside. Out of the 7 analysts, 2 have buy ratings while the other 5 have hold ratings. The street high sits at C$8.78 from H.C Wainwright, while the lowest comes in at C$5.25.

BMO Capital Markets in their note reiterated their C$5.25 12-month price target and Market Perform rating on Endeavor Silver, saying that the third quarter showed solid production numbers out of the Bolanitos and Guanacevi mines.

For the quarter, BMO forecasted silver production would come in at 1 million ounces. Both gold and silver production was beaten by roughly 30%, thanks to higher than expected tonnage, and grades at Guanacevi.

BMO notes that the company selling 699 thousand ounces of silver, is “well below” their production which is forecasted to impact third quarter sales, but BMO believes this will help the company’s fourth quarter results.

Below you can see BMO’s updated 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 Endeavour Silver Beats BMO’s Production Estimates By 30% appeared first on the deep dive.

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Energy & Critical Metals

Victory Resources Commits to Lithium Exploration While China Continues With Its Lithium Buying Spree

The mining industry has been headlined by several major deals involving lithium firms over the past week.
This should be of no surprise as the…

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The mining industry has been headlined by several major deals involving lithium firms over the past week.

This should be of no surprise as the battery metal has been trending up since the beginning of the year. Following a second rally at the onset of the third quarter, lithium prices have shot up to their highest since 2018.

In China, the #1 electric vehicle market globally, lithium carbonate prices have shot up nearly five-fold over the past year and are trading near record highs.

Price of the key battery ingredient held around 165,000 yuan (~$25,000) per tonne in October, not far from the all-time high of 177,000 hit in late September, due to tight supply and stable battery demand.

Year-to-date, lithium prices are up a stunning 160%, based on the price index (including lithium carbonate and hydroxide) tracked by Benchmark Mineral Intelligence (BMI), the world’s leading battery supply chain researcher and price reporting agency.

Source: Benchmark Mineral Intelligence

The rally comes amid a global push for less polluting energy sources, which has automakers and battery manufacturers racing to secure supplies of so-called ‘future-facing commodities’ such as lithium.

China’s Lithium Buy Spree

China in particular has been actively and aggressively pursuing deals to secure battery materials as it looks to establish a dominant position in the global EV supply chain.

The nation’s top battery maker, Contemporary Amperex Technology Co. (CATL), recently outbid Ganfeng Lithium to acquire Canadian miner Millennial Lithium Corp., which holds lithium assets in Argentina.

As China’s largest lithium compounds producer and the world’s biggest lithium company by market value, Ganfeng has gone on an acquisition spree over the years, having invested in several lithium projects in Argentina (Caucharí-Olaroz, Mariana), Australia and China.

In August, Ganfeng proceeded with a takeover of Mexico-focused lithium developer Bacanora, and in the same month, inked a four-year supply deal with Australia’s Core Lithium for 300,000 tonnes of spodumene concentrate, a partly processed form of the battery material.

“We have and will continue to see the Chinese looking to buy lithium,” Matthew Hind, head of global mining at Bank of Nova Scotia’s investment banking division, said in a recent Reuters report, adding that “there will also be small-cap consolidation as well as EV companies buying stakes in mines with strategic partners in order to secure supply.”

It didn’t take long for Hind’s prediction to come true either.

In somewhat of a surprise move, China’s Zijin Mining Group Co., known for its status as a major gold and copper producer, announced last week its first foray into the lithium sector with a $770 million purchase of Neo Lithium Corp., outbidding many other Chinese bidders.

Neo Lithium’s main asset is a high-grade brine operation in Argentina, with CATL already being one of its backers.

“As Zijin is a gold-copper producer and Neo Lithium is still some years from commercial production, this deal exemplifies how hot the market is for independent lithium assets, and how eager the Chinese are,” Chris Berry, president of House Mountain Partners, a Washington-based industry consultancy, told Bloomberg.

In total, Bloomberg Intelligence analyst Christopher Perrella estimates five companies essentially control the $4 billion global lithium market, two of which are Chinese.

Battery Metals Race

The race to secure battery materials is taking place outside of China as well.

Rock Tech Lithium Inc., which is backed by venture capitalist Peter Thiel, plans to locate its first battery metals smelter within a 90-minute drive of Tesla’s gigafactory under construction outside Berlin, in a bet that Germany will take the lead in Europe’s electric vehicle transition.

South Korea’s LG Energy Solution, one of the biggest EV battery makers globally, recently agreed to buy as much as 100,000 tonnes of lithium a year as part of a six-year “take-or-pay” deal with Vancouver-based Sigma Lithium Corp., which controls a hard rock lithium deposit in Brazil.

In Australia, the world’s biggest lithium exporter, Prime Minister Scott Morrison plans to establish a A$2 billion ($1.5 billion) loan facility for the development of critical minerals projects, with the mining powerhouse aiming to win a bigger market share for materials used in electric cars.

In short, demand for lithium is accelerating around the world, with sales of electric vehicles growing at a faster pace than previously thought.

Source: Reuters

According to SQM, one of the top producers of the battery ingredient, EV demand surged more than 150% in the first half of 2021 from a year ago. As a result, the Santiago-based firm estimates that global lithium demand could increase more than 40% this year, translating into a sales volume of more than 95,000 tonnes, up by 10,000 tonnes from its previous forecast.

Data from battery consultancy Rho Motion shows global EV sales were up 150% in the seven months to July to over 3 million units compared to the same period in 2020, with about 1.3 million sold in China alone. For 2021, Rho Motion expects sales to reach as high as 5.8 million.

Longer-term, BloombergNEF estimates that the green energy transition will result in a five-fold increase in global lithium consumption by the end of this decade.

Source: BloombergNEF

In light of a global race for battery minerals, a recent World Economic Forum report forecasts that the global market for lithium-ion batteries will reach $300 billion annually by 2030.

Supply Crisis

The EV boom has naturally depleted stocks of battery materials such as lithium, causing the supply to tighten in major markets.

In China, lithium carbonate output in August rose 19% year-on-year to almost 20,000 tonnes, according to state-backed research house Antaike, but this output would be easily outstripped by demand from the EV sector.

BMI estimates that demand for lithium is expected to jump 26.1%, or about 100,000 tonnes LCE, to a total of 450,000 tonnes this year, more than enough to flip the entire market into a deficit.

Prices are already climbing across the supply chain. Pilbara Minerals Ltd.’s second auction of spodumene concentrate attracted a top bid of $2,240/tonne for a cargo of 8,000 tonnes, up from $1,250 in its inaugural tender in July.

China’s lithium carbonate has almost doubled in just two months, and lithium hydroxide is up more than 70% in the period, according to Asian Metal Inc. data.

Exacerbating the lithium supply crunch are the high production costs arising from the global energy crisis.

Ganfeng has already told customers that it is raising prices for lithium metal products by 100,000 yuan ($15,500) per tonne for the next month, partly because of China’s power supply shortages.

However, even before the reduced industrial output, BMI analyst George Miller had previously forecast an LCE deficit of 25,000 tonnes this year, with acute deficits expected in 2022 and beyond.

Given China represents more than 60% of the world’s processing capacity, the actual supply deficit is likely to exceed estimates by the end of this year.

“Unless we see significant and imminent investment into large, commercially viable lithium deposits, these shortages will extend out to the end of the decade,” Miller added.

A lengthy slump since 2018’s peak meant investment in the sector slowed, and the pandemic has since exacerbated global supply constraints.

“The financing for lithium projects is still too little, too late,” Cameron Perks, a Melbourne-based analyst at BMI, said in a Bloomberg report. “The market deficit is already occurring.”

Source: BMI

“As prices increase now, there will be unknown yet-to-be-announced projects and expansions that will help to increase supply to meet demand. That is almost a certainty. What is not certain is just how many unknown projects there are out there,” Perks added.

“There’s also a possibility that not enough lithium can be mined, then it could risk a slower EV roll-out.”

All signs are pointing towards a sustained market shortage for the battery metal in the coming years. China, seeking to maintain a dominant position in the EV industry, has perhaps triggered a flurry of deals and new investments in the lithium sector, which could soon be followed by many others.

Smokey Lithium

Sooner or later, the big players in the EV battery space (i.e. China) will turn to projects outside South America’s Lithium Triangle, as political factors are most likely to influence mining decisions in these countries in the future.

One place we’ve previously discussed in detail is the Clayton Valley of Nevada, whose lithium deposits contain favorable characteristics such as arid climate, closed basin containing a playa or salar, tectonically driven subsidence, associated igneous or geothermal activity, and suitable lithium source rocks.

The Clayton Valley is also where Albemarle’s Silver Peak mine, the only lithium-producing site in North America, is found.

Leveraging Nevada’s favorable geology and rich mining history, several companies have begun exploring its claystones and brines over recent years, with the goal of developing the next lithium source for the EV battery supply chain.

Among those lithium explorers in Nevada, we are particularly intrigued by Victory Resources Corporation (CSE: VR) (FWB: VR61) (OTC: VRCFF), which is anticipating further advancement on its Smokey lithium project in the near term to benefit from the EV revolution.

Victory’s Smokey lithium project is located about 35 km west of Tonopah, Nevada, within the famous Big Smokey Valley that traverses three counties across the state.

Esmeralda County — where the project is situated — is one of the world’s most prolific regions for lithium clay deposits (Noram, Cypress, American Lithium, Spearmint, Enertopia, Jindalee). These deposits all have proven large tonnages with acceptable lithium grades in excess of 900 ppm.

The Smokey lithium property lies approximately 35 km north of Clayton Valley, adjacent to and possibly on trend with the Clayton North project (930 ppm Li) held by Australia’s Jindalee Resources Ltd.

Farther away, Noram’s Zeus lithium project (900 ppm Li) is about 25 km to the southeast, while 35 km to the northeast is American Lithium’s flagship Tonopah Lithium Claims property (1,000 ppm Li).

Smokey clay lithium project and other properties in the region

In this prolific lithium region hosting, Victory’s Smokey project covers a total of 350 claims covering 7,000 acres of land with excellent access and relatively flat ground.

The property shares similar geologic settings to the Clayton Valley and the many exploration projects nearby. It is located in the Walker Lane trans tensional corridor on the western margin of the Basin and Range province.

The property’s geology consists of Miocene – Pliocene tuff deposits, claystones and siliciclastic beds (Esmeralda Formation) with overlying younger alluvium deposits and desert pavement formation. The claystone, which can carry high lithium concentrations, is observed as highly weathered light grey to tan mounds of unconsolidated clay from 0.10-1.50m thick.

The flat-lying nature of the claystones, together with the frequent occurrence of transported cover, requires drilling to fully validate and assess the Smokey project’s lithium potential.

Based on strong results from this summer’s geological sampling, which indicated several areas of high lithium values (up to 1,500 ppm Li), Victory is now fast-racking a drill permit application for the Smokey lithium property.


Victory’s progress at its Smokey project comes just as when lithium is in the midst of another record-setting rally.

The BMI lithium index has already shot up by 160% year to date, with prices averaging $10,800 during the first half of 2021 versus over $17,000 in 2018.

Strong demand for lithium-ion batteries for EVs and other applications is expected to put a strain on the global supply of battery raw materials, which will likely invoke a string of new investments.

China’s biggest battery makers and miners are already gobbling up lithium assets left, center and right, with more deals still left to be done. Lithium has gotten so hot in China that even the gold miners now want to join in on the act.

With the global race to secure minerals in full throttle, there will be calls made to companies holding lithium projects within the most prolific regions of the world.

In the Clayton Valley of Nevada, best known for its affluence of lithium clay deposits, Victory Resources, with a strategic focus on serving the EV sector, is gearing up for drilling at its highly prospective Smokey lithium property, and just one discovery hole from that could be a game-changer for the company.

Seeing many others have previously found success in this area, we expect Victory to deliver more exciting news later this year.

Victory Resources Corp.
Cdn$0.055, 2021.10.12
Shares Outstanding 89.9m
Market cap Cdn$5.4m
VR website

Richard (Rick) Mills
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