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While I mostly agree. The devaluing of a currency is an inevitable consequence of money printing, it just takes time to soak into the system and see that impact. Gold will hold its value while the currencies around it depreciate, materially raising the price you pay in those currencies. Central banks don't have much room to maneuver when it comes to raising rates in the next 2-3 years else they'll quash any recovery. Instead they'll let inflation run hot, as JP has stated is their intention - which is incredibly bullish for gold.
i agree perm bear, but all the money creation is finally going to create inflation in the US. check lumber prices, all metal prices etc etc to 12 months ago. The big one will be wage push inflation. Who is going out to work when you get $600 a week for doing nothing? Democrats are also pushing debt forgiveness and UBI so i am sure the money printers are not stopping any time soon. Anecdotally companies in the US are finding people are not showing up for work / interviews etc. The only way to get people to work will be to pay them more. When headline rates in the US hit 3 and maybe 4% then real rates will be negative 2% which should boost gold back towards and above 2,000.
Kando - gold price and real rates have historically enjoyed the strongest relationship (almost perfectly inversely correlated), not gold price and the money supply. Gold shone in 2020 because real rates became negative, however, once 10-year yield moved up swiftly this year (up to 1.75%), gold lost its appeal as it typically yields zero or marginally negative once associated storage/insurance and transportation costs are included. If you can get circa 2% (or more) lending to the US government then why hold gold, so the logic goes...
Most of the new dollar creation in the last year has been in the form of central bank reserves, not cash as most people know it, otherwise we really would have seen hyperinflation.
For me personally it’s the combination of additional production coming online soon along with the price of silver /gold due a sharp upturn that makes this a good bet for decent returns.
Again perma I echo your sentiment about the returns compared to other stocks but that just shows we have lots to catch up on and catch up we will.
The money printing is here to stay - UBI for all is the goal. What did WEF say ' You will own nothing and be happy'
Where that leaves Fres, it's hard to project, but clearly it isn't unreasonable to expect it back above £20, especially after production issues are resolved.
Personally, my expectation, given that in the US, a third of all cash in existence has been printed in the last 12 months - with similar money printing across the west, is that inflationary pressures will build over the next 3-4 years and gold will hit $3-4000. It won't happen overnight, but the history of PM prices against loose monetary policy indicate that it's probably almost inevitable. The last 3 months have been not the end of the bull run, but a pause.
IMO production issues are, at the moment, a red herring since surely all that matters is cash production and profit. Both will be at record levels if metal prices stay here to say nothing of what will happen if they move higher. If the market wants to fixate on production then to me that just means this is getting more and more asymmetric in its risk profile. When silver breaks $30 for real it will be the wake up call to all and sundry that this is a share that you will want to own. Of course in the short term it is a concern that someone may know something we don't, but lets see what the April 28 report has to say. Watch the May Comex deliveries for short term pressure. If a lot of people stand for delivery and there is evidence that it could be a record breaking month then silver prices will have to rise in comex. Most FM will only look at the comex price and not the 'real world' price of silver which has been rising all year. Since the reddit crowd really got going, investment demand for silver has exploded and pretty soon the industrial use will rise too with all the solar and evs coming. They will be competing for the same scarce resource. IMO this name wont get exciting until silver breaks $30, but when it does we all know that this name can rise 50% in a few weeks maybe more. When that rise starts? who knows, but for my money May Comex deliveries will be a possible source. DYOR and GLA.
PB, Hochschild pretty much same boat as we are though. They also have production issue although it could be argued that theirs is worse than ours.
A FRES peer we often bring up here and one I've held for a while, POLY, up 18% since March 30/31 PM lows whereas FRES hasn't even managed a 5% upturn since then.
Been away from the chat for a day or so and its good to see (in a negative positive way) that many of my concerns and sentiments are echoed below - I think as alluded to there are a couple of large distressed players (or MM's) messing with the price on lower volumes so the SP just bounces around until production numbers come out or some other larger piece of information... fingers crossed we are all in the same boat trying to call it! I still think £11 - £13 come July and August..
Fres will never get bought. Forget it. 75% owned by Penoles and they have no interest to sell unless stupid price. Almost like a family business that.
On 19th April FRES hit 965 intraday when PMs were actually lower, PMs are now higher today (silver much more so) yet FRES is down 8% since then. Wow.
Perma. Although I echo your sentiment towards this stock I feel you could miss a trick here especially as you say many stocks and sectors have doubled + gains recently.
My £20 absolutely stands on the basis silver breaks above $30-40 and gold heads towards $2300 with extra production coming on in q3 -q4 one can not help but think the PM sector is yet to peak.
Watch out for M&A action over the next 6-12 months on the sector but I agree ... first stop is obviously the £13-15 range but £20 will be exposed if gold and silver catch fire and finally after many years of predictions the metals peak at levels probably never to be seen again !!!
Yesterday had the hallmark of a large stop getting triggered. As you said, with PM prices where they are, no one would sell at 900p unless distressed. Looking at the volume profile, bulk of the selling happened in a 2-3min period. This is the theory I am leaning to due to the above. If it was insider info, the selling pattern would be more drawn out and sustained.
If PMs perks up from here, I think we could be due a big rise.
But then of course, this is Fres and it has been particularly frustrating of late. Almost unbelievable.
For clarification, even with it going ex-div yesterday, I decided not to sell at the delayed open given that PM prices were surging early yesterday. Of equal irritation to me would be a stop loss around 920 triggering early on and then watching FRES catapult up towards 960-1000 in line with PM price momentum. Silver in particular was very strong initially yesterday.
Yesterday was an absolute shambles. I held firm for the dividend, which given PM prices at yesterday's open (silver >26.3 and gold >1785 was AT THE TIME the right thing to so no stop loss for me. However, clearly some of the spivs got out around 940 (no way individuals on a retail trading platform got out then) after the 40 mins delay and then proceeded to pummel it down to the 870s. That was an absolute disgrace.
Even if I had sold around 920 early in the session I probably would have gone back in circa 900, naturally and logically with the view that it couldn't possibly go lower. FRES will bounce back soon as sure as night follows day, however, once I hit my targets I am definitely done for good with this name. It is absolutely not a long-term hold and whilst it can be a good trading stock (and was for me very lucrative pre-January), the daily share price suppression throughout 2021 and absurd share price movements on RNS, results, dividend and PM red days mean this is just not a name you want hard-earned money in, IMO.
It may well go north of £13 again later this year if PMs rally (I've seen £20 predictions which I think is ridiculous), but frankly, so what? Even many of my beleaguered travel and bank stocks have more than doubled since September (Barclays & easyJet just to name a few) and that's not even beginning the comparison with tech stocks and crypto. GLA.
We will soon find out if this was a distress sale flash crash/tree shake or an insider clearing when the production report come out. We will then know what sort of shenanigans is being played around this share.
I call 936 to 878 a tanking when I had expected the reverse today. Topped up at 901 and 889 , didn't sell. so glad of the opportunity.
Have we tanked? Allow for dividend and we are now about 1% down on yesterday.
This morning's late opening etc was unusual and no doubt the fortunate may have got out at 940plus. And some would be in for the dividend with their stop loss set expecting the drop.
Picked up a few HOC in my son's ISA.
First time I traded these.
Have to start somewhere.
The last time is tanked like that was the with the Archegos losses for the banks. The sell off then was attributed to financial institutions raising easy money to cover the losses.
Interesting today that Credit Suisse announced more losses related to Archegos.
Wonder if it is a repeat of banks having to realise funds and like the last time if was over as soon as it began?
With that out the way and PM's moving upwards on global case numbers/inflationary fears, could drift back up to ~960p over the next few weeks.
It looks to me like the price got walked down in very thin volume and then a large stop got hit. The volume spiked right up at the flash crash or there was a big seller in the fold. There is definitely something fishy going on. Either production continues to be problematic and the news was leaked out or it was an effort by MMs to drive this down. Polymetal is up today but HOC is down similar to Fres. Miners in general are down but only by a little. This drop is definitely manufactured to either shake people off their position or someone has been tipped off on production issues. Regardless, even if that is the case, time surely will rectify this because I am confident in Fres' ability to overcome production issues.
Craigo123
Think of a share price over a year zigzagging up and down. you only realise a loss when you sell. As long as not on credit and paid for then you can afford to relax.
Price range here is 830 to 1050 - we are at the bottom end of the range.
Yes the drop is annoying, but for me selling when there is so much potential upside here.
That flash drop has passed, who knows what is ahead but I will hold regardless as it is an investment and I want 20k+ out of my current core holding .
That said, in hindsight I wished I hadnot neld for the dividend but felt so positive yesterday with rising silver and gold. I still believe PM are in an upward channel and look forward to some good production news next week.