Don Durrett’s GoldStockData.com
I’m not a mining stock expert – but I would consider myself a jedi in training that has devoted 2.5 years of his life and every waking moment to understanding the metals and mining better. To me, I’m someone who gets intently deep in things, masters them, and then has that skill or knowledge for life. Some things I outgrew – I competed in the World Open of Chess at 14 in Philadelphia. I gravitated away from it due to the amount of time needed to get much better than I was and other things I loved to do. I played baseball in HS and read books on hitting, had a cup of coffee playing college tennis and eventually mastered a 100mph+ serve after years of practice. I played trumpet in college orchestras and led my HS band as lead trumpet in Veteran’s Stadium in Philly and Disneyworld. I also devoted 3 years of my life to nutrition, lost 175 pounds, and competed in 5Ks and did a triathlon before back issues and COVID derailed me to gain the COVID 60 (no exercise does this to you over 2 years!). I have 6 years of grad school and 2 master’s degrees – cybersecurity (related to my work) and an MBA (use the mgmt stuff with my work). I have 10+ work certifications in highly specialized areas – including the CISSP, PMP, and MCSE.
I use this as a backdrop to show the level of commitment I’ve used in learning new things and mastering them, and I’m always looking for people who are smarter than me along with awesome tools/visuals to use to learn something better. There is so much amazing FREE information out there now, we truly are in a new age of information. But the free resources also have a limit. That is, some tools/knowledge requires dedicated people to use their blood, sweat, and tears to put together – then requires a lot of work to maintain. I pay for a few mining stock services – and one in particular I wanted to discuss today is Don Durrett’s GoldStockData.com.
I previously had bought Don’s book. It’s EXCELLENT for someone new in mining stock investing, and I highly recommend it. I think I got halfway through it and life pulled me in 85 directions – but he gives new investors a lot of insight as to what to look for. But his website, dear God!! I had put off becoming a member because I already had like 7 paid subscriptions. But one day Don did a Twitter session where it was like an “Ask Me Anything” where he was asked about dozens of miners and within seconds the dude is rattling off nugget after nugget. I was in awe. He was a walking database!! At the time, I had a spreadsheet I had created that I had shared out with my small newsletter at the time for about 40-50 stocks – but the amount of information HE has? Oh my. I only had a fraction of it and I was mostly spending a lot of time updating news, let alone financials.
So I have used it to look up individual companies and get some info. Really good. But I never sat down for like an hour and said, “what else do I have here”? So it’s 3:34AM now, and yesterday around 2AM I was fiddling around and discovered something I need to share with you.
With these paid subscriptions, you are paying these guys for their expertise with picks. There are like 3,000 miners out there listed, and all but about 200-300 of them are not viable or have fraudsters running them. From there, how can I find the best 10-20 stocks for me, for NOW? These guys look through the best of the best of these to give you a lot of good finds. But most of them already made a move by the time I hear about it. I wanted to learn how to fish for myself.
So I saw some ways you can value a producer…
Above, you see P/NAV – which was one I was familiar with from Dave Kranzler’s Mining Stock Journal where he had discussed how to value mkt cap with companies that had PEAs. In case you hadn’t heard me promote his service 100 times, please check it out again here. But I had some issues when trying to value producing companies as in there are a lot of different ways to do so. While I get into scuffles with Taylor Dart at Seeking Alpha – the dude is a machine when it comes to how to value a lot of these companies and some of these methods are beyond my abilities at the moment. Sometimes I feel he places too much emphasis on one metric and doesn’t capture the whole picture – but he is perhaps dare I say brilliant at what he does. Yes – he is my foe in the comments section, but I appreciate his work and can disagree with him at the same time. I find his analysis of the pieces to be spot on, but the conclusions he draws from these bits and pieces are what I have some issues with, at times.
But one thing jumped out at me that I could get relatively easy enough was price to cash flow. (P/CF). With my Excel sheets, I was pulling some stock information, but I couldn’t pull the Cash Flow. Hold on, let me see if GoldStockData.com has it?
Oh my. I stumbled into something I should have found weeks/months ago. See, what I am gearing at here is a way to find RELATIVE value. Taylor had massive issues with FSMs reserves, and that was his main critique – but he seemed to miss the stupid amounts of cash flow, the upside to Seguela and the upside to Lindero. So I had mentioned how it was undervalued to peers at 450k production (FSM now at 330k AuEq and next summer will be around 450k AuEq). How do I find 450k producers? If only there was a database……
On GSD, go to “search and compare”.
OH. MY. GOD. How did I miss this????
So I heard FSM is a mid-tier gold and mid-tier silver producer, which has to do with the market cap range. So let me look at these.
It brings up a lot of records (only showing a few here to keep his data with him) – with a ton of fields across the top.
If you keep going to the right on scrolling, there’s more…and more…and more fields. One thing that stood out in the first red circle was he already did the Cash Flow multiple for you. He took the market cap and divided by the cash flow. The lower, the better, kind of. The low number signifies a high cash flow relative to the market cap. That doesn’t then tell you how efficient they are with that cash, but gives you a good ballpark to start with. You can then look at debt to income ratios, etc. There may be a reason the P/CF is lower on some. The LOWEST one by a lot is a Russian company. Gee, I wonder why? The mkt cap crumbled by CF still high. So just because this is lower than another, doesn’t mean it is better. And, there are some on there that are very high, which can indicate they are overvalued to others based on cash flow. But this can happen with a brand new producer who doesn’t have a year of production yet, or starter production, with a high mkt cap that is ANTICIPATING higher cash flows. So some of them may have already made a move and there isn’t any meat on the bone for you to get in share price upside.
The next red circle I have highlighted is the Gold production.
If you go down to FSM, you can see the .22m gold and 8m silver. If you know that FSM has a gold mine coming online in 15 months and they may be a 450k AuEq producer, you can, in theory, look at the mkt cap of 450k AuEq producers today to get a sense of where the market values FSM.
The closest analog I can find, using this database, is Eldorado gold – and this is the same company Kranzler had mentioned. If you look up current producers in sorting this list at .45, you see 3. One is Eldorado, then the Russian company that is more or less de-listed, then Regis Resources (I never heard of them).
What you see is relative – Eldorado has a higher multiple than FSM, and Regis less than FSM.
You see Eldorado’s mkt cap is $2.15B. FSM is $1.15B
So what I see from this is that the market may see a .45m oz AuEq producer as $2.15, and FSM is $1.15. Meaning, as FSM brings the new mine online by summer 2023 that the market may re-rate it somewhere closer to $2.15b. If the share price is $4.00, that tells me that you are looking somewhere at $7.75 for FMV to a peer if they did nothing else.
What you QUICKLY understand is no two miners are alike. With this, you also see Eldorado has a LOT more gold in the ground, but FSM really just started getting strong in the gold game recently – but Eldorado mines at 1gpt and FSM at 3gpt thanks to the high-grade Western Africa mines. Additionally, FSM mines 8m oz silver, and the 4th qtr revenues had silver at $23.35 sales or so. I want you to consider next summer, gold is $2500 – and FSM has the new mine online. However, silver is $50. That double in silver doubles the revenue from the 8m oz silver, providing a LOT more torque to the upside than Eldorado. Meaning – I’d put FSM at a premium to Eldorado with CF/P and not at a discount. While Eldorado HAS greater reserves at the moment, I can see FSM adding significant ounces over the next 1-2 years with what they are doing currently.
So for my money, I’d put FSM at a FMV of $10-$12 with 450k AuEq due to the silver upside. This is where Taylor Dart and I disagreed. His time frame and references were different than mine. He saw support at $3.20 or so by drawing a line on a chart to show $3.20 as a downside (I don’t recall the exact number) and saying the upside was $.75 higher. So his investment thesis was more short term and calling out the lack of reserves. I had a time frame of July/Aug 2023 and could see this stock at $10-12 with current gold/silver prices. IF you look at $2500 gold and $50 silver, you might be looking at a $15-$20 stock as FSM has silver in its name and also went parabolic during silver squeeze. At $3000 gold and $75 silver, this is a $30 stock.
Current market price is $3.90. This is why I’m stupid crazy.
And this is why I’d highly recommend Don’s service. You can really go to town doing comparisons!
One other feature I played with was creating portfolios. I try to have a “Starting lineup” with different companies playing different positions. There’s a feature on his site to create portfolios, and I added my starting lineup and on-deck circle profiles in.
You can then look up your profiles and get ALL of the data…
These fields go to the right for quite some time. But at the bottom of this, there’s a “select” and “action” so you can also do some things with these. One I liked was “get summary”.
This is just a snippet, but you can then go down through and read all about his findings on these stocks.
With the main view – another cool thing is it can show you the countries you are in and the scores that Don and others have for the miners. I already know I’m too heavy in Mexico…
Lastly – he also has a ‘best and worst’ area so you can see the best and worst performers over some time frame.
Sorry – one last, last thing. He also has a section where he values stocks at $2500 gold and $75 silver, so you can see how these stocks have torque with the higher prices of metals. For example, a NEM may not move NEARLY as much as a mid-tier and a junior might wipe them both up. He talks about 3-baggers and 5-baggers etc for upside potential given his take on relative upside that companies have.
I briefly emailed Don yesterday to thank him for the service he’s doing for the community and to share a little of my IT background with him. I have worked in IT since 1995 or so and Don worked in IT for what looked to be 20 years. I did SOME web-based scripting in 2008 so I have an idea of the work it took to write this out with the db calls and creating the APIs to interface – for example, he’s not manually typing in the daily stock prices from yahoo, but an application presentation interface (API) can then talk to Yahoo or the like and get this info automatically. I’m not sure if he programmed it himself or hired someone to set it up, but this is a #^#^$@$ work of art when you are talking about mixing mining stock info with financial information with information technology. And, it is lightning fast as well – so you don’t have 1,000 people hammering the backed database with calls all the time.
If you aren’t a subscriber, and in gold and silver mining stocks, I’d look into this. Someday me or others may want to ask to buy him out and take this on and use my IT background to pick up the torch. I don’t see that day anytime soon, but this also has soooooo much potential to then add uranium and base metal miners to as we are approaching a commodities super cycle! I wanted to look up Rio Tinto and it wasn’t there. I am in desperate want to find good nickel producers to capitalize on the vertical moves going on. Figuring I’d like to see ALL uranium PRODUCERS now and who are near term producers versus the explorers. Got me thinking of building out an east wing lol.
I don’t recall the cost, but it came out to be something like $10 per month on the year-long subscription. Think about a resource like this when compiling your own portfolios to capitalize on a $5,000 gold move!
Metals Options Expiration
I’m going to keep this brief this month compared to many in the past. I see the POSSIBILITY this month, more than last month, that gold and silver can be knocked down relatively hard during this period before Monday 1:25PM ET. While there still is a war going on, the war premium seemed to come down quite a bit as the shock of the invasion has worn off. The war was the CATALYST needed to move everything up, but it has settled down a bit now.
David Brady has talked about one of three scenarios for gold now. It could go straight up, it could go up with a negatively divergent higher high then fall, or just fall. To the outsider, it just looks like he’s saying, “it could go up or down, I don’t know”. But if you look at the charts through the view of the fib, RSI, and Elliot Wave (I’m learning this now and still new, so I’ll keep my mouth shut), he is suggesting that the ‘short term has some volatility but all long-term paths head higher’. I’m paraphrasing, but you could have this answer on almost any given day.
But when you look at the CATALYSTS to move price with news, you have the OpEx Monday and LME OpEx at end of month, along with the end of the quarter. I cannot tell you how many times I’ve had a religious experience at the end of quarters, getting roasted. This may have been conditioning everyone. Well, call me burned one too many times to stick my hand in the fire. I was texted with Chris Marcus on Sunday that I felt this week we’d have a rise in prices before a slam down closer to OpEx. It may not happen. This nickel thing that happened along with the war may also be having these trading houses forego these smashes due to increased risk of getting blown out.
In my FIRST Palisades interview a year ago, I was ranting and raving mad about how these big banks allowed their people to go so damn short. I’m wondering now if wheat and nickel may have their overlords taking a closer look at their risk profiles. You can see silver volumes have shrunk the last few weeks – as if the slam jobs and algos were halted that could perhaps catch them in a squeeze were reduced/eliminated.
So, how to play this? I looked at downside risk of a slam job versus the possibility of a 3-5% upside rally in the metals and went to a lot of cash with the miners. I then noticed stronger moves up in the metals yesterday and miners yawned, which to me is a pre-cursor to the smash downs. As if the miners are expecting it.
The good news is that metals have outperformed miners and the corner has turned where miners are now outperforming metals, so even if there is a colossal smash job, miners may not react that terribly because they may already be priced at those much lower levels.
I hadn’t touched this chart in months and the black down arrow I drew started when the ratio was at the top of the channel. Meaning, there’s a lot of torque yet here for gold/silver miners to catch up to their metals. It’s about halfway down – and when it starts to get at the bottom of the channel, it would tell me miners may be pricing in higher metals prices already and have me backing off of them to perhaps play the metals instead with PSLV/PHYS etc or SLV/GLD call options.
My BIG takeaway is that with RISK events, you can choose to ACCEPT, AVOID, TRANSFER, or MITIGATE. I see the downside risk of OpEx and quarter end as legit, so I choose to MITIGATE some of this risk by halving my junior miner positions and scaling back on some of the FSM. I am looking to AVOID risk by not buying much of anything in the G&S sector until April 1st. I had looked to perhaps go into Rio or some Uranium, but my novice Elliot Wave self sees Rio as correcting despite a nice MACD setup and U is running a little hot for me at this stage with 70 RSIs everywhere also possibly in an EW correction.
So, I’m in the most cash I have been in awhile and sitting on my hands. I still have massive FSM holdings to catch a wave up, but I also trimmed positions for a possible downturn.
Gold for oil?
Luke Gromen has probably done a million awesome things with his life, but 40 years from now, I’m going to remember the Palisades interview where he spoke of gold for oil as one of THE defining moments in the death of the dollar. I had to replay that part of the interview a few times to really grasp it. Lo and behold, a few weeks later, you now see Russians demanding the ruble for oil and gas, and those who are unfriendly, can pay in gold.
The milkshake crowd seems to not be grasping the significance of this. I know Brent IS a gold fan, but his reactions recently to this suggest he’s not fully understood this. I would be interested to see his full analysis on this from his perspective, as to me it is clear as day that the dollar is now 100% under nuke attack by belligerents who are challenging the dollar hegemony. Additionally, Powell came out a few weeks ago and said, “there can be more than one reserve currency”. To me, Powell was having a nod to this “basket” of shit currencies I think the IMF is talking about. Where the reserve currency is a basket, in a sense, and not one.
But Russia just kicked the door in and said, “pay us in Rubles. You can’t get Rubles? Fine. Give me gold”. Despite years of the Fed trying to gaslight you into thinking gold is not money, one new release by the Russians just told you gold is money, to the world, and it is currency they accept as PAYMENT. Germans and Austrians are now balking at the US pressure to not use Russian gas, but many like Steve St. Angelo have pointed out that they may face a certain recession and possibly a depression if they turn off the gas. To me, this was FAILED policy at the German highest level. Literally my whole family comes from Germany in the 1700s, so I’m not picking on the people – I think the bowing to the tree huggers by turning off nuke and coal and volunteering to use French nuclear and Russian gas as their energy policy WAS the last domino to fall before Russia gave the green light to invade.
Western powers that have decided it best to turn off goal or their oil then rely on oil/gas producers for their supplies. The fallacy of these idiotic politicians and the tree hugging support is that if WE stop production, then WE are making a GREENER planet. Morons. Where do I start? The DEMAND does not cease, it only changes where you get the SUPPLY. So when you rely on Iranian oil….Saudi oil…Russian gas…you then have to bow to THEM. Morons.
Question for the group…
If Germany was self sufficient for their energy with nuclear and coal and did not NEED to buy Russian nat gas, would they now be in the position of having to send Russia GOLD for nat gas? No. If the US didn’t shoot themselves in the foot with oil/gas production, would we still be begging the Saudis and UAE to produce more? Would we be sitting at a table with the Russians and Iranians begging the Iranians for oil production so we can give them money so Iran can then funnel that to Hezbollah to then send those rockets to Israel? Meaning – if we got our own oil and did not need Iranian oil, would we be contributing to more peace in the middle east? Yes.
My point here is that by accepting Rubles for energy and gold as payment for anything, we have now added direct challenges to US as THE world’s reserve currency. India now buying oil in rupees.
The US wants more sanctions. Ok. All they seem to be doing is shooting themselves in the foot with their biggest export. Dollars. Meanwhile, I’m neck deep in gold and silver miners thinking about how bad this policy is, and how rich it’s about to make me.
Someday, we shall see….
“40 barrels of oil sold for 1 ounce of gold”. That is a $50 barrel by USD figures. Immediately, people play that arbitrage of buying gold at $2,000 to get 40 barrels, then EXCHANGE that gold for 40 barrels, then sell oil for $4000 on the market. That’s Luke’s take, using different barrel numbers however.
What happens then is the LME/COMEX get wiped out of physical in a week. Maybe. We just saw what might happen….
I’m not going too much into nickel, per se, here – but I wanted to discuss one more time the implications this is having with the LME. I asked Tom to see if he might try and get Zoltan Pozsar on the show to talk about how broken everything is with the commodities trading houses – there’s a serious liquidity problem going on with the exchanges.
With Nickel, you had a Chinese “big shot” (his name) short the nickel market – and him and JPM got blown out to the tune of $12b. Instead of paying up, the LME REVERSED these trades. I believe this has then happened TWO MORE TIMES on limit up days.
I need to tell people how significant this is to the markets that are unaware. I try and share these at times with non-metals friends. THE MARKET IS BROKEN.
What this has shown was a preview of what I was discussing in my first Palisades interview I mentioned above. These shorts are a MASSIVE liability to these firms, and it’s hard to understand how compliance allows it. My mother was one of 9 compliance officers for one of the big 5 based out of NYC. So…I’m used to hearing stories about risk management and compliance. The thing is, my mother never talked about anything with the futures, perhaps not her area. I just find it hard to understand how some of these banks can be THIS VULNERABLE and their oversight either doesn’t know or isn’t tracking it.
This nickel thing. You have stupid high EV demand, nickel is a major component. Then you have Russia, a major manufacturer of this nickel, shut off supplies. So, what the hell did you think would happen? A scramble for materials. Who the F would paper short that???
The problem is these banks simply work to re-write the rules, and/or governments will backstop them. To me, this is one fight Putin seems to be taking to the house. YOU see TANKS. I see currency wars along with commodities wars. For YEARS, Western banks have ROBBED people in non-G8 countries by setting fake commodities prices, then forcing these low prices out so that the only people who can produce and stay in business have workers who are barely able to feed themselves. To ME, I see this as the East fighting the banking system. Obviously there are people dying in Ukraine – I don’t want to appear callous. But nickel is the beginning.
There are sooooo many resources Russia produces. And Ukraine. Then, think of the amount of finished goods China provides to the US, and the US immediately went to sanction China due to their stance on the Russian/Ukrainian war.
So – right now you have a TON of people paper short all of these commodities, ON LEVERAGE. I want you to consider the POSSIBILITY that a lot of bad shit happens in the near future. Perhaps the significantly raise margin needed to trade these items. WHO does this affect worse? Look, if I NEED silver, I have a futures LONG contract, and I’m sitting on the $125k I need to pay for the 5,000 oz. If they ask me to raise the margin from $10,000 to $30,000 – I don’t give a shit. Also, if I see this is about to explode higher, I’m forking out the higher margin. It’s the SHORTS who are going to be hurt by higher margin calls, and that’s what I can see happening – many of these guys may want to get out of the short because they see disaster – but may have to go long to balance it out. This not only requires more margin to cover the short, but the additional margin they need to hold the long.
Anyone see a liquidity problem with that?
So what this is telling me is all of these shorts are about to get blasted into orbit. And the banks. But if Nickel has shown you anything, it is that even if you bet correctly, the house may trample you and protect the big banks or the billionaires.
And that….that is fucking scary when you think we are in a free market system. We aren’t. And, ironically, a former Soviet KGB agent is in the position to wreck these exchanges that rig the system on the behalf of the Western oligarchs to then favor the producers. And…those who bet the long on the producers.
I am now of the conclusion these markets are now broken beyond repair, and we may see one commodity after another get blown out on these exchanges. The questions then come…
“what are soybeans worth”? I don’t know, the Exchange is down or limit up.
“what is corn worth”? I don’t know, the Exchange is down or limit up.
“what is copper worth”? I don’t know, the Exchange is down or limit up.
“what is wheat worth”? I don’t know, the Exchange is down or limit up.
“what is lumber worth”? I don’t know, the Exchange is down or limit up.
Then you recall….”oil is worth 40 barrels to one ounce of gold. Wheat is then worth x bushels per ounce of gold”.
This is the creative destruction of the system BACK to a gold-based standard. Right now, the West is fighting it with all of the lip service, gaslighting, and jedi mind tricks it can.
Don’t be fooled. Those exchanges are rigged AGAINST YOU BY THEM. Don’t forget the “tampy tamp” down last year by the CFTC and silver. Don’t forget the interview where Bart Chilton said it was a “political decision” about JPM.
We will eventually have our free markets back. However, there may be a lot of pain to get there. If you hold silver futures and it goes up $5 in one day, you now have seen a blueprint where they will reverse your trades if it hurts someone else.