Navigating the Golden Wave of Opportunity in the Commodities Market Navigating the Golden Wave of Opportunity in the Commodities Market

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By Ronald Tech

Source: Malcolm Shaw 03/15/2024

In the realm of investments, uncertainties often parallel opportunities, and seasoned investors know that taking risks when the tide is high can lead to golden outcomes. Malcolm Shaw, a knowledgeable figure from Hydra Capital Partners, has shared his strategic insights on promising investment opportunities in the metals and energy markets. Shaw bears open the chest of his investment treasure, unveiling stocks he owns and monitors to inspire due diligence maneuvers in the commodity cocoon.

March has seen the gold sector take center stage, with prices soaring to celestial heights. This glittering uptrend, however, is viewed with skepticism by some investors who have felt the burn of false flashes in the past. Yet, amidst this cautious realm, as central banks hoard gold and the U.S. dollar wanes, the precious metal stands under the brightest limelight of all.

Gold’s Resilience and Investor Confidence

Gold’s recent breakthrough past the formidable $2,080 barricade has startled many onlookers. The majority, unaccustomed to the sector’s nuances, gawk in astonishment at the unfamiliar tickers and valuations dancing before them.

The lack of widespread engagement suggests that the golden parade might have ample grounds to prance further, shedding disbelief like a snake sheds its skin, akin to the energy sector’s phoenix-like revival in the bygone era of 2020 and early 2021.

Despite the euphoric climb, numerous gold stocks glimmer at historically enticing valuations when analyzed through the lens of price-to-net asset value (P/NAV) metrics, free cash flow yields, and cash flow multiples.

Even goliaths like Newmont Corp. continue to linger close to their half-decade lows without a touch of bubble froth. These sturdy metrics, coupled with gold’s skyward trajectory, whisper that the sector could be gearing up for a robust, enduring rally.

The Diverse Palette of Commodities

While gold pirouettes in the limelight, other commodities twirl in their own disco ball glow. Silver follows gold’s lead, with some “silver bugs” daring to forecast that the white metal might just surpass its radiant counterpart.

Copper, a key dancer in the energy ballet, has pirouetted past the critical $4.00/pound threshold. A weakening U.S. dollar and robust supply-demand dynamics nod favorably at the crimson metal. Zinc shadows copper, tracing its steps with precision.

Oil and natural gas shares linger at bargain prices amidst the bustling market landscape, while uranium’s structural supply-demand narrative sings an optimistic tune.

Lithium, however, falters like a wilting flower, possibly courting tax-loss selling later this year, and Nickel grapples with the shadow of fresh Indonesian supply.

Strategies for Success in a Dynamic Market

In the wilderness of commodities, simplicity reigns supreme as a seasoned investor’s trusted companion. Peering at the long-term tapestry of the TSX Venture index reveals tantalizing future vistas if the stars align for a synchronized ascent in commodities. Should the current tempo hold steady for some more heartbeats, the Venture index might witness a “golden cross,” marking a technical milestone that heralds a significant march forward in the commodities sphere.

While optimism grazes my spirit, the mere act of penning these reflections hints at a potential need for the market’s pulse to harmonize before marching onwards. History whispers that before this fresh breeze, commodity equities wheezed through an arid stretch of underperformance. Nevertheless, the present terrain hints at the potential endurance of a full-fledged commodity rally.

Exploring Energy and Copper Constellations

Tenaz Energy Corp. ATUUF:

Within the domain of energy, Tenaz is a beloved star in the constellation. Anchored by a methodical M&A blueprint and a battle-scarred management crew, Tenaz Energy stands sturdy, poised to seize the day in a milieu where heavyweight energy firms seek to streamline their portfolios, entrusting non-core assets to adept hands.

Endowed with a modest share count and a market cap shy of $100 million, Tenaz finds ample breathing room for expansion while weaving its strategic tapestry. With a steadfast eye on M&A, Tenaz’s growth reads like an oracle’s prophecy. Furthermore, Tenaz twirls amidst the stars as one of the most affordable energy stocks, trading at a modest enterprise value to annual cash flow (EV/CF) ratio (hovering around 1.5x, compared to industry peers at 2.5-4x). I dare say that the company embodies one of the most promising risk-reward sagas I’ve witnessed. The stellar leadership sets sail towards hoisting the company to its production pinnacle of 50,000-100,000 barrels of oil equivalent per day, navigating the realm of acquisitions with caution and foresight. In a realm short of patience, I believe those who nurture patience alongside Tenaz will reap the rewards magnificently in due time.

TAG Oil Ltd. TAOIF:

Tag Oil’s excavation odyssey in Egypt, aimed at the Abu Roash F formation, kindles a fiery enthusiasm among niche investors. However, delays in drilling have cast a shadow over the stock, nudging the market to await the verdict from its inaugural horizontal well tests. It’s intriguing to note that the Abu Roash F formation mirrors the oil-rich source rocks of the thriving Eagle Ford play in the southern U.S.

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With a potential trove of 60-80+ treasure troves in its Badr concession territory, Tag Oil braces for substantial expansion in the forthcoming epochs if the pending well assessment unveils commercial blessings. Any yield above 1,000 barrels of oil daily at the inception should be glimpsed as a triumph. Eagerly awaiting the flow test results







Exploring Exciting Investment Opportunities in Energy and Metals

Exploring Exciting Investment Opportunities in Energy and Metals

Latin American Energy Potential

Amidst the volatile tides of the energy market, New Stratus Energy Inc. (RDRIF) emerges as a beacon of potential. Under the stewardship of the well-connected Jose Francisco Arata, the company sets its sails to become the next Latin American energy powerhouse.

Niche Market Expertise

Condor Energies Inc. (CNPRF) offers a unique window for investors seeking exposure to the Central Asian energy landscape. With recent accomplishments like securing a gas field management contract in Uzbekistan and venturing into LNG initiatives in Kazakhstan, Condor Energies showcases its prowess in navigating specialized markets.

Untapped Value Proposition

Trading at a staggering 50% of its proven+probable net present value, Valeura Energy Inc. (VLERF) beckons investors with a compelling value proposition. Bolstered by a recent reserves report validating its field-life extension strategy, Valeura Energy stands on a debt-free ground with a robust cash position of US$150 million, ready for future expansion.

Exploration Excitement in Metals

Don’t let the name mislead you—not all that glitters is silver. With a substantial investment infusion from Barrick, Hercules Silver (BADEF) embarks on an exhilarating copper exploration journey in Idaho. Unveiling a vast copper-porphyry system beneath known silver mineralization, the company aims to strike gold with promising drill results expected soon.

Revolutionizing Energy Futures

Critical Elements Corp. (CRECF) stands tall, despite the hurdles of permitting and off-take agreements. With a robust lithium project on the horizon, the company holds vast potential for patient investors, despite recent stock disappointments.

Metals in the Spotlight

Libero Copper and Gold Corp. (LBCMD) steps into the limelight, buoyed by legendary investor Frank Giustra. With a colossal porphyry deposit identified at its Mocoa project in Colombia, the company eyes exponential growth potential, albeit amidst some political risks. Drilling operations set to resume in Q2 2024 promise an exciting journey ahead.

Frontier Market Opportunities

For the daring investor, Sun Peak Metals Corp. (SUNPF) shines as a frontier market gem, with its Shire project in Ethiopia echoing past success stories. Drawing parallels with the lucrative Bisha VMS deposit, the company positions itself for a drilling spree later this year, hinting at lucrative returns.

Potential in Copper Exploration

Atex Resources Inc. (ECRTF) uncovers a treasure trove in the Chilean copper landscape. Aided by Pierre Lassonde’s backing, Atex sets its sights on expanding the high-grade core of its significant resource, with promising drilling prospects awaiting exploration.

Shining Gold in a Sea of Choices

With the gold market conversation abounding, here’s a concise list of intriguing picks worth considering: Kinross Gold Corp. (KGC), Falco Resources Ltd. (FPRGF), OceanaGold Corp. (OCANF), New Gold Inc. (NGD), Aya Gold and Silver Inc. (AYASF), Goliath Resources Ltd. (GOTRF), Ascot Resources Ltd. (AOTVF), Karora Resources (KRRGF), Osisko Mining Inc. (OBNNF), and Rupert.








Exploring Explosive Uranium Discoveries

Intriguing Developments in the Uranium Sector

Exploring Uncharted Territory

One might think there’s nothing new under the sun when it comes to uranium, a commodity with a rich history dating back to the Manhattan Project in the 1940s. However, amid the familiar hum of the industry, there is one stock causing a stir: CanAlaska Uranium Ltd.

CanAlaska recently unveiled a groundbreaking drill hole find at its West McArthur joint venture project, a collaboration with industry giant Cameco. In this jackpot, CanAlaska boasts an 83.35% stake. The drill hit gold, or rather uranium, striking a vein of 16.8 meters deep with a mind-boggling 13.75% eU3O8 grade. This discovery propels CanAlaska into the elite circle of junior uranium explorers with significant breakthroughs.

While the reported grades are based on gamma probe readings, with the “e” prefix indicating such, eagerly awaited chemical assay results are expected to be unveiled within the next six to eight weeks.

A Glimpse into the Future

In the meantime, CanAlaska is poised to intensify drilling efforts around this mother lode, a move that should rivet the attention of investors. Such stellar grades often herald a durable mineralizing system, hinting at the promise of substantial expansion. This landmark find has not only stirred the curiosity of the mining realm but has also set pulses racing among discerning investors.

Every seasoned investor knows that such discoveries are akin to striking gold during the California Gold Rush – a rare and rewarding event that may catalyze a seismic shift in the uranium landscape.