Gold and Silver exploration to outperform in 2021!
Important Research Report on why Crescat Capital believes Gold and Silver exploration companies will greatly outperform in 2021.
Looking at Markets is cyclical, today, it expect a new wave of rising commodity prices, set up by past underinvestment in basic resources, to soon ripple through the global supply chain creating a headwind for real living standards. Welcome to the Great Reset.
Scanning the opportunity for activist gold exploration, the underinvestment in most of the last decade in the gold mining industry will soon send the majors scrambling to invest their near term soaring free cash flow in the most prospective new gold and silver deposits being explored today.
These properties are in the hands of the extremely undervalued and ultra-depressed small cap segment of the mining industry, the junior explorers and a group that has been through a brutal, capital starved bear market that effectively lasted ten years.
The whole industry completed a double-bottom retest by successfully holding above its 2015 lows and rebounding sharply to lead all industries in stock price performance coming off the March 2020 correction. We think there is much more performance ahead for this industry as it is still in the early stages of a new secular bull market.
We are confident that within the precious metals mining industry, the most value for shareholders will be created from the small cap exploration segment over the next several years. We think Crescat’s Precious Metals Fund and SMA strategies have already started to demonstrate that potential in 2020.
By working with world-renowned exploration geologist, Quinton Hennigh as Crescat’s geologic and technical advisor, Crescat has already created an activist portfolio of over 50 companies where we are among the largest shareholders of a targeted 200 million ounces new high-grade gold equivalent discoveries. We plan to continue to grow these targeted ounces while getting the needed investment capital to our companies to prove out these economic deposits through drilling and discovery.
Crescat’s activist fund is a large and significant capital deployment opportunity. We are currently seeking a select group of right-minded institutional partners who can understand and appreciate the focus, scale, and timeliness of what we have set out to accomplish in this fund.
Our activist portfolio is positioned ahead of a likely major new wave of M&A by the large and mid-tier producers which are still to come as they necessarily must replace their reserves through acquisition. We also have a handful of holdings that we call keepers, the cream of the crop companies that control the unquestionably new world class, high grade gold and silver deposits that will catapult them into the next great mid and large cap gold producers in the industry over the course of the new secular bull market.
To be frank, buying gold or silver is not a contrarian investment position today. There are enough people in agreement with the idea that all government backed fiat currencies are doomed to some level of devaluation through inflation due to the level of fiscal and monetary imprudence and unsustainable debt imbalances in the financial system.
Naturally, with a constructive view on precious metals, the next step for most investors is to start dipping their toes into well-known and established mining companies. Despite their past reputation of being capital destroyers, investors today are warming up to the idea of buying the Newmonts and Barricks of the world or even ETFs such as GDX and GDXJ.
What we see as contrarian, however, is a much bigger opportunity to unlock value through a well-targeted activist strategy in the exploration segment of the industry. No doubt, many are sceptical of the gold exploration business, given its poor performance during the last downturn in the industry at large, but the biggest gains today in the industry are likely to come from what are the smaller cap names.
Between Crescat and its 21 years of money management experience and Quinton Hennigh with his 30+ years of gold mining exploration experience to serve as Crescat’s geologic and technical advisor, we believe we have the expertise and preparedness to navigate this incredible opportunity before us. We hope you will join us as we seek to exploit the mispriced opportunities on the exploration and discovery side of the Lassonde Curve that is still in the early stages of what is likely to be a new rip-roaring secular bull market for precious metals. December month to date has been shaping up incredibly well for Crescat’s three private fund strategies and Precious Metals SMA that contain our activist precious metals positions.