Hedge funds slash bullish wagers on gold over Trump election win
Hedge funds and other large speculators boosted net-long positions by 11% to 197,362 as of Nov. 12, the lowest in 14 weeks.
The junior mining space is so beaten up that there are a raft of opportunities for investors looking for exposure to the energy transition, and to rising prices for gold, silver and copper, delegates at the recent Energy Transition Metals Summit heard.
“If you’re an investor and just new to the space, there’s some ridiculous valuations out there of companies that have made significant discoveries that are needed in the energy transition,” said Terry Lynch, the CEO of Quebec-focused junior Power Nickel (TSXV: PNPN). He sat on a panel outlining both the challenges facing juniors and their potential upside.
“We’re not talking about greenfields,” he said. “We’re talking about serious, 43-101 resources that’ve got considerable upside,” he said, referring to the technical study designation. The projects have strong net present values and internal rates of return that normally should trade at five to 20 times higher than they are, the CEO said.
Lynch, the founder of Save Canadian Mining, which fights predatory short-selling practices affecting junior miners, also spoke about how different rules for some traders like hedge funds allow them to pound down junior valuations.
On the positive side, there are signs that what has been a very difficult fund-raising markets for juniors is starting to turn, according to John Feneck, founder of Feneck Consulting. Since March, gold and silver CEOs in the junior space report they’re having an easier time raising funds, he said.
“That turned the corner last year, with gold’s breakout right now and then silver’s follow through,” he told delegates. “Where it would take them maybe a month to raise three or four million, now they’re doing it in two or three days, which is really exciting to see.”
The Energy Transition Metals event was organized by The Northern Miner and Precious Metals Summit Conferences and took place April 29-30 in Washington, D.C.
Below, watch the full discussion, moderated by The Northern Miner’s editor-in-chief, Alisha Hiyate.
