Keeping it Simple: Jan 28, 2020

Is gold in a bull market?

Probably yes

Are gold miners undervalued?

On average yes

Are gold majors undervalued?

Not really, but not that expensive either

Is silver in a bull market?

Probably yes

Are silver miners undervalued?

Not really, on average

Are base metals in a bull market?

Doesn’t look like it but may be near some sort of bottom

Are base metal juniors undervalued?

Not really, but some have huge optionality

Are major base metal miners undervalued?

Kinda. Teck is trading at a PE ration of around 6-7 and even Rio is trading at a PE ration of around 10 for example.

Thoughts

I still think gold juniors have the best risk/reward on average with some trading far below their value (on paper). Gold majors doesn’t look that cheap. Silver juniors are very “hot” and not really cheap even though silver is cheap. Base metal juniors have poor economics for their projects with the current base metals prices but could be considered big time optionality (beta) plays. Some large cap base metal miners look pretty cheap.

… I personally see no obvious reason to hunt for good cases outside gold juniors at the moment.

R/R in my opinion:

• Gold juniors > Gold majors
• Silver > Gold
• Silver > Silver juniors
• Gold juniors > Silver juniors
• Base metal majors > Base metal juniors