A new bull market for gold & silver

Jan 15, 2021 | General (EN), General (EN)

In our opinion, there has never been a greater diver­gence in the finan­cial markets than today between macroeco­nomic funda­men­tals on the one hand and asset prices on the other. But there is one excep­tion: gold and silver mining stocks. There­fore, we as German Mining Networks (www.german-mining.com) and the inves­tors we serve are mainly invested in precious metals and gold and silver mining stocks.

In this special issue we will show you why we are only at the begin­ning of a golden decade, what perfor­mance poten­tial this offers for mining shares and how inves­tors can maxi­mally profit from this.

The story also rhymes on the finan­cial markets

Compare the overva­lued stock markets of 1930 and 1970 with the subse­quent perfor­mance of gold mining stocks. We find the figures below speak for them­selves and could point us towards the 2020s. Even today, stocks in the Dow Jones, S&P 500 or Nasdaq indexes trade at valua­tion levels arti­fi­cially created by central banks and money prin­ting. A burs­ting of the bubble and strong correc­tions are prepro­grammed. While the Dow Jones lost 86% of its value within 2 years during the 1930s, the shares of Homes­take Mining, back then one of the largest mining compa­nies, rose 7 times.

A compa­rable scen­ario took place in the early 2000s (figure below). The shares listed on the Nasdaq lost 78% of their value. Gold and silver mining stocks rose 5‑fold by 2008.
The picture is similar at company level. The real earning returns of the compa­nies in the S&P 500 are at a long-term low just like in 2000 and 2009. Both periods were excel­lent entry points to buy mining stocks at a low price, as gold has performed like hardly any other asset class in the following years.

From 2000 to the end of 2002, gold outper­formed the S&P 500 by 120%. Even 2010, was a good year for equi­ties in which gold outper­formed the S&P 500 by 50%.

The Time is Now

We curr­ently see very good entry oppor­tu­nities, just in time before the second wave of strong price incre­ases in mining stocks begins. Only recently, gold has broken through an important resis­tance line towards the top compared to the S&P 500. There is thus no tech­nical resis­tance and enor­mous upside potential. 

We also believe that we are in the last few weeks and months where you can buy an ounce of gold for less than $2,000. You can see below the annual growth rates of gold in percen­tages since the 1970s. Again, the price of gold has recently broken a long-term resis­tance line towards the top.

Since incre­ases in the price of gold are immedia­tely reflected in the profi­ta­bi­lity and valua­tion levels of the miners, you can achieve returns of several 100% with the right mining companies.

The catch-up poten­tial of gold mining stocks

The catch-up poten­tial of the mining stocks them­selves is immense. To return to the median of 1.46 only, the mines – as a sector measured against the Barron’s Gold Mining Index (BGMI) – must rise by 100%. Selected quality stocks, such as those presented below, have already doubled in value and have the poten­tial to multiply further.

Conclu­sion: We are at the begin­ning of a golden decade. Looking back, many inves­tors will wish they had bought more gold and gold mining stocks in 2020. To make sure that you don’t feel the same way, we have compiled a number of factors below. These enable you to care­fully select indi­vi­dual mining stocks. We at German Mining Networks have been using these factors for years to invest in the best of the best via private place­ments (link) and via the stock exchange.

Insider Report: How to select the best gold mining stocks for your portfolio!

In no other sector is selec­ting the right people as important as in the mining sector. Through nume­rous meetings we found out ourselves who really means what they say and who puts their words into action. These are then exactly the CEOs in whom we want to invest and who repeatedly manage to gene­rate excep­tional perfor­mance for their shareholders.

Our meeting with Steven Dean in 2015 laid the foun­da­tion for our success today. Previously, Steven had success­fully founded and sold two mining compa­nies to Cana­dian and Austra­lian corpo­ra­tions. With Atlantic Gold he managed to sell again yet to another major player.

Another example of conti­nued success in the mining sector is Ross Beaty, Cana­dian billion­aire and founder of Pan American Silver (PAAS) and Equinox Gold (EQX). He has created more than $6 billion in share­holder return with his 13 founded companies. 

GMN list of excel­lent CEOs:

  • Robert Fried­land
  • Ross Beaty
  • Steven Dean
  • Keith Neumeyer
  • Sean Roosen
  • Mark O´Dea
  • Amir Adnani
  • Ivan Bebek
  • Craig Perry
  • Eric Fier

Share­holder structure

Not just the manage­ment is extre­mely important. Good CEOs attract good inves­tors. One example is Pure Gold with Mark O’Dea, whose track record attracted star inves­tors such as Rob McEwen and Eric Sprott as major share­hol­ders. We are happy to follow these inves­tors. They have also proven that with the right selec­tion of compa­nies, 10–20x returns are possible. A good example of this is the case of Eric Sprott and Kirk­land Lake Gold (KL).

GMN list of renowned mining investors:

  • Eric Sprott
  • Lundin Familie
  • Rob McEwen
  • John Paulson
  • Tom Kaplan
  • Richard Warke

Artemis Gold: Mit diesem Erfolgs­re­zept sind wir ständig auf der Suche nach dem nächsten Star in der Branche und haben diesen mit Artemis Gold (ARTG) erneut gefunden. Artemis Gold ist das neue Unter­nehmen von Steven Dean, das 2019 nach dem erfolg­rei­chen Verkauf von Atlantic Gold an den Start ging. Iden­ti­sches Manage­ment und diszi­pli­nierte Vorge­hens­weise beim Voran­treiben des Projekts haben Inves­toren bereits mit einem 5x Return belohnt. Das Manage­ment hält selbst 42% der Aktien, und hat mit dem Black­water Gold Projekt in British Columbia, Canada eines der größten Gold­vor­kommen in Nord­ame­rika erworben. Das Unter­nehmen kann mit diesem Projekt über­pro­por­tional von weiter stei­genden Gold­preisen profi­tieren und ist durch seine Größe erneut attraktiv für eine Über­nahme durch einen größeren Player.

Wir sind gespannt auf den rasanten Vormarsch bei der Projekt­ent­wick­lung und freuen uns über weiter stei­gende Kurse, die der Markt dieser Aktie wohl noch zu geben hat, bis das volle Poten­zial ausge­schöpft ist. Weitere Details zum Poten­zial der Artemis Gold finden Sie in diesem Blog­ar­tikel.