Loading ...avoid avoid avoid the streamers
Franco Nevada is getting desperate. They are issuing equity to buy a stream on a Glencore copper mine. These streamers will die on the backs of the base metals guys. They are so desperate to grow that they are doing deals with bankrupt companies. Avoid the streamers and stick to the miners in this cycle… avoid FNV SLW RGLD. All are garbage now that they are in bed with base metal producers.
Thanks cash
This is great info
I always thought that model was the best of the best
appreciate the insight
Hi FGC,
So did I until I began to think, “Hey, how come these companies are doing better than all the miners?”. If they can do that, then why isn’t every company a streaming company? So they are a niche and niches are often a nice place to be: I mean Switzerland is the world’s banker and they do OK.
The thing I could never understand is: why would any company sell a stream of silver for $4 an ounce when silver was trading at $30 for example? Seems insane to me. I guessed it was desperation for credit on the part of the counterparty, desperation to expand in a bubble environment, see my comment 1 below. What else could it be? I mean why not just go down to the bank to get a loan and sell the byproduct metal for $30/oz on the open market? The bankers might make you hedge your production but that would be at a whole lot more than $4/oz! It just does not pass the smell test for me.
It’s like moral hazard – yet another way for a company to get more credit and make bad decisions in the up cycle. Like a pay-day loan, kind of.
Many thanks Dave for your insight and explanation. Brilliant text. Thanks.
I view the streaming and royalty companies as
1: Beneficiaries and actually a by-product or symptom of a bubble in the commodities sector.
2: I just thought of a second one: I think of them as paper gold.
I thought they would collapse in a commodities bear market. Initially the benefitted from it guess with better deals, especially with counter-parties with credit I would not touch personally. I mean if a counter-party is a company whose stock you would not touch with a 10 ft pole, is that not a problem?
Just my personal twopennyworth. Not talking about any specific companies of course, just in general.
Great info indeed,thank you cash!
I did own SLW,but I sold it a month ago to buy Kaminak.
They (the streamers)were considered the best during the final phase of the last bull market in gold and also during the bear market.
It seems things are changing.
Thanks Cash.
I sold my RGLD. It used to be the best leading indicator for PM sector.
Streamer includes the Osisko Royalty (OR.TO) as well ?????
I don’t think that they have any PM production tied to base metal producers. Im referring to the streamers who are getting in bed with the base metal producers. These streamers are in an absolute panic… they have run out of gold and silver mines from which to buy streams so they are now doing mega headline deals with base metal names like Glencore and Vale. I personally would no be surprised to see Freeport show up soon. I like to stick to the rule that an optimist buys base metals and a pessimist buys precious metals. Why mix the 2?
Thanks for that insight CC.