Hey There Income Hunters,
Here is what we know …
- The US is coming to the end of its cycle as the sole reserve currency of the world
- There is much uncertainty as to who the new leaders will be, what currencies will be involved and how it will all be rolled out
Behind the scenes, many of the global central banks are accumulating gold as a backstop for their currency in the new monetary system.
Why? Because gold is unique in its ability to maintain its value. You can’t print gold and it has stood the test of time in every economic environment and against every paper currency in the world.
In fact, it is written in the US constitution that the only “real money” is gold and silver.
Gold is currently consolidating an initial move higher that followed inflation. The Fed has kept a lid on gold by talking tough on inflation …
However, the next leg up for inflation will send the dollar lower and gold higher.
When Powell capitulates on tightening because the economy and asset prices collapse, there will be the pivot that the dollar will not recover from.
That is when gold and silver will make new highs, triggering a wave of takeover activity for junior gold and silver miners.
This next leg presents an incredible opportunity and today I’ll present the case for this trade and how you can create generational wealth by capitalizing on it.
Prepare for Takeover Mania in Mining
For centuries people have made money producing the minerals businesses need.
This has gone on whether prices of the commodity are going up or down.
When demand is greater than supply, larger mining companies will gobble up smaller ones because mines cannot grow forever. When they run dry, they’re out of business.
So, takeover activity is important for the larger mines to guarantee they can survive and grow longer-term.
Now, in order to get the smaller mines to cooperate, and for shareholders to agree to these deals, the big boys MUST pay a hefty premium over the market price for the mines.
That means you want to own the smaller, high-quality mines that are takeover targets, and get paid multiples on your investment.
Examples of Takeovers in Mining
- 51.5% – Osisko’s bid for Brett Resources (above 20-day VWAP)
- 40.8% – St. Barbara’s bid for Atlantic Gold (above 30-day VWAP)
- 37% – Newmont’s bid for Fronteer (above previous close)
- 43% – First Majestic’s bid for SilverMex (above 30-day VWAP)
- 40% – Kinross Gold Acquires Great Bear Resources (20-day VWAP)
Activity is really picking up and there are many more that include all minerals.
How to Pick the RIGHT Miners
There are two things I look for when I purchase junior minors that could possibly become takeover targets or move into production and make investors hefty returns …
- Scale potential, meaning initial findings and feasibility studies have been positive and there is potential for massive size.
- High-grade results. Maybe the scale isn’t massive, but the grade is superior, meaning profit margins will be outstanding.
That’s why Power Income Trader scans hundreds of mining companies to find mines that will either get taken over or move into production and drive great returns for investors.
Selection is critical, as miners may be in one of three stages:
The majority of speculators in mining take their shot in the early days of discovery …
However, I believe the lowest risk/highest reward way to play it is when a successful discovery shows successful drilling results in the feasibility stage.
Now is the Time to Build a Portfolio
Prior to Covid, mining (and commodities in general) were stuck in a 10-year bear market. In bear markets mines shut down exploration.
So, now that the commodity markets have turned, I believe we are entering a secular bull market for physical commodities.
I also believe that during the next couple of years, takeover activity will soar for gold because of the demand – not just real money, but also safe money as the Fed devalues the dollar to reduce US debt.
Bring It Home
I have about a dozen miners that I consider excellent takeover targets or successful producers that send their stock soaring.
If you are interested in understanding more about this fascinating industry and get all the details on companies and the companies I pick and how to maximize returns subscribe to Power Income Trader.
These gems will help protect your wealth as the US heads to its end game as the reserve currency and is forced to devalue the dollar to restart the economy.
Have a great weekend and as always …
Live and Trade With Passion My Friends,