Fear and Who Wakes up to Gold?

BTO and EQX

Don't Worry be Happy or more to the point Don't Panic be Patient

That is the best advice I can come up with now. These bear markets do eventually end and it is rarely a good idea to sell in market panics, unless your portfolio is way out of balance. Even so, use bear market rallies to adjust. Hopefully readers here are fine if they heeded my suggestions to raise cash and invest in precious metals that have been the market darlings. Investors are certainly scared right now and many in a panic.

North America Wakes up to Gold

In the last 2 or 3 months North American investors have discovered gold, not much by retail investors yet, but certainly the bullion banks and many investment funds. Deutsche Bank just raised their price target in the midst of current market turmoil with a brand new report. As most they highlight Central Bank physical demand much like Goldman and Bank of America recently have. About time, as I have been highlighting this for the last two years and it would be a key driver for higher prices. This CB buying is not going to stop at higher prices because it is a clear move out of the USD and Euro into gold, especially as gold is a tier one asset under the new Basal III accord. Why keep fiat currencies as reserves that have been prone to inflation and out of control government spending when you can have a superior and liquid asset on your balance sheet.

Just recent, the bullish case for gold remains as strong as ever, according to analysts at Goldman Sachs. “We maintain our $3,300/oz gold year-end forecast – and our forecast range at $3,250-3,520, reflecting mostly upside risks to investors' positioning,” Goldman analysts wrote in a note. “We continue to see risks relative to our forecast skewed to the upside.”

I keep an eye on the gold stock ETFs and many retail investors are still betting the wrong way with higher volumes in the DUST short ETF in this correction. And still not much retail demand in silver yet and shorts still controlling that market so silver hit way harder than gold. This next chart is the silver SLV etf compared to gold GLD etf. Gold came down from an 18% gain this year to the current 15% gain in this correction while silver gave up all it's gains. Silver came down below it's 200 day MA which is negative, but given this is still a market influenced by shorts I am not that worried about a small drop below the 200 day MA.

I only started added more silver stocks to our list in late 2024 and AYA Silver in January. I may use this correction to add a couple more silver stocks.

I have recently highlighted advanced juniors Amex Exploration and now Rio2 Ltd., but for favourite producers to buy in this correction, I like B2Gold and Equinox. It appears the market is still stuck in the past where mine developers were being punished because of cost over runs.

That was all driven by rapid rising inflation that was difficult to see what parts of the mine building process was being hit hardest by rising costs. We are past that stage now and the mine builders have a good handle on costs now. B2Gold is building their Goose project and Equinox the NFLD Valentine mine as well as their Greenstone mine just came into production.

It seems the market is still pricing in a lot of construction risk and ignoring the high rate of growing gold production that both companies offer. I am just going to present the charts as we all know the stories.

B2Gold - - - NY:BTG US$2.80 - - - TSX:BTO C$3.95

This is a chart on the US side BTG compared to the HUI Gold Bugs Index. You can see that B2Gold has under performed most gold stocks and it just can't seem to break resistance to make higher high in the last year and a half. Volume has really picked up since February in the latest up move. I expect we will see that higher high in the next up wave with gold stocks.

Equinox Gold - - - NY:EQX US$5.90 - - - TSX:EQX C$8.25

Equinox was pretty much performing the same as the HUI, but it has corrected way more than other gold stocks. Part of the reason is has indefinitely suspended operations at its Los Filos mine in Guerrero, Mexico, following the expiry of its land access agreement with the community of Carrizalillo on March 31, 2025.

Equinox Gold has been engaged in collaborative discussions with the three communities that host the mine since November, 2023. Consensus on terms was reached in January, 2025, and new long-term agreements were subsequently ratified and signed with the Mezcala and Xochipala communities. To date, Carrizalillo has not signed a new long-term agreement with the company.

Equinox Gold has not included any production from the Los Filos mine in its 2025 production guidance. For 2025, the Company expects to produce 635,000 to 750,000 ounces of gold which is still higher than about 622,000 for 2024. Los Filos produces about 170,000 ounces/year. Valentine will start production mid year so 2026 will have a full year of production from Valentine and could easily be producing over 1 million ounces per year with Los Filos back.

All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.