Brett Heath: Sentiment Has Changed Drastically in the Last Month
Brett sees severe capitulation across the board from the metals to the majors and down to the juniors. Most of the majors are at or near 52-week lows. This looks like scary times, and both gold and silver are incredibly volatile right now.
The sentiment has changed drastically from just a month ago. What we have seen for the last two years is gold stuck in a channel. It was looking like gold and silver were setting up for a very good run, but that did not materialize. He warns that the market may continue to be oversold for some time.
With this latest market decline, a lot of issuers were caught off guard. Many are in a vulnerable position with their stock holdings down forty percent.
Investors need to be ready to take advantage of opportunities. You do not want to be holding companies that need to raise capital in the next year as they will likely get very unfavorable terms. You want to understand the financial situation of the companies you do hold and where the value truly lies.
Royalty and streaming companies can benefit from this type of market. When companies or holders see this level of negative sentiment, they may throw in the towel. Historically this is when the real deals are made. Brett outlines how Metalla operates and why they differ from other royalty and streaming companies. (TSXV: MTA & OTCQX: MTAFF)
He says, “Investors get killed when they act on fear, they need to learn to use the fear in the markets to their advantage.”
Talking Points From This Week’s Episode
• Gold and Silver are currently very volatile markets.
• There is capitulation across the sector and very weak sentiment.
• Many issuers and companies are vulnerable.
Mr. Heath is President and CEO and Director of Metalla Royalty & Streaming. He has an extensive career in the structured finance, corporate finance, and investment management industry. He was previously the Chairman and CEO of High Stream Corporation before Metalla acquired it in August 2016. High Stream was a specialty streaming and royalty consulting company where he worked with First Mining Finance, and several other private equity funds, advising and brokering metal streaming transactions. Before that, he was the President of a private streaming company where he deployed $11 million in 4 producing streaming transactions in 3 separate jurisdictions. Before that, he was a founding principal of KSIR Capital Management a hedge fund focused on small and micro-cap mining companies. He also advised several mining companies with KSIR Capital, the corporate finance division of KSIR.