While mostly gloomy on the resource sector, Soar Financial Group CEO Kai Hoffmann noted that valuations are awfully cheap.
Hoffmann spoke to Kitco on Tuesday. Hoffmann’s other company, Oreninc, tracks financings in the junior resource space. There were only two bought-deal resource financings in July and August, according to Oreninc.
Summing up sentiment in the resource space, Hoffmann recalled the resource sector nadir of the last decade.
“We’re back to the 2015 … the G&A financings just to keep the lights on,” said Hoffmann.
“I guess if you wanted to make it a bull case, things are getting pretty,” said Hoffmann, noting that senior gold miner Newmont has a dividend yield of 5.4%.
“Talk about cheap. I don’t think I’ve seen that in the last 14 years I’ve been in the sector,” he said, adding that dropping energy prices could further benefit the miners if gold prices don’t retreat much further.
To adapt Hoffmann observed that the junior sector is pulling back, spending less and guarding what cash they have. The juniors are “…doing what they’ve always done. They’re canceling financings. They’re decreasing the amount of drill rigs they’re using. They’re just…waiting until this is over. And, I don’t see much on the horizon that might change.”
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
Read More:‘We’re back to 2015’ – Soar Financial Group’s Kai Hoffmann on a bleak junior resource sector
2022-09-01 17:02:00
