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And that’s a wrap: The Market Herald at PDAC 2022

The first in person Prospectors & Developers Association of Canada (PDAC) Convention…
The post And that’s a wrap: The Market Herald at PDAC 2022…

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  • The first in person Prospectors & Developers Association of Canada (PDAC) Convention since March 2020 was held earlier this month
  • More than 1,700 investors, analysts, mining executives, geologists, and government officials attended
  • The Market Herald interviewed dozens of the world’s mineral exploration and mining industry leaders

The world’s premier mineral exploration and mining convention, the Prospectors and Developers Association of Canada (PDAC) welcomed a massive crowd of more than 17,000 back to Toronto for its first in person convention since March 2020.

Confirming the mining sector’s hunger for returning to business, the 90th annual convention was a robust and busy affair with a jammed packed line-up of speakers and workshops.

The mining sector has been enduring and overcoming challenges this year, chief among them geopolitical challenge like revolving governments and resource nationalism.

Even so, a recent survey of miners found that an overwhelming majority expect royalties to increase.

How would operators mitigate future risks and work to stabilize the supply chain? What of the other factors bucking the trend when it comes to the mining industry? These were the questions on the minds of many PDAC 2022 attendees and The Market Herald Team caught up with dozens of leaders and executives from top mining companies working in various corners of the world to learn more about the potential they seek to unearth.

Highlights:

Tonno Vahk, CEO of Aton Resources (TSXV:AAN) discussed the latest results of their diamond drilling program.

Developing the Mon Gold Property in the Yellowknife Gold Belt District, 60 North Gold (CSE:SXTY) Vice President, Corporate Development, Ronald Handford, spoke about recent bulk samples taken to give the team a sense of mineral grades.

Engaged in the business of mineral exploration, CAVU Energy Metals (CSE:CAVU) has been drilling since early May 2022 at its Yukon Copper Project, home to its porphyry copper, gold, silver and molybdenum project with first assays at lab. The company’s CEO, Jacob Verbaas, spoke about the large copper systems at its Yukon Copper and Star Projects.

Chris Eager, President and CEO of Resouro Gold (TSXV:RAU), spoke about mobilizing a team and drill rig for its Novo Mundo Gold Project in Brazil.

CEO of Atex Resources (TSXV:ATX), Raymond Jannas, spoke about new and impressive gold-copper results from the Valeriano Project in Chile.

Search Minerals (TSXV:SMY) plans to be in production of Critical Rare Earths Elements (CREE) in three years, specifically permanent magnet REEs. The company’s President and CEO, Greg Andrews, spoke about his team’s next steps.

President and CEO of Millrock Resources (TSXV:MRO), Gregory Beischer, sat down to discuss the company’s upcoming second drilling campaign at the 64 North Project.

Paul Sun, President and CEO of Eminent Gold Corp. (EMNT) noted that sample results from Spanish Moon Project, show the potential for a large gold deposit.

Chris Frostad, President & CEO of Purepoint Uranium (TSXV:PTU) discussed the upcoming drill program at Red Willow Project in Saskatchewan.

Heritage Mining CEO, Peter Schloo talked about the company’s flagship the Drayton-Black Lake Project, which boasts 100 years’ worth of data which has never been digitized or looked at from a low-grade high-tonnage perspective.

JP Vargas de la Vega, Managing Director of Galan Lithium (ASX:GLN), spoke about a brand new pegmatite discovery at the Greenbushes South Project. While at the PDAC, the company announced its discovery at its lithium hotspot project in Western Australia, roughly five kilometres south from the largest lithium mine in world. The company generated 12 targets and found pegmatite discovery on the first one.

i-80 Gold (TSX:IAU) CEO, Ewan Downie talked about the first gold ore shipment out of Granite Creek and how the company is currently processing the ore at Nevada Gold Mine’s facility.

Cameron McCall, Executive Chairman and President of Macarthur Minerals (TSXV:MMS) sat down to discuss the optimistic feasibility study results on the Lake Giles Project.

Atac Resources (TSXV:ATC) President and CEO Graham Downs talked about its ongoing copper and high-grade gold exploration programs at its Nadaleen Gold Project in Yukon.

Managing Director of Rafaella Resources (ASX:RFR), Steven Turner, spoke about the opportunities and challenges of growing its presence in Canada.

Vancouver junior mineral explorer Faraday Copper (CSE:FDY) President and Chief Executive Officer, Paul Harbidge talked about rebranding, the company’s plans over the coming 12 to 18 months, and developing a pair of projects in mining-friendly U.S. jurisdictions.

Tesoro Gold (ASX:TSO) holds one of the largest and most prospective gold projects in Chile. Geoff McNamara, a Non-Executive Director with the company spoke about its El Zorro Project, a 1.1 million oz. open pittable project looking to grow to 2 million oz. gold in the next 24 to 36 months, drilling to start in next couple of weeks, scoping study out in 4 weeks.

Brunswick Exploration (TSXV:BRW) Chief Executive Officer Robert Wares discussed the company’s current lithium exploration plans, its inventory targets and future prospects.

Tara Christie, President and CEO of Banyan Gold (TSXV:BYN) discussed the drilling program underway at the Aurmac Property, Yukon. The updated Resource Estimate comprises a total inferred mineral resource of 3,990,000 ‎ounces of gold on the property.

Peter Clausi, VP of Capital Markets for Silver Bullet Mines (TSXV:SBMI) discussed bringing the Buckeye Mine online is the company’s primary focus. The fully funded mill is being commissioned.

Monument Mining (TSXV:MMY) President and CEO, Cathy Zhai shared news about its Selinsing Gold Property near Kuala Lumpur.

Managing Director of Golden Rim (ASX:GMR) Craig Mackay spoke about the company’s new project, acquired last year during the COVID pandemic.

Focus Graphite (TSXV:FMS)  is developing two of the most promising high-purity flake graphite projects in North America, both located in Quebec and its CEO Marc Roy spoke about the need to depend less on foreign countries for EV battery minerals.

Green River Gold (CSE:CCR) CEO and President. Perry Little spoke about the company’s magnetic survey, having just completed the second portion with results that showed a lot of nickel on their Quesnel nickel property.

Cassiar Gold (TSXV:GLDC) President and CEO, Marco Roque discussed recent drilling on the company’s flagship Cassiar Gold Property in northern British Columbia.

Richard Murphy, CEO of Manitou Gold (TSXV:MTU) provided an overview of the company’s projects, including the Goudreau Project in Ontario, where two past-producing mines bookend the project.

Mario Stifano, CEO of Galantas Gold (TSXV:GAL) discussed the company’s upcoming gold production planned for its Omagh project, which is located west of Belfast in Northern Ireland.

ArcPacific Resources (TSXV:ACP) is an exploration play with 100 per cent ownership of the LMSL Copper Gold and Silver Project in British Columbia.

Base metals focused company, Osisko Metals (TSXV:OM) is moving into feasibility for 2 projects. The company’s CEO, Robert Wares spoke about the Pine Point project, an assemblage of more than 50 open-pit and underground mines containing as much as 7b lb of lead and zinc proposed to be developed in Northwest Territories.

Macarthur Minerals (TSXV:MMS) CEO, Joe Phillips, spoke about its prospective Lake Giles Iron Project and its 1.3 billion tonnes magnetite resource.

Joel Freudman, CEO, Co-Founder and President of TRU Precious Metals (TSXV:TRU) spoke about building long-term shareholder value through exploration, potentially leading to exciting mergers and acquisitions opportunities. TRU is building copper-gold-silver assets in the Newfoundland in the highly prospective Central Newfoundland Gold Belt and has an option with TSX-listed Altius Minerals to purchase 100 per cent of the Golden Rose Project.

Perth-based resource exploration company Winsome Resources (ASX:WR1) turned to its Managing Director, Chris Evans to shed some light on the company’s flagship project as it moves towards expanding its maiden resource.

Lomiko Metals (TSXV:LMR) CEO, Belinda Labatte, talked about the company’s ongoing work at the La Loutre Project in Quebec. The project’s recently completed preliminary economic assessment indicated a mine life of 15 years producing 100,000 tonnes of graphite concentrate every year.

Ross McElroy, president and CEO of Fission Uranium (TSX:FCU) discussed the company’s uranium feasibility study that is currently underway at the Patterson Lake South Project in Saskatchewan’s Athabasca Basin.

Sitka Gold (CSE:SIG) is a junior gold, silver and copper explorer based in Canada. The company’s VP of Corporate Development, Mike Burke spoke on the company’s new discovery in Yukon. The RC Gold Project is an exploration venture highlighted by 220 metres of 1.17 g/t Au in the Tombstone Gold Belt region.

New Pacific Metals (TSX:NUAG) Founder and CEO, Dr Rui Feng, spoke about the start of drilling at its Silverstrike Project in Bolivia.

Xanadu Mines (TSX:XAM) Managing Director Colin Moorhead discussed the Kharmagtai Mine lies within Mongolia’s South Gobi porphyry copper province, which hosts most of the region’s known porphyry deposits, like the similar Oyu Tolgoi Mine operated by Rio Tinto.

Orange Minerals (ASX:OMX) Non-Executive Director, Conrad Karageorge, sat down with The Market Herald to talk about the latest completed drilling campaign at its Wiseman’s Creek Project in New South Wales.

Snowline Gold (CSE:SGD) CEO, Scott Berdahl, spoke about the company’s recent gold discovery at the Rogue Project in Yukon, which  showed visual gold in a drill core sample.

Elmer Stewart, President and CEO of Copper Fox Metals (TSXV:CUU), talked about commencing development work on the Eaglehead Project as the exploration crew readies for drilling.

Silvercorp Metals (TSX:SVM) Vice President Lon Shaver spoke about the company’s two mining districts in China; the flagship Ying Mining District and the GC Mine.

David Christie, President and CEO of Orford Mining (TSXV:ORM), spoke about several key projects in Quebec and shared results from the company’s winter drilling program at the Joutel Eagle Property.

Baselode Energy (TSXV:FIND) CEO, James Sykes, spoke about the company’s encouraging intercepts from ongoing drilling at the Hook Project in Saskatchewan’s Athabasca Basin.

Peter Dembicki, President and CEO of Tier One Silver (TSXV:TSLV) discussed the upcoming drill program at its flagship silver-gold project, Curibaya in southern Peru, comprised of approximately 16,800 hectares in a copper porphyry belt that hosts some of Peru’s largest porphyry deposits.

Northstar Gold (CSE:NSG) President and CEO, Brian Fowler, spoke with The Market Herald about the highly prospective opportunity at its Miller Gold Property near Kirkland Lake, Ontario.

Steve Robertson, President and CEO of Infinitum Copper (TSXV:INFI), spoke about three brand new discoveries at its flagship high-grade Cu-Au-Ag La Adelita Project in Sonora, Mexico.

Max Porterfield, President and CEO of Callinex Mines (TSXV:CNX), spoke about the Rainbow Deposit discovery at the Pine Bay Project, one of the highest grade copper discoveries in the world.

Mawson Gold (TSX:MAW) CEO, Ivan Fairhall, spoke about the company’s flagship Rajapalot Gold-Cobalt Project, based in Finland, which features an August 2021 Inferred Resource of 1.04 Moz grading 3 g/t AuEq.

Debuting its first discovery of 6.64 g/t gold over 30.48 metres from its flagship Reliance Gold Project in B.C., Endurance Gold Corporation (TSXV:EDG) President and CEO, Robert Boyd, spoke about the company’s acquisition, exploration and development of highly prospective North American mineral properties.

Altaley Mining Corporation (TSXV:ATLY) operates two 100-per-cent owned projects in Mexico covering gold, zinc, lead and silver, its flagship Tahuehueto Project in Durango, which will be one of the top 3 high-grade gold mines in the country once finalized, as well as its Campo Morado Mine in Guerrero.

Dominic Duffy, CEO, of Mandalay Resources (TSX:MND) spoke about the Björkdal mine in Skellefteå, Sweden with processing capacity of 1.3 million tonnes per annum, and production in 2021 of around 45,236 oz Au.

Alexandra Woodyer Sherron, CEO & President of Empress Royalty (TSXV:EMPR) introduced the company’s Manica Gold Mine in Mozambique, which had just moved into pre-production.

Investors don’t prosper on potential. Investors prosper on returns.

After several very lean years, mining investors (and mining companies) may be starting to see a light at the end of the tunnel.


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Dinosaur teeth reveal what they didn’t eat

Scratches on dinosaur teeth could reveal what they really ate. For the first time, dental microwear texture analysis (DMTA) has been used to infer the…

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Scratches on dinosaur teeth could reveal what they really ate. For the first time, dental microwear texture analysis (DMTA) has been used to infer the feeding habits of large theropods, including Allosaurus and T. rex. By taking 3D images of individual teeth and analyzing the pattern of marks scratched into them, researchers could reason which dinosaurs may have frequently crunched on hard bone and which may have regularly eaten softer foods and prey. This technique opens up a new avenue of research for paleontology, helping us to better understand not only dinosaurs themselves but also the environment and communities in which they lived.

Credit: 2022 D.E. Winkler

Scratches on dinosaur teeth could reveal what they really ate. For the first time, dental microwear texture analysis (DMTA) has been used to infer the feeding habits of large theropods, including Allosaurus and T. rex. By taking 3D images of individual teeth and analyzing the pattern of marks scratched into them, researchers could reason which dinosaurs may have frequently crunched on hard bone and which may have regularly eaten softer foods and prey. This technique opens up a new avenue of research for paleontology, helping us to better understand not only dinosaurs themselves but also the environment and communities in which they lived.

From Fantasia to Jurassic Park, the T. rex is seen as a terrifying apex predator that would chase down its prey and crunch on it whole. But how much did this iconic dinosaur actually chow down on bones? And what about other predatory dinosaurs that existed long before it?

Researchers from the University of Tokyo, in collaboration with teams from the University of Mainz and the University of Hamburg in Germany, have used dental microwear texture analysis (DMTA), a scanning technique to examine topographical dental wear and tear in microscopic detail, on individual dinosaur teeth from more than 100 million years ago to better understand what they may have eaten. “We wanted to test if we could use DMTA to find evidence of different feeding behaviors in tyrannosaurids (from the Cretaceous period, 145 million to 66 million years ago) compared to the older Allosaurus (from the Jurassic period, 201 million to 145 million years ago), which are both types of theropods,” explained postdoctoral fellow Daniela Winkler from the Graduate School of Frontier Sciences. “From other research, we already knew that tyrannosaurids can crack and feed on bones (from studies of their feces and bite marks on bone). But allosaurs are much older and there is not so much information about them.”

DMTA has mainly been used to study mammal teeth, so this is the first time it was used to study theropods. The same research team from the University of Tokyo also recently pioneered a study on DMTA in Japanese sauropod dinosaurs, famous for their long necks and tails. A high-resolution 3D image was taken of the tooth surface at a very small scale of 100 micrometers (one-tenth of a millimeter) by 100 micrometers in size. Up to 50 sets of surface texture parameters were then used to analyze the image, for example, the roughness, depth and complexity of wear marks. If the complexity was high, i.e., there were different-sized marks which overlaid each other, this was associated with hard object feeding, such as on bone. However, if the complexity was low, i.e., the marks were more arranged, of a similar size and not overlapping, this was associated with soft object feeding, like meat.

In total, the team studied 48 teeth, 34 from theropod dinosaurs and 14 from crocodilians (modern crocodiles and alligators), which were used as a comparison. The team was able to study original fossilized teeth and take high-resolution silicon molds, thanks to loans provided by natural history museums in Canada, the U.S., Argentina and Europe. “We actually started dental microwear research of dinosaurs in 2010,” said Lecturer Mugino Kubo from the Graduate School of Frontier Sciences. “My husband, Dr. Tai Kubo, and I had started collecting dental molds of dinosaurs and their contemporaries in North and South Americas, Europe, and of course Asia. Since Daniela joined my lab, we utilized these molds to make a broader comparison among carnivorous dinosaurs.”

“It was especially challenging to carry out this research during the pandemic,” said Winkler “as we rely on being able to gather samples from international institutions. The sample size might not be so large this time, but it is a starting point.”

Winkler says what they found surprising was that they didn’t find evidence of much bone crushing behavior in either Allosaurus or tyrannosaurids, even though they know that tyrannosaurids ate bone. There may be several reasons for this unexpected outcome. It could be that although Tyrannosaurus was able to eat bone, it was less commonly done than previously thought. Also, the team had to use well-preserved teeth, so it might be that extremely damaged teeth that were excluded from this study were in such a condition because those animals fed more on bone.

Something the team did find with both the dinosaurs and crocodilians was a noticeable difference between juveniles and adults. “We studied two juvenile dinosaur specimens (one Allosaurus and one tyrannosaurid) and what we found was a very different feeding niche and behavior for both compared to the adults. We found that there was more wear to juvenile teeth, which might mean that they had to more frequently feed on carcasses because they were eating leftovers,” explained Winkler. “We were also able to detect different feeding behavior in juvenile crocodilians; however, this time it was the opposite. Juvenile crocodilians had less wear on their teeth from eating softer foods, perhaps like insects, while adults had more dental wear from eating harder foods, like larger vertebrates.”

Winkler says that the next step with dinosaurs will probably be to look in more detail at the long-necked sauropods, which the team has also been studying. But for now, she is experimenting with something much, much smaller: crickets. The insects’ mouths may be tiny and don’t have any teeth, but the researchers want to see if they can still find evidence of mouth wear using the same technique. “From what we learn using DMTA, we can possibly reconstruct extinct animals’ diets, and from this make inferences about extinct ecosystems, paleoecology and paleoclimate, and how it differs from today.” said Winkler. “But this research is also about curiosity. We want to form a clearer image of what dinosaurs were really like and how they lived all those millions of years ago.”

###

Paper Title: 

Daniela E. Winkler, Tai Kubo, Mugino O. Kubo, Thomas M. Kaiser, Thomas Tütken. First application of dental microwear texture analysis to infer theropod feeding ecology.  Palaeontology, 2022, e12632. doi:10.1111/pala.12632

Funding: 

This work was supported by the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation program (ERC CoG grant agreement no. 681450) to T.T. The Japan Society for the Promotion of Science under a Postdoctoral fellowship awarded to D.E.W. (KAKENHI Grant No. 20F20325).

Useful Links:

Graduate School of Frontier Sciences: https://www.k.u-tokyo.ac.jp/en/index.html

Mugino Kubo Lab: https://sites.google.com/edu.k.u-tokyo.ac.jp/mugino-kubo-lab/home

 

Research Contacts

JSPS Postdoctoral Fellow Daniela E Winkler, Ph.D.

Department of Natural Environmental Studies,
Graduate School of Frontier Sciences,
The University of Tokyo

5-1-5 Kashiwanoha, Kashiwa City, Chiba 277-8563

E-mail: daniela.eileen.winkler@edu.k.u-tokyo.ac.jp

Lecturer Mugino O. Kubo
Department of Natural Environmental Studies,
Graduate School of Frontier Sciences,
The University of Tokyo

5-1-5 Kashiwanoha, Kashiwa City, Chiba 277-8563

E-mail: mugino@k.u-tokyo.ac.jp

Press contact:
Mrs. Nicola Burghall
Public Relations Group, The University of Tokyo,
7-3-1 Hongo, Bunkyo-ku, Tokyo 113-8654, Japan
press-releases.adm@gs.mail.u-tokyo.ac.jp

 

About the University of Tokyo
The University of Tokyo is Japan’s leading university and one of the world’s top research universities. The vast research output of some 6,000 researchers is published in the world’s top journals across the arts and sciences. Our vibrant student body of around 15,000 undergraduate and 15,000 graduate students includes over 4,000 international students. Find out more at www.u-tokyo.ac.jp/en/ or follow us on Twitter at @UTokyo_News_en.

 

 


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Could investing in bonds yield better returns than equities in 2023?

It’s not news that 2022 has been a tough one for stock markets. There have been sectors, like energy and utilities, that…
The post Could investing…

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It’s not news that 2022 has been a tough one for stock markets. There have been sectors, like energy and utilities, that have bucked the negative trend but the big picture has been bleak. The UK’s large cap FTSE 100 index has faired better than most and is more or less flat for the year thanks to its heavy weighting towards energy, industrial commodities, and finance.

Source: CSIMarket

But it’s been a volatile ride and the end of the year could still drag London’s benchmark index into the red.

ftse100index

Over in the USA, the major indices have suffered significant losses. The growth companies, especially in the tech sector, that saw Wall Street enjoy over a decade of strong growth with only the occasional short-lived correction have been among those hit hardest by inflation hitting decades-long highs and interest rates rising.

That’s seen the tech-heavy Nasdaq Composite register an over 30% loss for the year-to-date and the broader based S&P 500 is down a little under 18% over 2022.

nasdaq composite

However, while the hangover from the Covid-19 pandemic and Russia’s invasion of Ukraine were unpredictable events that have undoubtedly deepened stock market losses, a turn of the market cycle is not a surprise. The bull market that preceded the 2022 bear market was the longest in history, supported by unprecedented levels of quantitative easing and record-low interest rates in major developed economies.

If anything, the surprise was that the bull market for equities persisted for as long as it did and pushed valuations so high. More bearish analysts had been warning of a reversal for years before it actually transpired.

What has been far more surprising, almost unprecedented, is that bond markets have failed to live up to their traditional portfolio role of providing insurance against an equities bear market. When equities, especially growth stocks, enter bear territory, bonds usually go in the opposite direction, rising with interest rates and an influx of capital seeking a safe haven.

Traditionally, a portfolio with a 60% allocation to equities and 40% allocation to bonds should come into its own during periods like this year. The bond allocation would be expected to cushion the blow of an equities bear market, paying its way for lower returns than equities during the good times.

But in the third quarter of this year, a traditionally conservative portfolio with a 40% allocation to equities would have actually underperformed one 100% allocated to equities. Inflation remaining stubbornly high this year despite the Fed and other central banks including the Bank of England has upended the conventional investing wisdom that equities and bonds do not both move in the same direction – the foundational principle of traditional diversification strategies.

But will that change in 2023? Could bonds outperform equities next year in a way that means investors should consider increasing their portfolio weighting towards fixed-income investments?

Why have bonds not lived up to their billing in 2022?

Nothing has worked well for diversified investors this year, not equities, not bonds and not the traditional 60/40 portfolio split between the two asset classes. But will this year prove a blip or has the relationship bet equities and bonds changed fundamentally?

Analysts including Morningstar’s Lauren Solberg believe the performance of the bond market next year will be most influenced by inflation. If inflation remains high, bonds could continue to struggle alongside equities. However, if major central banks including the Fed manage to wrestle inflation back down towards target levels, especially if that is accompanied by a recession, bonds would be expected to revert to their traditional anti-correlation with equities.

This year, one they would have been expected to benefit from a flight from equities and rising interest rates, has been the worst for bonds in modern history. It’s also been the only time in history that stocks and bonds have both recorded losses for three consecutive quarters.

chart2

Source: Morningstar

Sky-high inflation, which is bad for both equities and bonds, has negated the usually positive impact on bonds of a bear market for equities and rising interest rates.

Will bonds return to form in 2023?

There is differing opinion among analysts and market observers about what 2023 might hold in store for bond markets. The more common expectation is that bonds will do a much better job at insulating portfolios than this year with yields now much higher than they were in late 2021.

However, others believe that a secular change in the correlation relationship between equities and bonds is now underway. That is based on the expectation that inflation, even if it falls meaningfully in 2023, could remain at higher levels and be more prone to volatility than it has been over the past couple of decades.

Recent research published by Truist Wealth shows that U.S. government-backed debt has delivered average annual returns of 6.6% over the past four recessions, beating both high-yield ‘junk’ and investment-grade corporate bonds. That would indicate 2023 could be a very good year for bond investors with the right exposure – a focus on government rather than private sector debt. However, we’ve already seen a significant divergence from historical patterns this year.

Marta Norton, chief investment officer for the Americas at Morningstar Investment Management, believes 2023 could be hold opportunities for fixed income, across government-backed and corporate bonds:

“When you look over the past 10 years, it’s really only been an equity story: It’s been such a good market to take on equity risk, a tremendously good time to be an equity investor. But today, it’s harder to know where to invest the marginal dollar. Fixed income is looking more appealing than it has in some time. You don’t have to take enormous risk to earn some return, and that’s a mindset shift to the environment we had before.”

While she acknowledges that U.S. equities now look a lot more attractively priced than they did a year ago, she cautions against investors rushing back to the market and thinks the bear cycle could last longer than many expect. She says the “buy the dip”mentality that has worked so well over the past decade could mean investors risk suffering meaningful losses by moving into a losing market.

She doesn’t advise not investing in equities but that investors should instead drip feed any investment instead of trying to time a bottom.

She is more confident in the opportunities around fixed income investments, especially higher-quality, shorter-dated fixed income, which she says comes with the added benefit of lower risk, especially if a deeper recession materialises.

Christian Mueller-Glissmann, head of asset allocation research within portfolio strategy at Goldman Sachs agrees. He notes the gap in yields between stock and bonds has narrowed substantially since the COVID-19 crisis and is now relatively low. The same is true for riskier credit, which yields relatively little compared with practically risk-free Treasuries and means investors are getting little premium for the risk of owning equities or high-yield credit in comparison to lower-risk bonds. As a result, equities and high-yield debt are particularly exposed to an economic slowdown or recession:

“That just makes equities and riskier debt very vulnerable for disappointments on growth next year”.

Lisa Shalett, chief investment officer of Wealth Management at Morgan Stanley is also championing bonds for 2023. She concludes:

“We continue to believe it is premature to call an end to the bear market for U.S. stocks. Investors may have moved on from inflation concerns, but they cannot ignore the economic picture. For now, investors should consider reducing U.S. large-cap index exposure. Instead, look to Treasuries, munis and investment-grade corporate credit. Stay patient and collect coupon income.”

What about UK Gilts vs London-listed equities?

Should investors mainly exposed to London-listed rather than Wall Street-based equities be thinking along similar lines? The FTSE 100 has remained largely flat in 2022, finally benefitting from its lack of growth stocks and heavy weighting to more traditional sectors like energy, commodities and finance.

London-listed equities were considered cheap before 2022, which is another reason valuations have not fallen in the same way as they have in the USA. On the other hand, they are also less likely to see as much upside if a recession is avoided next year and economic sentiment improves.

The FTSE 100 has also been boosted considerably by the soaring valuation of big energy companies like BP and Shell and utilities such as Centrica, which has compensated for companies in other sectors, such as consumer cyclicles, losing value. Energy prices easing off next year, which is by no means guaranteed depending on how geopolitical factors play out, would be negative for the benchmark index.

The UK’s outlook for both equities and government debt is not particularly positive. RBC Wealth Management summarises:

“A crippling cost of living, austerity measures, and the Bank of England tightening monetary policy will all conspire to create a prolonged recession in the UK, in our view. We advocate an underweight position in UK equities, although we are mindful that depressed valuations may produce interesting dividend income opportunities. We have a negative outlook on UK sovereign debt, as increased government debt issuance and the Bank of England proceeding to sell its Gilts portfolio will likely create a Gilt supply glut.”

While it may not appeal to patriotic sentiment, investors looking for the best risk-to-reward ratio in 2023 might be better served to invest in U.S. Treasuries than UK Gilts if a fixed income approach is favoured.

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Call For Investigation Into Mortality Rates As Australia Sees Death-Rate Spike

Call For Investigation Into Mortality Rates As Australia Sees Death-Rate Spike

Authored by Victoria Kelly-Clark via The Epoch Times,

Australia has…

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Call For Investigation Into Mortality Rates As Australia Sees Death-Rate Spike

Authored by Victoria Kelly-Clark via The Epoch Times,

Australia has seen a spike in its mortality rates in 2022, with the Australian Bureau of Statistics (ABS) stating that by the end of August 2022, 128,797 deaths had been registered, which is 18,671 deaths, or 17 percent, more than the historical average.

In the data release on Nov. 25, the ABS noted that of registered deaths; there had been a rise in the number of Australians dying from dementia (18.9 percent above the baseline average), diabetes (20.8 percent higher than the baseline average), cancer, and COVID-19.

Karen Cutter, a spokesperson for the Actuaries Institute of Australia (AIA) said in a media release (pdf) that even after the Institute’s COVID-19 Mortality Working Group removed all “from” and “with” COVID-19 deaths, it was not clear why Australians were dying in larger numbers from other diseases such as ischaemic heart disease, cancer, and cerebrovascular disease in 2021 and 2022.

In an analysis (pdf) from Nov. 3, the AIA noted that 1,200 more Australians had died from ischaemic heart disease than expected, while cerebrovascular disease had 450 more deaths than normal. Meanwhile, mortality rates from diabetes increased by 400 deaths, and dementia saw an extra 800 deaths.

According to the ABS, between January and August this year, 7,727 Australians died from COVID-19.

“It is not clear what might be driving this, although we expect that at least part of the excess will be in respect of people who otherwise may have succumbed to respiratory disease in 2020 and 2021,” said Cutter.

They also said that diabetes deaths have generally been higher than expected throughout the pandemic.

Cutter noted that the AIA had also noticed that of the excess deaths in the 0-44 and 45-64 age bands were small, and the number of women dying was higher than expected.

She has called on the federal government to launch an inquiry into the cause of the spike.

“The differences are worth investigation, although the small numbers mean that there is considerable natural variation,” she said.

Spiking Mortality Rates a Global Phenomenon

The spike in mortality rates is being experienced globally, with the UK’s Chief Medical Officer, Sir Chris Whitty, as well as Sir Patrick Vallance, the country’s Chief Scientific Adviser, declaring the country is facing a “prolonged period” of excess deaths after people differed treatment during the initial stages of the pandemic.

Meanwhile, the UK’s health secretary Steve Barclay said that the government needed to come clean about the excess deaths.

In a speech to the Spectator Health Summit in London on Nov. 28, Barclay said that the government must share the scale of the COVID backlog, which he estimated was now “around now 7.1 million patients.”

We know from the data that there are more 50-to 64-year olds with cardiovascular issues. It’s the result of delays in that age group seeing a GP because of the pandemic and, in some cases, not getting statins for hypertension in time,” he said.

“When coupled with delays in ambulance times, we see this reflected in the excess death numbers. In time, we may well see a similar challenge in cancer data,” Barclay said.

COVID-19 Lingering Effects

The AIA agrees that delayed medical treatment may be a cause behind Australia’s rising death rate.

In an analysis of the pandemic in 2022, they said that it was highly likely that delays in medical care was a contributing factor to the excess death rates from other diseases.

“Pressure on the health, hospital and aged care systems, including ambulance ramping and bed block, could lead to people not getting the care they require, either as they avoid seeking help, or their care is not as timely as it might have been in pre-pandemic times,” they said.

“There is some evidence that this may be affecting cancer deaths. It may also be a factor in higher deaths from other causes, such as ischaemic heart disease, diabetes, and the large ‘other’ category.”

They also noted that COVID-19 lingering health effects could also be contributing to the increased rates.

Studies show that coronavirus is associated with increased mortality risks from heart disease and other causes. However, because doctors certifying the death would not necessarily know of the infection if it had occurred months prior, this could demonstrate a causative link several months after recovery from COVID-19.

Tyler Durden Thu, 12/08/2022 - 21:00

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