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Update: Alamos Gold Gets Its EIA Approved For Its Agi Dagi Project In Turkey
- Alamos Gold Announced that the Turkish Ministry of Environment and Urbanization signed off on the company's Environmental Impact Assessment (EIA) for its Agi Dagi Project.
- This fits with my May projection that the company will bring the Agi Dagi Project into production in late 2016/early 2017--18 months after the adjacent Kirazli Project begins producing.
- This is good news, especially given the company's Mulatos Project has been performing terribly with lower production and higher costs: this should shift emphasis onto the company's other assets.
Update: Asanko Gold Commences Construction Of Phase 1 Of Its Asanko Mine In Ghana
- Asanko Gold has begun construction at its Asanko Mine: the company should begin commercial production in 2016.
- This is in line with my expectations laid out in January.
- While some of the upside is gone the shares still offer excellent value and gold price leverage, and I continue to be a buyer on weakness.
Update: Avnel Gold's Earnings And Pre-Feasibility Study Commencement
- Avnel Gold reported its Q2 earnings and announced that it has commenced its pre-feasibility study for its Kalana Project.
- The bullish thesis I put forth in April remains intact as management moves the Kalana Project forward as expected.
- As I anticipated in April the stock has pulled back as investors have taken profits, but the shares have reached support making them extremely compelling for long-term investors.
Maximize Your Silver Exposure Through Junior Miners That Trade Like Mispriced Call Options
- Silver is dirt cheap and it has the potential to outperform gold.
- Silver investors should look for ways to maximize their exposure by buying miners that are highly leveraged to the silver price for their optionality.
- This is difficult since there aren't many primary silver miners and because these companies often have a lot of exposure to other metals.
- However there are quality choices out there, and if you buy them while silver is cheap you can do incredibly well as the silver bull market continues.
WisdomTree Investments' International Expansion Efforts Will Almost Certainly Pay Off Big Time
- WisdomTree has been actively pursuing international opportunities in 2014.
- While these opportunities have yet to generate tangible returns, they are very real and have the potential to become a substantial cash-flow source for WisdomTree with very little risk.
- If we couple this with my May thesis that the company offers good value, it is like getting a free option on international expansion, making the shares that much more.
Update: Gold Fields Sells Its Stake In Chucapaca To Its JV Partner, Retains A 1.5% NSR Royalty
- Gold Fields continues to divest non-core assets in riskier jurisdictions with the sale of its 51% stake in Chucapaca - an exploration project in Peru - to JV partner Buenaventura.
- This is in-line with my August 2013 thesis that the company is refocusing its business on cash-flow generating businesses in low-risk jurisdictions.
- The company's transformation isn't over but it is getting there, and the stock remains compelling, particularly in a higher gold price environment.
Update: Orosur Mining's Earnings
- Orosur Mining reported strong 2014 earnings results of $5.1 million as production costs came down.
- The company's production figures surpassed my expectations.
- The company also increased its reserves at San Gregorio.
- The shares are inexpensive with a P/E ratio of 4.5 making them extremely compelling.
Introducing The Sprott Gold Miners ETF - A Superior Alternative To The Market Vectors Gold Miners ETF
- Last month Sprott Asset Management released its own gold miner ETF.
- Unlike the more popular Market Vectors ETF, this fund overweights stocks that have low debt, high growth, and low costs.
- These features make the fund categorically superior, and despite minor drawbacks, it should be your top choice if you don't have the time and the knowledge to pick your own.
Update: Minco Silver Buys 5% Of Gold Road Resources
- Minco Silver announced that it bought 5% of Gold Road Resources--an Australian junior gold miner with exploration property and a 3.8 million oz. resource in Western Australia.
- Given the company's capital position it can easily afford to do this, although the motivation behind it is questionable.
- I had not anticipated this when I analyzed the company back in June.
- While this is unusual it doesn't impact the investment thesis given that the company can still afford to finance its Fuwan Project given its cash and its line of credit.
Update: Trevali Mining Earnings 'Weak' But Don't Impact The Long-Term Investment Thesis
- Trevali Mining reported weaker revenue and earnings on lower production at its Santander Project.
- This should be a temporary measure as management is modifying Santander's operations.
- Despite this weakness costs on a per-tonne basis are lower than I expected last August.
- A pullback in zinc and in Trevali shares is warranted, but I haven't sold my position and I like the shares under $1.
Update: Mandalay Resources' Largest Shareholder To Divest 40 Million Shares - Expect Near-Term Weakness And A Buying Opportunity
- West Face Capital - Mandalay Resources' top shareholder - will divest 40 million shares through a secondary offering through BMO Capital Markets.
- This will increase supply significantly for a stock that trades 720,000 shares per day.
- With the stock trading near all-time highs and with metal prices weak, this could trigger a sell-off.
- This was unanticipated in January, but I think it can provide an opportunity for long-term investors.
- I am not a buyer at current levels, but I am expecting weakness that could lead to a buying opportunity, and I am a buyer under $0.90/share.
Update: Seabridge Gold's Q2 Earnings Support The Long-Term Investment Thesis
- Seabridge Gold continues to develop the KSM Project as the environmental assessment was approved by the British Colombian Government.
- Seaboard's management has become near-term bullish on gold which is a primary topic in the company's Q2 Report to Shareholders.
- These developments fit my October investment thesis, which is that Seabridge is a gold leverage play; the first point in particular eliminates a great deal of regulatory risk.
- The stock has been strong since BC's environmental assessment approval, and it might be time for a pullback.
Update: TriMetals Mining Reports Q2 Earnings
- TriMetals Mining continues to focus on exploration and metallurgy at its Gold Springs Project.
- Management has reduced G&A Costs over the quarter which means the company is preserving capital.
- My bullish thesis remains intact as the market cannot get over the loss of the Malku Khota Project.
Update: Aura Minerals Earnings - Slashes Costs And Generates A Profit In Q2, Investors Shrug
- Aura Minerals reported incredibly strong second quarter results as costs came down at the company's San Andres Project.
- The company turned a $0.02/share profit for the quarter (this is a $0.12/share stock).
- The numbers from San Andres blew past my expectations, the market will re-rate this hated stock soon enough.
Update: Great Western Minerals Reports Strong Q2 Earnings
- Great Western Minerals reported a 31% increase in sales for its Less Common Metals (LCM) unit: losses declined.
- The company released a robust feasibility study for its Steenkampskraal Project.
- While I didn't anticipate such strong figures from LCM, these figures show the strength in the company's downstream operation make the potential synergies with the upstream operation stronger.
- I remain convinced that this is a good speculative stock for rare earth element investors.
Update: Luna Gold's Q2 Earnings Weren't So Bad
- Luna Gold broke even in Q2 as the company's production declined on heavy rainfall.
- The company was forced to process lower grade stock-piled ore which pushed costs higher.
- As I suggested in my article last week, this shouldn't be a regular occurrence and the company should benefit from its strengthened partnership with Sandstorm Gold.
- Shares are in the doldrums at multi-year lows: maybe the bottom hasn't been reached yet but the risk/reward is favorable.
Book Review: Dimitri Speck's The Gold Cartel
Sat, Aug. 16 • 4 Comments
- Dimitri Speck's The Gold Cartel provides readers with an in-depth analysis of the gold market and the thesis that it is manipulated.
- Speck provides conclusive statistical evidence of this manipulation with a qualitative explanation as to why it is taking place.
- Investors interested in the gold market looking for a very strong case supporting market intervention are urged to read this book--especially the first part.
Update: Northern Graphite Reports A High Spherical Graphite Yield Making The Shares More Compelling
- Northern Graphite reported that about half of its large flake graphite has a 50% spherical graphite yield.
- This confirms my claim that Northern Graphite is a good stock for investors looking for high-value graphite.
- However, the recent spike in the share price leaves that stock vulnerable to a pullback from a technical standpoint.
- Fundamentally, however, this news probably increases the value of the company's graphite deposit on a per-tonne basis, which increases the Bissett Creek Deposit's value.
- The stock is ultimately a good one to own on a pullback.
Update: Osisko Gold Royalties Learns The Results Of The Updated Reserve Estimate For Canadian Malartic
- Osisko Gold Royalties' primary asset is a 5% NSR royalty on Canadian Malartic owned by Agnico Eagle and Yamana Gold.
- The latter two companies updated their reserve estimates for the mine to roughly 9 million ounces.
- At 600,000 ounces of production per year, this is enough production for 15 years, or slightly better than I expected.
- Osisko Gold Royalties is still a new company so it is speculative, but on a price to cash-flow basis, it is cheap among its peers, making it compelling.
Update: St. Andrew Goldfields' Earnings
- St. Andrew Goldfields reported a small profit as the company's higher cost operations produce less.
- The company's main driver going forward is its low-cost Taylor Project, which should be in production next year.
- Production costs were in line with my estimates but below my estimates ex-Taylor.
- The company is still highly undervalued and gold bulls should consider taking a position at the current price.
Update: Argonaut Gold Is Better Off Than The Company's Q2 Financials
- Argonaut Gold announced Q2 earnings came in at $2 million with $13.5 million in operating cash-flow and $40.9 million in revenues.
- The figures are weaker than expected but the company is ramping up its operations.
- As I expected production would be weak but increase as the year goes on.
- Investors should also keep in mind that the company's project pipeline is extensive and not reflected in these numbers.
- I continue to like Argonaut Gold as its share price remains depressed.
Update: MAG Silver's Q2 Earnings
- MAG Silver reported a Q2 loss of $2.1 million for the second quarter.
- This money went to good use as the Juanicipio resource is considerably larger now.
- This fits my November thesis that MAG Silver will create value for silver bulls.
- Shares are up 65% since then and while value has been created interested investors should wait for a pullback.
Update: J.C. Penney's Earnings - Enthusiasm May Wane Quickly As Problems Persist
- J.C. Penney reported a quarterly loss of $176 million on revenues of $2.8 billion.
- The company is growing its sales but it is still saddled with debt, which is a problem I anticipated.
- The company has thus far been able to avoid more dilution, which was another prediction I made earlier this year.
- The company remains vulnerable in a fiercely competitive and tepid retail environment. Proceed with caution.
Update: Rio Alto Mining's Q2 Earnings
- Rio Alto reported earnings of $15.2 million and operating cash-flow of $22.4 million.
- This reflects strong production figures, which I pointed out a month ago, but the company's long-term outlook depends on its long-term La Arena mine plan, which has yet to be updated.
- With the stock price rising recently despite my concerns, I would continue to be cautious in this name.
Update: Pan American Silver's Q2 Earnings Disappoint As Costs Remain High
- Pan American Silver reported a slight net loss of $5.7 million, operating cash-flow of $48.7 million on revenue of $200.8 million.
- Tepid growth, high costs, and dormant assets continue to hold the stock back.
- As I argued last July, the stock will generate leverage to a rising silver price but it is dead money otherwise.
- A weak share price will hopefully incite management to make an acquisition using its large cash hoard, and I think the stock is interesting on weakness.
Update: Sandstorm Gold's Q2 Earnings
- Sandstorm Gold reported a profit of $3 million and operating cash-flow of $9.4 million on revenues of $13.2 million.
- Slightly lower revenues are a result of lower gold prices offset by higher attributable production despite lower production at Aurizona, Santa Elena, and Black Fox.
- These figures don't reflect the true potential of Sandstorm's streaming assets that I have pointed out in the past.
- Given this, and given other, more recent developments, I am positive on the stock and want to be a buyer at around $5 - $5.50.
Update: SilverCrest Mines Earnings - Excellent Beneath The Surface
- SilverCrest Mines reported Q2 earnings of $1.3 million, cash-flow of $3.1 million on revenues of $7.7 million.
- This represents a substantial decline as the company's Santa Elena Mine transitions from open pit to underground operations.
- The transition was smoother than expected reflecting management's ability to execute as I've pointed out in the past.
- The shares are slightly overvalued but they are worth accumulating on pullbacks.
TrueGold Is Fully Financed And Has 44% Upside From Here
- TrueGold's Karma Project is being constructed, and it should be in production by the end of next year.
- Thanks to the recent financing deal with Franco Nevada and Sandstorm Gold TrueGold doesn't have to worry about financing.
- Despite the fact that there are many royalty and streaming claims on the project it is still valuable even at lower gold prices.
- The shares trade at just a slight premium to the cash the company has on its balance sheet, and added to the value of the project it has significant upside.
Update: Chaparral Gold's Q2 Earnings
- Chaparral Gold's Q2 earnings reflect the company's fiscal conservatism with a loss of just $0.55 million.
- The company is bringing its Gemfield Project forward on the permitting front while concurrently pursuing "strategic alternatives" in order to maximize shareholder value.
- The former point speaks to the company's realistic path towards production of a low-cost gold mine in Nevada, a central point of my investment thesis from last month.
- I still consider this to be a compelling investment with near-term cash-flow potential and leverage to the gold price.
Update: Iamgold's Q2 Earnings
- IAMGOLD reported a second quarter profit of $8.8 million and operating cash-flow of $96.8 million on revenues of $288 million.
- The company brought down production costs to $1,136/oz. which is great news considering that production costs were an issue for the company last year.
- As I predicted last September the company's niobium mine - Niobec - is leading the way in terms of profitability.
- Going forward the company's costs should come down even more as it began production at its low-cost Westwood Project.
- After a long period of under-performance IAMGOLD shares are set to trade higher assuming the gold price holds up, but it is still risky if the gold price declines.
Update: Klondex Mines' Q2 Earnings
- Klondex Mines reports net income of $4.4 million and cash-flow of $14.2 million on revenue of $36.4 million.
- The company's second quarter was the first of full production, and as I expected the Fire Creek Project is highly profitable.
- While the current mine plan is short, Klondex's Fire Creek Project has excellent exploration potential making this a compelling speculation stock.
Update: Silver Wheaton's Earnings Decline On Lower Production, Silver Prices
- Silver Wheaton reported earnings of $63.5 million on revenues $148.6 million.
- Silver equivalent production fell by 4% to 8.4 million ounces.
- This reflects weakness that I didn't anticipate in January, although a short-term setback in growth shouldn't perturb long term investors.
- The stock will likely pull back, especially since it has been rising while silver has been weak, but the stock is worth buying on a pullback.