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Ben Kramer-Miller

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  • Update: Golden Queen Mining Shareholders Approve The Gauss LLC JV Arrangement [View article]
    Wikipedia is wrong
    When interest rates rise it means that people are selling interest bearing assets and exchanging them for assets that have intrinsic value that doesn't depend on them paying a dividend or coupon. Bonds are only valuable insofar as they generate interest. The same with stocks, which are only valuable insofar as they generate cash-flow. And they tend to trade together despite popular opinion. Notice that as interest rates on bonds are at historic lows the same can be said about stock dividends and earnings yields (inverse p/e ratios). So when interest rates rise bonds and stocks will fall while gold and other commodity prices will rise.
    Oct 30, 2014. 09:53 PM | Likes Like |Link to Comment
  • Update: Golden Queen Mining Shareholders Approve The Gauss LLC JV Arrangement [View article]
    The great thing about discount rates and gold miners is that if interest rates spike--invalidating models with lower discount rates--gold will rise
    Oct 30, 2014. 07:23 PM | Likes Like |Link to Comment
  • Update: Golden Queen Mining Shareholders Approve The Gauss LLC JV Arrangement [View article]
    The market you use shouldn't matter with regards to exchange rate. If the stock goes up 5% in USD and the CADUSD cross rises 1% then the stock should go up 6% in CAD. I'd rather buy in the US given the added liquidity.
    Oct 30, 2014. 04:26 PM | Likes Like |Link to Comment
  • Update: Lake Shore Gold Continues To Find High Grade Gold Zones At Its Timmins Deposit [View article]
    It depends on what LSG shares do in response to an increase in the gold price. The best time to buy the company was when it had a lot more debt, less production, and higher costs. You had to believe that management was capable of turning the company around when others didn't. So frankly I'm less interested in figuring out at which gold price I would like LSG and more interested in finding good companies that the market doesn't like and selling them when the market likes them. I also think LSG is going to be on the acquisition path and am more interested in potential targets such as Lexam VG and Gowest Gold.
    Oct 23, 2014. 07:12 PM | 1 Like Like |Link to Comment
  • Be Careful: Lake Shore Gold's Performance May Have Reached An Intermediate-Term Plateau [View article]
    The grade is fine for an open pit resource. Just to clarify there are no reserves yet as the economics haven't been worked out. If the resource is 2 MM oz. the reserves will probably be substantially lower. Barring an enormous discovery the project is years away from 5 MM oz. of reserves.
    Oct 20, 2014. 03:08 PM | Likes Like |Link to Comment
  • Update: Allied Nevada Releases Q3 Production Figures, Hycroft Feasibility Study Highlights [View article]
    My guess is that there are no financiers. Who is laying out $1.3 billion for a gold mine in this environment, especially to an indebted company?
    Oct 18, 2014. 02:14 PM | Likes Like |Link to Comment
  • Update: SilverCrest Reports Record Q3 Silver Production [View article]
    I don't disagree and it is a move that makes sense but still it jeopardizes the growth aspect of the thesis, and I remain cautious. Frankly I want to see them buy GoldSource Mines to jump-start growth.
    Oct 15, 2014. 01:22 PM | 1 Like Like |Link to Comment
  • Update: Royal Gold Receives 13,600 Oz. Of Gold From Mt. Milligan In Q3 [View article]
    Silver Wheaton's probably the cheapest right now, but it also has the least amount of optionality.
    Oct 14, 2014. 04:17 PM | Likes Like |Link to Comment
  • A Closer Look At Franco Nevada's Candelaria Stream [View article]
    Regarding the difference between royalties and streams I just put out a short piece that speaks to your question.
    Oct 14, 2014. 02:18 PM | Likes Like |Link to Comment
  • A Closer Look At Franco Nevada's Candelaria Stream [View article]
    Sorry, I forgot your second question.
    So basically the appeal of the royalty is in its perpetual optionality. When LAssonde says "stream" in his interview with Sprott you have to realize that he's using a different definition of the term, meaning that the streaming company makes an up front payment in exchange for the right to buy a fixed amount of metal at a given price, or a portion of the metal produced for a fixed amount of time. The same criticism can actually be applied to some royalties such as Royal Gold's Mulatos royalty that stops after Alamos produces a certain amount of gold.
    The deciding factor is perpetual optionality, not whether it is legally speaking a royalty or a stream. The difference simply is that for a royalty the mining company pays a percentage of the revenue generated from the production at a particular mine, or a percentage of a subset of the revenue such as just the revenue from the gold production. A stream means that the royalty/streaming company is actually buying the metal.
    The appeal of the stream is that it is legally far simpler than a royalty. So a stream that allows a company to buy 10% of the gold production from a 100k oz./year producer at $500/oz means that the company exchanges $5 million for 10k oz. of gold each year. You could construct a royalty with the same financial implications (a 10% gross smelter return royalty minus $500/oz) but in that case the royalty company would just get cash.
    Recently we have seen far more streaming deals and I went to a conference where a fund manage was asked about the issue and he likes the simplicity of streaming agreements vs. royalties.
    But you can still get the perpetual optionality on the stream that makes it such a powerful investment proposition, and you can see that in the incredible growth that Silver Wheaton has shown as purely a streaming company (although it did buy a royalty recently).
    Oct 13, 2014. 11:06 PM | Likes Like |Link to Comment
  • Update: Input Capital Provides Q2 Updates For Its Fiscal 2015 [View article]
    Agriculture is seasonal so the company is going to see more revenue when crops are being harvested and it is going to make more streaming deals during the growing season when farmers are going to be spending more money. But the streaming model has high operating margins and so I don't see this as a major issue for investors.
    Oct 13, 2014. 03:47 PM | Likes Like |Link to Comment
  • A Closer Look At Franco Nevada's Candelaria Stream [View article]
    To answer your first question--they pretty much all do for the most part. The group as a whole has outperformed and you would have done incredibly well in Royal Gold and Silver Wheaton. There are a couple of things to point out. First, there are a couple of companies with streaming deals that have time limits or production limits such as Royal Gold's Mulatos royalty and Silver Wheaton's San Dimas stream. These deals clearly lack the perpetual optionality that Lassonde values. However such restricted deals comprise a small portion of these companies' portfolios and it isn't a major issue. Royal Gold is just as good as Franco Nevada. The company has done a phenomenal job of creating value for its long-term shareholders. The same goes for SLW.
    One issue that stands out--and this is something that big guys have avoided--is that Sandstorm Gold's deals are large compared to the size of its partners' projects. So the Aurizona stream is for 17% of production where FNV's deals on primary gold mines are usually <5%. So Sandstorm is getting a huge cut and that can jeopardize the success of its partners as we are seeing with Luna Gold right now, which has an effective realize gold price that is about $100/oz less than spot because of what it pays to Sandstorm.
    Oct 13, 2014. 03:19 PM | Likes Like |Link to Comment
  • Goldcorp: The Bear Case [View article]
    If you're looking for a major probably IAMGOLD, Goldfields, or Kinross
    Oct 13, 2014. 02:06 PM | 1 Like Like |Link to Comment
  • Update: Silver Standard's Q3 Production Results [View article]
    I haven't looked at CDE in a while, but I'll go over it.
    Oct 13, 2014. 02:05 PM | 1 Like Like |Link to Comment
  • Goldcorp: The Bear Case [View article]
    You need to realize that stated book value is a highly subjective metric. It depends on a lot of things such as how steeply you discount cash-flow and how you calculate depreciation of plant equipment. AS investors from the outside looking in we have to view these numbers as suspect, and realize that for practical purposes "book" value is the liquidation value of the company's assets plus its discounted cash-flow minus its liabilities, not what some balance sheet says it is. Feel free to do a balance sheet analysis of GG to show how the company is worth $21 billion.
    GG's current NEV sits at 25-times operating cash-flow with its longest mine life extending out maybe 14 years. The company needs to find more gold in order to bridge the difference and that means a lot of capital expenditures.
    Oct 12, 2014. 08:01 PM | 1 Like Like |Link to Comment