Comments on EMU@GSR's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/emu-gsr/articles http://seekingalpha.com/article/160535-barrick-gold-a-5-6-billion-blunder?source=feed#comment-669829 669829 Thu, 10 Sep 2009 02:56:27 -0400
The key to Barrick's reversal of fortune, not surprisingly, is the price of gold. When the price of bullion was low, as it was for much of the 1980s and 1990s, Barrick's aggressive hedging program—which was pioneered by current Chief Executive Randall Oliphant—made it far more profitable than most of its peers, who were exposed to the spot price.

Barrick, however, managed to negotiate forward contracts that locked in relatively high prices for its production, and the use of this hedge "book" helped produce billions more in profits than the company would otherwise have had. The dependability of this strategy was the main reason for the premium on Barrick shares.

Unfortunately for Barrick, however, the price of gold couldn't stay down in the mid-$200 range forever, and as it's risen over the past year or so to the upper $300 level, Barrick's hedging program has changed from being a benefit to a liability. That has been one of the main factors depressing its share price, while shares of its competitors such as Placer Dome Inc.—which doesn't have a big hedge book—have risen.

In fact, in December alone the share price of Placer Dome climbed by more than 29 per cent, while Barrick's stock rose by only 7 per cent. Part of the reason for Placer's rise is that it recently completed its takeover of Australia's AurionGold Ltd., substantially increasing its asset base. But the company has also benefited from a flight of investors toward gold producers that are exposed to gold spot prices, because of the profit leverage that provides.

That's why earlier this month Barrick's stock was down 12 per cent from January of last year, while the Toronto Stock Exchange gold index was up 23 per cent in the same period, and some producers such as Newmont Mining Corp.—now the world's largest producer after its merger with Normandy Mining Ltd.—has risen by about 40 per cent. Barrick has been reducing its hedge position and has pledged to shrink it even further, but that takes time.

Barrick also lost some of the market's trust in September, when it came out with a surprise profit warning, saying production problems at several mines would cut its year-end profit by as much as 30 per cent. This was a shock for many investors, who had become used to the company outperforming, or at least meeting, its estimates like clockwork. The combination of that and the market's fear about the impact of hedging on Barrick's profit has kept the stock under pressure.

Still, there are analysts who believe that investors have overreacted to the hedging issue, and that based on Barrick's forecasts for the next two years, the company's growth prospects justify a substantially higher share price. According to Merrill Lynch, for example, Barrick deserves a premium valuation because of its "above-average growth prospects going forward." By using a multiple of 2.5 times enterprise value, Merrill comes up with a target price for the stock of $22 (U.S.), versus about $16.50 at the end of January.

Dundee Securities said that the stock has been a "chronic underperformer over the past three months, mostly as a result of misconceptions regarding their prodigious hedge book," and that the brokerage believes "investor sentiment will slowly change as Barrick shows that it can deliver at spot prices." Dundee says it's looking for a 12-month share price of $41 (Canadian) and has a "strong buy" rating on the stock.

Bear Stearns, meanwhile, said in a report last month that all the negative news about Barrick has already been reflected in the stock price, and that the company "continues to maintain a superior balance sheet, an enormous reserve base, a more global presence, diversified country risk, and strong organic growth prospects that few can match." The firm maintained its "market overweight" rating and target of $21 (U.S.).

Mathew Ingram joined The Globe and Mail's online news team in June of 2000, after spending four years as the Western business columnist, based in Calgary.]]> http://seekingalpha.com/article/160535-barrick-gold-a-5-6-billion-blunder?source=feed#comment-669698 669698 Wed, 09 Sep 2009 20:29:44 -0400 gata.org/node/7773)

"In theory Barrick should have to go into the market and buy gold to deliver into its obligations instead of paying cash. Of course this would blow the gold price sky-high and thus might bankrupt the company in the process. But this is not the end of the story because the counterparty to these hedges, probably JPMorganChase, no doubt also has obligations to deliver to some other entity the gold it was expecting from Barrick -- maybe a central bank. Will the counterparty also be able to settle its obligations in cash or will significant quantities of gold have to be purchased? Barrick may be getting off the hook but this technical default creates a shortage of physical gold...
This is explosive news for the gold market. The run on the Bank of the Gold Cartel is unfolding. Much more gold has been sold than can be delivered. The implications for the gold price are mind boggling."

A monstrous short squeeze if ever there was one.
]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-668594 668594 Wed, 09 Sep 2009 11:02:44 -0400 www.chinaenergyrecover... ]]> http://seekingalpha.com/article/160535-barrick-gold-a-5-6-billion-blunder?source=feed#comment-667753 667753 Wed, 09 Sep 2009 07:39:18 -0400
It may be that advance word or this transaction, which puts a floor under gold (for awhile), is what was behind gold's rise in the past month. ]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-660554 660554 Thu, 03 Sep 2009 13:27:40 -0400
Biotic Carbon, the carbon transformed by life, should never be combusted, oxidized and destroyed. It deserves more respect, reverence even, and understanding to use it back to the soil where 2/3 of excess atmospheric carbon originally came from.

Biochar allows the soil food web to build much more recalcitrant organic carbon, ( living biomass & Glomalins) in addition to the carbon in the biochar.

Every 1 ton of Biomass yields 1/3 ton Charcoal for soil Sequestration (= to 1 Ton CO2e) + Bio-Gas & Bio-oil fuels = to 1MWh exported electricity, so is a totally virtuous, carbon negative energy cycle.
.
This is what I try to get across to Farmers, as to how I feel about the act of returning carbon to the soil. An act of penitence and thankfulness for the civilization we have created. Farmers are the Soil Sink Bankers, once carbon has a price, they will be laughing all the way to it.

Unlike CCS which only reduces emissions, biochar systems draw down CO2 every energy cycle, closing a circle back to support the soil food web. The "capture" collectors are up and running, the "storage" sink is in operation under our feet. Pyrolysis conversion plants are the only infrastructure we need to build out.

.Biochar viewed as soil Infrastructure; The old saw;
"Feed the Soil Not the Plants" becomes;
"Feed, Cloth and House the Soil, utilities included !".
Free Carbon Condominiums with carboxyl group fats in the pantry and hydroxyl alcohol in the mini bar.
Build it and the Wee-Beasties will come.
As one microbiologist said on the Biochar list; "Microbes like to sit down when they eat".
By setting this table we expand husbandry to whole new orders of life.

One aspect of Biochar systems are Cheap, clean biomass stoves that produce biochar and no respiratory disease. At scale, the health benefits are greater than ending Malaria.
unccd.int/publicinfo/p...

Endorsments:
Secretary of Interior Ken Salazar, NASA's Dr. James Hansen
Charles Mann ("1491") in the Sept. National Geographic
Dr. James Lovelock; " Mankinds only Hope"
Tony Blair, Malcomb Turnbull, Richard Branson
Dozens of USDA-ARS Researchers


Internationally, the work of the IBI fostering the application by 13 countries for UN recognition of soil carbon as a sink with biochar as a clean development mechanism will open the door for programs across the globe.
biochar-international.....

Reports:
This new Congressional Research Service report (by analyst Kelsi Bracmort) is the best short summary I have seen so far - both technical and policy oriented.
assets.opencrs.com/rpt... .

Carbon to the Soil, the only ubiquitous and economic place to put it.





]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-660449 660449 Thu, 03 Sep 2009 12:21:28 -0400 Natural gas has the possibility of weaning us from oil while we develop other sources. The wholesale infrastructure is already in place and converting vehicles and power plants is not expensive or difficult. And it would create jobs. The money saved by not importing oil will pay for the changes needed for various approaches.
Glad to see mention of transmission efficiencies as crucial to the changeover to a non-oil based economy. Various technologies already exists to make numerous improvements. We have unlimited clean energy supplies in hydro, tidal, wind, geothermal, biomass, et al. The roadblocks are political resistance and general ignorance. ]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-660343 660343 Thu, 03 Sep 2009 11:20:48 -0400 I would assume that the raw materials are almost free.
On a grass roots level burning wood catches on during times of increased fuel costs. It will be interesting to see if the macro will refect the micro.
Keep the home fires burning.]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-660159 660159 Thu, 03 Sep 2009 09:58:26 -0400 It would help to have 100% tax-writeoffs for the R&D and setup.]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-659615 659615 Thu, 03 Sep 2009 00:11:13 -0400 http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-659611 659611 According to a latest magazine, I happened to browse through at a > local book store, 53% of total energy is lost and never used. This > includes oil, gas, electricity etc etc. To me it seems that we need > to focus more on efficiency and energy optimization as well.]]> Thu, 03 Sep 2009 00:04:06 -0400
Any technology that can reduce this loss will make a lot of money for the company selling it as well as help the environment.


On Sep 02 11:23 PM jtareen wrote:

> According to a latest magazine, I happened to browse through at a
> local book store, 53% of total energy is lost and never used. This
> includes oil, gas, electricity etc etc. To me it seems that we need
> to focus more on efficiency and energy optimization as well.]]> http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-659574 659574 Wed, 02 Sep 2009 23:23:03 -0400 http://seekingalpha.com/article/159671-wood-energy-the-new-renewable?source=feed#comment-659044 659044 Wed, 02 Sep 2009 16:37:36 -0400 Instead of burning the biomass, they should be making biofuel gasoline/diesel by the FT process and use the waste heat, gas to make electricity.
This tech should be used by them or after any steam engine or anyone from a steam plant to nukes, It's a division of UTC, ther jet engine company.

PureCycle® geothermal systems have been in operation since 2006 at Chena Hot Springs Resort in Alaska, as a U.S. Department of Energy Geothermal Technologies demonstration project. Chena Hot Springs Resort is the first geothermal project in Alaska and the lowest temperature geothermal resource (165° F) in the world ever used for commercial power generation. Raser Technologies has ordered 200 PureCycle® systems that will have the capability to generate approximately 40 to 45 megawatts (MW) of renewable electrical power.

Or gasify the biomass and feed a gas turbine generator who's exhaust feed a steam turbine who's waste heat runs a Raser engine/generator getting 65-70% eff.

Either of these would get 2x's + the energy, income of burning the wood straight.

There is plenty of energy if we use what we have right instead of wasting most of it.]]> http://seekingalpha.com/article/158148-newfield-exploration-dealing-with-lower-gas-prices?source=feed#comment-647696 647696 Wed, 26 Aug 2009 14:39:46 -0400 ]]> http://seekingalpha.com/article/141091-patterson-uti-energy-rig-numbers-indicate-drop-in-oil-and-gas-exploration?source=feed#comment-594023 594023 For 2009, we expect the demand for many of our deepwater oilfield services and products will decrease, with the exception of our ROV services. ---> According to industry data published by ODS-Petrodata, at the end of 2008 there were 211 floating drilling rigs in the world. Ninety-eight additional floating rigs were on order and scheduled to be delivered through 2012, and 70 of these have been contracted long-term, for an average term of over six years. The 28 remaining floaters that will come into service by end 2012 are currently uncontracted and could be a cause of concern for the older floaters. On the way to the peak oil prices, we have seen fresh contracts for 30 year old rigs at $450K per day. Also, rigs would get mobilization payments as well as payments for idle days. Drilling companies are, today, no longer getting payments for idle days. Fundamentals could get weaker, but the stocks may have already bottommed out. On Jun 04 12:15 PM biomedlives wrote: > I believe the deepwater drillers - RIG, ATW, NE, DO - are much more > attractive now.]]> Sun, 19 Jul 2009 15:11:20 -0400
I present here a few quotes from the OII 2008 10K filing:
--> For 2009, we expect the demand for many of our deepwater oilfield services and products will decrease, with the exception of our ROV services.
---> According to industry data published by ODS-Petrodata, at the end of 2008 there were 211 floating drilling rigs in the world. Ninety-eight additional floating rigs were on order and scheduled to be delivered through 2012, and 70 of these have been contracted long-term, for an average term of over six years.

The 28 remaining floaters that will come into service by end 2012 are currently uncontracted and could be a cause of concern for the older floaters.

On the way to the peak oil prices, we have seen fresh contracts for 30 year old rigs at $450K per day. Also, rigs would get mobilization payments as well as payments for idle days. Drilling companies are, today, no longer getting payments for idle days.

Fundamentals could get weaker, but the stocks may have already bottommed out.

On Jun 04 12:15 PM biomedlives wrote:

> I believe the deepwater drillers - RIG, ATW, NE, DO - are much more
> attractive now.]]> http://seekingalpha.com/article/141091-patterson-uti-energy-rig-numbers-indicate-drop-in-oil-and-gas-exploration?source=feed#comment-531920 531920 Thu, 04 Jun 2009 12:15:02 -0400 http://seekingalpha.com/article/131938-marathon-oil-making-the-right-moves?source=feed#comment-529034 529034 Petronas and Petrobras are two different state oil entities, the > former in Malaysia; the latter and more well known is Brazil's Petro > Brasilerio which trades on the NYSE.]]> Tue, 02 Jun 2009 20:19:59 -0400

On Apr 21 11:38 AM Rohan C. Pease wrote:

> Petronas and Petrobras are two different state oil entities, the
> former in Malaysia; the latter and more well known is Brazil's Petro
> Brasilerio which trades on the NYSE.]]> http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-478157 478157 Sun, 26 Apr 2009 15:54:19 -0400
"This response to short term changes in potash demand is the same strategy that has supported our success for more than 20 years now. We followed this approach as recently as 2006 when buyers in China and India waited until July and August respectively to settle contracts and the rest of the world reduced buying to await the outcome.

"Our management team has been around for a long time and we've seen these conditions before. When it's time to gear down, we know how to do that rather than driving full speed off the edge of a cliff, and when it's time to open up and race forward, we are better prepared than ever to meet growing demand."]]> http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-476540 476540 Fri, 24 Apr 2009 19:04:39 -0400 http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-476486 476486 I don't think so. Pack your portfolios with agricultural plays like > Potash (http://seekingalpha.com/symbol/pot), Mosaic (http://seekingalpha.com/symbol/mos), > and Agrium (http://seekingalpha.com/symbol/agu) if Dr. Paul Ehrlich > is just partially right about the impending collapse in the world’s > food supply. You might even throw in long positions in wheat, corn, > soybeans, and rice. The never dull, and often controversial Stanford > biology professor told me he expects that global warming is leading > to significant changes in world weather patterns that will cause > droughts in some of the largest food producing areas, causing massive > famines. Food prices will skyrocket, and billions could die. At greatest > risk are the big rice producing areas in South Asia, which depend > on glacial run off from the Himalayas. If the glaciers melt, this > will be gone. California faces a similar problem if the Sierra snowpack > disappears. Rising sea levels displacing 500 million people in low > lying coastal areas is another big problem. One of the 77 year old > professor’s early books “The Population Bomb” was required reading > for me in college in 1970, and I used to drive up from Los Angeles > to hear his lectures (followed by the obligatory side trip to the > Haight-Ashbury). Other big risks to the economy are the threat of > a third world nuclear war caused by population pressures, and global > plagues facilitated by a widespread growth of intercontinental transportation > and globalization. And I won’t get into the threat of a giant solar > flare frying our electrical grid. “Super consumption” in the US needs > to be reined in where the population is growing the fastest. If the > world adopts an American standard of living, we need four more Earths > to supply the needed natural resources. We need to raise the price > of all forms of carbon, preferably through taxes, but cap and trade > will work too. Population control is the answer to all of these problems, > which is best achieved by giving women an education, jobs, and rights, > and has already worked well in Europe and Japan. All sobering food > for thought.]]> Fri, 24 Apr 2009 17:54:15 -0400
Ironically, global cooling would result in temperate shifts that would have a negative impact on North American wheat and corn production - leading to the crop shortages.

Take a look for the recent cycle of sunspots that we are in, and what impact that will have on temperatures and agriculture. A decent net search should eventually provide those papers.


On Apr 24 10:11 AM Mad Hedge Fund Trader wrote:

> I don't think so. Pack your portfolios with agricultural plays like
> Potash (seekingalpha.com/symbo...), Mosaic (seekingalpha.com/symbo...),
> and Agrium (seekingalpha.com/symbo...) if Dr. Paul Ehrlich
> is just partially right about the impending collapse in the world’s
> food supply. You might even throw in long positions in wheat, corn,
> soybeans, and rice. The never dull, and often controversial Stanford
> biology professor told me he expects that global warming is leading
> to significant changes in world weather patterns that will cause
> droughts in some of the largest food producing areas, causing massive
> famines. Food prices will skyrocket, and billions could die. At greatest
> risk are the big rice producing areas in South Asia, which depend
> on glacial run off from the Himalayas. If the glaciers melt, this
> will be gone. California faces a similar problem if the Sierra snowpack
> disappears. Rising sea levels displacing 500 million people in low
> lying coastal areas is another big problem. One of the 77 year old
> professor’s early books “The Population Bomb” was required reading
> for me in college in 1970, and I used to drive up from Los Angeles
> to hear his lectures (followed by the obligatory side trip to the
> Haight-Ashbury). Other big risks to the economy are the threat of
> a third world nuclear war caused by population pressures, and global
> plagues facilitated by a widespread growth of intercontinental transportation
> and globalization. And I won’t get into the threat of a giant solar
> flare frying our electrical grid. “Super consumption” in the US needs
> to be reined in where the population is growing the fastest. If the
> world adopts an American standard of living, we need four more Earths
> to supply the needed natural resources. We need to raise the price
> of all forms of carbon, preferably through taxes, but cap and trade
> will work too. Population control is the answer to all of these problems,
> which is best achieved by giving women an education, jobs, and rights,
> and has already worked well in Europe and Japan. All sobering food
> for thought.]]> http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-476320 476320 Fri, 24 Apr 2009 15:45:11 -0400 http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-476315 476315 Fri, 24 Apr 2009 15:42:56 -0400 http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-476042 476042 Fri, 24 Apr 2009 13:16:46 -0400
One "catches a falling knife" when there is no floor for the valuation of the asset - if it can go to zero or near zero (e.g., dot-coms, overleveraged brand names, etc). Glance at the 5-year patterns for most S&P 500 - you'll find a significant number that fell 50 - 75% over the period, but POT has still doubled. That suggests folks still believe in the values (just aren't willing to take on ridiculous amounts of leverage to gamble about the values).

If a commodity is a necessity, if there are no readily available alternatives, if company management is prudent and avoided excessive speculation, then one ought to buy without undue trepidation.
]]> http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-475782 475782 Fri, 24 Apr 2009 11:18:38 -0400
The 'cap and trade' before congress will have a hard time in the present economic conditions, and the evidence against it can not be suppressed for ever.
See this video on the fraud of MAN-MADE climate change which features scientists who were on the IPCC and point out the fallacies behind the hype.
video.google.fr/videop...

And see all the info in the Senate Minority Report.
Hundreds of scientists are taking a stand against the false claims.
epw.senate.gov/public/...
]]> http://seekingalpha.com/article/132833-the-start-of-a-dry-spell-for-pot?source=feed#comment-475776 475776

Fri, 24 Apr 2009 11:16:19 -0400

Potash Corp looked after their customers and held the market prices they did not abandon them for short term profits


Their recent open policies regarding execuative salaries was fresh and forward looking. In my view they remain the brightest star on the board.]]> http://seekingalpha.com/article/132188-halliburton-or-weatherford-don-t-buy-either?source=feed#comment-473911 473911 Thu, 23 Apr 2009 08:35:51 -0400 http://seekingalpha.com/article/131938-marathon-oil-making-the-right-moves?source=feed#comment-471210 471210 Tue, 21 Apr 2009 11:38:08 -0400