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  • Investors Take Note: The Swiss Gold Referendum Has Already Changed The Gold Market
    Today, 1:43 PM PHYS, CEF, NEM 5 Comments

    Summary

    • The upcoming Swiss Referendum has already changed the gold market as it has put gold in the public domain for citizens and politicians.
    • Recent events by central banks across the world are suggesting a new view on gold and the desire for repatriation.
    • If the psychology of the gold market has changed to demand repatriation then there may be a large rise in the price of gold.
  • What It Really Costs To Mine Gold: The Randgold Third Quarter Edition
    Today, 5:30 AM GOLD Comment!

    Summary

    • Randgold’s costs on both a core and a core non-tax basis have continued to fall on a year-over-year and sequential basis.
    • This decrease in costs is primarily due to the company's ramp-up at its world-class Kibali mine in Congo.
    • Investors need to carefully monitor the decision of the Congolese government concerning new mining taxes as it will cut into the company's profitability.
    • Randgold remains one of the few gold miners with costs low enough to survive at $1200 gold and offers investors a quality low-cost producer with growth potential.
  • What It Really Costs To Mine Gold: The Eldorado Gold 3rd Quarter Edition
    Yesterday, 11:43 AM EGO 2 Comments

    Summary

    • On a core cost basis, Eldorado's third quarter costs rose on a sequential and year-over-year basis but still remain one of the lowest in the industry.
    • Core non-tax costs remained in-line with previous quarters and keep the company's costs before taxes under $1000 per ounce.
    • Eldorado remains one of the fewest miners profitable at current prices.
  • What It Really Costs To Mine Gold: The Yamana Gold Third Quarter Edition
    Yesterday, 2:44 AM AUY 10 Comments

    Summary

    • Yamana's core costs rose significantly in the quarter, but most of it was due to a huge write-down and extraordinary taxes experienced in the quarter.
    • To get a better idea of the company's costs we need to analyze core non-tax costs, which Yamana did an excellent job with in the third quarter.
    • Most of the profitability of the company did not show in the quarter because it didn't sell much of its production and booked extra-high taxes.
    • Yamana is setup to have a very good fourth quarter as it sells third quarter production and probably will see much lower taxes.
  • What It Really Costs To Mine Gold: The Agnico Eagle Third Quarter Edition
    Fri, Nov. 21 AEM 4 Comments

    Summary

    • Agnico Eagle’s costs on both a core and a core non-tax basis have continued to rise as it saw its highest costs in 2014 in the third quarter.
    • Cost increases were mostly due to a combination of increasedexploration, production, and amortization related costs, and decreased goldproduction compared to the excellent first quarter.
    • We're disappointed at the high costs seen in the third quarter but it is not completely unexpected as the company continues to integrate its new acquisitions.
  • What It Really Costs To Mine Gold: The Newmont Gold Third Quarter Edition
    Mon, Nov. 17 NEM 9 Comments

    Summary

    • Newmont’s costs on both a core and core non-tax cost basis have risen to the highest levels of 2014.
    • Investors shouldn't be too concerned as in the current quarter copper production was drastically reduced due to issues at Batu Hitau.
    • Newmont has received large tax reimbursements over every quarter in 2014. This isn't sustainable and increased taxation should have a negative impact on future core costs.
  • What It Really Costs To Mine Gold: The Barrick Gold Third Quarter Edition
    Fri, Nov. 14 ABX 10 Comments

    Summary

    • Barrick’s gold-equivalent production costs on both a core and a core non-tax basis fell noticeably in the third quarter.
    • Third quarter cost decreases were due to a combination of increased production and lower nominal costs.
    • Though the company had a very good quarter, investors should still be careful as it will be important to see the company maintain its cost structure moving forward.
  • There Are Strange Things Happening With The Gold Held At The Gold ETFs
    Editors' Pick • Sun, Nov. 9 AEM, AG, GG 203 Comments

    Summary

    • Gold ETFs are continuing to see withdrawals of physical gold despite increases seen in physical silver at silver ETFs.
    • Gold withdrawals are not strictly correlated to the gold price. Otherwise, we wouldn't see that discrepancy.
    • Gold withdrawals may be a way for bullion banks to satisfy Asian gold demand as they began approximately the same time Chinese gold demand skyrocketed.
    • Thus investors should look at the decline in gold held at the GLD ETF as a bullish sign.
  • Update: Randgold Reports Strong Earnings And Is Well Prepared To Respond To The Ebola Crisis
    Fri, Nov. 7 GOLD 2 Comments

    Summary

    • Randgold reported strong earnings that surprised the market, as it increased gold production sequentially.
    • The company also revealed that it is actively and regularly preparing for any Ebola outbreak, to help minimize the impact on operations.
    • Investors should greatly lower any risk premium associated with Ebola.
  • What It Really Costs To Mine Gold: The Goldcorp Third Quarter Edition
    Fri, Nov. 7 GG 8 Comments

    Summary

    • Goldcorp’s costs on both a core and a core non-tax basis rose significantly on a year-over year basis.
    • This rise was due to increasing costs and lower gold-equivalent production due to operating issues at some of the company's mines.
    • We expect production to rise again in upcoming quarters and capital spending to decrease into 2015.
    • For gold investors, the fact that costs are well above the current gold price suggest that the current gold price is too low to be sustainable in the long-term.
  • The Next Steps For Gold Investors
    Tue, Nov. 4 GLD, SLV, GDX 23 Comments

    Summary

    • Precious Metals investors need to make sure they construct their investment thesis to help them select their gold investments.
    • The current price for gold is unsustainable as most miners sell it for above their current all-in costs.
    • Exploration budgets at miners have been cut significantly and that means that we think acquisitions will be the name of the game in the next few years.
    • Investors should look for miners with good balance sheets and a significant portion of their valuations in "in-ground" reserves.
    • Investors should look for developers and explorers that have the characteristics of a good acquisition and enough cash to avoid desperation deals and dilution.
  • What Should Gold Investors Do Now?
    Sun, Nov. 2 GLD 244 Comments

    Summary

    • Gold fell last week when the Fed cut QE and the Bank of Japan increased QE.
    • The fundamentals right now are not relevant to gold as it is trading based on very negative sentiment.
    • Investors need to think long-term and control their emotions as that is the only way to weather "sentiment bottoms".
    • Investors should not be idle, but instead be developing their strategies and culling their portfolios to the best gold stocks.
  • Our Favorite Gold And Silver Potential Takeover Candidates (Part 1)
    Fri, Oct. 31 XRA 23 Comments

    Summary

    • Investors should consider finding quality explorers and developers, since miners will need to replenish existing reserves.
    • We expect acquisitions to increase significantly over the next few years, regardless of the gold price.
    • Exeter Resources is a convincing acquisition target for a company like Kinross because of its location and price.
  • Update: Kinross Gold Sells Fruta Del Norte Project
    Sun, Oct. 26 KGC 7 Comments

    Summary

    • Kinross Gold sells its much maligned Fruta Del Norte for around $240 million in cash and equity.
    • The proceeds will help add liquidity to Kinross's balance sheet and help service its large debt load.
    • Investors will be able to tell a lot about the nature of management's approach based on whether they conservatively or aggressively use this money.
  • Russians Make Largest Gold Purchase In 15 Years: What Does It Mean For Gold Investors?
    Thu, Oct. 23 AEM, GG, NEM 132 Comments

    Summary

    • Russian central bank purchases 1.2 million ounces of gold in September.
    • This is the largest gold purchase by Russia in over 15 years.
    • If the Russian central bank keeps up monthly gold purchases of this size then it will impact total annual gold demand.
    • There may also be significant political motivations in publicly announcing this large gold purchase.
  • Chinese Gold Production Falling As Physical Demand Jumps
    Sun, Oct. 19 GG, AG, NEM 24 Comments

    Summary

    • Shanghai Gold Exchange weekly withdrawals reach 68 tonnes which is the second highest weekly withdrawals for 2014.
    • Withdrawals continue existing trend seen over the last few months of Chinese buyers increasing physical demand as the price drops.
    • Chinese miners are also having a tough time producing gold and expect production growth to fall significantly over the next few years.
    • Drop in Chinese gold production will mean demand will have to be met by further gold imports.
  • Update: Bear Creek Mining Removes VP Of Exploration
    Fri, Oct. 17 BCEKF 5 Comments

    Summary

    • Bear Creek recently announced the elimination of its VP of Exploration position, though the company will maintain a consulting contract with Mr. Rios.
    • This position is very important to any explorer and shows management is very serious about cutting costs and preserving cash.
    • This decision will not affect any of the large short-term catalysts for the company as neither require spending from the areas being cut.
    • We think this is the right move by the company as sometimes it is better to do nothing and sit on reserves than drain cash in a down market.
  • Update: Exeter Resources Expands Its Water Drilling Program
    Wed, Oct. 8 XRA 5 Comments

    Summary

    • Exeter Resources recently expanded its water drilling program after first holes show good water results.
    • Management expects last two holes will continue to show that water resources can support the Caspiche project.
    • Water results are one of the remaining unanswered questions regarding Caspiche development and may be the last straw that an acquirer needs to pull the trigger.
  • Is It Time For The Gold Bulls To Panic? It All Comes Down To The True State Of The U.S. Economy
    Tue, Oct. 7 BABA, GG, GOLD 44 Comments

    Summary

    • The key to the gold trade lies in the true nature of the US economic recovery.
    • The most recent jobs report was not as strong as it may seem and looking beneath the numbers reveals a lot of problems in the economy.
    • Falling commodity prices also reveal a lot of economic weakness as we would expect them to rise in a strong economy and not fall.
    • Falling commodity prices, a rising US Dollar, and increased debt loads put pressure on debtors and suggest the potential for a debt crisis into a Fed taper.
    • Gold is what investors would want to own if we start to see debtors default on obligations.
  • Update: Iamgold Sells Niobium Operations
    Mon, Oct. 6 IAG 7 Comments

    Summary

    • Iamgold recently decided to sell its niobium operations for total consideration of $530 million to Magris Resources.
    • This deal eases the burden of the company's debt load as now Iamgold will have enough cash on hand to pay off debts if it chooses.
    • Additionally, this deal will give Iamgold the financial flexibility to acquire companies or properties if the gold price turns around.
    • We think this deal was a good deal for Iamgold because it allows management flexibility to react to the gold price and either be aggressive or hunker down.
  • Update: Novo Resources Begins Drilling And Bulk Sample Program
    Thu, Oct. 2 NSRPF 10 Comments

    Summary

    • Novo Resources recently announced that it will begin its drilling and bulk sample program in early October.
    • This program should help give investors an idea of the potential of Beaton's Creek and bring the property closer to production.
    • The results should be released over the next few months which should provide a nice catalyst for the company as North American explorers slow operations for the winter.
    • Investors able to shoulder the risk should consider buying shares now as most of the stock is closely held and there is a small amount of float.
  • Latest COT Report Shows Short Managed Money Positions At Highest Level Of 2014
    Mon, Sep. 29 NEM, PAAS, GG 8 Comments

    Summary

    • Latest Commitment of Traders report shows that short positioning by Managed Money traders has increased to the highest level of 2014.
    • The last time these short positions were at these levels was December of 2013, which was around the gold bottom.
    • Contrarian investors should be interested in building long positions at these high short levels regardless of their long-term view of gold.
  • Gold Investors Dont Despair As There Are Many Bullish Catalysts For The Market
    Fri, Sep. 26 PHYS, GLD 46 Comments

    Summary

    • Gold has been hit hard over the last few months due to a strong US Dollar but investors have plenty of bullish catalysts.
    • Indian gold demand is reportedly up significantly as premiums and smuggling rises due to upcoming festivals and a strong monsoon.
    • Possibly the biggest catalyst for gold is the upcoming Swiss referendum which could change the way the Swiss bank manages it reserves.
  • Update: Richmont CFO Departs To 'Pursue Other Opportunities'
    Thu, Sep. 25 RIC Comment!

    Summary

    • Richmont's CFO has announced his resignation to pursue other opportunities - which is usually a bad sign.
    • We think in this case his departure was related to Mr. Carmel's earlier departure, and is simply the company cleaning up the former leadership regime.
    • Investors should be awaiting the announcement for the company's new CEO, as that will tell us a lot about the future of the Island Gold Deep deposit.
  • What It Really Costs To Mine Gold: The Timmins Gold Second Quarter Edition
    Wed, Sep. 24 TGD Comment!

    Summary

    • Timmins costs on both a core and a core non-tax basis rose in the second quarter on a sequential and year-over-year basis.
    • Costs primarily rose as a result of lowered grades experienced in the quarter which management expects to continue for the rest of the year.
    • Even though Timmins costs disappointed on the quarter, their costs still remain one of the lowest in the industry.
    • The fight with Sentry Investments was settled in the second quarter, and we will be curious to see what changes will be implemented as a result.
  • Novo Resources: An Explorer With A Project That Could Forever Change The Mining Landscape
       • Tue, Sep. 23 NSRPF 12 Comments

    Summary

    • Novo Resources is looking for a new Witwatersrand basin and they have found some characteristics similar to it on their property in Australia.
    • Newmont Mining is at the very least very curious, and during the worst year for gold in 30 years took an extremely large 35% stake in the company.
    • The company CEO is very familiar with the area, is PHD level geologist, and has been looking at this land package for years before he started the company.
    • The CEO's large personal financial investment in the company allows investors the comfort to know that he has a lot at stake in the company succeeding.
    • Upcoming drill results and a PEA on the Beaton's Creek project provide for some near-term catalysts during a traditionally catalyst-slow Northern Hemisphere winter season.
  • Afraid Of The Plummeting Gold Price? Russia Certainly Is Not
    Sun, Sep. 21 NEM, AEM, PHYS 48 Comments

    Summary

    • The Russian Central Bank recently added 300,000 ounces of gold to its reserves in August.
    • This large gold purchase came despite a falling Ruble and a weak gold price.
    • Russian's September gold purchase numbers will be very interesting for investors as the gold price has dropped another 5% since August.
    • Russia has recently warned it may unload its Western debt securities and investors may get an early sign of this if Russia increases the pace of its gold purchases.
  • Commitment Of Traders Report Offers Investors Much Optimism On The Gold Price
    Mon, Sep. 15 AEM, GG, NEM 14 Comments

    Summary

    • Latest Commitment of Traders report shows that short positioning by Managed Money traders has increased for a fourth straight week.
    • Based on the current gold price, by this Tuesday's release we expect that positioning to increase for a fifth straight week.
    • The last time we saw five straight weeks of Managed Money short increases was in December of 2013, the bottom of the gold price.
    • The gold price is set to decrease for five straight weeks - it has never decreased for six straight weeks in our data set (going back to 2006).
    • It seems this would be an excellent time for short-term investors to build a gold position based on this and the great bearish interest by gold traders.
  • Update: Goldcorp Denies It Is In The Acquisition Market
    Mon, Sep. 15 GG 12 Comments

    Summary

    • Goldcorp CEO Chuck Jeannes stated that investors would be wrong to assume that the company was poised for an acquisition.
    • Coupled with other thoughts from the company CEO, we believe this statement to be accurate and not a simple smokescreen.
    • Investors owning potential Goldcorp targets should remove any premiums attached to their investments based on a possible Goldcorp acquisition.
  • Complete Second Quarter Gold All-In Costs Show That 'Peak Gold' May Be A Reality
    Sun, Sep. 14 IAU, SGOL, OUNZ 19 Comments

    Summary

    • Total industry gold production has remained flat over the first half of the year and expected FY2014 production is lower than 2012 and 2013.
    • Second quarter core costs remained flat sequentially, but this was a result of a large write-down experienced by Barrick which resulted in a tax break that lowered costs.
    • Despite industry efforts to aggressively cut costs, second quarter core non-tax costs continued to rise and are actually higher than 2012 and 2013.
    • Cuts to exploration and the high grading of existing mines have led to temporary relief for miners, but this may result in a large drop in future gold production.
    • Investors that are patient should be looking to acquire gold as supply seems to have peaked.
  • What It Really Costs To Mine Gold: The SilverCrest Mines Second Quarter Edition
    Thu, Sep. 11 SVLC 10 Comments

    Summary

    • SilverCrest’s costs on a core basis have fallen on both a sequential and year-over-year basis, which is very good as the company continues its underground mining transition.
    • The company's core non-tax costs have risen though as the new Mexican tax law takes effect.
    • The company should continue to see lower costs through the second half of the year as capital expenditures drop and production increases.
  • COMEX Gold Inventories May Have Increased, But Are Still Way Below Pre-2013 Levels
    Sun, Sep. 7 GLD, IAU, SGOL 12 Comments

    Summary

    • COMEX gold eligible and registered inventories have increased since the beginning of 2014, which is generally a bearish development.
    • We believe this increase is primarily due to re-stocking, as non-Western demand has been lower than demand seen in the second half of 2013.
    • When compared to the pre-2013 gold plunge, inventories are still down significantly and that suggests that much of the gold that left Western warehouses won't be back.
    • With dollar values of available gold at the COMEX way below pre-2013 levels, an increase in physical demand will absorb available COMEX inventories, which are only $1.3 billion.
    • Investors should be looking to increase their gold positions while others aren't interested in gold.