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  • Update: Goldcorp Strikes A Deal To Buy Probe Mines
    Mon, Jan. 19 GG 6 Comments

    Summary

    • Goldcorp acquires Probe Mines and its Borden Gold project for around $440 million in an all-stock deal.
    • The 49% premium paid was significant, and may be an example for future acquisitions in the gold space.
    • The deal allows Goldcorp to improve Borden Gold's economics by processing ore at its nearby Porcupine operations.
    • This acquisition confirms our Goldcorp acquisition expectations, and we now think the company is done with its near-term acquisitions, but other companies may be on the prowl.
  • Update: Alamos Gold Receives Government Injunction On Agi Dagi
    Mon, Jan. 19 AGI 1 Comment

    Summary

    • The company received a government injunction on its Turkish Agi Dagi project that will require further work before the EIA is approved.
    • This is not unprecedented as it is the same thing that happened to the company's larger Kirazli project.
    • It is a slight negative for the company and we think it may be prudent for investors to hold or take profits until a government decision on Kirazli is rendered.
  • Eldorado Gold: Has Political Risks Finally Caught Up With The Company?
    Mon, Jan. 19 EGO 10 Comments

    Summary

    • Eldorado has done a great job keeping production costs low while managing operations across 3 continents in some riskier jurisdictions.
    • Upcoming Greek elections pose a major risk to the company as around 30% of gold reserves and resources are located in Greece.
    • We believe it would be prudent for investors to reduce expectations as we expect the company to underperform by anywhere from 8-15% due to Greek risk.
  • The Swiss National Bank's Move And What It Means For Gold Investors
    Mon, Jan. 19 AEM, NEM, CEF 46 Comments

    Summary

    • The SNB decided to drop its currency peg in a sudden move that shocked markets.
    • We think this means that an ECB QE program is imminent as the ECB meets next week.
    • The implications for gold are mixed, but three out of four outcomes of the ECB meeting we think are positive for gold.
  • A 2014 Gold Investors Year In Review: Cracks In The International Order Appear
    Sun, Jan. 11 GLD, GG, GDX 22 Comments

    Summary

    • We think 2014 will be remembered for major events that are breaking down the current international order.
    • US and Russian relations hit their lowest point since the Cold War and there is no sign of improvement.
    • In the Middle East, ISIS threatens the status quo even as oil plummets and savages oil-producer revenues.
    • Populist groups in Europe are emerging, with the most notable event being the upcoming Greek elections that could break up the European Union.
    • Despite gold not doing much in terms of price in 2014, investors will want to own gold in 2015 if we see further turmoil.
  • Update: Argonaut's 4th Quarter Production Totals Rise
    Wed, Jan. 7 ARNGF 1 Comment

    Summary

    • Argonaut's fourth quarter saw record production of 44,312 gold-equivalent ounces.
    • Management's outlook for 2015 is 135,000-145,000 gold-equivalent ounces, which is slightly higher than 2014 production.
    • Results are mixed as grades fell sequentially and investors need to pay close attention to what management expects in terms of grades over 2015.
  • What It Really Costs To Mine Gold: The Argonaut Gold Third Quarter Edition
    Dec. 30, 2014 ARNGF 2 Comments

    Summary

    • The company's core and core non-tax costs both fell on a sequential basis and were around the company's average costs for 2014.
    • Despite this much of this rise was due to record rainfall in Mexico during the quarter.
    • We think that the company could surprise with much better earnings in the fourth quarter as costs can drop due to normal rainfall and lower oil prices.
  • 5 Of Our Favorite Gold And Silver Stocks For 2015
    Dec. 30, 2014 ABX, TGD, BCEKF 16 Comments

    Summary

    • Randgold meets the "best in class" standards with low costs, a clean balance sheet, and future gold growth which makes it one of our top picks.
    • Tahoe Resources is one of the few silver producers prodcing silver at a profit at sub-$20 silver and is clearly an industry leader in terms of profit margins.
    • Timmins Gold has a relatively clean balance sheet and has the possibility to re-rate much higher as invesotrs digest their Caballo Blanco acquistion.
    • Exeter Resources owns one of the largest gold deposits in the world and offers acquirers a cheap target in an already popular mining district.
    • Bear Creek Mining is another "best in class" developer that owns one of the largest silver deposits in the world that is practical at today's silver price.
  • Complete Third-Quarter Gold All-In Costs Show That Gold Investors Should Be Very Comfortable With Their Investment
    Dec. 27, 2014 GLD, ABX, GG 50 Comments

    Summary

    • Our analysis of gold costs includes more than 25% of total world gold production and thus we're confident it can be extrapolated very accurately.
    • Gold miners on a core cost basis are producing gold at a higher cost than the previous two quarters due to an increase in taxes.
    • Gold miners on a core non-tax cost basis saw their costs drop sequentially, but are relatively flat on the year.
    • Despite heavy cost cutting, most gold is produced at prices higher than the current gold price, and that is bullish for the gold price.
  • It Seems Like Hedge Funds Are Jumping Into The Gold Market
    Dec. 20, 2014 GDX, NEM, GDXJ 39 Comments

    Summary

    • The popular narrative is that the gold market is currently quiet and dead and there is very little investor interest.
    • That is not supported by the large amounts of volume that we're seeing in the gold mining and leveraged gold mining ETFs.
    • The volume has increased to the largest levels in history and it seems to be hedge funds who are getting into the market.
    • Since most of the interest seems to be on the short side this may provide a good opportunity for patient gold mining investors.
  • Update: Timmins Gold Acquires Caballo Blanco Gold Project
    Dec. 18, 2014 TGD Comment!

    Summary

    • Timmins Gold announced the acquisition of the Caballo Blanco Gold project for $10 million in cash and 16 million in shares.
    • This confirms our belief that the company expects to have a much better fourth quarter in terms of costs and cash flow.
    • We also believe this acquisition will help re-rate the company's shares to higher levels as it is expected to increase production by 90,000 ounces per year.
    • This is the second acquisition in the sector this week and the previous acquirer (Coeur Mining) rose the day afterwards based on broker upgrades which is positive for Timmins.
  • What It Really Costs To Mine Gold: The SilverCrest Mines Third-Quarter Edition
    Dec. 15, 2014 NEM, GG, GOLD 2 Comments

    Summary

    • The company's costs on a core and core non-tax basis continued to rise in the third quarter.
    • This shouldn't be a surprise as the company is continuing its transition from open pit operations to underground mining and milling.
    • Investors should pay particular attention to Santa Elena's capitalized costs in the fourth quarter report as any reduction will significantly lower SilverCrest's costs.
  • What It Really Costs To Mine Gold: The Timmins Gold Third Quarter Edition
    Dec. 15, 2014 TGD 9 Comments

    Summary

    • The company's core and core non-tax costs rose during the third quarter to the highest levels of 2014.
    • Much of this rise was due to record rainfall in Mexico during the quarter which lowered production.
    • Management expects cash costs to fall in the fourth quarter and we believe that investors can expect core costs to fall as well.
  • Is This The Reason European Central Banks Repatriating Their Gold?
    Dec. 14, 2014 GG, NEM, PHYS 127 Comments

    Summary

    • The Austrian central bank is the latest central bank to bring up repatriating gold reserves from abroad.
    • Gold repatriations by European central banks suggest that maybe there are more problems with the Euro than investors think.
    • The European political climate is a mess as populist and anti-Euro parties gain popularity and establishment politician poll numbers plummet.
    • We are starting to see gold performing very well in Euro terms with gold nearing its highest levels of the year in Euros.
    • If we are right we may start to see European central banks increase gold reserves.
  • What It Really Costs To Mine Gold: The Richmont Gold Third Quarter Edition
    Dec. 11, 2014 RIC 3 Comments

    Summary

    • Richmont's core and core non-tax costs both rose on a sequential basis, but they are still in the top half of gold producers.
    • Most of the rise in costs per ounce were the result of lower production totals as total nominal costs actually fell in the quarter.
    • Recent quarter's low cost totals have taken Richmont from one of the highest-cost producers to one of the lower-cost producers.
    • The key moving forward will be the development of the company's high-grade Island Gold Deep deposit and investors should monitor the development closely.
  • What It Really Costs To Mine Gold: The Iamgold Gold Third-Quarter Edition
    Dec. 10, 2014 IAG 11 Comments

    Summary

    • Iamgold's core and core non-tax costs for the quarter were the highest in 2014 and were a disappointment for investors.
    • Rising costs were attributed to a large increase in quarterly taxes and higher operational costs.
    • The sale of the company's Niobium operations should be watched by investors to see what management chooses to do with the new cash hoard.
    • Investors should also keep an eye on the ramp-up of Westwood operations, as that will be a key determinant of future costs.
  • Our Favorite Gold And Silver Potential Takeover Candidates: Meet This Peruvian Bear
       • Dec. 5, 2014 BCEKF 14 Comments

    Summary

    • Bear Creek Mining's Corani deposit is one of the largest undeveloped silver deposits in the world.
    • Corani is an advanced stage deposit that would almost double most major miners' silver reserves overnight and would cost a little over $100 million.
    • Pan American Silver is the most logical acquirer as it could double its reserves with an acquisition and already has operations in Peru.
    • We think acquirers will wait until the Peruvian government concludes its ruling on the company's Santa Ana deposit.
  • What It Really Costs To Mine Gold: The Alamos Gold Third Quarter Edition
    Editors' Pick • Dec. 4, 2014 AGI 13 Comments

    Summary

    • Alamos Gold saw its core and core non-tax costs jump in the third quarter to the highest levels of 2014.
    • Some of it was due to the extraordinary rainfall seen in Mexico that diluted the gold recovery solution, but this shouldn't sugar-coat a poor quarter.
    • Alamos Gold's value lies in what it will do next and that is where investors should pay particular attention.
  • What It Really Costs To Mine Gold: The Kinross Gold Third Quarter Edition
    Dec. 2, 2014 KGC Comment!

    Summary

    • The company's core costs were up in the quarter to the highest levels in FY2014, mostly due to a big increase in quarterly taxes.
    • The company's core non-tax costs were lower on a sequential level and suggest that production costs were fairly stable.
    • After the quarter ended, the company was able to sell its Fruta Del Norte property which will help give the company some financial flexibility.
  • What It Really Costs To Mine Gold: The Goldfields Third-Quarter Edition
    Nov. 28, 2014 GFI 9 Comments

    Summary

    • Goldfields continues to lower its core and core non-tax costs to the lowest levels of FY2014.
    • The company also is working hard to lower its debt load, and reduced it by $137 million in the quarter.
    • Goldfields continues to climb into the ranks of the mid-tier gold producers.
  • What It Really Costs To Mine Gold: The Allied Nevada Gold Q3 Edition
    Nov. 26, 2014 ANV 2 Comments

    Summary

    • Allied Nevada's costs on both a core and a core non-tax basis have continued to rise on a year-over-year basis.
    • This isn't unexpected, as the company predicted this in the second quarter as stripping ratios rise.
    • The company needs a significantly higher gold price at the current cost structure.
  • Investors Take Note: The Swiss Gold Referendum Has Already Changed The Gold Market
    Nov. 26, 2014 PHYS, CEF, NEM 33 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
    Nov. 26, 2014 GOLD 1 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
    Nov. 25, 2014 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
    Nov. 25, 2014 AUY 12 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
    Nov. 21, 2014 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
    Nov. 17, 2014 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
    Nov. 14, 2014 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 • Nov. 9, 2014 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
    Nov. 7, 2014 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
    Nov. 7, 2014 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
    Nov. 4, 2014 GLD, SLV, GDX 24 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.