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  • What It Really Costs To Mine Gold: The SilverCrest 4th Quarter Edition
    Tue, Mar. 31 SVLC 5 Comments

    Summary

    • SilverCrest's costs on both a core and a core non-tax basis have risen in 2014.
    • This is to be expected as the company is transitioning to higher cost underground operations.
    • Investors need to pay close attention to the company's remaining Santa Elena reserves that should be issued by the end of the first quarter.
  • McEwen Mining Has Potential, But It Needs To Execute Much Better To Appeal To Investors
    Mon, Mar. 30 MUX Comment!

    Summary

    • McEwen Mining's core and core non-tax costs for 2014 were both extremely high compared to industry competitors.
    • The company has potential, as its 2015 costs are expected to fall and grades at El Gallo are expected to jump.
    • The company needs to show investors it can execute and produce gold at much lower prices to make it appealing compared to other junior miners.
  • The Latest Commitment Of Traders Data On Gold Shows Something Very Surprising
    Sun, Mar. 29 GLD, GG, NEM 13 Comments

    Summary

    • Despite the large weekly rise in the gold price speculative traders increased their short positions.
    • Current Managed Money short positions are at all-time nominal highs at over 84,000 short contracts outstanding.
    • This rise in short after a large rise in the gold price is unusual and suggests that the latest rise in gold was not due to COT short covering.
    • We take a contrarian view and think gold may have much more short-term upside.
  • A Young Commander Making His Mark In The Middle East May Be Trouble For Markets And Bullish For Gold
    Sat, Mar. 28 GG, XOM, USO 20 Comments

    Summary

    • The recent conflict in Yemen brings the possibility of a much bigger war as it may be a proxy for the Sunni-Shiite struggle.
    • Investors need to understand that the new Saudi Defense minister is young, inexperienced and seems ready to stretch his muscles.
    • Debt and Equity markets are at all-time highs despite lukewarm economic data, which suggests significant underlying instability.
    • Gold remains the only safe-haven investment not at all-time highs, and that may lead money out of equities and debt and into gold in the case of a crisis.
  • Novo Resources: Upcoming Drilling Results Provide An Opportunity For Educated Speculation
     • Wed, Mar. 25 NSRPF 4 Comments

    Summary

    • The volatility within Novo Resources shares shouldnt concern investors as it is expected with the company's low share count and limited float.
    • The company should release drill results in the upcoming few weeks and we expect them to be good considering the proximity to previous good drill-holes.
    • If the company is successful in expanding the gold-bearing reef with some of its further out western holes, it would significantly help the feasibility study.
  • What It Really Costs To Mine Gold: The Argonaut 4th Quarter Edition
    Sun, Mar. 22 ARNGF 3 Comments

    Summary

    • Argonaut's costs on both a core and core non-tax basis were a bit better than average in the fourth quarter.
    • Looking forward, the company expects cash costs to decline in 2015 and we expect those declines will also mean lower core costs moving forward.
    • Since much of the company's value is related to its undeveloped Magino project, investors should stay tuned to upcoming drilling results (Q2) and the updated PEA (Q4).
  • What It Really Costs To Mine Gold: The Timmins Gold 4th Quarter Edition
    Tue, Mar. 17 TGD 2 Comments

    Summary

    • Timmins Gold had a sub-par fourth quarter as core and core non-tax costs rose to the highest levels of 2014.
    • The newly discovered high-grade mineralization at its San Francisco mine may help raise production grades and lower costs.
    • The big driver for Timmins moving forward will be the progress of its acquisitions, especially Ana Paula.
  • The Last Time Gold Miners Did This Was... Never
    Sun, Mar. 15 AG, AEM, NEM 52 Comments

    Summary

    • The Philadelphia Gold and Silver Index has never been down four consecutive years in its 30 plus year history until 2014.
    • So far in 2015, the index is down again for the fifth consecutive year.
    • These streaks of consecutive down years are showing that sentiment has never been lower.
    • Busts have always been followed by booms, and we think investors that are patient can position themselves for the future boom in gold miners.
  • What It Really Costs To Mine Gold: The Richmont Mines Fourth Quarter Edition
    Tue, Mar. 10 RIC 6 Comments

    Summary

    • Richmont’s costs on both a core and a core non-tax basis have continued to fall significantly during the fourth quarter.
    • Richmont has transitioned from one of the highest cost producers to one of the industry's lowest over the past two years.
    • Moving forward in FY2015 expect costs to rise and production to drop as the company focuses on developing its Island Gold Deep mine.
  • Investors Got It Wrong: The Latest Jobs Report And Rising Interest Rates Are Reasons To Own Gold
    Sun, Mar. 8 GG, NEM, PAAS 55 Comments

    Summary

    • Markets are concerned that the latest good jobs report will make the Fed raise rates earlier than expected.
    • While this would be bad for both stock and bond markets, it may be of great benefit to gold markets as money seeks a safe haven.
    • Friday's gold dump provides an opportunity as raising rates will be a big mistake for the Fed.
  • What It Really Costs To Mine Gold: The Goldfields Fourth Quarter Edition
    Fri, Mar. 6 GFI 5 Comments

    Summary

    • Core and core non-tax costs continued to show a declining trend for Goldfields as management continues to push efficient production.
    • While declining costs are positive, Goldfelds still is producing gold at little to no profit in the current gold environment.
    • Based on FY2015 guidance of relatively flat production, Goldfields needs to lower costs further or hope for a higher gold price to offer investors good profits.
  • What It Really Costs To Mine Gold: The Eldorado Gold Fourth Quarter Edition
    Thu, Mar. 5 EGO 9 Comments

    Summary

    • Eldorado's core and core non-tax costs for the fourth quarter and FY2014 have once again placed it amongst the lowest cost producers we cover.
    • The big and obvious cloud hanging over the company is the future of its Skouries and Greek operations.
    • We are not there yet, but this may make an excellent opportunity to buy one of the lowest cost producers after a drastic drop.
  • What It Really Costs To Mine Gold: The Iamgold Q4 Edition
    Thu, Mar. 5 IAG 5 Comments

    Summary

    • Iamgold’s costs on both a core and a core non-tax basis have risen significantly to make the company one of the highest producers that we cover.
    • We will give the company a pass as there is significant restructuring going on, which includes the sale of its cash flow positive niobium operations.
    • Moving forward, the company expects to increase production in 2015, but investors need to see significant core cost decreases that can make the company attractive at $1200 gold.
    • Investors should keep track of how the company chooses to spend the $500 million from the sale of its niobium operations, with a quality acquisition being a major positive.
  • What It Really Costs To Mine Gold: The Alamos Q4 Edition
    Tue, Mar. 3 AGI 1 Comment

    Summary

    • Alamos Gold's costs on both a core and a core non-tax basis were a pleasant surprise for investors in the fourth quarter.
    • A major contributing factor to this cost improvement was the ability of the company to process its highest average throughput of more than 18,000 tonnes per day.
    • The key thing for investors to watch is the company's development projects in Turkey and Mexico as a lot of the company's value is tied to these projects.
    • If Alamos can get the necessary permits and approvals for these projects the future is bright as they have significant cash on hand to develop both without additional financing.
  • What It Really Costs To Mine Gold: The Yamana Q4 Edition
    Mon, Mar. 2 AUY 7 Comments

    Summary

    • Yamana gold's core and core non-tax costs rose in the fourth quarter.
    • While we aren't surprised by the rise since the company is ramping up gold production, we still would want to see lower costs as production rises.
    • With a large debt load and slim profit margins, Yamana needs to continue to ramp up production and lower costs to be attractive in the current gold environment.
    • On a positive note, at a higher gold price Yamana would provide nice leverage since profits would double with only a moderate increase in the gold price.
  • Year End Gold Reserves Plummet In 2014 Confirming A Drop In Future Production: Is There A Better Slam-Dunk Investment Than Gold?
    Sun, Mar. 1 GLD, ABX, GG 28 Comments

    Summary

    • According to industry analysts, gold production will peak in 2015 and then drop drastically.
    • Year end gold reserve reports confirm that miners are not replacing currently mined gold.
    • Slashed exploration budgets signal that without a miraculous set of discoveries, there is no reason to believe that current reserves will be replaced in 2015.
    • Without a higher gold price, future production will continue to fall as money-supply and the global population increase which makes gold very attractive even without a financial crisis.
  • What It Really Costs To Mine Gold: The Agnico Eagle Q4 Edition
    Sat, Feb. 28 AEM Comment!

    Summary

    • Agnico Eagle's core costs fell on both a sequential and year-over-year basis, but were on the higher end for the year.
    • This isn't surprising as the company has been ramping up production.
    • The key moving into 2015 will be if the company can lower prices as forecast and also increase production to the targeted 1.6 million ounces.
  • Is It Time To Invest In Platinum?
       • Fri, Feb. 27 PPLT 16 Comments

    Summary

    • The production cost of platinum is significantly higher than the current market price.
    • The platinum market is also very concentrated, implying that a few cuts can have a major impact on global mine supply.
    • Hidden stocks of platinum have kept the market supplied despite analyst calls.
    • The price of platinum is too cheap to ignore and if investors can be patient, now is the time to be accumulating platinum.
  • What It Really Costs To Mine Gold: The Newmont Q4 Edition
    Tue, Feb. 24 NEM 1 Comment

    Summary

    • Newmont's fourth quarter costs were relatively stable on a core and core non-tax basis.
    • For FY2014, Newmont continued to bring down its costs, though production also fell.
    • One thing that gold investors should note is that Newmont, along with other companies, are not making enough money to sustain the industry at current gold prices.
  • What It Really Costs To Mine Gold: The Barrick Gold Q4 Edition
    Sun, Feb. 22 ABX 1 Comment

    Summary

    • Barrick's costs on a core non-tax basis were relatively flat on a sequential basis, which continues the company's push towards lower costs.
    • Gold production continued to drop in 2014 and the outlook for 2015 suggests only minimal increases in gold production.
    • The company's focus will be on cutting debt and minimizing overhead and administrative costs, but despite that still needs a higher gold price to really juice earnings.
  • What It Really Costs To Mine Gold: The Goldcorp Fourth Quarter Edition
    Fri, Feb. 20 GG 15 Comments

    Summary

    • Goldcorp's core non-tax costs were relatively flat on a sequential and year-over-year basis.
    • Investors thought Goldcorp's report was poor and sent the stock down 10%, but lower costs in 2015 and higher production should benefit the company.
    • Once Eleonore and Cerro Negro production are fully commercial in Q1FY15, we expect Goldcorp to again become one of the lowest gold producers.
  • What It Really Costs To Mine Gold: The Kinross Gold Q4 Edition
    Thu, Feb. 19 KGC 7 Comments

    Summary

    • Kinross's core and core non-tax costs both rose to the highest levels of 2014.
    • The company's production also did increase in 2014 which is a positive for investors.
    • The company's outlook for 2015 suggests that production will drop from current levels.
    • With Kinross's debt load, we think the company needs to start using its cash balance to make smart acquisitions to excite investors.
  • What It Really Costs To Mine Gold: The Randgold Q4 Edition
    Tue, Feb. 17 GOLD 4 Comments

    Summary

    • Randgold's costs on both a core and a core non-tax basis have continued on their downward trajectory.
    • The company's production continues to increase as Kibali ramps up production.
    • Randgold remains one of the lowest cost producers and consistently shows that it can produce gold on a core basis at under $1000 per ounce.
  • Latest Deutsche Bank Research Shows Gold Has A Lot To Gain From A Shift In Financial Assets
    Sun, Feb. 15 GG, NEM, PHYS 13 Comments

    Summary

    • Recent research by Deutsche Bank shows global financial assets grew to an all-time high of $294 trillion.
    • Since 2007 most of this growth has come from government debt markets which have almost doubled over the past 7 years.
    • We may not be seeing inflation in consumer goods but we are seeing it in financial markets.
    • This growth is not sustainable and anything that spooks debt investors may cause a mass exodus in financial assets.
    • A small shift of global assets due to a market panic would cause a big increase in the gold price and an even bigger one for gold miners.
  • The Drop In The Turkish Lira May Be An Opportunity For A Few Gold Miners
    Fri, Feb. 13 AGI, ALIAF, PLGTF Comment!

    Summary

    • The Turkish lira has dropped much faster than many other currencies versus the U.S. dollar.
    • This drop in the lira provides some much needed cost savings to a few producers and developers with Turkish operations.
    • Investors may see some nice positive surprises in these companies' cost structures as fourth-quarter earnings reports are released.
  • Tahoe Resources Acquisition Of Rio Alto Is An Excellent Move By The Company To Diversify Operations
    Tue, Feb. 10 TAHO 2 Comments

    Summary

    • Tahoe's $1.1 billion dollar acquisition of Rio Alto offers investors important diversification.
    • Tahoe's revenues will now originate from both Guatemala and Peru.
    • Tahoe will now become much more attractive to institutional investors and funds as it no longer has a single point of failure.
    • Tahoe will now have significant exposure to the gold price and will no longer be a silver-dependent producer.
    • Rio Alto's Shahuindo mine offers the potential to add 90,000 gold-equivalent ounces at cash costs of a little over $500 per ounce by 2016.
  • Investors Have No Choice But To Own Gold After This Latest McKinsey Chart
    Sun, Feb. 8 GG, NEM, AEM 303 Comments

    Summary

    • Global debt levels continue to rise despite record-low interest rates.
    • Debt is also growing as a percentage of GDP which signals that economic growth is lagging behind debt growth.
    • Based on the most recent numbers, the world is taking on the equivalent of the market capitalization of every S&P 500 company every 2.5 years.
    • This is not sustainable and wise investors should seek out investments that are not correlated with public and private debt.
    • Gold is the easiest and most obvious of these investments and investors should use short-term weakness to increase gold positions.
  • Update: Premier Gold Forms Joint Partnership To Advance Trans-Canada Project
    Thu, Feb. 5 PIRGF Comment!

    Summary

    • Premier Gold announces a 50/50 partnership with Centerra to advance its Trans-Canada property.
    • Centerra will be putting the lion's share of the initial development money into bringing the project to production which will help Premier avoid shareholder dilution.
    • This deal is a good deal for shareholders of both companies as it brings together Centerra's cash and Premier's property in a mutually beneficial partnership.
    • Premier's shareholders should be pleased with this deal as it would have been difficult for the company to raise the cash on its own.
  • Pilot Gold: Halilaga Results Are Good But Very Copper Dependent
    Thu, Feb. 5 PLGTF 6 Comments

    Summary

    • The updated PEA results for Halilaga show a robust IRR, but are highly dependent on the copper price.
    • The project is probably too small for a company like Teck at its current specifications.
    • If Pilot Gold can show promising results at its nearby TV Tower project, then that paired with Halilaga may be an attractive acquisition.
  • Alamos Gold - An Opportunity To Buy A Company That Can Triple Near-Term Production
    Tue, Feb. 3 AGI 11 Comments

    Summary

    • Alamos Gold's shares have seen a recent 40% underperformance relative to the GDX due to a poor outlook on production and costs.
    • The 2015 outlook may be an outlier as both production grades and strip ratios are below the mine plan and can return back to expected levels as grades/strip improve.
    • The company has two near-term production projects that can be ramped up once approvals are received and could triple production by late 2016 or 2017.
    • The company's current cash position is around 50% of total market capitalization and allows it to fund all projects internally without a need for external financing.
    • Investors that can think long-term can be rewarded by Alamos as its production is expected to ramp-up just in time for world gold production to drop.
  • Update: New Greek Government Announces Opposition To Eldorado's Flagship Gold Mine
    Sun, Feb. 1 EGO 22 Comments

    Summary

    • In comments to the press, Greek Energy Minister Panagiotis Lafazanis announced his opposition to Eldorado's development of its Skouries mine.
    • We expected that risk would be raised significantly with a new government, and this confirms our expectations and investors should be cautious about all Greek projects.
    • The government has not taken any concrete steps against the project, but we think at this point investors should wait until management and the government clarify the situation.
  • Update: Bear Creek's Santa Ana Arbitration Schedule Published
    Fri, Jan. 30 BCEKF 5 Comments

    Summary

    • The ICSID's arbitration schedule for the resolution of the Santa Ana case has been publicly published.
    • It looks like if arbitration goes the full schedule that it will be a bit longer than we have expected.
    • The company is making progress in the case and we still expect that it will be settled.
    • The ICSID has previously awarded large damage awards to claimants who have had rights violated, thus that is a positive for the company as it has a strong case.