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  • Update: Alamos Gold Receives Approval For The Agi Dagi Project
    Thu, Aug. 21 AGI Comment!

    Summary

    • Alamos Gold recently received approval for its Agi Dagi project which shows the Turkish government is still mining friendly.
    • This means that we believe there is a good chance the company's legal issues surrounding the more important Kirazli project will also be settled.
    • Investors looking to front-run the anticipated fourth quarter decision may want to acquire shares now because we believe the Turkish government will not unduly hold up the Kirazli project.
  • What It Really Costs To Mine Gold: The Iamgold Second Quarter Edition
    Thu, Aug. 21 IAG 3 Comments

    Summary

    • Iamgold’s costs on both a core and a core non-tax basis have continued to fall on a sequential basis.
    • Iamgold's core non-tax costs though are still elevated compared to FY2012 and FY2013 which tells us taxes are higher on a per dollar basis.
    • The company's debt load is something for investors to monitor as liquidity is sufficient for the next 1-2 years but it is high relative to market capitalization.
    • Westwood production is forecast to increase significantly in the second half of the year and this may significantly reduce costs and surprise investors.
  • What It Really Costs To Mine Gold: The Kinross Gold Second Quarter Edition
    Thu, Aug. 21 GG, NEM, ABX 7 Comments

    Summary

    • Kinross’s costs on both a core and a core non-tax basis have continued to fall significantly on a year-over year basis.
    • Sequentially though the second quarter saw Kinross's cost rise from the surprisingly good first quarter numbers.
    • While Kinross's silver production was down due to the closure of La Coipa operations, gold production has been rising.
    • Investors should also monitor the company's ability to service its debt as at current gold prices it is essentially breaking even.
  • What It Really Costs To Mine Gold: The Randgold Second Quarter Edition
    Tue, Aug. 19 GOLD 2 Comments

    Summary

    • Randgold's costs on both a core and a core non-tax basis have continued to fall on a year-over year basis.
    • The company also continues to increase production and is on pace to produce the most annual gold in its history.
    • Investors need to monitor the Ebola outbreak in Africa as a spread of the disease to Mali would be a large risk for the company's current operations.
  • What It Really Costs To Mine Gold: The Allied Nevada Gold Second Quarter Edition
    Mon, Aug. 18 ANV 34 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 and sequential basis.
    • Management expects cash costs to continue to rise in the second half of the year because of higher stripping so that the company can access more ore in 2015.
    • With costs above the current gold price and a high debt load, investors need to be extremely careful with their Allied Nevada investment.
  • What It Really Costs To Mine Gold: The Alamos Gold Second Quarter Edition
    Sun, Aug. 17 AGI Comment!

    Summary

    • Alamos’s costs on both a core and a core non-tax basis have risen significantly compared to its first quarter costs.
    • The company's gold production continues to drop from its Mulatos mine and it is one pace for its third year of declining production.
    • The company needs to increase production by either improving Mulatos results or through development of its Turkish properties.
  • What It Really Costs To Mine Gold: The Eldorado Gold Second Quarter Edition
    Tue, Aug. 12 ABX, GG, NEM 8 Comments

    Summary

    • Eldorado Gold’s costs on both a core and a core non-tax basis have continued to fall significantly on a year-over year basis.
    • While some of the reduction in costs per ounce is due to increased production, management has also shown it has worked hard to cut expenditures.
    • Eldorado's low costs per ounce puts it at the top of all the mid-tier and major gold producers we've covered s far in the second quarter.
    • Investors should monitor cash flows because even though costs were low expenditures made cash flows negative for the quarter due to CAPEX investments.
  • USGS Report Confirms That U.S. Gold Production Is Dropping Fast
    Tue, Aug. 12 GLD, PHYS, GDX 7 Comments

    Summary

    • The US is the world's third largest miner of gold and production has continued to fall over the last 10 years.
    • 2014 is looking to be the lowest year of gold production for the US since the beginning of the bull market in gold.
    • Gold investors should be reassured by this data as it strengthens the view that current production of gold is unsustainable at current prices.
  • What It Really Costs To Mine Gold: The Agnico-Eagle Mines Second Quarter Edition
    Tue, Aug. 12 ABX, GG, NEM 2 Comments

    Summary

    • Agnico-Eagle’s costs on both a core and a core non-tax basis have continued to fall significantly on a year-over-year basis.
    • The company also continues to increase production and is on pace to produce the most annual gold in its history.
    • The company’s production did fall on a sequential basis as Meadowbank production dropped significantly and is expected to drop further in the second half of the year.
  • What It Really Costs To Mine Gold: The Barrick Gold Second Quarter Edition
    Fri, Aug. 8 GG, NEM, AUY 12 Comments

    Summary

    • Barrick's production numbers continue to decline on both a year-over-year and sequential basis and this is something important for investors to note.
    • Barrick's true all-in and core non-tax costs are also rising sequentially and the company is merely treading water at $1300 gold.
    • Management turnover at the company leads us to think the chances of a Newmont and Barrick merger are probably higher than the industry thinks.
  • What It Really Costs To Mine Gold: The Yamana Gold Second Quarter Edition
    Thu, Aug. 7 NEM, GG, AUY Comment!

    Summary

    • Yamana's core costs dropped on both a year-over-year and sequential basis which is positive for the company.
    • Investors should also pay attention to core non-tax costs which actually rose as this quarter saw a large tax refund.
    • The company has more work to do to lower costs to reach its low-cost competitors.
    • Too early for investors to accurately evaluate costs as the Malartic mine acquisition significantly changes the company's production profile.
  • Update: Pretium Drill Results
    Wed, Aug. 6 PVG 20 Comments

    Summary

    • Recently released drill results confirm deep mineralization under the Valley of the Kings resource.
    • Though mineralization is positive, we see nothing exciting about these results that would add value to the existing resources.
    • Deep drilling will resume in September with results probably to be released later in the fourth quarter so no real catalysts for the company until then.
  • Update: Premier Gold Mines' Acquisition Of Cove-McCoy Gold Properties
    Tue, Aug. 5 PIRGF Comment!

    Summary

    • Premier Gold fully consolidated its Cove-McCoy gold properties by purchasing 100% interest in it from Newmont Mining for $21 Million.
    • In our opinion this shows a lot of confidence of management in the Nevada property as they are already developing their Canadian Hardrock property.
    • This confirms and possibly adds to our earlier valuation of the company as we only considered the Hardrock property in the valuation.
  • What It Really Costs To Mine Gold: The Goldcorp Q2 Edition
    Tue, Aug. 5 GLD, NEM, GG 11 Comments

    Summary

    • All-in costs continue to decline on a year-over-year and sequential basis as the company adjusts to the new gold price environment.
    • Compared to competitor Newmont, Goldcorp offered investors a much better quarter with lower costs across the board.
    • Investors may want to monitor production totals in future quarters as second quarter production was a bit lower on a sequential basis.
    • Goldcorp continues to show that it is one of the lower cost major mining companies.
  • What It Really Costs To Mine Gold: The Newmont Mining Second Quarter Edition
    Sun, Aug. 3 GLD, GDX, NUGT 21 Comments

    Summary

    • Newmont Mining showed a slight decrease in total gold-equivalent production.
    • All-in costs continue to decline on a year-over-year comparative basis as the company adjusts to the new gold price environment.
    • While the quarter's drop in costs was good, core non-tax costs actually rose on a sequential basis.
    • Investors need to pay attention to earnings reports from other major miners to get a better context on Newmont's performance on a comparative basis.
  • Gold Investors Take Note That An Industry Report Shows Gold Production Dropping Precipitously
    Sun, Jul. 27 GLD, GG, IAU 52 Comments

    Summary

    • Discoveries of gold resources and reserves have been falling and are not keeping up with gold production.
    • The trend of falling gold discoveries has accelerated over the last decade.
    • The time it takes to bring a discovery to production has increased substantially to close to twenty years.
    • Gold investors should ignore the economic noise and concentrate on gold's fundamental supply picture.
  • Indian Silver Imports Surge In May, But Silver Investors Should Instead Monitor This Possible Catalyst
    Sun, Jul. 20 SLV, HL, PAAS 15 Comments

    Summary

    • Indian silver demand surged in May to 711 gross tonnes of silver.
    • Indian silver demand is strong but it was similarly strong in 2013 and thus is only keeping a floor under the price of silver.
    • The true catalyst for the silver price is Chinese demand which remains relatively low, but if it rises then we could see silver move up significantly.
  • When Mark Bristow Talks Gold Bugs Should Listen
    Sat, Jul. 5 EGO, GG, GOLD 28 Comments

    Summary

    • Mark Bristow, Randgold's CEO, is one of the few gold mining CEOs that predicted the 2011 gold drop and he emphasizes that $1300 gold is unsustainable for the industry.
    • Thus gold offers investors a low-risk long-term opportunity regardless of the performance of the stock markets and the Fed's taper.
    • Gold miners are bit more risky and investors should carefully select which miners they will own in their portfolios.
  • Bill Gross, Bondholders Battle The Fed, And Gold
    Sun, Jun. 29 GLD, ABX, GG 24 Comments

    Summary

    • PIMCO believes that the Fed needs real rates to stay low to avoid a "financial earthquake" - this is what they term the "New Neutral".
    • The consequences of financial repression force bondholders to fight the Fed and thus increase leverage in the financial system and force real rates even lower.
    • Instead of investors leveraging themselves up to fight the Fed's financial repression, they should consider alternative assets that do well in leverage unwind situations like gold.
  • Pretium Resources: Updated Feasibility Study And New Drilling Provide Potential Catalysts
       • Thu, Jun. 26 GG, PVG 15 Comments

    Summary

    • New feasibility study shows that Brucejack is one of the few gold projects that would be profitable at gold prices under $1000 per ounce.
    • CAPEX costs for development remain under $800 million and thus allow Pretium to develop Brucejack without waiting for an acquisition.
    • Even though the company has a plan to move to permitting and construction, continued drilling show that management believes that there is significant potential to expand the resource base.
    • Investors should pay particular attention to the results of holes SU-628 and SU-629 that would give clues into the potential of expanding the Valley of Kings at depth.
  • Investors Take Note That 2 Headwinds May Restrain Share Price Increases For Gold And Silver Miners
    Sun, Jun. 22 GDXJ, GDX, ABX 29 Comments

    Summary

    • Gold miners and explorers have seen 2014 gains that have significantly outdone even their traditional leverage on the upside over gold and silver prices.
    • Many explorers and developers may be tempted to take advantage of the rise in share price to raise capital which may negatively impact investors.
    • Rising energy prices also may hit at miner profit margins as margins drop despite an increasing gold and silver price.
    • Investors may want to swap gold and silver mining shares for the underlying assets of gold and silver to find a better entry point.
  • Bank Of England's Quarterly Report: Are We Quietly Seeing Central Banks Repatriate Their Gold?
    Thu, Jun. 19 AEM, GG, NEM 52 Comments

    Summary

    • Bank of England's Quarterly Report shows that the bank held 5485 tonnes of gold for 72 central bank customers.
    • The gold holdings of the bank have dropped over 750 tonnes year-over-year with no reported central bank selling.
    • This suggests that we may be seeing large amounts of gold repatriation, which is exactly what happened when Bretton Woods broke down.
  • Bear Creek Mining: The Market's Undervaluation Of Santa Ana Provides Investors With A Nice Upside
       • Thu, Jun. 12 BCEKF 2 Comments

    Summary

    • Recent Peruvian court's decision on Santa Ana adds significantly to Bear Creek's potential.
    • Market attached a $50 million value to Santa Ana where we think based on conservative comparables it should be closer to $80 million.
    • Santa Ana has additional upside that is not included in the comparables including expansion of the resource at depth, additional silver recoveries, and the inclusion of 36 million silver resource.
  • The Most Important Takeaway From The ECB Meeting For Gold Investors: The ECB Won't Fail Like This Again
    Sun, Jun. 8 AEM, NEM, GG 25 Comments

    Summary

    • Recent action by the ECB to take interest rates to negative levels are unprecedented but despite these extroardinary efforts the Euro rose.
    • The ECB needs to bring the Euro to lower levels because the EU economies are struggling and anti-Euro parties are gaining popularity.
    • The failure to drop the Euro means the ECB will have to take even greater steps in fture meetings.
    • Gold stands to benefit from these currency wars as ECB easing will be increased and other central banks may fight to also lower their currencies to keep up.
  • Why We Are Now Selling Our Gold Positions For Silver Positions
    Sun, Jun. 1 SLV, HL, PAAS 60 Comments

    Summary

    • Silver's performance over the last three years has been especially weak, but we believe silver is about to start significantly outperforming gold.
    • 2013 Silver Institute data shows that scrap silver supply has plummeted by more than 60 million ounces; 2014 should see even further drops as the silver price has fallen further.
    • Primary silver miners didn't produce silver profitably in 2013, and may have challenges in 2014 mining silver profitably; and byproduct silver production may also see a drop.
    • Analysts and investors are especially bearish on silver and are positioned accordingly; thus positive news may catch the market off-guard, and being long silver is truly a contrarian position.
    • The annual silver market is very small at under $20 billion, and there is the potential for significant gains if even a moderate amount of money enters the silver market.
  • Seasonal Gold Moves: Is This The Catalyst That Gold Needs To Break Out Of Its Trading Range?
    Mon, May. 26 GLD, GG, NEM 17 Comments

    Summary

    • Seasonal demand is a very relevant historical indicator for gold.
    • Investors may want to initiate or increase gold positions if we see traditional summer price weakness.
    • Seasonal physical demand may spur gold to break out of its trading range especially if we see no notable moves in early summer.
  • Russian Gold Reserves Increase By A Massive Amount In April: Could Russia Cause Chaos In The Gold Market?
    Thu, May. 22 GG, NEM, AG 38 Comments

    Summary

    • April's gold purchase is Russia's largest since 2010 and could be a harbinger of things to come.
    • Russia's continuing diversification out of US Treasuries means that we could see much bigger purchases in the future.
    • Russia's gold reserves as a percentage of foreign exchange reserves is low and it would have a long way to go before reaching parity with the US and EU.
  • A Forgotten Friend: Gold Investors Should Welcome The Bengal Tiger
    Sun, May. 18 GLD, GG, NEM 23 Comments

    Summary

    • Narendra Modi victory in India offers a number of bullish catalysts for gold.
    • An easing of Indian gold import duties and restrictions would ease current high Indian gold premiums and lead to a rise of gold imports.
    • The business friendly policies of Mr. Modi would also mean a stronger Rupee, and thus increase citizen purchasing power of gold.
  • Exeter Resources: Investors Should Expect A Higher Share Price Or A Buyout
       • Sat, May. 17 XRA, KGC 19 Comments

    Summary

    • Exeter's new PEA shows that Caspiche can be developed as a low-CAPEX mine with a fraction of the original water usage.
    • Exeter's current share price is at levels that reflect its previously financially unfeasible, high-CAPEX Caspiche plan and Exeter could have a 30-50% upside to get to price levels that reflect.
    • The newly demonstrated optionality of Caspiche offers potential acquirers two different ways to develop the project based on high or low gold prices.
    • Kinross's nearby Maricunga mine is expected to leach its last ore in 2019 and Exeter would make a nice, cheap target to shift resources over in time for mine decommission.
    • A new Chinese law to remove government approval for acquisitions under $1 billion may bring in Chinese acquirers as Chinese-Chilean trade relations are extremely strong.
  • Iamgold's First-Quarter Report May Offer A Positive Surprise For Investors As Cost-Cutting Efforts Pay Off
       • Mon, May. 5 IAG 11 Comments

    Summary

    • Iamgold's core production costs should drop as CAPEX drops significantly from last year's levels, as we expect management to hit its guidance of 40% lower CAPEX costs than 2013.
    • Looking forward, Westwood production should come online in late 2014 and ultimately increase gold production to around one million ounces by 2016.
    • Expansion and development projects at Rosebel, Sadiola, and Cote will be put on hold, which should allow Iamgold to conserve more cash and lead to a better bottom line.
    • Debt risks are overblown, because most of the debt isn't due for another 3-4 years and should allow plenty of time for the gold price to recover.
    • Investors' expectations are set extremely low, and the upcoming earnings report should show significantly higher profitability due to CAPEX costs, exploration reduction, and expansion suspensions.
  • Weekly COMEX Gold Inventories Increase: Is That Bearish For Gold Investors?
    Mon, Apr. 28 GG, NEM, IAG 8 Comments

    Summary

    • COMEX registered and eligible gold inventories have risen in recent weeks.
    • Investors need to remember that inventory levels are still at historically low levels.
    • Gold claims per registered ounce have dropped, but also remain at levels never seen before June 2013.
  • The Drums Of War Are Beating: Prepare Your Portfolio For An Escalation In Ukraine
    Sat, Apr. 26 SPPP, PLG, CF 128 Comments

    Summary

    • Friday's escalation in the Ukrainian conflict leads us to believe that additional sanctions (and counter-sanctions) will begin as soon as Monday.
    • Gold and gold stocks stand to benefit from both Russian counter-sanctions aimed at the US Dollar and general financial market chaos that may result.
    • Platinum and Palladium ETFs and equities would benefit from the reduction in Russian supplies as they are the second largest global producer of both metals.
    • Fertilizer stocks stand to benefit as both Ukraine and Russia are major players in the global fertilizer market.