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  • What It Really Costs To Mine Gold: The Yamana 4th Quarter Edition
    Today, 5:02 AM AUY 6 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?
    Yesterday, 12:29 AM GLD, ABX, GG 16 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 Fourth Quarter 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 13 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 10 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.
  • 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 19 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.