Bad Street, Best House No More: It's Time To Go Short Goldcorp
Itinerant • 36 Comments
Itinerant • 36 Comments
Today, 5:35 PM
- ABX, ACGL, AEM, AHL, ALDW, ALGT, AMSF, ANIK, AR, ARI, ARRS, AXS, AXTI, BGG, BWLD, CAA, CACI, CAKE, CDE, CHE, CMO, CMPR, CRY, CSGP, CSII, CW, DDR, DLB, DRE, ECHO, EFX, EGHT, EPE, EQY, ESND, ESV, EXR, FBHS, FFIV, FISV, FORR, GG, GRPN, GTY, HUBG, IBKC, INFN, JBT, KEX, KMT, KNX, KRA, KRC, KWR, LLNW, LMAT, MB, MC, MEOH, MKSI, MMLP, MMSI, MN, MUR, NEM, NEU, NOW, NTGR, NTRI, NXPI, O, OCN, ORLY, PLNT, PLXS, PPC, PRXL, PSA, PTC, QDEL, QEP, QTM, RCII, RGA, RHI, RJF, SCI, SFLY, SGMO, SHLM, SIGI, SU, TER, TILE, TIS, TRN, TSLA, TTMI, TXN, TYL, UCTT, UHS, UNM, VAR, VMW, WCN, WDC, WIRE, WLL, XL
Yesterday, 3:58 PM
- Gold Standard Ventures (GSV -5.1%) is lower after announcing a private placement of up to 7.88M common shares at C$3.17 each for total proceeds of up to ~ C$25M.
- As a part of the private placement, Goldcorp (GG -1.4%) is purchasing more than 4.7M shares at the offering price; GG anticipates owning ~10.6% of GSV shares at closing for the placement.
- GSV expects to use the proceeds to acquire certain royalty interests on its flagship Pinion-Railroad gold project in Nevada, purchase nearby land claims, continue exploration on the project and for general working capital purposes.
Yesterday, 2:24 PM
- Analysis from Canaccord Genuity suggests the gold price may have bottomed, thus the firm upgrades Goldcorp (GG -2%), Centerra Gold (OTCPK:CAGDF +0.8%), Detour Gold (OTCPK:DRGDF -1.5%) and Fortuna Silver Mines (FSM -0.4%) to Buy from Hold.
- With the recent pullback in commodity prices, "a window of opportunity appears to have presented itself, and we believe investors should consider increasing weights" in select precious metals stocks, the firm says.
- Canaccord cites rising market volatility related to the upcoming U.S. election, the recent pullback in extreme non-commercial long gold positions on the Comex, declining selling pressure among hedge funds, and real interest rates remaining near zero whether or not the Fed raises rates in December.
- The firm cites other names that could benefit, as underperforming portfolio managers look to increase their leverage to gold, including Kinross Gold (KGC -5.7%), Iamgold (IAG -2.2%) and B2Gold (BTG -3.9%) among senior producers, Endeavour Mining (OTCQX:EDVMF -1.6%) and Alamos Gold (AGI -3%) among mid- and small-cap producers, and Tahoe Resources (TAHO -1.1%) in the silver space.
Mon, Oct. 10, 1:10 PM
- Goldcorp (GG -0.2%) says it reached an agreement with protesters to lift the blockade that interrupted operations for about a week at its Penasquito gold mine in Mexico.
- The company promised to renew contracts with carriers, expand and establish two health centers, improve infrastructure in the nearby city, and study the water and air to assess whether it should compensate communities for alleged contamination, according to a state government mediator.
- Operations at the mine had been temporarily suspended because of a blockade by truck drivers protesting a loss of contracts.
Wed, Oct. 5, 4:58 PM
- Negotiations are underway to resolve the week-long blockade at Goldcorp's (NYSE:GG) suspended Peñasquito gold mine in Mexico, a government mediator tells Reuters.
- GG said on Monday that it shut operations at the mine because of safety concerns from the blockade by a trucking contractor concerned about losing business.
- GG says it has a contingency plan in place that would allow mining and processing to be restarted immediately once the dispute was resolved; it maintains that the shutdown will not impact 2016 production or cost estimates.
Tue, Oct. 4, 2:20 PM
- Precious metals miners are slammed as gold prices dip well below $1,300/oz. to settle at $1,269.70, its lowest since the U.K.'s Brexit vote in June, as upbeat U.S. manufacturing data yesterday has stoked expectations of higher interest rates.
- Gold is “falling off the cliff,” says Naeem Aslam, chief market analyst at ThinkMarkets. “Traders are buying the equity market with both hands, especially over in the U.K.” as the British pound declines.
- Among precious metals miners today: ABX -9.2%, KGC -10.4%, GG -7.8%, NEM -8.7%, EGO -7.4%, RGLD -7.8%, AEM -8.9%, NG -9.7%, SLW -9.1%, FNV -5.6%, IAG -11.2%, GOLD -8.1%, AU -9.3%, GFI -6.4%, SBGL -8.1%, HMY -9.9%, AUY -11.6%, BTG -9.3%, NGD -6.6%.
- ETFs: GDX, NUGT, GDXJ, GGN, DUST, SIL, JNUG, GLDX, JDST, SGDM, ASA, SLVP, SILJ, RING, PSAU, SGDJ, TGLDX, GDJJ, GDXX, GDXS
Mon, Oct. 3, 12:34 PM
- Freeport McMoRan (FCX -0.5%), Barrick Gold (ABX -2.5%) and Pan American Silver (PAAS -0.5%) are upgraded to Buy from Hold at Deutsche Bank, which notes the 12% Q3 rally in commodity prices have enabled the sector to improve their balance sheets via stock issuance, debt refinancing and asset disposals.
- The firm is neutral overall in the metals group, as it continues to believe that material supply cuts still are needed in most commodities and thus does not anticipate prices continuing their upward trend.
- Deutsche Bank says its top picks are ABX and Newmont Mining (NEM -3%) in precious metals, Steel Dynamics (STLD -2.4%) in steel, and Alcoa (AA -1.1%) and Kaiser Aluminum (KALU -1.8%) in aluminum; it upgrades AK Steel (AKS -0.7%), Coeur Mining (CDE -0.8%), Teck Resources (TCK -1.5%) and Goldcorp (GG -4.2%) to Hold from Sell.
Mon, Oct. 3, 10:24 AM
- Goldcorp (GG -2.3%) announces a controlled shutdown of operations at its Peñasquito gold mine in Mexico following a blockade by a trucking contractor that began last Monday.
- GG says it has taken legal steps, including filing criminal charges against the protesters, but that it also is ready to talk with the contractor's representatives.
- GG says it does not expect the incident to hurt overall production and cost guidance for 2016; Peñasquito produced 860K oz. of gold in 2015.
Thu, Sep. 29, 8:17 AM
- Protesters have blocked access to Goldcorp's (NYSE:GG) Penasquito mining complex in northern Mexico, threatening to interrupt production at the country's biggest gold deposit.
- The protesters began their blockade on Monday and are demanding payment for environmental damages, jobs and water for their communities, according to one of the protest leaders.
- Last year, Penasquito produced 860K oz. of gold, 25% of GG´s total production.
Wed, Sep. 21, 5:55 PM
- Newmont Mining (NYSE:NEM) was today's best-performing stock in the S&P 500 and precious metals miners gained across the board, enjoying a big boost from the Fed’s decision to keep interest rates unchanged.
- NEM even outperformed the VanEck Vectors Gold Miners ETF (NYSEARCA:GDX) - +7.5% vs. +7% - and Credit Suisse analysts say business in looking up for the miner, as NEM continues to meet or beat cost and production targets, as well as strengthen its portfolio.
- The firm adds that NEM believes shareholders appreciate its predictability, discipline and defining growth based on free cash flow rather than production.
- Also today: ABX +8.6%, GG +7%, AEM +7.1%, EGO +5.7%, KGC +7.6%, SLW +7.8%, FNV +4.8%, RGLD +9.6%, IAG +7.9%, GOLD +4.7%, AU +10.4%, GFI +9%, SBGL +9.5%, HMY +11.8%, AUY +7.6%, BTG +6.3%, NG +8.1%.
- ETFs: GDX, NUGT, GGN, DUST, SIL, GLDX, SGDM, ASA, SLVP, RING, PSAU, TGLDX, GDXX, GDXS
Sat, Aug. 27, 9:17 AM
- It's been a good year for gold and the companies that mine it, but Goldcorp's (NYSE:GG) 38% gain is badly lagging a near-doubling in the GDX, and even stronger advances for other sizable producers like Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX).
- Overpromising and underdelivering has been an issue, and investors right now are paying just 7.2x next year's forecast cash flows vs. the peer average of 9.8x. But new CEO David Garofalo (he's been on board for six months) has already made significant operational changes, and hopes to deliver $2B in NAV accretion over the next two years. Cost cuts could add $0.20 to EPS, says JPMorgan's bullish John Bridges.
- "There’s a value gap that should narrow without needing the gold price to take it there,” says Tocqueville Asset Management's Ryan McIntyre, who thinks there's 40% upside in Goldcorp at current levels for the metal.
- Source: Robin Goldwyn Blumenthal in Barron's
Wed, Aug. 24, 2:30 PM
- Shares of gold miners are sharply lower as gold futures fall 1.2% to settle at a one-month low $1,329.70/oz., closing below its 50-day moving average for the first time since June 7.
- The top gold miners ETF (GDX -6.3%) trades well below its 50-day moving average of $29.09 and is on pace for its first four-day losing streak since early November.
- Investors are dialing down bullish bets on gold ahead of Friday's scheduled remarks from Janet Yellen, says Peter Hug, global trading director at Kitco Metals.
- Among top mining stocks: ABX -8.4%, NEM -6.7%, GG -8.7%, KGC -9%, AEM -6.3%, SLW -7.3%, RGLD -7.3%, EGO -7.2%, GFI -5.1%, AUY -8.8%, GOLD -5%, HMY -5.7%, SBGL -4.9%, IAG -8.7%, BTG -6.9%, NG -7.3%, FNV -6%.
- ETFs: GDX, NUGT, GGN, DUST, SIL, GLDX, UGL, DGP, UGLD, GLL, DZZ, SGDM, ASA, SLVP, DGL, RING, DGZ, DGLD, PSAU, TGLDX, UBG, GDXX, GDXS
Wed, Aug. 24, 12:26 PM
- Mexican regulators say they are examining whether Goldcorp (GG -5.2%) broke any regulations in its handling of a long-running leak of contaminated water at its Pensaquito gold mine.
- GG reported a rise in selenium levels in groundwater to the Mexican government in October 2014, after which contamination near its mine waste facility intensified, Reuters reports, citing internal company documents; the company told Mexican regulators two weeks ago that contaminated water also was found in other areas of its property.
- GG says it has not told villagers living near the mine because its tests showed the leak had not affected groundwater beyond its property line or contaminated the local drinking water.
Tue, Aug. 9, 11:24 AM
- Goldcorp (GG +2%) is initiated with an Overweight rating and $22 price target at Morgan Stanley, which says the underperformance of GG shares relative to gold mining peers has created an entry point for investors.
- The firm believes GG’s production guidance for 2016-18 appears conservative, and that although the company is mining above reserve grade, the issue seems to be overblown; also, GG is less likely to begin work on a large greenfield project or make a big acquisition since it has steady medium term production and a large resource base.
- Stanley says GG offers a better risk-reward outlook than Barrick Gold (ABX +0.2%) or Newmont Mining (NEM +0.5%), which the firm rates at Equal Weight with respective stock price targets of $20 and $41 (I, II).
Sun, Jul. 31, 4:15 AM
- Barron's interviews Jim Grant, founder of Grant's Interest Rate Observer.
- Grant is bullish on metals, including Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM), Goldcorp (NYSE:GG), New Gold (NYSEMKT:NGD), and Pan American Silver (NASDAQ:PAAS): "Gold stocks have come a long way. But many were priced for bankruptcy, notably Barrick Gold, an encumbered mining company priced at $6 at the bottom, as if its debt would not be paid. Now the stock is $20. I personally own Newmont Mining, Goldcorp, and New Gold.
- "I'm very bullish on the metal, bullish on miners. Bears on credit finally get paid in gold. At the end of the road to confetti, gold will reclaim some position as an active monetary asset, not a crank's asset. It is now a relatively high-yielding asset, yielding, as it does, nothing.
- "We are also bullish on silver. It is the crazy uncle in the attic of monetary assets. It is as volatile as Donald Trump. It has industrial uses as well as monetary ones, which will come to the fore as the gold bull market progresses. In June, we recommended Pan American Silver (PAAS) and long-dated, out-of-the-money call options on the silver exchange-traded fund iShares Silver Trust (NYSEARCA:SLV).
- Grant is bearish on Kraft Heinz (NASDAQ:KHC), Campbell Soup (NYSE:CPB), and United Rentals (NYSE:URI): "One idea that hasn't worked yet is being bearish Big Food. Both are indicative of one form of excess, reaching for yield in equities. Campbell is trading for 23 times trailing net income, and Kraft is 46 times. Both are battling new trends in eating."
- Other ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GTU, UGLD, GLL, DZZ, GLDI, OUNZ, DGL, DGZ, DGLD, GYEN, GEUR, UBG, QGLDX
Thu, Jul. 28, 4:58 PM
- Goldcorp (NYSE:GG) has put its Los Filos gold and silver mine in Mexico up for sale, and is looking at selling its Alumbrera mine in Argentina and its Marlin operation in Guatemala, both of which are getting close to being mined out, CEO David Garofalo tells Reuters.
- Garofalo does not speculate on a sales value for any of the assets but says GG would consider getting paid in part in the shares of the acquirer, as happened in 2010 when it sold its Escobal silver deposit to Tahoe Resources.
- Shares fell 5.9% in today's trade after reporting a larger than expected Q2 loss, as production plunged by nearly a third to 613.4K oz. from 908K oz. in the year-ago period, and costs rose partly due to a maintenance shutdown and slow restart of its biggest mine.