Aug. 22, 2014, 4:17 PM
Jul. 25, 2014, 4:14 PM
Jul. 18, 2014, 4:19 PM
Jul. 11, 2014, 4:13 PM
Jun. 19, 2014, 3:10 PM
- A nice-sized rally has turned into a melt-up for the precious metals and the companies that pull them out of the ground. Gold is up 3.9% to $1,319, its highest level in two months, and silver is ahead 5.7% to $20.90. GLD +3.6%, SLV +5.4%
- The gold miners (GDX +4.7%), and the silver miners (SIL +6.1%).
- A dovish interpretation of the FOMC news from yesterday makes for a nice excuse, as does the President's move to send 300 military advisers to Iraq to try and head off an all-out civil war there.
- Gold and silver ETFs: GLD, SLV, AGQ, IAU, USLV, SIVR, ZSL, SGOL, UGL, DGP, GLL, UGLD, DZZ, SLVO, GLDI, DSLV, DGL, DBS, DGZ, DGLD, AGOL, OUNZ, TBAR, USV, UBG, GYEN, GLDE, GLDS, GLDL, GEUR, GGBP
- Gold and silver miner ETFs: GDX, NUGT, GDXJ, DUST, GLDX, JNUG, JDST, RING, GGGG, PSAU, SIL, SLVP, SILJ
Jun. 13, 2014, 4:14 PM
May 29, 2014, 9:04 AM
- "The fact that gold companies tend to burn cash in good or bad markets to us accentuates the industry’s poor fundamentals," says the team at Citi, noting the "easy levers" on cost cuts have been pulled, but 75% of the industry is still cash-flow negative at today's gold prices.
- Besides, cutting capex and exploration costs is nice for next quarter's margins, but what happens to production and unit costs longer term (hint: one falls, the other rises)?
- "Whether or not they cut capex, we see both scenarios as bad for cash flow delivery and shareholder returns, longer term. Increasing head grades in order to boost near-term results (a practice that has become common over the past year) should also have detrimental effects longer term. There seems to be no easy way out."
- ETFs: GDX, NUGT, GDXJ, DUST, GLDX, JNUG, JDST, RING, GGGG, PSAU
May 19, 2014, 6:33 PM
- Despite the collapse of the $33B Barrick-Newmont merger last month, scarcity and extraction costs would seem to make consolidation of the embattled gold mining sector inevitable, WSJ's Alistair McDonald and John Miller write.
- The gold industry ramped up exploration as prices increased 6x from 2001 through 2012 to $1,750/oz., but prices since have tapered off to ~$1,300/oz.
- Discoveries also have tapered off: 22 gold deposits with at least 2M oz. of gold each were discovered in 1995, there were six such discoveries in 2010, one in 2011, and zero in 2012.
- The grade of gold held by miners declined 35% from 2001 to last year, and lower grades require digging up more earth to find the metal so are more expensive per ounce; the cost of mining an average oz. of gold rose to $745 in 2012 from $280 in 2005.
- ETFs: GDX, GDXJ, NUGT, DUST, GLDX, JNUG, JDST, RING, GGGG, PSAU
May 9, 2014, 4:22 PM
May 2, 2014, 4:18 PM
Apr. 25, 2014, 4:23 PM
Apr. 22, 2014, 7:55 AM
- Gold and silver equities now appear more fairly valued, Goldman Sachs says, raising its sector coverage view to Neutral as it sees more responsible capital allocation, successful cost cutting initiatives, a refocus on maximizing free cash flow, and sound strategic portfolio optimization improving the positioning of select companies and offsetting its below-consensus outlook for commodity prices ($1,200/oz. gold from 2015 forward).
- The firm upgrades Barrick Gold (ABX) to Buy, believing the company's financial flexibility has significantly improved; ABX +1.8% premarket.
- B2Gold (BTG) is initiated with a Buy rating and C$4.20 price target, as Goldman cites imminent production growth from the Otjikoto project which enhances BTG’s free cash flow generation and should fund future development.
- Started at Neutral: AGI, FNV, BVN,.
- Maintained at Buy: GG, AUY, SLV.
- Sell: IAG, EGO, PAAS.
- ETFs: GDX, GDXJ, NUGT, DUST, SIL, GLDX, JNUG, SLVP, RING, SILJ, JDST, GGGG, PSAU
Apr. 17, 2014, 5:44 PM
Mar. 28, 2014, 4:23 PM
Mar. 21, 2014, 4:15 PM
Mar. 20, 2014, 1:26 PM
- The rally in large gold miner names (GDX +0.8%) may have gotten ahead of itself as the companies still have plenty of work ahead of them as they move to repair balance sheets and focus on cash flow over growth, writes Liam Denning. The smaller miners (GDXJ +2.7%) have rallied faster this year, but they fell further last year, and their attraction now would be the potential for deals - the larger players are pushing off projects, and thus need another way to replenish resources.
- Not all are good targets, but those with projects closer to completion and for higher grade ores are most attractive, says CIBC's Jeff Kileen, highlighting Continental Gold (CGOOF +0.5%), Premier Gold Mines (PIRGF +1.1%), and Pretium Resources (PVG -0.8%).
- Other smaller players with attractive projects starting up this decade include Asanko Gold (AKG), Golden Queen Mining (GQMNF +0.6%), and Orezone Gold (ORZCF -0.2%).
- ETFs: GDX, GDXJ, NUGT, DUST, GLDX, JNUG, RING, GGGG, JDST, PSAU
GDXJ vs. ETF Alternatives
The Junior Gold Miners ETF seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Junior Gold Miners Index. The Index provides exposure to a global universe of publicly traded small- and medium-capitalization companies that generate at least 50% of their revenues from gold and/or silver mining, hold real property that has the potential to produce at least 50% of the company’s revenue from gold or silver mining when developed, or primarily invest in gold or silver. The Fund will normally invest at least 80% of its total assets in companies that are involved in the gold mining industry. As such, the Fund is subject to, among others the risks of investing in international equities and small- and mid-cap mining companies. Many companies may not have begun to generate material revenues and operate at a loss, contributing to greater volatility, lower trading volume and less liquidity than larger companies.
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