Seeking Alpha

ducat

ducat
Send Message
View as an RSS Feed
View ducat's Comments BY TICKER:
Latest  |  Highest rated
  • Afraid Of The Plummeting Gold Price? Russia Certainly Is Not [View article]
    DRM_ You should tell that "nobody wants the Ruble" to China who just signed up for that unprecedented natural gas deal. Hard to know what auto manufacturers would pay for Rubles if that was the only currency accepted to buy essential Platinum/Palladium and nickel.
    Sep 21 02:26 PM | Likes Like |Link to Comment
  • Afraid Of The Plummeting Gold Price? Russia Certainly Is Not [View article]
    Hebba_ Thanks for keeping this potentially market moving situation in the spot light. Need to keep in mind also that in addition to the The 36 million ounces Russia has in gold reserves, she is also the 4th largest producer in the world of countries. That amounts to a growing annual production of ~7 million ounces Withholding those ounces from the world market like China has done would be a shock to the supply chain.

    Mike Stone_ I think you might want ti check your figures. From the Fed's own data they show that from Aug 2013 to July 2014 China's holdings in US treasuries dropped from 1,268.1 Billion $US to $US 1.264.9. A small but significant change from the past. You might be getting China mixed up with Belgium which moved their holdings from $US 166.8 Billion up to $352.6 Billion. :>)
    Sep 21 02:03 PM | 1 Like Like |Link to Comment
  • Insiders Are Buying Hecla Mining [View article]
    PF_ I see that you qualified your analysis with the statement: "This is not intended to be a full SWOT analysis," but being that you highlighted total debt of $496 million, I think it would be fair to elaborate on this issue. Hecla purchased Casa Baradi last year at a hefty price:

    "After proration, Hecla issued an aggregate of 56,997,790 shares and paid total cash consideration of $514.5 million. The cash consideration was funded, in part, by a US$500,000,000 private placement of Senior Notes by Hecla...."

    The debt seems to me a miner issue if indeed Baradi is as good as expected. What isn't shown in the debt that one might expect is that in the last two years HL had paid off ~$260 million in Superfund assessment and finished over 60% of the several hundred $million investment in developing the ultra rich ore grade Gold Hunter deposit that will likely extend life of mine for several decades with an increased production at the Friday. Add to this the fact that HL shut down the Friday with "0" income for a full year in 2012 and it is clear that the company has been generating a large cash flow for some time.

    It is hard to leave a discussion of Hecla's future without mentioning the recent release of excellent drill results at the San Sabastion mine in Mexico. Thanks for the attention given to this US company.
    Sep 19 01:03 PM | 6 Likes Like |Link to Comment
  • Coeur Mining Needs To See Silver Price Rise Fast [View article]
    Jack_ You are right. A terrible choice had to be made. Mothball the unfinished Palmarejo project or agree to this terrible deal. You may recall that Palo was up and running in 2011 when Coeur had a spectacular cash flow. That unforeseen credit crunch in 2008 had no mercy on those companies caught in need of money. I think it was better to take the deal. What turned out to be the most devastating impact on Coeur was the silver/gold ratio turning sour for Ag. Palmarejo was and still is a silver mine with revenue from silver exceeding that from gold. The minimum gold delivery requirement forced Coeur into carrying out a mine plan that favored gold production at the detriment of "profitable" silver mining. At least, that problem will be mitigated in the future with the new agreement.
    Sep 17 01:53 PM | 1 Like Like |Link to Comment
  • Coeur Mining Needs To See Silver Price Rise Fast [View article]
    Jack_ It is not clear to me if by recent "streaming agreements", you mean the Jan. 2009 Franco deal or the 2014 re-negotiation of that agreement. Hard to understand it if you mean this recent deal. That can hardly be viewed as a negative move on the part of Coeur. Maybe you are meaning the recent establishment of the Coeur Capital Unit that is taking the streaming role as lender in exchange for Net Smelter Royalties. is that a bad deal(s) in your mind? Have you spent enough time researching this issue to be using it as a measuring stick on management decision making?

    It is hard to contest your view that other silver miners have done better than Coeur in terms of share price and earnings. However, when making comparisons it is important to view the "position" Coeur is in when silver finally breaks the stranglehold. Coeur's large resource base is substantially located in and around existing/operating 100% owned mine processing facilities. The future is all about the price of silver for all these Ag miners...you are right about that one.
    Sep 16 11:57 AM | Likes Like |Link to Comment
  • Coeur Mining Needs To See Silver Price Rise Fast [View article]
    Jack_ Good broad brush of the Coeur situation but I don't see your urgency in needing to see silver price increases soon...nice as that would be. I agree with Azinsd that the negatives with the company are already priced in.

    You should have mentioned that along with the Total debt of $480 million, Coeur has cash and equivalents of $317 million leaving a Net debt of "only" $163 million.I don't know where you got the $413 million price tag for La Preciosa. At the time of closure, it was stated that the deal was for $100 million CAD plus 11.6 million shares of Coeur and some million or so of warrants. Depending on which of the share prices one chooses at that time when the price was jumping radically, the shares made of well over 1/2 of the purchase cost....the official price tag at the time was pegged at a total value of $344 million. Viewed in today's share price, that would closer to $250 million. That is a good deal in my mind...betting that silver will "eventually" get out of this rut. I think the expenditures since purchase only amount to some $20 million...which has yielded some increases in resources and a revised/more cost effective development plan.

    There has been some misunderstanding of the royalty re-negotiation with Franco Nevada. The old contract calls for a minimum delivery of gold to F/N of 50,000 oz per year. That will change in about 1.5 years when the original amount of 400,000 ounces of gold (50kx8yrs.) has been delivered. The problem has been that Coeur has (at Palmarejo) had to mine the low silver grade open pit to capacity in order to meet minimum gold delivery to Franco. Your $20/yr figure is correct in that the new agreement calls for Franco to give back $800 per ounce instead of the current $400 (50,000x$400=20 million). In the meantime, Franco is contributing ~$20 to aid Coeur in opening up the Guadalupe adjacent property which contains higher grade ore (especially, the gold). The main point is that when that original minimum (400,00 oz) is satisfied, the minimum required delivery is history. Then Coeur will be able to mine like a silver producer rather than a gold producer...that is afterall, what they are suppose to be. Thanks for covering this important company.
    Sep 15 12:35 PM | 2 Likes Like |Link to Comment
  • The Importance Of Rosemont Mine For Silver Wheaton [View article]
    Itinerant_ I agree. In light of:
    "A dam failure that sent billions of gallons of mine waste flowing down a British Columbia creek threatens to put a chill on new mining projects across Canada.

    The Aug. 4 accident at Imperial Metals Corp.’s Mount Polley copper-and-gold mine led the local district authority to declare a state of emergency amid concerns about drinking water and the fate of millions of migrating salmon.", the project permitting looks more questionable. I read one report that said the Rosemont tailings pond design was done by the same firm that designed the Mount Polley waste management facility. Even if inaccurate, that facility was considered "state of the art" and it's failure points out the environmental risk involved with these huge copper mines.

    Further, I see no reports of EPA backing away from earlier statements that indicated they would have to veto a 404 permit if issued by the Corps of Engineers, due primarily to wetlands destruction. If water quality standards cannot be sufficiently met, EPA is required to use their veto.
    Sep 10 11:35 AM | 1 Like Like |Link to Comment
  • Update: TriMetals Mining To Continue Gold Springs Exploration After Solid Initial Results [View article]
    Ben K-M_Thanks for the update. Those of us who bought in at the time the Bolivian project was flying high have little to celebrate but it is good to know the old SAS is still alive. Please continue to keep us up on any news.
    Sep 8 01:06 PM | Likes Like |Link to Comment
  • Why You Should Buy Silver Before It's Too Late [View article]
    Crabster_ Indeed you are correct that CDE did the reverse spit of 10 to one when they got caught in the 2008 whip out. They were in a position of being delisted with a price of ~<$1.00 while trying to bring on two large mines. Bad timing...or bad management???

    At least they were able to survive that dire situation and live to be in a position to do quite well if the PM prices increase. The share price has increased from a low of $3.60 ($0.36 in per-split terms) to the current ~$8.00 level. During this time they have managed to bring on line those two large mines and set themselves up to just fine if the PM prices head back up. Would it have been better if they had gone bankrupt rather than proceeding bringing the mines on line? This mining is a risky business and sometimes things don't come out the way they are planned. If you sold at that $0.36 level, I can sure understand your disdain for the company. As t turned out, I bought some at that low-low level..which explains partially why I have a positive attitude toward the company. Time will tell us if my trust is rewarded.
    Aug 27 12:24 AM | 1 Like Like |Link to Comment
  • Why You Should Buy Silver Before It's Too Late [View article]
    Make that CHAD..sorry. Forgot to mention that the new "fixing" arrangement will likely not change the manipulation game with the CME crew involved...my opinion anyway.
    Aug 26 04:12 PM | Likes Like |Link to Comment
  • Why You Should Buy Silver Before It's Too Late [View article]

    chat_ I hope you have your hat on.Writing positive of Coeur can be dangerous to one's ego. Perhaps the most hated of the PM producers? But I do agree with your assessment that the company is severely under priced and due for a serious share price increase. With silver and gold at these prices, CDE is hard pressed to make a profit. Things may improve even if the ~$20 and ~$1,250 metal prices hold, but any real profits await the probable increase in those prices. Coeur is not alone. Most silver miners are struggling in this $20. range.

    Palmarejo, Coeur's largest mine has been hamstrung with a 50% gold royalty with a minimum 50,000 ounce per year requirement. They have had to churn though a full capacity amount of relatively poor silver ore to satisfy this gold commitment. This will change in about a year and one-half time due to a change in the re-negotiation of the royalty arrangement with Franco-Nevada. At that time, the minimum will disappear and FNV will increase the $400. per ounce payback fee to a new $800 level. In the meantime, Coeur is storming ahead with developing the adjacent Guadalupe Deposit that will provide more gold per ton (less possessing costs). Nevada is providing cash to facilitate this change beginning in the first quarter of next year. This move should save some silver resources and be a life of mine benefit when silver prices recover. Thanks for your article.
    Aug 26 04:07 PM | Likes Like |Link to Comment
  • Coeur Mining's Assets Are Worth Far More Than Its Current Market Cap [View article]
    Investment Doc_ You say:

    " But at this point in time, it's just a piece of dusty land. Your 100M can't be anything else than 'anticipated' value, but that is 100% conditional on the silver price and nothing else."

    Are you saying that if silver drops down to $15/0z next month, vertically every silver miners' assets will be worthless? I don't think so.

    You are aware that First Majestic worked hard to buy La Preciosa at well over $100 million when silver was ~$25/oz. And yes, all silver property valuations have to be "speculative" because the price of silver can swing violently up or down. I think the supply/demand fundamentals suggest we will see a much higher price in the not so distant future. That makes this whole argument mute..especially because Coeur will not be offering LP for sale to test the real value.
    Aug 14 11:13 AM | Likes Like |Link to Comment
  • What Is Keeping Silver Down? [View article]
    james_ I hope you are wrong...but I think you have it right. This is a dangerous time with so called free world leaders willing to take any measure available to entrap Russia in an iron circle.
    Aug 13 05:57 PM | Likes Like |Link to Comment
  • Update: Coeur Mining Earnings [View article]
    Investment Doc_Good explanation of the fact that a quick look at Coeur, or even most PM miners, "earnings" alone gives an incomplete picture of company health. Appreciate how you laid that out. Where I think you oversimplified your criticism of the company is when you say:

    "think that the acquisition of Orko Silver to get its hands on the La Preciosa silver project in Mexico was a very stupid move as the project definitely isn't viable at the current silver price."

    Silver had only recently dropped to the $20/oz range when they bought out Orko (April 16, 2013). As I recall, there were very few analysts venturing to propose silver would go below $20, let alone remain at these depressed prices for many many months. Then too, The bulk of the purchase price was satisfied with Coeur Shares that were valued at ~$15/share at the time. Orko was picked up really cheap if the price is recalculated using today's share price. And, the competition with Majestic for the deposit was keen. In sum, I think it would be much fairer to say Coeur had bad timing luck, rather than having made a "stupid" move.

    The company will look brilliant when silver makes a base above $25.00/oz and the decision to delay construction is reversed in a heart beat. Thanks
    Aug 7 07:33 PM | 3 Likes Like |Link to Comment
  • TriMetals Mining Is Moving Forward And Has Significant Upside Potential [View article]
    Ben K-M_ Thanks for taking the time and effort to detail this unloved little company. One issue unaddressed in your effort is the recent passage of the new Bolivian Mining Law. With that document signed by the president it could seemingly increase the potential for a honest settlement with the company over the expropriation of the Malku Khota. Little has been reported on the specifics of the Law, I have read that it codifies the constitution's prohibition forbidding the taking of private property. While there may be no retroactive action covered under the new law, the fact that the Morales Administration has verbally committed the country to an investment friendly path might suggest they need to clear the books on this one.

    The most descriptive comment I have read (in English) is an article based on the comments of the Bolivian Finance Minister was found in this release:

    "Asked about the legal certainty the government provides foreign investors, Arce said Bolivia’s constitution offers guarantees for foreign as well as domestic private capital. He also noted that recent legislation, including a new law enacted in April, provides investment incentives."

    http://bit.ly/1lRbZHJ

    If any reader has a link to any decent discussion of the law, a post of it would be appreciated. I have no idea why the passage of it has been largely ignored by the press. And, yes, I am one of the legacy bag holders of the old South American Silver company and have some of the spun-off B shares.
    Jul 8 12:04 PM | Likes Like |Link to Comment
COMMENTS STATS
243 Comments
287 Likes