Seeking Alpha

ducat

ducat
Send Message
View as an RSS Feed
View ducat's Comments BY TICKER:
Latest  |  Highest rated
  • U.S. Investors Buy Early During This Gold Market Rebound [View article]
    Tim_ As usual, I enjoyed your article. Appreciate the effort you put into your comments. However, I wish you would amend your comment containing: "sales of one-ounce gold coins rose to 4,755,000 in January," You are of course aware that this number of coin sales is for silver, not gold. Still that is an outstanding figure. As I recall, back in the late 1990s only ~4 million Silver Eagles were sold ANNUALLY.
    Feb 10 07:57 PM | Likes Like |Link to Comment
  • What The Marigold Purchase Means For Silver Standard Shareholders [View article]
    BenKM_ Good job of detailing the specifics of this deal relative to SSRI's cash flow picture. I agree with the majority of positive remarks in this comment section. You used a sharp knife to carve out the potential cash flow expectations and still came out showing this to be a great buy. Especially so for us long time holders that have stared at the quiet pond for years. One thing you didn't mention was the reference made in the news release that there are some outstanding NSRs attached to Marigold's production. As we all know, these instruments can turn out to be a serious drag on income. Thanks for your work.
    Feb 10 11:32 AM | Likes Like |Link to Comment
  • Prepare For A Shortage Of Physical Gold [View article]
    Indiana_ Thanks for the response. In light of your explanation, I still don't quite understand the often stated figure of longs holding claims on gold ounces at a ratio of over 100 ounces for every ounce available in the Comex registered category. I do understand that all most all long contracts are either settled in cash or rolled over to another month. I will keep your one to 2.4 ounce ratio in mind when reading about this situation. Hebba probably is my best source as he deals with this subject regularly. Keep up your frequent commenting posts as they provide valuable information.
    Feb 4 08:12 PM | 1 Like Like |Link to Comment
  • Prepare For A Shortage Of Physical Gold [View article]
    indian**_ Help me out on this one. I have yet to figure out the Comex gig. I read that in the most recent time period there are anywhere from 90 to 100 ounces asking for every ounce in the Comex registered category. You say that there are 8,988 contracts (each contract equal to 100 ounces?) equaling 898,800 ounces standing for delivery. You give the Comex registered ounces as 400,000. That seems to me to be a ratio of "only" 2.4 ounces asked for each Comex ounce available. Where is my thinking screwed up?

    Ben, Was in not "silver" that the Chinese had cornered and England came up with the opium trade to get back the silver they had lost in trade imbalances with China?
    Feb 4 05:19 PM | Likes Like |Link to Comment
  • An In Depth Look At Silver Wheaton [View article]
    IlIiluinia_ Your view is appreciated but your description of the area and resources impacted by the mine is abbreviated and controversial. I did read your referenced article and commend you for presenting your view clearly. There are a number of issues involved...not just "wild cats" and water consumption. The comment period on the EIS opened at the beginning of the year and closes on Feb. 14. We will know a lot more when those comments are addressed by the company.
    Jan 28 08:55 PM | Likes Like |Link to Comment
  • An In Depth Look At Silver Wheaton [View article]
    Bem K-M_ To follow up BrianBrian G's comment on tax issues, I am curious to see what will be the outcome of the new Mexican tax ramifications regarding streaming companies. As I understand it, Primero won a law suit exempting them from having to pay the SLW Mexican income tax on the portion for silver delivered to Wheaton at a price far below the market value. This new 7.5% tax is a royalty designed to reward the government for the extraction of value from the country's mineral wealth. Intuitively, I would think some entity is going to get stuck for the difference between the ~$4.00 miner(s) are selling to SLW for and the true value of the product. If it is not the case, it seems there will be a glaring loophole where both miners and streamers escape paying royalty tax on this silver production. That would encourage set ups where under the table deals could be cut to legally circumvent the new tax.

    You didn't mention that the Rosemont Mine was facing some permitting hurdles. The last I read, Augusta was facing a challenge from the EPA who has called the current Environmental Impact Statement insufficient to mitigate significant, identified impacts. Primarily, the EPA finds that the mine will wipe out some fish bearing streams and jeopardize large acreages of wet lands in a sensitive area. EPA has an obligation to veto any permit issued by the Corps of Engineers unless these impacts can be mitigated with a a major plan re-work. At lease that is how I see it. Good comprehensive article. Thanks for researching and writing it.
    Jan 28 12:59 PM | 1 Like Like |Link to Comment
  • Short Coeur Mining On Declining Gold Prices And Weak Fundamentals [View article]
    Artem_ On Oct. 25, 2013 Eric Sprott wrote an open letter to the World Gold Council demonstrating how the calculations they use to arrive at gold supply and demand is flawed. In the introduction he says:

    "In my opinion, the massive imbalance between supply and demand is not reflected in prices because available statistics are misleading. It is not the first time that GFMS (and World Gold Council) statistics have come under pressure from the investment community."

    He concludes that the annualized (for 2013) demand should be 5,200 tonne. After adjusting for Chinese and Russian gold being unavailable to the market, less than 2,142 tonne of new gold was available. Recycle/scrap added 1,344 tonne and ETFs added about 914 tonne. Documented total supply amounted to 4,400 tonne. Even if these figures are remotely close (appreciating that some people are saying demand was slack for the last two months of the year) there was a supply deficit of ~800 tonne. What this says to me is that without the ETF gold to augment supply, prices would have gone up substantially. This is not the kind of news gold shorts want to hear as this hidden source of that 800 tonne may be near exhaustion. The GLD supply is certainly constrained.

    Your #1, "Thus, it doesn't matter that Coeur also mines silver." is correct to a point. The strong correlation indicates that silver is being viewed as a monetary metal. However, the silver/gold ratio is 60 to 1, which doesn't make sense given the industrial demand augmenting a growing investment demand. It is certainly possible that any major drop in gold price will be met with a small (tiny) drop in the price of silver.

    Jan 12 03:56 PM | Likes Like |Link to Comment
  • An Explanation For The Divergent Prices Of Gold And Stocks [View article]
    Micheal L_Your hypothesis is interesting but it seems to be using USA birthrates and stock market prices. As you are aware, gold prices are currently being driven by non-US demand. If you extrapolated your hypothesis to the World population, would China's step away from the "one child policy", Russia's bounty for new births and Japans efforts create new children along with India's historically high birthrate force a change in your time line? Just curious if you considered these parameters.
    Jan 12 11:47 AM | 6 Likes Like |Link to Comment
  • Short Coeur Mining On Declining Gold Prices And Weak Fundamentals [View article]
    SD_ Thanks for putting some meat on the bone regarding Artem's hatchet job on Coeur Mining's true situation. I recommend that anyone tempted to follow his shorting advise should pull up Coeur's Home Page and read about the company. They have been in a re-build and build mode the last few years and have spend a ton of money setting up for a solid future. If one sentence of all he writes sums it up, it is: "Thus, Coeur is going to be extremely pinched when the gold price falls. Worst case scenario, it could go out of business.".

    First and foremost, Coeur is a SILVER miner. One does not judge a silver miner by the price of gold. That is especially true without dong an analysis of the current silver demand and a grossly out of whack silver/gold ratio. If the price of silver is held at this current price, there are few or any silver miners that can survive in the long term. I own shares in Pan American, Silver Standard, Majestic and US Silver&Gold in addition to half a dozen silver explorers. All will do great if silver returns to a reasonable price. ALL will struggle if the big bank's continue to keep the metal price below the long term cost of production. Coeur's capital expenditures looking forward are discretionary. Putting off development costs associated at La Preciosa and Joaquin would allow Coeur to grind along at low silver prices for a long time, albeit, at a lousy ROI.

    Artem_ I suggest that you do some research regarding your acceptance of the World Gold Council's use of ETF (mostly GLD) as an indicator of reduced demand. Most knowledgeable analysts make the case that ETF is not "supply"; rather, it is a response to overwhelming demand coming from the East. This gold is gone! It will only be replaced (in the ETFs) by scarce newly produced gold at a much higher price,
    Jan 12 11:15 AM | 4 Likes Like |Link to Comment
  • Could Silver Bounce Back? [View article]
    Lior_ Thanks for getting back to me on this one. I didn't spend much time reading (too many numbers) but near the top of the report I satisfied my curiosity. There is a graft that shows total consumer demand. Even though It does not include the full year figures for 2013, it clearly shows an increase in consumer demand when compared with the proceeding 4 year's worth of data. You referred me to "full report for Q3" while our discussion was about demand for the "year".

    As I am sure you are aware, the methodology used by the World Gold Council has been challenged by a number of reputable analysts. Complaints seem to center around the GLD draw down (and subsequent shipment to China) not being properly accounted in the demand figures. I won't swear to the accuracy of my judgement on this topic. Maybe someone more informed will fill in the story for us. Thanks for your help.
    Jan 8 03:36 PM | Likes Like |Link to Comment
  • Could Silver Bounce Back? [View article]
    Lior_ your good discussion of the correlation between the price of silver and gold (strong), is appreciated. To me it demonstrates that silver is being viewed primarily as a monetary asset with little value given for its industrial use. That is a train in the distance as silver users look to the futures to "secure" a steady stream of cheap silver to keep the lines running. I don't intend to stall my car on that track.

    You say: "Since gold's demand (both as investment and the physical metal) diminished in the past year,...".

    That statement flies in the face of evidence that China alone has gobbled up nearly the entire gold production for 2013. Where are you finding the numbers to justify your statement? Thanks
    Jan 8 12:14 PM | Likes Like |Link to Comment
  • An Analysis Of Gold And Its Miners For 2014 [View article]
    David_ I agree with your statement " unfairly penalize growth companies for reinvesting their cash flow." This seems to be the case with most of formulas attempting to identify the true cost of mining gold and silver. They produce results that if applied to a family would give high praise to the parents that eat their kids. In some cases what we are seeing in the miners is efforts to replace diminishing reserves as legacy mines are drying up. If someone presents reputable information showing that we are building the base for much higher production and/or much lower demand in the future, I would give credit to complaints that miners are overbuilding (including the cost of "land"). The case as I see it is that ore grades are going down and the low hanging fruit is mostly gone. The demand (exceeding new supply) seems secure at current prices and world econopolitics. The begging and the end of this story is all about the price of the metals. Give us $1,800 gold and those companies having invested in the future will shine, regardless how bad they look to those currently condemning capital expenditures.
    Jan 4 12:22 PM | 1 Like Like |Link to Comment
  • 4 Of Our Favorite Precious Metals Stocks For 2014 [View article]
    1077****_ Thanks. That is an important piece of information. It would be interesting to know if they attained the 400 ton limit and for how long. The EIS should provide information on this and the success they had in suppressing acidic conditions.
    Jan 1 02:18 PM | Likes Like |Link to Comment
  • 4 Of Our Favorite Precious Metals Stocks For 2014 [View article]
    Hebba_ You say: " There are plenty of projects that deposit their tailings into lakes that get environmental approval.".

    I do not believe that is an accurate statement. Understand that there are two ways mining waste may be discharged into surface waters. The most common practice is to place the waste material including tailings and process water into lagoons where evaporation removes most of the liquid and any overflow is treated to water quality standards before being discharged into the water be it lake or stream. The other rarely approved way water bodies become receiving waters is when all waste including both solid rock and process water is deposited in a lake. In the USA an EPA NPDES permit is/was required to manage hard rock mining waste and a permit could not be issued for tailing disposal in surface waters because it has been determined that a known and available alternative existed in most circumstances (dry stacking). While Coeur Mining took the permitting issue to the Supreme Court where it was ruled that the Kensington Mine in Alaska could be permitted as a Corps of engineers dredge and fill project, EPA still has the final authority to veto those COE permits. The circumstances associated with Kensington's Slate Lake disposal are rare. The tailings generated at that mine are of a neutral pH and do not lead to heavy metal contamination. Furthermore, the lake in its natural state was not a good fishery and Coeur laid out a plan that would leave the lake in a much better state when mining was complete. Like I said, we will know a lot more when the EIS for the project is developed. Watch Agusta's Rosemont mine permitting process for information on how the COE and EPA interface on water related discharges in the USA.
    Jan 1 03:15 AM | 1 Like Like |Link to Comment
  • 4 Of Our Favorite Precious Metals Stocks For 2014 [View article]
    Hebba_ Sorry, I must have developed a lazy eye. You compared PAAS silver production as ...larger than "MANY", not all silver miners. as I first read it.
    Dec 31 03:46 PM | Likes Like |Link to Comment
COMMENTS STATS
224 Comments
264 Likes