Wheaton Precious Metals Corp (WPM)

[JohnCM]

Will Silver Wheaton Increase Its Stakes On Pascua-Lama?

Dec. 29, 2014 11:22 AM ET
By Peter Arendas - Seeking Alpha

Silver Wheaton hasn't made a new streaming agreement for more than a year.
Pascua-Lama is a large project suspended by Barrick Gold due to huge cost overruns.
Pascua-Lama is too big and Barrick Gold has invested too much money into it not to finish it.
Gaining another silver or gold stream from Pascua-Lama would mean a huge boost to Silver Wheaton's share price.
Silver Wheaton (NYSE:SLW) lags behind its main competitors, Royal Gold (NASDAQ:RGLD) and Franco-Nevada (NYSE:FNV). While Royal Gold is up 32% year to date and Franco-Nevada is up 15%, Silver Wheaton has lost 3.5% of its value. Also the comparison of P/E ratios shows that investors are more optimistic about the future prospects of Royal Gold and Franco-Nevada.

Company Estimated P/E (12/2014)
Franco-Nevada 48.56
Royal Gold 44.70
Silver Wheaton 25.29
Source: Bloomberg.

The competitors have almost two times higher P/E ratios than Silver Wheaton. The underperformance of Silver Wheaton is usually explained as a combination of two factors:

Silver Wheaton's main focus is silver and silver is more volatile (i.e., more risky) compared to gold. Gold has lost only 2.2% of its value while silver is down by almost 19% year to date. This is why investors are more confident in investing in shares of Franco-Nevada and Royal Gold that are primarily focused on gold.
Silver Wheaton hasn't expanded its royalty portfolio for more than an year. On the other hand, Franco-Nevada and Royal Gold were more active. This is why the investors expect more growth from them, which is also reflected in higher valuations of their shares.
Both of the above-mentioned points can be resolved at once. Silver Wheaton needs to buy another stream, ideally a gold stream. Although there is a lot of projects that need to be financed right now, only a couple of them is big enough to have a meaningful impact on the valuation of a company like Silver Wheaton. Pascua-Lama owned by Barrick Gold (NYSE:ABX) is big enough. And Silver Wheaton knows Pascua-Lama quite well because it already owns a streaming agreement on a 25% share of its silver production.

Pascua-Lama and Its Future

The Pascua-Lama deposit is located in South America on the Chile-Argentina border. There are proven and probable reserves of 15 million toz of gold and 675 million toz of silver. The projected mine life is 25 years. The production during the first 5 years was expected at the level of 800,000-850,000 toz of gold and 35,000,000 toz of silver, with all-in sustaining cash costs between $50 and $200 per toz of gold. It means that the project can be highly profitable even at the current gold price. The problem is that the estimated capex grew from $1.6 billion in 2006 to more than $8.5 billion in 2014. Barrick has already invested more than $5 billion, but the decline of the gold market together with some political and environmental problems forced the company to stop the construction of the mine back in 2013.

Although the construction has been suspended, there was too much money invested for Barrick Gold to not finish the mine. The mine would be highly profitable even at the current gold price. The production of 800,000 toz of gold at all-in sustaining cash costs of $200/toz and gold price of $1200 would result in an yearly profit of $800 million. For comparison, the adjusted net earnings of Barrick Gold were $222 million in Q3 2014. It means that Pascua-Lama has the potential to significantly boost financial results as well as share value of the company.

Barrick's management surely knows this, although its comments about the restart of development are only tentative. But keeping the project conserved is expensive ($300 million in 2014 only) and it is probable that the estimated capex of $8.5 billion will rise as the years pass by. And upon of it if the mine isn't completed by the end of 2017, Silver Wheaton will have the right to terminate the streaming agreement. In this case, Barrick will be obliged to return Silver Wheaton $625 million less a credit for silver already delivered.

The above-mentioned is why Barrick claims that it will explore opportunities to improve the project's risk-adjusted returns, including strategic partnerships or royalty and other income streaming agreements. According to a government official in Argentina, Barrick Gold is in talks to form a partnership on Pascua-Lama with Zijin Mining (OTCPK:ZIJMF). Zijin Mining is the biggest Chinese gold producer and it is trying to expand its operations outside of China. Only a couple of weeks ago, Zijin Mining announced that it will acquire 9.9% of shares of Pretium Resources (NYSE:PVG) via a private placement. Whether the Chinese will make a deal with Barrick Gold or not, Barrick may need another financial infusion to complete the construction of Pascua-Lama, and Silver Wheaton has more than $1 billion to play with.

Silver Wheaton and Pascua-Lama

Silver Wheaton acquired the Pascua-Lama silver stream in September 2009. Silver Wheaton made an upfront payment of $625 million. As a result the company will receive 25% of silver production from Pascua-Lama at a price of $3.9 (or the market price if the market price is below $3.9/toz). The price of silver was $16.5/toz and the price of gold was $997/toz back in September 2009, which means that the price conditions were similar to the present ones. As such, if Silver Wheaton wants to make another streaming agreement with Barrick it should be able to reach similar terms.

Silver Wheaton should get 9,000,000 toz of silver per year during the first five years of operations. The estimated silver production of Silver Wheaton is 36,000,000 toz of silver equivalent. The current agreement may result in a 25% increase of today's production numbers. Silver Wheaton has over $1 billion of capital prepared for acquisitions of new streams, which means that it has more than enough money to reach a streaming agreement with Barrick Gold similar to the current one. It would mean a significant boost for the valuation of Silver Wheaton because:

The agreement would mean that Pascua-Lama is back on track and the markets can include the 25% growth of production into the share price.
Silver Wheaton made another deal and the business will expand.The markets should include the value of the new contract into the share price.
If the new agreement was about a gold stream instead of another silver stream, it would mean a significant diversification of the Silver Wheaton's portfolio. It should increase the valuation of Silver Wheaton (in the terms of the P/E ratio) to levels more similar to Royal Gold and Franco-Nevada.
Yes, someone can tell that the exposition against Pascua-Lama could get too big, but most of the risks can be treated in the terms of the streaming agreement (as it has done in the current streaming agreement where Barrick Gold is obliged to finish the construction by a predetermined date, or else Silver Wheaton will have the right to terminate the contract). Barrick Gold is a strong partner that should be able to fulfill its obligations. And although there were some environmental issues, it is in the interest of Argentina as well as Chile to let Barrick Gold to finish the construction of the mine, to employ the local people, and to pay local taxes.

Conclusion

Pascua-Lama is too big and Barrick Gold has invested too much money into its development to only throw it into the trash bin. Barrick Gold will be looking, and some sources say that it already is looking, for ways how to complete the mine. Pascua-Lama has a huge potential to become a major catalyst for the Silver Wheaton's share price. If Barrick Gold decides to go it alone or if it decides to bring in a new partner, the markets will attribute a higher value to the current streaming contract held by Silver Wheaton. If Barrick makes another streaming agreement with Silver Wheaton, the impact on the share price will be even stronger. It would make sense for Silver Wheaton to increase its stakes on Pascua-Lama.

[JohnCM]

There we go. Popping over $20.00 again. I guess money is back on the sidelines.

[Pro-Life]

A keeper but indecision reigns in the charts...

SLW

[JohnCM]

SLW is a keeper ...

[Stoxxman9]

Are we having fun yet?

Not all boats fall on the ebb tide ... those backed by a rising metal are gonna continue to make us rich notwithstanding.

Tee Hee.

http://pennystockjournal.blogspot.ca/2014/11/silver-wheaton-corp-slwt_25.html

[JohnCM]

SLW is super!

[Stoxxman9]

Ag, Au flat early.

Ag keeps tacking on the gains, daily, and all of em are bottom line accruing to SLW. Best insurance against potentially falling equities is Silver.

http://pennystockjournal.blogspot.ca/p/silver.html

[JohnCM]

I am with you ...

[Stoxxman9]

Ag up $ .07, Au up $ 3.11

We predict a super duper good week for Ag and SLW.

[Stoxxman9]

Overseas Ag market open in a few hours.

Not very liquid and subject to manipulation but semi-interesting anyways.

Future looks peachy for Ag and SLW. This monkey believes the manipulators are on the slippery slope now.

http://pennystockjournal.blogspot.ca/p/silver.html

[JohnCM]

I like SLW but maybe I like USLV better!

Buy sub $20.00

Is SILVER the new GOLD?



3X ETF leakage?

[JohnCM]

Do they ship SILVER?

[Tmyz]

You like the UTiw right now

[C6rx9630]

Wow thank you for that site, great info!!!

[JohnCM]

Great site !!!!!

[Stoxxman9]

Ag up another $ .11 today ... and every penny is bottom line accruing for SLW

Real Time Silver Chart

[JohnCM]

YES!!!!

That's the way to do it!

[FadeMeToWin]

recently added sub $20s and loving it.

[JohnCM]

Gold off 1.7 percent.

SLW can be had at $19.50

To think it was selling in the 17's recently.

THAT was the buy ...

[Stoxxman9]

India drops Au import duties.

Reversal in metals explained and both Ag and Au will trade higher this week. IMO.

[Stoxxman9]

Metals down large on overseas open. (Update ... big reversal, check out Au chart. http://pennystockjournal.blogspot.ca/p/gold.html)

Last gasp for manipulators. We say both Ag and Au will close strongly higher today.

Penny Stock Journal

[JohnCM]

Buy SLW $19.25 2 hours in ...

IMO

[Stoxxman9]

Geeze Louise. Long SLW and the price of Ag in the last two days of virtually zero volume is highly suspicious.



http://pennystockjournal.blogspot.ca/2014/11/silver-wheaton-corp-slwt_25.html" rel="nofollow" target="_blank" >http://pennystockjournal.blogspot.ca/2014/11/silver-wheaton-corp-slwt_25.html

[HONU]

Hmmmmm, Oil is the only concern I have, honestly a little fearful about its short and long term direction.

[JohnCM]

I left the Bull ETF 3X crude oil stock about a week ago.

What about buying Monday morning, or do you see further weakness in the price of crude?

[HONU]

Contrarian investing at its finest......That applies to all natural resource stocks right now, Silver Wheaton not withstanding.

[JohnCM]

17's = Fantastic

18's = Good

19's = OK

20's = Decent buy and hold

21's = Reaching a bit

[Pro-Life]

Incredibly, the P&F chart in the i-Box says the bearish price objective is $6... AMAZING!!!

[JohnCM]

Buy SLW under $20.00 like your life depends on it ...

[JohnCM]

No doubt. SLW is a keeper. Especially $17.00 - $18.00

[SsMurry]

Neutral impact for SLW
Daniel Earle has sent out an analysis report on SLW. Silver Wheaton reported Q3/14 EPS of $0.20, which was slightly below both consensus of $0.22 and Daniel Earle's estimate of $0.23, due to a lower realized silver price and higher depreciation

Silver-equivalent production totaled 8.4 Moz at cash costs of $4.59/oz (Daniel Earle had forecasted 9.1 Moz at $4.65/oz); The company will need to produce 10.2 Moz in Q4/14 to meet its annual guidance of 36.0 Moz

The company declared a quarterly dividend of $0.06/share, as expected and the company’s cash position increased by approximately $94mm to $233mm in the quarter

Daniel Earle forecasts the company's operating cash flow to be in the range of $420mm to $540mm per year over the next few years (at $15.50/oz silver) and he currently only model $230mm of capex payments for the remainder of 2014 and 2015

Silver Wheaton is currently trading at 1.21x NAV5% and 13.8x 2015E CFPS, which is a meaningful discount to what Daniel Earle views as its closest peer, Franco-Nevada Corp. (FNV-T), which trades at 1.78x NAV5% and 20.8x 2015 CFPS

With SLW's strong balance sheet and access to capital, the company is well positioned to continue to complete attractive transactions and further its business model, in Daniel Ear;e's view. Daniel Earle maintains his BUY recommendation.

[JohnCM]

UWTI Velocity shares 3X Long Crude

[Solantey]

"Sell gold, brace for tanking oil, and a rocky ride for stocks in 2015"

http://www.marketwatch.com/story/sell-gold-brace-for-tanking-oil-and-a-rocky-ride-for-stocks-in-2015-2014-11-13?siteid=yhoof2

[Toofuzzy]

I am thinking of hedging my SLW by buying dollars insteadof the other way around.

Toofuzzy

[goforthebet]

yes, it has not a great influence on their business

[JohnCM]

Silver Wheaton confident despite $62m impairment charge

Silver Wheaton shares closed up 1.71% at $19.01 per share on the NYSE Wednesday after the company released its financial results.

Author: Dorothy Kosich
Posted: Thursday , 13 Nov 2014
RENO (MINEWEB) -
Silver Wheaton’s decision to take a US$62 million impairment charge relating to its Mineral Park and Campo Morado silver interests (which were impacted by lower silver prices) generated some concern during a conference call with analysts Wednesday.

Mercator Minerals filed for Chapter 11 bankruptcy in August. “As a result, management has concluded the value of the Mineral Park silver interest is nominal, and as such has reported an impairment charge of $37.1 million during the current period, representing the carrying value of the Mineral Park silver interest at September 30, 2014,” said Silver Wheaton in 3Q financials published Wednesday.

However, Silver Wheaton entered into a settlement agreement earlier this month, which retains the company’s right to be paid of a portion from the sales of the Mineral Park mine and its assets.

Meanwhile, the G9 orebody at Nystar NV’s Campo Morado mine is nearing exhaustion and the company decided to reduce its estimate for future production. “The reduction in estimates of future production is an indicator of impairment related to the Campo Morado silver interest,” said Silver Wheaton. “Management estimates that the recoverable amount under the Campo Morado silver interest is $25 million, resulting in an impairment charge of $31.1 million during the current period.”

“Despite this, we remain confident in our portfolio,” said Silver Wheaton CEO Randy Smallwood during a conference call with analysts Wednesday. “As a reminder: 86% of our current production comes from mines in the first cost quartile of the respective cost curves and we challenge you to find a higher quality portfolio of our size anywhere in the precious metal space or in the mining industry in general.”

However, analyst John Tumazos of John Tumazos Very Independent Research observed, “I think it’s the words of Franco-Nevada, your peer, I recall, emphasizing that their royalties or streams are written into the deeds, that survive bankruptcy, are enforceable.”

Silver Wheaton CFO Gary Brown admitted that “Mercator’s said some challenges. … Do we want to fight the right out, (or) is it better for us to, in our eyes, we’ve done well on this investment that we are ahead of the game, in terms of our original investment back in and out. And we look at this almost … as a chance to just clean up the portfolio and continue to improve the quality of our asset base and the percentage things.”

During the conference call, Smallwood noted that Silver Wheaton “recently marked the 10-year anniversary of streaming, a model that we created in October of 2004 when we signed the first streaming agreement on the San Dimas mine.”

“Over our first 10 years, the company has grown to have over 20 assets in the portfolio, including such cornerstones as San Dimas, Penasquito and Salobo,” he added. “Our streaming model has been adopted across the industry and is now recognized as a valuable way for traditional mining companies to raise funds and crystallize the value of their non-core precious metals production.”

“As far as performance, in its first 10 years, Silver Wheaton’s share price has climbed over 500%, while silver has risen just under 140%,” Smallwood observed in the company’s financials.

During the third quarter, Silver Wheaton reported attributed silver equivalent production of 8.4 million ounces (6.1 million ounces of silver and 35,400 ounces of gold), down 7% from 9.1 million SEO ounces (6.8 million ounces of silver and 36,600 ounces of gold) in the third-quarter 2013.

For the first nine months of the year, Silver Wheaton reported 25.9 million SEO (19.3 million silver ounces and 102,000 gold ounces), down 1% from 26.1 million ounces (19.5 million ounces of silver and 110,400 ounces of gold) for the comparable period in 2013.
The company forecast 2014 attributable production of 36 million silver equivalent ounces, including 155,000 ounces of gold.
Financials

Net earnings for the third quarter and nine months ended September 30, 2014 was $4.5 million ($0.01 per share) and $147.8 million ($0.41 per share), respectively, compared with $77.1 million ($0.22 per share) and $281.6 million ($0.79 per share) for the comparable periods in 2013, representing a decrease of 94% and 48%, respectively.

Adjusted net earnings for third quarter and nine months ended September 30, 2014 of $72.6 million ($0.20 per share) and $215.9 million ($0.60 per share), respectively, compared with net earnings of $77.1 million ($0.22 per share) and $281.6 million ($0.79 per share) for the comparable periods in 2013, representing a decrease of 6% and 23%, respectively.

Average cash costs for the third quarter and nine months ended September 30, 2014 of $4.59 and $4.62 per silver equivalent ounce, respectively, compared with $4.73 and $4.63 per silver equivalent ounce, respectively, for the comparable periods in 2013.

Silver Wheaton’s EPS for the 3Q were one cent below analysts’ consensus of $0.21.

Cowen and Company analyst Adam P. Graf said, “Earnings for 3Q14 was in line with consensus, and relatively consist y/y as increased sales offset lower metals prices. Overall, operations remained consistent, and are building cash at a healthy rate. The company is on track to meet its year-end guidance. Maintain Market Perform.”

Scotiabank’s Trevor Turnbull also maintained a Sector Outperform rating for Silver Wheaton. He noted that the operating cash flow from Mineral Park ($51m) already exceeded the stream’s purchase price of $42m.

However, Turnbull observed, “We feel gold production is likely to be about 10% below the original plan of 155,000 oz despite the expected increase in output from Salobo and Sudbury.”

[goforthebet]

Impairment Charge Weighs On Silver Wheaton 3Q Earnings

Wednesday November 12, 2014 10:15 AM

Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) posted net earnings in the third quarter of $4.5 million, or 1 cent per share, down 94% from $77.1 million, or 22 cents per share in last year’s comparative quarter after absorbing an impairment charge of $68.2 million related to its Mineral Park and Campo Morado silver interests.

" The lower pricing environment recently forced the operators of one of our smaller streams, Mineral Park, to face liquidity issues and subsequent bankruptcy," says Randy Smallwood, president and chief executive officer of Silver Wheaton. " While this is certainly disappointing, it's important to recognize that these were the only two assets we found to be impaired, both are relatively small contributors to our portfolio, and both assets have generated cash flows well in excess of the original upfront payments."

The company reported revenues of $165.9 million in the quarter, on par with the $166.4 million generated this time last year. Silver equivalent production totaled 8.4 million ounces, down 7% year-on-year while silver equivalent sales volume rose 12% to 8.7 million ounces, the company says. Average realized sale price per silver equivalent ounce sold in the third quarter totaled $18.98, down 11% year-on-year. Silver Wheaton declared a quarterly dividend of 6 cents per common share.

http://www.kitco.com/news/2014-11-12/KitcoNews-kitco-mining-minutes-Nov-12-2014.html

[Pro-Life]

This is excellent material.

[JohnCM]

Technically, December gold futures prices closed nearer the session low and hit a 4.5-year low today. The gold bears have the strong near-term technical advantage. However, this market is well overdone on the downside, on a short-term technical basis. The gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,160.00. Bears' next near-term downside breakout price objective is closing prices below solid technical support at $1,100.00. First resistance is seen at $1,150.00 and then at $1,155.00. First support is seen at today’s low of $1,137.10 and then at $1,130.00.

December silver futures prices closed nearer the session low and hit a contract and four-year low today. The silver bears have the strong overall near-term technical advantage. Prices are in a four-month-old downtrend on the daily bar chart. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at this week’s high of $16.22 an ounce. The next downside price breakout objective for the bears is closing prices below solid support at $15.00. First resistance is seen at $15.635 and then at $16.00. Next support is seen at today’s contract low of $15.12 and then at $15.00.

[JohnCM]

24/7 Wall St

4 Gold Stocks That Can Survive Despite Tumbling Spot Prices
By Lee Jackson November 5, 2014 8:30 am EST

"Although, along with oil, gold has been crushed as the spot price continues to fall, that has more to do with dollar strength than any actual failure of the precious metal to hold value. Still, it doesn't make it any easier for investors that have been hammered on both sectors. The precious metal team at RBC dissected the top companies in a new research report, looking for stocks that not only can survive, but that may be incredible buys for long-term investors at these levels.

The analysts stressed in the report that investors should consider royalty-stream companies and certain gold producers with lower debt structure and less leverage. They believe the current gold price pullback presents an opportunity to buy gold equities with strong balance sheets that have very attractive risk-reward profiles.

Eldorado Gold Corp. (NYSE: EGO) is rated Outperform at RBC. The company engages in the exploration, development, mining and production of gold properties in Turkey, China, Greece, Brazil and Romania. Eldorado also explores for iron, silver, lead, zinc and copper ores. Its principal properties include Kisladag and Efemcukuru gold mines located in Turkey; Jinfeng open pit and underground gold mine situated in southern China; and the Olympias gold, silver, lead and zinc development project and the Skouries gold-copper development project located in northern Greece.

Eldorado investors are paid a small 0.3% dividend. The RBC price target for the stock is $9, and the Thomson/First Call consensus target is at $8.46. Eldorado closed Tuesday at $5.11 a share.

Goldcorp Inc. (NYSE: GG) is also rated Outperform at RBC on the potential for solid upside. The company operates as a gold producer involved in the exploration, development and acquisition of metal properties in Canada, the United States, Mexico and Central and South America. Over the past years, Goldcorp has been altering its mine plans, cutting spending and disposing assets in order to reduce costs and focus on the most profitable production, which the CEO recently warned may be lower than current 2014 estimates. Overall, the moves place the company on solid financial ground going forward.

Goldcorp investors are paid a 3.2% dividend. RBC has a $34 price target, and the consensus target is $29.25. Goldcorp ended Tuesday at $18.41.

Randgold Resources Ltd. (NASDAQ: GOLD) is a top mid-cap stock to buy, and it has recorded solid production so far this year from its flagship Loulo-Gounkoto complex in Mali. This increased production has set Randgold up to hopefully achieve its guidance for the year. At the same time, the developing Kibali mine in the Democratic Republic of Congo remains on track to reach its forecast target despite commissioning disruptions. The company has substantial proven and probable reserves totaling 15 million ounces.

Investors in Randgold are paid a 0.6% dividend. We could not find a current rating or price target on the stock from RBC. The consensus target is $88.26. Shares closed trading Tuesday at $59.75.

Silver Wheaton Corp. (NYSE: SLW) is a royalty and streaming stock that the RBC analysts feel very positive about, and they have a rating of Outperform on it. The company has 20 long-term purchase agreements associated with silver and gold relating to 23 mining assets. Its principal portfolio includes silver and precious metal streams on the Barrick’s Pascua-Lama project, Hudbay’s Constancia project and Vale’s Salobo and Sudbury mines.

Silver Wheaton shareholders are paid a 1.4% dividend. RBC has a $31 price target, and the consensus target is posted at $28.38. The stock closed Tuesday at $17.22.

Investors looking to add a portfolio allocation of gold and precious metal stocks should consider scaling in some capital now. Sentiment is horrible, and that is always the time to take a contrarian view. At current price levels, the interest in Asia usually picks up for retail buyers. In addition, the world geopolitical situation always remains dicey, and believe it or not, there may be inflation down the road."

[JohnCM]

[JohnCM]

"Stupid to short SLW $19.00 - $19.25"

Throwing out the playbook.

[JohnCM]

Can't argue with that. I am sure some countries are saying the same thing.

[Pro-Life]

I gotta hurry up and buy more physical... seriously!!!

[JohnCM]

[JohnCM]

Silver Doctors

Marshall Swing on Coming Collapse:
TPTB Want it (Gold & Silver) All!
Posted on October 30, 2014 by The Doc

"We are in a bottom for sure. How long will it last is anybody’s guess- but silver stackers need not worry.

This is only a question of how much fiat can you raise in order to purchase hard core, hold in your hands bullion to hold for a couple of years through the greatest worldwide total economic collapse in history and the institution of a one world government and one world currency.
They simply must destroy the U.S. dollar along with all the world’s currencies otherwise the many that hold USD would retain power and that means many nations and small businesses that oppose them.
“The Powers That Be” want it all for themselves!

But, just like this guy came back to life after being declared dead, silver and gold are going to have their day in the Sun for those who invest in the physical metal not the fiat paper futures.

Time did not allow me to write a report last week but then again not much happened in the silver futures and not much happened this past COT week either.

Gold is a slightly different story and while price is pretty much dead there as well and is bound to a range there is great upheaval in the futures positions.

In silver, 10/7 – 10/14, all major players open interest totals change was well under 1,000 contracts. Lifeless! Only the commercials in the 10/14 – 10/21 report had numbers above 1,000 contracts as they took almost 3,200 new total long positions and about half as many new short positions while new total open interest only increased 863 contracts.

The real story is in gold as 10/7 – 10/14 as total open interest grew almost 18,800 contracts with the large speculators betting big the bottom is in and they gobbled up over 19,500 longs. The commercials added over 12,500 short contracts to their totals. This past period 10/14 – 10/21 those large specs grabbed over 13,500 longs while covering over 9,000 shorts. The commercials bit off almost 25,000 shorts! That is about 3.125 Billion USD in short ounces of gold.

Those speculators who have sold their shorts have done well. Those who are still holding on to shorts, and they are many, are in a tenuous position as they could lose all their profits in a sudden price rise.

Will the commercials lull the gold speculators who bought long to sleep with continued depressed prices? That is where I am placing my bet as there is no indication in silver of an imminent price rise and we already have a wide gold silver ratio so it seems better to me to lull speculators to sleep to get them to think the short game is the place to be so when the time comes in the next 11 months to go really heavy short right before the price skyrocket the commercials can flip long on the way down and the speculators get caught holding all the negative paper short fiat indebtedness obligations.

They will become lifeless slaves!

Until next week, stay thirsty for physical at these low prices my friends and buy physical with every fiat dollar you can muster!"

Marshall

[JohnCM]

[JohnCM]

One, of many, things I like about buying physical is it is an investment for the future. By it's nature, the temptation to accumulate and divest, over and over again, is diminished. As opposed to the ease of selling a stock, taking the CASH to spend, and the future nest egg lies empty.

[Pro-Life]

Content to buy physical ONLY...

[JohnCM]

A little unexpected to see SLW hammered like that today. Understanding it was a widespread massacre.