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Bishop,when i hear convertible financing,i start to worry. The lack of information about it was another worry.
The three things that worry me most about this stock are:-
1) Lack of transparency regarding the convertible financing.
2) The 70% cost to recover the tailings. Would like to know if higher gold prices would reduce the costs of recovery or if this was a mistake in the PR. An explanition is in order especially since they have touted they would be a low cost producer.
3) Lack of an official communicator for the company. It has to somebody who has the authoriety to address all questions pertaining to the company.
At this point not issuing a PR will also tank the stock. Anything bar a cash buyout at this moment time will tank the stock. The shorts are in control,hence we have been on the SHO list the last 15 months of 18.
If the buyout does not happan they need to concentrate on production,you will be amazed how this stock will change course if they announced they have reached their 10000 ozs per month gold production target.
If they also show verification that the bank received the gold,watch this stock fly to 55 cents in a heartbeat.
The watchword now is PRODUCTION PRODUCTION PRODUCTION...........................
No shorts will be able to hold this stock back when the production gets ramped up.
Historically High Silver Prices Have Mining Companies Booming
Last update: 5/14/2007 11:10:25 AM
By Nicholas K. Geranios
Of THE ASSOCIATED PRESS
KELLOGG, Idaho (AP)--Silver prices are at their highest in more than 25 years, and mining companies are riding an economic boom.
Silver - heavily used in computers, cell phones and other electronics, plus jewelry and photography - is suddenly one of the hottest commodities in the world.
Idaho's Silver Valley, the handful of surviving mining companies are enjoying record revenues and big expansions. Two publicly traded companies - Hecla Mining and Coeur - are having banner years.
"In 2006, we reported the highest earnings and lowest cash costs for silver in the history of our 116-year-old company," said Phil Baker, president of Hecla Mining Co. (HL). "We now have the potential to set another record in 2007."
The worldwide price for silver is more than $13 an ounce, highest since the metal reached $20 in 1980. Before last year, silver hadn't been in double digits since 1983.
At The Silver Institute in Washington, D.C., they call silver "the indispensable metal," because a bit is used in every computer and cell phone, and in many other industrial applications. Silver is a superior conductor of electricity and is very durable, said Michael DiRienzo, director of the institute.
As a result, stockpiles of the metal have disappeared even as demand is rising.
Silver jewelry is also popular in China and India, two huge markets with growing numbers of affluent consumers. The worldwide market for silver jewelry soared from $1.4 billion in 2000 to $2.6 billion in 2005, he said.
That demand makes up for big drops in the market for photographic paper and for silver in currency, he said.
The amount of silver used for jewelry exceeded the amount for used photographic paper for the first time in 2005, he said.
Many experts say silver remains a good investment. Mark O'Byrne, managing director of Gold and Silver Investments Ltd. in Ireland, speculated that silver prices could reach $20 in 2007, as demand grows while the supply does not keep up.
"It is estimated that 95% of the silver ever mined has been consumed by the global photography, technology, medical, defense and electronic industries," he wrote in a recent commentary. "This silver is gone forever."
Silver production worldwide remains flat, and the amount of silver mined has been less than demand every year for the past 15 years, O'Byrne said. The difference was made up by stockpiles that are now depleted.
That means production is not likely to grow much even as prices go up, O'Byrne said.
Peru and Mexico are the two largest silver producers in the world. The United States ranks eighth. Two of the largest silver producers in the U.S. are based in Coeur d'Alene, Idaho.
Earlier this spring, Coeur d'Alene Mines Corp. (CDE)announced a deal that would make it the largest primary silver producer in the world. Coeur is acquiring all the shares of Bolnisi Gold NL of Australia and Palmarejo Silver and Gold Corp. of Montreal, in a transaction valued at about $1.1 billion. The deal allows Coeur to expand into Mexico, the world's second-largest silver producer.
"With this transaction we are establishing Coeur as the clear leader in the silver mining industry," said Dennis E. Wheeler, Coeur's chairman, president and chief executive officer.
The deal is expected to close in the third quarter.
At Hecla Mining, based in Coeur d'Alene, Idaho, officials are looking to dramatically expand mines such as the Lucky Friday in nearby Mullan that have been producing silver for six decades. For the first time in half a century, the company is conducting a major exploration program on its 40-square-mile property surrounding the Lucky Friday mine.
Vicki Veltkamp, head of investor relations for Hecla, said silver is benefiting from a general boom in metals prices.
"China and India as they become more developed have a tremendous demand for all types of base metals," Veltkamp said.
There's also plenty of new exploration in the Silver Valley, a narrow gap in the Rockies about 70 miles east of Spokane, Wash., that produced much of the nation's silver in the early 20th century, but which has been economically depressed since the 1980s.
"There's a lot more activity in the Silver Valley," Veltkamp said.
One place where the boom has not been reflected is in the stock price for Hecla and Coeur.
Hecla's is stuck at around $8.50 per share on the New York Stock Exchange lately, with a 52-week range from $4.05 to $9.89. Coeur's price is around $3.60, which is near the 52-week low. The high is $6.40.
Hecla officials believe their stock price is not reflecting the company's strong bottom line these days.
"Precious metals are always interesting to people, but they've been out of favor for so long it takes a lot of reeducation of the market," Veltkamp said. "I think the market is sitting back and watching this."
But she noted that Hecla's price is up 90% from last year.
In 2006, the company reported record sales of $217.4 million and record profits of $68.6 million. The sales figure was 30% higher than the second-best year in company history, and profits were 20% higher than the second-best year, Hecla said. In 2005, the company had reported a loss of $25.9 million, or 22 cents per share.
The rising fortunes of Hecla and Coeur will not likely result in a big job bump in the Silver Valley, as many mining jobs have become automated.
Company Web sites: http://www.hecla-mining.com
http://www.coeur.com
(END) Dow Jones Newswires
May 14, 2007 11:10 ET (15:10 GMT)
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S/T i have the same sentiments. Low prices have yet to make any of the long time longs sell,why would it now. I can picture all those shiny gold bars aurus have and will be producing going forward.
This commodiety market is here to stay for the next 20 years so some have said,can you imagine what the price of gold will be then. I can wait another year or two for true value to rear its head. $5000 per oz gold is a coming.
Wo cares if they sell.
The good news is that the 55 cent counteroffer has elapsed and so has the 68 cent offer Aurus originally proposed. Its highly probable that the BOD were very surprised at the 55 cent counter offer after during negotiations they were led to believe the buyout offer at 68 cents was going to be taken.
Katrix will now have to putup or shutup now. Aurus needs to get back on plan and start producing those shiny new gold bars.
True you don't have to believe if you intend to trade. I'am not a trader,so for me to hold a stock,i have to believe in the stock.
With all the DD done on AURC,i believe.
Probably a wise decision. Will be able to buy below 5 cents next week if you believe in the company.
Of course with these hedge funds.its sell sell sell sell................................
I am waiting to buy lower. I know what these hedge funds can do. Hoping to load up yet again below 5 cents, This is a no brianer.
As i said before the timeline for the deal has elapsed. Its a NO deal. The last two PR's were hints that the deal is dead. Its business as usual. I think the Russians were originally flattered about the pending sale and quick money,over time they realised they were selling far to cheap.
Another year and they will be commanding a $4 PPS IMHO,you don't think they haven't noticed the share price of SGDM,do you.
Current time in Moscow 7:20. Deal didn't happan,time to move on.
If the other party is not willing to talk about a higher offer its obvious the deadline will be allowed to elapse. I don't think there will be a sale now. Not horrific news,we will just have to wait longer for our pot of gold,
Stock will take a hit after the elapsed time is confirmed.
I have never seen the bid and ask price at 0.14,0.145 before on my ameritrade streamer for AURC. Its usually around 6 cents.
Makes you wonder why a hotshot like Jim Profit is so interested in saving all us longs. The guy probably works for a hedge fund.
Either way i think the longs win. If the deal doesn't happan no big deal it goes down and within 6 months we get the $2-$3 its worth,shorts or no shorts.
This company is the real deal.
"Martin Grancharoff, the newly appointed board member, has obtained financing from a Canadian private equity fund in the amount of $50 million over a period of 5 years."
Maybe the bond will be used to get rid of the debt they took on with the convertable. If they have purchased the new equipment they may feel they can finance the rest of the project with operational income. So the 3 month period is no big deal for the bond funds to come in.
If we could confirm they have the new equipment,i really don't understand this 68 cent sale of the company.
They have dragged this buyout scenerio for nearly 6 weeks now. Either the BOD need to take the offer or move on. I am fed up with this buyout news watching.
Lets have some production figures and plans going forward.
The Bond funding is a great financing vehicle. Have to be careful they don't hedge any of their future gold production thou. Gold is going to be king very soon,lets profit fully at higher gold prices.
I hope you get rewarded for your courage. Lets hope there is a cash deal where everybody wins except the shorts.
SGDM now with a market cap of nearly $600 million. Because of corrupt hedge funds AURC market cap of $31 million.
I bet the shorts know who the bidder is. They always have far more avenues to find information then the longs, The hedge funds have the money to find out.
May the 9th is Russian Victory day. Will they announce before or after the 9th. I would imagine they already will have decided what they will be doing and will announce on the 10th their answer.
If the shares were part of a deal between two parties then they probably would not show up until after hours.
I would not be selling SOMA shares now. Looks like they could be worth alot more soon.
If they are covering i would imagine Larry is enabling them to do it. Without a question in mind now that its larry selling some of his own holdings in EQBM. Probably makes sense since he has to come up with the $3 million Mrs Hui needs to start a 2nd and 3rd line for Dalian.
I don't think Soma shares are part of the deal however. If the shorts have enough shares to cover EQBM then they don't have to come up with the SOMA shares.
In the long run i guess both companies will benifit with revenues coming from Dalian.
The reason SOMA shares are in demand is that they really do have value because Dalian has started production.
Only speculation,but maybe Etrade were not part of the deal made with Larry.
Doesn't mean anything in Pinkland,will be back to 10 cents by the end of the trading day.
Seriously though,it looks like Dogvan just sent out a warning shot,that they are quite prepared to go it alone. If the buyer is still interested he needs to up his 55 cent offer. This current Bond financing deal was in negotiations before the buyout offer was given,i would imagine.
However the Bond issue does present some leverage for the company in negotiations with the would be buyer.
I say No to the 55 cents,YES to the 68 cents now.
Thanks lumdus. Investor99 no more buyout,bashing can start again,lol.
christoph,forget it,Dtgoody, did what he was comfortable for him. It was a nice profit. Nobodies actions are wrong,they do what they feel they have to do to stay ahead. These pinks are treacherous and in the final analysis he might of done the right thing.
Good luck DTGOODY,wish you the best. Use the profit well. I'am not to worried about the PPS,it just give's me a chance to buy lower. Company gets £10 million dollars from a Bond issue and trades with a market cap of $30 million. Who would give them $10 million unless they had the assets to back it up.
Not a fan of the convertable,i hope they dump that sort of financing.
Please take me off the buyout YES list and put me on NO. Never really could understand the lowball figure. Please 2C could you find out about that 70% production cost figure.
I'am with you zebra lets hope they dump the convertable debenture. Should be able to lease enough equipment with this $10 million to get production really moving. A producing gold company will drive investors into this stock. I'am freeing up more funds to buy more AURC. I am very happy with this news.
The company is worth at least $4. Gold producer means higher PPS whatever the shorts do.
Looks like we have our answer no buyout we are going the production route. It looks like the company want more for their assets. I 'am cool with it. Give it another 6 months and we shall be at 68 cents due to production figures.
They also trade as an ADR under the symbol POGNY. Would be a great fit since they want to be a 1 million ounce producer by 2009. Currently producing 250 million ounces per year.
Its interesting to know that Peter Hambro do not hedge gold production. Yes if this the company interested in Aurus,i will gladly take shares instead of a cash deal.
Omchak Joint Venture
Overview
The Omchak Joint Venture in the Magadan region with Susumanzoloto and Shkolnoye was established in August 2003 following the signing of a joint venture agreement in July 2003. The Company contributed US$7,400,000 to the joint venture and Susumanzoloto and Shkolnoye contributed their interests in two operating mines, the Berelekh mine and the Shkolnoye mine respectively.
CJSC Susumanzoloto was formed following the privatisation of State operations in 1993-4 and is the legal successor to the Susuman Gold processing plant which was commissioned in 1938. It is the largest gold mining company in the Magadan region and has its head office in the town of Susuman and a representative office in the region�s capital city, Magadan.
CJSC Nelkobazoloto was a subsidiary of the Shkolnoye gold mining company which was formed in 1994 for the purpose of acquiring the mineral licence for the Shkolnoye deposit in the Tenkinsky District of the Magadan region. CJSC Nelkobazoloto was subsequently formed in 1996 as a subsidiary of JSC Shkolnoye for the purpose of bringing the Shkolnoye deposit into operation. CJSC Nelkobazoloto has its head office in the town of Ust-Omchug as well as a representative office in Magadan city.
CJSC Nelkobazoloto holds the exploration and production licence for the Shkolnoye hard rock gold deposit which it mines by underground methods. Major development works were completed at the deposit in 2002. The company also mines the Vetrenskoe hard rock gold deposit under contract with CJSC Susumanzoloto which acquired the licence to the deposit in 2000. In 2001 CJSC Nelkobazoloto was contracted to develop and operate an open pit and underground mine and a processing plant; ore processing subsequently commenced in August 2002 at the deposit.
CJSC Berelekh was formed in 1999 and holds a number of licences including 4 exploration licences. Placer gold deposits have been exploited in the Berelekh River valley in the Susmansky district of the Magadan region since 1936. The company has its head office in Susuman and a representative office in Magadan city.
In May 2005 the Omchak Joint Venture acquired 50% of OOO Zeyazoloto and 100% of OOO 'Noviye Tekhnologii' which owns five licences for the development of placer gold in the Amur region with evaluated gold reserves and resources of c.100,000oz and development and analysis work suggests that its reserves and resources will increase significantly over the next two years.
Noviye Tekhnologii�s deposits are near to Pokrovskiy and are thus easily accessible with developed infrastructure and also benefit from their proximity to a supply of earthmoving and processing equipment as well as experienced labour. During the first half of 2005 'Noviye Tekhnologii' started preparatory works for the commencement of production on the five licence areas. Mining works commenced in May and included stripping and the preparation of machinery for the washing of gold bearing sands.
During the first six months of 2006 OOO Zeyazoloto and OOO Noviye Tekhnologii acquired several licences for the right to explore and produce alluvial gold at local deposits. New licensed areas acquired in this process have confirmed reserves that are expected to yield a planned annual production of alluvial gold in the Amur region of an additional c.10,000oz gold per annum starting in 2007 for some five years.
The Omchak Joint Venture also acquired the combined exploration and mining licence for the Verkhne-Alliinskiy gold property in the Chita region in May 2005. The deposit contains gold reserves and resources of 669,000 oz and silver reserves and resources of 890,000 oz. The Omchak Joint Venture also won the auctions for the Kuliinsky and Bukhtinskiy hard rock deposits also in the Chita region. In 2005, the Joint Venture also acquired the Uduma deposit in the Republic of Sakha (Yakutia).
Peter Hamro
Pokrovskiy Rudnik - Processing
Resin-in-pulp Plant
The resin-in-pulp plant was commissioned in July 2002. The first gold from this production facility was produced on 7 September 2002. The plant uses resin-in-pulp technology, which is commonly used in Russia. The process involves crushing and grinding the ore, resin in pulp absorption and electro-winning to produce dor� bullion. The barren tailings are treated by a cyanide destruction process before being pumped to a tailings dam.
Following the success of the Pokrovskiy Rudnik team in bringing the plant into full production, during 2003, production at Pokrovskiy increased by 74% to 121,000 ounces. In 2003, work began on a 50% increase in the processing capacity of the plant, primarily by commissioning a third grinding circuit. This initial work was completed at the end of 2004, bringing the capacity up to 1.5 million tonnes per annum and in 2006 the plant's capacity reached an annual rate of 1.9 million tonnes of ore.
The productivity increase in 2006 was accomplished through the expansion of the resin-in-pulp circuit and the optimisation of the grinding circuits and classifiers. In 2006 the recovery process was also modified in order to maintain stable recovery rates for the mixed ore types being mined. The significant changes were an increase in resin volume and the commencement of the cyanidation ore in the SAG mill which increased the total resin surface area and leaching time. The seperation of the flows of pregnant solutions and the installation of additional electro-winning cells also optimised gold recoveries.
At the end of 2004 a bulk ore sample was successfully treated through the resin-in-pulp plant at Pokrovskiy as part of the metallurgical tests preceding the planned feasibility study for the development of Pioneer. Trial processing of Pioneer ore using the Pokrovskiy mill was carried out successfully and the results have allowed the Group to develop the pre-feasibility study on the Pioneer deposit. The study showed that there was significant content of visible, large gold particles in the ore and during processing these were found to accumulate and remain in the milling process rather than flow with the invisible particles to the leach tanks. Partly as a result of the Pioneer study, in 2005 the Group decided to add reagents to the ore at the grinding stage which resulted in an increased recovery rate.
Due to the high standard of works undertaken in 2004-5 for the plant's expansion, the resultant increased capacity of the mill allowed the economic processing of lower grade material and increased the total gold produced at Pokrovskiy during the first six months of 2006. Previously this material would have been treated using heap leach technologies which have lower recovery rates than the plant.
Heap leach
The first gold from Pokrovskiy Rudnik was produced through heap leach operations in 1999. Before the commissioning of the resin-in-pulp plant, all of the ore from Pokrovskiy was crushed, screened and then agglomerated before being stacked onto heaps for leaching. The pregnant solution was then drained from the heaps onto a pad connected to a Merrill Crowe circuit and the gold was recovered by precipitation. This gold was then smelted into dor� bars and the barren solution recycled. After the 60-day cycle, the leached ore was reclaimed and stockpiled for future grinding and subsequent treatment in the new plant. Following the commissioning of the resin-in-pulp plant, the pregnant solution is now treated within the resin-in-pulp plant and the Merrill Crowe circuit is being refurbished for potential use at Pioneer.
A major development in the heap leach operation was introduced in 2004 when the Group implemented double stacking technology for the process; this simply entails stacking a proportion of the ore before applying the treatment solution and then stacking the heap higher and again applying the solution � the bottom layer thus receives approximately two times the leaching. Double-stacking has increased recovery by 40% to 60% which has generated a similar increase in the gold recovered from only a 23% increase in stacked ore. The enhancement in heap leach technology preserved production costs in 2005 at the same level as 2004 and also allowed for the economic treatment of grades lower than originally anticipated. Double stacking has also allowed the Group to carry out the heap leach maintenance schedule.
Test work carried out in 2005 in order to improve heap leach technology proved successful and has allowed the application of new methods in 2006 on a larger scale. These involve ore being left on heap leach pads through the winter until spring for futher leaching and ore for the following year's treatment being stacked on pads during the autumn of the previous year. This method allowed the start of leaching one month earlier than in 2005 and produced 2,000 oz of additional gold from these test works during the first 6 months of 2006, improving recovery rates at the pads under test from 30.7% in the first half of 2005 to 68.3% in the same period of 2006. This will allow the Group an opportunity to treat a larger amount of low grade ore through the heap leach process and also to increase recovery rates using this process.
I also think Dogvan is a very smart cookie,he knows the markets now and knows how to create value. However he also knows he has to have access to capital. These Russians are very fast learners.
I agree with bullburch Moly will be huge for the next 10 years.