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in regard to your ARQ comment, just found this Grandich link:
"Kinda like where I'm at with Anooraq today. <ng>"
Anooraq Resources (ARQ, TSX-V
$1.60, ANO-AMEX $1.36) – It’s my
largest personal holding by far and I
believe the largest position I ever had in
one stock versus my entire portfolio. That
makes me very biased!!!
My reasons for this are many but the share
price has certainly not proven such a
position wise at this point. But after 20
years of investing, I’ve learned that
current share prices aren’t necessarily a
barometer of what is taking place at a
company. Nowhere is that more evident
in the resource sector than with this
company.
It’s not often that a resource play trades
at or below NAV (Net Asset Value), but
this one does. One of its major assets
almost tripled in size recently, yet was met
with a ho-hum market response. This led
to some disappointing selling into a thin
market. In turn, selling begot selling.
Remembering that it’s year-end, the stock
was much higher earlier in the year and
was an institution favorite; new blood
could pick shares on the cheap for a few
more weeks. 2005 can be the best ever
for Anooraq (or the year I become
divorced and homeless). Something to
look forward to, no?
http://www.grandich.com/docs/alertGL_12-06-04.pdf
http://www.grandich.com/docs/alertGL_11-24-04_ARQ.pdf
trotsky (the Rand) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
here is why the Rand is set to weaken further, and probably a lot more than anyone now thinks possible:
1. SA's trade balance. Sotuh Africa has now a persistent large trade deficit since qu.1 of 04. this is highly unusual - SA's economy has been a net exporter for at least 5 decades ( with occasional exceptions, like now ) .
2. the SA yield curve. after having spent the better part of 2002 and 2003 in deeply inverted territory ( at one point the negative spread between the repo rate and 10-yr. yields was close to 400 basis points ) , the curve has widened dramatically , by almost 500 bps. to its current positive 100 bp. spread. the inverted curve is a sign of extremely tight monetary policy and has been a decisive factor in producing Rand strength. this prop has been kicked away.
3. credit and money supply growth. after plunging close to 2% annualized in qu. 1 '04, credit growth in SA has resumed at a brisk pace. it is now close to 10% annualized, and the rate of change of this growth rate is quite steep. this has also brought annualized broad money supply growth to its highest level in 2 years at about 16% currently. more importantly, the trajectory is now UP, whereas two years ago the trend in the rate-of-change measures was down. with money supply growing at 16%, and the rate of growth on an accelerating trajectory, there is obviously no shortage of Rands.
4. SARB forex reserves. while the country's trade and current accounts have gone into deficit, the SARB's reserves have grown in almost parabolic fashion, more than doubling since early '04. there can only be one reason why its reserves have grown so much concurrently with a negative balance of payments: there must have been a huge influx of 'hot money' by hedge funds and other emerging market investors. by definition these are vulnerable positions, and since the Rand is not exactly a liquid currency, the coming outflow of these 'hot money' funds is going to exacerbate any potential decline.
5. interest rate spreads and inflation. since mid 2004, the spread between SA and US rates at the very short end ( SA's repo rate vs. the US FF rate ) has narrowed markedly, by 175 bps. while the spread remains quite large in absolute terms, it used to be even larger in the past. this spread is at least in part a risk premium SA must offer foreign investors. while one can't say for sure where exactly the threshold for the premium portion of the spread is, it is clear that a narrowing spread is not favoring the Rand.
inflation: after having been in a strong down trend throughout 2003, PPI has recently reversed sharply from a negative 2.5% annualized to a positive 2% - a swing of 450 bps. CPI inflation has been far tamer, but has bottomed in the 3.8% region and has begun to head back up too. this reduces the real yield on SA debt securities further. again, it is unknowable where the real yield threshold is that causes hot money flows to reverse. but a threshold does exist.
6. the movements in the USD gold price , as well as other commodity prices ( e.g. coal and platinum group metals are also big export earners for the SA economy ) also influence perceptions about the Rand, but they are clearly not the main drivers. rather, since pricing of these commodities is in dollars, periods of dollar weakness tend to coincide with periods of commodity price strength. however, points 1. to 5. are more pertinent to the motivations of the emerging market funds that have driven the Rand to unsustainable levels. the emerging Rand negative trends in these backdrop conditions could result in a period of pronounced Rand weakness regardless of commodity price trends. of course, one must add that these weakening currency fundamentals are also emerging elsewhere - so the dollar is likely to not only strengthen vs. the Rand. thus a bout of Rand weakness could once again coincide with weakness in USD based commodity prices as well - but the cause-effect relationship is complex, and there will be leads and lags. it is those lead/lag periods when SA's mining industry is able to make money.
Gold Stock Metrics
RNC continues to be one of my favorite stocks based upon valuation metrics. One of the key goals for RNC in 2005 will be to close the San Andres/Honduras transaction which will add 75,000 annual production ounces. The #1 goal for RNC is to start hitting current Nicaragua mine plan production and cash cost targets... There is no reason why RNC cannot hit 105K ounce prodcution at Nicaragua operations at under $267 cash cost plus 75K oz annual run rate if and when Honduras deal is consumated. If RNC can meet these goals, then believe RNC will be trading at $800 per production ounce IMO (in line with peer group) rather than $225.
http://www.investorshub.com/boards/read_msg.asp?message_id=5031218
Updated Gold Stock Metrics
As mentioned previously, my favorite metrics are now:
1) Forward PE/OCF (Share Price to 2 Year Forward Operating Cash Flow) [column 8]
2) Market Cap Per Production Ounce [column 6]
A few definitions:
MC=Market Cap
AMC=Adjusted Market Cap (adjusted for working capital, fully diluted shares and capex/LT debt to build mine)
PPMI=Proven & Probable + Measured & Indicated Ounces after Recovery percentage
%=Gold = Percentage of Gold Ounces to Total Resource Ounces (this model includes in-situ gold equivalent ounces for silver, copper, nickel, etc)
Believe it is best to concentrate on the profitability of the ounces in the ground rather than just the number of ounces in the ground... Also, best to concentrate on PPMI ounces rather than total resource ounces, IMO, or at least to compare the two so you can see how much of total ounces are PPMI ounces (i.e. compare columns 2 and 3.
Also, important to compare Capex expenditures required for next 2 years (Capex-2 Yr) vs. existing working capital (WorkCap), i.e. lets you know whether they need more cash to build the mine and hence anticipated dilution...
_______________
If you follow my posts, then you can see why currently favor RNC, MFN, EPM, GBN, and GRZ as stock picks. Each of these stocks appear undervalued in regard to current share price relative to 2 Year forward operating cash flow. None of these stocks require $500 POG to be profitable, they all are/will be profitable at POG=$375...
Agree that CMF is not a useful indicator for stocks trading below US$5, but it is meaningful for stocks trading above US$5, IMO.
Well, I will defer to your judgement in respect to the technicals, lord knows you are much more often right than wrong in this regard.
In regard to your comment: "the upside potential evaporated upon completion of their final feasibility study", please be advised that MFN has yet to issue said final feasibility study. The last tech report issued in December only regarded the gold equivalent ounces contained at Dolores. The final (bankable) feasibility study [BFS] is/was to be released by end of January and this will contain the capex costs and total cash costs, none of which were mentioned or even alluded to in the Dec tech report.
All investors are evidently in the dark and capex and total cash costs are the key variables, not the contained ounces. What's worse is that MFN is now stating the BFS will be released in 1Q05, hopefully trying to be conservative, and M3 Engineering appears to be in no hurry to make their original Jan05 commitment... All these Engineering firms now have more work than they can complete timely, maybe we should be investing in the engineering firms, they got quite the backlog...
In any event, I continue to believe MFN is likely the best takeover prospect there is, and this could happen virtually any time, and even before the BFS is released. Likely suitors have already signed confidentiality agreements with MFN and are privy to the interim reports all of which will be incorporated into the BFS. But the dirt cannot fly (e.g. stripping) until the permits, enviromental and other BFS components are in hand. My calcs continue to show MFN selling at under 3x 2006 cash flow...
Again, thanks for your comments, I will hold off buying more, got more than enough for now.
I sure hope so..., am having to internally justify owning MFN with this extra research since it keeps going down, usually not a good sign..., but the fundamentals are just fine and dandy...
Sure wish Frank would/could tell me MFN was a technical buy because fundamentally it keeps on screaming for more of my cash...!!
________________
In regard to RNC, there will likely be news on San Andres/Honduras transaction by month end given the Circular states: "San Andres Option
RNC holds an option to acquire all of the shares of RNC Honduras, a Belize company, which owns 25% of the shares of Minerales de Occidente S.A. de C.V. (“Minerales”), a Honduran company. Minerales own all of the assets and concessions in respect of the San Andres Mine in Honduras. The current shareholders of RNC Honduras are the same as the shareholders of RNC Management and RNC Management is the manager of the San Andres Mine.
The option price is to be determined by future negotiation between the parties, but in the absence of anagreement, the option price will be determined by an arbitrator appointed by the President of the Canadian Institute of Mining Metallurgy and Petroleum pursuant to the Arbitration Act, 1991 (Ontario). The option expires on January 24, 2005."
This Honduras transaction is the key event in 2005 for RNC, IMO. Honduras will add 75K ounces annual production at $260 cash cost for the likely bargain price of under 8M shares and assuming $6M or so bank debt. Thus, RNC goes from annual production of 106K ounces to 181K ounces. The bank that owns the 75% of Honduras wants out and this provides a nice profit to this bank which acquired this mine via bankruptcy, RNC effectively already owns the other 25% and has managed this property for the bank from 2000-2004 and the bank is very happy with RNC management of this mine.
FWIW, my understanding is an analyst trip to RNC Nicaragua operations will take place in late January so here's hoping this will spark some additional interest. RNC likely needs to find a buyer for most of the Honduras bank's 8M shares by the end of January... But the issuance of only 8M shares is anti-dilutive..., EPS will increase substantially for 2005 and beyond if RNC can close this deal.
Good luck, we may well need it given how the POG and HUI are behaving here recently...
the FGX chart, my hope and prayer for MFN...
AMEC begins final feasbility Dec 19
GLG takeover announced Mar 02
takeover consummated July 02
Since the CLG fiasco, the final feasiblity study news release has been viewed as a neutral to negative whereas before the CLG fiasco, a gold stock often got a bounce upon a BFS news release...
FWIW, confirmed that GLG did in fact make the acquisition of Francisco Gold PRIOR to the bankable feasibility study per review of Francisco circular:
"Glamis first signed a Confidentiality Agreement with Francisco in March 1999 and thereafter conducted a property visit and a due diligence review of the pre-feasibility work on the El Sauzal project. In April 2000, Glamis management approached Mr. Reifel, the President of Francisco,with the concept of exploring the potential of combining the two companies. Terms of an indicative offer were proposed by Glamis management which were taken to the Francisco board for review. After careful deliberation, Francisco’s board determined the offer was not in the best interests of its shareholders at that time and declined to pursue discussions further. In turn, the Company decided to advance the El Sauzal Project to a final feasibility stage.
During mid-2000, Francisco initiated a comprehensive review of certain property interests in Guatemala owned by Montana Gold Corp. The due diligence review resulted in Francisco acquiring Montana Gold Corp. in December 2000. In early 2001, Francisco commenced drilling the Marlin Gold-Silver Project in Guatemala. Glamis continued to monitor Francisco’s corporate developments during this period. By early 2002, the final feasibility study on El Sauzal was well advanced and Francisco had reported the drill results of 70 holes completed at Marlin.
Throughout this entire period, Francisco management continued hosting site visits and providing due diligence information to a number of interested mining companies. In early 2002, Glamis conducted further due diligence on the El Sauzal feasibility work advanced by the AMEC Simons Group of Vancouver, British Columbia, and all of the exploration and drilling results reported on the Marlin Project. Once reviewed, Glamis management again contacted Mr. Reifel to invite him to attend a meeting at their corporate headquarters in Reno, Nevada. At this meeting, Glamis management presented terms of a proposed offer to combine the two companies. Several meetings were held during the period of February 18-20, 2002 and included financial advisers for both companies. Negotiations progressed and resulted in a Letter Agreement being signed between the two companies on March 5, 2002."
see page 46: http://www.sedar.com/csfsprod/data31/filings/00446447/00000001/i%3A%5Ckkbl%5C41114%5C28%5CFINAL%5CPD....
AMEC was just about to release the BFS prior to the GLG acquistion of MFN. AMEC was awarded BFS contract in Dec 14 2001 and this was to be completed in March 02.
http://www.sedar.com/csfsprod/data28/filings/00410159/00000001/e%3A%5C%40Sedar01%5CF%5CFgx%5C1214fgx....
As stated, my hope is something similar happens with MFN being acquired right before release of its BFS. MFN has been in discussions with several gold majors/intermediates for the past several months in regard to an acquisition and I confirmed this once again with MFN investor relations today.
chaos
http://www.chaos-onomics.com/gateway3/index.htm
Your user-name is: John
Your password is: Law
well, I am going to take a look at another card or two before selling any gold stocks... bought more MFN today and picked up a tiny position in GRZ... I'm on 14% margin now on my trading account...
" so if it doesn't bounce today, we'll see it right back to where it was last summer."
Specifically, need to see that jobs jamboree card on Friday and based upon that will re-assess... may lighten up a bit and get off margin at that point before the US Treasury 5 year and 10 year auction cards next week...
My hope and prayer is that the gold majors/intermediates start buying some juniors..., such takeovers would give a nice bounce to the advanced exploration plays. Most prone to a takeover would be MFN, GRZ, and EPM it seems to me... MFN and GRZ should have their bankable feasibility studies out this month. Am hoping for another Francisco Gold with MFN, i.e. the timing of GLG takeover of Francisco was just before the bankable feasibility study was released if my recollection is accurate... and similar to Francisco would expect MFN to keep about $5M+ cash and retain their other properties...
This is my hope and prayer without any 700 Club membership necessary...
Likewise RNC Gold does not need the 700 Club either, it needs only to figure out how to get its gold out of the ground for under $260 cash cost, in line with its mine plan since its hedges will be gone after this quarter... A stable $400 POG is all that is necessary for several junior gold producers such as RNC, GGG, CBJ to be selling at less than a 7x 2005 PE multiple...
Faber
Booming China heads for collision with West
Intransigence over fixed exchange rate will cause tension, ‘prophet of doom’ Marc Faber tells Michael Sheridan
FROM where Marc Faber sits in his stately pleasure dome by the banks of the placid Ping river in northern Thailand, the latest corporate scandal in Asia over $550m (£285m) in trading losses by a Chinese oil company looks like a perfect storm.
It brings together three big themes that have fascinated the Swiss financial analyst since he moved to Hong Kong in 1973 for Drexel Burnham Lambert, made a mint in the markets, and then turned into a colourful “contrarian” commentator.
First is the awesome economic rise of China, symbolised by the presence of China Aviation Oil, which holds a monopoly on fuel for domestic airlines, in the Singapore oil futures market.
Second is the chaotic and contradictory nature of Chinese “capitalism”, which placed this commercial venture in the hands of a Communist party loyalist, Chen Jiulin, 43, who was arrested and bailed by Singapore authorities last month.
Third is the insatiable Chinese demand for resources that propelled the company to venture into tricky derivative trades as it sought to supply aviation fuel for a hungry industry at home.
“The Chinese are so big in these commodity markets that they can to some extent manipulate the markets,” said Faber.
“I’m surprised that it’s a Chinese company that lost money being short of oil because Chen should have seen this huge demand coming from his own country. That is an irony.”
The Singapore courts will now sort out the case. But to Faber, whose Boom, Doom and Gloom report is addictive reading for many in the Asian financial markets, it is a useful illustration of China’s economic power.
And this power will only become greater as China develops. “The 3.6 billion people in Asia, including India, Australia and New Zealand, consume 20m barrels of oil a day,” he said. “In America, 265m people consume 22m barrels a day.
“Per capita consumption in China is 1.7 barrels a year, in Japan and South Korea about 17 barrels and in America 28 barrels. So you start from 1.7 in China and 0.7 in India and, for sure, oil demand in Asia will go up. I think it will double in about 10 to 12 years.”
For the first time in the history of capitalism, said Faber, Chinese growth will exert a crucial influence on the rest of the world. “Their cost advantage, I have to stress, is not only based on cheap labour but on rapidly improving productivity and hard work and huge improvement in infrastructure,” he said.
In many commodity markets China is no longer just on the margin but has become the largest factor. Faber reels off stunning figures. More than 27% of global iron ore production is absorbed by China. “Take copper,” he added. “In 1990 the Chinese absorbed 6% of world production, in 2000 12% and now 22%.”
China has overtaken Japan as the second largest importer of oil in the world.
Whether a threat or a boon, the China effect will transform the world economy.
“US industrial production basically doesn’t grow. But in China industrial production does grow,” said Faber.
Already, Japan’s exports to America are declining but its exports to China have risen 30%-40% in the past 18 months, while Korean exports to China have soared by up to 50%.
“China is gradually displacing America as Asia’s leading economic power and this will have geopolitical consequences throughout the world,” he said.
As a doom-monger who was one of few commentators to predict the 1997 Asian financial crisis, Faber has an interest in gloomy realism to correct what he calls “Chinamania”.
“China will have business cycles like every other economy. It would be most unusual for China to sail ahead and never have a crisis,” he warned.
“I think the Chinese know they are on a collision course with America. Statistically the United States has a $11.2 trillion economy and China is a $1.3 trillion economy. But these figures are totally misleading because many markets in China are already larger than in America. It’s just that there is a huge price difference.”
Adjusted for purchasing power parity, Faber claimed, China’s economy is already 60% of the size of America’s. He cited big “physical markets” — more steel than America or Japan, 330m smokers, 250m mobile-phone users. “Geopolitically, tensions are inevitable.”
The prime source of tension is China’s refusal to revalue its fixed exchange rate, which pegs the yuan to the dollar.
Faber has blunt advice for speculators who have piled into currency futures to bet on a revaluation: “My view is that they are not going to move. By keeping the exchange rate where it is, in their minds they guarantee the continuous shift of industrial production and capital spending into China and the rest of Asia.”
“The problem is really this. Today one US dollar equals 8.28 yuan. So they go to one dollar equals four yuan. At four the wages of factory workers in China will go from $100-$200 a month to $200-$400. You think manufacturing will move back to Switzerland and America because of wages doubling in China? No way.”
Aside from unheralded risks to growth and stability in Asia — civil wars, floods and other natural disasters — ultimately, he believes, Chinese growth will propel Asian financial markets, still down between 50% and 80% from 1990 levels, and Asian currencies to outperform America. The dollar, he pointed out, has lost 90% of its purchasing power since the creation of the Federal Reserve in 1914.
“Everything points to the dollar going the way of the Roman denarius,” said Faber.
Back from vacation..., so how about a rally now...
Read stratfor's Americas Secret War, which was quite good..., here's the epilogue...
http://www.americassecretwar.com/epilogue.pdf
looks like tax selling is over and gold stock bellweathers are aligned for at least a 5% bounce...
http://www.investorshub.com/boards/read_msg.asp?message_id=4104671
Now have a full position in MFN, average purchase price of US$6.58
Estimate total cash costs @ $186.83/oz
Capex = $118M / 8.4 year mine life = $35.30/oz depreciation
Total Production Cost (excluding amortization) = $222.13
Assume POG = $440/oz
$440 - $222 = $218 profit/oz
Thus theoretically given above assumptions, an acquisition of MFN would be at "fairly priced" at $218/oz (less one's discount rate) and MFN is currently selling for $72 per recoverable PP+M&I ounce. MFN has 4.2M equivalent gold ounces @ 80.6% recovery = 3.4M recoverable ounces. (I am not including MFN other projects which have value, but none of these have over a 1M ounce resource.)
MFN currently has $41M of cash/working capital = $1.13/share
Capex is $118M so no additional PP should be necessary to finance mine construction. Assuming 75:25 debt to equity financing, MFN would need $30M of equity and they have $41M as of 9/30/04.
Note that GLG paid $3.4B for GG's 6.4M ounces of PP+M&I = $530/oz, but please note this included GG's already built mine capex with no debt as well as a skilled mining workforce. Nonetheless, I believe MFN is fairly valued at over $150 per PP+M&I ounce in any bidding war by a major or intermediate producer. If so, that would be a double from today's share price...
As noted, the bankable will not be released until Jan 05, so be advised that my $118M capex and $186.83 cash costs are guesstimates based upon recent analyst reports...
Also FWIW, the .786 retrace from recent $8.78 high and $5.92 low is $6.53, hopefully MFN can hold this fib price...
Likewise... a very Merry Christmas to all...!
I am heading off to Jupiter Florida from Dec 28 to Jan 3, my last vacation before tax season gears up once again...
Merry Christmas to you as well TF!!!
Hey, no pumping allowed on this board...
RNC needs to close on San Andreas/Honduras within the next few weeks/months in line with its previous comments. If that happens for less than 8M shares, then RNC becomes even more undervalued at present prices...
another good blog-check out the MoreAu charts...
http://sitekreator.com/optimist/gold__silver.html
"What is happening to the value of Gold as measured in all paper currencies? This is an essential focal point for investors who must first decide what proportion of their resources to allocate to hard assets like Gold, with the remainder of their assets used to continue pursuit of traditional investments which all revolve around paper.
When the US $ drops and the price of Gold (measured in dollars) increases, is that change in the price of Gold due more to Gold rising, or to the dollar falling? The MoreAU index was created to answer that question. The MoreAU index is calculated by multiplying the closing price of Gold (in US $'s) times the closing price of the US $ (USDX trade weighted) and dividing by 1,000. Although it may not be obvious that multiplying the price of Gold times the US $ produces a result with meaning, it can be clearly demonstrated that the MoreAU index is as valuable to use as it is simple to calculate. "
here's an interesting read on US Debt/Treasury Auctions...
http://www.roubiniglobal.com/archives/2004/12/index.html#000124
Yes: "Wasn't "Limon in Nicaragua" part of the old Blackhawk Mining company?"
As you know, I continue to prefer the junior producers which appear to offer the most value. Explorers may be nothing more than Mark Cuban's baseball trading cards vs. producers that will be able to pay dividends. At $700 POG (per your charter membership to the 700 Club) and $250 cash costs, the junior producers likely offer the best value currently.
Here is a key metric that gives you an idea of the upside of junior producers using Market Cap to Forward 2006 Production Ounces:
Ticker.. MC/Prod Oz FWD
EPM..... $170 in production 2006
RNC.to.. $231 currently in production
GRZ..... $251 in production 2006...?
GGG.to.. $547 currently in production
MFN..... $619 in production early 2006
RNO..... $692 in production
DSM..... $697 in production 2005
GBN..... $818 in modest production by 2006
HMY..... $818 in production
GRS..... $911 in production
CBJ..... $1,034 in production
MNG..... $1,108 in production
AGI.to.. $1,170 in production 2005
GSS..... $1,322 in production
KGI.to.. $1,321 in modest production
GFI..... $1,439 in production
HUGO.... $1,515 in modest production
NEM..... $2,780 in production
NG...... $2,838 in modest production by 2006
GLG..... $3,530 in production
GG...... $4,138 in production
I believe stocks such as RNC and GGG will be re-rated up to at least CBJ, GSS, and AGI level of over $1,000.
I don't think so... "...and aren't they having perpetual legal problems in that area?"
No problems at Limon in Nicaragua which is already producing.
Bella Vista in Costa Rica is scheduled to start production in Mar 05 with first gold ounces sold in Apr 05. GGG already has all the permits, 75% complete with construction, the Costa Rica town where they are located supports them (90%), and the Costa Rica government is in favor of the project. No court order has been issued to stop GGG from finishing construction or beginning production in Mar 05. That said, there are NGO's that continue to try to thwart Bella Vista mine development but my understanding is these NGO's will not be able to stop GGG from production at Bella Vista in Mar 05 and the earliest their case will be heard is 2-3 years from now...
Here's the GGG press release on this matter:
http://www.glencairngold.com/s/NewsReleases.asp?ReportID=94505&_Type=News-Releases&_Title=Gl....
Here's some information dated Feb 04 on Bella Vista:
"Glencairn managed to pick up the Bellavista project – fully permitted with a bankable feasibility study, for less than $1 per ounce when gold was still trading in the $300 range. The project had a difficult run with the permitting process during the 1990s and low gold prices until 2002. A permit was finally granted in 2001. Then, the government put a moratorium on new open pit mining permits, from which it turned out Bellavista was exempt. Any doubt about these issues was put to rest when construction began in late 2003.
After spending an estimated US$26 million to build the open pit heap leach operation, Glencairn expects to produce an average of 60,000 ounces gold per annum at a cash cost of US$163 per oz. over the mine’s 7.5-year mine life, starting next year.
By integrating Costa Rican professionals into the mine management, lobbying for half of the 2% government royalty to be allocated to the local community, and keeping residents of the nearby town of Miramar up-to-date on developments at the project, Glencairn has overcome one of the major challenges associated with modern mining projects: community resistance. About 90% of the residents of Miramar now support the mine, compared with only 20% six years ago."
also note this:
"Glencairn's subsidiary, Metales Procesados MRW S.A., has been made a party to a legal proceeding brought by this group before the Constitutional Court of Costa Rica against three branches of the government that alleges several deficiencies in the process followed by the government in granting permits for the Bellavista mine.
The legal proceeding does not include a challenge to the exploitation concession under which Metales's holds its mineral rights to the Bellavista mine."
http://insidecostarica.com/dailynews/2004/december/07/nac0.htm
Yep, I picked up a whole bunch of GGG @ C$.49; GGG is my #1 tax loss rebound candidate this year...
GGG has a very talented mining engineering management team (most all ex-Wheaton River staff, one of the best in the business) which is only matched by the sheer stupidity of their financial management. The same morons that are such great engineers decided to issue a PP at year end to further the tax loss selling...
Ratio of oil / gold prices remains at unprecedented high
http://www.resourceinvestor.com/pebble.asp?relid=7586&t=57
you're a day or two behind in your reading...
also, Coxe still bullish on gold per Mauldin's latest...
New 700 Club Member-John Ing...
but, as for me, I will stick with Martin M's @ $472
"We continue to expect gold to hit $510 an ounce, and our next target at $700 an ounce is expected late next year. Gold stocks in general have been laggards in part in the belief that gold bullion would spike and fall back. Part of the reason for this divergence was due to investor scepticism over the sustainability of the current move in the price of gold. We believe that this disbelief is similar when the oil price moved and the oil shares lagged until oil broke above $40 a barrel. Gold investors appear to have bought their tickets to the show, sat in their seats and have been waiting for the show to start. Gold has taken took off but the stocks haven't."
http://www.safehaven.com/article-2372.htm
Dec 24th almost here...
Tax-loss selling is better done sooner than later
Updated: 2004-10-27 14:42:00
When it comes to tax-loss selling, it's better to sell your losing stocks in October or November than to wait for year-end to do it. The reason is quite simple: you'll likely get a higher price for them.
The prices of tax-loss candidates, particularly small cap stocks, usually drift lower right into the deadline (December 24) as most people procrastinate, hoping for a miraculous recovery.
If you sell now, you can buy the same stock back later when a lot of others are selling, usually with a 'sell at whatever price you can get' mentality.
Of course, nothing is ever certain in the investing world. It is possible that what has been a loser until now can become a winner in the last two weeks of the year.
But if you are thinking of waiting until the last minute, just remember that history and human nature are not on your side. Weak stocks usually get weaker as they get dumped in the days leading up to Christmas.
The reason behind all this is that tax rules allow individuals to deduct their capital losses against capital gains. (This applies only to securities held outside of registered plans like RRSPs, RRIFs and RESPs.)
A capital loss incurred in 2004 can be used to offset capital gains incurred in 2004 or, if there aren't enough gains to use up all the losses this year, in any of the last three years.
This means that investors can save on income taxes for this year or get a tax refund for any year going back to 2001 in which they have reported and paid income tax on capital gains.
Remaining capital losses can be carried forward to offset capital gains anytime in future years.
The capital gains or losses don't have to be from stocks. They can be from selling other securities, such as bonds, mutual funds, exchange traded funds (ETFs), or even real estate.
But be warned that, as with many things related to the Income Tax Act, it is important to follow the rules in how you take and claim your losses.
If you want to be able to claim the capital loss from selling a stock, you (or someone related to you) cannot repurchase the same stock within 30 days of the sale. Your loss could also be denied if you bought more of the stock in the 30 days prior to selling it.
However, the rules don't prevent you from buying another stock in the same sector (for example, selling one insurance company to buy another).
Investors should also check their mutual fund or ETF holdings to see if capital losses can be harvested there.
You can generate claimable losses and still keep your stock market exposure by switching from an equity mutual fund into an ETF replicating the S&P/TSX Composite or visa versa.
Similarly, you could dump a Canadian technology mutual fund and instead buy the iUnits S&P/TSX Canadian Information Technology ETF.
However, it wouldn't be within the rules to sell one index fund based on the TSX Composite Index at one institution and buy an ETF based on the same index or another index fund based on this index from another financial institution. Tax authorities would consider all three of these to be identical property and would reject the claim.
There is another special tax rule that investors may be interested in. If you own shares that have simply lost all value such as from bankruptcy, you don't have to actually sell these to trigger a capital loss. You can claim the capital loss if you attach a note to your tax return explaining the situation and reporting that the shares have been disposed of for no proceeds.
You can claim the loss even if the company hasn't formally declared bankruptcy as long as the company is insolvent, it is no longer carrying on business and is unlikely to in the near future, and the fair market value of the shares is zero.
Of course, since you still own the stock, if a miracle gives it some value again and you eventually sell it, you would have to report a capital gain at that time.
December 24 is the deadline for tax-loss selling for stocks traded on the Toronto Stock Exchange because, with three-day settlement and the exchange closed December 27 and 28 in lieu of the Christmas and Boxing day which fall on Saturday and Sunday this year, it is the last day of the year that you can sell and have your sale registered as occurring in 2004.
No 700 Club membership for Martin M...
but $472 will work just fine for me...
Forecaster Sees Gold Averaging $472/oz in 2005
http://www.resourceinvestor.com/pebble.asp?relid=7555
here you go Louis...
http://www.hussmanfunds.com/wmc/wmc041220.htm
The final bankable feasibility study will be released in Jan 05. We will know more then...
Looked through the analyst reports again and have revised my estimated total cash costs up to $180 (better to be safe than sorry) without the silver credit, the Orion report caught my attention and believe it may be more accurate than BMO or Dundee estimates. But the impact on MFN cash flow per share was fairly minor, still has a price to cash flow under 3.0x
Reuters Abridged Summary...?, surely you jest... You've got to give up that light reading...
http://www.sedar.com/csfsprod/data51/filings/00719535/00000001/C%3A%5CPDF%5CDOLORESReport_Final.pdf
Agree with you, almost all my junior gold company investments are either in production now or are advanced stage reserve companies that will be in production by 2006.
FWIW, MFN is my first choice of likely takeover candidates...
In regard to your comment "RNO's earnings sound like they could increase somewhere between 5 and 10 fold in 2005 over 2004", I sure as heck hope NOT!!!
>>>> A 10 fold increase from -$.11 YTD 2004 EPS would be -$1.10...!!!
Well, a hard landing in China is the greatest risk, with the result of nickel prices falling below $4/lb.
Then you have comparables for the entire junior producing sector to compare RNO with...
I prefer using operating cash flow per share (a 2 year forward projection, i.e. EPS but not including G&A/exploration/admin costs) and MCPRO in evaluating junior producers/miners... Many junior producers have similar comparables to RNO, here are 2 year forward share price to operating cash flow per share:
RNC Gold = 1.90x 2006 operating cash flow (producing)
MFN = 2.29x 2006 operating cash flow (MFN should be in production within 12-18 months)
GGG = 3.42x 2006 operating cash flow (producing)
GBN = 3.84x 2006 operating cash flow (Hollister alone)
DSM = 3.87x 2006 operating cash flow (Jacobina Mine in full production by 2Q05)
RNO = 4.64x 2006 operating cash flow Aguab in production/Tasiast in 2006
CBJ = 4.77x 2006 operating cash flow (producing)
AGI = 5.59x 2006 operating cash flow (in production 2Q05)
GSS = 6.08x 2006 operating cash flow (producing)
The entire junior producer sector is beaten down, RNO is a buy along with several others. But a China hard landing as anticipated by Rogers/Faber would likely impact nickel/RNO more than the others...
MFN seems a very viable play, cannot figure out what is holding this one down, and I still just have a small position in MFN, hoping to add more on a pull back... Have MFN total cash costs at $144 which will need to be verified to their bankable feasibility study to be released in Jan 05. Per both BMO & Dundee cash costs without the credit will be $132 and I am adding 2.7% for royalties/production taxes to get $144. FWIW, everyone looks at market cap per resource ounce (MCPRO) which MFN does not compare well. But much better IMO to look at profitability per ounce produced in conjunction with MCPRO, this makes MFN a very attractive investment.
Do not anticipate any PP for Tasiast gold project. This last PP appears to be for the financing of Tasiast, and this was not needed if RNO would have simply delayed Tasiast construction for 12-15 months.
RNO currently has working capital of US$95M (of which $58M came via this last PP) and Tasiast capex is $48M. In addition, cash flow from Aguablanca and other operations for 2005 is projected at $66M. This $66M cash flow was more that adequate to internally finance Tasiast, albeit construction would have had to be delayed.
Hartman
"For now I believe we are in the calm before the storm. With the Holiday Shopping Season upon us, nobody wants to tip the apple cart. Everyone needs to make their numbers over the coming two weeks as we close out the year. Foreign governments don’t want to jam us up right now because they want their exporters to sell all of their goods to holiday shoppers. Once the spending dries up after the first of the year, it will be time to play some global hardball in the currency pits. I believe the gloves come off after the first of the year and we’ll get a better idea of just how vicious the currency and trade wars are going to be.
As it stands, the report today clearly demonstrated a waning appetite for U.S. assets by foreigners. In January I fully expect Treasury prices to come tumbling lower because we have a huge quarterly debt re-funding that is scheduled to take place February 8-10. The last number I remember reading was $157 billion the Treasury will need to borrow during the three-day auctions. In the last 10-year auction foreign investors only bought 9.6% of the offering when they usually buy closer to 45% of the debt. It looks to me like the U.S. will have to offer higher yields in February to sell the huge load of debt. I’ll be looking for my entry point to short bonds in the very near future."
http://www.financialsense.com/Market/daily/wednesday.htm
updated Octagon analyst report
http://members.shaw.ca/dsk.consulting/Kupgrade.pdf
Kimber Resources - KBR
We have 1.024M warrants coming due two days hence:
$0.80 1,024,255 December 16, 2004
May be a good time to pick up more KBR in the next few days..., although the volume on Dec 13 may have been them exercising already, i.e. these warrants already digested...
my hero, Martin M...
http://www.murenbeeld.com/
article: http://www.murenbeeld.com/pdfFiles/US$USCA.pdf
wish your sentiment numbers reflected the same as Hulbert...
"Consider the latest readings from the Hulbert Gold Newsletter Sentiment Index (HGNSI), which represents the average exposure to the gold market among a subset of short-term gold timing newsletters. The HGNSI has fallen a total of 52 percentage points in recent sessions, and now stands at 19.6 percent."
http://cbs.marketwatch.com/news/story.asp?guid={DC1599D0-7C3E-4AC2-AF58-66DBFAA889D4}&siteid=mkt...