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The Impact Of China On Metals Markets
(Lawrence Roulston’s market commentary from Kitco)
China has had an enormous impact on commodities markets over the past couple of years. Will China be able to maintain the incredible level of growth that has pushed metal prices to record levels? If economic growth falters in other parts of the world, how will that impact on the outlook for China?
These are critical questions for resource investors. This article offers statistics and some insights from my eighth visit to that nation in transition. It is clear to me, and to anybody who has looked closely at the situation in China, that the bull market in metals is still intact, and likely to grow stronger.
Let’s start with the situation outside of China. Many investors are concerned that the massive government deficit in the United States is adding to an unsustainable level of debt at the same time that consumers continue to rack up a mountain of debt.
Of course, the level of debt in the U.S. is not sustainable. And, it is not being sustained. The dollar has fallen roughly 30% against the euro and it has plunged even further in value when measured against hard assets such as gold. That continual slide in the value of the dollar acts as a safety valve, letting the pressure off gradually.
In essence, an economy with an excessive level of debt is being steadily downgraded by the rest of the world. There is no need for a cataclysmic adjustment. The imbalance is being steadily rectified as Americans give up an ever larger share of their wealth to the rest of the world through the erosion of their currency. Many Americans will be shocked when they discover how much of their wealth they have already lost.
As the American economy is becoming progressively less dominant in the world context, it is likely to grow less quickly. Some commentators are still suggesting that a slowdown in the U. S. economy will reduce demand for merchandise produced in Asia to an extent that it will impact commodity prices.
Their argument is that growth in the Asian economies is a result of those nations producing goods for export to the United States.
Even a moment's reflection will make it clear how naive it is to believe that Asia is merely making stuff for the U.S. Consider how total demand for metals has grown at a pace that has pushed the mining industry beyond its limits. Demand for copper, for example, is so strong that the copper price is six times higher than the level of five years ago; and similarly across the board for base metals.
It is hard to comprehend how anybody could fail to see that such strong growth in demand is anything but the result of an entirely new consuming economy. I estimate that if a person spent even one day in China it would be enough to convince even the strongest cynic that metals are being consumed in that country at a fast pace; in fact at a pace that is entirely incomprehensible to most investors in the West.
I am presently returning from a trip that took me through four big Chinese cities plus Hong Kong. Some observations from that trip, in a sidebar article, should help provide further insights into the economic growth of Asia.
The numbers provide a hint of what is happening. Many people have heard the figure of 30 million people a year moving to the cities. Migration at that level is expected to continue for another 10 years, during which time about a third of the rural population will move to the cities, a proportion similar to many developing nations.
People who have spent time in Latin America or Africa have seen the shantytowns that extend for kilometers around many of the big cities. Put that the vision completely out of your mind. China is creating urban housing for 30 million people a year by building high-quality concrete high-rise apartments and condominiums.
That is not to say that a farmer is given a new condo on arriving in the city. Those high-end condos are being purchased by the well-to-do business owners, executives and professionals that constitute a rapidly growing middle class in every Chinese city. Condo prices vary from city to city, but are generally in line with big-city prices in North America.
The homeowners pay cash or they get mortgages, just like in the West. People across the economic spectrum are trading up, and that opens up housing units at the lower end of the markets for the new arrivals.
The condominiums are being developed by private developers, exactly as they are in the West. Many of the developments involve hundreds of units in each of a number of phases.
People are moving to the cities to work in factories as well as the range of services and support jobs found in any big city. The urban development goes well beyond building housing for 30 million people a year. A proportionate number of factories, schools, hospitals, roads, airports, train stations, buses, restaurants, bars and all the other amenities of any city, anywhere in the world, are being constructed.
To put that level of new construction into perspective: It is like building six cities the size of Toronto or a New York plus a Los Angeles, from the ground up, each and every year. The urban growth of China is being spread across 100 cities that already have more than a million people, as well as an even larger number of smaller cities.
That massive development program in China is extraordinarily well organized. It has been planned and carefully thought out. The result is that things work. In fact, they work better than in many Western cities which have sprawled in all directions with no sense of planning.
China is by far the largest consumer of concrete and metals in the world, and it is still early in the first wave. Each year sees the basic infrastructure for another 30 million people constructed. In addition, that ever growing urban population are acquiring consumer goods.
Already there are roughly 300 million middle-class people in China – people with the same level of wealth and buying power as middle class people in the West. Beyond the basic needs of urban living, the growing middle class are buying all the trappings of middle-class life: luxury cars, designer furniture, plasma TVs, jewelry, holiday homes and all the other essentials that we in the West accumulate over our lifetimes.
The fast-paced growth extends well beyond China, to encompass most of Asia. Already this year, I have been in three other Asian nations. China is definitely the standout, but growth is evident throughout a region that is home to 3 billion people.
Remember how the modernization of Japan boosted demand for commodities for a couple of decades. The present modernization in Asia involves more than 20 times as many people.
The size of the Chinese economy has already exceeded that of Great Britain. The government is hard-pressed to keep the growth rate under 10%. And remember, each year’s growth is building on a larger base.
Chinese investors now have $1.9 trillion dollars of savings. Investor wealth is mounting quickly, with the two major Chinese stock exchanges both up more than 60% in the last year. Adding a level of stability is China’s official foreign currency reserves, which have now surpassed Japan’s to become the world’s largest.
Until you see it, it is hard to really comprehend the pace and the magnitude of what is happening in Asia. A couple of the people I traveled with on the latest trip were seeing China for the first time. They had seen the statistics and read numerous accounts of China. Nevertheless, they were totally blown away when they saw it for real.
People who continue to think of China in terms of a pool of cheap labor making stuff for other countries will miss out on the greatest investment opportunity the world has ever seen.
Those who see China first-hand quickly comprehend that the country is going through a transformation into the modern world and that process is absolutely unstoppable.
RNO Website worth a visit
Here is the link:
Canadian company mining Spain and Portugal
http://www.rionarcea.com/s/Home.asp
RNO - Cl001 Table Pounding Post
Posted by: cl001
In reply to: None Date:8/19/2006 11:58:24 PM
Post #of 53656
RNO: I am table pounding!
I suggest anyone with cash at hand(folks like MSGI, Len and SSK?) to take a close look at RNO before it runs away!
1. RNO is a nickel play: It produced 3.6 M lb of nickel in Q2 at cost of $2.57(USD). RNO just had the second crusher, the production will increase significantly. "the new secondary crusher, commissioning of which commenced in July 2006...". The company is guiding 17 M pounds of nickel this year, which means 5 M lb/quarter in H2. I am trying to be very conservative here. I only give RNO 4 M lb/quarter. Here are the numbers using Friday's nickel price and I believe Nickel price is going much higher due large short position and tight inventory:
4,000,000*(14.4-2.57)= 47 M USD/quarter cash flow. RNO has 194,622,422 shares full diluted, including 22 M warrants at $5 CAD expiring 2008. 24.2c/Quarter (USD). With copper price stablizing, this number will likely be the actual earning due to loss carry forward. At Friday's close RNO is trading at 2.3 forward cashflow! If RNO can hit the guidance, at 5M lb nickel/quarter, it is trading at 1.9 times cashflow! Note: Aguablanca is opened in 2005 with open pit mine life estimated at 10.5 years.
2. RNO Is gold Play:
Tasiast Mine in Africa is schedule to open in 2007, 105 K oz of gold at cost $240/oz. At gold price of $600/oz, it should bring 34M additional cash flow to the company. The mine life is at least 10 years.
Salave gold
Most investors already wrote off Salave gold. RNO is still in court trying to overturn the Asturias government's decision. However, even RNO fails in court, it probably can receive some compensation.
In the event that the decision of the Government of Asturias is maintained, the independent legal advisors of the Company believe Rio Narcea should succeed in obtaining significant monetary compensation.
El Valle and Carles gold:
RNO plan to close El Valle and Carles gold operations by the end of the year. It produces gold at ~500/oz after switching to underground. However, read the fine line,
In reaching this decision, the Company was significantly influenced by the decision of the Regional Authorities of Asturias, not to approve the "change of land use" required to develop the Salave gold project located some 70 km west of the El Valle....
RNO is closing El Valle and Carles to protect the Asturias government! If Salave is resolved, RNO will likely to keep it open. In addition, the cost to produce gold will likely to drop if RNO put resources behind it.
In short, RNO has many opportunities to become a much bigger gold player. Gold companies are mostly trading at PE of 10, 20 and 30. if any of these measurements applies to RNO, RNO stock price is likely to explode.
In conclusion, I believe RNO is a screaming buy at the current price. I have been looking for the next EZM that is undiscovered and traded in the US for a while and finally I found one! For those who bought EZM with me at low 1s, RNO is for you. For those who didn't buy EZM and only watch EZMoney running away, don't miss the run of RNO again!
RNO - Part 3
"We will probably have to endure another nine weeks of fools selling their RNO everytime metals prices drop a little. Copper went from $4.10 in May to $2.90 in June and EZM crashed from $3.25 to $1.85. As EZM was piling up gigantic profits(even with copper at $2.90) in May and June fools were dumping the stock. In August as EZM reported $71M in profits compared to $18M in the first quarter the people realized how foolish they had been for selling at $1.85 as the stock hit $3.10. Right now fools are selling their RNO at $2.25 even as RNO is piling up gigantic profits. With nickel at $13.30 RNO is piling up record profits far beyond anything they ever dreamed of making. Who cares if nickel went from $15.50 to $13.30? Copper went from $4.10 to $2.90 and then back to $3.50 and EZM made huge profits every single day during that period. RNO makes huge profits at $12, bigger profits at $13.30 and staggering profits at $15.50. So if nickel "drops" to $13.30 we should all freak out and sell our stock? I don't think so. I had to wait three months for my 40% gain in EZM and I will probably have to wait another nine weeks for my huge gain in RNO, but it will be well worth it."
RNO - Part 2
"The people that are selling RNO are acting irrationally unless they are just daytrading. Nickel has dropped from $15.50 to $13.65 in the last two weeks. You could say that nickel is way down or you could compare that $13.65 price to the average price of $7.71 that RNO got for nickel in the second quarter. My projection of a $48M profit for RNO is based on an average nickel price in the third quarter of $12. So far nickel is averaging about $13 in the third quarter which only has three weeks to go. Most of the nickel for RNO for the third quarter has allready been priced. The huge profit for RNO for the third quarter is a done deal. Keep in mind that RNO made $26M in the second quarter if you exclude the copper hedging charge. This was with nickel at $7.71 and they only sold 3.1M pounds of nickel and 3.1M pounds of copper in the second quarter. That number should move higher with plant improvements in place. Lower metals prices in the fourth quarter would lead to a hedging gain on copper so another good fourth quarter profit is likely. Don't throw the baby out with the bathwater. Nickel prices cannot go straight up without a correction. If you're in this for the long term you will need patience until November 10. The market's perception of RNO will change dramatically on that day. How does the market value a company with .04 in earnings. How does the market value a company with .30 in earnings. "
RNO - I am buying this pull back.
Cl001 has been a big fan of RNO and he got me interested. I went to Yahoo and started reading the board over there. A poster with the handle "Firecracker" makes some points that I am in agreement with. He was also a big voice on EZM when it fell to $1.85 from $3.25.
Here are some good points taken from "Firecracker"
".30 earnings in third quarter? 2-Sep-06 07:38 am
Some people might think I am using pie in the sky numbers to arrive at my estimate of third quarter earnings. Actually, I am trying to stay conservative with my estimate. I am figuring that RNO will sell 4M pounds of nickel in the third quarter at $12 and that they will make another $12M from repricing the nickel that was shipped in the second quarter for a total of $60M in nickel revenues. RNO produced 3.6M pounds of nickel in the second quarter, but improvements in the TPH at the plant from 185 to 210 should make nickel production higher in the third quarter. I am using $12 as an average price of nickel for the quarter. The price has averaged about $12.50 so far for the quarter. If nickel stays at $15 for September the average price for the quarter will be about $13. RNO stated that there were 3.1M pounds of nickel at the end of the second quarter that needed to be repriced in the third quarter. These 3.1M pounds were originally priced at $7.71. Gold revenues are hard to figure. I am going with $17M for the third quarter, the same as the second quarter. Nalunaq revenues went from $13.1M in the first quarter to $3.3M in the second quarter. RNO said they didn't process any Nalunaq ore in the second quarter, but they expect to process two shipments in the third quarter so Nalunaq revenues may be higher in the third quarter. The average gold price is higher in the third quarter. Expenses were $47M in the second quarter. $21M of that was hedging losses. There should be no hedging loss in the third quarter if copper remains around $3.40. I am estimating expenses of $29M for the third quarter. My estimate is for $77M in revenues and $29M in expenses and a profit of $48M or .30 per share for the third quarter."
Commodity Consolidation OR ???
This is an interesting take on where commodities are headed.
http://www.kitco.com/ind/Dony/sep62006.html
Citi ups metal prices
Still seems like these guys are way way behind the curve, but they are projecting zinc price up through 2007 for the first time.
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=86965A40-17A4-1130-F56DB069A0837E14
Kipp
nsomniyak - I disagree that EZM upside is pre-empted by the merger.
Look at the August presentation Lundin gave, here is a link:
http://www.lundinmining.com/corporate/presentations.php
Here is what the new company would look like: The new company had $281M
in revenues during the second quarter($168M + $113M). The new company
had net profits of $108M during the second quarter($71M + $37M). The new
company will have 93M shares outstanding(41M Lundin plus 53M issued to
EZM holders). The new company earned $1.15 per share in the second
quarter. The new company had positive cash flow of $137M in the second
quarter($83M plus $54M). The new company should do about $330M in
revenues in the third quarter. The new company should earn about $150M
in net profits in the third quarter or about $1.60 per share. The new
company should have $160M in positive cash flow in the third quarter. If
the market valued the new company at ten times earnings based on the
third quarter the stock would be $64.00. The EZM CEO would be CEO so
basically EZM is taking them over. My guess is that they are using
Lundin stock to essentially do a sort of a reverse split. EZM will no
longer have all those shares out there like they did before. Now the big
question is does somebody else step in and make an offer. We now have a
company with 1/6 as many shares outstanding and with about eight times
as much share earnings in the third quarter compared to what we would
have had($1.60 compared to .20)
Kipp
nsomniyak - Zinc Stocks
I still like EZM and it is my largest holding. I think the merger with Lundin is far from a done deal and may take a few twists and turns. Even if the deal goes through, the resulting entity is going to do very well. There are lots of core samples being drilled in new areas of the exhisting mines, and they are prospecting in new areas that hold much promise.
I have been rebuilding my position in Breakwater. Breakwater is still a great value.
HudBay is a great way to play several metals all in one stock.
So EuroZinc, Breakwater, and HudBay are my favorite low risk ways to play zinc. I think Breakwater may have the largest percentage gain from today on.
The reason I say these stocks are a low risk way to play zinc is because they are all very well managed companies, located in "safe?" countries, with verified reserves, and good mine life.
I have stayed away from story companies like Yukon Zinc that have no cash flow from current mines.
As far as the LME inventory going to zero, it seems to be a sure bet.
Good Luck!
Kipp
Looks like our base metal stocks are a good place to be. I have been in Kodiak, AK for the past 2 weeks and it's like stepping in a black hole. There were 800 and some posts for me to read just on this board!
I think we are about to see fireworks in zinc. The market is just waking up to the fact that supply will not meet demand and the LME inventory is headed for zero. The situation will be made worse when hoarding starts.
Thanks for your work on the nickel stocks.
Kipp
Copper Rises in London as Chinese Seen Replenishing Stockpiles
By Chanyaporn Chanjaroen and Katy Watson
Sept. 4 (Bloomberg) -- Copper rose in London on speculation that producers of wires and pipes in China, the world's largest consumer of the metal, resumed purchases to replenish falling stockpiles.
Record global prices for copper this year prompted Chinese users to turn to domestic stockpiles. Inventory monitored by the Shanghai Futures Exchange dropped to 48,193 tons Aug. 31, down 17 percent this year. That's a 40 percent decline from a 19- month high of 75,264 tons reached on Dec. 1.
``The Chinese have been out of the market for the past six months; now they are returning,'' said Jim Lennon, a London- based analyst at Macquarie Bank Ltd. who ranked third in a survey of commodities specialists by Australia's BRW business magazine in October 2005.
Copper for three-month delivery gained $75, or 1 percent, to $7,665 a metric ton at 3:44 p.m. on the London Metal Exchange.
Chinese buyers reduced copper imports this year after the metal soared to a record $8,800 a ton on May 11. Prices have fallen 13 percent since then. The nation imported 477,220 tons of copper from January through July, 42 percent less than a year earlier, according to data released by the China Customs General Administration on Aug. 25.
A shortage of copper in China has helped boost prices, said Ulrich Steiner, an analyst at Zurich-based Bank Leu AG. ``In China, inventories are very low.''
LME-monitored stockpiles increased 2,700 tons, or 2.2 percent, to 128,100 tons, the exchange said today. That's still less than three days of global consumption.
Escondida Mine
Workers at BHP Billiton's Escondida mine in Chile, the world's largest copper deposit, returned to work Sept. 2, ending a strike that halved production. Processing plants at the mine began working at full capacity yesterday and extraction of ore also is at levels prior to the strike, Pedro Marin, a spokesman for Escondida Workers' Union No. 1 in the city of Antofagasta, said by telephone.
The strike, which began Aug. 7, resulted in about 45,000 metric tons in lost production at a cost of more than $200 million, according to BHP Billiton.
Chile, the world's biggest copper producer, may face further labor disputes.
State-owned Codelco, the world's biggest copper producer, has wage negotiations coming up at its Chuiquicamata mine, while Highland Valley, owned by Teck Cominco Ltd., is also due to start wage talks, Michael Davies, an analyst with commodities broker with Sucden (UK) Ltd., said in an e-mailed report. BHP's Cerro Colorado mine and Falconbridge Ltd.'s Collahuasi mine are also scheduled to hold pay talks through next June.
Wage Talks
Copper net short positions, or bets prices will fall, rose to the highest since September 2003 on the Comex division of the New York Mercantile Exchange. Speculative short positions of Comex copper futures held by hedge-fund managers and other large speculators outnumbered long positions by 11,180 contracts, a 15 percent gain, the Washington-based U.S. Commodity Futures Trading Commission said Sept. 1. Comex is closed today for the U.S. Labor Day national holiday.
Other LME-traded metals gained. Aluminum added $2 to $2,494 and zinc increased $55, or 1.6 percent, to $3,485 a ton. Lead was $35 higher at $1,265 and tin advanced $75 at $9,050 a ton. Nickel dropped $1,050, or 3.7 percent, to $27,550 a ton after earlier rising to as much as $28,900.
``The price of nickel has consolidated; it has reached the maximum possible in the short term,'' said Steiner. ``Demand remains strong and supply remains short.''
Copper Gains in London on Speculation Demand to Outpace Supply
By Katy Watson
Sept. 5 (Bloomberg) -- Copper gained in London on speculation supply won't keep pace with growing demand as manufacturers increase consumption of the metal used in construction after the summer vacation period.
Copper reached a record $8,800 a metric ton on May 11, propelled by demand from countries including China. While global copper stockpiles climbed 23 percent to 189,462 tons since the end of July, inventories remain ``seasonally low,'' said John Meyer, an analyst at London-based Numis Securities.
``There is concern that this is insufficient to meet new demand as manufacturers ramp up production into the autumn,'' said Meyer.
Copper for delivery in three months on the London Metal Exchange rose $80, or 1.1 percent, to $7,730 a metric ton as of 10:13 a.m. in London. The metal has gained 76 percent this year.
Workers at Chile's Escondida, the world's biggest copper mine, returned to work Sept. 2 after a strike that lasted nearly four weeks and halved production. Further wage negotiations later this year at mines including Chile's state-owned Codelco may help to keep prices high, said Meyer.
``Demand is the key to the current market, with the potential supply disruption being the catalyst to continuing high prices,'' he said. ``The supply deficit looks likely to continue for the next six to 12 months.''
Also on the LME, aluminum gained $35 to $2,525 a ton, nickel added $450 to $28,050, lead was $17 higher at $1,275, tin rose $25 to $9,075 and zinc advanced $67 to $3,520.
European Spot Zinc Premiums Hike After Summer - Traders
Monday September 4th, 2006 / 19h00
LONDON -(Dow Jones)- The end of the summer months and galvanizers getting ready to ramp up production has sharply hiked European spot zinc premiums, traders said Monday.
Spot premiums for special high grade zinc, basis duty paid have hiked to $280-$340 a metric ton over the London Metal Exchange zinc cash price, up from around $250/ton last week.
"Customers are coming back from their holidays but there's hardly any availability in the market. Most supplies are from LME warehouses," one physical trader said.
Zinc is mainly used as an anti-corrosive coating for steel products.
LME zinc stocks have plunged over the course of the year as consumers draw on exchange stocks as metal of last resort. At the beginning of the year, LME warehouses held 393,300 tons of zinc, now down at 170,250 tons.
"There are rumors that some galvanizers have had to stop production for one or two days in the higher quality segment, but I've seen no evidence so far," another trader said.
Zinc prices have hit a record $4,000/ton during May, up 113% since the start of the year and have since retreated to trade at around $3,400, but still far above the historical average at around $1,000-$1,500.
"The hike in premiums at the end of the summer is understandable. Some form of cut in consumption will be inevitable because there is such a shortage of zinc," CRU analyst Giles Lloyd said.
"Manufacturers may apply some voluntary measures, painting products such as farm gates instead of galvanizing them," he added.
"We have applied a zinc surcharge on our products for the past 18 months. Customers have accepted the charge though it is hard to say whether high prices have led to a smaller market," a spokesman at U.K. galvanizer Wedge Galvanizing said.
Years of depressed zinc prices have curtailed exploration investment, leading to few new zinc mines coming on stream at a time of increased commodity demand due to China's and some extent India's economic development.
Long lag times of up to 10 years to bring new mines into production have produced a protracted zinc shortage, exacerbated in some cases by a higher cost environment and lack of mining personnel.
Physical traders in European increasingly looked to New Orleans LME warehouses as a source of metal but freight cost and shipment were currently a deterrent, they said.
"One of my customers doesn't want to pay the current premium. I'm looking at zinc in New Orleans but we need to work out freight arrangements first," a trader said.
New Orleans warehouses hold 126,775 tons of LME zinc warrants, or 74%. Much of the material had to be cleaned after flooding following Hurricane Katrina submerged many warehouses.
Extreme tightness in the zinc concentrate market will likely ease somewhat towards the end of the year, analysts said.
Shipments from Teck Cominco Ltd's (TCK) Red Dog mine in Alaska would ease the tightness somewhat, they said. Red Dog only ships for a limited period during the summer months but in 2006 extreme ice conditions delayed vessels for two to four weeks.
-By Elisabeth Behrmann, Dow Jones Newswires; (4420) 7842 9412; elisabeth.behrmann@dowjones.com
REFLECTIONS ON THE GOLD/METALS MARKET
Speech by Mr Philipp Hildebrand, Member of the Governing Board of the Swiss National
Bank, at the
LBMA Conference, Montreux, 26 June 2006.
* * *
Introduction
Thank you for giving me the opportunity to speak to you this morning. The last time a
member of the Governing Board of the Swiss National Bank (SNB) had the opportunity to
address this audience was in June 1999, when our present Governor Jean-Pierre Roth
had the difficult task to explain why the SNB intended to sell 1300 tonnes of its gold
reserves. Back then, the gold market environment was quite different: the price of gold
had steadily declined to USD 250/oz and there were widespread concerns in the market
place that central banks were intending to liquidate a substantial part of their gold
reserves. In seven years, the market has, in many ways, come full circle: the price of
gold climbed to above USD 700/oz before receding below USD 600/oz, levels that were
last seen in 1981. Central bank activity in the gold market is not considered as a threat
anymore. The agreements of 1999 and 2004 between 15 European central banks - the
so-called Washington agreements - have removed much of the uncertainty regarding
central bank sales. Indeed, market rumours today are arguably more concerned
about central banks buying gold than they are about central banks selling gold.
As many of you know, the SNB completed its gold sales program fifteen months ago1. In
total, 1300 tons were sold. The decision to reduce our gold holdings by half was taken
for two reasons that were highlighted by experts as early as 1997: First the SNB
arguably had more gold than it needed. Switzerland’s official gold holdings per capita
were five times higher than those of the next G10 country. Second, the SNB had - on a
mark-to-market basis - excess capital reserves that were no longer required for monetary
purposes. As a result, the decision was taken to sell 1300 tons of gold. In May 2000, as
soon as the legal framework had been amended to allow market sales, the SNB started
it gold sales operations. We adopted a very transparent strategy and tried, within the
constraints of the Washington Agreement, to maximize the proceeds of the gold sales in
Swiss francs. The average selling price of USD 350/oz was 17 dollars higher than the
average London fixing of the selling period. The gold con-
Of course, with today’s prices around 600 USD/oz, you might think that we revisit our
tract is trading at
sales program with mixed feelings. As a matter of fact, price forecasts, which are
$624.40 today.
inevitably subject to great uncertainty, did not feature prominently in the SNB’s decision
to sell gold. The timing of the gold sales was largely influenced by factors that the SNB
did not fully control. Once we were allowed to sell, we started our program within the
window of opportunity that had been negotiated with other central banks under the first
Washington agreement. Today, the SNB is no longer in the spotlight with regard to its
gold policy. This makes my task today easier than President Roth’s seven years ago. I
have no newsworthy information to present to you regarding our gold policy. Instead, I
will briefly reflect on six commonly held arguments related to commodities and, more
specifically, to gold. The point of considering these arguments is not to either reject or
confirm them definitely but rather to illustrate the likely speculative nature of long-term
gold price forecasts. Since it was freed from central bank intervention, the gold market
has been quite volatile. Historical evidence as well as analytical considerations suggest
that price volatility will likely remain an important feature of the gold market.
First argument: gold is a commodity like any other
Since the collapse of the Bretton Woods System, gold has lost its role as an anchor for the
international monetary system. Does that mean that it has become a commodity like any other? Before
trying to analyse fundamental differences or similarities between gold and other commodities, lets look
at what prices tell us: At first sight, gold and other commodity price cycles indeed look similar: the
1 For a detailed overview of SNB’s sales program, see Hildebrand (2005), SNB Gold Sales - Lessons and Experiences,
Institute for International Economics, Washington.
boom in the gold market since 1999 clearly has parallels in other commodities as well. Oil prices have
increased sevenfold since 1999; industrial metals have increased threefold since 2001. Similarly, the
extraordinary gold bull market at the end of the seventies occurred in the context of rising oil and
commodity prices. This parallelism, however, is not perfect. The average correlation between weekly
price changes of gold and oil throughout the last 20 years is a mere 0.1. For metals, the correlation
with gold is slightly higher but remains below 0.2. Both correlations have varied heavily within the
period; currently, they are clearly on the high side (Graph 1).
Graph 1: Correlation between gold, metals and oil prices
Despite similarities in price movements, the gold market has a number of distinct features relative to
other commodity markets. Arguably, the most important distinction is the fact that the ratio of available
supply to annual production is much higher for gold than for other commodities. A significant
proportion of the estimated 160,000 tonnes of all gold worldwide available in the form of jewellery,
bars, coins, etc. (sixty times the annual mine production) could be brought to market at relatively low
cost. Thus, in contrast to other commodities, gold prices are not only dependent on the current mine
production and processing demand but are also influenced to a great extent by the supply and
demand behaviour of existing and potential owners of gold. In other words, the investment motive is a
much more important driver in the gold market than in the market for other commodities. Of course,
mining and processing demand have an important role in the long term, but the medium term price
equilibrium depends heavily on the investment or disinvestment decisions of the private and public
sectors.
Second argument: commodity supply cannot catch up with demand
A common argument in commodity markets relies on a kind of Malthusian logic: due to limited supply,
prices must rise in the long run in order to match increasing demand. This argument has been invoked
for centuries. However, secular trends show the contrary: in almost all commodity markets, prices
have decreased relative to other goods and services. This secular relative price decline does in no
way imply that bottlenecks in production or increased demand cannot trigger a commodity price cycle.
These cycles are often caused by the delayed reaction of supply to an increase in demand, which
tends to push up prices temporarily. But in due time, higher prices tend to trigger new mining
investments and foster technological progress.
This raises the question of whether we are currently witnessing a commoditity cycle like any other or
whether things might be different this time? On the demand side, there can be little doubt that the
increased demand caused by the integration of China and India in the world economy is a once in a
century historical event. On the supply side, there has been a significant increase in exploration
investment since 2002.2 It remains to be seen whether the increased supply will be sufficient to bring
prices down significantly. The depletion of easy-to-mine resources has contributed to a significant rise
in extraction costs. Other factors might also push in the same direction: for instance, it is possible that
the internalisation of external mining costs, previously born by society as a whole (i.e. through the
degradation of the natural environment), might contribute to commodity prices remaining at elevated
levels.
With regard to gold, on the other hand, I am doubtful that the main source of uncertainty is related to
surprises in future mining supply or fabrication demand. As I mentioned before, absent new vast
discoveries, investment demand will arguably continue to dominate future gold prices.
3
Third argument: today’s commodity investment boom is structural and will be long-lasting
Let’s turn our focus to investment demand. In recent years, institutional and private investors appear to
have rediscovered commodities as an asset class. According to some market estimates, investment in
commodities has surged tenfold since 2003 and amounted to USD 120bn in May 2006. Many market
analysts see this increase as the beginning of a new trend: their argument goes roughly as follows: if
all pension funds had only 3% of their assets invested in commodities, this would represent a total
investment of more than USD 500bn.3
The gold market has also benefited from a surge in investment demand. According to market
specialists, net investment exceeded 700 tonnes in 2005. Exchange-traded funds (ETFs) have
become particularly popular because they give investors the opportunity to make flexible and liquid
investments in gold, even for small volumes. At the end of 2003, gold ETF investments accounted for
less than 20 tonnes. Today, they likely exceed 500 tonnes.
Does the risk/return payoff of commodities justify this new interest? Empirical studies have shown that
the inclusion of commodities as an asset class improves the efficient frontier of a portfolio.
Nonetheless, we all know that returns and correlations can change. With respect to correlations, there
is arguably no compelling reason why low correlations between commodities and bonds or equities
should change significantly going forward. The case for diversification with regard to investing in
commodities may therefore well remain intact. With regard to returns, however, things appear more
complicated, particularly if we base our analysis on the return of commodity futures indices. In the
past, most commodity markets have been in backwardation: futures prices were lower than the spot
price. This was beneficial to investors buying commodity futures, because they could profit from a socalled
roll-yield. This yield can be interpreted as a risk premium priced into the futures contract to
compensate the holder for bearing the commodity price risk. However, if the number of investors ready
to bear this risk increases significantly, the risk premium could disappear or even turn negative. In fact,
for some time now, the near-term structure of many commodity prices has experienced a change from
backwardation to contango. It seems to me, there may well be a connection between this change from
backwardation to contango and the growing trend to invest in commodity futures.
Contrary to other commodities, gold has typically been in contango. The reason is that there is plenty
of gold around and plenty of market participant - including central banks - willing to lend it. As a
consequence, gold lease rates are usually lower than USD interest rates and gold futures prices
higher than spot prices. The roll yield is thus negative, which is one of the reasons why investment in
gold futures did not generate the same returns as investments in broad commodity future price
indices. So what return should we expect from investing in gold? History shows that gold has been
able to keep its value in real terms, but compared to bonds or equities, no real return has been
realized (Graph 2).
2 For instance, Metals Economics Group (2005) estimates that expenditures for commercial nonferrous metals exploration
increased from a 12-year low of USD 1.9bn in 2002 to USD 5.1bn in 2005, a level just slightly lower than in 1997, when
expenditures were at their highest level.
3 Source: Watson Wyatt in GFMS Gold Survey (2006).
4
Fourth argument: gold mine hedging is “passé”
As you know, in the second half of the 1990s, gold mines increasingly sold their future production on a
forward basis. In doing so, they pushed up gold supplies by more than 10% per year, thus reinforcing
the already negative price trend. As from 2001, mining companies increasingly abandoned this type of
price hedging, which amounted to a de facto reduction in the supply of gold and thus contributed to
rising prices.
This raises the question of what constitutes an optimal hedging policy to maximize shareholder value?
One of the reasons gold mine companies typically give for reducing their hedge book is that
shareholders want to incur a gold price risk when investing in mines. While there is arguably some
logic to this argument, investors clearly have other alternatives if they seek exposure to the price of
gold. There is no doubt that no hedging at all would have been better from a shareholder’s perspective
than the kind of pro-cyclical policy that was followed in the past. Nonetheless, it seems to me, we
cannot rule out that the gold mining industry will start increasing its hedging activities again at some
point in the future.
Fifth argument: central banks will adopt a homogenous attitude towards gold.
At the end of 2005, central banks had officially declared reserves of around USD 3,500bn. Of this
amount, around 15% was invested in gold (Graph 3). The proportion of gold varies considerably from
one country to another. For instance, it amounted to more than 70% for the United States, 50% for the
Eurozone, 40% for Switzerland, 4% for India, 2% for Japan but less than one percent for Brazil, China,
Hong Kong, Korea or Malaysia. These variations have always been a source of market rumours. At
the end of the nineties, the prevailing question was: what if European central banks would reduce their
gold holdings to 10% of their reserves? Now, the question is: what if Asian central banks would
increase their holdings to 10% of their reserves? I doubt that in the foreseeable future, these national
discrepancies related to gold reserves will diminish significantly, let alone disappear. Countries have
different geopolitical situations, different historical backgrounds, different levels of development and
different functions for their official reserves. These differences give rise to different priorities with
regard to the role of gold reserves.
Sixth argument: increasing living standards will boost private gold demand in emerging Asia
My comments on this last argument will be brief. As often when looking at economic issues, there are
substitution and income effects at work. On the one hand, prosperous Asian workers will be able to
save and consume more, which should be reflected by an increased demand for gold. On the other
hand, as financial markets and banking systems become more developed and more secure in today’s
emerging economies, the palette of alternative saving vehicles will increase and we should expect the
relative proportion of wealth invested in gold to decrease. In other words, we might expect the income
effect to be strong at the beginning before receding and giving way to the substitution effect.
Conclusions
Despite the demonetisation of gold, the yellow metal continues to have a special significance for
central banks. Unlike currencies, the value of gold does not depend on a national sovereign.extreme movements in
markets tend to level out in the long run
Moreover, payment transactions with gold are fully under a central bank’s control. These are two
important reasons why gold, more than any other type of investment, serves to ensure the capacity to
act in extreme crisis situations. From an investment viewpoint, the price of gold often moves in the
opposite direction to other financial assets, in particular to the US dollar. The price for this ‘insurance
function’ is reflected in the fact that gold is less profitable in the long term than other financial assets.
It is not surprising that Switzerland, a small open developed country with a highly integrated financial
sector and an ageing but relatively wealthy population, continues to invest a significant proportion of
its reserves in gold. At present, the SNB holds 1,290 tonnes of gold or roughly 30% of its assets. Price
fluctuations in both directions are to be expected and may be strong and sustained. As was the case
in the past, such price fluctuations will modify the proportion of gold on our balance sheet from year to year. These
short-term fluctuations should not give rise to great concern. Experience has shown that
extreme movements in markets tend to level out in the long run.
nuts - Bobwins posted his view on base metals a couple of days ago. He talked about China moving from the farm to the city, hosting the Olympics, hydro dam projects, etc. Anyone who thinks the metal markets are tied to U.S. housing construction is going to miss the boat. Infrastructure build out in the B.R.I.C. countries is clearly what is driving metal consumption. Once these capital projects get started, they are like a snowball rolling down hill. The zinc inventory is down almost every day. The interesting thing to ponder is what happens if it gets to ZERO.
Kipp
Everyone should read my last post!
Go to the slides in that presentation and study the consumption of zinc and copper is the populations GDP/per capita increases. Amazing, we could see a 40% increase in demand, with a supply increase of less than that and no way to meet it, by 2010.
Check it out and comment.
Kipp
Cl001 - I am with you on both nickel short term and zinc longer term. I think we will hit the skids very hard on construction in the US short term. BUT, I think the developing countries are picking up the slack.
Go to this link and study the slide show on zinc consumption. WOW, Asia is on fire! Open the August 2006 pdf and start on page 37.
http://www.lundinmining.com/corporate/presentations.php
Kipp
cl001 - Just take the word "Nickel" out and insert "Zinc", roll the date ahead 6 months and we are going to be hearing the same tune! My point is......it is still early to get into zinc miners.
Kipp
The new company will have huge earnings. I project earnings well north of $6.50/share for the next year. The zinc price is going up, in about 6 months zinc is going to do what nickel is doing right now. I know of no better way to play zinc than EuroZinc + Lundin, HudBay, and Breakwater. Anyone selling EZM is not looking out into the future. 400,000,000 pounds of zinc will be worth a lot when zinc sells for as much as copper.....it's coming.
Good Luck,
Kipp
Guy - Thanks for posting metal inventory numbers! All of the numbers I get are delayed.
Kipp
Wade - I am in ARSD
I have 35k shares at $1.60 or so average, even got a few under a buck the day it went to $.10 on what I think was a typo. I have done everything but go visit the company. I am going to hold for a while to see what happens next. I would like to read what what you say the hedge fund said.....got a link?
Thanks,
Kipp
Lundin's Report From 10 Days Ago
This looks good to me. I am going to stick this "merger" out and see what develops. Someone may come out of left field wanting to bid up the entire works!
Here is a link to Lundin's mid year report. They have a lot of good things going on. Most importantly, all are in STABLE PARTS OF THE WORLD!
http://biz.yahoo.com/ccn/060810/200608100341730001.html?.v=1
We shall see.
Kipp
Commodities
I have almost all of my stock market investments in the commodities sector for all of the reasons Bobwins and others posted today. I have long term holds in many, and getting close to the 1 year mark on most. I am going to lighten up on the PAR.OL and DNO.OL oil shares I hold. I like the fundimentals of zinc and nickle and will probably re-deploy some there. I am also going to spend some on things I like to do. I have had an unbelievable run these past few years and want to thank all of you for sharing your picks, ideas and opinions. Proud to be a part of it!
Good Luck!
Kipp
Commodity Bull Breakdown
Anyone interested in commodities want to read this article and comment?
http://www.forbes.com/investmentnewsletters/2006/08/18/commodities-crude-oil-in_jd_0817chartroom_inl...
Kipp
cl001 - I'm going to hold ARSD for all of those reasons you mention. Low risk to hold and see if there is value recognition or a buy out.
Kipp
ARSD - Give it a Closer Look
I have read all the 10Q's going back several years. (I posted DD here earlier this year if you serch ARSD it will come up) This company is gettting it's act back together, and I don't see a scam as others may. Someone, not sure who, is pushing the company to communicate with investors via PR's and also to get the mining deal going.
It is still a totally unknown stock and may get a big pop when it gets discovered.
Kipp
ARSD.OB earns $.116, Developing Mine
Off the pinks, looking at $.45 to .50/shr earnings for '06, developing copper/zinc mine. $1.65/shr seems really cheap. Need to read 10Q.
http://biz.yahoo.com/prnews/060815/datu005.html?.v=66
Still holding all my shares just to see what happens. The fact they are off the pinks helps a bunch. Also have new $12 million credit line with Bank of America.
Good Luck
Kipp
Link to EZM Report
If you use the search tool and type in hedging you can see all of the details about their hedging.
I am also happy to see no dilution coming our way to finance the new Aljestrel zinc mine!
http://www.eurozinc.com/i/pdf/2006Q2.pdf
Still holding all of my shares. I still think zinc is going to get short this winter.
Good Luck All.
Kipp
Freeport-McMoRan Copper & Gold Inc. Reports Second-Quarter and Six-Month 2006 Results
Tuesday July 18, 8:02 am ET
NEW ORLEANS--(BUSINESS WIRE)--July 18, 2006--Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX - News):
HIGHLIGHTS
Second-quarter 2006 net income of $367 million, $1.74 per share, compared with net income of $175 million, $0.91 per share, for the second quarter of 2005.
Second-quarter 2006 sales for PT Freeport Indonesia (PT-FI), FCX's Indonesian mining unit, totaled 220.1 million pounds of copper and 278.0 thousand ounces of gold, compared with 313.7 million pounds and 616.4 thousand ounces in the second quarter of 2005.
Link to coplete report: http://biz.yahoo.com/bw/060718/20060718005521.html?.v=1
Base metal companies earnings are going to rock this quarter!
Kipp
EZM - ZINC - Cramer - Bobwins, Hweb, Len, Skills, All.
Guys,
Disclosure, I have a $1.24 average in a boatload of EZM. I am involved in the zinc sulfate manufacturing business (for 18 years) and follow zinc every day. I have posted in depth DD on zinc and EZM on this board if anyone wishes to search my previous posts. My take is that we are going to see a short squeeze on the supply of zinc metal that will last the next 18 - 24 months. I talk to Zinifex, Teck Cominco and ZincOx middle managers weekly, all are in agreement that zinc concentrate supplies are as tight as they have ever been, and no major new source is on the horizon. They also agree that the only thing that could de-rail the market is a MAJOR failure of the global economy. It is also true that the miners are going after their low grade ore (lower percentage of contained zinc) and saving the high grade reserves for the day when prices go down, this just adds to the shortage! What I am starting to see for the first time is my customers are worrying about the fact that they only carry a "just in time" inventory of zinc sulfate, and have no emergency reserve inventory. Many of them are asking me if we are going to have problems getting raw materials and delivering product if the zinc price keeps going up, and inventories go away. The answer is yes, we are already having a hard time buying raw materials because of the fierce competition with other producers. What do you guys think will happen when the vendors of say GM, Ford, Eveready, Michelin, ect. figure out there may not be enough zinc to go around in the next 2 years. What will happen if they start building emergency reserves???? Now, remember, there will be a cliff to go over when supply catches up with demand, but I think that day is still a long ways off.
Just go to www.kitcometals.com and study the historical charts. Watch the daily LME inventory numbers.
As far as Cramer, all he has done is bring attention to EZM. The true value and pps will come with or without Cramer. I guess if I was a swing/day trader I would pay more attention, but I am going for a long term hold here. Examples of a long term hold for me has been MDF (mdpa) from $.30 to $2.88 sale, VPHM $4.40 to $22.40 sale.
Holding EZM, HBM, BWLRF for long term and looking for multiple doubling before selling and paying long term cap gains.
The above is all my "hope"! And I hope all of you do well with your investments. I enjoy reading all of your posts and THANK THE FOUNDERS AND REGULAR CONTRIBUTORS here for all they have done. This thread has changed my life in a huge way.
Good luck gents! I am off to Cabo in 1 hour and "hope" to catch a Blue Marlin and fill my cooler with Tuna, Dorado, and Wahoo!
Kipp
TD Bank expects slump in metal prices
(In order to be fare I am posting this opinion. I am bullish on zinc. Kipp)
Last Updated Tue, 11 Jul 2006 17:12:53 EDT
CBC News
Commodity prices started to fall in June, the beginning of a downward trend that will likely continue into the first quarter of 2007, the TD Bank said Tuesday.
In its latest commodity outlook, the bank economists said commodity prices fell by 5.4 per cent in June, excluding energy, the largest decline in nearly five years.
Precious metals dropped by 12.7 per cent in the month and base metals lost 9.8 per cent, while forest products fell by 2.5 per cent. The energy sub-index was flat.
Last month's slide was just the beginning of a long trend, the bank said.
"We still see scope for further adjustment over the next several months," senior economist Derek Burleton said in his commentary to the report.
"Prices for crude, base metals and, to a lesser extent, forest products appear to be most vulnerable to downward pressure in that environment," he said, adding that gold and silver are expected to gain ground.
The slump in June reverses the trends of the past five months, when the bank's commodity price index soared by nine per cent.
The TD Bank forecast differs markedly from other recent forecasts. TD Bank spokespeople were not available for comment.
Burleton expects the markets to turn up in the second quarter of 2007, "when early signs should emerge that the U.S. economy has found its footing. Then, the secular upswing in commodity prices which has been helped along by rapid growth in the developing economies should be ready for another leg."
In the meantime, Burleton expects oil prices to fall to $55 US a barrel by year-end and to $45 by mid-2007. Crude oil prices hit a record $75 in early July.
He expects base metal prices to fall by 20 to 30 per cent through the first quarter of 2007, followed by a moderate recovery later in the year.
Gold recently suffered its first losing month in a year, falling from a quarter-century high of $725 US an ounce to below $600.
However, the TD economists predict that geopolitical jitters and U.S.-dollar weakness will keep gold between $650 and $725 US an ounce over the next 18 months.
Nickel Climbs for 11th Day as Stockpile Slump Curbs Supplies
July 12 (Bloomberg) -- Nickel rose for an 11th consecutive day in London as inventory declined, curbing supplies of the metal used to make stainless steel.
Stockpiles of nickel monitored by the London Metal Exchange fell 2.1 percent to 8,244 metric tons, the lowest since Aug. 22, the LME said today to a daily report. Inventory has dropped 78 percent this year. Stockpiled nickel may be needed by consumers to compensate for the production shortfall forecast for this year by some analysts.
``Supply concerns are back on the markets' minds for now,'' said Roy Carson, a London-based trader at Triland Metals Ltd., one of 11 companies trading on the floor of the LME. ``The psychology is quite bullish.''
Nickel for delivery in three months on the LME rose $450, or 1.8 percent, to $25,950 a metric ton at 9:47 a.m. London time. Earlier, the metal rose to $26,000, the highest since at least 1987. The metal has gained 91 percent this year.
``Nickel's out on its own,'' said Carson, who added that the metal could rise to between $27,000 and $28,000.
Credit Suisse Group said last month 2006 demand will outpace output by 15,000 tons. LME stockpiles are sufficient for three days of demand, Barclays Capital analysts led by Kevin Norrish said in a report yesterday.
``There are now very real concerns that many consumers will simply not get the nickel they require over the coming months,'' Barclays said.
Among other LME metals, copper gained $230 to $8,140, lead rose $20 to $1,130, zinc added $80 to $3,600 and aluminum advanced $20 to $2,628. Tin was unchanged at $8,900.
LME metals rally in early trade, nickel at new peak
Wed Jul 12, 2006 10:03 AM GMT
LONDON (Reuters) - Base metals were buoyant in early European trade on Wednesday, with copper regaining $8,000/tonne for the first time in five weeks, while nickel struck a fresh record high.
By 0734 GMT, three month nickel futures were at $25,900 a tonne in London Metal Exchange (LME) electronic trading, up from Monday's close of $25,650. Prices earlier hit a fresh all-time peak of $26,000.
Copper futures rose to trade at $8,000 a tonne, up $100. Prices are still some way off the all-time high scored in May at $8,800.
Nickel prices have shot higher in the past month, gaining 45 percent, as funds and consumers have bought on supply fears.
"There is no material around and $30,000 is not impossible," a European trader said.
Copper climbs towards $8,000, at five-week high
Last Updated(Beijing Time):2006-07-12 14:34
London Metal Exchange copper extended gains to hover just below $8,000 a tonne on Wednesday, supported by strong fundamentals and steep gains to an all-time high in nickel prices the previous day.
By 0424 GMT, LME copper for delivery in three months <MCU3> was up $50 at $7,950 a tonne. The red metal had earlier traded as high as $7,985, the highest since June 5.
"We expect copper prices to test the $8,000 level later today," said an LME dealer in Tokyo, adding that copper was supported by firmer sentiment in the commodities market with gold trading below a five-week high.
On Tuesday, copper closed up $170 or 2.2 percent at $7,900, while nickel <MNI3> touched a record peak of $25,700 before ending up $1,000 at $25,650 on dwindling stocks and strong demand from stainless steel mills, especially from China.
"Sometimes, a high nickel price hurts demand, but at this moment there is no indication on lower purchases as the inventory is still decreasing," said Peter Richardson, chief metals economist at Deutsche Bank.
Nickel stocks in LME warehouses fell another 486 tonnes on Tuesday to 8,418 tonnes, the lowest since August 2005, with the premium for cash nickel over the three-months price widening to $1,900. On May 11, the premium was $475.
On the supply side, the union at Chile's Escondida, the world's biggest copper mine, said on Tuesday there had been no progress in talks with the company to negotiate a new contract to replace one that expires in early August.
Mine workers are labouring at a slower-than-usual pace in hopes of spurring along the talks, a union representative told Reuters, but BHP Billiton, which controls the mine, said production has not been affected. [ID:nN11177167]
The most active copper contract in Shanghai, September, <0#SCF:> ended the morning session up 1,540 yuan at 72,980 yuan ($9,133) a tonne, supported by gains in LME copper.
"Traders have been arbitraging as they believed Chinese prices would chase LME prices in near futures," said Yang Jun, an analyst at Dalian Northern Futures.
Shanghai spot copper prices were between 65,200 and 65,600 yuan, up 475 yuan from the previous day.
LME Base Metals Blasting Off Again!
The zinc inventory drop is picking up steam again and should drop below 200,000 tons by Friday.
A panic is starting in nickel due to shortages. I think zinc is headed for the same panic of a shortage. If big users start to stockpile emergency reserves, this will cause the parabolic spike to go a lot higher than it should. I am sure that some day the supplies will catch up with demand and when that happens....look out.....the price will tank. But here's the rub, this could take YEARS! We may see metal prices double and triple from here.
I continue tolike Eurozinc, HudBay, Breakwater, and Zinifex. This run in metals still has a long way to go and there will be a lot of money made in these stocks.
Good Luck!
Kipp
cl001 - Where are you getting real time inventory numbers? I use kitcometals and the quotes are real time but the inventories are a day old.
Thanks!
Kipp
Please advise T/A on EZM if you have a chance
I visit here often and appreciate your efforts.
Kipp
OT - Ken Lay died in Aspen, heart attack?
CNN Breaking News Email-
-- Enron founder Ken Lay has died in Aspen, Colorado, a spokesman for Lay's family said today. Lay was awaiting sentencing after being found guilty of conspiracy and fraud.
Bobwins - EZM News
I have held all of my EZM through the dip. I was holding my breath for this announcement of zinc production to start on time. Looks like management will spare us the Teseko fiasco of delays and cost over-runs. I think we will see a nice steady gain into earnings. Earnings of $.10/share minimum are my expectations, should send the stock back into the $3's. I still think we will see a price in the $6/share range sometime in '07.
Have a great 4th!
Kipp