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HL faded a bit after the selling hit at 10AM as usual. HL has minimal country risk and several good mines. Getting a bit overvalued but Peru and even Mexico aren't looking so good recently.
South and Central America are turning left but so is the USA! You don't have to wait for Peru's election, we've already had our election and guaranteed income, huge deficits and zero interest rates forever are already here. Inflation? It's only transitory and the FED is confident they can control it if it gets out of hand! Just raise rates......Oh wait, we can't do that anymore because we can't afford the interest on the US debt. Oh, they are confident they have the tools to control inflation.
I wish they would spell it out for us so we can judge for ourselves. But since they're not elected, they only have to explain to their owners, the US commercial banks. How comforting.
Reports of my demise have been greatly exaggerated! LOL!
I survive. Just haven't had much to contribute. I seem to have lost my touch so don't want to take anyone else down with me.
Could be on the cusp of a price change for gold and silver but I've said that before.
I sold it a few months ago. They've had trouble during the startup operations of their mine. The grades have been lower than forecast and I think some big investors have been bailing. The stock is overvalued, even for a fully functioning 100K producer, even after the big fall over the past few months. The big allure to Pure Gold is the deeper drilling prospects. The mgmt has been selling the fact that they have similar rocks to the very high grade gold found in their neighbor's mine, The famous Red Lake mine that built Goldcorp. Their current 2million oz of gold is found in the first 1200 meters of depth. Red Lake found their high grade gold at depths below 2,000 meters and they're still going deeper.
IF you decide to believe their story, you will have to wait until at least next year before they have a bigger drill program at depth. Even then, it will take years to prove it up, build a mine plan to get down to that depth and build the additional capacity mill to take advantage of it. So it's a long term hold that "might" turn into a bonanza. In the meantime, you have a 100-130K producer that should be profitable after they work out the bugs of startup. It might take them until the end of 2021 to show regular profits.
Magna Gold MGLQF/MGR.v +.0388 to .7838
Magna is recommissioning the San Francisco mine that Timmins built. The mine was a 100K producer for many years but production fell dramatically over the past several years as new mgmt didn't understand the mine. The former mgmt team bought the mine cheap in mid 2020 and have been making necessary improvements to make it profitable again.
Magna has a market cap of around US70million. Cheap for a producer. They are guiding for 55-60K gold in 2021. Their FYE is 3/31/21. Today they announced 9 month results and have become a producer again.
https://seekingalpha.com/pr/18265055-magna-gold-reports-year-end-2020-results
Magna has 89,432,813 shares outstanding. There are 4,800,000 options with an avg strike price of C$1.21. There are 729,160 warrants outstanding with an exercise price of C$.35 and C$.41 that will expire in May and June 2022.
https://www.magnagoldcorp.com/_resources/presentations/2020_12_30%20Magna%20Gold%20Investors%20presentation.pdf
Magna has no debt and owns 100% of the San Francisco mine. They had a Prefeasibility Study done in 8/2020 and have 752K oz of gold reserves at $1350 gold. The company believes there are additional resources beneath the open pit and in surrounding deposits. In addition, they have been actively acquiring prospective properties for exploration and development. Most of the prospects are silver targets.
The 9 month results show a loss of US$5,725,000. But that is after only one qtr of production. Results should improve dramatically as the mine hits full production levels of 20K/qtr. They anticipate declaring commercial production in Q2 2021(this qtr). This has always been a low cost producer.
I like Magna because they have proven mgmt, the mine is built and operating and Magna has no debt. They have $7million cash to absorb startup issues and should be profitable in 2021. Mgmt expects the San Francisco to finance the exploration and development of their prospects and nearby small deposits.
playing big names because they move first and liquidity is high. Hecla HL, Coeur CDE are well known, located in US and primary silver miners.
Dolly Varden Silver, DV.v is a Canadian silver pure play around CS86million market cap. High grade, safe jurisdiction. There are indications Mexicans are going to up taxes on mining. In Peru, Kuya Silver, Kuyaf looks like a high end explorer. Around same market cap, C$80million. Has high grade past producing Peruvian mine AND could be in production within a year. Also has high grade Canadian silver play near Ontario. Both would be high grade, low costs.
I expect the retail silver shortage will be around for the next few months. Silver physical buyers are excited right now but as that excitement subsides, so does interest and buying. Shortage will not be forever. Expect premiums to gradually decline as products comes to the market.
I did have a sand play but it was supposed to replace Wisconsin white sand that was preferred for fracking. Turns out that the shipping costs are a big part of the cost and that closer local sand became prevalent. The Canadian outfit never raised enough money to make it into production before the price of crude fell sharply. Texas local sand put a big dent into premium Wisconsin white sales. Not a big enough moat and it turns out the local sand worked as well as the premium stuff or close enough so that lower costs won out.
RE AMRK
Currently there is a big shortage of available gold, silver and platinum coins/bars. So AMRK is going to make extra ordinary profits IF they have inventory. Current premium over spot for American silver eagles is $7 to $16 versus $26 spot price. That is double,triple,quadruple the normal premium. Gold eagles premiums are more modest around 8%+. Their guidance indicates they expect continued good news.
gold and silver prices have been falling due to rising interest rates but once investors figure out that real interest rates are still negative, due to rising inflation, gold and silver will come back. AMRK's acquisition target, JM Bullion is strictly retail so their markups are probably off the charts. AMRK appears to have other services that are less tied to retail coin/bar margins.
Powell has no choice. We cannot afford to pay the interest on government debt at normal interest rates. His next step will be to contain longer term rates by buying more medium term US debt.
We are receiving about 50% of govt spending in taxes. Not exactly a balanced budget.
The big problem has been lower gold production. In spite of being a big silver producer, higher gold production in 2019 provided a nice boost that lessened in 2020. Guidance for gold in future years is a slow decline. Total production forecast for the next few years is pretty flat for all metals. Nevada has been a big miss. Few encouraging comments about Nevada that would lead to production again.
If metal prices take off, Hecla will surely benefit but there is no dramatic organic growth forecast. This means that Hecla will live or die based on future metals prices. That's always the case but Hecla needs to find a growth vehicle. I guess that was what Nevada was supposed to be.
Sounds like physical is getting tight. Utube videos over the weekend say that 1,000 oz bars are tough to get. That's usually what mints and industrial users order and have been in ample supply. Real tightness showing. Going to be hard for futures traders to keep dumping price and not reveal their game of shorting without physical to back it up.
Maybe hedge funds start demanding delivery from Comex at the artificially low prices. The paper game could be ending. They can still resort to not delivering physical and paying in cash but that would spell defeat because then the cat would be out of the bag.
Margins will rise to $16,500 per contract from $14,000, effective Feb. 2, based on "the normal review of market volatility to ensure adequate collateral coverage," CME says.
This is the first response from the Comex. They will try to dampen the price rise by raising margins. If that doesn't work, they will raise them again. Anything to cover up the fact that they don't have much silver backing the hundreds of thousands of futures contracts trading every day.
The leverage of paper silver to real silver is something like 500 to 1. Exorbitant amounts of silver compared to real silver in storage or even against annual production. AND the bullion banks are allowed to short huge amounts of silver anytime the price threatens to get away from them. Nobody is regulating the big banks that control the market.
Many commodity markets use futures to hedge against actual production. Farmers who sell wheat will hedge their production until the crop comes in to minimize price risk. In contrast the silver market is seldom used by silver producers to hedge price. Silver is a byproduct of base metal production so is not the primary source of revenue for most mines producing silver. The people shorting silver are the big bullion banks who are manipulatiing the market to ensure speculative profits for themselves. It is a classic monopoly situation. The Banks have relatively unlimited access to capital so individuals betting long don't have much chance. As long bets are made, the bullion banks just pile on the shorts until the longs have to cave. You can see the banks enter each day, typically around 10AM. Must be after going to coffee with their trading buddies.
Ok, rant over. Back to my cave.
List of silver stocks with a rating by Don Durrett.
This is a pretty big list but covers most if not all silver stocks. Gives you the basics so you can research more on your own.
https://www.silver-phoenix500.com/article/silver-bull-market-and-54-silver-mining-stocks
OT
also if you want to profit from silver, you could jump in the wayback machine and go back to April 2013 and get back the silver you sold me. I still have it. Price isn't that different, although at the time I expected silver to pop a lot more. Silver was $23? then vs $27 now.
Let's see what happens next week. Could be the start of something big or another disappointment. We shudda bought rhodium!
My sister was telling me that her neighbor got the catalytic converter stolen out of her Prius while it was sitting in their driveway. The police told them that it's happening all the time. Apparently the Prius has more precious metals(platinum, palladium, rhodium) in their cat than most other cars. So the cats sell for more at the junkyard or metals processor where the thieves sell them. In fact, it's happening so often, there is a 3 month backlog for the part and it costs $2500! The neighbor had an old Prius so bought a cat from a junkyard and had it installed for a lot less.
Yes, premiums are up and ASE's are gone. One site said it wouldn't take any more orders until futures markets open at 10PM PST. Of course that won't mean anything if price gets smashed Monday morning. When they dumped the price in March 2020 to $13/oz, you couldn't buy any silver without paying a premiun equal to the price of silver.
IF, and it's a big IF, silver does pop in the short term, the big silver producers is the way to play it. They will get the big money first. If the price holds and rises, the smaller cap names will soar.
So SLV, AG, HL, CDE, MAG, PAAS are the short term way to play it. Not only will they move first but they have the liquidity to get out if the trend changes.
I don't trust the silver pricing. SLV had the biggest day in years on Friday. Something like 34 million ozs of silver should have been bought by SLV just on Friday's rise. But they don't buy real silver. They just lease the silver in paper form. The bullion banks have something like 500 paper oz of silver for every real ounce in a vault someplace. So when SLV says I need 34 million ozs, some bullion bank just gives them a piece of paper that says you have the right to that much silver but doesn't go out and buy it at the market OR deliver it anywhere. It's like the government printing more US$.
Until buyers force the banks to deliver the silver, the charade goes on and it takes big money to demand delivery in the Comex futures market. I don't think the Reddit crowd can force a silver squeeze by buying SLV. The custodian of SLV is JP Morgan, who was just fined 900million bucks for hundreds of thousands of fake bids and asks to manipulate the silver prices. And you can't audit SLV or ask for your shares in real silver. SLV is part of the scam. If you force the price of SLV up, they just buy more paper ounces and increase the leverage to the real amount of silver in the vaults.
Recently the Comex allowed new mints to provide "approved" bars of silver. They included huge numbers of obscure foreign mints from questionable countries. They are having trouble getting enough silver but still the price of silver doesn't rise.
OT vaccines
went to first available hospital, got Moderna and they gave me a card with all my ID on the card as well as the type of shot I got so second shot provider will know what I need. Hopefully I will go back to same hospital chain for my second shot but don't have to as long as I get Moderna shot.
A little worried about availability of vaccine for second shot. The more vaccines get approved, the better the chances that Moderna will be available. Also Moderna effective about 85% after first shot so I'm in pretty good shape even if second shot gets delayed. Pfizer 1st shot only gives 50+% and then goes up to 90+ after second.
Sorry for the late reply, overslept. As you can tell by what happened this morning, there are a few names that the market links to silver. They aren't small cap but tend to move the most on a silver bullish rally.
AG, HL and CDE are big, safe and big silver producers. They are mostly North American and well known names. They are still up 14% vs some smaller names that only are known to mining investors.
I will think about your original question and see if I can come up with a name or two.
Trump signs $900billion dollar stimulus package plus government deficit spending bill. More printing, more printing. When will it end? When no one will take dollars anymore. Could be awhile but there is no doubt the printing will accelerate as it takes more and more printing to get any response from the economy.
Overseas gold/silver prices are up big. Look for JP Morgan to smash it down at the open or 10EST. It's not going to stop the printing but may keep metals prices in check.
OT scrub worship
And wouldn't you feel like a heel if people started coming up to you and praising and thanking you for your service in the face of danger.
OT I go to the grocery store and feel pretty safe. I use the sanitary wipes on my basket on the way in and on my hands on the way out. I don't feel crowded and have yet to stand near anyone that looked or sounded like they were sick. I think the chances of catching it from a brief encounter passing in the store aisles is pretty slim. The viral load would seem to be too small. Personal dinners or family celebrations would seem like a much more likely super spreader event. Talking and getting animated about a football game or a joke is likely to send viral loads thru the roof compared to passing a stranger in an aisle.
Ordered gifts online and haven't been to the Mall in a long time.
Stock market seems perfectly safe to me. I haven't caught any viruses from my computer screens in a long time! Oh, I did catch the gold bug a long time ago...... Can't seem to shake it...
The massive difference between Japan and all other money printing countries is that the Japanese citizens BUY their own debt. So there is no danger of foreigners dumping the currency on the markets. They are ferocious savers and buy their government's failed attempts to print their way out of their problems.
By comparison, how many US citizens own US debt? and how much do Americans save?
Silver up 3% in Sunday trading overseas. Gold up less than 1% but both should rally based on the stimulus package passage and continued spending by US govt. We'll see how long the metals can rally based on this long awaited event. May already be priced in.
Silver appears to have broken out of the downtrend since August. We'll see if silver can approach/pass the $30/oz price again. Silver is still well below the $50 all time high of a decade ago. Hopefully it will continue to play catchup thru 2021.
I have been waiting for precious metals for a long time...
So I guess I'm greedy and want to see more. I think silver will outperform gold in 2021. It trailed gold in 2020 so some logic to that. I missed the base metal surge this year. Guess I'm just not as optimistic that the economy is going to surge back to life. Copper certainly has fundamentals going for it as there is a real shortage of product and the cv19 mine shutdowns didn't help. In addition, there is the longer term green energy argument that will support copper going forward but it's going to be awhile before any beneficial legislation passes and causes actual usage increases.
So while I agree that base metals are going to increase as the world economy recovers, I still think precious metals will outperform in 2021. Both will likely be positive but I just think there is going to be some ugly economic truth surfacing in 2021.
The vaccines won't be fully deployed until mid 2021 so I don't think we're going to see airlines, cruise ships, hotels and tourism, in general, take off until after Q2. But as long as the vaccines do their job, it could be pretty explosive.
Bankruptcies are going to become a regular part of our lives for a couple of years, I would think. Eventually that is going to show up in the economic stats. Restaurants are going to be front and center.
But your question is probably focused on housing. If the jobs are there and people keep buying houses, then base metal consumption should be healthy. I'm not sure it's going to boom. Copper is the exception. If you're going to add to base and specialty miners, I would think that miners with exposure to multiple metals might be a safer way to increase your exposure. FCX is the poster boy for copper but has significant gold production. Obviously there will be smaller versions of Freeport where you can get good exposure to the base metals while retaining some PM production. Silver miners might be a good compromise. Most of them have significant base metal production because there aren't many pure silver mines. Zinc and lead comprise a hefty percentage of production for most. Copper exposure is more likely from gold producers.
The spending by all governments isn't going to stop. And in the short term, they will think there are no consequences but history says otherwise. Buying votes works as long as the currency is relatively stable so that the debasement isn't obvious. As the populations come out from their bunkers and start spending money, monetary velocity is going to increase and inflation should follow.
We are seeing unprecedented government actions and spending following this worldwide event. Hopefully 2021 won't be as strange as 2020. But there are an awful lot of goblins in the closet and I don't think this is going to be a smooth uneventful recovery.
Good luck to all of us. We might need it. We certainly can't depend on politicians to save us.
We have seen the enemy and it is THEM! They create the bubbles, they create the deficits, they print the money to prevent the bubbles from popping. Of course we are all part of it, always demanding more government "Free" money with no new taxes. I don't know if I'm going to be around when the SHTF but I doubt it's going to be pleasant.
Silver punched thru $26 this morning. Currently futures are trading at $26.21. Could be the start of another surge towards $30. I'm riding Hecla options. HL +.51 to $6.33
Mom, they're printing again! Can Congress agree on something before the weekend?? If so, should be positive for precious metals and miners. Looks like a much smaller deal but drop in economic activity may get to shelve the petty fighting until next year.
Big pop in metals today. Gold +$37, Silver +1.49 and Platinum +38. Platinum is slightly above $1,000 and may be close to a breakout.
SBSW is a good way to play platinum. #1 producer in the world and also has good gold and rhodium production.
Long run on MRNA and the other vaccine makers, I think the extreme refrigeration needed is going to be a hindrance to high usage. I think that's why they applied for early approval. They need to get a head start because if more vaccines report results that don't require more than refrigerator temps and definitely low costs, they are going to get snapped up by the market. At first all will flourish because the whole world needs vaccines but once the mad rush is over, the market will favor ease of use and low cost.
Once mass innoculations begin, there may be other factors that affect usage but this temperature thing seems important to me.
Yikes MGLQF -.06 to US$.74
Big selloff on the third vaccine trial announcement. Always comes out on Monday and takes a few days for people to realize that any vaccine is still months away. This particular vaccine sounds promising because it can be stored at refrigerator temps and is cheap. One shot is 70% effective and up to 90% with 1/2 dose followed by full dose. However one shot followed by a second shot wasn't as effective. No explanation why. Looks like it needs more study.
Bought a few more shares of Magna at US$.71 today so hoping gold holds at $1800.
Magna Gold, MGLQF/MGR.v US$.95
Magna named as one of Frank Holmes favorite 10 small cap gold miners in this short article. No substance in the article, it's just designed to get participants in an upcoming virtual conference with the same 10 miners presenting their investment case. BUT it does say Global owns some shares in Magna, which is good news.
http://www.usfunds.com/investor-library/frank-talk/these-are-my-10-favorite-junior-mining-companies/
silver and gold are bouncing back from the big vaccine selloff yesterday but miners are lagging. I think investors are adjusting their expectations towards miners after the big vaccine announcement. BUT governments are still going to have to continue printing money and have already printed unprecedented trillions of dollars that are already spent and gone.
I think the metals will come back as investors realize that the vaccine isn't here now and hasn't been approved yet. The actual production of the vaccine and distribution to the general public is months away.
The economy isn't out of the woods. The government has delayed the bad news by prohibiting rental evictions and mortgage repossessions. Eventually they will have to let mortgage holders and landlords exercise their rights. Jobs are the biggest problem. No jobs, no income, no money for housing, travel, entertainment.
Over the next 12-24 months, the stuff is going to hit the fan. The FED can't print away the misery that going to follow.
I'm all in on miners. Wall Street has been demanding more printing. They will continue to encourage and expect money printing until the markets realize that all this money printing is significantly devaluing the US dollar. Longer term, the US dollar is going to fall and IF/WHEN the US dollar is no longer the world's primary currency, the US will really feel the pain. It's longer term but it will happen. We have abused the privilege and history has shown that the abuse will have negative consequences.
Magna has acquired a silver project in Mexico. Magna had mentioned that it was pursuing silver prospects in Mexico and this must be one of them. The property has been drilled recently by the previous owner and there are good results reported in the news release.
Magna has aggressive plans to expand production beyond San Francisco and this large property could be an important piece. Obviously they will have to balance and prioritize future drill programs to take advantage of their portfolio.
https://stockhouse.com/news/press-releases/2020/11/10/magna-gold-corp-announces-agreement-to-acquire-margarita-silver-project-in
Magna Gold Corp, MGR.v/MGLQF US$.95
Magna is a new name for an old asset. Timmins Gold started producing from the San Francisco mine in 2010 and produced around 100K oz/yr for about 8 years. The last two years, the mine struggled under the new name for Timmins of Alio Gold. In early 2020, Magna purchased the mine from Alio for $5million in cash in the future plus 20% of the stock in Magna.
Magna is run by the former CEO of Timmins, Arturo Bonillas. Alio had fired many of the managers at the mine but Mr. Bonillas has reassembled the team.
The dramatic fall in production from 100K oz in 2016(the last year Mr. Bonillas was involved) to 83K in 2017, 51K in 2018, 36K in 2019 and 18K so far in 2020 has been attributed by Mr. Bonillas to poor knowledge of the asset by the management and the contractors they used.
Since the purchase in spring 2020, Magna has been working to ensure that the gold can be recovered as it was during the Timmins era. They just received an updated PFS that determined they could produce an average of 69K/yr for 8 years from the San Francisco mine at an AISC of ~$1200.
Mgmt thinks they can do this in 2021 and improve production by an additional 30K by pursuing underground mining beneath the current pit AND mining a nearby deposit.
So Magna will gear up for full production during the next few months and has aggressive plans to increase production further.
The mine has current reserves around 750K and 1.4million oz of total resource. At current gold prices the NAV for the mine is US$231million.
At current prices of US$.95 and 90+million shares FD, Magna has around a $86 million dollar market cap. This is very low for a proven producer. Obviously the troubles of Alio will make this a prove it type investment but I believe the old mgmt can revive the San Francisco mine and aggressively explore to expand production. Their goal is 200K/yr by 2023 and they outline several nearby deposits that could help them increase production. They have drilling plans and should have results in the next few months.
Magna raised capital to buy the mine this spring but didn't actually have to pay any cash out to secure the mine. This gives them drilling money now before full production ensues.
The mine is in good condition with a mill that can grind 16,000tpd. Imagine the capital cost of building that big a mill now. No more dilution is going to happen to build the mill or buy the asset.
Assuming they can get back to 70K/yr+, Magna is undervalued at $86million. If they can get to 100K/yr, they should be in the 200-400million market cap range. If they reach 200K in a couple of years, they could be in the 500million+ range.
The San Frisco mine is one of the first mines I encountered with a low grade gold deposit. The average grade of the ore is below .50 grams/tonne. I missed the runup in Timmins because I just didn't like the low grade. But the stock took off without me because the strip ratio is low and the mine is a pretty simple operation.
Here is the latest presentation by Magna.
https://www.magnagoldcorp.com/_resources/presentations/Magna%20Gold%20Investors%20Presentation%20October%2021%2C%202020.pdf
Here is a video about Mr. Bonillas and Magna.
SBSW +.40 to US$11.64 Sibanye reported excellent Q3 results. Production was flat compared to Q3 2019 but prices, especially rhodium and palladium were up substantially, resulting in a huge 922 million dollar EBITDA. Results were also helped by a falling South African rand.
https://thevault.exchange/?get_group_doc=245/1603951282-sibanye-stillwater-Q32020-operating-update-29oct2020.pdf
PGM.V/LRTNF +.21 to C$2.51
Pure Gold released latest round of drilling results and hit some big holes near surface. 1.2 meters of 1,147gm/tonne gold! Of course, this is the long term goal of Pure Gold. They have over 1 million ozs of reserves and expect to produce 100K oz of gold/yr beginning this December. BUT they also think they have a twin to the original Goldcorp mine that transformed Goldcorp into a billion dollar giant. These drill results are shallow but the real prize at the original Red Lake mine started at 2,000 meters deep. They hit bonanza grade gold and multiplied their production and profits. Production went from 100K to 500K/yr and profits zoomed due to the high grades. Pure is already a very high grade mine with reserves around 9gm/tonne.
https://finance.yahoo.com/news/puregold-intersects-1-147-g-103000551.html
MAG +.84 to $18.43
Mag Silver is 44% partner with Fresnillo on the big Juanicipio mine with Fresnillo. They announced today that they have been producing during Q3 at around 500tpd thru the nearby Fresnillo plant with extra capacity. The mill at Juanicipio is still under construction but should be completed and processing by Q2 2021. Will ramp up thru the following year to nameplate capacity of 4,000tpd. This will be a huge silver mine and MAG should get a rerating once full production has been achieved.
Juanicipio produced 394koz of silver, 610oz of gold, 138t of lead, and 174tof zinc in Q3/20 (100% basis). This first development material was processedthrough the nearby Fresnillo processing plant (100% owned by Fresnillo) with leadand zinc concentrates treated at market terms under off-take agreements withMet-Mex Peñoles. Revenue from this production (net of processing and treatmentcosts) will be used by the Juanicipio JV to offset cash requirements of initial projectcapit
SBSW +.41 to $11.16 +3.86% Bought a few options on Sibanye Stillwater again. Cashflow has improved dramatically and production has been maintained in spite of CV19. US operations doing very well with mine output increasing slightly. Recycling operation is down but main production has been steady.
1st half profits were outstanding. Net profits of US561million vs loss of US$89million the previous 1/2 year. Expect 2nd half to be similar.
Platinum, palladium, rhodium and gold. Sibanye is a unique PGM producer.
https://thevault.exchange/?get_group_doc=245/1598524629-sibanye-stillwater-shortform-H12020-27aug2020.pdf
sorry, don't know of one site that lists all that info.
Argentina has imposed currency controls and made it very hard to do business in their country. If you have miners with mines or exploration in Argentina, you should think hard about the impact of the changes on your stock. They require anyone wanting to exchange Argentine pesos for US dollars to use the official exchange rate of 75 to 1 versus the market price of 145 to 1. So any miner wanting to move money out of the country is going to suffer major loss during the conversion as well as paying higher taxes.
Today I sold out of FSM. They have a new gold mine in Argentina that is coming online. Should double revs and add big cashflow but now I'm not sure how positive the changes will be after Argentina gets done taxing and cheating them via currency exchange. Of course, local expenses will be paid in cheap pesos but they still will have trouble getting any profits out of the country.
HL $5.36 -.32 Big selloff in gold and silver stocks this morning with overall markets. However Hecla came out with very positive production and cash news over the weekend. After the panic subsides, I think markets will realize that Hecla is going to have a big Q3 and support the price.
September 20 2020 - 09:00AM
Business Wire
Alert
Print
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Increases 2020 Production Estimates, Repays Revolving Credit Facility
Hecla Mining Company (NYSE:HL) today announced preliminary production results, anticipated cash position at the end of the third quarter, repayment of the revolving credit facility and increased production estimates for the year.¹
HIGHLIGHTS
Estimated silver production between 3.2 million and 3.4 million ounces
Estimated gold production between 41,000 and 43,000 ounces.
Revolving credit facility repaid in full during the quarter.
Cash and Cash Equivalent position anticipated to exceed $90 million.
“We are very pleased with third quarter operational performance particularly as the mines continue safe practices to manage COVID-19,” said Phillips S. Baker, Jr., President and CEO. “Lucky Friday’s ramp up is as planned so this year’s production should double last year and is set up to potentially double again next year. The higher-than-expected silver grades at Greens Creek have driven silver production higher for the quarter and the annual estimate. Gold production was lower at Casa during the quarter where continued major planned maintenance activities in the mill reduced the processing days.”
Baker continued, “Our strong production for the quarter is expected to translate into robust cash flows in excess of $20 million even after repaying our revolver in full and the interest payments on the bonds. We are close to realizing our financial goal of having in excess of $100 million of cash and cash equivalents on the balance sheet. Finally, if our realized silver price is above $25 for September, we expect the silver-linked dividend to be paid pursuant to our enhanced dividend policy.”
Performance Comparison and Updated Outlook
Silver (Moz)
Gold (Koz)
Greens
Creek
Lucky
Friday
San
Sebastian
Total
Greens
Creek
Casa
Berardi
Nevada
San
Sebastian
Total
Estimated First
9 months 2020
8.0
1.1
0.8
9.9
37
86
32
6
161
2020 Outlook
8.9-9.3
1.4-1.8
0.6-0.8
10.9-1198
46-48
119-124
24-29
6-7
195-208
2020 Updated
Outlook
10-10.3
1.6-1.8
0.8-0.9
12.4-13.0
47-48
114-124
32
6
199-210
(1) See cautionary statement regarding estimated results and forward-looking statements at the end of this release.
Greens Creek’s estimated nine months production has increased due to higher silver grades. The fourth quarter assumes planned grades. Lucky Friday is ramping up as expected so the lower end of the production range has been raised. San Sebastian mining is expected to be completed in the third quarter with processing concluding in the fourth quarter. Casa Berardi’s nine-month estimated production is low because of major planned mill maintenance activities but production in the fourth quarter should increase due to expected high-grade underground production from the East Mine. Nevada exceeded expectations as the developed stopes were mined out. For the remainder of the year, ore is being stockpiled for third-party processing expected in the fourth quarter. Gold production might not be realized until first quarter of 2021. Hecla’s per ounce cost estimates are unchanged at this time.
In September, the Company repaid $50 million on its revolving credit facility and has no remaining balance outstanding. During the third quarter, the Company received three of the four installments of C$12.5 million (US$9.2 million) each of Investissement Quebec’s C$50 million (US$36.8 million) senior secured note proceeds. The fourth installment is expected to be received in the fourth quarter. The Company’s cash and cash equivalents as of September 30, 2020, are estimated to exceed $90 million with the increase in cash for the third quarter expected to exceed $60 million.
ABOUT HECLA
Founded in 1891, Hecla Mining Company (NYSE:HL) is a leading low-cost U.S. silver producer with operating mines in Alaska, Idaho and Mexico, and is a growing gold producer with operating mines in Quebec and Nevada. The Company also has exploration and pre-development properties in eight world-class silver and gold mining districts in the U.S., Canada, and Mexico.
Cautionary Statements Regarding Estimated Results
In this news release we include certain estimated preliminary third quarter 2020 operating and financial results, including metals production and cash position. Each of these amounts is preliminary and reflects only the Company’s estimated third quarter 2020 results as of the date of this news release, based on information available as of September 20, 2020, and should not be regarded as a representation by the Company as to its actual results for such quarter. Actual reported third quarter 2020 results are subject to the Company’s financial closing procedures, completion of the financial statements, and management’s final review as well as review by the Company’s independent registered public accounting firm and may vary significantly from the preliminary estimates due to a number of factors, including, without limitation, additional or revised information, changes in accounting standards or policies or in how those standards are applied, and certain risks the Company faces, including, but not limited to those described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. You are cautioned not to place undue reliance on these preliminary estimates of our third quarter 2020 operating and financial results.
Cautionary Statements Regarding Forward Looking Statements
Statements made or information provided in this news release that are not historical facts are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and "forward-looking information" within the meaning of Canadian securities laws. Words such as “may”, “will”, “should”, “expects”, “intends”, “projects”, “believes”, “estimates”, “targets”, “anticipates” and similar expressions are used to identify these forward-looking statements. Forward-looking statements in this news release may include, without limitations, (i) estimates of silver production for the third quarter of 2020 on a consolidated basis and at each of the Greens Creek, Lucky Friday, San Sebastian, and Nevada Operations mines; (ii) estimates of gold production for the third quarter of 2020 on a consolidated basis and at each of Casa Berardi, Greens Creek and Nevada operations; (iii) estimates of lead and zinc production for the third quarter of 2020; (iv) quarter-end cash and cash-equivalent position which is dependent on the Company receiving cash receipts from sales of metals at its operations prior to September 30, which is expected, and zero balance on the revolving credit facility; (v) Lucky Friday expected to increase production and 2020’s total production expected to be twice that of 2019, and 2020 could also significantly increase; (vi) production from bulk sample in Nevada expected in fourth quarter; (vii) expected increased production at Casa Berardi due to expected high-grade production; (viii) cash flow generation for the quarter is expected to be in excess of $30 million which is dependent on the Company receiving cash receipts from sales of metals at its operations prior to September 30, which is expected; and (ix) expected payment of the silver-linked dividend in the event the Company’s realized silver price per ounce for the third quarter is above $25. The material factors or assumptions used to develop such forward-looking statements or forward-looking information include that the Company’s plans for development and production will proceed as expected and will not require revision as a result of risks or uncertainties, whether known, unknown or unanticipated, to which the Company’s operations are subject.
Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected, or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production and costs, litigation, regulatory and environmental risks, operating risks, project development risks, political risks, labor issues, ability to raise financing and exploration risks and results. Refer to the Company's Form 10-K and 10-Q reports for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation and has no intention of updating forward-looking statements other than as may be required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20200920005050/en/
Russell Lawlar
Treasurer
Jeanne DuPont
Corporate Communications Coordinator
800-HECLA91 (800-432-5291)
Investor Relations
Email: hmc-info@hecla-mining.com
Website: www.hecla-mining.com
LRTNF/pgm.v +.15 to US$2.10
Pure Gold continues it's runup. No news, although I did a comment that they are due for drilling news anytime. Could be a leak of good drill results coming.
PGM.v/LRTNF +.08 to US$1.75 Pure Gold has been bucking the trend for the last couple of days and rising strongly while almost all other gold/silver miners have gone down with the price of gold and silver.
Don't know why Pure Gold has the sudden interest but this interview with Eric Sprott and Mining Entrepreneur Mark O'Dea might have something to do with it. After reading the transcript, I didn't realize that Pure Gold was a product of an incubator formed by O'Dea that also spawned Liberty Gold.
https://ceo.ca/@jonathanroth/podcast-billionaire-eric-sprott-talks-30m-investment-in-puregold-mining