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http://sprottglobal.com/thoughts/articles/will-resources-see-a-v-shaped-recovery-after-capitulation-rick-rule-responds-to-your-questions/
>>The weak demand worldwide for commodities today, Rick believes, is partly thanks to stimulus measures over the last 10 years. By seeking to “juice” demand back then, today’s consumption of commodities is tepid, Rick believes.
Will we see a “V-shaped” recovery?
“I think the answer is ‘no,’” says Rick. “I see a gradual recovery, not counting on some exogenous shock. Certainly, if Fed Chairman Yellen were forced to rescind a 25-basis –point rate increase, it would be bullish for the gold. A 25% increase in the gold price would take it to the $1,400 or $1,500-per ounce level, which would probably lead to a doubling of some of the better stocks Would this be a ‘V-shaped’ recovery in the context to of what we’ve seen before? Not really. But would we welcome it? Of course yes.”
Why say that capitulation is “upon us?”
“Conditions are ripe for capitulation,” Rick advises, “any reasons to be hopeful have been taken out of the market after many years of a bad market.
“Capitulation is an emotional response and we’re seeing bad news come out ahead of October, a time of year where investor emotion is typically high.”
Of course, a recovery can still occur even if we don’t have capitulation, according to Rick. “The TSX Venture (where many Canadian mining stocks trade) is off by around 85% from its peak. So the market might not need to go lower. But from an emotional point of view, you usually need a capitulation before the market takes off again,” he says.
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What’s in store for precious metals and commodities generally?
“I think it’s important to distinguish between industrial metals – base metals, ferrous metals, or metals used in energy and agriculture – and precious metals,” Rick explains.
“For industrial metals, you’ll need to see a broad economic recovery – or at least a recovery in demand somewhere,” he says, “and so I think it will take a long time for them to recover.
“For precious metals, on the other hand – and in particular gold stocks – I believe they will benefit as the US dollar reaches a peak and begins to roll over,” Rick explains.
In his view, the US dollar would begin to decline before we saw a broad economic recovery in demand, so we should see gold – and precious metals – move higher before other metals. <<
http://usawatchdog.com/plunge-protection-team-losing-control-of-markets-jim-sinclair/
Plunge Protection Team Losing Control of Markets-Jim Sinclair
By Greg Hunter On August 26, 2015
Legendary gold expert Jim Sinclair says what is going on right now in the stock market is just the warm-up act. Sinclair contends, “This is a pre-crash, and we are not making it through September without the real thing. Everybody is on credit. Main Street is on credit. This seems to be a bubble of historical proportion when it comes to the amount of money supporting the accepted lifestyles as being the new normal. Raising interest rates is impossible today. The market is so fragile. Nothing can come out that causes people any concern or derivatives any change, nothing whatsoever. We are going through a period of time where expecting nothing meaningful is a dream. These are times never experienced in financial history. . . .It is very possible that we are going to have a super civilization change. ”
The US Plunge Protection Team is losing control of the markets, and Sinclair warns, “They got the dickens scared out of them. They actually backed off providing the funds necessary. . . . That’s your warning. The warning is markets can overrun plunge protection teams. Markets can and will overrun the manipulation of metals and currencies. The market will overrun the false strength in the US dollar. The idea that a lift in interest rates would be beneficial to the dollar is absolutely incorrect. We do know the limits of the Plunge Protection Team, and we do know the omnipotent power of the Fed is a total fallacy.”
On gold, Sinclair says, “I didn’t call the top in gold in 1980 because of any kind of a system. I was told, I acted on what I was told.”
His sources are talking again, and Sinclair says he was told: “Number one, the downside on gold is extraordinarily limited here. Two, the rally we are facing that will come in gold is going to be stupendous. Three, they tell me we may never call you back because this may be the rally you don’t sell. This may be the rally you don’t sell because gold is moving from a currency form to a valuation form. . . . This may be the last time we call you means this is a rally that is not meant to be sold. What is coming up in front of us is the Great Reset where currencies wear their gold like ladies wear a necklace, and the most beautiful necklace will be the strongest currency. The ladies without the necklace won’t be invited to the ball. Huge changes are coming. The dollar is always going to be with us, and the yuan and all of the currencies are still going to be there. We are not going to one single currency. The SDR (Special Drawing Rights) is nothing more than a glorified index of currencies. It’s a cure to nothing. How can a package of junk cure the problem of junk? It can’t. The two last men standing will be gold and gold on steroids—silver.”
Sinclair stands by his prediction last year of an eventual gold price of $50,000 per ounce. Sinclair explains, “You have to understand we are going into unprecedented deflation, and it’s the reaction of central banks around the world to the concept of deflation that brings about hyperinflation. . . . There will be debt monetization of all kinds of debt to maintain some sort of equilibrium. The price of gold is going to go to a level that is going to surprise everybody. I was told that this is a rally that you won’t sell. That means gold will go to a level and not react violently down from that level. . . . This is when gold is going to levels that today are considered more mental illness than monetary analysis. Silver is best understood as gold on steroids because whatever potential and direction is taken up by gold, silver will be multiplied by 2 or by 5. . . .Silver will outperform gold.”
Join Greg Hunter as he goes One-on-One with renowned gold expert Jim Sinclair of JSMineset.com.
(There is much more in the video interview.)
Gold is a hard currency, the only one. The other currencies are fiat currencies. What happens when you stick that FACT in your models ?
In the last deflation which was in the 1930's, gold price did better than the dollar. And that is also a fact.
Apparently this is only a pause in the dollar rally which will resume after this tempest is over:
http://www.bloomberg.com/news/articles/2015-08-24/chartist-who-got-it-right-on-china-sees-dollar-gains-versus-euro?cmpid=yhoo
This Chart Told Us All We Needed To Know!
https://alphahorn.files.wordpress.com/2015/08/spx-monthly2.png
Posted on August 21, 2015 by alphahorn
I’ve been posting this chart off and on for several months as the top process was playing out. I called the top of primary wave [3] via an ending diagonal back in May, way ahead of anyone else (I posted that count for the public on June 7th, see tab “Big Picture Count” above). And, although the SPX never made a higher high than its May high of 2134.72, it continued to chop around in a trading range for several months. But all the while it was building negative divergence on the intermediate term, weekly and monthly charts. At tops in particular, swing trading requires patience!
The monthly chart below has been spot on calling intermediate term tops, and it was again this time around. I know a lot of you got pretty impatient hearing the same thing out of me day after day. “I favor an intermediate term top in place, and expect an impulsive leg down to begin anytime.” The market dances to its own timing, but as I read the script, the market’s destiny had been written long before this week’s sell off. Congrats to those of you who remained patient and have been aptly rewarded.
https://alphahorn.wordpress.com/
As most here are aware, Banro has seen nice insider buying this year:
http://www.acting-man.com/?p=39408
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What Insiders Know
With respect to buying by insiders in a sector in which producers have very little or no control over the price of their product, one needs to keep a few things in mind. Insiders in the gold sector usually have no special insights into future gold price trends (there are a few exceptions). In fact, quite often their estimates of the extent or direction of future moves in the gold price turn out to be wrong.
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One thing corporate insiders are definitely aware of is whether their companies’ shares are undervalued or overvalued relative to current gold prices. It is rare that insiders in this sector buy a lot of shares in the open market, so when they do it is a sign that there must be a quite sizable gap between market valuations and what they believe to be fair value.
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GDXJ was only up 3% today. IMO under performance of gold stocks relative to gold price is not a good sign as gold stocks usually lead gold.
Why has Druckenmiller Dived in Gold & Copper
http://ashraflaidi.com/forex-news/why-has-druckenmiller-dived-in-gold-copper
Four weeks after gold tumbled to 5-year lows on revelation of far lower Chinese gold holdings than previously anticipated, gold bulls find out that one of the world's greatest hedge fund managers made gold the biggest holding in his fund in Q2. He also loaded up on 2 large miners.
Druckenmiller acted as George Soros' chief strategist when he helped execute the shorting of the British pound to the extent of forcing the UK out of the Exchange Rate Mechanism in September 1992. Since its inception in 1986, Duquesne has had an average return of 30% per year. In early May, Druckenmiller told Bloomberg in May that interest rates were likely to stay near 0% for 10 years, casting doubt over whether the Fed would ever move to liftoff.
Druckenmiller vs Paulson
Despite the scale and timing of Druckenmiller's gold position, it remains unclear whether the trade is a long-term bet on the stabilisation of gold resulting from a possible peak in the USD and lack of Fed hikes, or is a short-term trade aimed at taking profit after a brief bounce. The fact that Druckenmiller has also purchased 1.28 mn shares of gold miner Newmont Mining and 3.6 mn shares of copper giant Freeport-McMorcan in the same quarter could indicate he's in it for the long run.
In contrast to Druckenmiller, John Paulson, the biggest holder of the GLD ETF, sold 11% of his holdings in Q2 after initially slashing them by 50% in Q2 2013 during gold's 25% collapse that quarter. While Paulson is the biggest owner of GLD, accounting 4% of the ETF, the fund makes up less than 5% of Paulson & Co's holdings, ranking 7th out of 64 different securities. More importantly, Paulson's gold selling is a result of forced redemptions whereas Druckenmiller's entry is an accumulation at a far stronger position.
As John Paulson is quietly planning an exit out of his gold holdings, Druckenmiller is prominently loading up on the yellow metal.
http://www.businessinsider.com/druckenmiller-buys-gld-shares-2015-8
Druckenmiller's GLD stake had a value of $300.3 million at the end of the quarter based on the June 30 closing share price of $104.27. Shares of GLD have fallen 5.5% since then.
Druckenmiller has previously said that when he sees something that really excites him he will "bet the ranch on it."
Anyone who gets a margin call that they cannot meet or had a stop loss sell order triggered today is by definition a weak hand. I believe hedge funds and the proprietary trading arms of brokers & banks like TD etc., can purchase access to data about price/size of client stop orders. This data can then be used to run the stops, as part of a trading strategy.
Famed Investor Druckenmiller Bets Big on Beaten-Down SPDR Gold Trust ETF (GLD)
http://www.thestreet.com/story/13257635/1/famed-investor-druckenmiller-bets-big-on-beaten-down-spdr-gold-trust-etf-gld.html?puc=yahoo&cm_ven=YAHOO
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The filing shows more than a 2.8 million share position in GLD valued at about $323,626,000, making the gold position his largest single holding, followed by Facebook (FB) and Wells Fargo (WFC).
Shares of SPDR Gold Trust are currently up 0.29% to $107.16.
"Before the (currency) move from the Chinese government, you couldn't find anyone who could make a bullish case (for gold)," Dan Denbow, a portfolio manager at the $700 million USAA Precious Metals & Minerals Fund told Bloomberg.
But there could potentially be other bright spots when considering a gold play.
Here's what TheStreet's Jim Cramer, portfolio manager of the Action Alerts PLUS charitable trust, says: "The only gold stock I am recommending is Randgold (GOLD) because it has the lowest finding costs, the best African prospects, where the most gold is, and the best management in CEO Mark Bristow."
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Good article on AISC of the GDX component companies:
http://www.321gold.com/editorials/hamilton/hamilton081415.html
IMO Semafo is the best company in this list for doing a peer comparison with Banro for following reasons:
-Its production at 265koz/yr is of comparable magnitude
-Its AISC at $604 and and projected to fall further this year is one of the lowest in the industry (as is Banro's)
-All its production is in Africa
Where they differ is primarily in the balance sheet. Semafo has a high quality balance sheet with no debt and over $100 million in cash. But Semafo's market cap is 14X that of Banro. So in the scenario where POG has recovered to $1500 and Banro is on track to repairing its balance sheet it should have 10X the leverage of Semafo on the upside. All Banro needs to do is hang in there without massive share dilution until the inevitable turnaround in the gold price, which is a WHEN not IF type situation. Which is why I am sticking with Banro and have all my eggs in this one basket. I should add that Banro has vastly superior organic growth prospects to Semafo or any other gold producer out there.
POG is still only a few percent above multi-year lows. What is the POG telling you that I am missing ?
Deflation is good for gold miners as in this environment the gold price will hold up much better than industrial commodities and so input costs fall faster than revenues and so margins hold up better as compared to other industries:
http://www.theguardian.com/business/2015/aug/12/chinas-currency-devaluation-could-spark-tidal-wave-of-deflation
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Fathom believes China could be willing to let the yuan depreciate by as much as 25% over the next five years – “stone by stone, step by step” – in an attempt to restore the export-led growth that was such a winning formula in the decade running up to the global financial crisis.
“As investors realise yet another recession beckons, without any normalisation of either interest rates or fiscal imbalances in this cycle, expect a financial market rout every bit as large as 2008.”
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You must have missed this one then:)
http://www.cnbc.com/2015/08/09/-are-dying-a-slow-death.html?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=102900126
Commercial production milestone for Namoya is THE critical milestone as the cost overruns due to the combination of rebel/weather related delays and start up problems with the Namoya mine ore processing are to blame for destroying both Banro's balance sheet and the share price. Let us hope once commercial production is declared that the nightmare for Banro shareholders caused by Namoya will be history:
Gold Summary for March 2, 2015
2015-03-02 21:13 ET - Market Summary
by Stockwatch Business Reporter
Arnold Kondrat's Banro Corp. (BAA) remained unchanged at 28 cents on 3.62 million shares. The company has arranged $100-million in financings from Gramercy Funds of Connecticut. This is in place of the $121-million it had been hoping to receive from Gold Holding Ltd. of Dubai, but Banro had been waiting for that money since August. On Sept. 30, it had negative $60-million in working capital, so it cannot afford to wait much longer. The company will spend the money expanding gold production at its two gold mines in the Democratic Republic of the Congo. Its Twangiza mine should produce about 110,000 ounces of gold this year, and Banro hopes its Namoya mine will produce 100,000 ounces, but this will likely be difficult. The mine has caused the company nothing but trouble since Banro started building it in 2011. Months later work had to stop because rebel violence broke out across the country. The violence prevented supplies from getting to the mine, and the delay ended up doubling capital costs to $224-million. Banro finally brought Namoya to production at the beginning of last year, when it aimed to produce 120,000 ounces in 2014. It managed only 18,000 ounces, which it blamed on torrential rains that washed out roads and prevented fuel from reaching the site.
BAA is beyond DIRT cheap @20 cents/$50 million Market cap for a low cost profitable 250k oz/yr gold producer with the ability to organically double production within 3-5 years. So basically you can buy a not too far in the future 500K+ producer for $50 million.
BAA is priced for bankruptcy. After the recent $90 million financing, the odds of bankruptcy have been greatly reduced. Randgold has 100 times the market cap of BAA, but at 1 million oz/yr has only 4x the production of Banro's 250K/oz yr 2016 expected production. Going forward the production gap will close as Banro's growth rate is vastly higher as it has all new un-depleted mines and can double its number of mines from 2 to 4. As for political risk, ALL Randgold's mines are in Africa and its flagship mine is the Kibali mine in Northeastern DRC.
The main explanation for this valuation discrepancy is:
-debt: Randgold has no debt VS. $200+ million for Banro
-single mine risk: but this will soon change with commercial production at Namoya imminent
-country risk: Randgold has multiple mines spread over many countries in West and Central Africa while all Banro's mines are in DRC.
-track record: Banro is an emerging turn around situation while Randgold with MD Bristow at the helm is one of the most respected gold miners on the planet.
Klondex is a very good company with its mines in Nevada. But it is 6x the market cap of BAA, but with less production of 120,000 oz/yr and way less resources at only 1.5 million oz of resources. Being an underground mine, they will surely find more resources at Firecreek.
So KDX is roughly 10x more expensive than BAA. I am not prepared to pay that much of a premium for assets in Nevada over assets in Africa.
Thank you Stockrocketer for your detailed response. I would agree with you that Banro is the better buy than EDVMF due to the larger resource base in the ground which can lead to organic growth in production. EDVMF's production growth has come thru 3 acquisitions to date. Also Banro has lower ASIC, lower tax rate and owns 100% of the mine.
But due to my having 90+% of my stock portfolio in Banro, I keep looking for another gold producer that is a better value so as to be able to diversify. I have been owning Banro for 1 year now and so far have not had any luck in finding another miner that is as undervalued.
stockrocket, I like your posts even if your language is hard to follow at times. Please don't take offense, but I assume English is not your first language ?
Do you follow Endeavour mining ? They had a 2nd consecutive quarter of good earnings and the market seems to finally be responding positively as they were I think one of the only gold stocks to go up during this recent gold price drop:
http://stockcharts.com/freecharts/gallery.html?edvmf
Like Banro, Endeavour mining capital had a very large debt taken on to build their mines. Once Endeavour's Hounde mine goes into production they will have around 750,000 oz/yr gold production in West Africa. I would be interested in hearing your thoughts on which of these 2 is the better buy, Banro or EDVMF ? The market cap of EDVMF is around 3x that of BAA.
Gold – The More Hate, The More Bullish We Become
http://www.gold-eagle.com/article/gold-%E2%80%93-more-hate-more-bullish-we-become
Fantastic article. Thanks for sharing.
Below are some thoughts written in the spirit of hoping for the best while preparing for the worst:
Per chart link below POG may just now be completing a not unexpected 50% retracement:
http://i.imgur.com/qtvUZNM.gif
IMO we haven’t seen enough capitulation selling yet. If the $1070 level doesn't hold the next retracement level is 61.8% or $880. I am mentally preparing myself for gold going to $880 as there is a decent chance this will happen, as I don't think there has been enough capitulation selling yet. At $880 gold price I think BAA share price will retest the 15 cent level and so I am mentally writing down the value of my BAA shares to 15 cents. I will resume marking the shares to market once this capitulation move has clearly ended. It will be clear to everyone that we are seeing capitulation once we are in it. Right now there is room for debate which means it hasn't ended. As I am not a trader, I plan on riding this coming capitulation down as fortunes will be made on the other side of this final capitulation move down and I wouldn't want to take a chance of missing the spectacular upleg that should follow. Banro should be able to easily survive $880 gold price for a few weeks/months as it should still be making a margin of $300 and this will be sufficient to cover all cash costs including interest expenses. It is in the interest of all long term investors to get this capitulation move over and done with in the next 6 months or so, rather than having the down trend drag on for another year or more. This way when the march 2017 debt refinancing deadline comes along BAA will be doing so in a favorable environment where both gold and gold shares are in clear long term up trends.
SA article along same lines:
http://seekingalpha.com/article/3382295-former-gold-bulls-becoming-bears-does-that-mean-gold-has-reached-a-bottom
Conclusion for Investors
When it comes to market sentiment, gold is at the bottom of the barrel as almost everyone is predicting a complete collapse in the gold price and is falling all over each other to predict the new and lowest price for gold. The exact opposite of what they were doing in 2011 as almost everyone expected a $2000 gold price.
What does that mean? Well, the majority of these forecasters calling for lower gold are probably already positioned for it, and the fact that gold interest is rising, suggests that most of these people are not only out of gold, but are shorting gold. It doesn't mean the gold price cannot fall further as shorts pile on, but at a certain point there will simply be no more fuel for the selling - that's when you get the bottom and the turnaround.
Not to mention that gold has quite a few strong fundamental factors pushing it including the fact that gold reserves at the major miners have been falling, money supply as measured by the Federal Reserve is still growing, Chinese and Indian investors continue to firmly buy gold, and perhaps the most important, US and world debt levels have grown significantly since 2008 - we do not think that is going to end well especially if interest rates start to rise.
So gold investors should take some solace in the fact that the same prognosticators calling for the end of gold are the same ones that called for $2000 and $5000 gold when gold was rising - they were dead wrong then and they may be dead wrong now. Gold has truly become a contrarian trade and we think it's a no-brainer for long-term investors (i.e. who have horizons greater than one year) to build up positions
Casey is also a scum bag and con artist who makes his money thru subscriptions and front running his subscribers and not from his investment acumen. If these newsletter writers were so astute, why are they not quietly make money from their personal investments instead of promoting various small caps.
Oceana buys Romarco. This is what the lowest cost gold producer in the world looks like:
>>Highlights of the Combined Company
Sector leading low cost gold producer – Estimated to produce approximately 540,000 ounces of gold annually by 2017 at an All-In Sustaining Cost ("AISC") of less than US$600 /oz. <<
http://finance.yahoo.com/news/oceanagold-acquire-romarco-creating-lowest-084000590.html
The Market cap of Oceana gold will be ~20x that of BAA. BAA can organically grow its own production to 500k+. So if you believe that the price of gold won't go below $1000 AND stay below that level for long AND also that the price of gold will be over $1400 by March 2017, when BAA needs to refinance their debt, then BAA is the much more leveraged buy. I am betting on POG recovering sooner rather than later, which is why I am heavily invested in BAA. But BAA is in Congo, has a huge debt and the gold price is still very much in a down trend, hence the very low share price of BAA and HIGH risk/HIGH reward opportunity presented.
What about interest expense on their debt ? That will eat up a good chunk of their earnings.
Also that $888 AISC is disappointingly high and no longer makes them the lowest cost miner in the world. I thought the expectation was for AISC to drop further from the $589 level seen in Q1. Instead it is going up 50%, after depleting the high grade zone they are currently mining.
http://www.hussman.net/wmc/wmc150720h.png
Following post is from another site:
One of my favorite charts towards end of J Hussman article (link), showing the price of gold divided by the PM mining basket (as expressed by the XAU Index).
The previous, post-WWII trading band ratio of 2.5 – 5.0 dictated rough company valuations and today’s action (20Jul2015), the Au / XAU ratio at about 22.00.
The reversion back to anywhere close to the valuation mean for the PM mining will be historic IMO … back to waiting patiently for that inevitable reversion to emerge.
http://www.hussman.net/wmc/wmc150720.htm
Incredibly, the XAU index is back down to the bottom seen at the depth of the gold bear market in Oct 1, 2000 when gold was $250/oz:
http://finance.yahoo.com/echarts?s=^XAU+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}
Smells like capitulation to me ...
http://www.businessinsider.com/now-is-the-time-to-get-greedy-in-gold-2015-7
>>It’s very easy to say, “be greedy when others are fearful,” but it’s another thing entirely to actually do it. Here are a couple of reasons why it might pay off in the miners right now.
They say the best time to buy is when there’s “blood in the streets.” At -22%, the 5-year average annual return for the Philadelphia Gold/Silver index has never been so poor, as Short Side of Long reports. This is exactly what “blood in the streets” looks like:
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Price of gold decisively and sustainable breaking out over the 200 dma which is now around $1200
Legendary Pierre Lassonde: A Spectacular Turn In The Gold Market Is Coming – China And India Will Be The Key
July 22, 2015
With the price of gold and silver tumbling recently, today Pierre Lassonde told King World News that a spectacular turn in the gold is coming and China and India will be the key. Lassonde also spoke about what he is doing with his own money right now. Lassonde is arguably the greatest company builder in the history of the mining sector. He is past president of Newmont Mining, former chairman of the World Gold Council and current chairman of Franco Nevada.
Lassonde is one of the wealthiest, most respected individuals in the gold world, and as always King World News would like to thank him for sharing his wisdom with our global readers during this critical period in these markets.
Pierre Lassonde: “We are in the dog days of summer, but I believe prices are more likely to be higher in September than what we are seeing today. However, if the U.S. dollar is going to stay on a tear, it will be very difficult for the gold market to work its way higher….
“It’s all about the dollar right now. The U.S. is the only economy in the world that’s growing and everybody is fearing the collapse of their currencies, so they are all moving into the dollar. As long as the dollar is ‘king,’ gold is going to struggle.”
It's 1998 – 2001 All Over Again
Eric King: “Will gold mining companies start cutting back on production at this point?”
Lassonde: “They are going to high-grade to survive, so they are going to cut their own throats. That’s what they will do — they will cut their own throats. They are just going to high-grade their mines and then you are going to see mine lives go from 12 years, to 7 years, to 5 years in no time. Essentially the industry is destroying itself. This is exactly what was happening in 1998 – 2001. By 2001, Newmont only had 6 years' life of reserves — that’s it.”
A Spectacular Turn In The Gold Market Is Coming
Eric King: “If you look at the HUI (Gold Bugs Index), the plunge in gold has essentially destroyed the market capitalization of the gold sector.”
Lassonde: “Absolutely. But the flip side of that is that when it turns, it is going to be an absolutely spectacular turn to the upside. The reason for that is because all of the sudden production will have fallen dramatically, demand will be there and nobody will be there to fill it. The more painful the downside, the more glorious the upside.
King World News -- A Remarkable View Of The War In The Silver, Commodity And Gold Stock Markets
China And India Are The Key
You are going to see production cuts and the secondary market (recycling) will essentially dry up. From that perspective I’m optimistic. The key will be China and India. If the Chinese for any reason stop buying, the gold price will be in trouble. China is the key. 60 percent of the world’s gold is sold into China and India.
So the sooner the Chinese economy turns around, the better. Because if China goes into a recession, God help us. India is doing well, which is good. They are probably going to consume more gold this year than last year. And so far the import statistics into China are good. That should keep a floor in the gold market and lead to a recovery.”
It is too soon to say that the downtrend in gold is over. After such a large plunge there will probably need to first be a successful retest of the 1080 level.
And what on earth does the price of gold have to do with this scam stock ?
Around the $1080 level is also the 50% fibonacci retracement of the entire massive move up in gold from $250 to $1900
You seriously think gold price can go to $5000 while all the mining input costs such as diesel, CAT trucks and spare parts, labor all stay flat ?!
Per Armstrong the rabid gold bugs need to go bankrupt before we can see the turn in gold. Hopefully the current plunge in gold won't stop until they have all capitulated and the decks have been cleared:
So Who is Still Long in Gold?
As you move into a major low, it is not about who is still long, it is who is short. As gold capitulates and spirals lower, the gold promoters are running out of nonsense to justify it rising while the world is declining. What happens is two aspects. Those who have been long lose their shirt, pants, house, wife, kids, the car, and the dog. The buy-every-dip-average-in advice becomes toxic, just as it did during the Great Depression in stocks – hold now for new highs by year-end is always the prediction. So yes, the investors married to the trade typically lose everything and when the cycle changes, they likely will not buy again unless new highs come into play for they will say, “No thanks, been there done that.” Any rational person can analyze the sales-pitch about fiat and hyperinflation and see that they existed for 19 years as gold declined. Such fundamental analysis scenarios always crumble to dust and fall to the ground for they are never true to the history of events.
At the top, the majority is long and they become the fuel to make any market crash and burn. Shorts and conspiracies do not force markets to decline; it is always the LONGS themselves. Someone whom is long sells because he cannot hold and each has a different pain threshold. The market crashes for there is no bid. It takes courage to try to catch a falling knife. Again, this applies to ALL markets.
armstrongeconomics.com
From your link the head grade is 3.1 grams/ton:
http://news.banro.com/press-releases/banro-announces-q2-production-results-nyse-mkt-baa-201507091016580001
This is more than 20% higher grade than the twangiza proven and probable reserves:
http://www.banro.com/s/Resources.asp
So the AISC should increase once they stop hi-grading. I have no idea when that time will be, but it is coming. Hopefully not for a few more quarters yet and not before the gold price has risen from these low levels.
$560 AISC is very low in comparison to the vast majority of other miners. They must be hi-grading. Any thoughts on how long they can continue mining for such low cost ?
Congomining, if I understand you correctly you are of the opinion that Banro is still the best value in mining even though it is up 150% from the 52 week lows ? Even compared to other miners like TGD, TRX that are still near their lows ? I will have some new funds available in a couple of weeks and wondering whether to average up in Banro or look for something else. BTW, I did see your warning on MDW and paid heed, thankyou.
There is no better risk-reward prospect than BAA.
No, we been waiting on Namoya commercial production news