Replies to post #174 on All Things Precious Metals

[Pro-Life]

Hecla to Acquire Mines Management
Tuesday, May 24th

http://www.silverseek.com/article/hecla-acquire-mines-management-15597

SPOKANE, Wash., May 24, 2016 (GLOBE NEWSWIRE) -- Mines Management, Inc. (NYSE MKT: MGN, TSX: MGT) (Mines Management) and Hecla Mining Company (NYSE:HL) (Hecla) today announced a merger agreement with Hecla acquiring Mines Management. In the proposed merger, each outstanding common share[1] of Mines Management will be exchanged for 0.2218 of a common share of Hecla. This represents a 41% premium to Mines Management, using both companies' 10 day VWAP (Volume Weighted Average Price) on May 20, 2016. The transaction is expected to close in the third quarter, 2016. The transaction is subject to approval by Mines Management shareholders and other closing conditions.

Following closing of the merger, Hecla intends to advance the evaluation program of Montanore. Located in northwestern Montana, Montanore is considered one of the largest undeveloped silver and copper deposits in North America. The project is approximately 10 miles from Hecla's Rock Creek project and 50 miles north of Hecla's Lucky Friday Mine in Idaho.

"The Montanore Project has been significantly advanced by Mines Management and, with the issuance of the final Environmental Impact Statement and Records of Decision early this year, now is the time to pass it on to Hecla to further advance the project and put it into production," said Glenn Dobbs, Mines Management's CEO and Chairman.

"Hecla is the logical company to move Montanore forward, with its close proximity to Rock Creek, as well as its similar geology and scale," said Phillips S. Baker, Jr., Hecla's President and CEO. "We have considerable experience operating Greens Creek in a National Monument which will, combined with our financial strength and commitment to the community and environment, help Montanore reach its full potential."

[DragonBear]

A Few Questions To Those Who Slam Gold

The simple answer to all questions: Gold is the "currency" of last resort, against the USD in times of inflation. It needs inflation, and there isn't any globally.

Instead the global economies are struggling with deflation. The PBOC, BOJ trying to deflate their currencies so as encourage inflation, and stimulate their economies. Then the ECB responds. The only central bank siting tight, and not trying to race to the bottom is the US Fed. Thus, the USD strengthens against Gold. Then we have the Fed worrying they might get behind the curve on raising rates. Further strengthening the USD. What happened when Yellen (aka The Honey Badger) last week implied a rate hike was quite probable in Jul or even Jun? The EUR took a dump against the USD. More strength for the USD, and Gold went down.

A major source of the deflation is OPEC. Exporting deflation to the ROW in the form of flooding the market with cheap oil. It also has a deflationary effect on the US economy. Shale oil in 2014 accounted for somewhere close to 70% of business growth, and loans. It was a growth story, helping the US balance of trade. Also a potential inflationary growth story. But then the Saudis declared an economic oil war on the US oil industry. A deflationary story now, with the oil industry hunkered down. The banks which lend the money out, forced to set aside reserves to cover potential high risk loans. Less money to lend out. Deflationary to the US economy. But Honey Badger don't care. Hike those rates.

Until oil recovers, with base metals following, inflation is going to be hard to generate in the US, and globally. Instead it's the problem of deflation, which is worse outside the US. Resulting in a stronger USD, with Gold going down in response. Until then the USD will keep getting stronger (e.g. don't invest in US biotech with large earnings in the EU - they are getting a major hit via the EUR/USD FX exchange). Gold hasn't hit bottom yet. It won't until the deflationary pressures in the ROW goes away. Where the other currencies recover, with the USD going down.