Larry Edelson - Gold & Miners Near Bottom in Time & Price

I have quoted Edelson previously, as a long term gold bull who has been rightly bearish since 2011 and sceptical of the early 2014 advance, which has since seen significant correction.

This week Edelson writes.......

John Kaiser Interview

Stock Discussions with Al Korelin

Brent Cook - What happens the year after?

Brent Cook again making the case for quality development and exploration in the next bull.

Building Goldcorp's Eleonore Mine

Interesting link from Sprott on the building of Goldcorp's Eleonore mine in Quebec.

Compare the factsheet in 2011 with $1.4bn capex vs latest estimate of $1.9bn.

Acquired from junior Virginia in 2005 for $420m (plus 2.2% NSR), relatively early in the exploration cycle, after 212 drill holes, but no fully defined resources or scoping studies, Goldcorp since developed the deposit with 600,000m of drill core. A 9 year development and build path.
Soon to be a high grade, low cost, long life asset producing 600k oz pa.

Gold Mining M&A - Barrick / Newmont / Goldcorp / Goldman

Are the Gold Miners "Cheap Enough"?

• Recent reports of a potential tie up between Barrick and Newmont
• Franco Nevada billionaire co-founder Seymour Sculich taking a 11m share 1% position in Barrick.

Gold Prices vs Cash and All in Mine Costs (Real Terms 1980-2014)

Putting an all too convincing medium term bearish gold case at CB Capital Research including this long run gold price vs costs chart. You have to say there is something in the DNA of miners to extract low grades and extend mine life when gold prices are good and high grade, shortening mine lives, when gold prices fall. There are very few periods in this 35 year chart where a profit has been delivered by the industry.

A bull market inevitably builds excess, and nowhere is this more evident than in the evolving marginal cost curve of gold miners. At the bottom in 2002, the marginal cost of extraction was approximately $300 a troy ounce. Despite technology improvements, the marginal cost of extraction steadily rose to nearly $1,000 an ounce by 2011 as gold miners exploited lower-grade mines and as mine workers enjoyed higher wages. Since the peak in 2011, the marginal cost of extraction has come back down to $850 an ounce (see Figure 2 below, courtesy Goldman Sachs). Deflation has set in within the gold mining industry–and given that it is a commodity industry, it is a race to the bottom. Ironically, some gold miners are producing even more gold in an attempt to stem cash flow problems–thus increasing supply and depressing gold prices even as demand remains anemic. So far, there have been no major mine closures; nor major bankruptcies in the industry. We believe that neither the price of gold nor gold mining stocks will bottom until the industry experiences a couple of major mine closures and/or bankruptcies. The gold mining ETFs, GDX ($24.26) and GDXJ ($36.66), could easily decline another 25-30% from current levels.

OT - Chatsworth House in the Spring

Peter Munk - Barrick Founder - Profile at the Economist

As noted on CEO an Economist Profile of Peter Munk

GFMS Gold Survey - April 2014 including Mine Cost Analyses

New Release, reviewed at Mineweb.....Get the full report below - Essential Reading

Richard Schodde at Minex Consulting - Enough new mines / Cost of Discovery / Delay from Discovery to Development / Commodity Prices vs Exploration

I have previously linked to the excellent presentations by Richard Schodde at Minex Consulting......

Mexico's Guerrero Gold Belt - Torex $375m Debt Financing & Osisko Spinco Exploration

Going to show some Gold projects can secure debt finance, subject to final due diligence, Torex (TXG.TO) announced $375m loans which should see them to production at El Limon in the Guerrero Gold belt in Mexico. At the end of 2012 the project's bankable feasibility saw a 24% IRR at $1276 gold. 6% of life of mine gold would be hedged, one of the issues in taking debt finance, whilst avoiding the dilution of share issue in current markets.

Interesting to note also today that as part of the current Osisko M&A battle the Osisko "Spinco" highlighted the recently secured large, 1 million Ha, Guerrero properties as a key exploration asset.......more

Current Trends in Mine Finance - Society for Mining, Metallurgy & Exploration - SME - NY April-14

Programme                      Abstracts

All looks very worthy with some interesting discussion to come no doubt, but then there's an astrologer as one of the 3 co-chairmen.

Gold Reportage and Silver Technicals

On the anniversary of the big decline in gold there was an interesting focus on gold yesterday.

Gold Mining M&A - Friendly Osisko bid from Yamana & Agnico

More twists in the bids for Osisko as Agnico team up with Yamana to bid ahead of Goldcorp.
The 3 companies issued a joint presentation which gives interesting reading.
The Osisko spinco will have high cash and significant royalty streams which may earn a premium rating. They will also hold a the large exploration package in Mexico which Osisko recently secured.

Sector Performance through the Economic Cycle -101

JC Parets at All Star Charts discussed Energy market performance and included this standard graphic indicating sector performance during the economic cycle.......

Gold Mining M&A - Goldcorp up Bid for Osisko

Not such a big premium...?
Goldcorp Inc. is raising its hostile bid for Osisko Mining Corp. to $7.65 per share or $3.6-billion in an attempt to knock out a friendly deal between Osisko and Yamana Gold Inc.

2014 Global Mining Deals Outlook / 2013 Review - Pwc

Full Report

Gold Mining M&A - Osisko to Sell 50% Stake to Yamana

Osisko today announced their alternative to Goldcorp's bid with Yamana taking a 50% stake in cash and shares.

Kimble - Barrick breakout ?

Kimble Charting often have some interesting perspectives.
Here considering a breakout by Barrick.

OT - Elbow - Real Life Angel

Bury boys Elbow have released their latest album - The take off and Landing of Everything........more

John Kaiser - Gold Deposits / Cost vs Grade

John Kaiser is a long standing data and analysis driven newsletter writer.......

Platinum Cost Curves

Cost Curves below ......

Who Drives the Price of Gold / ADX indicator for Gold / Golden Crosses / Charles Nenner

Anyone following the gold and mining market is likely to find (perma) bullish opinion at sites like King World News. While they do carry a few interesting interviews it is well to also follow some of the traders who take a more critical view of some of the more dramatic claims of the "gold gurus" and have been more wary of the 2014 advance, without simply being gold perma-bears or sceptics  ........

Deep Mine / Narrow Vein Technology

The pressures on profitability in the mining industry should lead to step changes in innovation and technology. As good grade near surface is harder to find the potential to mechanise high grade deep underground should become more appealing with the right technologies.
Anglogold are making substantial investments to improve South African deep mine economics.
Rocmec discussed narrow vein mining innovations at PDAC.
If these technologies can prove themselves old mining areas may see renewed interest.

Eric Coffin - A New Resource Bull

Eric Coffin of Hard Rock Advisory is one of the more experienced and respected voices in the sector.

Mines & Money Hong Kong 2014

After PDAC the Hong Kong Conference seems to be growing in importance as a melting pot of Canadian, Aussie and UK listed miners chase Asian money.
An apparently long list of over 400 financiers and investment companies attend, though a tidy up of the duplications might look more professional.
And plenty of Exhibitors
Including Miners & Explorers 

Investing in Mineral Discoveries - Steve Todoruk at Sprott

HT IKN ........

Income & Value Investors Look to the Miners

Buying by general investment funds Artemis Income Fund and Old Mutual UK Alpha Fund.

The most significant change has been in the management of the mining companies. The CEOs of Rio Tinto, Anglo American and BHP Billiton have all stepped down. Efforts are being made to bring costs under control and some companies have increased the amount they are returning to shareholders through dividends and share buybacks.

Following their recent poor performance, valuations are also starting to look attractive and this is gaining the attention of investors...........................................

We are encouraged by the fact that the forecasts and outlook for miners already incorporate falling commodity prices yet the resultant cash flows and dividend potential still looks attractive. 

Mining in Canada - Parets & Brandt - USD:CAD

Currencies - A double edged sword as a UK based mining investor.....

PDAC-14 Leading Stocks - Interactive

The past few years has seen the development of advanced interactive graphical analysis tools reach the mass market. Gartner's "Magic Quadrant" puts Tableau near the top in their analysis.
The dashboard below takes the PDAC stock watchlists (and these rely on google finance data so please always double check) and makes the analysis of stronger performing stocks more visual and interactive. Also note that the datalink is via google / via excel (!!) so I will note the last refresh date here:
Refresh 15th March 2014.
To interact drag the sliders, highlight areas of the chart on the right or click to re-sort the values in the left hand graphs

Learn About Tableau

HT - Inca Kola News - IKN

Thanks to Otto at Inca Kola for recommending his readers to stop by here.

OT - Springtime

Daffodils along York's city walls.

Have we reached Peak Discoveries?

Discussion by Kitco at PDAC.
Brent Cook, Miles Thompson, Catherine McLeod Seltzer, Alex Davidson.

PDAC 2014 News - Reviews and Stock Picks

Catching up on some of the PDAC 2014.

Jurisdiction Risk - Fraser Institute Survey 2013

The Fraser Institutes Annual Ranking of Mining Jurisdictions is published for 2013
Summary HERE

The top 10 most attractive jurisdictions for investment worldwide include (from the top) Sweden, Finland, Alberta, Ireland, Wyoming, Western Australia, New Brunswick, Nevada, Newfoundland & Labrador, and Norway.

How Serious Junior Miners are Separating from the Pack

At the Financial Post.

These companies do not need to have world-class deposits with 10 million ounces of gold or 20 billion pounds of copper. In fact, investors are likely to shun projects like that, because they are too large and risky in the current environment. No one wants to see another Tasiast or (even worse) a Pascua-Lama. All these companies need is an economic discovery and a logical path to production, and investors will take it.

"Projects are being scrubbed down to a nugget that works,

A Tax on Ignorance and Inflation - Pensions and Government Debt

An interesting article by Merryn Somerset Webb in the Weekend FT.

PDAC 2014 - Full Stock Watchlist

This post follows on from the Coreshack watchlist posted earlier.

Brent Cook - Discussion with Scott Gibson

Mining companies have to prove to market they can make money. High grading sterilising deposits. Accumulate the few legitimate deposits and exploration groups. Wake up to too few deposits next year. Identify lowest quartile cost projects.

PDAC 2014 - Coreshack Stocklist

The PDAC convention is the big annual mining exhibition in Toronto, running from Sunday 2nd to Wednesday 5th March.