Goldman and SocGen Bearish Gold Notes

Bearish notes from first SocGen and then Goldman this month are seen as some part of the plunge in gold on Friday.

Bill Cara has them posted in full
SocGen - HERE
Goldman - HERE

Some thoughts from Gene Arensberg - Are Goldman "initiating" a short position as this chart reaches the highest levels in years?

Gold Technicals and Sentiment

Good Review at the Acting Man Blog - HERE

Troy Bid for Azimuth in Guyana

Australian companies (also listed on Toronto) Troy and Azimuth are looking to combine, using Troy's cash, cashflow from production, and recent mine building experience, to develop Azimuth's near surface relatively high grade (3g/T) deposit in Guyana.
Troy's stock has been weak, along with many other gold miners', recently with added concerns around operations in Argentina.
The deal would value Azimuth at $188m, a 60% premium similar to Troy's Market CAP.
Troy's stock traded at A$2.40-2.50 pre-announcement, down to A$1.90 today giving an MCap of A$173m

Article at Mineweb - HERE
Broker Note at Resources Roadhouse - HERE

Japan to double Monetary Base - $1.4 Trillion QE - Currency Crisis to Follow?

Retuters Report - HERE

Kyle Bass - Currency Crisis forecast - HERE

Reuters : The Bank of Japan unleashed the world's most intense burst of monetary stimulus on Thursday, promising to inject about $1.4 trillion into the economyin less than two years, a radical gamble that sent the yen reeling and bond yields to record lows..................more...................

QE will never be Reversed - Woodford

Report by Ambrose Evans-Pritchard at the Daily Telegraph - HERE (well worth reading in full)

Columbia Professor Michael Woodford, the world's most closely followed monetary theorist, says it is time to come clean and state openly that bond purchases are forever, and the sooner people understand this the better.

"All this talk of exit strategies is deeply negative," he told a London Business School seminar on the merits of Helicopter money, or "overt monetary financing".

He said the Bank of Japan made the mistake of reversing all its money creation from 2001 to 2006 once it thought the economy was safely out of the woods. But Japan crashed back into deeper deflation as soon the Lehman crisis hit.

"If we are going to scare the horses, let's scare them properly. Let's go further and eliminate government debt on the bloated balance sheet of central banks," he said. This could done with a flick of the fingers. The debt would vanish.

Lord Turner, head of the now defunct Financial Services Authority, made the point more delicately. "We must tell people that if necessary, QE will turn out to be permanent."

John Doody on Gold Stocks

Doody writes the Gold Stock Analyst. Discusses looking for miners HERE which;

• Are proven producers or are very near commencing production (avoid unproven exploration plays)
• Have big existing cash flows or are projected to grow their cash flows quickly in the next few years
• Compare favorably to their peer group on the following ratios:
  • market cap/ounce in reserves
  • market cap/cash flow
  • net margin
• Do not dilute their share base (this has been a huge problem in past years)
• Report an "all-in cash-cost" in their accounting. $900 or less is desired.

Happy Easter

OT- Lyrics - Radiohead - Joy Division - Morrissey

For when you can't get a song out of your head, don't catch all the lyrics, or consider.
>>> Song Meanings HERE

Meanwhile Radiohead covering Joy Division. And Morrissey - Everyday is Like Sunday

BMO Global Metals & Mining 2013 Research

BMO 200pp Mining Research & Analysis covering >100 stock universe
HERE

Down But Not Out - PWC - Global Mining Deals 2012 Review / 2013 Outlook

PWC Mining - HERE

Report - HERE    Quotes follow.....

US Dollar Topping or Ready to Break Decade Long Downtrend?

Two views of the US Dollar considering a resumption of the downtrend in place since 2001, or a break to the upside.
If the dollar lifts will Gold lift with it or revert to the inverse?

Considering a US Dollar Top - HERE
Or a rise of The Dollar AND Gold - HERE

Eric Coffin - Resource Sector Paradigm Shift

Eric Coffin of Hard Rock Advisory on the state of the miners. HERE . Discusses the renewed focus on smaller higher margin deposits.

Another article HERE at Bloomberg suggesting break up of the large miners to release value, "shrink to grow" allowing smaller groups to replace reserves, show growth, provide cleaner geographical and management focus with less mines.

Perhaps the contrarian view is that there is value in large advanced resources which could advance with a new move in the gold price ahead of cost inflation. The majors, under pressure from shareholders due to recent failures, are afraid of big projects and there will be less demand and pressure on industry wide mine design, build and operating service costs leaving the field open for smaller companies and private capital.

As an example, consider Newmont's sale of the large Hope Bay project (acquired from Miramar in 2007 for $1.5bn for 10.7m oz resource) to privately held TMAC Resources. Directors at TMAC previously cashed out of FNX mining and are involved with Torex Gold, one of the strongest juniors. The Hope Bay project has sunk development costs which saw Newmont take a $1.6bn writedown when they put it on care and maintenance in 2012. One key risk appears to be in reaching agreements with First Nations. (and HERE) Some steps in developing these relationships with "KIA" look to be underway. TMAC may consider the project in a different way, concentrating on vein mining. Perhaps Hope Bay will also serve as a test case for First Nations to reach agreements knowing that miners will walk away from projects, especially in remote regions like Nunavut, north of the Arctic Circle.

Geologists At the Bar - PDAC

Good interview at PDAC with Ron Stewart - ex Dundee,  Doug Kirwin, Brent Cook, Simon Ridgway - Goldgroup, Gram Brown - Anglo American
HERE

GDXJ Breaking Downtrend?

Stewart Thompson's weekly review shows this chart
HERE 

Some Miners Looking to Buy

Some successful miners are looking to Buy distressed assets

Archipelago - HERE

Mick Davies Looking to set up Xstrata 2.0 to buy distressed assets? - HERE

Teck Looking to Build Up gold Business - Involved with 100 Junior Companies - HERE

Hudbay Look to buy with Majors on the Sidelines - HERE

Commitment of Traders - Gene Arensberg

Gene Arensberg at the "GotGoldReport" analyses the Commitment of Traders reports in depth, read the full article for charts etc....more.....
....

Trading the miners

Good article at Vancouver Venture

Harbingers of a market bottom.

Pro-traders will be looking for the technical signs of a true turn before committing but I believe many are watching and will deploy significant funds against the negative sentiment levels.

HUI : SPX

Interesting chart from Bob Hoye
Article HERE

Gold, the Renmimbi and the Multi Reserve Currency System

Some see changes coming in the global currency system, China's and gold's place within it.
Here from the OMFIF

Turning High Risk into High Potential - Grant Thornton

Report on the Mining and Juniors sector HERE

The Monetary Base & Gold Prices

I have Added some links to the Blog, (below the gold price chart) tracking monetary base and Treasury operations
An interesting Review HERE with links to papers outlining unconventional monetary policy.
Will this latest break out in the monetary base see a delayed follow through in the gold price as seen previously?

Avondale Asset Management suggest a potential 2-3 month lag between expansion in the monetary base and gold prices. HERE

Peter Degraaf - Gold Review

Interesting collection of charts and indicators HERE

It has now been 78 weeks since gold reached a new all-time high price.  The correction of 2006 took 71 weeks.  The correction in 2008 took 77 weeks. 

This chart courtesy Goldmoney.com shows the current long vs short positions among hedge funds.  Here are the comments that came with the chart:  Managed money (ie hedge funds) is short of 47,357 gold contracts, a record, and can be seen as the red line in the chart below. There are 45 funds short – well over twice the average and very close to the record of 48. Furthermore, their net long position (green line) is close to all-time lows. Interestingly, the last time managed funds held record shorts was in May 2012, when gold bottomed out at $1,540 before rallying to the $1,800 October high

PDAC - 2013 Companies

The year's biggest Mining Convention is underway in Toronto over 4 days.
The miners and especially the juniors have much to prove.
Many analysts are looking for M&A and new discoveries to turn the market around and it is likely to be the junior companies to deliver this as compelling bid targets or making new finds.
In the current environment cash is king for the juniors, holding it on their balance sheets or the ability to raise it without excessive dilution.
More ......

Rule - Cook - Kaiser - Fulp at Cambridge house Palm Springs Conference

Much of the same ground as previous interviews but all on one panel....

Mine Construction - On Time & Under Budget

Recent failures to successfully deliver projects, by a number of miners from senior to junior, have centred on project management. Failures of control and management by managers, directors and owners on the ground.

Silvercrest will present at PDAC on how they feel they have done it right. 

It probably helps that they had a smaller project and could grip the detail.

The small contingent of stocks succeeding in this market are the growth producers who can deliver controlled, profitable growth moving good teams from one project to the next. Look for good levels of insider and management ownership to align interests.

Silvercrest's Summary........

The World's 10 Most Prolific Gold Fields

A summary of the Top 10 HERE
Some would add the Ontario Camps in Canada HERE

Jurisdiction Risk - Fraser Institute Survey 2012/13

The comprehensive annual survey of mining jurisdictions is just out ........

BMO Metals & Mining Conference Feb 2013

Links to Presentations - HERE

Jim Rickards Interview

Excellent Interview on Gold and Currency Wars at Kitco

PMI Gold and Keegan Terminate Merger

Interesting development in M&A - another suitor?

Think Pieces on the Miners and Juniors - Brent Cook, - Quinton Hennigh - John Kaiser - Rick Rule

As the gold price dips and the mining ETFs tumble three of the industry players and writers who urged caution last year deliver some thoughts on the problems of the sector and what can turn it around. There is a clear expectation for a big clear-out of the weak companies on the venture, with no cash and no credibility to finance, but great potential for the winners to deliver the quality projects the industry desperately needs with a new focus on discovery after years of developing marginal projects which should work at higher metal prices but are seeing cost inflation catch up with them.
Opinions on the potential acquirers from Cook.

FT Gold Miners in Search of Richer Seams - Rob McEwen Interview

FT coverage (below) of the issues ailing the gold miners.
Rhymes with Brent Cook. Miners looking for better grade, perhaps smaller, deposits. Looking to new frontiers while balancing risk and cash returns to share-holders.

However it is also worth considering Cohen's call to the miners to focus on gold as their functional currency, holding above ground reserves like ETFs - HERE

Rob McEwen discusses this practice and more in a recent interview HERE

Brent Cook

Interview at CEO.ca - HERE

Many of his usual themes. Suggests Vancouver's money is made in the early placements.

FT - Martin Wolf on The Case for Helicopter Money / Gavyn Davies - Helicopters can be Dangerous

Leading columnist Martin Wolf at the FT making the case for more aggressive use of money printing through public spending projects financed by the Central Banks..
HERE

And a counterpoint article by Gavyn Davies in the FT - on the Dangers
HERE

RIU Explorers - Australia Feb - 2013

The well regarded conference for Australian listed explorers.
Presentations by companies listed below.

Mining M&A - Hudbay seeking $400m of Acquisitions

An interesting discussion by Hudbay on their outlook and approach to mergers and acquisitions. Looking to add value to projects.

“We’re looking at a lot of things and I’m hoping that we can tuck something in this year,” Garofalo, 47, said in an interview at Bloomberg’s office in Toronto, where HudBay is based. “We’ve never been busier looking at opportunities.”

“I wouldn’t be surprised if you look down at the junior producer level to see some of those junior producers trying to consolidate to create a bit of critical mass and try to fill that void,” Garofalo said. “I think that will happen.” 

HERE

OT - Blackadder

Been too long .....

Silver Wheaton - $1.9bn Gold Streaming Deal with Vale

An interesting $1.9bn deal from Silver Wheaton, with significant diversification from primarily silver streaming into gold.

3 Tests on HUI

An interesting analysis here showing 3 tests of the bottom is typical for the gold miners.

HERE

Pierre Lassonde at AME-BC and interview

Pierre Lassonde speaking recently at the AME BC Roundup, and also interviewed on KWN......