But what it also says that’s very beneficial for the long term is that the mining industry is beginning to understand that they have to deliver something besides production. They have to deliver profits............I think the damage in the juniors has been extensive enough that I am personally of the view that the very best issuers are cheap enough. It isn’t to say that they couldn’t get cheaper but my own personal bias is much more on the long side than on the short side with the best issuers.
there is a dearth of projects that make really good returns on capital employed at these gold prices. So the juniors ......that make good discoveries or the companies that are still advancing on very economic feasibility studies will get taken over in the next 18 months.Interestingly points to divergent opinions within Sprott. ........more....
Lewnowski wanted to pursue a strategy of building a portfolio of smaller mining firms while RK believed mining finance should be strictly tied to offtake agreements, said a source with knowledge of the matter, declining to be identified.Their list of previous transactions is a very mixed bag... One of the first ATW was a disaster for stock-holders, Great Basin went bust, Norseman Gold fell hard. But perhaps if you provide the finance secured on assets there is something to be gained, Golden Predator, now America;s Bullion Royalty look set to lose assets to Red Kite. Some of the other companies in the deals are more respected.
CEF Holdings, a venture between Li Ka-shing's flagship company and Canadian Imperial Bank of Commerce (CIBC), is looking to invest in gold mining companies after a slump in prices created buying opportunities.
The Major Gold Producers - HERE - and a review of the article HERE
We are on record as arguing that this is a sector steeped in mediocrity. The sector has focussed on production and per ounce valuations for too long and will be forced to focus on shareholders’ returns as competition increases for the investor dollar.
And just after Goldman and JP Morgan had called a bottom in commoditiesChairman Ben Bernanke said on Wednesday that the U.S. economy continues to need highly accommodative monetary policy. Answering questions at a conference sponsored by the National Bureau of Economic Research Bernanke said that when looking at the Fed's dual mandate on employment and inflation more work needed to be done. He said the 7.6 percent unemployment rate probably "overstates the health of the labor market" and that inflation remains below the Fed's 2 percent target. Moreover, fiscal policy remains "quite restrictive," Bernanke said.
We observe profound internal change within the industry which suggests to us that the strongest companies will deliver compelling upside performance when the metals markets turn. These changes include substantial scale backs of capital spending and other measures to preserve cash and reduce expenses. As managers, we are focusing on companies with the strongest financials and best assets.
short positions of these traders are higher than at the bottom in 2008 (chart below), after which gold rallied 167% and mining shares 256% (basis XAU)
