Nolan Watson on Gold Streaming & Royalty Companies

Interview HERE. No mention of Brazilian mis-adventures at Colossus and Luna Gold

• With the assets, what we are looking for is robust economics. You want to ensure that the ratio of the value of the mine to CAPEX is high so that you’re not putting up a tremendous amount of capital for a small return when you do build that mine. 

• We are also looking for low-cost operations, so once they do build it, the question is whether the company is going to be able to produce at below the industry average all-in cost of production. 

• The third thing that we are looking for with a mine is exploration upside. We want to find situations where the mine life can double or triple. 

• On the company side, what we are looking for is obviously good management teams, but other things we are looking for are capital structure and balance sheets.  

• We are very sensitive to not over-stream a mine. Our goal is to ensure that their shareholders are the primary beneficiary of the cashflow of the asset. We have run into it in the past where things have been over-streamed and mining companies started losing incentive to actually extract value from the asset.

Monthly MACD for Gold - Approaching first Buy Signal since 2009

From Here
But Peter Brandt still wary of the bear.

Pierre Lassonde on Royalties and Exploration - Interview with Sprott

Interview with Pierre Lassonde at Sprott - in full

......when we create a royalty. I’m not talking about a stream; I’m talking about a royalty -- like the GoldStrike royalty or the Detour royalty. We get a free perpetual option on the discoveries made on the land by the operators, and we get a free perpetual option on the price of gold.

we need the exploration companies to get back to making discoveries. Otherwise the whole industry, particularly the gold mining industry, is going to go very flat production-wise. Even if the gold price starts to go up, it could take five or six years before production increases in response. So there’s a real need for venture capital

So do you avoid early-stage exploration stocks? Mostly, yes – though I do have people looking for the next Hemlo, or the next Voisey’s Bay. Whoever finds one of those, the premium they get to their share price will be beyond belief, because it’s been way too long since we’ve had a really significant new discovery – a Hemlo, at like 20 million ounces of gold, or a GoldStrike, with around 40 million ounces, a Voisey’s Bay or a Diamond Fields. It’s been over 20 or 25 years since we’ve had one of those discoveries. The world is just panting for one and I think it would be helpful to bring back the risk-taking attitude that’s completely gone from that sector. But those companies I look at are 1 in a 1,000. You can look at 999 dogs before you find one. It’s very difficult. 

 

Brent Cook - Telling Right from Wrong in Exploration

Identifying Exploration Companies

Exploration is a tough business, making a discovery is much tougher, and advancing a real deposit through the hurdles of geology, politics, and the stock market is the hardest test and is rarely successful.

......We should move ‘down the food chain’ into companies with stellar, early-stage projects that have yet to be tested—a process also much easier said than done. You can always find a reason not to buy. 

Paradigm Capital Gold Developers - 20 Takeover Targets

Report
Research Coverage

Rick Rule Interview

at SmallCapPower site

• Saucer shaped recovery,no spike sell off, so no hockey stick rebound.
• Feasibility / PFS stage M&A will be first movers 50-70% gains
• Entering beginnings of discovery cycle.
• Tiny-caps with good teams will be 10-baggers later as market develops
• Risks muted. Those who survived fairly decent. Top quartile. Past success. Current endeavour in similar circumstance.
• Capital / access to capital to stay alive until tide lifts all ships
• Nobody dreams about small deposits. Rewards commensurate with risk - size.
• Gold & silver M&A this year.
• 2-3 year horizon  industries in liquidation with prices below cost of production. Plat/Palladium. Uranium, Zinc, Nickel, Lead, Potash / Ag minerals. Longer horizon coal sector. First time since 2001 gold & silver reasonably priced.
• Prospect generators
• Optionality stocks - big deposits , price sensitive, very large capital. See much more upside. $40-50m caps vs $400m 3 years ago.

British Columbia Mining - Mt Polley Disaster

The catastrophic breach of the tailings dam has seen huge concern in Canada - reported with videos at IKN

Jack Caldwell at I Think Mining (see blogroll) has this from correspondents.

The cost to other mining aspirants of delayed projects, additional tailings facility features, and so on is, in a sense, incalculable.   As one private correspondent said to me today: “This sets mining in Canada back for at least ten years.”  Another private correspondent said: “Nobody will permit a new mine in BC for at least ten years.”

Very Junior Gold M&A

Some of the smaller juniors becoming extinct through M&A in the very junior gold space over recent months. List Below

Diggers & Dealers - Australia 2014

The premier Aussie Mining event kicked off in Kalgoorlie today

Presenting Companies and Exhibitors
Review at Mining Australia

Mervyn King former governor of the Bank of England gave the opening address.

"We need to have these changes in the world economy, supply side reforms and changes to real exchange rates in order to boost the real incomes of countries that previously had large trade surpluses, and they will need to spend that on consumption and reduce their trade surpluses."

Brent Cook - Discovery Panel with Tim Coughlin, Eira Thomas & Miles Thompson

Discussion of the Discovery Process chaired by Brent Cook at the Sprott Symposium

Marginal Producers

The marginal producers clearly offer great risks to investors during periods of metal price weakness, a number of business failures have occurred during this down-cycle. If we are entering a period of increasing prices the marginal producers who survived may offer great leverage, and sooner than the explorers or developers as they will control increasing cashflow.

Here Ravi Sood, the CEO of such a marginal producer is interviewed on Palisade Radio.

OT - Hungaroring - Hell yeah

Youtube - below

Brent Cook Interviewed by Daniella Cambone

Interview on Kitco

 On the junior side, he thinks that it is an interesting area to look at but at the same time it is getting ‘tough.’ “There are very few [junior] companies out there now with the technical competence and cash to really advance exploration plays.” However, Cook says well-standing junior companies are the place to be because over the next two years, the majors are going to have to buy something and this is where they will be looking

Productivity in Mining - Ernst & Young

Report from Ernst & Young putting the case for "broad transformation" by the miners to increase productivity.

Summary                         Full PDF

For example Australian Mining labour productivity trend

A long term re-focus is required

Eric Coffin & Rick Rule Discussion at Sprott Vancouver Resource Symposium

Discussions from Sprott Conference on Korelin.

Sprott Symposium - Includes list of Sponsor Companies
Reports on Symposium discussions

• Northern Miner (free subscriptions offer)
• Sprott 

Liam Halligan - UK Telegraph Questioning the Dollar

Goldbug narrative in the mainstream / establishment UK Telegraph newspaper questioning the Dollar's role as reserve currency, the rise of the Brics at purchasing power parity and non-dollar trade settlement.

Martin Armstrong also discusses the politicisation of the dollar in trade and reserves.

Silver Deposits in Mexico - Size & Grade

Comparative graphic from Plata Latina
Also Silver Institute - Global Silver Production for perspective
And Companies with Mining Projects in Mexico according to the Mexican Geological Service - large searchable database.
Production       Development        Exploration

Top 20 Silver Producing Countries in 2013 (millions of ounces)
1.	Mexico	169.7
2.	Peru	118.1
3.	China	118.0
4.	Australia	59.2
5.	Russia	45.4
6.	Bolivia	41.2
7.	Chile	39.2
8.	Poland	37.6
9.	United States	35.0
10.	Argentina	24.7
11.	Canada	20.8

OT - Anglesey & North Wales

Hot Sunny Days   -   Trearrdur Bay

New Sprott Gold Miners ETF

New Gold Miners ETF from Sprott - SGDM
Sprott discuss weighting for growth and balance sheet strength - HERE
Company components - at launch sees a very strong concentration in top 3 holdings. Franco Nevada, Randgold and Goldcorp.

Rising Rates Good for Gold - Myrmikan Capital - Daniel Oliver

Myrmikan Capital Research Report

If less printing and higher rates were bad for gold, as the bank analysts tell us, gold should have sold off vigorously. It surged instead.

Peter Brandt - Gold bias Long Term Bullish

Peter Brandt sees critical supports at $1277 and $1240

Marginal Oil Production Costs vs Rise of Alternatives

Ambrose Evans Pritchard reviews the marginal cost of oil production and the increasing competitiveness of alternatives, which may leave trillions of dollars of malinvestment - the "subprime danger of this cycle".

US Official Gold Reserves vs M3 Money Supply

An interesting chart from Jason Hamlin's speculations on the gold price

Canaccord Junior Mining - Joe Mazumder

Interview at CEO .ca

There are companies that provide leverage as an ‘out-of-the-money’ option on the gold price because they have the liquidity to deliver a high beta. Those without the liquidity do not offer the beta despite having projects with high gold leverage......The asymmetry is derived by selecting

Rick Rule - Do the Work - 3 investors with $3bn on the sidelines for juniors

Do Rule and the "bigmoney on the sidelines" get what they want?

"Market clearing prices like summer 2000"

Choose your strategy - "Do the work" or "Have a hunch, bet a bunch"

Also see more recent comments HERE

“I don’t know about the short term,” said Rick, “but ‘leveraged’ plays are looking pretty attractive to me because they are so hated.”

‘Leveraged’ plays on precious metals usually refer to mines or deposits that depend on higher metals prices in order to generate returns. Today, many investors prefer to focus on projects that may prove to be money-making at current metals prices. But Rick says the aversion to leverage makes these types of opportunities more attractive:

“In my view, precious resources and precious metals markets have an up-cycle that lasts around five years. To me this means we could see much higher metals prices within the next couple of years. Right now, nobody wants to own the leveraged juniors; everybody wants to own the smaller, high-grade deposits, which are less dependent on higher metals prices. What that means is that leveraged deposits are probably cheap. I’d warn that you may not get much pleasure from owning them in the next 12 months. In the 3 or 4-year timeframe though, you could be handsomely rewarded.

OT - Le Tour Yorkshire - Grand Départ 2014

Massive crowds for Tour de France Grand Depart in Yorkshire - England...pics

John Hathaway - Tocqueville Gold Investor Letter - 2014-Q2

Latest Letter

The precious metals complex, both mining shares and bullion, appears to be in the process of completing a major bottom extending back to mid-2013.

Haywood Securities - Weekly Dig - 2014

CEO. CA has links to Haywood's Weekly Dig, including their Junior X watchlist and numerous producer earnings estimates and reserve/resource valuations across Gold, Silver and many other miners.

• 6th Feb 2015      
• 16th Jan 2015       23rd Jan       30th Jan
• 7th Nov 2014        14th Nov       21st Nov           28th Nov    
• 3rd Oct 2014        10th Oct        17th Oct           24th Oct            31st Oct
• 5th Sept 2014       12th Sept       19th Sept         26th Sept
• 1st August 2014   8th August    15th August     22nd August     29 August
• 4th July 2014       11th July       18th July          25th July
• 27th June 2014

Brent Cook - Tips for Finding Juniors that can survive the dust bowl

Brent Cook Interview at The Gold Report

In H1/14, I went through more than 100 gold deposits with NI-43-101-compliant resources and found very few that I felt actually made good money. There are lots of resources being touted by too many companies, just not many that can make money, assuming the gold price and cost structure stays more or less where they are.

If we see a rapid rise in the gold price, maybe some of these assets will look more profitable. The last time the gold price rose, the majors dropped the grade they were mining, thereby lowering their per ton profitability. At the same time the input costs that go into mining—labor, materials, consumables—rose. We never saw the profit that was advertised and that we expected.

Unlike many interviewees, Cook actually owns some juniors.
Brent Cook: I own, or my family owns, shares of the following companies mentioned in this interview: 

• Pilot Gold Inc.
• Fission Uranium Corp. 
• Focus Ventures Ltd.
• Dalradian Resources Inc

In Gold We Trust - Stoeferle - Incrementum 2014

The eighth annual report from Ronald-Peter Stoeferle at Incrementum covering much gold "fundamentals" ground.

In the course of last year’s price collapse, a lot of technical damage was inflicted. The past months have seen a significant decline in speculative activity in the sector. The majority of bulls appear to have thrown in the towel. We like the fact that the consensus considers the gold bull market over. Gold is now a contrarian investment. 

The migration of gold demand from West to East is continuing. The growing importance of Asia's middle class for gold demand is widely underestimated. Assuming that incomes in China and India will continue to rise, gold will inevitably be one of the beneficiaries of this “love trade”.  

Gold stocks clearly exhibit a highly asymmetric risk-reward profile at present. In the wake of the correction, mining companies have reset their priorities - profitability, capital spending discipline and shareholder value have replaced the maximization of production. Moreover, there is no other sector that investors view with similarly pronounced scepticism. 

From a technical perspective, our assumption is that the gold price is near the end of its long consolidation period. The clearly positive CoT data and the recent revival of gold mining shares all suggest as much. We are therefore convinced that the technical picture has been repaired and that a stable bottom has formed. 

Of course correlation is not causation .... but some interesting charts below  - But Do Read the Full Report linked above.....

Brent Cook on the Upturn in Junior Stocks

Brent Cook in discussion on Korelin

Have Precious Metals begun a New Bull Market ? - Possible massive H&S bottom - Peter Brandt

Peter Brandt points to a possible massive head and shoulders bottom in gold, yet to be confirmed, with a break over $1400 targeting $2400.
Similarly Chris Kimble points to a possilbe H&S bottom in the Gold Miners.

Barron's Mid-year Roundtable - Fred Hickey on Gold as Interest Rates go negative

Mid-year Roundtable from Barron's

Fred Hickey -

The European Central bank just announced it will charge banks 0.1% for parking cash overnight. That gold and silver now yield more than cash could be a spectacularly bullish propellant for the metals. 

We should consider that negative over-night rates, as a tool to push banks to lend, may not prove effective if applied solely in one jurisdiction, the EU, whilst capital is mobile globally. The stronger £ GBP and US$ may be some sign of EU capital movement. If these economies do not want stronger currencies we may see more central banks also set negative rates, can this be a spur to increased lending and money velocity lacking in recent years? Gold should react to this.

Brent Cook - Insights into the Discovery Process

Discovery Process

A series of free articles

1)    The ability to conceptualize a legitimate target that offers the possibility of a meaningful economic deposit.

2)    Teamwork and open minds to revise and adjust the exploration target concept based on new data.

3)    Money, plus an investor base that is willing to let the exploration process play out.

4)    The ability to rapidly recognize and accept failure and walk away from a project that once held great potential.

Fed Prepares to Maintain Record Balance Sheet for Years

Bloomberg article

Meyer said the FOMC now doesn’t appear worried about having a big balance sheet, and many officials “prefer to operate at a higher level of reserves.”     “There is a preference emerging to say, ‘This works,’” Meyer said. “The question is, do they ever want to get back to normal?”

Junior Gold M&A - Pilot Gold to Acquire Cadillac Mining

Pilot, one of Mark O'Dea's companies, spun out of Fronteer Gold after acquisition by Newmont, announce the acquisition of tiny junior Cadillac focussed on a past producing Utah sediment hosted gold project.

Larry Edelson Increasingly Bullish on Precious Metals and Selected Miners ?

HERE

While gold, silver and mining shares may look weak on the surface, I have every reason to believe that this weakness is merely a disguise for the next big move,  which will be dramatically higher for both metals -

Junior Gold M&A - Mandalay to Acquire Elgin

Mandalay have seen steady stock appreciation during the mining bear market with a focus on production and near production assets and benefits from Antimony prices.(last year revenues were ~ 39:42:19 Gold:Silver:Antinmony) They recently purchased Silver Standard's Challocollo project (in Bolivia) and are now proposing the $70m acquisition of Elgin Mining who started out with a plan to rehabilitate the Lupin mine in Nunavut then acquired Gold Ore Resources for their producing Swedish Bjorkdal gold mine. Adding another 50k oz production could see Mandalay produce over 150k oz combined. Elgin's last presentaation indicated that $30-50m capex could move them to 70-78k oz pa. It will be interesting to see whether Elgin's Patrick Downey remains in the combined group.

Junior Gold M&A - B2 Gold to Acquire Papillon Resources $570m

So the rumour mill was right, Clive Johnson's B2 Gold are to acquire Papillon's high grade deposit in Mali which should add 300k low cost oz to production for near $300m additional build capex, near $900m in all. Together with the Volta acquisition in Burkina Faso this should make quite a centre in a relatively undeveloped and unexplored West African gold belt with political risk the key concern.

Rio Tinto Chartbook - May 2014

No precious metals at Rio Tinto but a wide ranging view of the materials and markets Rio operate in, especially Iron and Coal to China. Including Iron cost curves