OT - The Kaiser Chiefs on Lairy

My Own Market Narrative asks  - What is Lairy?
The Kaiser chiefs are worth turning up loud on the matter - video below

The Real Cost of Gold Mining - Adequacy Ratios

In February Mickey Fulp published analysis with Cipher Research detailing the financial failures of the gold industry and proposing a renewed focus on grade rather than growth which analysts chased companies to chase for the past decade.

• Summary Report
• Interview
• Youtube    Pt1     Pt2    Pt3

Most interesting is the "Adequacy Ratio" which simply compares operating cashflows against all outflows including "capex"

Cipher Research has developed a new, simple, and powerful tool to analyze profitability, the Adequacy Ratio (AR). It is cash inflows (revenues) divided by cash outflows (OP-EX + IMP + debt repayment + dividends paid). Note it does not include equity raises or cash spent on acquisitions. If the ratio is greater than 1.0 a company is healthy; if less than 1.0, unhealthy. Of the seven companies we looked at over 11 years, none had an average ratio greater than 1.0 over the period. Only for one year, in 2011 when gold hit its all-time high, did the average adequacy ratio for the companies as a whole exceed 1.0. To compare for example, Apple has a 1.3 adequacy ratio over the past 5 years.This industry-wide failure means the major gold miners have not generated enough cash flow to meet their obligations despite the amazing 11-year run for gold. We found that companies have been going into debt to pay dividends. For example, Newmont took on an additional $5.8 billion in debt and paid out $5.2 billion in dividends over the period. We know of small-tier junior miners that have paid out dividends with equity raises… that’s unholy and in my opinion, should be illegal.

Open Pit Gold Mining Costs / Tonne

Lat-Am per Tonne ranges from Condor Gold PFS

Debt and (not much) deleveraging - McKinsey

McKinsey review of $200 Trillion Global debt 136pp Feb-15

Euro QE and Debt Restructuring

OMFIF on risks of European QE

.......It feels as if the markets are programmed to crash when the ECB's QE programme nears its end, if not before.

Pettis on Debt restructuring

As soon as Draghi made the statement to do “whatever it takes”, markets recognized that the ECB was in effect guaranteeing the bonds of EU member states whose credibility was in question, and yields immediately dropped. It is important to understand why this was effectively a kind of debt restructuring. .......Draghi’s promised immediately reduced a larger part of the uncertainty associated with the resolution of the debt. The collapse in uncertainty reversed the reflexive process in which rising uncertainty caused declining economic expectations, which caused rising uncertainty.

Global Dollar Credit: links to US monetary policy and leverage - BIS

Bank for International Settlements Paper

Ambrose Evans Pritchard discusses HERE    notes below

Franco Nevada look to deploy $1bn

Reported at Bloomberg

Franco-Nevada Corp., a Canadian company that provides financing for energy and mining projects, sees sagging commodity prices as an opportunity to complete deals worth more than $1 billion this year.  

“I’d like to deploy all my cash this year,” David Harquail, chief executive officer of the Toronto-based company, said in an interview in Vancouver Monday. “That would be my ideal.” Harquail, who put more than $900 million to work in 2014, said mining and energy companies need more financing for projects hurt by falling prices. Franco-Nevada and other buyers of royalties provide financing to developers in exchange for a discount on future output.

AME BC 2015

AME BC 2015 took place at the end of January
Companies Below .....

Greg Gibson moves to Barkerville Gold - Callaghan Out

In October 2013 we noted Greg Gibson's industry moves.
Things haven't worked out well at San Gold, Northern Gold, Temex or Kerr Mines (formerly Armistice) during this bear market.
We now see Gibson and Thomas Obradovich (formerly Aurelian) recruited, ousting promoter Frank Callaghan at Barkerville Gold.
Barkerville became notorious, and their stock was suspended, for putting out an extremely optimistic resource statement in 2012.

Premier Gold JV with Centerra Gold

Breaking the usual pattern of junior buyouts here we see Premier Gold, a significant junior with multiple projects, entering a 50:50 Joint Venture where Premier's contribution is the Trans-Canada Gold property and Centerra fund $300m of development. PEA was completed Jan-14 and Feasibility is underway. PEA indicated 19% IRR @ $1250 Gold, with Capex at $410m including an $83m contingency.
With falls in the $CAD vs $US and depressed general commodity markets mine-building costs in Canada should be favourable.

The Trans-Canada property is in Ontario's Geraldton Beardmore camp which saw a great deal of speculative investment after Kodiak Gold made spectacular drillholes in 2007 and raised substantial funds but never pulled together a successful deposit. Goldstream Minerals now hold the properties they call Hardrock East, with Kodiak's Brian Maher involved.

Kodiak merged with Golden Goose to form Prodigy Gold and developed the Magino deposit bought out by Argonaut, but needing higher gold prices for development.

Meanwhile Roxmark and Ontex developed old mines, Brookbank and Bankfield amongst others in the region and merged to form Goldstone Resources subsequently bought out by Premier Gold. 

Baker Steel & EMR Capital raising over $600m for Mining Investments

EMR Capital raising $450m for mining investment fund.

EMR Chief Executive Jason Chang said the fund will focus on copper, gold, coking coal and the fertiliser potash, and had attracted a mix of institutions, endowments and private investors....."We think now is a good time to deploy capital into these markets," Chang told Reuters in an interview. "We're looking at the medium to long term and not worried about the day-to-day fluctuations."

Baker Steel (additional link HERE)   looking to increase assets 6 fold by $180m

The Baker Steel Resources Trust – which has lost nearly three quarters of investors’ money – is asking for clients to pile in millions more in an audacious call that the commodity slump will soon be over.The investment trust, managed by David Baker and Trevor Steel, has lost investors 72.3 per cent in the past three years, according to FE Analytics.Investors have been fleeing from anything related to commodities in the belief that the ‘super cycle’ sparked by China’s rapid growth had come to an end.The £31.4m trust is planning to increase its assets sixfold through a £79m share issuance and a further £100m capital raising to be outlined at an extraordinary general meeting later this month.

While he admitted it was impossible to call the exact bottom, he said with valuations as low as had been seen in many years, much of the “smart money” in the private equity space was also poised. “We are at or somewhere near the bottom,” he said. “Whether we have actually seen it or whether we will in another six or 12 months, I don’t know. But the risk-reward of the potential upside looks positive.” He thought the current conditions would not “last forever”. “The sector is on its knees and we would like more capital to take advantage of that. Mr Steel said with the new money he would be interested in adding a handful of development-oriented stocks, of which he had already identified a pipeline of potential names.

“There is very little competition in our space and it gives us an opportunity to do attractive deals,” he said. “It might be companies that need the last bit of capital to get their projects into production, or if they have a lot of debt. We can get involved in refinancing that debt – effectively exploiting that weakness – and getting in at a good entry point for our investors.” He said that while the sector could continue to fall, he wanted to raise the money now because the risk of waiting to get the deals done at a better price was too great.

Top Holdings   - currently including private company holdings include deeply out of favour iron and coal aswell as silver, gold, platinum and copper

Martin Armstrong's Writings & Presentations

Martin Armstrong's forecasts and cycles work foresees a key turn point in September 2015, "Big Bang", and currently points to a problem in the bond markets, a strong dollar and US stock market.
He currently sees gold weak but later gains as the bond markets weaken.
Most recent interview HERE (part 3 discusses the September-15 turn)

• Seeing beginnings at the periphery now in Greece, China.
• Only US strong, pushing up US$. If US stockmarket chops then initial sell off then take off to upside in 2017. Phase transition as capital flees bonds to stock markets.
• Current concentration of capital in bond markets. Sitting on money because don't know what to do.
• If Stock market increases then Fed will raise interest rates, then higher dollar.

Armstrong Papers and you-tube links below.....

Mickey Fulp on Buying the Best Junior Miners

Interview from VRIC at Small Cap Power. Stock picks are sponsors.

Gold Long Term Turning Point - Second Time Lucky ?

Chart from Jeff Clark's monthly chart showing long term turning points at MACD crosses.
We narrowly missed a crossover last year, but have now.

World Economic Forum - Davos 2015 - On Mining

Mining Papers from Davos
Also summaries of many other presentations from other industries and regions.

Big Data in Mining - SAP-Mining Journal

76pp HERE

Pinetree falls to Creditors - Sheldon Inwentash out

Symbolic of the rise and fall of the canadian juniors; today news that Sheldon Inwentash has left Pinetree having failed to maintain covenants on large debentures.
Pinetree's big peak was in the uranium bubble but rose into 2011 invested across many mining stocks.
Inwentash ensured a last hurrah in 2011 taking pay of 10% of fund growth.

Pinetree Capital, an investment fund with a portfolio worth $794 million, paid its CEO Sheldon Inwentash $34.6 million in 2010.

Market Cap today C$ 17m

Ross Beaty Interview - Vancouver 2015

• Outlook has changed quite "profoundly" since last year. 
• Bearish on most metals, very bullish on gold, more bullish as the months have gone on. Nervous on copper.
• Metals move in cyles, make money on the way in, this is the kind of time to be buying. 
• Mostly investing in gold and silver stocks. Great couple of years ahead for silver. 
• Ecuador, mining industry as catalyst for country growth as oil turns down, Beaty and Lundin view.
• Still likes renewable energy, thinks dirty coal is dead, dustbin of history. Oil little to do with renewable energy - competes with coal and gas, low gas prices an issue.
• Strong pricing has encouraged over-supply for most metals. Zinc well balanced, copper energy metal not so over-supplied.
• Successful juniors de-risked large assets good management. 
• Been buying gold and silver junior stocks. Good discoveries rare but always a winner.
• Watching and buying a number of junior mining stocks undisclosed below 10% insider holdings.

Publicly holds : Pan American Silver, Alterra, Kaminak (with Lundin) , Odin Mining, Anfield Nickel, Nord Resources?, Amerigo,  Kivalliq

John Kaiser Stock Picks from Vancouver Resource 2015

Picks noted HERE, a number of these are long standing picks.

• Gold: Midas, Temex, Highway 50, 
• Peregrine Diamond, 
• Copper: Amarc, Tsodilo, InZinc, Nickel: First Point Minerals
• Scandium International - (new materials theory, see also investments by Robert Friedland) 

Kaiser's detailed company analyses can be found HERE , with those over a month old being free to read. Clearly the latest notes are restricted to paid members but price reaction may indicate bullish or bearish to the original views you can follow.
Interview discusses changes in the oil market and the bullish case for gold, changing from the 'apocalyptic goldbug narrative' to one focussed on the improving 'real price' of gold for the miners. (As discussed on the blog here, miners operating outside the US should see substantial cost reductions)
China infrastructure build out over, focus on consumption.
India future powerhouse, hardline on regulations, take 5-7 years then a supercycle for massive expansion.

Brent Cook Interviews - VRIC-15

Don't buy crap zombie juniors. Copper may have lower supply. Gold higher by year end.
Interview at CEOca



Additional interview  discussing the usual subjects of lack of discoveries and the majors needing to buy good deposits, of which there are few, plus more discussion of selling discipline.


Smallcap-power interview from VRIC - Mentions that December-14 newsletter bought Kaminak, Premier Gold and Lakeshore Gold

Rick Rule Interview from VRIC-15

Another Resource Investing Interview from the Vancouver Show -
Best of the best on sale cheap, 20% of companies worthwhile.
The idea that there is no quality is idiotic.
Not in a capitulation market yet based on issuer behaviour.
Long term likes coal, uranium, gas - finding the best producers hanging on  until market changes.




Additional interview at Smallcap power - discusses focus on buying "the best of the best" and the market recovery as a cracking whip.

Doug Casey Gold Stock Picks - Louis James

At the Vancouver Conference - HERE
Include - Integra Gold, Continental Gold, Dalradian, Kaminak, Rubicon, Dynacor

Junior Gold Mining M&A - Goldcorp to acquire Probe Mines

Goldcorp announced the acquisition of Probe Mines in Ontario for $440m-$526m, a near 50% premium.
The straws have been in the wind since Jamie Sokalsky ex Barrick chief joined the company and the junior consolidated key land packages to control the district target and the key high grade targets. John Kaiser has been early in highlighting the high grade discovery in what was seen as a low grade play - his last note gives a detailed view of the project. Scotia's downgrade of the stock caused a scare last year but does not look to have put off Goldcorp. Probe made their first run during the Noront led Ring of fire Chromite discoveries and this will be spun off to a new company with cash.
The stock is the rare 100-bagger from the 2008 crash lows with a technical team changing project focus to Borden gold and then identifying a high grade core to a large low grade deposit.
In December 2014 David Palmer of Probe won PDAC's Bill Dennis Award for the Borden project

"This prestigious award is shared by every member of the Probe team," said David Palmer, President and CEO of Probe Mines. "From our technical team that has continued to advance and improve this deposit in the four years since its discovery, to the prospectors who brought us the property, Mike Tremblay and Jack Robert; Brian Atkinson, former OGS Regional Resident Geologist (Timmins); our Board of Directors; management and support teams; consultants and the First Nations and Chapleau communities - none of this would have been possible without them. On behalf of the entire Probe team, I would like to thank the PDAC for this incredible honour. As discoveries become scarcer, Borden exemplifies the importance of grass roots exploration and the potential that still exists within Canada to find high-quality and relevant deposits."

Junior Gold Mining M&A - Couer buy Wharf Mine from Goldcorp

Late reporting this one from 12th Jan
Couer moved to increase exposure to Gold from Silver announcing the acquisition of the Wharf gold mine in South Dakota from Goldcorp for $105m .
This follows on from their $146m acquisition of Paramount Gold & Silver in Mexico
The strategy of increasing exposure to gold by acquisition from a major follows Silver Standard's acquistion of the Marigold mine in Nevada from Barrick/Goldcorp. Of course Fresnillo has long been both silver and gold producer but recently increased the gold mix with acquisitions from Newmont, and Hecla purchased Aurizon Gold.

Vancouver Resource Investment Conference 2015

Cambridge House show in Vancouver began Jan 18th and continues Jan 19th.
Programme   Putting up Interviews

Company Lists - quite a few look dead, you'd think they would have a tidy up.
Some just need IR to get their stock tickers to work on yahoo and googlefinance.

Stock Price trackers below .......

CIBC - Whistler Conference - 21-24 Jan-15

Link for Programme and Webcasts   (webcasts after the show - links on Co. Names)

Lithium Cost Curves

From Bacanora presentation -
Low oil prices will presumably dent the enthusiasm for electric cars for some time?

Kimble - Mining Stocks Bounce

Kimble

Swiss Bank Decision Pops Gold

• AEP Telegraph
• Martin Armstrong
• Dan Norcini
• Buttonwood - Economist Blog
• Bruce Krasting
• FT Alphaville
• Swing Trading
• Yra Harris

General view that this anticipates Euro QE at which point the pressure to track the Euro would be too great.

Harris' conjecture I find especially interesting

A QE program, then, was no surprise. IN MY MIND SOMETHING ELSE IS IN THE AIR. Here’s my conjecture: At the coming ECB meeting, Mario Draghi announces the specifics of a large QE program and his resignation as he returns to Italy to serve as the Italian president. In his place, ECB Executive Board Member and Bundesbank President Jens Weidmann is named ECB president. The Germans gain control of the ECB, which is a victory for Chancellor Merkel and calms the anti-ECB forces building in Germany. The QEprogram is put in place under German vigilance, which gives it great international credibility.

The French will be unhappy but the Dutch, French and Italians have served as ECB president so why not a German, especially as it will be German money providing the ECB‘s capital backstop. The EUROrallies as the steadfastness of Weidmann is appreciated  and the Swiss will be able to sell their massive European sovereign bond portfolio to a willing ECB buyer for very nice rates and eventually ease the burden of owning far too many euros. The SNB would cut their enormous losses and be able to calm the anger of its Swiss citizens.THIS IS ONLY CONJECTURE BUT THAT IS WHAT PULLING THE PEG AND GOING TO 1% NEGATIVE RATES WAS TWO MONTHS AGO. Volatility anyone!?!?

On the Ground - Mine Latin America

Presentations dating from November 14 Conference

John Doody - Interview

John Doody's Gold Stock Analyst is a premium priced letter often promoted by Stansberry and Agora.
Here is Bonner's long interview with Doody discussing selection and portfolio management criteria, including discussion of the contribution of rebalancing to performance in this volatile sector (389% over 13 years).
(Note- Mike Swanson has also recently come to focus on rebalancing Here and particularly Here)
The free samples and public monthly front pages show the stock universe analysed by Doody.

Brent Cook Interview

Interview at The Gold Report - covering a lot of the same ground as recent broadcasts, discussion of additional companies - Lakeshore, Premier, Kaminak, Reservoir, Pilot Gold
And more on peak gold mining lagging peak discovery

Eric Coffin Interview

Interview with Jay Taylor

Goldquest, Silvercrest, Columbus Gold, Precipitate Gold. Thoughts on Oil prices.

Red Flags Mining Investors Should Heed - Graham Clow - Roscoe Postle Associates

A Northern Miner Article from Nov-14 has much to keep in mind. Based on "Potential Mining Pitfalls" Presentations to the Mineral Resource Analyst Group - MRAG
Part 1     Part 2

“There are a lot of capable people doing very good work,” he said. “And experience shows that in periods when markets are quieter, such as now, project results improve.” 

An RPA review of failed or troubled projects since 1985 identified 75 projects that failed to meet expectations, and of them: ........

John Kaiser - Canadian Juniors - Past & Future

As usual plenty of reading and charts from John Kaiser reviewing the history and potential futures for junior exploration - (Dating from AME-BC presentation Dec-14)

Cutting G&A - Ten things Miners can do to survive the Downturn

Mining Markets article from Nov-14

Rick Rule Interview - Cut G&A Fat so there are Fewer More Solvent Players

Another interview with Tekoa Da Silva with Transcript

So a focus by the investor on the upside and the downside is what will allow the industry to thrive. As an example, in the TSXV, there are probably 400 or 500 surplus companies in Canada. As my friend Otto Rock says, please don’t feed the animals. Don’t give these guys any more money. Make them go to company heaven. Thank and excuse.

Think about it—500 companies at maybe $700,000 a year in general and administrative expenses including listing fees and auditing fees. That’s an enormous amount of money and every dime of it’s wasted. We need to cut this out of the industry so that there are fewer, better, more solvent players.

Happy New Year 2015 - with some Uptown Funk

Gold Juniors that Gained Traction in 2014

Northern Miner article discuss
Detour Gold, Guyana Gold, Lakeshore Gold, Rio Alto, Probe Mines

Brent Cook Interview on BNN

HT IKN         Part 1      Part 2   notes below....