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Showing posts with label GBG. Show all posts
Showing posts with label GBG. Show all posts
Friday, February 10, 2012
Monday, April 11, 2011
Top Safe Picks @ Bargain Prices - GBG, GGCRF/SLX
Goombarh 50 - April 11th, 2011
Good morning,
All is well with Great Basin Gold (GBG), though the market does not appreciate this emerging mid-tier producer. News this morning:
More exploration finds at Hollister with high grade extensions off their existing gold veins and surface exploration startup. This I believe will be the key to unlock the future potential of GBG. It is possible to find another deposit similar to Hollister at their claims! At Burnstone the ramp up is on-going, and they are finding more Gold in the Kimberly layered sediments that is the reef. The thickness is greater than expected and the grades are higher than expected. However, as the mine is in South Africa, the market will just ignore this, and will wait for the expected Gold output information before re-rating the share price, this fall. Great Basin is just a great bargain at this price level!
As stated in the Silver article sent out yesterday, I believe Silvermex (GGCRF, TSX: SLX)is a great bargain at this price level also!
Those are two, underestimated strong precious metal stocks, while Gold and Silver prices are pursuing higher prices. One can do no better that these two for a relatively safe, yet prospective stock. I would not be concerned about the ups and downs, as multiples are in store for these two.
Further thoughts for readers, I do understand that there is a varied background out there. On the one hand, I advocate paying attention daily, as I try to do, yet on the other, I say the buy and hold is dead. Many readers would not have the time available to perform daily monitoring of your positions, nor would you wish to, as there are other things to do in life. Do not try to emulate, the jumping in and out of stock positions, as I seem to be doing recently. For a longer term hold, meaning over 1 year, the above two stocks cannot be beat in my opinion. Their strong management coupled with their prospective mining properties are an ideal mix for the rising environment for equities, precious metals rising and demand growth stemming from the emerging markets middle classes.
Enough said, and now I am looking for more risky and volatile situations for myself and other traders. As disclosed previously, I have positions in:
· Pacific Wildcat Resources (PWCRF, TSX: PAW) - Rare Earths in Kenya Africa.
· Ethiopian Postash (TSX:FED) - KCL in Danakil basin in Ethiopia.
· Compliance Energy (CPYCF, TSX:CED) - Coal in BC Canada.
· Shore Gold (SGHDF, TSX:SGF) - diamonds in Saskatchewan, Canada.
· Anvel Gold (ANVZF, TSX:AVK) - gold miner in Mali, Africa
Until next time,
Marco G.
http://goombarhsedge.blogspot.com/
Tuesday, January 4, 2011
Sample Notes and Flash for Readers on Email List
As we enter the year 2011, the markets are just as inscrutable as previously. The possibility of a global economic recovery is promising, yet there are still many reasons to be wary. Where should one dip their toe into the investment markets?
I am a firm believer in the rise of emerging markets and a firm recovery in North America. I believe the safest and most reliable gains will be in the basic materials sector. For myself, I am positioned in smaller miners and precious metals explorers and special mining situations.
For readers, interested in a sporadic notes email, just pop me your email address and I will put you on my distribution list for my market thoughts and occasional flashes.
Marco Goombarh
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Goombarh 20, Jan 4th, 2011
I am a firm believer in the rise of emerging markets and a firm recovery in North America. I believe the safest and most reliable gains will be in the basic materials sector. For myself, I am positioned in smaller miners and precious metals explorers and special mining situations.
For readers, interested in a sporadic notes email, just pop me your email address and I will put you on my distribution list for my market thoughts and occasional flashes.
Marco Goombarh
================================================
Goombarh 20, Jan 4th, 2011
Good Morning,
Just sitting and examining the news, looking for a bit of inspiration here, while Gold/Silver is showing volatility and dropping about 2%. Just wondering about the AGQ, double bull Silver ETF down 4%.
Floods in Queensland is affecting world coal production. About 50% of the world's coking coal comes from there and may be affected for a few months, due to the widespread flooding covering an area the size of France and Germany. See Bloomberg news here:
Interestingly, the US coal miners have just been on a tear in the last week. CLF, MEE, PCX, CLD. Similar for the US listed China Coal miners, SCOK, LLEN, PUDA.
An interesting posting about mining at Seeking Alpha:
Noticed Alco is up 4% while rest of miners are sagging. Support for the idea of Aluminum in a new upswing.
Copper has hit new highs and is driving copper miners. Norsemont and Mercator Minerals are both up.
Rare earths are certainly in a frenzy, with AVL and REE up large, but I am afraid, that I have no insights or comments about those, except that I am not a participant and I don't plan to be.
Almaden (AAU, TSX:AMM) is up with anticipation of the epithermal gold drilling results to be released in one large batch. My previous thoughts on that:
As stated previously, I am expecting good news from Great Basin Gold (GBG) and am nibbling to increase my position prior to the results expected at the beginning of February.
Longer term, I am expecting to pull some monies out from Gold companies as they rise and re-deploy to the smaller base metals miners. I see rises for aluminum, Zinc, Nickel and other metals that will be needed in recovery, but have not yet participated in gains.
Overall, I am doing nothing, but just sitting, watching and digesting the news, as I am keeping steady with the previous positioning and awaiting an inspiration for any new trading ideas.
Marco G.
http://goombarhsedge.blogspot.com/
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Goombarh Flash 11, Dec 24th, 2010
Good Morning,
Just had a chance to go over the Great Basin Gold (GBG) transcript of their conference call on November 16th. Wow, they are talking of 5000 tons of Gold ore that averages 15 ounces per ton, on page 15:
"WE CURRENTLY -- IF YOU JUST TAKE THAT YOU'RE LOOKING AT ABOUT 4,500 OR 5,000 TONS, AND WHAT WE'VE SEEN IS THAT IN
THE HIGH-GRADE AREA WITH A VEIN PHYSICALLY IS, WE CAN MINE CURRENTLY OUT OF THAT 80 IS COMING UP WITH ABOUT 15
OUNCES PER TON --. 15 -- YES, ONE, FIVE."
Link to transcript:
Link to quarter presentation:
Also on page 4, Ferdi's talking about being cash flow positive in this quarter ending December 31st:
With the increased production from Hollister and first production ounces from Burnstone, we expect to be cash flow positive from operations in quarter four 2010.
What with the possibility of some of the super bonanza high grade Hollister ore hitting the books and also turning cash flow positive, GBG should have some great news in mid -February, 2011.
Smart people should begin to position themselves appropriately.
Marco G.
Sunday, December 19, 2010
The Year of the Golden Bunny!
The Year of the Golden Bunny!
December 19th, 2010
By: Marco G.
The upcoming year 2011, in the Asian Zodiac, is the year of the "Metal Rabbit", or if you will, the year of the "Golden Bunny", in following the tradition, there is a 60 year Golden Cycle for these zodiac animals. This new Asian lunar year is poised to begin on February 3, 2011. We are looking forward to the "metals" aspect of the Rabbit year to help us obtain a bit of an edge in the equities markets for this upcoming Golden Bunny year.
Fall of the Tiger Year
Looking backwards at the soon passing year of the Tiger, the author is thankful for the numerous messages from the many stoic supporters; never mind the exasperating events and the volatility of the irrational and maddening markets. This year was a much memorable one in that we have seen many and varied changes in the evolving landscapes and horizons of the equities markets. It was breath taking and challenging to be able to wade in and participate in and possibly profit a little in the markets' remarkable bull rise off the summer malaise.
The general North American equities markets have enjoyed an amazing fall run, with a gain of about 17% for the S&P 500 since the FOMC announcement of August 27th, 2010 for equities market support. This run was given a further jolt by the FOMC's injection of treasury support on November 3, 2010. As the year ends, more and more economic and market indicators are turning positive while the myriad voices of the bear detractors are still calling for caution and uncertainty.
In examining the performance this fall, the author has created a comparison chart following for the market items of interest: (click to enlarge)
Figure 1: Fall 2010 Action in the Markets. The S&P 500 (^GSPC) has gained about 17%.
The base trace is that of the S&P 500's 17% move, illustrated above in red and green candlesticks. The precious metals have moved forward with Gold (using GLD as proxy in green trace) moving upwards about 11% in the same time span. The major Gold equities in the HUI index (red trace) of the 14 largest Gold companies has moved higher about 15%. Note that beginning in December, the HUI has broken upwards leveraging the Gold price; we shall refer to this later in this posting. The 30 large cap Gold equities in the GDX ETF (brown trace) has moved up about 13%. The Gold price and major Gold equities have been moving higher together with the general equities, albeit underperforming the action of the S&P 500. This is a bit unusual for Gold to be that closely correlated to the general equities markets, but then this is a year of change. Also, the author was a bit surprised to see the S&P 500 outperform Gold and the Gold equities by up to 4%. Again, this is against my preconceptions, of the precious metals being in a bull run rally mode and yet being outdone by the S&P 500 index.
Now looking at the upper traces on the chart, the GDXJ consisting of 60 varied Gold Junior equities (light green) shows an impressive 35% gain this fall. The Gold Junior mining equities have roughly doubled the rise of the S&P 500 and have more than doubled the large Gold equities and the Gold price, which is as it should be in a precious metal bull run rally. The Gold Junior equities should be generally the leaders in this rally.
The top two traces on the chart are quite intriguing with the Silver (SLV Silver ETF as proxy in yellow trace) price surging forwards over 50% this fall. Again, this is generally accepted wisdom, for the Silver price to lead in a precious metal bull market. The ultimate trace on top is the SIL ETF of the 30 Silver companies, which sports a spectacular 59% gain for the fall. So, this is a prime example of the Silver equities leveraging the gains in the rise of the Silver metal. For Silver going forward, Mr. Anathan Thangavel paints a very cohesive story as to why the demand of Silver is increasing.
Readers who have been following the authors writings and others that have spotted the rising precious metal trend and who have entered the markets, should now be sitting on some gains for this fall season. Correction, anyone at all, who has been in the equities markets this fall, should all be sitting on some pretty gains this fall. Such is the power of the rising confidence tide in these equities markets; the rising tide should have lifted all equities (boats), to give one a nice year end feeling of success.
Golden Bunny Outlook
The question then is what is the outlook now for next year, the year of the Golden Bunny?
The author found a marvellous quotation as to what is happening in the world equities markets given by an astute Seeking Alpha commentator, "Venerability" who states:
Commodities are a positive GROWTH trade. The Commodities Bull Market is secular. And it is extremely long-term.
We are still in the very early stages of nothing less than the World's Second Industrial Revolution.
It is even bigger than the World's First Industrial Revolution, which brought the US, Europe, Japan, and a few other lucky countries and their populations into the modern world.
We are still in the very early stages of nothing less than the World's Second Industrial Revolution.
It is even bigger than the World's First Industrial Revolution, which brought the US, Europe, Japan, and a few other lucky countries and their populations into the modern world.
Yes, the author also believes, we are seeing the rise of the emerging markets, not just of China, India and BRIC, but also of Columbia, Bolivia, Mauritius, Oman, Latvia, Morocco and many other countries that you may not have heard from for years. The whole world is in throes of change, driven by advances in information technology; everyone everywhere is seeking peace, health and the right to a modern fruitful life. We in the modern world, truly have a lot to be thankful for.
These small steps taken towards the modern technological world, requires acquisition and consumption of a varied basket of metals and commodities. The author has taken the 2010 fall performance of commodities (using the Jefferies TR/J CRB Global Commodity ETF as a proxy - CRBQ) and compared it to the S&P 500 and Gold in the chart following: (click to enlarge)
As stated previously, and shown in the chart above, all the traces shown, everything has been uplifted by the rising confidence tide. Again the red and green candlesticks are the motions of the S&P 500. The red trace is the CRBQ commodities ETF and one can see that it has risen together with the S&P 500. Then in November and again in December, the CRBQ starts trying to outpace the S&P 500. The CRBQ has gained about 18% for this fall.
Figure 2: Comparison of Commodities to the S&P 500. Note the surprising action of the Copper price.
The yellow trace is for OIL, (iPath S&P GSCI Crude Oil TR Index ETN as proxy for oil price) is shown above as following along with the rising S&P 500 index. OIL has gained about 14% for this fall. Note that OIL, is more volatile, and the relative performance is vastly affected by the choice of the starting date for the comparison.
The green trace the is for the JJC Copper, (iPath DJ-UBS Copper TR Sub-Idx ETN as proxy for copper price) which is the leader in gains for the fall with an exceptional 23% rise. Does it surprise you that copper has gained more than twice as much as the Gold price this Fall?
As first postulated by the author, earlier on August 27th, 2010, Copper with its industrial dependencies will be leading the markets forward this fall. Then later on November 15th, 2010, the author again establishes a bullish case for mining, commodities and the general markets. Finally, on December 12, 2010, the author forecasts a copper shortage forthcoming in 2011. The industrial and investment demands are driving the copper price, while the production shortfall is resulting in a squeeze higher. Therefore, lead by "Doctor Copper", the author's new year outlook is bullish for the general markets, for the commodities and for the continuation of the precious metals bull.
Positioning for the Golden Bunny
For the general markets going forward, I will make no recommendations as this is not the author's specialty, and besides, there is a plethora of information and opinions available on Seeking Alpha.
For the precious and base metals going forward, this is the author's specialty and following are some possible prospects for positioning. I stay away from the large cap major Gold miners such as Barrick (ABX), Goldcorp (GG) and Newmont (NEM) but am invested instead in Junior mining equities. Even though, from the first chart previously, the HUI large cap Gold index which the above 3 top Gold miners are part of, has broken upwards in December and is now showing some leverage to the Gold price. This leverage breakout by the HUI is indicating the movement of large investors and institutions into the large cap Gold miners and bodes well for the continued advancement of the precious metals bull in the imminent Golden Bunny year.
In the following specific mining equities that I have a position in, I qualify them with two main criteria. Firstly and most important is the quality and competence of the company management. The management need to be focused upon creating value for the shareholders. Secondly, the companies' specific stories of the value creation need to be very compelling and capable of driving and sustaining the share price even if the markets are uncertain and may pull back a little.
So to start off, in the precious metals space, my favorite Gold mining Junior is:
Great Basin Gold (GBG, TSX:GBG) - here is an exclusive interview with their CEO Mr. Ferdi Dippenaar. Great Basin is a Gold miner that will leap from mine developer to mid-tier gold producer status by 2012, in producing close to 350k ounces of Gold per year. Their Hollister Nevada mine is the highest grade production Gold mine in the world, with expected production of about 110k ounces of Gold equivalents per year. They have just recently uncovered super bonanza grades above one of their existing ore veins at Hollister. In addition, Great Basin's Burnstone, South African mine is starting ramping up to full production of 250k ounces of Gold per year. This quarter or next, Great Basin will turn the corner to profitability and the markets will re-rate the stock price. I believe out of all my stock selections, Great Basin Gold will give the most payback for the lowest risk.
In the Silver space, my favorite Silver mining Juniors are:
Silvermex (GGCRF, TSX:SLX) - here is an exclusive interview with the former Genco CEO, Mr. James Anderson, The new Silvermex is formed from the merger of the old Silvermex and Genco Resources. The new management includes former and present executives of Hecla Mining (HL) and Silver Standard Resources (SSRI). Silvermex has over 250 million ounces of Silver resources and they anticipate increasing their Guitarra Mexican high grade Silver/Gold mine output by multiples. I believe that this Silvermex stock has the highest growth possibilities of any Silver Stock in the market.
Canadian Zinc (CZICF, TSX:CZN) - here is an exclusive interview with their COO, Mr. Alan Taylor. Canadian Zinc owns the previous Hunt Brothers Prairie Creek Silver, Zinc, Lead mine in northern Canada. The mining infrastructure is 90% complete and Canadian Zinc is awaiting environmental approval for water usage which is due in 1st or 2nd quarter of 2011. I believe that with the environmental approval, Canadian Zinc will be re-rated to a multiple of its existing share price.
US Silver (USSIF, TSX:USA) - is described here in a previous article. US Silver operates the joint Galena, Coeur and Caladay mining areas in the Silver Valley of Idaho. They are rehabilitating the Coeur mine shaft for increasing their Silver production. I believe that US Silver is a much underrated production Silver miner and they will be acquired by Hecla Mining (HL) or Coeur d'Alene (CDE), who are situated nearby.
In the precious metals exploration space I am interested in the following:
Victoria Gold (VITFF, TSX:VIT) - which has shed 30%+ on the back of an error in resource definition for their Cove project. Victoria Gold is busy drilling proving up both their Cove deposit in Nevada and their Dublin's Gulch multi-million ounces Gold deposit in the Yukon. I believe that they will be acquired by Kinross (KGC) or Newmont (NEM) in the Golden Bunny year.
Tarsis Resources (TARSF, TSX:TCC) - is drilling their Erika epithermal Gold/Silver deposit in Mexico. They are also active in many projects in the Yukon. I believe that they will strike Gold in their drilling of the Erika project as the property is part of the Mezcala Gold skarn district, and it abuts the Torex Gold (TORXF, TSX:TXG) El Limon Gold deposit, and further in that their geological expertise is shared with Almaden Resources(AAU, TSX:AMM), which has already struck Gold.
Almaden Resources (AAU, TSX:AMM) - which are drill looking for the deeper high grade core to their Ixtaca epithermal Gold/Silver discovery in Mexico. Almaden has over a score of properties joint ventured out and under exploration. Of course, I believe that they will hit the high grade Gold/Silver motherlode in their present drilling.
Torex Gold (TORXF, TSX:TXG) - which is expanding their reserves and resources (4 million oz.) at their El Limon Gold deposit in Mexico. They currently have 9 drills on site and expect to have 11 drills working in 2011. I believe that Torex will be acquired by Goldcorp (GG) which operates Mexico's largest Gold mine, the Nukay/Los Filos in the adjacent property
Atac Resources (ATADF, TSX:ATC) - own the huge RAU project in the Yukon where they have discovered a large Nadaleen Trend which they compare to the Carlin Trend in Nevada. Early prospecting and drilling has uncovered Gold in multiple locations along the Nadaleen Trend. Atac expect to have 8 drills in operation in 2011. I believe in the Atac Resources assessment of their Carlin Trend geologic cousin, as they are backed by the geological expertise of Archer, Cathro & Associates, renown Yukon geologists with many discoveries to their credit.
Caerus Resources (CAEUF, TSX:CA) - is negotiating for the Antioquia Gold project in Columbia which is adjacent to the Aragua Mine owned by Continental Gold (CGOOF, TSX:CNL). I believe that Caerus will be successful in acquiring these prospective artisanal mining claims.
In the base metals mining space I am interested in the following:
Norsemont Mining (NOMFF, TSX:NOM) - is proving up their Constancia copper/Gold project in Peru. They are presently drilling to increase the 43-101 resources in a new report due 1st quarter of 2011. A 2009 feasibility study indicates a NPV (8%) of $931million, and an IRR of 27%. I believe that Norsemont is an ideal copper/Gold takeover candidate.
Belvedere Mining (BLVDF, TSX:BEL) - is a Nickel, Gold, Cobalt miner operating the Hitura nickel mine in Finland. They have an advanced Gold property in Kopsa, which is 15 km away. Belvedere's plan is to develop the Gold property and run the ore through the Hitura mill. I believe that the management of Belvedere will be able to create value with Gold mining, as they have been meeting all targets promised ahead of schedule.
Adex Mining (ADXDF, TSX:ADE) - is re-opening the Mount Pleasant tin, indium, tungsten and molybdenum mine in New Brunswick Canada. Adex is partnered with a Chinese company, Great Harvest of Hong Kong. Adex owns the world's largest and richest Indium resource and North America's largest tin deposit. They also own significant resources in tungsten and molybdenum. I believe that the re-start of the Mount Pleasant mine will generate considerable value in the scarce metals that they mine.
Zaruma Resources (TSX: ZMR.h) - is owner of the Luz del Cobre copper project with the adjacent San Antonio Gold project in Mexico. They are focused on the re-start of the Luz del Cobre heap leach mine in 2011 with the financial support of Gravity Ltd. I believe that the timing is right for Zaruma to bring this mine on-stream in 2011, the year of the Golden Bunny.
Finally, for an oil exploration story that I am interested in:
Westernzagros Resources (WZGRF, TSX:WZR) - is drilling in the Kurdistan region of Iraq with partners Talisman and the Kurdistan Regional Government. Their exploration block of 2000 square kilometers is prospective for a super-giant type billion barrel oil field, similar to the Kirkuk field, which is 150 km distant. Their present Kudamir 1 well has proven gas, natural gas liquids and prospective oil resources on the flanks of the anti-cline. They will be re-entering their Sarqala 1 well which has previously encountered oil. Westernzagros is also proposing to drill a shallower Mil Qasim well. Here is the link to their latest corporate presentation. I believe that further drilling in 2011 will prove the immense quantities of prospective oil on their claim block.
As a side note, the author posts his more developed writings here, but has more scattered ramblings and musing notes available for interested parties, that are sent out in an email distribution list. To be added to the distribution, please just send me your email address.
Summation
So in examining the progress this fall and the prognosis for the future, we have interpreted the market indicators that are continuing to point towards a bullish outlook for the general markets. The emerging world is ramping up their demands for commodities and this will serve to drive the equities markets. On top of this, we are in the middle stages of a multi-year precious metals bull market. We as investors are truly blessed and have a lot to be thankful for. I am eagerly anticipating the arrival of the sixty year cycle of the Golden Bunny!
Disclosure: The author is long junior resource equities and may have positions in all the equities mentioned.
Important Disclaimer
The information and opinions contained within this document reflect the personal views of the author and should be viewed as food for thought and amusement only. The author may from time to time have a position in any of the securities mentioned. There are no guarantees of the accuracy, reliability or completeness of the information contained herein. Independent due diligence and discussions with one’s own investment and business advisor is strongly recommended. These writings are not to be construed as an offer or solicitation with respect to the purchase or sale of any security or as an endorsement of any product or service. We do not request or receive compensation in any form in order to feature companies in this publication. It is prohibited to copy or redistribute this document to any type of third party without the express
Monday, December 6, 2010
November - Gold Gains 6% While Silver Soars 20%
November - Gold Gains 6% While Silver Soars 20%
December 4, 2010
By: Marco G.
November, 2010 was a time of ups and downs and to make sense of it all the author did some calculations and took a look at some charts. Following are the charts with some commentary. I took the date of Wednesday November 3rd, 2010 as the baseline since that was the day the FOMC made their announcement of further treasury support.
Since we are in a precious metal bull, I look at Gold first. Using the GLD ETF as a proxy, we see that Gold has gained 6% for the month. This gain was accomplished in one week and the rest of the month was spent in a fake dip downwards into a rounding bowl shape. This prompted many forecasters to call a peak in precious metals and for investors to brace for a heavy fall downwards. It was only in the last week, that Gold moved up to almost complete the bowl shaped recovery. It is not apparent here, but in other leading indicators such as a few Silver miners, they are showing new strength in new highs.
Next we look at the GDX ETF of about 30 major Gold miners. The GDX has gained 12% for the month, leveraging the precious metal by 100% or a factor of 2 times. The shape of the GDX curve generally follows the price of Gold, shown by the red trace on the chart.
Looking at the Juniors version of the Gold ETF, the GDXJ we find a 18% gain over this period. The Junior miners ETF includes about 60 smaller companies that work in the Gold mining area (some companies such as GBG appear in both ETFs). The GDXJ gain is three times the gain of Gold’s 6%.
Goldcorp (GG) was one of my favourite Gold miners being a solid low cost miner based in politically stable jurisdictions. They gained 7% versus the 6% of Gold itself. Of late, Goldcorp has been losing my respect due to their non-response to my telephone calls to their investor relations and non-reply to my emails to their board of directors. The author had penned an article critical about their purchase of Andean Resources, and I wanted to give Gold Corp a chance to rebut my criticism. The market shares my ennui and does not give Gold Corp any leverage to the price of Gold itself.
Next looking at Barrick Gold (ABX) we see that they have gained 12% in the past month versus the 6% of the precious metal. Barrick is leveraging the gains of Gold by another 6%.
To round up the big three of the large Gold miners, we look at Newmont’s (NEM) 7% gain for the month. Again, Newmont is not sporting too much leverage over Gold’s 6% gain.
One of the reasons, the large Gold miners are not providing much leverage may be the popularity of the gold ETFs that are proliferating as explored in this previous article. There may be other reasons such as the escalating costs of mining and difficulties at replacing mined out reserves.
Next up is the author’s favourite Gold Junior miner, Great Basin Gold (GBG). It has only moved 4%, underperforming the Gold price’s move of 6%. Great Basin is suffering the market uncertainty to its announcement of being under watch by MHSA, the federal Mine Safety and Health Administration. However, interested investors should be aware, that Great Basin has found some bonanza grade areas in their Hollister mine as detailed in a previous article here.
We also take a look at New Gold (NGD) which has been solidly outperforming at a 31% gain for the month. This was due to their excellent third quarter results announced November 4, 2010.
Finally for the Gold companies, we look at Eldorado Gold’s (EGO) chart and find a 5% gain. Eldorado is still digesting its merger with Sino Gold of last year (share dilution). Eldorado was a competitor of Gold Corp’s in bidding for Andean Resources.
I look at Silver using the SLV ETF (SLV) as a proxy. Silver gained 20% for the past month, again hitting the $29+ peak hit earlier in the month on November 9th, 2010. This is compared to Gold’s 6% gain. Looking back to a previous article comparing Silver and Gold we find the previous 50% leverage to Gold has now become 333% leverage in November. Note that the GLD trace is shown in red on the chart above. This rapid rise in Silver may be due to the increasing media attention to Silver as a precious metal moving higher.
The SIL ETF (SIL) of Silver miners is showing a nice 26% gain for the month. That is 6% more than the gains for the Silver metal. Note that the Silver miners are reaching new highs, leading the way for the precious metals.
My “Crème de la Crème” of Silver companies, Silver Wheaton (SLW) is sporting a spectacular rise of 35% for November. Note that SLW is breaking away from the high reached earlier in the month.
Silver Standard Resources (SSRI) shows a gain of 18% for the month, underperforming the rise of Silver itself. This may be due to the divestiture of 50% their Snowfield and Brucejack properties to their former CEO’s company “Pretium Resources.”
Hecla Mining (HL) shows an outstanding move of 54% for the month. Hecla announced an outstanding quarter on October 26th, 2010.
Next we look at one of my small Silver juniors, Canadian Zinc (CZICF, TSX:CZN). They actually turned in a loss of 2% for the month. This is due to their drilling being shuttered for the season, in the arctic weather.
Next up is the new Silvermex (GGCRF, TSX:SLX) formed from the merger of Genco Resources and the old Silvermex. GGCRF is showing a gain of 44% for the month, mainly on optimism post merger. Note that Silvermex has recently conducted a $15 million private placement and is awaiting approval from the TSX exchange.
Last of our charts is US Silver Corp. (USSIF, TSX:USA), which is sporting a 29% gain for the month. Towards the last half of November, the USSIF stock is showing some hesitation.
Summation of the Charts
Companies | Symbol | Nov 3 2010 | Dec 3 2010 | $ Diff. | % Diff. |
Silver | |||||
iShares Silver Trust ETF | SLV | $ 23.85 | $ 28.62 | $ 4.77 | 20% |
Global X Silver Miners | SIL | $ 20.70 | $ 26.08 | $ 5.38 | 26% |
Silver Wheaton | SLW | $ 29.10 | $ 39.31 | $ 10.21 | 35% |
Silver Standard Resources | SSRI | $ 23.75 | $ 28.02 | $ 4.27 | 18% |
Hecla Mining | HL | $ 6.80 | $ 10.49 | $ 3.69 | 54% |
Canadian Zinc | CZICF | $ 0.65 | $ 0.64 | -$ 0.01 | -2% |
Silvermex | GGCRF | $ 0.54 | $ 0.78 | $ 0.24 | 44% |
US Silver | USSIF | $ 0.52 | $ 0.67 | $ 0.15 | 29% |
Gold | |||||
SPDR Gold Trust | GLD | $ 130.75 | $ 138.05 | $ 7.30 | 6% |
Market Vectors Gold Miners | GDX | $ 56.80 | $ 63.73 | $ 6.93 | 12% |
Market Vectors Junior Gold Miners | GDXJ | $ 36.40 | $ 42.98 | $ 6.58 | 18% |
Goldcorp | GG | $ 44.10 | $ 47.09 | $ 2.99 | 7% |
Barrick Gold Corp | ABX | $ 48.20 | $ 54.02 | $ 5.82 | 12% |
Newmont Mining | NEM | $ 58.40 | $ 62.37 | $ 3.97 | 7% |
Great Basin Gold | GBG | $ 2.80 | $ 2.90 | $ 0.10 | 4% |
New Gold | NGD | $ 7.75 | $ 10.16 | $ 2.41 | 31% |
Eldorado Gold Corp | EGO | $ 17.80 | $ 18.74 | $ 0.94 | 5% |
After this exercise of understanding the movements this month for the various stocks, the author is reassured. Silver is definitely rising rapidly, and outpacing the rise of the Gold price. Junior Gold miners are leveraging the gains in the Gold price. Large Gold miners are barely able to keep up with the price of Gold. For large Silver miners, they are moving quickly with their individual stories and some of their moves upwards have been spectacular. The junior Silver miners are continuing their leverage of the Silver price, all dependent upon their individual stories. Silver miners appear to be giving the best gains to astute investors.
Disclosure: The author is long junior precious metals miners.
Important Disclaimer
The information and opinions contained within this document reflect the personal views of the author and should be viewed as food for thought and amusement only. The author may from time to time have a position in any of the securities mentioned. There are no guarantees of the accuracy, reliability or completeness of the information contained herein. Independent due diligence and discussions with one’s own investment and business advisor is strongly recommended. These writings are not to be construed as an offer or solicitation with respect to the purchase or sale of any security or as an endorsement of any product or service. We do not request or receive compensation in any form in order to feature companies in this publication. It is prohibited to copy or redistribute this document to any type of third party without the express permission of the author. This document may be quoted, in context, provided proper credit is given.
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