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A forum of Gold and Silver Equities
Today ,it seems we have many experts calling for a return interest in gold and silver equities.Although gold and silver have come down some, from recent highs ,analysts believe that the spot price of both have a great future in 2012 .The equities are another story. They have been smashed on the rocks with some decent junior or intermediate producers making marginal comebacks ,but all told developers and explorers have been devastated. Here lies the the risk in stock investment when your only concern is Asset Value.I appreciate all the comments from the pro's but I wanted to reach out into the Pinnacle Community of amateur investors and try to make some sense out of an enormous list of gold and silver candidates that could make a lot of people here a lot wealthier in the next year,if what some pro's say comes through for us ,which is,BUY GOLD and SILVER equities,soon. I asked Frank Tabbert and he gave me a short list of Golden Goliath ,Golden Predator and Kootenay Gold. All undervalued in his opinion. If some others here at Pinnacle could put in their own companies with explanations why their pics could make us richer,I'd like to hear .Feel free to comment on bad companies as investing is just as much about insight into what not to invest in. I'm looking to draw attention to exploration companies ,developers and smaller producers,all in Gold and Silver Equities.
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Re: A forum of Gold and Silver Equities
southpen When it comes to silver miners, at least PURE silver miners there are not that many choices. My favourite at the moment is MAG Silver, I consider it a prime takeover target. In the early stage that is more speculative I have a small stake in TINKA which has been moving up nicely with a resource of over 20M oz. Was also holding ORKO when it got a takeover offer so in spite of the terrible market for juniors in the past 18 months I still have some stocks that are making me money.
thinker70
Re: A forum of Gold and Silver Equities
Good idea thinker..... low ball never hurts. I believe any of these silver miners could be a good investment because they are so low. I mean that's the idea, but I just don't like what deals HL has been involved in over the last year. All bad for their shareholders in my opinion. I don't care about the share price ,I'm looking at the value of what they own . US Silver is the best value of an active silver miner in N.A. , but I'm extremely skeptical about their management . Hecla has great properties but because of their share structure has less upside in my opinion. RVM and MGN are question marks because of the development concerns IE; costs ,permits and Aurcana is so overvalued at this point (compared to peers) ,I'm not understanding why it's not selling under 50 cents.
Re: A forum of Gold and Silver Equities
You may be right on Hecla southpen but the way I tend to "wait" on speculative stocks is to put in a "stink bid" well below market, and sometimes I do get filled at ridiculously low prices depending on market conditions. Sometimes not all factors you would prefer come together perfectly so there is always an element of risk involved in any investment you are considering.
thinker70
Re: A forum of Gold and Silver Equities
Thinker, I would wait on Hecla until knowing the new share structure. I like US Silver &Gold assets better than Revett's ,but prefer the RVM management. Whatever the case, all these silver miners are undervalued more than their counterparts in other places throughout the world. Idaho/Montana have seismic problems but they've been dealing with these problems for decades and MSHA regulates them fairly well. Troy and Lucky Friday have had problems ,not Galena. These regulatory inspections are worth becoming familiar with,imo. The greatest liability to a good mine,therefore share price of any of these companies is the uneducated investor. Investors seem more willing to throw silver investment moneys into Mexico and South America ,something I am at a loss for.
I think Hecla's mistakes in acquisitions will come to haunt shareholders but at 4/share ,it's likely worth a short term gamble.
Re: A forum of Gold and Silver Equities
Frank & Aaron: I should perhaps have qualified my previous statement; I am not averse to investing in explorers if they are relatively new and experienced teams with a fresh resource showing promise and have a decent amount of money in the kitty with a low share count, as somebody said, each situation has to be judged on its own merits.
What I am leery of is long standing explorers that have nearly depleted their funds without coming up with much to show for it and are raising only a few hundred thousand at prices under .10 just to stay alive and cover company expenses that will cover for a year or so of basics.
To southpen, if the market punishes Hecla for its offer on Aurizon I may just pick up some shares if they become cheap enough. I still hold some free trading shares of Revett and expect to hold on to them until the market turns and then re-evaluate the situation.
thinker70
Re: A forum of Gold and Silver Equities
Idaho and Montana G&S miners hurting bad. 3 long time favorites of mine for safe jurisdiction and a good work force are on tough times. The idea that producers/developers of mainly silver (still at a good price) should be this low is really sad.
1. US Silver &Gold , Since the merger with RX Gold this company has been decimated. Today it sits @ 1.35 ,pathetic. It will produce upwards of 3 million oz's of silver and 18,000 oz's of gold in 2013 ,has a newly discovered resource of between 150-200 milion oz's of silver,a 70 million fully diluted share structure and is actually operating profitably with cash costs going down. 28-29 /oz spot price of silver is not bad
2. Revett Minerals, has a temporarily closed Troy mine and a huge undeveloped resource at another mine called Rock Creek. Revett's share structure is below 40 million FD and if it can get Troy up and running again,it's good for as much as 2 million oz's /year,not to mention an excellent copper by product. RVM is selling at 2.06 after recently being as low as 1.60. Shocking!
3. Hecla Mining , Hecla is reworking their Lucky Friday mine which will add to their impressive Greens Creek output of about 6- 7 million/oz's per year. HL is use to being a silver producer north of 10 million,so Lucky Friday really needs to get back in the game. They made a blatantly stupid offer for US Silver in 2012 which easily could have made them hit the mark with Lucky Fridays down time but ,imo,they just flat out blew it. They have since paid in an offer for Aurizon Gold 4.75 /share. Too much for AUZ imo ,at this time No telling what the share structure will be because AUZ had about 170 Million shares and holders were offered the choice of cash or HL shares . Gotta wait and see. HL is selling for 4.26
Whatever the case these are sad times for shareholders of these companies,myself included.
Re: A forum of Gold and Silver Equities
Ok Aaron, I guess it was the question you asked " why one would invest in an explorer when a producer is so cheap" and that is true enough. I am sure in your personal portfolio you have taken advantage of the current market and added or increased your investmment in producers. Also I believe you are taking advantage and buying cheap explorers contrary to your question why buy explorers. I do believe one thing. Just like the HEMLO.prior to that juniors were near dead and suddenly came alive, and once again a little explorer will make a spectacular find in Canada and once again move the whole junior gold market.and even moose pasture properties will jump in value. I posted this before but as a reminder www.youtube.com/watch?v=vXDBAENrEK0
Re: A forum of Gold and Silver Equities
Evening Frank,
Shooting myself in the foot? By giving an opinion that near-term producers and producers are more attractive to investors than explorers at this time, given how beaten up they all are?
I’m also talking about explorers with cash issues. My mistake if I wasn’t clear on that - been a long day. There will always be a place for explorers in my portfolio!
However, unless an explorer has money in the till (and the amount is subjective I suppose), I’m not interested AT THIS MOMENT. That’s all I was implying. Next time I will be more clear with my comments.
I want to have the potential to get paid to wait in this market. So in other words, unless an explorer is conducting a work program in the near-term (meaning they are adequately financed), how is one to have a shot at making money holding it unless the market turns significantly?
I’ve always been of the mindset that nothing pays like discovery, in the famous words of Mr. Rule. And explorers are what gets my blood pumping, but without capital, they are in trouble (unless their burn rate is extremely low - which some have managed).
And if an investor is trying to decide between a near-term producer down 60%, or an explorer with say $300,000 in its treasury (like 500 plus venture plays do right now) also down 60%, which one is most likely to be invested in? I’d go for the near-term producer. But hey, that’s just me.
Devil’s advocate always welcome and I too take the glass half full approach.
Time to do some facetime with the wife and baby.
Great comments everyone.
A
PS. I will be doing some DD on SAM. Appreciate the heads up! This is the beauty of Pinnacle!
Re: A forum of Gold and Silver Equities
Hey Aaron, I will play Devils Advocate. You are actually shooting yourself in the foot as all of Pinnacle's featured companies are explorers and not producers. I believe the glass is half full not half empty, but one must be selective. I met with the management of such a company today and they are looking at the current market as an opportunity by.watching companies in their locale, that are in dire straits and are about to let claims lapse. They can acquire these simply by staking or submitting offers that were unthinkable a short time ago. Having said that, a producer who's shares have been beaten down and worth consideration is Starcore International Mines Ltd. SAM.V The stock nosedived on a drop in earnings from low recovery rates. The immediate thought is OH NO! Low grades, Are they running out of ore? No not so, What they did run into was gold hosted by a carbon graphite material that gummed up the machinery. They have solved this metallurgical problem and are purchasing a roaster which should return net profits back to one million bucks net per month.They recently paid down a loan to SPROTT by a million dollars with another 3.5 million to go after which they intend to pay a dividend. As a sweetener they own and will be putting up for sale a high density residential property near the mine with a large aquifer under it that could fetch up to 6 million dollars.All this potential and it trades at 20 cents.That is about as close to a no brainer as it gets.For disclosure purposes, I do not hold any shares but intend to do so
Re: A forum of Gold and Silver Equities
Hey thinker, To be an accredited investor one has to have a million dollars in net assets or 200,000 bucks in annual incomefor the preceding 2 years.. Now let me see. I consider my goodwill to be worth at least a million.. So " SCOUTS HONOUR" I qualify. The truth is a form is signed by the investor. The company accepts the word of the investor and has a signed statement on file so the company's tail is covered. Lane change no signal,I do disagree with your less than a million thought. If it is to top up the treasury to do a drilling program is one thing,but if it is for general expenses avoid it like the plague. As a matter of fact. I had lunch today with a company that did a small $175,000 flow through private placement at 20 cents, at a time when the shares traded at 13 cents. They were increasing their drill program and topping up the treasury to include some recent new drill targets discovered by airborne surveys and fieldwork.Each situation has to be examined before to determine the purpose and reason additional funds are required. This of course is my opinion. For disclosure purposes, I hold shares but did not participate as try to avoid having too big a position.The placement by the way was opened, filled and closed in less than 10 days.
Re: A forum of Gold and Silver Equities
I agree with that statement from Thinker70. Although 2008 & 2009 saw a similar environment for the juniors and exploration stocks proved lucrative investments in the following months, this time is different. So called 'easy money' may be hard to come by for the explorers for a long time to come. I certainly thought we'd get more of a boost for the Venture with QE3, but it never happened and hundreds of explorers are publicly on the brink. With the Dow at all-time highs and the Venture near historic lows, exploration plays are in big trouble. Risk tolerance is too low for explorers to thrive and I don’t see any policy change by the Fed that will change that sentiment. Sure, eventually supply and demand imbalances will come into play, but that could be years away for some commodities. And when near-term producers and producers are so cheap, why would an investor opt for an explorer?
Re: A forum of Gold and Silver Equities
There are a lot of desperate executives out there alright and i am getting the same solicitations.
Didn't know you were an "accredited investor" guess I should hit you up for a loan myself, (just joking of course) but there is no question I wish I had $100,000 or so to snap up some of the genuine bargains that now exist among the mid-tier producers or near producers and late stage development companies that will be in production before year end.
Private placements are the way to go if you have that kind of capital but I would still away from any explorers that are raising less than a million as that is minimal for any serious exploration.
thinker70
Re: A forum of Gold and Silver Equities
thinker, Lately, I have been swamped with calls asking me to consider putting money in private placements, in ntheir companies that to me are on life support.
Re: A forum of Gold and Silver Equities
Just speaking to share price- I have noticed a few that have held their value lately! MND.TO, DNG.TO, EMD.TO, PTM.TO, THERES MORE-
Re: A forum of Gold and Silver Equities
FRANK: Should have exchanged phone numbers to track each other down at PDAC. Attended for 3 days and attendance was quite good. Talked too and exchanged business cards with over 100 mining executives and all had pretty much the same story. Fundamentals no longer seem to have any relevance, no matter what the progress of their company in the past year or even money in the bank, very few have even held their ground, let alone seen price of stock increase, even the best companies have been punished. Gold Resources GORO which I sold, (fortunately) at around $22. and it is now $13. something, and they even pay a dividend. The one company that came through the worst of the ,eltdown with its stock price intact y/y was Yamana YRI but in the past month or so has backed off about 10%, which is the best of the mid tiers.
I did have one stock (not well known) EXCALIBUR XBR that ran from 09 to over .30 so a few triples at least helps to support the portfolio. Was very disappointed that the KEEGAN / PMI merger did not go through (holding both) but I do expect there will be a lot of mergers and takeovers during the rest of the year and into 2014.
There are a lot of management groups out there who are raising just enough money @ .05 to .15 to keep the lights on and pay their salaries, but don't raise enough to do any serious drilling that would add shareholder value. Two years ago one could make money on under .10 stocks but today I am leery about investing in juniors that don't have at least $5M in the treasury.
thinker70
Re: A forum of Gold and Silver Equities
Thanks dscaron. I will consider writing something.of interest. One thing I noted was the foreign presence is on the increase.I have been fortunate and I really don't understand why some people consider me to be connected with financing in the mining industry in some capacity even though I insist i am just a retail investor.so I get into some interesting conversations. Getting back to the Germans, One thing that surprised me was at a time when exploration money is hard to come bythese people tell me that regulatory authotities at the exchange have made it increasingly more difficult for foreign compnies to invest.At this time they are participants in several private placement and must jump hurdles and hoops to get the necessary approvals, They do not buy up companies or take a controlling interest THEY ARE INVESTORS and the TSX and TSX Venture gives them a hard time.every time even they have been making deals here for several years.
Re: A forum of Gold and Silver Equities
Frank- you should do a blog on what you learned from your trip to PDAC
Re: A forum of Gold and Silver Equities
". One thing that is for sure is their resounding belief that the US does not have enough gold available to deliver Germany's request"
Even more evidence that shows what Central Banks are doing with Gold. Some have sold it and most are collecting interest. My point from the beginning . it's the biggest scam going.
cronyism in Governments worldwide has reached new levels. The bottom line is that there are few Central Banks in the World that want gold to go up ,with many different reasons why. How long will that last ? I think in China's case it will be when they no longer feel a need for finding new sources of resources that are useful to their growth and security. They are buying up resources ,either swallowing companies whole , doing off take agreements or joint venturing. When they have their fill and their gold reserves are peaking,gold will rise. Why would they be in a hurry for the latter to happen first. ?
Re: A forum of Gold and Silver Equities
"They told me that they are also making strategic investments in beaten down gold and silver companies in politically safe jurisdictions, not by way of buying shares in the open market but by way of providing financing which appears to be lacking from the usual finance providers."
Absolutely ! This is why I've been saying for months now ,that carefully picking G&S equities are a good investment ,just not in the near term. If your buying for the future ,go for it.,imo
I prefer silver but regardless ,this is a time where the garbage is going under and the good companies ,though they have declined are readying themselves for times when their product will be dominant. Maybe a couple years yet, but I do believe as you do that gold &silver are a major part of the future economic picture, therefore the equities can be huge financial gains ,down the line.
Here's the thing Frank. If G&S equities were managed by people that didn't have a GOD complex,they would be doing a lot better. they have NO money in most cases because they are greedy and self serving. They are using the very limited cash resources of the company treasuries and paying themselves salaries that are obscene. When that's not enough ,they add options.If that's not insulting enough (since they are losing money),they go further.
IE; Options expire . They give themselves NEW options with a strike price a lot less ,usually just barely above the current market price.That's almost criminal. Their poor performance and salary greed helps the stock take a nose dive and they reward themselves with "in the money options."
What confidence ?
Investors are ignorant to the reality.. We should not invest in managements that believe themselves to be worth more than they are. If they set bench marks ,meet those benchmarks and keep their salaries at where they should be , as well as only award options @ 100% above the current share price (day of issuance),then ...we have found a winner
So who are they ?
Re: A forum of Gold and Silver Equities
I am niot sure southpen. One thing that is for sure is their rwesounding belief that the US does not have enough gold available to deliver Germany's request. They told me that they are also making strategic investments in beaten down gold and silver companies in politically safe jurisdictions, not by way of buying shares in the open market but by way of providing financing which appears to be lacking from the usual finance providers.
Re: A forum of Gold and Silver Equities
Frank, What do you think a German financing firm is going to do with physical gold ?
Institutions that can buy physical gold in large amounts are buying .I have not yet disagreed with that fact.
Re: A forum of Gold and Silver Equities
I was at the PDAC and was talking to some German gentlemen representing a financing firm out of Germany. They are buying up all they can while they can at thses prices. I visited the Sprott booth selling Silvers Maples and Eagles at over $33.00. that is more than 15% over the spot price.
Re: A forum of Gold and Silver Equities
Frank says; Central Banks are not sellers THEY ARE BUYERS as is China, Russia and India plus others and they are happy buying on weakness.
Southpen says; I don't understand your disagreement with me. China's ,Russia's and India's Central Banks are indeed buying gold AND want to continue to buy gold ,"cheaply" The best way to do that (keep the price of gold down) ,is too lend your reserves to brokers ,whom will short the market.
My point is,this sort of thing has been going on for years and the Chinese,Indians etc want to join the party. They can lend (,not sell), and accumulate all at the same time. It's the biggest scam going . They even have silent and somewhat unwilling partners. North America and Europe do not want the price of gold going up,for different reasons. They need their Fiat currencies to hold some value or nobody will buy their safe haven treasuries,which as your aware are necessary to pay interest on the debts.
Asians are buying gold for the future.How far in advance that future is has everything to do with other commodities ,which they need MORE than gold .
Re: A forum of Gold and Silver Equities
southpen, I will reply to the p.s. first. Regarding Golden Goliath, I will meet the CEO and CFO tomorrow at the PDAC along with their guest Rompin Ronnie Hawkins, Ronnie is another story for another time.. Anyway last fall they planned a private placement but delayed it hoping markets would improve and that Agnico would report great drill results or Comstock would start drilling on their optiioned property. Comstock has their own problems and Agnico continues drilling, but not the same way a junuior would as a junior needs excitement and drills where there is a good chance of a hitting something big in a specific area while Agnico places its focus on the big picture but is not that exciting and its not in their best interest anway. They will however provide GNG with monthly progress reports which certainly wasn't the case previously. GNG best option therefore will be going at the less risk.high potential San Martin tunnel with a less costly drill program first before Nopalera because a great drill intercept is more likely which might move the shares higher to do the next private placement to drill Nopalera, otherwise dilution as you say might/will be in the cards. Now back to gold/silver, Central Banks are not sellers THEY ARE BUYERS as is China, Russia and India plus others and they are happy buying on weakness.
Re: A forum of Gold and Silver Equities
I think you guys made some good picks. Scottie liked Atna and Elgin. I still like both ,just not now. I believe that G&S miners will go up rapidly once the objective of Asia is known. Asians have no employment problems,they are still in growth mode so gold miners would naturally be the last mining outfits that will go up. Asians want to attach themselves to as many N.A. resource assets as possible. Met. Coal ,Oil ,Copper and possibly Natural Gas. (partial ownership)
. While accumulating gold is happening ,it does not mean they want gold to go up. They buy it ,hold it ,lend it and gain more control of a market presently fixed (shorted) by Europeans and N .Americans to protect their currencies. The Asians don't want gold to go up ,not yet.
The time will come and I think that any surviving gold and silver miners in N.A. will do well and if you can afford to have money sitting do nothing ,invest now ,if not ,stay tuned. I'm trying to find N.A. mineral assets that are close to production or development stage and that are what the Asians need to continue their modernizations.
P.S. I find Golden Goliath to be a very good ,very real ,long term gold mining asset ,but fear a consolidation will happen this year.
Re: A forum of Gold and Silver Equities
I've concluded that the Bank of Canada ,though similar to the Federal Reserve is better at investment because it tends to stay clear of wasteful middlemen. The Bank bailout here in the States was actually more akin to Corporate Socialism. I'm talking about a straight up deal. "Financing for a Stream" .No real Government involvement other than a watch group.(making sure the people are being treated fairly)
Re: A forum of Gold and Silver Equities
Southpen, When I look at the short list I thought were very undervalued stocks back in 2011, I am embarassed to say both GNG and GPD aka AMB have really hit the skids. Kootenay Silver KTN, although down somewhat has held up pretty well. One must be careful in this market to refrain from doubling up or dobling down might be the better term just because half price looks like a bargain. Along with a great resource, what the company currently has in its treasury and how many shares they have already issued is the, as the inabiluity to raise money when a dollar doesn't buy much will pummel a lot of stocks even further.It will be interesting to see the mood at the PDAC this week..
Re: A forum of Gold and Silver Equities
Good idea southpen,excepting that governments prefer to bail out banks and big auto companies.
Re: A forum of Gold and Silver Equities
thinker, I'm sure you know that these monster or mega mines like Snofield-Brucejack of Pretium have as their only drawback , "Financing" Mining costs are sky rocketing and if a mine takes years to develop, the uncertainty is pushing prices down.
How long will the FIAT money system throughout the World last ?
. Some believe 6 months ,others 5 years and many believe it will not go away at all, in it's entirety, so projects based mainly on gold are actually being questioned as to their value. ,or future value.
KSM is the greatest resource in Canadian history Total resource including Reserves,M&I and Inf. is at about 63 Moz Gold, 370Moz Silver and 26B lbs. Copper . Seabridge owns it 100% and has a very conservative share structure ,yet struggles to reach even 15/share. Truly amazing.
The Canadian Government should finance both projects in a royalties only deal for gold bullion.(stream) The Canadian Gold Reserves are low (about 3 tons ) If a Central Bank is going to devalue their currency through dilution,they could counter the damage building gold reserves for a future currency ,which many of us believe will be partially pegged to gold. The GDP from those 2 mega mines over the years would be another windfall,imo.
If these mines wait for financing and neither Barrick,nor Goldcorp ,nor any of the 5 big banks come forward ,look for Asian support. Not the worst thing that could happen but in my view,not necessary
If the big U.S. Banks were readying themselves for an end to our current fiat system,Don't you think they would be buying into these mega projects ? There seems to be little evidence that they are trending towards encouragement in gold mine stimulation (development)
Re: A forum of Gold and Silver Equities
It seems the more things change the more they stay the same! Several times I have thought the market is "turning positive" and yet companies with excellent resources and Mgmt. even when well financed, continue to sell off severely, the latest example PRETIUM PVG with the high grade Brucejack project. Belo Sun BSX which looked very promising 6 months ago has fallen out of bed recently, the slighest problem and investors panic and punish stocks severely very quickly.
I was quite excited by the KEEGAN / PMI merger and even that has been cancelled, at least for now. I am trying to put together a BAKERS DOZEN Precious Metals Picks for 2013 and this is increasingly a hazardous occupation as what SEEMS solid evidence on making a pick one day gets trashed the next in a totally irrational market. Emotion rules and fundamentals no longer matter.
thinker70