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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
Another way to look at GORO.
Lets say you had the balls to buy GORO at $2 at the end of 2008. In a little over 3 years, you're sitting on a 12 bagger thats paying you an annual yield of 36% on your original investment (GORO paying 6c a month for a total of 0.72 in annual dividend payments).
If you had bought just 2,222 shares ($4,444) at the end of 08, you would be getting a 1 ounce dividend every year.
Re: A forum of Gold and Silver Equities
It dawned on me that paying investors with product (gold or silver) might work well with shoring up cash for MEGA projects. Kinda like KSM/Brucejack/Snofield.This will probably end up being 1 package . Imagine ,instead of selling to hedges and streams ,the company sold preferred shares in exchange for coins. Thousands of small fry's might want in. They need to raise about 4- 5 billion just for KSM,so it would have a lot of preferred shares but... Not sure if they would be called convertibles or simply metal dividend paying Preferred shares ?
Re: A forum of Gold and Silver Equities
Frank/scottie I thought the forum idea was yours Frank . anyway this dividend idea with gold or silver would be great and it was talked about on the Us Silver ihub board a long time before the big time longs soured on the company. The conference tomorrow at 430 should be interesting. I sent in a question about scheduled drilling. Incidently ,Eric Sprott owns over 10% of USSIF or at least he did at one point. The company should be a gift at 1.50 cents .25 million or so in the bank,no debt and now just 69 million shares fully diluted. The company is without a CEO .Tom Parker a real mining man retired.and I do remember sometime in the past the issue of silver coins came up but can't recall how it ended.Too much talk about the damn AMEX ,which I fully opposed. If you guys have some loose cash I would watch this stock.Any lower and even I will be under water.It's the worse devaluation of a silver producer I've ever seen. Production for years now and this year is well over 2 million oz's .The only silver stock I own. and I wish I was buying back in. k sira-sira
Re: A forum of Gold and Silver Equities
Eric Sprott is already pushing for silver co's to keep some of their silver in reserve rather than selling it all and holding cash reserves... something like 25%. Not only are balance sheets improving with rising PM prices, but that silver is kept off the market leading to greater supply scarcity.
Why not take it a step further and reward shareholders in the form of distributions?
Stock forums are a great place to start. Just plant the seed and watch others take it from there...eventually management will catch wind.
Re: A forum of Gold and Silver Equities
southpen, I believe I said this before but giving credit where credit is due, You deserve full marks for bring the guy who started this forum. The US Silver conference call is a great idea as well if this can get some air time. A small to mid size company is best to target and if a number of people or a group kept putting a bee in the company's bonnet eventually they would feel they need to apply some ointment. Then again mud is sometimes applied as a remedy for bee stings. Bee in the bonnet is the wrong expression. We want honey not mud. LETS TARGET A GOOD LITTLE COMPANY CAPABLE OF PAYING SUCH A DIVIDEND and start a little campaign.
Re: A forum of Gold and Silver Equities
Maybe I should suggest this strategy at the conference call tomorrow for US Silver.Somethings gotta give with them.
Re: A forum of Gold and Silver Equities
For further perspective, let me try and put this scenario in traditional terms - earnings.
Let's say GPD sells the 65,000 ounces left over after the all-in costs. At $1,600 an ounce, this represents earnings of $104M. Then the market slaps a 15x multiplier on earnings for a total market cap of $1.5B. Dividending out all the earnings would then amount to just a 7% yield. So while it might seem like alot to dividend out half of all the gold produced each year, it's a reasonable suggestion. If they dividend out just a quarter of all ounces produced, this would represent a 3.5% yield or in ounce terms, 1.9 ounces ($3,040) per year for 10,000 shs ($4,250)... still a steal of a deal.
like the idea! it's amazing how ,just by paying dividends this company can stay close to it's 52-wk high while most gold explorers producers are hurting
Agreed. Look at Newmont... they're a quality company that's been raising dividends yet they're near their 52 week low. Why is GORO the exception to the norm? My gut tells me investors are cheering its decision to dividend out sound money. Only a matter of time before other players figure this out... hopefully, GORO can maintain its strong performance so others start dipping their toes in the water.
Re: A forum of Gold and Silver Equities
I like the idea! it's amazing how ,just by paying dividends this company can stay close to it's 52-wk high while most gold explorers are hurting .The yield is about 30% higher than ABX .Seabridge SA ,I suppose ,the greatest of all the explorers has lost half it's value.
Re: A forum of Gold and Silver Equities
Hey Frank, I'm not making any recommendation to buy GORO. I am not yet familiar with their operations.
Rather, I am suggesting that GORO is an indicator for what has the makings of a new trend. GORO has been outperforming both the GLD and GDX. This would indicate the trend is gaining momentum and investors are willing to chase GORO's dividend paid in sound money, despite how small this dividend might seem in fiat terms.
If this is truly a trend in the making, and other miners eventually follow GORO's lead. Juniors will literally become money trees.
Let's use GPD as an example.
By 2016 they will be producing roughly 130,000 ounces of gold per year for up to 20 years. Let's say half or 65,000 ounces are sold to cover G&A, OPEX and replacement of reserves. That leaves 65,000 ounces to be dividended out to 170M shs or 3.8 ounces per 10,000 shs. In dollar terms, youre making a one time investment of $4,250 for 3.8 ounces of gold (~$6,000 at current prices) per year for 20 years.
Re: A forum of Gold and Silver Equities
Hey scottie, I took a quick look at the GORO website and I see that shareholders can let their dividends accumulate. Dividends are paid in full ounces s one needs alot of shares for the .06 dividend to get a one ounce gold coin. THE GOOD NEWS is you can opt for a silver eagle which would be much easier for the little guy. Wouldn't it be nice for Agnico Eagle to adopt this strategy as tghey have continued to pay a dividend albeit a small one. Why nit a silver or gold maple leaf?
Re: A forum of Gold and Silver Equities
Hey scottiepimps, A physical gold dividend. That would be fantastic and it would definitely start a trend once it gets started, others would step up to the plate. I think the trick would be to set a low minimum so you don't need megabucks of shares before a physical gold dividend kicks in.,say a minimum of 1/10 of an ounce cash equivilant. This would encourage the smaller investors. I will start my due diligence on GORO which I am not familiar with.
Re: A forum of Gold and Silver Equities
Aaron,
Last post on this topic, isn't Jeff Immelt an accomplished businessman? He's been the jobs czar and sits on Obama's Economic Recovery Advisory Board. In true businessman fashion, he's managed to benefit his company via green tech subsidies and shipping jobs overseas.
Frank,
I've been watching price action in GORO (Gold Ore Resources) lately. I think GORO's performance is extremely important to the future of gold miners. GORO is the first of gold mining companies to offer their dividend in physical gold. This is a highly disruptive concept and may be the game changer miners need to compete with ETFs and physical bullion. If GORO can continue to perform strongly in this market, it may start a new trend in which miners adopt the idea of dividending their product rather than selling it into the market for fiat. Granted, some will need to be sold to sustain operations and replace reserves, the rest can be dividended out. Shareholder's would then have a means to procure gold at a discount to spot with the added benefit of convenient storage a la the gold ETFs.
Re: A forum of Gold and Silver Equities
Some excellent points scottie. I might add that though I disagree with more points on Aaron's post ,I can see he is not far away from my thinking concerning the possibilities of gold ,near term.(6 mos.) I've heard arguments against my position on Glass Steagall (which is to bring it back in force),but I've not heard someone say the crooked game can't be corrected.That's a good point.Maybe I'm being nieve. All I can say is that, the enormous power of Banks using money that is essentially FREE from the Fed has got to end.They are why (in a round about way),small miners can't go get a loan,you know," from a Bank.." What an odd World we live in ?, that allows a Corp. that is registered and excepts full advantages of being a lender, can not only destroy the aspirations of the free enterprise ,it can literally hold it hostage and in time, ruin it ,along with all the suckers that invested. Commercial banks should lend to business shorter term and individuals longer term .Investment Banks should invest longer term in developments of alll kinds. Together, under one umbrella ,the Commercial Bank has a right to liquidity via the Central Bank,but is allowed to stay clear of it's charter and lend to itself in essence,under a different Corporate banner with costs to the lendee going up every time a new middle man is created and there are a lot of middle men. Worse still ,the payroll from the lendee is possibly in the Commercial Bank and can legally be used to again,lend out to another division ,which can legally operate to destroy the lendee. It's all insane,but it happens daily . short positions against the ETF that covers the miner,short positions against the miner's (lendee) commodity.You name it ,they can do it. It's not Free Enterprise at all.It is truly akin to paying the local Mafia ,to be allowed to operate in peace. You could be right scottie ,maybe Gov't regulations like Glass Steagall would cause the shifty bastards to think up a new strategy to screw enterprise but I feel we should make it as difficult as possible.It worked since 1933 until 1999. Maybe with stock market crashes (like the tech bubble) ,if Glass Steagall had NOT been in place ,the story would have been a lot worse.That's my thinking.
Re: A forum of Gold and Silver Equities
Frank,
Agreed!
The voice of reason prevails.
Have a great one,
Aaron
( I will start a blog on economic politics soon enough so we can duke it out there for all willing participants)
Re: A forum of Gold and Silver Equities
Not a bank (the big ones are more of a cartel anyway), I meant a real business. A business where you invest what you can afford and you save for a rainy day. A business where you promote leadership within (entrepreneurship) by creating an environment conducive to start-ups. A business where unsustainable projects are cut before they suck the life out of the other departments. Let's use an ice cream store for an example of how to build a business...anything other than a bank.
Re: A forum of Gold and Silver Equities
OK Guys/Gals, There is nothing much we can do about changing the eventual election outcome. What we can do right now is get back to reviewing stocks which may safely keep us ahead of the game in this political environment. I will throw one out there as it has been beaten down. What are your thoughts on Silver Wheaton SLW.
Re: A forum of Gold and Silver Equities
There are two guys to choose from and I think a country should be ran like a business.
It will be a sad, sad day when the US is run like a bank. What have banks and multinationals done for America, lately?
Re: A forum of Gold and Silver Equities
Scottiepimps59 (love the name by the way..makes me chuckle every time I see it)
Now I understand why people can't take my posts seriously :) The handle has stuck since highschool and I'm just not creative enough to come up with a better screen name.
Inflation is coming which is good for gold stocks
I think everyone here agrees with this statement. Regardless of your political ideologies, the evidence is clear that money supply continues to grow and no one here is arguing the fact that inflation is inevitable.
That said, I'll don my tin-foil hat and agree with Southpen that Romney will be no different than Obama. Neither party has come up with a way to reduce the deficit without commiting political suicide. If history is any precedent, Republicans will undoubtedly sack social programs in favor of "defense" spending... They'll turn to their favorite tactic of fear mongering and press Congress to spend, spend, spend on defense. It was the Republicans, afterall, that came up with the brilliant idea of engaging in two wars while cutting taxes... clearly for the benefit of their friends in places like Halliburton and Raytheon.
However, I will disagree with Southpen on the point of Glass-Steagall. Rules and regulations will do little to legitimize a game that is crooked by design. Without external rigors (a la gold) to put a limit on how much fiat we can print, the Banks will find their way to stoke credit expansion. The banking tentacles will firm it's grip on politicians - if Republicans happen to be in power, they'll get credit expansion through govt defense spending or loosen regulations to encourage credit expansion in the private sectors. As long as the USD enjoys its reserve status and as long as there are not external limits on how much we can print, Banks will push relentlessly to expand credit in efforts to purpetuate the ponzi. For every dollar that is created from thin air, the Banks can multiply it's profits throught the magic of fractional reserve banking and compounding interest.
For these reasons, I have little faith that Mitt "Etch-and-Sketch" Romney has any intention of acting in the interest of the public and have every reason to believe he will act in the sole interest of those enabling his ascension to power.
I’d be worried about dumping as much money as I could into that sector before I focused on infrastructure projects (which in times of desperation, fancy bridges and paved roads are a luxury anyway).
Are water lines, sewage treatment plants, rails, public transport, dams and ports all luxuries, too?
Stop importing energy from Canada (even though they are fantastic people - yes I’m bias) and the Middle East.
Easier said than done. We need more pipelines and storage facilities if we are to harness the full energy potential of the US. I've read in places that companies are simply tourching excess nat gas because there is a shortage of storage capacity. Why are we finding nat gas if we can't even store or transport it?
Increase China's natural resource reliance on the US! That is key and will soften their blow when debt payments eventually can't be made.
Brilliant!
Also, in respect to the gold mines, I wouldn’t nationalize them! Form JV’s with mining companies (and offer them attractive JV agreements with the borrowed money - act as a silent partner and buy their share of the gold produced at the going rate - with the borrowed money).
This works as long as USD maintains its reserve status. What happens when dollars are no longer accepted as payment? My greatest fear is that the government will turn to old habits and confiscate gold, whether above ground or below ground, to recapitilize the banking system as was done in 1933.
Re: A forum of Gold and Silver Equities
Aaron; Your 2nd paragraph deals with cutting the EPA in half.Well,maybe that's right but regulations for the good of the country are necessary so that FUTURE environmental problems are not another bill for the people that had NO ownership, NO interest in a resource project,maybe they just happen to live in that location.I've said before.Those that have a lot of money right now and NEED resources (ASIANS) , have to be made to understand that if North American resources are going to be exploited ,by them ,in the name of job creation,they better adhere to the toughest environmental standards ever. That's good for Americans and Canadian citizens and business's .Maybe our banks will stop buying bonds and start lending.Glass Steagall would have to be reinstated for that to begin. Your Infrastructure comments are off the wall,imo. Fancy Bridges and Paved roads ? Bridges and Roads are absolute necessity to almost all business's.When they break down,We break down.! Infrastructure , meaning " financial assistance in the form of loans to banks which the FED does anyway,with the absolute stipulation that the cash goes to the necessary developments . Nuclear Power Plants ,Natural Gas Liquification Plants and Coal Liquification Plants .All necessary stimulus to our Energy problem. The U.S. has lots of NG and OIL ,but it is not at the advanced stage of development that the Canadian Tar Sands are. We don't have 20 years to catch up. Oil should be a minimal energy source in 30 years. As far as JV with mining companies.That's the Gov't getting directly involved in business and most so called Right wingers would have a field day with that. The only loans Government should make in the U.S. is to banks ,then stay out of the way. Banks should be doing what Banks were formed to do .LEND. Loans from the FED to Banks should be positioned by the gov't .(if it's our liquidity ),they can damn well do with the cash what is good for the people ,not just themselves.Of course they can reject any involvement.That's their good right. Gov't doesn't belong in business.Gov't is to make the rules,enforce the rules and if necessary have liquidity to solidify a business plan on behalf of the people.I regret going off topic but it is ultimately related to Gold and Silver stocks. They NEED money!
Re: A forum of Gold and Silver Equities
My choice would be Mitt Romney over Obama. There are two guys to choose from and I think a country should be ran like a business. Romney is a better businessman. If Ron Paul was in the race, he'd get my vote, but he isn't, so my hypothetical vote goes to Romney. I lived in the US for a couple years, so I'm not totally blinded to what you speak of. And I lean libertarian. I'm well aware of the corruption that comes with politics. This blog is about gold and silver stocks so I do apologize for getting off-topic. No matter who runs the country, inflation is coming which is good for gold stocks and there are some strong investment ideas from all of you on this blog.
Enjoy the day,
Aaron
Re: A forum of Gold and Silver Equities
Aaron, My political standing is Classic Liberal with some necessary (due to modernism), Socialist attachments. They do not conflict Only the anti-liberal byist makes conflict an issue.This is exactly what Crony Capitalism. is all about. Destroying the rights of the individual ,while seemingly protecting us against the ravages of collectivsm . Classic Liberal is far to the right of any Conservative or Republican in Canada or the United States.
Re: A forum of Gold and Silver Equities
Thanks Frank, I am resistent to Mexico but to tell you the truth ,I'd rather have interests in mining companies that operate in Mexico than any other countries South of them.I like to see a company that has an interest in Mexico ,but that's not the whole company. AUQ is an excellent example Solid company ,got out of Australia (wise),and lessened their footprint in Mexico.They got a lot of cash and Kemess Underground awaits. (in Canada) As far as I know B.C. will allow Kemess to go forward in it's new format. .Hopefully somewhere down the road ,Kemess North open pit can be developed after reaching a settlement with the First Nations(no rush).The point is Mexico is a little dangerous ,if you believe their gov't could be overun by bandits.Something like that would be fixed relatively quickly imo so I should lessen my predjudice against Mexican deposits.Some are really impressive. Nothing is better than Canada -U.S..for safe investment.
Re: A forum of Gold and Silver Equities
Scottie,Aaron That's exactly right scottie, Obama's fate was spelled out for him the day he came into office.I don't agree with some of the wasteful spending,like" unemployment forever",or helping people with mortgages that are underwater or spending too much time and treasury overseas ,but ... many of these moves were moves of appeasement. Obama might have more social stimulus plans than someone like me cares to have,but can you honestly say things were any different with Bush. Socialism is running rampant in the U.S. The healthcare IS socialist (to the chosen).The U.S. Military IS the largest social network in dollars, that any country has ever had. Spending is no more evident today than it was when Reagan was in . Reagan doubled the national Debt in 8 years. Obama would have to hit 19 trillion to equal Reagan in another 4.5 years in a much more dire circumstance. Like you suggest scottie, What do we have to lose.? Does Aaron and Mit think that the World doesn't benefit by U.S. reckless spending.? I want it all to end,but the only program the American people have ever been issued to GET OUT OF DEBT and have strong sound currency was issued by Ron Paul. Mitt , and his insiders ,all but laughed at the guy Therefore,. Spend the money on infrastructure in this country until someone (the Chinese and the Japanese insist we stop),then STOP,but they have a lot of reforms themselves.Sounds like a good bargaining position for the U.S. to be in. You get it scottie,I know it. Aaron,You have too much of a good thing .You can't seem to understand the level of corruption in the U.S. ,unless you live here and experience it. Socialism, in chosen area's placed by corruption is a little like a lottery. At least where you are Aaron ,you know what's up before it hits you in the head .Right or Wrong .The damage to the U.S economy is not repairable ,in this economic reality. The USD could be saved by gold, is true ,but without the continuous spending and dollar depreciation ,neither the debt nor the dollar will survive. The only way to make the U.S. debt less ,is to lessen the value of what the country owes and greater the value of the gold it owns.Obama is smart and knows this.It might not be the most ethical solution but I hardly think Mitt Romney is the place to go ,for an ethics lesson.
Re: A forum of Gold and Silver Equities
Hey southpen Kootenay Gold changed their name to Kootenay Silver to better reflect the value of their silver asset the Promontorio in Mexico. They do have a lot of property in the Kootenays some of which is optioned to others. The guys running this company are smart operators and I do hold shares in KTN.I realize you don't like Mexico much but there are worse jurisdictions.
Re: A forum of Gold and Silver Equities
I was forwarded this today. It comes from Grandich.com. Very applicable to this blog.
They say they don’t ring a bell at tops or bottoms but after receiving this email from a good friend, well-known financial adviser and someone who told me he would never buy a junior again over a decade ago only to become a major player in the juniors, will someone please answer that door:
————————————————————————————————————————————————————————————————
Pete
I’m done with this junior resource sector, liquidating transactions only.
After years of agony I’m deciding to stop hurting myself
My account has gone down every day for a month as I’m sure yours has as well
GIX .21 it’s ridiculous There is no way to make money in this sector.
————————————————————————————————————————————————————————————————
This email is among many classical signs at major bottoms so when it comes to mining and explorations shares:
Re: A forum of Gold and Silver Equities
Scottiepimps59 (love the name by the way..makes me chuckle every time I see it)
Hmmm. That’s a great question. First off, if I’m Obama and suddenly found god and realized the US economy was on a path to an imminent economic collapse, I’d probably be enlightened to the fact that I am incapable of getting the country out of this mess and would hand over the reigns to Romney (who’s really starting to grow on me by the way. But that’s a whole other conversation).
So, back to your question. I agree with you in that the US needs to open up its natural resources and specifically, energy industry. I think we will see a transformation in that respect within the next decade regardless. But in order to do that, first things first - cut the EPA in size...50% downsize (minimum), because if I’m Obama, I won’t be able to do a darn thing with those folks screaming in my ear every time I want to open up a new oil reserve or mine. Let’s not forget how pivotal the EPA was in influencing the delay of the Keystone pipeline.
The US has the potential to be a net exporter of oil even after servicing its own oil demand. Get the oil flowing and create manufacturing jobs, service jobs, lower domestic fuel prices etc. I’d be worried about dumping as much money as I could into that sector before I focused on infrastructure projects (which in times of desperation, fancy bridges and paved roads are a luxury anyway). Start controlling the country’s fate by controlling its life-blood (which is oil). Stop importing energy from Canada (even though they are fantastic people - yes I’m bias) and the Middle East. In addition, become a larger exporter of oil to China. Lower the ever widening trade gap with your biggest economic competitor. Increase China's natural resource reliance on the US! That is key and will soften their blow when debt payments eventually can't be made.
While the country still has strong credit, borrow money to open up all economic gold deposits and buy as much gold as I can find from foreign mining companies (get the gold onto American soil because it will be our advantage when we abandon the dollar). Also, in respect to the gold mines, I wouldn’t nationalize them! Form JV’s with mining companies (and offer them attractive JV agreements with the borrowed money - act as a silent partner and buy their share of the gold produced at the going rate - with the borrowed money). When the crap hits the fan for the US, by international creditors revolting, I’m going to need as much domestic support as I can get. It’ll be important I stay on good terms with the resource world.
Finally, lock the gold in Fort Knox because when the crap finally does hit the fan, I’ll be using it to go back to the gold standard.
In a nutshell, that’s what I would do in said situation. Very similar to you.
Aaron
Re: A forum of Gold and Silver Equities
Aaron, suppose you were in Obama's shoes for a moment and you had suddenly found God and realized that the US was on an inexorable path towards economic failure. You know that restructuring is an inevitability and that the dollar is soon to lose its reserve status. Assuming for a second that the damage is irreparable, what do you do as the President?
If I were the POTUS, I would probably rack up as large a bill as possible on my good credit to rebuild the crumbling infrastructure and deploy as much cash as possible towards energy and resource development. When restructuring comes, at least we'll have some infrastructure in place and enough resources to rebuild our economy.
Re: A forum of Gold and Silver Equities
Aaron, I think Southpen was being sarcastic.
Southpen, Kootenay is silver country.. very lead, zinc, silver rich just like the neighboring Coeur d'Alene and Butte mining districts.
Here's a good read on bonds: http://slopeofhope.com/2012/05/the-sky-is-fallingand-so-will-treasuries-by-phantomcapital.html
Indeed, the only safe haven today is the USD. Equities, Bonds and Gold all showing weaknesses.
Re: A forum of Gold and Silver Equities
One positive from all these bank robbers..oops, I mean socialists. The more socialist leaders there are in this world, the more rampant inflation will become. All they do is borrow, over-regulate and spend anyway. This is good for commodities over the long-term. It's the austerity measures that are holding commodities back from exploding in value and keeping inflation at bay.
Have a good night all,
Aaron
Re: A forum of Gold and Silver Equities
Southpen,
You stated "The French are becoming fiscally responsible by hiring a Socialist." Please tell me that was a typo?