Thursday and Doctor Postma is In with a few Company opinions.
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Great link
QUOTE:
“1. There was a cumulative loss of $189 over the Employment-Report days since the beginning of 2013, which means that about 40% of gold’s total loss over the 28-month period in question occurred on Employment Report days.”
Started a short position in the pm’s miner today and an oil short, will add or reverse to long positions depending on NFP data.
Doc Euro$ and oil have been trending together for over a year now (have a look on your charts) par Euro$ will send oil much lower so if US interest rates are to be sooner rather than later the $ will be heading back to test 100 on the back of a bullish NFP
http://www.efxnews.com/story/28892/eurusd-usdjpy-risk-reward-nfp-goldman-sachs
Original, I’ve sold a few in the money calls on some of my positions at the beginning of this week.
LIP STICK FOR THE PIG….employment numbers will be painted to look good, and then will be revised later…..Kick the CAN OF HAM on down the road.
They can always revise… If these numbers do come in good I think they will surprise many people.
Cory – great point about the difference in the landscape of who was holding mining stocks in 2008 (lots of momentum traders) versus today 4 years into a PM Bear market (the stocks are in the strong hands now, and the selling shouldn’t be as bad this time.)
Al & Cory – good questions for Doc……and Doc good overview. I also am a fan of Exeter, Claude, and Richmont. We appreciate your insights guys.
They do love to revise those numbers Frankjerstein….The Boot.
Good thinking and questions AL ! You’re onto something ? https://www.youtube.com/watch?v=d23N4bQ7Pk8
Who are The Copper Gamins?
I agree 1000% with DOC.
I also like Al’s position that danger is right around the corner.
Thirdly I always appreciate Cory’s optimism .It keeps me looking at the charts regardless of what I think.
I absolutely love the TSX.V right now.I am having to practice some serious restraint right now.
The thought of a major correction keeps me from buying more.Imagine being able to acquire even more at lower prices.
I am acquiring companies with cash that can weather the storm.
Like Doc says ,it may take some time to materialize,but when it does our patience will be rewarded.
Agreed on all the points you made John K.
Doc, what would change yr mind (technicals) for gold stocks to go higher than you are presently thinking..?
Thank you
Agatha; I watch the technicals of multiple gold stock companies and by doing that you can define technically what is in the near future when you notice a trend with the vast majority. Often , the only thing that can reverse significantly a technical direction is a sudden unexpected event (fundamental) out of the ordinary—-an example would be the employment report tomorrow which would be out of the ordinary and shock people. I believe in our first newsletter I mentioned that technicals are more forward looking then fundamentals. And right now they’re acting like there is nothing on the near horizon that portends a significant movement one way or another; they’re almost acting like you can the usual seasonal results for summer. I would turn more bullish for stocks if gold would break above the 200 day MA which is currently at about $1220—-interestingly, resistance is also at $1220—if we get a close above that level stocks should follow. That doesn’t mean most of them will break out to new highs but they could get a temporary boost. That would entail much higher gold prices. What will help a lot of the producing companies in the near future is efficiency of operations and getting into a position where when gold moves, they’ll compound prices. I know I’ve sounded a little negative recently but long term am very positive—-I always look at moves down as opportunity to pick up more shares of well run companies.
Doc I agree with those points 100%, and have been waiting to see if Gold would take out resistance at 1221-1222 for over a month now, and so far Gold has not. We’ll see what happens tomorrow, but if it is a fizzler, then I believe the sell in May through the summer doldrum tendencies will take over. However if we got a pop above 1221-1222 range which now nicely correlates with the 1220 point in the 200 day moving average, then that would be a bullish factor.
I also agree big time with the line: “What will help a lot of the producing companies in the near future is efficiency of operations and getting into a position where when gold moves, they’ll compound prices. ” Where the last bull cycle was about growth (often for the sake of growth which caused the Majors to overpay and over extend themselves and most companies got really sloppy on cost controls); this next bull cycle in PM miners will be all about free cash flow, and if people have been reading all the 1st quarter reports that is the new buzz and what they are trying to highlight. Most serious miners really have taken great strides to reduce costs, repair balance sheets, sell non-core assets, and there are now dozens of quality mid-tier and smaller producers and even a few majors that will do incredibly well when prices do start to rise in Gold and Silver.
If we don’t get a pop but instead get a summer pullback, then depending on the severity in the PM movement, I’ll be buying these quality miners and a few ETFs (Like the new Sprott EFTS – SGDM and SGDJ) to spread the risk.
Gee, you really sound great Al. Your recovery has been amazing. I mean to say you sound reborn today. Like a new man back on top of the game.
Doc: GDXJ is threatening a dip below the 50 day so I think you are spot on with your idea to delay adding too much to positions just yet. The other thing is GDX which turned down right where we would expect based on the daily and weekly charts. Both have a destiny with new lows in my view.
Late summer may be the time to get serious again. Just before trading gets serious in the fall.
I’m thinking the same as you, Birdman.
But I’m keeping one evil eye on it 24×7, ’cause I’ve been caught asleep at the switch too many times!
Bird, I agree. I expect lower prices for most of the PM stocks and gdx and gdxj in the end of May. Then we could get a little bounce and then start moving down again for late summer—-I’m pretty sure of the May thing but then will be more comfortable to project for the rest of summer. Right now, I don’t see anything that the lows for late summer will be appreciably lower then a cycle low for end of May.
Not back on top quite yet Bird. I do appreciate you kind words!
I agree that Al is sounding real good this week. We love ya, Al.
I am looking at gold in Sterling and in Euros and they don’t look too good. Gold does not look so bad in Japanese Yen. Gold also looks fairly awful in dollars I think.
Euro gold has moved up for more than a year and also gold in Yen. Maybe they are due for a correction. This could coincide with a move down in gold prices in dollars to $1080, let’s say for example.
It’s interesting that this poor gold performance is also on quite a correction in the US dollar. The US dollar has lost 5% and gold has not done anything positive in any currency.
UK election: Cameron and the COnservatives win and on Kitco gold is up a touch in all quoted currencies except the British Pound. I thought a conservative win would put the pound up a bit if they made a coalition again but it looks like they will actually have a majority. That means a bit of austerity for the UK and maybe a delay to our eventual national bankruptcy.
Claude reports Q1
eps=0.03
– Record quarterly gold production of 21,067 ounces, an 86% increase from Q1 2014
– Mill head grade of 10.17 grams of gold per tonne for the quarter, a 77% increase from Q1 2014
– Gold sales for the quarter were 17,326 ounces, a 59% increase from Q1 2014
– Total cash cost per ounce of gold sold (1) of $675 (U.S. $544), a 31% decrease from Q1 2014
– All-in sustaining cost per ounce of gold sold (1) of $1,374 (U.S. $1,107), a 28% decrease from Q1 2014
– Cash flow from operations before net changes in non-cash operating working capital (1) of $9.3 million ($0.05 per share), a 417% increase from Q1 2014
– Santoy Gap Deposit ramp up on pace to achieve 500 tonnes per day
http://finance.yahoo.com/news/claude-sets-another-quarterly-gold-213000648.html
P/E < 6
The share price would need to triple ($US1.65 / $C 2.04 ) for Claude’s P/E to be 18.0, which would make it close to two other profitable gold miners in Canada: Klondike (16.9) and Kirkland Lake (20.8) – These figures are based on presentations by the two companies.
It will be interesting tomorrow to see what happens to the share price, but the target might be significantly over $US 1.00.
I sold my Klondike stock yesterday and will wait for lower prices to get back into a position.
I’m loving the correction in Claude right now—-will wait for the next entry point to add more shares.
Agreed.
All in cost 1374, is that not saying they are losing money? tmx has them at losing
13 cents a share.
Small companies like this can go up with a little “web” promo.
Used to be, anything selling for pennies would double once it was written about on321 gold. Then drop back of course, but if you were quick you could make 75% in a day or so.
BB; just a quote from the earnings report today—-“With the most challenging quarter behind us, cash on hand of $15.4 million and a declining all-in sustaining cost per ounce profile for the remainder of the year, we are confident in our ability to continue to generate free cash flow during 2015. All-in sustaining costs per ounce of gold were budgeted to be higher in the first quarter as the majority of the annual property, plant and equipment budget, $5.1 million of the $6.1 million , was incurred. This Santoy Gap ore will displace lower margin ounces and optimize the Company’s mine plan for improved cash flow.
These are some points I get based on the earnings report. It’s expected that the average all in sustaining costs for all of year 2015 will average $1175-$1275. They have a positive cash flow and also minimal free cash flow. The reason is their capital expenditures have been fairly high as they expand their reserves. One has to remember 90%+ of those capital expenditures were booked in this quarter so the rest of the year will see their all in sustaining costs drop immeasurably if there are no unexpected curve balls. also the comment that the Sanjoy property is expected for the rest of the year to increase their cash flow. Since their capital expenditures are to be minimal for the rest of the year, their cash flow and free cash flow should improve—-if they squeeze out 2 more cents per quarter going forward, their forward earnings on a yearly basis should be in the $.20-$.28 range. With a 5 PE, it should make the stock a $1.00; with a 10 PE a $2.00 stock—that’s with the expectation of a $.20 per share earnings for one year.
Yes, I believe the balance of the year will do more to increase cash flow, as they’ve spent the majority of their wad already firming up resources with exploration and mine improvements.
+1 Doc, Especially this: “The reason is their capital expenditures have been fairly high as they expand their reserves. One has to remember 90%+ of those capital expenditures were booked in this quarter so the rest of the year will see their all in sustaining costs drop immeasurably if there are no unexpected curve balls.”
There seems to be way too much focus on AISC these days and not enough on cash costs. AISC can vary greatly Q over Q.
I actually bought a little for a change, yesterday. It’s been a long time since I’ve done that.
Now the new buzz is Free Cash Flow (FCF), AISC is so 4th quarter 2014 and Q1 2015 🙂
The funny thing about AISC is that no ever cared about it until after the sector plunged from its 2011 highs. Cash costs are important because they are tied directly to mining and not all the very variable “sustaining” activities.
FCF never goes outta style.
https://scontent.cdninstagram.com/hphotos-xaf1/t51.2885-15/s306x306/e15/11085072_471719179648069_551091555_n.jpg
Thanks for posting Brian, as I’ve been slammed with work the last few days and was anticipating Claude’s earnings release today. Again, I’ve been a fan and shareholder since 2013, and sold out too early in March, and had to start buying back at higher prices. I am simply impressed with how resilient it has been this year in spite of market chaos and slumping gold prices. I would like a nasty little correction (beyond what we’ve had the last few days) to add more to my position.
The NFP drive our technical’s, Doc have a look at golds reaction off NFP these past 2+ years, so you’ve removed your $1225 call?
http://www.safehaven.com/article/37565/gold-and-the-us-employment-report