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We've done this end-of-week comparative before, but today's is interesting because...
Today we have a NR update on the process and we have this excerpted:
"Based upon the input of their independent financial advisors, each special committee has directed its legal counsel to continue due diligence and begin negotiation of binding transaction agreements at a ratio of 0.45 of a US Gold common share for each 1.0 Minera Andes common share held. This is a change from the exchange ratio of 0.40 of a US Gold common share for each 1.0 Minera Andes share originally proposed by Mr. McEwen."
...silver is following it and not going with copper & friends.
For the moment at least.
...the population of Argentina.
"The Republican Party in Arizona’s Pima County, which is represented by Rep. Gabrielle Giffords (D-AZ), is in the midst of a fundraising raffle, $10 per entry.
"The prize: the same model of gun that delivered a near-fatal blast to the Democratic lawmaker’s skull outside a Tucson grocery store in January.
"Tucson is in Pima County."
UPDATE: This needs music.
1) Market volatility
3) Tax loss selling in November and December this year.
4) The discovery cycle of PM deposits
Plenty more too. It's 1 hour 24 minutes long, so the type of thing you listen to in the downtime moments. And if you get bored trying counting the number of times he says "very very very".
A great video. Thanks to reader J for the headsup
- Context: In 2q11 FVI reported production of 474,979 oz Ag. If you split that down into months by a simple 3 division, you get 158,326oz Ag/month.
- In the July figures just released, the Caylloma mine reports production of 6063kg, which is 194,951oz Ag in old money. That's an all-time record for the mine.
- As silver's average selling price for the month of July was around U$37.91/oz (according to the London Fix average at least), we're looking at about $1.4m of extra income compared to the average month of 2q11. Just the silver, just one month of three, just the extra on top. Cool beans, no?
The Shame of All Peru: How much gold comes from the environmental wasteland known as Madre De Dios, Peru?
Here's Reuters (translated):
August 31st 09:51am
Production at the mining company Shougang Hierro Perú (Shougang Iron Peru) is currently stopped this Wednesday due to an indefinite strike by its workforce, according to general manager, Raúl Vera.
Shougang Hierro Perú. controlled by the Shougang Group of China, is the only producer of iron ore in the country and has its mine in the southern Ica region.
"The company is not producing in light that the workers have down tools...we are waiting for word from the ministry of labour for a meeting", said Vera in a telephone conversation with Reuters.
Workers have gone on strike to demand better pay and working conditions, a union leader told Reuters.
UPDATE: Next time I won't bother translating, as ten minutes later here's an EngLang Reuters note on the story.
"Peru’s foreign debt rating was increased to BBB from BBB- by Standard & Poor’s on signs President Ollanta Humala will continue policies that made Peru one of the fastest growing economies. Note that the increase puts Peru above both Brazil and Colombia.
"Since taking office last month, Humala has pledged to honour previous contracts, spur private investment and implement a fair and equitable mining tax regime. According to Mines and Energy Minister Carlos Herrera, the Peruvian government is hoping to wrap up negotiations with mining companies and define a new tax this week. Many industry leaders are expecting the new tax regime to mirror that of Chile."
Here's the front page of the GS note out this morning.
Rebasing estimates to reflect lower growth; Buy FCX and AA
Market pricing in very weak demand; prefer metals over steel In line with recent weak economic data and macro concerns, with leading indicators like ISM and ABI pointing to renewed weakness, we are cutting our estimates and target multiples, resulting in an average -24% in our PTs across our coverage. We remain more positive on emerging markets, which have a higher influence on metal demand versus developed economies. We thus prefer metals and mining stocks over steel stocks in the near term. Within carbon steel, we prefer service center stocks over steel mill stocks.
Metals & Mining: Correction creates opportunity; Buy FCX and AA We believe the recent pullback in metals & mining stocks has created a particularly attractive entry point for select names. We remain very bullish on copper fundamentals and recommend investors continue to buy FCX. Although we are not as bullish on aluminum as copper, we prefer AA as we see the delinking of alumina-aluminum prices and AA’s aerospace exposure as strong earnings drivers over coming years. We are upgrading CENX to Neutral was Sell as the stock now appears fairly valued. We are also lowering our aluminum price forecast and estimates for AA, CENX and NOR. We are also lowering our PT multiples across our covered stocks to reflect the higher risk premium the market is applying, thus lowering PTs on average 21%.
Steel: Correction appears overdone but fundamentals remain weak. Despite the underperformance of steel stocks during this recent downturn, we are reluctant to get more constructive and expect supply-demand fundamentals to remain challenged in the near future. Although a seasonal uptick in demand in the autumn period, expected lower imports in coming months, and a negative arbitrage between US and global prices may provide some support in the near term, we question the sustainability of price increases going into the latter part of the year. We prefer service center stocks over mill stocks and are upgrading RS to Buy, was Neutral. We are downgrading WOR to Sell from Neutral as the stock appears overvalued, and we see 14% downside vs steel sector upside of 6%. We are also downgrading STLD to Neutral from Buy as we prefer RS. Among the mill stocks, we prefer NUE (Neutral), and on the upstream we prefer SCHN (Neutral). Among specialty metal stocks, ATI (Buy) is our preferred name as we remain very bullish on the aerospace cycle. We are also lowering our PTs by 26% for our covered stocks as we lower our estimates (on revised demand, pricing and costs assumptions) and PT multiples (to reflect higher risk premium)
Last week we noted our concern about the “fight for four”, as copper was having all sorts of trouble in making up its mind whether the sink below $4/lb or move higher. By way of a reminder, here’s a small snippet of last week’s text:“...the best bellweather commodity metal out there, copper, will need a close eye on it for the next couple of weeks. I’ve previously said out loud that I’m not worried about the state of play in copper as long as the metal stays $4 or over, so the last few days of struggle to hold that line is telling. There’s no rush to judgment here, but radar on copper? Yes.”Cut to today and as we can see on the above futures chart, up to last Friday copper had traded both above and below $4/lb on every single day for 14 trading days after its significant drop in the early days of August. However Friday August 26th marked a change in direction, which also happens to be the right direction for those long Cu such as your author.Just as last week, we’re not calling outright victory at this point and we’re not rushing to judgment. What we are doing is saying that copper looks healthier now and may turn out to be one less thing to worry come this time next week. Vamos a ver....
Here's the big question: Where in the world is this?
Otto RockThird cubicle along (wide stance)Minneapolis - St. Paul Intl AirportUSA
UPDATE, one hour later: You can stop now folks, because we got a winner within three minutes (i kid you not) of this post going up. Congrats to the quickdraw reader known to the world as Nowhuffo because that was lightning fast, dude. Nowhuffo correctly identified that photo as Rio Alto (RIO.v) at its La Arena property in Peru.
...monthly copper production figures for Mexico, 2009 onwards:
Hey, take a wild guess as to when Cananea stopped striking and came back on line?
"Carson Block is looking like a champ. For his part, John Paulson took his lumps like a man. It was big loss for his fund, but he showed he could recognize when he was wrong.
I do feel for the analysts who came out to support the company. Lesson learned, hopefully. Don't trust everything they tell you, sometimes the numbers are simply a lie. Company officials are NOT your friends."
1) In early 2011 the dumbass Canadian anal yst community drives their shareholders straight off a cliff by getting them into Coro Mining (COP.to) and promising them the environmental permit final approval is just one rubberstamp away, when in fact the dangers were crystal clear for anyone who actually understands how Argentine politics works.
2) Coro Mining (COP.to) is refused its permit last week and the stock tanks over 50% from an already low level (and way below the silly $1.80 and $2 targets bandied about by said anal ysts).
3) Same anal ysts now say that the permit denial is not as bad as it seems and that the project is merely being "delayed" a couple of years.
4) Same sheep clients actually believe this line and buy COP.to this morning.
The blind leading the blind.
TORONTO, Aug. 29, 2011 /PRNewswire/ - AuRico Gold Inc. ("AuRico") (TSX:AUQ.to - News) (NYSE:AUQ - News) and Northgate Minerals Corporation ("Northgate") (TSX:NGX.to - News) (NYSE-Amex:NXG) are pleased to announce that they have entered into a definitive acquisition agreement (the "Agreement") to create a new leading intermediate gold producer. The new company will have 5 operating gold mines, a sixth mine targeting production in 2012 and 3 gold development projects in Mexico, Canada, and Australia, three of the top global mining jurisdictions. The combined company is completely unhedged and offers full exposure to record gold and silver prices and an exceptional growth profile from approximately 475,0001 gold equivalent ("Aue") ounces2 this year to 730,000+3 Aue ounces in 2013 (growth of approximately 54%). All figures in Canadian dollars, unless otherwise indicated.
Under the terms of the Agreement, AuRico will acquire all of the issued and outstanding common shares of Northgate on the basis of 0.365 AuRico common shares per Northgate common share. Based on both companies' 20-day volume weighted average prices on the Toronto Stock Exchange (TSX) ending on August 26, 2011, the exchange ratio under the offer represents a 45% premium to Northgate's shareholders.
"The combination of AuRico and Northgate will immediately position the combined company as a pre-eminent intermediate gold producer with peer leading growth", said Rene Marion, President and CEO of AuRico. "The assets, projects and people in our two companies are highly yada yada continues here
UPDATE: Apparently technicals are the "first things" you need to know about a gold stock. Ahhh, silly old me for actually following a company and knowing its track record, eh....
UPDATE 2: What Brian Christie of Desjardin's thinks (extract):
We expect the market will view this transaction negatively. It is likely that the market believes that AuRico is overpaying for the Young-Davidson asset, given that based on our experience, we believe it will ascribe little value to Northgate’s Australian mines and Kemess project. However, we note that AuRico has a strong track record of turning around and/or optimizing various mining assets, as it has done with Ocampo and is currently doing with El Chanate.We will be reviewing our model for AuRico to reflect the proposed transaction.
Le market c'est moi? Nope, just happened to state the obvious earlier, that's all.
Which is interesting, I think. Here's the NR, go read.
...one that shows how Guatemala'a murder rate has been dropping in the last three years: