Friday Market Commentary from Rick
Click download link to listen on this device: Download Show
Peter R.
This is what we need to see as we near a bottom in the gold market (might already have happened). I, for one, would not mind seeing several more close up shop and gold prices oscillate for awhile between $1250 and $1130. Heck! Wouldn’t bother me to see it drop to my lower target (please! please! please!) and more companies close up shop. THAT would be the absolute indicator we are very near a bottom in gold. Just my opinion though.
stay frosty
Peter R:
They are not closing the mine, that’s not what the report says. They are reducing staff and going to high grade the mine with less people. That’s not the same as shutting the mine.
Thanks for the input Bob.
Best to you,
LPG
Please do not thank Bob. He already thinks that he is the smartest guy in the world. (As do we!)
“NUM spokesman Livhuwani Mammburuu said the company had indicated it planned to put the mine on “care and maintenance,” which effectively means closing it.
NUM members are saying that Harmony must give back the license so it can be put on market for potential buyers,” he said, referring to the company’s permit to operate the mine.”
http://www.mineweb.com/news/gold/harmony-in-talks-to-cut-over-3000-jobs-num/
Thanks for that input. It is difficult for us to stay on top of evrything.
By the way, there is help for your specific malady!
!wonk ot doog ,sknahT
“good to know, Thanks” 🙂
Not quite. From right to left, it says: Thanks, good to know! 😉
+1 🙂
You sure dashed my I.Q.
thanks….i think 🙁
Sorry. 😐
+1
Bob,
We all know where you stand on gold and the miners. To say that you defend them vigorously is an understatement. That’s not to say that you aren’t fair and provide equal analysis or there is a knock against you, but only to point out the inherent biases that may be relevant.
Clearly the business part of your livelihood depends on these diverse group of so called miners staying viable and staying in business is mandatory because advertising fee’s have to be paid.
So my question to you is do you think that an unspecified number of these worthless money sucking companies that are really nothing more than a fart in the wind that call themselves gold/silver explorers and even money losing producers should go the way of the dodo bird and be delisted as I do or should they stay around on the TSX just for the hell of it.
I like the terminology that Brent Cook uses, or it could be Rick Rule that coined the phrase. One of them called these crap companies “lifestyle Companies”.
In other words they simply exist to complete financing’s, dilute the shareholders, rent lavish offices that are well above prudent spending thresholds and extract funds from dumb investors to continue to pay lavish salaries and inflated pay packages while most of the dirt they hold claims on is nothing more than cow grazing pasture for the most part.
I’m interested where you stand on this issue since your such a hardcore, visible and vocal commentator with in the gold and silver community.
Thanks
V
KInd of agree Peter R.
I also agree with Mark Allan’s comment below!
siht si dipoots!
Bob,
That mine employs 2,836 permanent staff and an additional 736 contractors. How much mining do you think they are going to get done by keeping a few hundred employed. They are not saying closed but the reality is is that mine is toast. Their Kusasalethu mine is focussing on high grading and when that doesn’t work it will be toasted as well. Rumors are it is next.
Sorry, I linked the wrong article above. Here is the correct one. Harmony is a gong show.
http://www.mining.com/harmony-gold-to-cut-over-3000-jobs-union-asks-govt-to-intervene/
Harmony Gold (NYSE:HMY), South Africa’s third-largest bullion producer, said Tuesday it will cut jobs at its troubled Kusasalethu mine to try returning the operation to a profit, as it has consistently recorded losses since September 2012….
The new plan for the mine —located about 75 kilometers west of Johannesburg— will involve digging a lower volume of ore at higher grades and reduced cost, Harmony said.
I’d like to see a lot more marginal companies go under, especially the juniors but what they are reporting is a positive for them, not a negative.
I thought Harmony Gold was an Anime cartoon company? Robotech comes to mind.
OK, I’ve got it now. One mine is indeed being closed, the Mineweb article and the 1st article is about another mine where they are cutting staff but not closing.
Thanks for the input Bob, part II
🙂
Best to you,
LPG
I agree about Kusasalethu but todays article is about their Doornkop Mine. I linked the wrong article initially. Click on this one.
http://www.mining.com/harmony-gold-to-cut-over-3000-jobs-union-asks-govt-to-intervene/
Kusasalethu is in trouble still and will be next on chopping block. Ramp downs almost never work.
You all know one of the companies that I see a lot of potential in is V.FMG. Bob M. is also a share(bag) holder. Anyways, they announced a Private Placement this week at 0.03 cents a share with a 0.05 cent full warrant. I suspect most didn’t notice the announcement but thought I would bring it to your attention. The private placement wont be open for long but it is an opportunity for you to get in really cheap. I am buying $20k plus and the CEO is investing about $40k. The CEO owns about 15% and there are a number of other major shareholders. The float is as tight as I have ever seen. Call Jim the CEO 519 699 5352 or email him drift@golden.net and he can give you the low down. Mexican property and below are some drill highlights to give you a taste of the potential.
Karen zone drill highlights to date (for all near-surface intercepts, see news releases dated April
28, 2011, Feb. 27, 2012, and Oct. 15, 2012):
• DDH No. 1: 5.8 metres of 3.67 grams per tonne gold, 753 grams per tonne silver;
• DDH No. 2: 15.2 metres of 2.58 g/t Au, 47 g/t Ag;
• DDH No. 3: 37.8 metres of 6.51 g/t Au, 678 g/t Ag;
• RC hole No. 2: two metres of 1.48 g/t Au and 1,330 g/t Ag;
• RC hole No 3: 18 metres of 6.52 g/t Au and 61 g/t Ag;
• HDH 11-04: 15.2 metres of 1.57 g/t Au, 335 g/t Ag, 0.18 per cent copper plus 22.3
metres of 0.35 g/t Au, 200 g/t Ag and 1.21 per cent Cu;
• HDH 11-05: 33.4 metres of 4.27 g/t Au, 395 g/t Ag, 1.24 per cent Cu;
• HDH 11-06: 21.6 metres of 4.90 g/t Au, 104 g/t Ag, 0.73 per cent Cu;
• HDH 11-27: 9.7 metres of 6.22 g/t Au, 1,853 g/t Ag, 12.62 per cent Cu;
• HDH 11-29: 12.2 metres of 1.86 g/t Au, 70 g/t Ag, 0.14 per cent Cu;
• HDH 11-30: 24.4 metres of 0.34 g/t Au, 25.8 g/t Ag, 0.42 per cent Cu;
• HDH 11-32: 7.6 metres of 3.64 g/t Au;
• HDH 11-33: 10.9 metres of 2.70 g/t Au, 152 g/t Ag, 0.20 per cent Cu.
Diana zone drill highlights to date (for all near-surface intervals, see news release on March 10,
2011):
• HDH 11-09: 15.7 metres of 0.77 g/t Au, 105 g/t Ag (143.7 silver equivalent g/t);
• HDH 11-10: 39.0 metres of 0.40 g/t Au, 135 g/t Ag (154.9 silver equivalent g/t);
• HDH 11-11: 49.5 metres of 0.42 g/t Au, 86 g/t Ag (107 silver equivalent g/t)
including 13.3 metres of 0.75 g/t Au, 195 g/t Ag (232.7 silver equivalent g/t).
Peter… is this Fortuna Silver ?? THANKS
or First Mexican Gold Corp ????
First Mexican Gold
all those drill results are at or near surface and can be mined and processed simply and cheaply. They arranged a nice deal with BVN that fell through and Jim has had several other offers but he is being a very picky SOB.
Thanks Peter
San Gold and their Rice Lake mine is toast as of yesterday as well. They produced 40,000 plus ozs last year.
I feel bad for the workers and shareholders but we desperately need a purge in this in the industry.
More and more of this is, of course, going on! And it ain’t stopped yet!
I want to see gold tank just so I can hear the whaling and nashing of teeth. Then it gets better when Art Bell claims space aliens caused the crash, Steve Quayle blames Satan, and Alex Jones blames the NWO. Oh and the fact that I am shorting the heck out of the junior minors! lol
I would personally exercise caution is which companies you short Jason!
Not suggesting, by the way, that some truly deserve it!
BitGold Announces C$18.25-million offering StockWatch
Not a particularly large amount.
Thanks,by the way, bb I just read it. With the four month hold, it might be an interesting play.
I personally am passing. I know that Bob and Barbara will completely disagree with me.
Oh well, a man’s gotta do what a man’s got to do!
Actually not Al that is not a bad move. You can’t kiss all the pretty ladies. Barbara bought some shares at a higher price because she has always wanted to be part of something big. The stock is really dangerous because of the 3.5 to 4 million share float but for all those wise enough to buy cheap and sell dear a few days later, good for you.
Peter R: Roy Sebag is the smartest guy I know. I knew one guy smarter but he died. BitGold is going to surprise a lot of people. Your points may well be valid and only time will tell. I can tell you Peter Schiff and BullionVault are having a hissy fit, they think it’s going to succeed a lot more than they have.
yikes. not a good start to the marketing campaign. For the first 40 seconds I thought is was mocking bit coin but I just wasn’t sure how. I see bitcoin being a gigantic flop. I get the idea and think it is good but it is not a business. There is no money to be made. It is a service that should be offered as part of a much much much larger business. The advertisement I just watch probably cost them their total revenue for 2014. Transaction volume will not be high enough to make their 1% fee even close to enough. I am guessing, admin and overhead wont even be covered by revenue for the fees they charge. The only value is the gold they hold and that will soon be diluted away with below market private placements (today) and debt. New companies with massive potential don’t raise money well below market right out of the gate. Todays new release and that advertisement is already indicative of the hole that is deepening below their feet. Improved gold prices wont even help them and will hurt them as people will choose other ways of securing their money in gold (miners, gold backed etf, physical). Bitgold does not stand a chance.
Interesting comments, Peter R.
What do you think about mine?
100% agree – “interesting play” to say the least.
please replace “coin” with “gold” in my post above.
I had a girlfriend tell me that no matter what you do it all boils down to the in and out.
With a 1% premium that’s about the best in and out your gonna find.
Free storage with the option to spend is extremely competitive.
I agree. That is why they fail. Fees gotta go up. Maybe that is their plan. Get people in with no fees for the first little while and then break the bad news that transaction fees need to go to 2 then 3% and storage fees are progressive (free if you have over 100 ozs or do X number of transactions per month. You get the idea. If that is there plan they have a chance but like I said before, as soon as gold starts ticking up people are exiting bit coin and jumping in the efts, junior and miners.
I saw their ad in China yesterday, they are going to have a huge customer base.
With different storage locations around the world. the ability to move gold across boarders and a very low redemption fee the advantages are compelling.
I don’t see it. In China and India they will want to hold it or they will develop their own system. Another issue with bitgold. Nothing about it is proprietary. Can be copied and improve a thousand times over.
That is interesting. Are you sure it is not a proprietary system?
There will be an advantage to doing business in gold which bitgold allows.
No need to exchange currencies.
Indians Chinese and Moslems should find that an appealing thought.
Peter R:
Their technology is patented. The idea is not proprietary but the execution can be. You are correct that BitGold needs a lot of customers to survive but if you go to Alexa and look at who is going to their site, it’s countries in deep trouble financially such as Mexico, India and Spain. I’d love to know how many customers they have picked up in the last two weeks from Greece.
http://www.alexa.com/siteinfo/bitgold.com
The EU can mumble all they want about Greece and exiting the Euro but if individuals all bail out of the banks and went to gold, Greece just went to a gold standard. Governments always believe they have a lot more power than they really do. You could make a good living going door to door in Athens and signing people up. This is a game changer.
Bob, I am sure you remember Intertainment. There was a lot of reliance on Alexa data to indicate traffic to the site. In the end it didn’t amount to anything because they either, could monetize the traffic, or the traffic was fabricated.
couldn’t monetize
The ability to buy and sell gold at a 1% fee is pretty compelling. You are totally correct that they need volume and I agree. But I love the idea of buying gold at 1% in any quantity.
Totally agree. I the business proves sustainable I will definately open an account.
Almost too good to be true, huh bb!
I don’t believe its too good to be true Al, its just time.
They are giving people what they want, we see it in the states with states allowing taxes to be paid in PMs and Texas is building their own system to transact in PMs.
I think its just a natural progression and bitgold has figured that out.
The management should be the deciding factor of success, capitalising on the idea, time and name is the advantage.
I have a hard time purchasing some of the PM stocks of companies that are looking at focusing on producing gold from their high grade ore bodies. To me, it often smacks of desperation and will impact their future earnings and costs.
RD:
High grading is a great way to kill your future.
Agreed,
But for some of them, its their only chance of survival until the spot price goes back up.
Not much change in the commercial positions on the COT report this past week.
That is Harmony and Impact Silver’s strategy.
http://www.impactsilver.com/s/NewsReleases.asp?ReportID=709946&_Type=News-Releases&_Title=IMPACT-Silver-Announces-First-Quarter-2015-Financial-and-Production-Results
From Impact Silver’s financials yesterday
“Silver production continues to transition to new mines to take advantage of their higher grades in response to lower metal prices.”
And they can still barely keep there head above water. Mining high grade is a potential option for micro miners that don’t have to ramp down production to do so but for large scale miners it removes all the profit in a couple years and leaves an unsustainable mine. Not to mention you cant scale back large operations effectively. Works on paper not on the ground.
Unlike Harmony, Impact has no debt. So it can weather whatever the market throws at it.
What’s happening now is neither new nor unusual. After trading at 4.25 in 1997, Impact bottomed at .03 in 2001. It then hit 2.50 in 2006 and fell to .17 in 2008. In 2011, it topped at 3.14 and, in March 2015, it hit .15. When silver finally does get up off the mat, Impact will have a lot more going for it than it did in 1997 or 2006.
Didn’t mean to bash Impact. I agree a small minor can get away with it. Impact is on my watch list and I will buy Impact when silver starts to climb. But they are an example of a company that needs to rob its future to pay for the present.
I know you weren’t bashing. You just told it like it is. I really own it for its exploration upside but like the fact that their production has provided for most of their funding needs and therefore kept dilution to a minimum.
Since Impact has explored less than 1% of their Zacqualpan property, which now has 4,000 old mines cataloged, I’m not concerned that their tiny production of high grade material will rob much from their future.
You probably know this already, but even much of the tailings (waste rock) from the old mines is high grade by today’s standards.
This about says it all:
“BitGold, the company that needs no capital, raises capital.
The best thing; today’s news confirms every suspicion. Goodbye forever Bitgold (XAU.v), we have no need to take you seriously any longer.”
incakolanews.blogspot.ca May 29/15
All I know is – there’s a gap below $3 looking for a fill.
http://stockcharts.com/h-sc/ui?s=XAU.V&p=120&b=5&g=0&id=p72096254903&listNum=1&a=410137139
Sold my pot (GBLX) and bought a StockCharts “basic”.
Is “Charts-R-Us-dot-Calm” taken?
Roy Sebag And Josh Crumb View On BullionVault
You should read the article below before the one above.
Two good articles – thanks mfF!
Should be interesting to watch from the sidelines.
Yep Irwin,
Agree about both the articles & the sideline watching.
Bitcoin, BitGold, GoldMoney – and BullionVault
https://www.bullionvault.com/gold-news/bitgold-goldmoney-052720152
Great articles. But they didnt answer the golden question. How are they going to pay the bills and generate a profit. Storage fees are massive not to mention the other massive admin and overhead costs. There promotional costs to generate customers is going to be huge As well. What is stopping a Chinese business person from doing all there transactions through this platform. They could run a gold exchange using bit gold and eliminate overhead from there business. Bit gold would be bankrupt in a year.
Harmony gold closing mine that produces 100,000 ozs plus per year. This is the first significant gold closure that I am aware of based on economics. Many more to follow.
http://www.mining.com/harmony-gold-cutting-jobs-at-s-african-mine-to-turn-around-operation-45141/