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"...we would see irrational exuberance to the upside when the gold market turns."
I agree with this, but we have not seen this behavior out of IAG yet. KGC yes, but not IAG. Only BAA, KGJI, and PPP are trading cheaper than IAG with regard to book value in the entire sector and they are pretty much garbage companies. EGO, HMY, AUY, and AGI are the only other gold stocks currently trading under book value.
IAG will only get to irrational trading ($6-7+) if Letwin actually delivers some earnings. Q1 might come in anywhere from the 0-7 cent range, but I'm looking ahead to Q2, where he better deliver at least a dime. There is no excuse now with POG near 1300. If he continues to show losses in this environment while everyone else at least shows some profit, he will FINALLY get the boot.
Essakane and Rosebel have come in under $1000 AISC at times in recent quarters. With the layoffs in Rosebel taking effect at some point and Essakane being at least decent, I think both mines can realistically get down to the low $900s and Wall Street will love that, especially with rising POG.
Just scalped a few thousand at 3.31 for a day trade. If gold hits 1300, this stock is worth at least 3.43 today. I just don't trust Letwin to produce the necessary profit, hence my open order on the original shares!
Had a sell order (all my IAG) in at 3.43 and a measly 300 shares were bought..... Order is still open. Interesting how IAG has been up 6% on a $6 move in gold on several trading days over the past few weeks and yet gold is up $25 and we're up only 6%. I am not that surprised. If gold holds up here before market close, my 4.43 order will fill. However, my point is that the miners lead the metal and they got ahead of themselves a little.... Nice thing is that those who bid them up have been vindicated, so they will do it again on any minor pullback. Typical bull market behaviour. When the regulars on this board were watching IAG lose 10% in a day, I opined that we would see irrational exuberance to the upside when the gold market turns. I've seen a fair amount of that over the past few weeks.
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NGD is a WAYYYY better company on many levels. They have AISC of $865 vice $1100, they are producing 400k oz this year and upcoming approx. 325k ounces starting mid 2017 for Rainy River, Blackwater and Rainy River add HUGE oz potential. Blackwater (8.2M oz) is just in dev stages. They are making money, good money, with gold at this level. They will be killing IAG next year and years after. Their AISC and debt burden is completely manageable. IAG will almost certainly lose money again this quarter but will see.
I find it shocking that NGD is worth almost twice as much as IAG. Paltry revenue, paltry production, paltry cash balance, and higher debt, yet double the market cap. Obviously, the quality of management cannot be compared, but NGD worth almost 2X IAG? I don't see it.
If you look at the DYX, its been in a short term downtrend since beginning of Feb. That's about the time most miners have bottomed. A bear market in the DYX is good for gold. Miners, such as IAG, will continue to rise with the POG. POI has also risen, but probably not enough to offset the rise in POG to boost miner's profits.
The bull market in the US $, these past few years, as put quite a resistance on the POG & most miners.
The bar doesn't seem to have been set as high as I thought it would be for the juniors. I had figured IAG would have to make 0.03/share to move higher, but as long as they make a profit of at least a penny or perhaps even just break even, they should get the benefit of any doubt that the future is paved in gold. I am getting out if they make a loss the Q though.
Will IAG surprise us and actually make money or lose less? All of the other miners are getting their acts together. Look at NGD. Profits of 26M this quarter when commodity was at a low. They offset their production costs by selling copper, zinc, etc. And they made good money. What will IAG do this quarter? This will tell you where to stick your money. If IAG can't peform then move on. It won't be worth it. Others will move much higher much faster. But we hold out hope....
Just like everyone else waiting for that 30-40% correction in the SP 500/ DJIA. LOL.
This is just like the bear market. Everyone thought, myself included, they knew where it would end and "it can't go any lower". Now every prognosticator is waiting for the big pull back. I see it everywhere. Clive Maund is the worst of the worst but he isn't the only one. There a plenty out there. I have seen many telling their subscribers to short the miners. That is why "trading" the mining stocks are incredibly hard. May is usually the start of the doldrums..... Will it be this time?