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Freeport-McMoRan Inc. Message Board

  • investora2z investora2z Jun 22, 2013 7:19 AM Flag

    Gloom appears excessive

    Starting of Copper production from Grasberg mine is a positive for Freeport. Freeport is excessively associated with gold prices, and hence bears the brunt of adverse movements. The way gold / silver companies crashed this week, it seems that it may take some time to improve the sentiments. There was some rebound in many stocks on Friday (including Freeport) with great volumes, but the weekly cut was still high. The stocks & the gold prices had been stable for few weeks. They had tested the lows a couple of times, and the supports had held. Interpretation of news from the Fed that QE may gradually be reduced led to a lot of negativity. Wonder why this was not in the price already as there were many who were talking about reduction of QE in December this year. In any case, now some big investors have started turning bit positive about the sector. The voices include Jim Rogers who is predicting that the prices may ultimately rise due to devaluation of the currencies. Rogers has stated that some companies have been beaten down so much that an increase in gold prices may lead to a sharp rebound. Recent crash in prices has prompted some companies to acquire assets / stake in development stage companies due to attractive valuations. Even some streaming companies have acquired rights / royalties etc. Coeur 'D Alene (CDE) had hinted at some interest in smaller companies surrounding its properties in Nevada. It already has a 5% stake in Pershing Gold Corporation (PGLC) which is a development stage company expected to start production in a few quarters. Even Chairman of Franco-Nevada (FNV) had expressed optimism about prospects of gold prices. FNV Chairman had stated that the woes of the gold companies are linked to the fact that they started mining too low and for lower grades when the prices were high. The costs became unsustainable when the gold prices corrected.

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