While the Company is focused on operations and deriving significant and increasing cash flow and earnings before interest, taxes depreciation and amortization ("EBITDA") from its operations, a strategic objective has been to also focus on monetization initiatives, which serve as catalysts to reducing debt and increasing cash balances. As part of this strategy, the Company has committed to reducing the outstanding balance on its revolving credit facility to zero and holding sufficient funds for some or all of the scheduled debt repayments in 2016 and 2017. The Company's monetization initiatives are on track to achieve this strategic objective before the end of 2015 with the first of which, the metal purchasing arrangements, having already been completed, resulting in a sizable cash inflow. With the completion of these catalysts, the Company will be well positioned to focus entirely on operations, having secured a stronger balance sheet, and maximizing cash flow and EBITDA as noted above.
Cash costs for the third quarter were $594 per ounce of gold, compared to $528 per ounce of gold in the same quarter of 2014. Cash costs were impacted by a 9% decline in the realized price of copper and lower sales volume resulting in lower by-product credits for the quarter. On a co-product basis, cash costs for the third quarter were $653 per ounce of gold or 6% lower, compared to the $695 per ounce of gold in the third quarter of 2014. Relative to the second quarter of 2015, cash costs on a co-product basis were 7% lower reflecting the impact of higher production. Late in the quarter, further improvements in co-product cash costs occurred due to further weakening of the currencies in the countries in which the Company operates. The Company expects this trend to continue into the fourth quarter.
Starting in 2016, the Company will begin to fully benefit from the ..... fourth quarter will fuel lower cash costs starting in January of 2016 for gold
What is the justified equation can anyone explain? US holds worlds largest Gold Equity reserve and which is in trillions!
As the fall in precious metals has brought prices to rock bottom, a possible reversion in precious metals—especially gold in 2016—could give rise to a price increase for these stocks as well. Notably, Alamos Gold, Cia De Minas Buenaventura, and Eldorado Gold Corporation are trading at 16%, 25%, and 8% discounts, respectively, from their 100-day moving average prices.
Meanwhile, as of January 2015 the yuan has become the most frequently used currency in global transactions, surpassing the Canadian and Australian dollars. Only four years ago, the yuan was used only among a small group of 900 banks. At the end of 2014, that number rose to more than 10,000 organizations. (Source: “Washington, China, and the Rise of the Renminbi: Are the Dollar’s Days as the Global Reserve Currency Numbered?” Heritage Foundation, August 17, 2015.)
What effects will the yuan’s inclusion in the SDR have on international finance? For starters, bond issues and the opening of bank accounts in yuan will rise significantly in areas where such transactions would have knee-jerked toward the dollar. In addition, transaction costs will be lower and will increase the expansion of Chinese companies abroad.
As the subtitle of Rickards’ book not so subtly suggests, the effects of such a currency conflict are less than reassuring. “The making of the next global crisis,” perhaps one worse still than that of 2008–2009, may seem like hyperbole. After all, Rickards’ follow-up tome is The Death of Money: The Coming Collapse of the International Monetary System.
While the world collectively knocks on wood over the next few weeks, many believe that in December, the Federal Reserve will initiate the first interest rate hike. Interest rates have been held at historic lows for almost seven years. Now, Federal Reserve Chair Janet Yellen may decide to postpone the rate hike, again, in the wake of the IMF’s move and China’s related efforts to devalue the yuan. The suspicion is that China and other Asian monetary authorities in the region will act accordingly to protect their currencies and prevent slowdowns in domestic markets, fueling a downward spiral. Vietnam, China’s direct competitor, has already done so.
According to investment fund Schroders, the new mechanism for the official listing of the Chinese currency will lead to a shift away from a pure dollar peg to one based on a basket of currencies. (Source: “Large yuan depreciation not expected,” Schroders, August 11, 2015.) Accordingly, a further depreciation against the dollar would become more likely, further delaying the interest rate hike.
The International Monetary Fund (IMF) has approved the inclusion of the yuan (or renminbi), the Chinese currency, in its basket of reserve currencies, threatening a U.S. dollar collapse. The IMF’s Executive Council, which brings together representatives of the Washington-based institution’s member countries, has added the yuan to the dollar, euro, yen, and pound in its currency basket for the IMF’s Special Drawing Rights (SDR).
The yuan will formally take its place as a reserve currency starting on October 1, 2016 to allow for an orderly transition. The IMF is satisfied that the yuan fulfills the requirements of a valid and widely used currency for international trade. The IMF’s decision, however, was more the result of political than economic considerations, highlighting the threat of a U.S. dollar collapse.
As with the current reform of the representation in the IMF, the United States opposes any changes that would weaken the role of the dollar, let alone prompt a dollar collapse. However, unlike other decisions that require the mandatory approval of 85% of the IMF’s members, the vote for a currency’s upgrade to DSR designation requires only 70% approval, making Washington’s veto power irrelevant.
China is now the second largest economy behind the United States (the first, if purchasing power considerations were taken into account according to the IMF), but it has also suffered from significant underrepresentation within the IMF. The adjustment of quotas, approved in 2010, which has recognized China’s efforts, lingered under the veto of the U.S. Congress, which has veto power that effectively limits the extent of the IMF’s power.
The inclusion of the yuan in the reserve currencies basket may have finally been approved as compensation for the IMF’s failure to do so earlier; in other words, it may be an attempt by the leadership of the IMF to maintain good relations with Beijing. The yuan’s inclusion also represents a sign of confidence that Chinese authorities will continue to promote economic reforms, some of which were adopted specifically to secure reserve currency approval. (Source: “Momentum Builds to Label Chinese Yuan a Reserve Currency,” The Wall Street Journal, April 1, 2015.)