I suppose I an converting the time value into intrinsic value, in order to calculate the "premium". It's one way to measure premium but perhaps not the standard way.
"Selling the 4 puts, however, gets 30 cents" Exactly. That's about 7.8% premium if my math is correct..... However, if the Aug $4 call gets filled at .15 when pps hits 3.85, thats also .30 premium = 7.8%. I'm pretty sure I'm using the correct numerator.....
These smaller mining stocks seem to be traded in an extremely speculative manner; so much so that a move in POG is anticipated and the PPS can outperform POG considerably. When POG actually moves higher, as anticipated by the mining stocks traders, you see profit taking in the stocks. It seems to be a buy the rumor and sell the news kind of mentality. It will change when gold resumes its secular bull market trend and volume picks up in the stock.
Well, I too expected a pull back to 14 and I went short, very short.... PAAS is currently a hedge against long gold positions but it's a very bad one today. I'll double down here. I like PAAS, have liked it for a long time (I know, why short a stock you like.....) but it seems to be very overbought at these levels. I will lay PAAS over SLV and see what it looks like. I anticipate it will be innordinate outperformance.
I think you're both absolutely right. The pattern has been the same for a while now. IAG has anticipated a daily increase in pog, it jumps and then when the pog increase is confirmed, IAG doesn't move. That appears to be happening again, today. IAG anticipating a bounce back and if it happens today/tomorrow, there will be no gain in IAG PPS if it remains off by only 1.8%. However, if sell off in POG continues tomorrow, IAG will get hit for both days of selling at once and I think an additional 30 cents hit is a good guess as to what will come off.
Gold has been taking the escalator up and the elevator down, for the past couple of years..... It's just the way it's going to be until we're back into the secular bull market trend. Frustrating but patient investors will be rewarded over the next few monthe IMO.
TA tells me that there is monumental resistance at 4.20 and it will take a considerable gain in pog to break it. At least 20 bucks, closer to 30 to put a floor under it, imo. However, when it does break 4.20, this stock will likely outperform its peers!
I think you're right about Cote. From last CC:
Josh Wolfson - Dundee Capital Markets Inc., Research Division
Okay. And then on Côté Gold for a second, something I guess we haven't spoken about in a while, with the prefeasibility complete, should we expect to see a tech report on this asset issued or I guess revaluation to the current carrying value?
Stephen Joseph James Letwin - President and CEO
Josh, it's Steve. We're continuing to de-risk Côté but we are moving the permitting process along. We are looking at different designs for Côté given where the current gold price is looking at the capital really scrutinizing what we might be able to do with Côté again under this price environment.
So, I like to use the word news at 11, so we'll probably continue to do that and as we get information about what we can do to optimize Côté, we'll put out in the market. But right now our major theme here is to, continue to de-risk it, make sure we have permits in place and see what we can do to optimize the asset.
Thanks, Maven. So, I was right, almost 200K oz's/year and the high grade seems to equate to low costs/oz, as it should. Of course, a lot has changed in terms of costs, since 2010 but at 10 oz/ton, it should be very cost effective. Yes, you're absolutely right about Cotes, they will not be mining Cotes at todays POG, that's for sure. Would be nice to know how quickly they could start producing there though......
From previous conf call: Production for the Westwood and Mouska mines combined in 2014 is expected to range between 100,000 and 120,000 ounces.
and on last conf call, it was confirmed that Mouska had closed and they pulled 20K ounzes out of it in the Q.
Therefore, they must anticipate 100K ounzes in 3rd & 4th Q just from Westwood - right? That is a big deal going forward and at an estimate 10G/ton, they should be very profitiable oz's (not sure about costs in the Doyon Div in the past).
I think the regulars on this board, since later in 2013, have been patient in the knowledge that IAG is likely to start producing better numbers in 2015. If they stay on track with Westwood and they're expecting 200K oz's/year (2 x 100/half year.....) this will be a huge springboard toward higher production #'s. After that, I believe Cotes is likely to be operational in 2016, in some capacity. I anticipate the fast money will have been watching and waiting (who could blame them) and IAG does not screw up, there's no reason why even a 10% increase in pog from todays price will not produce a double, at least, by beginning of 2015. 8 bucks in the next 6-8 months seems more likely to me than a test of the 52 wk low.
Per last conf call: The focus of Westwood is on underground development to the first half of the year in preparation for commercial production in Q3. Productivity is improving, so we're in good shape for a commercial start, development productivity in the priority headings is running over 50% higher than it was last year. (MY QUESTION: Can anyone tell me what they mean by "priority headings is running over 50% higher than it was last year". I guess they're saying the development process is running twice as quick - would that be correc???
As we mentioned on the call last quarter, the yearly production for Westwood is heavily weighted to the second half of the year with over 80% of the production scheduled for the third and fourth quarters. (MY QUESTION: 80% of how many ounzes??? How many ounzes do they expect to get out of Westwood this year???
I would send them a message (success at receiving a response in the past has been mixed) but I'm certain they would not share any of that information. I am not expecting anything positive on Westwood during the next earnings release. They'd said almost all production will be realized in 3rd and 4th Q, if I remember correctly, so I anticipate a "we're on schedule" comment at best.
I just made, looking at the charts:
1. IAG is exactly where it was when GLD was trading at current levels - to the penny. That's quite a correlation, considering where IAG was just a month ago.
2. 4.20 should be an incredible buy signal if gets through that resistance.
Perhaps the huge buyer last month was a stat arb trader who put an equal value short on GLD while it converged. If that's the case, you will see some heavy selling every time we get above 4.20.
If it's not too late, PLEASE sell Niobec..... We are approaching the point in the economic cycle where I want to own gold and nothing else (of any considerable industrial value). I am now having to short silver in order to provide something of a hedge against a huge IAG position. Anyone know the name of the other niobium company? Maybe I could short that.
Better than down when we get a beat in UE & the $ is up..... I'd gladly sell the $4 July calls for .25 today. Can't imagine the bid will move up that much but we'll see.