Imagine, if you will, that the bank can line up three or more producers and others who want to borrow this gold. All of a sudden, that one ounce of gold is now involved in half a dozen transactions. The physical volume involved has not changed, but the turnover has multiplied. This is the basic building block of bullion banking. This admittedly rudimentary outline of bullion banking holds the key to understanding how bullion banking allows for a multiple of trades to be based on one lot of metal.
Many banks use factor loadings of 5 to 10 for their gold and silver, meaning that they will loan or sell 5 to 10 times
as much metal as they have either purchased or committed to buy. One dealer we know uses a leverage factor of 40.
(Long Term Capital Management had a leverage factor of 100 when it nearly collapsed in 1998.)
A bank does not even have to be buying gold at a particular time to be able to use it as collateral against which it
can trade, sell forward, and lend gold. If a bank has gold held in an unallocated account, or a forward purchase on its books committing a producer to sell it gold later, it can use these gold assets as collateral for additional gold
GATA CPM Group Bullion Banking Explained
There are plenty of CEO's out there taking pay cuts because of performance. ECU silver management pulled the same, stuffed with options. A 450K salary does not equate to a 50 cent share price and losses that have to be released Friday after hours. Investors should hold them to realistic salaries, while the company is trying to dig itself out of a big hole.
Time for the fractional reserve pozi physical market to get transparent.
Thursday, February 26, 2015 at 3:24 pm
Earlier today, I had the opportunity to visit with our friend, Andrew Maguire. Some exciting, new developments are pending in the global gold market and Andy stopped by to give all of us in Turdville a sneak preview.
The goal of this discussion was to familiarize everyone with some of the operations of the London-based, fractional reserve bullion banking system. As background, Andy references a document written by Jeffrey “Sister” Christian nearly 15 years ago.
Andy goes on to inform us of a new project that he has been fortunate to be a part of…a new, 100% physical and fully-allocated precious metals exchange.
The Korelin Economics Report
21 hours ago - Ripe for a Take-over – Gold Canyon Resources. A Swedish private research firm wrote up Gold Canyon yesterday.
oops - The TRGD website states - Shareholders are positioned to realize value. Take that statement and imagine a private placement filled with warrants and fees. That may be good for a few more paychecks. We may get some gold grab samples sprinkled from time to time.
mud.. Biscan & Barefoot were working on shareholder value. That's the best news you have posted in a long time. TRGD should now get bought out at a premium.
Friday PM release is appropriate for these numbers.
Golden Minerals Reports 2014 Year-End Results
In addition to the negative gross margin noted above, the net loss includes the following expenditures: $5.5 million on exploration expenses; $4.6 million on administrative expenses; $3.1 million on project expenses at Velardena incurred during start-up of mining and processing activities; $3.1 million on non-cash depreciation and amortization-related expense; $2.5 million related to Velardena shutdown, care and maintenance activities prior to the resumption of mining activities in June 2014; and $1.6 million of expense associated with the El Quevar project. These expenses were partially offset by other operating income of $0.7 million related primarily to the sale of certain exploration properties in the third quarter 2014, $1.6 million related to the reduction of a tax liability contingency, and $1.7 million related to the reduction of a warrant derivative liability
The Company's cash and cash equivalents balance totaled $8.6 million at December 31, 2014 compared to $19.1 million at December 31, 2013. The Company expects to end 2015 with a cash balance of approximately $2.0 million, which takes into account the December 31, 2014 cash balance and positive gross margin during 2015 from the Velardena Properties of approximately $2.5 million, reduced by expenditures during 2015 of approximately $3.0 million for exploration activities, $1.0 million for El Quevar, $4.5 for general and administrative costs, and $0.6 million for sustaining capital and increased working capital related to the Velardena Properties. In arriving at the forecast of positive gross margin for Velardena, the Company assumed a price for silver and gold of $17.00 and $1,250 per ounce, respectively.
February 27, 2015
Vancouver, B.C……..Corvus Gold Inc. (“Corvus” or the “Company”) - (TSX: KOR, OTCQX: CORVF) announces the closing of a CAN $4,500,000 non-brokered private placement. Pursuant to the financing the Company issued 4,500,000 common shares at a price of CAD $1.00 per share. Insider participants in the private placement include Tocqueville Asset Management L.P. and AngloGold Ashanti (USA) Exploration Inc. two of the Company’s largest and long term shareholders. Full transaction details can be found on SEDI
FEBRUARY 25, 2015
Saudi Arabia has reportedly offered to allow Israeli fighter jets use its national airspace to attack Iran when necessary, in exchange for Israel making progress in peace talks with Palestine, a senior European Official says, according to the Jerusalem Post (JPOST) and the Times Of Israel.
Saudi Arabia has expressed their willingness to cooperate with Israel on Iran — which includes using Saudi Arabia’s airspace by the Israeli Defense Forces (IDF) for possible air strikes on Iran — during private meetings with European officials, both the JPost and the Times of Israel report, citing a report by Israel’s Channel 2 television.
“The Saudi authorities are completely coordinated with Israel on all matters related to Iran,” the European official said, according to the Times of Israel.
According to the JPost report Saudi officials said that such cooperation would require progress in peace talks between Israelis and Palestinians “before having enough legitimacy to allow Israel to use their air space”.
“The Saudis have declared their readiness for the Israeli Air Force to overfly Saudi air space en route to attack Iran if an attack is necessary,” the TV report said, according to the Times of Israel.
By using Saudi airspace, this would mean that Israeli Defense Forces (IDF) would have the ability to strike Tehran at a much shorter distance, without having to fly around the Persian Gulf.
Although Jerusalem and Riyadh do not have diplomatic ties, there have been numerous unconfirmed reports of a possible coordination of the two nations against Iran.
24 Feb 2015
The Apple Watch Edition might be Apple’s most unusual product in years. Questions abound about the 18-karat gold smartwatch. How much will it cost? Will Apple offer an upgrade path for it?
But I have a broader question: how will it affect the world’s gold supply?
The Wall Street Journal has reported that Apple plans to ramp up production of the Apple Watch Edition to over 1 million units per month in its second quarter of production. That’s an unbelievable number of gold watches, especially considering that they could cost as much as $10,000 each. But I’ll never underestimate Apple’s ability to sell lots of an expensive product.
For the sake of argument, let’s assume that each Apple Watch Edition contains 2 troy ounces of gold( Apple Spotlight estimates 50–75 grams in the Apple Watch Edition; 2 troy ounces equals 62.2 grams). Now, 18-karat gold is only 75 percent pure, because pure gold is too soft for everyday use, but for easier math, let’s also assume that 75 percent still uses 2 troy ounces of gold. (Even if Apple uses only 1 troy ounce, halving all the numbers below, they’re still huge.)
If Apple makes 1 million Apple Watch Edition units every month, that equals 24 million troy ounces of gold used per year, or roughly 746 metric tons. That’s enough gold to make even a Bond villain blush, but just how much is it? About 2500 metric tonnes of gold are mined a year. If Apple uses 746 metric tons every year, we’re talking about 30 percent of the world’s annual gold production.
That’s a sobering thought, but it’s not entirely unbelievable: Apple has a tendency to buy up so many resources that competitors can’t keep up, and it certainly has the cash to do so. But gold is different than aluminum, say, in that it’s a precious metal. Although currencies are no longer backed by gold, governments still hoard it as a "store of value" and as part of the guarantee of a financial system. The Federal Reserve Bank of New York stores about...continued
By: Chris Powell, Secretary/Treasurer, GATA
Dear Friend of GATA and Gold:
If you're wondering why mainstream financial news organizations refuse to report the biggest financial news story in history -- the rigging of all major markets by Western central banks -- another reason has emerged in the last few days with the resignation of the chief political writer of the London Telegraph, Peter Oborne.
The Telegraph is a great newspaper with a wide scope, the standard bearer of the British Conservative Party, whose reporting is often cited favorably by GATA and frequently has been brave, as when a couple of years ago it exposed the scandal of expense padding by members of Parliament, including Conservative members.
But the Telegraph won't touch surreptitious intervention by Western central banks in the gold market any more than any other respectable Western financial news organization will, and departing the Telegraph, Oborne complained that the newspaper had gone soft in its reporting about a big investment bank that is a major advertiser, HSBC. Reports about Oborne's resignation are collected at the Google news archive here:
Feb. 20, 2015 7:27 AM ET Soma Bull Seeking Alpha
I continue to be extremely bullish on Almaden, I haven't liked the prospects of a junior this much since Rainy River Resources, which was bought by New Gold in 2013.
The Ixtaca project is exceptionally strong and exceptionally attractive in the base case form, there is no need to build this using the ramp-up model.
Projects in Mexico are being bought for around $40-$50 per ounce, Almaden is only being valued at $18 per ounce.
I would be surprised if Almaden hasn't been acquired by the end of this year.
I continue to pound the table on Almaden Minerals (NYSEMKT:AAU) as I haven't been this bullish on a junior mining company since Rainy River Resources. Rainy River was acquired in 2013 by New Gold for $310 million. I expect that Almaden will soon be acquired as well, especially since we are starting to see quite a few projects in Mexico being snapped up recently.
I wrote about Almaden back in August 2014, and since then the company has put out an updated PEA on their Ixtaca project. It showed lower cap-ex costs for the project as well as two production scenarios: a base case and a ramp-up case. I will take a look at both of those and explain why this ramp-up case is not a good choice and Almaden shouldn't even try to "market" this plan. I will also compare Almaden's valuation to other recent acquisitions in the sector.
Today I spoke with the CEO of one of the bigger Australian miners. My question was why doesn’t the industry speak out about the price manipulation. His response was everyone knows the price is manipulated. When I asked why it isn’t publicised by the industry he said there are stronger forces at work. Regards....
We have to wait out the BS LBMA/Crimex paper games. The producers, with the exception of AG, have turned a blind eye to it. They make their paychecks. Why should they care about employees or shareholders.
The Curious Case of the PM Fix vs. the AM Fix - James McShirley is a fine example.
Lemetropole cafe snippet...
*The large specs decreased their long positions by 889 contracts and increased their shorts by 4,652 contracts.
*The commercials increased their longs by 4,256 contracts and reduced their shorts by 1,480 contracts.
*The small specs increased their longs by 43 contracts and increased their shorts by 238 contracts.
*The large specs decreased their long positions by 10,915 contracts and increased their shorts by 12,625 contracts.
*The commercials increased their longs by 4,731 contracts and reduced their shorts by 22,225 contracts.
*The small specs decreased their longs by 987 contracts and increased their shorts by 2,429 contracts.
TOTALLY expected as The Gold Cartel forces fleece the specs again.
Hard Asset Investments Feb. 19, 2015 11:57 AM ET
IAMGOLD just reported EPS of $.03 on revenue of $272.5 million; more importantly, the company's all-in sustaining cost fell to $1,021 for Q4, the fourth consecutive quarterly decline.
Net cash from operating activities was $72 million, up 64% year-over-year.
IAMGOLD had $321 million cash and equivalents at the end of the quarter, not including the $500 million sale of the Niobec mine, and now has over $850 million.
The quarterly results are strong as they show IAMGOLD is successfully reducing cash costs and improving profit margins at its core gold mines.
IAMGOLD just reported its Q4 2014 and full-year 2014 financial results, and I am quite pleased with the results as IAMGOLD delivered on its production guidance and beat its cash cost guidance. Things are looking even better for 2015 as the company now has over $800 million in cash plus a $500 million undrawn credit facility to complete a gold mine acquisition.
First, all-in sustaining costs at the company's gold mines came in at $1,021 an ounce in Q4, down $94 an ounce from the previous quarter and $209 per ounce year-over-year, so the company is making strong progress on its cost-cutting efforts. Net cash from operating activities was $72 million in Q4, a 64% increase from last year. Capital expenditures of $325 million came in 10% below guidance and were 51% lower than 2013. All of this means improved profitability for IAMGOLD, which is crucial as the price of gold continues to show weakness and currently sits at just over $1,200 an ounce.
TORONTO, Feb. 18, 2015 /CNW/ - IAMGOLD Corporation ("IAMGOLD" or "the Company") today announced its 2014 year-end mineral reserve and resource statement. (See table below for more details.)
Total attributable proven and probable gold reserves decreased by 15% or 1.5 million ounces to 8.6 million ounces of gold at the end of 2014 due to three principal factors:
changes in economic and geotechnical parameters, mainly at Rosebel (-735,000 ounces) offset by positive economic parameters resulting from an optimization process at Sadiola (+269,000 ounces),
depletion at Rosebel, Essakane and Westwood sites (-790,000 ounces) somewhat offset by the increase in reserves at Westwood (+117,000 ounces), reflecting the transfer of resources into reserves, and
a lower gold price assumption (-360,000 ounces) for reserves at the Company's owned and operated mines of $1,300 per ounce at December 31, 2014 compared to $1,400 a year earlier. At Sadiola the gold price assumption for reserves was $1,100 per ounce in both years.
Total attributable measured and indicated gold resources (inclusive of reserves) decreased by 9% or 2.0 million ounces to 21.4 million ounces of gold at the end of 2014 mainly due to changes in economic parameters and depletion at Rosebel (-1.6 million ounces) and Essakane (-510,000 ounces) partially offset by additional resources at the Company's development and exploration projects, such as Côté Gold (+100,000 ounces) and Boto Gold (+90,000 ounces). As at December 31, 2014, the Company also had attributable inferred resources of 7.0 million ounces.
Steve Letwin, President and CEO of IAMGOLD, said, "The exploration and mine site geology teams made remarkable progress on a number of fronts and are developing a strong pipeline of growth projects, during a time when they, along with their colleagues across the Company have been required to focus on doing more with less.
Michael MCcrae February 11, 2015
Richard Fisher, the Federal Reserves' inflation hawk, owns platinum, uranium and over $1 million in gold according to annual filings of the 12 Fed presidents for 2010.
The full list of holdings can be found on page 522 of the disclosure documents that the New York Times posted online.
There are no miners amongst Fisher's common stock holdings, but there are a renewable energy companies, such as First Solar and Waterfurnace Energy. Investments are under $50,000.
Precious metals still make up a small amount of Fisher's portfolio. The Texan also owns several millions in property and municipal bonds.
Fisher, President and CEO of the Federal Reserve Bank of Dallas, will retire in March. Fisher was critical of QE
Feb 11, 2015 3:25 a.m. ET
ISTANBUL--The world's top finance leaders on Tuesday in effect backed currency depreciation as a tool for promoting growth by signaling strong support for aggressive easy-money policies aimed at boosting the fragile global economy.
The support by finance ministers and central bankers from the Group of 20 largest economies for mass monetary easing--policies that have weakened exchange rates from Europe to Japan--is at odds with the traditional view that currency depreciation could have damaging effects on other economies.
It also reflects worry that economies in much of the world could get stuck in a low-growth rut without decisive cash injections from central banks. It marks an implicit acknowledgment of the failure across the globe to enact longer-lasting structural overhauls to major economies after years of relying on short-term spending and other temporary stimulus programs.
The finance ministers appeared to be "trying to reduce tensions over perceived competitive devaluations by saying it's in the collective good, " said Simon Johnson, professor at Massachusetts Institute of Technology's Sloan School of Management.
International support for "accommodative monetary policies," as the G-20 statement issued at a meeting here put it, came the same day China said consumer prices last month rose just 0.8% compared with a year earlier, the slowest growth in five years. The announcement sparked fears that China might be tilting toward deflation, and boosted pressure on China's central bank to cut interest rates and expand credit.
Posted on February 9, 2015 by Martin Armstrong
Chinese researchers have artificial blood vessels made of a material that will offer stability while enabling the growth of new cells. The researchers in Shanghai used to a special type of 3-D printing and paper-thin threads. The vascular graft is surgically attached to a damaged or clogged artery to allow the blood to flow or even to permanently redirect blood flow, for example, in cardiac bypass surgery, reports Business Insider . Others have been working in this field as well. A Virginia man was the first to receive such technology.
Well politicians no doubt will be the first in line. Can you imagine what will happen if politicians live for 200 years? My bet, they still never learn from any mistake.