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HSBC Holdings plc Message Board

markedtofuture 61 posts  |  Last Activity: 15 hours ago Member since: May 25, 2011
  • markedtofuture markedtofuture 15 hours ago Flag

    Speaking of $3 this was posted in the comments section at tfmetalsreort behind the wall.

    This from Uncle Ted's latest:

    On the $3 price drop in silver from May 19, managed money traders sold 57,000 net COMEX silver futures contracts (also mostly in the form of new short sales) or roughly 30% of the entire COMEX market, also the largest silver exchange in the world. That’s the equivalent of 285 million oz or close to 35% of world annual silver mine production. How could a large trader selling such incredible percentages of both the COMEX and world mine production not send prices lower?

    I know that what I just reported on involves trading in futures contracts and not in the actual commodities, but therein lies the rub. Because all commodity producers and consumers are price takers and not price makers, physical commodities are priced off the futures price. Make the price of silver $3 lower on the COMEX and that automatically becomes the price for all silver producers and consumers. It’s nuts (and illegal) for pure speculators to dictate prices to real producers and consumers, but we live in a mad, mad world. (Perhaps only until real producers stand up against the madness).

  • markedtofuture markedtofuture Jul 29, 2015 3:12 PM Flag

    Healthy premium is a load right now going into the lows. Silver Crest should receive a better offer or go it alone until the bear resolves itself. This Seeking Alpha article is spot on.

    SilverCrest's Management Accepts A Low Offer

    SilverCrest is selling near the bottom.

    Accepting a low offer perhaps shows that management is not confident in the prospects of the company.

    Santa Elena has a relatively short mine life and La Joya is uneconomical.

    Insiders have shown no desire to buy the company's shares.

    By Ivan Y.

    On Monday, SilverCrest Mines (NYSEMKT:SVLC) accepted a roughly CD$154 million offer by First Majestic (NYSE:AG) in a friendly takeover. I think that this is a low offer and that SVLC's management either could've obtained a better offer from another company or waited for silver prices to recover and sold the company at that time. SilverCrest is selling low in my opinion. The takeover valued SilverCrest's Canadian shares at CD$1.30 and SVLC at US$1.00, but the stock was at this price just six weeks ago.

    continued....

  • Jul. 29, 2015 2:08 PM ET

    Summary

    SilverCrest is selling near the bottom.
    Accepting a low offer perhaps shows that management is not confident in the prospects of the company.
    Santa Elena has a relatively short mine life and La Joya is uneconomical.
    Insiders have shown no desire to buy the company's shares.

    By Ivan Y.

    On Monday, SilverCrest Mines (NYSEMKT:SVLC) accepted a roughly CD$154 million offer by First Majestic (NYSE:AG) in a friendly takeover. I think that this is a low offer and that SVLC's management either could've obtained a better offer from another company or waited for silver prices to recover and sold the company at that time. SilverCrest is selling low in my opinion. The takeover valued SilverCrest's Canadian shares at CD$1.30 and SVLC at US$1.00, but the stock was at this price just six weeks ago.

    In other words, SilverCrest shareholders are receiving no premium at all if you consider the two-month period. Selling near the bottom of a bear market does not seem like a wise strategy at all. SVLC began trading in the U.S. in 2011 and traded up to $3 per share. More than two-thirds of its value has already been lost. It may make sense for a company to sell low if it is in some kind of distress. Sometimes it is unavoidable. But that is not the case at all with SVLC. As of March 31st, the company had US$35.2 million in cash offset by US $15 million in debt. It also had over 82k ounces of silver and over 2.5k ounces of gold stashed in inventory that it could liquidate and add to the cash position if it wanted to.

    By all measures, SVLC is a financially healthy company in spite of the depressed silver price, so there was no urgent reason to sell the company now near the bottom of a bear market. SVLC could've waited out the bear market and waited for the share price to recover.

    With a strong balance sheet and production at a cash cost of $10-11 per ounce, SVLC should've survived this bear market.

  • markedtofuture markedtofuture Jul 29, 2015 8:42 AM Flag

    Wonder why the gold market can't catch a bid?

    Supply and Demand in the Gold and Silver Futures Markets – Paul Craig Roberts and Dave Kranzler

    July 27, 2015

    This article establishes that the price of gold and silver in the futures markets in which cash is the predominant means of settlement is inconsistent with the conditions of supply and demand in the actual physical or current market where physical bullion is bought and sold as opposed to transactions in uncovered paper claims to bullion in the futures markets. The supply of bullion in the futures markets is increased by printing uncovered contracts representing claims to gold. This artificial, indeed fraudulent, increase in the supply of paper bullion contracts drives down the price in the futures market despite high demand for bullion in the physical market and constrained supply. We will demonstrate with economic analysis and empirical evidence that the bear market in bullion is an artificial creation.

    The law of supply and demand is the basis of economics. Yet the price of gold and silver in the Comex futures market, where paper contracts representing 100 troy ounces of gold or 5,000 ounces of silver are traded, is inconsistent with the actual supply and demand conditions in the physical market for bullion. For four years the price of bullion has been falling in the futures market despite rising demand for possession of the physical metal and supply constraints.

    We begin with a review of basics. The vertical axis measures price. The horizontal axis measures quantity. Demand curves slope down to the right, the quantity demanded increasing as price falls. Supply curves slope upward to the right, the quantity supplied rising with price. The intersection of supply with demand determines price. (Graph 1)

    search article title

  • Reply to

    Silver takeover gets a shrug

    by markedtofuture Jul 28, 2015 6:07 PM
    markedtofuture markedtofuture Jul 28, 2015 6:11 PM Flag

    So, if 2015 turns out as expected, First Majestic’s all-in sustaining operating costs, with Santa Elena on board, could come down slightly and, assuming the price of silver doesn’t drop much further, boost cash flow.

    Meantime, First Majestic as a silver miner will gain in the ranks of silver producers (assuming silver-equivalent production), growing production in the near future by as much as 45%. It will potentially exceed Coeur Mining production next year, which is expected to produce about 15.8 million ounces silver in 2016 or about 1 million ounces less than a combined First Majestic and Silvercrest.

  • markedtofuture by markedtofuture Jul 28, 2015 6:07 PM Flag

    Silver consolidation in Mexico doesn’t create market buzz but gets kudos for free cash flow.

    Kip Keen | 28 July 2015 14:18

    On Monday, First Majestic Silver shares fell more than 10% on news it had inked a friendly, nearly all-share takeover with Silvercrest Mines. It seems the prospect of a bigger silver mining company, with more shares out, drove shareholders to dump shares amid an increasingly bearish precious metals market.

    Still, some analysts agreed with First Majestic reasoning that the takeover could buoy First Majestic cash flow and improve its operating cost outlook.

    "I think it is a good deal for First Majestic as it is free cash flow accretive and [comes with] a lower cost asset – so good on both of those items," Desjardins analyst Michael Parkins said by email. "The mine life looks good based on the reserves and the balance sheet of First Majestic will also improve on a net cash basis."

    The deal adds another mine in Mexico to First Majestic’s stable of six operations in that country. Silvercrest owns the Santa Elena gold-silver mine that is to produce some 4 to 5 million ounces silver-equivalent (gold is a major component) over the next few years. The mine plan shows declining production, falling to under 4 million ounces silver after that to 2022.

    First Majestic estimated production next year will grow by about 5 million ounces silver equivalent to 16.8 million ounces silver equivalent.

    Ownership-wise the combination mirrors the reserve base of both miners. Silvercrest is to own 21% of the combined company and brings a similar amount of silver-equivalent reserves to the table, 19 million ounces versus First Majestic’s 101 million ounces.

    Silvercrest forecast operating costs per silver-equivalent ounce beats out First Majestic somewhat. Silvercrest estimates all-in sustaining costs in 2015 just over $12/oz silver-equivalent versus First Majestic’s estimate for this year between about $14/oz and $15.50/oz.

    continued..mineweb

  • Dave from Denver…

    From the day back in 2004 that I first read James Turk’s analysis of the GLD ETF, I had suspected that GLD had been created to take investor money and accumulate a large pile of 400 oz bullion bars that would be used eventually to manage the growing western Central Bank short position in paper gold. Paper gold being the fraudulent, blunt instrument used to illegally manipulate the price of gold.

    GLD’s objective is not to provide investors with the opportunity to own gold bullion by investing in the shares of an ETF. Rather, GLD is designed to track the price of gold. That objective is no different than what is accomplished by a gold futures contract or any of the dozens of numerous gold derivatives available these days. More to the point, futures and derivatives are sold even if the seller does not own the underlying gold bullion needed to deliver on its obligation. They are in practice fractional reserve systems, which allow liabilities for gold to far exceed the quantity of gold owned by the seller of that liability. – James Turk, "Where Is The ETF’s Gold," November 2004

    In 2009 I wrote a reseach report on GLD in which I went through the GLD prospectus line by line and determined that the prospectus was specifically set up to enable the bullion banks – with HSBC suspiciously designated as the custodian of the GLD, as HSBC is the LBMA gold market counterpart in London to JP Morgan’s Comex silver market function – to amass gold in a legal structure that would enable the banks to finance the purchase of 400 oz ounce bars which could be leased or hypothecated via the "backdoor" web of subcustodians. Shockingly, even the trustee and sponsor of the the GLD trust, Bank of New York Mellon and the World Gold Council respectively, are not permitted to inspect the contents of HSBC’s vault without significant notice. And inspection is allowed according the prospectus only intermittently. Furthermore, no outside party is entitled to inspect any gold...cont

  • Seeking A

    Canada’s silver mining sector gets some much-needed consolidation with First Majestic Silver's (AG -12.5%) friendly takeover of SilverCrest Mines (SVLC +16.6%), and the deal is praised by Desjardins Capital analyst Michael Parkin, who calculates that SVLC’s Santa Elena mine in Mexico generated impressive free cash flow of US$2.99/oz. of silver equiv. production in Q1.Parkin notes the deal boosts AG’s production by ~26% and improves its balance sheet by adding $30M of cash, and he thinks Santa Elena may beat its guidance this
    year; the mine is expected to produce 4M-4.4M silver equiv. oz., but Q1 production reached a record 1.35M silver equiv. oz.

    The analyst sees potential for a higher bid on the deal, considering Santa Elena's impressive production and SVLC is generating free cash flow and has a relatively solid balance sheet.

    10,810 people have AG in their portfolio

  • markedtofuture markedtofuture Jul 27, 2015 2:07 PM Flag

    AISC are lower...The offer price needs bumped up.

  • VANCOUVER, BC, CANADA – First Majestic Silver Corp. (“First Majestic”) and SilverCrest Mines Inc. (“SilverCrest”) are pleased to announce that the companies have entered into a definitive agreement (the “Arrangement Agreement”) pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of SilverCrest for consideration of 0.2769 of a common share of First Majestic (the “Exchange Ratio”) plus C$0.0001 in cash per SilverCrest common share. The offer implies a value of C$1.30 per SilverCrest share based on the closing price of First Majestic’s common shares on the Toronto Stock Exchange (“TSX”) on July 24, 2015. The offer represents a premium of approximately 37% to SilverCrest’s 30-day volume-weighted average price (“VWAP”) on the TSX for the period ending July 24, 2015 and a 35% premium to SilverCrest’s previous closing price. The transaction will be implemented by way of a plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). In addition, shareholders of SilverCrest will receive shares in a newly formed company (“New SilverCrest”) which will hold certain exploration assets currently held by SilverCrest and First Majestic.

    BENEFITS TO FIRST MAJESTIC SHAREHOLDERS

    Enhances First Majestic’s leading position in Mexico, one of the world’s most prolific silver and gold regions
    Accretive to First Majestic’s net asset value per share, reserves and total resources per share and production per share
    SilverCrest’s Santa Elena Mine will be First Majestic’s sixth producing silver mine adding further growth potential to First Majestic’s portfolio of Mexican projects
    Strengthens First Majestic’s balance sheet by adding approximately C$30 million in cash and further enhances the working capital position
    Provides operational and production synergies with the potential for additional cost cutting
    Further diversifies production and cash flow across a robust portfolio of producing mines

  • As ANV times the Chapter 11 going into golds fake paper lows...The Hunt For The "Mystery" Gold "Bear Raid" Leader Begins...

    Submitted by Tyler Durden on 07/23/2015 15:20 -0400

    In the immediate aftermath of Sunday night's massive gold slam, which was oddly reminiscent of the great silver crash of 2011 when on May 1 just around 6:25pm, silver plunged by 15%, from $48 to $42 with no news or catalyst...

    ... marking the all time high price of silver in the current precious metals cycle (that particular 'malicious seller' has never been identified) the promptly arranged narrative was that because the gold crash took place in the span of 30 seconds just before Chinese stocks opened and broke the gold futures market not once but twice, that it has to be a China-based seller with Reuters taking the lead and quickly pointing the finger with an article titled "Gold hits five-year low, under $1,100 on Chinese selling."

    Ironically, the very same Reuters last night admitted that it had been wrong and that it was in fact: "New York sell orders in thin trade" that triggered the "Shanghai gold rout":

    So far this has almost succeeded, with gold repeatedly sliding just shy of $1080 but never actually breaching it. We expect this too support level to be taken out as what is now clear and accepted manipulation continues, which in retrospect, will merely afford those who buy gold for its true practical value, as insurance against a systemic collapse which is pretty close to where the Chinese central planners find themselves right now not to mention the imploding European monetary union, to buy more for the same paper price.

    As for the "great", and greatly misdirecting, hunt for the "bear raid" leader, one which will never reveal the true culprit, bring it on - we can always do with some entertainment meant to distract the masses. In fact, we would not be at all surprised if some Indian trader out of his parent's basement in a London suburb ends up going to prison..continued ZH

  • If only gold mine operators could flatten their debt mountains as easily as they can the real things.
    Mining companies built up record borrowings to boost gold output during a 12-year bull market in the metal that stopped dead in 2011. The 42 percent slump in prices since then leaves them effectively servicing the debt with devalued currency.

    “The industry is in a shocking state,” said Mark Bristow, head of Randgold Resources Ltd., the producer with the best share performance in the past decade. “Everyone is still focused on production and not on profitability.”
    Growth in output has exacerbated an oversupply that makes a recovery in the bullion price harder to achieve, Bristow said.

    Bloomberg

  • Lemetropole Cafe snippet...

    Pre-doomed

    Bill,
    The reasons to smash gold and silver today were numerous, and the metals were pre-doomed from the beginning. Weak manufacturing, higher PPI figures, the re-crashing of Chinese stocks and Yellen speak all added up to what should have been a smashing GOOD day rather than gold getting smashed. As we know however up is down and the canary in the coal mine can never be visible. Scheduled hit times were primarily the Comex open and London close, with steady pressure in between. Tracking cartel rules has become useless and until further notice assume ALL rules are in force, ALL of the time. If one final capitulation was the cartel’s goal they’re sure the hell getting it. The summer doldrums have turned into summer malaise courtesy of the Friends of the Working Group. Unfortunately I see little relief now until post-August option expiration and FND. Assume however gold will go up 1% if Israel attacks Iran.

    Now that Barrick is a proud member of the single digit stock price club maybe their shareholders will demand management stop being so denialist in their ways. If not it’s just a hop, skip, and a jump to being a delisted company with penny stock status. Such is life with a ruthless cartel, and a silence of the lamb mining philosophy.
    JMc

  • Jul. 7, 2015 1:31 PM ET Fun Trading

    Summary

    Iamgold Provides an update from ongoing exploration of the pitangui gold project In Brazil. Good results overall.
    Iamgold is conducting five exploration projects simultaneously, including the Pitangui gold project.
    IAG is now trading at an attractive price per share and I recommend a cautious accumulation from the $1.85 level.
    IAMGOLD (NYSE: IAG)

    Iamgold is a mid-tier gold producer based in Canada with five operating gold mines spread on three different continents. The company has also four development projects (Westwood in Quebec, a Cote Gold project in Ontario, Canada, Rare earth elements in Quebec, Canada, and Camp Caiman in French Guiana).

    This article is an update of my preceding article on Iamgold on June 29, 2015.

    SA

  • D

    Shareholders are formulating their own chapter 11 exit plan for precious metals mining company
    Allied Nevada Corp. as well as preparing to duel the company over control of its bankruptcy case.

    Allied Nevada had a restructuring deal in place with leading creditors when it sought bankruptcy protection in March. The mine operator has asked for more time to revise its plan with the court's protection from the threat of competing plans.

    Shareholders didn't like what Allied Nevada was offering them at the start of the case--warrants they say are "valueless"--and don't expect to be any more pleased with the revised numbers, according to papers filed Tuesday in the U.S. Bankruptcy Court in Wilmington, Del.

    The official committee representing Allied Nevada's shareholders is asking the court to turn down the company's request for protection from the threat of competing chapter 11 exit plans until Nov. 5.

    So-called exclusivity rights give companies in bankruptcy the sole right to propose a chapter 11 plan, but only for a time. After that, the company must prove it is entitled to an extension.

    Allied Nevada's shareholder committee says the company isn't engaging in substantial discussions with its members. The committee says the exclusivity shield is preventing it from alerting other shareholders that an alternative plan could be available.

    "The equity committee and its professionals are completing valuations of debtors' assets in order to propose an alternative plan that provides a meaningful recovery to equity holders," shareholder lawyers said in court papers.

    "Granting debtors an extension of the exclusive periods and foreclosing the equity committee from proposing an alternative plan that will provide a meaningful recovery will cause equity holders to suffer substantial prejudice," it said.

    Reached Wednesday, Allied Nevada lawyer Philip Dublin said the company will respond in court papers in advance of a hearing set for July 14 on its request for extended exclus

  • markedtofuture markedtofuture Jul 8, 2015 8:33 AM Flag

    Did the vote backfire on him? He should have listened to the finance minister and had a back up currency ready to go. Brussels is all about saving their jobs.

    It all started with a report by the Telegraph's Ambrose Evans-Pritchard, whose release of on the record comments by Yanis Varoufakis hat Greece was contemplating a parallel currency and potentially nationalizing Greek banks over the weekend, was supposedly the catalyst that got the Greek finmin fired.

    Martin Armstrong makes a good case that the Euro will not survive and that is Greece's only way out.

    Big Bang 2015.75 seems to be kicking in a little earlier than October 1, 2015

  • This is an interesting turn of events. The greek vote backfired on Tsipras per zerohedge.

  • Reuters

    paragraph 7 - "The government must rescue the market, not with empty words, but with real silver and gold," said #$%$ Xuejun, strategist at Huarong Securities Co, before the CSRC and PBOC announcements, adding that a market crash would hurt banks, consumption, companies and even trigger social instability. "It's a disaster. If it's not, what is it?"

  • markedtofuture markedtofuture Jul 2, 2015 9:57 AM Flag

    The financing also includes as an acknowledged debt a $50 million early payment premium on the loan.

    Oaktree would be entitled to "credit-bid" its loans at the auction for Neo, meaning bid by offering to cancel debt, instead of with new money, under the terms of the new proposed loan.

    Molycorp owes senior bondholders $650 million. Oaktree is owed about $260 million in loan and lease deals with Molycorp, not including the early payment penalty.

    The bankruptcy financing is up for interim approval Thursday in the U.S. Bankruptcy Court in Wilmington, Del.

    No final decision on a bankruptcy loan will be made until an official committee is appointed to represent Molycorp's unsecured creditors, including junior bondholders owed about $750 million.

    Peg Brickley WSJ

  • In an about-face, Moly Corp has chosen bankruptcy financing from top-ranking lender Oaktree Capital Group LLCover a competing offer from secured bondholders, setting off a new round of court fights.

    Oaktree's proposed loan is linked to the proposed sale of Molycorp's most valuable business, the moneymaking Neo Material Technologies Inc. operations. Bondholders say Molycorp needs to hang onto Neo to remain viable over the long haul. Rare-earths producer Molycorp filed for chapter 11 bankruptcy protection last week, after diving prices for its products made its $1.7 billion debt load unsupportable. A rare-earths production facility in California is losing money, but Neo, which processes the elements for use in high-tech products, is still making money.

    Bondholders say the Oaktree financing will end Molycorp's hopes of surviving as a unified company, and lead to a sale designed to hand Neo over to Oaktree.Terms of the Oaktree financing require Molycorp to mothball its money-losing California rare-earths facility, and sell Neo, with Oaktree leading the bidding at an auction in October.The company and its dueling lenders are due in court this morning for a hearing on the proposed Oaktree loan, which could run as high as $292 million.

    Molycorp's bankruptcy filing was part of a deal with senior bondholders linked to a $225 million chapter 11 loan, that set the stage for them to take control of the company.Oaktree mounted a successful objection to the bondholder financing, triggering a new round of talks about who would provide the money necessary to get Molycorp through bankruptcy. A new financing deal with Oaktree emerged from the talks, one that means $126 million in fresh cash for Molycorp, and unchallenged primacy for the rest of the company's debt to Oaktree.

    A so-called "roll-up," the proposed bankruptcy financing reinstates Oaktree's existing loans as chapter 11 debts, shielding them from creditor challenges.

HSBC
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