If I remember the bold Davidson statement from long ago and far far away.
GG- 800M shares, roughly.
RBY- 380M shares, roughly.
Seems as if we are on our way. Halfway there.
"What I mentioned as a better alternative a few months ago was a rights offering, where the discount and incentive to purchase would be given to the existing shareholders, and would have prevented the shares from getting crushed by this current selling."
MUX made a similar transaction over a year ago with that guy, Rob whats his name, lol, putting up a sizeable portion of his money into the subscription if I remember correctly:
We are conducting two concurrent rights offerings because we have two classes of shares: common shares of McEwen Mining ("Common Shares"); and shares of Exchange Co. that are exchangeable on a 1-for-1 basis into Common Shares ("Exchangeable Shares"). The Rights Offerings will provide that holders of Common Shares and Exchangeable Shares will participate on an equal and proportional basis with other holders of the same class of shares in purchasing additional shares of the same class of shares at a considerable discount to the current listed price.
"I believe a rights offering, versus all other forms of financing, is the most fair to our shareholders. We are giving the Companies' current shareholders who have been supportive and loyal to the Company the first right on this financing. I am personally backstopping this financing for $60 million because I believe McEwen Mining has a bright future," said Rob McEwen , Chairman and Chief Owner.
Excerpt from the Kid's link:
"Germany’s financial regulator was the first to comment, and likened possible gold, silver, and forex manipulation to the scale of the Libor-scandal, which led to $6 billion in fines against banks. (link)
Tampering with currency and precious metals markets is “particularly serious, because such reference values are based - unlike Libor and Euribor - typically on transactions in liquid markets and not on estimates by the banks,” Elke Koenig, the president of Bafin, said in a speech in Frankfurt on January 15.
The method of ‘fixing’ benchmarks, especially those which hold such a crucial grip on the financial sector, has been questioned in the aftermath of the Libor-rigging scandal, when bankers fixed the interbank lending rate to company gain.
Control over the Libor rate, which is tied to over $300 billion in loans, securities and derivatives may transfer to supervisory hands, possibly to an agency like Reuters or Bloomberg, which have less direct ‘gain’ in setting interbank interest rates higher or lower.
Germany’s biggest bank, Deutsche Bank, has already dismissed currency traders over probes involving alleged forex manipulation.
Libor manipulation has raised questions over other lending rates like the Euribor, WM/Reuters, and the Platts oil benchmark. "
This is not the first mention of LIBOR and gold price fixing lumped together that I have come across the last few months. Interesting.
GDP now includes "Creative content" that never before was measured to be included in GDP. Depending on your viewpoint whether this should or should not have been included in the past....it is included now.
We love our movies, music, vid games (myself excluded), software and apps. This will boost future GDP and perhaps look back at previous GDP as being too low.
Hollywood royalties, for instance, are not secure measures of investment. That's because, even in Hollywood, it's hard to measure what royalties are, or should be. Studios rely on notoriously accounting. Four major studios were hit with lawsuits this year over their accounting of royalties dating all the way back to the 1970's. "Hollywood accounting" is a shorthand for the obscure methods the industry has of turning profit into loss, or losses into hidden profits.
December 5, 2013
Washington, DC – The U.S. Bureau of Economic Analysis (BEA) and the National Endowment for the Arts (NEA) released prototype estimates today from the new Arts and Cultural Production Satellite Account (ACPSA). This is the first federal effort to provide in-depth analysis of the arts and cultural sector's contributions to current-dollar gross domestic product (GDP), a measure of the final dollar value of all goods and services produced in the United States. According to these new estimates, 3.2 percent -- or $504 billion -- of current-dollar GDP in 2011 was attributable to arts and culture. In comparison, BEA's estimated value of the U.S. travel and tourism industry was 2.8 percent of GDP.
In case you missed it, CNBC interviewed a analyst on the Bitcoin phenomena and his conclusion was that Bitcoin was not a currency.........wait for it..........it was.............a commodity. Indian fella too. Salt in wounds is painful.
Dogs and cats sleeping together world.
Would make me very happy. This was my target price after watching the trading range the past few months.
The stock has steadily climbed the ranges .03-.05, .04-.06, .05-.07, and now seem to be in the .065-.085's.
Think about that. A year ago or so this stock was less than .02-.03. 300-400%.
Now we have an actual 8-k and 3 press releases in a time span of 6 weeks! Wow.
.10 by Jan. 1 would be most impressive in my book. I am hoping for .25 by end of summer 2014. I think this is attainable. It is so thinly traded right now that it is easily moved.
Do I wish I had bought more in the .01-.02 range. Sure, but I have been a bag holder since the EK days and only bought more to lower my cost.
I have a DD post on the Chinese ore outlook that I believe is pertinent to Wits. Will try to get it on the board soon.
"I think containing the price of gold is key to a US strategy of dealing with the debt via inflation. The problem right now is that the duration of US debt is fairly short. For the US to try to deal with debt via inflation the duration needs to be longer. So, if you are the US and you want to inflate the problem away you need to convince people to roll their short term debt to the longer term. To do that, you need to somehow convince people that the low interest rates will persist for a long time. That would lead them to try to increase their absolute yield via the longer term debt."
And yet, the Fed continues to issue short term and buy long term.
"The USA's debt passed $17 trillion recently and will be over $20 trillion by the end of Obama's 2nd term. Interest on this at 1% is $200 billion per year while at 5% it is $1 trillion per year....."
Estimated by the CBO that the run up bond yields, from the infamous "Taper speech" until the close to 3% yield on the 10 year, added about 30B in interest to the national debt for the last fiscal year.
"It is obvious that our government cannot allow any inflation as a huge % of the governments expenditures would have to go to pay the interest...."
Thus, the Fed finds itself where it is. Tiger by the tail. Hold on and continue QE with stable rates, stock market wealth effect, and monetized pension funds or let go and be eaten by higher yields. Rising rates are an eventuality, I believe. When? Don't know.
I do know that paying interest on the national debt with rising interest rates will be like running up the down escalator. CBO projects a 4-5% yield on the 10 year about 2017. 3.25% on all interest bearing instruments at a total deficit of 19T is over 600 billion .... a year. 2% GDP growth is not enough to slow down the elevator.
How will the Fed put a square peg in a round hole? They round the square end.
Jane, stop this crazy thing.
The various gold ETF’s, gold certificates, etc.—they are all based on the trustworthiness of the counterparty issuing the paper. The gold bullion is stored in vaults, and paper receipts against it are being issued.
But as more than one precious metals commentator has pointed out, there is more paper issuance of gold than actual gold bullion.
What does this mean? It means that the global precious metals markets are essentially a game of musical chairs, with far fewer seats than players—far less gold than gold holders.
And market participants collectively know this. Which is why they don’t trust their counterparties. Which is why gold isn’t rising like a shot.
There is only one market in gold, not two. There is no way to segregate gold bullion holders from gold certificate holders, and thus create two markets, one for the real thing, one for the paper thing.
Thus the current spot price of gold is reflecting market uncertainty as to who has actual gold, and who has worthless paper certificates of gold.
Do recall: The prices of credit default swaps quickly reached their market prices after the 2008 crisis had passed. They reached those actual market prices once the insolvent counterparties, like AIG, had been identified and isolated.
But before and during the crisis? When it wasn’ clear which credit default swap would be honored and which wouldn’t? CDS prices were jagged—like gold’s is today.
In the long run, assuming that central banks don’t manage to raise rates in time to prevent high- or hyperinflation, gold prices will go parabolic. But between now and then, gold prices will continue to drift, because the markets don’t really know whose gold is real, and whose is worthless paper.
We all know and understand what’s going on with the global economies and the fiat currency system: The global overindebtedness is forcing central banks around the world to devalue their currencies, so as to make the debt burden less onerous.
Many people—and I happen to be one of them—believe that this policy will lead to an inflationary crisis, which will spiral into an uncontrollable hyperinflation event. The key assumption in this scenario is that the only cure for runaway inflation—raising interest rates higher, and hard, like Paul Volcker did in ’79—will never be implemented by the world’s central banks, because they believe (with some justification) that higher rates will shove the global economies into a deflationary death spiral.
Thus a spike in inflation will bleed into hyperinflation, and by the time the central banks wake up and raise interest rates to stop it, it’ll be too late.
In such a case, gold would be the perfect hedge against inflation and eventual hyperinflation. In fact, even better than a hedge, gold would be the perfect investment, an investment that would outpace all other asset classes, because market participants would anticipate this inflation scenario, and thus pile into gold so fast and in such numbers that gold prices would spike parabolically, far outpacing the fiat currency devaluation.
Since everyone with any sense realizes that this is the endgame of the current race to the bottom, gold ought to be rising dramatically.
But that is not happening. Gold rose steady and strong from 2000 through September 2011—but since then it’s been drifting jaggedly.
So why would gold—which is an actual, physical commodity—be acting like credit default swaps did right before the 2008 crisis?
For the same reason: Gold buyers don’t trust the counterparties selling gold.
Because after all, most gold markets are paper markets, not bullion markets.
Oh yes, they still finding varying traces Au in every Dore bar they pour at Shafter. Hmmm! Not sure if the smelter's will pay for it as was mentioned with LN. But I think Dore is different than concentrates as with LN. It would be nice to hear more here because the first two Dore ingots had 6% and 11% Au if I recall correctly. And that is way more than the 2% cut-off with the concentrates.
The best news was that the Au in that La Negra vein has been found at the top and lower down in the vein. The issue of how fast they mine it has to do with the grade of the Au in the concentrate. Apparently, below 2g/t and the dealers in concentrates won't pay much for it in terms of its real real worth. Why, wasn't clear. (I assume some cost of processing issues but I honestly don't know. Per Catalin and beyond this he wasn't clear either as to why. I bet cost because they all do it, even though as he notes - they operate like a cartel. )
AUN has some more drill results for LN destined for a re-release soon (no time line but before next year) and he said next year they would decide how to expand work on LN. The reserves are so huge they need to decide where, when, when etc. to approach it. (In the past, Lenic said they were out of room to expand the mill any further on the current site so any expansion may include issues of a new mill placement with respect to the ore body.)
Apparently, some of the new veins they have discovered at LN have much high grades further up in the veins so they have some sort of cavity drill (or machine) that will bore way up into the vein and mine it from up in the vein. Never heard of this before. I will follow up on that one.
Bottomline – the ore is there and they are working to get at it. The financing will help and they are working a Plan b if RK fails. Hopefully, the good news (hopefully), that by the time they get Shafter up and tuned up (1Q or 2Q 2014 with finance say this Q), the metal prices will be better. (Similar to GORO.) This was my hope – Catalin never mentioned it but agreed when I said it.
End part 2
Save a click. This was the post:
Here is a quick review of Aurcana (AUNFF) from yesterday's Euro-Pac meeting in NYC
Aurcana story was the same as we heard on the CC. Catalin (IR) gave the presentation. He did pretty good. I cornered him afterward and grilled him for about 10-15 minutes.
The $50M finance deal is still not fully completed – it is with the lawyers according to him. He liked the deal if they could get it closed. It includes a 3yr paid back with interest and Red Kite gets some sort of purchase arrangement based on spot for some period.
It sounded good because it was not a streaming deal per se. Red Kite will get to pick their purchase price every month calculated over a brief pricing window – something like this.
They still have $13M of capex to buy for Shafter using the money the rest of the money will be for ramp and a to reestablish a cash cushion for the company.
Grades are great at Shafter. They are getting 600 t/d and processing 600 t/p but without the additional press and fully upgraded mill their recovery is only ~50%. They expect to reprocess the tailings later once the mill is fully complete.
He said Lenic made the mistake of trusting his people on the design. They have all been fired and a new more seasoned vet is in. I said why didn't Lenic get reamed? He said Lenic got his – apparently Lenic bought $50m (I think that is what I heard) at what is now $10 per share basis (or something like this) - the long and the short, Lenic has big money is in the game and he is way underwater so he is bound and determined to get this fixed - on top of the fact that it is his job. Pain in the wallet never hurts as a motivator.
End part 1
I bought this fund in 1992/1993 with a initial investment of $5K in two equal purchase about a month apart. I have let time, appreciation and dividends do the rest. The strategy was based upon USA shift to Natgas as a increased energy source and the utilities in the fund as a bond replacement.
I have only made one withdrawal in 1997 to help with down payment on a house that I still live in.
Now have over 1500 shares but could not tell you the ACB. One day I will have the pleasure of figuring out my basis again but I hope to put that out into the future as long as possible.
Kit is correct that initially this was a Rushmore fund...then FBR and now in the Hennessy family. Rushmore was a small fund family and they were not able to provide ACB for one's shares after cap gains and dividends. I do not know if Hennessy is providing this service. I need to call them.
It mimics the AGA index fund as you probably know and is indeed a "steady eddie". Looking at the performance link it shows 17 up years vs. 6 down. 3:1 ratio. So, look at the down year as a opp to get cheap shares that will appreciate in the future.
You have made a wise choice. Let time do the rest.
The Asian Giant Stampeding into Gold
Tuesday July 16, 2013 13:33
****My friend and highly respected analyst, Gregory Weldon, highlighted an important point about rising rates in the U.S. The coupon on the nation’s $13.22 trillion debt averages 1.88 percent with an average maturity of 5.4 years. As interest rates rise, debt will be rolled over at a higher rate, making the burden even greater than it already is. This suggests a likely tipping point for Treasuries. Will the Federal Reserve suppress yields at that “line in the sand?”**** My asterisks.
Domestic Equity Market - U.S. Global Investors
In this environment, gold should remain attractive. However, as the West flees the precious metal, another set of gold buyers has come forward with the aim to preserve wealth. Take a look at the chart below which shows total gold production compared to the gold deliveries on the COMEX and the Shanghai Gold Exchange. In May, gold imports into the Asian giant rose to the second-highest level ever. While mining production is around 1,134 tons so far this year, gold delivery on the Shanghai Gold Exchange is 918 tons. This is strikingly in contrast to the gold delivery on the COMEX, which stands at only 103 tons year-to-date as of the end of May.
Domestic Equity Market - U.S. Global Investors
In fact, this year’s demand is so significant that the physical gold delivered on the Shanghai Gold Exchange through May is almost all of the official gold reserves in China! As George Topping of Stifel Nicolaus puts it, “Annualizing 2013 year-to-date figures, China’s imports would be equivalent to 50
Central banks don’t directly take their bullion to the market and lease it out. They use a vehicle called a bullion bank (BB).
Although bullion banks are numerous, some of the more well known are Barclays, Goldman Sachs, JP Morgan, Bank of America, UBS, and Citibank.
The central banks loan gold to the BBs at a rate of approximately 1%. The BBs take it to the LBM and sell it on the open market. The BBs take the cash from selling the bullion and in turn buy Treasuries.
So if the story were to end here, the bullion banks would just walk away with a net 4% return. But it doesn’t end, because they only have the leased gold for a certain length of time. They eventually have to give the gold back to the central banks, but now they are at risk of price swings in a very volatile market.
The answer to their problem is to go long the futures market. Essentially, they buy futures contracts to hedge their risk. In other words, they secure gold for delivery at a specific price, on a specific date in the future. Once they buy their futures contracts, it doesn’t matter what the price action of gold is.
In a perfect scenario, after the gold lease rate and price risk hedging, the bullion bank will walk with a modest 1–2% gain. The central banks will receive a return on their gold, keep the price of gold suppressed in order to keep real inflation suppressed, and get a boost in the demand for Treasuries. It’s a win-win situation for both the bullion and central banks.
The largest category of eight that comprise the CPI is Housing.at about 40% including utilities. The housing crash has effectively hidden rising food costs because of proportionality.
With a tepid recovery in housing it is possible that we could see a rise in the CPI.
It is hard to find articles relating to packaging size used in BLS food cost measurement. I have found two(!). One stating that the BLS maybe and maybe did not take shrinking quantities into CPI calculations. The other had this to say:
BLS economist Steve Reed says if a two-ounce candy bar, for example, suddenly becomes 1.8 ounces at the price of the old size, that change is converted to an 11 percent price increase. “We’re not mismeasuring inflation because of quantity changes of this type,” says Reed. ty.
As the Times points out, product downsizing during recessions is an age-old practice, and this time companies have plenty of incentive to control unit costs. Over the past year, BLS says prices for crude foodstuffs are up 29 percent, including increases of 10 percent for raw cane sugar, 46 percent for soybeans, 80 percent for wheat, and 91 percent for corn. Overall, wholesale prices for finished consumer foods have jumped 7.3 percent in the past year.
But at the retail level, food inflation has been more modest. The CPI for food is up 2.3 percent from a year ago, only slightly higher than the overall 2.1 percent overall inflation rate. To some extent, companies are swallowing the higher cost of commodities, because materials generally are only a small portion of total production costs. Labor costs, which typically account for about 70 percent of a company’s costs, have been very subdued, with hourly wages making little headway.
For consumers, the combination of tepid wage growth and lighter cans of tuna that cost the same as before are sure to feel like higher inflation, and to them, it certainly is. But to the BLS, it doesn't.
This was from March, 2011.
The original calculation of CPI, which measured the change in the cost of an identical fixed basket of goods priced at prevailing market costs each period, worked reasonably well for the intended purpose into the early-1980’s. However, as the pressure of increasing deficits weighed on political parties, the need to find solutions to reducing spending, without actually cutting spending, led to several substantial changes in the calculation of inflation.
Shortly after Clinton entered the White House the Bureau of Labor Statistics (BLS) altered the calculation of inflation by changing the weighting of goods in the CPI fixed basket. Then, over subsequent years, the method of weighting the underlying components was changed from a straight arithmetic weighting method to geometric. The primary result of the switch to a geometric weighting was a lower weighting to CPI components that were rising in price, and a higher weighting to those items dropping in price which led to lower reported inflation.
Lastly, there is "intervention analysis" in the seasonal adjustment process. Intervention analysis is critical to the highly volatile areas of food and energy. When a commodity, like gasoline, goes through periods of violent price swings the BLS steps in and uses “intervention analysis” to smooth out the volatility. As a result, sharply rising gasoline prices are never fully reflected in the reported headline inflation number. However, declining prices, which are never adjusted, do show an impact to reducing inflation.
The obvious problem with these manipulations is it changed the measure of inflation from a cost-of-living adjustment to a reduction-of-living adjustment. The original CPI calculation allowed individuals to understand the rate of return required on investments and incomes to maintain their current standard of living. However, by artificially suppressing the rate of inflation, the future standard of living is reduced to lower levels.