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