Tag Archives: Goldcorp Inc

Will You Be Buying Groceries With Gold Soon?

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The Arizona legislature last week tried to legalize shopping with gold and silver coins. Thankfully, Gov. Jan Brewer quickly put the kibosh on the idea, vetoing the law on Thursday. But even if she hadn’t, it never would have worked. I’m sorry. Did that statement sound a bit too matter-of-fact? Too dismissive of the gold bugs’ idea of a “sound monetary policy”? Well, let’s consider the evidence. Bugs of a feather flock together Arizona’s proposed law was flawed from the get-go, because it fatally misunderstood the philosophy behind precious-metal investors. Stock investors sometimes buy gold stocks such as Yamana Gold Inc. (USA) (NYSE:AUY) or Goldcorp Inc. (USA) (NYSE:GG) in hopes they will rise in value, so they can cash out at a profit. (Although with Yamana shares down 13% so far this year, and Goldcorp down 21%, there have been precious few profits to cash out lately.) They’re equally willing to trade one gold-mining stock with a high P/E (Goldcorp Inc. (USA) (NYSE:GG) costs 16.5 times earnings for example, and Yamana Gold Inc. (USA) (NYSE:AUY) more than 20) for a gold miner that looks cheaper than the competition — for example, Newmont Mining Corp (NYSE:NEM), which costs only 10 times earnings. People who buy actual precious metal — or invest in it vicariously, through ETFs such as SPDR Gold Trust (ETF) (NYSEARCA:GLD) or iShares Silver Trust (ETF) (NYSEARCA:SLV), which own actual ingots — have a different motivation. They buy gold or silver because they think it’s safer than cash. They’re convinced the metal will hold value over time. More than that, they’re convinced it will gain value over time. Hence, they’re wholly uninterested in converting their gold or silver into cash, or, even worse, converting their gold and silver into orange juice and Oreos at the supermarket, as Arizona’s law would have permitted.

Had Gov. Brewer signed Arizona’s bill into law, Arizona would have joined Utah as the second state in the Union to permit use of gold and silver coins as currency. Colorado tried to follow suit last year, but the bill died in the state Senate, and several other states are said to be contemplating, or actually working on, similar legislation. But for now, the sole state in the nation that permits use of gold and silver as legal tender is Utah. So how’s that working out? Recognizing that even with the law’s passage, few Utahns would feel comfortable walking down the street, their pockets a-jingling full of gold and silver coins (muggers being one risk, holey pockets another), Utah came up with an alternative. Rather than literally paying for goods and services in gold coins, the state permitted the establishment of a depository — the Utah Gold and Silver Depository — where folks could deposit their precious-metal coinage, and bullion as well. Deposits would be linked electronically to debit cards at UGSD, which account holders could then use to pay for goods and services with funds backed by their gold and silver — funds that automatically translated the day’s price for an ounce of gold, for example, times the amount of gold in an account, into a current gold-backed balance that could be paid out of the card.

Source: http://www.insidermonkey.com/blog/yamana-gold-inc-usa-auy-goldcorp-inc-usa-gg-newmont-mining-corp-nem-will-you-be-buying-groceries-with-gold-soon-134858/

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Ian Campbell Talks About Temex’s Juby and Whitney Gold Projects

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Temex Resources Corp V.TME announced April 29 an updated 43-101 resource estimate of its Juby Gold Project located in Ontario’s Timmins-Kirkland Lake mining camp. At a cutoff of 0.4 grams per tonne gold, it contains 25.3 million tonnes grading 1.28 g/t gold for 1.04 million gold ounces indicated and 74.2 million tonnes grading 0.91 g/t for 2.17 million gold ounces inferred.

Compared to the previous Juby estimate of January 2012, the indicated resource increased by 11%, and the inferred resource increased by 140%.

President/CEO Ian Campbell spoke to Kevin Michael Grace April 29.

RW: You showed a significant increase in resources at Juby.

IC: We were able to put a large increase in the inferred category of NI 43-101 resources. We’re pretty pleased about that. We’ve drilled 25 holes and covered a distance on surface of a little over a kilometre. All the holes hit gold, and the mineralized zone we’re identifying keeps on going. In fact, it gets a bit wider in some of the areas we recently drilled, so it’s becoming a substantial gold system.

RW: What are your 2013 drilling plans for Juby?

IC: Actually, the next phase is a field program. We completed a large land consolidation at the end of November last year where our wholly-owned landholding increased by 1,000%. The next phase is to put the geological team out there and assess the ground we have. Then we’re going to do some more drilling in the fall.

RW: How much cash do you have? What is your burn rate?

IC: We have about $7 million hard dollars in cash. Corporately, we burn about $1.2 million per annum. The burn rate really depends on how many drills we have going.

RW: So you’re set for cash this year?

IC: Yes. We raised $9 million in October; so we’re in good shape.

RW: Is Whitney your premiere project?

IC: Whitney is a different kind of project. It’s a working joint venture with Goldcorp Inc T.G; we own 60%, and they own 40%. It’s different because it has produced over a million ounces in the past and is in the centre of the Timmins camp, which is Canada’s largest gold camp.

One of the mines on our Whitney property had the highest grade. Whenever you have grade and, in particular, location, that’s a great combination because when you find enough gold to go into production you generally have a shorter timeframe. The other advantage is lower capital costs. You don’t have to build a lot of infrastructure. There is mill access in the area, so you don’t have to build one, and there are roads to the mills.

So is Whitney our premiere project? Whitney and Juby are both good projects, but at this juncture, I would say Whitney’s going to get the majority of our attention in the next little while.

RW: You told me in June 2012, “Within 2 years, I see us moving into a production scenario.” Is that still true?

IC: Yes, it is. We’re evaluating the Whitney resource we filed last October, and there are a number of production possibilities: one large openpit, all underground or some combination of the two. Since last June, we’ve added some serious depth on the mining side, with a fulltime project manager in Timmins who has worked operating mines. Then we added René Marion, the former president and CEO of AuRico Gold Inc T.AUQ, to our board last month. He’s been with Barrick Gold Corp T.ABX and has good minebuilding experience.

Source: http://business.financialpost.com/2013/04/30/ian-campbell-talks-about-temexs-juby-and-whitney-gold-projects/

Gold and Silver Outperform in January, Is There More Upside in 2012?

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With January wrapping up, I’ve looked at some of the sectors in the market to see their relative performance. The January flow of money is interesting to note, as this can indicate where the big funds are placing their bets for the rest of the year. As the clock ticked over into the New Year, the results are that silver and gold have been the big winners in January.

Silver was up approximately 20% and gold up just over 11% for the month of January. In fact, if we looked at the entire precious metals sector, like platinum and palladium, they’ve all had great a great month. Is this more to go for these precious metals? I would say yes, although I wouldn’t rush out and buy precious metals tomorrow, as there are always some consolidation gains before moving up.

With the Federal Reserve stating that they are going to leave rates at these low levels until well into 2014, we’re looking at more monetary stimulus worldwide being implemented over the next couple of years. This will inevitably create inflation and a lack of trust in the faith of paper currencies. This added liquidity will also be pushed into commodities, as it has historically. Just look over the last 10 years and you will see gold and silver prices rising along with additional liquidity (money printing).

This creates value in gold and silver mining companies. Both big-cap and small precious metals miners can offer some value for the investor. Barrick Gold Corporation (NYSE/ABX) and Goldcorp Inc. (NYSE/GG) are huge, diversified precious metals mining firms that have a variety of gold and silver mines. This diversification protects the investor from any problems at one specific mine and the scale of production allows a better ability to predict the flow of revenue from gold and silver sales.

Small- and mid-cap precious metals miners can offer the additional upside of being potentially bought out by the bigger gold and silver miners. Firms like Nevsun Resources Ltd. (AMEX/NSU), which has properties bearing gold, along with copper and zinc, start to look attractive to bigger gold firms that need more precious metals reserves. Plus they pay out a small dividend, which is an additional bonus. Getting paid to wait while the price of gold continues to go up is a nice bonus.

In the silver space, an interesting company is Silvercorp Metals Inc. (NYSE/SVM). This is a company with $1.00 of cash per share, forward price-earnings ratio of 12, and revenue that continues to grow. Profit margins are a healthy 38% and the company has no debt. With prices of gold and silver, as well as other precious metals, continuing to move up, you should look at the miners that have a solid resource base, relatively low level of debt, and a consistent history of hitting their targets.

One area that management can’t control is the actual price of gold and silver. But, thanks to the statements by central bankers and politicians around the world, they’ve essentially laid out the roadmap for the next several years. With more monetary stimulus—meaning more money printing—we will get more inflation. This is a hugely bullish sign for precious metals.

Gold and silver will continue to go up as long as central bankers keep the money tap open.