the lbo´s or rumaors have arrived in the mining sector

Gold Fields May Receive Bid From Pastorini-Led Group

Shares of the company rose as much as 15.3 rand, or 11 percent, to 152.5 rand, and traded at 145.25 at 12:50 p.m. in Johannesburg. A close at that price would be the biggest one-day gain for the stock since Aug. 21.

http://www.bloomberg.com/apps/news?pid=20601087&sid=anLgyjo9FXhw&refer=home

Most Americans Fear Recession in the Next 12 Months

An Inflation Heat Map
just in time to stand then spin after the fed minutes release today….

buy vs rent / nice realtor bashing plus an excellent buy vs rent calculator!

http://immobilienblasen.blogspot.com/

Interesting how the focus on Citi is wrt expenses, hardly anyone in the media has mentioned general business conditions and why Citi is having to cut expenses now. We'll see what happens in the following year... I don't think Prince has long before he gets his golden parachute :)

GFI...the rumor is unsubstantiated but it's great news. We finally timed one right as my better half redeems herself by picking up GFI yesterday after having unloaded UXG way too early (she'll be reading this post a little later today)...

MarkM,

You may be spectacularly wrong at some point, but your recent record speaks for itself. And noone who plays this game on a level field is right all the time.

jmf thanks for link to Goldfields news story..
I find this part of story a bit wierd
"Pastorini's group is already buying shares in the open market, he said in the e-mail. The strategy is to accumulate as much as 10 percent of Gold Fields' stock by June or July before making an offer, he said." Can't see why they would publize their intent to buy up to 10% ?

jmf and all,

there is no more rent vs buy equation in America. it is difficult for the average american to get a mortgage. I live in metro nyc and buying homes is now only the game of the rich. W2 couples can no longer afford it.

Meanwhile i have tenants in south east that cannot qualify for a loan or even keep up with their credit card debt (i have proof since i do a credit check before i choose tenants thru a mgmt company). And even though their rent income to me pays 90+% of my mortgage, they cannot get out of the rat race. But that heat zone chart is pretty cool. You might also find this resource valuable; its a migration pattern map of where people in america and canada are moving to/from.

http://www.atlasworldgroup.com/migration/

the last few programs I have watched on Robtv the majority of viewers calls seem to be on Uranimum, same thing happened to Oil before it corrected, may be time to tighten up the stops

Any EPP holders, keep an eye out. Double volume pre-mkt.

Good news on GFI and long overdue news on Citi, though methinks much more could be done.

You won't find this in the news but HD is beginning to make some adjustments. My eldest girl works in the Supply Division and will learn this coming Monday if she is still employed. Not really shocking news since some consolidation was sure to come due to the slowdown in home starts but some will see this as a sign that the new leader is serious.

Thanks Bill and Kaimu for your thoughts regarding Western Goldfields.

Everyone else, there is a Crystallex article on Seeking Alpha this morning by Ant & Sons (who have been positive on the trade for quite some time if I recall).
Basically, they remain very positive about the company receiving the permit. I guess Cramer mentioned it on his show last night, advising to "buy the dips".
Have a great day.

Eric,

What company are you talking about? JK.

That ant & sons piece came out yest. nothing new in it but a good summary. the stock seems to have built a self defense mechanism against short attacks and false reporting.

2dave-

Certainly not going to crow abou this little bit of selling so far. But at least it's red.

If I were the bulls I'd let this get a little oversold on the hourlies and then try to slingshot it over 1450 resistance to see if anyone is comfortable with that level. Second choice would be to let a little bit of selling take place today, put the Fed Minutes in the rear view mirror and then crank the programs back on another day.

Good luck and good trading.

Re: Uranium

I agree that a correction must be imminent, 60 minutes just had a piece about the French nuclear energy industry. Remember their oil sands piece last year? SU hit its high a day later. Unfortunately I am stuck using OTC stocks (I'm in the US), so I will just hold...two major mine floods in less than a year, you can't make this stuff up.

Okay, Dow off 52! NOW I get to crow. KMart knockoff Crystal Ball workin' again. Raining here in Cincy. ;)

ALOHA !!

On WGI, I hear you Bill ... I believe the impact of that loan won't be felt until later anyway. In the long run I believe it will hinder the company unless they can pay it off muy rapido or secure private funds!

I have to ask why didn't Microsoft(MSFT)back in the early 1980s not have to hedge their product? Or Intel? What about other commoditiy producers for, say, "pork bellies", like Smithfield and "orange juice", like Coca Cola ... Why aren't they subject to hedging requirements when they need a loan?

Randall Oliphant (CEO) of WGI made a good pitch at the AMEX Precious and Base Metals Conference and updated their corporate presentation from their last pitch. It will be available for replay at http://www.amex.com/?href=/atamex/news/events/MetalsConference2007.jsp

The key points:

Have 165,000 oz per year coming on in April, 2008 at $345 per oz cash costs and $402 per oz all in costs. At current gold prices, will generate $40m per year in cash flow giving a P/CF of under 7 at current prices. Even at $500 gold, will generate $23m per year in cash flow.

The other compelling point he made is that, according to BMO (which has done a good job on this) gold exploration / development companies trade at about $89 per reserve oz. and $319 per oz. when in production. Given that they have all the permitting in place, the financing and proven, successful team, all that is required now is execution and a steady gold price and the stock should triple within the next 12 - 18 months. WGI is valued at $79 per reserve oz.

Also, forgot to mention, low technology risk as this mine was in production from 1985 to 2001 before it was closed due to low prices and is now being reopened using the same low-technology (open pit) mining approach.

So, cheap on a earnings basis, cheap on a reserve basis, no political risk, no technology risk. I guess the only potential downside is the price of gold.

Kind of makes me think I should be trading out of Crystallex and getting even longer WGI.

Hello all,

Could anyone comment on how to read into the release by UXG? I'm long with a very nice cost basis, but I'm wondering how much wiggle room to give this thing, right now I'm letting it go with a wide trailing stop.

Thanks.

Hey Bill,
Thanks for the insight on the Goldfields loan !!

Re: Uranium
I disagree about the correction being imminent. A correction might be in order but not for another 8-9 months. Casey just had his Uranium Stock SUmmit and 300 professionals including hedge funds, mutual funds and sophisticated investors showed up in full force. I take that as a sign that the investment community is only has only now taken notice of Uranium and its prospects, besides why would it correct..there's no immediate reason to !!

No doubt there is a huge hype on Uranium similar to the hype discussed by Bill on the Gold hype from so called miners who have not even bought the bit to start drilling. I saw a piece recently where a former employee of BMO has set up a mining company. Next it will be the lawyers who seem to have alot to offer all industries.

If this Uranium buzz continues there will be more holes in Mother Earth than can be found in Swiss cheese.

I see today where Moody's have has to backtrack with red faces and downgrade the Banks the upgraded a few weeks ago. Poor old John Moody must be turning in his grave. They have lost credibility.

"Doomsday for the Greenback?"

http://www.counterpunch.com/whitney04112007.html

MarkM: Awesome call on the markets!

Kaimu: Very much enjoy your contra-contrarian thinking on the $, keep it coming! Yeah they still have tricks up their sleeves I am sure, however for those in this for the long haul fundamental trends will win over short term economic oversteer.

Man this place is one of the best on the WWW.

MU

I purchased this on in late March around 11.42. The stock went up to 12.25 or so. My mental stop was around 11 1/8. The stock has been declining since 4/3/07. Intraday yesterday, the stock dropped to 11 and I was going to sell if it did not look if it would close above 11 1/8. At around 2:30 eastern it popped up and closed at 11.23. I am wondering if this was a shakeout before the next leg up. Someone mentioned Goldman came out with a sell recommendation to knock the stock down to purchase at lower prices. I do not know, but I felt a shakedown yesterday. Still long SNDK and AMGN.

Adding to BMD here.

Not the bull case the Fed language was spun to be, eh? What a surprise.

http://www.marketwatch.com/news/story/fed-march-meeting-minutes-show/story.aspx?guid=%7BBB5DB4B8%2D6734%2D4363%2DB049%2DD94BB431F50F%7D

(Someday I will learn that tinyurl thingy I promise.)

MarkM,

If you use firefox, tinyurl has a toolbar, so you never have to go to their site to perform the task.

https://addons.mozilla.org/en-US/firefox/addon/911

MarkM,

Leisa also has a Tiny URL window on the homepage of her blog.

http://tinyurl.com/#toolbar

Go to the link above. And

Add TinyURL to your browser's toolbar
TinyURL Toolbar.

Click and drag the following link to your links toolbar.

TinyURL!

Once this is on your toolbar, you'll be able to make a TinyURL at the click of a button. By clicking on the toolbar button, a TinyURL will be created for the page you are currently at.

What is it with the tiny url. Is it fashionable to have?. I have enough tiny things to deal with. Do I need another?.

Horatio--It is fashionable because on many blogs (though not this one) the comments section does not have enough pixel width; accordingly when you post a URL that is long, it truncates and those who are clamoring to read your contributed site are stuck because vital information is not available (like the doc#).

Not so much fashionable as necessary (in some places).

Just broke my rule with respect to buying before earnings. Long DNA on the close.

I guess I feel like going to Vegas this afternoon.

Lucky 7's?????

Entered SDS at the open, and exited at the close (thanks, MarkM). Also exited GFI premarket...we didn't think an unsubstantiated rumor was good enough...

Hello to the Cara community. As I rarely post, I have a few things stored up to say. First to Bill, thanks. I was distressed when you said you needed to step away. You have seeded this fertile ground and I hope you will come back each day to wander in this field of flowers and poo. You have changed the way I think about my investing. No longer do I see a company touted and I rush to purchase...usually at a top.

Short aside here to 2nd_ave. Did you buy BMD based onfear of missing the boat or is there a reason at this time based on charts or news?

In fact, you and this community of commentators has changed my daily habit of making my portfolio the first stop. Now The first thing after doing my daily charitable clicks to the Hunger Site, I click on Cara and read all comments. With that daily info, my review of my holdings has more meaning. So thank you all, Bill, MarkM, Leisa, Kaimu all others. Even in the bs sometimes flung before Bill chops it, I laugh, and learn.

About the lightning rod topic of ceo overcompensation. It is one more symptom of the serious (insert moral,social,american,etc) decline
in our society. But, it is a big one. A BIG ONE.
I am a Home Depot employee and am embarrased by Nardelli's golden rape. It is disrespect writ very large. And I agree with you Bill that any company capable of awarding that and thus turning a blind eye to the little guy and the stock holder and in HD's case the customer, ought to be very critically evaluated as being worthy of inclusion in the Cara 100. Or Cara 97 or 45. As long as Bill is willing to distill a list of valuable companies worthy of my hard earned investment dollars, I will be grateful.
Thanks all. Peace

I can't believe my ears, Larry Kudlow, on CNBC just admitted that there is an inflationary problem.

WOW

ALOHA !!

FOMC
Ben has officially stated that his choice is between "inflation"(aka:US Dollar)and the US economy(aka:real estate/stock market). So he has officially put us all on notice that he is between a rock and a hard place, but he has a slant towards the inflation side. This is all according to the AP News release dated today.

Link: http://biz.yahoo.com/ap/070411/fed_minutes.html?.v=6

Okay, well he keeps saying they have a handle on inflation yet costs are rising all day ... all night. Look at metals markets ...

Shanghai Metal Index: UP 12.5% in one month
Silver: UP 6.25% in one month
Gold: UP 4.1% in one month

So if I were to go by commodities and GOLD it seems as if Ben does NOT have a handle on things!

He mentions the next FOMC meeting where they will announce rate hikes on May 9, 2007. Last year POG hit $730 on May, 12, 2006, after that POG fell like a rock dropping to $570 over a 30 day period.

What triggered the POG crash? The exact day the DOW tanked and continued to tank 1000 points for the next 30 days taking PM shares down, while simultaneously the US dollar rallied from 83 to 87, taking POG down at the same time. Double barrell!

All I can say is ... remember last year's rally but most certainly don't forget last year's dump!

re the study Bill posted on the evolution of a junior miner (various stages of development and of valuation). Does anyone have a copy? I can't find mine. Posted about a year ago. Was by either an i-bank or a consulting firm.

Thanks in advance.

Jock

Photogray,

Thanks for asking about BMD-hoping to get more input from others who are either long or planning to go long. Attaching my original post last Thursday:

Re AMGN: Hope JogyP and holdenll are in (I'm not!). Resistance is now at 60-62.

Went long BMD yesterday and plan to add to the position on any pull-backs. Near-term pop was due to an announcement of new orders for limestone aggregate (whereas the drop last November was due to delays/uncertainties in orders), but the long-term story is whether the company is able to obtain approval for using limestone to cut sulfur dioxide emissions during processing of oil sands (their quarry is centrally located relative to current and future oil sands projects).

Taking MU at 11.69...

Posted by: 2nd_ave at April 5, 2007 12:14 PM

Bill mentioned that higher tax receipts will keep the budget from getting out of hand. That is the reason that the fed will print/inflate until they can't anymore. They must keep the tax receipts up.

Printing money = higher gold prices over longer periods.

Inter-citic's private placement at first glance would seem to represent about a 10% dilution, although better finance minds than I will no doubt develop a better notion:

http://tinyurl.com/28g4g6

How do people feel about this? Maybe the buzz will get ICI.TO stock moving! It has been so DEAD, even after new drill results.

Kudos to MarkM for his clairvoyance. Dow has retraced about a third of the eight-day streak. Early trading might show if the bulls late effort to salvage support 12,500 (per C. Twiggs) carries through or if we have a slow downhill roll to the next (more solid) support @ 12,300. What do you make of the failure to fully close the Feb. 27 gap on Dow and S&P? I expect that we might look for support at S&P 50 DMA (mid-1420s) before another run. Any thoughts? For Nasdaq, I can't imagine that tonight's RIMM slaughter will provide much underpinning to the tech bulls now that one of their darling has shown weakness.

JML

ALOHA !!

I would not want to be a party to this $200mil loan ... I feel sorry for those who have their investments tied into Farallon Capital Management, a hedge fund based in San Francisco. I guess its "buyers beware" even for the rich people!! Can't wait to see how it is the US taxpayers will bail out Goldman and the gang ...

WOW !!! $200mil at 13% !!! Good luck ...

Hanky Panky galore!!!

Accredited Home Lenders

Accredited Home Lenders Holding Co.’s [ticker: LEND] largest shareholder has sold all but 760 of its 3.09 million shares in the company, according to an updated 13G filing with the Securities and Exchange Commission.

Late last month, Accredited took out a $200 million loan, at 13% interest, from San Francisco-based hedge fund Farallon Capital Management, which owns 7% of the company. Around that same time, Chicago-based Citadel Investment Group (Sequoia Fund) bought 4.5% of Accredited’s outstanding shares.

Link: http://movermike.powerblogs.com/posts/1176227273.shtml

Jock, perhaps this is what you are looking for.

TWELVE GUIDELINES FOR BUYING GOLD MINING STOCKS
By Kenneth J. Gerbino June 08, 2004

The twelve guidelines should help you to better understand some investment basics regarding the mining industry, especially if you do not have a background in geology or mining engineering. I have kept this as non-technical as possible so no one falls asleep. Keep in mind, these are basic guidelines and far from complete.

•• If the company does not have an independent professional resource calculation for gold or silver or other minerals, know that someone is either speculating or guessing at the most critical data point regarding mining industry valuations. Be careful not to confuse “resources” with “reserves”. Measured and Indicated resources are reliable as a resource. “Inferred resources” are very speculative mineral inventories, so be careful when “inferred” is used. A resource still has a long way to go to become an economic deposit, as opposed to “reserves” which are deemed to be proven economic and mineable ounces calculated by very strict engineering and government rules. Canada’s National Instrument 43-101 is one such guideline regarding resources and reserves.

•• I would suggest your portfolio be 60% invested in companies already producing gold or silver profitably. The other 40% divide into companies close to production with impressive projects or very far along in defining large and significant mineral resources. Producers should include majors and mid-tiers (your monetary insurance, since they undoubtedly have the goods in the ground). Look for mid-tiers with good growth profiles. Junior producers with new projects are also ok.

Companies with lots of money in the bank or access to sponsorship from top investment banks in Toronto, London and Vancouver is vital in this capital intensive business and always a good thing to look for. Diversify: have at least 15 good companies. Depending on your risk tolerance you could allocate a small portion to grass roots exploration stocks but know this is the very high-risk end of the business.

The industry has changed in the last five years. Exploration and development budgets from 1998 to 2002 declined dramatically. Therefore going forward, in my opinion, any substantial project that is near feasibility (an extensive outside engineering report based usually on tens of millions of dollars of geological, metallurgical, and engineering work) could be a buy-out candidate for major and mid-tier companies that need to catch up on reserve replacement and growth.

•• “Good management” is an overused word. My definition of good management is 20 year mining professionals who have had successful executive positions with large or successful mining companies or projects in the past. If you see names like Barrick, Newmont, Placer, Anglo, Goldfields, etc. on the resume you are most likely dealing with some quality professionals. People who ran mid-tier companies or successfully helped bring medium to large projects to production also qualify. There are always exceptions, but you better know who you are dealing with. Direct mail pieces touting some gold stock and claiming top management should be carefully checked out.

•• Size is very important. The larger the deposit or potential resource the better. Small mines are not worth your trouble as there are few institutions that will finance them and fewer companies that will ever acquire them. With gold mines try and look for 2-3 million ounce and above possibilities. Mining giant Goldfields, only targets projects with 2 million reserve ounces. With silver, 100 million ounces should be your minimum. But the above still has to be qualified. If the resource is too deep under the surface, of very low grade (richness), or has one of many other negative reasons it may not ever be economic to mine.

Tonnage is important. Big tonnage operations create economies of scale that can make some low metal values economic to mine. Three hundred million tonnes (a tonne is 2204.62 pounds, not to be confused with a ton which is 2000 pounds) for an open pit gold mine is big. Ten million tonnes open pit is small. For an underground operation, tonnage can vary dramatically and grade and mining widths become more important (we will discuss this below), but one million tonnes would be small. For a base metal open pit deposit, one billion tonnes would be huge, while 20 million tonnes would be small. So remember in this business – Big is Beautiful.

•• Grade (richness) is crucial. How much bang for the buck are you getting per tonne of rock. If the grades are high enough the above tonnage discussion becomes less relevant. With a near surface potential open pit gold deposit, 2 grams per tonne (a gram is .03215 of an ounce) would be excellent. 1 gram would be fair as long as you don’t have to remove too much waste rock to get at the ore.

With underground mines, everything changes: depth, the continuity and mining widths of the ore and the vertical or horizontal plane of the ore all comes into play as well as many other factors. Generally, to be on the safe side, if you can find gold grades of 10 grams (about a third of an oz.) or more per tonne across mineralized sections averaging 3-4 meters or more in width, then you are looking at good potential. Lower grades across wider widths also work (i.e. 6-7 grams across 10 meters) Keep in mind these are rough guidelines and subject to many other factors, like depth, vein continuity, overall tonnage and much more. But the sweet spot in this industry is high grades across wide zones of mineralization.

•• Expansion possibilities for a company’s production and resources/reserves are important. For non-producers, resource expansion is crucial, because as these companies drill and confirm more resources they will increase their intrinsic value. This helps them handle the big hurdles of either financing the mine or mines, selling-out, or bringing in a joint venture partner at reasonable terms. Mining companies with plenty of production and new mines coming on stream in the years ahead are usually a good group to own. Growth is Good.

•• Cost per ounce of production is very important. Companies with high costs are more risky since a low metal price market will make them unprofitable, but they will have considerable positive leverage if metal prices go up. A gold mine with $325 costs per ounce, doesn’t make much at $375 gold, but if gold goes to $425, the mining profit doubles. High cost producers are a double edge sword.

I like low cost producers. They are safer, have lots of cash flow to buy new properties and mines, will have more funds for exploration and development and could eventually pay strong dividends if gold stays in a new high price range over the years (i.e. $450-500). Also large mining companies are not going to buy-out high cost producers. They are risky and migraine headaches for management.

Mining costs are mostly a function of grades, mining widths and tonnage. If you can talk to a mining engineer and get a handle on the cost per oz. or tonne of the operation, you are acquiring crucial data for your analysis. Companies operating at high costs (within $100 of the gold price) or that have projects that look like they will be high cost producers should be avoided. High costs equal high anxiety.

•• Value per ounce: How much you are paying for the gold in the ground is an important stat. The lower the better. The following guidelines relate to a $350-400 gold price. If gold were to go higher these numbers would increase. For advanced exploration companies, try and stay in a valuation range around $15 per ounce of resource in the ground. As an example, a company with 15 million shares outstanding selling for $5 per share has a $75 million market cap. With a 5 million ounce resource, the market cap. per ounce is $15. As companies move up the food chain and expand and define the resource and test metallurgy and do engineering studies, the market cap. per ounce should go up to $30-50 per ounce. Depending on the quality of the deposit these valuations can change.

Producing companies if bought out, can go for $100 to $150 per ounce of “reserves” in the ground. That is an important guideline. You do not want to buy a stock where you are already paying $100 per ounce for just a “resource” (which means the “reserve” will actually be lower). With the company just in the advanced exploration stage, there won’t be enough upside unless the deposit gets a lot larger. Advanced developmental (meaning feasibility to actual construction) companies can be bought out for $40-75 per ounce of resource or much more depending on many factors that are beyond the scope of this writing.

Usually the value of the ounces and the stock price go up as more and more confidence is gained in the project. Initial resource definition usually allows for a value of $5-10 per ounce. At the bankable feasibility stage those same ounces could be valued at $40-75 per ounce.

If you see a mining company with a well defined resource and the gold ounces are valued at only $5 per ounce or so, just know there is probably a reason and it is probably bad. Most likely those ounces will never see daylight due to any number of reasons: environmental, logistics and infrastructure problems, political risk, low grades, high capital costs, narrow mining widths, high strip ratios (how much waste rock has to be removed to get to the ore in an open pit operation) and a host of other reasons. There is a right price for the ounces, don’t overpay.

•• In a favorable gold mining environment, which I believe we will have for the next 10 years, it doesn’t pay to take undue risks. Try and find good merchandise and be careful of the small grass roots exploration companies. Surface sampling is the key to the difficult exploration business. Positive soil and loose rock samples on a prospective property may have come from many miles away twenty million years ago. This means an ore body that is hopefully under the ground is not there. Only one inch of geological movement in a subsurface rock structure every 100 years equals in 20 million years, 3.2 miles. In geology you are dealing with billions of years. Mountains you see were once ocean floors, etc. Large and extensive outcrops (surface rock formations) that have mineral showings can be a good indicator as well as widespread crude and small local native mining activity. But it is no easy task finding these minerals in large enough deposits to be economic to mine. Surface showings are actually very important indicators for economic mineral discoveries but unfortunately they are still high-risk speculations.

•• A key stat is cash flow per share if the company is already a producer. Large gold mining companies can sell for 15-20 times cash flow in a good gold market. Mid-tier and smaller producers can sell for 25-35 times current cash flow because of expected cash flow increases, from new mines coming on stream. In this case the market is anticipating the future. Beware high cost producers selling at high multiples of cash flow, as they will get hit very hard if gold has a set back.

Companies expecting cash flow from future projects are usually valued using a net present value criteria. In this method the entire future cash flow of a mine is laid out and a value is placed on this cash stream, taking into consideration the time value of money. How much is the $500 million dollars that the mine will make in the years 2008 thru 2018 worth today in the present. The future cash flows have to be discounted in order to arrive at some sort of present value for the projects. Many times a 5-10% discount rate is used. I believe a lower discount rate is also ok, since gold is an anti-discounting currency (i.e. gold’s price should go up with inflation and interest rates therefore negating the discount rate - because it will keep it’s future purchasing value).
Earnings per share is a tricky stat for the miners because of so many non-cash charges and accounting complexities. In the long run it all comes out in the wash, but during the years of the life of a producing mine, cash flow is the king. Look hard at cash flow per share or expected cash flow from projects.

•• Comparables are very important. Why would you buy a stock where for every $1 you invest you get $5 of gold in the ground when another company with very similar fundamentals and resources gives you $40 of gold in the ground for every $1 you invest. There actually may be a good reason, but the point is you should know what that reason is. Comparisons are an important ingredient to avoid overpriced companies and missing some real bargains. We constantly do comparables at Kenneth J. Gerbino & Co. and I suggest you do also. One should compare the basics: grades, tonnage, costs per ounce, costs per tonne, smelter charges (for base metal deposits), reserve or resource value per dollar invested, market cap per reserve/resource ounce, discounted cash flows and the net present values of the mining assets. Comparables allow you to better shop the market.

•• Be careful of the term Gross Metal Value. This is all the precious metal ounces or base metal pounds in the ground multiplied by the current price of the metals. It is misleading unless you have a lot more information and knowledge. Just know that with any mineral deposit a company will never recoup anything near the gross metal value of what is in the ground. The ore will have a mine waste factor (5-15%), recovery losses in the mill or from the leach pads (5-20%), and smelter, refinery, transportation and penalty costs for base metals (20-35%). Throw in royalties, state and local taxes and other expenses and you will see that gross metal value is less important to your analysis than all the other ingredients that would determine a quality mining investment. It doesn’t mean the term is useless but it can be dangerous to use on it’s own.

Well, there you have some basic guidelines that I hope will help you through all the press releases and some of the direct mail hoopla about all the billion dollar mountains out there. Remember the more homework you do the better off you will be. For other articles on gold and the economy please visit our website at: http://www.kengerbino.com/

Good luck in what looks like a long-term, mostly bullish precious and base metal market.

More Hanky Panky from da Boyz:

Article by Adrian Ash:

"The US housing market's broader impact on the economy has been contained," reckons Simon Johnson, the IMF's chief economist. That verdict may come to look premature; this week sees a lawsuit filed by 20,000 private individuals caught holding $600 million worth of bonds in American Business Inc. when it went bust in 2005.

American Business offered yields of nearly 13% on 13-month notes according to the new SEC filing. No one spotted how unlucky that offer would turn out, least of Wall Street's finest. Bear Stearns, Credit Suisse, J.P.Morgan and Morgan Stanley picked up $50 million in fees between 2000 and 2003 by lending to American Business, says the suit – even though the firm was technically insolvent.

How much trouble this lawsuit and others like it will actually cause Wall Street's finest remains to be seen, of course. But with 54 subprime lenders now collapsed since late 2006 alone as ML-implode.com reports, what hope does the Fed really have of raising rates – no matter what happens to inflation in the cost of living?

http://tinyurl.com/3dqvpz

With all the negative headlines this should have been a 150pt down day. It wasn't to the bulls credit. I think traders will look long and hard at those Fed Minutes overnight. I read a LOT of nervousness. They have NO IDEA what is going to happen next, that is clear. they are feeling this thing out in the dark. The overseas markets will have their crack at reading that cold brew (down) and Europe won't like it in the early morning. After Europe closes midday I'm interested in what the bulls want to do.

Hedged, I made money today. 2dave, I may have a looksee at what the morning brings before taking some profits. Not criticizing you at all for cashing in at the close though.

Best all,

kaimu
Seems I have some much to teach you, but so very little time to do it in.
You will get your dump, but not until the broker bankers have your dollars. The POG crash was more a reflection of manipulation rather then the POG following the Dow down that slippery slide. Bill has already called for the DOW to hit some 1000 point down days. No doubt, it will be when the investors are fulling invested, not when they are sitting on the sidelines holding cash. Unfortunately an 8 day DOW green flicker may be bringing investors back into the shell game.
Investing in these unfree markets is a perfect shell game with your dollars. You simple can't win at the game, you have zero input, and you are being blindfolded to boot.
Here is your first lesson Kaimu.

http://www.youtube.com/watch?v=zJ6YiZgHei8&mode=related&search=

YOUR FIRST TEST.....
Did you learn anything? Y____ or N____

Keep some powder dry.

bigwad -
If you can't make good money in these markets what is the point of writing in this blog (especially in somewhat offensive tone) ? Read and learn to work market both directions.

bigwad -

While I thought the URL you posted was very interesting, I found your posting just a little arrogant, a little discourteous, a little disrespectful, and a little unmannerly. In this regard, it seems to me, you have a few things to learn as well.

ALOHA !!

"wad" ...

I cannot view any internet videos since I am out here on dial-up and I don't have the patience waiting for "buffering", so can you transcribe the video into text and post it here?

I appreciate a good lesson ... In terms of learning I am always learning just not from "wads"!

Thanks ...

In my humble opinion, this is the most important post I have ever made on Bill’s blog.

Goto http://origin.vcall.com/CustomEvent/conferences/AMEX/041107/day1.htm

12:00 PM Luncheon Presentation with Jim Sinclair

This man is a grandmaster without par in the world of gold.

It is about 57 minutes. Enjoy!!!

T3D

One last question to Bill, another grandmaster, is there any chance that you could post a sneak preview of the table of contents of your upcoming novel, ah book.

TIA

On the subject of books, can anyone recommend a good one for my cruise? I read economic hitman on recommendation from here and it is prob one of my top 5 favorites now. I am open to suggestions.

NYUgrad,

I just finished Against the Gods: The Remarkable Story of Risk by Peter Bernstein. It was a nice leisurely read.

Also I would recommened:

When Genius Failed by Roger Lowenstein (If you have not read it already)

Manias, Panics, and Crashes: A History of Financial Crashes by Charles Kindelberger is also great.

Inside the House of Money by Steven Drobny

Hmm. Woodshed open. Check. MarkM hasn't had to visit in a while. Check. Ahh, Kaimu my friend, much as I love piling on, I think you've tackled this one quite nicely. I'll just mosey off to bed then. ;)

Kaimu,
It was a tongue in cheek posting about a lesson.
I'm sure you already know enough about the banking system that the url was connecting to.
No offense meant by the post.
Keep up your good commentary.

Kaimu

The Video posted by Bigwad is about the history of the
Fed Reserve...Jekyl island etc. Jackson, Lincoln, Kennedy
and the fight for debt free money.

You know the story.
He isn't teaching you anything.

brianr,

thanks. Nourel Roubini coincidently referred to Inside the house of money yesterday. Ordered.

http://tinyurl.com/yo4w8f

NYUgrad,

You'll love it. Read some of the reviews on amazon.com too. I just read the review Roubini took from NYtimes... and to think I thought Roubini only posted about impending doom.

Don't get me wrong I used to be a regular to his site. But for the last few months he has been on a tangent. I still think he is a very intelligent man, just the same song and dance gets old after awhile.