Member Info for booboouberbear

The penny has dropped it would seem. I expect a Greenback devaluation, Trillions more pumped out the door and a real kick of inflation to boot.

https://www.bloomberg.com/quote/XAU:CUR

I think that is right, Covid-19 will be brought under control by a vaccine in the next 12 / 18 months, however the financial damage done will last (at least) a generation IMHO.

Even before Covid-19 the U.S was running 5% fiscal budget deficits, in the good times, this financial year the fiscal budget deficit will be circa 20%+, next year won’t be much better and it will take years to correct the fiscal budget deficits being racked up by the US as its population ages and tries to pay for the promises it made over the last 50 years to its citizens it can blatantly no longer afford anymore.

Net interest payments on the US National Debt is now circa 9% of all US Federal outlays and is due to increase sharply as a result of all this new debt, to keep the repayments manageable, interest rates can never go up, so that probably means yield curve control to maintain the low interest rates and if history is anything to go by on this experiment, when this was last done after WW2 by the US Federal Reserve the inflation rate went to 20%!

Biden (if elected) will come to office and spend a massive rescue package and all of this doesn’t account for what happens if Covid-19 spirals out of control this Autumn / Winter and crashes headlong into the Influenza Autumn / Winter season, the worrying thing for the US is what they have seen in the Spring / Summer may be small fry compared to the Atom Bomb about to go off in their country’s healthcare system / economy over the Autumn / Winter. CD is right, there will be no failure of the system, so it will mean the US Federal Reserve will turn printing presses to maximum.

I just can’t see how the Bretton Wood System on which the Greenback enjoys the being the world’s currency reserve possibly survives in such scenarios? It can only be Gold which prevails.

I seem to recall Zurrin saying (possibly in the May Webcast) that with Shanta being debt net debt free that a whole new line of debt / financing would open up for Singida and be able to be 100% funded through Project Financing. It may well be that this will be done in line with an equity investment by Shanta into the funding agreement to make the interest rate much lower to Shanta on a Debt / Equity split.

Either way, there shouldn’t be many issues funding Singida considering where AUX is.

I also very much hope Zurrin has also tied any development of Singida with getting the VAT reclaimed with the TG Government (be it a direct refund or offset on future taxes).

An excellent update with wheelbarrow loads of news to come.

With the hedge unwinding towards the end of 2020 and the AISC being controlled tightly we should have clear margins well in excess of USD$1,000 per ounce by year end just using today’s AUX Spot Price (just add in the zeros of future margins if you expect AUX to keep rising as I do).

The US Senate will release the next stimulus at the end of this week, expect another USD$1-1.5T in created money and the Greenback to weaken / AUX to strengthen.

Just recorded an all-time monthly high of $USD846 Billion for the month Of June. Pro rata that is a 48% budget deficit month on month based on 2019’s yearly GDP Total (the US Economy will seriously contract from that level in 2020) and that doesn’t even include what the US Federal Reserve is buying up in ‘assets’.

The US is debasing their currency on an unimaginable scale.

https://www.marketwatch.com/story/us-budget-deficit-soars-to-record-864-billion-in-june-higher-than-all-of-last-year-2020-07-13

A 35% devaluation in the $USD would take AUX to $USD2500 a Troy Ounce and that is before you even get to the debasement that gets you that kind of devaluation in the first place and the inflation it gives the US and the rest of the world at the same time which will make AUX rocket over and above the $USD2500 IMHO.

The US is probably in for a very bad month or two, it will have to lock down more states to contain the spread of COVID-19, if they don’t, you will be looking at a rampant COVID-19 spread during the fall / winter at the same time as the Flu Season, a probable collapse in the US Healthcare System at least in some heavily populated states and a dollar that will be trashed under a mountain of useless printed dollars.

At this rate Spot AUX will be at an all-time record later this summer.

In the next few weeks, the markets are going to have to come to understand what America’s spiralling (and getting worse) Covid problem is going to mean for their economy. There will be printing of cash on an epic scale and a full out devaluation of the US Dollar.

https://www.bloomberg.com/quote/XAU:CUR

Should be released sometime next week (week commencing Monday 13 July).

Judging by the 3,961 hedged ounces sold during the 1 to 20 April period (disclosed in the last quarterly update) I am hopeful for a 21 / 22k ounce quarter. Here to be shot down.

Just my opinion, but everyone should hold gold for what is about to happen to the $US Dollar, it’s undergoing a devaluation before our eyes, but in this ever more febrile market, this will take time to dawn on it.

The US is now printing almost unimaginable sums of money just to keep their economy afloat, the US Federal Reserve is now engaged in what amounts to yield curve control (one side of the US Government monetising / buying the other side of the US Government’s debts) because any spike in real terms interest rates will all but bankrupt a US Economy that has now come to rely on zero percent interest rates the last 12 years.

We now have slowing globalisation (inflationary) and broken supply chains because of Covid-19 (inflationary).

All this assumes we don’t have a second, more disruptive wave of Covid-19 in Winter 2020 that requires even more US Government intervention (probably wishful thinking).

A new US President in Joe Biden that will come in to power and spend money over and above what Trump is doing (more printing).

A US Federal Reserve with a balance sheet due to be $US10 Trillion by the end of 2020 (made up of garbage US Assets to keep the stock market afloat). If the market decides the US Federal Reserve’s Balance Sheet isn’t worth the paper it’s printed on, there will be hell to pay for the US Dollar.

As the US prints its own FIAT currency, it will never technically go bust, but in order to deal with a spiralling debt to GDP Ratio (now above 100%) that it can no longer afford it will simply have to keep interest rates at zero while inflation let’s rip and inflate their debts away.

This, sadly, affects everyone on earth as everything is priced in Greenbacks, we all have a problem coming.

AUX Spot Price coming back and close to going positive for the day

One swallow doesn’t make a spring, and one US jobs report where 4.8m people where moved from the ‘temporary’ unemployed column to the ‘employed’ column because of the US Government’s job programme doesn’t mean a great deal to Gold long term.

They still have a budget deficit of 20% (will probably get worse) and a federal reserve monetising debts on an epic scale and we can now add in an epidemic making new records each day. The day of reckoning will come one day for the Greenback, and probably soon.

https://www.google.com/search?q=shg+lse&rlz=1C1GCEU_en-GBGB824GB824&oq=shg+lse&aqs=chrome..69i57j0l2j69i60l3.2466j0j8&sourceid=chrome&ie=UTF-8

Is there a missing RNS or is this wrong?

That is what it says on Google???

When you look at the healthy amounts of gold forward sold from the 1 to 20 April reporting period stated in the last quarterly results I would agree with you, I think there is an upside ‘risk’ potential on the gold production numbers.

The problem with a possible takeover is Tanzania. The truth is you aren’t going to have lots of people queuing up to take a large punt on a 80k / 115k gold producer because of the in country risk (or at least perceived risk). In fact, if this was mining in another territory the SP would be much higher that it is currently. Diversification into Kenya may change that in future, but I don’t see a takeover any time soon.

The opportunity this gives us PIs is we can get a slice of the pie for a much more reasonable price that should otherwise be the case and as you pointed out earlier, if this turns into a dividend on Singida going into production the yield should be very nice indeed.

If you believe Stephen Roach and others, there could be a coming 35% crash in the value of the US Dollar weighted against other currencies.

Considering AUX is priced in the Greenback and AU is already at record levels against those other currencies as your post illustrates, it sets up a potential for an explosion in AU prices in US Dollar terms if there is a large scale US Dollar deprecation. That’s before you even get to what a US Dollar crash would do for inflation generally as everything is already priced in US Dollars anyway:

https://www.cnbc.com/2020/06/15/dollar-crash-is-almost-inevitable-asia-expert-stephen-roach-warns.html

https://www.bloomberg.com/quote/XAU:CUR

Just hit multi-year highs, not far off $1800 a troy ounce.

The movement in XAU is very interesting today. Staged a strong rally from 1% down to go positive. It seemed that the catalyst for this was disappointing economic data combined with a surprise rise in potential inflationary forces measured in the personal consumption expenditure price index in the United States. We could potentially see the worst of all recessions in the United States in Stagflation!

Rising debts to GDP Ratios and inflation would send gold rocketing.

https://www.bloomberg.com/quote/XAU:CUR

There’s no getting away from it, there is lots of risk with mining in Tanzania. Mining in Africa is a murky business full stop!

But the fallout from Acacia seems to be receding with the previously jailed executives being released last week and Barrick being allowed again to ship gold concentrate since May this year.

Other gold miners like Tanzania Gold Corp have financed and just started production at their Bucketreef site this month, so there is clearly a risk appetite still there for the country in mining. And I hazard a guess Shanta will have no issues securing good finance for Singida, either.

Thanks for the presentation updates last night.

When you look at Slide 15 of 16 of the presentation on 2020 news timelines, it would appear we will get both Kenya closing and Singida updated economics and financing by the time we get the Q2 2020 update in mid-July. A decent month ahead of us.

https://www.proactiveinvestors.co.uk/upload/SponsorFile/File/2020_06/1592489620_Shanta-Gold-Investor-Presentation-Final-Version.pdf

https://www.fxstreet.com/news/goldman-sachs-raises-12-month-gold-price-forecast-to-2-000-202006190340