Member Info for goldgnome

Solid set of numbers. I get the impression that underpricing and over delivering is lurking in the background.

Pog is going up....

Best
The gnome

Pog taken a hit. Don't panic...

Debt of various flavours, continues to pile up around the world, In Oz we have the buy now pay later (BNPL) love affair going on. So you buy now, and pay over series of installments the retailer gets hit by + 4% for the privilege, plus the user gets to pay interest (~17%) if they dont make the payments. How many miss payment - hmm, about 20%. How many credit crad defaults in a year by the bank customers...2%. Regulations, plenty for the creditc cards, v light touch for the BNPL. All in a country that boasts a level of household debt among the highest in the developed world! So now you can buy your fabvourite 200 inch TV, even though you might not be able to pay the gas bill or have to miss a few meals.

So how many ways can one get oneself into debt? It seems to be getting easier every year, BNPL being the latest craze, and it is a craze, just have a look at the valuations on some of the companies .... ESG...nah, dont worry about the misery you cause ...

Old tricks in new times. Well if you can't find your new gold depsoit, then you just have to go buy one. Use debt, use your share script, but lets get bigger and better ...

The M and A continues

Evolution Mining’s punt on the revival of an old Canadian gold province has gone above $1 billion after it agreed to pay $C343 million ($354 million) to acquire the neighbour to its Red Lake mine. The acquisition of Battle North Gold Corporation was designed to complement Evolution’s 2019 acquisition of the 72-year-old Red Lake mine in Canada’s Ontario province.
Red Lake was cash flow negative when Evolution bought it for $US375 million in 2019 with a patient plan to spend a further $US150 million to refurbish it, change mining methods and expand production. Double deep down.

Newmont acquired Canadian company GT Gold last weekfor cash consideration of approximately US$311 million (C$393.0 million).

Newcrest Mining’s 2019 strategy to turn Canada’s marginal Red Chris mine into something much better by tapping into attractive geology deeper underground.

Bogosu (Ghana) is on the block again, Golden Star Completes Sale of the Bogoso-Prestea Gold Mine to Future Global Resources..but the buyer has to come up wth the cash? Bugg..r about that.

Adriatic Metals (ASX:ADT,LSE:ADT1) to acquire Tethyan Resource (TSXV:TETH)
SSR Mining (TSX:SSRM,NASDAQ:SSRM), Alacer Gold (TSX:ASR,ASX:ASR) pen friendly merger
Shandong Gold (SHA:600547) purchases TMAC Resources (TSX:TMR)
Magna Gold (TSXV:MGR,OTCQB:MGLQF) buys Mexican mine
Barrick acquires 70 percent interest in Pueblo Grande
Newcrest Mining’s (ASX:NCM,OTC Pink:NCMGF) AU$90 million Gosowong mine sale.
NQ Minerals (OTCQB:NQMLF) buys Tasmanian gold mine
AngloGold Ashanti (NYSE:AU,ASX:AGG,JSE:ANG) sells rest of South African assets
ECR Minerals (LSE:ECR) offloads SLM gold project
Feb 2020 , ECR Minerals reported its intention to sell its SLM gold project to private Chinese company Hanaq.

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the gnome

Jim R: Isn’t excessive debt a bad thing? The MMT crowd say that too much debt can be bad if you’re a household. Individuals and families who spend more than they earn and make up the difference with debt can go bankrupt. This may apply to families, but it does not apply to countries according to MMT. Individuals cannot print money, but governments can. So everyday personal finance rules simply do not apply.

Comments: If a country creates its own debt, which is owed internally, it is "friendly debt". Default matters little.

If a country takes on debt which is owed to another country and is in foreign currency, then this is a problem.

Q: Who is creating a problem for whom?
Q: If a country cant pay its debt to a foreign entity in foreign currency, then what happens?

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the gnome

Yes, generally a new smart mngt will open their innings by under-promising and over-performing. Over promising and under-performing is not a good way to open your innings. To perhaps state the obvious

regards
the Gnome

Yes Mr Bond, but it is a document of legal significance, and does provide some facts and descriptions of how these were arrived at, rather than useless speculation and idle chatter.

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the Gnome

Couldn't agree more Cowichan.
A most remarkable omission, which is not a good look at all for governance and shareholder relations. I remain confident the new management will be far more forthcoming on West Africa. The previous management, well enough said, but I for one would be avoiding wherever they went.

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the Gnome

The Burkina Ore is mostly refractory, but has about 300-400k ounces of oxide gold. Not sure how this is distributed.
Its genesis is probably part of the same system which led to the mineralisation at Doropo.

The gold ore in Doropo, Cote IVoire is not refractory to my knowledge. Hosted in granodiorite. You can read their latest 43-101 which gives detail of 92-88% receoveries in oxide to fresh ore.
https://www.centamin.com/media/2318/cey-technical-report-doropo-project-290319_final.pdf
Flat geometries, and seems to be enough ounces.
"Gold mineralisation occurs late in the regionally-extensive, reactivating compressional shear networks, framed by intense silica-sericite-carbonate alteration haloes. The main structural hosts are cross-cutting quartz veins with diffuse overprinting with fine to medium grained pyrite sulphide selvages. Gold grade correlates with the density of pyrite and high grades are correlated with native gold within the structural laminations and contacts of the quartz veining. The veins range up to several metres. "

Be great tosee these get going

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the gnome

MrBond

1. Its hard to teach an old dog new tricks. They way most gold companies grow is by MandA.
2. Do gold companies want to grow. Again old dog syndrome. They want ounces of production and optionalities and the market seems to price this. As bizarre as it may sound, I have worked with companies who simply go after reserve ounces and production. If I understand, its because down the road a bit, the POG will get better as it has before, nd they will look good. [And the earth moving contractors get paid per tonne moved no per ounce recovered.]
3. How do they pay? ah ha...not by cash, but another form of funny money...their shares..so its not necessarily a case if taking on debt to do the MandA
https://www.proactiveinvestors.com/companies/news/73567/red-back-acquisition-makes-kinross-worlds-fourth-largest-gold-producer-7317.html
Do you follow?

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the Gnome

Thanks Cowichan

I would agree. The gold industry is an unusual industry. The big movers are

1. Lack of Tier 1 discoveries, and almost total lack of quality new gold camps or mining centers. Most of the "new discoveries" have been made around old mining centers in the last 25 years.

2. What is the new exploration technology that is going to make exploration more effective, discovery quicker. For greenfields NONE, For brownfields: V LITTLE

Can you grow a gold company through Greenfields Discoveries?. A: No chance now.

3. So if you want to grow your gold company, what do you do. A: The same as the industry has done for decades ...> M and A,

So M and A is where the action will happen. Build bigger, build better companies.
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the Gnome

Thanks Mr T

I will pass this along! There are some rays of sunshine, and many green shoots on the Queensland coast! There are signs everywhere warning of Koalas, and yesterday we saw a Koala come onto the road in front of us. Right in the middle. Didnt seem to be worried about us, as he promptly power walked in the center for about 500 meters, before diving into the bush.

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the Gnome.

Cowachin

Its all a matter of time and sensibilities.

From Ray Dalio..the bond story in simple english

The purpose of investing is to have money in a storehold of wealth that you can convert into buying power at a later date. When one invests one gives a lump-sum payment for payments in the future. Let’s look at what that deal now looks like. If I give $100 today how many years do I have to wait to get my $100 back and then start collecting the reward on top of what I gave? In US, European, Japanese, and Chinese bonds an investor has to wait roughly 42 years, 450 years, 150 years, and 25 years respectively to get one’s money back and then one gets low or nil nominal returns. However, because you are trying to store buying power you have to take into consideration inflation. In the US you have to wait over 500 years, and you will never get your buying power back in Europe or Japan. In fact, if you buy bonds in these countries now you will be guaranteed to have a lot less buying power in the future. Rather than get paid less than inflation why not instead buy stuff—any stuff—that will equal inflation or better?

So lets cross out bonds as a good place to go with your $. Banks as well.

Debt to keep an eye on. How Much? There is now over $75 trillion of US debt assets of varying maturities. US Treasury bonds and notes account for $16 trillion of this and US Treasury securities of other maturities account for another $5 trillion.

A concern, not if you are the beneficiary of "exhorbitant Proviliege/s"

History and logic show that central banks, when faced with the supply/demand imbalance situation that would lead interest rates to rise to more than is desirable in light of economic circumstances, will print the money to buy bonds and create “yield curve controls” to put a cap on bond yields and will devalue cash.

Lets not hold cash.

So whats the play? Now, there’s just so much money injected into the markets and the economy that the markets are like a casino with people playing with funny money. They’re buying all sorts of things and pushing yields on everything down.

Relevance to CEY. CEY consistently produces dividend, far greater than the "dividend" one gets from Banks and Bonds.
CEY has no royatlies, and debt. It has a Tier 1 mine, meaning that even with mediocre managment (which I think have now largely left) will produce solid free cash flow. Right now I would rather have 1 GBP in CEY than a host of other "financial assets". Longer term, say 3 years I will be very surprised if my 1 GBP shre in CEY is npt worth alot more, and in the meantime I would have had the benefit of above par income.

I think it is well worth reading Dalio's work and the latest can be seen at the below link.
https://www.linkedin.com/pulse/why-world-would-you-own-bonds-when-ray-dalio/

I am not a disciple, but rather a better informed investor. There is so much rubbish in the main stream press,
the Gnome

Well debt levels spiral, along with house prices and equity values, and the bubbles keep billowing, but at the same time interest rates are flatened and the central banks are attacking LT Bond rates.Data for the December quarter from the Australian Prudential Regulation Authority showed the number of property buyers with a debt to income ratio of greater than 6 TIMES (?!) has risen by 89 per cent from 11,397 in March 2019 to 21,551 December 2020.“It’s getting to a point where almost one in five new loans will have a debt-to-income ratio greater than six times,” . The rising number of home buyers up to their ears in debt has occurred as property prices delivered their fastest monthly price growth in 17 years, with national house prices rising 2.1 per cent in February alone.And of course it wont be too hard to imagine what will happen when the music stops...and it willCurrently suffering on a surf beach with a hive of younger sorts, and the magic question, from innocent me. Question: Haven't you got a job to go to. Ans: Surf is up, babes are great and hot, and beer is cold...why would you spoil paradise with a job! Buy now, pay later, a lot later, well perhaps not ...does anyone care...Job seekers $$, 50% off your next flight in Oz, rent forgiveness, apprentices for 50% off, and on it goes.Off to catch the next wave chaps, bestthe gnome

Anyone wanting to get some insights into the real power brokers in the world I would recommend THE WORLD FOR SALE. This is a riveting read providing some very real revelations on what a powerful, contrived and unscrupulous lot the commodity traders were and are. Gold gets a small mention (small market), and its interesting to note that the US went off the Gold Standard, which had a lot to do with trying to support the US Economy. Interestingly this happened at the same time the Seven (very ugly) Sisters lost control of the Oil Price, to the market. This basically saw the massive offloading of "price control" from government control to market place control, and saw the growth of the unscrupulous commodity traders, who were the KINGS of the market place.
https://www.amazon.com/World-Sale-Javier-Blas/dp/0190078952
for those who like to listen to the authors
https://www.youtube.com/watch?v=M1pyNFi-JGI

Switzerland, the home of opaqueness and privacy for the well healed, sinks to a new level.

The Banks performed as the willing accomplices they always seem to be (unknowingly supposedly LOL) and thankfully BNP copped $9b fine,

Pillars of society, fine upstanding guys?
What happening in the gold markets... If you read the book you might get some clues as to how the real markets work, and its not nice, and definitely not taught in the Universities.

havagoodweekend all!
the gnome

I think lot depends on the gold sentiment.

There is a lot of jawing about job recoveries and economic growth, but I for one think reality is a lot different. I recently had to travel by plane between 2 capital cities in Australia. On getting to airport 1 was given a mask to stay and walk in the airport. On getting on the plane I was given another new mask, and told to wear that at all times when not eating or drinking. The old mask was binned. On arrival at airport 2, my plane mask was taken from me, and I was to wear a new mask through the airport (150 meters). On arrival in city 2 I had a good nights sleep. Then awoke when my wife rang and asked whether I had seen the news. The City I was in had a virus outbreak, and part of it was going into Lockdown, and I could probably face 14 day quarantine. If anyone thinks there is going to be a rapid recovery, economic growth and the world is going to be a rosy place think again. The economists can run all their stupid models and the politicians can do all the jaw boning based on this study and that economic model, but running a business which relies on logistics, people travelling... is going to do it very very tough. Jobs, yes, they will be rubbish jobs funded by the government.

To show the real depth of concern we have the government now offering half price airfares to Australians to travel in Australia. But who is going to do this when you could suddenly find themselves in an indeterminate lock down in a hotel for who knows how long at your expense. Beyond stupid!
"Almost one million Australians will be able to enjoy half-price flights to domestic holiday destinations, under a government plan announced Thursday to boost tourism as Covid border closures keep international travellers out.

Prime Minister Scott Morrison said the government (READ AUSTRALIAN TAX PAYER) would spend Aus$1.2 billion (US$929,000 million) to subsidise 800,000 flights to areas outside major cities that were "heavily dependent on international tourists"."

So we now have tax payers subsidizing their own holiday after the government takes a clip (have to pay for their pensions, and their travel and accommodation, meals etc)

And then we find out the US govt is looking to re-stimulate its economy by mobilizing the US military and posturing to take On China in the Pacific! And Australia would take the side of the USA (as they do) and potentially go to war with its biggest trading partner and source of international students... and on the circus goes.

My bets still on gold holding its own, and the tide will turn and the POG.

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the Gnome

Thanks Mr T

What you are seeing is part of the evidence of the utter incompetency of the popularly elected governments around the world. Popularity does not himply intelligence , business acumen, ethics (etc), knowledge of the world, (etc) as a pre-requisite. Its almost the opposite. Who in their right minds who are bright, and capable ever take up being a politician as a career. Not many, if any. You would make far more money starting your own company, being your own boss, working with like minded and capable people etc...who afe focussed on socially positive, profitable outomces instead ends of useless waffle and bunkum.

The same goes for the public service. Getting into sludgery, administrative bureacratic nightmares, cover ups and general f.. ups not to mention other general matters.

So in Oz, there is dash by the underendowed into politics, to hold down a postion for 3-5 years, do BA and then retire on a magnficient pension for life, with freee flights and jobs with "mates thrown in.

Just a quietly ridiuclous state of affairs.

Just need to have more drugs, sex, tv and social media.

In fact Tik Tok is a ripper. You start with one 1 minute video (apparently getting down to 30 seconds), then are thrown into another random 1 minute video, and so on and on you go . Its apparently irreesitable. You dont have to read (who would bother its boring), just be amused, fixated on the next, titllated occasionally...and this goes on for hours, until we are hungry ...

good luck punters

must return to my medicine, double malt please

the gnome

Yes, it is obvious and well documented. The mine grade is lforever going lower, the reserve grades are lower, and the resource grade is lower. Furthermore the discovery rate is abysmal. So the supply side of gold is very sick. The trend is down for the gold grade, and nature won't allow much different (the alchemist has not supplied yet, in the gold space, and inthe fiat money space they call the alchemist bankers). So to mine gold the price has to be higher, otherwise free capital will chase higher returns So if free capital does not favour gold as such and such price, and the appetite for gold is still there, gold will only move in one direction. And then dirt moves and so on...

If gold goes totally out of favor then 100 million plus (artsinals, small and large scale miners) are out of a livelihood.

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the gnome

The gold mining industry was fundamentally broke at a gold price of $1 300/oz, Randgold Resources CEO Dr Mark Bristow said on Wednesday.Speaking to journalists at a media lunch, Bristow said the industry was unable to make returns at that low level of gold price range.

The consequences would be a reduction in the supply of gold, which would ultimately push the gold price higher, as physical demand was definitely present. The crystal ball that needed to be studied was the extent of damage the industry would need to experience to reduce supply to drive up the gold price and rescue the rest of the industry. “When you over supply the gold market, the gold price goes down. We saw that in Nineties with the gold hedging and we had multiple extra ounces being supplied into the gold industry. As soon as we tightened it up in 2001, the gold price just shot up,” he recalled.But the industry had become renowned for investing in the peaks and being unable to support those investments during the troughs. The average grade of the industry had dropped from 2.6 g/t to just over 1 g/t, which meant double the number of tons had to be mined to produce the same amount of gold, which was why costs had risen.

Sophisticated British criminals (just when I thought they had got rid of the lot by exporting to Australia as convicts and unionists!) exploited vulnerabilities in Australia’s search engine and cryptocurrency infrastructure to dupe small investors, lured by the promise of high-yield funds badged by some of the finance world’s most trusted brands.
... involved stolen identities and fraudulent prospectuses that claimed to represent high-yield investment funds run by global managers Citibank, Nomura, and IFM Investors. It has ensnared millions from unsuspecting victims who sought better returns as interest rates collapsed during the COVID-19 crisis.

Now the Brits are upstaging the Nigerians, I am sure their will be reprisals!

The US stimulus package equates to roughly 10 per cent of GDP and markets hope that the passage of the bill through the Senate will pave the way for MORE spending on infrastructure and clean energy.
“Policymakers’ attention will shift to Mr Biden’s proposed ‘build back better’ plan,” ...Markets expect that around $US3 trillion in stimulus may eventually flow to infrastructure in the next few years AND $US2 trillion for energy transition or climate change..so we are now speaking about US$5 trillion spend !!!

Where does the money come from? Where and who does interest go to? And what happens if everyone decides to default on the interest payments when the interest rates go up? Do the Feds call out the feds and invade the world with debt collectors?

“Short-term [investors have] gone pretty long cyclical trades,” said William Curtayne, portfolio manager at Milford Asset Management. “People are owning more financial equities and commodities than they have for a long time.

Allianz chief economic adviser Mohamed El-Erian says he has never seen such a massive disconnect between financial markets and the mainstream economy in his career and that the risk of “markets accidents” remains high.

Funny old world?

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the Gnome.

So if you watched the link, which is a Monty Pythin classi "the Upper class twit of the Year", please note the ending, which could be just how the Central Bankers end up. Summarised below

There is a lot of tasks the twits must try to accomplish...
...
...

Taking The Bras Off The Debutantes
The Twits must remove a bra from a mannequin representing a debutante while standing in front of it. It is claimed to be the most difficult obstacle by the commentator: many of the Twits even dismember the mannequins in their attempts to remove the bras, and a few still have bras (often with torsos still dangling from them) stuck to their hands as they go on to the final event:

Shooting Themselves
Finally, the Twits approach a table with five revolvers on it. The winner is the first Twit to shoot himself.

So its going to be interesting to see if the Central Bankers do end up shooting themselves....or which ones do, and which don't

Good luck to us all,

Jolly good laugh some of it, sad that it could have such negative ramifications for economies ...and people's lives

best
the Gnome