Member Info for Tornadotony

Gav it is in line with what they always have given for the July divi.

They are building a new tailings dam in H2 this is really important for the next 4 to 5 years production especially as they elevate copper output by several fold on existing levels.

The company will need to give more details on the transition. We know they aim to have a good Q4 on gold mining which is likely to anchor any production targets with a plan. They are cautious still in upgrading the annual production target. They are building a new tailings dam which helps increase production in 2023. They state they will be a mid tier copper producer which implies copper production may be up 6 to 10 fold in future years. A six fold figure would deliver the 2021 annual turnover and 7 to 8 fold would be near those of 2020. We need to see the plan of how this will all come about in the coming months.

Theo regarding Bank of New York, I do not know if it was a nominees or not but they had 1.2M odd shares and disappeared in a week.

The being sick comment was just for Theo.

Well Theo and to all our readers,

Pensana present on 19 May Amvest Capital 12 noon EDT . In the last talk he said a funding decision was expected week of 24th May. So we shall find out if it has been pushed back. You can register if you want to, but I do not want you to get sick again like last time.

The only really big news was of course was to all western Governments receiving advance notice from China that rare earth supplies will be managed downwards in the coming months/years and the primary reason given was for Chinese security purposes. This was all in the media on 9th May and the reality of future rare earth supply market is likely to change for good.

Angola are of course making a great deal of money from the oil market and have of course increased oil production significantly of late. They are in a good position to defend the 21% stake they hold in Pensana and could well maintain it after any future funding arrangement if they want to that involves dilution of equity. We await to see if other organisations are interested.

Bank of New York has pulled out of supporting Pensana and no longer hold a million or so shares on the register although Aurora has acquired substantially more of the company. Tony

PS my last missives were for others new to what was going on in that area on climate change.

Thanks for your reply Slater. My target for the miners is a recovery to prices we may have seen in 2021. I am certainly not in the camp of extreme high prices on gold. The key for many of us is preservation of as much capital as possible. I do not use CFDs myself but occasionally top slice some holdings where profitable and buy back at support levels in the technical charts. At the very least it creates a percentage free carry and offers a slight de-risk. Regards Tony

Slater are you shorting Fresnillo and HOC? Alternatively are you just sitting on the side-lines in 100% cash? I guess another possibility is that you are quietly holding, but are just pessimistic and want to curb over enthusiasm.

I am not sure what country you are in Slater. However, the most common issue for those who go out to work in the UK is that there is nothing left over for them after paying out all the standard bills. A few people are now working 7 days a week on two jobs and that is having a negative impact on them. The UK government is setting up some help for those on benefits and on the basic minimal pay (mainly as not doing so means they can not pay and will do whatever to survive). The problem is down the road when people in work feel that all the help available is better if they were not working at all and found ways to get fired and join the group that needs support. The governments and FED are in a terrible position. They are trying to reverse policies by slamming on the brakes after running people over and then going into reverse to run them over again. History shows that on previous rate hikes, gold goes up with increased rates 72% of the time. We shall see what happens in the UK when people walk out and go on strike, when the stress of survival results in more protests which governments have brought in more laws to suppress which in turn could spark more protests as the battle becomes an issue of liberty as well as necessity.

Overall there is a chance your view wins the day, but there is also another possibility of people losing confidence in their currency like the euro and the pound if it starts to go in the same way as Turkish Lira and in those circumstances buying gold is the best thing to protect their wealth. Neither of us have a crystal ball how this will all turn out.

In the meantime we can cut out comments on Weatherspoon's and the like and keep the debate on where it is important. At this time producer prices are going through the roof. It will be interesting what happens when the costs get passed on and nobody wants to buy end products. Ryanair CEO this morning said the future was their airline and for food staples it was Aldi and Lidl and it will be a race to the bottom. In some ways he could be right on that regard. In the end it could all come down to confidence in the central bankers and at this time I have precious little belief in them.

An error in the first that is corrected in the second.

Go the 16th minute to catch the last few minutes
https://schiffgold.com/friday-gold-wrap/wishful-thinking-schiffgold-friday-gold-wrap-podcast-may-13-2022/
The misallocation of resources impacts are being reported elsewhere. Some describe the FED as they were driving on auto pilot and ran over somebody so they stopped the car put it into reverse and drove over the body again. The market bubbles in some areas deserve to deflate but its being disrupted in parts of the economy that had to go forward to improve productivity that involved highly skilled people. They are now getting trashed along with everything else. The FED has really screwed it all up and the rate hikes are not going to fix it. (In the first 16 minutes they explain how inflation has not peaked and is currently 11% as producer prices are going through the roof. )

You either believe the central bankers are going to tame current inflation hikes and governments will slash spending to pay for higher interest on their debt or you don't. Believers will sell precious metals and the miners and non-believers who see it as the same as transitory garbage line of last year will hold and buy more in the precious metals space. There is no middle ground you are either in or your out on this issue. There is no point trying to convert people on an LSE board as we will find out who is right at the end of the year.

jointhedots,

Agree with how you wrote your piece. I recall the paper gold ratio on Comex was 40 to 1 as the world came out of the 2008 crash. After Covid-19 crash it was 15,000 to 1 in a past article I read. Of course many other governments have recalled their gold stored in USA (impacting the paper ratio) and many others have added to their reserves on gold. I noticed how everything has gone quiet on Basel III which is probaly getting extended for another year(s).

Last year we heard the inflation transitory story from central banks which for months nobody believed. We now hear that a few rate hikes will tame inflation and the major western economies can take the hikes. The UK government announced it will reduce its civil service workforce by around 91,000 people on Friday. It might save £8B to help towards interest payments which are going up around £22B per 1% hike. However far deeper cuts will be necessary. London rental rates are up 14% and food is set to rocket next year as reserves on grain get depleted because of the Ukraine war. China reopen should see inflation stay higher as the next 2 rate hikes arise. I can see a lot of frustration when inflation stays high and heavy cuts take their toll. The people and government can take it mantra will soon look hollow and parallels with transitory utterances will reduce Central bank confidence further. It will just need one story of a committee member acting in their self interest again and everything could fall apart. At some future point the central banks globally re-rate the value of their gold physical reserves so by allowing an equivalence say of $3,000 per ounce on gold as they generate new liquidity against its value as FIAT and they increase the paper gold ratio as well. The impact is then to take some pressure off governments on how much economic demand they close off at a time when carbon taxes are needed to transition the energy away from fossil fuels. The alternative is a breakdown of security in societies and of course that has to be prevented at all costs.

I therefore conclude that physical gold is worth holding for the longer term and that precious gold miners will fluctuate with big rises and occasional falls. In the meantime this company holds no USD debt and hold $26M and $8M or so gold ounces to be sold and so USD that has increased its value of late against pound sterling. AAZ is 5% of my portfolio and I will be staying with it and will just weather the storm for the longer term.

All the best to you JTD and to all our readers out there. Its a great day for a barbie and a few beers in the garden and playing Bob Marley with don't worry be happy.

Tony

For being attached to the end of an alimentary canal.

On the daily RSI is 16.9 with the weekly RSI approaching oversold which is at 30.

https://www.macrotrends.net/1437/sp500-to-gold-ratio-chart

Just to let you know the silver daily RSI just hit 17 so they are throwing all the ammo they can to smash the metals.

The chart above is more important then some of the arguments here in that being stranded on some atoll island with just coconuts and fish you do not need gold. I say that as most of the stocks going up today were food and ciggies and plumbing gear. The ratio stats work out like this SP 500 lands at 3500 which is a strong support zone rates gold at 1945 ish per ounce. If it goes down to 3000 we get gold at 1666 and really sharing the pain. At the nosebleed level at 2500 when everybody wants to find out where central bankers and committee members live the gold price is 1385 area. So the hit on gold is partly to scare SP 500 holders out of positions or do they put more cash in as value is believed. In a whole sale panic everything drops, but then gold rallies and its always months ahead of the market when finally it goes up and gold then retreats. On Kitco Bubba baited the buyers as he knows we have cash. Instead the likes of him get deeper on the short side and eventually the snap back happens and the maths they (Bubba crowd) rely on materialise days later.

All the best Tony

I am not sure how low they will take it but that is very oversold.

If silver gets into the dollar teens it will decimate the recycling market and knock out most of the 3% of its current annual supply. With high energy prices its becoming very problematic to recycle it. At around $23-24 the market in that area could still deliver. Biggest growth is in energy transition but perhaps they will cancel COP26 agenda as well.

https://ycharts.com/companies/CEE.TO/price_to_book_value

Just a reminder 4p divi is next week on 19th May

All companies out there are facing higher costs. Nearly all the miners have a total tax bill near 50%. It may be corporate tax, local taxes, VAT specific charges, royalties and like with Centamin they may have to give a share of the asset on top, they may have surcharges when gold prices are elevated beyond a certain level. The margin however is usually 20%-30% to give the real profits. We all know what happened on centamin many years ago with regards to the mine plan. What is key is how the mine plan operates going forward. In that regard Centamin is trading below its book value.

thanks target!

I made the decision to be an investor on Shanta. I am holding AAZ as its now undervalued with all its assets and JTD just wrote a piece on that board. Polymetal I have a small position for a split of assets from Russia in July, HOC I have a position from 113p and incredibly its lower today but that is silver exposure. Centamin is a good divi payer and like Shanta is being set up for a good H2. I still have 20% of stock portfolio as cash which I added in April. I am not sure how gold will play out but pound sterling has moved down from 141 to 122p against the dollar and most miners have their income ultimately in USD. So the share prices have a 13.5% currency debasement on top of everything else and I am not sure if it was factored in on Shanta with very little net debt. I am holding and waiting to see what happens later on.