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September 4, 2013

$GDXJ #Gold #ETF deletions/addition forecasts- $ANV, $SMF & $SSRI potential addition candidates

From BMO: 

CONCLUSION: this would be positive for SMF, ANV and SSRI. Note that Allied Nevada is a deletion candidate from the larger GDX index so the effect would be mitigated. The real positive impact would be IF Semafo is included. It would generate over 20 million shares of net purchases.

 

Timing is sept 13th for the announcement and sept 20th to become effective.

 

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Quantitative Execution Services

Tuesday, September 3th

GDXJ Gold ETF - Addition/Deletion Forecasts

Expecting several changes this quarter including SMF CN and CGG CN

 

The Market Vectors Junior Gold Miners Index will be having its quarterly rebalance on Friday, Sept 20th.  The official announcement is expected after the close of trading on Friday, Sept 13th.    

 

Forecasts: Expecting several changes this quarter

Allied Nevada and Semafo

Many of the forecasted additions were previously too large to be added to the GDXJ.  Several are now within the 90%-98% market cap addition range.    Currently we see Allied Nevada well within the addition threshold and Semafo just inside the addition threshold.   This scenario could be impactful to Semafo since its potential addition would cause 7 days of volume. 

 

China Gold

On the deletion side we are once again seeing China Gold (CGG) close to being too large for the GDXJ ETF (right at <80% threshold).   If it is removed this would cause around 20M shares of supply from GDXJ.   This would be ideal for the Van Eck ETF's since CGG CN is likely to be added to the GDX ETF which would result ~15 M shares of demand.   Considering the low liquidity of CGG this could be very impactful. 

 

Other deletions

There are also four likely deletions due to the minimum market cap requirement (U$ 75M).  

 

See below and attached for our forecasts

 

Announcement Date: Friday, Sep 13th  

Rebalance Date: Friday, Sep 20th

 

About the GDXJ ETF

Van Eck's Junior Gold ETF (GDXJ US) tracks the Market Vector Junior Gold Miners index and has an AUM of approximately U$ 1.6B.  Changes in this index are impactful since the GDXJ holds a significant portion of the underlying names (~7% of float shares).  

See estimated flows below

Forecasted Additions (ANV US, SMF CN, ~SSRI US)

Name

Symbol

Type

Estimated Index Demand

Days of Interlisted ADV

Conviction

ALLIED NEVADA GOLD CORP

ANV US

Add

+7.1 MM

1.2

High: Thru 90% threshold

SEMAFO INC

SMF CN

Add

+20.1 MM

7.1

Med: Just thru 90% threshold

SILVER STANDARD RESOURCES

SSRI US

Add

+6.0 MM

3.2

Low: Near 90% threshold

 

 

Forecasted Deletions (~CGG CN, VGZ US, RIC US, THM US, AUMN US)

Name

Symbol

Type

Estimated Index Supply

Days of ADV

Conviction

CHINA GOLD INTERNATIONAL RES

CGG CN

Delete

-19.9 MM

29.6

Med: Right at 80% threshold

VISTA GOLD CORP

VGZ US

Delete

-6.2 MM

8.9

High: Below $75M limit

RICHMONT MINES INC

RIC US

Delete

-3.2 MM

23.8

High: Below $75M limit

INTL TOWER HILL MINES LTD

THM US

Delete

-4.4 MM

6.0

High: Below $75M limit

GOLDEN MINERALS CO

AUMN US

Delete

-3.5 MM

13.3

High: Below $75M limit

 


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