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March 29, 2016

#Gold - $GLD #ETF Holdings up by 10MM Oz in 2016

Total global gold ETFs were up ~53koz yesterday to 56.793Mozs.  They are up 9.881Mozs so far in 2016 …. 
Source: Bloomberg

Above is a graphic outlining the strong buying in Gold ETF's since January 2016. A total of 9.8 Mio. ounces of gold were bought. One can only hope that these buyers are long-term holders and do not sell the holdings if gold prices come under pressure again.

We have seen in the past the damage ETF gold holders are able to do to the gold price if they start to liquidate.

#Canada: number resource-focused #brokerages Shrinks again, from @MiningMavenGwen

The List Shrinks Again
News a few days ago that PI Financial is acquiring Wolverton Securities and Global Securities. In other words, three of the few remaining independent Vancouver-based dealers are becoming one, shortening what in the last few years has become a short list of small, resource-focused brokerage shops.
Declining commodity prices did not only hurt miners and explorers: the small banks that advised their transactions, led their financings, and told their stories also took a beating. Salman Partners wound itself up late last year. Dundee Securities left the retail brokerage business, selling its unit to Euro Pacific. Octagon Capital and Jacob Securities went bust amidst compliance violations. Byron Capital, EdgeCrest Capital, and Fraser MacKenzie all went out of business.
In fact, the Investment Industry Association of Canada says 50 small houses, representing a quarter of the banks in the business, have either folded or been acquired in the last three years.
The bigger boys haven't fared much better. GMP Capital, one of Canada's largest independent brokerages, announced a major restructuring in January, laying off a quarter of its work force and erasing its dividend. Canaccord Genuity has also laid off staff while seeing its share price crater.
The commodity bear market is one major cause. Technological and regulatory changes are another.
Big banks pushing into the investment banking scene for small and mid-cap companies made a bad situation worse for small houses, who could not tag cheap loans into a finance package the way a big bank can.
As a result, I would say there are now only perhaps eight brokerages left in the junior mining game: PI (with the absorbed Wolverton and Global), Haywood, Leede Jones Gable, Mackie (which already took over Jordan Capital), Sprott, Richardson GMP, Euro Pacific, and Dundee Capital Markets. The bigger houses also play a role – Macquarie, Canaccord, Raymond James, and the big banks – but for reasons ranging from regulatory compliance to risk adversity they are doing less and less on the junior end of the spectrum.
The change matters. For one, with fewer houses competing for business the terms sheets offered companies looking for a financing lead will not be as good. Secondly, the advent of online trading has eroded the importance of the broker-client relationship, cutting off one key transmission route for stock tips and thus limiting the potential for strong share price moves.
Then there's the simple fact that, without brokers talking up the deals they like, retail just doesn't hear about mining stocks. Without retail our business cannot succeed, so we need to figure out an answer. Part of that answer is that full service brokers can be very valuable, providing their clients with access to quality deals, research, and financings.
Instead of that, however, many investors are doing their own research and trading through online accounts. That works, but only to a point, for both investors and companies
Read more on the Resource Maven website here:

March 25, 2016

#Gold and #goldstocks - Uptrend stopped

Gold and gold stocks - Uptrend stopped

Attached are the daily charts of  North American largest gold companies, Barrick Gold and Newmont Mining. Both broke yesterday on the downside from an uptrend which was in place since the middle of  January 2016. The MACD gave a signal of divergence since early March which requested extreme caution.

The gold chart (attachment 2) completed yesterday a Head&Shoulder formation with a neckline just under US$ 1,240 per ounce.

The good thing is that we were warned for the last 2-3 weeks with the divergence of the gold price and the MACD that something is wrong. Very seldom we get such a nice pre warning in advance and investors were able to take the necessary action.

We don't take serious the usual excuse it was all about  a strong dollar. As attachment 4 shows, the U.S. Dollar Index is still in a well defined box with no indication of a strong move on the upside or on the downside at the moment.

Happy Easter

US 2015 #Mining Losses Wipe Out Profits From previous 8 Years @WSJ

U.S. Mining Losses Last Year Wipe Out Profits From Past Eight Years - Real Time Economics - WSJ

Mining corporations with assets of $50 million or more recorded a collective $227 billion after-tax loss last year, according to Commerce Department data released Monday. That loss essentially wipes out all the profits the industry had made since 2007.

U.S. Mining Losses Last Year Wipe Out Profits From Past Eight Years
 A welder for an oilfield service company works on a pipe for the fracking industry in the Permian Basin in Andrews, Texas, in January. ENLARGE

A welder for an oilfield service company works on a pipe for the fracking industry in the Permian Basin in Andrews, Texas, in January. Photo: SPENCER PLATT/GETTY IMAGES


The U.S. mining industry—a sector that includes oil drillers—lost more money last year than it made in the previous eight.

Mining corporations with assets of $50 million or more recorded a collective $227 billion after-tax loss last year, according to Commerce Department data released Monday. That loss essentially wipes out all the profits the industry had made since 2007.


A crash in oil prices last year caused significant losses for what had been an upstart domestic energy industry propelled by petroleum reserves accessed via hydraulic fracturing, or fracking. Crude oil prices fell from above $100 a barrel in the middle of 2014 to less than $40 by the end of last year.

That meant many of those new wells were suddenly operating at a loss. What's more, other types of mining operations were stung by falling commodity prices tied to weak demand from China and other parts of the globe.

Mining revenues also fell sharply, down 38% in the fourth quarter from a year earlier.

A faltering global economy also stung the manufacturing sector, though the industry remained profitable. The sector recorded a $510 billion annual profit, down from $609 billion in 2014.


But manufacturing revenue declined 7.8% in the fourth quarter from a year earlier. Falling revenues suggest weaker global demand for U.S.-made goods. That's likely a symptom of a stronger dollar making American products relatively more expensive overseas.

The declines come despite steady, if unspectacular, demand on the part of U.S. consumers.

Retailers' revenue grew 1.5% in the fourth quarter from a year earlier. Annual revenue growth was between 1.5% and 2% all of last year. Retail sales tend to match up with other measures of consumer demand.

March 23, 2016

Trudeau sets #Canada on path for near-record deficits, growing to more than $29B over next fiscal year

After eking out a $1.9B surplus in the previous fiscal year during the
final months under the Conservatives, the Liberal Party will return the
country to shortfalls.

The Trudeau government has confirmed what so many private-sector
analysts have predicted for months: Canada is headed for a string of
near-record deficits as it plows tens of billions of dollars into new
programs — most of them promised, a few not — along with multi-year
infrastructure projects that have yet to be decided.

Read the article here: Bill Morneau sets Canada on path for near-record deficits, growing to more than $29B over next fiscal year

-- The MasterFeeds

March 7, 2016

#PDAC2016: Giant bifurcation underway in #juniormining sector

Recovery is limited to a very small group of companies. The high-quality juniors 

PDAC 2016: Giant bifurcation underway in junior mining sector

In mining, the great bifurcation is finally underway.
After a multi-year bear market in which nearly every junior mining stock got decimated, the sector is enjoying an honest-to-goodness recovery in 2016. This year’s PDAC conference is ringing with renewed optimism as commodities, particularly gold, are rebounding.
But the early evidence suggests this recovery is limited to a very small group of companies. The high-quality juniors are raising money again and enjoying huge bumps in their share prices. Meanwhile, nothing has changed for most of the companies, which remains entrenched in an awful bear market with no end in sight.
During the commodity boom, the rising tide of metal prices really did seem to lift all boats. Hundreds of low-quality miners were able to raise billions of dollars of capital from willing investors. Venture-listed companies raised an astounding $4.2 billion from brokered deals in 2007 alone, according to Financial Post data. Ultimately, the vast majority of those funds were flushed away on bad projects with almost no trace they ever existed.
Investors have learned painful lessons from the losses suffered during that boom. As generalists slowly wade back into the sector this year, they are being incredibly careful with their capital. The only companies that can raise money are the best of the best, which are in the process of separating themselves from the pack.
In short, investors are demonstrating actual sanity, something that went sadly missing last decade.
“There’s really just a handful of us who had opportunities to finance in the last few months,” said George Salamis, chairman of Integra Gold Corp.
Along with Integra, the select group includes Kaminak Gold Corp., NexGen Energy Ltd., Gold Standard Ventures Ltd. and a few others. They have all enjoyed incredible stock price gains, even with the dilution from their financings.
These companies share several key attributes: they have proven management teams, high-quality assets, reasonable capital costs and are located in mining-friendly jurisdictions.
“You’ve got good location, a viable theory, and good data, combined with good promotion, doubling these stocks,” said Rick Rule, president of Sprott U.S. Holdings Inc. and a major financier of junior resource plays.
“There was nothing you could have done 18 months ago to double these stocks. They could have drilled into Fort Knox and people would have gone, ‘Hmm.’”
On the other hand, assets with low grades, high capital costs or bad locations still have almost no chance of getting financed. Juniors with these sorts of projects are desperately seeking ways to reduce their capital requirements and lower their overall risk to attract investors. While some may succeed, the vast majority will likely fail.
And of course, hope remains non-existent for the hundreds of “zombie” companies on the TSX Venture Exchange with no capital and no ability to create value for investors. Trading liquidity in these firms remains almost non-existent, and it is hard to imagine a scenario where serious investors will ever put another penny into them.
Many experts continue to think a giant culling of these companies from the public markets would be the best thing for the overall health of the sector. It would shrink the sizable gap between the number of companies and the number of quality assets and management teams.
“It’s very difficult to see those (zombie) companies, in the current circumstances, finding a way out,” said Michael Pickersgill, co-head of the metals and mining practice at Torys LLP.
Just about everyone sees this bifurcation as healthy. The excesses of the last bull market have been wrung out of the system, and cheap buying opportunities abound.
Junior mining analyst John Kaiser referred to the current market as the best bottom-fishing opportunity in his lifetime. Thanks to the structural changes in the sector over the last few years, he said the current market offers investors the “greatest ever” assembly of management talent and high-quality projects, all available at an “unprecedented” valuation.
“This will not repeat itself for a very long time,” he said in a note.
But while the top juniors are enjoying a renaissance, raising capital remains a tremendous challenge.
Salamis said that when Integra raised $16 million in a bought deal last month, several of the institutional investors in the offering spent upwards of six months doing intensive due diligence on the company, including site visits. Five years ago, investors who knew nothing about the company would probably be lining up to give it money.
“In the grand scheme of things, it’s a pretty small cheque compared to the old days,” Salamis said.
Of course, experts noted that the current excitement in the junior mining space could dissipate very quickly. If gold prices drop back below US$1,050 an ounce, the financing window would quickly shut.
There is also a risk that a flurry of financing activity itself will hurt the market in the near term.
When gold streaming firm Franco-Nevada Corp. pulled off a gigantic US$920-million bought deal financing last month, it is safe to say that many gold companies started calling their brokers and inquiring about raising money themselves. (Indeed, Kinross Gold Corp. subsequently tapped the market for US$250 million.) Rule said there is a good chance more equity issues will follow and derail the market in the short term through sheer dilution and over-exuberance. 
Meanwhile, some miners have the opposite concern: that the huge funds being raised by Franco and Kinross are sucking all the available capital out of the market and leaving very slim pickings for the juniors.
And of course, there is a longer-term worry as well: That if metal prices rebound, all the excesses of the last bull market will return as every company with “gold” in its name gets financed. Anyone who lived through the misery of the last five years knows that this would not be a healthy long-term development for the sector.
While it seems highly unlikely that investors would repeat their previous mistakes, history does tend to repeat itself in mining.
“If the dumb money comes back, the industry is certainly disposed to take it,” Rule said.
But that isn’t a top-of-mind concern. For now, there seems to be plenty of smart money available for the companies that truly deserve it. They can only hope that lasts.

PDAC 2016: Giant bifurcation underway in junior mining sector