$GDX announces changes: Alamos, Detour, Franco-Nevada, Argonaut among main beneficiaries

The GDX announced the following changes. 

 

MAIN POSITIVES: Alamos, Detour, Fresnillo, Franco-Nevada, Argonaut, Alacer, Centerra, Hochschild, Centamin

 

MAIN NEGATIVES ( Deletions and re-weights): Tanzanian Royalty, Golden Star, Allied-Nevada and Vista Gold.  GoldFields, Harmony, NewGold, Aurico, Buenaventura and Royal Gold are being re-weighted down as well.

 

As expected, Torex and Pretium are not included as they are non producers yet.The details will be announced on Friday  sept 13^th and will be EFFECTIVE of Friday sept 20^th at the close.

 

Bloomberg	Name	Index Flow	Days of ADV	Type	Previous Conviction
AGI CN Equity	Alamos Gold Inc	+4.8  M	4.3	Addition	High
DGC CN Equity	Detour Gold Corp	+5.2  M	2.9	Addition	High
DPM CN Equity	Dundee Precious Metals Inc	+5.2  M	10.9	Addition	Medium
FNV US Equity	Franco-Nevada Corp	+5.6  M	4.2	Addition	High
AR CN Equity	Argonaut Gold Inc	+5.6  M	5.3	Addition	High
KOZAL TI Equity	Koza Altin Isletmeleri As	+5.7  M	7.6	Addition	Low
SBGL US Equity	Sibanye Gold- Spon Adr	+6.9  M	18.9	Addition	Medium
CG CN Equity	Centerra Gold Inc	+8.9  M	8.2	Addition	Medium
ASR CN Equity	Alacer Gold Corp	+10.8  M	8.6	Addition	High
MUX US Equity	Mcewen Mining Inc	+11.4  M	3.7	Addition	Medium
HOC LN Equity	Hochschild Mining Plc	+12.8  M	25.3	Addition	Low
POLY LN Equity	Polymetal International Plc	+14.7  M	12.4	Addition	Low
CGG CN Equity	China Gold International Res	+15.0  M	32.4	Addition	Low
ABG LN Equity	African Barrick Gold Plc	+15.5  M	9.7	Addition	Low
OSK CN Equity	Osisko Mining Corp	+16.5  M	3.4	Addition	High
RRL AU Equity	Regis Resources Ltd	+18.8  M	4.7	Addition	Medium
FRES LN Equity	Fresnillo Plc	+27.9  M	24.8	Addition	Low
NCM AU Equity	Newcrest Mining Ltd	+29.0  M	5.7	Addition	High
1818 HK Equity	Zhaojin Mining Industry - H	+33.1  M	3.1	Addition	Low
CEY LN Equity	Centamin Plc	+41.7  M	11.1	Addition	Medium
2899 HK Equity	Zijin Mining Group Co Ltd-H	+226.2  M	4.6	Addition	Low
KGC US Equity	Kinross Gold Corp	(12.8 M)	0.6	Reweight
GFI US Equity	Gold Fields Ltd-Spons Adr	(26.1 M)	4.3	Reweight
BTG US Equity	B2Gold Corp	(27.2 M)	2.5	Reweight
EGO US Equity	Eldorado Gold Corp	(17.5 M)	1.4	Reweight
ABX US Equity	Barrick Gold Corp	(5.3 M)	0.2	Reweight
NGD US Equity	New Gold Inc	(19.2 M)	2.5	Reweight
GG US Equity	Goldcorp Inc	(4.5 M)	0.3	Reweight
HMY US Equity	Harmony Gold Mng-Spon Adr	(18.4 M)	5.5	Reweight
AUY US Equity	Yamana Gold Inc	(3.9 M)	0.2	Reweight
IAG US Equity	Iamgold Corp	(15.9 M)	1.1	Reweight
HL US Equity	Hecla Mining Co	(9.9 M)	1.5	Reweight
NEM US Equity	Newmont Mining Corp	(2.6 M)	0.3	Reweight
AU US Equity	Anglogold Ashanti-Spon Adr	(5.4 M)	1.4	Reweight
AUQ US Equity	Aurico Gold Inc	(10.5 M)	2.5	Reweight
BVN US Equity	Cia De Minas Buenaventur-Adr	(8.2 M)	4.0	Reweight
SLW US Equity	Silver Wheaton Corp	(2.3 M)	0.3	Reweight
PAAS US Equity	Pan American Silver Corp	(6.4 M)	2.0	Reweight
AEM US Equity	Agnico Eagle Mines Ltd	(4.3 M)	1.3	Reweight
AG US Equity	First Majestic Silver Corp	(5.0 M)	2.3	Reweight
CDE US Equity	Coeur Mining Inc	(4.3 M)	2.3	Reweight
SSRI US Equity	Silver Standard Resources	(3.4 M)	2.0	Reweight
RGLD US Equity	Royal Gold Inc	(2.7 M)	2.9	Reweight
GOLD US Equity	Randgold Resources Ltd-Adr	(1.3 M)	1.3	Reweight
SA US Equity	Seabridge Gold Inc	(3.7 M)	4.5	Delete	Medium
GSS US Equity	Golden Star Resources Ltd	(20.8 M)	7.4	Delete	High
ANV US Equity	Allied Nevada Gold Corp	(8.3 M)	1.3	Delete	High
TRX US Equity	Tanzanian Royalty Exploratio	(8.1 M)	13.2	Delete	High
VGZ US Equity	Vista Gold Corp	(6.5 M)	9.6	Delete	High

 

 

 

Names that were not added and our previous conviction

Not Added	Conviction
TXG CN Equity	High
PGIL LN Equity	Low
TAHO US Equity	Low
NG CN Equity	Low
PVG CN Equity	Low
SVM US Equity	Medium

#Libya's #Oil Production has collapsed to 1/5 of per-war levels

As of today, Libya reported oil production has fallen to 320,000bpd (it was 665,000bpd yesterday), the lowest level since 2011.

Libya's Oil Production has collapsed due to security/strikes etc...

 

CONCLUSION: As of today, Libya reported oil production has fallen to 320,000bpd (it was 665,000bpd yesterday), the lowest level since 2011. At its pre-war peak Libya produced over 1.6M bpd of high quality light oil. Several issues have contributed to the dramatic fall in production;

1)      striking oil field workers demanding better work conditions and higher pay,

2)      an armed group has  apparently taken over several fields and pipeline facilities and halted production – no demands have been made of yet but, it is believed that this militia might be hijacking and selling oil without government approvals.

3)      longer term, the lack of political direction and security continues to discourage foreign investment in Libya  - this will result lower production from Libya for the foreseeable future.

 

A loss of 1Mbpd of production from Libya for a prolonged period of time may tighten supply and provide further support for oil prices at +$100/bbl level.

 

 

Follow these links for press articles and see below from Reuters:

 

http://online.wsj.com/article/SB10001424127887323324904579040711999886326.html

http://affaires.lapresse.ca/economie/energie-et-ressources/201308/28/01-4683991-nouvelle-chute-de-la-production-de-petrole-en-libye.php (IN FRENCH)

 

06:36 27Aug13 -LIBYAN OIL PRODUCTION HAS FALLEN TO 665,000 BARRELS PER DAY -  OIL MINISTER

06:39 27Aug13 -Libya says oil production drops to 665,000 bpd

    TRIPOLI, Aug 27 (Reuters) - Libyan oil production has fallen to 665,000 barrels per day (BPD) due to a month long disruption by armed security guards who shut down main export ports, the country's oil minister said on Tuesday.

   "In Libya we are precisely producing 665,000 bpd as a result of the strikes and the problems arising. We used to produce 1,550,000 bpd and when we produce now 665,000 bpd we are talking about a big difference," Abdelbari al-Arusi said in an interview aired by Libyan television channel Libya al-Hurra. 

(Reporting by Suleiman Al-Khalidi; editing by Keiron Henderson) ((suleiman.al-khalidi@thomsonreuters.com)(+962 79 5521407)(Reuters Messaging: suleiman.al-khalidi.reuters.com@thomsonreuters.net))

Keywords: LIBYA/OIL 

 

#Venezuela finds another way to destroy its credibility

"It is the state that sets the price of these products that will be sold, it's not some mafia ... no individual is going to come here and tell us the value of a product that belongs to all Venezuelans," Industry Minister Ricardo Menendez said last week during the launch of the new system.

The government has no idea what it's doing

With the new mechanism, Venezuela is now selling its metals well above the international price, according to mining industry workers, though it is not immediately evident how the companies are establishing prices.

Venezuela seeks 'fair price' for metals exports, traders wary

Traders warn that government plans to raise prices for its metals and minerals exports in a bid to obtain a fair price, could leave it without buyers.

Author: Diego Ore & Silvia Antonioli (Reuters)
Posted: Wednesday , 28 Aug 2013 CARACAS/LONDON (Reuters)  - 
Venezuela is hiking prices for its metals and minerals exports in an effort to obtain a "fair price" from buyers, but traders warned the move could leave the OPEC nation without buyers for its most important non-oil exports.
President Nicolas Maduro said the system would boost revenue for metals including iron, steel and aluminum, while reducing costly commissions paid to intermediaries and traders.
The "sovereign marketing" plan was rolled out in conjunction with promises by Maduro of a broad campaign to crack down on corruption after the arrest of several officials over alleged kickbacks at a state-run company.
"It is the state that sets the price of these products that will be sold, it's not some mafia ... no individual is going to come here and tell us the value of a product that belongs to all Venezuelans," Industry Minister Ricardo Menendez said last week during the launch of the new system.
Better known as a major oil producer, Venezuela also exports metals including long and flat steel products, iron ore, and primary aluminum that are produced by state-run firms.
Though it traditionally sold those metals using the benchmark prices of the London Metals Exchange (LME) - the world's top market for non-ferrous metals options and contracts - it also offered discounts off the reference prices.
With the new mechanism, Venezuelan is now selling its metals well above the international price, according to mining industry workers, though it is not immediately evident how the companies are establishing prices.
The industry ministry did not respond to requests for clarification.
Menendez pointed to a recent shipment of hot-briquetted iron (HBI) that sold for $310.00 per tonne, compared with a previous shipment that sold for $268.50 per tonne, noting that this would save the country $1.26 million.

'NO IDEA WHAT IT'S DOING'

Metals traders have decried the effort as another obstacle to doing business in the country, where commodities transactions are already made complicated by strict currency controls and overstretched port infrastructure.
"The government has no idea what it's doing ... They put up so many obstacles that clients are losing faith in Venezuela," said one ferrous metals trader who works in Venezuela.
"This is crazy, it's never going to work," said a metals merchant based in the United States. "People are leaving Venezuelan minerals in the ports."
Venezuela's metals industry output has slumped due to lack of investment, swollen payrolls and outdated technology. The contribution of mining to Venezuela's economic growth has fallen by 25 percent over the last decade, official figures say.
Metals output never recovered from a slump during an electricity crisis in 2010. At the same time, production costs have soared to the point they usually exceed the price fetched on the export markets.
Sidor, the largest steelmaker in the Andes region, was nationalized by the late socialist leader Hugo Chavez in 2008. According to official figures, it spends $700 to produce a tonne of steel billet that sells for $150 on the LME.
Venezuela largely stopped exporting steel because of demand from the local construction sector, driven by a massive housing program created by Chavez.
At Venalum, which has Latin America's largest aluminum plant, producing a tonne of aluminum costs $3,215, according to official figures, even though the LME lists its price at around $1,850.
Production at Venalum has fallen to levels similar to those of 20 years ago, and it is currently using only 35 percent of its installed capacity. It is exporting only about a third of its output, or some 44,640 tonnes.
This is considerably less than its supply commitments of 60,000 tonnes per year to commodities giant Glencore and 18,000 tonnes per year to Hong Kong-based Noble Resources, part of Noble Group.
The price disparities are partly the result of Venezuela's exchange control system, which fix the bolivar currency at a rate of 6.3 per dollar, even as greenbacks fetch more than five times that on an illegal black market. (Writing by Brian Ellsworth; Editing by Daniel Wallis and David Gregorio)


Venezuela seeks 'fair price' for metals exports, traders wary

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