Thursday, January 29, 2009

Even FOX get it: The Inconvenient Debt. DXY, GDX,

We love these guys - how much effort to trash Obama's team now after their guy has ruined the country, but they are right this time on the results - US Dollar will be the history and not the best one. Very good animation of the Chart Increase US Dollars in Circulation, Chart Printing Increase of US Dollars, Chart US Dollar Debasement, Chart Quantitative Easing.

Gold is Up, Market is down and Treasuries are selling off. TLT, GDX, AUY, SLW, TNR.v, SST.v, RMK.v.

Very important day today with Gold rallying from support to 908.3 USD even with stronger US Dollar at 85.34. Gold stocks GDX +5.1% to 34.4 decoupled today from general markets DOW -2.7% at 8149.01 and rallied with Gold. Treasuries are in a broad based Sell Off TLT -2.3% at 104.08.

Treasuries Headed for Full-Blown Bear Market, Citigroup Says

By Molly Seltzer
Jan. 29 (Bloomberg) -- Treasuries are moving into a “full- blown” bear market as global stimulus packages increase demand for capital, according to Citigroup Inc.
“This may sound a bit ridiculous, but we think we have begun a full-blown bear market in fixed income,” wrote Tom Fitzpatrick, Citigroup’s New York-based chief technical analyst, and London-based strategist Shyam Devani. “The commodity that is going to be the most in demand as far as the eye can see is capital. As a consequence, the cost of capital can only go one way -- up.”
The 30-year bond’s yield may rise to 5 percent by late 2009, the highest level since August 2007, according to Citigroup. The U.S. will probably borrow $2.5 trillion this fiscal year, compared with $892 billion last year, according to Goldman Sachs Group Inc. The firms are among the 17 primary dealers that trade directly with the Federal Reserve.
The bond’s yield rose 11 basis points, or 0.11 percentage point, to 3.53 percent today. It fell to 2.509 percent on Dec. 18, the lowest level since sales of the security began in 1977.
President Barack Obama’s $819 billion stimulus package, passed in the U.S. House yesterday by a 244-188 vote, is equivalent to one-quarter of the entire federal budget. Countries including the U.K., Germany and India are also increasing spending to boost economic growth.
“The most striking feeling we have as 2009 begins is that there is this wall of consensus negativity about financial markets,” the analysts wrote. “We believe this comes from the need for huge government issuance around the world competing for a scarce resource.”
Increased government spending will spur concern that inflation will accelerate, prompting the greenback to weaken and gold to rise, the analysts added.
To contact the reporter on this story: Molly Seltzer in New York at Last Updated: January 29, 2009 15:09 EST

“Argentina has solved its rollover problem for this year and maybe the next". TNR.v,,, AUY, CDNX, GDX, DXY

Very good news for all companies involved, default which discounted value of companies working in Argentina could never happen.

Argentine Debt Exchange Helps Cover Financing Needs (Update2)

By Drew Benson and Lester Pimentel
Jan. 29 (Bloomberg) -- Argentina may have lined up enough financing to cover its budget needs through 2010 after creditors agreed to extend maturities on 15.1 billion pesos ($4.3 billion) of debt, Credit Suisse Group AG and Barclays Plc said.
Ninety-seven percent of locally based holders of the so- called guaranteed loans accepted the offer to take new five-year peso bonds, President Cristina Fernandez de Kirchner said yesterday. The exchange will reduce the government’s 2009 debt payments by 5.4 billion pesos, Cabinet Chief Sergio Massa said.
Argentine bonds rallied this month, sending benchmark yields to a three-month low, helped by speculation that the debt swap will enable the South American country to avert its second debt default this decade. Argentina issued the guaranteed loans -- which were initially backed by revenue from a financial transactions tax -- in a 2001 exchange that sought unsuccessfully to stave off the $95 billion default that year.
“Argentina has solved its rollover problem for this year and maybe the next,” said Igor Arsenin, an emerging-market strategist at Credit Suisse in New York. “They will muddle through. There’s still quite a bit of upside.”
The price on the government’s 8.28 percent dollar bonds due in 2033 has climbed to 34.75 cents on the dollar today from 32.25 cents on Dec. 31, according to JPMorgan Chase & Co. The yield dropped to 21.66 percent from 32.25 percent. The bonds had sunk to 22.5 cents, the lowest since they were issued in a 2005 debt restructuring, on Oct. 27 after Fernandez said she’d nationalize the pension funds. They traded at 74 cents at the end of August.
‘Main Danger’
While the pension seizure hurt investor confidence, it also helped Fernandez cobble together financing by giving her access to more funds. The pensions held almost $30 billion in October.
“The main danger was a dent in confidence,” Arsenin said. “In a more narrow sense, it’s been positive. It has ensured flexibility in their short-term financing.”
Arsenin said the 2033 bonds may rally to 40 cents.
Argentina has been shut off from international markets since the 2001 default because some bondholders rejected the government’s restructuring offer and filed lawsuits in New York in a bid to recoup their money.
The government will extend the guaranteed loans swap offer next month to the 3 percent of locals who rejected it as well as to international holders of the securities, Massa said.
Faltering Expansion
Carola Sandy, a New York-based economist with Credit Suisse, said in a report today that she expects participation from foreign investors to be “relatively high” because the guaranteed loans are “very illiquid instruments.”
In all, about $4 billion of the $12 billion outstanding of guaranteed loans was set to mature this year, according to Credit Suisse. Sandy estimates that yesterday’s swap will reduce Argentina’s principal payments by as much as $1.5 billion a year through 2011.
“This is the most important voluntary exchange in the history of Argentina,” Fernandez said at a ceremony last night at her residence outside of Buenos Aires.
Argentina’s financing needs climbed to $18.4 billion this year from $4.7 billion in 2008 as a six-year economic expansion fueled by commodity exports faltered amid the global credit crisis, according to Royal Bank of Scotland calculations. Growth will slow to 2 percent this year from an estimated 6.7 percent in 2008, according to the median forecast in the central bank’s most recent survey of economists. Growth topped 8 percent every year from 2003 to 2007.
The new five-year bonds will pay an interest rate of 15.4 percent in the first year and 2.75 percentage points over the Argentina’s Badlar interbank rate after that, Massa said.
The swap “sends the signal that the authorities will look for market-driven transactions rather than moving straight into unfriendly restructurings,” Barclays analysts Guillermo Mondino and Donato Guarino said in a report yesterday. They recommend investors buy Argentine dollar bonds due in 2013, known as Bonars.
To contact the reporter on this story: Drew Benson in Buenos Aires at Last Updated: January 29, 2009 12:27 EST

Reinflation play: Obama, China and Zinc. CZX.v, CDNX, TSX, DXY

Obama is pushing for a new stimulus plan, House has voted for 819 billion US Dollars plan. Idea is to spend its way out of depression. All his infrastructure play will come to the basic supply and demand economic situation. Increasing supply in dollars from one bailout to another and decreasing supply in basic commodities. Mines are closing every week now, projects are put on shelves due to lack of financing. Will it be short sighted as it happen before? We believe so and next play after explosive recent Gold run, will be run in industrial commodities. First time is coming for Silver with its both monetary and industrial investment qualities, second time will be for Dr Copper pronounce that recovery is near. Zinc as a commodity is often overlooked and is not a main stream idea for Inflation play as others. Dull and Dirty, nothing is really exiting about it. This is why we like it now. At around 50 cents per lb we are at the same level as last recessional low in 2003. What could be the next catalyst in order that money will start to flow in Zinc plays? China could come back sooner then everyone is expecting:

Last recession in 2003 Zinc rocketed from 0.5 USD to over 2 dollars per lb in short couple of years. This time mines are hit very hard and closing production reducing the supply. Bailout liquidity is making its way in financial system, Chinese and Russian leaders are blaming West on recent crises and Mr Putin is questioning the status of US Dollar as reserve currency. Very logical in this situation is Chinese quest for resources in order to secure its growth opportunities. They are buying metals into strategic reserves and they started to buy stakes in Juniors. This week announcement by Tongling Nonferrous Metals Group Holdings about strategic partnership with Canada Zinc Metals CZX.v could be groundbreaking in a sense that real industrial money finally finding its way into Canadian junior market. Speculators and Hedge funds hot money left the sector last Autumn and bargains are everywhere if you agree with our Inflation outlook on recent Reflation Efforts over the world. Mr Market's gloomy mode has suppressed the prices of juniors to levels not seen in years, some of them were trading below cash flow value just three weeks ago. It will be justified for some companies without real properties of merit or overburden with debt, but other will prosper with strong management and access to financing. We will continue to monitor the situation in the sector and taking this particular development as confirmation of our view on undervaluation of Juniors with resources in stable political situation.

Wednesday, January 28, 2009

The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending. GDX, AUY, SLW

Greenlight’s Einhorn Follows Grandfather’s Advice, Buys Gold

By Stewart Bailey and Saijel Kishan
Jan. 28 (Bloomberg) -- Greenlight Capital Inc. founder David Einhorn, 40, is finally taking his grandfather’s advice. The $5.1 billion hedge fund is buying gold for the first time amid the threat of inflation from increased government spending.
Since Einhorn was 10 years old, his grandfather has warned him that investing in bullion and gold-mining stocks was the only “sensible” thing to do given the threat of inflation and the risks of so-called fiat currencies, New York-based Greenlight said in a Jan. 20 letter to clients. The firm had never before considered buying bullion or shares of miners.
“To everyone’s dismay, we believe some of Grandpa Ben’s predictions are playing out,” Greenlight said in the letter, a copy of which was obtained by Bloomberg News. “The size of the Fed’s balance sheet is exploding, and the currency is being debased.”
Greenlight is turning to the centuries-old currency to mitigate the effects of the economic collapse and government efforts to end it. Bullion gained for the eighth straight year in 2008 as governments in Europe and the U.S. rescued banks from collapse.
The 16-company Philadelphia Stock Exchange Gold & Silver Index gained 90 percent in the three months through yesterday while the Standard & Poor’s 500 Index fell 0.4 percent. Gold rose 21 percent in that period.
Steven Lehman, who manages Federated Investors Inc.’s $1.3 billion Federated Market Opportunity Fund, beat the S&P 500 by 30 percentage points last year. The fund, which outperformed 99 percent of its competitors last year, also has bet on the precious metal and counts Toronto-based Yamana Gold Inc. and Goldcorp Inc. among its top holdings.
‘Too Many Mistakes’
Greenlight, which Einhorn started in 1996, has returned an annual average of 20.8 percent from its Greenlight Capital LP fund. The firm said it made “too many mistakes” last year, when it posted its first annual loss.
Greenlight has added gold, call options on gold and the Market Vectors Gold Miners exchange-traded fund to its other investments.
The Federal Reserve’s policy of taking unorthodox steps to boost the supply of credit is essentially “printing money,” Greenlight said. The government’s “aggressive” fiscal policy also signals all efforts will be made to stem the effects of the current economic problems, the fund said.
To contact the reporters on this story: Stewart Bailey in New York at; Saijel Kishan in New York at Last Updated: January 28, 2009 13:20 EST

ECB could pause next meeting: US Dollar is welcome to fall further. DXY, GDX, AUY, SLW, TNR.v, CZX.v, SST.v, OK.v, MGN.

Trichet Says ECB’s Next Important Rate Meeting Is in March
By Simone Meier
Jan. 28 (Bloomberg) -- European Central Bank President Jean-Claude Trichet said the bank’s next important meeting is in March, suggesting it won’t cut interest rates next week.
“I said that the next important rendez-vous is in March,” Trichet told Bloomberg Television in an interview in Davos, Switzerland, today. “In March we’ll have a lot of new information, we’ll have our own staff projections,” he said.
To contact the reporter on this story: Simone Meier in Frankfurt at Last Updated: January 28, 2009 11:50 EST

Monday, January 26, 2009

Silver Wheaton SLW financing. SLW, SLV, TSX, HUI, XAU, GDX, SST.v

Very good, this is the solution to debt worries. It is a dilution for sure, but now all upside in Silver price will be shareholders' and company can sit out on cash flow volatility in the market. Bought deal means no short selling plays in the market. We would even prefer to see the new deal of acquiring Silver Stream to be announced in the near term. It will be a rocket again with silver close to 15USD.

Silver Wheaton to raise up to C$287,5m in bought deal financing

Published on 26th January 2009
Updated 1 hour 12 minutes ago
TORONTO ( – Vancouver-based Silver Wheaton has entered an agreement with a syndicate of underwriters who will buy 31,25-million shares in the company, at C$8,00 apiece, on a bought deal basis.The financing will raise C$250-million, but this could increase to around $287,5-million in the underwriters exercise an option to buy another 4,68-million shares on the same terms.
Silver Wheaton buys silver from producers on a long-term basis, at predetermined prices, and then sells the metal at the current spot price.The company plans to use the money to repay a revolving debt facility and for “general corporate purposes”, it said, although president and CEO Peter Barnes hinted that the firm could be building an acquisition arsenal.The share sale “significantly de-leverages our balance sheet, and positions our company to take advantage of some of the high-quality acquisition opportunities that we expect to become available during 2009,” Barnes said in a statement.“Our focus going forward is to continue to grow the asset base in an accretive manner, by adding high quality silver streams from low-cost mines that are already in production."
The offering is scheduled to close on or about February 12.
The company said on Monday that it still expects silver sales to be between 15-million and 17-million ounces in 2009, increasing to approximately 30-million ounces by 2013.
In the fourth quarter of 2008, silver production attributable to the company was in line with previous guidance, at around 3-million ounces.
However, silver sales during the quarter were only 2,7-million ounces, because the timing of shipments meant that some sales will only be accounted for in the first-quarter statements.
The firm expects to report total silver sales for 2008 of about 11,1-million ounces, at an estimated total cash cost of $3,94/oz of silver.
However, the company warned that expects to record a noncash writedown of its long-term investments of as much as $65-million in its fourth-quarter financial statements.
Silver Wheaton shares rose 0,71% on Monday, to C$8,53 a share by 16:19 in Toronto.
Editor: Liezel Hill

OIL - close to break UP over MA50. OIH, GDX

Slowly but surely OIL is close to upside break out. One more Inflation Indicator will be in place.

FT - Gold pushes above $900 in buying spree. GDX, AUY, GLD

It is only recognition of the beginning of US Dollar and other FIAT currencies debasement. US Dollar has broken down today and Treasuries continued selling off.
Strong investor buying on Monday pushed the price of gold above $900 a troy ounce, hitting a 3½-month high in dollar terms and posting all-time highs in euro and sterling, in a stark sign of money seeking refuge from equities and bond markets.
Traders said that investors, particularly in continental Europe and the UK, were pouring money into gold exchange-traded funds – a popular way to gain access to the metal – and also noted strong buying of physical gold, from coins to bars.
Edel Tully at Mitsui & Co Precious Metals in London said gold was the “obvious shelter” for safe-haven investors.
In London, spot gold rose to $915.30 an ounce, up from New York’s last quote on Friday of $898.40. The precious metal also hit an all-time high in both sterling at £661.55 an ounce, and in euros, at €701.55 an ounce.
The total amount of gold held by the world’s gold ETFs last week rose for the first time above the 40m ounce level. Together, such investment vehicles are now the largest holders of physical gold after the official reserves of the US, Germany, the International Monetary Fund, France and Italy.
“The aggressive appreciation in the ETF contracts ... is the clearest signal to date this year that gold is one of the limited assets that investors want exposure to during these frantic times,” Ms Tully said.
John Reade, a precious metal strategist at UBS in London, added that the change in ETF gold holdings so far this month, at plus 2.5m ounces, was “impressive”, but he warned that the figure fell short of the 6m ounces achieved in mid-October, following the collapse of Lehman Brothers.
ETF Securities, which provides commodity-based exchange-traded funds, said it saw record inflows last week, with $500m invested in its products in just two days.
Hector McNeil, managing director at ETF Securities, said that about 60 per cent of those inflows were into the yellow metal. “Gold is set to rise dramatically,” he said.
Tanaka Kikinzoku Kogyo, Japan’s biggest bullion house, said on Monday that sales of gold coins jumped 121 per cent last year as investors flocked to the safe-haven metal.
Traders and strategists cautioned, however, that jewellery demand was weak and noted that old gold in the form of scrap was returning to the market, particularly in India, potentially capping any price gain.
James Steel, a precious metals analyst at HSBC in New York, added that the global economy risked falling into deflation, a situation in which “historically, gold has never rallied for a sustained period”.
Mr Steel forecast gold prices at $825 an ounce on average in 2009, with any rally towards $1,000 an ounce short-lived.
In the short term, traders said gold was likely to consolidate above $900 an ounce this week and could test the $930 an ounce level previously touched in October.
Spot gold in London, the market’s benchmark, hit an all-time high of $1,030.80 in March.

Canada Zinc Metals CZX.v Chinese giant buys stake in the Junior. CZX.v,,,

It is very encouraging news for Junior and exactly what we were talking about yesterday in CDNX overview: the announced today transaction is at premium to the Friday close of Canada Zinc Metals CZX.v at 0.22CAD of 93%! Latest PP company did at 0.9CAD in October 2008. Very important observations for Venture Exchange Juniors:
1. Chines are moving in to secure resources.
2. They are ready to pay premium for top destinations.
3. It is not Gold property which are very popular now and this move suggests that Chinese are considering these base metals prices as close to bottom.
4. Lundin Mining LMC was considering this company as strategic investment with 10% shareholding, now with Chinese at 13% development could be more active considering Lundin Mining latest battle for survival.
5. We have here very interesting M&A potential combination Chinese are moving in, Teck TCK and Korea Zinc are holding deposit next door, Lundin Mining (should we write Hudbay Minerals still owns 10%.
Vancouver, British Columbia CANADA, January 26, 2009 /FSC/ - Canada Zinc Metals Corp. (CZX - TSX Venture, MTSZF - OTCBB, AOF7E1 - FWB), is pleased to announce that it has entered into a financing arrangement with Tongling Nonferrous Metals Group Holdings Co. Ltd. ("Tongling") pursuant to which Tongling will purchase units equal to a 13% equity position in Canada Zinc Metals. Tongling has subscribed, by way of a non-brokered private placement, for 11,500,000 units of Canada Zinc Metals at a price of $0.425 per unit for gross proceeds of $4,887,500. Each unit consists of one common share and one half of a common share purchase warrant. Each whole warrant shall entitle the purchaser to purchase, at any time within 24 months from closing, one common share of the Company at a price of $0.60 during the first year and at a price of $0.80 during the second year. "We are extremely pleased to be entering into this financing agreement with Tongling," stated Mr. Peeyush Varshney, CEO of Canada Zinc Metals. "The work that we have been doing on the Akie property has been advancing the value and merit of the Cardiac Creek deposit and continues to attract the interest of the world's premier base metal companies. The Cardiac Creek deposit is one of the most significant discoveries in Canada in the past several years." The proceeds of the private placement will be used to fund further exploration and advancement of the Company's SEDEX zinc-lead properties and for working capital purposes. "We are pleased to be acquiring this initial stake in Canada Zinc Metals," said Mr. Li Dongqing, Chief Engineering Officer of Tongling. "Along with the Akie property, the significant prospective land package in the Kechika Trough represents a potential long-term district development opportunity. We look forward to continuing to build our relationship with the Company." Tongling Nonferrous Metals Group Holdings Co. Ltd., based in Tongling, Anhui, is a state-owned holding company, and one of China's largest copper smelting companies. Tongling's principal activities are exploration, mining, ore processing, smelting & refining and products processing of copper, lead, zinc, gold, silver and other non-ferrous and rare metals. The shares of Tongling trade on the Shanghai Stock Exchange. The financing is subject to receiving the necessary approvals of the relevant Chinese regulatory departments and the TSX Venture Exchange. About Canada Zinc Metals Corp. Canada Zinc Metals is a mineral exploration company focused on unlocking the potential of a future long life mining district in British Columbia, Canada. The Company is the dominant land holder in a world class mineral belt called the Kechika Trough which hosts in excess of 80 million tonnes of base metal resources. Canada Zinc Metals owns a total of 78,526 hectares in 233 claims which extend northwestward from the Akie property for a distance of 125 km. About the Akie Property The Akie zinc-lead property is situated within the southern-most part (Kechika Trough) of the regionally extensive Paleozoic Selwyn Basin, one of the most prolific sedimentary basins in the world for the occurrence of SEDEX zinc-lead-silver and stratiform barite deposits. Drilling on the Akie property by Inmet Mining Corporation during the period 1994 to 1996 and by Canada Zinc Metals since 2005 has identified a significant body of baritic-zinc-lead SEDEX mineralization (Cardiac Creek deposit). The deposit is hosted by variably siliceous, fine grained clastic rocks of the Middle to Late Devonian 'Gunsteel' formation. The Company has filed a NI 43-101 report supporting the estimated inferred resource of 23.6 million tonnes grading 7.6% Zn, 1.5% Pb and 13.0 g/t Ag (at a 5% Zn cut off grade). The complete NI 43-101 technical report, titled "Geology, Diamond Drilling and Preliminary Resource Estimation, Akie Zinc-Lead-Silver Property, Northeast British Columbia, Canada" and dated May 30, 2008, can be viewed on SEDAR. Two similar deposits, Cirque and South Cirque, located some 20 km northwest of Akie and owned under a joint venture by Teck Cominco and Korea Zinc, are also hosted by Gunsteel rocks and have a combined geologic inventory in excess of 50 million tonnes. The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. ON BEHALF OF THE BOARD OF DIRECTORS CANADA ZINC METALS CORP. "PEEYUSH VARSHNEY" PEEYUSH VARSHNEY, LL.B CEO & CHAIRMAN
More on Tongling:

Sunday, January 25, 2009

Junior Miners CDNX Surreal Experience of the Desert before the Tropical Rain. CDNX, TNR.v, CZX.v, RMK.v,, SBB.v, MGN,, CNU.v, SST.v

If we would like to talk Historical, go to Obama in Washington or to Canadian Venture Exchange in Vancouver. Both events are ground breaking, promising and unexpected just a few years ago. They share another very important quality - they have happen and the world will never be the same.
This is a weekly chart of CDNX. This is the real end of the small investment world feeding Majors all over the world with new resources. Even brave are shaken, fortunes has gone and for some will never be back. All those guys which were without trunks are sitting naked after the tide has gone. To make things worse and BULL more solid - even those in diving gear were trading below cash value just three weeks ago. A lot will go bankrupt, the best will survive and prosper. Market will never give back where it has taken. Financials will be cursed for years of low returns, write downs and dilution. Those in Junior Miners and Exploration with strong hands, trustworthy management and properties of merit will be enjoying the ride on Rush to secure production assets. No one for years to come in the Major companies will put any significant money into exploration after recent Bust. We will know for sure that it was temporary Irrational Delusion and Value Dislocation in five years time short term, until then memory will be very fresh. Return from exploration could come in years time and you are never sure. When your life as an executive is measured from Q to Q performance you will pay the high buck first for producing assets, which will add to your bottom line in the rising market tomorrow, and then for deposits which could be developed when producing ones will be gone from the markets. Nobody will have the luxury of time before the next up leg in Gold, Silver and Commodities will go bust. All Black Rocks of the world will be chasing diminishing after recent shake out Treasury Maps to feed their M&A and Private Equity appetite. No deals - no money. They will be competing with Chinese State Eterprices, Barricks ABX and Newmonts NEM who will struggle to secure production profile. Here where the home work will separate new found wealth and bag holders in the years to come. Learn, study and act - time is coming on this side of the Play. Watch for US Dollar confirmation in a break down, Gold above 900USD and Juniors moving up 30-40% weekly from recent depressed lows. Winners are still there - hiding between the losers.

Gold Miners GDX is challenging MA200 to pronounce that Bull is Back.

While everybody on the Bubble vision is preoccupied in self inflicting "End of the world" and "Nowhere to hide" scenarios Gold miners are taking high by high. Silence here even from self pronounced Gold Bugs and Letter Writers, which are still hiding from their subscribers, is a very bullish sign. Gold has broken to the upside even with US Dollar still topping out at recent highs, Panic VIX is going down, markets are positioning themselves for a rally. One of the biggest (we are sure here it is The biggest) dislocation of assets in the world's history is going to be unfolded in an explosive fashion. Gold markets needs just One Percent of new money to increase Demand by 100%. Chart is showing that Fireworks in gold miners is in place very soon.
Technically speaking they are Breaking to the upside from Cup and Handle formation. MACD is at BUY, STO and RSI are positive, once MA200 broken up our ATM will be back in working order. Sector is very small, it will benefit from significant Inflow of pushed to search returns money from falling Treasuries Bubble. To spicy things up it is like a call on general equity bullishness, falling US Dollar, rising Gold price and money making machines with low oil and high Gold prices during recession suppressed earnings in general economy.

Gold break Up is the real story of the last week. GDL, GDX, HUI, XAU, SLV, AUY,

By any account it is called break Up and we were following this process for a while here. Gold has finally moved in a decisive mode even with US Dollar still holding at the recent Tops. Smart money are positioning itself for inflation protection, but the most important is that FED is ready to allow Gold to signal Inflation and END of Death talk about Deflation. Reason is very simple: banking system is insolvent as well as insurance network, with falling assets prices it will become apparent and will trigger CDS Derivatives which will collapse all financial system as we know it. By running Inflation expectations back into the system FED is not breaking any copyright of Mr Madoff: it was done for years before and it is the only way out. You are alive while you are running. Gold is aligned with Obama's dream to see his country strong again: first as an indicator of Inflation and then as a chance to come back with honest money. We will not bet on the second, but will make money on Obama's dream and first.

Technically our previous observations are confirmed by breaking up MA200 and pronouncing BUll is back! Downtreand line is broken to the Upside. MACD is at Buy with a cross over, RSI is strong in plus, STO is going Up. Retest of a break out will be in play, but it is a different message to the market place. No more uncertainty about the Gold Bull. It is well alive and ready to rock again.

DOW general market is trying the Rally mode again. DIA, SPY, QQQQ, TSX, CDNX, HUI, XAU.

Mr. Market is listening to Obama's rhetoric and shaking off bad news coming from the economy, attempt is to hold recent Low retest and turn it a Rolling Bottom on daily. Two Bullish hammers are showing Short Sellers hesitation to play with Obama at the moment. This view is supported by Treasuries Sell off, VIX reversal and US Dollar pleads to let him go Down.

Panic Indicator VIX is signaling Greed. DIA, SPY, QQQQ, TSX, GDX, CDNX, CZX.v, TNR.v, SST.v, MGN, RMK.v.

Watered down by Trillions of freshly printed money Fear is ready to be replaced by Greed again. Please notice that this recent spike in Panic is nowhere near as dramatic as during the last year's lows. While general markets were retesting the lows, Gold broke higher and Gold shares are in breaking Up mode, VIX has made a modest by recent standards move up. Now it looks like making a rolling Top below MA50 and STO is pointing to a move down. Players are not ready to pay excessive premiums on PUT protections and are liquidating their Short positions. Markets are ready for a Push up from Here with any Obama's announcement.

Treasury Bubble is in the Burst Mode. TLT, TYX, TNX, FVX, GDX, HUI, XAU, SLW, AUY.

As we have discussed before TLT has broke down below MA50 from Head and Shoulders Bearish formation. The picture is very weak and if we are considering that FED is already in this market buying it means that investors have started their massive exodus from this overinflated market. Rally in a general market will help to pronounce that inflation is back and efforts to weaken US Dollar by the FED are working: Deflation Death Spiral will be avoided by all means. This market could have a spike up to retest MA50 as resistance, but its Head reading is showing Investors Irrational Delusion about their ability to withstand massive debasing of US Dollar efforts by the FED.

US Dollar Rally is melting under Obama's charm. DXY, GLD, SLV, GDX, HUI, XAU, AUY, TNR.v, RMK.v.

Treasuries are selling off, markets are trying to rally, but the most important is the break up in gold above MA200. Technically we are positioned for a break down from recent counter rally in USD on Daily:
First Bearish Engulfing on 20th, 21st.
Second Inverted Hammer on 22nd.
Followed by Shooting Star on 23rd.
All are very Bearish Candles with Gold breaking Up on 23rd.
RSI has turned negative below previous high, Slow STO is crossing the Sell, MACD will turn Bearish with another move Down below MA50 84.26.
Last week US Dollar rally fading strength was based on "awful" news on banking crises in UK, perception of a very bad banking crises in Europe and official entering of UK into Recession with Q4 minus 1.5%.
What will happen with US Dollar with announcement of US GDP and new efforts to keep insolvent banking system in USA afloat? We will see it next week, but Gold which is fighting against all its usual enemies is signalling Inflation and lack of trust to all FIAT currencies.
Fundamentally the US Dollar strength is an Irrational Delusion about which books will be written for years.
To raise a question about Chinese intentions in the currency markets by "Treasury Secretary to be" is at least questionable tactic for us at this moment of US financial system survival mode, but pronounced with "desire for a strong US Dollar" it could be a signal for a dollar going sharply down. External enemies to be blamed as usual if necessary.
We will not be surprised here that the majority of Buyers of treasuries at recent artificially inflated prices are already structures controlled by FED.

China and Inflation, will it become its biggest export and sink the US Dollar? GDX, HUI, XAU, AUY.

Interesting article, we will agree with the main notion: China will take the lesser evil in order to keep economy running. It can not afford slowing below 5% p.a. without facing significant social tensions.

Gold at 903.8USD intraday - Wall Street Journal runs a story on Gold. GDL, GDX, AUY, TNR.v, RMK.v.

Gold runs on Friday from MA200 and touched 903.8USD intraday. WSJ runs a Gold story, this time we do not take it bearish - it is an acknowledgement of mainstream growing interest.

What You Need to Know About Gold

"Gold shined in 2008. Could 2009 be as bright?
Of all the major assets -- stocks, corporate bonds, cash and others -- gold was one of last year's few standouts. While so many investments collapsed amid the turmoil, the price of an ounce of gold posted a gain of about 4.3%.
Chris Gash
So far this year, the rare metal is up about 0.7%, after a rally Friday put it back in positive territory. And longer-term concerns are emerging that aggressive, untested government policies aimed at righting the flailing economy could ultimately fuel a further rise in gold prices.
When that might happen, no one knows. But for investors who want to hedge against potential economic turmoil, "buying gold is a very good idea for 2009," says Chuck Butler, president of EverBank World Markets in St. Louis.
The case for gold is this: The government is pumping trillions of dollars into bailouts and stimulus plans, a purposefully inflationary policy aimed at reversing current deflationary pressures. If inflation results, or if the dollar weakens as the supply of dollars necessarily increases under the stimulus plans, gold is a likely winner because it hedges against inflation and fiat currencies..."

Wednesday, January 21, 2009

TNR Gold TNR.v financing. CDNX, MAI.v, TNR.v

Looks like management is still supported by insiders and is moving fast looking for a new opportunities in this market. Next pit stop for the company is a scoping study on Los Azules prepared by Minera Andes MAI.v. Xstrata can not simply discount legal claims from TNR Gold now backed by cash.
TNR Gold Corp. Arranges Debenture Financing/Proposes Debt Settlement
Tuesday January 20, 2009, 7:34 pm EST
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 20, 2009) - TNR Gold Corp. ("TNR" or the "Company") (TSX VENTURE:TNR - News) is pleased to announce a debt financing of up to $600,000 through the issuance of Series I Convertible Secured Debentures. The Debentures have a term of one year and bear interest, payable quarterly, at 9% per annum, compounded semi-annually (9.2% p/a). The debentures are convertible by the Holders at any time during the Term into Units at $0.05 per Unit. Each Unit is comprised of one common share and one warrant to purchase an additional common share at $0.10 for a period of two years. Quarterly interest payments may also be made in Units, at the election of the Holder. The Debentures will be secured by a General Security Agreement, with the holders having the right to roll the debentures into any other debt or equity financing carried out by the Company during the term, subject to TSX Venture Exchange rules. The financing is subject to regulatory approval.
The company's major shareholder and Director Mr. Kirill Klip, who currently owns 18.4% of outstanding TNR Gold Corp issued shares, is showing his continuous support by participating in the current offering.
In addition to the financing, the Company is proposing the settlement of approximately $800,000 of debt with Units at $0.10 per Unit. Each Unit for non-related party debt will consist of 1 share and one-half common share purchase warrant. Each whole warrant will entitle the holder to purchase one additional common share of the Company at a price of $0.15 for a period of one year. Each Unit for related-party debt will consist of 1 share only.
The debt settlement, along with the proceeds of the debenture financing, will allow the company to explore new opportunities created by the recent economical crisis and advance its current portfolio of properties.
TNR is a base and precious metals exploration company focused on aggressively identifying new prospective projects as well as fostering work on its large portfolio of 15 properties in Argentina, as well as overseeing the exploration and development of the Iliamna and Shotgun projects in Alaska through its wholly owned US subsidiary.
On behalf of the board,
Gary Schellenberg, President

Gold Miners GDX are bouncing between MA50 and MA200. GDX, HUI, XAU, AUY, SLW.

Investors are trading between Greed and Fear, confirmation of Gold Bull above MA200 is crucial for a confidence in the Sector. All momentum are positive and CUP and Handle formation is still in place.

Gold is ready for a Break out off MA200. GDL, GDX, HUI, XAU, SLW, AUY, SST.v, TNR.v, OK.v, MGN, FVI.v.

Gold is sitting right on MA200. All momentum indicators are positive, will it be allowed this time to scream Inflation and run from its Downtrend confirming Bull market above MA200? So many times it was trashed at important levels that we can not be sure. All other charts are aligned for a confirmation of the best indicator that Inflation is here and well alive - Gold making new high in USD. In a lot of other currencies it is already the case.

Panic VIX - even panicking could be tiring. DIA, SPY, QQQQ, GDX, TSX, CDNX.

Very good chance that Mr Market is getting more Greedy then fearful, money Flow from Treasuries will find its way into bargains in equities. One percent of new money coming into Gold means 100% increase in Demand.

Treasuries TLT are Ready for a Waterfall. TYX, TNX, FVX, GDX, DXY, CDNX

Very weak picture here. Dive below MA50 will bring waterfall mode and Inflation talks will be back. Smell of freshly printed moneyZ can not encourage holdings of IOU with Trillions to come more tomorrow.

US Dollar - Bearish Engulfing? DXY, GDX, GDL, HUI, XAU, AUY, SLW, SST.v, TNR.v, OK.v, MGN.

Green fellow was celebrating Obama's Change yesterday with us. Today hang over is showing its stance on the chart. Levitation of USD is very expensive for economy. Sell off in banks could retest animportant low in general market, Gold is holding at MA200, Treasuries are selling off. Dive below MA50 in USD will make fireworks in Gold and market will rally. Trigger could be Treasury confirmation and new bailouts for banking system.

Monday, January 19, 2009

JIm Rogers on US Dollar. DXY, GDX, AUY, SLW, TNR.v, CZX.v, SST.v, MGN, ABX

Jim Rogers Says Worried About Dollar, Favors China (Update1)

By Chua Kong Ho and Nipa Piboontanasawat
Jan. 19 (Bloomberg) -- Jim Rogers, chairman of Singapore- based Rogers Holdings, said investors should be “worried” about the U.S. dollar, and recommended selling government bonds and buying raw materials, China stocks and the yen.
“If I were you, I would be worried about the U.S. dollar,” said Rogers, 66, in a speech at the Asia Financial Forum in Hong Kong today. “The Americans are printing U.S. dollars. The Americans are going to do whatever they can to revive their economy, even if it means destroying the U.S. dollar.”
The Dollar Index on ICE Futures, which tracks the greenback versus six major U.S. trading partners, fell 11 percent since Nov. 21, when it reached 88.46, the highest in 19 months. The Japanese yen climbed 12 percent against the dollar over the past three months as investors reduced holdings of higher-yielding assets.
Holding government bonds is a “big mistake” and is going to “end badly,” he said. Investors should favor agriculture, power generation and China shares if they want to make money, said Rogers, who correctly predicted the start of the commodities rally in 1999 and has written books including ‘A Bull in China: Investing Profitably in the World’s Greatest Market.’
The Reuters/Jefferies CRB Index, which tracks 19 commodities, has declined 3.7 percent this month after dropping 36 percent in 2008, its worst annual performance on record.
China Slowdown
The Hang Seng China Enterprises Index, which tracks 43 stocks of Chinese companies traded in Hong Kong, has declined 8.2 percent this year.
China, the world’s third-largest economy, may have expanded at the slowest pace in seven years in the fourth quarter, with gross domestic product rising 6.8 percent from a year earlier, according to the median estimate of economists surveyed by Bloomberg News before a government report due this week.
China’s government unveiled a 4 trillion yuan ($585 billion) stimulus package in November, which included spending on roads and bridges.
Rogers said in a Dec. 17 Bloomberg Television interview that he planned to sell the dollar. In a Dec. 31 interview, Rogers said he had been buying Chinese agricultural stocks to benefit from state efforts to bolster economic growth.
Stephen Roach, chairman of Morgan Stanley Asia Ltd., recommended investors buy “anything to do with the Asian consumer, infrastructure, alternative energy and technology.” He made the comments at the same forum.
To contact the reporter responsible for this story: Chua Kong Ho in Shanghai at; Nipa Piboontanasawat in Hong Kong at Last Updated: January 19, 2009 04:28 EST

Yamana Gold - on road to 2 million oz Gold production in 2012. AUY, GDX, HUI, XAU, GDL, ABX

TA is still strong, Buy on STO, Cup and Handle formation, this one needs move up in Gold and Markets to storm MA200.
Fundamentals are leveraged to the upside: Low cost production in South Americas, Gold and copper mix.

Saturday, January 17, 2009

Silver Wheaton upgraded at UBS, their target is way too Low. SLW, SST.v

Silver Wheaton SLW is still in Cup and Handle formation and has a good chance to move Up from it with STO at BUY, RSI is positive.

Silver Wheaton upgraded at UBS
Posted: January 13, 2009, 9:16 AM by Jonathan Ratner

Silver Wheaton Corp. was upgraded to a “buy” at UBS as a result of a more optimistic view of the risks associated with its credit facilities (highly leveraged to Silver over its Debt - this was killing the company it will launch it Up with Silver close to 15USD. S.). Analyst Dan Rollins expects that it will be able to renegotiate its debt covenants and de-lever its balance sheet through silver stream acquisitions and/or the divestiture of equity investments.
“Last year was a disappointing one operationally for Silver Wheaton,” he told clients, noting that the company’s sales guidance was reduced throughout 2008 from 15 million ounces to 11.4 million. Sales were also below original expectations as a result of lower-than-anticipated production from the Luisman mine in Mexico and Yauliyacu in Peru.
However, while Vancouver-based Silver Wheaton struggled operationally, it did sign four more silver stream contracts in 2008, Mr. Rollins noted. This follows a much bigger deal in 2007 that saw the largest pure silver company in the world pay US$485-million in cash to acquire 25% of the life-of-mine silver produced from Goldcorp Inc.’s Penasquito project.
UBS estimates that Silver Wheaton sold 11.3 million ounces of payable silver in 2008 at an average gross operating margin of US$10.84 per ounce. Based on those figures, it forecasts 2008 fully diluted earnings per share will come in at US31¢ and operating cash flow of US43¢.
At the end of the year, UBS said Silver Wheaton likely had approximately US$14-million in cash and US$373-million in debt on the books.
Mr. Rollins values Silver Wheaton on a price to net asset value basis, which factors in UBS’s silver price forecast of US$8.95 per ounce in 2010. (What are they smoking there? S.)This yields a price target of US$7.50 per share, up from US$5.75 previously, and representing upside of nearly 35%.He also expects a reserve/resource update in 2009 and approval of a shareholders’ rights plan.

CDNX Canadian Venture Home of Junior Mining near Death Exprerience. TNR.v, CZX.v, SST.v, SBB.v, OK.v,, RMK.v,, ASM.v, BTT.v, CGP.v

This is why I called it obliteration. We have a Buy on weekly and Index is above MA50 on Daily. A lot of companies will vanish into oblivion strangled by cash calls. The best will prosper and consolidate resources at pennies for the dollars. You know what to look for:
1. Trust in management.
2. Financial backing.
3. Solid properties.
4. Manageable country risk.
5. Near Term catalyst to realise value.

Insiders are Buying actively into Juniors. CDNX, TNR.v, SST.v, CZX.v, OK.v, CNU.v, SBB.v,,

* Indicators represent companies with buy only transactions divided by companies with sell only transactions of direct ownership equity securities or trust units on the public market by officers and directors (exclusive of officers and directors of subsidiaries) filed over the last 60 days. Transactions filed on Saturday and Sunday are aggregated into Friday's number. Information on this site does not constitute a buy or sell recommendation. For a more comprehensive and recent insider sentiment reading, please visit
Insiders are selling for a lot of reasons, but they are buying only in one case: when value of the business which is run by them is apparent and they are expecting best return compare to other opportunities on their own investment.

Irrational Delusion Treasury Bubble. GDX, GDL, SVL, SLW, AUY,

Very shaky grounds here, still a very good chance to see Right Shoulder formed before move below 110. VIX and US Dollar is the key. Announcement about Stimulus approval of 825 billion will send this market in a tailspin.

Gold Miners GDX Very Impressive Come Back. GDX, AUY, SLW.

Gold Miners have bounced off MA50, STO at Buy, RSI is turning Positive. There is still a good chance to resolve Cup and Handle into Upside after last week correction with definitive move in Gold Up and US Dollar down.

Silver is ready to follow Gold. SVL, SLW, SST.v, OK.v, MGN, CNU.v, FVI.v

Silver is even in a stronger bullish formation then Gold. Move in US Dollar is the key here as well. Rally could be more exiting then in Gold with Gold above MA200.

Gold is still very strong and fighting for come back. GDL, GDX, AUY, ABX, NEM.

One percent out of other markets means 100% rise in investment demand for Gold. Treasury Bubble exodus will fuel Us Dollar collapse again. Move above MA200 could bring casualties in COMEX and ignite short covering. The most dramatic move will be in Gold Miners, Silver and Silver miners in Junior sector.

DOW DIA is retesting important low. SPY, QQQQ, HUI, XAU

Dow is ready for Inauguration Rally. Index has retested important low and is sitting on a lower Bollinger band with buy signal in Volume and STO. RSI is turning Positive as well.

Panic and VIX is going down - time for Irrational delusion is Over. GDX, GLD, SLV, TNR.v, SST.v, MGN, OK.v.

Panic is receding, Irrational Delusion when all world seems to be collapsing and US Dollar looks like "Safe Heaven" will be a history as well. Time is for fundamentals to come into play. Shift from life preservation mode and into chasing gains available in the markets with massive reinflation effort will allow incredible gains resulted in Flow dislocated billions of dollars searching for value. Just one percent of money Flow into Gold will rise investment demand by 100% according to McEwen founder of Gold Corp GG in my previous post. Silver is much smaller market and Junior mining being the most risky of all was just obliterated by panic selling and naked shorting. It is already up 30-40% from low and fireworks to follow with decisive move down in US Dollar.

US Dollar Rally is out of stream. DXY, GDX, SLW, AUY, ABX, TNR.v, CZX.v, SST.v, OK.v, MGN.

US Dollar Rally is out of steam now, everything is possible nowadays, but odds are in favor of another waterfall phase for a green fellow. VIX is Topping out from reaction Sell Off in Markets, Markets have retested important low, Gold if fighting back to 850USD level. Bailouts are all Up and coming, after Bank of America we think that our assumption of 2 Trillion Defict is a very conservative one. Rate Cuts by BOE and ECB is out of the picture and USD will be a major play in town: watch the money Flow. TLT is showing that money is likely getting out of the Treasuries with new rally in the markets. Gold and Gold miners are building nice come back from much higher levels relatively to general markets after recent correction. With VIX coming down next week fundamentals will be back into investment decisions and Inflation/Deflation game will be slowly moving into Obama's camp - with proper determination FED will succeed in destroying US Dollar. We can have a lot of spin and distraction in the form of Wars and other games for resources, but you can not run the most leveraged hedge fund in the world US Corp. without destroying its shares US Dollar by diluting it with new shares issued every minute. Why should it be different this time? Just consider the small business case:
US Corp financials highlights:
1. Revenue (GDP) is shrinking due to recession down from 12 trillion.
2. Profits (TAX revenues) are going sharply down: higher unemployment, employed are moved down in the income chain, Corporate taxes are down, Real estate taxes are down. Muni are estimated by Bill Gross short of 1 Trillion to keep schools, police and hospitals running.
3. Your Deficit is rising - you need and Willing to spend more then you can afford in order to prevent Deflation Death Spiral and recognised insolvency of all banking and insurance system with Dow below 7000. It is a Survival mode with System Integrity at stake now. Your Deficit is close or even bigger then 16% of GDP.
4. You are able to sell Treasuries so far to finance this Deficit, but realisation is coming that with it and Quantitative Easing in the form of plane vanilla printing money, your most desired outcome - Inflation will bring demand for higher rates and collapse in Treasury Bubble.
5. Your balance sheet is expanding exponentially with assets in the form of junk bought or guaranteed in order to save financial system and your liabilities are in the form of "AAA paper". General Bernanke was arguing in LSE last week that he is making Credit Easing instead of Quantitative Easing and it is more important what you are buying into your assets side of the balance sheet then pure amount of money creation and credit expansion. We can hardly agree with him: different names for Rubbish you are buying from insolvent banks will not outplay your solid new debt issuing and capital dilution destroying the shareholders value.
6. You can Dream about GM work force arrangement - you have your baby boomers going out of work force in droves and Unfunded liabilities for another 50 trillion dollars.
7. In order to save the company, US Corp. management decided without proper disclosure to issue shares in the form of new US Dollar and expend credit.
You have to consider: Do you like this company, its business model and management? Will other people continue to buy its shares? Is there another more solid investment opportunities? Can potential fraud be exposed in the form of issuing new shares to pay out its Debts and coming liabilities? Can its investment rating be downgraded (only by investment community S&P and Moody's will continue to Trash Spain and Greece) spreads become bigger (on what?) and its service of debt become unmanageable? The question is when?

Rob McEwen on Gold. MAI.v, TNR.v, GDX.

The guy is backing Minera Andes MAI.v and TNR Gold TNR.v is involved in Los Azules.

"1% of money shifted into Gold means 100% rise in Gold demand"

Thursday, January 15, 2009

Fortuna Silver Mines FVI.v, Continuum Resourvces CNU.v update. GDX, SLV, HUI, XAU, CDNX.

Continuum Resources CNU.v is back from near death experience at 0.05CAD and hopefully acquisition by Fortuna Silver FVI.v will be done soon. Excellent grades and recovery from San Jose.
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 15, 2009) - Fortuna Silver Mines Inc. (TSX VENTURE:FVI - News; BVLAC:FVI) is pleased to report positive metallurgical test results for the San Jose silver-gold project located in Oaxaca, Mexico. A program of comprehensive metallurgical testing conducted by Metcon Research, of Tucson Arizona, has been in progress since October 2008. Main open flotation circuit or batch flotation tests have been concluded on multiple samples for two types of sulfides mineralization in the Trinidad area, which hosts the San Jose resource. Highlights of the open circuit test results include:
- Open circuit flotation tests using water from a potential water source for the project returned recoveries of 88% for both silver and gold.
- Open circuit flotation tests produced high grade commercial concentrates with 99 g/t gold and 12,306 g/t silver.
- Regrind of rougher concentrate increases concentrate grades to 135 g/t gold and 17,130 g/t silver.
- The above mentioned results were obtained with a standard grind size of 80% passing 74 microns. Additional tests are being carried out at coarser grind sizes of 105 and 149 microns.
- It is estimated that closed circuit flotation tests will improve metal recovery. Final results are scheduled for mid February.
Mr. Jorge Ganoza, CEO of the Company, commented, "We are extremely pleased with metallurgical results to date. It is clear that we can produce a high grade silver-gold concentrate for sale using standard grind and flotation processes and technology. We plan to have a final flow sheet design along with equipment selection by the end of first quarter."

Wednesday, January 14, 2009

Treasuries to fall and Dollar to weaken - sounds like people start to talk their Books. TLT, TYX, TNX, FVX, GDX, AUY, SLW

Treasuries Poised to Fall, Dollar to Weaken as Debt Sales Soar
By Daniel Kruger
Jan. 14 (Bloomberg) -- Treasuries will fall over the next six months and the dollar will weaken as the U.S. sells a record amount of debt to finance a budget deficit poised to exceed $1 trillion, a monthly survey of Bloomberg users showed.
Participants turned the most bearish on 10-year U.S. notes since September, while continuing to forecast declining yields on government debt from Germany, U.K. and Japan, according to the Bloomberg Professional Global Confidence Index. The survey, which questioned 2,991 Bloomberg users last week, showed the outlook for the dollar is the lowest since July.
The Treasury’s plan to sell as much as $2 trillion in debt to help the government fund bailouts of financial companies and a stimulus package comes as the Federal Reserve floods the financial system with dollars to end the freeze in credit markets. The amount of assets held by the Fed more than doubled to $2.14 trillion as of Jan. 7 from $909 billion in August, according to the central bank.
“The combination of selling a lot of Treasuries and printing a bunch of dollars to expand the Fed’s balance sheet isn’t necessarily a very positive dynamic over any kind of medium or longer term horizon,” said Jason Brady, a managing director at Santa Fe, New Mexico-based Thornburg Investment Management, which oversees $4 billion in fixed-income assets. Brady participated in the survey.

Roxmark Mines RMK.v 2009 update. RMK.v,, GDX, HUI, XAU, GDL

For us it is an M&A play in gold in Canada. Premier Gold Mines is moving into this historical Gold camp rather steadily, if results to follow Roxmark could become takeover play.

Tuesday, January 13, 2009

US Dollar Dead Cat Bounce and 2 Trillion Deficit is not the best value proposition for Treausary Buyers. DXY, GDL, SVL, GDX, SLW, AUY

U.S. Budget Gap Sets Record for Fiscal First Quarter (Update2)
By Rebecca Christie
Jan. 13 (Bloomberg) -- The U.S. budget deficit soared to a record in the first quarter of the 2009 fiscal year, surpassing the shortfall for all of last year as the government used taxpayer money to shore up the financial system by purchasing stakes in banks.
The deficit swelled to $485.2 billion in the first three months of the fiscal year that started Oct. 1, the Treasury said today in Washington. For all of 2008, the shortfall was $454.8 billion. The monthly budget picture also worsened, as the excess of spending over revenue widened to $83.6 billion in December, compared with a $48.3 billion surplus a year earlier.
President-elect Barack Obama will take over Jan. 20 facing the biggest budget deficit as a percentage of U.S. gross domestic product other than during the Civil War and the two World Wars, his nominee to head the Office of Management and Budget said today.
“We are inheriting a daunting fiscal position,” Peter Orszag, nominated by Obama to be the White House budget director, told the Senate Budget Committee. The budget shortfall in the 12-month period to Sept. 30 will likely exceed $1 trillion “even without steps to mitigate the economic downturn,” he said.
Government revenue fell 14 percent to $237.8 billion last month, while spending soared 41 percent to $321.4 billion compared with a year earlier.
Economists’ Forecasts
The December shortfall was forecast to widen to $83 billion, according to the median of 35 estimates in a Bloomberg News survey of economists, the same as the Congressional Budget Office’s prediction on Jan. 9.
Outlays in December for the Social Security Administration rose 9 percent to $58.7 billion, while Department of Defense spending increased 23 percent to $60.5 billion, the Treasury’s report showed.
Spending last month by the Department of Health and Human Services, which administers the Medicare and Medicaid health programs, totaled $63.5 billion, up 42 percent from the same month a year earlier.
The government also spent $51.1 billion in December on the financial rescue plan called the Troubled Asset Relief Program, and another $21.8 billion on purchasing mortgage debt from government-sponsored enterprises including Fannie Mae and Freddie Mac.
Obama is pressing Congress for a stimulus plan of about $775 billion, including tax cuts and spending on everything from roads and schools to the energy network, to help pull the world’s largest economy out of a slump that’s in its second year.
“Nearly every leading economist agrees we have no choice but to act aggressively to expand aggregate demand and address the macroeconomic crisis,” Orszag said. “That will necessarily imply even larger deficits in the near term.”
To contact the reporter on this story: Rebecca Christie in Washington at Last Updated: January 13, 2009 14:45 EST

Minera Andes - lost in translation., TNR.v, AUY, HUI, XAU, GDX

Junior backed by legendary founder of Gold Corp GG Robert McEwen and by Lukas Lundin is on fire sale at its recent low of 0.4CAD. Cash call in the amount of 11 mln dollars from its J/V partner on its operating mine distracted the market from developing story of Los Azules in Argentina. Value of this deposit even at recent level of Copper prices is estimated by Canaccord to be above 600 mln dollars. Xstrata is a provider of the Northern part of the deposit with highest Copper grade so far. TNR Gold TNR.v has moved into the picture with its claim on 25% back in rights for the property provided by Xtrata. Going further junior asked the court to reconfirm its rights on Escorpio IV adjacent to Los Azules. Xtrata according to Canaccord report has discounted claims from TNR Gold as without merit. Junior seems to be not discouraged and hired QC to fight the case in Vancouver according to latest public filing. Xstrata's dealing with stubborn Junior could put brakes on project development, they are discouraged to produce Feasibility Study by April 2010, when TNR Gold could claim 25%. With active law suit you can not really finance with any bank development of Los Azules on the part of Xtrata. It could be playing in favor of Xstrata, but can not keep McEwen and Lukas happy. With falling Copper prices and diversified operations Xtrata could be not the fastest developer of this asset. It will be interesting to see this year if another players more devoted to South Americas could move into the picture. Among others we like Yamana Gold AUY and their low cost Gold operations with credits from Copper production could be a perfect mix for Los Azules development. Should Gold move up as we expecting Yamana could have necessary leverage to crab promising Copper assets in Americas and play a nice recovery in 2-3 years time developing them into production. This is from recent corporate update of Yamana Gold:
"We will remain focused on demonstrating growth on all measures," continued Mr. Marrone. "We will continue with cost control and containment, with our precious metals and our Americas focus. We would look at add-on acquisitions that show better returns than our current development and exploration portfolio if they also meet the other criteria of stable mining jurisdictions and good infrastructure."
Developments to watch for Minera Andes
1. Cash call situation.
2. Scoping study for Los Azules.
3. Extension of the mineralised trend to the North.

Yamana Gold AUY - bet on Gold, low cost and increasing production. AUY, GDX, DXY, TLT, HUI, XAU

Yamana Gold Provides 2009 and 2010 Operating Outlook
2009 production expected to increase by approximately 40 per cent; cash costs expected to decline
"Yamana is very well positioned for 2009," said Peter Marrone, Yamana chairman and chief executive officer. "We expect to increase production to 1.3 to 1.4 million GEO at declining cash costs and most of our 2009 and 2010 production is based on mines already in production. Gualcamayo is a big driver of the production growth into 2009 and it commenced production late last year. We took time to better understand our assets and gather further information in 2008 and it positions us well beginning with 2009 both in terms of production and costs."
"We will remain focused on demonstrating growth on all measures," continued Mr. Marrone. "We will continue with cost control and containment, with our precious metals and our Americas focus. We would look at add-on acquisitions that show better returns than our current development and exploration portfolio if they also meet the other criteria of stable mining jurisdictions and good infrastructure."

Monday, January 12, 2009

China, Bailouts, Commodities and falling US Dollar. GDX, GDL, SVL, FCX, CZX.v, TNR.v

It is important for us here not only for the sake of buying pressure and increasing demand for metals: it is even more important why they are doing it now. China is not guessing about US Dollar value: its value depends on China ability and wiliness to Buy or even continue to Hold Treasuries.
China makes strategic use of commodity collapse

"...On Monday, it emerged that China was poised to buy up thousands of tonnes of rubber and sugar to create a bigger state buffer of supplies for the future, adding to efforts to enlarge stocks of everything from oil to corn to industrial metals.
At the same time, however, it's letting small coal mines go to the wall, seizing a chance to make good on years of rhetoric, as well as allowing smaller, less efficient metal producers go under.
"As the fundamental balance moves toward a liberal supply of coal, it is an opportune moment to close small mines and speed up restructuring and consolidation of coal resources," Zhang Guobao, head of the National Energy Administration, said this week.
The government's State Reserve Bureau has begun building up government reserves of metal, buying around 300,000 tonnes of aluminum and 30 tonnes of indium and starting negotiations to add to its zinc and copper inventories..."

Sunday, January 11, 2009

Barron's investment roundtable on Gold. GDL, GDX, AEM, ABX, AUY, SLW, SST.v, TNR.v

Interesting to see Gold as one of the major investment theme from Barron's.
"...Faber: The U.S. economy fell off a cliff between October and December, and will stabilize at a lower level of activity. Some indicators may look better than expected, which will justify the present rally. Stocks already are up 25%. If they go up 50% from the Nov. 21 low of 741 on the S&P, you'll have the S&P at around 1,100. Afterward, reality will set in and in real terms the market will go much lower for much longer.

Marc Faber: "With the Fed buying up everything, hyperinflation will be the result."
Around the world, governments are throwing money at the system to revitalize debt growth. When an economy is credit-addicted and debt growth slows, it is a catastrophe. With the Fed buying up everything and boosting the federal deficit, hyperinflation will be the result down the line. I am pleased that Barron's just wrote a cover story about the inflation in Treasury bonds ["Get Out Now!" Jan. 5]. This was the last bubble the Fed was able to inflate, aside from their egos.
So, Marc, you're not too bullish this year.
Faber: Let's put it this way. A true market low will be lower, but in a hyperinflating economy, you can have nominal price gains while going lower in real, or inflation-adjusted, terms. Between the start of 2008 and November, almost every asset market collapsed, but the dollar was strong. After November the asset markets rebounded but the dollar went down again. There's an inverse correlation. Dollar weakness is a signal that the Fed has succeeded in pushing liquidity into the system. Some say the dollar will collapse this year, but collapse against what? The euro? The Russian ruble? These currencies are even weaker. In the very long run, each citizen must become his own central bank. Every responsible citizen must hold some physical gold, platinum and silver -- physically, not through derivatives..."
"...Hickey: I suspect they were trying to mask revenue deterioration. When things get desperate, companies typically do things like try to buy other companies.
On to gold. You have to protect yourself against potential hyperinflation. All the central banks are printing money now. The bull market in gold was rather orderly for the first eight years. We haven't seen the blow-off phase you get in all bull markets. That's coming. In dollar terms, gold was up 5% or so last year. In Indian rupees it was up nearly 30%. The price of almost all other commodities collapsed. I own bullion, the gold ETF [ SPDR Gold Shares (GLD)], some gold stocks and coins. I couldn't get them as the year progressed because demand was so great. But my first pick today is Market Vectors Gold Miners, an ETF. It sells for 32 and mirrors the NYSE Arca Gold Miners Index, a modified market-capitalization-weighted index of publicly traded gold companies. The top five components are Barrick Gold [ABX], Goldcorp [GG], Newmont Mining [NEM], Kinross Gold [KGC] and Agnico-Eagle Mines [AEM].
How has it performed?
Hickey: The ETF dropped 26% last year, so while gold held up, the stocks didn't do as well. One reason is that oil prices were so high; oil is a key component in production costs. Now crude is falling, which will be a help to gold miners in 2009. The fund has $2 billion in assets. It has been around since 2006, and the expense ratio is 0.55%. It gives you broad exposure to the gold-stock business.
My second gold pick is Agnico-Eagle Mines . It fell about 6% last year, so it did relatively well. It trades for 51. Not every stock fell in the 1930s, either. Homestake Mining went from 65 a share in 1929 to 500 in 1935. It had two things going for it: rising production and an increase in the price of gold, against a devalued dollar.
Barron's Mike Santoli speaks with The High Tech Strategist Editor Fred Hickey, at the Barron's Roundtable, about the reaction to gold in the market and how it can be handled as 2009 progresses.
Zulauf: The U.S. was on the gold standard. It devalued the dollar and revalued gold relative to the dollar, and the price went up to 35 an ounce from 28.
Hickey: Gold could go to $2,000 an ounce this year, or next. The Fed is going to pump all kinds of money into the economy and it won't help. It won't get to corporations or the consumer. But it might get to gold and cause yet another bubble. Gold is one of the few assets that has performed well. And, there is a tremendous shortage of physical gold. In times of turmoil it is a classic hedge against inflation.
Gabelli: People withdraw their cash from banks and buy safes and guns and gold.
Zulauf: You can't get a safe at a Swiss bank anymore because they are all rented out.
MacAllaster: Agnico-Eagle doesn't make much money and pays almost no dividend. It earned more than a dollar a share in 2006 and '07. Earnings were cut in half in 2008 because one mine produces zinc and the price of zinc collapsed. The real kicker is that Agnico will quadruple production, from 300,000 ounces in 2008 to 1.2 million ounces in 2010. Capital expenditures will decline to $146 million by 2010 from $900 million in 2008. They have five new mines, in Canada, Mexico and Finland, countries with low political risk. Production costs are around $300 an ounce.
Zuluaf: The industry's break-even is about $430 an ounce. There is a limited amount of gold in the earth's crust, and most of it is in politically unstable places. It is cheaper to buy mining stocks than build new mines.Hickey: Very few gold miners will grow production or earnings this year and next. Agnico's earnings are going up by orders of magnitude. They'll do 40 or 50 cents this year, and $2 to $5 when the new mines come on. Because there is excitement about this company, they were able to do a stock offering in December. There are still a lot of momentum investors. This stock will have momentum."