Medusa Share Discussion Threads

[chipperfrd] 22/5/2016 06:21

Eintracht,

Even though I have been keeping an Excel sheet for Comex reports for 5 years now - I really think it is actually a waste of my time!

Nothing significant ever gets delivered out of the Comex and I cannot really see that changing. However, now that there is a competing 'fix' on the SGE to the LBMA and given that there now exists a clear arbitrage conduit between those two markets it would appear to me to be more likely that it is the LBMA that will eventually fail.

But the 'fix' can work both ways so the SGE price movements are key and the timing for wholesale pricing is now looking to be under Chinese institutional control.
Chip

ps. but worth considering why the Chinese have now taken over both the DB gold vault and the Barclays gold vault - that is c. 3,500t of storage available in London. Irrespective of Brexit they appear to have a long-term plan for gold trading in London!

[eintracht] 22/5/2016 04:55

How many more straws before the camel's back breaks ???

[chipperfrd] 21/5/2016 10:02

Yes, it's at extreme levels!

Comex gold futures open interest was 1,851 tonnes on the 17th May.

Comex silver futures open interest was 32,253 tonnes.

Both of these are record highs.

[nielsc] 20/5/2016 23:55

Gold open interest increased 88t on the Comex this week up to tuesday. Some of this may have been closed off in the past few days, but still a huge short position.Http://www.cftc.gov/dea/options/deacmxsof.htmCheers,Niels

[nielsc] 19/5/2016 12:38

deka1,

Yes I suspect many are aware that the gold futures aren't backed by very much gold, but don't care as they aren't wanting to obtain physical gold.

What I think will break the system is investors actually standing for delivery as they can then sell it on in the physical market for more. A nice arbitrage situation.
What could quite easily happen is that rather than getting the gold they are paid off in cash. Perhaps with a little thrown in to keep them sweet. If that is the case then more investors will want to stand for delivery to either make money out of the arbitrage situation or being paid off with a sweetener.

I would be very nervous if I held eligible gold at the comex. I would think there are far safer places to keep your gold. It is probably the last stash of gold that they can loot.

Cheers,
Niels

[deka1] 19/5/2016 11:39

Niels hi I suspect that all the players in the PM markets know that gold is not deliverable from the crimex and have known for many years, that's why I think the only players in the gold market are the banksters and their proxy hedge funds and the like,with a supply ratio of 540 to 1 paper to physical how can they not know.imo the gold market is a closed loop Banks to Banks,around and around, both sides of the trades, long and short,same people, who else would play the gold market knowing its so obviously rigged, I just cant see any other way to keep this fraud going.
Perhaps I just hate the Banksters so much, especially the Yankers, anyway that's my long and short of it LOL

[nielsc] 19/5/2016 09:03

Let me know if this is too o/t.

Gold and silver took a hit thanks to the FED indicating that rates could rise in June if conditions are right. Conditions of course won't be right and rates won't be raised.

Not really sure this drop is enough to get the commercials out of their predicament though.

I would imagine arbitrageurs will be taking advantage of the difference between the COMEX paper price and the price they can sell it for on physical exchanges such as the SGE. They will be standing for delivery. Exactly what the COMEX does not want as it is woefully backed by very little gold.

I do wonder if they would dip into the eligible gold they hold as their registered stocks near zero?

How does it end? Does the COMEX just say they will only cash settle due to "gold supply constraints". Speculators would realise they are just buying paper that gives them no right to the physical. At this point a scramble for physical would ensue.


Cheers,
Niels

[cncventure] 18/5/2016 03:35

What I've found interesting of late is that premium is being paid for physical gold (based on the Sprott Physical Gold Trust which is a closed fund):



Have to go back to 2012/2013 to see premiums this high.

Harbinger?

[nielsc] 17/5/2016 22:09

Gold open interest increased again on Monday and still the Comex paper gold price is barely dented.Craig from TF metals gives a rundown.Http://www.silverdoctors.com/gold/gold-news/the-epic-battle-over-gold-silver-continues/#more-67118Cheers,Niels

[nielsc] 17/5/2016 15:35

Deka,Enjoyed the Maguire interview. I sure I heard on some interview that the OI has increased by quite a bit again on Thursday and Friday. Obviously the COT number only cover until Tues. Will find out this Friday.Chipperfrd:I remember thing the 100 to 1 ratio was very high. Getting very stretched now at over 500 to 1. They just don't have the gold. Cheers,Niels

[ilostthelot] 17/5/2016 15:24

Thanks Gents.
Medusa looking quite steady since the sell off after that Quarterly report.
This time next year they should have another good few £ million on the books and be about to make some right good cash! I'm hoping for dollars a share by then and over 5 within 2/ 3 years.

[deka1] 14/5/2016 21:56

I hear -- The new case for gold - is a good read, not read it myself though
By James Rickards

[andrewsr] 14/5/2016 08:34

Thanks Deka. Very interesting, but could do with a glossary of the terminology used! Any good books on the subject?

[deka1] 12/5/2016 11:48

hxxp://www.resourceinvestor.com/2016/05/11/hsbc’s-steel-gold-bullion-long-term-insurance-policy

[ilostthelot] 11/5/2016 20:08

Cheers Deka. You'd think I'd know having my hard earned money invested here all 5 grand of it!!

[justinjjbuk] 11/5/2016 19:28

Chip

Regarding EDV, I think the retained earnings question and trailing PE are really the result of expanding production at a time when the gold price had been going down. You only have to look at MML to see the impact of asset markdowns due to lower gold prices on retained earnings.

My investment style is to look at forward free cash flow generation. And the perfect stocks for me are those that move from cash destruction to cash generation over a few quarters and catch them before the market revalues them at a different discount rate (since they have, in effect, become derisked).

A good example of this with a simple single mine company is the Aus name MOY. In Q1, cash on the balance sheet grew from A$10.7m to A$14.6m despite paying off A$3.9m in debt. In Q2, it is debt free, its hedge to production ratio falls from 2/3 to 1/2, the hedges have risen around $80 and spot sales will be $80 better than Q1. In Q2, we could see around US$7 million make its way onto the balance sheet (in one quarter!) which compares with a market cap of US$80m. If gold just goes sideways for 2 or 3 quarters I think this stock should double. Looking at CY2015 numbers you would see a very different picture.

Obviously, EVN is more complicated but in Q1 net debt had nearly halved over 12 months to $136 million. Net debt to operating EBITDA ratio has fallen from 1.8 to 0.4 times! If gold just stays static, I think they have the potential to both a) become debt free and b) increase production from 600k oz to 900k oz over the next 2 to 3 years. Don't think CEY or MML can compete with that!

Thanks

Justin

[justinjjbuk] 11/5/2016 18:43

Jim

Regarding Centamin (CEY), I don't dislike it. My only argument against it is the relative valuation rather than the absolute valuation. I agree that it could hit £2, although I think we would need to see gold break decisively above $1,300 to see that.

As you say, there are not many quality London listed gold names, and CEY appears to be used by fund managers as a vehicle for 'risk on, risk off'. You can see that in how it violently swings around in response to gold price movements, down 8% one day, up 8% the next.

I guess my argument is that there are certain gold names that have the potential to double even if the gold price flat lines. In Australia, I think that MOY, BDR (take a look at its latest drill results), RSG and perhaps TRY fulfil that criteria (some of those could even triple).

Even larger names like SAR, NST and EVN could pull a 12-month double off of flat gold given their valuation; and these larger Aus names have less country risk than CEY combined with cheaper valuations.

Cheers

Justin

[deka1] 11/5/2016 12:57

Hi Andy, there are around 100 stopes working iirc,and the grades for each stope are known by the advanced drilling, so I suppose they mix the feed stock to get an average , chip will explain it better perhaps.

[ilostthelot] 11/5/2016 08:56

Hi Deka I hope so mate. Some of thr drill numbers look good.


The new information about reserves per mine level is interesting.

I wonder do they mine every level at once and then blend then ore at the mill?

[deka1] 10/5/2016 08:29

Cheers TF we look forward to seeing the grade data, its said the deeper you go the better it gets --- generally lol

[tightfist] 10/5/2016 07:43

Hi Deka,

Yes, I like to see on a chart a significant intraday reversal on high volume, (in this case with a weaker PoG as well).

Time to review the data on grades below L8 and how the AISC should reduce before production increases next Summer - more info around on that now.

Cheers, tightfist