Hochschild Mining Share Discussion Threads

[chrisdgb] 21/7/2021 07:44

Nice looking update, RBC upgrade to 260p price target........

[knocknock] 20/7/2021 14:23

This is very likely to drift a lot lot lower u til Pedros intentions are clearer. 80p could be a reality now IMO

[rathkum] 20/7/2021 12:16

And the market markers decide to knock the price down even further on the news.

[knocknock] 20/7/2021 07:15

Pedro Castillo declared president-elect of Peru https://www.bbc.co.uk/news/world-latin-america-57897402

[sotolo] 15/7/2021 23:02

Q2 2018 San Jose overall production was 44k gold equivalent oz
2019 50k gold equivalent oz
It would appear from this that if McEwan with 50% produced share was 18300 gold equivalent oz in this year’s q2, then the total for this quarter is about 37k oz if my maths is right, so down 25% on the last non COVID year. Not a very good start to next week’s figures. Let’s hope Inmaculada saves the day as it often has to, as Pallancata won’t.

[stevea171] 14/7/2021 21:37

McEwan Mining reports on JV production at San Jose with HOC.
San José Mine, Santa Cruz, Argentina (49%(2))

During Q2, San José produced 9,300 gold ounces and 607,000 silver ounces, for a total of 18,300 GEOs, compared to 9,000 GEOs in Q2 2020. The Company received $2.5 million in dividends during the quarter.

[laptop15] 14/7/2021 15:06

Why is this down??

[chrisdgb] 13/7/2021 10:27

Update due soon I would have thought, looks a bargain at these levels......

[stevea171] 01/7/2021 16:17

Xeyed. I wondered about that too but you're probably right!!!

Anyway you know the point I was trying to make. The PM's won't be stopped by the BB's just delayed and try to put a dent in sentiment for another day, week, month, whatever. LT holders here know the playbook because it has been used to exhaustion!

[crosseyed] 01/7/2021 14:53

Wasn't the tide coming in!

[stevea171] 30/6/2021 18:57

29/6. London’s gold miners lost their lustre as the precious metal heads for its worst month in almost five years.

That's how desperate the BB's are. But like King Canute they won't be able to stop the tide going out ....

[deanroberthunt] 30/6/2021 13:30

the only positive I can spin on this, is, it's at the bottom of the current falling channel...but that's about it....

[stevea171] 30/6/2021 12:17

Last day of H1. Once the criminal manipulators of the PM's have got their predictable low PM target prices today to be used as bench marks - end Q's, end HY, end FY - probably we can see the PM's rebound from here commencing tomorrow .....??

[knocknock] 29/6/2021 14:02

Closer to 80pence than 225pence now.

[sotolo] 28/6/2021 12:28

Reduced output, higher costs, lo wish mine life, and threat of much increased tax all could mean much lower profits, not fully compensated by higher silver, hence much lower share price, tho live any different explanation. Seems reasonable value bow depending what new president does

[stevea171] 28/6/2021 09:18

Basel 3 explained

The risk with Basel III is a major shift towards allocated gold, which could trigger a liquidity squeeze in the physical metal and lead to higher prices by the end of the year, according to Goldex CEO Sylvia Carrasco.

The impact of the Basel III agreement, which will come into force on June 28, 2021, for European banks and on January 1, 2022, for British banks, is being debated by many gold industry experts, with opinions ranging from "everything will change" to "no impact at all."

Carrasco is in the camp that sees many people underestimate the impact of Basel III on the gold market.

"Basel III will affect the gold price more than many people believe. The spot price will definitely go up," Carrasco told Kitco News.

Basel III is an internationally agreed-upon set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. Many of the measures deal with bank capital adequacy, stress testing, and market liquidity.

One of the biggest changes for gold is that the precious metal is being reclassified from a Tier 3 asset, which is the riskiest asset class, to a Tier 1 asset, which is currently designated for cash and currencies. The change could make it more expensive to buy and sell unallocated gold.

This is because Basel III includes the new Net Stable Funding Ratio (NSFR) requirement, which specifies that an 85% Required Stable Funding (RSF) needs to be held by banks against the financing and clearing of precious metals transactions. This is a big change from the pre-Basel III level of 0%, and it makes holding unallocated gold more expensive by equating it to the same level of risk as holding equities.

"Basel III requires banks or dealers to collateralize 85% of the value of their unallocated gold with a Tier 1 asset, which is cash," Carrasco said.

For example, if a bank has $1 billion in gold positions, with $300 million in allocated gold and the other $700 million in unallocated gold. Before Basel III, the bank didn't have to put any collaterals for those positions. But with Basel III, the $300 million positions in allocated gold are fine. But the $700 million positions in unallocated gold are now considered risky as equities and are put in the same risk category.

"Under Basel III, the bank would have to show that 85% of this $700 million is actually sitting on their balance sheet, and the bank is not touching it," Carrasco explained. "That has a tremendous cost of finance. The bullion banks need to find 85% of the nominal value of their unallocated gold position and fund it."

The risk here is that trading unallocated gold would become a money-losing business.

"Banks cannot continue charging practically no fees on unallocated gold. Could they have to increase their price by 100 times? Will clients be interested in trading at those prices?" Carrasco asked. "The risk is going to be a lot of banks shutting down because suddenly it is a money-losing business. That is Basel III in a nutshell."

Allocated vs. unallocated gold

Understanding the difference between allocated and unallocated gold is critical here.

Allocated gold is when a customer buys physical gold that has already been minted, and it is physically sitting in a vault. And that gold belongs directly to the customer.

"It is the only gold that truly belongs to the buyer with proof of ownership," Carrasco said.

Unallocated gold is like a form of credit, she described. Unallocated gold doesn't have to be in a vault, and it is like the client trading against the balance sheets of a bullion dealer.

"In this case, the bullion dealer does not have to have the gold. They are saying to the buyer — 'I promise you that I owe you gold. I refer to it as balance sheet gold," Carrasco said. "If anything happens to the bank, that gold doesn't belong to the buyer, and the buyer loses the position."

Also, unallocated gold can be sold 20 times to 20 people, whereas allocated gold can only be sold once. "That is the systemic risk that Basel III is worried about," she noted.

Liquidity squeeze to trigger $2,100 gold price by year-end

What these changes mean for the gold space is that the demand for physical gold will likely increase, putting the squeeze on liquidity, which in response is likely to trigger a rise in prices, Carrasco pointed out.

"Basel III sees a systemic risk. If for whatever reason these banks go into financial trouble, all these clients will lose their money," she said. "If unallocated gold becomes more expensive, that means that the only thing left to buy and sell is allocated. And if suddenly the eyes turn to the allocated gold, there should be an increase in demand in physical allocated gold. If there is an increase in demand, there will be a liquidity squeeze. And potentially, there will be an increase in allocated gold prices because there is less liquidity and there is more demand."

Just in London alone, the amount of unallocated gold traded on a daily basis is around $200 billion a day, Carrasco added.

"It is so enormous that an issue could create a massive systemic risk to the financial industry," she said. "LBMA is worried about this because the majority of trading that goes through LBMA is unallocated gold. They are asking their UK regulator to reconsider."

This is why Carrasco expects to see the biggest impact from Basel III towards the end of the year — right before the UK is impacted. Basel III has been postponed until January 1, 2022 in Britain.

Carrasco's minimum gold target for the end of this year is $2,100 an ounce.

"The biggest impact might be visible at the end of the year before January 1, if Basel III kicks in in the UK. In the last quarter of the year, we'll see an impact. At the very minimum, I can see gold go over $2,100 by the end of the year," she pointed out. "The highest amount of unallocated gold is traded in London. On June 28, only a third of European banks will have to abide by the new rules. The rest will only be affected from January 1, 2022, if this goes through in the UK."

Allocated gold is finite, and the unallocated gold is infinite, Carrasco added.

"If people turn to allocated gold, liquidity will be squeezed, and prices should go up. There are X amount of bars around until more is produced," she specified. "Bullion banks hedge themselves with COMEX futures. They have tremendous short positions in COMEX, and they are getting rid of them. If from the end of June they need to start selling their short positions, that automatically creates an increase in the price of gold."

[stevea171] 28/6/2021 09:18

2021’s Most Informative Interview About Basel 3 And How It Will Impact On The Gold Market.

June 26. “We are heading into Basel 3 implementation right now. Your thoughts on the implementation of Basel 3 and the impact it will have on the gold market going forward.”

Chris Powell: “I’m pretty optimistic about it. Probably the strongest reason is the protest that was sent to the Bank of England by the LBMA and the World Gold Council. Their protest asserted that if Basel 3’s regulations about unallocated gold are implemented in the United Kingdom it will probably put the LBMA out of business.
Of course I could only cheer that.
But they were protesting it and I figured the LBMA has never protested anything from a central bank before and that if the LBMA is really worried about Basel 3 then there is probably something to it.

But I’m not expecting the gold market to be liberated on Monday when the Basel 3 regulations are taking effect at the direction of the European banking authority. You have to remember that the LBMA is headquartered in London and the UK is not subject to the jurisdiction of the European banking authorities. And most of the unallocated gold racket is run out of London, and Basel 3 is not yet being applied there.

Alasdair Macleod believes Basel 3 rules on unallocated gold will be applied in the UK at the end of the year. I wrote to the Bank of England about that a few weeks ago and they cordially replied that I should stay tuned, but as far as I know there is no formal decision yet from the Bank of England yet about applying Basel 3 in the UK.

But insofar as the LBMA is so terribly frightened of the Basel 3 regulations, I have to believe, as the LBMA complained, it could make unallocated gold prohibitively expensive for the bullion banks and that might put the unallocated business out of business…

[lionheart79] 27/6/2021 13:03

I don't understand why this is trading at half the highs of recent years while silver is at its high of recent years. Wtf...

[scepticalinvestor] 25/6/2021 07:34

Good grief has this crashed or what - was 200p last i checked..Best of luck to sh, looks as though you will need it!!