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@schischi Is van Eck selling $TGZ at the moment or are there any other isssues ?
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@enviro111 @LAURENTF from may 3rd to may 16, van yuck made no reductions in $tgz, smf, kdx or gsv. The selling seems furious today. Maybe they are seĺling again?
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@mountains_of_glory So does the index not much care what prices they get for the shares they sell? I have more TGZ shares than I want because I can't resist these prices and can wait for a bounce.
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@FundamentalAnalysis @mountains_of_glory Today's move was really quite unbelievable nothing else got smashed down so badly.......338mCAD haha about 135m cad is cash no one knows how much it can drop but its becoming funnier day by day. I don't think the Index cares, a computer isn't accountable to investors like a fund manager so even less of an incentive, look at pure commodity etc's or etf's they fail to track the commodity prices...always underperform. Were you with me on $marl when it was getting smashed down, before the takeout...remember the usernname
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@mountains_of_glory Yes, I was. $MARL was getting hit so badly for no reason and there was all kinds of fear and skepticism about what was wrong with it. I knew enough to know it was a screaming buy. I love that PEA. You don't see many like those ever. The IRR is well over 100%, the discount rate isn't 5, and the equity was and still is trading at a fraction of the NPV. With a Tier 1 asset like you know it's going to be built. Special opportunities are what I like best. $TGZ at these prices is my favourite in the sector. As it bounces I'll be looking to redeploy some proceeds elsewhere.
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@enviro111 $tgz the van yuck guy don't care too much what they get for the stock. They apparently have to liquidate some of their holding. They decided they have too much money to invest in junior gold stocks and now have to invest in senior gold stocks. Their positions in some juniors got too big. 10 or 20% Inn some cases. Lately, because of van yuck liquidation, the junior gold stocks have been pressured. This under performance has led to to redemptions by investors. Thus, they have to liquidate even more. If you look at the volume of trading in some of juniors you see large and steady increases lately and terrible performance. Smf, tgz, gsv, kdx gpl etc. There will be some great bargains when the van yuck selling is through in a few weeks. Sadly, the worst may still be ahead of us? Who knows? Hope not!!
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@Jayfire Unfortunately GDXJ hasn't sold down any $TGZ shares this week...
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@TheLip2 @Jayfire How do you find out they haven't sold down any shares? I would like to know what else they HAVEN'T been selling this week. Lol
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@Jayfire @TheLip2 A few of the names I have on a spreadsheet... from the daily holdings update on their website... http://cdn.ceo.ca/1chsvt6-Screen%20Shot%202017-05-18%20at%2010.15.23%20PM.png+
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@mountains_of_glory So who is selling? Clearly this selling is not normal and is not rational except in the context of index rebalancing.
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@FundamentalAnalysis It must be a retail investor, who places sell order on market and doesn't look at limit orders......the sell order must have matched part of the massive bid taking the price way down. Illiquidity can cause that.......
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@wannabeinvestor @Jayfire, what source do you use to track holdings? The most accurate source that I find is this: http://www.etf.com/GDXJ, click on view all under top 10 holdings. They report Teranga's position as being 0.86% of their total allocation, so if total assets are US$ 4bn, they would indeed have ca 11m shares.
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@Mr.Smokey traders are frontrunning VE. Short now,then cover with shares they sell. Check Short% that should make it clear, if that is really the case.
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@Jayfire @wannabeinvestor I get it directly from their website, daily holdings https://www.vaneck.com/etf/equity/gdxj/holdings/
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@wannabeinvestor sry, @Jayfire, not able to access any holdings data
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@enviro111 Is there a big fund that owns $tgz? They may be selling in conjunction with van eckhart. Other than $tgz, the other positions in van eckhart seem to be under 10%. Mystery sellers?
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@enviro111 Heavy volume on yesterday's drop in $tgz. Someone wants out badly.
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@Ruffus23 It will bounce back in summer.
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@Ruffus23 On the plus side there is good volume. Volume has increased since consolidation.
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@FundamentalAnalysis Its very weird to see such a low share price, one needs to question are we are missing something....is it because we only have one mine producing and its a little marginal. $SMF carried a premium and rightly so because it wasn't marginal (Until recently on main asset)......compared to west africa its arguably sensibly priced but compared to Americas its DIRT CHEAP. I can't believe people chase americas so much....when the value is in west africa. Its literally more then 50% off. (the risk being a little bit of armed troublemakers now and then in the region....nothing to stop project moving forwards)
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@mountains_of_glory At May 15 TGZ had only .15% short. 165,865 shares. It's lower risk and simpler to simply sell out positions and then buy back whenever.
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@mountains_of_glory Although it's interesting that the short position is so low. $SMF has 1.51% short, a huge difference. $ASR has over 2% short.
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@wannabeinvestor These African gold stocks sure are not popular right now despite newsflow. $SWA $TGZ $SMF
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from #swa,
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@FundamentalAnalysis @wannabeinvestor lol, I think not popular may be an understatement for some of those..... $TGZ is becoming funny....if it continues its smashdown towards 2015/2016 lows, I think I would have witnessed the greatest comedy on earth.
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from #swa,
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wannabeinvestor @FundamentalAnalysis, also the way $KDX is trading these days is beyond me. This used to be an absolute market darling... bought more of $KLDX today.
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@mountains_of_glory @wannabeinvestor $KDX is beyond you? $3000 AISC for True North. $1500 for Midas.
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@FundamentalAnalysis @wannabeinvestor I am partly with @mountains_of_glory Not sure about his figures though for True North..... $KDX needs about $$1300 gold for now based on the current reserves and to make any margin on its deposits overall, currently there is no free cash flow If they can bring down costs, and continue to prove up their reserves they will be ok, my concern was the lack of reserves to support valuation. Some have said the company have had the ability to keeping proving up more ounces, hence the concern for many isn't there. My understanding was Klondex was overvalued before and is now moving towards a more sensible valuation. What I'm observing at the moment is real shift in share prices based on fundamentals, and not where the gold prices could be in the future. So a company that struggles to make money now, will get slashed down heavily.....a lot of companies I'm looking at seem to be moving on that basis. If you are long term gold price bullish, you are now closer to getting that upside for free (market is no longer requiring much of a premium for it). West African plays especially $TGZ is pricing in no gold price growth, no exploration upside, no banfora and just cash + the after tax value we can extract from Sabadola at current gold prices. $1250+
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@Highheat Glad I picked up some $TGZ on the beatdown
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from #index,
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@FundamentalAnalysis This looks like a temporary suckers rally, but hey I'm not complaining if its onwards and upwards from here........
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@FundamentalAnalysis @wannabeinvestor $KDX in my opinion is an optionality producer for now, like most other producers including $TGZ and also now $SMF with its mana mine. (Joe Mazumdar's understanding I found out recently is in line with mine, he looked through a few junior/mid tier gold producers and the average FCF return he mentioned was zero many at sub zero and many just above zero lol). The reality is most of the mid tier gold miners and even silver in many cases just cannot make money in the current environment. AISC by the way is a crap metric if you look closely, doesn't include interest/taxes and in some cases royalties or streams etc... I've mentioned that if the precious metal prices don't move materially to a new higher base level $1300+ $20+ silver within next 5years, we are going to witness some serious problems unless costs of production i.e oil prices, mine equipment etc come down. Either that or capital will keep providing equity financing to keep the companies afloat diluting existing shareholders. Hate to be bearer of potential bad news....but I just don't believe things are 100% rosy as everyone wants them to be. This isn't a time to be reckless and putting capital in anything which has drifted down UNLESS you know the company well enough to see how value can be created (a producer should only be defined by how much money will the business make in future years..thats it). Even a 500k oz producer generating 0 Free cash flow YOY until gold goes past $1300 is effectively quite worthless.......I've chosen $tgz as my optionality producer hence not investing in other optionality producers unless the prices become ridiculous in the near term. This is still a swing traders market @excelsior style. $KDX will get the nevada premium, but longer term these gold prices won't help much.....you can get quarter of positive free cash flow like $tgz did in march 2016....but I don't think its sustainable. These are still difficult times..........I'm waiting and will become more comfortable over at a $1300+ sustainable new levels of gold none of this $1000-1300 area which is dangerous.
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from #kdx,
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@FundamentalAnalysis @wannabeinvestor $KDX in my opinion is an optionality producer for now, like most other producers including $TGZ and also now $SMF with its mana mine. (Joe Mazumdar's understanding I found out recently is in line with mine, he looked through a few junior/mid tier gold producers and the average FCF return he mentioned was zero many at sub zero and many just above zero lol). The reality is most of the mid tier gold miners and even silver in many cases just cannot make money in the current environment. AISC by the way is a crap metric if you look closely, doesn't include interest/taxes and in some cases royalties or streams etc... I've mentioned that if the precious metal prices don't move materially to a new higher base level $1300+ $20+ silver within next 5years, we are going to witness some serious problems unless costs of production i.e oil prices, mine equipment etc come down. Either that or capital will keep providing equity financing to keep the companies afloat diluting existing shareholders. Hate to be bearer of potential bad news....but I just don't believe things are 100% rosy as everyone wants them to be. This isn't a time to be reckless and putting capital in anything which has drifted down UNLESS you know the company well enough to see how value can be created (a producer should only be defined by how much money will the business make in future years..thats it). Even a 500k oz producer generating 0 Free cash flow YOY until gold goes past $1300 is effectively quite worthless.......I've chosen $tgz as my optionality producer hence not investing in other optionality producers unless the prices become ridiculous in the near term. This is still a swing traders market @excelsior style. $KDX will get the nevada premium, but longer term these gold prices won't help much.....you can get quarter of positive free cash flow like $tgz did in march 2016....but I don't think its sustainable. These are still difficult times..........I'm waiting and will become more comfortable over at a $1300+ sustainable new levels of gold none of this $1000-1300 area which is dangerous.
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from #kdx,
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laurentf @FundamentalAnalysis When you produce at $900 AISC you re not an optionality play buddy $TGZ
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@FundamentalAnalysis @laurentf As mentioned previously AISC isn't the real cost of mining an ounce. Do you think companies at 900 AISC are making $350/oz currently after all costs?
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laurentf Don't say so but optionality plays are subeconomic at current price, which is not the case of $TGZ
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@FundamentalAnalysis At current prices $tgz is marginal, so just about breaks even based on Q1 results.
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@FundamentalAnalysis basically $1250 is like the baseline price for $tgz
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@FundamentalAnalysis I dont believe gold is going below $1000 and if it does its not for long, $tgz like $kdx has enough cash....so concerns aren't that great in the short term. Breaking even is ok.....what we don't want is very low gold prices like $1100 and that persisting because we will drain our resources.......eventually.
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@FundamentalAnalysis I dont believe gold is going below $1000 and if it does its not for long, $tgz like $kdx has enough cash....so concerns aren't that great in the short term. Breaking even is ok.....what we don't want is very low gold prices like $1100 and that persisting because we will drain our resources.......eventually.
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from #tgz,
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laurentf @FundamentalAnalysis An optionality play means it costs more to produce than the money it makes. With that in mind, using the total all-in costs to decide if it's an optionality play or not instead of the operational costs is wrong. Why? Simply because if the company is actively drilling other properties or making acquisitions, it should not be taken into account in the balance. Finally, the AISC metric is not that bad (even if it doesn't take into account income taxes) and $TGZ is definitely making money at $1,250.
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@mountains_of_glory @FundamentalAnalysis My $KDX True North figures are from the latest report: FIRST QUARTER 2017 SUMMARY OPERATIONAL RESULTS
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@FundamentalAnalysis @laurentf the margins are wafer thin at these levels. Q1 results, if you back out the numbers spent on exploration which was only 1-2million I believe, cash balance was slightly down most of the money was spent on capex at sabadola which is required to continue the operation. Therefore $tgz needs $1250+ ideally $1300 for a sensible margin. Selling gold for basically no profit or zero is marginal. Look at cash flow statement. Q1 gold price was probably averaging $1200ish or so....I know its a bit higher now....I actually think we may get a bit more FCF this quarter as gold prices holding up a touch better. Review prior year cash flow statements for $tgz you'll see a similar issue after adjusting for acquisitions, growth exploration very little to no FCF. (You have to including sustaining exploration and sustaining capex as part of costs to replace the ounces to produce at same rate.)
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@mountains_of_glory @FundamentalAnalysis For better margins why not check out $ASR and $CGG?
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@FundamentalAnalysis @mountains_of_glory Thanks for those...... With Alacer $asr, there is a lot of reliance on the sulphide refractory ore being processed as the feasibility study shows. (Oxide easy to mine ore is running short) Processing of the ore using POX is actually a complex process, I've been following $pog.l who are doing a similar thing to $ASR. Another russian major who is using a similar process but initially bodged a few things up, i know $pog.l was learning from their mistakes to ensure everything operates on time and under budget as expected...but I think there is definite risk in regards to the complexity involved. I don't know management team at alacer well so couldn't assess if they can pull it off.. Alacer as you know are spending a lot of money to do this....so balance sheet will become more stretched. Its not a straightforward bet.but will do well if they can execute correctly. It's also a polymetallic deposit if i recall correctly, I would have assumed that makes it even more complex then what POG.L are doing now. Also they have used $1250 gold assumptions and only 5% discount rate not as conservative as I would like. In regards to $CGG I don't know much about it....but CNG having a large stake not sure if thats a good or bad thing, the EV is also a lot larger give the $1bn of debt or so, the assets they have appear to be quite large, and one is a large polymetalic deposit, but grades appear low...so can't tell how much NPV it will generate.
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@FundamentalAnalysis To cut out all the confusion.....the best way to assess a producer is just look into the future, so looking at individual AISC for a quarter is meaningless due to ramp ups etc...., you have to look at the past to see what they've done and their cost structures and use that along with changes they are making to assess what will happen in the not to distant future. Whatever conclusions you come up with as long as you can see as many facts is the best answer you have. But just to point out....in general most companies and that goes for gold majors, if you look at the reserves section of the balance sheet, there is negative reserves, that means cumulatively over time the company has been a net destroyer of capital (impairments have also written off assets to adjust to lower price levels)....how many times would they have said cutting costs blah blah.....most of what they say doesn't deliver the results otherwise we wouldn't have negative reserves for most of these companies. I own $TGZ but I am fully aware....the biggest driver is the gold price, they can't do much else unfortunately....and I see the same with $KDX and probably most other companies out there. The only exceptions in the producer/developer space are the high margin companies that ramp up production which is also high margin....only they can buck the trend in a low/decreasing gold price environment. The reason to hold these companies is the MASSIVE upside once gold hits just $1400. $KDX will probably double. $tgz maybe even triple.....big gains are ahead....and in the meantime at least the companies have cash.
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from #kdx,
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@FundamentalAnalysis again back down.....this is getting ridiculous LOL......I am hopeful that destruction always leads to creation.....and I wouldn't rule out another 2016 H1 run up at some point, once all the speculators have been washed out and given up on the carnage that pursues...this isn't a pullback its straight up destruction like a consolidation or washout #mbgtrends.
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@fbx258 $rsg $tgz $pru $smf taking a belting .... Got some more orders for Sarama awaiting them to get filled. Hoping it retests 15c CAD
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from #swa,
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@soulMiner Grandich's gold and copper stocks are $NSU and $TGZ
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from #index,
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@FundamentalAnalysis Just for those enticed by $AKG this is once again another example of a marginal producer. Pit shells designed at $2000 gold, reserves at $1300 gold. Lack of free cash flow (just checked the statements) despite AISC of around $950. There is 7moz of gold across Measured and Indicated, and that includes almost 5moz in reserves. So lots of gold in ghana.... BUT these are marginal reserves....so be careful. Big upside if gold prices go higher....but with GDXJ and should gold prices go down.....expect continued trouble....just a pre-warning for those wanting to buy up different west african producers most are in a similar boat with these Free cash flow issues so no benefit in diversifying across many companies. $AKG is more marginal then $TGZ from what I can see....$AKG needs $1300-$1350 GOLD.
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from #mbgtrends,