A Miner Key - Turd's Latest Thinking on Gold and Silver Miners

I've received quite a few requests lately for some technical analysis of some of our favorite gold and silver miners. Fortunately, today, I finally had some time to actually do the work necessary to write one. Here you go!

Of course, there's a lot more to evaluating the miners than simply Technical Analysis (TA). Production costs, provable reserves and hedging practices are all fundamental measurements for mining companies and anyone willing to invest considerable sums of money into these shares must be willing to do this additional homework. For those of you too bored or too lazy to go to all of this trouble, I present the charts below.

Before we can look at any individual equity, we must first examine the chart of the HUI (the Amex "Gold Bugs" index). If you want to look closer at the index, here's a link from your "friends" at Kitco:

http://www.kitco.com/pop_windows/stocks/hui.html

As you can see on the chart below, the HUI has been in a roughly 100-point range for the past 18 months. Though the index is just 15 stocks, it can be useful in ascertaining the general trend of the gold and silver miners. Being aware of this trend will help you to assess the relative strength or weakness of any individual issue. For example, individual equities that are out-performing the HUI should catch your attention while those that are under-performing should, perhaps, be avoided.

paper_2-8hui.jpg

So, where do we start? I've got 14, different stocks to show you and the question is, what is a logical way to present them? Let's try this: The stocks can be loosely grouped into three categories:

  1. Those that are out-performing the paper metal and/or the HUI.
  2. Those that trade as if they are simply a proxy for paper metal.
  3. Those that currently stink on ice.

With that in mind, here are the gold and silver miners that currently look the best. They are presented in alphabetical order so as not to show individual preference. (Remember, I present this information as a service. You are the only one who is ultimately responsible for deciding whether or not to buy.) Since these are the best-looking, most attractive gold and silver miner stocks, let's call this group:

Rachel McAdams

First up, here is Yamana Gold Inc. (AUY). Like many of the miners, AUY peaked in 2008 and then fell dramatically. Well, this baby has done nothing but trend higher ever since and sits today just below the 2008, all-time high.

paper_2-8auy.jpg

Next up is Coeur d'Alene Mines Corporation (CDE). Below is a weekly chart. Note that CDE fell with paper silver back in May but has since recovered quite well. In fact, it made a higher low back in December when paper silver was double-bottoming. Very interesting.

paper_2-8cde.jpg

Below is Endeavour Silver Corporation (EXK). Longtime Turdites will recall that this is my personal favorite. I began buying it several years ago when it was around $4/share and the company announced that they had retired nearly all of their debt. You can tell by this weekly chart that it's still a compelling story.

paper_2-8exk.jpg

Lastly, I must show a bit of bias here. Randgold Resources Ltd. (GOLD) looks so terrific that I felt I should give you two charts, the weekly and the monthly, so that you can really appreciate just how well its been doing.

paper_2-8goldm.jpgpaper_2-8goldw.jpg

OK, this next set of silver and gold miner stocks merit your consideration, as well. However, they don't belong in the Rachel McAdams group. These stocks are more average. They have tended to simply follow along with the price of paper metal. Because they are not overly hot but simply OK, we'll call them:

Sandra Bullock

First up is Barrick Gold Corporation (ABX). Even though Barrick supposedly covered most of their hedge book a couple of years ago, the price of it's stock is still below the highs of 2008. That said, it has recovered nicely from the lows of 2008 and has hung in there quite well through the late 2011 gold beatdown.

paper_2-8abx.jpg

I'm including Eldorado Gold Corporation (EGO) in this group but it could just as easily have fallen in with the under-performers. However, the chart since September looks a lot like the chart of paper gold so I decided to fit it in here.

paper_2-8ego.jpg

Below is a chart of Goldcorp Inc. (GG). Yes, it really is Goldcorp and not simply a reprint of ABX. Again, if you are looking for an equity proxy for paper gold, well...here you go:

paper_2-8gg.jpg

And finally, speaking of proxies, here is Silver Wheaton (SLW). Without question, the closest thing I could find to an individual stock that trades almost exactly with the metal the company mines/produces. Note that a share of SLW is even priced close to an ounce of silver. In fact, it's so close, I thought I'd accidentally printed a chart of iShares Trust Silver ETF (SLV) instead of SLW!

paper_2-8slw.jpg

And, finally, here are your dogs. These charts are so ugly and nasty that I would avoid them until further notice. Let's call this group:

Rosie O'Donnell

First up is the one-time favorite of chief CNBS clown and loudmouth, Jim Cramer: Agnico-Eagle Mines Limited (AEM). He was all over this baby between 60 and 80. I wonder how he feels about AEM now? Anyway, this one is pretty nasty:

paper_2-8aem.jpg

I was somewhat reluctant to put Great Panther Silver Limited (GPL) in this group but I did anyway. It's such a small company that it is subject to rather wild swings in price. If GPL can move back above $3, I'd put it back into the "Sandra Bullock" category. Until then, GPL stays with Rosie.

paper_2-8gpl.jpg

This next one is just freaking brutal -- Hecla Mining Company (HL). I've seen some mentions of HL lately on the boards so I know that some of you are still holding it. I don't mean to rub salt in the wound but...

paper_2-8hl.jpg

NovaGold Resources Inc. (NG) is another stinker that looked like it was going to have a great 2011 and then it just died. If NG can get back above $12, I'll start feeling better about it. Until then, be wary of another drop toward $6.

paper_2-8ng.jpg

Like NovaGold, Silvercorp Metals Inc. (SVM) looked poised for a stellar 2011. Instead, rumors and innuendo beat the daylights out of SVM and it is only just now beginning to recover. If it can stay above $8 for a while, it might begin to trend higher. Not sure it's worth the gamble, though.

paper_2-8svm.jpg

And, lastly, here's Santa's baby, Tanzanian Royalty Exploration Corporation (TRX). It just got the tar beat out of it in the second half of 2011 as it dropped from $7 all the way down to under $2. Yikes! You're simply placing a bet with Santa if you own this thing (which I do). Frankly, the main reason to own TRX, however, is to secure an invite to the annual shareholders meeting. I haven't had a chance to attend yet but one of these years I will. It always sounds like a lot of fun.

paper_2-8trx.jpg

OK, that's it. Those are the main gold and silver miner stocks we've followed here, dating back to the old blogspot days. I invite everyone to include their own analysis in the comments section of this post. Additionally, if there are a few gold and silver miner companies that I didn't mention but about which you'd like to include some information, please feel free to add you own charts.

TF

141 Comments

Dr G's picture

first?

Firsty? Okay, here is my problem with the miners: I'm too stupid to trade them. I think that there will be some that will go crazy in a consolidation period. That is, some small guys will make huge scores and get purchased by bigger guys and the stock will go ballistic. I don't doubt that.

I just don't know which guys those are, so I stay away. I think that some among us will make a literal fortune off miners. But I don't think everybody will. I think only a select few miners will increase exponentially in price. Rick Rule agrees with that (or shall I say that I guess I agree with him). Once again, I have more faith in stacking silver than I do in being able to pick the correct miners. So I stay away.

My other issue, is that miners are still a business, so their profits and stock price can be affected by a multitude of things that are unrelated to the underlying metals. Somebody on their board of directors can be a goon, and the price goes down. There can be a rumor that a guy is a goon, and the price goes down (buying opportunity?). They can have mines closed due to MSHA. They can have mines closed due to death. They can severely under perform in retrieving product. Any and all of that can happen while silver and gold are going sky high.

I stay away because I don't know enough to do well. I stick with stacking. I can appreciate the miners for what they are, but they aren't for me. Maybe I'm maturing because I can now say that without flinching. In former years I thought it was all for me and I could master it all.

Disclosure: bought some calls on AUY last year and got severly burned. Not AUYs fault, my fault for being an idiot.

lairdwd's picture

I've lost faith in the miners

Until they show commitment to defend shareholder value from the vicious long/short bullion/miner pair trade, I will avoid. 

Dr G's picture

One other thing: so Rangold

One other thing: so Rangold looks great. I don't deny it. It's trading in the low 100s. What are the odds it goes to 200? What about 300? Will it ever print that?

What are the odds that physical silver goes to 50? What about 100? Seems much more likely to me.

I know these are two different means for two different ends for many Turdites (I don't think anybody is holding miners to save them when the world ends, but some are probably holding physical metals for just that purpose).

I guess that whether or not you play the miners depends on your endgame. Probably some good fiat hidden somewhere in there.

(TRX is a dog because it hasn't actually pulled anything out of the ground yet, right? It's just a concept)

Be Prepared's picture

4th - My Turning

A little play on the 4th Turning concept.... but the edge of the cliff feels eerily closer these days....

Our Government has now decided that drones above our skies is a good thing....

Let me get this $hit straight...

  • The TSA gets to feel me up for refusing to be gamma rayed
  • NDAA has made our military a police force against it's own citizens
  • Government is considering granting itself the authority to strip citizens of their citizenship and make them non-persons.
  • Drones will be flying above us tracking our every move.
  • The Carnivore System, in league with our Telcos, now grabs every communication for "processing."
  • The TSA will now be conducted ID checks at random government buildings, i.e. Social Security Bldg.
  • The National ID acts has yet to be repealed and our fed government is still pushing for it.
  • The Prez and Government have or will have an internet kill switch.
  • There is an active "Report on Your Neighbor" campaign being run by Homeland Security.
  • The definition of Terrorist has been changed to mean anyone who thinks for themselves is now included as one.
  • The Prez, without Senator approval, signed a treaty worse than SOPA & PIPA.

This list only catches a small picture and what is being done to us.

When you ask whether this is worse than the last 40 years.... the answer is "Yes!"

If you ask if this going to get to continue to become a hell effing storm.... the answer is "Yes!"

Don't be lulled by your everyday life into doing nothing, but sieze this precious time to learn, plan and prepare!

RaRaRasputin's picture

Thanks Turd

I've 6 of the 12 that you highlighted so not too shabby although one of them is Tanzanian which I only recently bought and is green on my screen :) and Silvercorp which is still deeply underwater :(

7 of my 18 are now in positive territory so much better than it was a few months ago when they were bleeding all over the place.

Gonna hang on in there and see how these play out

RaRa

tobydaniel's picture

Silver Wheaton

Silver Wheaton had been the best investment of my life. Though I did ride it down from 17 to 2.50, I held on and purchased a crap load at 3.02 and held it until 42.60. Bought some shiny things with that money but like many on this board, I lost it all in a boating accident. Pretty sad about that;(.

I want to thank you Turd for the education that I am getting off this site. Its a blessing for sure and Im able to travel the world and help others who have nothing with what I make now. God Bless you buddy. I'm actually off to India on Saturday to work in the slums. Really excited.

Toby

kliguy38's picture

Miners

they are in fact forming a massive bull pennant on the HUI......this on (not on the daily) hint hint....... there will be a move over the next one year that will stun most of you........so go ahead and post your bacon but when this move completes most of you will not be on the real pig train......and its the miners this year

TheGoodDoctor's picture

Thanks Turd. I was looking

Thanks Turd. I was looking forward to an update on the stocks for awhile.

Strongsidejedi's picture

Turd's Brother Niall is a Harvard Professor

http://www.bloomberg.com/video/85770210/

Greek default "is only a matter of time".

Niall Ferguson talks on Bloomberg.

I didn't know the Turd had a brother at Harvard.

It makes me wonder if there are other Turd relatives at Yale or Princeton too.

jmmergott's picture

Turd: RE Santa's baby, TRX

I have the pleasure of doing IR work currently for Jim (santa) and Tanzanian Royalty Exploration.  If you (or anyone else)  would like information about what's going on with the company, please contact me at jmmergott@gmail.com

-Jonathan M Mergott

TheGoodDoctor's picture

Lots of turds go to Yale,

Lots of turds go to Yale, Harvard and Princeton. cheeky

PS Oops, see in the FEMA camps!

iceman321_2k2's picture

Stay Strong PM Investors...

Stay strong, cracks are appearing all the time in fiat-dollar-land.

http://wallstcheatsheet.com/stocks/should-investors-reconsider-cash-and-gold-as-safe-havens.html/

Dr G's picture

they are in fact forming a

they are in fact forming a massive bull pennant on the HUI......this on (not on the daily) hint hint....... there will be a move over the next one year that will stun most of you........so go ahead and post your bacon but when this move completes most of you will not be on the real pig train......and its the miners this year

​Riiiiight. Speaking of bacon, the HUI is a Pig second only to the The Piggy USD.

Hope everybody picks good miners. Miner roulette is what is should be called.

T's picture

upon further research ............

,,,,not  familiar enough, I had to go look at a picture of Rachel Mc Adams..... well, ok,  .... I'm not sure I could call her First Majestic  quality, or even up there with  Scorpio mining, or Kirkland Lake gold.....  I'm thinking there is a higher category still..... for stocks like these which have soared 400 %  and 500% for me....  maybe a classic beauty like  .... Hedy Lamarr..... 

But in any case.......plus ,I personally think Sandra Bullock is hotter than R    Mc A dams....but thats why   I own 45 miners..... its like a harem of  super vixens.... 

Heres the key to what Ive learned, and I've come to agree with  Dr G.....I'm not smart enough ,either, to know how to invest in them ....

and  I agree with  Lairdwd....also 'lost faith; in the miners....since we can clearly see  the kind of manipulation Andy H talks about....  the PTB are (so far) winning the battle to make miners a losing gamble. 

I agree with Turd, that AUY looks like  a good one, and AEM looks awful.....but the idea of buying ANY MINER  at the top zone or a 'breakout'  of the top  (think whipsaw fake out  suckers) is a  disasterous  strategy in this sector , IF you understand the manipulation game , the Only  'safe' way to buy the miners is to buy at the Lowest of low zones...... like Goldcorp at 40 and SLW at 26

Never buy the topside breakout.

Looking at AUY....I see the target buy zone now is  After we get a pullback to the 12 and 11 area....this is where the neckline is.... but its my strategy. everyone is entitled to  theirs.

If you go look at some photos of Hedy Lamarr, you will see she   is way more beautiful than Rachel Mc Adams....  I could have included   a young Sophia Loren, or even a young Racquel Welch.... 

The poster who bought Silver Wheaton at 3 and sold at 43 had the right idea. 

and I'm thinking Andy H has the right idea too. sad to say.....

stevecarolinep's picture

Sandy

Sandra Bullock average???? Naaaaah!

RobG's picture

ETFs

Another newbie/lurker :)   Would an ETF like GDXJ or GDX be better than trying to pick a particular miner?

HeNateMe's picture

I'm sorry but

I just gotta say that Bullock is no where near as hot as Rachel. Period.

HeNateMe

dropout's picture

@ Dr G

Ditto. I too stay away from the the unknown and remain with stacking the physical.

I agree that there will be a select few here, who guess right and become VERY wealthy on the miners.

One must remember that during the "Dirty Thirties" there was only one miner that did really well and that was 'Homestead'. Those that got in the ground floor did exceedingly well, while the vast majority kissed their money goodbye! 

No, I'll stay with the tried and true. A bird in the hand is worth two in the bush!  

¤'s picture

A research paper from the Fed about principle forgiveness....

 

Mass Refi Plan Would Hurt Morgage Bonds in Pensions

Feb 8, 2012 12:01 AM ETWed Feb 08 05:01:00 GMT 2012

Largest Bondholders

Mutual funds, pensions, insurers and real estate investment trusts are the biggest holders of government-backed mortgage bonds, known as agency bonds. Together they hold nearly $1.5 trillion, or more than 27 percent, of the $5.4 trillion total, according to Inside Mortgage Finance, a trade publication based in Bethesda, Maryland.

The Federal Reserve energized the mass-refi cause on Jan. 4 when Chairman Ben S. Bernanke noted that millions of borrowers have failed to take advantage of record-low interest rates. In a research paper, his staff said that policy “experiments”including principal forgiveness or a government-triggered mass refinancing “might be socially beneficial,” even if they come at a cost to taxpayers and bondholders....

For the rest of the story>>> http://www.tfmetalsreport.com/comment/126582#comment-126582

¤'s picture

Lol

I just started reading the thread and saw the stocks are ranked by how hot they are with a corresponding "hottie" or not so much.

Pretty friggin' funny, big yellow-hatted dudecheeky

I needed a laugh and I found one cool

MonkeySmoke's picture

Thanks, Turd...

Been waiting a while for an update and you always provide great information. Glad to see that I am not alone in owning TRX. I spent most of the morning reading the 2011 annual report that was posted yesterday. I still believe in Santa and believe this company will become profitable and our shares will pay out in a big way. I bought in @$5.90 so I am seriously underwater--I don't lose if I don't sell and will be profitable when it turns around. If we, as a populace, make it 2014 Santa should be pulling big chunks of gold out of the ground. I am in for the long haul and will wait it out.

Hopefully, all of us that own shares in these companies will be celebrating later this year as they all catch a series bid and move to the positive.

HeNateMe's picture

The Defense Rests

¤'s picture

RobG

Welcome aboard!

I don't think you can go wrong with GDX or GDXJ as far as the basket of miners they hold and what exposure you have to most of the big names.

However, if you want to know more about a large group of individual miners and their investment potential and the company backgrounds then you can't go wrong by starting at Eric Originals miner thread.  The guy really knows his stuff and is a invaluable source of info. and helpfulness.    Good luck!

Try this link. It's from earlier today but I recommend checking the entire thread for lots of miner info and background and I know EO would say this himself....do your own due diligence.

http://www.tfmetalsreport.com/comment/126322#comment-126322

beach_bum's picture

I don't know...

maybe the categories should have been Rachael McAdams, Sarah Jessica Parker, and Rosie "Saddam" O'Donnell

Rachel-McAdams.jpgimages?q=tbn:ANd9GcRerGUvPQ9ZGgaN5CG8sKIcloser in age here.

sarah-jessica.jpg

images?q=tbn:ANd9GcT48wDJXIdbbd_PHl647UW

TheGoodDoctor's picture

SILVERCORP REPORTS REVENUE OF

SILVERCORP REPORTS REVENUE OF $61.9 MILLION AND OPERATING CASH FLOW OF $31.6 MILLION IN THE 3RD QUARTER OF FISCAL 2012

http://silvercorpmetals.com/_resources/news/nr_2012_02_08.pdf

That's some nice cash flow! Might want to reconsider there Turd!

FleetFeet's picture

El Dorado

Seems Turd's comments are based on charts only. (?)  In EGO's case, the price suffered the Nov/Dec overall beat-down, plus an added fall from its "arrangement" (Merger/Acquisition) with Goldfields.  If there really is any gold in the ground in Greece and Eastern Slobovia, and they are able to pull it out and polish it up, then EGO may come out all shiny  . . .  in time.  

Anyone know any more than that?  Yes, I have a vested interest . . .   

Green Lantern's picture

AUY

Bought it in January and rode it for a 15% profit at $17.50 at the top of October channel.   Resisted 18 level and back to 17.   Still strong at $16.00 above Dec trend line.   A nice long term buy at $16.00 terrific short term buy at $15.00 for a nice ride back to 18 level or better.   We're in a bull market that's heating up.   It may be overly optimistic to think the miners are going to fall back to December levels.   I won't turn down a 15% profit any day.   if i want 200% returns or more, I'm not playing AUY.   If I want nice consistent profits, AUY excellent!

Bought NGD at 10.00 sold 1/2 at 11.50 other 1/2 at 12.00.   Another great short term buy at the 10 level for humble profits. 

AUQ getting close to be a screaming buy.  

I'll do this all day, every day.  No TA skills to speak of.   Just pick a couple strong miners.  There is usually something to buy that is oversold.  You don't have to be a genius.  Eric'O has a pleathora of good picks in his forum if you don't know.   If you don't know, ask somebody on the forum.  Plenty of smart, helpful people in the forums.  Don't be ashamed to ask stupid questions.  The opportunities are too rich. 

Since Bernanke spoke, this is now the trend.   If you miss the sell, just hold on.  In this market, they are coming back in days.  The majors are nice dinner/bills/vacation /bullion money.    I think the basement prices are now a thing of the past. 

Way to go Turd!! Keep them coming.   In one month, put these charts back up.   People are gonna hit themselves in the head.  Why didn't I get some of that.   Better to be a fear buyer, than a fear watcher. 

tyberious's picture

Jim Willie

GOLD & SILVER READY TO SOAR

Check out the obvious reversal pattern on the Gold chart in full view. It has a 200-point potential rise, which would take the Gold price to 1950. All solutions discussed are bogus and founded in funny money output, new debt, toxic bond redemption, and cost-free recapitalization of banks. No more liberated gold bullion like from Libya via mercenary wars on the horizon. Its 144 metric gold tonnes proved useful to the London and Wall Street Boyz. Syria aint got no gold to release. When the 1750 defended flank is overrun, the rise in the Gold price will be rapid. It will capture global attention again, enough to dismiss once more the vacuous shill self-serving nitwit calls for Gold's demise.

Check out the obvious reversal pattern on the Silver chart in full view. It has a 7-point potential rise, which would take the Silver price to 42 per ounce. The large gap between 32 and 40 has been filled halfway, the next half to be filled in the following several weeks, possibly very quickly. When the 35 defended flank is overrun, the rise in the Silver price will be rapid, more rapid than Gold since the gap will offer little resistance. The rise will capture global attention again, enough to dismiss once more the vacuous shill self-serving nitwit calls for Silver's demise and relegation to an industrial metal.

http://news.goldseek.com/GoldenJackass/1328734800.php

Green Lantern's picture

re: Santa's baby, TRX

Jonathan,

Thanks for the invitation and for coming by and saying hello.  Good to know that industry is supporting this site with their readership and listening to the voice of Turd and many investors around the world that gather here to learn and share. 

FleetFeet's picture

Correction

In post above, I wrote "Goldfields" when the company being acquired is "European Goldfields," not the South African company.  And the actual countries are Greece, Turkey, and Romania.  I received the proxy ballot without knowing the "arrangement" was even under consideration; have been wondering why the price has wandered low.  I'm slightly underwater at this point, after being up until the last months of 2011.  

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