Valuation Metrics of Canadian Gold and Silver Miners

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December 29, 2011 - 7:17pm

#122

Gwyde

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The demise of the gold shorters

The demise of the gold shorters

Sentiments on stock markets turned positive again for on this last but one trading day of 2011. Both sides of the Atlantic, stock markets are up with on Wall Street the S&P closing with a 1.07% gain.

The shorters' attack of precious metals resumed unabated this morning, with a new "post August" low (near $1525) set on gold on the LME. Silver was pushed below $27 and on the currency front the euro posted a 2011 low. The demise of shorters is however imminent: gold is still down 0.7% on the day, closing at $1545.5, but up $20 off the lows. Silver actually staved off the shorters' attack and managed to gain 2.4% on the day, closing at $27.77. Likewise the euro is up 1 ct from its low and fractionally over the trading session.

Seems the mining investors felt the shorters were running out of ammo. We have gains outnumbering losses 4:1 on our GMP list. Instead of factoring in lower future gold prices, mining investors are increasingly aware gold shorters have overplayed their hand lately.
After setting a new low yesterday, our GMP gold miners index is up 2.11% effectively counter trending the metal. The silver miners index is up 2.25%, in line with the metal recovery. The equal weight index is up 2.03%: the recovery is among miners, juniors and explorers.

We have three double digit gains offset by 1 double digit loss today.
The lucky ones are following pennies:

Crazy Horse Resources Inc.
Typhoon Exploration Inc.
Laurion Mineral Exploration

Arian Silver Corporation was to be avoided today, after its counter-trend gain yesterday.

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December 30, 2011 - 6:36pm

#123

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2011 fading out

European stock markets edged higher today after a weak start. London closed by lunch time and Frankfurt called it a day at 2 pm. Only the Euronext markets went on trading till the regular 5:30 pm. Wall Street felt uninspired and stock markets weakened on tiny volumes. The S&P closed down 0.43%. 2011 is fading out.

Precious metals continued their recovery but are quoting well off the highs of the day by 5 pm, responding to the poor stock market sentiment.

Gold is up over $20 or 1.4% closing at $1566.4. Silver is up less than a dime or 0.3% closing at 27.86. The platinum group metals rally more vigorously with a near 4% gain for the heavily beaten down palladium.

Among miners, gains are again outnumbering losses by over 4:1 today. Yet the percentage gains are less impressive. The gold miners index is up 1.09%, the silver miners index edges up 2.04% and the equal weight index firms by 1.54%.

We have five double digit gains against 2 double digit losses.

Gowest Amalgamated Resources Ltd.
Harte Gold Corp.
Treasury Metals Inc.
Orko Silver Corp.
Laurion Mineral Exploration

are the lucky ones.

Penny stocks:

Soho Resources Corp.
Galantas Gold Corporation

are today's laggards.

The Canadian miners list has index values updated till year end and the relative valuation blogpage 'gold miners pulse' is getting its last 2011 update.

Season's greetings and a prosperous 2012

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January 3, 2012 - 7:04pm Response to: The demise of the gold shorters

#124

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Stellar start

Best wishes for a prosperous 2012.
We have a stellar start of 2012: both sides of the Atlantic general stock markets are higher since we closed 2011. Many European markets were open yesterday and today's gains may not compare favorably to those on Wall Street, but they're extending yesterday's winning streak. On Wall Street we have the S&P firming 1.55%.

Precious metals make their re-entry through the main gate, confirming the recovery we witnessed on the last 2011 trading day. Gold rallies 2.4% to $1603.6 while silver soars 6.6% to $29.71 after being beaten down so heavily in thin trading after Xmas.

Among miners we have gains outnumbering losses 6:1 on the GMP list. The (cap-weighted) gold miners index rallies 4%. The silver miners index is up 5.1% (still lagging the stellar start silver made in 2012. The equal weight index advances 3.93%. A few juniors disappoint today and "Vae victis": we face three 'counter-trend' double digit declines, against a more plausible 11 double digit gains.
The impressive gains are for:

Soho Resources Corp.
Eco Oro Minerals Ltd.
Avino Silver & Gold Mines Ltd.
Esperanza Silver Corporation
Arian Silver Corporation
Mountain Boy Minerals Ltd.
Eastmain Resources Inc.
Golden Minerals Company
Minco Silver Corporation
Hecla Silver
NGEx Resources Inc

Quite a few silver miners, with Hecla even a senior producer among those.
The 3 unlucky laggards are penny stocks with a questionable track record:

Lincoln Mining Corporation
Laurion Mineral Exploration
AM Gold Inc.

Note that Yahoo posts an erroneous closing quote for NGEx Resources Inc: the stock is up 10% rather than down 26%.

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January 5, 2012 - 6:57pm

#125

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Not the daily update

The daily updates on the precious metals and miners on this thread, the maintenance work I'm devoting to the miners spreadsheet and to the 'gold miner pulse' blog-page have been crowding out many other activities lately. So I will need to trim down on my posting frequency. Yesterday wasn't a thrilling day and nor was today, though gold hesitantly continues its slow recovery and gains tend to outnumber losses among miners.

The 'gold miner pulse' page is trimmed down to four graphs with less comment and no historic 2011 overview any longer. Before dropping all information, I upgraded the material, added some data on the 2011 performance and the notes useful to understand about the (gold-miner-pulse list based) miners indices.

You can find this all in the blogpost: Miners' performance relative to precious metals

Large cap miners continue to be cheaply valued relative to gold. Silver miners have started their recovery relatively to silver which was beaten down much more late 2011. And juniors: well we've seen some nice upside moves lately, which don't however compensate for the poor performance during most of 2011.

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January 7, 2012 - 10:00am

#126

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Miner spreadsheet updated

The miners spreadsheet has been updated using the closing quotes on Jan 06 and the miner fundamental and valuation characteristics on that date.

The 'gold miner pulse' blog-page includes the index date and miner performance disparity graph and the Miners' News page contains the detailed performance graphs (the 5 quintiles) as of Jan 06, 2012.

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January 9, 2012 - 7:04pm

#127

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Miners keep up

Stock markets were more or less flat today, with the S&P gaining 0.23%.
Precious metals were mixed, with gold down $5.5 to $1611, but silver recovering half of Friday's slide to $29.05, up 1.1%.

Miners are upholding well. Losses outnumber gains by a tiny 8:7 margin, but the gold miners index is up 0.26% and the silver miners index is up 0.25% likewise. The equal weight index gains 0.48% as we have some nice gains among explorers:
Double digit gains for:

TVI Pacific Inc.
Laurion Mineral Exploration
Soho Resources Corp.

... while also Rye Patch recovers well after a pull back (+9.26%). Another remarkable gain (8.5%) for Pretivm. The stock is rewarded as it promotes from the pinkies to the NYSE main listing:

http://www.pretivm.com/News/2011news...0/default.aspx

Pretivm was my best pick last year; well, one of the very few good picks .

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January 10, 2012 - 6:07pm

#128

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Slightly disappointed

Slightly disappointed

Both European stock markets and precious metals on the LME were rallying today. Unfortunately during the Nymex session precious metals pulled back, with gold quoting $1631.7 by 4:20 pm (still up 1.3%) and silver at $29.91 (back below $30 but still up 3%).

Likewise the miners rally got lead in its wings. We still have gains outnumbering losses 8:3. The gold miners index is up a meager 1.1%, not quite keeping up with the yellow metal. The silver miners index does better with a 2% gain, but still lags the metal. The equal weight index is up 1.5%.

We have (only) two double digit gains, offset by one dd loss.

Golden Minerals Company and SilverCrest Mines Inc. are the lucky ones.
While Golden Minerals needed doing something about its poor track record, Silvercrest continues rallying.

Nanocap Laurion was to be avoided today.

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January 11, 2012 - 7:12pm

#129

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Hecla wrecks havoc

With broad stock markets essentially flat (the S&P is up a marginal 0.03%) one could expect miners to respond to metal price variation. Gold is up over $11 or 0.7% to $1643 and silver is a modest 0.3% (off 1% of the day high though). Yet we have losses slightly outnumbering gains (by 7:6). The gold miners index squeezes out a 0.23% gain (lagging the metal) but the silver miners index sheds almost 1%, leaving the equal weight index on the fence with a small (0.37%) loss.

Hecla wrecks havoc with a 21% decline (but closing well off the day lows) after having to close down its Lucky Friday mine because of security reasons. The 2012 output expectation was therefore lowered 25% in volume. We did have some four double digit gains among the penny stocks on our GMP list (mostly mending their poor track records).

Nevertheless, the updated performance disparity graph on the gold-miner-pulse page shows we still have three laggards down over 70% since start of observations.

Intraday AEM plunged 3% (with traders remembering similar mining hazard at their Goldex mine) but the loss was mitigated to slightly over 1% (TSX quote).

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January 13, 2012 - 6:40pm

#130

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European sovereign debt downgrades

European sovereign debt downgrades

European sovereign debt downgrades turn sentiment sour today. The first full trading week started off upbeat on Asian markets and European markets joined in with modest gains in the morning. Wall Street opening in the red turned around sentiment on European markets and rumours on Euro countries sovereign downgrades (confirmed later) finished the job also on Wall Street. The S&P is down 0.49% today.

... and precious metals are on the losing side, though we're off the lows by 4:30 pm and the PM weakening is due mainly to dollar strengthening. Gold is down 0.7% to $1639 and silver is down 1.8% to $29.75.

Among miners we have losses outnumbering gains by nearly 3:1. The gold miners index is off 0.85%, the silver miners index is off 1% and the equal weight index contains the loss to 0.7%.

We did have two counter-trend double digit gains, offset by equally two dd losses. Temex Resources Corp. and Soho Resources Corp. are at the winning side, while TVI Pacific Inc. and Alexandria Minerals Corporation made a slide. All of them are penny stocks.

It's often more illustrative to check which miners are the consistent winners. It only takes last three trading days to narrow down to just three miners or explorers: Golden Minerals Company, Seabridge Gold Inc. and US Gold Corporation have been the winning plays.

The planned merger of US Gold Corporation (UXG) with Minera Andes raises expectations and Rob McEwen inspires trust in a fruitful outcome.
Seabridge came with solid drilling results & resource increases. Plans for KSM going forward also help the explorer out of the slump.
Golden Minerals came with operational improvements at its Velardena mining site in Mexico. The merger with Ecu silver ultimately seems digested and the company has turned a corner.

Not surprisingly, the three of them have been lousy investments in the latter half of 2011.

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January 17, 2012 - 7:00pm

#131

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Quite disgusting

Asian stock markets rallied with Europe following suite. Wall Street started the day in good spirits with the S&P breaking 1300. After noon momentum was lost with gains shrinking towards the close. The S&P is up 0.36% on the session.

Pretty much the same profile for precious metals, with a 2012 high in early trading on the LME. Towards the Nymex close gold is well of the high of the day quoting $1652 by 5 pm still up 0.6%; silver holds on to a 0.4% gain (off 2% of the day high) at $30.09.

A quite disgusting reaction among miners with losses outnumbering gains 7:4 on our GMP list. The gold miners index sheds an impressive 4% today, while the GMP silver miners index holds up better with a 0.7% loss, comparable to the loss of the equal weight index.

Kinross spoils the broth with a 21% loss on TSX (slightly worse than on US markets) after a disappointing construction delay for its Tasiast mine and a 19% cost hike for 2012. Most majors are slide along in the downdraft, with another 5% loss for the heavily beaten up AEM.

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January 18, 2012 - 7:14pm Response to: Quite disgusting

#132

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Still groggy

Stock markets are more determined in their progress today. The S&P is up 1.11% and Nasdaq adds 1.53%.

Precious metals hesitated between loss and gain today, but finally are higher. Gold is up $7 or 0.4% to $1659.1, while silver adds 1.6% to $30.56.

On the GMP list we have gains outnumbering losses 7:4 (about the inverse fraction compared to yesterday).
The gold miners index is still groggy after its slide and makes a meager 0.23% progress. Little more enthusiam among silver miners, where the index is up 0.73% (yet still lagging the metal). The equal weight index holds the middle with a 0.48% advance. Two pennies gain double digits while one is at the losing end.

Apart from UXG, our 'consistent winners' saw an end to their winning streak. Tomorrow shareholders of US gold and Minera Andes vote on the proposed merger. Both stocks have been rallying in anticipation.

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January 19, 2012 - 5:59pm

#133

Gwyde

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Turning proverbial

Today we had general stock markets doing relatively well (European and Asian markets even better) with the S&P up half a percent.

Among precious metals we notice a marginal decline (-0.1%) for gold to $1657.3, while silver is up 0.3% to $30.64 by 4:30 pm. Yet among the Canadian miners of our GMP list, we see losses outnumbering gains 5:2. Gold mining shares underperforming bullion is turning proverbial. The gold miners index is down 1.76% and even the silver miners index counter-trends both the metal and the general market shedding 1.08%. Juniors seemed somewhat sheltered with only 0.54% loss for the equal weight index. We did have four penny stocks up double digits against only one down. Decent drilling results and some pumping can do a lot for many of these beaten down explorers. Many are called but few are chosen, unfortunately.

The 'gold miner pulse' blog-page includes a refreshed HUI/gold and SIL/Silver performance graph as well as the index data and miner performance disparity graphs. With yesterday's closing data the HUI/gold was at its 0.31 support level. Today we're down to 0.303. It looks like HUI/Gold is going to break below 0.30 any day now. The "short the miners - long the metal" hedge-mantra is far from dead.

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January 20, 2012 - 7:11pm

#134

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Shall we call it a bottom?

Stock markets were mixed across the globe today. On Asian markets yesterday's Wall Street rally was inspiring and markets were in good spirits. Europe ended the week with some profit taking, though losses were fractional. Wall Street started likewise, but rallied towards break even before the close. The S&P is up an insignificant 0.07%.

Precious metals were capricious, with both gold and silver losing in Asian trading but reverting course after the LME pm fix to continue rallying on Nymex/NY globex. By 5 pm gold is up 0.6% to $1667. Yet silver rallied up 4.8% during the session quoting $32.13.

On our GMP list, gains outnumber losses by 2:1 - not quite convincing given the PM rally. The gold miners index is up a modest 0.34%. Not surprisingly the silver miners index rallies 1.8% - still lagging the silver surprise leap. The equal weight index edges up a decent 1.35%. We have two double digit gains offset by two dd losses. Arian silver was among the winners after a disappointing slide over most of 2011.

The HUI is still fractionally lower (non-Canadian majors did less well today). This makes the HUI/gold ratio touch down on 0.30. Quite a few gold mining majors blew it early this year. Kinross has been the main victim, but NEM didn't do well either and AEM continues to slump. Majors have a hard time turning the corner... but shall we call it a bottom?

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January 21, 2012 - 2:15am

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It should be a bottom zone , G

If 495 - 500 doesnt hold support here on the HUI....where else should it be.

The wave structure looks like a good pullback, and a set up for the next run to test the Moving averages around 550....which could spell some trouble there for the index....IF it completes an ABC wave...... it could reverse down badly from there to retarget the lowest bottoms and make newer lows to target 440 .

440 could be the HUI summer bottoms for 2012. but for now...the next wave should go up to 550 zone. Maybe the miners can show some life soon and start the move.

January 23, 2012 - 6:41pm

#136

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Juniors in a sweet spot

Broad stock markets rose modestly in Asia and in Europe. Wall Street had a weak moment before lunch time and just about recovered to break even. The S&P is up merely 0.05%.

A little more enthusiasm among the precious metals with gold up 0.6% to $1677 and silver up 0.7% to $32.35 (by 5 pm).
Miners feel relieved and we have gains outnumbering losses 2:1 today. The gold miners index is up 1.24%, yet the silver miners index is down 0.07% since Pan American Silver sheds over 10% after its bid on Minefinders. The equal weight index is up 0.85%. Juniors are in a sweet spot as we have 6 double digit gains on the GMP list:

Minefinders
Arian Silver Corporation
Edgewater Exploration Ltd.
Mountain Boy Minerals Ltd.
Harte Gold Corp.
Fortuna Silver Mines Inc.

Offset only by the double digit loss for PAAS. Minefinders is not covered by GMP, but I have been keeping it on the quote list for about a year now. It is not part of the GMP indices calculated. Fortuna Silver Mines Inc is the other long term winner in today's lucky list. Arian Silver was left shattered last year but is making a remarkable recovery. The others are dogs among the juniors.
On BOG's penny stock list there are several more double digit gains. Guess it's party time over there...

The HUI makes the first significant progress since January 3. We avoid plunging below 0.30 on the HUI/Gold ratio.

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January 23, 2012 - 8:31pm

#137

BagOfGold

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Gwyde...

Yes...The party has just begun!...However...it's a long crawl up from the bottom...as some of these pennies...have lost up to 75% of their value!...But one man's loss...is/will be another man's gain...& the story continues!!!...

Bag Of Gold

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https://www.kitcomm.com/showthread.php?t=68585

January 24, 2012 - 6:21pm

#138

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False start

General stock markets were weakening today. Most European markets have been posting fractional losses. On Wall Street another lackluster trading day with the S&P nearly flat (-0.10%).

Precious metals couldn't confirm with gold down 0.7% to $1665.3 and silver down 1% to $32.03. Miners are paying the price. We have losses outnumbering gains 7:2 on our GMP list. The gold miners index loses 1.76%, the silver miners index is down another 1.53%. The equal weight index limits the loss to 1.15%. We had four counter-trend penny stocks up double digits, while two of yesterday's lucky saw their gains vaporize.

The HUI index is down 2.17% again leveraging down the loss of gold. Inevitably the HUI/Gold ratio broke its 0.30 support today. I refreshed the gold-miner-pulse page with updated graphs: http://gwyde.blogspot.com/p/gold-miner-pulse.html

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January 25, 2012 - 6:24pm

#139

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Step back to jump better

The FED confirming the intention to keep interest rates low for some years to come, spurred a rally on Wall Street. The S&P is up 0.87%. The announcement came to late to save European markets from a lackluster trading session with fractional losses or a break even at best.

Yet the most spectacular impact was felt among precious metals. Gold and silver had been declining throughout the morning but made a giant leap. Gold is quoting $1710, up 2.8% at 4:50 pm, while silver surges 3.8% to $33.25. "Reculer pour mieux sauter" (Step back to jump better).
The surprise move had a spectacular impact on PM miners, with gains outnumbering losses 6:1 on our GMP list. The gold miners index is up 5.91%, while the silver miners index rallies 6.34%. The equal weight index follows track with a 3.87% rise. Gold mining majors badly needed a recovery rally after the HUI/Gold ratio dropped fractionally below 0.30 yesterday. With the HUI up 6.57% today, the ratio is back above 0.31. This is the 'support level' of the repeated swoons we've witnessed since August '11. We have five double digit gains on our GMP list, with some well reputed names on the shortlist:

Great Basin Gold Ltd.
Tahoe Resources Inc.
Sabina Gold & Silver Corporation
US Gold Corporation
International Tower Hill Mines Ltd.

Three penny stocks blew it, losing double digits today:

Soho Resources Corp.
TVI Pacific Inc.
Typhoon Exploration Inc.

Too bad to miss a relief rally...

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January 26, 2012 - 6:10pm

#140

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The more things change...

European stock markets edged higher in the slipstream of yesterday’s Wall Street rally. In the US, the debt ceiling is again coming close, shifting focus to American sovereign debt problems. The S&P lost 0.57% at the closing bell.

Precious metals are not affected in the least, with gold continuing its rise on a more sustainable pace. The yellow metal quotes $1720.5 by 4:40 pm, up 0.6%. Silver is at $33.47, up 0.7%.
We have gains outnumbering losses 3:1 on our GMP list. The gold miners index gains 1.51%, yet the silver miners index lags with a 0.27% rise. There is some strength among juniors with the equal weight index leading with a 1.75% gain. We had 5 double digit gains today.

Esperanza Silver Corporation
AM Gold Inc.
Barkerville Gold Mines Ltd.
Pacific Rim Mining Corp.
Soho Resources Corp.

A remarkable absent phenomenon is the 'January gold bullion slump' this year. After a perilous slide in the 'seasonally strong' autumn, there is no need for reallocation away from precious metals. The more things change... the more they'll never be the same again.

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January 27, 2012 - 5:53pm

#141

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But the winner is...

Stock markets slump towards the close with poor performance on both shores of the Atlantic. More sovereign debt downgrades (http://finance.yahoo.com/news/fitch-cuts-italy-spain-other-182532530.html) turned sour sentiment. The USD doesn't however get much support by more EU-debt downgrades. It doesn't even seem to affect the ongoing euro recovery.

But ultimately the winner is... gold. Precious metals are up again, with gold firming 1% to $1738.4 by 4:30 pm and silver up 1.3% to $33.91. Gold is up over 10% YTD now, which is about its total 2011 gain... Silver is up more than 21% YTD, which covers almost twice its loss over 2011. On the GMP list, we have gains outnumbering losses 2:1 (not quite as convincing as yesterday). The gold miners index does gain 1.77% again, while the silver miners index gains 2.47% (after lagging yesterday). The equal weight index is up a more modest 1.22%. We have Premier Gold Mines Ltd. up double digits today, against TVI Pacific Inc. down 12.5%.

Over the WE, I will be updating the Gold Miners valuation list and the GMP blogpage with fresh graphs.

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