Again… the numbers are too low – AEM edition

Agnico reported Q1 EPS of 12c vs the street at 3c.  490.5 mln in revenue vs 481.  The street is at 4c and 491 mln in revenue for next quarter.  Where do you think these numbers are going to be with an average gold price for the quarter that is 70$ higher?  I’ll tell you… multiples of 4c and 525 million in revenue.  ALL OF THE NUMBERS ARE GOING HIGHER.  There is no place better to be than with constant rising analyst estimates.  This is the single best run company in the entire business.

For you Richmont holders – Stick to companies that are RUN BY MINERS

So the “throwing out” of Greg Chamandy is finally complete.  He bought his way into Richmont during 2009, proceeded to run the company into the ground and I think he is still the largest shareholder.  Now that the company is ACTUALLY RUN BY MINERS, one can see what happens.   It isn’t always JUST what is in the ground, but the people who extract it.  I saw this coming for awhile which gave me an edge in Richmont sub 3.  When companies are actually run by miners like Renaud Adams and Rene Marion, you get results.  Stick to companies that are run by miners.

I don’t know what this means entirely, but it could either be a continuation of things set in motion to change the management or it could have something to do with the rumored TAHO deal.  Anyways, his millions of shares floating out there kind of scare me.

 

I mean, seriously… this guy was CHAIRMAN OF THE BOARD OF A GOLD MINING COMPANY FOR 7 YEARS.

“Mr. Chamandy is the co-founder of Gildan Activewear Inc. He held the position of Chairman and Chief Executive Officer of Gildan from its inception in 1984, until retiring in 2004. In 2004, after creating the proper structure to replace himself, Mr. Chamandy retired from Gildan in order to pursue other interests. Mr. Chamandy subsequently became the Chairman and co-owner of Europe’s Best, North America’s largest selling brand of frozen fruit, which was sold to JM Smucker in 2008. Mr. Chamandy is currently also the Chairman of Oxbridge Group Inc., and the Chairman of Liquid Nutrition Inc., a Canadian smoothie and juice bar chain.

Mr. Chamandy has been a Director of Richmont Mines since May 2009, and was Chairman of the Board from December 2009 to January 1, 2016.”

Again… the analyst numbers are too low – Newmont edition

Newmont just reported.  Revenue of 2 billion… 7 percent above the street.  They also lowered 2016 cost guidance for 2016 from 900-960 to 880-940 AISC.  This is a solid quarter.  They also did 34c in EPS vs the street at 20c.  The 15c number is because of a loss on a sale in an equity stake.

Taking a shot in the EUO… short leash

I’m going to take a shot long on this one… 23ish mental stop.  Risk 50-75c to make 3$.  Anyone else see a Wolfe Wave here?

 

sceuo

Wow… AEM just fell 2$ in a straight line. Jittery much?

More Klondex

Klondex issued production numbers this morning and they ARE NOT GREAT.  They are just in-line… there are no upside surprises here like Richmont gave us.  Guess what?  The stock is outpacing the other miners today on monster volume.  Slightly Disappointing to in-line news and the stock is going higher.  This name is going much much higher.

 

sc-7

A VERY VERY important piece of news hit in the energy space that nobody noticed

http://www.ft.com/fastft/2016/04/19/crucial-coal-benchmark-deal-tops-expectations/

The spot prices for coal are too low and not the REAL price.  This is Australian Thermal, but you get the picture.

“One of the most important deals in the commodities industry has been signed with Japanese utilities agreeing to pay a significant premium over the market price to secure supplies of high-grade Australian coal.

Tohoku Electric Power and Glencore, one of the world’s biggest producers and traders of thermal coal, have settled their annual price negotiations at a price of $61.60 a tonne – more than $10 above the spot price and ahead of analyst expectations, writes Neil Hume, the FT’s Commodities Editor.

“This marks the largest premium to spot that we have on record (i.e. in at least 15 years),” said analysts at Macquarie.”

 

I have been pounding the table on CNXC for a couple of months.  It’s starting to go.  Every way that I model it from a fundamental standpoint, this LP is worth 20+.  With the bankruptcy of Peabody, coal has bottomed.

 

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Timmins Gold

Ever since Fully brought this to the table I have been trying to wrap my head around what is happening at the company.

They are high grading and harvesting San Francisco to keep the lights on thru 2016.  They have assets but can’t build them because they don’t have any money.  Their 1 producing asset, San Francisco is being put on care and maintenance at the end of 2016 unless gold is over 1300.

 

They are going to have a profitable 2016 based on the gutting of their San Francisco asset, but after that I don’t know what they are going to do.  If only for a year, these numbers look good considering the company is going to be trading at 3x EBITDA for 2016 with a bunch of gold at 2 other mines still in the ground.  If gold goes to 1300 and they keep San Francisco going, the company will be ok.  If not, this is bankruptcy in motion.

On the plus side, it appears that last year they threw out their founder (Much like Richmont did) and if the people they have in charge now know what they are doing, we could see a massive transformation a la Richmont with Renaud Adams.  This is one of the few TRUE GOLD CALL OPTIONS that is actually producing and not just gold in the ground.  This could be one of the biggest hits or a zero this year.  Maybe someone else can chime in here.

Also, Goldcorp is in their and those guys are not good.  Assets are more easily acquired in bankruptcy than out.

 

From their investor presentation.

 

  • Increase profitability of the mining operations at San Francisco
    • –  Adjust mine plan to maximize cash flow
    • –  2016 mine level EBITDA ~ US$25M at $1,080 gold, ~US$35M at $1,250 gold

CNXC – Consol (CNX’s) coal MLP – breaking out of consolidation

sc-5

I have been watching this like a hawk.  I’m buying today.

The talk of COTS and “anecdotes”

It’s easy for someone who comes to this site to think that EVERYONE IN THE WORLD IS BULLISH and that is the sentiment indicator… but I would argue that we are much more under the radar than that.

Look…

Goldman calling for gold 1000

Larry Edelson calling this week in his update for a drop in gold to sub 1200 at least

Savage calling for Gold to chop or down into its ICL

Armstrong holding out the possibility for a gold collapse to sub 1000

Trader Dan issuing a silver COT warning

vs.

A bunch of little guys running their own money and bouncing ideas off of each other at Goldtent and making a killing in miners

 

I’d argue that the MORE MAINSTREAM view is that gold is headed lower not higher… at least from my “anecdotal” perspective.  I’m prepared for both, but I’d hardly come to the conclusion that “the long lemmings are headed to slaughter.”

Every gold guy that I follow is bearish after this up move.  EVERY ONE.  Well, except Rambus and Spock… but I consider them Tenters.

 

I didn’t see this until today but Otto over at IKN is reporting that TAHO is close to buying Richmont… much like they did Lake Shore. He had the LSG call spot on, so this wouldn’t surprise me.

http://incakolanews.blogspot.com/2016/04/tahoe-resources-taho-thoto-close-to.html

Could explain the monster move we have been seeing.  If this happens, sell it and buy Klondex.

A couple names I am watching here… the Americans as I like to call them

A scenario is unfolding that I am keeping a close eye on here… if oil has bottomed and the Canadian Dollar strengthens, I think that the Richmonts and the Oceanagolds of the world are going to pass off leadership to the American miners who are mostly based in Nevada… this is mainly because their cost structures are going to get worse.  They have been enjoying extremely low Loonie level cost inputs.  The 2 in particular are Newmont and Klondex.  Now, I have owned Newmont since the 18 level and I’m not selling a single share for a long time.  Klondex I have owned since 2.11 although I sold half in the 2.90s.  Newmont is backtesting its breakout.  Newmont is the leader… it may have underperformed the smaller names and names with worse cost structures, but make no mistake, it is the only major that is increasing production.  It will be the largest gold miner in the world in terms of production over the next 5 years  as Barrick favors reducing output to only the highest grades.  It’s backtesting its breakout which is lining up with Fully’s charts.

nembreakoutbacktest

 

Next I find to be really interesting because it can go wild and move like a monster if it gets unhinged and that is the US listing of Klondex.  It is based in Canada but its operations are in Nevada… hence the American title.  Now what think is happening here is that it is going to start building out the right shoulder on and Inverse H&S that is going to propel it to $ 4ish and then it is going to go crazy.  This is the next Richmont IMO.

kldxbacktest

Non PM related… Nintendo – NTDOY is the ADR

http://finance.yahoo.com/echarts?s=NTDOY+Interactive#symbol=NTDOY;range=my

This a long term chart of the name.  It exploded through the 50 SMA on the monthly on the announcement of finally getting into smartphone gaming.  It backtested that move and appears to be turning higher.  Their first smartphone game is now generating 280k USD per week and this game is just a social networking game.  It isn’t even the big IP guns like Mario or Zelda.  They are target 5-7 games by 2017 and have a new console in the pipeline.  I’m a huge believer in the name and am looking for another run to the old highs.  Their IP is absolutely huge and they are now attempting to monetize it outside of their native consoles.  The company has an 18 bln USD mkt cap and over 8 bln in cash with no debt.

 

I highlighted it here and bought some that day.  I added today.  It is my third largest position behind Newmont and IBB.

Something perking my interest in Japan… NTDOY

 

 

 

Like I said yesterday, the street’s numbers are too low. Example Richmont this morning.

The street was at 37 mln in revenue.  Richmont announced 52 mln CAD in revenue.  That’s 41 mln USD.  Thats a 10% plus beat on the topline.  And just look at these cost numbers… they are just out of this world low.  These numbers are just ridiculous.  Look forward to this type of report happening from others over the next couple of quarters.

 

“Cash costs for the quarter at Island Gold were $674 per ounce (US$491 per ounce), a 52% decrease over the prior year period and a 34% decrease over the prior quarter. Company-wide cash costs for the quarter were $806 per ounce (US$587 per ounce), a decrease of 18% over the prior year period and a 22% decrease over the prior quarter.
First quarter revenues were a record $52.6 million at an average realized gold price of $1,629 per ounce (US$1,186 per ounce).”

 

https://goldtadise.com/?p=366569

I’ve been combing the street’s numbers on Q1 and especially Q2…

These numbers are going to have to go way up or the majors and mid-tiers are going to blow the doors off of things.  The massive write-downs are OVER (except for maybe Goldcorp and their various disasters) and the street is low on Q1 and from my numbers, they are looking at Q2 as if gold is trading sub 1100 as an average price for the quarter.  The average price of gold for Q1 was 1179 USD and the majors and mid-tiers are still lowering costs.  What happens if the price of gold averages 1250+ in Q2?  These margins are absolutely huge.  Gold doesn’t even need to go higher for a name like Newmont to go to 40.  We could potentially see a name like Agnico up 5-10 on an earnings report… especially on a production beat.  Things could really start to get unhinged as these earnings reports come out and more eyes actually see what is happening in the earnings releases.

Buying CNX on the completion of its backtest

http://goldtadise.com/?p=365048

cnxihs

Keep an eye on the IBB here

IBB

If this thing can get pulled up and close strong into the close with the rest of the market we may be getting a double bottom on the 50 EMA on the monthly.  It makes sense… the news in biotech has never been worse IMO with Valeant lurking.  Gary Savage is calling for a bubble phase in the biotechs especially and I’m inclined to agree with him.  I have a full position as of this morning.

I have never seen anything like this… not PM related – Trump’s first attack ad against Clinton has her barking like a dog

Search for it

Interesting chart pattern in CNX

cnxnew

So we know that coal is dead… natural gas is going to zero etc etc.  Look at what CNX has been doing as other coal miners and energy plays are going bankrupt.massive basing pattern and look at the volume on the break of the neckline on the inverse head and shoulders…. absolutely enormous.  Maybe the pattern has already played out, but I’m betting on this a different way and I have highlighted it already in CNXC.  It is the coal MLP that CNX spun out last year.  It has a 20 percent interest in CNX’s Pennsylvania thermal coal mines and has a distribution yield of 30 percent.  Something that CNXC does that gold miners do not anymore is hedge.  CNXC will most likely meet their distributions for the next 2-3 years because they have substantial hedges in place in the 50-55$ range per ton of thermal coal and their cash costs are in the 30s.  Einhorn owns 50 percent.

Buying OCANF here

ocanf

 

I’ve been waiting for a dip in this one.  I’m buying it here on the 50 day EMA.

Highlighting McEwen Mining again

How can anyone not give their money to Rob McEwen?  Just read this…

Stock Repurchase Program
On October 1, 2015, our Board of Directors authorized, and we publicly announced, a plan to repurchase up to 5.4% of our outstanding common stock, or up to $15 million in aggregate purchases, whichever is less. During 2015 we repurchased 1,896,442 shares of our common stock at a total cost of $1.8 million, for an average purchase price of $0.94 per share.

So while Goldcorp is diluting you and serially missing every guidance metric there is, Barrick is selling streams on one of their best assets in the Dominican, New Gold is selling a stream on a mine they haven’t even built and hedging on the first 200 points up, Rob McEwen is buying back stock at .94 in addition to buying millions of shares himself around 1$.

Armstrong’s 2016 PM report out now

500$ – thanks Marty…

GLW – inverse H&S

sc-4

I have been waiting on this one for awhile… it is breaking out of an inverse H&S.  22 target.  The company is buying back tons of shares and it is pretty cheap.

Getting involved in commodities outside of gold – CNXC

sc-4

This is a coal MLP spinoff from Consol Energy.  The MLP currently has a 30 percent yield distribution.  They can cover it although they may lower that number.  David Einhorn owns 50 percent and Michael Bury (he is one of the best value investors of the last 15 years and called the Big Short) had it on his sheets during his last filing.  The most important thing to know is this… Consol just sold its Buchanan Mine for 420$ million USD.  This particular coal mine has 88 million tons of reserves.  Contrast this to the following which outlines CNXC’s share of reserves of Consol’s PA coal mining complex.  CNXC shares 20 percent of Consol’s total reserves in the PA mining complex of 785.6 million tons.  On a back of the napkin valuation this implies an Enterprise value of 750$ million USD for CNXC compared to its current EV value of 328 million.  This is a double at a minimum, folks.  These are the best coal mines in the country.  So if you think we have hit the commodity bottom, get on board, lock in a big yield and ride this one higher.  It’s in a low risk spot right now and basing.  I was waiting for a little life and I’m a buyer today.

“As of December 31, 2014, the Pennsylvania mining complex included 785.6 million tons (157.1 million tons net to our 20% interest ) of proven and probable coal reserves with an average gross heat content of approximately 13,000 Btus per pound and an average sulfur content of 2.37%.”

Klondex getting ready to make a breakout move

sc-3

These are the types of setups that can really move quickly.  There is no supply above.  Look to a name like Northern Star Resources in Australia.  When there is no supply above like there is with many of the names that had bull runs through the 2000s, you can get mega moves.  Keep this one on the radar.

 

I highlighted Northern Star here.

http://goldtadise.com/?p=359079

Something interesting on this latest up move in Newmont and Richmont – NO GAPS

nogapnem

No gaps on this up move

nogapric

No gaps on this up move

 

As explosive as these moves have felt, there are no gaps to fill.  These have been measured moves.  Just food for thought.

Fake Assets – episode Goldcorp

I have been warning you guys about fake assets and miners that are trading substantially below book value.  I have also warned about the “Goldcorp Gang.”  Goldcorp is an impairment nightmare.  4.9 billion in assets just went poof due to an impairment.  Their latest quarter was nothing short of a disaster and it is no wonder Chuck Jeannes is leaving.  Cochenour gone.  Eleonore absolutely terrible… Penasquito absolutely horrific and terrifying 2016 guidance… there is ABSOLUTELY NOTHING GOOD IN THIS REPORT.  It is a nightmare and if this report were issued with gold at 1050 Goldcorp would be a 6$ stock.

I have never seen a company so blatantly mislead their shareholders as much as Goldcorp has post McEwen.  If you own Goldcorp, get out.  If you own anything related to the Goldcorp Gang including Taho (you see how they do business with Lake Shore), Primero Mining, and Silver Wheaton (you see how  tax problems happen to crop up out of a former Goldcorp entity?) get out and buy names with skin in the game and good management.  These include McEwen Mining, Pan American, Newmont, and Richmont.

What if the Armstrong gold bottom is actually the ULTIMATE FADE?

I got to thinking today and there has to be a relatively large contingent waiting on Armstrong’s bottom… what happens if his second benchmark comes and goes without any fireworks?  Will there be a massive chase or will he just write something about the bottom being delayed?  Something interesting I came across awhile ago and remembered that I saw it.  I can’t speak for the validity of it but this was at zerohedge a year ago.

 

“*From a Martin Armstrong email to my colleague Chris Powell…

May 14, 1999

Dear Chris:

I understand your frustration that gold has been perhaps the worst investment for the past 20 years. But to argue that it is being manipulated due to large short positions is not justified.

There is no interest in gold at this time and the central banks are all sellers. After they sell their gold, then we will see a bull market. Once those supplies are gone, no one will be able to lean on that supply and your bull market will begin.

I hate to tell you, but gold will drop to under $200 before it turns…

***

As you know now, gold never came close to taking out $200.”

 

What if his model is actually worth something and it is close to getting it right but is looking for too much of a down move just as in 1999?  Just a bit of food for thought in these nail-biting times.

Newmont conference call – In talks to sell Indonesian assets

There has been a story going around that Newmont could receive a bid for its Indonesian operation, Batu Hijau.  This has been going around for a long time and has recently been put into ink in January this year by Bloomberg.  On the earnings call, Gary Goldberg confirmed that Newmont is in fact in discussions.  This is a 3 billion $ deal folks.  This will allow Newmont to have a net debt of zero.  This quarter had poor headline numbers but do not let that deter you from the story.  This quarter was an aberration due to even more problems in Indonesia.  Do not underestimate this deal.  They will be ditching copper assets(which no gold miner in his right mind should have) and TOTALLY change the balance sheet.  Gary Goldberg is the best CEO in the game right now.  Hold those shares.