What Could Pull Silver Back Up?

By Lior Cohen
Seeking Alpha


Janet Yellen

The silver market cooled down last week, despite the escalation in the relationship between U.S and Russia. Looking forward, what could bring back up silver?

During last week, the price of silver declined by 2.7%. The silver ETF iShares Silver Trust (NYSEARCA:SLV) also fell by a similar rate during last week. Silver Wheaton (NYSE:SLW) and Pan American Silver (NASDAQ:PAAS) also fell by 2.3% and 1.5%, respectively.

Yellen testifies — silver falls

Chair of the FOMC, Janet Yellen, testified in front of the Committee on Banking, Housing, and Urban Affairs. She did made some comments about the potential bubble in certain sectors in the equities market, which may have contributed to the fall of U.S equities. Some also speculated, she may have laid the ground work to justify a rate hike sooner than anticipated. This speculation was enough to bring down silver. Up to now, however, the uncertainty around the timing of a rate hike played in favor of the bullion market. Thus, even the slightest hint of such a rate talk was enough to bring down silver.

Continue reading . . .

Gainey Capital has different plan for gold and silver exploration in Mexico

By Charlotte McLeod
Gold Investing News

mexhat160Gold and silver exploration and development company Gainey Capital (TSXV:GNC) operates in Mexico, a popular mining jurisdiction, but compared to many of the other companies working there, its game plan is fairly unique.

What does that mean? Put simply, while exploration is important to Gainey — the company has engaged Minera Cascabel to start a Phase I exploration program at its El Colomo project — it doesn’t seem to be its first priority. Instead, the company’s main focus is a 300-tonne-per-day mill that it plans to use to toll process the ore of other mining companies in the area.

Most recently, Gainey completed an upgrade program at the mill through which it “increas[ed] efficiency and substantially reduc[ed] operational costs.” The program included maintenance work “and focused on the main power system/grid, as well as electrical and mechanical systems and pumps, motors and water systems.”

Here’s a June 13 video showing the mill in action — make sure you watch with sound!

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How the mining zombies in Australia found a future in technology

Photo: Michele Mossop

Photo: Michele Mossop

By Tess Ingram
Australian Financial Review

Failed listed resources companies are finding a profitable future above ground — in technology.

Since January, at least eight struggling resources companies, including Latin Gold and Macro Energy, have merged with technology companies. Start-ups and companies looking for alternative capital raising mechanisms are using the “zombie” companies as shell vehicles for backdoor listings on the Australian Securities Exchange.

Last week, Perth-based Intercept Minerals announced plans to acquire US online streaming business xTV for $12.5 million.

Operating conditions are difficult for the small end of the resources sector. The median spend on exploration activity fell 27 per cent in the first quarter, BDO’s March Explorer Quarterly Cash Update said, noting that it was the biggest such decrease since it started looking at the trends.

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Turn That Frown Upside Down | Mining Conferences Demise

By Dudley Pierce Baker
Founder-Editor, CommonStockWarrants.com

The best news for contrarian investors is bad news for the folks at the Metals and Mining Conferences.

‘Turn that frown upside down’.

We have just learned of the demise of the Metals and Mining Conferences held annually in San Francisco and New York.

They have suspended their conferences indefinitely as of 16 July 2014 to include the conference in San Francisco in late November that was always a favor of ours.

The reason:

“The current challenged metals market has led us to make the difficult decision to suspend our events in the best interest of our participants, speakers, sponsors and stakeholders.”

To read their full disclosure on their website, click here.

For those investors looking for a sign of a bottom; this is it; a true contrarian has to love the timing of their termination of conferences.

Frankly, we are of the opinion that by the time of the San Francisco conference in late November that gold will be rocking and rolling at substantially higher prices.

Of course, we are sorry for the loss of an event of this nature and wish the employees well.

Time to Buy.

Fewer new discoveries, slower development weigh on gold industry


SNL Metals & Mining
Commodities Now

In light of declining discovery rates and a longer time to advance a discovery to production, the gold industry’s future ability to replace production through large discoveries is in doubt. Analysis suggests that discoveries made since 1999 might eventually only replace half of the gold produced over the same period.

Over the past 24 years, mining companies discovered 1.66 billion ounces of gold in 217 major gold discoveries, SNL Metals & Mining’s 2014 edition of Strategies for Gold Reserves Replacement shows.

While that sounds like a significant amount of gold, it falls short of the 1.84 billion ounces produced over the same period. In addition, the amount of gold discovered and the number of major discoveries (defined as any deposit with a minimum of 2 million ounces of contained gold) have been trending downward over time, from 1.1 billion ounces in 124 deposits discovered during the 1990s to only 605 million ounces in 93 deposits discovered since 2000.

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Is It Finally Time To Buy Gold?

By Costas Bocelli
Seeking Alpha

gold-etfEver since gold prices peaked around $1,900 an ounce three years ago, holding gold and gold related securities has been an utter disappointment.

There are many reasons why investors are attracted to the precious metal. The biggest one, of course, is that gold historically has served as a store of value and a hedge against inflation and dilution of fiat currency.

And the big run-up to $1,900 was largely fueled by the Fed’s response to the credit crisis and the great recession. The central bank slashed interest rates to ZERO and began printing trillions of dollars of reserves that, in turn, flooded the banking system with massive amounts of liquidity.

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Upward Trend a Silver Investor’s Friend

Sean Rakhimov

Sean Rakhimov

An upward trend is afoot in the silver space, says Sean Rakhimov, editor of SilversStrategies.com. Rakhimov believes that at $26/ounce the reversal of the downward trend in silver will be confirmed and silver investors should set their sights on the next resistance level — $32/ounce. And if that threshold is breached, silver will test $50/ounce and more. In this interview with The Gold Report, Rakhimov talks about a few silver miners that are well positioned to ride this trend perhaps several multiples higher.

Rakhimov’s writing has appeared on such Internet portals as Le Metropole Café, 24hGold, 321gold, Kitco, Gold Seek, Gold Seiten, and The Gold Report. He previously designed financial systems for the investment banking business, learning about options trading, securities lending, payments processing, clearing and settlement, fixed income securities and margin transactions. He launched his website, SilverStrategies.com, in 2004 and has been focusing exclusively on the silver sector since 2001.

Interview by Brian Sylvester of The Gold Report

The Gold Report: The Washington D.C.-based Silver Institute reports that net silver demand has exceeded net silver supply each year since 2004, with a supply deficit of 113 million ounces (113 Moz) reported in 2013. Why hasn’t that trend translated into dramatically higher silver prices?

Sean Rakhimov: First, I don’t put much faith in these numbers. For instance, CPM Group has somewhat different numbers. Either way, silver supply and demand have been roughly in equilibrium, in my opinion, over the past decade or so. Second, silver manifests itself as a precious metal in times of crisis or uncertainty. When it’s business as usual, silver acts more like a base metal and trades more on supply and demand numbers. Silver prices will respond during a crisis as its perception changes from an industrial to precious metal. That’s when you will see more of what we saw in 2011 when in the space of about six months silver went up three times. Another period like that is coming.

Excellon Resources Inc. has a handle on its deposit’s cost structure and grade.

TGR: In early June we started to see stronger precious metals prices and that has carried through. Is this a trend?

SR: It is the beginning of a trend. Precious metals characteristically start going up after a prolonged decline, yet early in the reversal they rarely inspire any confidence because the last dozen or so similar moves fizzled after a 10–20% move. This could be one of those. Silver is at $21 per ounce ($21/oz) now, maybe next week it will test $18/oz again. It’s anybody’s guess but I believe that toward the end of the year we’ll probably see higher numbers—maybe substantially higher.

TGR: Is there a telltale sign that shows investors that this upturn is real?

SR: There isn’t one that I use. It’s more of a gut feeling.

TGR: The existing silver fix mechanism expires on Aug. 14, 2014, and methods to replace it are currently being reviewed by the London Bullion Market Authority. Is a new silver fix system likely to yield stronger silver prices?

SR: It’s likely. This new replacement for the silver fix would, at least for the next year or two, have less tinkering with it than had historically been going on with the fix. On that basis, the price should become more volatile. On balance it’s probably going to be positive for the silver price.

TGR: What are your thoughts on the silver space?

SR: In this semi-stealthy firming up of silver instruments and investments, there is not much fanfare. Silver is certainly out of favor at the moment, which leads me to remember that it’s always darkest before the dawn. And I believe that this is going to reverse itself in short order.

All indications point to a very successful future for Tahoe Resources Inc.

Lately I’ve been thinking about some passages from the thinly disguised biography of Jesse Livermore,Reminiscences of a Stock Operator by Edwin Lefèvre He wrote, “There’s a lot of early bulls in a bull market.” I’ve been an early bull in a bull market for precious metals going back to the early 2000s. Many people exit along the way but Livermore’s idea was that investors have to stick with it for the entire cycle. That’s what I’ve been telling myself. Of course, convictions are tested along the way, such as during the last couple of years.

Silver is a little like water in that if you tell people you should invest in water, the first thing people do is look at you like something is wrong with you! Yet fresh drinkable water is a scarce resource. Silver is so familiar that it lulls people into this idea that it’s not important. Unsophisticated people align it with gold, yet the fundamentals for the two metals could not be more different.

TGR: What makes silver special? Continue reading

Why I am buying gold stocks right now

By Bill Gunderson

There is turmoil in the world right now with a number of “hot spots” that have a potential to heat up further. With geopolitical risks mounting, it is no wonder that many precious-metal stocks, and in particular gold stocks, have started to move up.

Gold stocks in general have underperformed the market the last few years. Looking at the historical performance of the SPDR Gold Shares ETF GLD +1.50% as a proxy for gold stocks, it has significantly underperformed the S&P 500 Index on a three- and five-year basis. Last year, while the U.S. stock markets were on a tear, gold stocks declined more than 28%.

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Stocks down, gold up: More fireworks

By Larry Edelson
Swing Trading Daily

Larry Edelson

Larry Edelson

I hope you paid attention to the market action this past week. The significance of it all is crucial to not only understanding what is going on, but also to protecting and growing your wealth.

First, the stock market has topped. All the evidence I am studying tells me we are now in a bear market that could last anywhere from three to 10 months.

The reason the market has finally topped is simple. It got stretched too high for too long and it needs to pullback and take a break. Much like trying to hold your arm up by your side for as long as you can, at some point, it’s going to feel like a lead weight and you’re going to have to drop your arm to recover. It’s that simple.

Analysts will tell you that corporate earnings for the second quarter are going to disappoint, or some other nonsense. But the fact of the matter is that the stock market needs a break — it needs to pullback and wash out some diehard bulls — and refresh itself before heading any higher.

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Understanding Stock Warrants

By Dudley Pierce Baker

csw160If you don’t understand stock warrants, you are not alone. Very few of the professional newsletter writers and analysts understand them, so why should you?

Allow me to give you a brief education on stock warrants in the following paragraphs and tell you exactly why you need this information.

Did you know that warrants have been in existence and trading for many decades but very few investors know about them? Why? Are warrants that difficult to understand? Of course not, it’s just that one needs to take some time to learn and understand this incredible investment vehicle.

To put this discussion in perspective, I would like to offer a quote from the past,

“…Common stock warrants turn in the most spectacular performance of any group of securities….the speculative potentialities of common stock warrants are enormous….
With potential profits and potential losses so great it is a source of wonder that so little understanding of the nature of common stock warrants exists not only among the investing ‘public’, who might be forgiven this sin, but even among the many ‘professionals’ of the business upon whom the ‘public’ depends for information and guidance.”
Sidney Fried, ‘The Speculative Merits of Common Stock Warrants’, 1949.

Did you get that? 1949. As stated in the above opening paragraph, the public and professionals today are, for the most part, not aware of the enormous profit potential of warrants and thus absolutely nothing has changed since Sidney Fried’s comments in 1949.

In the 1960’s and 1970’s Sidney Fried had a service called, ‘The RHM Warrant Survey’ to which many investors subscribed and which was available only in hard copy. To the best of our knowledge, this service stopped in the late ‘70’s or early 80’s and very little information has been available since to investors, until recently.

Currently there are approximately 200 stock warrants trading on the NYSE, OTC, Toronto Exchange and Toronto Venture Exchange. There are stock warrants trading on virtually all industries and sectors, i.e., resource companies, financial services, gaming, autos, banking, biotechnology, restaurants, etc.

Approximately one-third of the stock warrants trading in today’s markets are on the common shares of the natural resource and commodities companies. As we are still in a bull market in this sector (believe it or not), investors are constantly looking for new ways to invest with the potential for great gains. These precious metals companies which have warrants trading give investors exposure to gold, silver, uranium, zinc, copper, cobalt, platinum, oil & gas, etc.

Stock warrants are but one of the many vehicles to consider along with gold bullion, gold coins, ETF’s, mutual funds, options, LEAPS and common shares of the mining companies.

So with this background, let me give you a brief introduction to warrants.

A warrant is a security (similar to a call option) giving the holder the right, but not the obligation, to purchase the underlying stock at a specific price and expiring on a specified date in the future. Sounds very much like a call option or LEAP, doesn’t it?

Stock warrants are issued by a company usually in connection with a private placement or a financing arrangement and many of the warrants issued will remain privately held and will never trade in the open marketplace but those that trade are the focus of our attention.

So, why the interest in warrants? The owner of the warrant receives none of the benefits of ownership of the common stock of a company. He cannot vote, and he does not receive any cash dividends. Therefore, why would an investor want to buy an option (warrant) to buy something instead of buying the thing itself?

The essence of the answer is that the anticipated gain on the warrant must be greater than the anticipated gain on the common stock. Leverage, or at least potential leverage, is the prime reason an investor would be interested in warrants. This more rapid growth in the value of the warrant relative to the common stock is called leverage. Without this possibility of such leverage the investor would buy the common stock. A good rule of thumb is to seek out those stock warrants having the potential to greatly outperform the shares with a desired leverage of 2 to 1 or better.

Currently there are many warrants trading with expiration dates out to the year 2017 (one out to 2030) and though warrants expiring within, say, two years, may possess great upside leverage and potential for gains, they also pose a greater risk. Therefore, we personally suggest that investor’s focus their attention on those warrants that have a remaining life of at least two years before their expiration.

As with any investment each investor must decide how much of one’s portfolio to allocate to different sectors, different shares, ETF’s, mutual funds, gold bullion, etc.

Even though we personally view ‘long-term warrants’ as investments (as opposed to speculation), an allocation of 10% to 15% maximum of your portfolio would be a reasonable allocation of your total dollars to this investment vehicle.

To summarize, an investor may wish to purchase a stock warrant that is the option (the right) to purchase the common stock of a company. Investor’s may prefer to purchase the warrant instead of the common stock because the warrant offers more potential gain, that is, the warrant offers the investor leverage. Using a portfolio allocation of 10% – 15% and buying long-term warrants on some of your favorite shares, you are now in the position to capture some incredible potential gains as this bull market in the natural resource and commodity sectors reasserts itself over the next two to three years.

For those investors seeking more knowledge on warrants we invite you to sign up for our free emails and visit our Learning Center where we provide you much more information and examples to enhance your learning experience.

Dudley Pierce Baker
Founder – Editor
Guadalajara – Ajijic, Mexico
Website: www.CommonStockWarrants.com
Email: support@CommonStockWarrants.com
Facebook: http://Facebook.com/CommonStockWarrants

Disclosure: Neither Dudley Pierce Baker nor CommonStockWarrants.com is an investment advisor and any reference to specific securities does not constitute a recommendation thereof. CommonStockWarrants.com is an online newsletter providing complete details on all stock warrants trading in the United States and Canada. The information and opinions expressed should not be construed as a solicitation to buy and securities mentioned in this service.