Vale aims to halve debt to $10bn by 2019

By analyst

By Cecilia Jamasmie

Vale (NYSE:VALE), the world’s No.1 iron ore producer and Brazil’s largest private company, expects to halve net debt to less than $10 billion by 2019 and use the extra cash flow to hike dividends.

The Rio de Janeiro-based company, which earlier this week threatened to flood the market with iron ore if prices get too high, has made of reducing debt its number one priority particularly under the helm new chief executive Fabio Schvartsman.

Vale is ready to close its loss making nickel project on New Caledonia mid-next year if it has not found a strategic partner ready to buy a 20 to 40% stake in the mine.

To achieve such goal, the miner has been revising the future of unprofitable and non-core operations and even selling some of its former fleet of 19 Valemax vessels of 400,000 tonnes capacity.

In November, the company signed a 14-year $2.7 billion project-financing package with Japanese industrial and commodity trading giant Mitsui for a giant Mozambican coal mine and infrastructure project.

Vale is now looking for a partner for its lossmaking nickel project on the South Pacific island of New Caledonia. Speaking to journalists in London Friday, Schvartsman said he would have no hesitation in mothballing it if it could not find a partner ready to acquire a 20 to 40% stake.

He added it expected to close a deal on the matter by mid-2019, Reuters reported.

Vale has said it wants to diversify its investments and improve capital allocation, which should lead to stronger financial results over the long term.

For now, the miner expects financial expenses to drop to $550m- $660m by 2020 from $1.6bn- $1.7bn this year, while it forecasts Ebitda to hit anywhere between $13bn-$19bn over the period.

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Source:: Infomine

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Chris Temple from The National Investor – Fri 8 Dec, 2017

By Cory A Focus On Copper and Oil

Today in my chat with Chris Temple we look to a couple other commodities outside the precious metals, copper and oil. Both can be used as a barometer for economic growth and tell us a lot about economies around the world. Chris brings up the factors he thinks drove both copper and oil and what will be at play for net year.

Click here to visit Chris’s website for more in-depth coverage on a wide range of markets.

Download audio file (2017_12_08-Chris-Temple.mp3)

…read more

Source:: The Korelin Economics Report

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Newmont gold output growth: ‘We’ve only just begun’

By analyst

Newmont expansion plans: 'We've only just begun'

By Frik Els

Barrick Gold’s output fell to 5.5m ounces last year and the Toronto-based gold miner wil record another decline this year. Mined ounces could fall below 5m ounces next year. That’s down from a peak of 7.7m ounces in 2010 and 2011.

While Barrick has been getting rid of mines to tackle its debt load, world number two gold producer Newmont Mining is on an expansion drive coming close to topping 5m ounces for the first time in 2016.
Not included in Newmont’s outlook are seven greenfields projects located in the Yukon, Ethiopia, Colombia, Australia and elsewhere
This week Denver-based Newmont upped estimates for next year to between 4.9m and 5.4m ounces which could well result in the company overtaking Barrick Gold in terms of output of 2018. Barrick has not updated its 2018 guidance since February but it’s not expected to differ substantially from the 4.8m to 5.3m it forecast at the time.

In the last five years, the company has sold $2.8 billion in non-core assets, bought the Cripple Creek & Victor mine in Colorado, built three new mines and executed nine expansions, Newmont chief executive Gary Goldberg told investors on Wednesday:

“Taken together, we’ve added more than two million ounces of gold production at all in sustaining costs of about $750 per ounce.”

Not included in Newmont’s current outlook are seven greenfields projects located in the Yukon, Ethiopia, Colombia, Australia and elsewhere and projects that could come to fruition within three years at its Ahafo mine in Ghana and Tanami operations in Australia.

By 2024, Newmont’s global share of mined production will be 5%, Goldberg said, compared with 4.4% in 2015. Asked if the company has room for more production increases and lower costs, Goldberg said: “We’ve only just begun.”

(Bloomberg contributed to this article)

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Source:: Infomine

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The True Rate of Inflation

Omen of Recession

By Brian Maher

This post The True Rate of Inflation appeared first on Daily Reckoning.

Dear Reader,

The Federal Reserve pursues its 2% inflation target with a zeal verging on derangement.

Yet it progresses toward its target as poor Sisyphus of Greek mythology progressed uphill with his rock — in vain.

Core inflation registered 1.9% in January… and 1.5% in June.

The most recent core inflation number?

A Sisyphean 1.4%.

The rock rolls downhill.

Here we speak of official inflation.

But is actual inflation dramatically higher?

Today we pierce the mask of statistics… expose the myth within… and hazard a true inflation reading…

The Fed’s 2% inflation appears as distant as the summit of Sisyphus’ hill.

Experts dispute the causes — depressed worker wages resulting from globalization, “secular stagnation,” the astrological misalignment of stars and planets, etc.

But assets such as stocks, bonds and real estate have been the scenes of dramatic inflation over the past several years.

And therein hangs an epic tale…

Joseph G. Carson, former global director of economic research at AllianceBernstein:

U.S. financial markets have in the last 20 years experienced three unprecedented booms in asset prices and two busts. During this span, the market value of real and financial assets held by households has increased more than $70 trillion…

$70 trillion!

Traditional inflation models exclude these asset prices.

But what if they were included?

The New York wing of the Federal Reserve has hatched a model for that expressed purpose…

The “underlying inflation gauge (UIG).”

This UIG incorporates not only consumer prices… but producer prices, commodity prices and financial asset prices.

It thus promises a true inflation reading.

The New York Fed:

The UIG proved especially useful in detecting turning points in trend inflation and has shown higher forecast accuracy compared with core inflation measures.

If we gauge inflation by this comprehensive model… the true rate of inflation is above the Fed’s 2% target… and roughly double the core rate.

But what?

Roughly 3%.


The latest reading shows inflation of almost 3% for the past 12 months, compared with [core inflation, which excludes food and energy]…

Since the broad-based UIG is advancing 100 basis points above [core inflation], it indicates that asset prices are large, persistent and reflect too easy monetary policy.

The lesson, clear as gin:

Inflation lives and thrives. But largely in assets.

And the kernel in the nut:

The UIG carries [an important message] to policymakers: The obsessive fears of economy-wide inflation being too low is misguided; monetary stimulus in recent years was not needed.

Obsessive fears of low inflation are misguided? Monetary stimulus in recent years was not needed?

This Carson heaves up strange and dangerous heresies.

The Paul Krugmans and Ben Bernankes and Larry Summers of the world will set him down as an agent of the Old Boy himself, an enemy of civilization.

As well claim that George Washington didn’t fell the cherry tree…. that the moon is 99.9% blue cheese… worse, that gold is money.

But what if the UGI is right?

Were decades of loose monetary policy an epic blunder?

Analyst John Rubino of

The really frustrating part of this story is that had central banks viewed stocks, bonds …read more

Source:: Daily Reckoning feed

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Inflation Can Return Much Faster Than You Think

By James Rickards

This post Inflation Can Return Much Faster Than You Think appeared first on Daily Reckoning.

Consumer price inflation has remained persistently low, despite the Fed’s best efforts. This has led many people to ask where the inflation is, because the Fed has created trillions of dollars since the financial crisis.

But there has been inflation. It’s just been in assets like stocks, bonds, real estate, etc. How about bitcoin? Bitcoin increased about $2,000 yesterday alone! It’s trading at about $16,000 as I write. We’ve never seen anything like it.

The bottom line is, we’ve seen asset price inflation, and lots of it, too.

But the question everyone wants to know is when will we finally see consumer price inflation; when will all that money creation catch up at the grocery store and the gas pump?

It’s difficult to say exactly. But once it does happen, it will likely strike with a vengeance. Double-digit inflation could quickly follow.

Double-digit inflation is a non-linear development. What I mean by that is, inflation doesn’t go simply from two percent, three percent, four, five, six. What happens is it’s really hard to get it from two to three, which is ultimately what the Fed wants.

It’s proving extremely difficult just to get up to two. Personal consumption expenditures (PCE) is the core price deflator, which is what the fed looks at. Currently, it is at about 1.4%, but it’s stuck there. It’s not going anywhere. The Fed continues to try everything possible to get it to two with hopes to hit three.

The reason is that it’s not purely a function of monetary policy, it’s a partial function of monetary policy.

It’s also a partial function of behavioral psychology. It’s very difficult to get people to change their expectations, but if you do, it’s hard to get them to change back again.

Inflation can really spin out of control very quickly. So is double-digit inflation rate within the next five years in the future? It’s possible. Though I am not forecasting it. If it happens, it would happen very quickly. We would see a struggle from two to three, and then jump to six, and then jump to nine or ten.

This is another reason why having a gold allocation now is of value. Because if and when these types of development begin happening, gold will be inaccessible.

To this point, I am often approached on, “How can you say gold prices will rise to $10,000 without knowing developments in the world economy, or even what actions will be taken by the federal reserve?”

It’s not made up. I don’t throw it out there to get headlines, et cetera. It’s the implied non-deflationary price of gold. Everyone says you can’t have a gold standard, because there’s not enough gold. There’s always enough gold, you just have to get the price right.

That was the mistake made by Churchill in 1925. The world is not going to repeat that mistake. I’m not saying that we will have a gold standard. I’m saying if you have …read more

Source:: Daily Reckoning feed

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Gold Stocks Break, Gold to Follow

By Jordan Roy-Byrne CMT, MFTA

We’ve been persistently bearish on precious metals since September and that has annoyed our readers. The weak price action, negative divergences and bearish fundamentals are too much to currently overcome for the time being. The gold stocks finally cracked this week and have lost another 7%-8% in only the past seven trading sessions. Silver and Gold denominated in foreign currencies have joined the breakdown. Gold meanwhile has not broken down yet but all indications are that it will soon.

The chart below shows the daily candle charts for GDX and GDXJ which began their breakdown on Monday. They have declined sharply over the past seven trading days and are due for a bounce. A ~3% decline would take both GDX and GDXJ down to key support at GDX $21.00 and GDXJ $29.50. The miners are getting oversold and a bounce could begin from those levels.

Unlike the rest of the sector, Gold has yet to crack as it maintains $1260/oz. As we can see below, Gold/FC lost support and traded down to a 4-month low. This, after Gold/FC tested its 200-day moving average seven times. Gold has held above a confluence of major support that includes lateral support and the 200-day and 400-day moving averages. All indications are that Gold will break below $1260 and if it does, look for support at $1205-$1220.

The 30,000 foot, bird’s eye view for miners remains encouraging but they need first to get through the next several months. Initial support levels (for GDX and GDXJ) are $21.00 and $29.50 while future support levels (perhaps in Q1 2018) are around the December 2016 lows. Generally speaking, I’d much rather be a buyer around those levels and not current levels.

As we publish this article, Gold has broken below $1260/oz and the gold stocks have moved quite close to the initial support levels. I would not be surprised to see the gold stocks and Silver begin to bounce as Gold moves closer to strong support at $1220/oz. That being said, we are not expecting to turn bullish on the sector as a whole until sentiment worsens and the gold stocks approach strong support at their December 2016 lows. Values are starting to emerge in the juniors but it may be too early to be bullish. In the meantime, the key for traders and investors is to find the oversold companies with strong fundamentals with value and catalysts that will drive buying. To follow our guidance and learn our favorite juniors for 2018, consider learning more about our premium service.

…read more

Source:: The Daily Gold

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Craig Hemke from TF Metals Report – Thu 7 Dec, 2017

By Cory What’s The Deal With The Pullback In Base Metals?

Craig Hemke joins me today to discuss what helped drive the base metals this year and why they are pulling back this week. There are a number of factors to consider which include the downtrend in the USD, massive creation of money around the world, and stocks lagging to name a few.

Click here to visit Craig’s site for more metals commentary.

Download audio file (2017_12_07-Craig-Hemke.mp3)

…read more

Source:: The Korelin Economics Report

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Chris Temple from The National Investor – Thu 7 Dec, 2017

By Cory The Opportunities In The PM Selloff

In a preview to Chris’s upcoming newsletter to subscribers we focus on the precious metals and the opportunities this selloff presents. We ask the what it will take to get more eyes and attention on the sector. One thing to consider is that some companies have been coming out with some very good news and the stock prices have done nothing. Chris mentions a couple for you to look into.

Click here to visit Chris’s site and consider signing up for his letter before this weekend’s release.

Download audio file (2017_12_07-Chris-Temple.mp3)

…read more

Source:: The Korelin Economics Report

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A Very Special Update! – Thu 7 Dec, 2017

By Big Al

Corvus Gold closes Financing


December 7, 2017

Website version

PDF version

Vancouver, B.C… Corvus Gold Inc. (“Corvus” or the “Company”) – (TSX: KOR, OTCQX: CORVF) announces it has completed a CAD $5,253,500 private placement (the “Private Placement”). Pursuant to the Private Placement, the Company issued 2,829,130 common shares at a price of CAD $1.15 each to institutional shareholders and 1,574,803 common shares at a price of CAD $1.27 each to a key strategic shareholder. No warrants were issued. The Company expects that the proceeds of the financing will fully fund the Company’s planned 2018 exploration program at its new Mother Lode project.

Jeff Pontius, President and CEO of Corvus, said, “We are pleased to have secured this important financing which will provide funding to advance and develop our new high-grade Mother Lode project through 2018. The Company intends to expand its planned 2018 drill program to 20,000 metres, to focus on expanding the new high-grade zone at the north end of the currently defined deposit. The mix of long-term and strategic shareholders in this financing is a welcome endorsement of Corvus Gold and its Nevada projects. Our shareholders can look forward to continued news flow on our development progress of the high-grade Mother Lode project.”

The common shares issued in the Private Placement are subject to a minimum 6-month hold period unless otherwise registered under applicable securities laws. The Toronto Stock Exchange has granted conditional approval to the issuance of the Corvus common shares under the Private Placement.

In addition, a financial advisory fee of CAD $62,675 was paid to Industrial Alliance Securities for assistance and advice on the financing.

The foregoing securities have not been and will not be registered under the U.S. Securities Act of 1933, as amended or any applicable state securities laws and may not be offered or sold absent registration or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the foregoing securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About the North Bullfrog & Mother Lode Projects, Nevada

Corvus controls 100% of its North Bullfrog Project, which covers approximately 72 km² in southern Nevada. The property package is made up of a number of private mineral leases of patented federal mining claims and 865 federal unpatented mining claims. The project has excellent infrastructure, being adjacent to a major highway and power corridor as well as a large water right. The company also controls 65 federal unpatented mining claims on the Mother Lode project which totals 522 hectares and which it owns 100% of.

About Corvus Gold Inc.

Corvus Gold Inc. is a North American gold exploration and development company, focused on its near-term gold-silver mining project at the North Bullfrog and Mother Lode Districts in Nevada. In addition, the Company controls a number of royalties on other North American exploration properties representing a spectrum of gold, silver and copper projects. …read more

Source:: The Korelin Economics Report

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Valuable Insights from Around the Web – Thu 7 Dec, 2017

gold precious metals price support important_november

By Cory

A 6-Pack Of Metals Charts

Chris Kimble first shared the charts below about a month ago stating that gold and precious metals in general were at an importation juncture. Follow through to today and these charts are all breaking down. Check out the charts below to see the worries Chris has.

As a quick comment when we see so many people and chart turning negative on the metals at this time of the year there are still plenty of opportunities for investors. There are stocks cashed up and releasing some great numbers but the market does not care.

Click here to visit Chris’s website for more technical commentaries on a wide range of markets.

… Here’s the postings from Chris…

Gold and Precious Metals Sector At Important Juncture!

Investors are right to be a little concerned when looking across the metals sector of late.

Gold (NYSEARCA:GLD), Gold Miners (NYSEARCA:GDX), and Steel… there all in a short-term decline and approaching critical price support levels. Most of these are trend lines so bulls want them to hold.

In the the chart below, you can see 6 different angles on Gold, the Gold Miners, and steel. And in each of these snapshots, you can see that price action is nearing important trend line support levels.

The short-term and long term are converging here, so perhaps the next move will have a meaningful impact on your portfolios.

Stay tuned!

…And the follow up comments…

Gold/Precious metals could be in trouble here

Back in early November, I shared a 6-pack of charts showing that Gold (NYSEARCA:GLD) and the broader metals sector were all testing key price support levels.

Well, those price levels appear to be giving way to the downside. And this could be warning of lower prices to come. In the updated 6-pack of charts below, you can see blue trend lines for various charts of Gold, the Gold Miners (NYSEARCA:GDX), and Steel (NYSEARCA:SLX). In each of the charts you can also see where price is declining through the trend line (red shaded areas). The most watched and notable is the Gold decline.

Each of these breakdowns are still in the early stages and will need to see a follow through day to the downside (with strong volume) as confirmation.

Put these on your radar. Caution advised here.

…read more

Source:: The Korelin Economics Report

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