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Valued Member
United States
329 Posts |
If I'm trading something on margin, I wouldn't ordinarily have a long term view. These premiums cannot last. People will simply stand for delivery and collect the premium and the Comex gets cleaned out of bullion. Its a paper thin operation to begin with.
Edited by wjl
04/25/2013 8:27 pm
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Bedrock of the Community
13014 Posts |
Quote:
Newmount cut their divy because of production problems due to low grades (hence lower cash flow) and to give the balance sheet more flexibiltiy....AND THEY PLAN TO PRODUCE MORE GOLD in second half of the year...how do you form an opinion from that...that Newmount expects lower gold prices. No your right obviously theyre expecting prices to sky rocket so theyre tightening up. You make up for falling prices with spending your money better and producing more with smaller margins. You might want to take your own advice from the last sentence you wrote |
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Valued Member
United States
329 Posts |
There is only one price that matters to a mine, the costs to bring the reserve to account. Until its extracted it's in essence a liabiity that must ultimately be replaced. Even at gold 1700 this was a bad business.
Edited by wjl
04/25/2013 9:35 pm
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Valued Member
Canada
78 Posts |
I wrote that post very quickly. What price do you think Newmount got in Q1 of this year for gold? Over 1600 an ounce...AND THEY STILL cut the divy because they had lower grades and missed production and earnings estimates.
Gold could be 2000 an ounce for rest of the year and Newmount would still have DONE the divy cut because look at their balancesheet...they had too.
My point is a divy cut has zippo on what their future expectations on gold prices are. No operational problems and no divy cut...get it yet...
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Pillar of the Community
 United States
3789 Posts |
A 20% cut to a dividend is the death bells ringing. NEM having to raise cash means they are in trouble and it signals they know lower gold prices are real going forward. Nothing good in cutting a divy. Really its simple, if one has a brain.
I only care what the market says, and I will ALWAYS be right over everyone because I follow the market, not opinion, something that gold bugs cannot do.
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Valued Member
United States
329 Posts |
"My point is a divy cut has zippo on what their future expectations on gold prices are. No operational problems and no divy cut...get it yet..."
Indeed. The whole industry made some bad aquisitions. And if you measure the losses in terms of gold it really makes you wonder if they can turn it around. If this industry was in better shape, gold would be cheaper.
Edited by wjl
04/25/2013 10:32 pm
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Pillar of the Community
United States
3789 Posts |
Anyone who thinks a gold miner cutting a divy is great needs their head examined and should be ignored.
To begin with let me show you why this member who is defending NEM is a shill for the stock at least that's the impression I get.
First, he is quoting from the companies preliminary First Quarter operating results. That report is NOT the 10-Q which is the official report and will not be reported until the 29th of this month. that report will GIVE the reason why the divy cut and what matters is the guidance.
Second, this is only a press release. It doesn't give any data on the balance sheet, which immediately you can tell this member has no clue on reading reports versus press releases. It does not at ALL tell us why they cut the divy. This member CLEARLY has distorted and colored the facts, and he has made this mistake because he doesn't know what he is talking about, instead he is adding his own conjecture about why the dividend was cut.
Finally, this is the key sentence of the press release -"In light of the prevailing volatile metal price environment, the Company is continuing to review potential opportunities to improve cash flow and preserve financial flexibility."
When a company has to improve cash flow, and use words like "preserve"... that is NOT what you want to hear.
LASTLY... to show you how inaccurate, how wrong he is and why you should ignore him, they are talking about 1600 oz gold for FIRST QUARTER NUMBERS.
For the love of god, if you are going to discuss reports and financial documents, then do it right. Tell me, what QUARTER are we in now? Do you REALIZE what QUARTER we are in now? Instead of being in a rush to protect your ego and cover how you don't know how to read reports, please spend more time with your comprehension skills.
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Valued Member
United States
329 Posts |
They need to take writedowns, and then the stocks will go up, but not with my money. This is a really bad business regardless of the gold price. If you want to invest in gold, buy the bullion in which ever form you desire. Yes cutting the dividend is bad, but paying 8 billion for something that's probably only worth 1.5 and falling means you need to produce a lot of gold to make up the difference. This is really bullish for gold. Mine fails,defaults on contracts and before you know gold becomes sort of like real estate in that they won't be making it anymore. Its typical for gold mines to shut down and even fail in financial or currency crisis.
Edited by wjl
04/25/2013 11:02 pm
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Valued Member
Canada
78 Posts |
Yup....Why are you turning this into a discussion on Newmount? I never said Newmount was great stock buy....discussions about stocks are for Stockhouse. Your like a child having a temper tantrum.
You brought Newmount up first. I don't care about what Newmount stock price does, the point of my reply is that you can not ASSUME based on them cutting the divy that it meets they think gold is going to crash. YOU MADE that assumption...what did you talk to the CFO and CEO and said, "Hey this is Yup calling, why did you cut the divy?"
I never defended Newmount or said it is great for a stock price...again my point is Newmount cutting their divy does not mean we should all avoid being PHYSICAL GOLD AND SILVER.
Using your logic...does an oilsands company that cuts their divy after cost overruns and poor operational practices mean that they think oil is going to drop in future. You use one company to make a statement about whether to own physical gold...your desperate and using fear mongering to help you case.
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Valued Member
Canada
78 Posts |
Instead of talking about some stock of some gold miner...what do you think the impact on PM long term with this statement...this is a better discussion point then Newmount.
"There has been an almost doubling of sovereign debt to $22.9 trillion since 2008 as nations from the U.S. to the U.K. to Japan sought to stimulate economies. The IMF cut its 2013 estimate for world growth four consecutive times."
hmm, we are in a such a great recovery like you state and thus no need to own PM's....why has world growth been cut...Yup I am puzzled.
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Bedrock of the Community
13014 Posts |
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Newmount cutting their divy does not mean we should all avoid being PHYSICAL GOLD AND SILVER.
Nobody is saying that. I dont understand why things keep getting taken to the extreme because someone says to be cautious buying or doesn't buy into the fear mongering or just on the panic buying that all of a sudden theyre saying to never buy gold or silver. |
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Pillar of the Community
Australia
7096 Posts |
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Valued Member
Canada
78 Posts |
Basebal I am not a blind gold bug that thinks gold will go to the moon no matter what. I also respect well thought out debate and would find value in someone making a good statement on why gold or silver will crash. Nor do I believe in panic buying.
But for me, the fundamentals remain the same. I happen to think at these prices last week it was a good time to add some PM's to the portfolio, could I be wrong, sure, but I could also be right.
An argument exists both for and against buying PM's right now...but Newmount cutting divy has nothing to do with that discussion.
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Bedrock of the Community
13014 Posts |
Kavern the fundamentals are the same in some regards, though the one thing that has changed is time. Just like the panic buying with the big drop there was somewhat of a panic move into them with the 08 crash. A lot of people were driven into them that normally wouldnt be. As far as the big buyers go the upward movement flattened out which took away their potential gain. The DOW is doing alright now in some areas so there are better places for the money.
To me though the biggest change is insecurity. During the crash no one knew how low it would go ect. So there was security in moving into PMs just in case. As time goes on that insecurity has decreased. While things arent great they have normalized which gives incentive to move money into better returning things.
Maybe it was a really good time to buy maybe you could have waited and got it cheaper well see. Depending on your reason for buying it may not even matter. Theres less of a down side than there was two weeks ago though.
Newmount could have a lot of reasons for cutting the dividend we dont know there exact reasons and probably wont. It would be a safe bet to assume though the prospect of a lower profit margin was part of that reason and if not I would question the quality of their leadership. At the very least you can say they arent expecting the price to soar and have an influx of cash they didnt have before
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Pillar of the Community
United States
3670 Posts |
"The market is saying, right now, that silver and gold will NOT be the place they are going too if something were to happen. They are going into goverment bonds and the dollar and saying no thanks to gold and silver." Really, perhaps in the paper market Yup but again check around for physical silver and I think you will see empty shelves in most key stores like Perth Mint which TBK zipped me a link earlier and everything on one page was temp out of stock lol.... Looks like a possible upswing since I jumped back out real fast lol, but still wouldn't be surprised if its all false and we see more of a drop, but all the interest to buy in this dip makes me think that aint gonna happen..... Edited by Silverhawk74
04/26/2013 12:39 am
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Replies: 5,643 / Views: 459,914 |
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Posted 04/25/2013 8:26 pm
Get a grip yup, Nobody is Always right, even God got it wrong once and had to banish Adam and Eve from Eden.
