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With the price of gold hovering around US $1,350/oz the price of companies that mine and sell gold bullion should be at record highs right? This is only partially true and a reversal from what would normally be expected. While the junior gold mining stocks have been doing tremendous, the seniors have been lagging quite seriously behind. Large companies have always demanded a higher valuation thanks to economies of scale, operations that are established and have been up and running, a multitude of producing projects, and deep pockets. An article published by the Globe and Mail interview with Tanya Jakusonek attributed the higher valuation of the juniors to nothing but M & A speculation. Unfortunately, until we see some strength in the stocks of the senior producers this seems fairly unlikely to occur. Regardless as long as these prices continue, anybody selling gold is making a killing right now. Those looking to cash in by buying stocks will have to look deeper and should stick to the fundamentals by looking for companies are increasing their production, reducing costs, and still have a decent valuation.
The Enigma of Gold Stocks
22-Nov-2010 | Reggie | Commodities Mining
This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.
Retire First is a member of the Canadian Investors Protection Fund.
Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.
China backs out of Quadra FNX Deal
17-Jun-2010 | kate | Asia Commodities Mining
China has backed out of their billion dollar joint project with Quadra FNX mining, citing fears of calling prices in the commodity industry. In the past two months, the price of copper has fallen over 20%.
China is the world’s largest consumer of copper which drove their desire for a 10% stake in Quadra’s for 152 million as well as jointly developing the Frank and Sierra Gorda projects in Chile, before the project was put in place. China was expected to have a 10% stake in the two billion dollar project.
China’s concerns are surprising to many in the industry given that Chile reputation as one of the world’s most mining friendly countries. While China has pulled out of the Chile project they are still an aggressive buyer of resource projects in challenging locations such as Africa and Afghanistan.
On the news, Quadra (QUX) shares have slipped touching a low of $11.85 during today’s trading period. CEO Paul Blyth says that the company is in a better position today to finance the Sierra Gold on their own after merging with FNX, but they are still interested in looking for partners.
This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.
Retire First is a member of the Canadian Investors Protection Fund.
Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.
Hard day for the loonie and the markets
20-May-2010 | kate | Canadian Investing Commodities Economy Market Outlook Mining Stocks The Wise Investor
It was another hard day on the markets especially for the Loonie, which fell down 2.12 cents on Thursday, move downwards to 93.65 cents as traders panicked to a safe place to move their dollars.
The loonie moved down 2.12 cents today as the markets continued to look for their direction. With fears setting in about the instability of Europe, the world wonders if other member countries could be heading towards the same troubles as Greece.
While Canada is enjoying a healthy economy, the loonie has still taken a hit since trading at parity with the US dollar in April. The movement is not a statement about the world’s view of the Canadian economy or the value of our loonie but rather a natural consequence of the flight to save-haven, which is viewed as the US dollar.
Many economists believe that after the risk aversion has subsided that the US dollar will become vulnerable to parity, letting the Canadian dollar take another run.
Meanwhile, while the loonie and the stock market take a temporary breather, the prices of oil and gas as well as a handful of other commodities have been facing downward pressure leading to hard day on the markets. The markets closed down 259.82 points with the Metals and Mining section leading the way with a 34 point decline on the day.
This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.
Retire First is a member of the Canadian Investors Protection Fund.
Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.
Quadra FNX
24-Mar-2010 | kate | Uncategorized
Until yesterday, consolidation in the Canadian mining industry seemed like the perfect dream; strong commodity prices, access to capital and political stability which was never realized. While all the conditions for mergers where there, the deals never came, until yesterday when Quadra Mining and FNX Mining joined forces to create Quadra FNX.
Quadra is a proven skilled operator of low grade open pit mines in Nevada and Chile while FNX specializes in high grade underground mines in Ontario.
The merger will result in a market value of $3.9 billion, becoming the leading mid-size base metal company, producing 300 million pounds of copper. The deal will end up with both companies diversifying their asset bases and they will now be experiencing economies of scale which will allowed them multiple expansions opportunities. And with about $580 million in cash and nearly no debt, Quadra FNX will be in a very strong position for the future.
Mr. MacGibbon from FNX will become Quadra FNX non-executive chairman while Quadra’s Blythe will become CEO. Mr. Blythe said in an interview that while he wants to aggressively grow the company, he wants it to remain an intermediate producer, where a single transaction can still add a lot of value. He added that he is comfortable with a market value north of US$10-billion.
Under the terms of the deal, each FNX share will be exchanged for 0.87 Quadra shares. FNX shareholders will own 48% of the new company, while Quadra shareholders will control 52%.
This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.
Retire First is a member of the Canadian Investors Protection Fund.
Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.
Quadra Mining and State Grid of China strike a deal
08-Mar-2010 | Reggie | Asia Commodities Mining
Quadra Mining has been one of our favourite mining stocks for quite some time. They have consistently put up solid growth with very little debit all while trading at a significant discount to its peers. They have executed their expansion and growth plans almost perfectly. Combining the operating prowess of Quadra with the brute size, strength, and wealth of State Grid could make for some very exciting results.
For those of us unaware, State Grid is the worlds largest public utility company and one of the worlds biggest consumers of Copper. The deal is Quadra and State Grid will work together to develop and operate Quadra’s mining projects located in Chile. The Globe and Mail states that the deal “comes amid expectations of a copper shortage in China.” Whether there is actually a shortage, is a whole other story, but nonetheless the deal with State Grid should provide Quadra with long term demand for the ore it produces. State Grid uses the copper primarily in the construction of their power grids.
The mines in Chile Quadra has been working on are quite large. Large enough where costs were estimated to be in the neighborhood of $2 billion and produce between 250 and 400 million pounds annually over 25 years. The deal with State Grid ensures that Quadra will be able to go ahead with the development of the project without much shareholder dilution. With funding from State Grid, is it estimated the projects will be up and running by 2013. This is truly exciting news for Quadra and eliminates a major hurdle from their path to continued growth and becoming a world power of the mining community.
This blog has been prepared by the Retire First Team. The blog expresses the opinions of the writers and not necessarily those of Retire First Ltd. Statistic and factual data are from sources Retire First believes to be reliable but their accuracy can not be guaranteed. This blog is furnished on the basis and understanding that Retire First is under no liability whatsoever in respect thereof. It is for informational purposes only and is not be construed as an offer or solicitation for the sale or purchase of securities. Retire First Ltd. And its officers, directors, employees and their family may from time to time invest in the securities discussed in this blog. This blog is intended for individuals where Retire First Ltd is registered as a dealer in securities.
Retire First is a member of the Canadian Investors Protection Fund.
Commission, trailing commissions, management fees and expense all may be associated with mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. A recommendation of any of the mentioned investments would only be made after a personal review of individual portfolio. Third Party research has been used in formulating the writer's opinions.
