Friday, November 9, 2012

Andina Minerals Acquired by Hochschild

Canadian junior gold miner Andina Minerals (TSX-V:ASM) was acquired by Hochschild (LON:HOC), a mining company based in Peru. Hochschild paid $105 million 80¢ a share for Andina.

The takeover was a friendly one, as Andina and Hochschild already had a joint venture in place in Chile.

Andina probably accepted the deal because of its poor share performance, which stood at over the offered price earlier in 2012, and had traded as high as $5 a share in 2007 and 2008. Hochschild offer was about twice the closing Wednesday price of the gold miner.

Concerns over share dilution have weighed on the company as it sought capitalization of its Volcan gold property in Chile.

Cost inflation remains a challenge for all gold miners, with juniors being especially vulnerable. Of course that problem will be solved as the price of gold rises and companies focus on lowering production costs.

CEO, George Bee, said this in a statement, “After reviewing the alternatives available to our company, we believe that the offer is the best option for Andina shareholders.”

The Chilean Volcan project has about 6.6 million ounces in gold reserves itself, which had an estimated capital cost of $547 million in the early part of 2011. Since then costs have risen for other miners, making these types of deals more probable in the near future.

Thursday, November 8, 2012

Jim Rogers: Obama's Economic Disaster to get Worse

Now that Barack Obama has been re-elected President of the United States, billionaire commodity expert and investor Jim Rogers sees his disastrous economic policies as not only continuing, but making things much worse for Americans and the world in general.

More deficit spending means more economic problems for the United States asserts Rogers, who also says the global markets have probably already discounted the eventuality of a fiscal crisis in America.

Rogers has consistently stated that in 2013 and 2014 it's going to be very rough years for the United States economically.

"America is going to have a slowdown in 2013-14, there will be fewer jobs, more unemployment and turmoil in oil and currency markets," Rogers said.

Even so, Rogers says there is little doubt the so-called fiscal cliff in the country will get a quick fix by politicians, but in the end it'll make things even worse.

When queried about a possible downgrade of the economy of the United States, Rogers said it should have already been done in the minds of investors. "If you haven't downgraded America in your mind, you may do so," he concluded.

He sees no change in the practices of the Federal Reserve either, where he expects printing money out of thin air to continue as it has been.

Rogers sees hard assets as the place to be over the next ten years, with gold prices expected to continue to soar.

Along with his recommendation that investors get into agriculture, he also suggests metals as another strong place to put your money.

He has put his money where is mouth is, recently buying up agricultural land in Australia.

Tuesday, November 6, 2012

Van Eck: Gold and Miners About to Soar

Joseph M. Foster, who is the lead investment team member for its flagship fund, Van Eck International Investors Gold Fund, said in an interview with The Gold Report that he sees gold prices and gold mining companies, especially midtiers and junior stocks, as ready to soar.

Citing the implementation of QE3 as a catalyst for gold, whereby the price of gold has jumped about 6 percent since August 2012, and the fund he is lead investor on up close to 20 percent since August, he sees that as continuing to be the performance of the asset class and mining companies serving it.

When asked if he sees this performance continuing, Foster said this:

Yes, for a couple of reasons. First, the boards of the large gold companies that have been missing expectations have woken up to the fact that management changes are needed. Some very high profile CEOs and COOs have departed. There has been a shift in focus toward more profitability and less growth. That shift toward profitability, shareholder returns and returns on capital should bode well for the industry.
Second, costs could be coming more under control in the months to come. The slowdown in the global economy caused a slowdown in mining activity across base metals, coal companies and iron ore companies. More labor is now available. Lead times for equipment and materials are shorter. That should translate into less cost pressure as we move through 2013. That could be another catalyst for the industry.

Catalysts that have driven gold and silver up remain in place, according to Foster, and there is nothing to suggest the United States will stop running budget deficits in the trillion dollar range any time soon. Central banks around the world are addicted to stimulus, and interest rates aren't going to come down in the next several years.

Expectations are gold and silver prices will continue to be supported and rise, and that could go on for possibly another decade or so.

As for larger miners, they won't be as desirable a place to invest in until they get a better hold on costs and predictability. Until that happens and profitability becomes the focus, they won't be the best place to invest in within the parameters of gold.

Friday, November 2, 2012

Eldorado (EGO) (PXD) (SFY) (CNX) (PRU) (SUSP) (TOU) Ratings Changes

Eldorado Gold Co. (EGO), Pioneer Natural Resources (PXD), Swift Energy (SFY), CONSOL Energy Inc. (CNX), Perseus Mining Limited (PRU), Susser Petroleum Partners LP (SUSP) and Tourmaline Oil Corp (TOU) had ratings on them adjusted by analysts.

Canaccord Genuity downgraded Pioneer Natural Resources (PXD) from a "Buy" rating to a "Hold" rating. They have a price target of $111.00 on the company.

Global Hunter Securities downgraded Swift Energy (SFY) from a "Buy" rating to an "Accumulate" rating. They have a price target of $28.00 on the company.

Morgan Stanley initiated coverage on CONSOL Energy Inc. (CNX). They placed an "Equal Weight" rating and price target of $37.00 on the company.

Morgan Stanley initiated coverage on Eldorado Gold Co. (EGO). They placed an "Overweight" rating and price target of $19.00 on the company.

Fraser Mackenzie initiated coverage on Perseus Mining Limited (PRU). They placed a "Strong-Buy" rating and price target of $3.40 on the company.

Janney Capital initiated coverage on Susser Petroleum Partners LP (SUSP). They placed a "Buy" rating and price target of $27.00 on the company.

National Bank initiated coverage on Tourmaline Oil Corp. (TOU). They placed an "Outperform" rating on the company.