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Big Gold Miners #2 : How low will Anglo Am go?

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How low will Anglo Am go?

 

https://uk.finance.yahoo.com/echarts?s=AAL.L#symbol=AAL.L;range=my

 

£7.78 downtrend still intact.

 

Key stats

https://uk.finance.yahoo.com/q/ks?s=AAL.L

 

https://uk.finance.yahoo.com/news/commodity-woes-see-ftse-suffer-194950129.html

'Anglo American (LSE: AAL.L - news) hovered at 13-year lows — down 28.4p to 3.5p — as it announced plans to axe thousands of jobs and may offload more assets. Despite the gloomy outlook, analysts at Jefferies believe the mining giant is “positioned to weather the storm”. * Gold price falls again to new five-year low On the mid-cap index, Aggreko (LSE: AGK.L - news) and Lonmin (LSE: LMI.L - news) were hardest hit.'

 

 

Debt to equity ratio ina sustianed uptrend.

 

Underlying commodity prices in a sustained down trend.

 

Anyone any thoughts no when where how the bottoming process will start?

 

 

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Might get more response in the trading area - so I will move it there

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2.png

As low as it needs too! We're looking at a rare event here. We haven't been this low for some time. I don't expect a 2009 rebound - look at how we're drifted lower, rather than crashed.

 

I am keeping an eye on the CRB index each day, and have made a shortlist of commodity plays that might benefit after the dust has settled. But I'm not putting a even a penny in until we get some price confirmation.

 

FXPO

JKX

FRES

HOC

POG

DRYS (dryships) etc.

 

I will shout from the rooftops, when to buy. But now is not the time.

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Gold and Mining Stocks now at Key Support levels

 

RIO broke $40 (and a 5% yield) ... but is back to $40 (more or less)

 

Sym. : Price : P / E : Yield :

RIO : $39.80 : 25.9 : 1.17% :

AU- : $05.73 : n / a : 0.00% :

NEM: $16.14 : 16.6 : 0.62% :

ABX : $07.04 : n / a : 1.14% :

ASA : $07.98 : n /a : 0.50% :

Rgld: $50.18 : 62.7 : 1.75% :

Fnv.t: $53.40 : 79.7 : 1.91% :


RIO / Rio Tinto ... update : $39.80
RIO_zps2fjuv9df.gif

AU / Anglogold ... update : $ 5.73
AU_zpsdw4mfd2t.gif

NEM / Newmont Gold ... update : $16.14
NEM_zpsje8nah7p.gif

 

ABX / Barrick Gold ... update : $ 7.04

ABX_zpshqojvuxf.gif

 

ASA Corp. ... update : $ 7.98

ASA_zpset8nizqh.gif

 

... and the royalty co's are both on key support

 

RGLD / Royal Gold ... update : $50.18

RGLD_zpsck9xdrey.gif

 

FNV.t / Franco Nevada ... update : $53.40

FNV_zpsdlyr3xe9.gif

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The Firesign Theatre guys see ":Five Years of Deflation" - and maybe that's what these shares are warning...

 

NOPE! That's what they said back in 2010 - and were basically right - as the charts do show

 

The Firesign Theatre visits Thom in studio

 

Uploaded on 11 Jun 2010

 

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Anglo Am £6.48.Still going from what I can see

Glencore £1.06.Getting destroyed here.No long term entry point in sight yet.Although,I fear this is one to completely avoid.

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Take a look at the Royalty Co's, like: RGLD, FNV.t, SLW...

 

I bought Jan.$10 calls on SLW

 


15_09_16_David_Morgan_SS0.jpg
Silver Hits 3-Week High Ahead of FOMC Decision - David Morgan
Guest(s): David Morgan

December silver futures prices closed near the session high and hit a three-week high today, but one silver guru is remaining cautious. ‘One day does not make a market,’ said David Morgan, editor of the popular newsletter, silver-investor.com. ‘Will it fall through or not? I think it depends on how the Fed’s action or inaction tomorrow manifests in the marketplace,’ Morgan said in an interview with Kitco News. He added that he does not think the U.S. Fed will act this month. December silver futures jumped over 4% on Wednesday, with prices last up $0.559 at $14.89 an ounce

=== ===

 

SLW ... All Data : 5 years : 6-mos

SLW-all_zpsmoxbio7v.gif

 

Silver Wheaton (SLW) Receives TSX Approval for a Normal Course Issuer Bid

VANCOUVER, British Columbia, Sept. 18, 2015 /PRNewswire/ -- Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW) (NYSE: SLW) announces that the Toronto Stock Exchange (the "TSX") has accepted the notice of Silver Wheaton's intention to commence a normal course issuer bid (the "NCIB").

On September 14, 2015, Silver Wheaton announced its intention to seek TSX approval for an NCIB. This approval allows the Company to purchase up to 20,229,671 Common Shares (representing 5% of the Company's 404,593,425 total issued and outstanding Common Shares as of September 11, 2015) over a period of twelve months commencing on September 23, 2015. The NCIB will expire no later than September 22, 2016

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Since I earlier put self-updating charts on the Big Miners, I changed the title to:

Big Gold Miners #2 : How low will Anglo Am go? ... etc.

If you object, I will shorten it, and change it back

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Since I earlier put self-updating charts on the Big Miners, I changed the title to:

Big Gold Miners #2 : How low will Anglo Am go? ... etc.

If you object, I will shorten it, and change it back

Works for me Doc.I'm a long term buyer.I start these threads as reference points in the hope that they'll bring in some people like you and van who can lift and enhance my understanding.

 

Looking back,my purchases of the big miners back in the late 90's were pure luck as I was piling out of techs into anything where I could see value.This time,my sixth sense is telling me that's where the value is but this is a different era and we probably won't have the Greenspan put to fall back on.

 

Thanks for that point about the royalty co's earlier as it helped me realise something I'd been pondering a while.

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Doug Casey-Greater Depression Already Started

 

2011 - he was roght about junior co's being worthless

 

And not yet right about a bigger boom

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Royal Gold has broken support, and is seeking a low

 

RGLD -- all data

 

RGLD_zpsbdsrp3wq.gif

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Take a look at the Royalty Co's, like: RGLD, FNV.t, SLW...

 

I bought Jan.$10 calls on SLW

 

15_09_16_David_Morgan_SS0.jpg
Silver Hits 3-Week High Ahead of FOMC Decision - David Morgan
Guest(s): David Morgan

December silver futures prices closed near the session high and hit a three-week high today, but one silver guru is remaining cautious. ‘One day does not make a market,’ said David Morgan, editor of the popular newsletter, silver-investor.com. ‘Will it fall through or not? I think it depends on how the Fed’s action or inaction tomorrow manifests in the marketplace,’ Morgan said in an interview with Kitco News. He added that he does not think the U.S. Fed will act this month. December silver futures jumped over 4% on Wednesday, with prices last up $0.559 at $14.89 an ounce

=== ===

 

SLW ... All Data : 5 years : 6-mos

SLW-all_zpsmoxbio7v.gif

 

Silver Wheaton (SLW) Receives TSX Approval for a Normal Course Issuer Bid

VANCOUVER, British Columbia, Sept. 18, 2015 /PRNewswire/ -- Silver Wheaton Corp. ("Silver Wheaton" or the "Company") (TSX:SLW) (NYSE: SLW) announces that the Toronto Stock Exchange (the "TSX") has accepted the notice of Silver Wheaton's intention to commence a normal course issuer bid (the "NCIB").

On September 14, 2015, Silver Wheaton announced its intention to seek TSX approval for an NCIB. This approval allows the Company to purchase up to 20,229,671 Common Shares (representing 5% of the Company's 404,593,425 total issued and outstanding Common Shares as of September 11, 2015) over a period of twelve months commencing on September 23, 2015. The NCIB will expire no later than September 22, 2016

 

lookin good on that call Doc.Pardon the pun.

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Probably. I see no bottom in the commodities. I thought the 200 area would hold, but the CRB index is at 183. I am going to dig out my first investment book - Jim Rogers Hot Commodties and just see what I could be missing.

 

I remember reading about how when commodties do badly, stocks do well. But stocks haven't been steller, either, quite the opposite. The shorters of commodities must have made fortunes in the last 4 years - but I ask where are they putting their winnings into? What is the next bull market?

 

Something just doesn't add up. Either commodities are going to turn around or stocks are going to turn into the next bull super cycle.

 

Cash seems to be the only thing to be in, with a few very, very selective big/medium cap stocks, with no obvious sector to be in.

 

-----

 

The miners, I've never seen cheaper. But this isn't 2008, this is a protracted cyclical downturn in commodities. The unsophisticated investor probably has lost everything. I missed out on FXPO (iron miner) when it fell from about £5 to 50p, and then got back up to £5. Now it is at 25p. Dryships looks like it will never recover - it's at 16c, and the peak in 2007 was $120 a share.

 

If only I had a crystal ball, and someone could tell us, this IS the bottom, and which of the big miners won't go bust, and make a full recovery to their peaks. E.g. LMI, AQP (platium miners). We could make a millions from a very small outlay of a few thousand. Bargain of the century? Or Biggest trap of the century.

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http://davidstockmanscontracorner.com/the-lull-before-the-storm-an-ideal-chance-to-exit-the-casino-part-1/

 

 

'Last night’s Asian action brought another warning that the global deflation cycle is accelerating. Iron ore broke below $40 per ton for the first time since the central banks kicked off the world’s credit based growth binge two decades ago; it’s now down 40% this year and 80% from its 2011-212 peak.

The chart below purports to show a difficult outlook for iron ore prices in the next several years owing to an expected further reduction of demand, while supply is expected to grow by another 5% through 2017 owing to the completion of projects already in the pipeline.

But that is wishful mainstream thinking. In fact, all the major sources of steel demand are in deep contraction. World shipbuilding is coming to a screeching halt; industrial infrastructure building in Brazil, Turkey and throughout the EM economies is in freefall; and China’s credit Ponzi, which generated massive overinvestment in apartment buildings, industrial production and public infrastructure, is visibly toppling.

Accordingly, global iron-ore demand is likely to plunge by 20%, not 2% as shown in the graph. Prices are therefore heading far lower, perhaps into the $20 per ton range. There will be unprecedented, sweeping bankruptcies in the global metals industries and a multiplier effect among adjacent supplier sectors.

MW-EA091_ironOr_20151130070006_NS.png?uuWSJ

This implosion of demand cannot be remedied with another round of central bank money printing because the world is already at peak debt. Consequently, the global corporate profit cycle is heading into a deep downturn——just as the equity markets go into a final spasm of levitation based on a handful of still rising big cap stocks.

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http://www.investing.com/equities/anglo-american

 

£3-73........still going.No end in sight.

 

http://www.wsj.com/articles/anglo-americans-shares-plunge-to-all-time-low-1449496097

'LONDON— Anglo American PLC’s shares tumbled to a new all-time low on Monday, reflecting the harsh verdict by investors on a business model the U.K. company and other big miners have long pursued: Digging up a diverse range of materials.

The idea behind diversification is simple. Miners that produce and sell a broad range of commodities said they could perform better in a downturn than miners with a narrow basket, as strong performance by some commodities could balance out a poor showing by others.

Anglo is among the most diversified miners, with earnings before interest and taxes spread among iron ore and manganese (27%), coal (14%), copper (9%), diamonds (31%) and platinum (14%) in the first half of 2015.

The problem: In the latest downswing, nearly all commodities have slid amid softening demand by their biggest consumer, China. Iron-ore prices traded Monday at $39 a ton, according to the Steel Index, down from highs of more than $190 a ton on Feb 17, in 2011; copper rose 2.5% early Monday but remains down about 25% on the year.

“What you tend to find in most crises is that correlations [between commodities] move one way and everything craps out together,” said Sanford C. Bernstein analyst Paul Gait, a former Anglo executive who still advises buying the company’s stock because of its large reserves of commodities such as copper.

Anglo’s shares have plunged nearly 70% this year, falling to £3.70 ($5.59) on Monday morning in London trading, the lowest since the company went public in 1999, before recovering slightly.

Now Anglo is moving to fortify its balance sheet amid the rout in commodities, looking to sell off assets and cut costs. The Wall Street Journal reported Thursday that Anglo, the fifth biggest miner by market valuation, plans to slash its dividend, a move it could announce Tuesday at its “investor day,” or early next year, people familiar with the decision said. The company also says it is cutting 53,000 jobs—a third of its workforce—over the next few years.

Glencore PLC, which in September said it would suspend its dividend, has also touted its diversified earnings engine, which includes its trading arm and a mining division exposed to copper, coal, zinc and aluminum, among other commodities. Glencore executives said the firm’s trading business would generate solid profits no matter which direction the market was moving, giving it a cushion during hard times.

But investors revolted against the model this year as the high debt load carried by its trading arm, on top of the mining division’s debt, sparked concerns that Glencore would get hit with crippling credit-rating downgrades as commodity prices tumbled. Glencore’s share price has fallen nearly 71% this year.

Mining giants BHP Billiton Ltd. and Rio Tinto PLC, who are far more exposed to a single commodity—iron ore—have performed far better than their more diversified competitors. Iron ore accounts for nearly 60% of adjusted earnings at Rio and BHP. The companies have been able to weather a sharp downdraft in iron ore prices because their mines run at far lower costs than competitors, including Anglo.

Anglo spokesman James Wyatt-Tilby defended the company’s strategy, noting that various commodities have swung lower with “differing timing over the last two years.” “We expect different sequencing on the way back up,” including a swifter rebound in base metals than bulk commodities, Mr. Wyatt-Tilby said.

No big miner has talked up the benefits of diversification more than Anglo. Its chief executive, Mark Cutifani, in February said that in 2014 its “diversified product portfolio provided us with a degree of insulation from the particularly sharp price fall” in commodities.

Then, the argument made some sense. Anglo’s majority-owned De Beers unit, which produces about one-third of the world’s “rough” diamonds, posted an 11% gain in revenue to $7.1 billion in 2014 from the previous year on strengthening U.S. demand. That helped offset poor performance at its iron ore and coal mines.

 

But diamonds have been a disappointment this year amid lackluster demand and falling prices.

Some investors think Anglo’s business model could still work out. James Henderson of Henderson Global Investors Ltd., a London money manager that owns 2.3 million shares of Anglo, said he thinks the market isn’t appropriately valuing De Beers. He said he has been scooping up Anglo shares recently.

“I think this is an opportunity,” he said. “I think their balance sheet is OK for them to toughen it out for the next two to three years. It’s just hard work.”

Other investors are more glum.

“The bottom line is that most commodities tend to move together most of the time,” said Nik Stanojevic, an equity analyst at Brewin Dolphin Ltd., a $45 -billion private wealth manager. If a company is a low-cost producer, “you’ll make money no matter what the commodity price...[but] Anglo American is not the lowest-cost producer in many of its commodities.”

Mr. Stanojevic has advised his fund managers to sell Anglo’s stock for the past five years, pointing to the company’s elevated cost of insuring its debt against default as a sign. Anglo had net debt of $13.5 billion as of the end of June, or $11.9 billion on the closure of the sale of its stake in Lafarge Tarmac Holdings Ltd. buildings-material joint venture in July.

“For Anglo, the problem is that the balance sheet of the company has become weak,” said Yohan Salleron, a fund manager at Paris-based Mandarine Gestion which owns about $23 million worth of Anglo stock.

The diversified mining model seems to be a good strategy over the long term, but the company has to sell unwanted assets, said Fidelis Madavo, head of equities at South Africa’s state-owned pension fund Public Investment Corp. Ltd., Anglo’s largest shareholder. That process has been slow, he said, pointing to a September deal to shed labor intensive platinum assets in South Africa that could take over a year and a half to close.'

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https://uk.finance.yahoo.com/echarts?s=AAL.L#symbol=AAL.L;range=my

 

£3-39

 

90.4% off peak.

 

https://uk.finance.yahoo.com/news/anglo-american-says-slash-staff-111027779.html

'Mining giant Anglo American (LSE: AAL.L - news) on Tuesday said it plans to slash its workforce by almost two-thirds, from 135,000 staff to 50,000 after 2017, under restructuring triggered by tumbling commodity prices.

The company published a graph showing the expected decline in jobs -- to 99,000 next year and 92,000 in 2017 followed by another sharp reduction -- via a combination of asset sales and internal cuts.

"We will be radically restructuring our portfolio, so the net result is expect to be a reduction to around 50,000 employees," a spokesperson confirmed in an email to AFP.

"But bear in mind that these include assets that we will sell, so the 85,000 jobs don't (all) disappear as many will be employed by new owners of those mines that we sell."'

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