While gold has been hobbling along throughout July, the lower than expected numbers of the GDP report caused it to surge in the last trading day of the month by 1.1 percent, reaching $1,183.90 an ounce on the COMEX division of the NYMEX for December delivery.
Even so, it still finished July down 5 percent, falling $62.68. Spot gold price increased to $1,180.97, rising $12.20. This was the worst month for gold since December.
Gold surged on the day because gold investors rushed to cover their short positions in response to the GDP numbers.
Nothing has changed in the fundamental reasons of why gold has continued to rise over the last decade, and that will continue on.
Even the government attacks on the alleged fear-mongering of those pushing gold coins over gold bullion won't deter the rise of gold. The government attack is to shut up the voices of those who rightfully point out the risks related to the governmental policies around the globe which have brought to the economic catastrophe we're now experiencing.
Using Glen Beck as a focal point and the gold company he works with to sell gold coins and bullion, the government is using a few complaints (assuming they're even legitimate) to make it look like the reason gold is going up is because of unwarranted use of fear to sell gold coins rather than gold bullion.
The idea is to make a connection between gold and fear in a way that makes it seem like a bunch of hype. Don't think this isn't being orchestrated, even if a few innocent dupes are being used by the government to attack people investing in gold, which is a daily reminder of the failed and irresponsible policies of the government and Federal Reserve.
Giving the advice to acquire gold coins rather than gold bullion has been one that has been offered by many advisers for years, and it will continue to be because it's much more portable and easier to hide than bullion. Of course how many people can even afford to buy gold bullion in the first place, making this even more suspect.
Anyway, back to the fundamentals. Gold will continue to rise because of the practices attempted to be hidden by the government and Federal Reserve of continuing to print money and "stimulate" the economy, the ongoing sovereign debt crisis in Europe, and increasing and dangerous government deficits which are becoming more risky by the day.
Investors have been caused to dangerously relax because of the so-called banks stress tests in Europe which made it appear as if the majority passed with flying colors, while experts said they were in reality a joke. Even Citigroup (NYSE:C) noted, of the banks tested, 24 should have failed rather than only the seven asserted to have failed.
Even the downgrade of Ireland's debt recently was shrugged off as irrelevant by investors, who seemingly have swallowed the kool-aid.
The economic condition of the United States is dismal, China is being forced to slow, and Europe is in shambles, yet nobody seems to have remembered these things.
Maybe the BP (NYSE:BP) fiasco temporarily got their attention off of the ball. But that is close to being over as far as permanently plugging the oil well goes, and people are getting interested in other things again.
The fact that gold moved nicely today on just missing the GDP numbers by a small amount, shows investors are looking for a reason to push prices up again, and I don't think it'll take that long before it happens.
Friday, July 30, 2010
Haywood Securities Maintains "Outperform" on Barrick (NYSE:ABX)
Haywood Securities reiterated its "Outperform" rating on Barrick Gold (NYSE:ABX) while keeping a price target of $56 on the gold miner.
Analysts from Haywood said this about the valuation of Barrick, “Our $56.00 target is based on an 11.5x multiple to our 2011E cash flow of US $4.70 per share at a 2011E gold price of US $1,250 per ounce. The Company’s peer group currently trades at an average of 9.8x 2011E CFPS, a multiple we expect to expand as gold trends higher in the fall, and stocks recover from the recent sell-off.”
Even with their cash costs per ounce higher for the most recent quarter, where it cost $457 an ounce to produce, the company was still able to beat earnings estimates.
Production levels are still expected to come in at from 7.6 million to 8 million ounces of gold.
Analysts from Haywood said this about the valuation of Barrick, “Our $56.00 target is based on an 11.5x multiple to our 2011E cash flow of US $4.70 per share at a 2011E gold price of US $1,250 per ounce. The Company’s peer group currently trades at an average of 9.8x 2011E CFPS, a multiple we expect to expand as gold trends higher in the fall, and stocks recover from the recent sell-off.”
Even with their cash costs per ounce higher for the most recent quarter, where it cost $457 an ounce to produce, the company was still able to beat earnings estimates.
Production levels are still expected to come in at from 7.6 million to 8 million ounces of gold.
Centerra Gold (TSE:CG) Paying First Dividend in its History
With attention being fixated on gold and gold mining companies, a number of firms have made changes to attract investors and gravitate toward being run like a company people understand.
Centerra Gold (NYSE:CG) has responded in that regard by announcing their first dividend payout in the history of the company,.
Starting on September 1, shareholders will receive a dividend of 6 Canadian cents a share, payable on September 8.
This comes off a return to profitability by the company, which generated profits of $29.8 million, or 13 cents a share for its latest quarter. That is in contrast to the loss last year of $79.6 million, or 26 cents a share, last year in the same quarter.
That exceeded analysts' expectations of 5 cents a share.
Centerra Gold (NYSE:CG) has responded in that regard by announcing their first dividend payout in the history of the company,.
Starting on September 1, shareholders will receive a dividend of 6 Canadian cents a share, payable on September 8.
This comes off a return to profitability by the company, which generated profits of $29.8 million, or 13 cents a share for its latest quarter. That is in contrast to the loss last year of $79.6 million, or 26 cents a share, last year in the same quarter.
That exceeded analysts' expectations of 5 cents a share.
Chevron (NYSE:CVX) Earnings: Up, Up, and Away!
Earnings for Chevron Corp. (NYSE:CVX) skyrocketed in the latest quarter, tripling during the period, while exceeding analysts’ projections.
Second-quarter profits soared to $5.41 billion, or $2.70 a share, up from the $1.75 billion, or 87 cents a share, during the same quarter last year.
Analysts had been looking for earnings per share of $2.46.
As with their major competitors Exxon Mobil Corp. (NYSE:XOM) and ConocoPhillips (NYSE:COP), refining margins increased significantly during the reporting period, generating much of the earnings. Demand for fuel also rose around the world, contributing to the strong numbers from more sales and higher prices. The average price of U.S. oil futures was $78.05 a barrel for the quarter.
Revenue surged to $53 billion, a gain of 32 percent.
Production for oil and gas increased to 2.75 million barrels a day, an increase of 2.8 percent.
Second-quarter profits soared to $5.41 billion, or $2.70 a share, up from the $1.75 billion, or 87 cents a share, during the same quarter last year.
Analysts had been looking for earnings per share of $2.46.
As with their major competitors Exxon Mobil Corp. (NYSE:XOM) and ConocoPhillips (NYSE:COP), refining margins increased significantly during the reporting period, generating much of the earnings. Demand for fuel also rose around the world, contributing to the strong numbers from more sales and higher prices. The average price of U.S. oil futures was $78.05 a barrel for the quarter.
Revenue surged to $53 billion, a gain of 32 percent.
Production for oil and gas increased to 2.75 million barrels a day, an increase of 2.8 percent.
Centerra Gold (TSE:CG) Profitable Again
Centerra Gold (TSE:CG) has returned to profitability this quarter, as stability in Kyrgyzstan helped the gold miner to increase production, along with higher gold prices, helped them to a solid performance.
For the quarter, Centerra exceeded expectations, generating earnings of $29.8 million, or 13 cents a share. Last year in the same quarter the company had a loss of $79.6 million, or 36 cents. That was related to higher costs and diminished recovery of gold. Analysts had been looking for 5 cents a share on average.
Revenue increased to $152.2 million, a gain of 46 percent.
The flagship of Centerra is its Kumtor mine in Kyrgyzstan, and it operates a second mine in Mongolia - the Boroo mine, which is much smaller than Kumtor.
Gold production increased from 110,457 ounces in the second quarter of last year, to 121,728 ounces the last quarter.
For the quarter, Centerra exceeded expectations, generating earnings of $29.8 million, or 13 cents a share. Last year in the same quarter the company had a loss of $79.6 million, or 36 cents. That was related to higher costs and diminished recovery of gold. Analysts had been looking for 5 cents a share on average.
Revenue increased to $152.2 million, a gain of 46 percent.
The flagship of Centerra is its Kumtor mine in Kyrgyzstan, and it operates a second mine in Mongolia - the Boroo mine, which is much smaller than Kumtor.
Gold production increased from 110,457 ounces in the second quarter of last year, to 121,728 ounces the last quarter.
BP (NYSE:BP) Oil UPDATE: Static Kill Progress, Asset Sales
According to the soon to be CEO for BP (NYSE:BP), the company is planning on attempting the "static kill" operation on Tuesday. If successful it will seal the broken well. The the focus will turn to the relief well and permanently plugging it by the end of August.
The "static kill" process entails pumping heavy drilling mud followed by cement into the top of the Macondo well. The goal is to push a column of oil back into the reservoir almost three miles below the seafloor. Crews were installing a final pipe like casing into the well Thursday evening.
At a news conference in Mississippi, Dudley stated that BP is currently in the process of a $25 to $30 billion global asset sale. The Apace deal of $7 billion has also been agreed on. The sales are part of the company's plan to pay for the costs they've incurred from the massive oil leak that has spilled out over $200 million gallons of toxic crude.
The "static kill" process entails pumping heavy drilling mud followed by cement into the top of the Macondo well. The goal is to push a column of oil back into the reservoir almost three miles below the seafloor. Crews were installing a final pipe like casing into the well Thursday evening.
At a news conference in Mississippi, Dudley stated that BP is currently in the process of a $25 to $30 billion global asset sale. The Apace deal of $7 billion has also been agreed on. The sales are part of the company's plan to pay for the costs they've incurred from the massive oil leak that has spilled out over $200 million gallons of toxic crude.
BP (NYSE:BP) Oil Making $100 Million Fund For Rig Workers
BP (NYSE:BP) oil said today that it is planning on beginning a $100 million fund for unemployed rig workers. It will be a charitable fund for those workers experiencing economic hardship caused by the drilling moratorium forced by the United States Government.
BP's Managing Director Bob Dudley said, "The Baton Rouge Area Foundation has a strong track record of meeting community needs, and we are quite confident the foundations will respond effectively to assist the rig workers who today are struggling to make ends meet."
On June 16th BP said they planned on setting up a voluntary fund as a gesture of good will for the people of the Gulf Coast Region. What's being called The Rig Worker Assistance Fund will be handled by The Gulf Coast Restoration and Protection Foundation.
Foundation president and CEO, John G. Davies said, "The foundation is committed to moving as quickly as we can to write grants from this donation by BP. This agreement with BP came together over about three weeks, and we are moving rapidly to create the guidelines related to this grant program. We expect to release all the details of the program within two weeks, than to begin taking applications for grants September 1st."
BP's Managing Director Bob Dudley said, "The Baton Rouge Area Foundation has a strong track record of meeting community needs, and we are quite confident the foundations will respond effectively to assist the rig workers who today are struggling to make ends meet."
On June 16th BP said they planned on setting up a voluntary fund as a gesture of good will for the people of the Gulf Coast Region. What's being called The Rig Worker Assistance Fund will be handled by The Gulf Coast Restoration and Protection Foundation.
Foundation president and CEO, John G. Davies said, "The foundation is committed to moving as quickly as we can to write grants from this donation by BP. This agreement with BP came together over about three weeks, and we are moving rapidly to create the guidelines related to this grant program. We expect to release all the details of the program within two weeks, than to begin taking applications for grants September 1st."
Thursday, July 29, 2010
Barrick (NYSE:ABX), Agnico-Eagle (NYSE:AEM) See $1,400 Gold
After solid earnings for the second quarter were reported by Barrick Gold (NYSE:ABX) and Agnico-Eagle (NYSE:AEM), executives at both companies said they see gold going to $1,400 an ounce by the end of 2010.
Agnico CEO Sean Boyd said this in an interview concerning how people are viewing gold at this time:
“I think a lot of people are jumping to the conclusion that it's over, it's run its course.
“But I would not count gold out. We are going into a period, September/October, which is traditionally strong, let's see how things go there.”
The major reason behind the drop in gold prices is the easing of concerns over the sovereign debt crisis in Europe, said Boyd, and I agree with him. That and the typical slow summer gold season.
Much of this came about from the stress test bank results in Europe which gave the illusion all things were well. Many people that understand how it works said the tests were really a joke, and follow-up research revealed that far more than seven of the banks are under stress; up to 24 of them, according to Citigroup (NYSE:C).
No matter what gimmicks and tricks are attempted to fool people, there is no way you can hide the disaster that Europe is, and it's only a matter of time before conditions worsen and people look for a safe haven for their money again.
News from China continues to confirm they're slowing things down there, and the United States is far from any type of sustainable recovery.
In other words, conditions that caused gold prices to skyrocket in the first place haven't changed, and even though people are in denial and shrugging off what is right in front of their face, won't change what the reality is, and these conditions will continue to contribute to the rise in gold prices, even as Ben Bernanke reiterates he'll do what he needs to do to prop up the economy, i.e., print more money. All of this offers support to ongoing increases in gold prices, and people and institutions who ignore that will do it to their loss.
Agnico CEO Sean Boyd said this in an interview concerning how people are viewing gold at this time:
“I think a lot of people are jumping to the conclusion that it's over, it's run its course.
“But I would not count gold out. We are going into a period, September/October, which is traditionally strong, let's see how things go there.”
The major reason behind the drop in gold prices is the easing of concerns over the sovereign debt crisis in Europe, said Boyd, and I agree with him. That and the typical slow summer gold season.
Much of this came about from the stress test bank results in Europe which gave the illusion all things were well. Many people that understand how it works said the tests were really a joke, and follow-up research revealed that far more than seven of the banks are under stress; up to 24 of them, according to Citigroup (NYSE:C).
No matter what gimmicks and tricks are attempted to fool people, there is no way you can hide the disaster that Europe is, and it's only a matter of time before conditions worsen and people look for a safe haven for their money again.
News from China continues to confirm they're slowing things down there, and the United States is far from any type of sustainable recovery.
In other words, conditions that caused gold prices to skyrocket in the first place haven't changed, and even though people are in denial and shrugging off what is right in front of their face, won't change what the reality is, and these conditions will continue to contribute to the rise in gold prices, even as Ben Bernanke reiterates he'll do what he needs to do to prop up the economy, i.e., print more money. All of this offers support to ongoing increases in gold prices, and people and institutions who ignore that will do it to their loss.
Exxon Mobil (NYSE:XOM) Earnings Up On Refinery Margins and Oil Prices
In what appears to be a major story in the earnings' report season, Exxon Mobil (NYSE:XOM) was the latest of the oil companies to say refining margins were a major part of their earnings success, along with higher oil prices.
Consequently, earnings in the quarter surged 85 percent for Exxon, coming in at $7.56 billion, or $1.60 a share. That's up from the $3.95 billion, or 81 cents a share, in the same quarter last year.
Revenue soared to $92.5 billion, a 24 percent increase. Analysts had looked for revenue of $98.5 billion and $1.46 a share. The margin spread helped Exxon outperform in earnings even with lower-than-expected revenue.
The oil giant said oil production in the second quarter was 4.0 million barrels of oil equivalent per day, an increase of 8 percent over 2009.
Exxon made a major move to diversify their revenue and earnings by acquiring natural gas giant XTO Energy Inc. for $30 billion. That makes Exxon the largest producer of natural gas in the United States.
In the second half of 2010 they plan on ramping up drilling in the extraordinary shale gas fields in North America.
Consequently, earnings in the quarter surged 85 percent for Exxon, coming in at $7.56 billion, or $1.60 a share. That's up from the $3.95 billion, or 81 cents a share, in the same quarter last year.
Revenue soared to $92.5 billion, a 24 percent increase. Analysts had looked for revenue of $98.5 billion and $1.46 a share. The margin spread helped Exxon outperform in earnings even with lower-than-expected revenue.
The oil giant said oil production in the second quarter was 4.0 million barrels of oil equivalent per day, an increase of 8 percent over 2009.
Exxon made a major move to diversify their revenue and earnings by acquiring natural gas giant XTO Energy Inc. for $30 billion. That makes Exxon the largest producer of natural gas in the United States.
In the second half of 2010 they plan on ramping up drilling in the extraordinary shale gas fields in North America.
Hornbeck (NYSE:HOS) Surpasses Expectations, Earnings Skyrocket
Hornbeck Offshore Services Inc (NYSE:HOS) beat analysts' estimates, as the provider of marine transportation posted solid numbers for the quarter.
Earnings for the quarter came in at $13 million, or 48 cents a share, far surpassing the $199,000, or 1 cent a share, they generated in the same quarter last year.
For revenue and earnings, analysts had been looking for $94 million in revenue and 14 cents a share in earnings.
Revenue increased to $111.9 million, a 14 percent gain. Revenue from upstream operations was $100.5 million, rising 20 percent.
For the year, Hornbeck gave a guidance range of 81 cents a share to $1.73 a share for the full year. That beats the expected 76 cents analysts projected.
Hornbeck was the company that pressed hardest for the oil moratorium by Obama to be lifted, and temporarily had it stopped.
Earnings for the quarter came in at $13 million, or 48 cents a share, far surpassing the $199,000, or 1 cent a share, they generated in the same quarter last year.
For revenue and earnings, analysts had been looking for $94 million in revenue and 14 cents a share in earnings.
Revenue increased to $111.9 million, a 14 percent gain. Revenue from upstream operations was $100.5 million, rising 20 percent.
For the year, Hornbeck gave a guidance range of 81 cents a share to $1.73 a share for the full year. That beats the expected 76 cents analysts projected.
Hornbeck was the company that pressed hardest for the oil moratorium by Obama to be lifted, and temporarily had it stopped.
Eldorado's (NYSE:EGO) Earnings More Than Double, Revenue Surges
Eldorado Gold Corp. (NYSE:EGO) (TSE:ELD) joined the parade of gold miners who performed strongly in the latest quarter, as earnings more than doubled and revenue was up 158 percent.
For the second quarter, earning soared to $60.5 million, or 11 cents a share, way up from the $25.9 million, or 7 cents a share in the same quarter of 2009.
Revenue also exploded to $207.8 million, an increase of 158 percent.
Analysts were looking for revenue of $185.2 million and earnings of 8 cents a share.
Gold production in the quarter almost doubled, with the number of gold ounces produced exploding to 167,940 ounces, just short of doubling last year's 84,572 ounces.
Cost on average were up this quarter though, rising from $303 an ounce last year to $357 an ounce this year in the same quarter.
The average price of gold sold by the miner was $1,195 an ounce, selling a total of 172,826 ounces during that time.
Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Agnico-Eagle (NYSE:AEM) have all reported this week, and have performed strongly.
Newmont (NYSE:NEM) was the only slight disappointment, as there earnings were good, but revenue failed to meet expectations.
For the second quarter, earning soared to $60.5 million, or 11 cents a share, way up from the $25.9 million, or 7 cents a share in the same quarter of 2009.
Revenue also exploded to $207.8 million, an increase of 158 percent.
Analysts were looking for revenue of $185.2 million and earnings of 8 cents a share.
Gold production in the quarter almost doubled, with the number of gold ounces produced exploding to 167,940 ounces, just short of doubling last year's 84,572 ounces.
Cost on average were up this quarter though, rising from $303 an ounce last year to $357 an ounce this year in the same quarter.
The average price of gold sold by the miner was $1,195 an ounce, selling a total of 172,826 ounces during that time.
Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Agnico-Eagle (NYSE:AEM) have all reported this week, and have performed strongly.
Newmont (NYSE:NEM) was the only slight disappointment, as there earnings were good, but revenue failed to meet expectations.
Barrick (NYSE:ABX) Exceeds Earnings, Revenue Expectations
As expected, Barrick Gold (NYSE:ABX), the largest gold miner in the world, had a great quarter, exceeding analysts' expectations for earnings and revenue.
Earnings for the second quarter reached $759 million, or 77 cents a share. Last year in the same quarter Barrick generated $492 million in profits, or 56 cents a share.
Analysts had been looking for earnings of 72 cents a share on revenue of $2.61 billion. Revenue came in at 2.64 billion, so that was pretty close to expectations, although exceeding them by a little.
Gold production and higher gold prices led the way, even with the increased costs of mining. Gold production increased to 1.9 million ounce, a gain of 4.2 percent.
Guidance remains in place, where production estimates are expected to stay on target, with 7.6 million to 8 million ounces of gold produced in 2010. Cash costs are estimated to be from $425 to $455 an ounce during that time.
The board of directors of Barrick also declared a quarterly dividend of 12 cents a share, an increase of 20 percent over the previous dividend. Annually that translates to 48 cents a share.
Barrick will also move from their existing dividend payout structure of semi-annual to a quarterly payout structure.
Earnings for the second quarter reached $759 million, or 77 cents a share. Last year in the same quarter Barrick generated $492 million in profits, or 56 cents a share.
Analysts had been looking for earnings of 72 cents a share on revenue of $2.61 billion. Revenue came in at 2.64 billion, so that was pretty close to expectations, although exceeding them by a little.
Gold production and higher gold prices led the way, even with the increased costs of mining. Gold production increased to 1.9 million ounce, a gain of 4.2 percent.
Guidance remains in place, where production estimates are expected to stay on target, with 7.6 million to 8 million ounces of gold produced in 2010. Cash costs are estimated to be from $425 to $455 an ounce during that time.
The board of directors of Barrick also declared a quarterly dividend of 12 cents a share, an increase of 20 percent over the previous dividend. Annually that translates to 48 cents a share.
Barrick will also move from their existing dividend payout structure of semi-annual to a quarterly payout structure.
Wednesday, July 28, 2010
Goldcorp (NYSE:GG) Soars in Second Quarter, Earnings Reach $200 Million
Goldcorp (NYSE:GG) (TSE:G) performed as was expected from large gold miners today, as Newmont (NYSE:NEM) earlier in the day reported lower-than-expected earnings in the last quarter, generating doubts as to how other gold miners had performed.
That concern is off the table now, as Goldcorp report net earnings of $198.8 million, or 27 cents a share. That is in contrast to last year, where profits were at $99.2 million, or 14 cents a share.
Revenue surged to $844.3 million, a gain of 34 percent over last year, on higher gold prices and increased sales of gold.
Gold production in the quarter was 609,500 ounces, which brought operating cash flow to a record level of $382.6 million.
That concern is off the table now, as Goldcorp report net earnings of $198.8 million, or 27 cents a share. That is in contrast to last year, where profits were at $99.2 million, or 14 cents a share.
Revenue surged to $844.3 million, a gain of 34 percent over last year, on higher gold prices and increased sales of gold.
Gold production in the quarter was 609,500 ounces, which brought operating cash flow to a record level of $382.6 million.
Agnico-Eagle (NYSE:AEM) Earnings Reach $100 Million in Second Quarter
Agnico-Eagle Mines Ltd. (NYSE:AEM) (TSE:AEM) released its second quarter numbers, and they have a lot to celebrate, as they generated $100.4 million in earnings on revenue of $394.9 million.
Last year in the same quarter the company only had a profit of $1.2 million, or 1 penny a share. Revenue in the second quarter of 2009 reached $133.1 million.
Gross mine profits and increased gold production were the keys to the turnaround, with gold production rising 116 percent in the quarter, while mine profits rose 151 percent.
Chief executive Sean Boyd said in a statement, "Four of the mines are now operating at steady state with the other two in the late stages of optimization.
"Further increases in gold production and lower cash operating costs are expected in the second half of 2010 as we continue to optimize all our mines and focus on driving down the unit costs at our Kittila and Meadowbank mines."
Full year gold production guidance was maintained at from 1 million to 1.1 million ounces.
The average realized price for gold in the quarter was $1,222 an ounce, far above the $962 from 2009.
Last year in the same quarter the company only had a profit of $1.2 million, or 1 penny a share. Revenue in the second quarter of 2009 reached $133.1 million.
Gross mine profits and increased gold production were the keys to the turnaround, with gold production rising 116 percent in the quarter, while mine profits rose 151 percent.
Chief executive Sean Boyd said in a statement, "Four of the mines are now operating at steady state with the other two in the late stages of optimization.
"Further increases in gold production and lower cash operating costs are expected in the second half of 2010 as we continue to optimize all our mines and focus on driving down the unit costs at our Kittila and Meadowbank mines."
Full year gold production guidance was maintained at from 1 million to 1.1 million ounces.
The average realized price for gold in the quarter was $1,222 an ounce, far above the $962 from 2009.
Husky Energy (TSE:HSE) Disappoints Again, Misses Estimates
Husky Energy Inc (TSE:HSE) had another disappointing quarter, as they missed estimates again, while lowering production guidance.
Investors and analysts are starting to get frustrated with the company, as they've missed their own production guidance for six straight years. Some are openly wondering about their ability to see the near-term future and performance of the company.
Earnings came to C$266 million ($256 million), or 31 Canadian cents a share, for the second quarter, down from C$345 million, or 41 Canadian cents a share, for the same quarter last year.
New CEO Asim Ghosh unconvincingly said this about the company's performance and goals, “Husky’s business strategies have historically delivered strong results for shareholders and the company has a tremendous portfolio of assets to fuel mid to long-term growth...however, a key goal is delivering near-term production growth. We are rebalancing Husky’s portfolio to direct a measure of capital to low cost, high return projects to achieve this near-term goal while maintaining the integrity of our long-term objectives.”
The company primarily blamed the strength of the Canadian dollar in connection to decreasing the value of commodity prices, which had performed strong in the quarter, for their dismal numbers. They also used the poor weather in Western Canada as a reason for lower heavy oil production.
Since the latter part of September 2008, the share price of the company has gone nowhere, and there's nothing in this report to indicate that's going to change any time soon.
Investors and analysts are starting to get frustrated with the company, as they've missed their own production guidance for six straight years. Some are openly wondering about their ability to see the near-term future and performance of the company.
Earnings came to C$266 million ($256 million), or 31 Canadian cents a share, for the second quarter, down from C$345 million, or 41 Canadian cents a share, for the same quarter last year.
New CEO Asim Ghosh unconvincingly said this about the company's performance and goals, “Husky’s business strategies have historically delivered strong results for shareholders and the company has a tremendous portfolio of assets to fuel mid to long-term growth...however, a key goal is delivering near-term production growth. We are rebalancing Husky’s portfolio to direct a measure of capital to low cost, high return projects to achieve this near-term goal while maintaining the integrity of our long-term objectives.”
The company primarily blamed the strength of the Canadian dollar in connection to decreasing the value of commodity prices, which had performed strong in the quarter, for their dismal numbers. They also used the poor weather in Western Canada as a reason for lower heavy oil production.
Since the latter part of September 2008, the share price of the company has gone nowhere, and there's nothing in this report to indicate that's going to change any time soon.
Berry Petroleum (NYSE:BRY) Demolishes Earnings Expectations in Second Quarter
Berry Petroleum Company (NYSE:BRY) left analysts' earnings expectations in the dust for the second quarter, as they handily blew past the estimated 34 cents a share, to 42 cents a share, based on net income of $89 million.
President and chief executive officer Robert F. Heinemann said, “Performance from Berry’s portfolio of assets was strong in the second quarter. Production for the second quarter of 2010 was 32,854 BOE/D, 67% of which was oil production. While diatomite production declined during the quarter as we awaited new permits and optimized field production, we were able to increase companywide production by 12% during the quarter with meaningful contributions from each of our other operating areas."
Heinemann added, "We are maintaining our full-year 2010 production guidance of between 32,250 and 33,000 BOE/D. In addition, we settled our claim in the Flying J bankruptcy during the second quarter and received proceeds of $60.5 million on July 23, 2010 which we have used to pay down debt."
Oil accounted for 67 percent of production, while natural gas accounted for the other 33 percent. Last quarter oil production was at 70 percent of all production for Berry Petroleum.
President and chief executive officer Robert F. Heinemann said, “Performance from Berry’s portfolio of assets was strong in the second quarter. Production for the second quarter of 2010 was 32,854 BOE/D, 67% of which was oil production. While diatomite production declined during the quarter as we awaited new permits and optimized field production, we were able to increase companywide production by 12% during the quarter with meaningful contributions from each of our other operating areas."
Heinemann added, "We are maintaining our full-year 2010 production guidance of between 32,250 and 33,000 BOE/D. In addition, we settled our claim in the Flying J bankruptcy during the second quarter and received proceeds of $60.5 million on July 23, 2010 which we have used to pay down debt."
Oil accounted for 67 percent of production, while natural gas accounted for the other 33 percent. Last quarter oil production was at 70 percent of all production for Berry Petroleum.
Hecla Mining (NYSE:HL) Earnings Up in Second Quarter
Hecla Mining (NYSE:HL) reported earnings of $13.7 million, or 6 cents a share for the second quarter, beating estimates of 4 cents a share.
Revenue increased to $88.63 million, from $74.61 million in the same quarter last year. Last year Hecla had a loss of $0.9 million for the quarter.
Hecla Mining Company President and Chief Executive Officer Phillips S. Baker, Jr., said, “Our mines, operating management and orebodies combined with current prices allowed Hecla to generate an extraordinary amount of cash flow for the amount of production. With very low operating costs per ounce, our margin was in excess of $20 per ounce of silver which drove cash flow of $54 million in the quarter, the second highest in Hecla's history. This cash flow enabled Hecla to deploy financial resources to support larger exploration and development programs to build for the future. Importantly, we increased our cash balance during the recent quarter by more than $80 million to almost $200 million."
By-product credits allowed the company to have negative cash cost in the quarter, the reason margins were over $20 an ounce. Costs were a negative $2.41 an ounce in the first half of 2010.
Revenue increased to $88.63 million, from $74.61 million in the same quarter last year. Last year Hecla had a loss of $0.9 million for the quarter.
Hecla Mining Company President and Chief Executive Officer Phillips S. Baker, Jr., said, “Our mines, operating management and orebodies combined with current prices allowed Hecla to generate an extraordinary amount of cash flow for the amount of production. With very low operating costs per ounce, our margin was in excess of $20 per ounce of silver which drove cash flow of $54 million in the quarter, the second highest in Hecla's history. This cash flow enabled Hecla to deploy financial resources to support larger exploration and development programs to build for the future. Importantly, we increased our cash balance during the recent quarter by more than $80 million to almost $200 million."
By-product credits allowed the company to have negative cash cost in the quarter, the reason margins were over $20 an ounce. Costs were a negative $2.41 an ounce in the first half of 2010.
Newmont (NYSE:NEM) Earnings Rise, But Estimates Not Met
In somewhat of a surprise, Newmont Mining Corp (NYSE:NEM) failed to meet analysts' estimates, although they did enjoy solid earnings for the quarter.
With gold prices soaring for the quarter, expectations were high that the company, and the overall industry, would have extraordinary results. It wasn't gold prices, but rather declining copper prices which caused the company to miss estimates.
Earnings for the quarter came in at $382 million, or 78 cents a share, more than double the $162 million, or 33 cents a share generated in the same quarter last year.
Minus impairments and asset sales, earnings were 77 cents a share. Analysts on average were looking for 84 cents a share, so it was a pretty big miss by the world's second-largest gold mining company.
Revenue for the quarter was $2.15 billion, up from the $1.6 billion last year, but again, missing estimates of $2.2 billion.
Guidance for gold production remains on target, as Newmont said they're still looking at a range of 5.3 million to 5.5 million an ounce, at a cost of between $460 and $480 an ounce.
Newmont increased its quarterly dividend from 10 cents a share to 15 cents a share.
With gold prices soaring for the quarter, expectations were high that the company, and the overall industry, would have extraordinary results. It wasn't gold prices, but rather declining copper prices which caused the company to miss estimates.
Earnings for the quarter came in at $382 million, or 78 cents a share, more than double the $162 million, or 33 cents a share generated in the same quarter last year.
Minus impairments and asset sales, earnings were 77 cents a share. Analysts on average were looking for 84 cents a share, so it was a pretty big miss by the world's second-largest gold mining company.
Revenue for the quarter was $2.15 billion, up from the $1.6 billion last year, but again, missing estimates of $2.2 billion.
Guidance for gold production remains on target, as Newmont said they're still looking at a range of 5.3 million to 5.5 million an ounce, at a cost of between $460 and $480 an ounce.
Newmont increased its quarterly dividend from 10 cents a share to 15 cents a share.
BP (NYSE:BP) Oil Claiming $9.9 Billion Tax Credit
The fact that BP (NYSE:BP) oil says their plan is to claim $9.9 billion in tax credits is infuriating many. The BP oil spill may end up falling on tax payers shoulders after all ! Analysts are saying this was most likely part of the company's plan all along, and the almost $10 billion will keep the cash flowing for BP.
The credit is being based on the $32.3 billion the company reported for costs relating to the oil spill. Despite the fact that President Obama assured and insisted to the public that BP would take full financial responsibility for the entire oil cleanup, as well as effected businesses and wildlife. This will cut down their spill costs by a third.
Tony Hayward said, "We have followed the IRS regulations as they're currently written." There are tax code provisions that do allow companies to claim losses through tax refunds. BP has yet to be fined for the worst oil spill in U.S. history, so this is being based on their losses not penalties.
The credit is being based on the $32.3 billion the company reported for costs relating to the oil spill. Despite the fact that President Obama assured and insisted to the public that BP would take full financial responsibility for the entire oil cleanup, as well as effected businesses and wildlife. This will cut down their spill costs by a third.
Tony Hayward said, "We have followed the IRS regulations as they're currently written." There are tax code provisions that do allow companies to claim losses through tax refunds. BP has yet to be fined for the worst oil spill in U.S. history, so this is being based on their losses not penalties.
Tuesday, July 27, 2010
Teck (NYSE:TCK) Reports Earnings and Revenue Growth for Second Quarter
Teck Resources Ltd. (NYSE:TCK) (TSE:TCK.B) improved over the second quarter last year, as they generated earnings of $260 million, or 44 cents a share, and revenue grew to $2.11 billion, up significantly from $1.7 billion last year during the same quarter.
Earnings were down in constrast to last year because of some favorable foreign exchange gains which pushed profits up in 2009. "Earnings in the second quarter of 2009 included a $413 million after-tax foreign exchange gain on our US dollar denominated debt compared with a $42 million exchange loss in 2010," the company said in a press release.
Teck president and chief executive Don Lindsay said in a statement, "Our second quarter benefited from a substantial increase in coal sales to 6.4 million tonnes and the higher benchmark prices negotiated for the second quarter.
"In addition, in the quarter we re-established our investment grade credit ratings from all of the major rating agencies and declared a semi-annual dividend of 20 cents per share."
Teck sold its Araguaia nickel project in Brazil to Horizonte (LON:HZM) while taking a 50 percent stake in the company.
Earnings were down in constrast to last year because of some favorable foreign exchange gains which pushed profits up in 2009. "Earnings in the second quarter of 2009 included a $413 million after-tax foreign exchange gain on our US dollar denominated debt compared with a $42 million exchange loss in 2010," the company said in a press release.
Teck president and chief executive Don Lindsay said in a statement, "Our second quarter benefited from a substantial increase in coal sales to 6.4 million tonnes and the higher benchmark prices negotiated for the second quarter.
"In addition, in the quarter we re-established our investment grade credit ratings from all of the major rating agencies and declared a semi-annual dividend of 20 cents per share."
Teck sold its Araguaia nickel project in Brazil to Horizonte (LON:HZM) while taking a 50 percent stake in the company.
Occidental Petroleum (NYSE:OXY) Misses Earnings and Production Numbers
Although Occidental Petroleum (NYSE:OXY) had a decent quarter, with earnings rising to $1.1 billion, or $1.31 a share, gaining 56 percent over the $682 million, or 84 cents a share last year in the same quarter, they fell short of analysts' expectations by 4 cents a share.
What troubled investors and analysts more was missing the production numbers, which were expected to average 750,000 barrels a day, but which came in at 743,000 barrels a day.
The reason behind the weaker-than-expected performance was the payout to partners when prices increase beyond a certain level, which Occidental said cut production by 29,000 barrels a day.
Revenue for the second quarter did shoot up some, rising to $4.76 billion, or 29 percent.
The worst performing units of the company were the one housing Phibro, which the company acquired from Citigroup (NYSE:C). That unit lost $13 million or 79 percent, while the chemicals business earnings dropped 6.1 percent to $108 million.
What troubled investors and analysts more was missing the production numbers, which were expected to average 750,000 barrels a day, but which came in at 743,000 barrels a day.
The reason behind the weaker-than-expected performance was the payout to partners when prices increase beyond a certain level, which Occidental said cut production by 29,000 barrels a day.
Revenue for the second quarter did shoot up some, rising to $4.76 billion, or 29 percent.
The worst performing units of the company were the one housing Phibro, which the company acquired from Citigroup (NYSE:C). That unit lost $13 million or 79 percent, while the chemicals business earnings dropped 6.1 percent to $108 million.
African Barrick Gold (LON:ABG) Generates Profit, Lowers Guidance
African Barrick Gold (LON:ABG) generated earnings of $99.2 million in the first half, a gain of over 200 percent over the first half of 2009, where they had a profit of $31.3 million.
Revenue for the quarter also has significant gains, reaching $423.8 million, or 68 percent. Last year they had revenue of $258.8 million.
The bad news is production guidance was lowered for the entire year, based on delays in accessing higher-grade primary ore at its Buzwagi project, in Tanzania.
Consequently, they lowered the production range from 800,000 to 850,000, to 750,000 to 800,000. Operational cost estimates were also raised from $450 to $500 a ton, to $500 and $550 a ton.
This will cut into revenue, earnings and margins for the rest of the year.
African Barrick Gold was spun off from Barrick Gold (NYSE:ABX) earlier this year.
Revenue for the quarter also has significant gains, reaching $423.8 million, or 68 percent. Last year they had revenue of $258.8 million.
The bad news is production guidance was lowered for the entire year, based on delays in accessing higher-grade primary ore at its Buzwagi project, in Tanzania.
Consequently, they lowered the production range from 800,000 to 850,000, to 750,000 to 800,000. Operational cost estimates were also raised from $450 to $500 a ton, to $500 and $550 a ton.
This will cut into revenue, earnings and margins for the rest of the year.
African Barrick Gold was spun off from Barrick Gold (NYSE:ABX) earlier this year.
BP (NYSE:BP): Hayward's Not Testifying, PERIOD !
According to BP (NYSE:BP), Chief Executive Tony Hayward will not be testifying at the U.S. Senate hearing. The purpose of this hearing is to examine the evidence to see if BP had any influence in the release of the Lockerbie bomber.
BP did say they were willing to send another representative to testify at the Senate Foreign Relations Committee hearing, chaired by Senator Robert Menendez on Thursday. Although the name of the representative was not given. Menendez said he is going to continue to put the pressure on to have Hayward testify.
"It is apparently more important to BP and Mr. Hayward to focus on his multi-million dollar golden parachute then to help answer serious lingering questions about whether the company advocated traded blood for oil," said Menendez.
Menendez continued, "Though it may be convenient for BP to move Mr. Hayward out of his position, it does not change the need for answers. The bottom line is we need to hear from BP officials at the highest levels who had significant contact with both the Libyan and British governments. Mr. Hayward best fits that bill."
BP did say they were willing to send another representative to testify at the Senate Foreign Relations Committee hearing, chaired by Senator Robert Menendez on Thursday. Although the name of the representative was not given. Menendez said he is going to continue to put the pressure on to have Hayward testify.
"It is apparently more important to BP and Mr. Hayward to focus on his multi-million dollar golden parachute then to help answer serious lingering questions about whether the company advocated traded blood for oil," said Menendez.
Menendez continued, "Though it may be convenient for BP to move Mr. Hayward out of his position, it does not change the need for answers. The bottom line is we need to hear from BP officials at the highest levels who had significant contact with both the Libyan and British governments. Mr. Hayward best fits that bill."
Where or Where Has The BP (NYSE:BP) Oil Gone ?
Over 200 million gallons of BP's (NYSE:BP) toxic crude oil was spewed into the ocean. The federal government and BP has sent a small army to clean it up, but the problem is they can't find it.
The oil slick mass is now the size of New Hampshire but started out the size of Kansas. The Coast Guard flew around the BP rig site and no oil could be found. An ABC News team surveyed a marsh area and the oil eluded them as well.
A shrimper, Salvador Cepriano is one of many searching for the oil. He said hes been putting out boom but it's not catching any oil. "I think it is underneath the water. It's in between the bottom and the top of the water," said Cepriano.
The government is says it's getting harder and harder to find the crude. Thad Allen, National Incident Commander said, "It is become a very elusive bunch of oil for us to find." This doesn't mean that all the oil is gone, but experts are saying that a massive amount has reabsorbed into the environment.
The oil slick mass is now the size of New Hampshire but started out the size of Kansas. The Coast Guard flew around the BP rig site and no oil could be found. An ABC News team surveyed a marsh area and the oil eluded them as well.
A shrimper, Salvador Cepriano is one of many searching for the oil. He said hes been putting out boom but it's not catching any oil. "I think it is underneath the water. It's in between the bottom and the top of the water," said Cepriano.
The government is says it's getting harder and harder to find the crude. Thad Allen, National Incident Commander said, "It is become a very elusive bunch of oil for us to find." This doesn't mean that all the oil is gone, but experts are saying that a massive amount has reabsorbed into the environment.
Wis. Ron Johnson Changed Mind, Not Selling BP (NYSE:BP) Shares
Originally when Republican Senate candidate Ron Johnson was questioned two weeks ago about his BP (NYSE:BP) shares, he said he was going to be selling them. It seems he has had a change of heart because now he's not so sure.
He owns between $116,000 - $315,000 in BP stock. His campaign said on July 9th that Johnson was planning on moving his investments into a blind trust. Days later at the completion of a campaign rally, he told reporters that he was planning on selling his BP stock to help fund his campaign. As of Monday, he said the sale wasn't for sure.
"I think that will eventually happen, but I'm going to do it based on market conditions. I'm going to have to finance this campaign. At some point in time to get my message out, that will probably happen. But it's going to be based on market conditions," said Johnson.
His running mate, Democratic Senator Russ Feingold has accused Johnson of talking out of both sides of his mouth. John Kraus, Feingold's campaign strategist stated, "The fact that he now says he is waiting to make profit off his investment in BP so that he can continue to fund his campaign to defend big oil, shows that he is more interested in corporate profits than doing the right thing."
He owns between $116,000 - $315,000 in BP stock. His campaign said on July 9th that Johnson was planning on moving his investments into a blind trust. Days later at the completion of a campaign rally, he told reporters that he was planning on selling his BP stock to help fund his campaign. As of Monday, he said the sale wasn't for sure.
"I think that will eventually happen, but I'm going to do it based on market conditions. I'm going to have to finance this campaign. At some point in time to get my message out, that will probably happen. But it's going to be based on market conditions," said Johnson.
His running mate, Democratic Senator Russ Feingold has accused Johnson of talking out of both sides of his mouth. John Kraus, Feingold's campaign strategist stated, "The fact that he now says he is waiting to make profit off his investment in BP so that he can continue to fund his campaign to defend big oil, shows that he is more interested in corporate profits than doing the right thing."
BP (NYSE:BP) Doubling Assets to be Sold to Raise Cash
It seems everything is on the table now as BP (NYSE:BP) fights to raise enough cash to help pay for the mounting liabilities related to the Gulf of Mexico oil spill.
Originally they had announced the goal of selling about $10 billion in assets to handle the load, but they raised that projection Monday to about $20 billion.
Once thought untouchable, and among their choice assets - oil fields in the North Sea - could reportedly be put up for sale, with the French company Total eager to enlarge their presence in the region. It would also be an easy deal to do if BP decides to go in that direction.
Prudhoe Bay was almost sold to Apache (NYSE:APA), but that deal fell through, although Apache acquired other assets in a separate transaction.
With BP securing billions in credit from a number of different banks, it seems to imply they're wary of using that credit line to pay off liabilities, as it could put them in an even weaker position, and would be expensive to access.
However they do it, this does show BP is struggling to raise the needed capital to handle the situation, and will evidently become a much smaller and weaker company before it's all through.
This is important, as everyone knew they would be smaller before things were over, but assumed their top assets would remain under the company umbrella and be a foundation to build on in the future. That idea could very well fall apart if assets in the North Sea end up being sold.
Originally they had announced the goal of selling about $10 billion in assets to handle the load, but they raised that projection Monday to about $20 billion.
Once thought untouchable, and among their choice assets - oil fields in the North Sea - could reportedly be put up for sale, with the French company Total eager to enlarge their presence in the region. It would also be an easy deal to do if BP decides to go in that direction.
Prudhoe Bay was almost sold to Apache (NYSE:APA), but that deal fell through, although Apache acquired other assets in a separate transaction.
With BP securing billions in credit from a number of different banks, it seems to imply they're wary of using that credit line to pay off liabilities, as it could put them in an even weaker position, and would be expensive to access.
However they do it, this does show BP is struggling to raise the needed capital to handle the situation, and will evidently become a much smaller and weaker company before it's all through.
This is important, as everyone knew they would be smaller before things were over, but assumed their top assets would remain under the company umbrella and be a foundation to build on in the future. That idea could very well fall apart if assets in the North Sea end up being sold.
BP (NYSE:BP) Stock, To Speculative To Buy Says Biggs
The Hedge fund manager Barton Biggs, has this month become more optimistic of stocks, but is still leery saying BP (NYSE:BP) is still "to speculative" to purchase. He disagrees with the analyst in a Bloomberg Story who are rating BP's stock at "buy."
With the optimism from BP finally having success in placing their sealing cap and stopping the leaking oil on July 15th, many seem to think that everything is over with the oil spill. In reality, BP has still not reached the desired pressure in the testing of the well. The original target was set at 8,000 - 9,000 pounds per square inch, they have yet to reach over 7,000 pounds of pressure. Not to mention Macondo well has to still be permanently plugged. Yes BP has had a small success, but we must not delude ourselves to the full scope of reality that has yet to play out with BP.
Biggs said, "It's too speculative for me. Are these people down in the Gulf who aren't going to be able to fish, and their business was fishing, are they going to be able to sue BP for payments for the next 20 years ? I don't know, it's to hard to call."
BP has lost almost 40 percent of their stock market value since the explosion and sinking of the Deepwater Horizon, but the company has rebounded 37 percent.
With the optimism from BP finally having success in placing their sealing cap and stopping the leaking oil on July 15th, many seem to think that everything is over with the oil spill. In reality, BP has still not reached the desired pressure in the testing of the well. The original target was set at 8,000 - 9,000 pounds per square inch, they have yet to reach over 7,000 pounds of pressure. Not to mention Macondo well has to still be permanently plugged. Yes BP has had a small success, but we must not delude ourselves to the full scope of reality that has yet to play out with BP.
Biggs said, "It's too speculative for me. Are these people down in the Gulf who aren't going to be able to fish, and their business was fishing, are they going to be able to sue BP for payments for the next 20 years ? I don't know, it's to hard to call."
BP has lost almost 40 percent of their stock market value since the explosion and sinking of the Deepwater Horizon, but the company has rebounded 37 percent.
Monday, July 26, 2010
NovaGold (AMEX:NG), IAMGOLD (NYSE:IAG), Ivanhoe (NYSE:IVN) Down As Gold Prices Fall
NovaGold Resources (AMEX:NG), IAMGOLD Corporation (NYSE:IAG) and Ivanhoe Mines Ltd. (NYSE:IVN) all fell Monday, as gold tested the $1,180 an ounce mark, ending at $1,183.10 an ounce on the Comex division of the New York Mercantile Exchange.
With most economics seeming to be going against gold's grain, the relatively slow decline in price reveals the uncertainty of the market, and even though there is some risk appetite out there, it's not necessarily robust, for obvious global economic reasons.
Although investors were hailing the strong earnings and better-than-expected housing numbers, it isn't convincing, as there is nothing that is really surprising anyone, as the numbers for last quarter were expected to improve over their recessionary numbers from the year before, making everything look good this time around.
The current quarter is different, and we should see some weak numbers next time, although we're in the midst of this reporting season, so many investors aren't discounting that yet as it pertains to gold and equities.
Speaking of gold miners reporting for this quarter, the majority of them will be very strong, based on the strong gold prices last quarter, just like other commodity prices as well.
One thing I think will happen, and it could be any time, is gold prices are looking for an excuse to run, and investors are looking sideways at them, ready to plow money in them as soon as the negative news continues, which it will.
For now though, until investors realize the extraordinary threat the sovereign debt crisis in the European Union really is, and the joke that was the bank stress tests (which were a public relations ploy, not a true test), gold will continue to experience downward pressure, although probably at the incremental moves we've been seeing recently.
Gold miners like NovaGold Resources, IAMGOLD Corporation and Ivanhoe Mines Ltd. will perform in a similar fashion, although some, like Ivanhoe Mines, should do better than many of their peers.
With most economics seeming to be going against gold's grain, the relatively slow decline in price reveals the uncertainty of the market, and even though there is some risk appetite out there, it's not necessarily robust, for obvious global economic reasons.
Although investors were hailing the strong earnings and better-than-expected housing numbers, it isn't convincing, as there is nothing that is really surprising anyone, as the numbers for last quarter were expected to improve over their recessionary numbers from the year before, making everything look good this time around.
The current quarter is different, and we should see some weak numbers next time, although we're in the midst of this reporting season, so many investors aren't discounting that yet as it pertains to gold and equities.
Speaking of gold miners reporting for this quarter, the majority of them will be very strong, based on the strong gold prices last quarter, just like other commodity prices as well.
One thing I think will happen, and it could be any time, is gold prices are looking for an excuse to run, and investors are looking sideways at them, ready to plow money in them as soon as the negative news continues, which it will.
For now though, until investors realize the extraordinary threat the sovereign debt crisis in the European Union really is, and the joke that was the bank stress tests (which were a public relations ploy, not a true test), gold will continue to experience downward pressure, although probably at the incremental moves we've been seeing recently.
Gold miners like NovaGold Resources, IAMGOLD Corporation and Ivanhoe Mines Ltd. will perform in a similar fashion, although some, like Ivanhoe Mines, should do better than many of their peers.
Silvercorp Metals (NYSE:SVM) Shares Plunge on Heavy Rains in China
Silvercorp Metals Inc. (NYSE:SVM) plunged in New York and Toronto as the company projected a 10 percent drop in production as a result of abnormally heavy rains at their China "Ying" silver/lead/zinc mining camp.
Over a period of three hours, 217 mm of rain deluged the mining location, flooding three tunnels even with flood control measures in place.
Silvercorp said this in a statement:
“Mining facilities and equipment, such as such as compressors, power switchboards, and transformers at four sites were either flooded or buried by debris washed down from upslope.”
Silvercorp will have to put about $1 million into cleaning up the mess and to repair damaged machinery. The cleanup will take up to 30 days to complete.
The company has four mines in the Ying camp.
Over a period of three hours, 217 mm of rain deluged the mining location, flooding three tunnels even with flood control measures in place.
Silvercorp said this in a statement:
“Mining facilities and equipment, such as such as compressors, power switchboards, and transformers at four sites were either flooded or buried by debris washed down from upslope.”
Silvercorp will have to put about $1 million into cleaning up the mess and to repair damaged machinery. The cleanup will take up to 30 days to complete.
The company has four mines in the Ying camp.
UBS (NYSE:UBS) Likes Newmont (NYSE:NEM), Barrick (NYSE:ABX)
UBS (NYSE:UBS) via UBS Investment Research, said they like the overall mining and metals sector, and within the gold segment, Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) are their top picks.
UBS analysts cited these as the reasons for their positive outlook on gold:
"We believe that ongoing pressure on sovereign debt markets, combined with persistent concerns over private sector credit contraction will raise the spectre of debt monetization repeatedly over the next few years," the analysts advised. "We expect that this background will remain very supportive for gold prices over the period, and that informs our above consensus gold price outlook and our inclusion of two gold stocks in our top ten picks..."
"The fear of further debasement of fiat currencies follows closely. And in turn we expect the fear trade-very apparent through heightened physical demand for small bars and coins and rising ETF creations-will escalate in H2 2010 and into 2011."
UBS has also increased their estimates of gold prices, saying they're looking for an average of $1,205 an ounce in 2010, and in 2011 it'll pick up to $1,250 to $1,295 an ounce on average.
UBS analysts cited these as the reasons for their positive outlook on gold:
"We believe that ongoing pressure on sovereign debt markets, combined with persistent concerns over private sector credit contraction will raise the spectre of debt monetization repeatedly over the next few years," the analysts advised. "We expect that this background will remain very supportive for gold prices over the period, and that informs our above consensus gold price outlook and our inclusion of two gold stocks in our top ten picks..."
"The fear of further debasement of fiat currencies follows closely. And in turn we expect the fear trade-very apparent through heightened physical demand for small bars and coins and rising ETF creations-will escalate in H2 2010 and into 2011."
UBS has also increased their estimates of gold prices, saying they're looking for an average of $1,205 an ounce in 2010, and in 2011 it'll pick up to $1,250 to $1,295 an ounce on average.
Why Isn't Gold Going Up in Price?
It's somewhat puzzling as to why the price of gold hasn't surged up again, as the economic news released over the last week should have pushed prices up.
There are several things are probably holding it back, and those are simply the usual summer period where suddenly things slow down for gold, which could be people acting like usual, no matter what the news.
Secondly, and possibly more important, is the so-called stress tests on European Union banks which gave the appearance of there being little in the way of risk there.
Finally, low inflation in the U.S. has investors abandoning gold for other investments.
This is even after the downgrade of Ireland debt last week and Ben Bernanke committing to print as much money as needed to prop up the U.S. economy if he has to.
Add to that the ongoing story of China slowing their overheated economy down, especially in regard to the urban property market, and the price of gold should be skyrocketing.
The conflicting events and stories have investors somewhat on the sidelines and unsure as to where it will all lead to; the reason for the drop in prices, but also why the prices are dropping precipitously, like some on the other side of the equation have predicted.
Investors seem to be holding their breath some to see what the economic narrative really is, and until they make a decision there, gold will continue in its current pattern of going up and down, with a slight gravitation to the down side.
Once it is understood the bank stress tests in the EU were dubious at best, we could see a rebound, although it could take the usual fall season to get investors interested again.
Today's spot gold price was at $1,185.20 at 12:26 PM EDT.
There are several things are probably holding it back, and those are simply the usual summer period where suddenly things slow down for gold, which could be people acting like usual, no matter what the news.
Secondly, and possibly more important, is the so-called stress tests on European Union banks which gave the appearance of there being little in the way of risk there.
Finally, low inflation in the U.S. has investors abandoning gold for other investments.
This is even after the downgrade of Ireland debt last week and Ben Bernanke committing to print as much money as needed to prop up the U.S. economy if he has to.
Add to that the ongoing story of China slowing their overheated economy down, especially in regard to the urban property market, and the price of gold should be skyrocketing.
The conflicting events and stories have investors somewhat on the sidelines and unsure as to where it will all lead to; the reason for the drop in prices, but also why the prices are dropping precipitously, like some on the other side of the equation have predicted.
Investors seem to be holding their breath some to see what the economic narrative really is, and until they make a decision there, gold will continue in its current pattern of going up and down, with a slight gravitation to the down side.
Once it is understood the bank stress tests in the EU were dubious at best, we could see a rebound, although it could take the usual fall season to get investors interested again.
Today's spot gold price was at $1,185.20 at 12:26 PM EDT.
Be Aware Of Scams In Wake Of BP (NYSE:BP) Oil Spill
While there are many people with good intentions, there are just as many who are looking to take advantage of people and scam them in the wake of BP's (NYSE:BP) oil spill. The Better Business Burea is warning people, the recovery efforts create a lucrative opportunity for scammers trying to make an easy dollar.
The first one is called the job scam. What usually accrues is job hunters are told to pay an upfront fee for training or to get a job. The BBB said that people were told they were being recruited for cleanup work that was supposed to be by BP, but there was no contract with the company. Don't take anybodys word for it, do your research to make sure these are legitimate companies, especially if using BP's name. Be very cautious of any company requiring an upfront fee.
The second is the claim scam, this one involved people receiving unsolicited email saying that the person qualifies for compensation from BP. There are also phony adjusters who ask for fees to expedite services according to the Federal Trade Commission. You can file a claim through BP's official website or by calling BP's claim line at (800) 440 - 0858.
The third one is the charity scam, which is where people pose as various charities to solicit donations. The BBB Wise Giving Alliance has a list of nationally solicited charities that meet the standards of the BBB and they are asking for volunteers and donations for the continued Gulf efforts.
The first one is called the job scam. What usually accrues is job hunters are told to pay an upfront fee for training or to get a job. The BBB said that people were told they were being recruited for cleanup work that was supposed to be by BP, but there was no contract with the company. Don't take anybodys word for it, do your research to make sure these are legitimate companies, especially if using BP's name. Be very cautious of any company requiring an upfront fee.
The second is the claim scam, this one involved people receiving unsolicited email saying that the person qualifies for compensation from BP. There are also phony adjusters who ask for fees to expedite services according to the Federal Trade Commission. You can file a claim through BP's official website or by calling BP's claim line at (800) 440 - 0858.
The third one is the charity scam, which is where people pose as various charities to solicit donations. The BBB Wise Giving Alliance has a list of nationally solicited charities that meet the standards of the BBB and they are asking for volunteers and donations for the continued Gulf efforts.
BP (NYSE:BP) Won't Plug Well Until Next Week
Thad Allen, National Incident Commander told reporters on Sunday that BP (NYSE:BP) will most likely begin working on plugging the well next week. The ships used to help plug the well were evacuated Friday due to tropical storm Bonnie, but most have returned or are expected to return within 24 hours.
Allen said that he plans on BP beginning the process known as "static kill" next week. This entails pouring mud into the top of the well. Once completed, they will then proceed with what's called the "bottom kill." The process includes pouring mud and concrete by a connecting line to the relief well.
Allen was very optimistic over the success of containing the leaking oil on July 15th. He said the pressure continues to rise at a slow steady pace, reaching 6,904 pounds per square inch. The well remains intact with no leaks.
Allen said that he plans on BP beginning the process known as "static kill" next week. This entails pouring mud into the top of the well. Once completed, they will then proceed with what's called the "bottom kill." The process includes pouring mud and concrete by a connecting line to the relief well.
Allen was very optimistic over the success of containing the leaking oil on July 15th. He said the pressure continues to rise at a slow steady pace, reaching 6,904 pounds per square inch. The well remains intact with no leaks.
Tony Hayward Leaving BP (NYSE:BP) Oil October 1st
There has been much speculation and rumors surrounding Hayward's leaving BP (NYSE:BP) oil. A source spoke on the condition of anonymity due to the company not revealing their plans to the public yet. He said that Hayward is expected to leave October 1st and resign from the board by the end of the year.
The companys board of directors is meeting this evening, and whether he leaves or not is expected to be the center of their agenda. Hayward's whole career has been with BP. He has stated that he is ready to step down and has become "a liability going forward."
The board is also meeting prior to the Tuesday release of quarterly results. The directors will be discussing the best way to confront or diffuse criticism. While the company reveals its newest estimates of the losses and costs due to the worst oil spill in U.S. history.
Some analyst have said that Hayward's leaving would be a gesture that someone is taking full responsibility. According to another person who spoke under conditions of anonymity said, Hayward is not the only executive that will be leaving. It is expected that other top BP executives will be asked to leave.
The companys board of directors is meeting this evening, and whether he leaves or not is expected to be the center of their agenda. Hayward's whole career has been with BP. He has stated that he is ready to step down and has become "a liability going forward."
The board is also meeting prior to the Tuesday release of quarterly results. The directors will be discussing the best way to confront or diffuse criticism. While the company reveals its newest estimates of the losses and costs due to the worst oil spill in U.S. history.
Some analyst have said that Hayward's leaving would be a gesture that someone is taking full responsibility. According to another person who spoke under conditions of anonymity said, Hayward is not the only executive that will be leaving. It is expected that other top BP executives will be asked to leave.
UBS (NYSE:UBS), CIBC World Markets, TD Securities Increase Gold Estimates
Last week, investment banks UBS (NYSE:UBS), CIBC World Markets and TD Securities all increased their outlook on gold prices, will all of them looking for around $1,300 an ounce or more going forward.
UBS was the last of the three during the week to upwardly revise their numbers, increasing their outlook from $1,129 an ounce to $1,205 an ounce for 2010, and up to $1,295 an ounce, from $1,250 an ounce in 2011.
The dubious stress tests and their results didn't impress UBS, as it didn't many others, as the bank noted that "ongoing pressure on sovereign debt markets, combined with persistent concern over private sector credit contraction will raise the specter of debt monetization repeatedly over the next few years.”
TD Securities increased their gold price estimates in 2011 from $1,100 to $1,300, and from $1,000 to $1,400 in 2012. They also cited global economic uncertainties as the impetus behind their changes in viewpoint concerning gold.
For CIBC World Markets, their changes were the largest, increasing their outlook in 2012 to $1,500 an ounce. Over the long term, they see gold leveling at from $1,000 to $1,200 an ounce.
The fall season is historically a big mover for gold prices, and with prices continuing to find support a slightly below $1,200 an ounce, gold could make a big move starting in September.
UBS was the last of the three during the week to upwardly revise their numbers, increasing their outlook from $1,129 an ounce to $1,205 an ounce for 2010, and up to $1,295 an ounce, from $1,250 an ounce in 2011.
The dubious stress tests and their results didn't impress UBS, as it didn't many others, as the bank noted that "ongoing pressure on sovereign debt markets, combined with persistent concern over private sector credit contraction will raise the specter of debt monetization repeatedly over the next few years.”
TD Securities increased their gold price estimates in 2011 from $1,100 to $1,300, and from $1,000 to $1,400 in 2012. They also cited global economic uncertainties as the impetus behind their changes in viewpoint concerning gold.
For CIBC World Markets, their changes were the largest, increasing their outlook in 2012 to $1,500 an ounce. Over the long term, they see gold leveling at from $1,000 to $1,200 an ounce.
The fall season is historically a big mover for gold prices, and with prices continuing to find support a slightly below $1,200 an ounce, gold could make a big move starting in September.
BP (NYSE:BP) Work Stoppage from "Bonnie" Less Than Expected
Uncertainty as to the magnitude of Tropical Storm Bonnie has estimates of work stoppage by BP (NYSE:BP) up two weeks long. That changed quickly on Saturday, as the storm passed through quickly and with little damage, and vessels quickly began their trek back to the work area.
The good news concerning the storm was it disintegrated into what became essentially a series of thunderstorms and rain showers before it hit the oil well. It was uncertain what would happen once the tropical storm hit the warm Gulf waters, as past experience has at times had the storms gain in strength when that occurs.
If it would have performed in that manner, it could have stopped the relief well drilling effort for up to two weeks. Tropical Storm Bonnie was downgraded to a tropical depression as it weakened.
Only one of the relief well drilling rigs had been detached, so efforts didn't take too long to resume.
The containment cap continues to hold while the drilling continues.
The good news concerning the storm was it disintegrated into what became essentially a series of thunderstorms and rain showers before it hit the oil well. It was uncertain what would happen once the tropical storm hit the warm Gulf waters, as past experience has at times had the storms gain in strength when that occurs.
If it would have performed in that manner, it could have stopped the relief well drilling effort for up to two weeks. Tropical Storm Bonnie was downgraded to a tropical depression as it weakened.
Only one of the relief well drilling rigs had been detached, so efforts didn't take too long to resume.
The containment cap continues to hold while the drilling continues.
BP (NYSE:BP) Deepwater Drilling in Libya and Half Year Results
Despite the environmental concerns after the massive oil spill in the Gulf, BP (NYSE:BP) says they're pushing forward and going to begin deepwater drilling in Libya. The well site in the Gulf of Sirte is even deeper than the Macondo well in the Gulf of Mexico.
Reported by the Financial Times, the plans are in the shadow of controversy and BP faces much scrutiny because of its deal in 2007 to purchase Libya's oil and gas fields at the cost of $1 billion.
In other BP news, the company will be reporting their half year results today. It's being rumored that Tony Hayward is expected to officially announce his leaving the company before the results are given. The results are expected to show BP making $10 billion in profits so far for the year, even with the costs of the disastrous oil spill.
Reported by the Financial Times, the plans are in the shadow of controversy and BP faces much scrutiny because of its deal in 2007 to purchase Libya's oil and gas fields at the cost of $1 billion.
In other BP news, the company will be reporting their half year results today. It's being rumored that Tony Hayward is expected to officially announce his leaving the company before the results are given. The results are expected to show BP making $10 billion in profits so far for the year, even with the costs of the disastrous oil spill.
Saturday, July 24, 2010
Kinross (NYSE:KGC) Selling Diavik Diamond Mine Back to Harry Winston (NYSE:HWD)
No matter how you look at it, Kinross Gold (NYSE:KGC) (TSE:K) made a super deal with Harry Winston (NYSE:HWD) for the Diavik Diamond Mine, when they acquired from them in March 2009 for $150 million, and now are turning around and selling it back to them for $220 million.
Kinross, which also owns a 19.9 percent stake in Harry Winston, will sell that as well to an unnamed consortium of financial institutions.
The diamond industry was slammed hard during the harder parts of the recession, and Winston need the influx of capital to shore up its balance sheet, which Kinross wisely offered them.
Since it began operations in 2003, Diavik has produced over 50 million carats of rough diamonds.
The industry seems to be turning around now, as demand has surged from Asia, specifically India and China.
Major competitor De Beers increased sales by over 80 percent in the last half, and believes things will continue to improve.
Assuming the diamond industry has in fact turned around, it would make sense to Harry Winston to re-acquire the mine, even though they had to pay a premium to do it.
Although terms weren't disclosed, based on the closing on Thursday, the 15.2 million shares exchanging hands are valued at approximately C$200 million.
Kinross closed in New York at $16.43, gaining $0.10, or 0.61 percent.
Kinross, which also owns a 19.9 percent stake in Harry Winston, will sell that as well to an unnamed consortium of financial institutions.
The diamond industry was slammed hard during the harder parts of the recession, and Winston need the influx of capital to shore up its balance sheet, which Kinross wisely offered them.
Since it began operations in 2003, Diavik has produced over 50 million carats of rough diamonds.
The industry seems to be turning around now, as demand has surged from Asia, specifically India and China.
Major competitor De Beers increased sales by over 80 percent in the last half, and believes things will continue to improve.
Assuming the diamond industry has in fact turned around, it would make sense to Harry Winston to re-acquire the mine, even though they had to pay a premium to do it.
Although terms weren't disclosed, based on the closing on Thursday, the 15.2 million shares exchanging hands are valued at approximately C$200 million.
Kinross closed in New York at $16.43, gaining $0.10, or 0.61 percent.
Friday, July 23, 2010
Wheat Futures: Which Direction?
Wheat futures have been riding high over the last four weeks, but that seems about to end, even though weather conditions in Canada and Russia continue to cause problems for the grain.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
The challenge for wheat, as it has been for years, is the increasing amount of acreage around the world being dedicated to growing the grain.
With that in mind, the inevitable bad weather in various parts of the world, while having a temporary impact on wheat futures' prices, overall level off and bring them back down to where they belong.
Until there is a move toward planting less wheat, which is unlikely any time soon, this will remain the way things are.
Heading into August, wheat futures will drop down to about $5 a bushel, or even lower.
Energy Bill Will Hold Companies Like BP (NYSE:BP) Oil Accountable
The scaled down energy bill is expected to be introduced next week which will hold oil companies like BP (NYSE:BP) oil accountable. Harry Reid, Senate majority leader wouldn't get into details of the energy bill, but he did say there are four main goals. To hold "BP accountable," to "create clean energy jobs," to invest in the making of natural gas vehicles, and to lessen the U.S. dependency on foreign oil.
This is due to growing opposition in Congress among Republicans and centrist Democrats. They want to see more aggressive measures to curb carbon emissions. Reid said, following a Democratic meeting that he was well aware of the lack of support for a more far reaching bill. He was confident that the efforts would continue to "lay the foundations for a safer and stronger future."
The bill is expected to have a dramatic impact on oil companies with U.S. offshore drilling operations. It can include new regulations on rig safety which would be designed to prevent another oil spill disaster like BP has had. It also may increase the liability amount if there is an accident.
This is due to growing opposition in Congress among Republicans and centrist Democrats. They want to see more aggressive measures to curb carbon emissions. Reid said, following a Democratic meeting that he was well aware of the lack of support for a more far reaching bill. He was confident that the efforts would continue to "lay the foundations for a safer and stronger future."
The bill is expected to have a dramatic impact on oil companies with U.S. offshore drilling operations. It can include new regulations on rig safety which would be designed to prevent another oil spill disaster like BP has had. It also may increase the liability amount if there is an accident.
Gold Levels After Bank Stress Test Results Released
Gold futures and spot gold prices have held their own so far after the release of the stress test results of 91 banks, while the U.S. dollar rose against the euro immediately afterwards.
Results found that of the 91 banks being tested, seven totally failed the test, and were found they couldn't survive losses incurred from sovereign-bond holdings.
Gold dropped right after the results came in, but had rebounded slightly, and are holding level for now.
The U.S. dollar gained 0.8 percent against the euro.
Over the short term, how traders interpret the data of the banks will determine the volatility of gold prices.
Results found that of the 91 banks being tested, seven totally failed the test, and were found they couldn't survive losses incurred from sovereign-bond holdings.
Gold dropped right after the results came in, but had rebounded slightly, and are holding level for now.
The U.S. dollar gained 0.8 percent against the euro.
Over the short term, how traders interpret the data of the banks will determine the volatility of gold prices.
Gold Down on EU Bank Stress Test Uncertainty
Gold may be on its way to the negative for the first time in four days, as concerns over the response of investors to the results of the stress test of European banks as they come in.
At about 1:30 PM EDT, spot gold had dropped $5.10 to $1,189.40 an ounce.
Traders have been lowering their exposure to gold as a result, and so the prices have dipped slightly, although they could rebound, depending on what the results of the stress tests are on the 91 banks in Europe that have been subjected to the tests.
Expectations are if equities fall once the data are released, gold prices will probably come under even more pressure because investors will have to sell their positions to cover losses.
The opposite for gold prices today, as mentioned above, would be true on the other side of it.
At about 1:30 PM EDT, spot gold had dropped $5.10 to $1,189.40 an ounce.
Traders have been lowering their exposure to gold as a result, and so the prices have dipped slightly, although they could rebound, depending on what the results of the stress tests are on the 91 banks in Europe that have been subjected to the tests.
Expectations are if equities fall once the data are released, gold prices will probably come under even more pressure because investors will have to sell their positions to cover losses.
The opposite for gold prices today, as mentioned above, would be true on the other side of it.
Tracking Bonnie Headed Towards BP (NYSE:BP) Oil Spill Site
According to the U.S. National Hurricane Center, tropical storm Bonnie is South of the Bahama's and is heading toward the southern tip of Florida - straight to BP's (NYSE:BP) oil infested waters.
It is on track to hit the Florida Keys tomorrow at 6:15pm at 40 miles per hour. The storm is expected to gain strength as it hits.
The storm is being watched carefully by forecasters to see what it will do as it enters the Gulf and if its on track to hit directly over the BP oil spill site. Jeff Masters, co-founder of weather underground, said that tropical storm winds hitting 50 MPH would force oil into the Louisiana marshes as well as into Lake Pontchartrain.
Travis Hartman, energy manager and meteorologist said, "Oil production in the central to western Gulf should monitor this system for possible increases in intensity, but most rigs can withstand tropical storm force winds fairly well."
It is on track to hit the Florida Keys tomorrow at 6:15pm at 40 miles per hour. The storm is expected to gain strength as it hits.
The storm is being watched carefully by forecasters to see what it will do as it enters the Gulf and if its on track to hit directly over the BP oil spill site. Jeff Masters, co-founder of weather underground, said that tropical storm winds hitting 50 MPH would force oil into the Louisiana marshes as well as into Lake Pontchartrain.
Travis Hartman, energy manager and meteorologist said, "Oil production in the central to western Gulf should monitor this system for possible increases in intensity, but most rigs can withstand tropical storm force winds fairly well."
BP (NYSE:BP) Oil Partners Point Fingers At Hearing
There was a Senate Subcommittee hearing yesterday, BP's (NYSE:BP) oil partners in the Macondo Well distanced themselves from BP. Its investment partners are Anadarko, who owns a 25 percent stake and Mitsui owning a 10 percent stake in the well. Both companies are pointing the finger back to BP who's stake is 65 percent, saying the company was negligent in the days leading up to the explosion and sinking of the Deepwater Horizon.
James Hackett, chief executive of Anadarko said, "Our view is that this accident was preventable." They insist there is public information that clearly shows BP's negligent behavior and willful misconduct. Which Anadarko expects will clear them of all responsibility. While Mitsui has stated that they will wait until investigations are complete before making any decisions on payments.
At the hearing, executives for both companies said they were prepared and would pay if obligated. Both companies did make clear though that the procedure in cases like this put the financial responsibility upfront on the operating partner, which would be BP. Then seek contributions from the non-operating partners.
BP has billed its partners over $1 billion so far but the companies are refusing to pay. Members of the subcommittee were not pleased and said that Anadarko and Mitsui should, at the very least, set up escrow account to prove they have the funds and are wiling to pay.
James Hackett, chief executive of Anadarko said, "Our view is that this accident was preventable." They insist there is public information that clearly shows BP's negligent behavior and willful misconduct. Which Anadarko expects will clear them of all responsibility. While Mitsui has stated that they will wait until investigations are complete before making any decisions on payments.
At the hearing, executives for both companies said they were prepared and would pay if obligated. Both companies did make clear though that the procedure in cases like this put the financial responsibility upfront on the operating partner, which would be BP. Then seek contributions from the non-operating partners.
BP has billed its partners over $1 billion so far but the companies are refusing to pay. Members of the subcommittee were not pleased and said that Anadarko and Mitsui should, at the very least, set up escrow account to prove they have the funds and are wiling to pay.
Eldorado (NYSE:EGO) Rating Cut by CIBC World Markets
Eldorado Gold Corp. (NYSE:EGO) had their rating cut by CIBC World Markets, while Barrick Gold (NYSE:ABX) was upgraded to "Sector Outperformer."
The rating of Eldorado was slashed from "Sector Outperformer" to "sector performer," as maintance costs and other factors keep the company from a strong performanc.
The maintanence elements refers to the Kisladag mine, where they'll doing work going forward, while the producton factor is the lower grade ore found by the company.
Eldorado closed Thursday at $16.03, up $0.34, or 2.17 percent, in New York.
Volume was 2,787,579, about half the 3-month average.
The rating of Eldorado was slashed from "Sector Outperformer" to "sector performer," as maintance costs and other factors keep the company from a strong performanc.
The maintanence elements refers to the Kisladag mine, where they'll doing work going forward, while the producton factor is the lower grade ore found by the company.
Eldorado closed Thursday at $16.03, up $0.34, or 2.17 percent, in New York.
Volume was 2,787,579, about half the 3-month average.
Citigroup (NYSE:C) Raises Freeport (NYSE:FCX) Guidance
Citigroup Inc. (NYSE:C) increased their guidance for Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) for 2010, raising estimates from $7.15 to $7.20.
"Copper remains our favored base metal because of high industry utilization rates, declining exchange inventories, and rising merchant premiums that signal improving demand. As a low cost producer with good execution history, we believe FCX's valuation multiple can re-rate if copper prices average $3.29/lb in 2011 as we expect and the company continues to generate free cash," said Citigroup's Brian Yu.
Freeport is the top pick of Citigroup at this time, which the company affirmed again.
For 2011, the company lowered its outlook, dropping it from $7.90 to $7.50, and also cutting the price target of the miner from $93 to $92.
"Copper remains our favored base metal because of high industry utilization rates, declining exchange inventories, and rising merchant premiums that signal improving demand. As a low cost producer with good execution history, we believe FCX's valuation multiple can re-rate if copper prices average $3.29/lb in 2011 as we expect and the company continues to generate free cash," said Citigroup's Brian Yu.
Freeport is the top pick of Citigroup at this time, which the company affirmed again.
For 2011, the company lowered its outlook, dropping it from $7.90 to $7.50, and also cutting the price target of the miner from $93 to $92.
Murphy Oil (NYSE:MUR) Selling Off Entire Refining Business
Murphy Oil Corporation (NYSE:MUR) said on Thursday that their Board of Directors has given the go ahead to sell off all their refining units, as they exit the business entirely.
Included in the sale will be refineries located in Milford Haven, Wales; Meraux, Louisiana; and Superior, Wisconsin. Also being sold off will be a retail system located in the UK.
CEO and President David Wood said, “Murphy’s Upstream and U.S. Retail businesses have demonstrated marked growth and financial performance over the last several years. By exiting the refining business, we can fully focus our attention and resources on continuing that growth, developing a premier international upstream business and a top quartile U.S. retail franchise.”
Murphy, which is being advised by Goldman Sachs (NYSE:GS), expects the units to be sold in the first quarter of 2011.
Included in the sale will be refineries located in Milford Haven, Wales; Meraux, Louisiana; and Superior, Wisconsin. Also being sold off will be a retail system located in the UK.
CEO and President David Wood said, “Murphy’s Upstream and U.S. Retail businesses have demonstrated marked growth and financial performance over the last several years. By exiting the refining business, we can fully focus our attention and resources on continuing that growth, developing a premier international upstream business and a top quartile U.S. retail franchise.”
Murphy, which is being advised by Goldman Sachs (NYSE:GS), expects the units to be sold in the first quarter of 2011.
Thursday, July 22, 2010
Democrat Attack on Gold, Glenn Beck, Goldline Continues
After the Democrats snuck the provision for gold coin dealers to have to provide a 1099 for every investors they acquire over $600 in gold from, it was only a matter of time before the upped their attacks on the alternative investment and currency, and that has come in their ferocious and unwarranted attack on Glenn Beck and Goldline, through the investigation of alleged "sales tactics" which are evidently too aggressive for Democrats' tastes.
How this requires an investigation is so dubious you have to dig some before you find out that the person leading the probe of Beck and Goldline is an Obama campaign contributor - Adam Radinsky.
Another Democrat, of course from New York, Anthony Weiner, has been leading the questioning and assertions concerning Beck and Goldline.
What is the big deal about? This horrible company is encouraging customers to acquire gold coins rather than gold bullion. Really! That's it.
A tiny group of customers alleged they were "coaxed" into buying coins instead of bullion, which have been harder to sell at a profit. There's not one thing in the world someone couldn't say the same thing about, so this is a non-story created by the Democrats because of their hatred of Beck.
What company in the world doesn't attempt to sell their more profitable products, which gold coins definitely are. But bullion has a lot of risks, due to its size, and the fact of how much it would cost, which the average person obviously couldn't afford.
Gold coins are recommended, for the most part, by most in the gold industry, and their portability and lower costs are a major reason for that. How that gets turned into an investigation is beyond the scope of a healthy human being and the way they think.
Democrats, who own the health bill, also hid a provision to force gold coin dealers to have to provide a 1099 for each person they pay over $600 to for gold they acquire. That will devastate many of the small business owners dealing in gold because of the shear volume of paperwork required.
Gold continues to expose the policies of the governments and central banks around the world as crooked and devastating to the value of the currency. This is why they act stupid and clueless when people ask them questions as to why gold prices are going up.
How this requires an investigation is so dubious you have to dig some before you find out that the person leading the probe of Beck and Goldline is an Obama campaign contributor - Adam Radinsky.
Another Democrat, of course from New York, Anthony Weiner, has been leading the questioning and assertions concerning Beck and Goldline.
What is the big deal about? This horrible company is encouraging customers to acquire gold coins rather than gold bullion. Really! That's it.
A tiny group of customers alleged they were "coaxed" into buying coins instead of bullion, which have been harder to sell at a profit. There's not one thing in the world someone couldn't say the same thing about, so this is a non-story created by the Democrats because of their hatred of Beck.
What company in the world doesn't attempt to sell their more profitable products, which gold coins definitely are. But bullion has a lot of risks, due to its size, and the fact of how much it would cost, which the average person obviously couldn't afford.
Gold coins are recommended, for the most part, by most in the gold industry, and their portability and lower costs are a major reason for that. How that gets turned into an investigation is beyond the scope of a healthy human being and the way they think.
Democrats, who own the health bill, also hid a provision to force gold coin dealers to have to provide a 1099 for each person they pay over $600 to for gold they acquire. That will devastate many of the small business owners dealing in gold because of the shear volume of paperwork required.
Gold continues to expose the policies of the governments and central banks around the world as crooked and devastating to the value of the currency. This is why they act stupid and clueless when people ask them questions as to why gold prices are going up.
Freeport (NYSE:FCX) May Expand Copper Mine in Chile
Freeport McMoRan Copper & Gold Inc. (NYSE:FCX) said they are looking into the possibility of expanding the processing capacity at their El Abra mine in Chile.
Yesterday, Chief Executive Officer Richard Adkerson said they could work with their Chile partner Codelco, the state-owned copper firm, to build a new copper mill at the project.
Also concerning the El Abra mine, the company said they're going to spend about $725 million through 2015 to extend the mine's life, as there's significant resources to still access. That would add about 10 more years to the life of the mine.
Freeport owns 51 percent of El Abra, while Codelco owns the remaining 49 percent.
Yesterday, Chief Executive Officer Richard Adkerson said they could work with their Chile partner Codelco, the state-owned copper firm, to build a new copper mill at the project.
Also concerning the El Abra mine, the company said they're going to spend about $725 million through 2015 to extend the mine's life, as there's significant resources to still access. That would add about 10 more years to the life of the mine.
Freeport owns 51 percent of El Abra, while Codelco owns the remaining 49 percent.
Sellers of Gold Coins Slammed by Sneaky Provision Added to Health Care Bill
Normally 1099 forms are used for those self-employed or contractors.
This will not only increase the price of gold coins, because of the added employees needed to perform the paperwork, but will be an additional tax to people selling their gold.
The Industry Council for Tangible Assets has come out against the outrage perpetuated on them by the Democrats and Obama, with ABC News reporting Diane Piret, industry affairs director of ICTA, saying this, "Coin dealers not only buy for their inventory from other dealers, but also with great frequency from the public. Most other types of businesses will have a limited number of suppliers from which they buy their goods and products for resale."
Piret added, that every time someone sells over $600 in gold to a dealer, they'll have to fill out the paperwork to report it to the government.
Some dealers point out they could fill out up to 20,000 forms a year just to comply with the new law. This would require additional employees to keep up with it.
Ultimately this cost will be passed on to customers.
The provison, scheduled to be implemented in 2012, is being opposed also by Rep. Daniel Lungren, R-Calif., who has introduced legislation to repeal that particular portion of the health care bill.
Sellers of gold could also experience a nightmare if they don't understand what's going on, and the gold is considered revenue, as federal and state taxes would have to be paid, and FICA taken out after the fact.
Even the IRS admits it could be a nightmare concerning the volume of paperwork which would increase.
BP (NYSE:BP) Relief Well Reaching Target Destination by Weekend
The first relief well of BP (NYSE:BP) is close to reaching its destination, with expectations it'll arrive at its target this weekend.
This is the only permanent fix to stopping the well from gushing into the Gulf of Mexico, although the current containment cap is doing a good job, assuming it holds.
It's possible that within two weeks after this weekend the Macondo oil well will be permanently sealed.
We have the caveat of unsurety concerning everything being tried at this point by BP, as there simply isn't a blueprint for what will work at these depths.
One method that may be used to increase the probability of success would be to shoot drilling mud through the containment cap before beginning the final procedures.
Whether that happens or not, BP will drill sideways into the well to intercept it, and then start to plug it.
This is the only permanent fix to stopping the well from gushing into the Gulf of Mexico, although the current containment cap is doing a good job, assuming it holds.
It's possible that within two weeks after this weekend the Macondo oil well will be permanently sealed.
We have the caveat of unsurety concerning everything being tried at this point by BP, as there simply isn't a blueprint for what will work at these depths.
One method that may be used to increase the probability of success would be to shoot drilling mud through the containment cap before beginning the final procedures.
Whether that happens or not, BP will drill sideways into the well to intercept it, and then start to plug it.
Wednesday, July 21, 2010
Ivanhoe (NYSE:IVN), Paramount (AMEX:PZG), Northgate (AMEX:NXG), Aurizon (AMEX:AZK) Finish Positive on Down Day
Ivanhoe Mines (NYSE:IVN), Northgate Minerals (AMEX:NXG), Aurizon Mines (AMEX:AZK) Paramount Gold and Silver Corp. (AMEX:PZG) all managed to finish positive on an otherwise slow day, as most gold miners and miners in general were down.
Gold prices have been under pressure because of low inflation and the silly notion the European sovereign debt crisis is under control. People will find out about that soon enough, just like the recent reminder when Ireland debt was downgraded.
Some are attempting to prop up the euro, but over the long-term, and probably short-term, it is unlikely to work. Gold had been moving up as the euro went down.
Gold miners and other metal producers have declined with gold prices, but the companies listed here were all able to buck that trend on Wednesday.
Topping the list is one of my favorites for the long term, Ivanhoe Mines, which closed at $17.02 a share, gaining $0.29, or 1.73 percent. Volume was above the 3-month average for the day.
Paramount Gold and Silver Corp., as measured by percentage, was up the most of these four, ending the day at $1.33, gaining $0.06, or 4.72 percent. Volume was just above average for them.
Northgate Minerals finished the session at an even $3.00, increasing $0.09, or 3.09 percent. Northgate traded far above the normal 3-month trading average.
Aurizon (AMEX:AZK) ended the day at $4.90, gaining $0.05, or 1.03 percent. Trading volume for them was below the 3-month average.
Gold prices have been under pressure because of low inflation and the silly notion the European sovereign debt crisis is under control. People will find out about that soon enough, just like the recent reminder when Ireland debt was downgraded.
Some are attempting to prop up the euro, but over the long-term, and probably short-term, it is unlikely to work. Gold had been moving up as the euro went down.
Gold miners and other metal producers have declined with gold prices, but the companies listed here were all able to buck that trend on Wednesday.
Topping the list is one of my favorites for the long term, Ivanhoe Mines, which closed at $17.02 a share, gaining $0.29, or 1.73 percent. Volume was above the 3-month average for the day.
Paramount Gold and Silver Corp., as measured by percentage, was up the most of these four, ending the day at $1.33, gaining $0.06, or 4.72 percent. Volume was just above average for them.
Northgate Minerals finished the session at an even $3.00, increasing $0.09, or 3.09 percent. Northgate traded far above the normal 3-month trading average.
Aurizon (AMEX:AZK) ended the day at $4.90, gaining $0.05, or 1.03 percent. Trading volume for them was below the 3-month average.
Day Two of BP (NYSE:BP) Oil Spill Hearing: Proof of Negligence
Up to this point, there has been many accusations and speculation that BP (NYSE:BP) was negligent in their operations and safety at the Macondo Well. The proof came from an internal report that was brought to an investigative hearing in Kenner, Louisiana.
Two days prior to the massive explosion of the Deepwater Horizon, BP was told that there may be a problem with natural gas leaking from the Macondo Well. The warning came from a contractor on the rig employed by Halliburton. A BP well site leader Ronald Sepulvado, told the panel that he had received a different report on April 15th but not on April 18th, which warned of gas flow risks.
He also stated the workers became aware of a leak in the hydraulic system, which control the blowout preventer. In an emergency, the blowout preventer is responsible for shutting down a well. On the Deepwater Horizon Rig, the blowout preventer failed at shutting down the well.
Sepulvado continued saying, he was aware of an audit in April that showed the Deepwater Horizon's blowout preventer was well past due for a major inspection. He raised concerns to Transocean about maintenance of the blowout preventer, saying some equipment pieces were out of service for long periods of time. Transocean's response to him was they, "always told me they didn't have the parts."
Two days prior to the massive explosion of the Deepwater Horizon, BP was told that there may be a problem with natural gas leaking from the Macondo Well. The warning came from a contractor on the rig employed by Halliburton. A BP well site leader Ronald Sepulvado, told the panel that he had received a different report on April 15th but not on April 18th, which warned of gas flow risks.
He also stated the workers became aware of a leak in the hydraulic system, which control the blowout preventer. In an emergency, the blowout preventer is responsible for shutting down a well. On the Deepwater Horizon Rig, the blowout preventer failed at shutting down the well.
Sepulvado continued saying, he was aware of an audit in April that showed the Deepwater Horizon's blowout preventer was well past due for a major inspection. He raised concerns to Transocean about maintenance of the blowout preventer, saying some equipment pieces were out of service for long periods of time. Transocean's response to him was they, "always told me they didn't have the parts."
BP's (NYSE:BP) CEO Will Remain - For Now!
News that BP's (NYSE:BP) chief executive officer Tony Hayward will be booted from his position has caused a spokesman for the company to say he "remains the CEO."
This is the result of an article in the Times of London which said Hayward has at most about 10 weeks left at the helm of the company, whereby a new CEO will be named, with American Bob Dudley considered the front-runner by many.
BP spokesman Robert Wine said, “He has the full backing of the Board.”
Even so, there's almost no one outside the company that thinks Hayward will remain on board, and it's only a matter of when, not if, he's going to be relieved of his duties.
BP won't want to talk much of this at this time, as the important plugging of the leaking oil well is a triumph for them, and to focus on that would deter from the positives the company is finally getting.
Hayward is pretty much an irrelevancy now, and once the surety of the leak being permanently plugged arrives, it's probably at that time they'll make a move in a way that will appear a transferring of power to the cleanup part of the operations. That would keep things from being chaotic for the company.
This is the result of an article in the Times of London which said Hayward has at most about 10 weeks left at the helm of the company, whereby a new CEO will be named, with American Bob Dudley considered the front-runner by many.
BP spokesman Robert Wine said, “He has the full backing of the Board.”
Even so, there's almost no one outside the company that thinks Hayward will remain on board, and it's only a matter of when, not if, he's going to be relieved of his duties.
BP won't want to talk much of this at this time, as the important plugging of the leaking oil well is a triumph for them, and to focus on that would deter from the positives the company is finally getting.
Hayward is pretty much an irrelevancy now, and once the surety of the leak being permanently plugged arrives, it's probably at that time they'll make a move in a way that will appear a transferring of power to the cleanup part of the operations. That would keep things from being chaotic for the company.
Freeport (NYSE:FCX) Earnings Increase 10 Percent in Second Quarter
Freeport McMoRan Copper & Gold Inc. (NYSE:FCX) enjoyed a 10 percent increase in earnings in the second quarter, as higher copper and gold prices helped them to a strong showing, even though production numbers were down.
The miner earned $1.49 a share after excluding one-time items, far above the $1.34 a share analysts had been looking for.
Copper prices surged 38 percent higher on average during the quarter, leading the earnings gains. Copper entails about 75 percent of all sales by Freeport.
Gold also helped the company, as prices were at $1,234 an ounce on average during the second quarter. That was up by 32 percent over last year, which averaged $932 an ounce during the same quarter.
Revenue grew to $3.86 billion a gain of 5 percent, from $3.68 billion last year. Analysts had been looking for $3.66 billion. Again, this was led by higher prices and not increased production.
To get an idea of how the stronger prices helped the company, production last year for copper during the same time period was 1.1 billion pounds, while the most recent quarter was 914 million pounds.
Gold production was at 298,000 for the most recent quarter.
Guidance for the year remained the same, with production of copper estimated at 3.8 billion pounds, and gold production expected to reach 1.8 million ounces. Molybdenum, which could perform strong if the demand for steel increases, which is expected, has an estimated 63 million pounds to be produced for the year.
Freeport was up to $66.74 in New York as of 1:26PM EDT, gaining $2.42, or 3.76 percent.
The miner earned $1.49 a share after excluding one-time items, far above the $1.34 a share analysts had been looking for.
Copper prices surged 38 percent higher on average during the quarter, leading the earnings gains. Copper entails about 75 percent of all sales by Freeport.
Gold also helped the company, as prices were at $1,234 an ounce on average during the second quarter. That was up by 32 percent over last year, which averaged $932 an ounce during the same quarter.
Revenue grew to $3.86 billion a gain of 5 percent, from $3.68 billion last year. Analysts had been looking for $3.66 billion. Again, this was led by higher prices and not increased production.
To get an idea of how the stronger prices helped the company, production last year for copper during the same time period was 1.1 billion pounds, while the most recent quarter was 914 million pounds.
Gold production was at 298,000 for the most recent quarter.
Guidance for the year remained the same, with production of copper estimated at 3.8 billion pounds, and gold production expected to reach 1.8 million ounces. Molybdenum, which could perform strong if the demand for steel increases, which is expected, has an estimated 63 million pounds to be produced for the year.
Freeport was up to $66.74 in New York as of 1:26PM EDT, gaining $2.42, or 3.76 percent.
BP (NYSE:BP): State Pension Funds Ask for Lead-Plaintiff Status in Class-Action Lawsuit
Government fund of Ohio and New York are seeking to be named lead plaintiffs by a Louisiana court in a class-action lawsuit against BP (NYSE:BP).
Court papers filed by Ohio Attorney General Richard A. Cordray and New York Comptroller Thomas P. DiNapoli show the two pension funds combined lost $229.4 million by investing in BP and the resultant fallout from the Gulf oil spill.
The complaint states BP and its directors and officers are responsible for the pension fund losses, and should pay for it.
According to the filing, BP "made false and misleading statements regarding BP’s safety protocols, operations, and safety record, as well as its ability to respond to a major oil spill.”
So far over 300 lawsuits have been filed against BP in relation to the Gulf oil spill.
Court papers filed by Ohio Attorney General Richard A. Cordray and New York Comptroller Thomas P. DiNapoli show the two pension funds combined lost $229.4 million by investing in BP and the resultant fallout from the Gulf oil spill.
The complaint states BP and its directors and officers are responsible for the pension fund losses, and should pay for it.
According to the filing, BP "made false and misleading statements regarding BP’s safety protocols, operations, and safety record, as well as its ability to respond to a major oil spill.”
So far over 300 lawsuits have been filed against BP in relation to the Gulf oil spill.
BP (NYSE:BP) Admits To Altering Web Graphics of Oil Spill
While BP (NYSE:BP) is trying to maintain and rebuild their image, they've admitted to altering web graphics of the oil spill on their website. On an image posted on the official BP site, it shows a crisis command center in Houston with workers watching videos.
In the unaltered photo released by BP, it shows three of their screens blank. In the altered photo it shows all three as active with images from the oil spill they are monitoring. The photo is dated 2001, not July 16, 2010 as claimed on BP's website. Scott Dean, BP spokesman assured that the photo was just a photographer playing around and there is no sinister purpose.
In an email Dean stated, "Normally we only use Photoshop for the typical purposes of color correction and cropping. In this case they copied and pasted three ROV screen images in the original photo over three screens that were not running video feeds at the time."
He added, "We've instructed our post production team to refrain from doing this in the future. We will replace the Photoshopped version currently on bp.com with the original image tonight."
In the unaltered photo released by BP, it shows three of their screens blank. In the altered photo it shows all three as active with images from the oil spill they are monitoring. The photo is dated 2001, not July 16, 2010 as claimed on BP's website. Scott Dean, BP spokesman assured that the photo was just a photographer playing around and there is no sinister purpose.
In an email Dean stated, "Normally we only use Photoshop for the typical purposes of color correction and cropping. In this case they copied and pasted three ROV screen images in the original photo over three screens that were not running video feeds at the time."
He added, "We've instructed our post production team to refrain from doing this in the future. We will replace the Photoshopped version currently on bp.com with the original image tonight."
Dudley Replacing Hayward as BP (NYSE:BP) Chief
Tony Hayward, Chief Executive Officer is expected to step down from his position with BP (NYSE:BP) within the next two weeks, according to an anonymous source. The person most likely to replace him is Robert Dudley. The announcement of Hayward's successor isn't expected until August or September.
The leadership change is part of BP's strategy to rebuild their image, company, and reputation. Part of this process is raising money for the $20 billion fund by selling off some of their oil fields. The money raised will be used to compensate those in the Gulf Coast region. BP is making good strides in that direction with the agreement with Apache to sell $7 billion of their assets in North America and Egypt.
Hayward has gotten much criticism over public relation blunders. On May 30th he stated, I want my "life back." He took the job in 2007, promising a "laser like focus" on safety while boosting output and reducing expenses.
The leadership change is part of BP's strategy to rebuild their image, company, and reputation. Part of this process is raising money for the $20 billion fund by selling off some of their oil fields. The money raised will be used to compensate those in the Gulf Coast region. BP is making good strides in that direction with the agreement with Apache to sell $7 billion of their assets in North America and Egypt.
Hayward has gotten much criticism over public relation blunders. On May 30th he stated, I want my "life back." He took the job in 2007, promising a "laser like focus" on safety while boosting output and reducing expenses.
No Evidence BP (NYSE:BP) Swayed Scotland Decision to Release Lockerbie Bomber
The Prime Minister of Britain, David Cameron, reiterated his conclusion in the matter of BP (NYSE:BP) being somehow involved in persuading Scotland officials to release him, that there is no evidence to show that was the case.
He also pushed against the Democrats and Hillary Clinton, who foolishly have called for a full inquiry into the alleged connection. Cameron said, "I don't think there's any great mystery here. ... I don't need an inquiry to tell me it was a bad decision. It was a bad decision."
Cameron also separated the oil spill from the Lockerbie incident, saying they are two completely different things. That seemed to be a rebuke to the embarrasing Democrats who were ranting about "blood money" and other outrageous statements concerning the alleged connection between BP and releasing the criminal, without them having a shred of evidence to back up their irresponsible comments.
Cameron also continued to press the issue of the importance of BP to America and Britain, and the importance of them surviving the ordeal, while paying for their liabilities in the oil spill. He cited thousands of jobs created by BP in both countries as one of the important characteristics of the oil giant.
He also pushed against the Democrats and Hillary Clinton, who foolishly have called for a full inquiry into the alleged connection. Cameron said, "I don't think there's any great mystery here. ... I don't need an inquiry to tell me it was a bad decision. It was a bad decision."
Cameron also separated the oil spill from the Lockerbie incident, saying they are two completely different things. That seemed to be a rebuke to the embarrasing Democrats who were ranting about "blood money" and other outrageous statements concerning the alleged connection between BP and releasing the criminal, without them having a shred of evidence to back up their irresponsible comments.
Cameron also continued to press the issue of the importance of BP to America and Britain, and the importance of them surviving the ordeal, while paying for their liabilities in the oil spill. He cited thousands of jobs created by BP in both countries as one of the important characteristics of the oil giant.
Tuesday, July 20, 2010
Iamgold (NYSE:IAG), Goldcorp (NYSE:GG), AngloGold (NYSE:AU) Up on Weak Economy
As we gradually sift through the economic data and news, confirmation we are far from any type of recovery continues to emerge, as the latest data in new housing starts confirm once government props are removed it falls apart. Gold companies like Iamgold (NYSE:IAG), Goldcorp (NYSE:GG) and AngloGold Ashanti (NYSE:AU) will continually be the beneficiaries of the weak economy, as gold prices resume their upward climb.
Gold prices finished above $1,190 an ounce today, and the majority of gold miners climbed with it, as housing starts dropped another 5 percent in June, following the 15 percent drop the prior month.
Among the group of gold miners mentioned here, Iamgold performed the strongest of the three, ending the trading session in New York at $16.21, gaining $0.65. or 4.18 percent. They did decline after hours to $15.99 a share.
Next was Goldcorp, who had a nice upward move of $0.60, to end the day at $40.35, or 1.51 percent. They were level in after hours trading.
AngloGold Ashanti moved the lowest of the three, reaching $39.53 by close, a gain of $0.43, or 1.10 percent.
There is nothing that points to any of this changing, as the job market would have to completely turn around, which it hasn't, as consumers continue to hold back on spending as the economy continues to sputter.
Gold investors will be a happy lot going forward, as there will be a big move once the reality is digested by the market.
Gold prices finished above $1,190 an ounce today, and the majority of gold miners climbed with it, as housing starts dropped another 5 percent in June, following the 15 percent drop the prior month.
Among the group of gold miners mentioned here, Iamgold performed the strongest of the three, ending the trading session in New York at $16.21, gaining $0.65. or 4.18 percent. They did decline after hours to $15.99 a share.
Next was Goldcorp, who had a nice upward move of $0.60, to end the day at $40.35, or 1.51 percent. They were level in after hours trading.
AngloGold Ashanti moved the lowest of the three, reaching $39.53 by close, a gain of $0.43, or 1.10 percent.
There is nothing that points to any of this changing, as the job market would have to completely turn around, which it hasn't, as consumers continue to hold back on spending as the economy continues to sputter.
Gold investors will be a happy lot going forward, as there will be a big move once the reality is digested by the market.
Gold Rises on Weak Housing Report
Although it'll take a little time to sort out because of conflicting economic reports which attempt to mask the extremely weak U.S. and global economy, the weak housing report again reminds us of the importance of holding gold in the face of major risk associated with the economy.
The appearance that there is uncertainty as to which direction the economy is going is exasperated by news reports that imply this is the case, when in reality, now that the faux recovery is exposed as soon as the government props are lifted away from various sectors of the economy, gold will again be seen as the one place investors can place their money and retain it.
If you have trouble believing that, just look every time the data come out and the ubiquitous and dishonest word "unexpected" is added to it. Every single time we get down economic news the financial press, especially mainstream financial press, somehow can't ever figure out what's going on, and they are caught off guard by the "unexpected" economic news.
How could anyone be that ignorant, for example, concerning the housing market in the U.S. As soon as the tax credit was ended housing started predictably plummeted, as they did again in the latest data, where they were down another 5 percent in June, which was the lowest in eight months. How can that be unexpected?
Now they're saying there will probably be a double dip recession in housing if the job market doesn't improve any time soon. We also know that's not going to happen, as the wasted 100s of billions allegedly already spent has done nothing to create jobs, as government money never can.
All we've got from that, for the most part, is more government employees feeding off the hard work of the private sector, and which they can't afford to do any longer.
How that all affects gold is this: housing starts plummeting, and if no jobs are created, we're going into another recession. Unless you think a miracle is going to happen or spending another $1 trillion or so will solve it, you're in for a world of hurt as the "unexpected" circumstances overcome you. Gold will explode upward again as the realization comes that we've been lied to again. There never has been prospects for a recovery, there has never been a recovery, and there isn't going to be a recovery for a long time. Gold will be the beneficiary of that as the realization grows on the investing community.
The appearance that there is uncertainty as to which direction the economy is going is exasperated by news reports that imply this is the case, when in reality, now that the faux recovery is exposed as soon as the government props are lifted away from various sectors of the economy, gold will again be seen as the one place investors can place their money and retain it.
If you have trouble believing that, just look every time the data come out and the ubiquitous and dishonest word "unexpected" is added to it. Every single time we get down economic news the financial press, especially mainstream financial press, somehow can't ever figure out what's going on, and they are caught off guard by the "unexpected" economic news.
How could anyone be that ignorant, for example, concerning the housing market in the U.S. As soon as the tax credit was ended housing started predictably plummeted, as they did again in the latest data, where they were down another 5 percent in June, which was the lowest in eight months. How can that be unexpected?
Now they're saying there will probably be a double dip recession in housing if the job market doesn't improve any time soon. We also know that's not going to happen, as the wasted 100s of billions allegedly already spent has done nothing to create jobs, as government money never can.
All we've got from that, for the most part, is more government employees feeding off the hard work of the private sector, and which they can't afford to do any longer.
How that all affects gold is this: housing starts plummeting, and if no jobs are created, we're going into another recession. Unless you think a miracle is going to happen or spending another $1 trillion or so will solve it, you're in for a world of hurt as the "unexpected" circumstances overcome you. Gold will explode upward again as the realization comes that we've been lied to again. There never has been prospects for a recovery, there has never been a recovery, and there isn't going to be a recovery for a long time. Gold will be the beneficiary of that as the realization grows on the investing community.
BP (NYSE:BP) Lockerbie Inquiry Rejected by British Prime Minister David Cameron
Under fire in his own country for looking like he didn't stand up for BP (NYSE:BP) against the onslaught of the Obama administration, British Prime Minister David Cameron, in his first visit in that capacity to America, reiterated it was in the best interests of America and Britain for a strong BP, while rejecting demands from Democrats for a full inquiry into the release of the Lockerbie bomber to Libya.
Cameron did say he asked his cabinet secretary to see if any other documents related to the case would be allowed to be made public.
This was a sound thrashing of the thuggish Democrats, who outrageously, and without any proof whatsoever, implied British government officials lied about an alleged connection between the release of the prisoner and BP, even going so far as to call it "blood money." Democrat heads should roll because of that childish behavior and unbelievable lack of self control and demagoguery in making those types of accusations.
Cameron reiterated that BP had absolutely no role in the release of the Lockerbie bomber. He also repeated the theme that BP needs to remain "strong and sound," not only because of its value to the economies of both countries, but also to be able to pay for the obligations it has to the Gulf oil spill.
Cameron did say he asked his cabinet secretary to see if any other documents related to the case would be allowed to be made public.
This was a sound thrashing of the thuggish Democrats, who outrageously, and without any proof whatsoever, implied British government officials lied about an alleged connection between the release of the prisoner and BP, even going so far as to call it "blood money." Democrat heads should roll because of that childish behavior and unbelievable lack of self control and demagoguery in making those types of accusations.
Cameron reiterated that BP had absolutely no role in the release of the Lockerbie bomber. He also repeated the theme that BP needs to remain "strong and sound," not only because of its value to the economies of both countries, but also to be able to pay for the obligations it has to the Gulf oil spill.
BP (NYSE:BP) Oil Shares Plummet in Trading
Beginning the session in the negative column, oil shares started moving up as the energy sector gained strength from Weatherford's comments and higher crude oil prices but BP (NYSE:BP) plummeted. Oil rose 1 percent or 75 cents to $77.65 a barrel, while early in the morning it was trading down 1 percent reaching a low for the day of $76.05.
The New York Stock Exchange Arca Natural Gas Index gained 0.3 percent to 501. While The Dow Jones Industrial Average dipped 87 points or almost 0.9 percent. The NYSE Arca Oil Index declined 0.3 percent to 940. The Philadelphia Oil Service Index saw an increase of 1.5 percent to $178.34.
Exxon Mobil was down 0.5 percent to $58.13 and Chevron by 0.6 percent to $71.54. While BP shares took a nose dive to $34.87 losing 2.5 percent. The pressure in BP's well continues to slowly rise, it has now reached 6,825. They have not re-started drilling the relief well and are currently going over all possible options.
The New York Stock Exchange Arca Natural Gas Index gained 0.3 percent to 501. While The Dow Jones Industrial Average dipped 87 points or almost 0.9 percent. The NYSE Arca Oil Index declined 0.3 percent to 940. The Philadelphia Oil Service Index saw an increase of 1.5 percent to $178.34.
Exxon Mobil was down 0.5 percent to $58.13 and Chevron by 0.6 percent to $71.54. While BP shares took a nose dive to $34.87 losing 2.5 percent. The pressure in BP's well continues to slowly rise, it has now reached 6,825. They have not re-started drilling the relief well and are currently going over all possible options.
Eldorado (NYSE:EGO), Agnico-Eagle (NYSE:AEM), Gammon (NYSE:GRS) Up on Gold Rebound
Eldorado Gold (NYSE:EGO), Gammon (NYSE:GRS) and Agnico-Eagle (NYSE:AEM) were all up over 2 percent today, as gold rose on disappointing earnings from some companies, along with the euro dropping early in the trading session.
The majority of gold miners were up on the day.
Eldorado topped the three as of 1:14 PM EDT, standing at $15.76, gaining $0.38, or 2.47 percent.
Agnico was at $56.57 as of 1:13PM EDT, just behind Eldorado as measured by percentages. They gained $1.31 a share, or 2.37 percent.
Even as I am writing Gammon Gold made a nice move, and are at $5.49, gaining $0.19, or 3.58 percent, as of 1:18 PM EDT.
Gold is expected to be volatile during the short term, but should rebound nicely and continue its upward move.
The majority of gold miners were up on the day.
Eldorado topped the three as of 1:14 PM EDT, standing at $15.76, gaining $0.38, or 2.47 percent.
Agnico was at $56.57 as of 1:13PM EDT, just behind Eldorado as measured by percentages. They gained $1.31 a share, or 2.37 percent.
Even as I am writing Gammon Gold made a nice move, and are at $5.49, gaining $0.19, or 3.58 percent, as of 1:18 PM EDT.
Gold is expected to be volatile during the short term, but should rebound nicely and continue its upward move.
Freeport (NYSE:FCX) Earnings Report Should Reveal Economic Conditions
Although many were looking for Alcoa (NYSE:AA) to give some guidance as to economic conditions, Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) will probably be a more accurate measure, although combined with Alcoa's numbers, could give a snapshot of where the economy really is at, against the numerous assertions and conflicting reports out there.
Tomorrow morning Freeport gives its earnings report, and it'll be especially important to see the copper numbers, although the secondary molybdenum and gold numbers will be important as well.
But taking into account the importance of copper in the global economy, that is the primary measure to look for from the point of view of economic conditions and where they have been at.
Just like the economies of Europe and the United States, China will be found to have slowed down some after the stimulus money wound its way through the system. Copper in the first quarter was up based on that, and the sales in the second quarter should give a real reading, or at least, more accurate reading of economic conditions when they're not being propped up by governments.
As far as sales goes, Freeport is expected to have sold about 830 million pounds of copper, 15 million pounds of molybdenum, and 270,000 ounces of gold
Analysts are looking for earnings of about $1.32 a share on $3.56 billion in revenue.
Tomorrow morning Freeport gives its earnings report, and it'll be especially important to see the copper numbers, although the secondary molybdenum and gold numbers will be important as well.
But taking into account the importance of copper in the global economy, that is the primary measure to look for from the point of view of economic conditions and where they have been at.
Just like the economies of Europe and the United States, China will be found to have slowed down some after the stimulus money wound its way through the system. Copper in the first quarter was up based on that, and the sales in the second quarter should give a real reading, or at least, more accurate reading of economic conditions when they're not being propped up by governments.
As far as sales goes, Freeport is expected to have sold about 830 million pounds of copper, 15 million pounds of molybdenum, and 270,000 ounces of gold
Analysts are looking for earnings of about $1.32 a share on $3.56 billion in revenue.
Gold Prices Up as Earnings Weakness
After Goldman Sachs (NYSE:GS), IBM (NYSE:IBM) and other missed earnings estimates, or confirmed weak quarters, gold prices today increased by almost $8 an ounce at mid-day.
On the Comex division of the New York Mercantile Exchange, gold for August delivery increased $7.80 to $1,189.70 an ounce, while spot gold was up by $7.90, to $1,192 an ounce, as of 12:52 PM EDT.
Another factor was the fall of the euro, which dropped to $1.29 against the U.S. dollar, or 0.15 percent.
While gold will resume its upward march, short term it does look like there'll continue to be some volatility as conflicting economic news keeps investors in other assets like Treasuries and the U.S. dollar.
On the Comex division of the New York Mercantile Exchange, gold for August delivery increased $7.80 to $1,189.70 an ounce, while spot gold was up by $7.90, to $1,192 an ounce, as of 12:52 PM EDT.
Another factor was the fall of the euro, which dropped to $1.29 against the U.S. dollar, or 0.15 percent.
While gold will resume its upward march, short term it does look like there'll continue to be some volatility as conflicting economic news keeps investors in other assets like Treasuries and the U.S. dollar.
BP (NYSE:BP) Oil Leak Damage Causing Loss of 17,000 Jobs
According to Moody's analytics report, BP's (NYSE:BP) oil leak damage is not only effecting oceans and wildlife, it's also causing the loss of 17,000 jobs in the Gulf Coast. Also being lost is almost $1.2 billion in the regions economic growth by the end of the year. Even if the best case scenario plays out with the Macondo well being permanently fixed next month.
The other scenario is the Presidents six month moratorium gets pushed through, extended, and the leaking well continues spewing its toxic crude oil through the end of the year. Then the financial losses will be almost $7.5 billion and well over 100,000 jobs lost.
The hardest hit areas will be Florida, which relies on high tourism and Louisiana whose whole livelihood lies in fishing, oil extraction, and aquaculture. The other states, Texas, Mississippi, and Alabama will also feel the impact but on a much smaller scale.
The other scenario is the Presidents six month moratorium gets pushed through, extended, and the leaking well continues spewing its toxic crude oil through the end of the year. Then the financial losses will be almost $7.5 billion and well over 100,000 jobs lost.
The hardest hit areas will be Florida, which relies on high tourism and Louisiana whose whole livelihood lies in fishing, oil extraction, and aquaculture. The other states, Texas, Mississippi, and Alabama will also feel the impact but on a much smaller scale.
BP (NYSE:BP) Drilling Up to 100 New Oil Wells in Iraq's Rumaila Field
Along with partners South Oil Co., the Iraqi state-run oil company, and China National Petroleum, BP (NYSE:BP) will be issuing tenders to drill up to 100 oil wells in the giant Rumaila oil field in Iraq over the next two years.
The consortium have committed to increasing oil production at the field to 2.85 million barrels a day by the end of seven years.
BP holds the largest stake in the field at 38 percent, CNPC is right behind at 37 percent, and South Oil Co. owns the other 25 percent.
The goal in 2011 is to increase oil production by over 100,000 barrels a day, and they hope to do that in the early part of the year.
Revenue is generated from a fixed rate of $2 a barrel for each additional barrel produced at the Rumaila field.
The consortium have committed to increasing oil production at the field to 2.85 million barrels a day by the end of seven years.
BP holds the largest stake in the field at 38 percent, CNPC is right behind at 37 percent, and South Oil Co. owns the other 25 percent.
The goal in 2011 is to increase oil production by over 100,000 barrels a day, and they hope to do that in the early part of the year.
Revenue is generated from a fixed rate of $2 a barrel for each additional barrel produced at the Rumaila field.
Salazar Says No To Lifting Oil Drilling Moratorium: BP (NYSE:BP)
Ken Salazar announced the new moratorium, caused by BP (NYSE:BP) massive oil spill. He said, "So long as the spill is out there and has not been contained and the oil spill response capabilities are all being consumed by the current spill, it's too risky" to lift the moratorium. The revised version identifies at risk wells based on technologies and oil drilling configurations rather than the depth of water. The prior moratoriums focus was banning oil drilling below 500 feet.
Bobby Jindal, Louisiana's Governor said, "This second suspension of deepwater drilling is a clear sign that the administration is unwilling to follow the advice of their own scientist. The ultimate effect of this second moratorium is the same as the first. To shut down drilling operations in the Gulf and risk killing an estimated 20,000 jobs in Louisiana."
The new ban suspends drilling of 21 oil rigs in the Gulf, that's only 12 less than what the original moratorium would have affected. Several oil companies have said they'll go to other countries due to the ban on drilling. One of which is the largest U.S. deepwater oil driller, Diamond Offshore Drilling Inc.
Bobby Jindal, Louisiana's Governor said, "This second suspension of deepwater drilling is a clear sign that the administration is unwilling to follow the advice of their own scientist. The ultimate effect of this second moratorium is the same as the first. To shut down drilling operations in the Gulf and risk killing an estimated 20,000 jobs in Louisiana."
The new ban suspends drilling of 21 oil rigs in the Gulf, that's only 12 less than what the original moratorium would have affected. Several oil companies have said they'll go to other countries due to the ban on drilling. One of which is the largest U.S. deepwater oil driller, Diamond Offshore Drilling Inc.
Monday, July 19, 2010
Corn Plunges to Lowest Level in Seven Weeks
Corn plunges as expected, as it was known if wetter and dryer weather was forecast, the price of a bushel would come under pressure, after a period of consistent gains.
Already a number of corn fields, and other crops, have received almost 2 inches of rain, with other expected to get at least 1.25 inches up to 2.5 inches this week.
Over the next week there is no hot weather expected in a sustainable manner, making it almost perfect growing conditions for corn.
“The market is taking out the weather premium after weekend rains boosted crops in areas that had been dry,” said Greg Grow, the director of agribusiness at Archer Financial Services Inc. “Forecasts this week are wetter and a bit cooler than expected.
Corn futures for December delivery plunged 13.25 cents, or 3.3 percent, to $3.94 a bushel on the Chicago Board of Trade, the biggest drop for a most-active contract since the latter part of May.
Already a number of corn fields, and other crops, have received almost 2 inches of rain, with other expected to get at least 1.25 inches up to 2.5 inches this week.
Over the next week there is no hot weather expected in a sustainable manner, making it almost perfect growing conditions for corn.
“The market is taking out the weather premium after weekend rains boosted crops in areas that had been dry,” said Greg Grow, the director of agribusiness at Archer Financial Services Inc. “Forecasts this week are wetter and a bit cooler than expected.
Corn futures for December delivery plunged 13.25 cents, or 3.3 percent, to $3.94 a bushel on the Chicago Board of Trade, the biggest drop for a most-active contract since the latter part of May.
Barrick (NYSE:ABX), Goldcorp (NYSE:GG), Newmont (NYSE:NEM) Crushed as Gold Demand Wanes
Gold companies continue to slide on the weakening demand for gold, and Barrick Gold (NYSE:ABX), Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) were all down in New York today as gold prices continue to drop.
Spot gold was at $1,184.10 at 4:00 PM EDT, rebounding some after plunging earlier in the day, down about $8.90 at that time.
Other than the usual downturn in gold during the summer months, some of the reasons for the gold miners to fall, along with gold prices, is that inflation seems to be very low, and investors aren't taking into account the sovereign debt crisis in Europe, even though it's as bad as ever, contrary to mainstream media accounts.
Today Moody's (NYSE:MCO) downgraded Ireland government bonds, a sober reminder of the crisis still going on in Europe, and which is far from being under control.
Spot gold was at $1,184.10 at 4:00 PM EDT, rebounding some after plunging earlier in the day, down about $8.90 at that time.
Other than the usual downturn in gold during the summer months, some of the reasons for the gold miners to fall, along with gold prices, is that inflation seems to be very low, and investors aren't taking into account the sovereign debt crisis in Europe, even though it's as bad as ever, contrary to mainstream media accounts.
Today Moody's (NYSE:MCO) downgraded Ireland government bonds, a sober reminder of the crisis still going on in Europe, and which is far from being under control.
Gold Demand Plunges in Summer Duldroms - Gold Prices Continue to Fall
Gold has just about everything going against it right now, but still remains resilient with prices when taking everything into consideration.
One of course is the historical lack of gold demand in the summer, which usually drives the price of gold down some.
That doesn't explain the overall correction in gold prices though, and that is related to inflation, which for now in the united States, has been pretty much kept under control. At least that's the perception.
What hasn't changed, as evidenced by Moody's (NYSE:MCO) downgrading Ireland's government bonds today, is the safety factor. Mainstream media reports have given the illusion we're still solid economically around the globe, but that's far from true, and with the European Union being the largest economy in the world, it's a good reminder for investors to keep their eye on that region, as the sovereign debt crisis is far from being over there.
As of 2:17 PM EDT, spot gold was at $1,180.80, dropping $11.20. Gold futures for August delivery were almost the same, coming in at $1,180.40 earlier in the trading session.
One of course is the historical lack of gold demand in the summer, which usually drives the price of gold down some.
That doesn't explain the overall correction in gold prices though, and that is related to inflation, which for now in the united States, has been pretty much kept under control. At least that's the perception.
What hasn't changed, as evidenced by Moody's (NYSE:MCO) downgrading Ireland's government bonds today, is the safety factor. Mainstream media reports have given the illusion we're still solid economically around the globe, but that's far from true, and with the European Union being the largest economy in the world, it's a good reminder for investors to keep their eye on that region, as the sovereign debt crisis is far from being over there.
As of 2:17 PM EDT, spot gold was at $1,180.80, dropping $11.20. Gold futures for August delivery were almost the same, coming in at $1,180.40 earlier in the trading session.
Island Sized Oil Slick Trapped Thanks to BP (NYSE:BP)
While so many have been watching for BP's (NYSE:BP) testing results on the sealing cap, a lot of people seem to forget about the massive oil slick that is trapped and traveling around the ocean. It is compared to the size of an island.
Roger Laferriere Coast Guard Captain, oversees the command center in Southern Louisiana. He is in charge of putting together exactly how the oil is to be cleaned up. He said there are routinely over 40,000 people are working along the Gulf Coast to track the oil. They skim oil when they can, clean the shorelines, and lay protective boom to minimize damage by the oil slick.
There are several analysts who feed satellite data into computerized maps that show where the oil is moving. There are also several fisherman and shrimpers who are involved with the cleanup. They work out of small docks and are out after sun up repositioning boom that has moved out of place, changing out the oil soaked boom, and repairing torn boom.
Stopping the leak has little to do with his mission over the next several months, "Even given that, we still have a lot of oil on the water. We're going to continue to push forward until all the oil is removed and the people of Louisiana can get back to their way of life. We're going to be here until the end," said Laferriere. He also meets with mayors, city councilmen, and parish presidents.
Roger Laferriere Coast Guard Captain, oversees the command center in Southern Louisiana. He is in charge of putting together exactly how the oil is to be cleaned up. He said there are routinely over 40,000 people are working along the Gulf Coast to track the oil. They skim oil when they can, clean the shorelines, and lay protective boom to minimize damage by the oil slick.
There are several analysts who feed satellite data into computerized maps that show where the oil is moving. There are also several fisherman and shrimpers who are involved with the cleanup. They work out of small docks and are out after sun up repositioning boom that has moved out of place, changing out the oil soaked boom, and repairing torn boom.
Stopping the leak has little to do with his mission over the next several months, "Even given that, we still have a lot of oil on the water. We're going to continue to push forward until all the oil is removed and the people of Louisiana can get back to their way of life. We're going to be here until the end," said Laferriere. He also meets with mayors, city councilmen, and parish presidents.
Plumber Says His Design Stopped BP's (NYSE:BP) Oil Leak
A mystery plumber has emerged claiming that it was his design that BP (NYSE:BP) used to successfully stop the oil leak. His name is Joe Caldart, he's married has 5 children and is in his 40's.
When asked about why he choose to go public he said, "My wife was like, this is kind of scary, I don't know if you should go public." I said, "Yeah and no, but I also felt that people should know that here an average guy submitted something that maybe helped."
He said he drew three sketches on May 25th and sent them to BP and the Coastguard. They're almost an exact match to the cap that was lowered over the leaking Macondo well last week. BP's response was they weren't working on stopping the leak just containing the oil.
"The idea was using the top flange on the blowout preventer as an attachment point and then employing an internal seal against the flange surface," said Robert Bea, a Coastguard. "You can kind of see how a plumber thinks this way. That's how they have to plumb homes for sewage."
When asked about why he choose to go public he said, "My wife was like, this is kind of scary, I don't know if you should go public." I said, "Yeah and no, but I also felt that people should know that here an average guy submitted something that maybe helped."
He said he drew three sketches on May 25th and sent them to BP and the Coastguard. They're almost an exact match to the cap that was lowered over the leaking Macondo well last week. BP's response was they weren't working on stopping the leak just containing the oil.
"The idea was using the top flange on the blowout preventer as an attachment point and then employing an internal seal against the flange surface," said Robert Bea, a Coastguard. "You can kind of see how a plumber thinks this way. That's how they have to plumb homes for sewage."
BP (NYSE:BP) Kills Whale Skimmer With Dispersants
There has been much controversy surrounding BP's (NYSE:BP) use of the toxic dispersant Corexit, it's proving to kill off more than just marine life. The U.S. coastguard has deemed the Taiwanese skimmer called "A Whale" ineffective.
Due to the massive amounts of dispersants distributed into the Gulf, it broke up the oil resulting in "A Whale" not being able to properly skim the water for oil. There was a lot of optimistic hope that it would greatly assist in the removal of the toxic crude. During its testing it only removed minuscule amounts of oil.
Bob Grantham, TMT offshore spokesman said, "This ship demonstrated that it can bring substantial volumes of capacity to bear in addressing oil spills quickly and with great maneuverability. That said, the particular conditions present in the Macondo spill did not afford the vessel to recover a significant amount of oil. Due to the highly dispersed nature of oil in the Gulf."
Due to the massive amounts of dispersants distributed into the Gulf, it broke up the oil resulting in "A Whale" not being able to properly skim the water for oil. There was a lot of optimistic hope that it would greatly assist in the removal of the toxic crude. During its testing it only removed minuscule amounts of oil.
Bob Grantham, TMT offshore spokesman said, "This ship demonstrated that it can bring substantial volumes of capacity to bear in addressing oil spills quickly and with great maneuverability. That said, the particular conditions present in the Macondo spill did not afford the vessel to recover a significant amount of oil. Due to the highly dispersed nature of oil in the Gulf."
Transocean (NYSE:RIG) Reduces Rig Rate for BHP (NYSE:BHP), Shell (NYSE:RDSA)
Transocean (NYSE:RIG) came to an agreement late last week with Royal Dutch Shell (NYSE:RDS-A) and BHP Billiton Ltd. (NYSE:BHP) to reduce the day rate on oil rigs operating in the Gulf of Mexico, in light of the misguided moratorium by the Obama administration.
The two companies will pay what is described as a "special standby rate that is lower than the regular contract day rate." As a result, the two companies won't be allowed to declare "force majeure," and instead will have their contracts extended by one day for each day they aren't allowed to drill in the Gulf because of the moratorium.
Force majeure allows companies from having to fulfill their contract obligations under extreme circumstances like faced in the Gulf oil spill.
On the part of BHP, if they aren't able to secure a drilling permit after November 30, when the moratorium ends, they can end the contract or continue paying the special rate. When operations resume, Shell and BHP will begin paying the regular rates again.
Eni SpA (NYSE: E) and Chevron Corp. (NYSE:CVX) have already declared force majeure on several rigs on drillships provided by Transocean.
The two companies will pay what is described as a "special standby rate that is lower than the regular contract day rate." As a result, the two companies won't be allowed to declare "force majeure," and instead will have their contracts extended by one day for each day they aren't allowed to drill in the Gulf because of the moratorium.
Force majeure allows companies from having to fulfill their contract obligations under extreme circumstances like faced in the Gulf oil spill.
On the part of BHP, if they aren't able to secure a drilling permit after November 30, when the moratorium ends, they can end the contract or continue paying the special rate. When operations resume, Shell and BHP will begin paying the regular rates again.
Eni SpA (NYSE: E) and Chevron Corp. (NYSE:CVX) have already declared force majeure on several rigs on drillships provided by Transocean.
BP (NYSE:BP): Re-opening Spill Containment Cap and Hiding Data
BP (NYSE:BP) is hiding the data from their testing and reopening the spill containment cap. The cap has to be re-opened for up to 3 days said Doug Suttles. Saying that pressure must be taken off the well before BP can continue their containment efforts.
Doug Suttles took the place of Kent Wells at the McBriefing, after giving very little information he then refused to answer any questions. The only information that was given was about the pressure of the well, even that didn't make a whole lot of since. He said since the well was closed 63 hours prior, the pressure was up to 6,778 and was building as they thought it would.
What's odd about this is on Tuesday Thad Allen stated, "We will at some point try to get to 8,000 or 9,000 and sustain that for some period of time, and these will be done basically as I said. If we have a very low pressure reading, we will try and need at least six hours of those readings to try to ensure that that is the reading. If it's a little higher, we want to go for 24 hrs. If it's up at 8,000 or 9,000, we would like to go 48 hrs. just to make sure it can sustain those pressures for that amount of time."
Suttles continued to dodge questioning Sunday afternoon as to what BP plans to do next. He did say, "Nobody wants to see anymore oil going into the Gulf," a minimum of 5 times. He continued saying, the facilities to take all the oil flow wouldn't be completed until the end of July. In order to relieve the well of pressure, he said they would have to remove the containment cap and let oil flow out for 3 days.
Doug Suttles took the place of Kent Wells at the McBriefing, after giving very little information he then refused to answer any questions. The only information that was given was about the pressure of the well, even that didn't make a whole lot of since. He said since the well was closed 63 hours prior, the pressure was up to 6,778 and was building as they thought it would.
What's odd about this is on Tuesday Thad Allen stated, "We will at some point try to get to 8,000 or 9,000 and sustain that for some period of time, and these will be done basically as I said. If we have a very low pressure reading, we will try and need at least six hours of those readings to try to ensure that that is the reading. If it's a little higher, we want to go for 24 hrs. If it's up at 8,000 or 9,000, we would like to go 48 hrs. just to make sure it can sustain those pressures for that amount of time."
Suttles continued to dodge questioning Sunday afternoon as to what BP plans to do next. He did say, "Nobody wants to see anymore oil going into the Gulf," a minimum of 5 times. He continued saying, the facilities to take all the oil flow wouldn't be completed until the end of July. In order to relieve the well of pressure, he said they would have to remove the containment cap and let oil flow out for 3 days.
Sunday, July 18, 2010
Oil Leaks Found in BP's (NYSE:BP) Well, Possibly Methane
Among the hush, hush that seems to be surrounding the containment cap testing, a leak has been found in BP's (NYSE:BP) Macondo well. Scientist are concerned about this leak as well as what they fear is methane leaking from another source in the well.
A federal official spoke on the terms of anonymity. He said that he is familiar with the leak but would not say exactly what it was. He feels this is the reasoning behind BP's vagueness and not answering directly what their next move is. He also said that they are not complying with the government demands for stricter and more monitoring.
Meanwhile, BP has concluded their 48 hour testing of the spill containment cap. According to the live oil spill feed, no oil appears to be leaking into the ocean. It's being said that the full testing won't be completed until the end of July. When BP was asked about this they had no comment.
A federal official spoke on the terms of anonymity. He said that he is familiar with the leak but would not say exactly what it was. He feels this is the reasoning behind BP's vagueness and not answering directly what their next move is. He also said that they are not complying with the government demands for stricter and more monitoring.
Meanwhile, BP has concluded their 48 hour testing of the spill containment cap. According to the live oil spill feed, no oil appears to be leaking into the ocean. It's being said that the full testing won't be completed until the end of July. When BP was asked about this they had no comment.
Friday, July 16, 2010
Allied Nevada (AMEX:ANV), Iamgold (NYSE:IAG), Yamana (NYSE:AUY) Plunge, Along with Gold Price
Gold dropped for the fourth straight week, as investors look elsewhere for safety, albeit, it won't last too long. Consequently, Allied Nevada Gold (AMEX:ANV), Iamgold (NYSE:IAG) and Yamana Gold (NYSE:AUY) got hit hard Friday, as did most gold miners.
One of the worse performers in the sector for the day was Allied Nevada Gold, which plunged almost 7 percent to $17.25, losing $1.24, or 6.71 percent.
Next was Iamgold, falling to $15.91, a drop of $0.71, or 4.73 percent.
Yamana followed, ending the session and week at $9.53, a $.37 decline, or 3.74 percent.
The US dollar and euro were both higher, and the inflation picture looking pretty level in the U.S., at least for the short term.
What has skewed the picture some is the illusion in Europe by some investors that they've got back on track and are doing okay. That's probably the major factor that will unhinge all this optimism, and when Europe comes into the picture again, it will remind investors why gold will continue to go up over the long term.
One of the worse performers in the sector for the day was Allied Nevada Gold, which plunged almost 7 percent to $17.25, losing $1.24, or 6.71 percent.
Next was Iamgold, falling to $15.91, a drop of $0.71, or 4.73 percent.
Yamana followed, ending the session and week at $9.53, a $.37 decline, or 3.74 percent.
The US dollar and euro were both higher, and the inflation picture looking pretty level in the U.S., at least for the short term.
What has skewed the picture some is the illusion in Europe by some investors that they've got back on track and are doing okay. That's probably the major factor that will unhinge all this optimism, and when Europe comes into the picture again, it will remind investors why gold will continue to go up over the long term.
Gold Prices Fall Today on US Dollar, EU and Inflation
Gold prices today fell again this week, dropping $20.10 for August delivery, to $1,188.20 an ounce. Spot gold prices ended at $1,193.00, A decline of $15.40.
Several factors play a part in the gold price fall. First, the misguided idea that the sovereign debt crisis in Europe has been handled, or at least improved, mostly based on Greece begin able to sell bonds to the private sector. Second, inflation remains relatively mild in the U.S., and with recent data showing core consumer prices rising only 0.2% in June, had traders looking elsewhere for safety.
Finally, the U.S. dollar strengthened more, while the euro also made gains, seeming to imply that gold is unwinding against the euro.
With these various factors in play, investors are, for now, looking elsewhere to put there money, even though the sovereign debt crisis in Europe is, the American economy is in shambles, and safety should continue to be on the minds of investors.
This is the fourth week in a row the gold price have fallen, although it is still finding support in difficult circumstances.
Several factors play a part in the gold price fall. First, the misguided idea that the sovereign debt crisis in Europe has been handled, or at least improved, mostly based on Greece begin able to sell bonds to the private sector. Second, inflation remains relatively mild in the U.S., and with recent data showing core consumer prices rising only 0.2% in June, had traders looking elsewhere for safety.
Finally, the U.S. dollar strengthened more, while the euro also made gains, seeming to imply that gold is unwinding against the euro.
With these various factors in play, investors are, for now, looking elsewhere to put there money, even though the sovereign debt crisis in Europe is, the American economy is in shambles, and safety should continue to be on the minds of investors.
This is the fourth week in a row the gold price have fallen, although it is still finding support in difficult circumstances.
BP (NYSE:BP) Shares Decline As Cap Is Holding
After all the anticipation and excitement over BP's (NYSE:BP) success in stopping the leaking oil, reality has hit to the massive effects of the worst oil spill in U.S. history. BP saw a decline in their shares of 4 percent to $37.38.
Fifteen hours into the cap being placed upon Macondo, it is holding strong. President Barack Obama said, "It is important that we don't get ahead of ourselves here. You know, one of the problems with having the camera down there is, that when the oil stops gushing everybody feels like we're done and we're not."
While Kent Wells, BP's vice president, said that the spill center has measured a steady increase of pressure, above and beyond the minimum of 6,000 pounds to 6,700 pounds per square inch. He also stated that BP has restarted working on the relief well to help release pressure on the ruptured well.
Fifteen hours into the cap being placed upon Macondo, it is holding strong. President Barack Obama said, "It is important that we don't get ahead of ourselves here. You know, one of the problems with having the camera down there is, that when the oil stops gushing everybody feels like we're done and we're not."
While Kent Wells, BP's vice president, said that the spill center has measured a steady increase of pressure, above and beyond the minimum of 6,000 pounds to 6,700 pounds per square inch. He also stated that BP has restarted working on the relief well to help release pressure on the ruptured well.
Gammon Gold (NYSE:GRS) Closes Private Placement with Corex Gold (CDNX:CGE.V)
Gammon Gold Inc. (NYSE:GRS) (TSE:GAM) announced today is has closed its private placement with Corex Gold (CDNX:CGE.V).
Gammon acquired 4,706,000 units of Corex at a price of C$0.68 a unit, for a total investment of C$3,200,080. That gives them close to a 12 percent stake in the junior gold miner (14 percent on a fully diluted basis).
Included in each unit acquired is one common share of Corex, along with one half of one share purchase warrant exercisable at C$0.90. That will apply over a 24-month period from the date of close.
In order to maintain its current percentage of stake in the company, Gammon also has the right to take part in every future financing of Corex.
Corex was at $0.68 a share as of 2:25 PM EDT, gaining 2 cents, or 2.99 percent.
Gammon was down to $5.38 a share, dropping 35 cents, or 6.11 percent at the same time. Most of that is attributed to falling gold prices.
Gammon acquired 4,706,000 units of Corex at a price of C$0.68 a unit, for a total investment of C$3,200,080. That gives them close to a 12 percent stake in the junior gold miner (14 percent on a fully diluted basis).
Included in each unit acquired is one common share of Corex, along with one half of one share purchase warrant exercisable at C$0.90. That will apply over a 24-month period from the date of close.
In order to maintain its current percentage of stake in the company, Gammon also has the right to take part in every future financing of Corex.
Corex was at $0.68 a share as of 2:25 PM EDT, gaining 2 cents, or 2.99 percent.
Gammon was down to $5.38 a share, dropping 35 cents, or 6.11 percent at the same time. Most of that is attributed to falling gold prices.
BP (NYSE:BP): Bankruptcy and Sticking It To Asset Buyers
BP (NYSE:BP) may stick their potential asset buyers with lawsuits, said lawyers. As the company continues its attempt to raise money to help pay legal claims that some are estimating could reach over $100 billion.
There are certain laws in place that could prohibit fraudulent transfers, allowing victims to sue a buyer to get money to pay claims. Which would leave the purchaser required to pay BP's obligations, if the company files for bankruptcy. Although there could be a change to federal bankruptcy laws, if approved could make a buyer wait for BP's approval from victims for the sale. The other option being to convince a judge that the company has sufficient assets to pay all legal claims in full.
New York bankruptcy lawyer, Martin Bienenstock of Dewey of Leboeuf LLP said, "Any purchaser will worry about fraudulent transfer and successor liability issues and perhaps request part of the purchase price be kept in escrow for such a contingency."
There are certain laws in place that could prohibit fraudulent transfers, allowing victims to sue a buyer to get money to pay claims. Which would leave the purchaser required to pay BP's obligations, if the company files for bankruptcy. Although there could be a change to federal bankruptcy laws, if approved could make a buyer wait for BP's approval from victims for the sale. The other option being to convince a judge that the company has sufficient assets to pay all legal claims in full.
New York bankruptcy lawyer, Martin Bienenstock of Dewey of Leboeuf LLP said, "Any purchaser will worry about fraudulent transfer and successor liability issues and perhaps request part of the purchase price be kept in escrow for such a contingency."
Gold Declines on Euro, Inflation Speculation
Gold futures plunged to their lowest level in two weeks as traders speculate the gold and the euro have decoupled, and inflation may be under control for now, as economic weakness continues to hinder growth.
The euro will finish higher for the third week in a row as the illusion the debt crisis in Europe isn't a concern, mostly on the ability of Greece to sells bonds in the private market.
As long at that is thought to be taken care of concerning the overall European Union sovereign debt crisis, we will probably see downward pressure on gold prices, at least in how it responds in relationship to the euro.
Under normal economic conditions, gold will move in unison with the euro as an alternative investment and place of safety against the US. dollar, but that changed in light of the sovereign debt crisis, and now that the perception it is no longer as threatening as it had been, gold appears to be unwinding against the euro. That could of course change if and when things in Europe get worse, but until then, this should be the way things go.
Now we'll see how gold responds to the US dollar and its movement, as well as the possibility there will be very low inflation for some time to come.
At 1:45 PM EDT, gold was down $18.30, to $1,190.10 an ounce.
The euro will finish higher for the third week in a row as the illusion the debt crisis in Europe isn't a concern, mostly on the ability of Greece to sells bonds in the private market.
As long at that is thought to be taken care of concerning the overall European Union sovereign debt crisis, we will probably see downward pressure on gold prices, at least in how it responds in relationship to the euro.
Under normal economic conditions, gold will move in unison with the euro as an alternative investment and place of safety against the US. dollar, but that changed in light of the sovereign debt crisis, and now that the perception it is no longer as threatening as it had been, gold appears to be unwinding against the euro. That could of course change if and when things in Europe get worse, but until then, this should be the way things go.
Now we'll see how gold responds to the US dollar and its movement, as well as the possibility there will be very low inflation for some time to come.
At 1:45 PM EDT, gold was down $18.30, to $1,190.10 an ounce.
Subscribe to:
Posts (Atom)