With John Paulson selling some of his stake in Kinross and George Soros adding to his position, it underscores the fickleness of the stock and it relative underperformance in relationship to physical gold.
Kinross had a decent quarter, and generate revenue of $920.4 million, a record for the company. They also generated $3 billion in revenue for full year 2010.
Costs related to exploration at Tasiast dragged earnings down for the fourth quarter, dropping to $144.7 million, or 13 cents a share; down 38 percent from the same quarter the year before. Tasiast came with its acquisition of Red Back Mining.
For 2010 Kinross produced 676,635 ounces of gold at $551 an ounce, and for the full year, gold production reached 2.3 million ounces at $508 an ounce. The gold miner was able to sell gold for $1,333 an ounce in the quarter, generating strong margins.
Guidance was for 2011 production to reach 2.5 million to 2.6 million ounces of gold at a cost range of $565 to $610 an ounce.
Now as to why Soros increased his position in Kinross when it has been underperforming, it could be the Tasiast mine. On its conference call the company pointed out production at the mine could average 1.5 million ounces annually by 2014 at a cost of about $500 an ounce. The company also believes gold reserves could be significantly higher than original estimates.
He also could be thinking the stock could be ready to break out, which is quite possible after a disappointing year.
Kinross continues to pay out a semi-annual dividend of 5 cents a share.
Kinross closed Thursday at $16.64, losing $0.35, or 2.06 percent.
Showing posts with label John Paulson. Show all posts
Showing posts with label John Paulson. Show all posts
Friday, February 18, 2011
Tuesday, February 15, 2011
Paulson Adds Transocean (NYSE:RIG), Anadarko (NYSE:APC), Keeps Core Holdings
As a number of hedge funds and managers of holding companies are revealing their investments in the fourth quarter via 13-F filings with the SEC, a trend is emerging as far as funds and companies holding onto their core assets, while also venturing a little further into energy and financial stocks.
That's true with John Paulson and his fund as well, which kept his top long-term holdings in place, but added big in energy and healthcare.
For energy, he took big stakes in Anadarko Petroleum (NYSE:APC) and Transocean (NYSE:RIG); both connected to BP's (NYSE:BP) oil spill.
Paulson added 7.8 million shares of Anadarko and 7.2 million shares of Transocean to his portfolio. His fund now owns over 21 million shares of Anadarko.
In the health sector, he took new stakes in Medtronic Inc (NYSE:MDT), Teva Pharmaceutical (NASDAQ:TEVA) and Baxter International (NYSE:BAX).
He also boosted his stake in biotechnology firm Genzyme Corp (NASDAQ:GENZ) to 6.8 million shares, which is close to being taken over by France-based Sanofi-Aventis.
Core holdings he continues to hold onto are SPDR Gold Trust (NYSEArca:GLD), AngloGold Ashanti (NYSE:AU), Citigroup (NYSE:C) and Bank of America (NYSE:BAC).
In what appears to be based on Paulson's thoughts people are spending more, he dropped discount retailer (NYSE:FDO) from his holdings and added J. Crew (NYSE:JCG).
That's true with John Paulson and his fund as well, which kept his top long-term holdings in place, but added big in energy and healthcare.
For energy, he took big stakes in Anadarko Petroleum (NYSE:APC) and Transocean (NYSE:RIG); both connected to BP's (NYSE:BP) oil spill.
Paulson added 7.8 million shares of Anadarko and 7.2 million shares of Transocean to his portfolio. His fund now owns over 21 million shares of Anadarko.
In the health sector, he took new stakes in Medtronic Inc (NYSE:MDT), Teva Pharmaceutical (NASDAQ:TEVA) and Baxter International (NYSE:BAX).
He also boosted his stake in biotechnology firm Genzyme Corp (NASDAQ:GENZ) to 6.8 million shares, which is close to being taken over by France-based Sanofi-Aventis.
Core holdings he continues to hold onto are SPDR Gold Trust (NYSEArca:GLD), AngloGold Ashanti (NYSE:AU), Citigroup (NYSE:C) and Bank of America (NYSE:BAC).
In what appears to be based on Paulson's thoughts people are spending more, he dropped discount retailer (NYSE:FDO) from his holdings and added J. Crew (NYSE:JCG).
Monday, February 14, 2011
SPDR Gold Trust (NYSEArca:GLD) Gets $122 Million Jana Partners Investment
In the fourth quarter, Jana Partners said in a required regulatory filing that they invested $122 Million in SPDR Gold Trust (NYSEArca:GLD), equal to 881,844 shares.
After that investment it made SPDR Gold Trust the third-largest holding of the fund.
Another major holder of SPDR Gold Trust is John Paulson, who continues to be bullish on gold over the long term. His fund also has a major stake in NovaGold (AMEX:NG), among other gold miners.
Gold has been weak so far in 2011, but a growing number of investors and analysts expect it to break out sometime in the near future.
SPDR Gold Trust was trading at $133.04, up $0.72, or 0.54 percent, as of 1:51 PM EST.
After that investment it made SPDR Gold Trust the third-largest holding of the fund.
Another major holder of SPDR Gold Trust is John Paulson, who continues to be bullish on gold over the long term. His fund also has a major stake in NovaGold (AMEX:NG), among other gold miners.
Gold has been weak so far in 2011, but a growing number of investors and analysts expect it to break out sometime in the near future.
SPDR Gold Trust was trading at $133.04, up $0.72, or 0.54 percent, as of 1:51 PM EST.
Tuesday, January 25, 2011
Paulson Earns $1 Billion on Citigroup (NYSE:C) Stake
Contrarian investor John Paulson ended another good year with the help of Citigroup (NYSE:C), which generated about $1 billion for the hedge fund in 2010.
Over the last year, shares of Citigroup have gained close to 50 percent.
Typical negative response from pundits came when Paulson lost money earlier in the year, but he was again exonerated when losses turned to double-digit gains later in the year for his flagship funds.
For the year, Paulson's gold fund was up 35 percent, and his Advantage Plus Fund gained 17 percent.
Citigroup's fortunes haven't been as good in the early part of 2011. They're trading today at $4.8, down $0.055, or 1.13 percent, as of 12:42 PM EST.
Over the last year, shares of Citigroup have gained close to 50 percent.
Typical negative response from pundits came when Paulson lost money earlier in the year, but he was again exonerated when losses turned to double-digit gains later in the year for his flagship funds.
For the year, Paulson's gold fund was up 35 percent, and his Advantage Plus Fund gained 17 percent.
Citigroup's fortunes haven't been as good in the early part of 2011. They're trading today at $4.8, down $0.055, or 1.13 percent, as of 12:42 PM EST.
Wednesday, November 17, 2010
NovaGold Resources (AMEX:NG) Starting to Make its Move?
NovaGold Resources (AMEX:NG), if for no other reason, has garnered some attention because of investment of major players like George Soros, John Paulson and Marc Faber. Faber also sits on the board of the company.
NovaGold recently started to make a momentum move, although they have pulled back with the price of gold, although they've rebounded nicely today.
They continue to be a long-term investment, even though they will make money in the short term from momentum alone because they are largely undervalued, and the long term for the same reason.
But much of the company is potential at this time, because their huge Donlin Creek project in Alaska will take time to bring online. Some measure that project alone as pricing the company at about $40 a share.
NovaGold is trading at $14.44, gaining $0.97, or 7.20 percent as of 12:25 PM EST.
NovaGold recently started to make a momentum move, although they have pulled back with the price of gold, although they've rebounded nicely today.
They continue to be a long-term investment, even though they will make money in the short term from momentum alone because they are largely undervalued, and the long term for the same reason.
But much of the company is potential at this time, because their huge Donlin Creek project in Alaska will take time to bring online. Some measure that project alone as pricing the company at about $40 a share.
NovaGold is trading at $14.44, gaining $0.97, or 7.20 percent as of 12:25 PM EST.
Wednesday, September 29, 2010
John Paulson: Gold Could Hit $4,000
Hedge fund manager and billionaire John Paulson said he sees gold prices moving in a range of $2,400 to $4,000 an ounce, citing double-digit inflation emerging by 2012.
Paulson, speaking at New York's University Club recently, said 80 percent of his assets are held in gold.
He added that the coming inflation will result in gold prices being pushed up even more.
Paulson also said the inevitable quantitative easing by the Federal Reserve could extend double-digit inflation out for serveral years.
It's possible it could be even more than that depending on the economy and the political pressure to interfere with it, which would result in even more stimulus. That would add to the desirability and value of gold.
Paulson, speaking at New York's University Club recently, said 80 percent of his assets are held in gold.
He added that the coming inflation will result in gold prices being pushed up even more.
Paulson also said the inevitable quantitative easing by the Federal Reserve could extend double-digit inflation out for serveral years.
It's possible it could be even more than that depending on the economy and the political pressure to interfere with it, which would result in even more stimulus. That would add to the desirability and value of gold.
Friday, September 10, 2010
Time to Invest in NovaGold (AMEX:NG)?
Novagold (AMEX:NG) has a lot going for it from several angles, including the undeveloped resources they own, partners, and major investors.
As far as resources go, especially gold and copper, they hold some of the largest undeveloped deposits among miners. They also enjoy deposits of numerous other metals like silver and zinc.
Expectations are the cost to develop the assets will be about $4 billion. Factoring that in the stock could still easily be valued at double the close of $7.47 it was at close Thursday in New York.
For partners, they have mining giants Barrick Gold (NYSE:ABX) and Teck Resources (NYSE:TCK), both quality companies.
They also have investors like George Soros and John Paulson putting millions into the company via their hedge funds. Paulson has raised his stake NovaGold to 9.1 percent, according to his last filing.
With guaranteed deposits, and metals prices, in most cases, especially gold, sure to increase going forward, the major question becomes their ability to control costs while raising capital and expanding production.
If they are able to do that, this stock could run for some time, and go far beyond the mid-teens that some think it is really worth now.
As far as resources go, especially gold and copper, they hold some of the largest undeveloped deposits among miners. They also enjoy deposits of numerous other metals like silver and zinc.
Expectations are the cost to develop the assets will be about $4 billion. Factoring that in the stock could still easily be valued at double the close of $7.47 it was at close Thursday in New York.
For partners, they have mining giants Barrick Gold (NYSE:ABX) and Teck Resources (NYSE:TCK), both quality companies.
They also have investors like George Soros and John Paulson putting millions into the company via their hedge funds. Paulson has raised his stake NovaGold to 9.1 percent, according to his last filing.
With guaranteed deposits, and metals prices, in most cases, especially gold, sure to increase going forward, the major question becomes their ability to control costs while raising capital and expanding production.
If they are able to do that, this stock could run for some time, and go far beyond the mid-teens that some think it is really worth now.
Tuesday, August 17, 2010
John Paulson Acquires 9.2 Million Exxon (NYSE:XOM) Shares in 2nd Quarter
John Paulson, who runs the Paulson & Co hedge fund, acquired 9.2 million shares of Exxon Mobil (NYSE:XOM) in the 2nd quarter, a new position for the fund.
After being extremely bullish for some time concerning the U.S. economy, Paulson told his investors at the end of the latest quarter the he is modestly less bullish than he has been in the recent past. Still, he believes it's going to rebound.
But continuing to hold strong positions in gold miners, and now investing big in Exxon Mobil, confirms he is definitely not as positive as he has been, and in fact could be expecting a slowdown in the U.S. economy, which is in reality already here, if it ever left in the first place.
Oil investments helped a number of investors and companies do far better than they otherwise would have during the harsher parts of the recession, and buying large stakes like Paulson has in the sector, shows he has real concerns going forward.
Even so, other actions like adding to his holdings in Beazer Homes USA (NYSE:BZH) seems to be schizophrenic with the Exxon strategy, so we'll see how that plays out for him in a week home market.
Paulson also added 1 million shares of Goldman Sachs to the portfolio in the second quarter (NYSE:GS).
After being extremely bullish for some time concerning the U.S. economy, Paulson told his investors at the end of the latest quarter the he is modestly less bullish than he has been in the recent past. Still, he believes it's going to rebound.
But continuing to hold strong positions in gold miners, and now investing big in Exxon Mobil, confirms he is definitely not as positive as he has been, and in fact could be expecting a slowdown in the U.S. economy, which is in reality already here, if it ever left in the first place.
Oil investments helped a number of investors and companies do far better than they otherwise would have during the harsher parts of the recession, and buying large stakes like Paulson has in the sector, shows he has real concerns going forward.
Even so, other actions like adding to his holdings in Beazer Homes USA (NYSE:BZH) seems to be schizophrenic with the Exxon strategy, so we'll see how that plays out for him in a week home market.
Paulson also added 1 million shares of Goldman Sachs to the portfolio in the second quarter (NYSE:GS).
Friday, August 6, 2010
Will Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA), NovaGold (AMEX:NG) Be Beneficiaries of China's Targeting Precious Metals and Gold?
Flush with capital, China has been eyeing mining properties and companies around the world for some time to invest in preparation for meeting their needs long into the future.
They recently have increased their scrutiny and commitment, noting the lack of capital available because of weakened credit markets.
Consequently, the central bank of China has instructed their banks to offer credit to Chinese companies attempting to make acquisitions around the world, as well as directly to non-Chinese companies producing gold and silver.
This could strongly benefit companies like Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA) and NovaGold (AMEX:NG), who are sitting on large gold deposits, as those are the types of companies China is targeting to invest in.
Some have been castigating John Paulson for his investment in NovaGold, but in light of the direction China is taking, he's probably going to get the last laugh here, although it'll take a little time for it to take hold. This assumes China investing in NovaGold in some way, but the assets of NovaGold fit into the strategy of China perfectly. So the assumption is a healthy one.
China has already invested in Teck Resources, which has joint ventures with NovaGold, and are surely eyeing ways they can increase their stake in both companies.
For Seabridge, it's their Kerr-Sulphurets-Mitchell project which would be appealing to China, or anyone else interested in the sector that has the capital to invest.
There are of course many other possibilities, but the huge resources mentioned above are surely on the radar of China, and have a high probability of receiving the attention of the middle kingdom, along with a significant investment.
They recently have increased their scrutiny and commitment, noting the lack of capital available because of weakened credit markets.
Consequently, the central bank of China has instructed their banks to offer credit to Chinese companies attempting to make acquisitions around the world, as well as directly to non-Chinese companies producing gold and silver.
This could strongly benefit companies like Teck Resources (NYSE:TCK), Seabridge Gold (AMEX:SA) and NovaGold (AMEX:NG), who are sitting on large gold deposits, as those are the types of companies China is targeting to invest in.
Some have been castigating John Paulson for his investment in NovaGold, but in light of the direction China is taking, he's probably going to get the last laugh here, although it'll take a little time for it to take hold. This assumes China investing in NovaGold in some way, but the assets of NovaGold fit into the strategy of China perfectly. So the assumption is a healthy one.
China has already invested in Teck Resources, which has joint ventures with NovaGold, and are surely eyeing ways they can increase their stake in both companies.
For Seabridge, it's their Kerr-Sulphurets-Mitchell project which would be appealing to China, or anyone else interested in the sector that has the capital to invest.
There are of course many other possibilities, but the huge resources mentioned above are surely on the radar of China, and have a high probability of receiving the attention of the middle kingdom, along with a significant investment.
Wednesday, July 14, 2010
NovaGold's (AMEX:NG) Donlin Creek Getting More Expensive?
Now that NovaGold (AMEX:NG) losses have mounted over the last quarter, they are getting more aggressive in pursuing capital to work on their Donlin Creek project, which is by far their most important mine. They are in a 50/50 partnership with mining giant Barrick Gold Corp. (NYSE:ABX) in the project.
Either the costs at the project are increasing, or NovaGold is pushing harder to get it going, as the proven gold reserves of 34 million ounces, valued at about $41 billion at today's gold prices, has them salivating over the prospect of getting gold production going.
Marc Faber recently joined the board of the gold miner, and financial giants like John Paulson and George Soros have invested millions into the company.
At this time all the appropriate studies are being conducted, which take time, and the gold production may not start until as late as 2017.
With NovaGold having to pay close to $2.2 billion in capital costs for Donlin, you can see why they need more capital to operate until production begins.
This is of course nothing new to the industry, but if costs do increase, NovaGold faces challenges over the long term. Having Faber on the board and a resume of Paulson and Soros investing about $175 million in them, they do have a solid foundation and argument to work from.
Now they will attempt to battle to keep their 50 percent stake while raising capital, as their giant partner could easily take up the slack if problems arise, which NovaGold wouldn't want to allow to happen.
Over the long term this is a sure thing, now NovaGold has to raise the needed and significant amount of capital to last long enough to cash in, without giving up anything else.
Either the costs at the project are increasing, or NovaGold is pushing harder to get it going, as the proven gold reserves of 34 million ounces, valued at about $41 billion at today's gold prices, has them salivating over the prospect of getting gold production going.
Marc Faber recently joined the board of the gold miner, and financial giants like John Paulson and George Soros have invested millions into the company.
At this time all the appropriate studies are being conducted, which take time, and the gold production may not start until as late as 2017.
With NovaGold having to pay close to $2.2 billion in capital costs for Donlin, you can see why they need more capital to operate until production begins.
This is of course nothing new to the industry, but if costs do increase, NovaGold faces challenges over the long term. Having Faber on the board and a resume of Paulson and Soros investing about $175 million in them, they do have a solid foundation and argument to work from.
Now they will attempt to battle to keep their 50 percent stake while raising capital, as their giant partner could easily take up the slack if problems arise, which NovaGold wouldn't want to allow to happen.
Over the long term this is a sure thing, now NovaGold has to raise the needed and significant amount of capital to last long enough to cash in, without giving up anything else.
Friday, June 18, 2010
NovaGold Resources (NYSE:NG) Soars on Gold Prices
Although well off its 52-week high of $9.18, NovaGold Resources (NYSE:NG) was among the gold mining leaders on Friday, surging to close at $7.36, a $0.45 gain, or 6.51 percent.
NovaGold attained its high at the beginning of May.
Hedge fund managers John Paulson and George Soros have both expressed deep interest in the company, investing at least $175 million combined in the gold mining company, with Paulson's hedge fund investing $100 million.
NovaGold holds large stakes in Donlin Creek and Galore Creek, both holding huge reserves of gold, which the company now has the money to develop with its partners.
NovaGold attained its high at the beginning of May.
Hedge fund managers John Paulson and George Soros have both expressed deep interest in the company, investing at least $175 million combined in the gold mining company, with Paulson's hedge fund investing $100 million.
NovaGold holds large stakes in Donlin Creek and Galore Creek, both holding huge reserves of gold, which the company now has the money to develop with its partners.
Tuesday, June 1, 2010
John Paulson's Gold Investments Mixed in 2010
Kinross Gold (NYSE:KGC), SPDR Gold Trust (NYSE:GLD) and Anglogold Ashanti (NYSE:AU) are all part of the massive gold holdings of hedge fund manager John Paulson, and so far in 2010 they haven't done a lot to increase the value of the fund, although Anglogold and the SPDR Gold Trust have helped some over the last six months, at least generating gains during that time.
Although that is the case so far, the gold miners are poised to take off, along with gold prices in general, as they've lagged behind the price movements of gold for some time, and signs are there showing that has began to change.
As far as the numerous gold holdings of Paulson, they should contribute strongly to his fund over the rest of the year, and it'll be surprising if he doesn't have positive returns for the third year in a row.
Rumors are so far he's down by close to 3.3 percent for the year.
Although that is the case so far, the gold miners are poised to take off, along with gold prices in general, as they've lagged behind the price movements of gold for some time, and signs are there showing that has began to change.
As far as the numerous gold holdings of Paulson, they should contribute strongly to his fund over the rest of the year, and it'll be surprising if he doesn't have positive returns for the third year in a row.
Rumors are so far he's down by close to 3.3 percent for the year.
Wednesday, May 26, 2010
NovaGold (AMEX:NG) Attracts Big Players, Money
NovaGold Resources (AMEX:NG) (TSE:NG) President and Chief Executive Officer, Rick Van Nieuwenhuyse, seems to have a gift for attracting big players and big money to invest in the company, and that has paid large dividends for them at crucial times of their growth cycle.
Some of those investing in NovaGold Resources include billionaire Thomas Kaplan through his Tigris Financial Group, John Paulson with his Paulson & Co. hedge fund, and George Soros with Quantum Partners Ltd.
In the early part of 2009 they also reached a financing agreement with Electrum Strategic Resources, which saved their major Donlin Creek and Galore Creek projects.
Assuming good gold finds, the secret to success for junior gold miners really isn't a secret, it's who can secure financing for their projects in order to bring them online.
With the track record of Rick Van Nieuwenhuyse and his team, it looks like NovaGold will have a long and successful run, as he recently stated they have enough financing for the next three years.
If they're operationally sound and focus on cutting costs, once they are in strong gold production they should get some great returns for their shareholders.
In addition to gold, they also have copper, silver and zinc resources.
Some of those investing in NovaGold Resources include billionaire Thomas Kaplan through his Tigris Financial Group, John Paulson with his Paulson & Co. hedge fund, and George Soros with Quantum Partners Ltd.
In the early part of 2009 they also reached a financing agreement with Electrum Strategic Resources, which saved their major Donlin Creek and Galore Creek projects.
Assuming good gold finds, the secret to success for junior gold miners really isn't a secret, it's who can secure financing for their projects in order to bring them online.
With the track record of Rick Van Nieuwenhuyse and his team, it looks like NovaGold will have a long and successful run, as he recently stated they have enough financing for the next three years.
If they're operationally sound and focus on cutting costs, once they are in strong gold production they should get some great returns for their shareholders.
In addition to gold, they also have copper, silver and zinc resources.
Thursday, May 20, 2010
NovaGold (AMEX:NG) CEO Says Company Good for Three Years
NovaGold (AMEX:NG) CEO and President Rick Van Nieuwenhuyse said earlier in the month that the company has reversed its setbacks over the last three years and is now set financially for the next three years, referring to the financing secured by the gold miner.
Much of the financing required by NovaGold was secured through investment from hedge fund Paulson & Co. and Quantum Partners, which brought them $175 million to help with their capital needs.
Another strategic and important source of financing came from Electrum Strategic Resources in the early part of 2009, which allowed NovaGold to retain its interest in important assets of Donlin Creek and Galore Creek. They also had enough to deal with operational issues at its Rock Creek project, which they should be able to comply with regulations and get it back up and running.
Although the company is going through a correction related to the overall gold price correction, it is close to increasing production and getting going on all cylinders, which should make shareholders happy, and the company very profitable.
Much of the financing required by NovaGold was secured through investment from hedge fund Paulson & Co. and Quantum Partners, which brought them $175 million to help with their capital needs.
Another strategic and important source of financing came from Electrum Strategic Resources in the early part of 2009, which allowed NovaGold to retain its interest in important assets of Donlin Creek and Galore Creek. They also had enough to deal with operational issues at its Rock Creek project, which they should be able to comply with regulations and get it back up and running.
Although the company is going through a correction related to the overall gold price correction, it is close to increasing production and getting going on all cylinders, which should make shareholders happy, and the company very profitable.
Tuesday, May 18, 2010
Novagold (AMEX:NG) Iamgold (TSE:IMO) Barrick Gold (NYSE:ABX) (TSE:ABX) Randgold Resources (Nasdaq:GOLD) Added by Paulson & Co
John Paulson continues to like the gold market, and he backed that up with four new positions for his Paulson & Co. hedge fund, adding Novagold (AMEX:NG), Iamgold (TSE:IMO), Barrick Gold (NYSE:ABX) (TSE:ABX) and Randgold Resources (Nasdaq:GOLD), growing the number of gold investments to his already-significant gold positions in SPDR Gold Shares (NYSE:GLD), which is the largest holding in the fund, Kinross Gold Corp. (NYSE:KGC), and AngloGold Ashanti Ltd. (NYSE:AU).
Competitor George Soros, in my opinion, wrongly, reduced his stake in SPDR Gold Shares (NYSE:GLD) by just under 10 percent.
I believe we are far from any type of gold bubble as Soros has stated in the past, and think he's misreading the market by only measuring the idea of a bubble by the price of gold going up, rather than who it is that is investing in it.
There won't be a gold bubble until a huge number of non-institutional investors enter the gold market, and then the underlying fundamentals will have to had reached their full play before a bubble can be formed, let alone burst.
A bubble happens when there is no reason for the price of something going up. If there is a reason, it doesn't matter if the price is bid up, as it is based on fundamentals, whether or not the investors know it or not.
Not only is there very little to cheer about in the global economy, including the U.S., but there is more pressure and danger now than there ever was with the housing bubble and banking bailouts.
Now we're talking of entire countries being bailed out, and inflation in China being a real threat to demand for raw materials, which many around the world have been counting on for growth and an eventual and sustainable economic recovery.
All that may be off the table, and consequently, gold and gold mining companies should continue to go up in value and price as people continue to look for a safe haven outside of paper currencies.
Competitor George Soros, in my opinion, wrongly, reduced his stake in SPDR Gold Shares (NYSE:GLD) by just under 10 percent.
I believe we are far from any type of gold bubble as Soros has stated in the past, and think he's misreading the market by only measuring the idea of a bubble by the price of gold going up, rather than who it is that is investing in it.
There won't be a gold bubble until a huge number of non-institutional investors enter the gold market, and then the underlying fundamentals will have to had reached their full play before a bubble can be formed, let alone burst.
A bubble happens when there is no reason for the price of something going up. If there is a reason, it doesn't matter if the price is bid up, as it is based on fundamentals, whether or not the investors know it or not.
Not only is there very little to cheer about in the global economy, including the U.S., but there is more pressure and danger now than there ever was with the housing bubble and banking bailouts.
Now we're talking of entire countries being bailed out, and inflation in China being a real threat to demand for raw materials, which many around the world have been counting on for growth and an eventual and sustainable economic recovery.
All that may be off the table, and consequently, gold and gold mining companies should continue to go up in value and price as people continue to look for a safe haven outside of paper currencies.
Friday, April 16, 2010
NovaGold (AMEX:NG) Underwhelming to Some
NovaGold a challenge short term, great potential long term
For up to five years, it's possible NovaGold (AMEX:NG) could struggle strongly, even though it has two quality gold projects it has a stake in like Galore Creek and Donlin Creek.
It's not the long term prospects of NovaGold that concerns those following the company, as they are very bright, but it's not as simple as taking a stake in them and letting it ride, because until their large mines start to produce gold, there is a huge liquidity problem they face, which must be addressed and overcome if they're going to reach the day they can truly benefit from their holdings.
Even though John Paulson and George Soros invested $175 million in Novagold, which will help them in the early exploration part of their projects, but isn't much when considering the overall cost and scheme of things.
The two large project mentioned above are estimated to cost about $4 billion each to develop, so you can see that while $175 million helps, it's very little when looking at approximately $8 billion overall.
What NovaGold probably represents is the trend small mining companies which hold solid assets will be experiencing over the next several years, and this is larger companies will have to come in and acquire a large portion of those assets if they're to survive and thrive.
NovaGold has a 50/50 partnership with Barrick Gold (TSE:ABX) in their Donlin Creek project, as part of what we'll see going forward.
If NovaGold can survive the next several years, they do have extraordinary potential, and could generate a lot of profits for those investing in them. One must understand the short-term challenges though to determine how to proceed.
The fact that George Soros and John Paulson invested as they did in them show they understand what the huge potential of the company is, and whatever happens to NovaGold, they will reap the rewards, no matter which way they decide to head in the future.
For up to five years, it's possible NovaGold (AMEX:NG) could struggle strongly, even though it has two quality gold projects it has a stake in like Galore Creek and Donlin Creek.
It's not the long term prospects of NovaGold that concerns those following the company, as they are very bright, but it's not as simple as taking a stake in them and letting it ride, because until their large mines start to produce gold, there is a huge liquidity problem they face, which must be addressed and overcome if they're going to reach the day they can truly benefit from their holdings.
Even though John Paulson and George Soros invested $175 million in Novagold, which will help them in the early exploration part of their projects, but isn't much when considering the overall cost and scheme of things.
The two large project mentioned above are estimated to cost about $4 billion each to develop, so you can see that while $175 million helps, it's very little when looking at approximately $8 billion overall.
What NovaGold probably represents is the trend small mining companies which hold solid assets will be experiencing over the next several years, and this is larger companies will have to come in and acquire a large portion of those assets if they're to survive and thrive.
NovaGold has a 50/50 partnership with Barrick Gold (TSE:ABX) in their Donlin Creek project, as part of what we'll see going forward.
If NovaGold can survive the next several years, they do have extraordinary potential, and could generate a lot of profits for those investing in them. One must understand the short-term challenges though to determine how to proceed.
The fact that George Soros and John Paulson invested as they did in them show they understand what the huge potential of the company is, and whatever happens to NovaGold, they will reap the rewards, no matter which way they decide to head in the future.
Saturday, April 10, 2010
NovaGold (AMEX:NG) Positioned for Strong Growth
NovaGold Resources Strong Future
Although the current resources of NovaGold (AMEX:NG) haven't been inspiring to investors, those they hold with future potential definitely are, which is why hedge fund investors John Paulson and George Soros made significant investments in the company.
Total investment from the two hedge funds totaled $175 million, and that doesn't include other investors with interests in the gold miner.
Investors with a long term outlook know the extraordinary value in Novagold, as evidenced primarily from their Donlin Creek and Galore Creek projects, which are considered among the largest of any gold projects in the pending development stage in the world.
Novagold is another undervalued gold mining company with not only the two project mentioned above as part of their future, but others as well.
The company has also made quality partnerships with companies like Barrick Gold (NYSE:ABX) and Teck Resources (TSE:TCK-B), along with the financing deals, showing they have a great plan in place and are getting the right partners and financing to go forward with confidence and success.
Although the current resources of NovaGold (AMEX:NG) haven't been inspiring to investors, those they hold with future potential definitely are, which is why hedge fund investors John Paulson and George Soros made significant investments in the company.
Total investment from the two hedge funds totaled $175 million, and that doesn't include other investors with interests in the gold miner.
Investors with a long term outlook know the extraordinary value in Novagold, as evidenced primarily from their Donlin Creek and Galore Creek projects, which are considered among the largest of any gold projects in the pending development stage in the world.
Novagold is another undervalued gold mining company with not only the two project mentioned above as part of their future, but others as well.
The company has also made quality partnerships with companies like Barrick Gold (NYSE:ABX) and Teck Resources (TSE:TCK-B), along with the financing deals, showing they have a great plan in place and are getting the right partners and financing to go forward with confidence and success.
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