<Buy HM sell the Jan 7 1/2 puts. Return should exceed 25%. Unlikely the stock will be put to you don't you think? >
Jim,HM's chart shows a base going back to 1983. The Argentine acquisition may actually be a fair price. HM is increasing its production capability at a time when gold is cheap and HM is hedging against further downturn in the price of gold. Gold doesn't look like it's about to make any significant upside move in the short term:
decisionpoint.com
I think that the Eurodollar may help to move gold up in the near future and should the stock market falter after the DOW breaks 10k....Seems HM is safe enough, but why do you think they passed over on the Peruvian mines that could be had at a discount ?
biz.yahoo.com
Monday March 8, 2:25 pm Eastern Time
Peru gold deposit attracts no bids for second time
LIMA, March 8 (Reuters) - Peru's government failed Monday for a second time to attract bidders at an auction of its key gold deposit Quicay -- considered one of the top reserves remaining on its privatization slate.
The government had cut the deposit's minimum bid price at Monday's auction to $8.5 million from $10 million after eight potential bidders, including firms from the United States, Canada and Peru, made no offers at a February auction.
The government says exploration results show Quicay can become a highly profitable mine producing up to 70,000 gold ounces a year.
But potential buyers, who would be obliged to invest $10 million in the asset, are uncertain about the level of reserves at the deposit and are wary of the project's profitability given the weakness in international gold prices.
''It seems investors are unsure about how much reserves there are. It is also a difficult period in the international market,'' Enrique Olivares, spokesman for Centromin, the state miner which owns the deposit, said.
The government has not decided whether to reduce the price of the deposit again to attract bidders, Olivares said.
The auctions followed the withdrawal of Canada's Barrick Gold Corp. (Toronto:ABX.TO - news) from Quicay in August last year after it decided not to use a $202 million buy option on the asset.
The Quicay sale is part of Peru's eight-year-old widespread privatization program that has seen the government sell most of its top mining assets.
The program stalled last year as investors became reluctant to spend in Latin America amid global financial turmoil. In the mining sector, depressed metals prices meant the government made no major sales in 1998.
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