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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers -- Ignore unavailable to you. Want to Upgrade?

To: marcos who wrote (62300)	11/21/2008 8:41:35 PM
From: Valuepro	Read Replies (1) \| Respond to of 78407

What I find interesting to contemplate is, what was behind the rally in PMs and mining stocks today? Supposedly it was the presidential appointments that lifted the broader markets, but the PMs began much earlier in the day. It could be related to fears associated with a Citigroup failure and the growing damages to the other big banks. But, this sentiment should have brought down the broader markets even as it raised the PMs. Now, if the big banks are in very serious trouble, and the 3 big banking PM shorts are among these, perhaps they are driven to cover, despite their reasoning on the future of prices. Given that these 3 banks together have the largest short positions, any forced covering could drive PMs very much higher in the next little while. Hmmm, if this is so, I wonder how many more billions of dollars will be added to the left side of their ledgers, and the ultimate appeals in their bailout requests (which we will all pay for)?

To: marcos who wrote (62300)	11/22/2008 11:56:23 AM
From: tyc:>	Read Replies (1) \| Respond to of 78407

>>Agreed with most of this, except maybe base metals .. You observe that a base metal content seems to detract from the market's evaluation of a gold stock. Is the converse true ? Does gold enhance the market's evaluation of a base metal stock? I sharpened my pencil to calculate the profitability of Mt Milligan as a copper mine producing LOM 88,000,000 lbs of copper a year, treating LOM gold production (217,000 oz per year) as a by-product credit. At current prices of gold and the Canadian dollar, my arithmetic (using feasibility study figures) said that copper could be produced at a negative cost of C$0.096c per lb. For every C$10 change in the price of gold, cash flow from the mine would change by C$2,200,000 (88M*C$.025). Production of both metals in the first six years would be higher than the LOM figures I used, so initial cash costs might be even lower. (It sure wd be great if someone were interested in checking my figuring)