The Daily Gold http://thedailygold.com Thu, 17 May 2012 02:46:26 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Today’s Winners and Losers http://thedailygold.com/todays-winners-and-losers-52/ http://thedailygold.com/todays-winners-and-losers-52/#comments Thu, 17 May 2012 02:46:26 +0000 Raychel O'Byrne http://thedailygold.com/?p=15346 GDX gained by 0.56% while GDXJ declined by -0.83%  and SIL  declined by -0.65%

Today’s best performing silver and gold stocks:

]]> http://thedailygold.com/todays-winners-and-losers-52/feed/ 0 After Spain is Italy Next? http://thedailygold.com/after-spain-is-italy-next/ http://thedailygold.com/after-spain-is-italy-next/#comments Wed, 16 May 2012 18:30:02 +0000 Ian Campbell http://thedailygold.com/?p=15341 Why Read:  Because now that Spain’s economic woes are close to the center of world economic attention you need to focus on Italy – while still keeping Greece, Portugal, Spain and the Netherlands squarely on your ever more crowded radar screen.

Featured Article:  A May 15 article focuses on Italy’s current debt levels and debt yields, reporting on:

  • Moody’s downgrade of 26 Italian banks on Monday evening, May 14;
  • an increase in Italian bond yields to 5.86% on May 15 following a declaration by Italy’s ‘data agency’ that Italy’s GDP shrank 0.8% in Q1 2012;
  • Italy being the only ‘major state’ to have fallen in real per capita income since 2000; and,
  • a former Italian Premier saying that Italy, along with France and Spain, risks ‘instant contagion’ if Greece leaves the Eurozone, apparently saying “The whole house of cards will come down”.

Commentary:  Having suggested some months ago, when Spain seemed to be off most media radar screens when it seemed it should be on them all, it now seems Italy is moving ever closer to joining Greece and Spain as an important ‘center of attention’.  Consider that France may be several months behind, but given its recent non-austerity government mandate, is nonetheless ‘in the theatre’, perhaps edging toward ‘the wings’ and might yet tip-toe toward center stage.

Supplementary to the foregoing;

  • Italy’s economy measured by nominal (inflation included) GDP is reported as having been in the order of U.S.$2.2 trillion in 2011, making Italy the eighth largest economy in the world, the fourth largest economy in Europe – after Germany (U.S.$3.6 trillion), France (U.S.$2.8 trillion) and the United Kingdom (U.S.$2.4 trillion), and the third largest economy in the Eurozone (after Germany and France);
  • Italy’s inflation rate was last reported in March at 3.3%; and,
  • Italy’s reported unemployment rate last reported in March was 9.8%.  Italy’s youth (ages 15 – 24) unemployment rate currently is reported to be about 36%.  Contrast this with Spain’s current comparative reported unemployment rates of about 24% and 51% respectively.  The Italian reported unemployment rates are up from one year ago by approximately 1.5% and 6% respectively.

Clearly, increased focus should be directed to Italy going forward.  Simply put, Spain may well prove to be ‘too big to fail’, at least for the time being.  If that is true, it has to be even more the case with Italy.  If concern is being voiced with respect to possible contagion issues related to Greece, imagine the escalated extent of contagion concern if Spain’s and Italy’s economies continue to deteriorate.

Importantly, watch for escalated discussion and concern over real and nominal GDP growth generally, and country specific real and nominal GDP growth.  Simply put, without real GDP growth economic trends in the developed and developing countries are virtually certain not to be positive.

That said, pay careful attention to media and other data on Italy going forward as you think about and plan your financial affairs.  Italy is definitely something to discuss with your investment advisor(s), and most astute financial friends.

Moody’s Downgrades Italian Banks

Source:  The Wall Street Journal, David Enrich, May 15, 2012

Reading time:  3 minutes

Italy’s banks shaken as economic slump deepens

Source:  The Telegraph, Ambrose Evans-Pritchard, May 15, 2012

Reading time:  4 minutes

List of countries by GDP (nominal)

Source:  Wikipedia

Reading time:  3 minutes

Italy Inflation Rate

Source:  Trading Economics

Reading time:  1 minute

Italy Unemployment Rate

Source:  Trading Economics

Reading time:  1 minute

Europe’s perpetual ‘wasted youth’

Source:  Business Spectator, Marco Annuziata, May 14, 2012

Reading time:  3 minutes

 

Today’s ‘Speak For Themselves’ World Headlines

Why Read These Headlines:  Save Time and Stay Informed.  These Headlines have been personally filtered this morning from over 1,200 articles canvassing economic and resource news.

Another chart of the day: Greek bank deposits collapse

Overview:  Discusses Greek private sector deposits and possible Greek bank run

Source:  Credit Writedowns, Edward Harrison, May 16, 2012

Reading time: 2 minutes

Meet the Man Who Controls More Money than Ben Bernanke

Overview:  Discusses China Central Bank, Chinese inflation, and Chinese bad banking debts

Source:  Financial Sense, Dan Collins, May 15, 2012

Reading time: 3 minutes

Today’s Unabridged E-mail includes six other ‘Speak For Themselves’ Headlines dealing with the following topics:

  • Greek default importance;
  • Bank of England forecasts;
  • Eurozone and financial markets;
  • Greek bank run;
  • Deepwater discoveries update; and,
  • Eurozone industrial outputs.

 

Prospective Resource Prices?

Why Read:  Because the author of this article might be right, and it is always worth reading and thinking about an increasingly expressed view.

Featured Article:  A May 10 article says that as a result of what the author claims to be an expected Chinese economy ‘hard landing’, that China’s “intense demand” for commodities (other than agricultural commodities) is….. (continue reading)

Commentary reading time 2 minutes.

Referenced article(s) reading time 8 minutes, thinking time much longer.  Discussion with investment advisor(s) recommended

 

President Obama – How Long Is The Straw?

Why Read:  Because what is said here is something to think seriously about.

Commentary:  Consider the following:

  • how badly the Republicans in September, 2008 must have wished for a post-election postponement of the Lehman Bros. bankruptcy, and a concurrent stable U.S. equities market until ….. (continue reading)

Commentary reading time 2 minutes.

 

Visit Stock Research Portal for stock market data, analysis, and research on over 1,600 Mining,Oil and Gas Companies listed on the Toronto and Venture Exchanges. See our Legal Disclaimer.

]]> http://thedailygold.com/after-spain-is-italy-next/feed/ 0 Liquidation of “Crowded” Gold Trade Pauses But “Clean-Out of Weak Hands Necessary” http://thedailygold.com/liquidation-of-crowded-gold-trade-pauses-but-clean-out-of-weak-hands-necessary/ http://thedailygold.com/liquidation-of-crowded-gold-trade-pauses-but-clean-out-of-weak-hands-necessary/#comments Wed, 16 May 2012 17:24:33 +0000 BullionVault http://thedailygold.com/?p=15338

Liquidation of “Crowded” Gold Trade Pauses But “Clean-Out of Weak Hands Necessary”

BENCHMARK prices to buy gold for London settlement rallied more than $10 an ounce off new five-month lows beneath $1528 on Wednesday morning, bouncing as the Euro, world stock markets and commodity prices also paused this month’s sharp liquidation.

Spanish and Italian bond yields also eased back but remaind over 6% after Spain’s prime minister Mariano Rajoy told the parliament in Madrid there is “a serious risk that the markets won’t lend to us or lend only at astronomical prices.”

Over in Greece – where the daily “bank run” of withdrawn Euro deposits is now totaling some €700m per day – president Karolos Papoulias meantime appointed a judge to act as interim prime minister and set the date for an election re-run as 17th June.

“[Gold] selling continued in Asia today across all exchanges,” says Swiss refinery and finance group MKS in a note.

“Market participants have given up waiting for a bounce,” says a Singapore dealer. “The market will do what it needs to do to clean out the weakly margined before it becomes healthy once again.”

Hedge-fund legend George Soros opted to buy gold in the first quarter of 2012, reversing previous sales according to new data from March 31st released yesterday and showing his fund more than trebling its position in the $60 billion New York-listed SPDR gold ETF.

Fellow billionaire hedge-fund manager John Paulson – who represents the largest single holder of SPDR Gold shares – maintained his clients’ stake, leaving it unchanged for the first time since June 2011 at the equivalent of 53.8 tonnes.

Losing 8% since end-March, prices to buy gold have now lost one-fifth from the record Dollar peak of September last year – “the common definition of a bear market,” notes Bloomberg News.

“This is an example of our old friend ‘the crowded trade’,” reckons John Ventre, manager of Skandia’s Spectrum and multi-asset funds, speaking to Investment Week.

“Very many investors now own the asset, even though the market is in fact incredibly small. As investors – particularly levered ones like hedge funds – take losses in other parts of their portfolio, then selling pressure emerges across the board as investors pull their horns in.”

The spot-price to buy gold “is not far from our downside target zone at the September and December 2011 lows,” says the latest weekly report from technical analyst Axel Rudolph at Commerzbank in Luxembourg.

“Over the next few days a minor bounce back towards the breached 2008-12 uptrend line is likely to be seen before another down leg rears its head, probably by next week.”

Together with gold Wednesday morning, silver bullion also bounced from new five-month lows, adding 50¢ to trade above $27.70 per ounce.

Over on the Hong Kong stock exchange, however, shares in Chow Tai Fook Jewellery Group – the world’s biggest publicly listed jewelry retailer – closed 10% down at an all-time record low.

Along with the rest of Asia, the Hang Seng Index overall fell for the 9th session in ten, while US crude oil dropped through $93 per barrel and copper contracts dropped another 1.5% on the day.

“Gold’s slide has to be put in perspective with other commodities,” says Walter de Wet at Standard Bank in London, pointing to the 1-month drops in crude oil, platinum and copper.

While prices to buy gold have lost 7%, “Even [emerging-market] currencies such as the Brazilian Real and the South African Rand have depreciated 7.9% and 5% respectively against the US Dollar.

“Liquidation is taking place irrespective of market fundamentals.”

“Jewelers don’t know what to do,” says Ronald Leung, head of Hong Kong’s Lee Cheong Gold Dealers, speaking to Reuters.

“Maybe when the price has stabilised at some levels, they will start to reenter the market. There’s a bit of scale-down buying.”

Some wire reports said Wednesday that demand to buy gold had picked up despite a fresh record low in the Indian Rupee capping the new lows in the world’s #1 consumer market.

“Amid drying-up demand in off season,” says NDTV – pointing to the traditional summer lull between wedding and festival periods – these lower gold prices “could ease the burden on [India's] import bill.”

India’s gold bullion imports equaled some 2.6% of GDP last year, almost equal to the country’s entire balance of trade deficit.

On top of 2012′s quadrupling of import duty, “Gold imports could be discouraged by creating opportunities for more productive investments in the economy,” writes RV Kanoria, president of the Federation of Indian Chambers of Commerce & Industry (FICCI) – fresh from urging the privatization of India’s coal-mining sector – in the Economic Times of India today.

“A better investment climate through focus on reforms will steer investors to look towards ventures than just stock up gold.”

Adrian Ash
BullionVault

Gold price chart, no delay   |   Buy gold online at live prices

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

]]> http://thedailygold.com/liquidation-of-crowded-gold-trade-pauses-but-clean-out-of-weak-hands-necessary/feed/ 0 Today’s Losers http://thedailygold.com/todays-losers-8/ http://thedailygold.com/todays-losers-8/#comments Wed, 16 May 2012 00:58:53 +0000 Raychel O'Byrne http://thedailygold.com/?p=15335 GDX declined by -3.98% while GDXJ declined by-7.06%  and SIL  declined by -5.00%

Today’s worst performing silver and gold stocks:

]]> http://thedailygold.com/todays-losers-8/feed/ 0 Short-, Medium- & Long Term Technicals For Gold & Silver http://thedailygold.com/short-medium-long-term-technicals-for-gold-silver/ http://thedailygold.com/short-medium-long-term-technicals-for-gold-silver/#comments Wed, 16 May 2012 00:43:07 +0000 Willem Weytjens http://thedailygold.com/?p=15331 We now have a Bullish Extreme in the USD. Over the last 5 years, Bullish extremes have been very good indicators that a top was within a hand’s reach.


Chart courtesy sentimentrader.com

On top of the Bullish extreme in the USD, we also have a Bearish Extreme in Gold sentiment. Bearish extremes have been good indicators that a bottom was near.


Chart courtesy sentimentrader.com

Silver Sentiment is also very depressed at the moment, with only 29.70% bullishness. However, sentiment hasn’t pierced the “standard deviation bands” yet, and thus has more downside potential…


Chart courtesy sentimentrader.com

All this Dollar-bullishness/Gold-Bearishness has caused mining companies to sell off BIG TIME.
Some of them are now 75-80% below their top, and when you look at their charts, it looks like the world is coming to an end for those companies.
That being said, the BPGDM index from stockcharts, which shows the % of mining stocks that have a BUY signal on the Point&Figure chart, is very depressed at 10.71% at the moment. In late 2008, this index reached 0% for a very short time. Funny to see that that time, the mining stocks had set a higher low. The HUI index has now dropped below the 50% Fibonacci Retracement level from the bottom of 2008 to the top of 2011, so the next target would be the 38.20% level, which comes in slightly below 350. My expectations are that we might get close to this level over the next couple of days, followed by a very sharp rebound (possibly as high as 450, which is the 61.80% level). What happens then is still unknown, but as I pointed out, the severe underperformance of the HUI stocks to Gold is very similar to 2008, which means that the decline might not be over yet, even though a sharp bounce is overdue now with the extreme bearishness…


Chart courtesy stockcharts.com

Let’s have a look at the weekly charts. Gold is ready to set a tripple bottom. However, if that attempt fails, look out below (especially below $1,450). The MACD has just turned negative, which doesn’t look well…


Chart courtesy stockcharts.com

When we have a look at the following chart, which is a weekly chart from 1980, we can notice a similar pattern:


Chart courtesy stockcharts.com

When the MACD just turned negative in 1980, Gold was trading above $500 per ounce. It fell all the way to $300 in the next 1.5 years or so.


Chart courtesy stockcharts.com

Silver is also at a critical point right now. If this level holds, then we have a tripple bottom. If not, look out below…


Chart courtesy stockcharts.com

Now over to the monthly charts:
Gold’s MACD is extremely stretched, and we have negative divergence between price and RSI. Since this is on a monthly basis, this is not a good sign for the future.


Chart courtesy stockcharts.com

Silver’s MACD looks set to drop lower (potentially much lower). First support comes in around $19-$20:


Chart courtesy stockcharts.com

The Quarterly chart for silver shows an extremely stretched MACD, and an RSI that is still hovering around overbought levels:


Chart courtesy stockcharts.com

The situation is even worse for Gold:


Chart courtesy stockcharts.com

When we finally look at the Yearly chart, we can see that Silver has set a bearish reversal candle last year, which we have commented on late last year. On top of that, the yearly RSI is still OVERBOUGHT!


Chart courtesy stockcharts.com

Last but not least, the comparison between Silver Now and the Nasdaq is still very accurate:


Chart courtesy stockcharts.com (Nasdaq Bubble)


Chart courtesy stockcharts.com (Silver “Bubble”?)

An overlay of the two charts speaks more than a thousand words:

For those of you who want to call me an “idiot” who doesn’t look at fundamentals, Martin Armstrong wrote in his latest report:

“Fundamentals really mean little. The whole fiat reasoning means nothing since gold declined for 19 years from 1980 when it was still fiat. The same is true in stocks when the price can decline on good news and it is explained by saying the market was expecting results “better” than that. Markets trade technically because they are influenced truly by everything. Each market is interlinked to everything else so it becomes a delicate dance of comparison and capital flows like water to the lowest cost for the greatest gain. Focusing upon just one market exclusively ensures failure.”

For more articles, analyses and trading updates, visit www.profitimes.com

I have decided to only accept new subscribers until June 30th. From then on my services will be open to existing subscribers ONLY. To secure your membership now, visit www.profitimes.com and subscribe now!

]]> http://thedailygold.com/short-medium-long-term-technicals-for-gold-silver/feed/ 0 Argonaut Gold Announces First Quarter 2012 Revenue of $24.4 Million and Net Income of $7.3 Million http://thedailygold.com/argonaut-gold-announces-first-quarter-2012-revenue-of-24-4-million-and-net-income-of-7-3-million/ http://thedailygold.com/argonaut-gold-announces-first-quarter-2012-revenue-of-24-4-million-and-net-income-of-7-3-million/#comments Tue, 15 May 2012 15:57:49 +0000 Jordan Roy-Byrne, CMT http://thedailygold.com/?p=15328 TORONTO, ONTARIO–(Marketwire – May 15, 2012) - Argonaut Gold Inc. (TSX:AR) (the “Company”, “Argonaut Gold” or “Argonaut”) is pleased to announce its financial and operating results for the first quarter ended March 31, 2012. All dollar amounts are expressed in United States dollars unless otherwise specified.

FIRST QUARTER 2012 & RECENT HIGHLIGHTS

Financials

  • Revenue of $24.4 million.
  • Net income of $7.3 million, $0.08 per basic share.
  • Cash flows from operating activities before changes in non-cash operating working capital and other items of $8.1 million.
  • Cash on hand was $17.8 million at March 31, 2012.

Gold Production and Cost

  • Ounces loaded to pads: 44,169 gold ounces and 861,644 silver ounces.
    • El Castillo: 35,283 ounces (up 25% from Q1 2011); La Colorada: 8,886 gold ounces and 861,644 silver ounces
  • Production of 20,884 gold ounces in the first quarter of 2012.
    • El Castillo: 17,799 gold ounces
    • La Colorada: 3,085 gold ounces and 17,182 silver ounces
  • Cash cost per gold ounce sold – $639.

Operational Improvements:

  • Cash expenditures of $12.3 million on mineral properties, plant and equipment.
  • The Company’s El Castillo mining contractor expanded the mining fleet to 18 trucks (100 tonne capacity).
  • Leach pad 7A west side pad construction initiated at El Castillo and will be commissioned in the second quarter.

Exploration:

  • El Castillo - Three additional drill core holes were sent for testing during the first quarter of 2012.
  • La Colorada – 14,860 metres from 54 drill holes were completed during the first quarter. Three drills continue work on a planned 35,000 metre drill program.
  • San Antonio - Completed 3,285 metres from 14 drill holes during the first quarter.

This press release should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements for the first quarter ended March 31, 2012 and associated management’s discussion and analysis (“MD&A”) which are available from the Company’s website, www.argonautgoldinc.com, in the “Investors” section under “Financial Filings”, and under the Company’s profile on SEDAR at www.sedar.com.

Three months ended March 31,
Financials 2012 2011 Change
Revenue $24,353,000 $25,676,000 +5 %
Net income $7,260,000 $5,930,000 +28 %
Income per share – basic $0.08 $0.07 +14 %
Income per share – diluted $0.07 $0.07 -
Cash flow from operating activities before changes in non-cash operating working capital and other items $8,141,000 $9,339,000 -8 %
Gold ounces sold 14,498 18,461 -22 %
Gold ounces produced 20,884 18,014 +16 %
Average realized gold sales price $1,677 $1,388 +21 %
Cash cost per gold ounce sold $639 $590 +8 %

Financial Results – First Quarter 2012

During the first quarter of 2012, revenue was $24.4 million from gold sales of 14,498 ounces compared to $25.7 million from sales of 18,461 ounces in the first quarter of 2011. Cost of sales was $12.1 million for the quarter compared to $14.6 million for the first quarter of 2011. Cash cost per gold ounce sold was $639 compared to $590 in the same period of 2011. (Cash cost per gold ounce sold is a non-IFRS measure, see note below).

During the first quarter of 2012, gross profit was $12.3 million compared to $11.0 million gross profit in the first quarter of 2011. During the quarter, profit from operations was $9.7 million compared to $9.1 million for 2011. Net income for the quarter was $7.3 million or $0.08 per basic share versus $5.9 million or $0.07 per basic share in 2011.

Cash on hand decreased from $34.9 million at December 31, 2011 to $17.8 million. Capital expenditures in the first quarter were $12.3 million primarily as a result of expanding operations at the El Castillo and La Colorada mines. The 2012 capital expenditures and exploration programs for Argonaut Gold includes $38-$48 million at El Castillo, La Colorada and San Antonio which includes pre-production stripping at La Colorada of approximately $6 million. Cash flow from operations before changes in non-cash operating working capital and other items was $8.1 million during the quarter, compared to $9.3 million for the first quarter of 2011. The cash flow used in operating activities in the quarter was $5.3 million after taking into account the buildup of inventory and other working capital.

CEO Commentary

Mr. Pete Dougherty, Argonaut’s President and CEO states: “The Company continues to benefit from the gold production and cash generation at El Castillo, which has enabled us to fund construction of the La Colorada mine. The developments at La Colorada since acquiring the project have been quite impressive. The mine has been put back into production less than one year after finalizing the acquisition. The startup of gold production at La Colorada will provide growth to the Company’s production profile in 2012 through reprocessing the previous run-of-mine material. Expansion of the processing facility continues with final construction taking place on the desorption and recovery plant. 2012 is an important step in growth for the La Colorada mine. While much has been accomplished, there is much more work to be done with important milestones expected to be achieved in the second and third quarters.”

Three months ended March 31,
El Castillo Operating Statistics 2012 2011 Change
Mining
Tonnes ore 3,050,527 2,538,264 +20 %
Tonnes waste 2,914,397 2,221,194 +31 %
Tonnes mined 5,964,924 4,759,458 +25 %
Waste/ore ratio 0.96 0.88 +9 %
Heap Leach Pad
Direct ore tonnes to pad 2,183,893 1,813,011 +21 %
Crushed ore tonnes to pad 838,378 729,104 +15 %
Production
Gold grade g/t(1) 0.36 0.35 +4 %
Gold ounces loaded to pad 35,283 28,225 +25 %
Gold ounces produced 17,799 18,014 -1 %
Gold ounces sold 14,498 18,461 -22 %
Cash cost per gold ounce sold $639 $590 -8 %
(1) “g/t” is grams per tonne

El Castillo Summary of Production Results

Total tonnes mined increased by 25% for the first quarter 2012 over first quarter 2011. The total ounces loaded to the pad were 35,283 in the first quarter of 2012; this represents a 25% increase over the first quarter of 2011.

The strip ratio of waste to ore was 0.96 compared to a strip ratio of 0.88 in the first quarter of 2011.

2012 guidance at El Castillo is for 75,000 to 80,000 ounces at a cash cost between $625 and $650 per gold ounce.

La Colorada Operating Statistics Three months ended,3/31/2012
Mining
Total tonnes moved from ROM pads 678,310
Heap Leach Pad
Crushed ore tonnes to pad 680,396
Production
Gold grade (g/t)(1) 0.41
Silver grade (g/t)(1) 39.39
Gold ounces loaded to pad 8,886
Silver ounces loaded to pad 861,644
Gold ounces produced 3,085
Silver ounces produced 17,182
Gold equivalent ounces produced(2) 3,415
Gold ounces sold -
Silver ounces sold -
(1) “g/t” is grams per tonne
(2) Applied ratio of 52 ounces of silver per 1 ounce of gold

La Colorada Summary of Production Results

Non-commercial mining at La Colorada began in the first quarter of 2012. Initially, production generated at La Colorada will come from reprocessing of run-of-mine (“ROM”) material on site. 2012 guidance at La Colorada is for production of 13,000-17,000 ounces at a cash cost between $625 and $650 per ounce.

There was no inventory at La Colorada prior to the first quarter of 2012.

Looking Forward – 2012:

The Company plans on investing between $38 million and $48 million on capital expenditures and exploration initiatives in 2012.  These expenditures are expected to include the following:

  • $26-34 million of capital expenditure investments
    • El Castillo – Capital expenditures are primarily for expanding West heap leach pad capacity and operational improvements including a conveying and stacking system.
    • La Colorada – Capital expenditures are primarily for new infrastructure including crushing, screening and conveying, heap leach pad construction, a gold recovery plant and refinery, and other infrastructure.  Additional expenditures are expected to include land acquisition, and permitting.
    • San Antonio – Capital expenditures are allocated for engineering and environmental studies, land and water rights purchases, permitting for the project and infrastructure improvements.
  • $5-6 million for La Colorada pre-production stripping costs
  • $7-8 million exploration program
    • El Castillo – 1,400 metre core drilling program to collect mineralized sulphide ore for further metallurgical test work.
    • La Colorada – 35,000 metre drill program to expand resource areas and test multiple exploration targets within the Company’s land position is in progress.  Planned drilling on mine dumps and stockpiles was completed during the quarter.  The main resource targets for 2012 are El Creston and Veta Madre.
    • San Antonio – 10,500 metre drill program to test multiple exploration targets and complete condemnation drilling in areas of planned processing facilities is ongoing.

Non-IFRS Measures

The Company included the non-IFRS measure “Cash cost per gold ounce sold” in this press release to supplement its financial statements which are presented in accordance with International Financial Reporting Standards (“IFRS”). Cash cost per gold ounce sold is equal to cost of sales less silver sales divided by gold ounces sold. The Company believes that this measure provides investors with an improved ability to evaluate the performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS. Therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Please see the MD&A for full disclosure on non-IFRS measures.

Technical Information and Mineral Properties Reports

The technical information contained in this document has been prepared under supervision of, and reviewed and approved by Mr. Thomas H. Burkhart, Argonaut’s Vice President of Exploration, and a qualified person as defined by National Instrument 43-101 (“NI 43-101″). For further information on the Company’s properties please see the reports as listed below on the Company’s website or on www.sedar.com:

El Castillo Mine NI 43-101 Technical Report on Resources and Reserves, Argonaut Gold Inc., El Castillo Mine, Durango State, Mexico dated November 6, 2010
La Colorada Property NI 43-101 Preliminary Economic Assessment La Colorada Project, Sonora, Mexico dated December 30, 2011
San Antonio Gold Project Technical Report and Mineral Resource Estimate on the San Antonio Gold Project, Baja California Sur, Mexico dated June 30, 2011
La Fortuna Property La Fortuna, Durango, Mexico, Technical Report dated October 21, 2008

About Argonaut Gold

Argonaut is a Canadian gold company engaged in exploration, mine development and production activities. Its primary assets are the production-stage El Castillo Mine in the State of Durango, Mexico, the La Colorada Mine in the State of Sonora, Mexico, the advanced exploration stage San Antonio project in the State of Baja California Sur, Mexico, and several exploration stage projects, all of which are located in Mexico.

Creating Value Beyond Gold

Cautionary Note Regarding Forward-looking Statements

This news release contains forward-looking statements that involve risks and uncertainties that could cause results to differ materially from management’s current expectations. Actual results may differ materially due to a number of factors. Except as required by law, Argonaut Gold Inc. assumes no obligation to update the forward-looking information contained in this news release.

Contact Information
Argonaut Gold Inc.
Nichole Cowles
Investor Relations Manager
(775) 284-4422 x 101
nichole.cowles@argonautgoldinc.com
www.argonautgoldinc.com

]]> http://thedailygold.com/argonaut-gold-announces-first-quarter-2012-revenue-of-24-4-million-and-net-income-of-7-3-million/feed/ 0 Political and Economic Factors Bode Well for Gold http://thedailygold.com/political-and-economic-factors-bode-well-for-gold/ http://thedailygold.com/political-and-economic-factors-bode-well-for-gold/#comments Tue, 15 May 2012 14:38:49 +0000 Sunshine Profits http://thedailygold.com/?p=15325

Based on the May 11th, 2012 Premium Update. Visit our archives for more gold & silver analysis.

So far, 10 European political leaders out of 17 have been ousted out of office like a falling dominos in a little more than a year.

The issue that has angered voters other than unemployment is austerity. We know from personal finances that when we overspend, we must cut back, pay our debts and rebuild our savings. That’s the prudent thing to do and that’s what the austerity school preaches. But what happens if the financial hole is so deep that there is no way to climb out by reasonable cutting back and saving? That’s when you declare bankruptcy and your creditors share the pain. The laws of capitalism decree that if you don’t assess risk correctly, you lose money. The conclusion is that austerity has to come with a mechanism for default, which is not the case in Europe.

The growth club, represented eloquently by New York Times columnist and Nobel Prize winner Paul Krugman, believe that borrowing and spending will spur growth and consumption and that austerity will begat only more austerity. In other words, the European Central Bank (ECB) should print money and then Greece and the others can service their debts with cheaper euros due to the inflation caused by money printing. Is this not a kind of default, since you are paying back your debts with devalued money?

We believe that the massive printing of euros will eventually take place and please keep in mind that unlike Fed, EBC has still room to lower its main interest rate. Once markets believe that this is the likely (or even inevitable) outcome, the gold price will soar not only in terms of euros but also in terms of other currencies.

The ECB recently lent money at concessionary rates to European banks in an effort to co-opt these nearly bankrupt institutions into financing the nearly bankrupt European sovereigns. They offered loans against dubious collateral, to tempt commercial lenders to play the “carry” game, namely, buying Spanish and Italian debt of varying maturities yielding up to 7% while paying a mere 1% for a three year loan. The prospect of a devastating run on banks was avoided, for now.

We wonder if this is not pushing the can down the road.

There are certain things that look to be almost inevitable. The eurozone is in trouble, in particular Spain, Portugal and Italy. (We don’t even talk about Greece, that country is already just about bankrupt in more ways than one.) The longer this crisis will take to play out the deeper it will get with more countries caught in the net, with Belgium, France and Netherlands not far behind. The proportion of young people between the ages of 15 and 25 who are now without a job is 51 per cent in Greece and Spain, 36 per cent in Portugal and Italy and 30 per cent in Ireland. In France “only” one in five young people are out of work.

History has shown over and over again that when there are deep economic problems, the monsters that lurk in dark, dank corners come out brazenly into daylight looking for victims or scapegoats. It wasn’t so long ago when this is precisely what happened in Europe. This week in Greece a Neo Nazi party took 21 out of 300 seats and 7% of the popular vote – the first neo-Nazi party to enter a European assembly since the Second World War. This is enough to give us shivers. The center seems to be falling apart and the extremes of left and right are gaining power.

Even Somali pirates preying on merchants ships are having a hard time due to the economic downturn. On the one hand, things couldn’t be better for them. Shipping companies have reduced ship speeds through the highest-risk area to save on fuel, making the ships easier targets. But the companies have switched to relying on guards, rather than speed, for protection, which will make for shoot outs on the high seas. The math is simple. A single day at lower speeds can save $50,000 in fuel at current prices – enough to pay the guards for the entire journey.

The image reminds us of Europe, a cumbersome ship overgrown with barnacles, trying to make its way in pirate-infested waters. Instead of finding a solution to the problem, and perhaps there is no simple or fast solution, European leaders keep finding stop-gap, make-do, arrangements. So, do you put on speed with the hope of creating jobs and growth and outrunning the pirates, or do you cut back and hire armed guards?

So why do we focus on these political and economic factors that much? Well, we do feel that there is a need to separate short-term turmoil from the long-term fundamental picture. Markets are intrinsically emotional and prone to a sudden change of mood. Sometimes even seemingly unimportant events can spark an abrupt move, yet in the long term the fundamentals make the decisive impact. And these are indeed favorable for gold and the whole precious metals sector.

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]]> http://thedailygold.com/political-and-economic-factors-bode-well-for-gold/feed/ 0 $1522 “Next Target for Gold”, But Dealers in Asia See “Sudden Surge” in Physical Bullion Demand http://thedailygold.com/1522-next-target-for-gold-but-dealers-in-asia-see-sudden-surge-in-physical-bullion-demand/ http://thedailygold.com/1522-next-target-for-gold-but-dealers-in-asia-see-sudden-surge-in-physical-bullion-demand/#comments Tue, 15 May 2012 14:21:28 +0000 BullionVault http://thedailygold.com/?p=15322
$1522 “Next Target for Gold”, But Dealers in Asia See “Sudden Surge” in Physical Bullion Demand

WHOLESALE MARKET gold bullion prices dipped below $1550 an ounce for the first time since December on Tuesday – a fall of 7% since the start of this month – before regaining some ground by lunchtime in London.

“The bear channel support had been at $1581,” say technical analysts at Scotia Mocatta, the bullion banking division of Bank of Nova Scotia.

“The next target is a full retracement to December’s low of $1522 and there does not appear to be much standing in the way.”

“Gold bugs[are] hiding deep in their gold caves pondering why gold isn’t rallying in spite of [the] sharp spike in risk-off sentiment,” said NYU professor Nouriel Roubini on Monday via the medium of Twitter.

Asian dealers however report a pickup in physical gold bullion demand.

“At the moment supply is a bit tight for immediate delivery,” one Singapore dealer tells news agency Reuters.

“Refiners can’t deliver immediate gold because there’s a sudden surge in demand. We’re seeing demand from India, Thailand and Indonesia.”

Silver bullion meantime dipped below $28 per ounce for the first time since January 1 on Tuesday, before bouncing slightly, while European stock markets also regained some ground after Monday’s heavy losses. Commodities were broadly flat on the day, while major government bond prices eased.

The president of Greece is today expected to ask politicians to agree to the formation of a technocrat government, as the stalemate following last week’s election continues. The left-wing Syriza, which came second in the election and currently leads opinion polls, has indicated its opposition to the proposal.

“We don’t want to consent to any kind of bailout policies, even if they are implemented by non-political personalities,” said Panos Skourletis, spokesman for Syriza, referring to austerity measures such as public spending cuts, agreed by Greece’s previous government as part of its bailout package.

Any Greek government “would have to stand by the [austerity] program,” said Jean-Claude Juncker, Luxembourg prime minister and chairman of the Eurogroup of single currency finance ministers, speaking on Monday.

“If there are dramatic changes in circumstances, we wouldn’t close ourselves off to a debate over extending the deadlines.”

“The Euro breakup story is gathering steam again,” says Marchel Alexandrovich, London-based senior European economist at Jefferies International.

“If Greece were to ever exit the Euro, no amount of reassuring comments will convince investors that other countries won’t soon follow.”

Greece has meantime said it will meet €430 million in bond payments due today, Reuters reports.
Ratings agency Moody’s announced Monday that it has downgraded 26 Italian financial institutions. Over in Spain, yields on 10-Year Spanish government bonds remained above 6% on Tuesday, a day after hitting their highest levels since November.

“It’s looking alarming right now,” says Luke Spajic, senior fund manager at world’s largest bond fund Pimco.

“The market is effectively trying to price in a disorderly exit for Greece.”

In contrast with Spanish bonds, yields on 10-Year German bunds sank to record lows Monday, hitting 1.43%. Germany’s economy meantime grew 1.7% in the year to the first quarter of 2012 – up from 1.5% annual growth to Q4 2011 – according to provisional estimates published Tuesday.

Growth in the Eurozone as a whole was flat, showing 0.0% year-on-year GDP gain in Q1 – down from 0.7% to the previous quarter – Tuesday’s provisional estimates show.

Germany’s Federal Court of Audit is to report to the Bundestag its objections to the way the nation’s gold bullion is stored, the Wall Street Journal reports. The Court is expected to ask the Bundesbank to check that gold stored abroad is still there, the WSJ adds.

Over in India, “gold smuggling has increased drastically because of the increasing value of the metal,” Indian customs commissioner PM Salim told Indian press Tuesday.

“Most of the money used in gold smuggling is hawala money,” added another customs officer, referring to transfers of wealth that occur outside traditional channels so as to avoid leaving a trail.
“If people buy the metal from here, they will have to show the purchase, but if gold is bought from outside, they can pay hard cash and not pay any tax to the government.”

India’s government has twice this year doubled the import duty on gold bullion, as well as proposing to extend gold jewelry sale taxes. The latter measure was dropped following a three-week long protest by Indian gold jewelers.

Ben Traynor
BullionVault

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Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

]]> http://thedailygold.com/1522-next-target-for-gold-but-dealers-in-asia-see-sudden-surge-in-physical-bullion-demand/feed/ 0 Reviewing the Macro ‘Play’ http://thedailygold.com/reviewing-the-macro-play/ http://thedailygold.com/reviewing-the-macro-play/#comments Mon, 14 May 2012 16:47:38 +0000 Gary Tanashian http://thedailygold.com/?p=15318
There are signs in the recent jobs and ISM reports that the previously inflated economy is decelerating. Late last week, the clown running JP Morgan said stupid things about the smart [read: talented] people he has running his high risk trading operations. Europe is of course front and center as it continues to fall apart, with Gilts and Bunds rising on ‘safe haven’ buying and the bonds (debt) of Greece and other Euro basket cases declining toward their value, which is less than zero.

The precious metals appear to be watching for signs of outwardly promoted QE policy. But NFTRH has remained cautious on the timing of this pending a crack in the US stock market, so let’s review the big index.

People have gotten into trouble by failing to see that there would be little likelihood of policy maker ‘QE’ action with the broad US market flying around up there near post-2009 recovery highs. Our view has been that at the least, SPX must break down and test some support levels that were created out of the most recent downside turmoil, which was last summer’s acute phase of the Euro crisis. Otherwise, the Fed sits back and does little more than monitor the situation.

Well, the SPX is now testing a very important support level. If 1360 fails, the objective becomes 1300 strictly based on the measurement of the topping pattern. But it is more likely that the support zone in the 1260 to 1280 range would be tested as that is where visual support and standard retrace levels out of last summer’s bottom start coming into play.

The JPM noise reminds the public of the rotten scoundrels that wrecked the system in 2008 and it and any coming similar noise can only be supportive of policy makers laying in wait to inflate. ‘Laying in Wait to Inflate’… sounds like the title of a future public article.  :-)

The Fed is among other things, a political animal. I believe this animal becomes sensitive to calls for auditing its operations and austerity of policy with the public’s money. I also believe the Fed is boxed into a corner with an unofficial ‘inflate or die’ mandate because deflation scholar Ben Bernanke knows full well what would happen if the whole stinking inflated mess were to implode in a falling macro soufflé of debt, derivatives and leverage.

It is an election year and thus, we are on watch for the right conditions that would draw out policy from the inflators. SPX at 1420 is not gonna do it. SPX at 1260 just might, if it comes along with further signs of erosion in the economy. Every ‘jobs’ report going forward becomes a potential flash point.

NFTRH187 goes on to update technical and fundamental analysis of the gold sector, which would be an important first mover to any coming inflationary policy, if applicable. 187 discusses our long-held theme of deflation as a ‘lever’ that is necessary to future inflationary actions. We look at seasonals within election years and review the entire outline of the favored plan for the balance of 2012.

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]]> http://thedailygold.com/reviewing-the-macro-play/feed/ 0 Bull Market in Gold “Not Over” But Speculators Turn Bearish as Greek Insolvency Looms http://thedailygold.com/bull-market-in-gold-not-over-but-speculators-turn-bearish-as-greek-insolvency-looms/ http://thedailygold.com/bull-market-in-gold-not-over-but-speculators-turn-bearish-as-greek-insolvency-looms/#comments Mon, 14 May 2012 16:19:32 +0000 BullionVault http://thedailygold.com/?p=15315

Bull Market in Gold “Not Over” But Speculators Turn Bearish as Greek Insolvency Looms

THE PRICE OF GOLD and gold futures dropped yet again Monday morning, recording the seventh drop in nine trading days in May so far as industrial commodities, global stock markets and the Euro currency all sank amid Athens’ failure to negotiate a new coalition government.

Silver bullion also fell hard, touching $28.44 per ounce and losing 8.9% from the start of this month.

The price of Spanish government debt today fell yet again, pushing 10-year yields above 6.2% ahead of an auction of new bonds later today.

Greek public-sector salaries and state pensions may be unpayable “from the beginning of June” says a letter from stand-in prime minister Lukas Papadimos to party leaders, republished by Ta Nea, after May’s tranche of the international bail-out was cut and tax revenues came in below target.

“We do not think the gold bull market is over,” says a note from Morgan Stanley analysts, even though “gold has moved lower and is trading at levels not seen since December 2011.”

Viewed on a technical chart analysis, “Damage has certainly been done [but] we do not think it is irreversible,” they add, pointing to a sharp rise in speculative “short selling” by gold futures traders now expecting prices to fall further.

“The last time positioning was at these levels, prices embarked on a move higher, rallying to near $1800 per ounce. We are buyers of gold here.”

The rise in speculative short-selling of gold futures is “disconcerting” however, says Marc Ground at Standard Bank, because “while investors have over the past few weeks appeared cautious of running too short on gold, this fear seems to have evaporated.”

Over in the currency markets – where the Euro fell to new 4-month lows vs. the Dollar at $1.2860 – “We continue to target $1.20 for Euro/Dollar,” says Ground’s colleague, currency strategist Steve Barrow.

“Whether this takes time, or comes in an instant, could depend on the outcome of Greece’s political impasse.”

Energy, metal and food prices all sank once more Monday morning as European stock markets lost more than 2% of their value, with Madrid losing 3% and Athens dropping 5.3%.

At the weekend Swedish central banker Per Jansson said that “of course the question [of a Greek exit] is discussed.” Irish central bank chief, and fellow European Central Bank policymaker Patrick Honohan told journalists that “technically, it can be managed.”

“We wish it to be possible for Greece to remain in the euro but Greece must live up to its commitments,” a spokeswoman for the European Commission said Monday morning.

If Greece breaches the agreed terms of its bail-out deal then staying in the Euro would be “an impossible equation and I think in that sense it is an irresponsible statement,” said Finland’s Europe minister Alexander Stubb today about the ongoing calls for an end to cuts in Athens.

German chancellor Angela Merkel meantime suffered a drubbing in a state election on Sunday, with her Christian Democratic Union drawing only 26% of the vote in North Rhine-Westphalia, giving the coalition of Social Democrats and Greens a winning majority of 50%.

Price inflation in Germany’s wholesale markets rose sharply in April, new data showed today, while industrial production across the 17-nation Eurozone fell much harder than forecast, down 2.2% year on year.

On the FX market, the Euro today hit fresh 42-month lows vs. the British Pound, but fell less quickly than gold futures or bullion, with the gold price for Eurozone buyers slipping beneath €39,100 per kilo for the first time this year.

For Indian buyers, “The weakness of the Rupee is countering the fall in the Dollar gold price,” says Jeffrey Rhodes, global head of precious metals at INTL Commodities DMCC in Dubai, speaking to the Wall Street Journal.

“That’s likely to act as a drag on demand in the world’s biggest market.”

“There is hardly any work these days,” complains a Jaipur goldsmith to The Times of India. “First the 21-day long jewelers’ strike and now the increasing gold prices have rendered us jobless.

“It is getting tough for us to survive.”

India’s imports of gold bullion fell by two-thirds last month compared with April 2011.

Gold futures on the Multi Commodity Exchange in Mumbai today slipped back to a 5-week low, down 3.3% from early May’s new all-time highs.

Adrian Ash
BullionVault

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Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.

(c) BullionVault 2012

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

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