Coeur d'alene Mines Corporation: An Analysis

Coeur D`alene Mines Corporation (NYSE:CDE) is a very interesting silver play, which was on my list to buy. The Company’s properties are located primarily in the United States, Australia, and South America. They have 200 million ounces of silver ($US 6.6 billion) and 2.5 million ounces of gold ($US 4.3 billion) (proven and probable reserves). This translates to 60% silver and 40% gold. So Coeur D'alene Mines Corporation is essentially a silver play and that interests me because I'm bullish on silver.

Notable is that Sprott Asset Management significantly increased its position in Coeur D'alene Mines Corporation in September of 2011. On 06/30/2011, Sprott Asset Management reported holding 65,500 shares with a market value of $1,589,030. This comprised 0.21% of the total portfolio. On 09/30/2011, Sprott Asset Management reported holding 1,359,200 shares with a market value of $29,141,249. This comprised 3.65% of the total portfolio. The net change in shares for this position over the two quarters is 1,293,700. Since Sprott Asset Management bought in last year, the share price hasn't moved at all, so there is still time to buy in. Let's investigate why Sprott Asset Management has increased its position so much.

To find out visit: Seeking Alpha

Eric Sprott interview with Agoracom

Interesting interview on PSLV (Sprott Physical Silver Trust) with Eric Sprott.

Enjoy:
http://www.smallcapepicenter.com/ceo/AGORACOM_CEO_INTERVIEW_FEB_10_SRPOTT_SILVER_TRUST/Feb102012.html

The road to hyperinflation

Today president Obama disclosed the projected US budget deficit for 2012.

The projected deficit would reach $US 1.33 trillion in fiscal year 2012. While in December 2011 the trade deficit widened to $US 48.8 billion. For full year 2011 the deficit was $US 1.3 trillion.

Here's what the government forecasted previously (Chart 1). They forecasted a smaller deficit in 2012 of only $US 1.1 trillion. Clearly they got it entirely wrong because the deficit in 2012 is projected to be larger than 2011, namely $US 1.33 trillion. To see what this means go to: The road to hyperinflation.

Capstone Mining: The Future is Bright

I could not be more bullish on Capstone Mining (CS) today. Two years ago I heard Peter Schiff say that people should buy Capstone Mining at $US 3.2 a share before it was too late to buy it. Today, the price of Capstone mining is exactly $US 3.2 a share at a P/E around 12. So basically nothing happened to the share price and no dividend was paid to the shareholders. You would think that the company did nothing in those 2 years. But that is far from true. Find out on this link.

Chart 1: Capstone Mining (TSE:CS)

Baltic dry is forming a bottom

Looks like the BDI is forming a bottom. It could be that demand for industrial commodities is growing temporarily.

It is very important to know that the BDI doesn't correlate very well with commodity prices, but it correlates excellently with demand. If demand picks up in the coming months, we could see gains in stocks while people flee the dollar cash.

Baltic Dry Index

Baltic Panamax Index

Baltic Supramax Index

Trade Gold for Platinum

Since 2011 the gold price has been rising a lot, while platinum was going down. One of the reasons for this drop is weaker industrial demand due to the economic crisis. Other reasons are unwinding of funds and China slowing down. Platinum can be classified as a precious metal due to its rarity (30 times rarer than gold), but it's also an industrial metal (high heat and corrosion resistance). So it doesn't hold up as well as gold, which is money. The reason why platinum should be more expensive as gold is because platinum is very difficult to mine. But there are many other reasons out there, to find out click here.

Ride the Silver Boom with Endeavour Silver (EXK)

Gold has been riding a phase 2 bull market since it crossed over $US 1000/ounce since 2010. But silver is still in a phase 1 bull market. Nobody is buying silver, you can't buy silver in a bank. But the interest in silver is slowly arising and coming into a phase 2 bull market. As an anecdote I'll tell you a short story of my silver buying experience.

Last year I went on holiday to Hong Kong and the idea to buy silver crossed my mind. So I went to Hang Seng Bank to do the same. They told me they could only buy gold for me, not silver. I was not interested in gold, because I wanted to be invested in the real 10 bagger, which is silver. I asked if they had silver stocks then? Answer, they had none. They didn't have Silvercorp Metals on their Hong Kong stock exchange, which is the best silver producer in China. I was completely flabbergasted. Then next on, I told the clerk to give me gold. Her advice was: "Why buy gold? it is already so high". After hearing this, I immediately knew that the bull market in precious metals hadn't even begun... But let's get back to the silver story.

Historically, Mexico has been the world's largest silver producing country in the world with an annual production of 100 million ounces per annum. So all the silver is in Mexico, if silver goes up in price, Mexico will benefit the most from that. So you got to invest in a company that has its operations primarily in Mexico. Endeavour Silver (EXK) is such a company and is recommended by Peter Schiff (as he disclosed last year that he was (and still is) invested in this stock). To know more about Endeavour Silver please visit the link here.

Dominion Resources: A Play on Disparity in Natural Gas Prices Between America and Russia

I noticed that the spot natural gas price in America is going down while the Russian natural gas price is going up. Both natural gas prices started at $US 290 per thousand cubic metres gas in the beginning of 2007. Today Russian natural gas is 4 times more expensive than American natural gas. I wonder why this is...
Read my article to find out: Dominion: a play on natural gas disparity

European banks: Government Debt Exposure

Today I came across a very nice (and funny) presentation on how much government debt exposure these European banks have on their balance sheet.

You can find the presentation here: http://demonocracy.info/infographics/eu/debt_piigs/debt_piigs.html

Bank government debt exposure (Demonocracy.info)

Based on this picture you can almost predict which bank is the safest/riskiest bank to place your money in. The banks with the highest exposure to government debt are the banks that are the most risky when we are faced with a government debt collapse. Almost all of them are Spanish and Italian banks. If you do place your money in a bank, choose wisely! Or do what the wise man would do, don't choose, instead buy gold.

Cold weather in Europe

The cold weather has struck in Europe and demand for natural gas has picked up. Let me give a status update.

United Kingdom:

Preparations have been made across London to deal with what is forecast to be 5-10cm (up to 4in) of snow falling across England's capital city. Transport for London (TfL) said that over 100,000 tonnes of salt was ready to put on the roads, more than before.

Austria:

In Austria, temperatures in the western city of Salzburg hovered around 7 degrees Fahrenheit (-14 Celsius) on Saturday, and a technical problem at a power plant left 10,000 households without heating on Saturday.

Boznia and Herzegovina:

Rescue helicopters evacuated dozens of people from snow-blocked villages in Bosnia and air-lifted in emergency food and medicine as a severe cold spell kept Eastern Europe in its icy grip. Two helicopters were used Wednesday to rescue people and supply remote villages in northern Bosnia. All together some 200-300 people are cut off. Some villages have had no electricity for two days and crews were working around-the-clock trying to fix power lines. The snow is about two meters high (6 feet) and we have cleared off paths that look more like tunnels.

Ukraine:

In Ukraine, the cold led to more than 600 people being treated for frostbite and hypothermia within three days, according to officials. Nearly 24,000 people sought shelter during the same three days, and at least 30 people have died.

Moskow:

In Moscow, 15 people froze to death at the weekend, some because of exposure while intoxicated, city hall officials said. Overnight temperatures were -23 Celsius. All schools in Russia's central Siberian Khanty-Mantaisky region were closed because of daytime temperatures of -30 Celsius. Heavy snowfall in Russia's Kuban region, in the foothills of the Caucasian Mountains, left 17,800 people without power and closed airports and major highways. Overnight snow accumulation was 35 centimetres at some locations.