Prospecting Equipment

What’s Driving Gold and Gold Stocks (Part One)

Justice Litle, Editorial Director, Taipan Publishing Group

Gold and gold stocks have been hit hard in recent days. In part one we examine the reasons as to why, and in part two cover why gold stocks could be one of the biggest trades of 2009.

Gold and gold stocks have been hammered as of late. The yellow metal took a header on Monday, with the futures closing right on the 200-day exponential moving average. If that support doesn’t hold today (Tuesday), gold may even be trading lower by the time you read this.

So what’s going on exactly?

There are a few factors at work at here. To skip ahead a bit, there is still strong reason to believe gold stocks could be one of the best trades of the year – but in the short run, the environment for gold looks challenging.

The IMF Bogey

One old bogey that has come out of the woodwork is the prospect of IMF gold sales. At the recent meeting of the G20 in London, there was general agreement that the IMF (International Monetary Fund) should sell just over 403 tons of gold to free up cash for loans to poor countries.

Yawn…. the “IMF to Sell Gold” headline makes for much better press than the actual details.

For one thing, 403 tons of gold is just not that much. We’re talking roughly $11 billion worth at today’s prices. That’s a drop in the bucket, especially compared to China’s roughly $2 trillion pile of reserves… less than one percent of which are held in gold.

(For more detail on the relatively tiny gold holdings of many of the world’s central banks, see the Feb. 24 Taipan Daily piece “Why the IMF and Fort Knox Won’t Put the Hurt on Gold.”)

For another thing, the prospect of IMF sales is not new. The IMF has actually been trying to sell gold for more than two years. Part of why it hasn’t been able to do so is because authorizing the sales requires an 85% majority vote from the IMF’s 185 member countries.

On top of that 85% hurdle, the United States basically holds veto power over any IMF gold sales measure (because America’s proportional voting rights are so large). In that regard, the U.S. government has informed the IMF that, by order of law, authorization from Congress is required for any gold sale to go ahead. (Can you imagine Turbo Timmy making that request, to this Congress, in this climate? Ron Paul would have a field day.)

So any approved IMF gold sale would be small, in quantities easily absorbed by countries like Russia or China (who have openly stated a distaste for their overlarge dollar holdings). Any sale would further require 85% approval, plus approval from the United States Congress… and last but not least such sales, if they happened, would probably be disbursed over many years. The remaining 3,200 tons of gold the IMF holds represent quota requirements from member countries and cannot legally be sold.

But, still, gold has been sinking like a stone. What else could be the problem?

Ready to Scrap

Another factor hurting gold in the short term is “gold scrap,” or scrap sales. Private holders of jewelry and trinkets, particularly in Turkey, the Middle East and Asia, have been stepping up and selling their scrap gold.

India, the “world’s largest gold buyer by a wide margin,” has even stopped importing “for the first time in 10 years,” the Financial Times reports. In February and March India saw zero gold imports, while January imports came in light. Vietnam and Thailand, normally reliable buyers of gold, have also been selling. Stepped-up scrap sales have even put Asia scrap sales at a discount to the standard London quote.

It’s important to point out that many of these scrap sales are driven by distress more than any sense of market timing. Unemployment woes and rising food costs have forced hard-up Asian families to dip into their emergency stashes. Traders have further noted that these scrap sales seem sensitive to price. As the gold price per ounce fell towards $900 and below, scrap sales volume saw a clear decline.

Mark-to-Whatever

Yet another factor weighing on gold has been the suspension of “mark-to-market” accounting rules.

Last week America’s FASB (Financial Accounting Standards Board) bowed to pressure from Wall Street and loosened up mark-to-market accounting rules, causing a huge sigh of relief from the banks. Here is how I explained it to Macro Trader members on Friday:

Part of the reason stocks rallied big on Thursday was a suspension of “mark-to-market” accounting rules.

In plain English, this means the banks will no longer have to use real-time pricing for the stinky stuff on their balance sheets. They’ll be able to “estimate” what the toxic assets should be worth instead.

This is sort of like a homeowner saying “well, my house might not be saleable in this tough real estate market, but in a better market I’m sure it would be worth, oh, $300,000… so that’s what I’ll say it’s worth for now…”

Some people think the suspension of mark-to-market rules for bank assets is a smart idea. Others think it’s a terrible idea. Either way, it’s pretty bullish for the financials, at least in the short term.

Stocks also rallied [recently] on news of a potential trillion dollar injection into the IMF (International Monetary Fund), and the general perception that the G20 meeting in London was a success.

The mark-to-market change is basically a cheap magic trick. The banks may benefit from the opportunity to abandon real-world accounting in favor of fantasy-world accounting, but toxic assets are still toxic assets. Smoke and mirrors won’t change that.

Hot Money Rotation

In sum, the current weakness in gold and gold stocks is all about short-term perceptions (with the exception of increased pressure from scrap sales, which remain sensitive to distress and price). The IMF news is more hype than substance, and the abandoning of mark-to-market accounting rules is more a tacit admission of how ugly the picture still looks for banks, rather than a concrete step towards fixing the problem.

Meanwhile, rally-happy traders saw the chance to buy up risky assets on the back of mark-to-market suspension and good G20 news. As a result of the major move we just saw – the biggest 4-week rally in the S&P since 1933 – areas of the market that had previously suffered from lack of liquidity, like high-yield debt, commercial real estate assets and so forth, caught a huge bid. There was a fast-and-furious hot money rotation out of “crisis insurance” type assets (like gold and gold stocks) and into “woohoo let’s party!” type assets (like bank stocks and high-yield debt).

That wraps up the near-term end of things as to why gold (and thus gold stocks) are out of favor right now.

Tomorrow I’ll share my reasoning as to why gold and gold stocks could still be setting up for one of the biggest trades of the year.

gold dredge

Are you an aspirant of a career in heavy equipment operations and management? Are you looking for an institution that is nationally certified and well established and renowned? If you want to get admission into a school which will not only qualify you as a heavy equipment operator but also provide you assistance in securing a job in a top company, then make sure you research thoroughly through every minute detail before you take the plunge.

Here are a few guidelines that will assist you in your search:

Look for an institution that has published and recorder standards that are recognized universally. You don’t want to waste your time, money and energy persuading a lengthy course and discover at the end that it isn’t recognized in the first place, do you?

Apply to a school which exclusively provides heavy equipment training and nothing else. This is to ensure that you are in a specialized working environment that will focus on one major course of action and that is heavy equipment operation training.

Enrolling in a school that is a member of National Association of Heavy Equipment Training Schools (NAHETS) is the best you can opt for as these schools provide training that is competency based and job oriented.

Ensure that your prospective training school has a faculty of experienced and qualified instructors. The best knowledge can be imparted by a person whose expertise in the field has been exercised and proven.

The training school should also be in possession of as many equipment types that are needed for your training program.

The campus or training area should be spacious. A minimum area of 10 acre heavy equipment training area is needed.

Good administrative facilities should be available.

There should be a Career Resource Center located on campus,

Job site simulators, which give you practical training in operation heavy equipment and undertaking emergency safety and preventive measures, should be included in the curriculum.

You should also make sure that job placement assistance is provided to you at the end of your training program.

Though most of these training programs are full time, some schools also provide part-time leaning facilities or distance learning programs. If you are already a graduate with a technical degree, then you can opt for a Commercial Driver’s License or CDL. This is an absolute necessity before you begin your career as a heavy equipment operator. Look for a comprehensive study program which offers you this facility as well.

Linux Gold Corp. (OTCBB:LNXGF) has stepped up to the plate as it further expands its presence in Alaska’s historic gold camps. The company has recently acquired an option to purchase a 100% interest in 26 mining claims close to the historic Ester Dome mining camp near Fairbanks, Alaska for US$10.3 million in cash and shares over a two-year period. As per its October 18th press release, “on September 9, 2007, a major gold/silver discovery was located on the claims, with a potential strike length of 6,500’, width of 100’ and minimum depth of 100’ of high grade gold and silver values based on the sampling and trenching program completed this year. The area has been re-sampled and results are pending.” Placer gold has been mined around Ester Creek and its drainage for decades.

This latest acquisition adds considerable lustre to Linux’s position in Alaska, as it also owns the Granite Mountain gold-polymetallic-platinum Project– located approximately 80 miles east of Nome, on the eastern part of Alaska’s Seward Peninsula. The company staked a 37 square mile area at the ‘epicentre’ of some of the world’s greatest deposits– surrounded by Teck Cominco’s Red Dog, (the world’s largest zinc deposit) located 180 miles north, Nova Gold’s Rock Creek and Big Hurrah gold mines 75 miles west, their Khotol Silver project 60 miles east, and finally, Northern Dynasty’s massive gold-copper-molybdenum porphyry deposit (the Pebble Project) to the southeast. Red Dog is has over US$20 billion worth of zinc reserves and is producing 500,000 tons of ore annually. Indicated deposits for Rock Creek and Big Hurrah total 670,000 ounces of gold with an estimated Inferred Resource of 100,000 ounces of gold. Northern Dynasty has an inferred mineral resource of approximately 28 million ounces gold and 16.4 billion pounds of copper – certainly one of the world’s finest mineral deposits.

In early 2005, Linux acquired a 100% interest in the property by staking 148 State of Alaska 160-acre mining claims at several locations near Granite Mountain. Work done in the 1960s suggests that the property deserves additional exploration. To date, mapping and geochemical sampling has enabled the company to outline a two-mile mineralized zone with favorable discovery potential. The company’s consulting geologist for the project, Robert B. Murray, is currently completing a NI 43-101 report on the property. In September 2006, a drilling program on the property was completed, testing four separate mineralized zones. Further exploration work to confirm gold and silver values on the property is planned pending additional financing.

The USGS’ fact sheet entitled Regional Geologic, Geochemical, Geophysical, and Mineral Deposit Data for Economic Development in Alaska in the 21st Century confirms the immense base-metal resources of the Seward Peninsula: “Since the gold rush of the late 19th century, it has been recognized that the mineral endowment of the Seward Peninsula, Alaska, is considerable. The well-known placer gold operations have had significant historic production and continue operating to this day. Lode gold production has also occurred. The potential for base-metal deposits (Pb, Zn, Cu) has attracted exploration to the peninsula for decades, but the extent of that resource is unknown. Scattered across the Seward Peninsula, in an area 150 x 200 km, are numerous prospects and occurrences of stratiform massive sulfides.”

Linux also owns a 50% interest in 30 mineral claims known as the Fish Creek Prospect, located in the Fairbanks Mining Division in Alaska. The claims are located only six miles from Kinross’ Fort Knox mill. Linux has a 50/50 joint-venture with Teryl Resources Corp. (TSX.V:TRC) in the Fish Creek claims, in which Linux will spend US$500,000 on the project over three years. Linux Gold Corp. retains a 5% net smelter return or may convert into a 25% working interest. The Fish Creek claims are part of Teryl’s Alaskan holdings, which also include the Gil Project, the Stepovich claims, and the West Ridge property – all in the Fairbanks Mining District. Teryl is one of the main landowners in the district, with holdings contiguous to Kinross’ Fort Knox Project. According to Kinross’ Fort Knox Mine technical report, “the Fairbanks mining district is a celebrated placer gold camp with production in excess of 8.0 million ounces of gold since 1902. Although a significant mining district in terms of total production, it had only limited lode production until the discovery and development of the Fort Knox deposit in the late 1990s.” Fort Knox is the largest producing gold mine in Alaska, with a 4,000,000 oz Au ore reserve.

Linux and Teryl share something else – their president, CEO and chairman of the board, John Robertson, who brings an extensive business, mining and marketing background to both companies.

Management has diligently set about acquiring strategic properties near some of the world’s major producers in an area known for its world-class reserves and its mining-friendly political environment. This approach has yielded some great results so far, given the fact that it has been able to forge close ties with Kinross at Fish Creek.

The company is remarkably well-diversified in terms of its property portfolio, with projects near major former and current producers in Alaska, Arizona, China and Canada. Its accessible price point and Bulletin Board status make it especially attractive to American investors who wish to position themselves early on in the drilling stage in order to maximize their chances of seeing major-league near- and mid-term appreciation. With some good drill results we could well see Linux hit a grand slam.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

gold metal detectors

The Samsung U600 Copper Gold has quad band GSM connectivity, GSM 850 / GSM 900 / GSM 1800 / GSM 1900 network. Luckywireless Samsung U600 is also extremely stylish. Samsung U600 comes in many colours such as: Black, sapphire blue, garnet red, copper gold and platinum metal. The clever design of Samsung U600 Copper Gold includes a unique and stylish interface for the ultimate sophistication and usability.

The Bluetooth cell phone Samsung U600 Copper Gold comes equipped with a 3.2 megapixel camera encased in an ultra slim profile and boasting a 2.22 wide TFT LCD widescreen. For the feature watchers, Samsung U600 Copper Gold offers a HSDPA 3.6 Mbps data transfer speed, video telephony functionality and auto focus in a slim 12.1mm case. The feature rich smart cell phone Samsung U600 Copper Gold plays multiple audio formats including MP3, AAC, AAC+, e-AAC+ and WMA. The Samsung U600 Copper Gold phone has 60MB of user memory itself whilst a microSD card will provide up to an extra 2GB.

The unlocked mobile phone Samsung U600 Copper Gold is quite decent as well. Samsung U600 Copper Gold withholds within the power of 3.2 MP cameras, located at the rear. Apart from the pixel count, what makes the camera really impressive is its versatility and usability. The smart handset Samsung U600 Copper Gold phone camera provides enough control for editing and setting, which include a macro mode, and the ability to change ISO settings. But what mars the mood a little is that the camera lacks Xenon flash, and the weak LED photo light does not really make an impression.

The smart handset Samsung U600 copper gold phone built-in camera in the handset lets you record videos and click still snaps. The Bluetooth mobile phone Samsung U600 Copper Gold a pretty well specified phone – the Samsung U600 has a 2.2″ 240×320 pixel display, a 3.2 megapixel camera, microSD expandable memory, a multimedia player capable of playing back MP3, AAC and WMA formats, a web browser and email client plus assorted messaging enhancements.

Similarly, Luckywireless introduced Samsung U600 Copper Gold though the handset has been endowed with auto focus; the speed is so slow that it causes irritation while capturing moving objects. The unlocked mobile phone Samsung U600 mobile phone is an excellent device that combines strong multimedia functionality with pretty design and pocket friendly dimensions. Please purchase online www.luckywirelessusa.com

Gold Panning

Technological Benefits of Equipment Leasing

Technology provides a needed and powerful edge in business; the following points examine those benefits and let you decide how these benefits provide you with the needed edge in business. An equipment leasing arrangement provides you the edge you need without running the expensive costs associated with purchasing state-of-the-art equipment.

Wider Options, Lesser Costs – With an equipment leasing arrangement you are free to select your choice of equipment without paying the full price. This advantage also comes with the fact that most business equipment leasing companies will often handle everything from the maintenance to the deployment of their equipment. Your company can save the costs associated with the equipment as the leasing company usually gets price cuts on equipment and related services since they buy in bulk.

State-Of-The-Art Equipment – When a commercial equipment leasing company provides your business with equipment they provide the best. They do this because unlike your business, equipment leasing is the only business they do and their competition is steeped in proving you the best equipment at the lowest prices. If they don’t provide the best equipment at the best prices their competition takes over, so the company paying for leasing services gets all the related benefits of getting the best equipment at a cheap price.

Flexible Arrangements – With an equipment leasing arrangement, financing is according to your convenience. Financing can be arranged according to the way you intend to use the equipment and the cash flow of your company. You can also renegotiate the terms of your lease if your circumstances change and this comes without any repercussions. Some commercial equipment leasing companies also handle the insurance of their equipment so insurance costs for your leased equipment is not a problem.

Equipment Leasing Options

With the various equipment leasing companies available there is hardly a fixed set of leasing options. Companies will provide leasing options and tailor them according to the needs of their customers. In this equipment lease guide we have selected some of the most common business equipment leasing options available, which can be found across a variety of equipment leasing companies in the U.S. today.

The Capital or Finance Lease offers the lessee the option to buy the equipment at a much reduced rate at the end of the lease period. This equipment lease is also referred to in some quarters as a nominal buyout lease. With the Sale-Leaseback Lease the company buys the equipment it requires and sells it to the leasing company. The equipment leasing company can then lease the equipment back to your company or business for its normal use. The Municipal Lease option is available to public agencies as well as non-profit organizations. If your company falls into these categories you can make inquiries concerning this option. With the Deferred Payment Lease, the first monthly payments of such leases are usually deferred to a period of up to 90 days before the lease starts. With the Seasonal or Skip Payment Lease, the lessee pays for the lease at peak periods of the operating year, which are defined at his convenience. With the True Lease, the lessee may choose to return the leased equipment on conclusion of the lease or may buy the equipment at a fair market value price of the equipment. With the Graduated Lease, the leases start off with small monthly payments that rise according to the level of increasing income your business generates.