Personally i do not recommend investing into Silver or Gold ETF. It is safer to have physical gold in your own possession or allocated storage.
How Much More Gold Can They Drain From GLD Before It Loses All Credibility? - Monday, November 4, 2013
We have witnessed a stunning drain of gold from the GLD ETF trust. Through last Friday, an incredible 479 tons – more than 35% – of GLD’s gold has been removed and has disappeared, most likely to Asia – in the space of about 10 months. The biggest chunk of that 479 tons was removed shortly after Germany’s Bundesbank issued it’s feeble and hopeless request to the U.S. that the Federal Reserve start shipping back some portion of the 1500 tons of gold that is supposedly being "safe-kept" on behalf of Germany by the Fed in its vault in New York City. Gold luck, Germany…
· There’s something really wrong with that picture because the intuitive response from the market by Germany’s request of the Fed should have been a quickly rising price of gold. But as you we all know, the Fed defaulted on the request – for all intents and purposes – and that’s when the massive drain of gold from GLD commenced.
· The gold in the GLD trust is being used to satisfy the enormous physical delivery demands from China and the other big gold buying countries because the western Central Banks have run out of gold to deliver. That is an unmistakable fact. Reports and data ad nauseum have been published in the last six months describing and verifying the voluminous, unprecedented amount of gold bars that have been moved – literally physical transferred – from the Comex in NY and the LBMA and Bank of England vaults in London to Switzerland and then on to Hong Kong, where it flows to its ultimate destinations in China.
Excellent Set of Result just announced. Congratulation to all shareholders who has invested in CNMC.
<<< overall all-in cost of US$775 per ounce of gold >>>
This compare to current gold price of above US$1300 per ounces.
CNMC INCREASED FINE GOLD PRODUCTION BY MORE THAN NINE-FOLD IN 3Q 2013 AS COMPARED TO THE PREVIOUS CORRESPONDING PERIOD
Highlights:
• Revenue for fine gold increased by 631.6% to US$6.31 million in 3Q 2013 as compared to 3Q 2012 as production volume of fine gold increased by 921.4% to 4,762.95 ounces in 3Q 2013 as compared to 466.33 ounces in 3Q 2012.
• In its efforts to maintain the highest level of corporate transparency, CNMC has provided greater clarity on its cost metrics associated with gold production in
accordance with the World Gold Council’s recently issued Guidance Note on cost reporting for gold mining companies.
• The Group achieved an adjusted operating cost of US$473 per ounce of gold sold and an overall all-in cost of US$775 per ounce of gold sold for 3Q 2013, which is a 29.1% decrease in the all-in cost as compared to 3Q 2012. The economies of scale were achieved with the ramp up in gold production volume and also the significant improvement in production efficiencies through enhanced technology and methodology.
• Going forward, the Group is confident that it will be able to achieve further growth in production.
Net Profit for this quarter increased by 111.9% to US$1,666,291
Gold Price: US$1,300
All-In Cost of Production: US$775
Profit Margin: US$525 per ounces
Total Profit
= reserve x margin
= 500,000 x 525
= US$262.5 million
Based on US$1= S$1.24
Profit = S$325.5 million as compare to today's market capitalisation of S$104 million.
What if gold price goes back to US$1900 level? Expect profit to double if the gold price remain at current level as production will increase by 200% in the second half.
<< Outlook >>
The Group’s performance may be affected if gold prices continue to fall. However, the Group’s production capacity is expected to increase by approximately 200% in the second half of 2013 following the completion of the second leach yard.
The construction of the third leach yard is expected to be completed by the fourth quarter of 2013. Installation of new gold de-absorption equipment will also be completed by the fourth quarter of 2013. Upon the completion and operation of the three leach yards, the estimated annual capacity of 1 million ores per annum will be achievable.
Commenting on its outlook, Mr Chris Lim, Executive Director and Chief Executive Officer of CNMC Goldmine Holdings Limited remarked: “The fluctuation in gold price is beyond our control. Hence, we will focus on enlarging our leaching capacity as well as cost reduction
efforts. With the heap leaching and technical services agreement with China Gold in place, we achieved a record single gold pour production in October 2013 of approximately 1,526.09 ounces of gold doré bars since the start of gold production in July 2010. Going forward, we foresee more positive developments particularly in our production efficiencies with China Gold’s involvement in our operations. We remain cautiously optimistic of the
Group’s future performance.”
Turkey’s gold imports jumped more than threefold in October to 15.98 metric tons, from 4.8 tons in September, according to the Istanbul Gold Exchange’s website. That’s the highest since July, the data shows.
Turkey has already imported 251.4 metric tonnes in 2013, year to date, meaning that it will come very close to or surpass the record import year in 2005 when 269.5 metric tonnes of gold were imported (see table below).
Year to date imports are more than double the amount of gold imports in 2012 and more than triple those in 2011.
Turkey’s gold sales to neighboring Iran declined to $1.5 billion so far this year from a record $6.5 billion for all of last year. This may indicate a fall in demand from Iran or that Iran is now importing gold from other countries such as Dubai in the UAE.
Gold is being remonetised and becoming money again in Turkey. Unlike India which has embarked on a campaign of repression against gold, the Turks are being far more enlightened. They are allowing the considerable and growing gold holdings of the population to be remonetised in order stimulate demand and grow the economy.
The country's central bank last year allowed commercial banks to hold a portion of their lira reserves in gold and banks are making it easier to buy gold in Turkey..
Some Turkish banks are now offering customers the ability to use their gold based deposits for collateral on gold backed loans and using gold as access to Turkish Lira or for access to credit cards.
Isbank and Turkiye Garanti Bankasi AS, the country’s biggest lender by market value, offer gold-backed loans, where customers can bring jewellery or coins to the bank and take out loans against their value. Garanti also has a credit card linked to gold deposit accounts.
Government efforts to help ease the nation’s current account deficit are encouraging householders to bring their gold coins which it is estimated that there are $302 billion of hidden gold stashed in homes in Turkey.
This hidden gold is second only to the U.S., and Turkish gold based deposit accounts have grew 15% this year calculated until the end of July, which is a 3 fold increase in standard savings accounts according to the Turkish Central Bank.
The gold accounts give customers an amount in Turkish lira equivalent to the weight of the precious metal they deposit in the bank. Bank customers can then withdraw cash or take out loans, while the bank is able to sell or hold onto the gold.
Turkiye Is Bankasi AS (ISCTR), Turkey’s largest bank by assets, said gold deposits increased 10 times in the two years through June.
The campaign by Turkey’s banks, featuring ads for “golden age” accounts and products such as gold gift checks, is targeted at Turks who traditionally give gold coins or jewellery as presents at weddings, births and circumcision ceremonies. The custom gained popularity a decade ago as Turkey’s inflation rate topped 70%, making gold an attractive store of wealth.
The World Gold Council estimates that by bringing 5,000 metric tons (5,512 tons) of gold bullion into the banking system -- an amount greater in value than Ireland’s GDP, Turkey aims to reduce gold imports and external borrowing.
Government statistics cite Turkey’s current-account deficit, has narrowed its gap 23% from $77 billion (2011) to $59 billion (ending August). Record gold sales from Turkish companies to the United Arab Emirates and Iran increased its exports. Exports of precious metals to the UAE and Iran, climbed to $9.2 billion (ending August 2012) from $645 million last year driven by western sanctions on Iran.
Many of the gold exported is coming from the population that are shifting their gold stash from their homes to the banks since Turkish gold production is only 25 metric tons.
The Turkish Government endeavours include the August 16th central bank decision to raise the proportion of reserves lenders can keep in gold to 30% from 25%, having increased its efforts to get more bullion out of the homes and into the monetary system.
Banks are diversifying and offering diversification with a range of gold related services.
Turkey’s regulators have been discussing planned legislation to enable customers to buy or sell gold at bank branches or transfer gold into other accounts, according to an Aug. 29 report in Milliyet, a daily newspaper. Bank Asya has said it will soon start purchasing and selling bullion at its branches.
Jewellers in Istanbul’s Grand Bazaar, one of the world’s largest covered markets, have opposed the move. They say banks buying and selling gold would cut their revenue and push them into underground trading, according to Bloomberg.
The 6th century-old Grand Bazaar houses 4,000 jewellers, and about 1.5 metric tons of scrap gold is processed into bullion there every day, according to Istanbul Gold Exchange data. Transaction volume totalled 8.5 billion liras ($4.7 billion) last year. The move by the Turkish banks may soon be followed by desperate banks in other emerging and developed markets.
Turkey has been aggressively adding to its gold reserves in recent years and now has the world's 11th-largest gold reserves. Its holdings rose to 15.762 million ounces or over 490 tonnes at the end of September (see chart above).
<<< --- Gold is gradually being remonetised again in Turkey and this trend will soon be seen globally.
With gold soon to become a Tier 1 asset, banks will attempt to get a significant amount of investment grade gold bullion onto their balance sheets in order to buttress them. --- >>>
SUBSCRIPTION OF 98,186,000 NEW ORDINARY SHARES IN THE CAPITAL OF LIONGOLD CORP LTD (THE “SUBSCRIPTION SHARES”) AT S$0.183 FOR EACH SUBSCRIPTION SHARE TO RAISE GROSS PROCEEDS OF S$17,968,038
Wintercrest Advisors LLC(“Wintercrest”)is a multi-strategy hedge fund that seeks superior returns across global markets. Wintercrest is a fund manager that delivers absolute return and long-only investment strategies across asset classes, sectors and
geographies. Wintercrest looks at both qualitative and quantitative factors in assessing the risk/reward parameters and performs extensive due diligence before
making investment decisions. Wintercrest is wholly owned by Platinum Partners Value Arbitrage Fund LP.
Mr. Stephen Yeo Mah Ai is a financial consultant and Mr. Sia Ah Kheng is a businessman with interests in a construction business. They are both private investors and Shareholders and have previously indicated to management that they had an interest to participate in any fund raising exercises conducted by the Company.
The management of the Company receives such indication of interest from Shareholders from time to time. The Company had approached several such Shareholders who had previously indicated interest,in respect of the Subscription,and Mr. Stephen Yeo Mah Ai and Mr. Sia Ah Kheng agreed to participate in the Subscription in accordance with the terms of the Subscription Agreement
USE OF PROCEEDS
The net proceeds from the Subscription (after deducting expenses relating thereto) of approximately S$17.1 million
will be used by the Company in the following estimated
proportions:
Use of Proceeds
Percentage Allocation (%)
i.Working Capital 30
ii. Gold Mining Operations 70
Bad News: In need of cash.... and dilute minority shareholder interest with discount to share price. This compare to CNMC which have convertible loan at premium.
Good News: At least somebody is willing to dump S$17.968 million which means someone seem this as undervalued. Most fund to be for mining operation and hopefully will ramp up the production.
