GoldMinerPulse: TSX/TSXv Gold Mining and Silver Mining Companies

Last Updated With Closing Market Prices and Document Filings from: 23 April 2014 (as available at TSX closing time).


Seabridge Gold Gran Columbia Gold    

Returns From Gold Equity ETFs vs Gold/Silver Bullion vs Stock Picking The TSX Producers

The average returns from investments in one of three gold equity ETFs versus returns from purchases of gold or silver bullion versus the return from stock picking startegies are compared below:

Average Returns: 23 April 2014
• average return assumes buy and hold on
1, 3, 7, 11, 17, 23, 31 & 41 prior TSX trading days.
group average % return
Oracle: Best 20 6.2
ETF: GDX -1.8
Physical: Gold -2.0
Stock Picks: S1 -2.4
ETF: ZJG -2.5
Stock Picks: S3 -2.9
ETF: GDXJ -3.0
Physical: Silver -3.8
Stock Picks: S2 -4.7
Stock Picks: MVG -6.8
Oracle: Worst 20 -18.8

Stock Picks: MVG (Max Value Group), Stock Picks: S1, Stock Picks: S2 and Stock Picks: S3 are rule based selection strategies for picking TSX/TSXv gold/silver producers. The design objective for each of the Stock Picks groups is to generate better returns than the gold equity ETFs when the price of gold is rising while providing returns roughly on par with (or only slightly worst) in a flat or falling gold market.

The MVG membership list, and related rankings of the TSX/TSXv gold and silver producers used to compute the MVG, can be computed using the algorithm described within or alternatively the MGV list and related rankings can also be purchased pre-computed from GoldMinerPulse on a daily, monthly or quarterly basis (see Contact to learn more).

The Stock Picks: S1, Stock Picks: S2 and Stock Picks: S3 Stock Picks are alternate stock picking strategies under current investigation - the S1, S2 and S3 strategies can be easily implemented for independent back testing. Complete details, including access to more back testing results, are available on a subscription basis.

The Oracle: Best 20 is an upper bound on the possible returns from a stock picking strategy, but since the Oracle stock picking strategies relies on a look ahead cheat (i.e. seeing the closing prices on the 2014-04-23 when making the orignal buy decisions), it is not implementable. The Oracle: Best 20 does however provide an upper bound benchmark against which to test stock picking strategies -- the gap between the MVG and ETF returns versus the Oracle: Best 20 suggests a better stock picking strategy potentially remains to be discovered.

The data points used to compute average return were:  

Percentage return for each investment choice assuming:
• buy at the close on the buy dates listed below
• sell at the close on 23 April 2014.
group / buy date 24 Feb.10 Mar.20 Mar.28 Mar.7 Apr.11 Apr.17 Apr.22 Apr.
 
Oracle: Best 20 5.7 0.0 5.7 8.5 7.1 6.0 9.2 7.3
ETF: GDX -9.1 -6.5 -4.7 0.7 0.0 0.2 3.0 2.0
Physical: Gold -3.9 -4.1 -3.2 -0.7 -1.0 -2.6 -0.8 0.0
Stock Picks: S1 -11.0 -8.4 -5.8 -0.2 -1.1 0.3 4.3 2.7
ETF: ZJG -11.0 -8.8 -8.5 -0.7 0.4 1.5 4.0 2.8
Stock Picks: S3 -12.3 -10.1 -7.9 -1.9 -1.4 0.4 5.6 4.0
ETF: GDXJ -15.7 -10.8 -7.5 -1.0 0.7 1.0 6.5 3.1
Physical: Silver -11.7 -6.7 -4.2 -1.8 -2.3 -2.7 -1.0 0.0
Stock Picks: S2 -19.0 -14.4 -11.2 -1.5 -0.5 -0.2 6.0 3.4
Stock Picks: MVG -18.5 -16.8 -13.2 -3.9 -3.8 -3.0 2.1 2.7
Oracle: Worst 20 -34.4 -30.4 -24.4 -18.0 -19.0 -14.6 -7.8 -2.1

The percentage returns, which assume a purchase at the close of each buy date and a sale at the close of the 2014-04-23, are highligthed as follows:

Group with the best return for the buy date.
Group with the 2nd best return for the buy date.

The table rows are sorted by the arithmetic average of the percentage returns realized for each of the buy dates. The table rows are ordered from highest average percentage return to the lowest.

The percentage return tables are updated after the close of each TSX trading day. Group member is always computed prior to the start of each trading day. On a day to day basis, changes in the Oracle groups are common. Membership in any of the Stock Picks groups may also vary over time but by design the MVG group changes typically occur on a time frame matching the flow of new financial and technical reports from the producers (typically quarterly). The other Stock Picks group members are expected to vary even less frequently.

Stock Picks: MVG, an equally weighted grouping of TSX/TSX producers, is constructed using rule-based stock picking strategy. For more details please see:

  • Rankings for a description cost and benefit metrics we use to rank TSX/TSXv gold and silver producers.

  • Max Value Group of TSX/TSXv Gold and Silver Producers Criteria for the rules used to construct the Max Value Group before trading begins on each buy date.

  • Profiles for the 2014-04-23 version of the cost and benefit metric rankings of various equally weighted groups of TSX/TSXv gold and silver producers, including the Max Value Group.

The Stock Picks: S1, Stock Picks: S2 and Stock Picks: S3 Stock Picks are alternate stock picking strategies under current investigation. Complete details, including access to more back testing results and alternate selection strategies, are available on a subscription basis.

The Oracle groups, created by using a look ahead cheat designed to select the best (or worst) possible returns from buying and holding an equally weighted group of TSX/TSXv gold/silver producers, are excluded from highlighting.

The ETF groups assume you buy and hold the actual ETF. The Physical groups assume you are buying/selling gold (or silver) bullion at the spot market price at the TSX market closeing time.

Conclusions

In a rising gold market, the gold equity ETFs provide a significantly better return than the returns on physical gold or silver. However, the best returns can be expected from the application of stock picking strategies. This page now provides live testing of 4 alternate stock picking strategies (Stock Picks: MVG, Stock Picks: S1, Stock Picks: S2 and Stock Picks: S3). Currently, the Stock Pick strategies are limited to TSX/TSXv producers while an expansion to include TSX/TSXv listed gold and silver streaming companies as well as explorers (including developers) is planned for a Q2 release. Access to full details on back testing results from various stock picking strategies is available to monthly / quarterly subscribers.

Although no buy and hold stock picking strategy can better or even equal the outstanding returns for the Oracle: Best 20, the Oracle: Best 20 does provide a hard upper bound against which to benchmark returns from an implementable stock picking strategy.

In a flat gold market, the performance difference between the stock picking strategies (the Stock Picks: groups) and gold equity ETFs is expected to narrow.

In a falling gold market, holding physical gold/silver is expected to loose the least of the various groups presented while the ETFs and stock picking strategies can be expected to yield the poorest returns.

Since holding gold/silver bullion investments in a falling market are, by definition, going to loose money, an overall gold/silver investment strategy to maximizing returns overall markets to consider is:

  • increasing investment weighting in Stock Picks as the price of gold rises,

  • move investments from Stock Picks to physical gold/silver as the price of gold becomes range bound, and

  • move into and stay in cash as the price of gold is falling.

GoldMinerPulse does NOT offer any investment advise. Rather, all discussions here of investment strategies are made to introduce GoldMinerPulse services - GoldMinerPulse provides actionable data to investment professionals to support their investment and trading strategies (see Contact for more details). The Stock Picks: MVG, S1, S2 and S3 are concrete example of the kinds of actionable information that can be built from value based metrics available from GoldMinerPulse.

Gold and Silver Production Statistics

Production Based on Lastest Four Quarters

Using the most recently available quarterly production reports, the gold and silver stocks listed on the TSX/TSXv are reporting production totals on a rolling 4 quarters of:

  • Gold: 30.15M ounces (1,033.71 tons or 937.77 tonnes), a 1.5% change over the 4 quarters ending at the prior quarter.

  • Silver: 149.03M ounces (5,109.60 tons or 4,635.35 tonnes), a 2.7% change over the previous 4 quarters ending at the prior quarter.

The running totals for quarterly production numbers for companies with a quarter ending in the months of January, February and March 2014, along with the changes on a Quarter on Quarter (QoQ) basis, for TSX/TSXv Gold and Silver producers are:

# Producers
Reporting
Gold Produced
Latest Q Report
QoQ
Gold Δ
Silver Produced
Latest Q Report
QoQ
Silver Δ
31 of 90 703,699 oz
 
24.1 tons
 
21.9 tonne
-5% 11,635,670 oz
 
399 tons
 
362 tonne
-3%

TSX/TSXv Gold Reserves and Resources

Gold reserves and resources for TSX/TSXv listed companies with at least 12.5% of their in situ metal values from gold:

Metric

 
Type of Equity

Gold Reserves
(tons)

 

Gold Resources
(tons, inclusive of reserves)

 

Gold Producers

17932 41702

Gold Developers

4705 15105

Gold Explorers
>5M Oz AuEq

1811 7649

Gold Explorers
<5M Oz AuEq

101 6532

All Gold Equities

24550 70988

Based on gold production rates reports over the last 4Q, TSX/TSXv gold producers have 21.5 years of gold reserves.

TSX/TSXv Silver Reserves and Resources

Silver reserves and resources for TSX/TSXv listed companies with at least 12.5% of their in situ metal values from silver:

Metric

 
Type of Equity

Silver Reserves
(tons)

 

Silver Resources
(tons, inclusive of reserves)

 

Silver Producers

165419 365620

Silver Developers

51206 145363

Silver Explorers
>5M Oz AuEq

6562 62017

Silver Explorers
<5M Oz AuEq

174 55077

All Silver Equities

223360 628077

Based on silver production rates reports over the last 4Q, TSX/TSXv silver producers have 33.6 years of reserves.

TSX/TSXv Gold and Silver Equities Statistics

The following table includes TSX/TSXv listed companies with at least 12.5 of their in situ metal values from gold or silver (in US$).

Type of Equity

 
Metric

Producers
 

 

Developers
 

 

Explorers
>5M Oz AuEq

 

Explorers
<5M Oz AuEq

 

Enterprise Value
Per Oz AuEq

$82 $12 $4 $11

Estimated Discovery Cost
Per Oz AuEq

  $9 $3 $19

Net Working Capital
(US$)

$12,920M $1,512M $511M $689M

TSX/TSXv Company Counts by Category

TSX/TSXv company may appear at most one time in the following table. Companies without a gold/silver resource (generators, historic and grass roots) are included on the basis of qualitative assessment of descriptions published in quarterly financial statements.

Category # of Companies in Category

Gold/Silver Streaming and Royalty Companies

8

Gold/Silver Producers

90

Gold/Silver Developers

121

Gold/Silver Explorers

244

Gold/Silver Generator Model Companies
(No Gold or Silver Resource)

28

Gold/Silver Explorers with Historic Resource
(No Gold or Silver Resource)

27

Gold/Silver Grass Roots Explorers
(No Gold or Silver Resource)

534

Total Companies Listed in Sedar.com
(Current, historic, TSX/TSXv, CNDX, and others. See Note 1)

~30,000

Note 1: All TSX/TSXv listed companies are required to file in Sedar.com. However, Sedar.com companies include current companies, companies that no longer file (i.e. as a result of take over, merger, re-organization, bankruptcy, etc.), CNDX companies (Canadian over the counter market listings), and companies listed on foreign exchanges (e.g. US OTC, London, etc.) that have some connection with Canadian investors.

Featured Mining Company

  • Rio Alto Mining Limited (RIO.TO) | Visit | Report
    • Rio Alto Mining is a Canadian based resource company operating the La Arena gold / copper project, located in north central Peru. Production guidance for 2014 is 200,000 to 220,000 ozs of gold.
      • 7 April 2014, rio alto produces 53,463 ounces of gold in q1 2014 more.

      • 4 April 2014, rio alto mining announces management changes more.

CIM 2014

Shanghai Gold Exchange Gold Closing Price Versus Kitco Closing Price

Date Shanghai Gold Exchange Close - Au(T+D) Kitco Spot Price at TSX Close SGE Premium
Yuan/gram US$/oz
23 April 2014 257.85 $1286 $1285 $1
22 April 2014 258.46 $1289 $1285 -$4
21 April 2014 257.70 $1283 $1290 -$7
18 April 2014 259.16 $1293 closed na
17 April 2014 259.37 $1297 $1295 $2
16 April 2014 258.40 $1292 $1303 -$11
Note: Last September and for most of 2013 the SGE often had an ~$20 gold premium where the premium is calculated as the SGE Close US$/oz minus the Kitco Spot Price at TSX Close. A negative SGE premium denotes a discount.
18 September 2013 258.82 $1315 $1366 -$51
Note: news of day on 18 September - FOMC said no taper!
17 September 2013 261.81 $1330 $1311 $20
16 September 2013 263.35 $1339 $1310 $29
13 September 2013 262.70 $1335 $1328 $7
12 September 2013 268.21 $1364 $1323 $41
11 September 2013 272.30 $1383 $1364 $19

Currency conversions made using spot rates available on the date.

See the SGE page for daily updates on the Shanghai Gold Exchange, including a comparison of SGE gold delivery from vault in 2014 versus 2014.

Wednesday's News Highlights

Select Wednesday's news headlines from the 1,364 mining stocks (producers, developers, explorers, base metal producers plus a few of the capital pool companies) GoldMinerPulse tracks:

  • Avala Resources Ltd. (AVZ.V) | Visit
    • 09:28am EDT Avala Resources Announces Inferred Resource Estimate for Korkan East, Timok Gold Project [Marketwired more]
  • Bralorne Gold Mines Ltd. (BPM.V) | Visit
    • 09:00am EDT Bralorne February 2014 Production Up 192% Over February 2013 [Marketwired more]
  • Claude Resources Inc. (CRJ.TO) | Visit
    • 08:00am EDT Claude Announces Q1 Production Results [CNW Group more]
  • Eldorado Gold Corporation (ELD.TO) | Visit
    • 07:55am EDT Eldorado Gold Announces Renewal of Normal Course Issuer Bid [Marketwired more]
  • Goldstar Minerals Inc. (GDM.V) | Visit
    • 09:00am EDT Goldstar Minerals Intersects 0.91% Zn, 0.24% Pb And 6 g/t Ag Over 10 Meters, Uncovering a Potential Broken Hill Type Mineralization at Julien Project [Marketwired more]
  • Jaguar Mining Inc. (JAG.TO) | Visit
    • 11:06am EDT Jaguar Mining Announces Implementation of Plan of Compromise and Arrangement [CNW Group more]
  • Nevada Sunrise Gold Corporation (NEV.V) | Visit
    • 08:05am EDT Nevada Sunrise JV Partner Pilot Gold Reports 21.3 G/T Gold Over 29.0 Metres at Kinsley Mountain, Nevada [GlobeNewswire more]
  • Osisko Mining Corporation (OSK.TO) | Visit
    • 09:20am EDT Osisko Intersects 2.85 g/t Au Over 110 Metres at Odyssey North [Marketwired more]
  • Pilot Gold Inc. (PLG.TO) | Visit
    • 06:30am EDT Pilot Gold Reports 21.3 g/t Gold Over 29.0 Metres at Western Flank, Kinsley Mountain [Marketwired more]
  • Premier Gold Mines Limited (PG.TO) | Visit
    • 06:00am EDT Premier Gold identifies prospective open pit targets near Hardrock [CNW Group more]
  • Rockcliff Resources Inc. (RCR.V) | Visit
    • 09:29am EDT Rockcliff Options High Grade Talbot Deposit From Hudbay Minerals Inc., Historic Inferred Resource of 1,434,000 tonnes @ 3.4% Copper, 1.9g/t Gold, 2.9% Zinc, 58.4g/t Silver [Marketwired more]
  • Scorpio Gold Corporation (SGN.V) | Visit
    • 08:00am EDT Scorpio Gold Produces 10,294 Ounces of Gold in First Quarter 2014 at the Mineral Ridge Operation, Nevada [Marketwired more]

View more of Wednesday's news headlines here. Our news headlines update each TSX/TSXv trading day, typically mid morning and then several times during the trading day.

Contact Information

More Links

Canada's Gold Reserves -- the Vault Is Empty

Canada has sold its gold reserves

In the wake of the global financial crisis of 2008, which has led to quantitative easing ad infinitum, massive currency devaluation, currency wars and now the prospect of bank holidays as per Cypress, it is time to re-examine the rationale behind Canadian monetary policy prompting the sale of gold from our central reserves.

According to a newspaper account March 18/13, the federal government actually sold 83,339 ounces of gold in December, leaving Canada's holdings at a mere 599,000 ounces (18.3 tonne), down from about 21 million ounces (653 tonnes) in 1980. As of April, 2013 the World Gold Council reported Canada held 3.2 tonnes, less than any G20 country and ranks 86 out of 100 countries (and organizations).

It will take us years to return our gold reserves to the level they were 40 years ago.

Government of Canada: Stop selling, rebuild gold reserves in line with G20 peers.

If you agree, then please sign my petition at change.org.

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