GoldMinerPulse: TSX/TSXv Gold Mining and Silver Mining Companies

Last Updated With Closing Market Prices and Document Filings from: 21 August 2014 (as available at TSX closing time).


Seabridge 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 strategies are compared below:

Average Returns: 21 August 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 10.0
Physical: Gold -2.4
ETF: GDX -2.7
Stock Picks: S2 -3.0
ETF: ZJG -3.2
ETF: GDXJ -3.3
Stock Picks: MVG -4.3
Physical: Silver -4.3
Stock Picks: S3 -4.4
Stock Picks: S1 -4.6
Oracle: Worst 20 -16.1

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 2014-08-21 when making the original 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 21 August 2014.
group / buy date 23 Jun.8 Jul.18 Jul.28 Jul.6 Aug.12 Aug.18 Aug.20 Aug.
 
Oracle: Best 20 17.9 9.2 9.1 8.7 14.3 10.6 6.4 3.5
Physical: Gold -3.2 -3.3 -2.6 -2.2 -2.3 -2.5 -1.7 -1.1
ETF: GDX -0.8 -1.5 -3.2 -3.4 -2.3 -5.0 -3.4 -2.2
Stock Picks: S2 -3.7 -6.5 -3.7 -5.0 -1.2 -2.3 -0.1 -1.5
ETF: ZJG -5.0 -2.6 -2.9 -3.7 -1.4 -3.6 -3.5 -2.7
ETF: GDXJ -1.9 -3.6 -5.7 -5.4 -2.9 -3.3 -2.7 -0.8
Stock Picks: MVG -8.2 -13.0 -6.4 -3.8 -1.4 -2.6 1.3 -0.1
Physical: Silver -7.0 -7.6 -6.9 -5.7 -2.9 -2.7 -1.2 -0.2
Stock Picks: S3 -7.2 -7.1 -4.8 -5.0 -2.0 -3.3 -3.2 -2.2
Stock Picks: S1 -5.5 -5.1 -5.4 -5.8 -3.2 -5.5 -3.6 -2.3
Oracle: Worst 20 -25.1 -23.8 -21.1 -19.6 -14.0 -12.6 -7.3 -5.3

The percentage returns, which assume a purchase at the close of each buy date and a sale at the close of the 2014-08-21, 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 2014-08-21 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 Last/Latest 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: 29.44M ounces (1,009.37 tons or 915.69 tonnes), a 0% change over the 4 quarters ending at the prior quarter.

  • Silver: 164.49M ounces (5,639.66 tons or 5,116.21 tonnes), a 6% 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 April, May and June 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
76 of 89 7,086,371 oz
 
243.0 tons
 
220.4 tonne
2% 62,038,986 oz
 
2,127 tons
 
1,930 tonne
7%

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

17853 41544

Gold Developers

4005 14677

Gold Explorers
>5M Oz AuEq

2025 8265

Gold Explorers
<5M Oz AuEq

97 6210

All Gold Equities

23981 70696

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

164646 385684

Silver Developers

49937 133536

Silver Explorers
>5M Oz AuEq

6562 64771

Silver Explorers
<5M Oz AuEq

374 49193

All Silver Equities

221519 633184

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

$75 $11 $4 $12

Estimated Discovery Cost
Per Oz AuEq

  $11 $3 $19

Net Working Capital
(US$)

$19,676M $1,272M $528M $641M

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

89

Gold/Silver Developers

118

Gold/Silver Explorers

233

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

28

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

26

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

527

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.

Shanghai Gold Exchange Gold Closing Price Versus Kitco Closing Price

The Shanghai Gold Exchange Yuan Renminbi price of gold and premium/discount in US dollars relative to the Kitco spot price at TSX close follows (yearly average and 1 year rolling time period comparisons):

Yearly Average Shanghai Gold Exchange Premium:

  • 2014 (YTD average): $1.54

  • 2013 (Full year average): $16.05

Rolling Week on Week Comparisons of Shanghai Gold Exchange (SGE) Premiums (Δ) vs Kitco Spot Gold Price:

Date Shanghai Gold Exchange Close - Au(T+D) Kitco Spot Price at TSX Close SGE Δ
Yuan Renminbi/gram US$/oz
21 August 2014 253.67 $1283 $1276 $6
20 August 2014 256.33 $1298 $1291 $7
19 August 2014 256.89 $1301 $1296 $5
18 August 2014 257.44 $1303 $1299 $5
15 August 2014 260.23 $1317 $1304 $12
14 August 2014 260.26 $1316 $1313 $3
...
20 February 2014 257.51 $1317 $1323 -$7
19 February 2014 258.23 $1322 $1310 $11
18 February 2014 258.00 $1323 $1322 $0
17 February 2014 259.74 $1332 $1329 $3
14 February 2014 256.25 $1314 $1319 -$5
13 February 2014 252.09 $1293 $1302 -$9
...
22 August 2013 271.72 $1381 $1375 $6
21 August 2013 272.00 $1382 $1369 $13
20 August 2013 270.48 $1374 $1371 $3
19 August 2013 273.40 $1389 $1367 $22
16 August 2013 271.71 $1382 $1374 $8
15 August 2013 267.28 $1360 $1363 -$3

Currency conversions made using spot rates available on the date. The SGE Δ is computed as the SGE closing price in US$ minus Kitco Spot Price (bid) at TSX Close.

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.

Also see China Looking To Dominate Gold Market With International Shanghai Gold Exchange, a 27 June 2014 Kitco News story.

Thursday's News Highlights

Select Thursday's news headlines from the 1,358 mining stocks (producers, developers, explorers, base metal producers plus a few of the capital pool companies) GoldMinerPulse tracks:

  • Alexandria Minerals Corporation (AZX.V) | Visit
    • 10:13am EDT Alexandria Accelerates Akasaba Drilling Program with Addition of Second Drill Rig [Marketwired more]
  • Argentex Mining Corporation (ATX.V) | Visit
    • 09:30am EDT Argentex Increases Ping├╝ino Silver-Gold Project Mineral Resource Estimate to 26.7 Million Ounces Ag Eq. @ 132.3 g/t Ag Eq. Indicated and 7.0 Million Ounces Ag Eq. @ 98.0 g/t Ag Eq. Inferred. [Marketwired more]
  • Endeavour Silver Corp. (EDR.TO) | Visit
    • 07:30am EDT Endeavour Silver Acquires La Bufa Property Adjacent to Existing Endeavour Properties in the Guadalupe y Calvo Gold-Silver District, Chihuahua, Mexico [Marketwired more]
  • Ginguro Exploration Inc. (GEG.V) | Visit
    • 06:00am EDT Ginguro Samples 10.4 g/t Gold over 29 Metres on Godzilla Zone [Marketwired more]
  • Lincoln Mining Corporation (LMG.V) | Visit
    • 08:00am EDT Lincoln Announces Sale of La Bufa Property [Marketwired more]
  • Orex Minerals Inc. (REX.V) | Visit
    • 08:45am EDT Fresnillo Proceeding to Second Option Stage on Coneto Project with Orex [Marketwired more]
  • Rio Alto Mining Limited (RIO.TO) | Visit
    • 09:38am EDT Gold M&A Pickup Boosts Prospects for Seabridge Project [at Bloomberg more]
  • Seabridge Gold Inc. (SEA.TO) | Visit
    • 09:38am EDT Gold M&A Pickup Boosts Prospects for Seabridge Project [at Bloomberg more]

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

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