Monday, October 10, 2011

Irregular Posting Ahead & Gold Symposium

Unfortunately a busy schedule over the next several weeks due to travel & other projects will mean that posts on the blog will be irregular.

I will likely be back in full swing around mid November (should be a couple of posts in between now and then) to coincide with Australia's Gold Symposium, which I will be flying over to Sydney for:
With the gold price now rising to historic highs The Gold Symposium is a perfect opportunity for investors to understand what is driving this and what they need to do to ensure they are making the most of investing in gold.The Gold Symposium will be held at Sydney’s Luna Park on 14 and 15 November 2011, featuring presentations by world-renowned precious metals and monetary experts and gold mining company executives. No other event offers this combination in Australia. It’s what you need to understand the ongoing global monetary crisis, make the right investment decisions in this still largely ignored sector, and get in before the rush. Gold Symposium 2011
Many industry experts will be there giving talks on various subjects. David Evans (Gold Nerds), Eric Sprott (Sprott Asset Management), Dan Denning (Daily Reckoning), Alf Field (coming out of retirement for a one-off talk), Ben Davies (Hinde Capital) are some of those presenting. There are also presentations from senior management of several mining companies I have spoken about before (and/or hold myself), including from Silver Lake Resources, Castlemaine Goldfields, Cobar Consolidated Resources, Argent Minerals, Manas Resources and others. Well worth a look through the agenda if you are based in Sydney or can make it over for the event.

I will likely provide some basic cover of the event at the end of each day on the blog as well as tweet some snippets live over the course of the event (Follow Me on Twitter if you don't want to miss those).

I will leave you with a couple of photos after recently obtaining the final coins to complete the bullion Perth Mint Dragon 1oz Collection (Silver/Gold, 2000/2012):


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Happy collecting, investing, stacking and saving!

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Tuesday, October 4, 2011

PAMP Lunar Dragon Bar Preorders Open

I mentioned a few days ago that I would confirm when preorders were starting for the new PAMP Lunar Dragon Bars:

~ Stunning ~ PAMP Lunar Dragon Gold & Silver Bars

Bullion Money have opened up preorders. You can place your order through their online store for the bars here (LINK).

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Here are some fresh pictures of the bars:

To my knowledge the bars will not be limited to a specific mintage, so it's probably too early to tell whether they will obtain a numismatic premium in the future. Given that each bar is individually numbered we should be able to get an idea of how many have been produced later next year when the design is updated (to the Lunar Snake).

Lunar PAMP Dragon Bars will be available in gold size 5 grams, 1 ounce and 100 grams. Silver sizes will be sold in 10 grams, 1 ounce and 100 grams.

The benefit of preorders is that you can pay now to lock in the price if you think Gold/Silver spot price will be higher by the time these hit the market in November.


Perth Mint release more Lunar Dragons today

For those who weren't aware and are interested in Perth Mint numismatic releases (paying a lot more for the coins than their bullion content), more versions of the 2012 Silver Lunar Dragon will be released today:

# 2012 Year of the Dragon 1kg Silver Gemstone Edition (5,000 mintage)
# 2012 Year of the Dragon 1oz Silver Coin Gilded Edition (50,000 mintage)
# 2012 Year of the Dragon Silver Proof Coloured Coins  (10,000 mintage)
# 2012 Year of the Dragon 1oz Silver Typeset Collection (1,500 mintage)

Unfortunately the supplier who was going to provide my bulk order of Gilded dragons (as mentioned in this last post) had their allocation changed, I have now placed a bulk order for the coloured proof dragons elsewhere, but not holding my hopes too high on delivery after all the changes that have been made to my other bulk purchases. 

Apart from the Perth Mint website which should list the above coins later this morning (with strict order limits), you could try your luck at some other dealer/coin sites which already have some coins listed:

Note: Not Australian based.

Are a couple to try.

When buying numismatic coins on release, just remember they are like the junior mining stocks of the coin world. Some will soar, but for most that will only be for a short time as speculators and household limits temporarily restrict supply and collectors or punters bid up the price to get their hands on the few available. Demand must remain strong, if too many speculators get onboard at early stages then they will likely dump for a loss if the price doesn't look to be going anywhere. For those who are risk averse, you are best to stick with bullion priced coins and bars.

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Monday, October 3, 2011

Brief Update on Tribune Resources (TBR)

I covered Gold miner Tribune resources on the blog a couple of weeks ago:

Which followed a post 12 months ago on October 3rd 2010:

These posts will provide some background if you haven't already seen them.

I haven't yet had a chance to go through the annual report (released to the ASX Friday afternoon after close of trade) in great detail myself, but a few highlights on the first skim through:

  • Grade from Raleigh Underground Mine consistent @ 13.4 g/t
  • Entitlement to Raleigh's production was 52,147 ounces of Gold
  • Share of gold deposited: 48,537 ounces of Gold (58,218 last year)
  • 10,000m of RC drilling at Ghana project continues
  • Profit after income tax $9,901,300 ($19,309,081 in 2010)
  • Total Net Assets: $93m (from balance sheet, bullion not at spot)
  • Gold on hand, 30/06/11: net realisable value $83.5m ($102m @ spot)

So this company is sitting on:

  • $102m worth of Gold
  • $10.6m in cash
  • 10,003 ounces of Gold ($17m gross) credited in August
  • Probably another similar amount due in November
  • Mine providing 50k ounces of Gold pa (mine costs sub $450 per oz)
  • Exploration tenement down strike from PRU in Ghana

And the market isn't even valuing this company at $125m with shares sitting available on market today at $2.50...?

Absolute madness.


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RP Data/Rismark, Australian property spin doctors?

It was interesting to see in the latest RP Data/Rismark property index release that they focused on a 'total return' for property rather than the capital losses that have continued to accrue over the past 18 months.
Strong rental growth rates combined with slowing dwelling value declines have seen home owners realise positive ‘total return’ growth in August (+0.2%). While national dwelling values fell by -0.4% (s.a.) (or -0.1% raw) in August, this was the smallest seasonally-adjusted decline since April 2011. Bucking the national trend, home values in Australia’s biggest city, Sydney, rose +0.4% in raw terms (0.0% s.a.) in August. Including gross rents, Sydney dwellings have delivered a total 3.4% return in 2011 year-to-date. Nationally, capital city dwellings also produced a +0.2% total return over 2011. RP Data
The Prince suggested in a tweet on Friday that perhaps this change:
"shows a secular shift to treating property as an income generating asset not for speculating capital gain"
I really wish that I could give RP Data the benefit of the doubt and agree with The Prince that they are turning a new leaf, however the timing of the change leaves me highly suspicious. I've been described (in real life) as a very cynical person, I wouldn't disagree, but it can be difficult not to be so in this situation when those responsible for reporting the data have a direct interest in prices appreciating.

As an example, a couple of years back Rismark boasted that they were 'Australia's first national "shared equity" investor'. They provided (and as far as I'm aware still do) funds for the Equity Finance Mortgage (EFM), a product which allocates an interest free portion of a loan to a buyer in exchange for a percentage of their capital gains when refinanced or sold. Rismark International receives a direct benefit from rising house prices and we are to trust them along with RP Data to provide unbiased property data and research? You have got to be kidding me!

RP Data has a history of trying to soften the blows that falling property prices are having on property owners, titling their data releases in such a way that it lessons the impact of falling prices...

In the August release (for July data) they headlined the title "Sydney and Canberra homes buck weak market conditions", concentrating attention on the couple of cities that were rising, rather than the majority which were not.

In September (for August data) they have headlined their release "Robust rental growth keeps total returns positive in August", concentrating on an obscure 'total return' calculation which in no way accurately reflects the return an owner (or rather mortgagee) would have seen after taking into account all the costs associated with owning/holding property.

They often refer to falling property prices as 'softening', which reminds me of a recent funny comment left by velociraptor on MacroBusiness:
Soft? Next time I reverse down the driveway I’m going to ask my son: “what am I doing right now?”, “Going backwards dad”, “No son I’m softening”
It's crazy (somewhat amusing really) that more often than not RP Data and Rismark seem incapable of calling a spade a spade.

They go on in Friday's release to describe briefly the introduction of the 'total return' index:
Using its hedonic index technology, RP Data-Rismark measure monthly capital and gross rental returns across Australia. RP Data-Rismark report capital returns as changes in the “value” of homes, and rental returns as “yields”. This month RP Data-Rismark will commence publishing a “total return” series, which was always available in the underlying data as an “accumulation index” (the ASX also publishes accumulation indices that include dividends).
What they fail to include in their report is the many costs associated with property investment. These costs vary so much property to property, state to state, so it is perhaps not practical for them to include it in their report, however comments to the effect of "Our 'total return' index should not be used as an indication of an actual real life return" would probably be appropriate.

In many cases investors maintain a high LVR so as to maximise their leverage in this asset class and to take advantage of the tax benefits they receive for doing so. So realistically many property investors would have not only seen their equity fall as a result of falling prices in August, but they are also out of pocket for:

- Difference in cost between rent received and interest paid
- Property transaction costs
- Land tax in some cases
- Accountant fees
- Council rates (and in some cases water rates)
- Maintenance costs
- Emergency (and other various) levies
- Property management fees
(+ Any taxation benefits)

The only reason you would buy a negatively geared property (Australia's favourite type of property investment) is if the capital gains were to exceed all other costs (such as those listed above).

With the way that most Australian property investors structure and position themselves I think it is pretty deceiving the way RP Data and Rismark have suggested that a positive return would have been seen over the month of August. Even if we did concede that property had seen a growth rate of .2% in August, one would still have been better off keeping cash in the bank (earning term deposit interest rates) and the return is still not exceeding the inflation rate to show a REAL return.

Property owners and investors will continue to suffer over the medium term in my opinion with those in a negatively geared situation suffering out of pocket expenses to hold an asset which will continue to fall in price for many years to come. Let's hope that companies relied on for analysis and data can produce realistic reports on the state of the market rather than trying to spruce things up with wording and irrelevant indices which don't reflect the seriousness of the situation.


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Saturday, October 1, 2011

~ Stunning ~ PAMP Lunar Dragon Gold & Silver Bars

Please note updated post here: PAMP Lunar Dragon Bar Preorders Open

The PAMP Suisse Dragons are now available to preorder -> CLICK HERE

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Hold onto your Dragon reins... competition in the Lunar arena is about to heat up big time!

Produits Artistiques Métaux Précieux (artistic, precious metals products), better known as PAMP (or PAMP Suisse) is about to go head to head with Perth Mint for the Lunar Dragon Gold and Silver market.

Meet 'The Lunar Calendar Series Dragon' bars:

PAMP will be releasing a new design each year corresponding with the Lunar animal from the Chinese calendar (much like the Perth Mint does with their Lunar Series coins).

The bars will not be arriving until November, but site sponsor Bullion Money will be taking pre-orders from this coming Tuesday so that you can lock in the price & quantity and be some of the first in line for these magnificent bars.

The bars will come in a variety of sizes, 100g, 1oz and 5g for Gold:

And in Silver they will come in 100g, 1oz and 10g sizes:

I will post an update to the blog once these are available for pre-order (update: now available -> PAMP Lunar Dragon Bar Preorders Open). No pre-orders will be cancelled or substituted, after locking in with payment you will receive delivery of the bars once they are available later this year.


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