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November 30, 2010 Dear Friend,
Metals prices
have held up reasonably well with the dollar
appreciation to $1.31 euro, 84 yen, A$ $0.96, etc.
Last week inventories fell for aluminum, copper,
zinc and lead, and we are pleased as we enter
December that inventories or supplies are not
building up more.
We raised Barrick
Gold to Overweight as its shares have risen little
in relation to gold prices, as the five major gold
mines now average a near record $491 per oz level
suggesting that investors "believe" or accept rising
gold prices more than ever. We dropped Goldcorp to
Neutral Weight owing to the degree of its premium
valuation. We revised all of our gold earnings
model, cash flow and balance sheet spreadsheets to
estimated $1,200 gold in 2011 and $1,000 thereafter
as we view ETF holdings, gold bar hoardings, the
completion of hedge buybacks and rising mine output
as downside risk factors. Further, we foresee
rising fiscal conservatism and an eventual end to
monetary stimulus programs.
Faithfully,
John C. Tumazos,
CFA
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Copyright © 2008 John Tumazos Very Independent Research,
LLC
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