Below is a letter I plan to send to each producing mining company and precious metals mutual fund that I own personally. Gold and silver prices have been diluted by paper contracts to the point where no money can be made producing gold and an industry loss producing silver. Years ago, Rob McEwen of Goldcorp decided to withhold the sale of gold production to be held in their treasury until prices were higher. THIS is exactly what needs to be done now as a counterbalance to the unbacked paper contracts being sold to depress prices. The COMEX and naked shorts need to be starved for metal, the strong demand is doing this slowly while the mining industry could do this very quickly.
Please, copy and paste the below and sign with your name to any producing mining companies you have investments in. Also, do the same for any gold mutual funds you may own and ask the money manager to contact their holdings with this same letter. Government has an incentive to keep metals prices down and the lapdog regulators are allowing it to happen. Price manipulation is illegal, if the authorities will not fix it, hopefully the industry itself has sense enough to finally do something!
Dear Sirs, I am a believer in hard money and an investor in both the metals themselves and various mining shares, your company being one of them. As you well know, hard times have hit the producers of both gold and silver. Gold and silver prices have been forced down, capital, either debt or equity is very scarce for our industry and share prices are back to the levels they traded at when gold was under $400 more than 10 years ago.
Much evidence has been uncovered by GATA (Gold Anti Trust Action committee) over the last 15 years showing how gold and silver prices have been suppressed and continually manipulated yet we’ve heard not a sound from the industry itself. Many mining concerns pay dues each year to the World Gold Council which at the very best seems to be an antagonist to gold and silver. I know of no other industry which does not promote their own product nor protect it from outside and malicious pricing practices, this needs to change and the most logical catalyst is from within the mining industry itself.
The industry as a whole is mining gold at best at a breakeven and silver at a very substantial loss. It makes no sense at all to expend labor and capital to lose money, especially when your product is a finite resource and will not ever replenish. If working harder and digging more ore was an answer then I would be cheerleading the machines, the fact is, the more that gets dug up in the current environment the more money is lost and precious ore wasted.
The facts are well documented that global demand is and has outstripped supply of gold and silver for many years …yet the prices are dropping. Your “product” is being diluted by paper sales of “representative metal” while the board of directors do nothing at all. Actually, the mining industry itself is aiding the suppression scheme by delivering metal. Years ago Rob McEwen of Goldcorp withheld production from the market and held gold in their treasury for use at a later date and higher price. Why doesn’t the industry as a whole collectively do this? Yes I know, fixed expenses must be paid but if mining ore is done at breakeven or a loss, why not stop mining ore? Or at least only bring to market what is necessary to fund operations.
Either discontinuing operations or withholding metal from the market on an industry wide scale will break the backs of the speculators for lack of deliverable metal. This needs to be done industry wide but can only start one company at a time, why not our company? Why do we deplete our ore and not receive fair value for our capital and labor? Paper gold and silver contracts without any product behind them are “pricing” our product, the government is happy with this as it allows them to print freely and have lower interest rates than otherwise would be available. The regulators have turned a blind eye, we have only ourselves to rely on and collectively depend on.
Whether this proposed action is taken or not remains to be seen. Shortages of metal will occur sooner or later as physical demand and backwardation will eventually take the metals higher in price by multiples. Many companies will not be in existence within a couple of years unless those with the fiduciary responsibility to protect our companies and investments …also protect our product from fraudulent dilution. It is time to stand up and be counted now, later may be too late and will carry liability with it. Best regards, _________.
You don’t suppose that our Government is outright under the table PAYING mining expenses to the companies so they can continue production, do you?
Our Government wouldn’t use our money to do that, WOULD THEY!?
No, this is not happening.
Intersting point Bill and well written. Farmers do it. I have a friend who holds his corn when prices are too low, why not miners of PM’s?
it needs to be done, if you won’t fight for yourself no one else will.
Thanks for writing the letter, Bill. I just “pasted” the letter and sent it off to 2 gold companies I own. It feels so good to try and make a difference. I hope the industry gets flooded with this letter. There are Better days ahead. Thanks again for knowing how to frame the letter.
Thanks, Bill- I trust your judgment and contacts concerning my earlier point.
There are two problems with your approach:
(1) Mining depends on governments for permits, environmental regulations, safety inspections, taxation, etc.
(2) Mining depends on big finance for capital – lots of capital.
Who is rigging the metals markets? Big government and big banks.
What happens if you rock their boat? They kill you. Dead. In a heartbeat.
Would you rather make a little money now and have a chance of making a lot more later … OR make no money ever?
That’s why this garbage will continue until the criminals lose their leverage … until they run out of (or at least very low on) physical. Then, we will all have a very religious experience.
I’m pretty sure Goldcorp did not go out of business when they withheld from selling current production. No loans called, no permits pulled and Rob McEwen still walks the face of the Earth. I do get your point but the industry needs to “grow a pair”.
I don’t know about “dead in a heartbeat”, but your point does make sense in the grand scheme of things. The gov’t doesn’t need everyone to comply, just the big boys. And it is not too big a stretch to believe that some of them have been convinced to ‘support our National Security Interests’ and going along with the Feds. And with the feds printing press, they may be making more than they would on the free market.
bill,how does the treasury procure their gold and silver blanks for our eagles? do they buy at a pre-determined price that lasts for years,or do they pay spot all the time?lastly,does the treasury even turn a profit on the sales. can you fill us in,even though we read about how many oz’s we sold month over month in the u.s. lately,i’m wondering if they profit.thanks.i been holding exk since 11 handle,and cringe at even opening my portfolio,but still won’t be shaken from my phyzz no matter what the cartel does.thanks fork all you do,chris
they now buy on the open market, we used to have 2 billion ounces of silver and minted from that and gold from domestic production. They mark up the prices over spot and yes they do make a profit but not much. We have already sold more Silver Eagles than silver will be produced this year in the U.S..
Fabulous idea. I praise your initiative.
thanks Todd, as others have said, it may only be dreaming but I don’t see the harm in trying to light a fire under some boards of directors.
Bill, why do the miners sell the metals for below the cost of production? On the surface it doesn’t make sense. They must have very good reasons for doing this. And, just because mine shareholders don’t like it they probably are not going to stop selling metals below the cost of production until the company is gutted. Your open letter is very good but I feel that it is just a waste of time. Maybe gave you something to write about today but thats it. I personally don’t believe there are many mine managers that care how the share holders feel about anything nor are they going to withhold product from the market just because they are selling it too cheap. Once the mining company’s go bankrupt they will stop selling underpriced metals. Simple as that. Just my opinion.
because they have fixed costs
One of the worst things I have ever done is to buy mining stocks. I would have been a rich man if I had invested almost anywhere else.
depends on which ones and when you bought, the 3 sisters (Goldcorp, Agnico and Meridien) are all still at least 10 baggers. Royal and S. Wheaton are also at least 10 baggers even after being smashed. Where will they be a year from now? Lower or “more baggers”?
Concerning Lucas’ last point: I started buying a precious metals fund for my IRA in late “90’s, adding on down ticks over some years. I saw it SOAR in 2006-8– up about 80%- well above metal prices on their own. Then Sen Schummer sent the quiet little letter to the little bank in Indiana about them loaning to folks whom they knew to be poor credit risks Of course, all banks were doing it by Gov’t directive. The Sen. wanted to put a small scare into the markats prior to 2008 election, hoping Bush et. al would be blamed for it. It blew up way bigger and faster than anyone dreamed, and before I could assess what was going on, my Metals fund lost 78% in 6 months (I was being a pig waiting so long to sell). The point: When your gains equal your investment, sell to recover the investment, and play with other people’s money! I knew it, but didn’t do it.
Now I’m holding on to the metal- period.
flash crash of 2010 did it for me.i was in lumber big time and some options contracts.when that happen,i slowly started to take it ,and put it into metals.mostly silver,as i have been collecting coins as a kid,and had a bit of pre 65 half’s still stashed for years out of circulation and figured no more stock markets again.all in all after 7 plus years of trading i’d rather have physical.
long term stacking while paying with fiat will always be a winner.
Hi Bill, please write another mail and send it to Paulson & Co, ask them to convert their GLD holdings into Real Gold and store it by themselves.
please send it for me.
90% of the Gold Mining CEO’s dont have the integrity of a Rob McEwan … most CEO’s are only interested in lining their pockets with fiat by mining their shareholders’ pockets … people need to stop buying Gold mining shares and just buy the metal.
they will not stand up for themselves because their are many more producers than bulk or wholesale buyers and refiners. also, to whithhold as an industry invokes collusion and anti trust laws, that is why producers are afraid to stand up. what is required is a physical distribution warehousing mechanism for bulk players only delivering minimum sized bars and owned by producers with an incentive to gain the highest price for production. A distribution centre would avoid exchange trading regulations….kinda like grain elevators in the farming industry….and only producers can own membership
These fledgling miners are on the verge of bankruptcy. They don’t have the luxury of producing gold and silver then sit on it for years waiting for higher prices. How many businesses can shut off the revenues but keep the expenses going? Even the major producers couldn’t do this for long.
Gold is a busted bubble. It’s not going to come back. It has much further to drop. People invested in high cost producers or speculative developers are probably looking at BK 100% wipeouts. It’s just bizness.
I have no proof but in my opinion the large producers are in collusion with the bullion banks to keep the spot price on the Comex down in order to pick up the quality junior explorers on the cheap.
Remember Barrick shenanigans?
yes, and also Anglo
probably a few.
“Many companies will not be in existence within a couple of years unless …”
Doesn’t this explain precisely why the industry will not act together? The stronger will wait for the weak to fail.
Also, if a baker can be forced to sell to others in the Land of the Free, what makes you think miners can refuse to sell their product?
I’ll be surprised if mines in this country are not nationalized within my lifetime.
in the U.S. maybe, globally no.
Although I’m happy to send this letter to the companies I’m invested in, I see little chance of any effect. Some reasons are stated in previous comments. Sadly, the manipulated paper market rules and banksters own the industry.
Sorry to be off topic. Bill Holter’s biggest booster’s blog is no longer. The metals community is hoping Harvey Organ is OK. His many years of effort to stop the dishonest dealings in gold and silver by shining the light of his knowledge on the subject are much appreciated.
still trying to find out what happened.
Harvey’s report is here so bookmark it
Hopefully he it will continue here.
thank you rodmadman.
I believe it would be better for gold producers to bypass New York and London and deliver their gold to eastern gold futures markets where contracts have to be backed by gold and delivery made.
Harvey’s report is here so bookmark it
oops replied wrong place. see above
I am quite sure the miners would have been raising a stink long before now if they were losing the game financially. 70% of the silver mined is a small by product of metals that they mine. I am quite sure that they are handsomely compensated by the banks that support them for not raising a stink. Call it hush money if you will. As for the actual silver miners? I could only guess they might be very handsomely compensated. Just my theory but so logical that I can see no other reason for their lack of what should be utter rage over the manipulation.
Any thoughts on gold regarding this?
really? How “quite” is “quite? Think about what it is you are really saying…”trust me because you can trust me? The reality is that the miners do not have cohone #1 or anything after that. We have proverbially screwed the pooch for everyone to understand.
Just my simple way of thinking I guess. If you can walk right up and take the dogs bone without bark or bite, chances are he is getting fed plenty.
Produces 3.5 Million Silver Eqv. Ounces in Q3; Postpones the Sale of 934K Silver Ounces of Inventory
First Majestic Silver Corp. (“First Majestic” or the “Company”) is pleased to announce that total production at its five operating silver mines in Mexico for the third quarter ending September 30, 2014 reached 3,523,536 equivalent ounces of silver, representing a 5% increase compared to the same quarter in 2013.
Total silver production for the quarter consisted of 2,680,439 ounces of silver, relatively unchanged compared to the same quarter in 2013. In addition, 9,703,792 pounds of lead and 3,222,877 pounds of zinc were produced, representing an increase of 14% and 44%, respectively, compared to the same quarter of the previous year. Also produced were 2,781 ounces of gold, representing a 5% decrease compared to the third quarter of 2013.
Keith Neumeyer, President & CEO of First Majestic, states, “the Company’s primary focus remains to be cost cutting. Several successes have been achieved while many challenges still remain. As management gets accustomed to operating in a much lower silver price environment many efficiencies are slowly showing up in the business, however, often change comes slower than we wish. I would like to compliment management for their efforts, yet persistence is required in this daily challenge to achieve the highest levels of efficiencies possible”.
Maybe because of my missive, who knows? Whatever, they are withholding supply …a good thing!