What’s About To Implode Next Wednesdays with Andrew Hoffman:
– Collapsing mine production, exploding PM demand
– Yesterday’s and today’s articles
– Post Fed “no hike”
– Greek elections
– Plunging commodities! all-time low currencies!
– 75% of Americans are concerned about out of control government corruption.
– Over half of Americans fear their government.
This interview was hosted by Financial Survival Network.
Hi Andy
I am a big fan of what you have been doing.
I am in complete agreement with you on the poor state of the major mining companies, but I am having a hard time understanding your comment on Hecla being a bankrupt risk.
They have cash on hand of $192 million. In addition their free cash flow over the past 4Qs is $56 million after paying cap ex of $166 million.
Some where around year end they will bring silver production on line in Mexico from shallow high grade pits (30 oz/ton silver), using a leased mill, causing low cap ex, and over they next 2 years that will generate an additional free cash glow of $43 million. (Cash costs of $5.49 with low capex)
In case you have not noted it gold priced in Canadian dollars is close to $1500, due to the the strong U.S. Dollar. Many small gold mining companies like LSG are making high returns due to costs in cheap Canadian dollars, and low fuel prices .
Yes the majors are introuble with high debt loads, but companies like LSG have paid off its debt, and built up cash reserves while increasing production.
Best Regards
Bob DesRoches
Robert,
I do not follow (most) individual companies; and sometimes, by “bankruptcy risk,” I simply mean the risk of dilution to oblivion (debt and/or equity) to survive. However, all along (for years now), I have warned of risks of asset write-downs – which is the biggest risk of all to miners right now (aside from heavily leveraged ones like Barrick), especially for ore “resources” (/audioblog-79-whats-more-fraudulent-mining-resources-or-the-greek-debt-deal). When the write-downs occur – which at current prices they certainly will at the mandatory year-end reviews, many previously sterling balance sheets won’t look so sterling.
And given HL’s stock price movement, you can bet “someone” is betting on said write-downs.
a