Seeking Alpha: A Tough Mix For Kinross Gold Investors

The best thing I think I can say about Kinross Gold (KGC) is that this senior gold miner may be one of the better picks in 2014 for investors who believe gold prices will rebound. For those not so bullish on gold, the combination of high cash costs, limited production growth potential, and elevated political risk may well outweigh the benefits of substantially lower capex spending needs in the next year or two. Although these shares look undervalued today, I don't see enough undervaluation to want to be a buyer with my own money.

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A Tough Mix For Kinross Gold Investors

Investopedia: The Haunted Houses Investors Won't Enter

Depending upon your point of view, the financial markets offer either an endless variety of ways to make money or lose money. No one can follow everything, and the wise investor does not even try. So while many savvy investors have decided that they do not have the time, interest, or skills to approach certain areas of the market, others base those decisions on fear. So afraid are some investors, that they turn entire investment categories into something more like haunted houses than financial instruments. 


Gold
Writing about gold is a little like throwing meat into a hyena cage - good or bad, it's going to produce a ruckus. Few investment options seem to carry the emotional baggage of gold; its advocates often claim to own nothing else, while it detractors spare no scorn for it.

Why should investors fear gold? For starters, it produces no income. A gold mining operator like Newmont (NYSE:NEM) may pay a dividend, but gold bullion and gold ETFs like SPDR Gold Shares (NYSE:GLD) do not. While that may be a concern for investors who derive all of their income from their investment portfolios, gold is hardly unique in not paying dividends.


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http://stocks.investopedia.com/stock-analysis/2011/The-Haunted-Houses-Investors-Wont-Enter--GLD-NEM-BRK-A-MSFT-AMGN-RIG-PBR1028.aspx

Investopedia: Freeport Looking Shiny

Investors can easily lose themselves in the details of calculating PV-10, forecasting future inventory imbalances and interpreting drill hole data. But here is an alternative way to look at the mining sector - developing countries like China, Brazil and India need a lot of metal to develop their infrastructure and support their economies, and certain companies like Freeport McMoRan (NYSE:FCX) have both ample resources and attractive production profiles. While there is really no good way to completely tamp down the volatility that goes with commodity speculation, buying good companies at good prices seems like an approach worth exploring. 


Digging into the Fourth Quarter
Freeport McMoRan delivered another strong quarterly result. Revenue rose more than 21% from the year-ago level, fueled by higher price realizations for copper, gold and molybdenum. Freeport actually sold less copper (down 4% in pounds), but got nearly 31% more per pound for what it did sell. The same was true of molybdenum, while the company both sold more gold and got a higher price per ounce in the fourth quarter.

Freeport also managed to produce its ore more effectively in the fourth quarter. Overall consolidated costs came out to $0.53 per pound in the fourth quarter - down from $0.62 a year ago and lower than the company's full-year average of $0.79 per pound. (For more, see Copper Developments Continued To Heat Up In 2010.)


The link below will take you to the full article:
http://stocks.investopedia.com/stock-analysis/2011/Freeport-Looking-Shiny-FCX-TCK-RIO-BHP-VALE-TC-XSRAY0121.aspx

FinancialEdge: Who Stands To Benefit From QE2?

The markets have been all atwitter from the very first mention of the next round of quantitative easing via the Fed. As with any government (or in the case of the Fed, quasi-government) program, there will be winners, losers and unintended consequences. (For a closer look at QE, also check out Quantitative Easing: What's In A Name?)


All told, the Fed expects to inject $600 billion into the system, primarily by having the Federal Reserve Bank of New York acquire Treasury securities from primary dealers like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS) and Bank of America's (NYSE:BAC) Merrill Lynch. Although the precise details of the program may change as time goes on, the systematic purchases will likely have the most impact on the medium area of the yield curve.

The idea here is that the Fed says it wants to fight deflation and produce something on the order of 2% inflation. It is an open question as to where exactly the Fed is seeing deflation. True, housing prices are still dropping, but food prices are higher, gas prices are higher, electricity prices are flat-to-higher and so on. Nevertheless, a $600 billion program comes to almost 7% of the latest M2 money supply reading, so it will clearly have some impact on the economy and markets.

Please follow the link for the full piece:
http://financialedge.investopedia.com/financial-edge/1110/Who-Stands-To-Benefit-From-QE2.aspx

Will The Market Show Faith In An Aluminum Recovery?

In the metals market today, details matter. Iron ore giant Vale (Nasdaq:VALE) is near a 52-week high, as are major gold producers like AngloGold Ashanti (NYSE:AU) and Newmont Mining (NYSE:NEM); copper companies like Freeport-McMoRan (NYSE:FCX); and diversified mining giants like Rio Tinto (NYSE:RTP). (For background reading, see A Beginner's Guide To Precious Metals.)

Unfortunately, Aluminum companies are not feeling the love. Spot prices on the London Metal Exchange have recovered nicely from early summer lows, but aluminum giant Alcoa (NYSE:AA) is trading closer to the bottom of its range than the top. Will solid third-quarter results and improving underlying trends start a new move up in the stock, or will Wall Street stay in a "show me" mode a while longer? 


Please click below to continue on to the full piece:
http://stocks.investopedia.com/stock-analysis/2010/Will-The-Market-Show-Faith-In-An-Aluminum-Recovery-AA-VALE-AU-NEM-FCX-RTP-BA1008.aspx

Five Gold Ideas Off The Beaten Path

No matter what an individual investor may think about gold these days, there is no denying that it is a major topic of conversation. The SPDR Gold Shares (NYSE:GLD) is just one of several ETF options, and investors have been turning to funds, bullion, coins and miners of all shapes and sizes to make their plays on the shiny yellow metal that is once again so popular. (To learn more, see Why Gold Matters.) 

With such a significant interest in gold, it is difficult to find too many credible ideas that would really meet the standard of "overlooked" or ignored. Nevertheless, here are five ideas that investors may not always see in broader discussions of gold mining stocks. In particular, these are names that may attract the attention of larger miners looking to build their reserves through the checkbook instead of the drillbit.


To read the full piece, please go to:
http://stocks.investopedia.com/stock-analysis/2010/Five-Gold-Ideas-Off-The-Beaten-Path-GLD-ANV-NEM-AZK-IAG0916.aspx

Has Fluor Built Its Foundation?

Last week, we heard from Nucor (NYSE:NUE) and Steel Dynamics (Nasdaq:STLD), and both companies were pretty cautious about business conditions in the second half of 2010. Since both companies are leveraged to commercial construction, that is relevant. The engineering and construction industry, though, looks as though it might be building a base and perhaps getting ready to rebound.

Analysts seem relatively confident that capital spending is going to resume in the energy market, mining projects continue to go forward, and there is a general assumption that we are seeing the worst in the government-funded infrastructure business (so it will start to get better).

Interestingly, Fluor's (NYSE:FLR) stock tracks those steelmakers relatively closely, so who should we believe? Are the engineering companies (and steel) simply building a base for a second half rally, or are we looking at a sluggish environment for the next six months?


To read the full column, please go to:
http://stocks.investopedia.com/stock-analysis/2010/Has-Fluor-Built-Its-Foundation-FLR-NUE-STLD-NEM-FWLT-KBR-MDR-CBI0728.aspx

Australia Proves Taxing To Miners

The latest article on Investopedia:
http://stocks.investopedia.com/stock-analysis/2010/Australia-Proves-Taxing-To-Miners-RTP-BTU-FSUMY-ABX-NEM-FCX-VALE0506.aspx

I'll be very curious to see how debate in Australia shapes this issue. Mining is a major source of income for the country and Australia derives huge benefit from being a modern and mineral-rich nation relatively close to China. Here's hoping they don't strangle the golden goose. 

One of the biggest risks that go along with investing in mining stocks is the risk that sovereign governments will change the rules midstream. More than a few mining projects in Africa and South America have been canceled or curtailed by governments suddenly changing the rules, typically by tearing up contracts demanding a larger slice of the pie. Historically, Australia has been seen as a very mining-friendly country, but a recent proposal to change tax rules in that country has sent some major ripples through the sector.


The TaxAs part of a comprehensive tax policy review, the Australian government has proposed a new "resource super profit tax" of 40% that would be levied on companies with on-shore mining assets in Australia. In short, this tax would increase the effective corporate tax rate for mining in Australia to about 57%. Another way to look at it is that basically makes the government of Australia a 40% partner in all resource projects starting in the summer of 2012.   
For the full article, please go to: http://stocks.investopedia.com/stock-analysis/2010/Australia-Proves-Taxing-To-Miners-RTP-BTU-FSUMY-ABX-NEM-FCX-VALE0506.aspx