Goldcorp - I will close my under perform positive
August 11, 2008
– Comments (9) |
RELATED TICKERS: GG
Goldcorp remains an over priced pig. Their last financial reports were out last week.
Notice the co-production cost of gold production is skyrocketing. A few years back it was under $100/ounce and now it is over $400/ounce. That is due to the grossly declining grade of what they are mining. My link looks at costs with declining grade when all else remains the same. The quality reserves they once mastered have been replaced by garbage. There are other cost increases but the declining grade is enormous.
The full effects of the share dilution are finally showing up. I suppose they have been showing up since last quarter. Gold bugs complain about government printing money, but gold companies seem to print stock a lot faster than governments print money.
Look at the book value, the 6 billion created out of thin air. We've seen the effects of repricing inflated book values to true values, and I think that will eventually be coming for Goldcorp. You can not create $6 billion out of thin air.
Right now copper has had a strong price. Gold has had a strong price. Prices are strong. The results are a disaster. Prices are declining, expect more of what I wrote about on how copper affects them.
They are also so far behind their promises. When I wrote "How I Discovered the Gold Bubble," their materials said they expected to produce 2.8 million ounces of gold. They are at 2.2 million ounces roughly 1.5 years later. They were saying they were going to 3.5 million ounces, now their 2008 guidance is 2.3 million ounces.
I will close Goldcorp positive and I will get several times to close it and re-open it on the way down to below $10.
Pig stock.
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