(links below)
From ZeroHedge:
A little over a year ago, we showed the average cost curves of gold and the cost per mine for one reason: with the forced selling in paper gold, extracting physical gold is increasingly unprofitable for gold miners.
And while some companies, those lucky few which have no debt on their balance sheet, have the option to mothball projects and wait for the lack of supply to catch up with demand and also price (at least in a world in which physical supply and demand still have some bearing on trading of paper gold) others, those who have creditors breathing down their neck, whose extraction cash costs are above the spot price and who aren't hedged, are essentially out of options.Things can't be going too well for Hambro the Younger either.
One such company is Russian gold producer Petropavlovsk, which a few years ago was one of Russia's biggest companies and whose Pioneer mine produced 314,850 oz of gold in 2013, and is one of the largest gold mines in the Russian Far East.
As Siberian Times reports, founded by Eton-educated Peter Hambro, Petropavlovsk was valued at more than $3 billion four years ago and was a potential candidate to move into the coveted FTSE100. But today the firm is now worth just $60 million and is in a perilous financial situation, with speculation it may even default on $310 million in convertible bonds in February.
A statement from Petropavlovsk said: 'The company confirms it is continuing to talk to its senior lenders, bondholders, other stakeholders and third parties in order to complete a holistic refinancing of the group’s outstanding four per cent convertible bonds due February 2015."...MORE
The old man did the right thing, selling forward over half the company's H2 production at $1408 back in 2013, but maybe shouldn't have used the money to develop a gold mine.
As to Evy, just after père got his hedge on we read "BlackRock’s Hambro: We Bought Gold"
On the bankruptcy beat I started repeating myself:
Apr 22
UBS: Gold Miners Aren't Minting It (GDX; GDXJ)
We're pretty negative on the group and probably will be until we see some juniors going bankrupt.
May 21
Gold: Do The Miners Still Have A Pulse? (GDX; GDXJ; DUST)
Shorting the miners is the highest probability trade we know of, with the Juniors in particular being at risk. We've been saying we won't be at the bottom until we see some bankruptcies and that hasn't happened yet....May 29
Junior Gold Miners Consider Cashing Out, Pursuing Medicinal Marijuana Opportunities
July 16
"Goldman Forecasts Lower Commodity Prices as Super-Cycle Ends"
Just as we expect bankruptcies among the mining companies to mark the bottom in gold we would expect front page human interest stories on the travails of the American farmer before the ags turn decisively....July 22
Signposts: New York, San Francisco Gold Mining Conferences Suspended
In October 30ths "Bear Market: The Junior Gold Miners ETF Is Down 84.56% (GDXJ)" we noted:
On Dec. 6, 2010 the Market Vectors Junior Gold Miners ETF traded at $179.44. Today it's at $27.70....Since then it has set some more all-time lows with the most recent being $22.34 on November 5th.
$23.95 down $2.09 last and going lower.
