Recent highlights from the Precious Metals sector:
1. Vista Gold (VGZ) announced on Monday that its delayed arrangement whereby it will spin off shares of a new entity named Allied Nevada Gold Corp. will finally close on May 10. VGZ had a breakout recently, so it will be interesting what happens to the shares of the two entities. I have a feeling that the Allied Nevada Gold Corp. spin off will be a success, since this entity will own VGZ's Nevada properties, which could be in high demand.
2. Barrick (ABX) announced the closure of its corporate hedging program, reporting a one time charge of $557 million in connection therewith. ABX will now be selling all its gold at spot prices. Barrick also raised its dividend by 36%. ABX's chairman and founder Peter Monk recently mulled the possibility of ABX's diversifying further into base metals in light of ABX's underperformance relative to other miners. It's hard to understand that logic however, considering that base metal miners actually have much lower P/E ratios than Gold miners. Though, it is true that they tend to be significantly more profitable. Maybe in the long run, the market will recognize and fully value that profitability. Obviously, when the biggest player in the industry closes out its hedges, that is a sign that industry insiders definitely expect higher Gold prices going forward. In that sense, this news is bullish. On the other hand, it also eliminates a further source of future buying so in that practical sense, it is also not bullish.
3. Mine workers launched a nationwide strike in Peru on Monday to demand better job benefits, but it was unclear to what extent the country's silver, copper, zinc and gold producers would be affected. This is potentially bullish for metals prices as Peru is an important metal mining country, though for now, the strike is not that significant and has only just started. Companies with mines in Peru include ABX, BVN, NEM, PCU, Swiss-based Xstrata, and local miners Volcan and Cerro Verde.
4. My buddy Dean sent me the following interesting article about Gold and other precious metals and gem stones becoming an
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