3SOF

Last week the gold indices broke out - both the XAU and HUI have similar patterns and here is the HUI

(http://xs41.xs.to/pics/05325/1208hui.jpg)

They broke a 10 month trend line then came back to test it then shot up again. Gold is still related to the actions of the US dollar so if the dollar rallies then gold stocks will likely pull back. This looks now like this may be a extended multi-month move as so many gold stock charts have broken out or look close to doing so.

I like to pay attention to the top Bollinger bands and lighten up when a stock gets too extended. I keep many stocks on one trading page and if we get a day like yesterday when gold is set to move then I buy a basket of them or add to ones I have and day trade part to lock in gains as gold can move with world situations.

Here 10 stocks that have either broken out in the last several days or may be about to. A couple are silver stocks and they are not yet as strong.

The Nasdaq has been pulling back and may continue a while and if the correction picks up while gold is strong then many will run to gold for safety.

Here are some charts - they are not live charts so as of yesterday's close.

(http://xs41.xs.to/pics/05325/1008gss.jpg)

(http://xs41.xs.to/pics/05325/1208grs.jpg)

(http://xs41.xs.to/pics/05325/1208cde.jpg)

(http://xs41.xs.to/pics/05325/1208bgo.jpg)

(http://xs41.xs.to/pics/05325/1208ego2.jpg)

(http://xs41.xs.to/pics/05325/1208iag.jpg)

(http://xs41.xs.to/pics/05325/1208gbn.jpg)

(http://xs41.xs.to/pics/05325/1208auy.jpg)

(http://xs41.xs.to/pics/05325/1208vgz.jpg)

(http://xs41.xs.to/pics/05325/1208sil.jpg)

(http://xs41.xs.to/pics/05325/1208pmu.jpg)

Many of the stocks on this site are momentum related and stock are bought that are already extended. IMP for gold stocks unless yo are buying for a several month hold it is not so good to chase them. It is better to buy on pull backs. You can see that several of the stock here moved up then pulled back to test support and that is where it is best to buy. Pay attention to a shorter term chart of the HUI and or XAU and to the price of gold - chart below:

(http://xs41.xs.to/pics/05325/1208goldeod.jpg)

BTW - you can just play the price of gold with the ETF with the symbol GLD it trades at 1/10 the price of gold and trades like a stock so you can go long or short.

Also  - here are links to the components of the HUI and XAU for your quick check on news and prices.

http://finance.yahoo.com/q/cp?s=%5EHUI

http://finance.yahoo.com/q/cp?s=%5EXAU

And just for fun - there are sometimes real momentum plays in gold stocks also like USGL

(http://xs41.xs.to/pics/05325/1208usgl.jpg)

but it is not the norm and of course very risky. There are so many gold stocks now that look very positive so have fun and make some money.

A really great post!  <everything you need to know about gold> (applaud)  Thx Metro.  Good to see you around again.

Applaud this guy.. look at all this work and insight.  ;)

Nice work.  Applause.  Thanks.

Yes!

Big applause  :) :) :)

Here is a nice link for gold-diggers...

http://www.goldsheetlinks.com/goldsheet.htm

Metro,

Nice work put into all the info we need about Gold and the indexes.  A def. applaud.  You know your Gold.

That's what I love about this site, so many people with different strengths.  "One mans weakness is another mans strength".

That's what makes this different from all other stock sites.  

Saffey.

Metro, thanks for this info !!
;) applaud

Applaud metro. If Gold futures closes above 447 then we may see another run next week. At the moment they are at 451.40

Metro, have you bought some of them?
Thanks again for this informative posting

la-onda -

Yes I had many but I day trade often so as gold was pulling back I sold just to use that money some other things - I will buy back as soon as gold settles. The US$ is really at a support are so may have a little rally this week which may drop gold a bit since it is oversold.

I think gold will be higher at the end of the year and many of the stocks shown here will be good plays to hold a few months based on the charts of the dollar and gold and the stocks.

If I had no current use for my money I would have just kept many of these stocks and ride them through gyrations but I like to buy them on pull backs when I can to make a bit extra money.

Silver has not moved yet and they do not need to move together but it would signify a stronger metals market when silver can also rally. Palladium is the other metal I trade and in the USA stocks there are 2 main ones SWC and PAL

PAL had a nice break out and ran up above the top Bollinger band while RSI was above 70 so IMO a sell signal since the metal Palladium had not moved much. Anyway it has now gone back below a break out line but above another one so could be bought with a stop below the lower line - note how the MACD ws very strong on the move - a good thing to look for.

(http://xs41.xs.to/pics/05320/1208pal.jpg)

SWC had resistance at the 200-day EMA and fell back to support so also is at a place that could be bought with stop below support.

(http://xs41.xs.to/pics/05320/1208swc.jpg)

You need to keep and eye on Palladium prices - the chart does not look so good and the RSI has not returned to 30 but the price has returned to the trend line on Friday and is at the lower Bollinger band so worth watching for a bounce. If PAL and SWC hold they may   also be good longer tern holds as long as the Palladium price confirms the move. Buying as close as you can to support can be good in that if it breaks you sell and wait for another set up --- of course you risk an intra day shake out and being stopped out followed by a strong rally but money management is important to staying in the game. Better to miss some of a profit then to take a bigger loss.

BTW often gold stocks that start out higher at market open will give a pullback not to long after the open and the strength shown on the buying after the pullback can be a good guide to how strong the move may be. It just takes experience to judge that.


Here is the Palladium chart

(http://xs41.xs.to/pics/05320/1208palladium.jpg)

Metro, thanks again for this detailed answer and the additional information.
:D
I have decided to have GBN & PMU now on my radar (started a small position already);
updated charts for other board members:

updated PMU chart:
http://stockcharts.com/def/servlet/SC.web?c=pmu,uu[g,a]dhclyiay[dd][pb20!b50!b200][vc60][iup14,3,3!uh39,3!ul14!ua12,26,9!lb14!lc20][J38159858,Y]&listNum=13

additional PMU information:
http://www.pacrim-mining.com/s/FreqAskedQuestions.asp

Q: Does Pacific Rim need to raise money?

A: Pacific Rim is in a relatively unique position, being one of the few exploration companies with cash flow. Pacific Rim utilizes cash flow from gold production at its 49% owned Denton-Rawhide residual leach gold operation in Nevada to conduct its exploration activities, primarily at the El Dorado gold project in El Salvador, and to pay for general and administrative expenses. Pacific Rim is one of the few companies that have not financed in recent years, operating solely on cash flow and sparing shareholders' dilution.

Pacific Rim anticipates continuing to fund its exploration initiatives and G&A from cash flow for the foreseeable future, and is not contemplating a financing at this time. Readers are referred to this FAQ for a discussion of potential mine financing options for the El Dorado gold project.

updated chart for PMU & GBN:

PMU NEWS update:

Pacific Rim Mining Corp.: Andacollo Extension Payment Received
Thursday August 18, 5:55 pm ET


VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 18, 2005--Pacific Rim Mining Corp. ("Pacific Rim") (AMEX:PMU - News; TSX:PMU - News) has been informed by Trend Mining Company ("Trend") of its intent to extend the due diligence period related to its proposed purchase of Pacific Rim's Andacollo gold mine in Chile, as permitted by an amendment to the terms of the June 20, 2005 Letter of Intent signed by both companies. Pacific Rim has received from Trend a further US $300,000 to extend Trend's exclusive due diligence period for an additional 30 days. Under the amended Letter of Intent, Trend's remaining payments for the Andacollo asset will consist of: US $2.1 million upon closing; US $1 million within 12 months of closing and US $1.4 million within 24 months of closing, for a total purchase price of US $5.4 million.

Gold still had far to many commercial shorts from last week (and they are usualy correct) to play the stocks in general but some of course can move on their own.

I forgot to re-post the EGO chart as it trades in its own channel and yesterday hit the bottom again - one to watch for this nice behavior.

(http://xs43.xs.to/pics/05345/ego2608.jpg)

la-onda - on PMU a break with good volume above the trend would be my way to play this one but as of last week the commercial traders were still very short gold so I am just not even considering gold stocks until they start to cover some of those contracts.

PMU seems to have support at 0.55 so if I owned it I would sell if that support breaks



(http://xs44.xs.to/pics/05353/3008pmu.jpg)

thanks for the update & comments metro  :)

The US$ fell so gold rallied. The futures were right at the lower Bollinger bands and at a 3-month trend line so the perfect place for a move up.

All of the 10 stocks here had nice moves - days like these are at least good for short term trading - will wait to see if the break out holds to see for longer term.


(http://xs44.xs.to/pics/05355/0109goldfut.jpg)

an example of one break out is GRS

(http://xs44.xs.to/pics/05355/0109grs.jpg)


And BGO may try for  a break out

(http://xs44.xs.to/pics/05355/0109bgo.jpg)

I keep my favorites on one tradoing page so that when gold rallies I can get a basket of them and then add to the strongest ones

and EGO still in its channel so some can be kept with stop below channel and some can be traded with the swings.

(http://xs44.xs.to/pics/05355/ego0109.jpg)

I am not a gold bug,although I bought   a sizable(for me) position in VGPMX on 9/3/98 and held it since, as my WWIII investment...I am looking at GRS as a separate stock to hold at least a year for the following reasons:
Production starting within 6 months
Rich(and relatively cheaply extractable) reserves of gold and silver
Fairly stable government
Gold going above $ 475
Takeover target at a high price

Do you guys expect a price at or above $16.00 in a year????? :)

Gold Stocks revisited 


Gold stocks have had some very nice moves and a lot of break outs and it looks like time to stay long...will know better in a few days as it would be good to see how they perform on a first pullback as many of the stocks are overbought short term.

The NASDAQ and DOW are likely to have a decent pullback in the next couple of months and if that happens, often very speculative stocks that have been doing so well can fall rather quickly. If this happens there may also be a move into gold for "security"

The Fed meeting may effect how gold performs so pay attention as that comes next week.


First note three of the gold stock indexes and the break outs

GDM  (http://xs46.xs.to/pics/05374/1409gdm.jpg)

XAU       (http://xs46.xs.to/pics/05374/1409xau.jpg)

HUI   (http://xs46.xs.to/pics/05374/1904hui.jpg)

Then more importantly note how the weekly chart of this HUI to Gold ratio chart below has made a break out. This chart shows when gold stocks are outperforming gold itself so when it is going up you want to be in gold stocks. This is a longer term buy signal and could mean many months of moves in the gold stocks.

As long s this chart remains bullish then gold stocks can be held and added to on pullbacks. In the past when a bull gold trend took charge many of the stock doubled or more over the next 6 months or so and it will happen again but we can not be sure it starts now but it is looking good so far. Note how the moving average shown acted as support the last time the chart was going up - this shouldl also happen this time so you can use that indicator as a mental stop.



HUI to Gold Weekly (http://xs46.xs.to/pics/05374/1409huitogold.jpg)


You should be aware of the US$ as it still has a relationship to gold so if the dollar rallies then gold usually falls. The US$ is right now at the top of its channel and it could of course break out which could stop the gold rally for a time. Just be aware of this as if it heads back down again then gold stocks should continue to move up.

US Dollar   (http://xs46.xs.to/pics/05374/1409usd.jpg)

Here are the HUI and XAU weekly ration charts so you see one has broken up and the other not yet so we would like to see both above soon. These possible bull flags have been forming for  two years so a break out here can move a lot and for a long time.

(http://xs46.xs.to/pics/05374/1409huigold3year.jpg)

(http://xs46.xs.to/pics/05374/1409xaugold3year.jpg)






Now a look at some of the stocks of interest and decide which type you like as there are many nice charts.



PMU   (http://xs46.xs.to/pics/05374/1409pmu.jpg)


IAG  (http://xs46.xs.to/pics/05374/1409iag.jpg)     

 
MNG  (http://xs46.xs.to/pics/05374/1409mng.jpg)


BGO     (http://xs46.xs.to/pics/05374/1409bgo.jpg)




SIL   this is a silver stock and silver has not been doing well but this stock has.

(http://xs46.xs.to/pics/05374/1409sil.jpg)


AUY     (http://xs46.xs.to/pics/05374/1409auy.jpg)



VGZ     (http://xs46.xs.to/pics/05374/1409vgz.jpg)


DROOY      (http://xs46.xs.to/pics/05374/1409drooy.jpg)



EGO          (http://xs46.xs.to/pics/05374/1409ego.jpg)



KGC             (http://xs46.xs.to/pics/05374/1904kgc.jpg)


CLG   (http://xs46.xs.to/pics/05374/1409clg.jpg)


GFI  (http://xs46.xs.to/pics/05374/1409gfi.jpg)


USGL  (http://xs46.xs.to/pics/05374/1409usgl.jpg)



Also this is a palladium stock with a break out point shown as it is also above the 200 day EMA so probably a nice place to get in as it breaks with volume.

SWC - palladium   (http://xs46.xs.to/pics/05374/1409swc.jpg)

The thread is here:

http://www.3stocksonfire.org/trading/index.php?topic=2215.new#new

I am noting it here also as this may be the start of a longer term move in gold stocks. It may take another few days to confirm this and watch how they do on pullbacks but if the down trend is broken now then the new trend could last for many months so worth checking.

So many nice looking charts I bought several and they all went up -- thanks looks like some need to pull back a bit now

This little one had a super move. Tried a break out 2 days ago and failed - then pulled back to 9-day and then super break out on nice vol. It is typical that the major ones like NEM make moves then the smaller ones but the smaller ones often make big % gains. AUY DROOY PMU all did well so now a pullback on some should take place.


(http://xs46.xs.to/pics/05375/1509mfn.jpg)

David is gonna buy DROOY.

I left these one off - they are low vol stocks but at trend lines with increasing volume

(http://xs46.xs.to/pics/05375/1509cgr.jpg)

(http://xs46.xs.to/pics/05375/1509gbn.jpg)

You can buy a basket and sell parts off as they get over bought

amazing day - I have 69 gold/silver/palladium stocks on my screen and 66 were up today USGL the best with 17% but all good. It is best to buy break outs of trend lines or horizontal on heavy volume or pullbacks in most cases as extended gold stocks generally do not keep going as often as say a penny stock might. There is and will be a lot of hype about buying gold stocks now for a while and on pullback days when people forget or think the "fad" is done will be times for nice buys.

Quote from: stout7735 on September 10, 2005, 09:48:13 PM
I am not a gold bug,although I bought   a sizable(for me) position in VGPMX  on 9/3/98 and held it since, as my WWIII investment...I am looking at GRS as a separate stock to hold at least a year for the following reasons:
Production starting within 6 months
Rich(and relatively cheaply extractable) reserves of gold and silver
Fairly stable government
Gold going above $ 475
Takeover target at a high price

Do you guys expect a price at or above $16.00 in a year????? :)

Hecla Mining (HL) began to follow the price of gold mining companies on friday...Market Watch stated silver prices may  go as high as $50 per ounce(relatively more %  than gold)...
GRS will produce primarily silver like Hecla,but has  much richer veins....What do you gold bugs think a good entry price for GRS is????

Stout  - on GRS the chart shows a clear trend line and support near the 9-day EMA so pullback to there seem  good.


(http://xs47.xs.to/pics/05381/1609grs.jpg)

And HL broke out of its trading channel on very strong volume as silver is perking up. Many new break outs and some are over bought short term but can be bought on pullbacks for what appears now as a long term rally.
(http://xs47.xs.to/pics/05381/1609hl.jpg)

RANGE broke out on the horizontal and trend line today - very bullish


(http://xs47.xs.to/pics/05381/1909range.jpg)

and SMXMF penny stock gold broke trend

(http://xs47.xs.to/pics/05381/1909SMXMF.jpg)

Metro,
Thank you for your expert advise...I began buying GRS today... :)

Gold stocks generally do not act like "regular" stocks. Many stocks are good to buy on break outs with high volume and run them for a a nice trend but gold stocks are usually better ones to buy on weakness - on pullbacks then sell on days like this. I mentioned shorting HMY today in pre market and the stock looked great but too many gaps ups. As long as the gold ratio charts remain positive though the gold stocks will be ok and have some nice moves so it is not bad to hold - just have to wait during retraces. Many people like to buy a position and sell some of it after big rallies then keep part and then buy the other part back on pullbacks.

Also if buying a pullback and you do not want to wait for a "known" support then you can buy a partial position and add to it if the stock pulls back more of if it bounces.

If gold acts like it looks like then this rally will last for months so plenty of opportunities. Gold stock are not good ones to chase.

wht?

PMU downgrade:

PMU: BMO Nesbitt Cuts to Mkt Perform from Outperform; Analyst Notes

Tuesday , September 20, 2005 08:11 ET

Issuer: Pacific Rim Mining Corporation (AMEX: PMU)

Analyst Firm:  BMO Nesbitt Burns Securities Inc.
Ratings Action: DOWNGRADE
Current Rating: Mkt Perform (from Outperform)
Analyst Comments: The firm is downgrading PMU due to the longer time line for progress at their El Dorado project.


I´m holding GOLD, CDE and DROOY ;)

RANGE pulled back to the trend line and my favorite 9-day EMA today so bought there and it has run up so far. It is still below the 20-day EMA but looks good to go.  I also got AUY today as it was back to support

(http://img365.imageshack.us/img365/3249/2009range4xm.jpg)

DEZ is another that has pulled back close to support with 9-day and short term trend line just below


(http://img172.imageshack.us/img172/4719/2009dez4dv.jpg)

Gold futures are pulling back some today  YG05Z  and the 9-day is at 464 and 454 solid support. Many stock are down 3-5% and near their recent support areas. Ones like AUY that made a high of 4.70 is back to 4.20 and has support at 4.17 so I like to take partial positions and they see - if they drop more I can add some more or if they have increased volume I can sell for a tin y loss if need be.


Another nice thing about buying on down days is you have time to watch the stocks a while and puck entry points near support.

Like BGO that has had support at the 9-day EMA or CAU at its short trend line at 0.72


NEM seems to closely track the sector so watching a 10 min chart of it can give you an idea of short term moves to come.

This is the gold futures December contract - the one currently the front month. today it pulled back to the 9-day and bounced a bit as expected but with the weekend weather unknown it is hard to say - it may rally form here next week - expected but it could fall to the are of the two blue lines. Anyway several gold stock are now at  decent buy points

(http://xs47.xs.to/pics/05385/decgold2309.jpg)

An example of the type of place I like to buy is with CLG - yesterday it dropped to the 50-day EMA and also the bottom of its trading channel so I bought for a low risk entry as if you buy close to support you can sell if it does not hold and loose little.

http://tinyurl.com/dsr99

IT is similar to the EGO chart that I have shown and traded many times buying the bottom of the channel and selling the top... one day it will break out of the channel and then I will buy and hold.

http://tinyurl.com/cz7gh

I agree that the current pullback is a buying opportunity and if it establishes a base at or above $450/oz,it is a bull signal...Greenspan's increases in interest rates will continue,but not to prevent inflation...I believe he is desperately trying to support the dollar in the face of Japan's and China's reduced  purchases  of U.S. treasuries...The smart money will ignore interest rate increases and buy gold miners...The interest rate increases are doomed to fail in supporting the dollar due to runaway personal debt and government deficit spending...It is dollar devaluation that will enrich the gold bugs...

This is a fund on the NYSE and it is heavily weighted with Sough African gold stocks and you can see the break out on the weekly chart.

One thing to note is when the South African Rand is weak compared to the US$ that this is good for SA gold stocks. They sell in dollars but pay most of their bills in Rand so they make more profit on a weak Rand to US$. That is why some days you see stocks like HMY  AAUK AU DROOY GOLD and GFI move more or less then other gold stocks.

Gold had a pullback today but nice bounce. The comercial traders are still net short a pretty high amount so more pullback may come.


(http://xs48.xs.to/pics/05391/2609asa.jpg)

Gold has been pulling back and it is near the break out price so if this rally is going to continue then we should see a reversal.

If playing the futures the the price is higher by $2.80 (The December time difference) so the point would be 497.67)


(http://xs48.xs.to/pics/05393/2709goldeod.jpg)

DROOY, nice consolidation on low volume - lock and load

Gold did move up but I would rather see it to to the break out point just to get that taken care of. It is of course not needed.

Most all golds stocks up and many have flag formations or bounced at 9-day EMA. I like to buy at support as it is lowest risk short term. The ratio chart here shows that gold stocks outperforming the metal and it is also in a nice flag pattern.

As long as this stays above the trend then gold stocks look good to go.

(http://xs48.xs.to/pics/05393/2809ratio.jpg)

hi metro,

you seem like the only gold bull round here right now, as David has sold out of his entire gold position for reasons that are not entirely clear to me.  i was of the opinion that 3SOF was long term bullish on gold ???

Now I understand that David has to follow his technical game plan on his trades, and that DROOY broke his trendline, but I am in at $1.50 still.  Your consolidation range is pretty wide there - do you see it bouncing around here for a little while?  If so, I may try to sell in the mid-1.50s to buy back lower at arround 1.40, but given that gold looks to be holding suppport, do you think we could see a run from here in the short term?

I know, lots of questions but I'm new to gold, and understand that gold stocks trade a little differently than others, but you seem to have this sector nailed pretty tight...

cheers for your insights  ;)

ScottishTrader -

Gold is in a bull market that started in 2001 and it still has not returned to where it was on 1983. The rally may last many more years so all depends on your holding period.


This chart shows the last 5 years and note that the 65 week moving average has given support on each pullback. And note the recent break out.

(http://xs48.xs.to/pics/05394/2809gold.jpg)

You may see that stochastics do not look very reliable at pointing to the action as often when it was topping above 80 the price went up for weeks more. But the MACD has been a good tool - see below.

In the shorter term there may be some topping in a month to 6 weeks.

The gyration of gold are not so easy to predict as so many issues effect it. The two right now that are of concern is the current rally in the US$ as it may go to 90 cent area and also the commercial traders have a high short interest in gold at the moment - maybe they will just keep adding contracts as gold moves higher. Those issues are there but the charts still look very good.

One thing is the MACD on the gold chart has been accurate at predicting pullbacks and now it suggests a pullback is to come.

http://tinyurl.com/dg6zp

I suggest diversity in your metal stocks holdings and taking some profit on rallies due to the question about the shorter term. I have for years found it better to buy pullbacks and not break outs in gold stocks. One I sold  some of yesterday are SA and NXG and the stocks look great but when they go above the top Bollinger band it is nice to sell into strength while other are buying. I like to buy when other are selling. Other gold stocks that made new recent highs yesterday include FNX LIHRY NEM  OZN PMU RTP SSRI . A god indicator is to use the NEM chart as it often is a good indicator of other gold stocks.

The 9-day is often a good place to buy - like CDY yesterday nice bounce from there. Then if you are a short term trader just sell the stock if the 9-day does not hold. There are many strong stocks consolidating near their 9-day and in uptrends that have pulled back on lower volume.

In regards to DROOY remember that as a South African company its stock price will fluctuate with the price of the Rand in comparison to the US$. On the long term chart is shows it has been a weak stock while gold has rallied for 5 years though it is now back in a channel
http://tinyurl.com/an77v

Compare that chart to one of CDE that instead over the last 5 years is up 700%. I like to buy the stronger stocks

http://tinyurl.com/aqsjr

and look at the longer term chart just to see what could happen if gold does a good job in the years ahead -

http://tinyurl.com/bdfhm

NXG and PMU so far the top gainers and both were break out patterns as was GFI so some partial profits can be taken of stops moves up  only for short term traders when the candles go above the top band - most gold doing well today while gold itself only up $2

the HUI and AUX made 50 week highs today

I guess I will start a thread at some point in the premium service section instead of keeping this going here.

hi metro,

thanks very much for your overview and excellent thread on gold.  I pulled out of my gold positions this week to focus on some energy plays, but appreciate your analysis and will keep a close eye on it in future.  I was in DROOY and CDE last week, but had to sell both for small losses.  Will look for at least 1 best in breed gold stock to run me through to next year.

Again, applauds for your excellent work on gold - I hope it continues to go well for you.

ScottishTrader

Gold has just been consolidating but many gold stock have pulled back. This chart is a ratio chart so it shows when the stocks on the HUI are doing better then the price of gold. It is only updated after the close each day - we hope it will get back to the moving average and trend line.

You can always make partial buys on stocks that are at support and add if they do fall a bit further. Ones like CDE bounced of the 50-day today at 3.88 and AUY is right on it. BGO bounced at the lower Bollinger band.  One just has to go through your charts and pick ones that have pulled back on a bit lower volume and are near support. Most should be good long term holds now. NXG looks good also


http://tinyurl.com/8e2e8

Was a good week for gold with a early week dip then back to highs. Now there is "room" again under the Bollinger bands for it to move higher

http://tinyurl.com/89haz

Personally I like the congestion often during congestion in a bull trend gold stocks can rally 2-3 days then pullback the same so I like to buy for s day or two then when they rally sell some. One day the move seems likely that they will move much more in a few days.

Some South Africans like HMY are back near recent highs as the Rand is weak so makes them more profit.


For low priced ones Watch AGT to see when it can beak back above sell off trend line that is just above the 9-day - CAU is close to doing that now. PMU has stayed in tight range - DEZ will have a break out at 2 but watch the volume - OZN slow mover but pretty steady - MFN nice bull looking flag watching for break above trend at about 5. CEF made new break out Friday. GFI similar to several as it is nice consolidation. IN this Gold bull market I think buying weakness is better then buying strength as then you can sell some as they get overbought if you also like some shorter term trades. If you own a collection then you can ring the sash register every few days on some and put that money into other that are a bit weaker on lower volume.

Silver broke out of its 9-month range to a new year high last week so good to keep an eye on ones like CDE HL PAAS SSRI SIL and WTZ

(http://xs50.xs.to/pics/05411/silver0710.jpg)

Hi Metro,
hope everything is fine with you.
may I ask you about your Silver comments?

Silver seems to be just for a BO...

Whats your opinion about SLW & MGN?

If you compare your list of "Silver" stocks, which one would be the most interesting one (just your opinion)?

cheers
Oliver

Hey metro, would appreciate your take on today's gold action.

Cheers and thanks for all your input!

BGO made nice channel break out today

(http://xs62.xs.to/pics/06015/bgo050106.jpg)


http://tinyurl.com/dwcz8


Many gold stocks have ben just great - EGO as an example

It should be a very good year for gold...adn gold stocks -

It has been 5 months since 10 stock charts were posted and they were not all buys yet but all were near break outs.

Just thought I would post results anyway if you had bought the 11 stocks and kept them even if they went down.

none have doubled since then but many will - though several did double in 2006.

10 of the 11 made gains and the best AUY with 82% but several did well.

(http://xs62.xs.to/pics/06016/goldgains.jpg)

Over the next years commodities should remain very strong and you can hold a collection in a long term port and likely do quite well.

Any pullback in the price of gold can be a buying opportunity for gold stocks. The main support long term of gold  is the 65 week moving average and is now at $446. Hard to think it would pullback to there but in time it will likely test a higher level of the 65MA.

Most expect a general market correction this year the the 4-year low if it comes will be in Oct-Nov area and that could set up a super rally into winter 2007 to end the bull market.

This is only more interesting speculation then useful but that is what many chart indicators say. Regardless we can only play what it really happening and now we know the gold has broken out and many countries will be increasing their gold reserves and more will likely follow this behavior. These things are not quick event but can take many years to unfold. Gold stocks in general except ones like NEM are rater illiquid  and the general public plays with dabbles with them. In the coming years at some point in time the price of gold will get high enough that it will we be very popular and then there will be some very big moves.

Here is a monthly chart of gold and you can see that the break out is recent and has plenty of room to bun and even a measured move takes it above $700. It is getting extended now so hopefully a pullback. But for 401K type holdings gold is  a good one.

(http://xs62.xs.to/pics/06016/15goldch.jpg)


Live chart
http://tinyurl.com/bmeco

If you cannot or do not like to short stocks when a market correction comes there will always be some things going up. Gold or other commodities and other markets. Japan had a huge move this past year but is just coming out of a very long bear market and is looking very good with the closest target 20800. You can play it with ETFs like EWJ or small cap fund JOF or  Profunds Ultra Japan fund, which moves about 200% relative to the Nikkei. I am sure there are several ADRs also in the USA for Japanese companies.

(http://xs62.xs.to/pics/06016/nikk060106.jpg)

Live chart

http://tinyurl.com/eykjt

Several brokers now allow you to buy stocks in other markets. I use Interactive Brokers and trade the Sugar futures on the LIFFE market in England. You can "play the market" almost around the clock - ha -

One day I will post some more gold charts. There are still many that may double or triple in the coming years.

It is a pleasure to read your posts, metro.

Thank you for sharing.

Of the gold stock you mention, I only hold GSS. I regret selling GG, and might buy it back next week - or maybe GOLD.

I check the following from time to time:

http://www.goldsheetlinks.com/goldsheet.htm

Quote from: cumulina on January 07, 2006, 01:31:08 PM
It is a pleasure to read your posts, metro.

Thank you for sharing.

Of the gold stock you mention, I only hold GSS. I regret selling GG, and might buy it back next week - or maybe GOLD.

I check the following from time to time:

http://www.goldsheetlinks.com/goldsheet.htm

Great link!  Looks like quite a few plays in metals....anyone have a few in mind for this week? 

I bought AUY.  (Actually YRI.TO because I like the TSX).

Great prospects for the future (750,000 OZ by 2008!) and they are already making a ton of cash (they are in the transition from break even to profit making).

Do you DD, but out of all the Gold stocks, I have AUY as my long term hold (it's been on a tear, but I still think it's undervalued!)

Do not think have posted this chart in a while - many golds are extended and they may get more so but would love to see gold pullback to the bottom trend line and moving average or at least the gray line. Have not seen MACD lower buy signal for a year and has not hit moving average since August so a pullback could be very nice.

(http://xs63.xs.to/pics/06022/gold100106.jpg)

live larger chart

http://tinyurl.com/eyxzz

KRY been good

(http://xs63.xs.to/pics/06022/kry1001.jpg)

Live chart

http://tinyurl.com/cpdna

AGT doubled in last few days

(http://xs63.xs.to/pics/06022/agt100106.jpg)

I point it out as it can be good to look at some small ones that broke a trend line or other resistance as right now many small ones are making nice moves

Little uranium stock also nice did a high volume break out

URIX

(http://xs63.xs.to/pics/06022/urix1001.jpg)

Live chart

http://tinyurl.com/d5lxc

and do not forget copper

CUP -- pulling back and may become a buy near trend line and moving average

(http://xs63.xs.to/pics/06022/cup100106.jpg)

Live chart

http://tinyurl.com/7m63d

All of these are at or near break outs. Golds are not always as good of a break out play as the price of gold is a factor but if volume if good on a break out then play away.

I am in a rush this morning and copied the html link instead of the picture link by mistake so you will have to open each one as I do not have time to redo at the moment

gg
http://tinyurl.com/ohu6r

cbj
http://tinyurl.com/m7alc

nxg
http://tinyurl.com/rhcuz

usgl
http://tinyurl.com/nz2vu

auy
http://tinyurl.com/oe8rv

nto
http://tinyurl.com/naq85

rno
http://tinyurl.com/pwat8

gbn
http://tinyurl.com/phoeo

mmk
http://tinyurl.com/qduap
(http://tinyurl.com/qduap)

Gold pulled back $5 today but USGL did 11%

I forgot to put PAAS on the list - it is silver

http://tinyurl.com/hygbr


(http://xs71.xs.to/pics/06101/paastease.jpg)

I have never seen a day when so many metal plays were at break  out so here is another I forgot to put on list and it broke

URIX  Uranium

http://tinyurl.com/lu4rm

With gold dropping $10 it hit all the metal stocks though USGL was a nice 11%

anyway with break out setups it is not so important as the setup are still there just waiting to be played when the time is right - jsut set alerts and wait...

So far URIX been to one that broke out very nicely as Uranium hit $40 - USEG also took off and has a level near

GBN at cup handle bo again

and MMK
NTO
USGL
AUY

all similar patterns

Gold has been in a long term bull market for a long time and likely has years to go. The biggest money is made by just holding it but for trading it is great to buy on pullbacks. Some like to buy on break outs though or pullback to support after break outs. Whatever is your preference here are about 20 charts from which you may select. I keep a list of 5 - 8 of my favorites and on days like yesterday I go full margin (4X) by adding those for maximum gains. I think most portfolios should hold some precious metals as they are going up and that is the point. Most of these stock have at least doubled since autumn and no trading was needed. I cannot made images of them all but here is a list and they all have annotations. I would buy most of these for my mother without worry...though stops of course for company specific problems.

AUY at a new bo  http://tinyurl.com/lbgqa
BAA near bo at 11.50    http://tinyurl.com/l723j
BGO near new bo - but note how best gains on this are buying pullbacks (for short term trades) http://tinyurl.com/fuq58
CBJ just bo at 3.28  http://tinyurl.com/gqgwq
CAU broker triangle and pulling back to it and the 200-day http://tinyurl.com/h83ea
CEF near bo at $8  http://tinyurl.com/k3uq5
CDE extended http://tinyurl.com/kessq
CLG near bo at 3.80  http://tinyurl.com/gfzu5
DEZ at bo $5.50 http://tinyurl.com/g896d
DROOY Broke trend huge volume and near resistance http://tinyurl.com/gmsku
EGO recently broke out of bull flag and would wait for gap to fill http://tinyurl.com/jgsqr
GRS  at bo $18.60 http://tinyurl.com/z63g9
GRZ uptrend bo would be at $6.58  http://tinyurl.com/g6fxf
GBN Just bo at $1.97  http://tinyurl.com/gvwhk
MNG sitting at bo line  http://tinyurl.com/z9os5
PAL  - palladium at bo  http://tinyurl.com/jrqtf
RNO broke  triange - pretty http://tinyurl.com/k9daw
SA also broke triangle   http://tinyurl.com/gre2p
SLW been one of the strongest silver stocks with a staircase  http://tinyurl.com/g969c
TRE  gapped above triangle http://tinyurl.com/j36f9
VGZ just bo http://tinyurl.com/glvhv

Good job metro! <applaud>
what are you favorites of this list, technically speaking? thx

It has been 8 months and thought I would post the gains so far of these 12 stocks


          Buy      Now          Gain
GSS    3.44    3.42        0%
GRS    7.62    16.59        117%
CDE    4.19    7.37        75%
BGO    2.6    5.28        100%
EGO    3.17    5.26        65%
IAG    7.52    9.8        30%
GBN    1.01    2.17        114%
AUY    4.1    11.2        173%
VGZ    3.97    8.08        103%
SIL    14.5    25.35        74%
PMU    0.64    0.85        33%
USGL    2.15    8.05        274%

The average gain so the total gain for the portfolio is 96.5% - pretty good for 8 months.

Many of the companies make no profit and ones that do may have PEs of over 100 so they seem to me overbought. In time as gold moves higher in the coming years the companies will start making profits and as their profit and stock prices rise the PE will get much lower.

For now though it would be good on some to set stops then buy back later. For real long term of course this is a multi year and maybe decade bull market but it is nice to take some profits.

The HUI was at 217 and now at 385 so up 77%

Nice chart on SIL

http://stockcharts.com/h-sc/ui?s=SIL&p=D&b=5&g=0&id=p59191861522

SIL still moving up.

Gold is poised to make a major move UP or Down...Don't ask me which direction...I doubt anyone knows... ???

Press Release Source: Stillwater Mining Company


Stillwater Mining Reports Third Quarter 2007 Results
Monday November 5, 3:00 am ET


BILLINGS, Mont., Nov. 5 /PRNewswire-FirstCall/ -- Stillwater Mining Company (NYSE: SWC - News) today reported a third quarter 2007 net loss of $11.1 million, or $0.12 per fully diluted share, on revenues of $163.1 million. The 2007 third quarter loss compares to net income of $6.9 million, or $0.07 per fully diluted share, on revenues of $180.8 million in the third quarter of 2006.


Results for the quarter and the year were affected by lost production associated with a seven-day strike at the Company's Stillwater Mine and Columbus processing facilities and unusually high miner attrition in 2007 primarily related to a first-of-the-year change in work schedules. The Company's mines produced about 128,600 ounces of PGMs during the third quarter of 2007, as compared to 151,300 ounces produced in the third quarter last year.

For the first nine months of 2007, the Company reported a loss of $14.6 million, or $0.16 per fully diluted share. This compares to the first nine months of 2006, when the Company reported net income of $5.1 million, or $0.06 per share. Earnings for the first nine months of 2006 included $6.9 million of profit from sales of the palladium inventory received in the 2003 Norilsk Nickel transaction. That sales program ended during the first quarter of 2006, and accordingly, there was no comparable earnings contribution in the first nine months of this year. Other factors contributing to the nine-month loss include somewhat higher costs for materials and power.

During the second quarter the Company entered into negotiations to renew the contract with its union workers at the Stillwater Mine and Columbus metallurgical operations. Following a strike in early July, the union membership approved a new four-year labor agreement. In addition to strike losses, productivity also declined during the negotiating process. The new labor agreement provides for an immediate 3% wage increase for miners and a 4% increase for other employees as well as wage increases in subsequent years of the agreement. Following the strike, operations resumed in an orderly manner and production has subsequently returned to normal levels. Production at the East Boulder Mine continues to be challenged by a difficult transition from bulk mechanical mining toward more selective mining methods.

The lower third-quarter 2007 production was partially offset by slightly higher average sales realizations on the mined ounces -- $499 per ounce in this year's third quarter, up from $492 in the same period last year, the result of higher prices and the reduced impact from platinum price hedges. Platinum hedges dropped to 23,500 ounces in the third quarter from 28,000 ounces in the second quarter. Hedges fall away completely over the next three quarters -- 20,500 ounces in the fourth quarter, 9,000 ounces in the first quarter 2008 and 6,000 ounces in the second quarter 2008. At the current platinum price of $1,440, results in 2008 would benefit by about $25 million over those in 2007.

The Company's smelting and refining facilities in Columbus, Montana process mined concentrates and recycle catalyst materials received from third parties. Including material tolled for others, the Company recycled a total of 98,600 PGM ounces of platinum, palladium and rhodium through the smelter and refinery during the third quarter 2007, up 9.2% from the 90,300 ounces recycled during the same period last year. Sales of purchased recycle material declined sharply however, to 70,300 ounces in this year's third quarter from 96,000 ounces in the same period last year, in part because tolling activity has increased this year and also because of the favorable timing of inventory flows into last year's third quarter. Recycling activities contributed about $7.9 million to the Company's operating margin (before corporate overhead and financing charges) during the third quarter of 2007, compared to $10.7 million in the third quarter of 2006. The reduced performance this year is primarily attributable to the lower PGM volumes sold, and, again, to the timing of inventory flows in last year's third quarter, partially offset by this year's higher PGM prices.

Describing the current market environment for platinum group metals, Francis R. McAllister, Stillwater Chairman and CEO, said, "During the past several months, we have seen very strong markets for both platinum and palladium. Platinum, in particular, traded as high as $1,457 per ounce recently, an all-time record, and palladium has traded around $370 per ounce in recent weeks. While undoubtedly speculative interest plays a role in these markets, there appear to be some fundamental supply and demand factors at work here, as well. Production of these two metals is relatively fixed at about 7 million ounces per year each, plus a small amount generated from recycling and occasional sales, particularly of palladium, out of government inventories. Several key PGM producers have announced recently that their production this year will fall short of earlier estimates, putting pricing pressure on these markets. Demand for both platinum and palladium is driven, first, by applications in automotive catalytic converters, followed by jewelry demand and then by various other specific industrial requirements.

"Industry reports suggest that about 51% of platinum demand and 49% of palladium demand derives from catalytic converters. Conventional wisdom in recent years has been that modern catalytic converters use much more palladium than platinum (along with a small amount of rhodium), so at first this outcome seems a little surprising. However, lost in all this is the very strong growth in high-performance diesel engine technology in recent years. Over 50% of the automobiles manufactured in Europe this year will be equipped with quiet, smooth-running, economical diesel engines. In the U.K., 70% of BMWs sold this year will be diesel-powered, so these engines are clearly finding their place even in the luxury sector -- suggesting diesel power is not just more economical, it is emerging as a preferred technology. Each of these diesel vehicles will be equipped with a catalytic converter and particulate filtration. Because of the lower exhaust temperatures of diesels, these diesel catalytic converter systems are primarily a platinum application, requiring about twice as much PGM catalyst by weight as the average gasoline- fueled car. This move toward diesels has been a powerful source of increased demand for platinum -- in a platinum market that does not have surplus capacity available.

Mr. McAllister continued, "Of course, with the very wide price disparity between platinum and palladium, there is a lot of economic incentive to find ways to substitute palladium into these diesel units. That appears to be starting to happen, with manufacturers reporting success in replacing about 25% -- and in some cases closer to 40% -- of the platinum in these converters with palladium. However, this new technology is only now emerging, so its effect on PGM markets is not yet fully evident. What is clear is the limited supply of all these metals (including rhodium) in a growing automotive market.

Regarding the Company's third quarter 2007 operating results, Mr. McAllister commented, "Mine production in this year's third quarter, at 128,600 ounces, was well below plan and also well below the 151,300 ounces produced during the third quarter last year. Breaking this down further, Stillwater Mine's third-quarter production decreased by about 23,800 ounces compared to last year, while East Boulder Mine production was approximately 1,100 ounces above a year ago, although below plan. The financial result of this production shortfall was a loss of about $11.1 million for the third quarter of 2007. Obviously, the third-quarter labor issues and related productivity challenges, taken together, overwhelmed the benefit of any strategic progress the Company made in the quarter. The following provides some perspective on the difficulties the Company faced in the quarter, together with a sense of our strategic direction.


    "Reiterating what we faced in this year's third quarter:
    *  We began the quarter with contract negotiations in progress covering
       our represented employees at the Stillwater Mine and Columbus
       processing facilities.  The disruption caused by the negotiations had
       already reduced mine production at the Stillwater Mine in June.  A
       draft labor agreement, finalized in early July and endorsed by the
       union negotiating committee, was ultimately rejected in a vote of the
       union membership, who then went out on strike for seven days.  Because
       production takes about a month to flow through into earnings, both July
       and August earnings were negatively affected by this lost production.
    *  As we discussed last quarter, a workforce schedule change at the
       Stillwater Mine implemented near the end of the first quarter of 2007
       resulted in significant employee attrition during the second quarter.
       This higher rate of employee attrition dropped back to a more normal
       level late in the third quarter.  However, the employees who left
       during the second quarter included some of our most seasoned miners,
       and as a result the overall average experience level of our Stillwater
       miners has fallen.  The remaining workforce is performing well and
       gradually closing this experience gap, but productivity at Stillwater
       has suffered in the interim.
    *  At the East Boulder Mine, a major transition is under way, converting
       much of the mining there from entirely sublevel extraction to include a
       mix of other, more selective mining methods.  This is a complex
       changeover that involves new skill sets among many of our miners and
       technical people, as well as adjustments to the developed state of the
       mine.  The implementation is progressing well, but at the expense of
       overall productivity.  Looking forward, we will keep the focus at East
       Boulder on quality of operations.
    *  Our recycling business performed well during the third quarter,
       although earnings were lower than in the same quarter last year.  The
       third quarter of 2006 had included the benefit of inventory flows that
       in effect shifted a portion of the material cost into the second
       quarter, benefiting the third-quarter results accordingly.  The PGM
       recycling business remains highly competitive and some aspects of it
       are constantly in transition.
    *  Finally, despite record-high prices for platinum, much of our
       third-quarter mine production was constrained by long-standing forward
       pricing hedges that have fixed a large portion of our platinum
       realizations at a price several hundred dollars per ounce below market.
       These hedges will roll off over the next several months, allowing our
       platinum realizations to more closely track the market.

"Regarding the Company's full-year production outlook, several months ago we announced revised 2007 production guidance in the range of 555,000 to 585,000 ounces, taking into account the strike during July and various other operational challenges. Based on a preliminary review and subject to adjustment, mine output for all of 2007 is now expected to be approximately 550,000 ounces.

"The Company's total cash costs per PGM ounce produced(1) averaged $346 in the third quarter of 2007, much higher than the $245 in last year's third quarter. Year to date, total cash costs per ounce have averaged $324 per ounce, compared to $293 per ounce for the same period last year. Some of this cost variation is attributable to the strong 2006 third-quarter earnings from recycling, which we treat as an offset against total cash costs. More significantly, however, the production shortfall during this year's third quarter was not accompanied by any overall reduction in total costs, so the same costs were spread over fewer ounces. We believe our 2007 full-year total cash costs per ounce will be slightly above the previous guidance of $315 per ounce due to the strike and associated weak production during the third quarter."

Turning to the Company's progress toward its ongoing strategic initiatives, McAllister reported, "Operationally, despite the tough quarter, progress continued on our mine transformation program during the third quarter of 2007. Safety and environmental performance were both excellent during the quarter. Engineering design work moved forward on the second smelter furnace in Columbus, Montana. As noted last quarter, we believe this furnace, once in operation, will increase our processing capacity, and provide a strategically critical back-up facility during scheduled or unscheduled furnace outages. We expect the new furnace to be operational by the end of 2008. Total production from captive cut-and-fill stopes decreased slightly during the quarter to 588 tons per day from 607 tons per day during the second quarter of this year, reflecting in part the impact of the strike. Production from ramp-and-fill mining in the Upper West area of the Stillwater Mine increased to an average of 298 tons per day in the third quarter, up from 288 tons per day for the second quarter of this year. Production from ramp-and-fill mining at the East Boulder Mine increased from 159 tons per day during the second quarter of this year to 201 tons per day during the third quarter. Our manpower training efforts to date remain on track to graduate about 100 new miners during 2007."

Regarding the Company's other strategic initiatives, Mr. McAllister commented, "Another of Stillwater's corporate objectives is to expand market demand for its primary products. Early last year, we established an industry palladium trade organization, the Palladium Alliance International (PAI). Since then, the Company has channeled most of its efforts to develop and broaden markets for palladium through the PAI. The Alliance's objectives include establishing palladium's jewelry market presence as a specific elegant brand of precious metal, distinct from platinum and white gold, and instituting a system of standards for use of the palladium brand that will emphasize palladium's rarity and value. The Alliance sponsors technical articles in jewelry trade publications illustrating methods of fabricating palladium jewelry, maintains a website with information on palladium suppliers and retailers (www.luxurypalladium.com), organizes informational presentations at industry trade shows and provides image advertising in critical jewelry markets. To date in 2007, the Alliance has funded several new palladium commercial spots for presentation in major Chinese cities, and participated in an effort to broaden and unify market development efforts among palladium producers and fabricators.

"During this year's third quarter, we were very pleased to announce the signing of a new and amended PGM supply agreement with one of our automotive customers. While we are required to keep the specific commercial details of the new agreement confidential, I am pleased that the new agreement extends a portion of our sales commitments out through 2012, allows us some flexibility in sourcing a portion of our requirements to this customer, and includes a favorable adjustment to the minimum sales price for palladium.

"We also are undertaking to diversify the Company's asset base. This is a multi-faceted effort. We are continuing our efforts toward growing the volume of the Company's recycling operations, thereby reducing the degree of financial dependence solely on performance of the Company's mines in each period. Our planned addition of a second smelter furnace is intended to support this objective by accommodating the expansion of both mining production and recycling volumes over the next several years, as well as creating opportunities to improve metal recoveries.

"As we announced previously, late last year the Company invested $1.9 million to purchase approximately an 11% interest in Pacific North West Capital Corp., a Canadian exploration company with substantial exploration expertise that has identified several PGM opportunities. Exploration efforts are proceeding and the Company has allocated an additional $0.7 million to this program during the first three quarters of 2007. Also, on July 3, 2007, the Company finalized its investment of $1.5 million in Benton Resource Corp., another Canadian exploration company, providing Stillwater with an opportunity for future participation in Benton's Goodchild Project as well as an equity interest in Benton itself.

"These investments in generative exploration projects are inherently long- term and fairly speculative in nature, but are intended to build a portfolio of attractive opportunities for the future. We also are evaluating various later-stage mineral development projects and operating properties to identify those that might offer good investment value and mesh with Stillwater's corporate expertise.

"In summary," McAllister concluded, "despite a disappointing quarter, we are committed to an effort at keeping the Company on track toward reaching its strategic objectives. The Company is also continually engaged in reviewing a variety of transactions or opportunities that are believed to benefit the best interests of shareholders. In this regard, management is concerned with the approaching expiration of its automotive contracts and the volatility of metal prices, both of which are leading the Company to consider proposals intended to strengthen its balance sheet."

Cash Flow and Liquidity

At September 30, 2007, the Company's cash and cash equivalents (excluding $4.4 million of restricted cash) totaled $67.4 million, up $10.2 million from the beginning of the quarter but down $21.0 million from December 31, 2006. Taking into account the Company's available-for-sale investments in highly liquid federal agency notes and commercial paper, the Company's total available cash and investments at September 30, 2007, was $104.3 million, up about $7.4 million from $96.9 million at the end of this year's second quarter. The increase in liquidity during the third quarter is mostly due to decreases in working capital requirements of the recycling business. Working capital constituting marketable inventories and related advances in the Company's PGM recycling business decreased to $80.6 million at the end of the third quarter of 2007 from $97.1 million at the end of the second quarter. Including these highly liquid inventories, the Company's underlying liquidity was $184.9 million, as compared to $194.0 million at the end of the second quarter 2007 and $194.8 million at the end of the 2006. Also, at the end of the third quarter of 2007 the Company had $16.4 million available to it under undrawn revolving credit lines.

Net cash provided from operating activities totaled $31.0 million in this year's third quarter. By comparison, $25.5 million of cash was consumed by operations in the third quarter of 2006, reflecting strong growth last year in recycling working capital requirements. Capital expenditures were $22.4 million in the third quarter of 2007 and $62.8 million year to date, both lower than planned. Capital spending in the third quarter of 2006 also totaled $22.4 million and was $67.8 million through the first nine months of 2006.

As was scheduled, the Company paid down $0.3 million of long-term debt and capital leases during the third quarter of 2007. Outstanding debt at September 30, 2007, was $128.5 million.

We are in the process of seeking an amendment and waiver to the language in our credit agreement to increase our permitted annual capital expenditures, accommodate the additional palladium sales under our new automotive agreement, and clarify the definition of debt. We expect to receive approval for the amendment and waiver before we file our third-quarter Form 10-Q. If the proposed waiver is not approved, we would need to reclassify a substantial portion of our long-term debt as a current liability.

Third Quarter Results - Details

For the third quarter of 2007, the Company's mine production was 128,600 PGM ounces including 85,400 ounces from the Stillwater Mine and 43,200 ounces from East Boulder Mine. For the comparable quarter of 2006, the mines produced 151,300 ounces including Stillwater Mine production of 109,200 ounces and East Boulder production of 42,100 ounces. As already noted, the sharp decrease in Stillwater production for the quarter resulted from attrition and lower productivity associated with labor negotiations.

Sales from mine production totaled 127,500 ounces in the third quarter of 2007 at an overall average realization of $499 per ounce, down from 150,000 ounces at $492 per ounce in the third quarter of 2006. PGM market prices generally were higher in the third quarter of 2007, but the Company's average realization in both periods was favorably affected by the above-market average floor price on palladium sales under the Company's automotive contracts, and unfavorably affected by the price caps on platinum in the same contracts and by losses on forward sales commitments for platinum. The Company's average realization on palladium sales from mine production was $383 per ounce in the 2007 third quarter, compared to $370 per ounce for the same period in 2006. The average net realization on platinum was $950 per ounce in the third quarter of 2007 and $877 per ounce in the 2006 third quarter. Putting this in perspective, the London Metals Exchange afternoon posted prices per ounce for platinum and palladium were $1,377 and $344, respectively, on September 28, 2007, and $1,140 and $315, respectively, on September 29, 2006.

During the third quarter of 2007, the Company processed about 98,600 ounces of PGMs from recycled catalytic materials. By comparison, in the third quarter of 2006 the Company processed about 90,300 ounces of recycled material. The Company processes material purchased from third parties and toll material that is processed on behalf of others for a fee.

Revenues for the third quarter of 2007 were $163.1 million, down 9.8% from $180.8 million received in the third quarter of 2006. Proceeds from sales of mined PGMs totaled $63.6 million in the 2007 third quarter, down from $73.7 million in the same quarter of 2006, reflecting lower sales volumes in 2007. Recycling revenues decreased to $94.1 million from $104.2 million in last year's third quarter. Although the company realized higher PGM prices from recycling in the third quarter 2007, the higher realized prices were not enough to offset the volume of sales that flowed into the third quarter of 2006. Resales of purchased metal generated $5.4 million and $2.9 million in revenue during the 2007 and 2006 third quarters, respectively.

Costs of metals sold (before depreciation and amortization expense) increased to $147.3 million in the 2007 third quarter from $146.4 million in the third quarter of 2006. Mining costs included in costs of metals sold increased to $54.1 million in the 2007 third quarter from $48.1 million in the 2006 third quarter. Recycling costs, mostly reflecting the cost to purchase spent catalytic materials for processing, totaled $87.9 million in the third quarter of 2007, decreasing from $95.4 million in the third quarter of 2006, driven mostly by lower volumes of PGM ounces being sold. Third-quarter costs also included the purchase for resale of 15,400 ounces of palladium at a cost of $5.3 million in 2007, and 9,000 palladium ounces at a cost of $2.9 million in 2006.

Depreciation and amortization expense increased very slightly to $20.1 million in the 2007 third quarter from $20.0 million in the same period of 2006. The increase is mostly attributable to slightly higher amortization rates in 2007.

General and administrative ("G&A") costs, including marketing and exploration expenses, decreased to $6.8 million in the third quarter of 2007 from $8.3 million in the same period of 2006. The timing of marketing expenditures during 2006 accounted for most of this decrease.

The reported net loss of $11.1 million for the third quarter of 2007 included, by business segment, a loss of $10.6 million from mining operations and earnings of $7.9 million of income from recycling activities, less corporate costs including $6.8 million of G&A expense and $2.9 million of unallocated net interest expense.

For the third quarter of 2006, the reported net earnings of $6.9 million included earnings from mining operations of $5.6 million, and income from recycling activities of $10.7 million. These earnings items were offset by $8.3 million of G&A expense and $3.0 million pertaining to unallocated interest expense.

First Nine Months' Results - Details

In the first nine months of 2007, the Company's mining operations produced 405,800 PGM ounces including 267,900 ounces from the Stillwater Mine and 137,900 ounces from East Boulder Mine. For the comparable period in 2006, total mine production of 446,000 ounces included Stillwater Mine production of 301,000 ounces and East Boulder production of 145,000 ounces. The production decrease at the Stillwater Mine reflects attrition, mechanical equipment problems and strike-related productivity issues during the second and third quarters. The decrease in East Boulder Mine production mostly reflects transitional challenges as the mine moves from highly mechanized methods toward more captive cut-and-fill mining.

Sales from mine production totaled 419,000 ounces in the first nine months of 2007 at an overall average realization of $504 per ounce, down from 439,000 ounces at $478 per ounce in the same period of 2006. PGM market prices generally were higher in the first nine months of 2007, but the Company's average realization in both periods was benefited, as in the past, by the above-market pricing provisions for palladium sales under the Company's contracts with major automobile companies, and reduced by price caps on platinum in the same contracts and by losses on financially-settled forward sales commitments on platinum. The Company's average realization on palladium sales from mine production was $382 per ounce in the 2007 first nine months, compared to $370 per ounce for the same period in 2006. The comparable average realization on platinum, net of the loss on forward sales, was $937 per ounce for the first nine months of 2007 and $845 per ounce in the first nine months of 2006.

During the nine months to date of 2007, the Company processed about 278,600 ounces of PGMs from recycled catalytic materials, including toll material processes on behalf of others for a fee. By comparison, in the first nine months of 2006 the Company processed about 238,700 ounces of recycled material.

Revenues for the first nine months of 2007 totaled $470.5 million, up 7.5% from $437.6 million in the first nine months of 2006. Proceeds from sales of mined PGMs totaled $210.9 million in the first nine months of 2007, up slightly from $210.0 million in the same period of 2006, as higher average sales realizations in 2007 more than offset the lower sales volumes. Recycling revenues grew to $248.0 million from $178.5 million in the first nine months of 2007. The higher realizations and growth in recycling revenues more than offset the reduction in revenue from completion of the program to sell off the palladium inventory received in the 2003 Norilsk Nickel transaction, which contributed $17.6 million to revenue, all during the first quarter of 2006. Resales of purchased metal generated $11.6 million and $31.5 million in revenue during the 2007 and 2006 periods, respectively.

Costs of metals sold (before depreciation and amortization expense) increased to $400.6 million in the 2007 first nine months from $349.6 million in the same period of 2006. Mining costs included in costs of metals sold increased to $157.1 million in the first three quarters 2007 from $142.3 million in the 2006 period. Recycling costs, largely comprised of the cost to purchase spent catalytic materials for processing, totaled $231.9 million in the first nine months of 2007, up substantially from $165.3 million in the first nine months of 2006, driven by the much higher volumes processed and, to a lesser extent, by higher prices paid for the PGM ounces contained in the recycled material. Costs for the first three quarters of 2007 included about $11.5 million for the purchase of 33,400 ounces of palladium for resale. The 2006 first three quarters' costs also included $10.8 million for 63,250 ounces of palladium sold from inventory and an additional $31.2 million to acquire 35,800 ounces of PGMs for resale under various commitments.

Depreciation and amortization expense increased slightly to $62.2 million in the first nine months of 2007 compared to $61.3 million in the same period of 2006. The slight increase is attributable to higher amortization rates in 2007.

G&A costs, including marketing and exploration expenses, totaled $23.1 million for the first nine months of 2007 and $21.6 million in the same period during 2006. Timing of marketing expenses, including contributions to PAI, accounted for a portion of the difference, with $4.0 million spent on marketing in this year's first nine months compared to only $3.2 million in the same period last year. Higher compensation expenses accounted for most of the remainder.

The net loss of $14.6 million for the first nine months of 2007 included, by business segment, a loss of $8.2 million from mining operations and $21.0 million of income from recycling activities, less corporate costs including $23.1 million of G&A expense and $8.5 million of unallocated net interest expense.

For the first nine months of 2006, the reported net earnings of $5.1 million included earnings from mining operations of $6.3 million, income from recycling activities of $17.4 million, plus at the corporate level $6.9 million of income related to sales from the palladium inventory received in the Norilsk Nickel transaction. These earnings items were mostly offset by $21.6 million of G&A expense and $8.5 million pertaining to unallocated interest expense.

Stillwater Mining Company will host its 2007 third quarter results conference call at 12:00 noon Eastern Time on Tuesday, November 6, 2007. The conference call dial-in numbers are 800-288-8968 (U.S.) and 612-322-0335 (International). The conference call will simultaneously be webcast on the Internet via the Company's website at www.stillwatermining.com. To access the conference call on the Company's website, go to the Investor Relations section under Presentations and click on the link to the conference call. A replay of the conference call will be available on the Company's website or by a telephone replay, numbers (800) 475-6701 (U.S.) and (320) 365-3844 (International), access code 893502, beginning at 3:30 p.m. Eastern Time on Tuesday, November 6, 2007 and ending at 11:59 p.m. Eastern Time on November 13, 2007.

Stillwater Mining Company is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of South Africa and the Russian Federation. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. Information on Stillwater Mining can be found at its Website: www.stillwatermining.com.

Some statements contained in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially. These statements may contain words such as "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions. These statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Such statements include, but are not limited to, comments regarding expansion plans, costs, grade, production and recovery rates, permitting, financing needs, the terms of future credit facilities and capital expenditures, increases in processing capacity, cost reduction measures, safety, timing for engineering studies, and environmental permitting and compliance, litigation, labor matters and the palladium and platinum market. Additional information regarding factors, which could cause results to differ materially from management's expectations, is found in the section entitled "Risk Factors" in the Company's 2006 Annual Report on Form 10-K. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.


Reconciliation of Non-GAAP measures to costs of revenues

The Company utilizes certain non-GAAP measures as indicators in assessing the performance of its mining and processing operations during any period. Because of the processing time required to complete the extraction of finished PGM products, there are typically lags from one to three months between ore production and sale of the finished product. Sales in any period include some portion of material mined and processed from prior periods as the revenue recognition process is completed. Consequently, while costs of revenues (a GAAP measure included in the Company's Statement of Operations and Comprehensive Income/(Loss)) appropriately reflects the expense associated with the materials sold in any period, the Company has developed certain non- GAAP measures to assess the costs associated with its producing and processing activities in a particular period and to compare those costs between periods.

While the Company believes that these non-GAAP measures may also be of value to outside readers, both as general indicators of the Company's mining efficiency from period to period and as insight into how the Company internally measures its operating performance, these non-GAAP measures are not standardized across the mining industry and in most cases will not be directly comparable to similar measures that may be provided by other companies. These non-GAAP measures are only useful as indicators of relative operational performance in any period, and because they do not take into account the inventory timing differences that are included in costs of revenues, they cannot meaningfully be used to develop measures of profitability. A reconciliation of these measures to costs of revenues for each period shown is provided as part of the following tables, and a description of each non-GAAP measure is provided below.

Total Costs of Revenues: For the Company on a consolidated basis, this measure is equal to consolidated costs of revenues, as reported in the Statement of Operations and Comprehensive Income/(Loss). For the Stillwater Mine, East Boulder Mine, and other PGM activities, the Company segregates the expenses within costs of revenues that are directly associated with each of these activities and then allocates the remaining facility costs included in consolidated costs of revenues in proportion to the monthly volumes from each activity. The resulting total costs of revenues measures for Stillwater Mine, East Boulder Mine and other PGM activities are equal in total to consolidated costs of revenues as reported in the Company's Statement of Operations and Comprehensive Income/(Loss).

Total Production Costs (Non-GAAP): Calculated as total costs of revenues (for each mine or consolidated) adjusted to exclude gains or losses on asset dispositions, costs and profit from thirdary recycling, and changes in product inventories. This non-GAAP measure provides an indication of the total costs incurred in association with production and processing in a period, before taking into account the timing differences resulting from inventory changes and before any effect of asset dispositions or thirdary recycling activities. The Company uses it as a comparative measure of the level of total production and processing activities in a period, and may be compared to prior periods or between the Company's mines. As noted above, because this measure does not take into account the inventory timing differences that are included in costs of revenues, it cannot be used to develop meaningful measures of earnings or profitability.

When divided by the total tons milled in the respective period, Total Production Cost per Ton Milled (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the cost per ton milled in that period. Because of variability of ore grade in the Company's mining operations, production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. And because ore tons are first actually weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Production Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Production Costs (Non- GAAP) and by the volume of tons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in the respective period, Total Production Cost per Ounce (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the cost per ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because extracting PGM material is ultimately the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company's mines. Consequently, Total Production Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Production Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

Total Cash Costs (Non-GAAP): This non-GAAP measure is calculated (for each mine or consolidated) as total costs of revenues adjusted to exclude gains or losses on asset dispositions, costs and profit from recycling activities, depreciation and amortization and asset retirement costs and changes in product inventories. The Company uses this measure as a comparative indication of the cash costs related to production and processing in any period. As noted above, because this measure does not take into account the inventory timing differences that are included in costs of revenues, it cannot be used to develop meaningful measures of earnings or profitability.

When divided by the total tons milled in the respective period, Total Cash Cost per Ton Milled (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the level of cash costs incurred per ton milled in that period. Because of variability of ore grade in the Company's mining operations, production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. And because ore tons are first weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Cash Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Cash Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in the respective period, Total Cash Cost per Ounce (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the level of cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company's mines. Consequently, Total Cash Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Cash Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

Total Operating Costs (Non-GAAP): This non-GAAP measure is derived from Total Cash Costs (Non-GAAP) for each mine or consolidated by excluding royalty, tax and insurance expenses from Total Cash Costs (Non-GAAP). Royalties, taxes and insurance costs are contractual or governmental obligations outside of the control of the Company's mining operations, and in the case of royalties and most taxes, are driven more by the level of sales realizations rather than by operating efficiency. Consequently, Total Operating Costs (Non-GAAP) is a useful indicator of the level of production and processing costs incurred in a period that are under the control of mining operations. As noted above, because this measure does not take into account the inventory timing differences that are included in costs of revenues, it cannot be used to develop meaningful measures of earnings or profitability.

When divided by the total tons milled in the respective period, Total Operating Cost per Ton Milled (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the level of controllable cash costs incurred per ton milled in that period. Because of variability of ore grade in the Company's mining operations, production efficiency underground is frequently measured against ore tons produced rather than contained PGM ounces. And because ore tons are first actually weighed as they are fed into the mill, mill feed is the first point at which production tons are measured precisely. Consequently, Total Operating Cost per Ton Milled (Non-GAAP) is a general measure of production efficiency, and is affected both by the level of Total Operating Costs (Non-GAAP) and by the volume of tons produced and fed to the mill.

When divided by the total recoverable PGM ounces from production in the respective period, Total Operating Cost per Ounce (Non-GAAP) -- measured for each mine or consolidated -- provides an indication of the level of controllable cash costs incurred per PGM ounce produced in that period. Recoverable PGM ounces from production are an indication of the amount of PGM product extracted through mining in any period. Because ultimately extracting PGM material is the objective of mining, the cost per ounce of extracting and processing PGM ounces in a period is a useful measure for comparing extraction efficiency between periods and between the Company's mines. Consequently, Total Operating Cost per Ounce (Non-GAAP) in any period is a general measure of extraction efficiency, and is affected by the level of Total Operating Costs (Non-GAAP), by the grade of the ore produced and by the volume of ore produced in the period.

--------------------------------------------------------------------------------
Source: Stillwater Mining Company


Yesterday's closing chart.......

Nice bounce today.
Could be key reversal day for CDE finally. Looking for this dog to push it on up !
While CDE is not doing much lately I still like the looks of the Cup with Handle
formation from Aug to Oct -- it's one of the signs that usually works out for
a stock. I think it's going to work for CDE, just taking more time to break
upwards. But when it does, it'll be heading up quickly. Have
patience, this is a potentially strong silver stock that will work out in the
next few weeks.


52wk Range: 2.98 - 5.50
Volume: 24,392,340
Avg Vol (3m): 7,234,090

Technicals
Close Below the 13-day MA
Most Actives
Percentage Gainer

Last Price Quote is:
14.44%above 13-day MA
16.92%above 50-day MA
RS Rating: 87 

Fundamentals
Key Data:
Market Cap (M): $1,095.55 
P/E Ratio: 22.53 
PEG Ratio: 1.09494 
Next Earnings: 02/21/2008
Last Analyst Rating: Hold

updated chart look...