For those familiar with financing or IB

[libor.plus1]

Question I can't seem to find an answer to:

 

 

In times like this, where gold is surging, but financial markets are getting wrecked, how easy/difficult is it for gold producers/explorers/miners to get financing?

 

Any colour on this would be greatly appreciated.

[given2invest]

Question I can't seem to find an answer to:

 

 

In times like this, where gold is surging, but financial markets are getting wrecked, how easy/difficult is it for gold producers/explorers/miners to get financing?

 

Any colour on this would be greatly appreciated.

 

Are they public?  Most junior producing miners are not participating in the gold rally.  Most miners that are not producing (and are just concepts) have been plummeted in the last few weeks.    I think financing is tough.  Makes little sense, but what does these days?

[libor.plus1]

Yes, lets assume they are public. I suppose it makes sense that explorers/juniors would have a tough time with financing. How bout the producers? Even if they aren't doing too badly, do people want to put their money in stocks?

[given2invest]

Just take a look at GDXJ vs the price of GLD.  It has done nothing but hasn't gone down.  So the answer is, no, people don't want to own equities even if their only asset is something that's skyrocketing! 

 

But the simple answer is any liquid stock can do a secondary 5-10% in the hole at any given time.  It really depends on how much they have to raise vs. their market cap.  Or were you referring to debt financing?  Most of these gold companies use equity financing unless they can pledge producing gold (sell forward gold). 

[Guest Hester]

I wouldn't think their credit would tighten up heavily just because their stock prices are down 20%. Especially in this age of extremely easy corporate credit.

 

Long the junior miners and short the physical is looking like an increasingly interesting reversion to the mean pairs trade.

 

http://finance.yahoo.com/echarts?s=gld#chart12:symbol=gld;range=ytd;compare=gdx+gdxj;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined