Even Warren Buffet is worried about the economy in US, are you? As a vote of confidence he's putting some money in Goldman, hoping the general public will follow...what do you think?
Warren Buffett to the rescue: His Berkshire Hathaway Inc. agreed today to invest $5 billion in Goldman Sachs Group via a purchase of preferred stock.
Berkshire also will get warrants to buy up to $5 billion of Goldman common shares.
The deal, announced after markets closed, amounts to a huge vote of confidence by Buffett in the investment banking titan, at a time when investors remain spooked about the future of Wall Street.
"Goldman Sachs is an exceptional institution," Buffett said in a statement. "It has an unrivaled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance."
Goldman CEO Lloyd Blankfein said the firm considered Buffett’s capital infusion "a strong validation of our client franchise and future prospects." Goldman also said it would raise another $2.5 billion by selling more common stock to the public.Buffett will earn a hefty 10% dividend yield on his preferred shares. The warrants, which are immediately exercisable, have a strike price of $115 a share.
The deal has given Goldman’s shares a pop in after-hours trading, to $135.87. The stock had gained $4.27 to $125.05 in regular trading, after falling as low as $113.
After the harrowing turmoil in the financial system last week, the Federal Reserve late Sunday announced that it had granted bank holding company status to Goldman and Morgan Stanley -- a move that essentially ended the era of the giant standalone investment bank.
Anyone reading what I'm reading? Dividend yield of 10%. Last I checked the free market shares didn't feature this... having the name Buffett might help even if its' a drop in the bucket in the grand scheme of things.
My point is, unless you're Buffet and you get a 10% dividend on GS, it might not be the brighest idea jumping in now.
One of our favorite stocks here, TNR Gold Corp, announced spectacular results on first pass at El Tapau. Next day showed a nice gain but pared back so far today to low $0.20 range, great time to get in before it's noticed by majors (of which many already know of the junior mine/explorer, BHP Billiton, Barrick, etc)
TNR Gold drills 82.25 m of 0.49% Cu at El Tapau
2008-09-22 17:57 ET - News Release
Mr. Gary Schellenberg reports
TNR GOLD DRILLS 82.25 METRES OF 0.49% COPPER AT EL TAPAU
TNR Gold Corp. has released preliminary copper results from the first hole of a seven-hole diamond drilling program at the El Tapau project in Argentina. Interpretation and analysis of precious metals and other elements are pending.
Drill hole ET-08-01 was angled at 060/60 degrees and drilled to a depth of 440.40 metres. Drill hole ET-08-01 was collared proximal to a tourmaline breccia hosted within granodiorite intrusion. It intersected variably mineralized (pyrite chalcopyrite) both breccia and tourmalinized granodiorite host. The best mineralized intercept has returned the results in the table.
Hole depth From To Length Copper
(metre) (metre) (metre) (metre) (%)
440.4 97.25 179.50 82.25 0.49
Including 98.40 171.20 72.80 0.54
And 111.30 144.95 33.65 0.87The entire core for hole ET-08-01 was sampled and cut in half with a diamond saw which was then processed, analyzed and reported from an ISO-9001 fully accredited analytical facility, Alexis Stewart Assayers, in Mendoza, Argentina.
TNR is encouraged with the initial results obtained from this hole with the best copper grades coming from what appears to be a zone of enrichment.
Gary Schellenberg, chief executive officer and president of TNR, said: "The presence of native copper and chalcocite mineralization in our first hole is very encouraging. Given these new results, we will reinterpret our geophysics and complete detailed mapping over the area to pinpoint the location of additional drill holes."
Ike Osmani, PGeo, chief geologist of TNR, is the designated qualified person for the El Tapau project, and has prepared and approved the technical information contained in this news release.
El Tapau
The El Tapau copper-gold property, occurring within the eastern Andes of the San Juan province, is strategically located approximately 50 kilometres north-northwest of TNR's El Salto property. El Tapau has had historical gold and copper production from numerous underground workings. However, complete records do not exist regarding quantities and grades.
In 2007, a 3-D induced polarization survey and limited mapping and lithogeochemical sampling were conducted in selected areas of the property. A second phase of the geological survey, consisting of mapping and sampling programs, was initiated in early 2008. Systemic bedrock sampling by Petra Gold in 2006 outlined a 2,500-metre-by-1,000-metre area with values ranging from trace to 19 grams per tonne gold, averaging 2.2 g/t gold from 157 rock sample sites.
The current drill program is testing several main targets including the gold vein area in the west-central portion of the property and the porphyry copper-gold targets in the northeastern corner, of which assays results are pending.
As with all good news in this difficult and confusing market with funds liquidating, TNR (TNR.v) is a down a bit today, but if anything has shown us for this resilient junior miner, it should bounce back nicely, and you should probably get in at a basement price of around $0.20-0.22.
Well known technical analyst Clif Droke who is regularly on Kitco Gold and Financial Sense network of sites, likes TNR Gold and publishes a regular update for his premium paid suscribers. He's a well read publisher himself with several books on Technical Analysis under his belt. See his August 2008 and more recommendation on TNR here. Other notable mention is Minera Andes (MAI.to) , which was recently recommended by Doug Casey as a great pick at bottom fishing (not KaiserBottomFish!) at the low $1.00 range... I hate beating on a dead horse but for a company that makes $9million a quarter whose last News Release said they just added 11 billion lbs of Copper to their reserves... it deserves another look.
Focusing more on Copper today, there's word that Copper production is lowering next year, all the while demand is going up, up, up. Trading at around $3/lb still, it won't take much for copper to make another run soon, I'd pick up MAI and TNR for their copper prospects - with 30% McEwan ownership in MAI, I'd wager production is the keywrd of the day for the Argentinean miner. Scoping/Costing for Los Azules soon, by end of 2008.
‘Everything that could go wrong is going wrong’ for new global copper mine production
London-based Bloomsburg Minerals Economics foresees a reduction in copper mine production as new copper projects are failing to meet production forecasts.
Author: Dorothy Kosich
Posted: Wednesday , 24 Sep 2008
LAS VEGAS -
Bloomsbury Metals Economics Christopher Welch warned Tuesday that "everything that could go wrong is going wrong" in copper mine production, as new copper projects are not meeting production expectations.
In a presentation to MINExpo in Las Vegas, Welch forecast a reduction in copper mine production, as well as a deficit of refined global copper this year.
Welch noted that supply chain stocks are still at multi-year lows, which copper mine development and operation has become more difficult due to high input costs and low equipment availability.
"We're pretty much in a trough of physical [copper] stocks," he advised.
Among the current copper production constraints are the following:
· 10% of total mine copper production is linked to power problems currently experienced in Chile
· Severe lack of trained personnel
· Dramatic development cost increases
· Environmental costs including regeneration bonds, baseline study costs, and water use constraints
· Equipment production bottleneck
· Production cost increases including a high oil price, high sulphuric acid price, and high staff costs
Welch suggested that "rising production costs are underpinning the long-term metals price."
In his presentation, Welch highlighted that base metals mining has been getting a "wall of money from pension funds," beginning in 2005. As a result Welch asserted that a new economic model for base metals should require consideration of commodity index funds' demand for metal futures in addition to currency market fluctuations, price per tonne, as well as stock cycles.
When asked if major copper deposits remain awaiting discovering, Welch responded, "The low-hanging fruit for copper mining has all gone."
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