gold prices

North American Palladium, $3.70, symbol PDL on Toronto (Shares outstanding: 141.5 million; Market cap: $570.1 million; www.napalladium.com), runs the Lac des Iles palladium mine near Thunder Bay. This mine produces about 150,000 ounces of palladium per year, but it could reach 250,000 ounces when production at the high-grade offset zone starts in late 2012. North American Palladium also operates the Sleeping Giant gold mine in the Abitibi region of western Quebec. This mine continues to experience difficulties, mostly because of low production and high costs. However, the company expects to finish deepening the mine shaft later this year. North American Palladium is hoping that will push up Sleeping Giant’s production to historic levels of about 55,000 ounces per year. The stock fell sharply earlier this month after the company cut its full-year 2011 palladium production forecast to 145,000 to 155,000 ounces, from its earlier estimate of 165,000 to 175,000 ounces. The company cut its forecast because it has decided to focus on expanding its mines, rather than maximizing production this year....

Silver has fallen sharply from its all-time high of $48.70 U.S. an ounce, where it closed on April 28, 2011. Silver now trades at $36.80 U.S. an ounce. That’s up 106.2% from $17.87 U.S. an ounce a year ago. Silver could well regain its high and move up even further over the longer term, although it will likely remain volatile. Higher prices would arise from investor fears that inflation or global political and economic uncertainty will weaken key currencies, such as the U.S. dollar. ...

Argonaut Gold, $5.14, symbol AR on Toronto (Shares outstanding: 56.1 million; Market cap: $452.3 million; www.argonautgoldinc.com), owns 100% of the El Castillo gold mine in Mexico, plus advanced-stage exploration properties, including La Fortuna, La Colorada and San Antonio, all in Mexico. The company also holds 11 exploration properties in the state of Sonora, Mexico. El Castillo is an open-pit mine located one hour north of the state capital, Durango. El Castillo hosts as much as 2.9 million ounces of gold. The company’s shares have almost doubled since July 2010, mainly because of rising gold prices. But Argonaut’s strong balance sheet (it holds cash of $25.4 million, or $0.40 a share), and earnings from El Castillo (which amounted to $4.2 million, or $0.07 a share, in the latest quarter) should let it keep developing its other properties....

San Gold, $2.77, symbol SGR on Toronto (Shares outstanding: 309.2 million; Market cap: $856.6 million; www.sangold.ca), operates the Rice Lake gold mine in Manitoba. The mine is about 200 kilometres northeast of Winnipeg, and west of the Red Lake mining region in neighbouring Ontario. The Rice Lake gold mine originally operated from 1932 to 1968. During that time, it produced 1.36 million ounces of gold. It remained idle for almost 30 years, until Rea Gold Corporation decided to rebuild it. Rea installed a hoist and a new shaft, and it built new surface infrastructure. It also expanded the mill. But before Rea could begin mining gold at the site, it ran into financial trouble and filed for bankruptcy in 1997. Harmony Gold Mining Ltd. of South Africa bought the property in 1998, and produced 110,000 ounces of gold before low gold prices prompted the company to close the mine in 2001....

NEWMONT MINING $56.43 (New York symbol NEM; Shares outstanding: 493.7 million; Market cap: $27.9 billion; TSINetwork Rating: Average; Dividend yield: 1.4%; www.newmont.com) earned $1.04 a share before one-time items in the three months ended March 31, 2011, up 25.3% from $0.83 a year earlier. The latest earnings beat the consensus estimate of $0.99 a share. Revenue rose 9.9%, to $2.5 billion from $2.2 billion. This dividend paying stock continues to benefit from rising gold prices. Newmont now plans to link future dividend hikes to the price of gold: it will raise the quarterly rate by $0.05 a share for each $100 per ounce rise in its average selling price for gold in the preceding quarter. The rise in gold prices in the latest quarter prompted the company to raise its quarterly dividend by 33.3%, to $0.20 a share from $0.15. The new annual rate of $0.80 yields 1.4%....

PLEASE NOTE: Our next Hotline will go out on Friday, April 29, 2011. INTERNATIONAL BUSINESS MACHINES CORP., $168.28, New York symbol IBM, reported higher-than-expected earnings this week. In the three months ended March 31, 2011, IBM’s earnings rose 10.1%, to $2.9 billion from $2.6 billion a year earlier. Earnings per share rose 17.3%, to $2.31 from $1.97, on fewer shares outstanding. Excluding one-time items, such as costs related to acquisitions, IBM earned $2.41 a share. On that basis, the latest earnings beat the consensus estimate of $2.29....

Gold closed at an all-time high of $1,475.00 U.S. in Friday’s trading. It now trades at around $1,468, up 27.4% from a year ago. Gold’s recent gains have partly resulted from investor fears about the sovereign debt of European countries after Portugal requested a bailout from the European Union and International Monetary Fund. Investors are also worried about political turmoil in Libya and other Middle Eastern countries, as well as the possibility that today’s artificially low interest rates and governments injecting money into their economies will spur a huge rise in inflation. These fears are prompting more investors to buy gold and gold investments, because they believe investing in gold will provide them with additional security....

PLEASE NOTE: Our next Hotline will go out on Thursday, April 7, 2011. EBAY INC., $31.36, Nasdaq symbol EBAY, is buying GSI Commerce Inc. (Nasdaq symbol GSIC) which sells e-commerce services to over 500 businesses. GSI’s customers include major retailers, such as Toys R Us and Aeropostale, consumer-electronics makers, including Hewlett-Packard, and professional-sports leagues, such as the National Football League. GSI helps these clients process and fulfill online orders, and increase their online sales....

Trelawney Mining and Exploration, $4.56, symbol TRR on Toronto (Shares outstanding: 91.0 million; Market cap: $414.9 million; www.telawneymining.com), owns three properties that are located halfway between the northern Ontario cities of Timmins and Sudbury. The properties centre on the Chester mine, which was nearly completed in the 1980s, but never went into production. So far, the company has outlined a 4.2-million-ounce gold deposit at the Chester properties. With further drilling, the estimated deposit could more than double. Trelawney holds cash of $54.3 million, or $0.60 a share, so it has the funds to continue to develop its properties and work toward building a mine....

PASON SYSTEMS $14.75 (Toronto symbol PSI; TSINetwork Rating: Speculative) (403-301-3400; www.pason.com; Shares outstanding: 81.5 million; Market cap: $1.2 billion; Dividend yield: 2.4%) rents equipment that its customers use to monitor and manage land-based oil rigs. It also sells communications systems, such as its satellite system, which companies use to remotely collect data from their drilling operations. The company serves oil and gas companies and drilling contractors throughout Canada, the U.S., Mexico and Argentina. In the three months ended December 31, 2010, Pason’s revenue jumped 79.2%, to $73.5 million from $41.0 million a year earlier. Earnings climbed 232.0%, to $8.2 million, or $0.10 a share. A year earlier, it earned $2.5 million, or $0.03 a share. Cash flow per share more than doubled, to $0.34 from $0.15. That’s mainly because its oil and gas customers increased drilling in the U.S., and Pason raised its selling prices. Pason holds cash of $110.4 million, or $1.35 a share, and has no long-term debt....