Agnico Eagle Mines AEM A Safe Gold Investment, 2014 Palladium Deficit, EU Trade Deal Favors Companies

Agnico-Eagle Mines AEM stock hit a 52-week high of $42.12 on July 28th, a gain of 27% since May.  This should come as no surprise given that i) it's a consistent producer - whereas other high profile companies ie Gold Fields have had to selloff assets in anticipation of the lower gold price ii) high grade mines give it flexibility iii) improved cash flow and output stemming from a 50% interest in Osisko's Malartic mine.

- 20% increase in production from Malartic mine (50% interest) leading to improved cash flow.  Osisko was pursued by three high profile gold companies.
- In 2014 gold margins industry-wide are expected to increase owing to a more stable gold price, companies abandoning low grade non performing assets, better logistics.

Agnico-Eagle 2q2014 earnings surprise despite $19.9 million in new costs connected to the recent acquisition of Osisko Mining Corp.
For the quarter Agnico earned $37.7 million (versus a loss of $24.4 million last year) or 20 cents per share (vs -$0.14 per share).  Quarterly operating cash flow at $197.7 million (versus $75.3 million).
Gold prices were down but production was way up !  Output at 326,059 ounces with total cash costs at $626 an ounce; Malartic contributed 11,878 ounces (Agnico's share of 2 weeks worth of production in June - total Osisko output 23,756 at $614; for the entire second quarter, Malartic produced 133,181 ounces of gold at a cash cost of $645.

China Hacking Canada

Canada is accusing China of hacking into the CNRC Canadian National Research Council.  This is significant news because if true, China would have gained access to new Canadian technology: the council is responsible for bringing new technologies to market.

SecuSmart anti-eavesdropping

BlackBerry BBRY buys SecuSmart of Germany.  SecuSmart provides high-level voice and data encryption for business, governments, and telecommunications service providers.  Secusmart technology is already being used by government officials in Germany - it adds another layer of security to BlackBerry devices.  SecuSmart is widely respected within the European community for their patented micro sd cards which, when connected to mobile devices render them virtually impenetrable to hacking (149 years using brute force).  In my opinion, this deal gives BlackBerry a key advantage over IBM-Apple in the enterprise market.

2014 Palladium Deficit

Automaker Mistubishi is "forecasting a 1.8 million ounce palladium deficit this year due to the perfect storm of South African supplies falling to a near 20-year low, growing autocatalyst demand and of course the heavy inflows into the two South African ETFs,"  this bodes well for the price of palladium which has significantly outperformed both gold and silver this year.
January 1, 2014 - July 30, 2014: palladium up +22.5% $717 -> $878, gold +5.9% $1221.3 -> $1293.9, silver +2.8% $20.04 -> $20.60

Canada-EU free trade pact to be rejected by Germany

“There’s a fair chance the whole (Canada-EU) agreement could unravel” over the investor protection issue - the clause gives investors and corporations more power to challenge national governments and get around regulations.
Europeans put more stock in decisions made by international tribunals; this law gives multinational corporations precedence over special tribunals. What the corporations are saying is that these mechanisms are needed to convince investors their money is secure in foreign countries.
The Germans are concerned that it gives investors and corporations too much power to challenge national governments.

I think they're right !  Tribunals exist to protect the interests of the populace, the state and the worker.  This means even more today where high food prices, gas prices, and drug costs are becoming major issues.