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Santa Fe Gold Fortune Magazine Ad


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Santa Fe Gold Fortune Magazine Ad

  1. 1. SPECIAL ADVERTISING SECTION some kind of financial crisis,” says Gregg Fisher, chief invest- ment officer at Gerstein Fisher. “That’s when it’s nice to have gold in your portfolio.” Nice may be an understate- ment. Since the recession began, gold has risen at an average annual rate of 18.9%, according to Morningstar. That trounces stocks (1.1%) and real estate (4.7%)—and even bonds (11.9%), which have benefited hugely from falling interest rates. Going back further: If you had invested $10,000 in gold in 2000, it would be worth $56,000 today. Not everyone is convinced that gold makes sense at these prices. The metal has fallen from more than $1,800 an ounce last year to around $1,600. Warren Buffett has counseled against investing A Golden in gold because “it just sits there.” It has no earnings and no yield. “Anyone watching fromOpportunity Mars would be scratching their head,” Buffett has said. New research out of Duke University argues that gold is not nearly as effective a hedge against infla- Diversifying by putting a portion of your tion as is commonly believed. portfolio in gold is a smart long-term safety bet. Glittering N Allure othing has or simply playing a trend, you But gold bulls are buoyed risen faster may end up disappointed. But if by a number of factors. Just than gold your goal is long-term diversifi- about everyone recognizes that since the cation, today’s price shouldn’t gold is a good hedge against financial be an obstacle. hyperinflation, which, thanks to crisis. But Gold is that rare invest- record-low interest rates during after a long run that began even ment that often goes up when the past half-decade, may be before the economic meltdown, other things go down. During brewing. Meanwhile, commer- is it too late to invest in the glit- the worst of the financial crisis cial demand, while down from tering stuff? in 2008 and 2009, stocks fell a year ago, remains strong for Most experts say no, it’s 48% and real estate investment things like jewelry and electron- not too late—so long as you trusts fell 59%. But gold rose ics. And last year central banks understand why you want to 13%. This safe-haven status is purchased 456 tons of gold, up own gold in the first place. If one of the metal’s chief allures. from 77 tons the previous year, you’re looking for a quick profit “Every decade or so, there is reports the World Gold Council. S1
  2. 2. advertisementThe Midas Touch Becoming a gold and silver producer puts G Santa Fe Gold Corp. on the fast track. old has long been seen as a safe holding for investors unnerved by a rocky stock market. Investing in the gold mining industry, however, is not for the faint of heart. Among the major and junior companies that define the industry, depth of management, cost structure, and portfolio quality sepa- rate the successful businesses from the also-rans. Santa Fe Gold Corp., based in Albuquerque, is a junior miner that intends to establish itself as a major player in the gold, silver, copper, and industrial minerals markets. The company has a unique strategy that sets it apart from competitors. For starters, Santa Fe’s entire mining portfo- lio is located within the Southwest region of the U.S. Bigger major global mining companies have access to gold and silver reserves all over the world, but with that reach often come unpredictable political and country risks, issues that Santa Fe doesn’t face. With its U.S.-based assets, the company’s goal, explains president and CEO W. Pierce Carson, is to produce signifi- cant cash flow from its precious metals holdings while creat- ing a portfolio of quality exploration and develop- ment projects. Santa Fe currently has four major projects under way, the two biggest of which are Summit Silver-Gold and Ortiz Gold, both located in New Mexico. In a market environment that has not been kind to the stock price of any mining company, the cash flow from Santa Fe’s Summit silver-gold mine is another plus. The mine began commercial production in April and is operating at 10,000 tons per month. The processing plant, however, has significantly greater capacity. The company aims to fill that capacity with ore from its own properties and from acquisitions. In addition, Carson says Santa Fe’s production costs for mining its gold and silver are well below the industry average. Combined with high market prices for these precious metals, the company’s margins are attractive. So far, Santa Fe is doing well with this formula. Results for the fiscal year that ended in June show that revenues grew 80% over the prior year, mainly because of increased production at the Summit facility. Says Carson: “Explora- tion is an important part of the company, but our business model is different than a lot of the juniors in the sense that we want to be a real producing company.”
  3. 3. SPECIAL ADVERTISING SECTION a coveted asset small institutions seeking to broaden their portfolios beyond is audited twice a year. Gold-mining stocks carry Gold’s steady rise in value stocks and bonds. “Most inves- a degree of risk that ETFs do tors acknowledge there is a not. The mining company must US$ RECORD HIGH place for gold but haven’t yet be able to dig and produce thePER OZ. JAN. 21, ‘80 done anything about it,” says metal at a profit. But these 2,500 $2,491 Kevin Quigg, global head of ETF stocks also have certain ad- strategy and consulting at State vantages. They’ve languished YEARLY GOLD PRICE: Street Global Advisors. He be- for the past decade, and their 2,000 NOMINAL REAL lieves that money will flow into prices probably do not reflect gold ETFs for years to come. the value of gold they own that The biggest gold ETF by far is still in the ground. is State Street’s SPDR Gold “The stocks clearly have not 1,500 Shares (ticker: GLD), launched kept up with the rising price of in 2004, with assets over $65 gold,” says W. Pierce Carson, billion as of August 2012. Next CEO of Santa Fe Gold Corp., 1,000 in line is the iShares Gold Trust which owns or is purchasing $850 (ticker: IAU), with $9 billion in mines in New Mexico with an assets, followed by a handful estimated 15 to 20 years of pro- of smaller ETFs. The total U.S. duction. He says Santa Fe will 500 gold ETF market is about $78 be able to produce gold next billion. Before these funds were year at a cost of $470 an ounce, JUNE 29, ‘12 created, investors who wanted making his company among the 0 exposure to gold had to own most efficient, and able to turn ‘71 ‘75 ‘79 ‘83 ‘87 ‘91 ‘95 ‘99 ‘03 ‘07 ‘11 coins, gold mining stocks, or a nice profit even if gold prices Sources: LBMA, Bureau of Labor Statistics, World Gold Council commodities futures contracts. fall. “There is underlying value Each of those options has costs in production companies like and risks unrelated to the price ours with low costs,” he says. Another key driver has been of gold. With gold coins, for “There is a lot of potential ap- the emergence of gold-backed example, there is typically a preciation that you do not have exchange-traded funds (ETFs), minting fee and a dealer markup with the ETFs.” which have made the metal easy that together add 7% to 10% on Should you invest in gold to buy and sell and are helping top of the spot price for gold. now? Owning the metal as reel in a whole new category “ETFs have democratized a portfolio hedge is sound of investor: individuals and the gold market,” says Jason strategy. Consider putting 3% Toussaint, manag- to 10% of your assets in a gold- ing director for the backed ETF like SPDR Gold U.S. and invest- Shares. If you are looking for America’s bounty: ments at the World more potential pop, gold-mining aerial view of a gold mine in Utah Gold Council. With stocks may be a bargain at re- SPDR Gold Shares, cent prices—though they prob- an individual pays ably won’t rally until the global the same fees that economy picks up. Consider hedge fund manag- putting 5% of your portfolio in ers and giant insti- a diversified precious-metals tutions pay—about mutual fund. 0.4% of assets. A pullback is always possible. laurel daunis-allen; Getty The ETF is readily But with so much uncertainty accessible because in the world—the Euro crisis, it trades as a stock, mounds of global debt, seeds of and it is backed by inflation—it might be smart to physical gold in a own something that goes up when London vault, which most other things go down. S3
  4. 4. YOU DON’T GET A TIN WATCHWHEN YOU RETIRE. Everyone knows the best way to thank someone for a lifetime of service is with a gift made of gold. Now it’s more accessible than ever, thanks to SPDR ® Gold Shares. When you invest in GLD, you get a precise way to add gold to your portfolio. And you get an asset that offers diversification potential because it’s generally not tied to the ups and downs of broad US equities.* A gold watch may be in your future. But a gold ETF is something you can have right now. Scan the QR code with your smartphone to visit for details. *Source: Over the 10-year period ending June 30, 2011, gold’s correlation with the S&P 500® has been -0.01 with 0 being uncorrelated and 1 being perfectly correlated (StyleADVISOR, June 2011). Important Information Relating to SPDR Gold Trust: The SPDR Gold Trust (“GLD”) has filed a registration statement(including a prospectus) with the Securities and Exchange Commission (“SEC”) for the offering to which this communication relates. Beforeyou invest, you should read the prospectus in that registration statement and other documents GLD has filed with the SEC for more completeinformation about GLD and this offering. You may get these documents for free by visiting EDGAR on the SEC website at or by Alternatively, the Trust or any authorized participant will arrange to send you the prospectus if you request it by calling 1-866-320-4053. ETF’s trade like stocks, are subject to investment risk, fluctuate in market value and may trade at prices above or below the ETF’s net asset value. Brokerage com- missions and GLD expenses will reduce returns. Diversification does not assure a profit and may not protect against investment loss. Investing in commodities entails significant risk and is not appropriate for all investors.“SPDR” is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and has been licensed for use by State Street Corporation. No financial product offeredby State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its affiliates, and S&P and its affiliates make no representation, warranty or condi-tion regarding the advisability of buying, selling or holding units/shares in such products. Further limitations that could affect investors’ rights may be found in GLD’s prospectus.For more information: State Street Global Markets, LLC, One Lincoln Street, Boston, MA, 02111 • 866.320.4053 • FDIC Insured – No Bank Guarantee – May Lose ValueIBG-4542