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The Company's Eagle Gold Project in Yukon Canada hosts a National Instrument 43-101 compliant Reserve of 2.3 million ounces of gold.
Message: New Jr Gold Exchange Traded Fund? Implication are Profound IMO
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i don't understand this concept. an ETF or an index type fund still buy the shares.....so if Robs ETF fund buys 1.5 million shares in a certain junior or 14 retail investors buy a total of 1.5 million shares is this still not the same effect?
I am not sure I can answer your question with authority. I suspect you are right in your example above; however, institutional trades are handled in a different manner than they are for a typical retail account. When an institution wants to buy in size they try and keep is secretive and not advertise what they are doing. To give you an example, if I was an institution and wanted to buy a million shares of VIT, I would be a fool to just place a limit order to buy the stock at a fixed price. The best way to handle orders in size is to contact traders that will try and locate the amount of stock that you want to buy - they don't just go out and tell everyone that they have a buyer for a million shares at "X" price and publish this information so everyone can see there is a big buyer in the "wind". Some of the readers here might be much more knowledgeable than I am in regards to large block trades and can give you the real facts how these trades are completed under the cloak of secrecy.
With regards to McEwen only including stocks he wants to include in a potential index: First off, before any index is established there has to be some rules spelled out as to what type of stocks would be eligible to be considered as an addition to the index. The criteria would have to be spelled out in advance of establishing an index. For example, when the INDU deletes a stock from their index and then adds another stock to replace it - I don't believe that someone out there in their "ivory tower" dictated any changes just based on their own vested interest. There must be some rules to invoke a change and criteria set in advance to add or delete a new stock in the index. If an exchange traded fund for junior gold stocks emerges, there will be specific rules for deleting or adding at junior gold stock to the index. Maybe McEwen will propose rules that are to his benefit - time will tell. The most important thing to recognize that an exchange traded fund will significantly increase investors interest in junior gold companies. Just look what has happened with GLD. Thousands and thousands of investors today that would have never bought an ounce of gold for delivery have found it advantageous/convenient to buy paper gold vis the ETF - and I am sure there are many who will debate whether or not they should buy GLD and will only consider taking delivery of gold bullion itself. Just look at the success of GLD and how it is responsible for a significant amount of demand for gold bullion. Like it or not, ETF's have a profound impact on investors demand for the underlying assets composed within the ETF. I believe McEwen sees what I see, and an ETF for junior gold stocks will be PROFOUND - it will not only benefit his stock but many others just like VIT. If a junior gold index emerges, investors who chose not to buy the index may very well buy individual stocks outside the index that share the same criteria for including them within in an index. Thus, if VIT is never included in a potential junior gold index, investors will seek out other juniors that meet the same criteria that are required for a junior gold stock to be considered for a junior gold index - and if VIT meets those criteria there should be substantial increase in demand for VIT's stock - which would translate into a higher price for VIT.
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