VC Market Intelligence June 2013

DCID MARKET INTELLIGENCE JUNE 2013 VISUAL CAPITALIST ABOUT VC MARKET INTELLIGENCE The goal of this monthly infographic is to provide a big picture snapshot of market signals, commodity trends, and economic indicators in an intuitive and visual way. MARKET TRENDS MONTH-TO-MONTH MAY 2013 VS PREVIOUS MONTH +6 THE US MARKETS +5 0+3.92% Nasdaq O +2.08% S&P 500 0 +1.95% TSX 0+1.86% Dow Jones O +0.20% TSX-V CONTINUE TO MOVE +4 HIGHER HITTING ALL +3 TIME HIGHS. +2 +1 The Canadian markets continue to struggle after a broad based selloff in -1 commodities. -2 -3 MONTHLY TECHNICAL ANALYSIS MARKET COMMENTARY The SPX index declined this week, marking two consecutive weekly declines; the first set since early November 2012. By Jeremy Salsburg NEUTRAL SILVER LINING Intermediate term (1-3 months) ASSET ADVISORS Market commentary provided by Jeremy Salsburg of Silver Lining Asset Advisors, LLC The most likely scenario is a test of support from the breakout at 1597.35 and the 50 day moving average at 1603. If sell side pressure pushes through the 1600 zone secondary support is at 1573.66. 561-948-3414 x10 [email protected] 1640.00 50 DAY MOVING AVERAGE 1620.00 1600.00 1597.35 1580.00 1560.00 1573.66 1540.00 1520.00 1500.00 1480.00 1460.00 1440.00 1420.00 1400.00 1380.00 90.00 44 30.00 Aug Sept Oct Nov Dec Jan 2013 Feb Mar Apr May June The last 3 tradable lows have all had RSI readings of 44, dip buyers have yet to let stocks get oversold. A break below these levels would be an excellent indication of a trend reversal. 100 80 The NYSE McClellan Oscillator is showing signs of a short term bottom, this should lead to low 60 40 20 -20 volume selling into the 1597-1603 support area and create a tradable low for investors. -40 -60 -85.16 -100 -120 -140 JUL SEP DEC 2012 FEB APR JUN AUG NOV JAN MAR JUN 2013 DOES LO W SILVER DEMAND AND HIGH ALL-IN COSTS SPELL TROUBLE Go SILVER? for Silver has been considered a precious element for 6000 YEARS and it was first used as a currency in 700 B.C. PRIMARY SILVER MINES account for 28% of global production, UP 1% in 2012. % Industrial silver fabrication SLIPPED BY 4 PERCENT to 465.9M oz, the result of the challenging economic environment seen in many industrial- ized countries. PRIMARY SILVER TOP TEN SILVER PRODUCING COUNTRIES IN 2012 MEXICO POLAND 162-2M oz 41.2M oz 2. 31 4. CHINA BOLIVIA 117M oz 39.7M oz PERU CHILE 111.3M oz 37.0M oz 9. 10 AUSTRALIA USA 56.9M oz 32.6M oz RUSSIA ARGENTINA 45.0M oz 24.1M oz 1200 WORLD SILVER DEMAND 900 600 IMPLIED NET INVESTMENT PRODUCER DE-HEDGING 300 COINS O SILVERWARE PHOTOGRAPHY JEWELRY I INDUSTRIAL APPLICATIONS '03 '05 '07 '09 '11 INDUSTRIAL PRODUCTION Due to poor macroeconomic conditions industrial production around the world has fallen, which in turn lowers the demand for industrial metals such as silver. CHINA 15% 10% INDIA 5% USA 0% -5% JULY 2011 JAN 2012 JULY 2012 JAN 2013 ALL-IN PRIMARY SILVER PRODUCER COSTS First Majestic FR $16.29/oz $22.27 Silver Closing Price May 31 2013 Pan American Silver PAA $22.30/oz Fortuna Silver FVI $24.17/oz .-. Great Panther Silver GPR $24.69/oz Silver Standard Sso $25.45/oz Hecla Mining HL $25.98/oz COMPANIES HAVE LIMITED OPTIONS AT LOOKING FORWARD CURRENT SILVER PRICE LEVELS Cut production and wait for economic conditions to improve Continue at current production pace, but increase inventories Hedge by shorting futures contracts (Hecla Mining is very good at this) DEPOSITS MEASURED & INDICATED OUNCES ENTERPRISE VALUE / OZ 335,100,000 FR S3.58 1,052,300,000 PAA 1.36 42,500,000 FVI 7.35 7,289,681 GPR 11.64 637,300,000 sso S0.42 276,629,300 HL S 2.96 ANALYST IDEAS First Majestic has fantastic all-in cash FR costs at $16 / ounce, they will be able to Capitalize on Silver Standard's EV/OZ, so you risk $0.42 per contained ounce of ride out any potential short to medium term adverse market conditions, 110 mil- Silver Standard's deposit. Additionally, Silver Standard has 460 million in cash lion in cash - trading at 33% cash to market cap. and is trading at 68% Cash / MC. The catch is 479 million+ ounces are still under exploration, this is long-term value play. MARKET DASHBOARD ECONOMIC INDICATORS UNEM PLΟΥΜΕΝT RATE 7.5% UNITED STATES Understanding VC Market Intelligence ΜΟΝEY SUPPLY M2 10.52 IN TRILLIONS VIX VOLATILITY INDEX 52 WEEK HIGH 16.30 52 WEEK HIGH T CURRENT PREVIOUS MONTH 52 WEEK LOw PREVIOUS MONTH THIS MONTH 231.49 CPI CONSUMER PRICE INDEX 52 WEEK LOW 52 WEEK HIGH PMI GDP GROWTH Q1 – 2013 CI RETAIL SALES CONSUMER CONFIDENCE INDEX GROWTH VS PREV QUARTER PURCHASING MANAGERS INDEX 1 2.4% $76.2 $376.33 54.2 $76.2 $373.13 Q4 – 2012 0.4% O $372.73 1 $52.3 $68,1 50.7 HIGHLIGHT US unemployment rate hits a 4 year low at 7.5% in April. 58.4 $359.72 49.9 EUROZONE NADA HINA NOTE: Eurozone / Euro Area only refers to the 17 countries using the euro PMI GDP UNEMPLOYMENT 53.2 1 53 1.80% 1.60% 1.40% Current Previous 1.6% + 52 EUROZONE 12.2% 12.1% 51 50.64 1.20% 50 1.00% 0.80 0.60 CANADA O 7.2% 7.0% 49 Current 0.40 0.20 48 0.2% 46.9 1 47 0.00% 46 -0.20% -0.2% 1 -0.30% CHINA* ur 45 -0.40% 49.8 49.0 -0.50% Q1 2013 C1 2013 Q1 2013 *Emplcyed Persor Index COMMODITY TRENDS Percentage change from last month 10% COMMODITY AV. PRICE SUMMARY AU GOLD (oz) AG SILVER (oz) PT PLATINUM (oz) PD PALLADIUM (oz) $1413.50 $23.01 $1474.90 $720.19 Commodity prices were weak across the board in May. 5% OIL OIL (WTI) GAS NAT. GAS (HENRY HUB) $4.04 U URANIUM (LB) $94.67 1% GAS $40.45 PT PD OIL GOLD CU AG 1% CU COPPER (LB) $3.30 2% 3% 8% 10% VISUAL CAPITALIST For more information on investing and commodities, visit us at: visualcapitalist.com MILLIONS OUNCES DCID MARKET INTELLIGENCE JUNE 2013 VISUAL CAPITALIST ABOUT VC MARKET INTELLIGENCE The goal of this monthly infographic is to provide a big picture snapshot of market signals, commodity trends, and economic indicators in an intuitive and visual way. MARKET TRENDS MONTH-TO-MONTH MAY 2013 VS PREVIOUS MONTH +6 THE US MARKETS +5 0+3.92% Nasdaq O +2.08% S&P 500 0 +1.95% TSX 0+1.86% Dow Jones O +0.20% TSX-V CONTINUE TO MOVE +4 HIGHER HITTING ALL +3 TIME HIGHS. +2 +1 The Canadian markets continue to struggle after a broad based selloff in -1 commodities. -2 -3 MONTHLY TECHNICAL ANALYSIS MARKET COMMENTARY The SPX index declined this week, marking two consecutive weekly declines; the first set since early November 2012. By Jeremy Salsburg NEUTRAL SILVER LINING Intermediate term (1-3 months) ASSET ADVISORS Market commentary provided by Jeremy Salsburg of Silver Lining Asset Advisors, LLC The most likely scenario is a test of support from the breakout at 1597.35 and the 50 day moving average at 1603. If sell side pressure pushes through the 1600 zone secondary support is at 1573.66. 561-948-3414 x10 [email protected] 1640.00 50 DAY MOVING AVERAGE 1620.00 1600.00 1597.35 1580.00 1560.00 1573.66 1540.00 1520.00 1500.00 1480.00 1460.00 1440.00 1420.00 1400.00 1380.00 90.00 44 30.00 Aug Sept Oct Nov Dec Jan 2013 Feb Mar Apr May June The last 3 tradable lows have all had RSI readings of 44, dip buyers have yet to let stocks get oversold. A break below these levels would be an excellent indication of a trend reversal. 100 80 The NYSE McClellan Oscillator is showing signs of a short term bottom, this should lead to low 60 40 20 -20 volume selling into the 1597-1603 support area and create a tradable low for investors. -40 -60 -85.16 -100 -120 -140 JUL SEP DEC 2012 FEB APR JUN AUG NOV JAN MAR JUN 2013 DOES LO W SILVER DEMAND AND HIGH ALL-IN COSTS SPELL TROUBLE Go SILVER? for Silver has been considered a precious element for 6000 YEARS and it was first used as a currency in 700 B.C. PRIMARY SILVER MINES account for 28% of global production, UP 1% in 2012. % Industrial silver fabrication SLIPPED BY 4 PERCENT to 465.9M oz, the result of the challenging economic environment seen in many industrial- ized countries. PRIMARY SILVER TOP TEN SILVER PRODUCING COUNTRIES IN 2012 MEXICO POLAND 162-2M oz 41.2M oz 2. 31 4. CHINA BOLIVIA 117M oz 39.7M oz PERU CHILE 111.3M oz 37.0M oz 9. 10 AUSTRALIA USA 56.9M oz 32.6M oz RUSSIA ARGENTINA 45.0M oz 24.1M oz 1200 WORLD SILVER DEMAND 900 600 IMPLIED NET INVESTMENT PRODUCER DE-HEDGING 300 COINS O SILVERWARE PHOTOGRAPHY JEWELRY I INDUSTRIAL APPLICATIONS '03 '05 '07 '09 '11 INDUSTRIAL PRODUCTION Due to poor macroeconomic conditions industrial production around the world has fallen, which in turn lowers the demand for industrial metals such as silver. CHINA 15% 10% INDIA 5% USA 0% -5% JULY 2011 JAN 2012 JULY 2012 JAN 2013 ALL-IN PRIMARY SILVER PRODUCER COSTS First Majestic FR $16.29/oz $22.27 Silver Closing Price May 31 2013 Pan American Silver PAA $22.30/oz Fortuna Silver FVI $24.17/oz .-. Great Panther Silver GPR $24.69/oz Silver Standard Sso $25.45/oz Hecla Mining HL $25.98/oz COMPANIES HAVE LIMITED OPTIONS AT LOOKING FORWARD CURRENT SILVER PRICE LEVELS Cut production and wait for economic conditions to improve Continue at current production pace, but increase inventories Hedge by shorting futures contracts (Hecla Mining is very good at this) DEPOSITS MEASURED & INDICATED OUNCES ENTERPRISE VALUE / OZ 335,100,000 FR S3.58 1,052,300,000 PAA 1.36 42,500,000 FVI 7.35 7,289,681 GPR 11.64 637,300,000 sso S0.42 276,629,300 HL S 2.96 ANALYST IDEAS First Majestic has fantastic all-in cash FR costs at $16 / ounce, they will be able to Capitalize on Silver Standard's EV/OZ, so you risk $0.42 per contained ounce of ride out any potential short to medium term adverse market conditions, 110 mil- Silver Standard's deposit. Additionally, Silver Standard has 460 million in cash lion in cash - trading at 33% cash to market cap. and is trading at 68% Cash / MC. The catch is 479 million+ ounces are still under exploration, this is long-term value play. MARKET DASHBOARD ECONOMIC INDICATORS UNEM PLΟΥΜΕΝT RATE 7.5% UNITED STATES Understanding VC Market Intelligence ΜΟΝEY SUPPLY M2 10.52 IN TRILLIONS VIX VOLATILITY INDEX 52 WEEK HIGH 16.30 52 WEEK HIGH T CURRENT PREVIOUS MONTH 52 WEEK LOw PREVIOUS MONTH THIS MONTH 231.49 CPI CONSUMER PRICE INDEX 52 WEEK LOW 52 WEEK HIGH PMI GDP GROWTH Q1 – 2013 CI RETAIL SALES CONSUMER CONFIDENCE INDEX GROWTH VS PREV QUARTER PURCHASING MANAGERS INDEX 1 2.4% $76.2 $376.33 54.2 $76.2 $373.13 Q4 – 2012 0.4% O $372.73 1 $52.3 $68,1 50.7 HIGHLIGHT US unemployment rate hits a 4 year low at 7.5% in April. 58.4 $359.72 49.9 EUROZONE NADA HINA NOTE: Eurozone / Euro Area only refers to the 17 countries using the euro PMI GDP UNEMPLOYMENT 53.2 1 53 1.80% 1.60% 1.40% Current Previous 1.6% + 52 EUROZONE 12.2% 12.1% 51 50.64 1.20% 50 1.00% 0.80 0.60 CANADA O 7.2% 7.0% 49 Current 0.40 0.20 48 0.2% 46.9 1 47 0.00% 46 -0.20% -0.2% 1 -0.30% CHINA* ur 45 -0.40% 49.8 49.0 -0.50% Q1 2013 C1 2013 Q1 2013 *Emplcyed Persor Index COMMODITY TRENDS Percentage change from last month 10% COMMODITY AV. PRICE SUMMARY AU GOLD (oz) AG SILVER (oz) PT PLATINUM (oz) PD PALLADIUM (oz) $1413.50 $23.01 $1474.90 $720.19 Commodity prices were weak across the board in May. 5% OIL OIL (WTI) GAS NAT. GAS (HENRY HUB) $4.04 U URANIUM (LB) $94.67 1% GAS $40.45 PT PD OIL GOLD CU AG 1% CU COPPER (LB) $3.30 2% 3% 8% 10% VISUAL CAPITALIST For more information on investing and commodities, visit us at: visualcapitalist.com MILLIONS OUNCES