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Friday, June 5, 2009

Gold News | Kinbaruri Gold Investment Deal with Glen Eagle Cancelled

Gold News

The proposed investment deal between Kinbauri Gold Corp and Gold Eagle Resources has been halted, as Kinbauri Gold said they didn't feel comfortable with the funding arrangements by Glen Eagle, and believed there wasn't enough funding available to make the deal happen.

Glen Eagle had in April offered to invest C$32 million in Kinbauri for a 45 percent stake in Kinbauri Espana unit -- which holds interests in the El Valle/Carles gold and copper project in northwestern Spain.

Separately, Glen Eagle said it believes that Kinbauri's termination is a breach of their deal and is considering its options.

Kinbauri, which is also the target of a takeover bid from Toronto-based Orvana Minerals Corp (ORV.TO), said it has decided to allow the matter to be determined in a court at the same time as the application brought by its shareholder Jaguar Financial Corp, scheduled to be heard on June 17.

Last month, Jaguar Financial, which owns 9 percent of Kinbauri, had approached the court, after Kinbauri rejected Orvana's offer of 55 Canadian cents a share as its deal with Glen Eagle was on the verge of completion.

In a statement on Friday, Kinbauri said a special committee continues to evaluate the takeover bid from Orvana Minerals, consider other alternatives and will make a recommendation to the board in the near future.

Gold News

Thursday, June 4, 2009

Gold News | Gold Prices Rise As Investors Look to Increasing Demand

Gold News

Optimism about the economy showed through in the commodities markets recently as investors sent prices for gold, oil and grains higher on the belief that demand for basic materials will soon rebound. I think they're right, although no one can predict the timing of any market.

There is "a general feeling that maybe we're starting to stabilize here in terms of the economy," said Stephen Platt, an analyst with Archer Financial Services in Chicago. "There is some hope that the demand might come back."

Surprisingly positive data on the jobs market renewed hopes that the economy is recovering. The Labor Department said Thursday that the number of unemployed workers continuing to receive benefits unexpectedly dropped last week for the first time in 20 weeks. New jobless claims also declined, falling to 621,000 from 625,000, nearly matching analysts' estimates.

Unemployment has been one of the most closely watched gauges of the economy's health throughout the recession. Rising job losses affect vast areas of the economy, including consumer spending, retail sales and the housing market. The report came a day ahead of the government's crucial tally of monthly job losses.

A slightly weaker dollar also helped spur buying of commodities, particularly gold and oil. A weaker dollar makes both gold and oil attractive investments. By buying gold, investors insulate themselves from the risks of inflation, while oil becomes cheaper for foreign buyers when the dollar falls.

On Thursday, the dollar traded mostly lower against other major currencies as central banks in Europe made the decision to keep their benchmark interest rates at historically low levels, signaling a cautious stance on the economy.

Low interest rates are a tool governments often use to revitalize the economy by lowering borrowing costs, but they can also undermine a country's currency. The Federal Reserve also has kept its benchmark interest rate very low — near zero — as it works to boost the U.S. economy, which has put pressure on the dollar.

The dollar has declined steadily since early March as the outlook on the economy improves. This leads investors to look for more traditionally risky assets like stocks in which to park their money.

Gold for August delivery rose $16.70 to $982.30 an ounce on the New York Mercantile Exchange, erasing nearly all of the previous day's 2 percent loss.

Other metals also rose. July silver jumped 58.5 cents to $15.8950 an ounce, while July copper futures added 8.9 cents to $2.3010 a pound.

Gold News