Goldcorp (TSE:G) (NYSE:GG) CEO Chuck Jeannes, said the usual inverse relationship between gold and the U.S. Dollar is no longer the realty, as the sovereign debt crisis in Europe has decoupled the dollar from gold.
An inverse relation refers to if the dollar goes up, normally the price of gold will go up, and the other way around.
With the euro under tremendous pressure, "investors chose gold," said Jeannes.
So even though the U.S. dollar is preferred over the euro and has also risen against it, gold has risen against both of them, making them the place investors want to park their money to keep it safe.
Friday, April 30, 2010
Goldcorp (TSE:G) (NYSE:GG) CEO Chuck Jeannes, said the usual inverse relationship between gold and the U.S. Dollar is no longer the realty, as the sovereign debt crisis in Europe has decoupled the dollar from gold.
Newmont Mining (NYSE:NEM), Agnico-Eagle Mines (TSE:AEM) and Barrick Gold (TSE:ABX) Show Gold Stocks May Start Reflecting Gold Prices
After Newmont Mining (ASX:NEM) (NYSE:NEM), Agnico-Eagle Mines (TSE:AEM) (NYSE:AEM) and Barrick Gold (TSE:ABX) (NYSE:ABX), and other gold mining companies revealed strong earnings and outlooks on the quarterly reports, it looks like they are ready to finally break out and perform more in line with gold prices than underperform like they have been.
With many things lining up favorably for gold, it increasingly looks like gold may end up beating last year's record highs.
As the depth of the emerging sovereign debt crisis in Europe is unveiled, it has caused investors to pour their money into gold as the best and safest place to be, especially that it is now understood that there is no way this is going to stop with Greece, and no doubt the will of the European Union is being test in a way it hasn't been since its inception.
Possibly the best thing for the gold mining companies at this time is that they're getting so much attention it seems to have helped a lot of investors understand the industry better and how they can invest in that to their advantage.
But just like last year, the underlying drive of gold prices is as a haven of safety, and with the sovereign debt crisis of Europe and ongoing economic uncertainties, nothing seems in the way of gold prices to continue rise, and now it seems gold mining companies like Newmont Mining, Agnico-Eagle Mines and Barrick Gold are going to ride that wave even higher, and take their investors with them.
Barrick (TSE:ABX) (NYSE:ABX) CFO Jamie Sokalsky recently said that the great portion of the capex or capital expenditures will target the Pueblo Viejo project in the Dominican Republic, and the Pascua-Lama project located in Argentina and Chile.
The company has said aside $1.7 billion for its capex budget this year, which will cover 100 percent of the financing required at Pueblo Viejo.
Of the $1.7 billion budget, $1.6 billion will go to the two projects mentioned above.
Agnico-Eagle (NYSE:AEM) CEO Sean Boyd said recently the company has opened up five new mines and are positioned for strong growth going forward.
Because of the extra costs in opening the mines, earnings will be about level with what the street estimates are, although that should change soon once gold production ramps up.
For the entire year, Boyd projects production will reach close to 1 million ounces, almost twice what they produced in 2009.
Boyd added they are taking measures to cut costs, and together with increased production should provide value to their shareholders. Costs will also naturally drop now that the mines are online, which will grow earnings.
The overall goal is to eventually elimate the need to borrow to grow, and to grow from cash flow, again, decreasing the cost of doing business for Agnico-Eagle.
Gold continues its upward climb as investors continue to keep safe-haven as the primary motivator in their investment decisions.
The yellow metal hit above the $1,180 an ounce mark, and most are wondering how long it'll take to break $1,200.
Ongoing economic concerns and the potentially economic devastation of Europe with the sovereign debt crisis keeps gold as the best way to protect your wealth.
Thursday, April 29, 2010
Freeport-McMoRan Copper & Gold (NYSE:FCX) announced today the conversion rate for its 6 3/4% Mandatory Convertible Preferred Stock (the "Preferred Stock"), which automatically converts into shares of FCX's common stock on May 1, 2010. Under the terms of the Preferred Stock, the conversion rate per $100 face amount of the Preferred Stock will be 1.3716. All of the outstanding shares of Preferred Stock will automatically convert into common stock; therefore, no action by Preferred Stock holders is required.
FCX will issue approximately 38 million shares of common stock in connection with the mandatory conversion on May 1, 2010. After giving effect to this transaction, FCX will have approximately 470 million shares of common stock outstanding.
Holders of Preferred Stock on the April 15, 2010 record date will also receive the previously announced final quarterly cash dividend of $1.6875 per share, unless the shares of Preferred Stock were voluntarily converted into shares of FCX's common stock prior to the May 1, 2010 mandatory conversion date.
Holders are urged to consult their tax advisors with respect to the particular tax consequences to them of owning and disposing of the Preferred Stock and the common stock, including the consequences under the laws of any state, local or foreign jurisdiction. Conversion of the Preferred Stock into common stock generally will not be a taxable event. A U.S. holder's tax basis in the common stock received upon a conversion of the Preferred Stock will generally equal the tax basis of the Preferred Stock that was converted and the holding period for the common stock received will include such holder's holding period for the Preferred Stock converted.
FCX is a leading international mining company with headquarters in Phoenix, Arizona. FCX operates large, long-lived, geographically diverse assets with significant proven and probable reserves of copper, gold and molybdenum. FCX has a dynamic portfolio of operating, expansion and growth projects in the copper industry and is the world's largest producer of molybdenum.
The company's portfolio of assets includes the Grasberg mining complex, the world's largest copper and gold mine in terms of recoverable reserves, significant mining operations in the Americas, including the large scale Morenci and Safford minerals districts in North America and the Cerro Verde and El Abra operations in South America, and the Tenke Fungurume minerals district in the Democratic Republic of Congo. Additional information about FCX is available on FCX's web site at "www.fcx.com."
SOURCE: Freeport-McMoRan Copper & Gold Inc.
Freeport-McMoRan Copper & Gold Inc.
Kathleen L. Quirk, 602-366-8016
David P. Joint, 504-582-4203
William L. Collier, 504-582-1750
Copyright Business Wire 2010
Wednesday, April 28, 2010
Barrick Gold (TSE:ABX) (NYSE:ABX) had a great quarter as they exceeded analysts' estimates by a solid amount, with revenue and profits climbing on the increase in price and sales of precious metals.
Earnings rose to 75 cents a share, beating the 63 cents a share analysts had looked for, on revenue of $2.56 billion, a hefty increase of 44 percent from the year before in the same quarter. Earnings last year came in at 42 cents a share.
Net income was over twice what it was a year ago, coming in at $758 million 76 cents a share in contrast to $371 million, or 42 cents a share last year.
The average price of gold during that time was $1,114 an ounce, while gold sales for the company increased to 2.07 million ounce, a 21 percent rise.
Demand for gold is the driver of good results, as it's becoming the preferred safety haven for investors and hedge against inflation.
Although gold it the predominate force at Barrick's, copper helped the results for the quarter as prices there continue to surge. Copper accounts for approximately 14 percent of overall sales in 2009 for the company.
Guidance from Barricks is for 7.6 to 8 million ounces of gold production for 2010 at a cost of $425 to $455 an ounce.
Tuesday, April 27, 2010
Kinross Gold (TSE:K)(NYSE:KGC) announced it has finished its pursuit of Underworld Resources (CDNX:UW.V) by acquiring the junior gold mining company.
Terms of the takeover are 0.141 of each Kinross common share and C$0.01 in cash for each common share of underworld.
The offer values Underworld at C$139.2 million.
Kinross will issue 5.5 million common shares to complete the transaction.
The major asset held by Underworld is their White Gold project in the Tintina gold region.
Newmont Mining (NYSE:NEM)(ASX:NEM) exceeded analysts' estimates as first-quarter profits surged 46 percent on increased selling prices of gold.
According to CEO and President Richard O'Brien, performance for the quarter was based on growing demand and tighter supply, which should ensure bullish prices going forward.
on the conference call, O'Brien said, "Fundamentals including evidence of a rebounding market in India and growth from the jewelry market in China, plus sustained flows and historically low central bank sales continue to support gold price performance."
Net earnings for the quarter climbed to $743 million, or $1.11 a share, a major increase over the $277 million, or 40 cents a share last year in the same quarter.
Revenue grew 46 percent to $2.24 billion on sales of 1.33 million ounces of gold for the quarter. That was an increase from the 1.26 million ounces sold last year.
The average price of gold sold for the quarter grew 22 percent to $1,106 an ounce, with cost in relationship to sale stood at $480 an ounce.
Monday, April 26, 2010
Goldcorp (TSE:G)(NYSE:GG) seems to be poised for another strong quarter of gold production, and earnings per share, while estimated to come in at 27 cents a share - lower than the 40 cents a share in the same quarter last year - still reflects a strong quarter for the company, while also improving significantly over the 9 cents a share in the last quarter.
Estimated gold production for last quarter is about 30,700 ounces at its flagship Penasquito mine alone, with a projected 180,000 for the all of 2010 there.
This year Goldcorp is expected to produce another record in their gold production, which last year came to 2.42 million ounces.
Very few, if any, gold producers can do it as inexpensively as Goldcorp, and they continue to be among the best in that reguard, with cost running at $289 an ounce on a total cash basis, while standing at $422 an ounce on a by-product basis.
Barrick Gold is (TSE:ABX)(NYSE:ABX) due to report earnings, and if analysts' estimates are close, they should enjoy a good quarter with earnings per share increasing from 42 cents a share the same quarter last year, on $1.8 billion in revenue, to 56 cents a share the latest quarter on $2.4 billion in revenue.
The company has also reportedly increased its margins from 41.9 percent last year to $53.4 percent this year; a terrific improvement no matter how you measure it. Some companies take years to make this type of increase in margins, so to do it that quickly is quite an accomplishment, although the question is whether it's sustainable or not.
What makes Barrick Gold so desirable is the predictability due to its strong pipeline, which allows for some measure of consistency lacking in a lot of gold mining companies which always have new but unproven projects on their books.
Newmont Mining (ASX:NEM)(NYSE:NEM) appears to have a solid quarter under its belt, which should be confirmed when they release their report.
Newmont has been working on streamlining its operations and that should be reflected in their earnings results, which are estimated to reach 77 cents a share on $2.15 billion in sales.
That's up from the 40 cents a share the company generated in the same quarter last year on revenue of $1.44 billion.
The worlds second-largest gold production company has been incrementally increasing margins from 46 percent in 2005 to 57 percent in 2009.
Toronto-Dominion Bank analyst Greg Barnes upgraded Goldcorp (TSE:G)(NYSE:GG) to "Action List," which reflects the top stocks in the opinion of the bank.
Barnes gave the following reason as to why Goldcorp was upgraded, as “given our view of the company’s low political risk profile, conservative balance sheet, and low cost production.”
Goldcorp is of course always among the low-cost gold producers in the world, given them a strong competitive advantage.
Gold Reserve (TSE:GRZ), Crystallex (AMEX:KRY), ValGold Resources (CDNX:VAL) and Nationalizing Venezuela Gold Mining
While the news that Hugo Chavez is looking at nationalizing the gold mining concessions in Venezuela won't have a lot of impact on the industry, for a couple of companies, Gold Reserve (TSE:GRZ) and Crystallex (AMEX:KRY), it will be a blow to them, as they were ready to come in line soon.
For Crystallex, they were about to come in line with about 250,000 ounces of gold later in 2010, while Gold Reserve was slated to produce about 460,000 ounces of gold in 2012.
ValGold Resources (CDNX:VAL) was in the exploration stages and probably won't be hurt, other than losing potential.
Gold Reserve sunk $300 million into their ventures, and reportedly are in arbitration from already being taken over.
Laughably, Venezuela is seeking partners to work with them to develop their Las Cristina project, one of the largest undeveloped gold mines in the world.
Saturday, April 24, 2010
Eldorado Gold, (NYSE:EGO) IAMGOLD (NYSE:IAG) and Gammon Gold (NYSE:GRS) Response to Gold Prices Rising
Just because gold prices are rising doesn't guarantee gold mining companies will rise significantly with them, and that's the case with gold miners like Eldorado Gold (TSE:ELD)(NYSE:EGO), IAMGOLD (NYSE:IAG) and Gammon Gold (NYSE:GRS).
Of the three gold mining companies mentioned above, Eldorado Gold performed the best when measured by the last 12 months or so, while the Gammon and IAMGOLD struggled more, with Gammon plunging in share price on operational problems.
Gold and silver production at their Ocampo project in Mexico was the major factor in that, gold production was down 23 percent and silver production was down 5 percent for the first quarter.
A board shake up at Gammon may help turn things around for the company, although that remains to be seen, and in the gold mining sector there are a lot better companies to invest in until that's proven.
The positive for Gammon is it's beaten down and cheap, and if they are able to turn things around, that could bring some good returns for investors, but that is a risky bet, even at the current price of the company.
Marc Faber, publisher and editor of The Gloom, Boom & Doom Report, says the gold bull market will continue to run, and paper currencies will lose value as the printing presses of central banks around the globe are running non-stop.
In an interview with Kitco News, Faber said this, “If you have $100 today, you buy that much less in terms of a basket of goods and services then you did ten years ago – paper money has already lost a lot of value and in my view it will continue to lose value. The price of gold will adjust on the upside according to the loss of the purchasing power of money.”
Gold is being considered more and more a currency by a growing number of people, the reason it has been decoupling from the U.S. dollar and the usual inverse relationship between the two not performing as usual on a consistent basis.
Faber agrees, not only looking at gold alone as a currency, but other precious metals as well.
Friday, April 23, 2010
TD Newcrest analyst Greg Barns has upgraded Goldcorp (TSE:G) (NYSE:GG) to 'Action List Buy' this week, and increased the target price to $55 a a share from $50 a share.
Barnes said the reasoning behind the upgrade was this, "We believe Goldcorp has the best growth profile among its senior peers. We use higher multiples for Goldcorp than Barrick (TSE:ABX) (NYSE:ABX) or Kinross (TSE:K) (NYSE:KGC), given our view that it has a better growth outlook, lower costs and lower political risk."
The specifics of that are related to production at Peñasquito, which has a projected increase in production for all four metals there, including gold, lead, silver and zinc.
Annual payable production, according to TD Newcrest, for each metal is estimated at 470,000 ounces of gold, 28 million ounces of silver, 450 million pounds of zinc, and 200 million pounds of lead; all on an annual basis.
gold could go far beyond that, with it reaching 800,000 ounces of annual production from 2010 - 2015, based on increased quality of grades.
Jaguar Mining (NYSE:JAG) has been looked upon, even until recently, as one of the top small gold mining companies, but that has changed quickly after their latest quarterly report showed earnings which were down and higher costs of doing business.
Like a young man growing to quickly as a teenager, it looks like Jaguar is getting gangly and uncoordinated, as they're having to readjust their production goals in order to align with these new realities.
Part of Jaguar's problem as far as cost go were the continuing strength of the Brazilian real, which increased the cost of doing business for them. The other challenge was they hit lower grade ore, so while costs were rising the quality of the ore was falling, creating the lower earnings.
Even with lowering the production goals from 700,000 ounces to 650,000 ounces by 2014, it's difficult to see how they're going to reach them unless they change tactics as far as how to finance it, which no doubt would dilute the stock, or possibly dropping the plans to expand for now until circumstances change.
Either way, it's hard to imagine Jaguar reaching the lofty goals they've set for themselves without some major changes. Dilution or slowing growth seems to be the only options available to them, and to do that they'll have to change their past resistance to doing that.
Newmont Mining (NYSE:NEM) announced Friday it has sold it interest in the in the Amulsar Gold Project, which it had joint ventured with Lydian International (TSX:LYD). They divested of their stake via its Newmont Overseas Exploration Limited wholly owned subsidiary, which sold it to Lydian.
Per terms of the agreement, Newmont Overseas Exploration Limited received 3 million ordinary shares of Lydian along with the first cash payment.
That brings the overall total of ordinary shares controlled or owned by Newmont in Lydian to 8,150,000. That's over 10 percent of the outstanding or issued common shares in the company.
Barrick Gold (TSE:ABX)(NYSE:ABX) Goldcorp (NYSE:GG)(TSE:G) and Yamana Gold (TSE:YRI)(NYSE:AUY) are all enjoying a surge in gold prices today as Germany's assertion it stands ready to aid Greece pushed the euro up and the U.S. dollar down, resulting in gold prices increasing by over 1 percent at its high for the day.
Gold mining companies are partaking in the gold price surge, as Greece seems all but sure to need a bailout, although there is still a lot of uncertainty as to whether it will be enough or they come back in a year or two wanting or needing more.
Either way, gold investors like it when the European Union says they'll back up Greece, and gold prices increase whenever that statement is made and confirmed.
Even so, those holding or wanting to increase their positions in gold would do better to watch inflation, interest rates and things related to economic safety, rather than the economic soap opera coming from Europe, which while real, has a lot of script to go before we really see how bad the region is.
Portugal debt has been under pressure, as bonds rise in value, and it seems Spain and Italy, and possibly Ireland could be next in line - in that order - to ask for a handout.
Gold has exploded upward today, rising to as high as $1,156.35 an ounce, as the U.S. dollar fell against the euro after Germany again confirmed it stood ready to help Greece in their sovereign debt debacle.
As revelations have come out that Greece is far worse off than originally thought, more concerns have risen on whether bailing them out will even help the country, which could need another cash infusion not too long into the future, and this doesn't even deal with the problems coming from Portugal and Spain, which is highly doubtful the European Union could handle; even if they had the will to.
But what happens when they bail out Greece and the other member countries come with hat in hand wanting their bailout? It will probably be the beginning of the end of the European Union, if it already hasn't started with Greece.
Of course this story has gold going up and down along with the value of the U.S. dollar versus the euro, and that will continue to play out.
If Greece does get bailed out, gold will rise, if not, the dollar will increase in value and gold will have downward pressure on it.
The longer term concern for the value of gold is inflation, and as we've seen from the Labor Department, that has surged in the two most important sectors for consumers: food and fuel, which will make gold more attractive in the months and years ahead.
It's hard to tell how the European debt crisis will play out, as we don't know if the countries are coming clean or not, or if they're even capable of understanding where they stand economically.
For now most things are working in the favor of gold, and we won't know until it unfolds how deep the European Union is with the crisis it faces, and how that will affect the value and credibility of the euro.
Concerning gold, the other factor will be how soon the U.S. decides to increase interest rates as well, which could also put downward pressure on prices, at least for a short period of time.
The bottom line for gold will be inflation and safety, and the more we look at Europe and inflation, the better gold looks.
Thursday, April 22, 2010
The largest tin miner in Peru, Minsur (MINi.LM), announced it will start producing gold in 2010 at its Pucamarca mine.
Expectations are gold production will start sometime in the last quarter of 2010.
Projections are the mine should produce about 70,000 ounces of gold on an annual basis.
Minsur also operates one of the largest tin mines in the world, San Rafael.
It hasn't taken long for Exeter Resource's (TSX:XRC) (AMEX:XRA) spin-off of what has become Extorre Gold (TSX:XG) to get investors excited, as the latest resource estimate of Extorre has them reaching over 1 million ounces as exploration continues at their Cerro Moro project.
Exeter recently spun off Extorre Gold in order to focus on their Caspiche gold/copper project in Chile, so a new management team could solely concentrate on the Argentina of Extorre's.
Exeter itself has also updated their Caspiche project and now there are over 30 million ounces of gold and gold equivalents there, along with significant copper deposits.
Caspiche is among the largest undeveloped copper-gold projects in the world.
President and CEO of Extorre, Eric Roth, said the latest update at Cerro Moro raises their "our resource objective ... to 2 million ounces gold equivalent."
The continuing debacle in Greece has investors on edge, and that has pushed the price of gold down again, as the euro continues to drop while the U.S. dollar rose today.
At one point gold for June delivery had fallen by $13.50 to $1,135.30, although gold prices have rebounded some from that, and have traded from $1,133.10 to $1,149.80 throughout the day.
News that the budget deficit of Greece is probably worse that thought, and they are probably moving toward being bailed out has caused concern, but the ongoing uncertainty from the European Union and the IMF underscores there is probably extraordinary fighting behind the scenes as other nations like Portugal seem poised to pounce on bailout money if Greece gets rewarded for their terrible financial practices.
For investors, it's the uncertainty that continues to surround the Greece debt crisis, and even when it seems things have been settled, there continues to be mixed signals from the EU and IMF.
Adding to that the threat of Ireland, Italy and Spain, and you have an extraordinary set of economic circumstances which aren't going away, no matter what the outcome of the Greece fiasco is.
The good news for gold investors is gold continues to be strong no matter what the U.S. dollar does, implying the decoupling is real, although that will fluctuate back and forth for some time.
But it seems to say there is support under gold which even the worst of potential circumstances isn't able to break through, and that's good news for those holding gold.
There was also reports from the U.S. Labor Department today that inflation rose by 0.7 percent in March, with food prices surging the most for a month since 1984. Energy prices also rose, signaling inflation is growing, and that's something investors need to consider strongly in their gold strategies.
Wednesday, April 21, 2010
The continuing concerns over the debt crisis in Greece has investors going back to gold as a safe haven, and gold mining companies like Barrick Gold (TSE:ABX)(NYSE:ABX)and Goldcorp (TSE:G)(NYSE:GG) continue to ride the wave with them.
Both Barrick and Goldcorp made nice moves upward today, as investors look for a cheaper, but safe way to invest in the metal.
Even with the better performance of companies in their quarterly reports, that hasn't made much of an impact on the market, as they are mostly being compared with the disaster last year, which doesn't really give a good snapshot of the health of these companies, as they pretty much had nowhere to go but up, even with the poorest of managements in place.
Gold stood at $1,146.50 as of this writing, a gain of over $6 an ounce on the day.
Freeport-McMoRan (NYSE:FCX) is in talks about the possibility of selling a stake in its Grasberg mine to Indonesia via its Papua province, or possibly investors from that area.
Chief Executive Officer Richard Adkerson said on a conference call that "It could have some positive strategic benefits in terms of our relationship with the people there."
At this time Freeport owns a 90.64 percent stake in the mine while the Indonesian government owns the remaining 9.36 percent stake. Freeport ha operated the mine for 37 years through its PT Freeport Indonesia subsidiary.
Grasberg is the largest gold mine in the world.
Tuesday, April 20, 2010
Lihir Gold (ASE:LGL) Quiet on Barrick Gold (TSE:ABX), Newmont Mining (NYSE: NEM) Access to Data Room
Lihir Gold Garnering Increased Interest from Major Gold Mining Companies
Lihir Gold (ASE:LGL) is quiet on the news it has opened up access to its data room to Barrick Gold (TSE:ABX) and Newmont Mining (NYSE: NEM).
Newcrest Mining (ASE:NCM), which has already been rejected for its takeover offer for Lihir, has asked that Lihir allows them access to the data room in order to obtain the relevant information needed if they want to make another bid for the company.
A day before its quarterly report, NovaGold (TSE:NG) announced they have launched a pre-feasibility study at the Galore Creek project.
Galore Creek is one of the most highly touted projects in the world, and is among the largest undeveloped copper-gold-silver mines known. There is an estimated 1,300 million tons of high-grade copper-gold-silver at the project, with a strong possibility of more.
In a press release, the company said "The pre-feasibility study will provide capital cost estimates using higher copper and gold prices than used in previous studies, as well as permitting, construction and production timelines."
Teck Resources (TSE:TCK-B) has an equal share in the Galore Creek project.
Monday, April 19, 2010
Agnico-Eagle (TSE:AEM) and Comaplex Minerals (TSE:CMF) announced they've extended the exclusivity period under the previous agreemtned between the two companies in order to provide more time for required documentation and finish due diligence.
The exclusivity period was originally to end on April 19, 2010, but will now extend to May 3, 2010.
The purpose of the period is to deal with the acquisition of the rest of the shares of Comaplex Minerals which Agnico-Eagle already doesn't own.
A number of usual legal hurdles remain before the deal goes through, once the period is over, including approval from the boards, court, regulators and sharholders.
Pan American Silver (TSE:PAA) released an update of its silver and gold production for the latest quarter,
Gold production increased to 27,896 ounces, a nice 34 percent rise over the same quarter last year.
Silver production surged to 5.5 million ounces, an increase of 13 percent over the same quarter in 2009.
So far for the year, silver production is about 3 percent behind estimates for 2010 for the first quarter, while gold production is up by close to 8,000 ounces.
Gold production was driven largely from the better than expected results from the Manantial Espejo mine in Argentina. Lower cash costs were also related to better prices of gold than projected.
For silver, production is expected to pick up and estimates of 23.4 million ounces should be achieved for the year, said the company.
With the endless amount of economic news coming out which reiterates the volatility in the market, along with continuing government attempts to manipulate things behind the scenes, like the charges of fraud against Goldman Sachs (NYSE:GS) in order to push forward their regulatory agenda, gold has a lot of opportunities to present buying opportunities, and we need to be vigilant in watching for them.
We need to largely neglect the Goldman Sachs story, as that's completely irrelevant to the price of gold, no matter what clueless media outlets state.
More important is the debt of governments and the horrid monetary policies of central banks around the world and the amount of paper money they've thrown out into the market.
Inflation and a place of safety is what is driving investors in relationship to gold, and we need to keep from getting sidetracked by the ignorance of so-called financial reporters who simply regurgitate what the official Obama administration line is concerning Goldman Sachs.
They have no effect on gold, and only the continual assertion they do is what makes some people believe it does, not the reality. So even when media continue to assert this, ignore them, and focus on what is really driving the price of gold, and not the lie that charges against Goldman Sachs has the markets reeling.
The Goldman Sachs incident is related to something from 3 years ago, not anything related to the current market. Just understand this is a hoax as far as it relates to today, and is only, as mentioned, a tool the government is using in attempts to put pressure on other lawmakers to pass their regulatory agenda.
Don't get caught up in the politics of it and neglect the underlying fundamentals driving the price of gold.
Sunday, April 18, 2010
Harmony Gold Closes Three Shafts at Virginia Project
Harmony Gold Mining (NYSE:HMY) is closing down three of its shafts at the Virginia project in South Africa, affecting close to 3,700 workers.
The particular shafts being shut down have been mined for about 60 years, and according to CEO Graham Briggs, have "reached the end of their lives.”
About 10 percent of those working at Harmony Gold were part of the Virginia operations, and they will either be offered transfer, early retirement or retraining.
Costs for extracting gold has increased at the shafts while the amount of gold is shrinking, as they had to go deeper in to get the gold, raising the costs of doing business.
Saturday, April 17, 2010
News is out that Lihir Gold (ASE:LGL) has possibly prepared a 'data room' for those intersted in bidding on the company.
This could be a strategic move to pressure Newcrest Mining to increase its bid of $8.9 billion, which Lihir has rejected.
Other potential suitors of Lihi which have named include Goldcorp (TSE:G), Kinross Gold (TSE:K) and AngloGold Ashanti (NYSE:AU), although none of them have been confirmed as absolute.
Friday, April 16, 2010
NovaGold a challenge short term, great potential long term
For up to five years, it's possible NovaGold (AMEX:NG) could struggle strongly, even though it has two quality gold projects it has a stake in like Galore Creek and Donlin Creek.
It's not the long term prospects of NovaGold that concerns those following the company, as they are very bright, but it's not as simple as taking a stake in them and letting it ride, because until their large mines start to produce gold, there is a huge liquidity problem they face, which must be addressed and overcome if they're going to reach the day they can truly benefit from their holdings.
Even though John Paulson and George Soros invested $175 million in Novagold, which will help them in the early exploration part of their projects, but isn't much when considering the overall cost and scheme of things.
The two large project mentioned above are estimated to cost about $4 billion each to develop, so you can see that while $175 million helps, it's very little when looking at approximately $8 billion overall.
What NovaGold probably represents is the trend small mining companies which hold solid assets will be experiencing over the next several years, and this is larger companies will have to come in and acquire a large portion of those assets if they're to survive and thrive.
NovaGold has a 50/50 partnership with Barrick Gold (TSE:ABX) in their Donlin Creek project, as part of what we'll see going forward.
If NovaGold can survive the next several years, they do have extraordinary potential, and could generate a lot of profits for those investing in them. One must understand the short-term challenges though to determine how to proceed.
The fact that George Soros and John Paulson invested as they did in them show they understand what the huge potential of the company is, and whatever happens to NovaGold, they will reap the rewards, no matter which way they decide to head in the future.
Barrick Gold (TSE:ABX) has sold its Sedibelo platinum project to Platmin (TSE:PPN). The Sedibelo platinum project is located in South Africa.
The approximate $60 million paid by Platmin is for a 10 percent stake held by Barrick in the project.
How the deal breaks down is the stake itself is valued at $15 million, while additional "long lead items" worth up to $45 million will also be included in the deal.
Once Barrick decided not to increase its stake in Sedibelo, it was only a matter of time before they unloaded it. For Platmin it makes sense because it is located close to their Pilanesberg mine, the flagship project of the company.
The deal is expected to close sometime in the second quarter.
Goldcorp, Barrick Gold, Jaguar Mining all Drop
Goldcorp (TSE:G), Barrick (TSE:ABX) and Jaguar Mining (TSE:JAG) were all down today as gold futures and gold mining stocks took a hit from the uncertainty generated from the SEC charging Goldman Sachs with fraud.
Supposedly this has worried investors over whether there is a level playing field out there, but this is only something the SEC alleges, and yet has to be proven, so the news is in reality largely irrelevant, but does underscore how skittish investors are now that equities and commodities have been surging throughout 2010.
Most investors and analysts are starting to look for a correction, and it seems investors are more than ready to flee on any news that comes out which will have a negative effect on the markets.
Gold futures dropped the most since the early part of February, finishing down by 1.9 percent. For Jaguar Mining, they weren't simply affected by the news of Goldman Sachs, but by the announcement costs for the last quarter were larger than expected based on currency management issues. Shares in Jaguar dropped 6.5 percent on the day.
Gold traders dump the yellow metal on Goldman Sachs fraud charges
In an illogical move, traders fled gold after the news that Goldman Sachs (NYSE:GS) was charged with fraud by securities regulators.
The idea that gold is considered a risk in volatile times doesn't make sense, but then traders behave in that manner, although gold investors don't.
Gold futures plunged on the news, dropping by over $24 an ounce as of this writing.
Most fears over gold are in the short term and not the long term, as uncertainty over what else may emerge in the banking industry has gold traders flustered for now.
Thursday, April 15, 2010
With the extraordinary run of gold prices, and what looks like a gold bull run which will go on for years, a number of "gold companies" have been communicating in a manner which doesn't reflect what the company actually is.
Does the company have a variety of precious metals they mine? Many do, yet they continue to market themselves as "gold companies," when in many cases gold isn't the primary metal that is mined by them.
Major mining companies which have fallen into this practice include Goldcorp (TSE:G) and Barrick Gold (TSE:ABX), which most investors consider primarily gold mining companies, when in fact they have numerous metals they extract from the ground.
Under normal conditions this would be a positive to have a variety of revenue sources, but in the age of the gold bull run, solely focusing on gold posititions them stronger in the mind of investors and the market.
Just keep in mind when evaluating gold mining companies, that most aren't solely gold miners, and research how many other metals they mine and the percentage of that in relationship to revenue and profits. You don't want to fall asleep at the wheel thinking you're strong in gold by investing in a company that may only be a gold mining company in name, but in fact is a metals mining company with gold as one of the various metals they generate revenue and profits from.
Who are some of the real gold mining companies in the world, as measured by almost completely mining gold? They would include Harmony Gold (NYSE:HMY), Kinross (NYSE:KGC), Lihir (Nasdaq:LIHR), Gold Fields (NYSE:GFI) and AngloGold Ashanti NYSE:AU), among others.
While these mine other metals, their primary source of revenue and profits is gold. All of this can change as they bring new projects online, but for now, they are the more pure plays in the gold mining industry.
Gold dipped earlier in the session but has rebounded to level off around $1,160 an ounce.
Even though Greece and other members of the EU made it look like the loans promised the country were only as a last resort, and reiterated they may not be needed, already Greece is saying there's a good possibility they'll have to apply for the loans, making investors jittery over the implications of the move, and what that may mean for other struggling countries in the EU, who without a doubt are poised to get their share of the money once Greece has received theirs.
But not only is the need for a rescue the main thing bothering investors, but whether or not it'll even be enough to keep the country going, as there has been little done to deal with the core problem of the issue, which is Greece and its mindset itself, which has spent far beyond its means to keep its socialist agenda going.
This is why gold is holding, and may be ready to run up again, depending on how believable a bailout of the country will be as to how long it will last and if it'll take hold.
Gold is increasingly being thought of as an alternative currency, and it will continue to strengthen against paper currencies, including the euro, and is being considered a place of safety equal to the U.S. dollar by many, as evidenced by its decoupling from the U.S. dollar in its usual inverse relationship.
Newmont Mining Corp. (NYSE:NEM) said they're looking at starting up its Doris North gold mine after an a one year hiatus from the project.
Although the Doris North mine is a small one, with an estimated 300,000 ounces of gold there.
Reopening Doris North would probably be a prelude to nearby projects, which contain much more gold, as the combination of Doris Central, Boston and Madrid mines hold an estimated 3 to 5 million ounces of gold.
Other plans are to bring in a mill which could process 800 tons of ore a day, which would be in preparation for all of the projects it would seem, which are being considered a second phase in the overall area.
Underground work could start as early as the fall of 2010 for Doris North.
Wednesday, April 14, 2010
Barrick Gold (TSE:ABX) was encouraged by the decision by a U.S. court to allow the gold mining company to move forward at the Nevada Cortez Hills mine.
People opposing Barrick had asked for a complete work stoppage while the U.S. Bureau of Land Management studied some of the concerns laid out by the group.
While there were some limitations imposed on Barrick, it was good to see a judge which understood the implications if the mine was closed and some of the dubious motives of those attempting to close it, who seemed more obsessed with that than other issues.
Consequently, Barrick won't be able to move ore off the site and will be limited as to how much water will be pumped from the mine while the study is being conducted.
In 2010, Barrick estimates the Cortez mine will product somewhere between 1.08 to 1.12 million ounces of gold. The mine employs over 1,000 people.
In an incredible statement, consultancy firm GFMS Ltd. announced in a press release that the gold bull run was over, and it'll probably play out over the next year or so.
Of course that's cowardly in itself, as they give themselves enormous wiggle room if gold keeps on going up in price to say it's taking some time to wind down.
In the press release, GFMS chairman chairman Philip Klapwijk said this, "We're certainly in the end-game now, although that could still take a year or more to play out. But after that, it's difficult to see how we can avoid a hefty drop in prices if we want to boost jewelry and trim scrap to bring the overall market back into equilibrium."
So the trillions in paper money printed around the world, increasing inflation and place of safety aren't factors any longer in the price movement of gold? That can't even be taken seriously.
Now that doesn't mean there won't be a correction, as there is always that as part of any commodity or investment that rises quickly. But to announce the gold bull run is over is the height of ignorance to me, and must have been thrown out there to garner attention rather than to be taken seriously.
But when the gold bull run continues, people need to remember it was GFMS that said it was over, and determine from there if they want any other input from the company.
Tuesday, April 13, 2010
Royal Gold Gets Downgraded
UBS (NYSE:UBS) announced it has made several estimates below consensus, with Royal Gold (Nasdaq:RGLD) bearing the brunt of it, being downgraded from "Buy" to "Neutral" based on the share price rising quickly.
Since mid-February when the share price of Royal Gold dropped below $13, it has rebounded strongly to close at over $17 a share today; a move considered to strong in the eyes of UBS.
Other companies UBS has estimated as below consensus are Gammon (NYSE:GRS), IAMGOLD (NYSE:IAG), Agnico-Eagle (NYSE:AEM), Coeur d'Alene Mines (NYSE:CDE) and Yamana (NYSE:AUY).
Major competitors for investor dollars for Royal Gold are Gammon and Harmony Gold Mining Co. (NYSE:HMY).
NovaGold Quarterly Report
First quarter results for NovaGold Resources (TSE:NG), while nothing to brag about, did improve over the same quarter last year, as they improved losses from $28.5 million last year to $18.7 million losses this year.
The $28.5 million equaled 20 cents a share, while this year losses were 10 cent a diluted share.
Revenue for the quarter came in at only $30,000 for the quarter, far behind the $300,000 in 2009. Most of that was the result of a major decrease in sales of land in the Alaska market.
NovaGold targets mineral properties in Alaska and British Columbia, Canada for exploration and development.
The future of NovaGold is in its joint-venture with Barrick Gold (TSE:ABX) at the Donlin Creek project, which will produce an estimated 1 million ounces of gold on an annual basis for the next 20 years.
Gold and Oil
Gold and other metals headed south today, as the results of Alcoa (NYSE:AA) disappointed; stocks also fell as investors responded to the poor performance of Alcoa, generating concerns the economy isn't anywhere near a sustainable recovery, if it's in a recovery at all.
Long term investors in gold should be too concerned, as this is a temporary blip in the market, as gold fundamentals should remained strong, based on inflation concerns and the sovereign debt crisis in Greece and other parts of the European Union.
Gold has dropped as low as $13.90 today, to $1,149.20, but has regained much of that, rebounding to $1,152.50 as of 1:53 EST.
For commodities, most eyes have been on oil today rather than gold, as losses will accumlate for the fifth straight trading session, as inventory is expected to increase again.
Monday, April 12, 2010
Newcrest Mining still interested in Lihir, but not at any cost
The assertion by Newcrest Mining (ASE:NCM) that its offer to acquire Lihir Gold Ltd (ASE:LGL) was "full and fair," along with the invitation to talk more with the company, seems to imply they still want to make a deal, but there isn't going to be any major new offers which would be far beyond the one they already made; although it seems to leave so wiggle room to increase it slightly.
What has been put on the table by Newcrest is to trade of share of Newcrest for nine shares of Lihir, plus an additional 22.5 cent a share. That would also be minus any dividend added by Lihir up till June 30, 2010.
With Newcrest in a strong position as far as its financials go, they don't have to make this deal in order to grow in the future, but it is a deal that should work well for them and Lihir. Newcrest has a market cap of around $24.5 billion with net debt of only about $200 million.
Newcrest said they'll continue to pursue the deal only if shareholders from both companies get value out of it, and the support of shareholders on both sides are there.
Lihir has rejected the offer by Newcrest, believing it undervalues the growth of the company and its current assets.
Gammon Gold Production
Gammon Gold (TSE:GAM) reported reduced production in the first quarter, as levels plunged by 13 percent over the same period a year ago, although gold and silver prices experienced nice jumps.
Last year in the first quarter Gammon produced 36,829 ounces of gold and 1.35 million ounces of silver. For the first quarter this year, that was down to 28,431 ounces of gold and 1.28 million ounces of silver.
Gammon gave the reason for gold production declines as coming from replacing of equipment in the quarter and voids from former mining activity which were larger than expected.
The average price of gold for the quarter the company garnered was $1,107 an ounce for gold, and $16.81 an ounce for silver. That was far above the $903 an ounce for gold and $12.63 an ounce for silver received last year.
Sunday, April 11, 2010
Gold will get an interesting test this coming week, as the European Union committed about $40 billion in loans to Greece for a backup in case of emergency over the weekend, and the IMF reiterated they've made $10 billion in loans available as well.
They also noted that this was only for 2010, as over the next three years it could reach as high as $107 billion.
Now as far as all this affects the price of gold, we've been in relatively new territory lately in that gold has been decoupling from the U.S. dollar as people consider it a more trusted form of currency than the paper currency, and the Greece debt crisis has largely brought about that change.
It remains to be seen if investors continue on with this practice now that the EU has become more specific in its support, which seems to have an endless moving target in the recent past, implying a lot of disagreement behind the scenes.
Now that specific numbers have been thrown out there, it'll be a good test and learning experience to see if gold prices continue to hold up under the seemingly safer conditions presented to Greece.
It could cause temporary downward pressure on prices, but when you look at the so-called austerity program of Greece to deal with their extraordinary and outrageous excesses, it's very underwhelming indeed, and doesn't lend itself to being something that would necessarily allow all the European nations to keep supporting if there isn't real change in Greece.
If investors feel the same way, and most don't believe Greece will make real meaningful and long-term change, we could see gold shrug off the temporary fixes being offered the country and explode to new highs.
Obviously that's a big if, but we are in uncharted territory for the times we are living in, and there are no sureties as to how gold will respond to them.
Saturday, April 10, 2010
NovaGold Resources Strong Future
Although the current resources of NovaGold (AMEX:NG) haven't been inspiring to investors, those they hold with future potential definitely are, which is why hedge fund investors John Paulson and George Soros made significant investments in the company.
Total investment from the two hedge funds totaled $175 million, and that doesn't include other investors with interests in the gold miner.
Investors with a long term outlook know the extraordinary value in Novagold, as evidenced primarily from their Donlin Creek and Galore Creek projects, which are considered among the largest of any gold projects in the pending development stage in the world.
Novagold is another undervalued gold mining company with not only the two project mentioned above as part of their future, but others as well.
The company has also made quality partnerships with companies like Barrick Gold (NYSE:ABX) and Teck Resources (TSE:TCK-B), along with the financing deals, showing they have a great plan in place and are getting the right partners and financing to go forward with confidence and success.
It seems Goldcorp (NYSE: GG) isn't getting the respect it deserves, as the mining company has a lot of things going for, yet is selling at about $40, a very low price for what the company has.
For example, Goldcorp has a solid present and outstanding future with their mining projects, and last year alone produced 90,000 ounces of gold and about 1 million ounces of silver, and they have the means and sources to continue that on for some time, and even increase it.
I say that because of their Peñasquito, which has a huge future for the company, and is among the largest in the Americas.
Goldcorp should be a great stock for those with a long-term outlook, as it has positioned itself strongly for the present and future which not too many of its rivals and meet.
Where is gold going next?
It has been a struggle, but gold has again broken past the psychological barrier of $1,150 an ounce, and some are looking for a target as high as $1,240 in the not too distant future.
Of course $1,200 should be another barrier to break through, but with so many variables out there to move gold one way or the other, it's hard to tell where it'll go in the short term, especially if the Greece debt crisis ends with them being bailed out, which could put downward pressure on gold, at least temporarily.
But Greece alone isn't driving gold up, and the idea that gold is an alternative currency to paper currencies has been increasing among some who haven't thought that way in the past, and that will be a primary driver of gold prices in the years ahead, as governments and central banks around the world attempt to figure out how to pay back the extraordinary amount of debt they've incurred and try to limit the pain related to the paper money they've printed out as a consequence.
The close ot $1,161.40 an ounce for gold on Friday is the highest close in four months, and it's almost assuredly going to rise higher than that going forward.
Friday, April 9, 2010
Gold surges to four-month high
Gold closed the week hitting a four-month high as deepening concerns about the Greece sovereign debt crisis refuses to go away, and investors flock to safety in concerns over all paper currencies, which less people are trusting daily and the Greece crisis has revealed, as the euro continues to take hits from its weakening position as a viable currency.
Gold futures for June delivery increased to $1,161.90, the strongest finish since December.
The concerns over Greece are that it will default on its debt, which a growing number of investors are believing is going to happen.
As there is no will or discipline among central banks or governments to quit printing their currencies in order to artificially and temporarily prop up their economies, investors are realizing we're reaching a point where the value of paper currencies will be under pressure for years, along with increasing inflation from the misguided policies.
That makes gold and other commodities highly desirable, and should outproduce other investments over the next decade.
Eldorado Gold Corporation (TSE:ELD)(NYSE:EGO)(ASE:EAU) will release its 2010 First Quarter Financial Results after the market closes on Thursday, May 6, 2010. Paul N. Wright, President and Chief Executive Officer, of the Company will host a conference call on Friday, May 7, 2010 at 8:30 AM PT (11:30 AM ET).
The call is being webcast by Thomson Reuters and can be accessed at Eldorado Gold's web site at www.eldoradogold.com or from www.earnings.com.
Teleconference call details are as follows:
Calls in numbers are:
Toll Free: 1-800-355-4959
Chairperson: Paul Wright, President & CEO
The replay numbers are:
Toll Free: 1-800-408-3053
Pass code: 8574327
Replay will be available until May 14, 2010
Eldorado Gold Corporation is a gold producing and exploration company actively growing businesses in China, Turkey, Brazil, Greece and the surrounding regions. We are one of the lowest cost pure gold producers. With our international expertise in mining, finance and project development, together with highly skilled and dedicated staff, we believe that Eldorado is well positioned to grow in value as we create and pursue new opportunities.
Request for information packages: laurelw@eldoradogold.
Ivanhoe Mines (NYSE:IVN) development of their Oyu Tolgoi gold and copper project is about to begin, with a price tag of approximately $5.5 billion committed to the construction.
Production at the mine is estimated to begin in 2013, and an initial investment of $758 million will be put toward the project this year.
Ivanhoe has a strong partner in Rio Tinto (ASE:RIO), which has increased their stake in Ivanhoe in anticipation of the eventual haul the largest gold and copper mine in the world yet to be worked will produce.
Rio Tinto will finance the equipment to use at the project.
Estimates are Oyu Tolgoi has 46 million ounces of gold and 81 billion pound of copper reserves.
Thursday, April 8, 2010
SPDR Gold Trust
Gold bullion held by SPDR Gold Trust (NYSEArca:GLD) has reached record levels, as the exchange-traded fund added 9.7 metric tons of gold to its reserves, the highest ever held by the ETF.
Holding as of Thursday for SPDR stand at 1,140.43 tons after adding the physical gold to their holdings.
The increase in gold was the largest addition in over six months, and represented an increase of 0.9 percent.
SPDR said their net asset value stands at $42.09 billion.
Gold: The New Currency
The finance minister of Greece announced today that the country will continue to borrow, even at the high interest rates which have increased of costs of attaining capital. It generates the question of how all of this will affect the price of gold, the yen, and the U.S. dollar.
Investors are again losing any faith that is left in the country, and are very unsure as to weather Greece will be able to pay off its huge debt, which are about to become due very soon.
What the sovereign debt crisis of Greece has revealed in relationship to gold, the yen and the U.S. dollar is that gold is increasingly becoming thought of as a form of currency by a growing number of people, which is the reason you see it moving in tandem with the U.S. dollar and yen on some days people are looking for a safe haven for their money.
That means there is a lack of faith in all paper currencies at this time, and while the dollar and yen will continue to be considered to be a relatively safe place for people to place their money, gold is growing in influence, and for many, is by far the safest place to put their money in economic times like these.
The Greek debt crisis has brought this to the surface for all to see.
Gold: The New Currency
Clients who lost money because of investments in Citibank (NYSE:C) will be compensated, as the bank agreed to pay about $80 million to the alleged victims.
This is in relationship to clients of Lehman, which Citibank was marketing their products to those in the country with modest savings and supposedly wasn't in their best interests to invest in.
Oddly, many of those being compensated weren't even Lehman clients, but the banks of some of the people had invested in the products, which caused losses when Lehman collapsed.
Those who agree to the deal will receive their money up till May 7.
Most of those affected by the failure of Lehman Brothers are expected to take the offer.
Teck Resources (TSE:TCK.B),Centerra Gold (TSE:CG) and Eldorado Gold (TSE:ELD) are all down today as concerns over the Greek debt crisis continues to be a major factor in the markets.
Centerrra Gold has the added burden of violence and geo-political problems in Kyrgyzstan, where their flagship mine - Kumtor is located.
This is going to continue to be the story until the Greek crisis resolves itself one way or the other, and will also including lingering doubts about a number of other nations in the European Union.
We'll continue to see gold and the U.S. dollar and yen be choice people go to for safety, and the new realities have investors going back and forth between them.
Gold has rebounded from earlier in the day, and has gained to reach past the $1,150 mark again, which it continues to flirt with.
Wednesday, April 7, 2010
Jim Rogers on Gold
Jim Rogers reminded investors in gold to hold onto it and not sell, as he maintains gold could go as high as $2,000 over the next 10 years, and those discarding it will miss out on a lot of profits.
Of course it also must be considered as the best place of safety at this time, and there is no paper currency close to it for those who understand the staying power of gold.
For the first time in a long time, gold has fought the U.S. dollar as the haven of choice, and even when the dollar goes up, there have been days where gold has risen with it, defying the usual inverse relationship between the two where gold will go up when the dollar goes down, and the opposite.
When they go up together, that means a sizable number of people and/or institutions consider gold to be safer than the dollar, and that's quite a change from the normal behavior of those looking for safety.
Greek Sovereign Debt and Liquidity Problems Drive Gold Prices Up
After gold rose well past $1,150 an ounce today before settling below the mark, safety was the key factor driving it, and as ongoing concerns about Greece and the euro continue in the forefront, that will be the case for some time to come.
There appears to be a return to a liquidity crisis in Greece, as Commerzbank is pulling it repos with Greek banks, which coupled with the ongoing withdrawal of funds by consumers, makes this a full-blown problem which really has no where to go but the loss of liquidity.
Once news of this gets out on a larger scale and is understood as to what it means, gold, the yen, and probably the U.S. dollar will be the place investors park their money until the result of this crisis finally plays out.
Gold Closes at highest level in 2010
Gold surged on concerns over the euro, closing the session at $1,153 and ounce, its highest close in 2010. That was a $17 gain for the day.
The safety factor helped major gold companies like Barrick Gold (TSE:ABX), Eldorado Gold (TSE:ELD) and Kinross Gold (TSE:K) make nice gains on the day, led by Eldorado with a huge increase of 7.38 percent.
With little place for those looking for safety to go, gold will continue to battle it out with the U.S. dollar as the safety investment of choice, as the dollar is also suspect, and only looks good when compared with other struggling currencies.
Gold up again on weakening euro
With investors continuing to look for an alternative to the euro, gold is rising in reponse to that increasing demand, rising above $1,150 an ounce today, although standing slightly below it as I write.
This is the fifth session in a row gold has made gains, and it stands at the highest levels it has reached in 2010.
Reports from Europe that its gross domestic product remained flat in the fourth quarter caused investors to seek opportunities elsewhere, with gold being the chief beneficiary.
Exeter Resource (TSE:XRC) has reportedly attracted significant interest in selling the company and its Caspiche gold-copper-silver project in Chile.
Along with some interest from the Chinese, other major gold companies interested are Newmont (NYSE:NEM), Barrick (TSE:ABX) and Kinross (TSE:K).
It could be a very good deal for either Kinross or Barrick, as they already have operations within 10 to 15 kilometers of the site.
To set up the sale of the company, Exeter spun off its Cerro Moro project - which produced gold and silver - into a new company.
The Caspiche project is a gold-copper porphyry system, which means it has similarities to some of the largest gold-copper mines in the world, which is a very attractive asset, which should ensure a sale sometime in the near future, with executives at Exeter thinking it could be sold by the end of the year.
Kinross Gold and Barrick Gold deal for Cerro Casale Project
Kinross Gold (NYSE:KGC) has sold Barrick Gold (NYSE:ABX) 25 percent of its stake in the Cerro Casale project in Chile for about $474 million.
Terms of the deal were $20 million in contingent obligation from Barrick Gold, along with $474 million in cash.
Barrick now controls the project with a 75 percent stake, while Kinross now holds a 25 percent stake in the Cerro Casale project.
Tuesday, April 6, 2010
Jim Rogers who is a bull on commodities throughout the next decade or possibly more, has stated recently that he wouldn't acquire any more gold at this time, as the price has surged and could go sideways for awhile.
At the same time, Rogers said he won't be selling any of his gold for some time either.
Along with the high price, speculators have now entered the gold and oil markets, and they could drive prices up for no reason, and those investing in gold could take a hit as a result, as it may not be market forces but speculation moving the prices.
Rogers advises commodity investors to invest in commodities at lower price levels like natural gas and silver.
Tech Resources and Fronteer Development Joint Venture
Tech Resources (TSE:TCK-B) and Fronteer Development (TSE:FRG) say they are planning to begin drilling in Turkey at the Halilaga project in Turkey, a joint venture between the two companies, with Tech Resources represented by their subsidiary "TMST."
Halilaga includes deposits of gold and copper at the site, and the companies are committing $2.7 million for the drilling program.
Teck Resources is overseeing the project, as they have a stake of 60 percent in the venture.
Drilling is planned to start in June, with an estimate for the first-round resource scheduled near the end of 2010.
Monday, April 5, 2010
PC Gold Raising Capital to Add Drill
PC Gold (TSE:PKL) announced it will be raising $6.96 Million in a private placement which will be used to expand exploration at its Pickle Crow gold mine in Ontario.
An offering of 3.85 million flow-through shares at C$1.82 each is the means of raising the capital.
After a large gold discovery at Pickle Grow in March, PC Gold wanted to increase its drilling there, which will be done through adding a fourth drill once they receive the cash.
The offering will be held on April 20.
Bear Lake Gold
A class action lawsuit filed against Bear Lake Gold (TSXV:BLG) has reportedly been settled, although no terms of the deal were revealed.
The terms, while not disclosed, will be funded, for the most part, "through directors and officers insurance coverage, with a contribution from the company."
The lawsuit was followed after it was found there were "serious material inconsistencies in its exploration data."
The settlement still has to be approved by the court.
Barrick Gold (TSE:APX) is asking the U.S. District Court to hear oral arguments concerning being allowed to continue mining at the Cortez Hill project while awaiting the reviews of the U.S. Bureau of Land Management on potential environmental impact of mining in the area.
The 9th Circuit Court of Appeals ordered more analysis of the effects on the environment, and shut down the mining operations at the time.
Barrick Cortez, a subsidiary of Barrick Gold, is asking for permission to mine on a limited basis while awaiting the outcome.
Junior Gold Stocks
After taking the latest economic hit or correction, gold has held on strongly, finding support at around the $1,100 an ounce level. There doesn't seem to be much chance that it'll change any time soon, and gold mining stocks, especially junior gold stocks, could be ready to explode upwards, as they lag the overall gold market, even though gold continues to be a long-term play.
For example, the larger gold stocks are down about 15 percent, while gold itself is up 30 percent. But for junior gold stocks, they are still down 60 percent, with a lot of room to increase, which many of them assuredly will going forward. This is as of the latter part of 2007, when noting the numbers above.
The gold bull market will be around for some time, and even though there is the possibility of interest rates being increased in the latter part of 2010, that shouldn't be near enough to overcome the economic pressures which continue to drive the price and value of gold up.
Junior Gold Stocks
Saturday, April 3, 2010
Silver Short Squeeze Could Be Imminent
FORT LEE, N.J., April 3
FORT LEE, N.J., April 3 /PRNewswire/ — The National Inflation Association today issued a silver update to its http://inflation.us members:
On December 11th, 2009 NIA declared silver the best investment for the next decade. In our December 11th article, we said that it wasn't a coincidence that the very day Bear Stearns failed was the same day silver reached its multi-decade high of over $21 per ounce. We went on to say, "The reason why we believe the Federal Reserve was so eager to orchestrate a bailout of Bear Stearns, is because Bear Stearns was on the verge of being forced to cover their silver short position."
JP Morgan took over the concentrated short position in silver from Bear Stearns and gained complete control over the paper price of silver. Within weeks, JP Morgan was able to manipulate the price of silver down to below $9 per ounce. NIA believes they were able to drive the price of silver down through "naked short selling," selling paper silver that is unbacked by physical silver.
On February 5th, we witnessed another sharp decline in silver prices, which NIA described on February 7th as being "just a temporary wash out, before a huge surge in silver prices later in 2010." Since then, silver prices have rebounded by 18%. The temporary wash out that occurred on February 5th was predicted by independent metals trader Andrew Maguire, who came out this week exposing the fraud that is taking place in the paper silver market.
On February 3rd, Andrew Maguire wrote Eliud Ramirez, a senior investigator for the CFTC's Enforcement Division, giving him the "heads up" for a "manipulative event" signaled for February 5th. He warned the CFTC that JP Morgan was about to manipulate down the price of silver after the release of non-farm payroll data on February 5th. Andrew said that the takedown would happen regardless of if employment was better or worse than expected and the price of silver would be flushed to below $15 per ounce. During the next couple of days, silver was crushed from $16.17 per ounce down to a low of $14.62 per ounce.
Despite all of the evidence given by Andrew Maguire to the CFTC of gold and silver manipulation, Andrew wasn't allowed to speak at last week's CFTC hearing on limiting gold and silver positions held by banks like JP Morgan. Bill Murphy of the Gold Anti-Trust Action Committee (GATA) was allowed to speak (within a five-minute time constraint) and present some of Andrew Maguire's evidence, but right when his presentation began there was a technical failure of the live television broadcast, which was mysteriously fixed as soon as he was done speaking. Bill Murphy was scheduled for several mainstream media television interviews after the CFTC hearings, but they were all abruptly cancelled at once.
A couple of days after the CFTC meeting, Andrew Maguire and his wife were involved in a bizarre hit-and-run car accident in London where a second car coming out of a side street struck their vehicle, which resulted in a police chase using helicopters and patrol cars before the suspect was nabbed. Andrew and his wife were released from the hospital with minor injuries. (NIA does not believe in conspiracy theories but when you consider that this is a potential multi-trillion dollar fraud that could bring down the world's financial system, it really makes you think.)
The silver market provides a window into what is happening in the gold market. Because the silver market is very small and its short position is so concentrated, its price is easier to manipulate than gold, but the same manipulation is taking place in gold on a much larger but less noticeable scale. In our opinion, the CFTC is under pressure not to do anything about the manipulation because the lower gold and silver prices are, the stronger the U.S. dollar appears to be. If we saw an explosion to the upside in gold and silver prices, it would result in a complete loss of confidence in the U.S. dollar.
NIA believes the precious metals markets are currently being artificially suppressed by paper gold and silver that doesn't physically exist. At last week's CFTC hearings, Jeffrey Christian of the CPM Group admitted that banks have leveraged their physical bullion by 100 to 1. This means for every 100 ounces of paper gold/silver that trade, there could be as little as 1 ounce of physical gold/silver in the vaults backing it. However, Mr. Christian sees no problem with this because he says "it has been persistently that way for decades" and there are "any number of mechanisms allowing for cash settlements."
What Mr. Christian fails to realize is, most investors around the world holding paper gold/silver believe they own physical gold/silver. There will come a time when these investors don't want cash settlements in U.S. dollars, but they will want the physical precious metals themselves. When investors around the globe eventually call for physical delivery of their precious metals, NIA believes it will result in the biggest short squeeze in the history of all commodities.
The physical silver market is now more tight than ever before. In the first quarter of 2010, the U.S. mint sold 9,023,500 American Silver Eagles, the most since the coin debuted in 1986 and up from 8,299,000 sold in the fourth quarter of 2009. All U.S. silver mines combined are currently producing only 40 million ounces of silver annually. This means the U.S. needs to use almost all of its silver production just to keep up with the demand for American Silver Eagle coins.
Silver closed this week at a 10-week high of $17.89 per ounce and a major short squeeze to the upside could be imminent. With the spotlight now on JP Morgan, NIA believes they will be less likely to naked short silver at these levels and manipulate the price down like in February. With the mainstream media blackout, it is important for NIA members to work harder than ever to spread the word and help expose what could be the largest fraud in the history of the world.
To receive NIA's latest updates about inflation and the economy, sign-up for the free NIA newsletter at: http://inflation.us
The National Inflation Association is an organization that is dedicated to preparing Americans for hyperinflation. The NIA offers free membership at http://www.inflation.us and provides its members with articles about the economy and inflation, news stories, important charts not shown by the mainstream media; YouTube videos featuring Jim Rogers, Marc Faber, Ron Paul, Peter Schiff, and others; and profiles of gold, silver, and agriculture companies that we believe could prosper in an inflationary environment.
Contact: Gerard Adams, 1-888-99-NIA US (1888-996-4287), email@example.com
SOURCE National Inflation Association
Gerard Adams, +1-888-99-NIA US (+1-888-996-4287), firstname.lastname@example.org
Many people, even Americans, may be surprised by which state is the top gold producer in the country, as it's usually known for its glitzy entertainment and gambling, and of course that state is Nevada.
Not only is Nevada the top gold producing state in the U.S., it's the top gold producer by a huge margin, accounting for 82 percent of all gold produced in the country.
And even with the huge deposits found and reported on in other countries, Nevada would still rank as the fourth-largest producer of gold in the world if it was a nation of its own.
The largest trading partner of Nevada in 2009 was Switzerland, which they exported $2.8 billion in goods to, most of that being gold.
Top Gold Producing State in America
Friday, April 2, 2010
British AAA Credit Rating at Risk
According to bond investor Pacific Investment Management Co (Pimco), Britain is in danger of losing its AAA credit rating within the next 12 months.
This is why the idea the recession is over and everything is on solid footing is a ridiculous assertion from those making it and shouldn't be believed be gold investors.
As a matter of fact, Pimco added the stability of the British financial system is at risk and the public finances of the company could end up in a disaster.
Scott Mather, the head of global portfolio management at Pimco gave a devastating critique of the condition of not only Britain, but the U.S. and European sovereign debt situation as well, saying, "Miracles are needed in the next six months in order to keep economic growth in the developed world."
Moody's (NYSE:MCO) has also stated Britain is considerably closer to losing its AAA rating too.
Oh, I must have forgotten though, we're in a sustainable economic recovery now, so we don't have to be concerned with little things like sovereign debt ratings and threats.
Gold Prices Down Slightly
Gold prices slipped from two-week highs on Friday as the euro eased after gaining against the dollar the previous day, with activity subdued due to Easter holidays in many Asian and most European markets.
As the global economic recovery becomes more evident, gold may come under pressure, with investors turning to other commodities which traditionally gain on strengthening industrial demand such as platinum and palladium, traders said.
"Gold will be seen as an underperformer when the economic outlook brightens, with investors showing more interest in other commodities which benefit from rising industrial demand," said Wakako Harada, a senior trader at Mitsubishi Corp in Tokyo.
Rest of gold prices story:
Argentex Mining Corporation (TSX-V: ATX, OTCBB: AGXM) is pleased to provide an update on ongoing exploration activities at its Pinguino property in the silver-gold district of Santa Cruz, Patagonia, Argentina.
Trenching reveals high-grade gold vein at Pinguino
One of the new veins recently discovered at Pinguino is the Isla vein, which has been mapped with approximate dimensions of 1 to 3 meters (3.2 to 9.8 feet) wide by 1,700 meters (5,577 feet) of strike length. The mineralized section is composed of quartz vein, quartz vein breccias and quartz limonite breccias represented by scattered outcrops, within a large area of thin overburden.
Geophysics and trenching were carried out on the Isla vein in advance of diamond-drill testing. Preliminary analytical results from trenching across the Isla vein have returned a high-grade gold intercept of 2.0 meters of 20.72 g/t (0.67 oz/t) gold and 75.4 g/t (2.42 oz/t) silver. Industry standard fire assay re-analysis of these high-grade samples will be carried out with an additional procedure of screening for metallic gold.
These new trench results complement the first 2010 drilling results on Pinguino's Marta Norte vein, which included 3.06 meters (10 feet) of 836.6 g/t (26.90 oz/t) silver for the first drilled target.
A total of 57 drill holes covering 3,186 meters (10,453 feet) have now been completed at the Pinguino property. This includes 20 drill holes at Marta Norte, 19 holes on the Tranquilo fault, 10 holes on the Luna vein, four holes at Isla and four other holes on various targets. Samples have been collected from these holes and submitted for analysis. Results will be published as they are received.
"We are excited by the trenching results from the Isla vein because they reveal high-grade gold within the northwestern portion of our Pinguino property. This new discovery augments the high-grade silver Marta Norte vein, which is also located in this developing precious-metal quadrant at Pinguino," said Ken Hicks, President of Argentex.
Drilling at Condor scheduled to start in one week
Argentex has concluded the drill-target-definition phase at its gold Condor project. Drilling is scheduled to start on Condor's El Aguila vein within one week and approximately 2,000 meters (6,560 feet) have been budgeted for this initial drill program.
Recently completed detailed exploration at Condor's El Aguila vein area included 16 grab samples ranging in value from 0.25 g/t to 59 g/t gold (0.008 oz/t to 1.897 oz/t gold) within an area of approximately 2,000 meters (6,560 feet) by 250 meters (820 feet).
"We look forward to the first-ever drilling on our Condor property as it falls along an exciting mineralized trend in the eastern Deseado Massif," added Mr. Hicks.
Pinguino is located in Argentina's Patagonia region, within the Deseado Massif of Santa Cruz province. With more than 74 line kilometers (46 line miles) of veins discovered to date, the Pinguino property is host to the largest known undeveloped vein system in Santa Cruz province after the developed AngloGold Ashanti Cerro Vanguardia mine. Both vein systems fall within the Tranquilo trend, a major northwest structural corridor in central Santa Cruz.
Mineralization at Pinguino is unique in the region, containing silver-indium-zinc-lead-gold in multiple zones that remain open-ended along strike and to depth. Although more than 47 veins have been mapped on the property to date (with vein widths ranging from under one meter to more than 10 meters), only 21 of these veins have been tested by drilling. To date, Argentex has drilled 326 holes at Pinguino for a total of 33,214 meters (108,970 feet).
Pinguino is easily accessible, situated approximately 400 meters (1,312 feet) above sea level in low-relief topography. An existing system of all-weather roads provides year-round access to the property.
The majority of mineralized zones at Pinguino lie along the strike of the northwest-trending Tranquilo trend, which is a dominant northwest trending regional fault structure cutting across the approximately 24,710-acre (10,000-hectare) property.
Samples selected for analysis are sent to Acme Analytical Laboratories' sample preparation lab in Mendoza, Argentina. From there sample pulps are sent to Santiago, Chile for fire assay gold analysis and to Vancouver, Canada for Group 1DX multi-element MS-ICP analysis. Samples with over-limit zinc, lead, silver and/or copper are reanalyzed using an ore-grade high detection limit 7AR analysis, also conducted in Vancouver. Acme Analytical Laboratories is an accredited ISO 9000:2001 full-service commercial laboratory with its head office in Vancouver. Referee analyses will be carried out by Alex Stewart (assayers) Argentina S.A. in Mendoza, Argentina. Argentex, Acme and Alex Stewart all maintain comprehensive and independent Quality Control/Quality Assurance programs.
Argentex Mining Corporation is a Delaware corporation. It is a junior mining company in the exploration stage with significant holdings in the Patagonia region of Argentina. In total, the company owns 100% mineral rights to more than 35 properties with approximately 307,981 acres (124,636 hectares) of prospective land located in the Santa Cruz and Rio Negro provinces of Argentina, including the Pinguino property. Shares of Argentex common stock trade under the symbol AGXM on the OTCBB and on the TSX Venture Exchange under the symbol ATX.
Exploration on the Pinguino property is being conducted under the supervision of Mr. Kenneth Hicks, P.Geo., Argentex's President and a Qualified Person as defined by Canada's National Instrument 43-101. Mr. Hicks has read and approved the contents of this release. Mr. Hicks is not considered independent of the issuer.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Statements in this news release that are not historical facts are forward-looking statements that are subject to risks and uncertainties. Words such as "expects", "intends", "plans", "may", "could", "should", "anticipates", "likely", "believes" and words of similar import also identify forward-looking statements. Forward-looking statements in this news release include statements about "this new discovery augments the high-grade silver Marta Norte vein, which is also located in this developing previous-metal quadrant at Pinguino," and well as "looking forward to the first ever drilling on our Condor property as it falls along an exciting mineralized trend in the eastern Deseado Massif". Actual results may differ materially from those currently anticipated due to a number of factors beyond the Company's control. These risks and uncertainties include, among other things, competition for qualified personnel and risks that are inherent in Argentex's operations including the risk that the Company may not find any minerals in commercially feasible quantity or raise funds sufficient to prosecute its exploration plans. These and other risks are described in the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission.
Source: Argentex Mining Corporation
We've been talking some recently on Everything Gold about the false connections so-called financial reporters are making between alleged improved economic conditions and gold.
The latest example I found was in reference to the U.S. Labor Department reporting unemployment claims dropped to 439,000 last week. This particular writer actually connected this to the reason gold prices rose during the day.
Evidently the reasoning was because gold increased after the data were released, that means the small improvement was good news for gold. It defies belief that someone could be a financial "reporter" and be that clueless.
Even those not that familiar with gold know gold rises on bad news and uncertainty, not on good new. Oh, let's go buy some gold in celebration that everything is okay. Whoever hears that being said? Yet, that's the logic behind this ignorance.
We've been seeing that all over the financial news lately, and thought we would write some on it so those interested in investing in gold don't go around putting their money in the metal because they hear what is perceived as good economic news.
Imagine what that writer was implying: Unemployment claims dropped by a tiny 6,000 last week, so everyone went out to buy gold and caused it to surge in price because of the celebration of that fact. It doesn't get much more ignorant than that about why gold is invested in and what the causes behind it going up in price are.
Gold and Economic Recovery
I get tired of hearing the supposed connection between the increase in price of gold and the alleged economic recovery we're in. Headline after headline connects the two as if there is a relationship between them, and in fact there isn't any.
For the sake of this article, we'll pretend there is an economic recovery, even though there isn't, so we can learn something important here.
First of all, some seem to think because of the sovereign debt crisis in Greece, people and institutions chose to go to the U.S. dollar as a place of safety over gold. That couldn't be further from the truth.
There were actually exception to that assumption, as gold on some days moved up with the U.S. dollar, showing many investors felt gold was the safer of the two.
The reason investors fled to the U.S. dollar most of the time during that period of uncertainty was there isn't enough places in the gold market that kind of money can be placed quickly. At times like those, even though the dollar is weak, it looks better than other currencies, and gold can't seem compete with that type of volume.
Concerning the idea gold is going up because of renewed belief the economy is improving doesn't even make sense. Those writing that nonsense evidently aren't able to distinguish between the sovereign debt crisis and why gold and the dollar reacted like they did.
They write as if they think the sovereign debt crisis in Europe is similar to the economic crisis we've been going through. While there are some similarities, there are a lot of differences as well.
The point is the European sovereign debt crisis is something different, and gold will be treated differently (at least for now) if another country is close to defaulting on its debt.
But in the current economic crisis and response of central banks and world governments to it, gold is set to flourish because of extraordinary debt, the continual printing of money, the resultant debasing of the currency and the need for a place of safety for our capital, or even to have an alternative currency if things completely break down. Oh yeah, there's also that little thing called inflation in the mix.
Those are the factors mainly affecting the interest in investing in gold commodities at this time, not the dubious idea an alleged improved economy is what is driving the interest in gold, Again, it simply doesn't make any sense to make that statement as it has been being made over the last couple of weeks.
If the economy was truly improving, gold would become less interesting and less attractive to investors, and would most likely go down in price as a result; at least under normal circumstances.
But the enormous amount of printed money out there is unprecedented, and it is no longer business as usual, and we're swimming in waters we've never treaded before. That makes gold a solid investment choice for years to come.
Gold the currency
One good thing about the irresponsible and outrageous practices of central banks and governments around the world in debasing their currencies in order to make it look like they're doing something to boost their economies, is the more they do it and fail, like they have been, the more investors and people who wouldn't normally think of it, are starting to focus on gold being a form of currency, which it of course is, but hasn't been thought of that way by most for some time.
Even if it's considered an alternative currency, that fact that alternative is attached to it doesn't diminish its ability to maintain your wealth and spending power.
While there are some ancillary factors besides gargantuan debt involved with the increase in the price of gold, at this time debt is the major factor, and there is nothing that will change that for a long time, as governments at this time don't have the will to stop printing money because of fears of being voted or removed from office.
Having seen the tremendous weakness inherent in the banking systems around the world, people now are understanding they're at risk, and gold is rising as one of the chief currencies of the world as it has been in the past.
China's Gold Supply
China has increased gold production in the country in a relatively few years to become the largest gold producer in the world in 2007. That surprised everyone at the time because to do it China's output grew at an extraordinary annual rate of 84 percent.
At that rate of production, the question must be raised as to whether China is going to run out of gold any time soon.
If they continue at the production rate they're currently at, China would run out of gold in about six years. That of course assumed no other gold is found and no mines come online.
But it does take time to get mines ready for production, so the supply of gold in China is going to pull back in the near future, and it's something to keep in mind in the years ahead.
One other interesting factor, is demand for gold in China is growing at a rate of about 13 percent annually, with the majority of that being used for jewelry. India has largely been the retail leader in that area for decades, and it didn't have much effect on the prices of gold. But add China retail jewelry demand, and you could have a demand for gold unique in history, as far as the amount of that demand is.
Right around 80 percent of China's demand for gold is from the jewelry industry.
As they get used to investing in gold - which they will because the government is encouraging them in that direction - that will create even great demand with a diminishing supply.
Anyway, we're in for interesting times for gold, and if China does begin to run out of gold, or at minimum assuredly slow down significantly in production, it's anyone's guess as to where the price of gold will go if investment demand continues for years and a significant jewelry demand from China creates a sigificant secondary market for the metal.
Gold prices going up
The price of gold continues to move up, as it finished the shortened week at $1,124 an ounce, as the U.S. dollar continues to weaken and fears of inflation rising even more than it has weighs on investors.
Gold prices rising continued its trend after the market closed, and it'll be interesting to see where it lies when they open again in the U.S. on Monday. London markets won't open again till Tuesday.
Many gold companies enjoyed the renewed vigor of gold, as many increased in price in tandem with spot gold prices.
Gold prices going up
Thursday, April 1, 2010
Swiss National Bank Intervention
After the euro rose against the Swiss franc and U.S. dollar today, rumors circulated there was intervention from Swiss National Bank, which they declined to comment on. Wells Fargo (NYSE:WFC) currency strategist Vassili Serebriakov said, "There was suspected intervention by the Swiss National Bank. The sharpest movement in the euro was against the Swiss franc, but it looks like it also helped the single currency across the board."
Others agreed there was no doubt Swiss National Bank intervened, but assume there will never be a confirmation they indeed did.
The gain by the euro against the franc was the best performance in nine months.
Severstal drops bid for Crew Gold shares
Severstal (CHMF.MM) said it is no longer interested in making a tender offer for Crew Gold (TSE:CRU), which had wanted to buy a controlling stake in the company.
Endeavour Bank (TSE:EDV) started acquiring shares in Crew Gold, and now owns about 43 percent of the shares, and has 3 of its people on the board of Crew Gold.
Severstal said the price of Crew Gold shares from the buying of shares by Endeavour has made the deal no longer attractive because of their higher price, and consequently is dropping their pursuit of managing control.
Severstal currently owns 27 percent of Crew Gold shares.
Ivanhoe Mines, Rio Tinto and Oyu Tolgoi Project
Ivanhoe Mines (TSE:IVN) and Rio Tinto (ASE:RIO) have finished the preliminary requirements concerning the Oyu Tolgoi project in Mongolia, and are ready to begin construction in the second quarter.
The paperwork required to advance to the construction phase has been completed, and the project, consisting of copper and gold, is ready to begin.
The Oyu Tolgoi project is one of the largest untapped deposits of gold and copper known in the world today, and it should bring huge dividends to Ivanhoe and Rio Tinto for a long time to come.
Ivanhoe Mines will own 66 percent of the project while state-owned Erdenes MGL LLC will own the remaining 34 percent. Rio Tinto's role is one of technical and financial support.
Rio Tinto also has a 22.4 percent stake in Ivanhoe Mines, along with options to acquire a stake up to 46.6 percent over the next 19 months.
For the beginning of full-scale construction, a committee consisting of representatives from Ivanhoe Mines and Rio Tinto have approved an initial financial outlay of $758 million.
The mine is expected to be operational in 2012 and commercial production to begin in 2013 for both copper and gold. Total costs to get things up and running are estimated to eventually reach about $5 billion.
Secret Gold Bull Market
One of the reasons the assertion that gold is an ultimate bubble by George Soros makes little sense, is he possibly doesn't understand what's really going on in the markets, or he's being the sly fox he is as far as investing goes.
For example, Soros was saying this on one side of his mouth while investing millions in gold mining companies and gold ETFs. So I think Soros was attempting to do some manipulating of the minds there in order to move the market and thoughts in the direction he wants it to go.
The reasoning behind this is Soros almost assuredly knows the general public hasn't been investing in gold, and know very little about it and don't have much interest in it.
Until they come on board in hoards, there's little chance of a gold bubble bursting, as there isn't a bubble without the public entering into the gold investing market.
In reality, most of us who follow gold closely sometimes aren't aware that what is common and everyday to us is mysterious and unknown to the average investor, at least in the Western world.
By the time the average investor comes in, which still may take some time, gold will be much higher and it'll be taken to levels that aren't sustainable and above market prices. That's when we'll have an ultimate bubble.
Until that time, the fundamentals, along with the foibles of central banks and governments around the world are what we need to be concerned with watching.
Once the general public starts to enter the market, that's when we need to be weary. That hasn't happened yet, and I think things will have to get worse, or they get more educated as to why gold is important, before they do come in in droves.
Unfortunately for the uneducated in gold, they'll experience something similar to the housing market because they just can't leave the herd mentality and do the type of research which puts them ahead of the game.
Secret Gold Bull Market