Gold's future looking brighter and brighter
Most people that understand the depth of what's happening around the world economically, know the future of gold is very bright, and will increase in price in the years ahead, although those trying to time the gold market could get clobbered, as it seems there will be a lot of bumps along the way, and those holding for the long term will be those who profit from the trend.
The jobs report yesterday showing another 23,000 jobs were cut by employers helped gold rise nicely, and even though the government will attempt to massage those numbers, almost everyone knows we're not anywhere near an economic recovery, and most likely are still in a deep recession.
One thing that could derail gold in the short- or mid-term would be another country being in danger of defaulting in Europe. Those who are clueless seem to think that's a reason to invest in U.S. dollar, based only on the fact it's not near as bad as the euro or most other currencies.
Even so, gold did have some days where it abandoned the normal inverse relationship with the U.S. dollar, seeming to reveal people are starting to understand gold is the place to be in times like these, although just as many days the usual inverse relationship between gold and the dollar occured, also showing there's confusion or uncertainty that gold is a better place to put your money in those types of times.
Other than that, the economic practices of governments and central banks around the world ensure gold will be strong for some time, and other than occasional anomalies, albeit some very potential strong anomalies, gold should enjoy a contiuous upward flow in price, even if there are a lot of swings while on its journey.
Wednesday, March 31, 2010
Gold's future looking brighter and brighter
Gold Futures Prices
In spite of a somewhat rocky March, goal is poised to rise for the sixth quarter in a row as investors continue to seek safety and and an alternative to paper currencies.
With the latest job report underscoring the continual weak economic conditions we're operating under, as companies shed 23,000 more jobs, led by manufacturing and construction cuts, gold will continue to shine and may be ready for a breakout after the pressures asserted on it in March, especially from the sovereign debt crisis in Greece.
Gold is soaring today, up over $11.30 for the day as of 2:30 P.M. est.
With gold only gaining 0.9 percent in the first quarter, a slight but significant performance in light of the downward pressures on it, I think it's ready to break out again, but that assumes no more confusion and really bad news comes out of the European Union, which is teetering on collapse.
The U.S. dollar, for whatever reason, became the investment of choice for safety-minded individuals when the Greece debt crisis became known, and gold prices suffered as a result. That could happen again if another country becomes in danger of defaulting.
Golden Star Resources
Golden Star Resources (AMEX:GSS) has had a nice run over the last 12 months, increasing in share price from $1.17 to as high as $4.39, and settling in at about $3.80 as of this writing.
There are some good fundamentals related to Golden Star, one of the best being its organic growth strategy and putting money into increasing exploration. The company also increased its reserves in 2009 by 14 percent.
One question going forward in 2010 for Golden Star is its costs, which it has said will increase over 2009 costs, which of course affects earnings. They also have said production will probably be a little lower in 2010 than in 2009.
Taken altogether, Golden Star is still attractive, especially with the economic circumstances and policies of central banks around to world to keep the paper money printing presses running. But at the upper end of its 52-week high, it's hard to see it increasing a lot in price in 2010, although if it drops more it may be a good buying opportunity, as they're pretty well positioned to profit as things settle down more and they increase production and manage costs a little better.
SPDR Gold Shares Good Investment?
With many well-known investors continuing to put a large amount of their money in gold, the question becomes whether or not an ETF like SPDR Gold Shares (NYSE:GLD) is still a good investment.
I bring it up like that because many of the major investors with a large position in gold bought it at lower prices, and now gold seems to be remaining tight around the $1,100 level, seeming to imply it's going to move forward incrementally rather than in huge swings. That is probably a good thing for most investors.
But as far as SPDR Gold Shares, it can really be simplified as to the answer to the question if it's still a good investment for you. The think to ask is this: Is gold still a good investment? If the answer for you is yes, the answer for SPDR Gold Shares should also be yes.
I think in the current gold environment we'll have to take a longer time-frame than possibly in the past with SPDR, but again, I think that's more healthy than the huge gains it made in a relatively short time.
From November 2008, when the gold ETF dropped as low as $70 a share till now, it has gained almost $40 a share, a nice move by any metric used.
Bank of America Upgrades Hecla Mining
Hecla Mining (NYSE:HL) enjoyed an uptick today as Bank of America (NYSE:BAC) upgraded the mining company from Neutral from Underperform.
Hecla has actually had a good year as far as share price goes, starting off at $1.85 twelve months ago to $5.42 as of the last trade.
They've reached as high as $7.47 a share during that time.
Increased Gold Production says Gammon Gold
Gammon Gold (NYSE:GRS) said yesterday gold production over the next three years should be higher for the company.
This year Gammon estimates production levels of between 150,000 to 180,000 ounces of gold, which should increase to between 175,000 to 205,000 ounces in 2012.
Increased production estimates are largely based on the completion of the Santa Eduviges mine in Mexico, and also production levels as existing mines enjoying higher production.
While costs per ounce of gold this year will be around $440 to $475 an ounce, the increased production levels should bring costs down to about $395 to $430 an ounce by 2012.
Pan American Silver's Navidad silver project
Current policies in the Chubut province of Argentina disallow open-pit mining, but that could change soon, and Pan American Silver (NASDAQ:PAAS) benefit nicely from it because of their Navidad silver project, which is located in Chubut.
The Navidad silver project came with the acquisition of Aquiline Resources in the early part of 2010. Pan American has hopes and expectations this could be opened up for them, and there's now a good chance it will.
In other related discussion, bans on cyanide will probably also be lifted in conjunction with the open-pit mining.
Freeport-McMoRan Dividend Unveiled
Freeport-McMoRan Copper & Gold Inc.(NYSE:FCX) it will pay a dividend on preferred stock and common stock for the quarter.
Shareholders of record as of April 15 will receive the dividends on May 1. The dividend was announced as 15 cents a share for those holding common stock and $1.6875a share for those holding 6 percent mandatory convertible preferred stock.
There will be an automatic conversion for preferred stock holders on May 1.
AngloGold Ashanti Storage Unit at Iduapriem Mine
AngloGold Ashanti (NYSE:AU) said yesterday it will resume production at its Iduapriem Mine in Ghana sometime in April.
After some possible negative effects from tailings from a storage unit, the gold miner suspended operations at the mine once a temporary storage unit is built.
AngloGold received permission from the Environmental Protection Agency of Ghana to build the temporary storage until they could get a permanent one in place, which should be completed by the early part of 2011.
Barrick Gold 2009 Nevada Production
Barrick Gold (NYSE:ABX) released its production numbers for 2009 in the state of Nevada, which includes three joint-ventures and five operations in the state which Barrick owns 100 percent of.
All the properties in Nevada produced 2,116,000 ounces of those the own 100 percent, and another 391,000 ounces were mined in the joint-ventures.
Those numbers were down from the 2008 figures in Nevada for Barrick, where they produced 2,359,000 ounces from properties they wholly owned, and 406,000 ounces from the joint-venture projects.
Unsurprisingly, Barrick's Goldstrike property produced the largest amount of ounces, bringing in 1,355,000 for the year.
Tuesday, March 30, 2010
Goldcorp and Terrane Metals: Dating or Getting Married?
Terrane Metals (CDNX:TRX.V) recently enjoyed a nice infusion of capital, selling $70 million in stock to a group of dealers, and via Goldcorp. (TSE:G) adding another $30 million in a private stock placement.
A $40 million credit facility backed by Goldcorp was also extended another year for Terrane.
I bring it up to mention the possibility that Goldcorp may be developing more interest in Terrane Metals than helping them capitalize the company for more development.
Is this the beginning of what could turn into a marriage for the two? It's quite possible, and worth watching as things unfold between the two.
American Bonanza Gold Corp. (TSX:BZA)(OTCBB:ABGFF)(FRANKFURT:AB2) ("Bonanza") is pleased to report on the status of the permitting program at the 100% owned Copperstone Gold Mine in Arizona. Permitting began July 15, 2009 with a project organization and strategy meeting between Bonanza and Schlumberger Water Services from Tucson, Arizona led by Kent Lang, Project Manager. The permitting process has gone methodically to date, and is expected to be complete during the fourth quarter of 2010.
After months of work, the permitting cycle formally began on October 22, 2009 with the submission of the Copperstone Mine Plan of Operations ("MPO") to the United States Department of the Interior's Bureau of Land Management ("BLM"), the lead agency for permitting mining operations at Copperstone. Closure and Reclamation Plans were developed as part of the MPO. The MPO was accepted as complete by the BLM on November 6, 2009, and is currently undergoing the National Environmental Policy Act ("NEPA") evaluation through an Environmental Assessment ("EA") process. The EA was submitted to the BLM on December 18, 2009 for the NEPA review.
Federal permits or approvals which have been obtained include the Miner Registration Number which has been received from the United States Mine Safety and Health Administration ("MSHA"). Radio communications licenses have been obtained from the Federal Communication Commission ("FCC"). Other Federal permits applied for include the Environmental Protection Agency ("EPA") Regulated Waste Permit.
Significant portions of the permitting process will be evaluated by the Arizona Department of Environmental Quality ("ADEQ"), working in cooperation with the BLM. The first of these permits is the Air Quality Permit ("AQP") which reviews mobile and stationary emission sources and emissions mitigation at the proposed mining operation. The AQP was submitted for Administrative review on February 19, 2010, and was accepted as complete on March 3, 2010. The AQP is now in the Substantive (technical) review period, with approval expected during the second or third quarter 2010.
The other major permit to be obtained from the ADEQ is the Aquifer Protection Permit ("APP"), which describes plans for protecting the groundwater in relation to the waste dumps, tailings impoundment facilities, and processing plant. Required as part of the APP process are 100% complete, sealed engineering drawings for these facilities, a process which took several months of engineering design. The APP was filed with the ADEQ for Administrative completeness review on March 26, 2010. Upon a finding of acceptance as complete, the APP will enter the Substantive review process which may take between five and seven months to complete, and will be on the critical path forward, meaning the APP is likely to be the final major permit to be approved. Once all permits have been obtained, Bonanza can begin mining gold ore.
Other State permits include filing the Reclamation Plan with the offices of the Arizona State Mine Inspector. The Reclamation Plan was developed as part of the MPO as described above. The ADEQ is also responsible for oversight of the Industrial Storm Water Permit which is currently being prepared with an initial submission target date during April, 2010 and is expected to be approved in the second or third quarter, 2010. Several permits, approvals, or registrations from a number of agencies will be applied for at the appropriate time, such as Blasting Operator Registrations from the United States Bureau of Alcohol, Tobacco, and Firearms ("ATF") which require that all personnel handling the blasting agents undergo background checks and therefore application must await identification of those personnel.
A number of design plans have been prepared to support the permitting process and mine construction planning. The tailings storage facility ("TSF") and solution reclaim pond are fully designed, with analysis including construction specifications and plans, surface and process water controls and containment, analysis of geologic conditions and surface hydrology. Hydrogeology and dewatering studies and designs are complete. Geomechanical analysis is complete and provides plans for maintaining stable rock during underground mining operations, and includes completed studies and plans for rock character, span analysis, crown and sill pillar analysis, and backfill requirements. The feasibility study is now complete and has been placed on www.sedar.com, as previously announced.
The following are highlights of the feasibility study as previously reported (News Release dated February 3, 2010).
The Copperstone Gold Mine is estimated to produce on average 45,891 ounces of gold annually for the first 3 years, and have a capital investment payback period of only 13 months. The feasibility study details a total capital cost of US$17.74 million, including working capital, G&A startup, reclamation bonding, and contingencies. The feasibility study estimates the cash production cost to be US$415 per ounce of gold produced.
The After Tax Net Present Value ("AT-NPV") of the mine is US$51,291,204 and the Internal Rate of Return ("IRR") is 96.3% in the base case using a future gold price estimate of $962 per ounce and a 5% discount rate. Using the current spot gold price ($1104 per ounce on www.kitco.com on December 28, 2009) the AT-NPV rises to $68,089,302 and the IRR increases to 120.5%. The table below provides a range of economic results at various gold price assumptions.
Copperstone Economic Sensitivities at various Gold Prices:
Net Present Value
Gold Price Gold Price Undiscounted pre-tax After-Tax (US$)
Case (US$/Oz) IRR (%) Cash Flow (US$) (Discounted)
Low $850 74.3% $50,162,532 $37,194,541
Base Case $962 96.3% $74,169,910 $51,291,204
Spot $1104 120.5% $104,496,256 $68,089,302
High $1250 145.1% $135,727,452 $84,874,376
The feasibility study results indicate a total of 256,430 ounces of gold can be mined from current known diluted Proven and Probable Mineral Reserves during the 6.3 year mine life at Copperstone.
Bonanza is working to re-activate mining at the development-stage Copperstone gold property in Arizona. Please visit our website at www.americanbonanza.com.
AMERICAN BONANZA GOLD CORP.
Note: All numbers may not add up to total due to rounding errors.
The technical information in this news release and in Bonanza's associated technical reports was prepared in accordance with the standards of National Instrument 43-101 "Standards of Disclosure for Mineral Projects" ("NI 43-101") and was reviewed by Chris Pratt, Bonanza's Geologist at Copperstone and Qualified Person ("QP") under NI 43-101. Information regarding data verification, and the resources and reserves at Copperstone, is set out in the Company's February 3, 2010 news release.
CAUTIONARY NOTE REGARDING RESOURCE AND RESERVE ESTIMATES
The Resource and Reserve estimates included in this news release are estimates and no assurances can be given that the indicated level of gold production will be achieved. Such estimates are expressions of judgment based on knowledge, mining experience, analysis of drilling and sampling results and industry practices. Valid estimates made at any given time may significantly change when new information becomes available, and reserve estimates established at any given time may, as a result of macro-economic or other factors, cease to be valid in the future. While the Company believes that the reserve estimates discussed in this news release are accurate, by their nature resource and reserve estimates are imprecise and depend to a certain extent upon statistical inferences which may ultimately prove unreliable. If such estimates are inaccurate or are reduced in the future, this could have a material adverse impact on the Company, and adversely affect the results of the Study. Investors are cautioned not to assume that any part or all of the mineral deposit will ever be extracted or processed at a profit.
US Investors are cautioned that the reserve estimates disclosed in this news release have been calculated pursuant to Canadian standards, and may not be considered "reserves" by the U.S. Securities and Exchange Commission.
FORWARD LOOKING INFORMATION
This news release includes certain statements that may be deemed "forward-looking statements" or "forward-looking information" ("FLI"). FLI relates to future events or future performance and reflect management's expectations or beliefs regarding future events and include, but are not limited to, statements with respect to the estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, success of mining operations, environmental risks, timing of application for permits and approval timelines, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. This FLI is provided as of the date of this document and Bonanza does not intend, and does not assume any obligation, to update these forward-looking statements except as required by law. Although the Company believes the expectations expressed in such FLI is based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.
Bonanza provides the following specific risk disclosure associated with certain statements contained in this news release which may be deemed FLI, referenced to the section of this news release which provides the information or statement. Investors are cautioned to read the below risk related information together with the above statements and Bonanza's other risk disclosures. Sensitivity analysis set out in the Study indicates that Copperstone project economics are most sensitive to gold price and metal recovery, so these parameters, among others, represent risks common to most types of FLI thus it is unavoidable that the below sections are in some respects similar. What is presented below is a discussion of the most salient risks to each type of FLI, in order of decreasing risk to the fruition of the FLI. These are current risk discussions and subject to change based on changing macro-economic and market conditions.
Information regarding the economics of mining at the Copperstone project set out in the Study, including the following types of information set out in this news release, "Copperstone Economic Sensitivities at various Gold Prices" "Highlights of results from the Feasibility Study", and similar information include FLI. Specific risks associated with this FLI include: (i) the risk that gold prices may rise or fall in the future, which would improve or degrade this type of FLI; the risk that macro-economic conditions change to adjust the risk-free return on capital, thus affecting the discount rate used in these cash flow projections - a rise in the discount rate would reduce the present value of the project; (ii) the risk that capital and labor costs may rise or fall in the future, thus degrading or improving the project economics; (iii) tax structures and taxation rates may change in the future to the detriment or benefit of the project economics; (iv) the risk that equity, debt and corporate markets are not sufficiently robust to allow the project to be financed; (v) risks related to gold recoveries and the availability of off-site gold from concentrate recovery facilities, the lack of which would cause an increase in capital costs and a likely delay to obtaining permits; (vi) delays in obtaining governmental approvals; (vii) risks related to possible variations in ore reserves, grade or recovery rates; (viii) availability of key personnel to provide services which while currently good, may become difficult, potentially leading to delays in obtaining permits and conducting operations; (ix) accidents, labor disputes and other risks inherent to the mining industry; (x) inflation, which could affect cost estimates and negatively affect project economics; (xi) delays in obtaining financing to commence mining operations, all of which may affect the attainment of these FLI. The Company has assessed these risks using among other things Monte Carlo simulations which indicate these likelihood that these risks are realized and preclude the FLI from coming to fruition is limited. This type of FLI, economic summary data, is affected by most of the risks associated with the project because it is bottom line economic results type information.
Information regarding permitting at Copperstone" and similar information: Specific risks associated with these statements include: delays in obtaining governmental approvals; determinations by government agencies adverse to Bonanza's interests; application of more stringent requirements by governmental agencies than that expected by the current fast track process applied to previously mined properties, changes in law and regulations, in particular environmental regulations, and availability of key personnel to provide services, which, while currently good, may expand or contract; all of which may affect the attainment of this FLI.
While Bonanza has attempted to identify important factors that could cause actual actions, events, or results to differ materially from those described in FLI, mining is an inherently risky business and there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that FLI will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly investors should not place undue reliance on FLI. For more information on the Company and the risks and challenges of its business, investors should review the Company's financial statements, Annual Information Form, the Study and other disclosure available on the Company's website www.americanbonanza.com and on www.sedar.com and investors should review the Company's annual filing on Form 20F with the United States Securities Commission.
American Bonanza Gold Corp.
Barrick Gold lobbying over changes in U.S. mining laws
Barrick Gold (TSE:ABX) spent $100,000 lobbying the government in the fourth quarter on issues it had an interest in, including taxes and changes in the mining laws.
That's down from the $153,000 the company spent in the third quarter of 2009, but a little higher than the $90,000 spent in the same quarter of 2008.
Most of the focus of Barrick Gold has been the U.S. Senate via the National Mining Association, as concerns over changing the 1872 mining laws by the Obama administration are creating concerns for all mining companies doing business on public lands in the U.S.
Minefinders Future Prospects
Minefinders (TSE:MFL) has been experience increased scrutiny after turning their first quarterly profit, based on extracting gold and silver from the Dolores mine in Mexico.
One positive looking ahead for the company is it's trading near the level before the turned profitable and constructed a road to the Dolores mining project.
Some wonder why it isn't increasing in share price because they are now profitable and seemingly have worked through the challenges of the start-up. The answer could be investors simply haven't heard that much about them, or aren't quiet sure they are ready for the big time.
I think if their next quarter is also profitable, they will get a long look from potential investors.
The company is also free now to pursue higher grades of gold and silver, which should generate better revenue and profits.
There is the thought of building a mill to increase production of higher-grade silver, which could be another positive step toward long-term profitability, although it could cut into profits over the short haul.
The mine has an estimated life of 15 years, and the addition of a mill could extend or shorten it, depending on whether there are more resources added because of the mill, or it could shorten it because of improved and quicker processing.
Dolores is located close to Chihuahua, Mexico.
Gold Trading Range
With the markets closing Friday because of the Easter holiday, gold trading is expected to be low, which under normal conditions could mean tremendous volatility during the week.
This is because smaller trades can move the markets more when there is less volume.
Even so, with the ups and downs, in the end the gold trading range should remain and end the week tight, even if there are a few big moves throughout the week.
Monday, March 29, 2010
Gold Futures, dollar and China demand
Gold future rose by 0.5 percent or $6.10 by the end of trading in New York to finish the session at $1,111.50 an ounce for June delivery.
Along with the weakness of the U.S. dollar, Chinese demand for gold is expected to increase by double over the next decade also helped push the price of gold futures up. Chinese gold demand news was from a report from The World Gold Council, which based their demand assertions on an increased interest in jewelry and of course investment demand for gold.
In 2009 gold demand in China grew to 424 metric tons, with their domestic gold production providing only 314 metric tons of that. With demand growing as it is, they'll continually have to go outside their country for supply, and that should help push gold prices up, even with the usual safe haven and inflation factors not being considered.
Just these factors in China alone provide a solid support for gold prices, and that doesn't include growing interest from institutional investors and those wanting to protect the value of their assets.
Gold futures and China
Tanami Gold Project to Produce 200,000 ounces a year
Tanami Gold (ASE:TAM) is looking to start its Tanami Desert project it acquired from Newmont Mining sometime in 2011.
Based in Western Australia, Tanami says it is in the last leg of determining whether it will be an underground or open pit mine, or possibly both.
By 2012 Tanami will be producing about 200,000 ounces of gold a year, according to managing director Graeme Sloan.
Sloan added at that time Tanami should be propelled up among the top of the mid-tier gold mining companies in Australia.
Crocodile Gold's Australia Strategy
Crocodile Gold (TSE:CRK) has its eyes on Australia, and they're going after the huge market with the goal of being one of the largest gold miner in Australia before they're through.
It seems a lot of investors support their goal, as North American and European investors have thrown a lot of cash their way to help them reach their objectives.
For 2010 Crocodile estimates they'll produce 120,000 ounces of gold at a cost of $650 an ounce. They have also committed $23 million to expand its exploration efforts.
Capital expenditure for 2010 is projected to be about $56 million.
Oceana Gold closing hedge book
Oceana Gold (TSE:OGC), like its competitors, has closed its hedge book, signaling their belief a stronger gold price is here to stay for some time.
After closing its hedge book this week, Oceana will generate around $2 million in free cash flow a week, assuming gold prices will stay at $1,100 or above; which is definitely has a good chance of doing, as evidenced by finding support in a very difficult economic environment in Europe, where the sovereign debt crisis weakened the euro and strengthened the U.S. dollar, putting downward pressure on gold prices.
Chief operating officer, Mark Cadzow, said, "Oceana is now in a position to present itself as an unhedged gold producer, and a significant one at that, at a time when gold is pretty strong and people are still looking for a safe haven."
Saturday, March 27, 2010
Jim Rogers says gold and oil attracting speculators
Jim Rogers said in a recent interview with CNBC that gold and other precious metals have made some big upward moves since 2009 and for now should "consolidate and rest."
While reiterating he owns gold, he believes speculators have now entered the market for gold and oil, and for now he thinks it's best to sit on the sidelines while they do their speculating.
What does Rogers like at this time? "I like to buy what's cheapest. Silver is cheaper than gold, on a historical basis; natural gas is cheaper than oil," said Rogers.
Conway Resources (CDNX:CWY.V) announced the discussions held about acquiring the Croiner property with First Gold Exploration Inc., as well as a loan agreement with them, has ended, with neither company able to agree to the terms of the deal offered by First Gold.
In spite of the setback, Conway Resources will continue to negotiate with other possible partners for the acquisition of Belleterre Mining Resources, which it has an option on until March 31, 2010.
Friday, March 26, 2010
Iamgold (NYSE:IAG) has expanded its existing $140-million secured, revolving credit facility to a $350-million unsecured, revolving credit facility, the company stated Friday.
According to Iamgold, the larger facility has improved the conditions and terms of the credit, and will expire on March 2013.
Iamgold will also enter into a $50-million facility, which will allow for the issuance of letters of credit in support of certain asset retirement obligations of the company,
Like much of the gold market, Iamgold climbed higher Friday, up 1.67 percent near the close.
Gold Prices Up
Even though European leaders got behind a proposal from Germany and France to back up Greece, most onlookers believe the sovereign debt issue in Europe is far from over, and in fact could be just beginning. Gold prices rose on that assumption up $1103.10 as of this writing. That's the highest gold has reached in a week.
The situation in Greece is only looked upon as a temporary fix, and the euro looks extremely weak going forward, with little that can be seen which can sustain it.
With many banks who were buying euros have been pulling back and buying some of the U.S. dollar, but are now hesitant to increase their positions there, making gold the only safe choice left for them.
Government debt should continue expanding the midst of all this, which is a plus for not only gold, but precious metals in general.
Freeport-McMoRan Peru Strike
Freeport-McMoRan (NYSE:FCX) workers communicated to the company that they plan to go on strike at the Sociedad Minera Cerro Verde SAA mine in Peru on March 31.
Union representatives of the workers said the reasons for the strike were to extract a one-time bonus from the profits of the company.
Director of communications at Freeport, Eric Kinneberg, stated:
"Cerro Verde has paid the legal profit sharing in accordance with Peruvian law and has compensated our employees." It was also in accordance with the existing collective bargaining agreement, said Kinneberg.
Assuming this is true, and it seems like it is, other than attempting to break the agreement by the union and extort more money from them, this is a bad move by the Peru union.
These area easily verifiable if they are facts, and to attempt to force more money out of the company is illegal and unethical, but unions around the world don't mind breaking the law and ethics in order to attain more money, as they are almost all socialist organizations now, and think they have a right to take whatever they want from those they work for.
Goldcorp Buys Warrants and Shares from Terrane Metals
Goldcorp (TSE:G) has acquired $97.6 million in shares and warrants from Terrane Metals (TSE:TRX), helping them fund the Mt. Milligan mine in British Columbia. A group of underwriters also were part of the acquisition of shares and warrants.
National Bank Financial Inc. led the group of underwriters who will acquire 63.6 million units, consisting of one common share and a half common share purchase warrant, for C$1.10 each. Goldcorp has agreed to purchase 27.3 million of the same units made up of common shares and warrants.
Construction on the mine, which has production estimates of 89 million pounds of copper and 262,100 ounces of gold annually for the first six years of mining, is scheduled to begin in July. The mine has a life-span of 22 years.
Terrane Metals is willing to sell a portion of Mt. Milligan to raise more needed capital, with the buyer getting the rights to the metal produced at the part of the project sold.
Thursday, March 25, 2010
Metal Trading Limits Needed?
A number of industry pros say if limits on metal trading are imposed on the market, business will probably just go overseas, making the move only harmful in America, and doing nothing to change the alleged effects of letting things go on as the have been.
Others contend the metals market can't simply be considered a market like energy, as they are completely different and the metals futures market some say, hasn't had excessive manipulation to warrant these types of major changes.
Even with normal trading, according to traders the big banks and financial institutions can disrupt a market just by making huge trades, whether the purpose was manipulation or not.
It's not even agreed upon yet in any market whether speculative trading causes price volatility, and to simply impose limitations because of unproven theories or possible future scenarios doesn't justify the real risk, which is regulators themselves being the worst market manipulators, based on taking actions on which aren't proven need to be instituted.
Shore Gold Inc. (TSE:SGF) reported it slashed losses for its fiscal 2009 year from $458 million or $2.48 a share in 2008 to $9.1 million or 4 cents a share in 2009.
The largest share of 2009 losses were a $6.3 million writedown for expenditures in relationship to their mineral properties.
Losses in 2008 were attributed largely to mineral property which has been capitalized before being written down; which was a huge writedown for the year.
Revenue for the company dropped significantly for the year, with the company only able to generate $100,000 in interest and other income, whereas the year before it came to $1.6 million.
Lower interest rates and cutting back on investments able to earn interest were the reasons given for the decline.
The current portfolio of Shore Gold entails diamond properties.
Queensland Mining Corporation Estimate Flamingo copper-gold
Queensland Mining Corporation (ASE:QMN) announced its estimate of the Flamingo copper-gold resource project. Shares in the company rose as identification of mineralization of a 300 meter long area reinforced company assertions in the past.
All resources have been classified as Inferred Resources at the site, and the estimate has been reported in compliance with the 2004 edition of the JORC Code.
Drilling by Xstrata (formerly Mount Isa Mines) in 1994, along with data garnered from drilling by QMC in 2009 was the basis of the resource estimate.
The drilling program to define the resources at the Flamingo copper-gold will start on April 7. The drilling will be 2,500 meters and will commence to find out the size of the resource and to expand the search of the overall area in the project targeted.
Gold Price Swings
With the sovereign debt crisis in Europe, and the euro under extraordinary downward pressure, gold prices will probably experience even more price swings than before as concerns over where it all will end continue.
Europe is obviously holding its cards close to its chest, and aren't letting out how deep the problem really is, but the markets seem to be saying they think it's deep enough to prop up the flawed U.S. dollar, which has its own problems.
The reason why gold prices will swing - possibly more than usual - is the indecision on the part of investors whether gold or the U.S. dollar will be the place to put their money for safety.
This is only because most don't realize gold is the only place in that sense our money should go, but again, the euro is looking so bad that the U.S. dollar looks extremely safe, as eyes turn away from fundamentals to comparisons.
Gold will swing as investors choose gold rather than the dollar, causing them both to rise, adding confusion to those that don't understand why the inverse relationship between gold and the U.S. dollar, at times, is no longer in play.
Wednesday, March 24, 2010
Gold Prices Plunge
The situation concerning sovereign debt and Europe and the viability of the euro as a currency keeps pushing the U.S. dollar up and in some cases like today, gold futures prices down.
Gold and the U.S. dollar have been struggling with their usual inverse relationship which has them normally moving in opposite directons.
Lately that has changed with gold and the dollar moving at times in the same direction. That comes from investors not being sure which one is the safest and most secure to invest in, although gold is the obvious one for those that understand its safety and inflation hedge.
The U.S. dollar is very vulnerable as well, but with investors looking at it in contrast to the euro, it looks a lot safer than it should be.
We'll continue to see this as the European sovereign debt story unfolds. Greece isn't the only nation facing problems, as Portugal debt was downgraded today by Fitch Rating.
Gold Prices Plunge
Newmont Offers Swick Mining Services $50 Million Drilling Contract
Swick Mining Services (OTC:SWCKF) $50 Million landed a $50 million mining contract with Newmont Mining (NYSE:NEM) for underground drilling.
The contract will generate the revenue over a period of three years.
This is the largest contract Swick has been awarded in its history, and promises to be the key revenue generator for the company for the duration of the contract.
Swick will provide drilling services at the Tanami and Jundee gold mines for Newmont beginning in April 2010, which they have been working on since 2007. There is a provision to add a fourth year if needed.
The $50 million plus estimated by Swick is based on eight rigs working full time for the duration of the contract.
China and Gold Price Support
Even though there has been a pull back in gold prices lately, leading the usual clueless commentators to question gold prices going forward, China remains a solid customer of gold, and recent changes in their laws had freed up its citizens to acquire more jewelry and hold a bunch of physical gold.
Of course this is small potatoes compared to the inflation and safety factor being priced into investing in gold, and that isn't going to change for a long time to come.
But adding the physical gold freedom in China and you have even more reason for gold to continue to rise for years to come.
China and Gold Price Support
Tuesday, March 23, 2010
Barrick Gold IPO Results for Africa Barrick Gold
While it was a little disappointing and on the low end of what they had hoped for, Barrick Gold (TSE:ABX) raised $887 million in their spinoff of their African buinsess named African Barrick Gold.
Barrick was able to sell 101 million shares in the new company for 575 pence each. The high end of what they had hoped for would have brought them 650 pence a share. The lower end was 550 pence a share, so it wasn't a disaster in that regard.
Africa Barrick Gold entails four mines in Tanzania at this time.
Gold futures in slight gain
Gold had to fight its way back from losses earlier in the day, and over the last week, as many were thinking the end of the gold bull market had come.
Of course that never was the case, but it was nice to see gold futures rise over $1,100 again, as it finished the session at $1,103.70 an ounce, up by 0.4 percent.
This is more important psychologically than anything else, but still an important event for investors to see. Now comes the test to see how investors view gold after the rebound, as they've gravitated back and forth between the U.S. dollar and gold as the place they want to keep as a safe haven for their capital.
PC Gold - Gold Discovery
PC Gold (TSE:PKL) surged today as they announced they made a major gold discovery at one of their tip mines in Ontario.
"This is one of the best intercepts to come out of drilling anywhere in northwestern Ontario in the past year. The combination of width and grade is exceptional," Chief Executive Kevin Keough said in a statement.
The mine with the strong intercept was its Pickle Crow gold mine, where the intercept was close to its key workings.
PC Gold - Gold Discovery
Monday, March 22, 2010
SEMAFO reaches million ounce threshhold
SEMAFO (TSE:SMF) was one of the better performers on an otherwise weak day for gold prices, as the indecision on investors whether to use gold or the U.S. dollar as a place of safety fluctuates from day to day.
It wasn't primarily the fundamentals that moved the stock up 5 percent to C$5.24 today, but rather more of a marketing push announcing the company had produced its 1 millionth ounce of gold.
The million ounces of gold have come from three mines, led by the Samira Hill Mine in Niger, which has produced 385,000 ounces; the Kiniero Mine in Guinea, which is right behind Samira with 355,000 ounces; and Mana Mine in Burkina Faso, which the company has extracted 260,000 ounces out of.
Dick Bove Upgrades Citigroup
Rochdale analyst Dick Bove gave Citigroup (NYSE:C) another boost as he upgraded the stock from neutral to buy, citing the government selling its 7.7 billion shares in the company will give it a huge boost.
Citigroup has moved up strongly almost every time mention is made of the government selling its shares and Citigroup removing that weight off of them in order to go forward unhindered.
The target price increase by Bove for Citigroup of $5 a share from $3.75 a share was largely based on this action of the government. Secondarily,
Bove likes how much cash Citigroup now has to offer it some flexibility going forward.
Eldorado Gold Results
Eldorado Gold (TSE:ELD) generated net income of $102. million for the year, or 26 cents a share. That's down significantly from teh $163.7 million generated in 2008, but that was mostly due to the sale of Sâo Bento.
Sino Gold didn't help the company in 2009 either, suffering a net loss of $3.3 million.
For the most recent quarter, net income at the company grew to $33.3 million or 8 cents a share, an increase over the fourth-quarter income of $28.2 million in 2008, although that also was 8 cents a share as well.
Overall revenue in the fourth-quarter increased by 126 percent during that period.
Cost per ounce this year is estimated at $385 to $400, while looking to reduce production costs from $315 to $325 in 2011.
The average realized gold price increased $995 an ounce.
NovaGold Donlin Creek Gold Project
NovaGold Resources (TSE:NG) has increased it reserve/resource estimates for the Donlin Creek Gold Project by 4.3 million ounces, according to a release from the company.
Jointly owned by Barrick Gold and Novagold, the Donlin Creek Project now has an estimated 33.6 million ounces of gold on the property.
The 50 percent interest of NovaGold in the project includes 16.8 million ounces of gold reserves, 2.2 million ounces of inferred gold resourses, and 2.1 million ounces of measured and indicated gold resources.
China shot off its own response to the aggressive comments by some American politicians and business leaders over the alleged idea that they are manipulating their currency to their own advantage.
With political pressure in the U.S. mounting, this could turn into an unpleasant and unprofitable dispute for both countries, with the U.S. having the most to lose.
Some business groups claim the yuan is undervalued as high as 40 percent, although that's largely conjecture and not able to be proved.
Even so, the Chinese currency is almost surely undervalued to some degree, and could rise some if allowed to by the Chinese authorities.
But the problem is the way America is dealing with the situation, where populist-leaning lawmakers from America are making a lot of noise in order to get noticed by their constituents regarding looking like they're doing something about the problem.
With China holding so much U.S. debt and being in the much stronger position from that point of view, it doesn't make much sense to do the public saber-rattling which can sometimes lead to stupid decisions because of not being willing to back down.
China asserts its global trade surplus will probably drop to a trade deficit in March, after plunging by 50 percent in January and February.
Golden Star Resources
A growing number of gold and silver mining companies have started to offer dividends to their shareholders as precious metal producers continue to grow strong profits. Golden Star Resources (AMEX:GSS) is rumored among those companies which may be one of the next mining companies to offer a dividend to their shareholders.
Others already offering dividends include Harmony Gold Mining, Kingsgate Consolidated, Alamos Gold and Lihir Gold, among others.
It wouldn't be surprising to see Golden Star Resources include a dividend for their shareholders, as the company has drawn a lot of interest recently, and that would be a nice addition to attract even more investors.
Friday, March 19, 2010
Gold being looked to as Reserve Currency!
There has been a lot of confusion form people commenting on reading stories about gold, as one day a headline will read gold goes up on Greek concerns, and the next day the same headline will be applied to the U.S. dollar.
The reason this is happening and there are paradoxical movements between gold and the U.S. dollar, and the two are the only two currencies in the world being considered as reserve currencies, with gold making a bold upward movement and people feeling better about the consistency and safety of gold than they do about the dollar.
As to why one day gold and the dollar go in the same direction and the next day they go in the usual inverse relationship they normally do, could be a reflection of the uncertainty as to which one will win out in the minds of investors.
Everything at this time as far as economic data is conflicting, and I think that's the same with most commodities and businesses as well.
One day prices of commodities are going up on demand and the next day they're going down on China tightening its money supply; it can't be both. So the uncertainty is written about by writers who for the most part, don't know what is going on, and pretty copy one another in their writing, while putting it into their own words.
While there are many factors related to the price of gold, including inflation, printing more paper money, safety, and geo-political concerns, I think what the Greek sovereign debt problem has unveiled is the inherent weakness in paper money to deal with the types of problems we're facing, and if just tiny Greece can bring this type of response, what would happen if Spain or even a major country defaults on their debt? It seems it would be unfixable, and the European Union and the euro probably wouldn't last (not that it would be a big deal in that sense).
What matters to most people is how this will impact their lives, and gold is the only proven type of currency out there that has been resilient over thousands of years. Silver could be a second one, but that's not solely a currency, although it could step up as one. But gold stands above all currency competitors, and is battling to regain its place as the choice of those looking for a sound and healthy currency.
Gold New Reserve Currency
Now that gold has gravitated away from it traditional inverse relationship with the U.S. dollar, it leaves people asking what's happening, and accoring to a Citigroup (NYSE:C) analyst, what's happening is gold is being increasingly considered second reserve currency, alongside the U.S. dollar.
As the public gets more and more educated about the consequences of central banks printing a seemingly endless amount of paper money, they understand it will weaken the currency of the countries doing that, increase inflation, and no longer be safe to count on as the primary means of trade.
While the last one has a way to work out yet, there is a growing unease with what the central banks, bank cartel and governments around the world are doing with their currencies.
According to economist and hedge-fund manager Dennis Gartman, this isn't going to be a temporary situation or fad. "The trend shall continue months, if not years, into the future," said Gartman, referring to gold being considered a reserve currency.
Many already believe gold to be superior to any paper currency, but what's new is a growing number of people are seeing the reality of that and are acquiring gold as a place of safety as a result.
Gold New Reserve Currency
Aurizon Mines Seeking Early-stage Acquisitions
Aurizon Mines (TSE:ARZ) has let it be known they're looking for acquistion targets that the early stages of exploration with a goal of generating three times the output over the next five years.
In 2009 Aurizon produced close to 159,000 ounces, and by 2014 they're looking for gold production to increase to 500,000 ounces on an annual basis.
With no end in sight for the strength of gold prices, gold producers are seeking early-stage projects because more mature projects have skyrocket in price because of gold demand an gold prices.
At this time Aurizon has three gold properties, all of them located in Quebec. From those properties it looks like they could extract about 270,000 ounces of gold a year by 2013, with the rest of the goal being reached through acquisitions.
African Barrick IPO
Barrick Gold (NYSE:ABX) announced it will sell shares in African Barrick Gold spinoff for $8.70 each or 5.75 British pounds.
Barrick will sell approximately 101 million common shares in the offering, which at the above price will generate about $834 from the IPO.
They will retain a 75 percent stake in African Barrick Gold.
The reason for creating African Barrick was to get listed on the London Stock Exchange.
After the IPO Barricks will have a market capitalization of about $3.55 billion.
Thursday, March 18, 2010
Yamana Gold and Brazil
Yamana Gold (NYSE:AUY) has a solid base in Brazil, and in fact solidified and built the company around that base to the strong stock it is today.
Many people consider Brazil and other South American countries difficult places to do business, but that's mostly because of the over-emphasis on some trouble spots which are unique to themselves, and not how it is across most of the country.
That's why many investors shy away from mining or other companies doing business in Mexico as well. Even though there has been a long history of support and continuity in Mexico, especially for mining, the focus of the media on the more troubling gang warfare in the border cities of the country make it look like it's like that all across Mexico, which it isn't.
Yamana understood this with Brazil and being willing to take a calculated risk has built up a nice company their shareholders are profiting from.
Gold prices going up!
For the fourth day in a row gold rose as continuing concerns over the fate of Greece with its sovereign debt crisis pushed prices upward.
Even the stronger U.S. dollar couldn't keep investors from going to gold as their preference for a safe haven against the growing uncertainty on the depth of the crisis Europe and the euro face.
Comments by Greece authorities that they may have to go to the IMF to access funds speaks to Europe not backing them like they've publicly stated they are willing to.
Taking everything into account, it won't be the inverse relationship between gold and the U.S. dollar which determines where gold prices will head, but the condition of the global economy which seems far worse than is being revealed by many countries.
Gold and Greece Sovereign Debt
Concerns over the ongoing Greek sovereign debt helped buoy gold up again, as it is the primary mover of gold prices at this time, decoupled from the usual movement in opposite directions with the U.S. dollar.
This has become a consistent theme over the last several weeks as the usual inverse relationship between gold and the U.S. dollar continues to weaken.
The renewed concerns over the sovereign debt issue in Greece was an official saying they're going to look for aid from the International Monetary Fund in the early days of April, seeming to imply the public promises of support from the European Union may have been more talk than possible action. Germany has resisted the aid strongly, although it's no longer publicly stating that fact any longer.
The bottom line is gold is being considered a place of safety beyond anything else at this time, and that will overcome the inverse relationship with the U.S. dollar for some time to come, as long as we continue in the recession and economic debt crisis.
Wednesday, March 17, 2010
Barrick Gold (NYSE:ABX) received conditional approval for the expansion of its NSW gold mine.
Under the original request, Barrick had looked to expand its Cowal Gold Mine by doubling its size, along with the life of the mine. That resulted in legal action which leads the conditions included with the expansion, which have now been modified some.
Most concerns were over three affect farms, which Barricks may have to acquire if the owners of the farms ask them to. And they'll also have to cut down on the noise on six of their other properties as part of the conditions of expanding the mine.
Although a major buyer of water in the market, which was a concern, Barricks has found alternative sources which would reduce the need to tap into the Lacklan River entitlements it has.
Barricks will spend approximately $58 million to expand the mine.
New Gold's Cerro San Pedro Mine Open for Full Operations
New Gold's (TSE:NGD) announced operations at its Cerro San Pedro mine in Mexico have resumed after it had been partially closed down while waiting for a court to make a decision on the use of explosives at the project.
In 2009 the environmental ministry revoked the permit given to the company in 2006, based on a federal court ruling in the country.
New Gold added they maintain their production estimates at Cerro San Pedro of between 95,000 and 105,000 ounces, at a cost of C$390 to C$410 an ounce sold.
Gold prices and Inflation
Gold prices dropped $2 today in response to data showing in February that inflation was still under control; at least for now, and gold responded as expected with a slight drop in price.
On the Comex division of the New York Mercantile Exchange gold for April delivery dropped to $1,120.50 an ounce.
The U.S. dollar index predictably rose, gaining 0.04 percent to $79.70.
With or without the news though, this was sure to happen after large gains on Tuesday where gold prices surged by over $20 an ounce.
Europe and the euro continue to be important to gold, as over-optimistic reports could end up with the euro taking another hit, which would strengthen the dollar and put downward pressure on gold prices.
Even so, the sovereign debt crisis will probably help gold in the future, and that may override whatever strength the U.S. dollar maintains during that time.
Tuesday, March 16, 2010
Gold Stocks Climb with Gold Prices
After gold prices exploded upward today in anticipation of the news the Federal Reserve would be keeping interest rates where they were, once the news was confirmed, gold prices increased even more, taking gold stock up with them, making a lot of investors very happy.
Large gold mining companies enjoying the resurgence were Barrick Gold (TSE:ABX) and Goldcorp (TSE:GG), which were both up over 2.5 percent on the day, gaining back what they lost last week.
With confirmation of the interest rates staying the same, we may see a nice move by gold again as everything is favoring the yellow metal at this time, with monetary policy, an inflation hedge and a place of safety all lining up to make things look good for some time to come.
Gold Stocks Climb with Gold Prices
Gold Prices and Interest Rates
Gold prices increased as much as $21 today, reaching $1,128 an ounce in anticipation of the Federal Reserve keeping interest rates where they were, which highly favors gold prices and gold futures.
Now it will be interesting to see if gold pushes past these barriers and maintains its move upward.
Fundamentals continue to reward gold because of ongoing monetary policies form central banks and governments around the world which are hammering the value of their currencies, making gold a currency, and the most trustworthy one, in the minds of investors and those seeking safety from inflation and risk.
Gold Prices and Interest Rates
Gold futures and Interest Rates
Gold futures rose early in the session and held their gains after the Federal Reserve announced it wouldn't be increasing interest rates at this time.
Gold futures had risen in anticipation there would be no surprises from the Fed, as most feel the earliest increase in interest rates will be later in the year.
The U.S. dollar will remain under downward pressure while gold could resume on a significant upward trend because of everything favoring it as far as monetary policy goes, and the resultant concerns over inflation and risk.
Gold futures and Interest Rates
Monday, March 15, 2010
Gold Prices holding at $1,100
Although gold stocks tend to move in tandem with gold prices, that isn't always the case, and today is a case in point as gold rose some while gold stocks remained mixed.
This is probably because of the sovereign debt concerns based on a Moody's report that the four-largest AAA-rated nations are in danger of losing that top rating over debt issues. Spain, while not one of the four, is considered very close to losing its rating at this time.
In those cases, the dollar and gold stocks don't perform in their usual manner as the day revealed. The U.S. dollar increased, as did the gold price.
Gold prices at this time are finding support at the $1,100 point, being looked upon as a buying opportunity by many.
Tomorrow's Federal Reserve meeting will be interesting as to its conclusions and how that may have an effect on the prices of gold in the near term.
Gold Prices holding at $1,100
Gold and Sovereign Debt
Moody's Investors Service gave gold a nice boost when they announced the ratings for the four largest AAA-rated economies - the United States, the United Kingdom, Germany and France - are increasing in risk.
Think of this in relationship to all the concerns over the sovereign debt of little Greece and the other PIIGS nations (Portugal, Ireland, Italy, Greece and Spain), and it shows the risk we're all still under.
With no currency in the world trustworthy at this time, gold is increasingly being considered the only currency that could be considered a safe place to put your money.
Although historically the dollar and gold usually move in the opposite directions, we are not in normal times any longer, and even though the U.S. dollar may rise, that no longer is a guarantee gold will fall, based on what I mentioned above.
Depending on what comes out of the Federal Reserve meeting Tuesday, we could really see some interesting things happen with the dollar and gold.
Gold and Sovereign Debt
South Africa Gold Production
Even though South Africa has been the leading producer of gold for most of the 20th century, in the 21st century they aren't faring as well, as they've dropped to the No. 4 position globally.
In 2009 gold production in the country fell to under 205 tons for the year. Aging gold mines are the principle culprit in the reduced South African gold production.
To give an idea how quickly this is happening, in 2008 the production levels were down by 14.5 percent, while in 2009 it fell a further 5.8 percent.
There's only one factor going on here, and that is that the country is simply starting to run out of the metal with no new, significant gold mines waiting in the wings.
The top three gold producing countries in the world are led by China, and then the United States and Australia.
What could be good news is this could increase the price of gold which isn't expected to diminish in demand for some time.
South Africa Gold Production
Sunday, March 14, 2010
Yamana Gold (NYSE:AUY) has held a lot of favor in the market recently, but their luster has somewhat came off of them after production levels fell below expectations.
One thing Yamana has always had going for it was its cost controls, which were as good as any in the gold mining industry. But with the production levels that's a different story, as that's where the long-term growth is, and when you're already the top company for operational costs, your growth in profits can only come from increased production.
To add some insult to injury, some unexpected higher production costs from some of its South American properties had a drag on excitement for the company going forward as well.
The bottom line for Yamana is they're going to have to prove themselves over the next year that they can continue to hold costs down while meeting their projected production goals.
There are too many other gold companies which can increase production levels even if they aren't as good as Yamana at cost management. Many times investors look at production levels before operational costs, and those that do will bypass Yamana for what they perceive as greener pastures.
Right or wrong, that is the case. So Yamana needs to work hard to convince investors they can contain costs while boosting gold production or there won't be a reason to invest in them, in the minds of many people that otherwise would.
Any time and company enters a foreign market, they gain exposure to flucuating value in the nation's currency, and that's the case with Eldorado Gold (NYSE:EGO) when they entered the Chinese market in 2009 via the acquisition of Sino Gold Mining in China.
While a small change in the value of the reminbi wouldn't have a significant effect on Eldorado Gold, a major move definitely would.
But taking that into account, the Chinese have never succumed to pressure to float their currency, and while thinking about it for the long term, over the next several years it's highly unlikely to happen.
Even so, investors in any company with China exposure need to know the effects of a change in monetary policy of the Chinese, especially if it's allowed to move upward in strength.
In the short term there's nothing to be concerned about with Eldorado Gold and other gold mining companies, but it does need to be taken into consideration for those planning on holding the company for some time.
SPDR Gold Trust
After a somewhat difficult week for gold, SPDR Gold Trust (NYSEArca:GLD) found itself struggling along with gold in general, as it participated in the down week, as gold prices fell.
Gold ended the week at $1,101.70 on the New York Mercantile Exchange, dropping 2.4 percent overall. On Friday gold fell $6.50 or 0.6 percent. SPDR Gold Trust dropped 0.5 percent.
Recent gold holdings for SPDR were reported at 1,115.511 tons as of March 11, the same it had on Wednesday.
Contrasting pressures are making it hard to determine where gold will gold, but it's pretty sure it will retain support for some time, although that support is the issue gold investors are thinking of as to how high it will be.
Saturday, March 13, 2010
Newmont Mining Growth
Newmont Mining (NYSE:NEM) continues to be a favorite among gold stocks, as the company is expected to continue on its upward growth trajectory, although not at the levels it has in the recent past, which of course would have been hard to sustain for any company in any sector.
Even so, Newmont is expected to grow faster than the majority of the market, and will continue being a solid performer for some time to come.
Recently Newmont quadrupled its earnings in the fourth quarter, while doubling them in the third. While no one can keep that kind of pace up, even slowing down, Newmont should continue to offer good returns for shareholders in the years ahead.
Newmont Mining Growth
China and Gold
There is a lot of speculation swirling around out there which could have a strong impact on gold if any of them turn out to be true, with one of those being China could end up tightening its money supply to cool down its economy.
With China it is believed they may raise their interest rates, which could result in not only a downward pressure on Gold prices, but possibly on other commodities as well, if demand slows as a consequence of those actions; if they're what really happens.
But with all the other positive factors for gold to remain in demand, such as inflation and currency weaknesses, gold should continue to find support at around $1,000, or maybe even more, and will be considered a buying opportunity by investors when and if it falls to lower levels.
There are too many variables to make an interest rate hike by China a major game breaker for gold, but it would have a temporary downward pressure on gold, and as mentioned, would present a buying opportunity at that time.
China may attempt to cool off its economy some, but it's not going to do cool it off too much. So including that with other factors, and gold prices should hold strong for some time to come, and eventually will resume their upward climb.
China and Gold
Gold prices would have been really down this week if it hadn't been for the last couple of days, where it helped prop it up some after a devastating week.
After the rebound of the euro, gold dropped about 2 percent for the week as safety hedges against currencies declined as concerns over the sovereign debt of Greece fell some.
This should only be a temporary lull, even though some are speculating governments will begin to pull back on stimulus programs, which has helped gold surge on inflation concerns and the dropping in value of currencies as central banks around the world continue to print money, which weakens their currencies and sets the stage for inflation.
The idea that this is a reality is far from certain, and I think we're far from this being over, and central banks and governments are ready to throw money at the problem at the drop of a hat.
So I wouldn't make any decisions about gold for a long time, and even if governments were to completely stop their stimulus programs, we have the money ready to spread across globe, and that will drive inflation, no matter what happens afterwards.
Gold should do well as a consequence of what has already transpired.
Friday, March 12, 2010
Goldcorp Production Goal and Growth Areas
Goldcorp (TSE:G) is looking to its recently acquired El Morro project and the Eleonore project in Quebec, Canada as the major sources of growth in the company by 2015, according to CEO Chuck Jeannes.
It isn't certain for Goldcorp whether they're retain control of El Morro, a major question for them going forward, as Barrick Gold (TSE:ABX) is contending the deal in hopes of gaining control of the El Morrow project.
The Eleonore project is a good one for Goldcorp for sure, as the production costs are about $400 an ounce. That doesn't include byproducts of $450 an ounce.
Jeannes has recently stated they have a goal of growing gold production through about 2015, and then probably leveling it off, based on other companies who have reached certain production levels and then have trouble growing from there.
Production goals on an annual basis are to reach around 3.8 million ounces a year.
Goldcorp Production Goal and Growth Areas
Gold Prices Rising
Newmont Mining (NYSE:NEM) CEO Richard O'Brien recently said he believes the misguided monetary policies of the governments around the world ensure gold prices will rise as inflation increases and currencies fall in value.
Consequently, O'Brien thinks gold could reach as high as $1,500 an ounce over the next several years, as the consequences of central banks printing money to allegedly stimulate their economies will come back to haunt them, saying, "The long-term impact of all the stimulus programs that we have seen in the U.S. and in European countries is going to come home to roost."
This year O'Brien sees gold trading in a range between $1,000 to $1,250.
Gold Prices Rising
Thursday, March 11, 2010
Barrick Gold wants to add Xstrata to Lawsuit
Barrick Gold is attempting to add Xstrata to a lawsuit over a Chilean mine.
The battle is over the attempt by New Gold Inc. to sell the property to Goldcorp.
Barrick sued Goldcorp and New Gold where Goldcorp agreed to advance New Gold $463 million to let it buy a 70 percent stake in the El Morro property from Xstrata Plc. Goldcorp also agreed to pay an additional $50 million to purchase the stake from New Gold, which already owned 30 percent and had right of first refusal.
The case centers around Xstrata agreeing to sell its stake in the property to Barrick for $465 million on Oct. 11, on the condition New Gold’s right of first refusal expired, according to Barrick. Since a shareholder agreement didn't allow the transfer of the stake to a third party, Goldcorp’s acquisition was illegal and Barrick was entitled to complete the transaction, according to Barrick.
Barrick Gold wants to add Xstrata to Lawsuit
Gold traders back in the game
After three days of pulling back, gold traders got back into the game, driving some of the gold stocks back up.
The Gold Index showed gains of 0.43 percent, as Barrick Gold (TSE:ABX) and Yamana Gold (TSE:YRI) surged over 1 percent for the day.
Data from a variety of places will take time to be absorbed, but major concerns were China may raise its interest rates in order to combat inflation and manage its economic growth, which continues at a hot pace even in the midst of the global recession.
Gold traders back in the game
U.S. Gold Futures
U.S. gold futures ended the day up a little, as it finished the day on the COMEX at $1,108.20 an ounce, a slight 10 cent increase.
Currencies moved very little, giving little indication or guidance for gold.
A number of gold traders said the possibility of China monetary tightening could move the gold market going forward.
U.S. Gold Futures
Wednesday, March 10, 2010
Gold Futures Drop
Gold futures dropped to their lowest levels in two weeks as stop-losses triggered sales.
Other than taking a temporary breather, there was no news which caused the yellow metal to slide.
Gold ended the session at $1,107.80 an ounce on the Comex division of the New York Mercantile Exchange.
Gold Futures Drop
Tuesday, March 9, 2010
As many following China and its acquisition of gold have noted, it has shown they are nervous about their holdings of U.S. Treasury's, and China is now attempting to spin they're not as interested in gold as they were before, seeming to attempt to shore up their interest in U.S. Treasury's, even though they are a very poor investment at this time, and will be long into the future.
More than likely it is also a nod that China may be buying gold again, but doesn't want to show its hand so prices don't skyrocket and make it more expensive to acquire.
Another problem for China is it'll have to ease off buying Treasury's slowly, as it would have a detrimental impact on their manufacturing base and exports.
China has been working up growing its domestic economy in order to not need to buy into U.S Treasury's to grow its markets.
With U.S. consumers having slowed down their spending, even if China buys Treasury's it may not be that helpful to them if Americans don't turn around and buy products from the country.
So while gold is probably the better investment taking into consideration the economic climate, China has to continue playing a balancing game until their domestic economy matures more.
Until then, gold will be better for them to invest in, but for the sake of their manufacturers and exports they'll probably be forced to buy U.S. Treasury's until that changes.
So investing in gold will continue, but it'll probably be much quieter and probably not at former levels, although it's hard to tell with the Chinese which way they'll go and how they're going to do it.
Monday, March 8, 2010
Eldorado Gold Eastern Dragon Project
In case you didn't catch the recent news concerning Eldorado Gold (NYSE:EGO), they reported a huge 42 percent increase in proven and probable gold reserves, equal to 747,000 ounces, at its Eastern Dragon Project in China.
With that data in hand, the mining company has increased it drilling budget by $2.4 million to get a better idea of what they have and to secure the find.
They also want to do more exploring of the mine to confirm vein structures and to see if there are additional gold resources.
Eldorado Gold Eastern Dragon Project
Goldcorp Growth Strategy
According to Goldcorp (NYSE:GG) CEO Charles Jeannes, the company could grow the company quicker than he is planning at this time, but lessons from major rivals like Barrick Gold (TSE:ABX) and Newmont Mining (NYSE:NEM) give him a check on that, and he's look at a more modest doubling of gold production from now through about 2018.
From there, Jeannes said it'll be hard to see how there could be significant growth once they reach that level of production. He uses the metric of about 5 million ounces a year as the place where gold production growth gets difficult.
Jeannes is looking to reach 5 million ounces of gold production by around 2018.
Goldcorp Growth Strategy
Goldcorp's Return to Shareholders
Goldcorp (NYSE:GG) should be a strong performer for many years into the future, and the ongoing returns of over 20 percent for the last 15 years should continue on in the current economic climate.
With gold production costs of around $350 an ounce, and gold almost guaranteed to be over $1,000 an ounce for a long time into the future, Goldcorp should continue to make shareholders in the company happy for years ahead.
Goldcorp's Return to Shareholders
Saturday, March 6, 2010
Lihir Gold Sells Ballarat Project
Lihir Gold (ASE:LGL) has sold its Ballarat project to Castlemaine Goldfields (ASE:CGT) for A$4.5 million.
Based in Victoria, Australia, the Ballarat Gold Mine sale will be subject to meeting certain conditions; a major part being the issuing of stock to raise A$20 million.
Terms of the deal, along with the sales price, includes Castlemaine keeping a 2.5 percent royalty of any production in the future, with a cap of A$50 million on that part of the agreement.
In the near term Lihir said it will focus on exploration rather than operations at this time.
Lihir Gold Sells Ballarat Project
Everything Gold Authors
Ellen has owned or managed several multi-million dollar retail or service business through her career, and has been writing on business, the U.S. economy and the effects of the Federal Reserve and government policy on overall global financial health.
With Everything Gold she'll cover numerous aspects of how gold plays such a vital part in the economy, safety, and as a protection against inflation.
Ray is an expatriate living in China, who listens to and observes the heartbeat of business in the Middle Kingdom, as well as other Asian countries.
He also keeps his finger on the pulse of China's economic policies and the resultant response of its leaders to current events.
China and its gold policies, as well as Chinese investors and consumers and how they acquire and view gold will be part of the highlight of Ray's reports.
Gary has been running Internet businesses for over a dozen years, and has been writing on business topics since 2005. His favorite financial topic is the commodity bull run, which he expects to continue on for years.
Companies associated with commodities are also of interest to this Internet, business and investing expert.
Gold and other precious metals will be the focus of the majority of Gary's articles, especially as they related to the growing sovereign debt crisis in Europe and America.
Libby worked in the banking industry for years before deciding she wanted to research and write about it, especially as the extraordinary events surrounding it have unfolded, and which has resulted in the global economy being brought to the brink of failure.
Banking, gold, the Federal Reserve, and the U.S. dollar will be the primary focus of Libby's articles.
Allen's specialty is currencies, precious metals, the Federal Reserve, and other central banks and their policies which are having a major impact on the world we live in.
Also important to Allen is the irresponsible government policies around the world which, overall, refuse to stop spending and to shrink the governments down to manageable size.
Central banking, gold miners and currencies will be the dominant themes of Allen's articles.
Gold Leading Investment Over Last 10 Years
With the last decade experiencing some tough economic times, the price of gold and the attraction of gold as a place of safety has encouraged investors to place their money in the yellow metal, which has resulted in it becoming the best performer over the last 10 years, generating profits of 277 percent during that time.
Other metals performing strongly were platinum and silver, which also grew by over 200 percent over that same period of time, with platinum enjoying a increase of 230 percent, while silver grew by 227 percent.
Gold should continue to grow in value for years to come, as continuing economic data and the printing of money by central banks continue to keep it at the top of the list for many investors.
Now the sovereign debt crisis in Europe has added another reason to invest and hold gold, and that situation is far from being worked out or understood how deeply it will go.
Gold Leading Investment Over Last 10 Years