tag:blogger.com,1999:blog-78000509143408090052024-02-20T09:39:09.853-08:00mining flash newsjimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.comBlogger342125tag:blogger.com,1999:blog-7800050914340809005.post-48737600020188528662011-07-09T21:30:00.000-07:002011-07-09T21:43:49.445-07:00Australian markets performed over the past weekThere was an upward trend in share prices late last week, with better expected next week in the wake of the sharp jump in the gold price after we had closed on Friday. But, as you suggest, before we start trading on Monday we’ll have to absorb the next instalment in our never-ending tax debate. Because Sunday is the day the government unveils the details of its proposed carbon tax.<br />
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A tax which might target the mining sector.<br />
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Little doubt about that. The major worry for miners is a likely increase in the price of diesel, which the industry uses heavily in mobile fleets and remote area power generation, though we’ll have until what’s been termed “Carbon” Sunday for the detail. At that point the bean-counters will get to work, to tell us what it all means, and how it fits in with that other new tax, the super-tax on mining profits.<br />
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The other big news last week was confirmation that the resources sector in this country is being stretched to breaking point, and beyond. Troubles at Murchison Metals (MMX), one of the west coast companies planning to mine, process, rail and ship low-grade magnetite ore, was a timely reminder that cost inflation is accelerating, that infrastructure is not being developed in a timely fashion to handle Asian demand for commodities, and that workers of every sort, from skilled to unskilled, are in alarmingly short supply.<br />
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You’re concerned that the Murchison crisis could spill over into other projects?<br />
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I don’t see how it can’t, because everyone is in the same boat when it comes to finding people and equipment. Murchison discovered that a project expected to cost around A$4 billion would probably cost more than A$10 billion, which is an impossible undertaking for a company valued on the ASX at A$300 million. Little wonder its share price has crashed from around A$3.00 last year to a closing price on Friday of A69 cents.<br />
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But with all that said it was an up week. Overall, the Australian market as measured by the all ordinaries index, rose 1.4 per cent last week, with most of the gain coming on Friday. The metals and mining index did better, putting in a rise of 3.3 per cent, while gold went a step better with a gain of 3.6 per cent.<br />
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Right. Let’s move on to prices, starting with the strongest sector, gold.<br />
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As mentioned earlier, there were several strong risers among the gold companies. Gryphon Minerals (GRY) was rewarded with a rise of A24 cents to A$2.03 after it reported excellent assays from its Nogbele prospect in Burkina Faso. Best drill hits included eight metres at 38.75 grams of gold a tonne from a depth of 68 metres, and five metres at 17.41 grams per tonne. Mt Isa Metals (MET) joined in with its own discovery news, also in Burkina, reporting on intercepts of four metres at 7.45 grams per tonne, with a core of two metres in that hit grading 14.08 grams per tonne. On the market, the Mt Isa added A8 cents to A39 cents. Ramelius (RMS) was a third significant winner from good gold news, this time on the production side. The company went through the 100,000 ounce a year mark, an event which moved the shares up A12 cents to A$1.37.<br />
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Most movement among the rest of the gold companies was up, although there were a handful of declines. Crusader (CAS) rose A9 cents to A$1.27. Tanami (TAM) rose A9 cents to A97 cents. Ampella (AMX) rose A22 cents to A$2.07. OceanaGold (OGC) rose A24 cents to A$2.76. Medusa (MML) rose A63 cents to A$7.11. Integra (IGR) rose A7.5 cents to A50 cents. Silver Lake (SLR) rose A22 cents to A$2.16. And Kingsgate (KCN) rose A51 cents to A$8.44. Companies that were worse off included: Troy (TRY), down A7 cents to A$3.52, AusGold (AUC), down A10 cents to A$1.46, and Reed (RDR), down A3.5 cents to A46.5 cents.<br />
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Over to the iron ore sector now please.<br />
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Conventional iron ore producers and explorers performed well, though not as well as the gold companies. The unconventional iron ore companies, those focussing on magnetite, did less well, in the face of a potential double hit from the super-profits and carbon taxes. Iron Ore Holdings (IOH) benefited from news that its overall resource had swollen to more than one billion tonnes, helping lift the shares by A5 cents to A$1.41. Amex (XZ) continued its remarkable run by adding another A9 cents to A$1.35 on news that it has received the results of a positive prefeasibility study on its Mba Delta iron sands project in Fiji. Fortescue (FMG) was another mover of note, up A14 cents to A$6.53 as interest grows in its expansion plans. Atlas (AGO) added A13 cents to A$3.90. Iron Road (IRD) put on A4.5 cents to A90 cents, while among the leading magnetite stocks Gindalbie (GBG) crept A1 higher to A82.5 cents, and Grange (GRR) recouped some of its recently lost ground with a rise of A4.5 cents to A56.5 cents.<br />
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Base metals next, please, starting with copper.<br />
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Strength in the price of copper was only partially reflected in the copper company share prices. Sandfire (SFR) led the way with a rise of A34 cents to A$7.48. Rex (RXM) wasn’t far behind, rising A13 cents to A$2.48. Other companies on the rise included: OZ Minerals (OZL), up A36 cents to A$13.71, PanAust (PNA), up A13 cents to A$4.06, and Anvil (AVM), up A70 cents to A$6.60. Losses were posted by Hot Chili (HCH), down A3.5 cents to A58.5 cents, Resource and Investment (RNI), down A6 cents to A$1.21, and Metminco (MNC), down a fractional half a cent to A30 cents.<br />
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Nickel companies continued to firm after a few bad months. Mincor (MCR) recovered another A4.5 cents to A97.5 cents, up considerably on the A82.5 cents price of three weeks ago. Western Areas (WSA) added A31 cents to A$6.05. Independence (IGO) put on A 26 cents to A$5.84. Mirabela (MBN) firmed by A10 cents to A$1.92. Even Minara (MRE) managed a rise of A2 cents to A75 cents, despite an equipment failure at its Murrin Murrin mine which is likely to cut annual nickel output.<br />
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Zinc companies also shrugged off a long spell of negative sentiment. Kagara (KZL) gained A6.5 cents to A64.5 cents. Perilya (PEM) put on A2.5 cents to A66 cents. Blackthorn (BTR) rose by A6.5 cents to A51.5 cents. Terramin (TZN) closed the week at A29 cents for a gain of A2 cents, but did trade up to A31.5 cents on Wednesday. Meridian (MII) added A1.9 cents to A11 cents.<br />
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The energy stocks next, coal and uranium, please.<br />
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All up, in sympathy with the oil price. Best of the coal companies was Coal of Africa (CZA), which rose A18 cents to A$1.29 after it delivered some good news on a South African project. <br />
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Yes, we’ll be hearing more on that from John Wallington, the chief executive, on Minesite next week.<br />
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Look forward to it. Also on the move in coal was Whitehaven (WHC), up A28 cents to A$6.08. Metro Coal (MTE) rose A12 cents to A70 cents. Carabella (CLR) rose A19 cents to A$1.99, and Bathurst (BTU) rose A9 cents to A$1.11.<br />
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Those coal rises would appear to indicate that the carbon tax isn’t seen as too much of a worry?<br />
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Or that investors are looking through the tax and seeing a change of government, caused to some extent by the introduction of these unpopular taxes. Whatever the reason, the market has redeveloped a taste for energy companies. That was evident too in the continued rebound among the uranium explorers. Bannerman (BMN) was the star in the uranium space last week, adding A10 cents (35 per cent) to A38.5 cents. Forte (FTE) gained A1.6 cents to A7.6 cents. Berkeley (BKY) rose by A5 cents to A44 cents. Deep Yellow (DYL) had its best week for some time, with a gain of A3 cents to A19 cents, and Aura (AEE) gained A2.5 cents to A27 cents.<br />
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Minor metals to close, please.<br />
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Rare earths led the way among the more exotic mineral commodities. Lynas (LYC) announced a joint venture with Germany’s Siemens to produce high-strength magnets and its shares moved strongly as a result, closing A26 cents higher at A$2.01. Alkane (ALK) added A10 cents to A$2.28, and Arafura (ARU) put on A5.5 cents to A80 cents. <br />
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Potash companies rose marginally. South Boulder (STB) rose A12 cents to A$2.49, and Minemakers (MAK) added A3 cents to A47 cents. <br />
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Lithium companies weakened. Galaxy (GXY) fell A3 cents to A75 cents, and Orocobre (ORE) by A1 cent to A$2.08 cents.<br />
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<a href="http://minesite.com" target="blank">Source</a><br />
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</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-16004021722966943692011-07-09T19:04:00.000-07:002011-07-09T21:35:17.389-07:00Canadian markets performed over the past weekPoor job numbers out of the United States prompted a sell-off in equities on Friday but for the most part it was a good week for the resource-related companies. Once all the trading was done, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had added 4.23 per cent, while the TSX Gold Index had tacked on 2.64 per cent.<br />
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Let’s start off with the exploration news out of the Yukon.<br />
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Well, the 2011 field season in Canada’s Yukon is starting out on a solid footing and delivering favourable drill results on multiple fronts. Atac Resources led the charge by tabling results from work on the Conrad zone within the Nadaleen Trend in central Yukon. In 2010 the company drilled a discovery hole which hit 21.13 metres grading 8.03 grams gold per tonne. The first 2011 hole was drilled 100 metres east of this and hit 114.93 metres of 3.15 grams gold per tonne. Atac ended the week at C$8.70 for a C$1.40 gain.<br />
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And good news for Atac also means good news for Strategic Metals, which at last count held nearly 10 million Atac shares. The Yukon project generator closed up C$0.45 at C$3.60.<br />
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Positive stuff! Anyone else delivering good news in the Yukon?<br />
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Yup. Golden Predator released results from the final five holes from its winter 2011 drill program at the Carlos zone on the Grew Creek project. Highlights included 92 metres running 2.02 grams gold per tonne and 104.2 metres of 1.68 grams gold per tonne. Golden Predator closed out the week up C$0.03 at C$0.99.<br />
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And shares of another Yukon market darling performed well on no new results. Kaminak Gold added C$0.43 to close at C$4.18 as investors buy ahead of more drill results from its Coffee project.<br />
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So, what’s happening among the producers?<br />
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Shares of Sandstorm Gold added C$0.16 to close at C$1.35 in the wake of good operational news from Luna Gold’s Aurizona mine in Brazil. Sandstorm has an agreement to purchase 17 per cent of the life-of-mine gold production from Aurizona.<br />
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Elsewhere, Avion Gold announced production results from its Tabakoto/Segala operations in Mali. The company produced 25,823 ounces during the second quarter, putting it on track for 100,000 ounces in 2011. Avion ended the week up C$0.24 at C$2.18.<br />
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Also in production news, Kirkland Lake Gold tabled quarterly production of 24,566 ounces of gold and record yearly production of 81,860 ounces of gold from its operation in Ontario. Operating costs have dropped to US$759 per ounce from US$1,045 per ounce a year earlier. Kirkland ended the week up C$1.50 at C$16.70.<br />
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Meanwhile, First Quantum Minerals said it produced of 64,500 tonnes of copper and 40,700 ounces of gold during the second quarter. This was lower than expected. First Quantum ended the week down C$4.42 at C$136.20.<br />
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Capstone Mining produced 21.2 million pounds of copper in concentrates in the second quarter from its Cozamin operation in Mexico and from its Minto mine in Yukon. Capstone ended the week up C$0.08 at C$3.67.<br />
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Back with exploration, but staying with copper, Duluth Metals continued to table the goodies from its Twin Metals Nokomis deposit in Minnesota. Highlights included 185 feet of 1.92% copper equivalent. Duluth ended the week up C$0.16 at C$2.54.<br />
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It was a good week for shareholders of European Goldfields. The company will now get its Greek mining permit this month after a very long wait. The environmental impact studies for the Olympias polymetallic and Skouries gold-copper projects on Greece’s Halkidiki peninsula have been on the table for several years. European Goldfields closed up C$3.55 at C$13.65.<br />
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China raised interest rates, the jobless rate in the United States climbed to 9.2 per cent and a report circulated that underwater rare earth deposits have been discovered by Japanese scientists. A mixed bag of news if there was one. For speculative investors all eyes are on drill results and nothing else. We will see what next week has in store.<br />
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<a href="http://minesite.com" target="blank">Source</a><br />
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</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-65089883519580904552011-06-14T22:42:00.000-07:002011-06-16T09:10:40.377-07:00Spot gold and Spot silver are stableSpot gold is relatively stable on Monday, after slipping nearly 1 percent in the previous session, while the dollar mixed - down against the euro but rose versus some other currencies, and holidays in Australia, is expected to create anxiety in the trade.<br />
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FUNDAMENTALS<br />
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* Spot gold fell 4 cents to $1,530.99 an ounce by 0118 GMT, after ending last week half a percent lower.<br />
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* U.S. gold edged up 0.2 percent to $1,532.30.<br />
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* The dollar fell 0.1 percent versus the dollar, by rose 0.05 percent against a currency basket .DXY.<br />
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* Bullion came under pressure after Wall Street resumed its slide following weaker Chinese trade data last week..N<br />
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* More data is scheduled to be released from the world's top gold producer, including inflation where the market expects a small rise to 5.4 percent in consumer prices.<br />
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* Support for gold was seen at its 20-day moving average of $1,524, a level it has held for the past three weeks.<br />
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<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcd0j9JF4VJTJkxykmN8tjamsRhgUc32sYBBngFMpbSwjiEJr-JbRYLQZYMViDUvK32ZojiefsEm0-ROOu3D1nu1PkBIDfVbHaHorLk1swzTqTRbnqvi90b85GV9BUj2Rgy8Lf0_dlA-fB/s1600/gold-moving-chart.jpg" imageanchor="1" style=""><img alt="gold moving chart, gold progress chart, gold outlook chart" border="0" height="199" width="320" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgcd0j9JF4VJTJkxykmN8tjamsRhgUc32sYBBngFMpbSwjiEJr-JbRYLQZYMViDUvK32ZojiefsEm0-ROOu3D1nu1PkBIDfVbHaHorLk1swzTqTRbnqvi90b85GV9BUj2Rgy8Lf0_dlA-fB/s320/gold-moving-chart.jpg" /></a></div><br />
* Silver rose 0.2 percent to $36.21 after slipping more than 3 percent on Friday.<br />
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Precious metals prices 0118 GMT<br />
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Metal Last Change Pct chg YTD pct chg Volume<br />
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Spot Gold 1530.99 -0.04 -0.00 7.86<br />
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Spot Silver 36.21 0.08 +0.22 17.34<br />
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Spot Platinum 1825.24 1.49 +0.08 3.27<br />
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Spot Palladium 811.75 1.80 +0.22 1.53<br />
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TOCOM Gold 3972.00 -8.00 -0.20 6.52 30344<br />
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TOCOM Platinum 4772.00 -3.00 -0.06 1.62 3269<br />
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TOCOM Silver 93.90 -2.40 -2.49 15.93 650<br />
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TOCOM Palladium 2108.00 13.00 +0.62 0.52 149<br />
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COMEX GOLD AUG1 1532.30 3.10 +0.20 7.80 3704<br />
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COMEX SILVER JUL1 36.24 -0.09 -0.25 17.11 6724<br />
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Euro/Dollar 1.4337<br />
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Dollar/Yen 80.50<br />
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TOCOM prices in yen per gram. Spot prices in $ per ounce.<br />
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COMEX gold and silver contracts show the most active months<br />
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<a href="http://miningspot.com" target="blank">Source</a><br />
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</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-64394434263865458502011-06-13T08:35:00.000-07:002011-06-16T08:42:02.959-07:00London's markets performed over the last weekEquities lacked clear direction in a week which was decidedly mixed as far as commodities were concerned. On the bigger stage traders continued to fret over the state of the global economy. Even so, gold edged lower to US$1,532 per ounce while silver held firm at US$36 per ounce. Platinum fared better, rising to US$1,828 per ounce, and palladium climbed to US$813 per ounce. Copper slipped to US$9,016 per tonne, or US$4.09 per pound, while nickel reversed its downward trend to climb to US$22,905 per tonne. Zinc also strengthened, rising to US$2,272 per tonne.<br />
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Amongst the majors, Xstrata slipped 2.2 per cent to 1,333p, Rio Tinto edged higher to 4,111p, BHP Billiton rose to 2,308p and Anglo American rose to 2,946p. Commodities trader Glencore climbed 2.1 per cent to 516p. Two miners resumed operations after resolving labour disputes. Following the dismissal of workers taking industrial action at its Karee operations, platinum miner Lonmin has largely completed the recruitment of replacements. Production at Karee has now resumed and is ramping up, although management estimates that full-year sales will be around 30,000 ounces lower than previous guidance. Sales for the year to September are now expected to total around 720,000 platinum ounces. Lonmin’s shares closed 7.4 per cent lower at 1,460p. <br />
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Cluff Gold also successfully resolved a labour dispute. Normal operations have resumed at the company’s Kalsaka mine in Burkina Faso. The company also stated that the disruptions have not affected the company’s production guidance of 70,000 ounces from Kalsaka in 2011. The shares recovered 12.7 per cent to 95.75p.<br />
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And in a dispute of a different kind, in the boardroom, the murky tale of ENRC continues. ENRC lost a lot of friends when it sided with the Congolese government in the sequestration of the Kolwezi tailings project from First Quantum. That prompted a US$2 billion lawsuit from First Quantum, which is pursuing the case from the safety of the British Virgin Islands. Most recently, two independent non-executives have been voted off the board, exacerbating a sense of unease in the market about the company’s corporate governance. The stock exchange said that the company was not in breach of any rules, but the uncertainty continued on Sunday as a report that Glencore was considering making a takeover offer appeared in the papers. ENRC shares dropped by more than 50p to 742p.<br />
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In gold exploration, Patagonia Gold provided a positive update from its Monte Leon gold-silver prospect in Santa Cruz province, Argentina, where drilling has intersected wide, near-surface zones of potentially bulk mineable gold and silver over a strike length of one kilometre. Markets wanted more, though and the shares slipped 7.5 per cent to 40.25p. <br />
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In Ghana, Goldplat published a technical report on its recently acquired Banka project in the Ashanti gold belt. The report suggests that Banka offers significant potential for an upgrade to the current non-JORC compliant resource of 262,107 ounces of gold. The shares closed 3.3 per cent lower at 11p. <br />
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In South Africa, Pan African Resources announced encouraging results from drilling the at Bramber tailings dam at the company’s Barberton operation. If viable, production from tailings could increase output from Barberton by 20,000 ounces per annum, which should lift total output comfortably above 100,000 ounces. The shares stayed firm at 10.75p. <br />
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Away from gold, uranium investor Kalahari Minerals announced a resource update for the Husab uranium project in Namibia in which it holds a 42.76 per cent interest via an investment in Extract. The total resource has increased 33 per cent to over 500 million pounds of U3O8, and Husab is now recognised as the world’s fourth largest uranium deposit. The shares edged higher to 234p. <br />
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The challenges continue for African Barrick Gold. Just weeks after its North Mara mine in Tanzania was attacked by 800 intruders in an assault that left seven intruders dead, the company has had to refute media reports that Tanzania is to impose a mining super profits tax similar to that proposed in Australia. The company asserted that its mineral development agreements cannot be amended without its agreement, although the market wasn’t convinced and the shares closed nine per cent lower at 411p. <br />
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Another miner facing potentially heightened political risk is Minera IRL, whose operations in Peru could be vulnerable should the newly-elected leftist government decide to impose populist policies. The market was relaxed about the threat, though, and the shares strengthened 2.2 per cent to 71p. <br />
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EMED Mining has long suffered government delays to the planned reopening of the Rio Tinto copper mine in Spain. Nevertheless, detailed geological investigations have identified significant underground mining potential for the project once it does get up and running. The shares closed 3.3 per cent lower at 10.4p. <br />
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The week's political challenges didn’t deter two miners from floating on the Alternative investment market. First came Strategic Minerals, which raised £750,000 through a placing at 5p to fund the next phase of exploration at its magnetite iron ore exploration project in northeast Queensland, Australia. Then on Friday, Touchstone Gold raised £10 million through a placing at 27p to fund exploration and development at its Rio Pescado project in Colombia. Strategic Minerals closed the week at 12p and Touchstone Gold at 30.9p. <br />
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However, it wasn’t all good news on the fundraising front as Nautilus Minerals was forced to abandon its substantial Canadian fundraising as a result of poor market conditions. The company remains debt-free and holds cash of US$139 million as it works to bring its first sub-sea project to completion. The shares slumped 18 per cent to 135p. <br />
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Several miners were on the acquisition trail, including Sable Mining Africa, which acquired a 49 per cent interest in the Lubimbi coal project in Zimbabwe. Historical work here has indicated an in-situ resource in excess of one billion tonnes and the company is planning an immediate exploration and development programme. The shares slipped 1.3 per cent to 19.75p. <br />
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Meanwhile, coloured stones specialist Gemfields entered into a conditional agreement to acquire a 75 per cent interest in a ruby deposit based in the Cabo Delgado province in Mozambique. The consideration of US$2.5 million will be paid in stages. Gemfields shares gained 1.4 per cent to 17.75p. <br />
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In South America, Orosur Mining has entered into an agreement to acquire a 100 per cent interest in the Talca gold property in Chile for a phased consideration of US$7.6 million. Orosur also announced a US$13.5 million placing at 66p a share. The shares slipped 0.5 per cent lower to 70.63p. <br />
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Finally, GGG Resources gained 7.1 per cent to 26.13p after it extended the closing date its off-market takeover offer for partner Auzex Resources until 4 July 2011.<br />
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<a href="http://minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-255648890297063052011-06-12T08:23:00.000-07:002011-06-16T08:31:02.970-07:00Australian markets performed over the last weekThe slide in share prices we’ve seen over May and June has been more like a slow melting process, as each week has produced slightly lower numbers. The outlook for next week is not much better, given that the Dow Jones index on Wall Street closed below 12,000 points for the first time since March.<br />
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All of the key indices on the ASX lost ground last week, but not substantially. The all ordinaries index had four modestly down days and one up, to shed a relatively painless 0.7 per cent overall. The metals and mining index did even better, losing just 0.5 per cent, while the gold index suffered the biggest decline, at 2.3 per cent, though that didn’t tell the whole story because a reasonable number of gold companies also rose. <br />
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Shall we start with gold, then? Because while the world worries, gold often performs at its best.<br />
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There two things that are more certain than gold: death and taxes, and the issue of taxes was again in the news this week. The Australian Government seems to have two tax surprises in store. The resource rent, or super-tax, has reached the draft legislation phase with the release of a review which, surprise-surprise, further complicates an already complex proposal. What the government wants to do is force miners to value individual mining leases inside their projects. Naturally, some of those leases will be of lesser value because they contain less ore. The upshot is expected to be a decline in allowable depreciation and an increase in tax.<br />
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How horribly convoluted.<br />
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Couldn’t agree more, but it’s an indication of the determination of the government to tax anything that moves, or burns, because the new carbon tax is also moving down the legislation runway, speeding up to catch the coal miners. Until now, the coal companies thought they would get a reprieve for being exporters. Not so. So from next year, or the year after, coal companies will have two new taxes to contend with, the resources super tax and a carbon tax.<br />
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Enough boring tax talk. Let’s have some prices.<br />
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We’ll start with gold, but also toss in a few of the outperformers in other sectors to provide our readers with a few fresh names. Best of the gold explorers was one we’ve never heard of before, Alloy Resources (AYR). It doubled in price last week, rising from A3.2 cents to a peak on Thursday of A7.6 cents in massive turnover. More than 113 million shares changed hands on the day, out of an issued capital of 146 million shares. Sanity returned on Friday and Alloy closed at A5.9 cents for a gain over the week of A2.7 cents, or 84 per cent. Driving the shares was a fresh gold discovery called Warmblood at the company’s Horsewell project in Western Australia. Best intersection was 32 metres at 3.9 grams a tonne from the surface, and 8 metres at 4.4 grams per tonne from 12metres.<br />
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Nor particularly high grades, but presumably they link up with earlier drill results.<br />
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That seems to be the theory. By the way, Alloy’s chairman is a well-known mining character down this way, Peter Harold, chief executive of the nickel miner, Panoramic.<br />
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Let’s keep going with prices please.<br />
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Also up in a down week was Troy Resources (TRY) which is showing the benefits of a management marketing tour of North America. It added A21 cents to A$3.68. Azumah (AZM), one of the Aussie gold companies busy in West Africa which we took a look at last week, added A3.5 cents to A56 cents. Allied Gold (ALD) continued to recover lost ground, putting in a rise of A4 cents to A55 cents. Kingsgate (KCN) released an optimistic production forecast and was rewarded with a share price rise of A57 cents to A$8.20. Ausgold (AUC), the company which thinks it is on to something big near the wheat-belt town of Katanning in WA, rose by A10 cents to A$1.48, and might be worth a site visit soon.<br />
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Among the other gold movers was Beadell (BDR), up 1.5 cents to A80 cents. St Barbara (SBM) rose A3 cents to A$1.85, while its takeover target, Catalpa (CAH) was steady at A$1.72. Perseus (PRU) posted one of the biggest falls of the week, shedding A21 cents to A$2.36. Crusader (CAS) was also sold off quite heavily, losing A20 cents to A$1.00. After that most falls were modest. Kingsrose (KRM) lost A6 cents to A$1.37. Silver Lake (SLR) slipped A4 cents lower to A$1.67, and Adamus (ADU) eased back by A3 cents to A60 cents.<br />
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Iron ore next, because there seems to have been a bit of action there.<br />
<br />
Territory (TTY) was the star of the week as its long-term trading partner, Noble Group from Hong Kong, weighed in with an all cash A50 cent-a-share bid to try and knock South Africa’s Exarro out of contention. On the market, Territory added A5.5 cents to A52 cents, a price which indicates that some investors expect Exarro to counter bid. Elsewhere, Atlas (AGO) rose by A7 cents to A$3.65. Haranga (HAR), a company we rarely hear anything about, attracted interest with a rise of A4 cents to A30 cents as its makes progress at its Mongolian iron ore exploration projects. After that most moves were minor. Fortescue Metals (FMG) slipped A14 cents lower to A$6.32. Mt Gibson (MGX) shed A2 cents to A$1.76. Gindalbie (GBG) lost A4.5 cents to A89 cents, and Sherwin (SHD) was A1 cent lighter at A14 cents.<br />
<br />
The base metals next, starting with copper, please.<br />
<br />
A mixed bag, but without any significant moves up, or down. Sandfire (SFR), which is worth a closer look next week, added A16 cents to A$7.17, as investors continue to digest its very positive feasibility study into the DeGrussa project. OZ Minerals (OZL), Sandfire’s biggest shareholder, added A7 cents to A$13.70. Anvil (AVM) was one of the only other copper companies to rise, putting on A5 cents to A$5.67. After that came a list of declines. PanAust (PNA) lost A4 cents to A$3.77. Rex (RXM) was down A14 cents to A$2.52. Metminco (MNC) dropped a fairly sharp A6.5 cents to A30 cents, and Hot Chili (HCH) was A2 cents weaker at A58 cents.<br />
<br />
All nickel companies lost ground. Most zinc companies rose, marginally. Among the nickels Mincor (MCR) fell by A10 cents to A89 cents. Panoramic (PAN) was A4 cents weaker at A$1.79, and Western Areas (WSA) fell by the same amount, A4 cents, to A$5.99. Best of the zinc companies was Perilya (PEM) which rose by A1.5 cents to A66 cents. Blackthorn (BTR) gained A1 cent to A53 cents, and Ironbark (IBG) firmed by A2 cents to A29 cents.<br />
<br />
Coal and uranium next.<br />
<br />
There were only a few risers, but lots of fallers. Whitehaven (WHC) was the lone coal company to rise, just. It added A8 cents to A$5.59. Falls were posted by Aquila (AQA), down A42 cents to A$7.75 as it continues to have joint venture problems, Coal of Africa (CZA), down A1 cent to A$1.16, Carabella (CLR), down A8 cents to A$1.96, and Coalworks (CWK), down A6.5 cents to A65 cents.<br />
<br />
The three uranium companies rise were Extract (EXT) which added A3 cents to A$7.79, Berkeley (BKY) which rose by A5 cents to A44 cents, and Forte (FTE), perhaps thanks to our midweek report, which managed a rise of A0.4 of a cent to A7.2 cents. Then come the falls, led by Paladin (PDN) which was hit by rumours about funding issues, and which dropped A24 cents to A$2.79 on the week, but did get as low as A$2.68 at one stage on Thursday. Bannerman (BMN) lost A1 cent to A29.5 cents. Toro (TOE), sold down to A7.6 cents, off by A0.7 of a cent, and Energy and Minerals (EMA) fell by A2 cents to A13.5 cents after reporting fresh legal problems.<br />
<br />
Minor metals to close, please.<br />
<br />
Much like the rest of the market. A handful of rises and plenty of small falls. Alkane (ALK) was the pick of the rare earth companies, putting in a rise of A30 cents to A$2.35. Iluka (ILU) was in demand thanks to sky-high zircon prices. It added A$1.64 to A$17.49. Lithium stocks firmed. Galaxy (GXY) put on A1.5 cents to A86 cents, and Orocobre (ORE) added A3 cents to A$2.18. Potash stocks weakened. South Boulder (STB) fell A2 cents to A$3.13 and Minemakers (MAK) was off by A1 cent to A45 cents. Biggest fall of the week was freshly listed Kimberley Rare Earths (KRE) which dropped A4.5 cents to A16.5 cents after being stopped from completing a related party asset purchase ASX regulators.<br />
<br />
<a href="http://minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-6762336946215417632011-06-11T08:16:00.000-07:002011-06-16T08:23:08.288-07:00Canadian markets performed over the last weekThe summer doldrums have hit the resource-rich Canadian markets, and a notable lack of buying interest has caused the broader markets to decline on weak volumes. And the critical game six of the Stanley Cup finals to be held in Vancouver on Friday also seemed to have many investors focussed on hockey rather than money. Once all the trading was done this past week, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had dropped 5.87 per cent, while the TSX Gold Index had fallen 4.84 per cent.<br />
<span class="fullpost"><br />
Let’s start off with the political news out of Peru and how that impacted the Canadian-listed companies working there.<br />
<br />
Righto. The presidential election victory went to leftist candidate Ollanta Humala and that sparked renewed concerns that mining taxes will be raised and that the government may take control of the country’s natural resources.<br />
<br />
As we said in our article earlier in the week.<br />
<br />
Precisely. Since then companies operating in Peru, along with Humala himself have attempted to reassure investors that the concerns are overdone. But there were still plenty of fallers come the end of the week. Candente Copper lost C$0.17 to close at C$1.39, Sulliden Gold dropped C$0.27 to C$1.90 and Bear Creek Mining fell C$1.15 to C$5.05.<br />
<br />
What’s been going on elsewhere?<br />
<br />
Drilling news produced mixed results, depending on the whims of the market. Kaminak Gold tabled the first set of results from its highly anticipated drill program on the Coffee project in the Yukon’s White Gold district. Despite cutting 27 metre of 2.5 grams gold per tonne and 10.4 grams gold per tonne over six metres, investors were unimpressed because Kaminak ended the week down C$0.22 at C$3.31.<br />
<br />
But B2Gold prompted some buying after the company announced results from its newly discovered Cebollati gold property in Uruguay. Highlights included 2.2 metres of 23.61 grams gold per tonne. B2Gold closed at C$3.68 for a C$0.42 gain.<br />
<br />
However, despite cutting 112.9 metres of 2.51 grams gold per tonne at its Ana Paula project in Mexico, shares of Newstrike Capital lost C$0.20 to close at C$1.85. <br />
<br />
And Avion Gold continues to hit the goodies at the Vindaloo zone at its Hounde project in Burkina Faso. The latest results included 32 metres running 11.48 grams gold per tonne. Avion ended the week up C$0.11 at C$1.64.<br />
<br />
Duluth Metals tagged 34.5 feet averaging 2.82% copper equivalent from its Nokomisdeposit in Minnesota. Duluth ended the week up C$0.04 at C$2.21.<br />
<br />
Trade Winds Ventures tabled a drill intercept of 4.37 grams gold per tonne over 15 metres at its 50 per cent owned Block A joint venture project in northeastern Ontario. Not good enough in a down market, though, because Trade Winds closed at C$0.22 for a C$0.025 loss.<br />
<br />
Anybody putting out financials?<br />
<br />
Minera Andes managed to table earnings of $17 million, or $0.06 per share, for the three months ended March 31st, 2011. The company’s 49 per cent owned San Jose mine in Chile produced 18,000 ounces of gold and just over 1.34 million ounces of silver. For the week, Minera Andes lost C$0.11 at C$2.29.<br />
<br />
On the diamond front, higher prices for rough diamonds propelled Harry Winston Diamond to first quarter earnings of US$3.6 million, up from US$2.9 million in the same three month period a year earlier. Harry Winston ended the week down C$0.04 at C$16.<br />
<br />
There was also a bit of a legal spat as Barrick Gold took on Goldcorp, New Gold and Xstrata over Goldcorp's purchase of Xstrata's 70 per cent interest in the El Morro project and its subsequent sale to New Gold. Barrick claims that the deal with Goldcorp breached El Morro shareholders' agreement and is now going to trial in Ontario’s Superior Court. Barrick is looking either to regain the 70 per cent stake in the project or to get financial compensation for economic damages. Barrick ended the week down C$2.25 at C$42.62, Goldcorp fell C$1.78 to close at C$46.20 and New Gold dropped C$0.52 to close at C$8.99.<br />
<br />
The job market in Canada has shown some improvement but all eyes are on the end of quantitative easing by the United States Federal Reserve as of June 30th. The stopping of the printing presses is widely expected to impact commodity prices and not in a good way. We will see what next week has in store.<br />
<br />
<a href="http://minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-42643120529484641142011-06-10T23:11:00.000-07:002011-06-12T23:21:40.454-07:00Gold in a great summer - John EmbryOf common occurrence, gold tends to breathe more easily during the summer in the northern hemisphere. However, there are some things that need attention, such as Sprott Asset Management chief investment strategist, John Embry, who believes this year may be a little different.<br />
<span class="fullpost"> <br />
Embry once said, because of what happened at the big picture geopolitically, gold tends to have a great summer.<br />
<br />
"I don't like putting numbers and dates in the same sentence because you always make yourself look bad - but I would be very surprised if it doesn't take out $1,650 this summer and maybe headed towards $1,800 over the next three months," he said.<br />
<br />
To back up the statements, Embry points to a number of macroeconomic factors that are likely to have a bearing on gold prices over the next few months.<br />
<br />
Firstly, much of the seasonality that is traditionally associated with the metal comes from Asia where gold purchasing is strongly related to the wedding season and, in India because much of the demand traditioanlly comes from rural areas, the sowing cycle.<br />
<br />
"People forget," Embry said, "that the gold market is changing fairly significantly from traditional sources of demand into investment demand as an alternative to currencies... investment demand doesn't know seasons - it buys gold because it is fearful of other assets."<br />
<br />
Fear is a dominant theme in another of this summer's big economic events - the end of quantitative easing in the U.S and worries about the country reaching its constitutionally mandated debt ceiling.<br />
<br />
Embry says, these two events are likely to have a significant impact on the gold price, especially given the recent data that suggests, the U.S. economy could begin to recede once more.<br />
<br />
"If you want to withdraw enormous amounts of stimulus by cutting the deficit dramatically at this point, or if QE2 actually marks the end of quantitative easing there's no question that the United States' interests rates are going to go up dramatically because from the numbers I look at, the Federal Reserve has been buying the vast majority of the all the treasuries that have been coming into the market."<br />
<br />
"In my opinion we have reached the point of no return. We are either going to take a collapse in the dollar or a collapse in the economy depending on which direction they take. The idea that they can return to normalcy in my opinion is out of the question at this point. They are way too far off line."<br />
<br />
The third reason for gold's likely strong performance comes from Europe. "There are an enormous number of problems in Europe, just as there are in United States and to me the conclusion one should arrive at is neither of these currencies are attractive and that to me is one of the underlying factors why I am so bullish on the gold price," he says.<br />
<br />
" I look at the Greece situation and I see absolutely no way out that's palatable to the euro and the European banks or what have you that hold a lot of this paper. In some way the Greeks cannot afford to carry the debt load they've have got and somehow that's going to have to be addressed."<br />
<br />
Beyond the summer, Embry continues to remain positive on the outlook for precious metals, but he does caution that it can never be only way traffic.<br />
<br />
"You are always going to have corrections and there are people who are in this market who are using leverage that had better be careful because the corrections can be quick and violent. But having said that, for you to say that the bull market in gold is over is essentially by saying that we are going to re-establish paper currency as viable and I don't think that's going to happen - I am of the mind that before this whole mess is ended we are going to have a new monetary system and as we make our way towards that, gold and silver will be refuges."<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-85202215641775960702011-06-09T01:03:00.000-07:002011-06-12T23:11:54.704-07:00Profit margin of 40 top global mining companies fall - PwCPricewaterhouseCoopers reveals that the profit margin from mining world's top 40 companies are under the historical peak in 2006 and 2007 as a result of the high cost burdened profits.<br />
<span class="fullpost"><br />
Profit margins for the world's top 40 mining companies are below the historical peaks of 2006 and 2007 as higher costs outweigh record commodity prices, PricewaterhouseCoopers said on Tuesday.<br />
<br />
Revenues for the world's 40 largest miners by market value rose 32 percent to a record $435 billion in 2010 on higher commodity prices and a 5 percent climb in production.<br />
<br />
However, cost pressures meant the return on equity was only 22 percent last year, compared with the highs of 31 percent and 28 percent in 2006 and 2007 respectively.<br />
<br />
"With no sign of inflationary pressures easing, maintaining cost discipline in a volatile global and financial environment remains extremely important for the industry," PwC's global mining leader Tim Goldsmith said.<br />
<br />
Top 40 mining companies have announced more than $300 billion of capital expenditure programmes, of which over $120 billion is planned for 2011, PwC said.<br />
<br />
"The real challenge now is addressing ever rising costs with huge forecast capital expenditure programmes compounding already tight labour and materials supply - and increasing complexities in operations, as sourcing new supply continues to move into more remote and challenging locations."<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-28386306536686869182011-06-08T22:52:00.000-07:002011-06-12T23:03:44.181-07:00Gold and silver easily influenced by economic conditionsGold prices everyday is very fragile and easily influenced by a growing range of issues, one will be able to lead to the strengthening gold price as the currency continues to devalued.<br />
<span class="fullpost"> <br />
New York closed at the weekend with gold at $1,541 and Asia plus London took the gold price higher Monday. The dollar continued to want to weaken and stood at €1: $1,4640 for much of the morning in London before strengthening slightly to €1: $1.4420 ahead of New York's opening. In the euro gold was Fixed at €1,054.66 still at the bottom of its trading range. In the dollar gold Fixed at $1,542.75 nearly the same as it was in New York on Friday.<br />
<br />
Just after New York's opening the gold price was higher at $1,548, still not fully reflecting the fall of the dollar and in the euro at €1,058.08 slightly down on Friday's price. The dollar stood at €1: $1.4625.<br />
<br />
Silver rose well in London to stand at $37.05 after Fixing at $36.87 as New York opened. <br />
<br />
SILVER & GOLD PRICE DRIVERS<br />
<br />
The week holds promise of another attempt to bailout Greece after the Greek government imposes further harsh austerity measures. One wonders how long the government can hold onto power as huge demonstrations there continue. We will be surprised if the Greek economy can bear even harsher burdens than it already has without some major reforms to bureaucracy and taxation.<br />
<br />
In the States we are sure that the bulk of fund managers are in investment strategy meeting to re-formulate their investment policies in the light of last week's labor figures.<br />
<br />
We look around the globe for some economic good news that will bring solid hope and can't find a significant amount. We don't think we will see economic collapse but may well see the bite of steady incomes in the face of inflation, which eats away at spending power. The developed world has been made cautious by the past four years of economic difficulties so another downturn will be quick to persuade people to pull in their spending horns even more. It does look as though the downturn will last as long as the downturn in the housing markets lasts. This is being forecast at up to four more years until the U.S. housing market is iin good condition again. By then the global investment scene will have changed dramatically.<br />
<br />
Gold Prices in different currencies which highlight currency moves:<br />
<br />
Swiss Franc: - Today: Sf1,293.57: 1 ounce of gold. Friday: 1,295.27: 1 ounce of gold.<br />
<br />
U.S. $: - Today: $1,546.50: 1 ounce of gold. Friday: $1,539.15: 1 ounce of gold.<br />
<br />
Euro: - Today: €1,058.49: 1 ounce of gold. Friday: €1,065.16: 1 ounce of gold.<br />
<br />
India: Today: Rs. 69,247.63: 1 ounce of gold. Friday: Rs.68,984.70: 1 ounce of gold.<br />
<br />
To read more of Julian Phillips' commentaries on the gold and silver markets go to <a href="http://www.goldforecaster.com" target="_blank">www.goldforecaster.com</a> and <a href="http://www.silverforecaster.com" target="_blank">www.silverforecaster.com</a><br />
<br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-50983510727140158102011-06-07T02:44:00.000-07:002011-06-08T03:06:10.288-07:00London's mining sector during last weekNews of the weak U.S. economy rocked the capital markets and also impacted on their base metals market. Copper fell to U.S. $ 9,035 per tonne, or U.S. $ 4.10 per pound, and nickel fell to U.S. $ 22,575 per ton. Zinc closed lower at U.S. $ 2,245 per ton.<br />
<span class="fullpost"><br />
Gold fared somewhat better, as investors took flight from equities, edging higher to US$1,543 per ounce. Platinum edged higher to US$1,816 per ounce and palladium also climbed higher to US$783 per ounce. However, silver retreated to US$36.23 per ounce.<br />
<br />
The turbulent market sent many mining shares lower, although there wasn’t much company-specific newsflow about. Amongst the majors, Rio Tinto and Chinalco have formed a joint venture to explore mainland China for world-class mineral deposits. Chinalco will hold a 51 per cent interest in the joint venture and Rio will hold 49 per cent. Even so, Rio closed 3.9 per cent lower at 4,101p.<br />
<br />
The other majors fared little better. BHP Billiton lost 3.4 per cent to close at 2,309p whilst Anglo American closed 2.2 per cent lower at 2,927p. Xstrata closed 3.7 per cent lower at 1,371p. Shares in trader Glencore closed 2.3 per cent lower at 512p as fresh concerns were raised over the group’s corporate governance.<br />
<br />
Amongst junior precious metals miners, Arian Silver admitted that it faces a number of operational challenges at its Mexican operations. In particular issues regarding the mill and plant, which were not specifically designed for treating ore from its San Jose mine, need to be addressed. Those problems resulted in a small loss for the mining operation in the first quarter, but were compounded by thefts of silver-bearing concentrate from the mill, which lead to lower-than-expected recoveries. Nevertheless, Arian plans to update the silver resource at San Jose in the coming months and to start another drilling programme. What’s more, the company reckons it will be able to fund operations, including ongoing exploration, from working capital and production cash flow. Arian’s shares slipped 7.3 per cent to 30p.<br />
<br />
Vatukoula Gold Mines also had a tough time of it, as it announced increased production from its Fiji operations to 29,743 ounces of gold in the six months to 28th February. The higher gold price helped lift gross profit from £4.5 million to £5 million. However, the market had been expecting annualised production to be pushing towards 100,000 ounces and the shares tumbled 22.7 per cent to 110p.<br />
<br />
Elsewhere, several juniors upgraded mineral resources during the week. Producer Highland Gold Mining announced that the Kyrgyz government had signed off on the company’s latest resource of 1.38 million ounces of gold at its Unkurtash project in Kyrgyzstan. The approval will facilitate the granting of a mining license and represents an important step towards mine development of the Unkurtash project. The shares edged 0.8 per cent higher to 151p.<br />
<br />
Also on the up was Pan African Resources, which increased the total mineral resource at its Barberton gold mine in South Africa by seven per cent to 2.55 million ounces of gold. There was also a significant increase in grade, which improved by 33 per cent to 8.35 grammes per tonne. The shares climbed 4.9 per cent to 10.75p.<br />
<br />
Elsewhere on the continent, African Consolidated Resources increased the resource at its Gadzema gold project in Zimbabwe to 912,000 ounces, as a result of ongoing drilling. The company’s total gold resource now exceeds 1.4 million ounces. But it’s not easy doing business in the land of Uncle Bob, and the shares slipped 9.4 per cent to 6p.<br />
<br />
Much worse, though, was the performance across the way in Mozambique, from Noventa. Noventa’s never been a Minesite favourite, but the company must have lost a few other friends too this week after its shares dropped from just over 170p to a meagre 55.5p in the space of a couple of days. The reason was an announcement that delays in construction and development at the company’s Marropino tantalum mine meant that it would need to seek new funds.<br />
<br />
Elsewhere in Africa, copper developer Discovery Metals announced a doubling of the mineralised depth of the Plutus deposit that forms part of its Boseto project in Botswana. The grades and mineralised thickness compare favourably with those at the nearby Zeta deposit and indicate that Plutus may also have potential for underground mining. The shares climbed 4.7 per cent to 83.25p.<br />
<br />
In southern Cameroon, Afferro Mining has been encouraged by high-grade intercepts at its Nkout iron ore project, which the company believes warrant additional drilling to evaluate the potential for a direct shipping operation, which would offer accelerated cash flow. The company plans to release an updated mineral resource for Nkout later this month. The shares slipped 2.4 per cent to 104p.<br />
<br />
It wasn’t all about the mining and resources though. There was also some corporate activity on the cards. Sylvania and Aquarius Platinum have agreed jointly to assess the Everest North UG2 platinum deposit in South Africa. Under the terms of the agreement ore will be processed through Aquarius’s Everest South metallurgical plant, and the resulting concentrate is likely to be sold to Impala Refining Services. Sylvania closed 6.6 per cent lower at 40.63p whilst Aquarius strengthened 0.9 per cent to 337p.<br />
<br />
Meanwhile, Turkey-focused Ariana Resources has acquired four gold exploration licences in western Turkey from fellow junior Kefi Minerals. The licences include high-grade veins where previous assay results have returned up to 152 grammes per tonne of gold and 1,320 grammes per tonne of silver. Ariana slipped 2.9 per cent to 4.25p while Kefi closed 5.6 per cent lower at 6.75p.<br />
<br />
Elsewhere, Herencia Resources has entered into an agreement to acquire a 51 per cent interest in the Guamanga project, a new copper-gold opportunity in Chile that lies approximately 750 kilometres north of Santiago. The project has potential for iron oxide, copper, and gold. The market wanted more, though, and the shares closed 15 per cent lower at 2.65p.<br />
<br />
One deal that seems to be taking forever to conclude is Shandong Iron & Steel’s investment in the huge Tonkolili iron ore project being developed by African Minerals in Sierra Leone. African Minerals announced further progress in its discussions with Shandong over the Chinese group’s proposed investment, although finalisation of the deal remains elusive. African Minerals climbed 9.2 per cent to 545p.<br />
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<a href="http://minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-11508437805764587852011-06-06T10:37:00.000-07:002011-06-08T02:43:53.556-07:00Australia's mining sector during last weekAlthough some sectors are harder hit than others. Nickel companies suffered more than most, and a glimpse at the five-year nickel price chart reveals several reasons why the depth. Back in mid-2006 nickel color sold under U.S. $ 10 per pound. Today, this color is more than U.S. $ 10 per pound. Prices, however, is only part of the problem for Australian nickel miner. They have also been hit by higher costs felt in the mining industry, and exchange rates rise.<br />
<span class="fullpost"><br />
With a real squeeze on profits.<br />
<br />
A very nasty squeeze actually, which can be measured using the exchange rate alone. Back in June, 2006, the Aussie dollar exchange rate against its US cousin was US74 cents. Today, it’s US$1.06. To put it another way, the Australian dollar price of nickel five years ago was around A$13.50 per pound. Today, it is A$9.40, a real decline of around 30 per cent for a miner with costs in Australian dollars, and perhaps a lot more after cost inflation is factored in.<br />
<br />
Well, thanks for that piece of news - it’s just what we didn’t need to hear.<br />
<br />
Sorry for bearing bad tidings, but that background explains why a number of nickel companies hit 12 month share price lows last week. Mincor (MCR) dropped to A98.5 cents on Friday, before closing the week at A99 cents for a loss of A10 cents. At this time last year Mincor was trading above A$2.00. Panoramic (PAN) lost A9 cents to close the week at a new low of A$1.83. Last October it traded as high as A$2.97.<br />
<br />
Before running through more prices, perhaps a big picture snapshot.<br />
<br />
Overall, both the base metals and the gold markets weakened by around 1.5 per cent. That was a better performance, moderately, than that delivered by the all ordinaries index on the ASX, which lost two per cent. And for our superstitious readers we have a few numbers which might send a chill through their spines. The all ordinaries index closed on Friday at 4666.6, which is the Devil’s triple 6, plus an extra 6 for good measure. And, if that doesn’t catch your eye the official exchange rate on Friday, as published by the country’s central bank, the Reserve Bank of Australia, was 1.0666.<br />
<br />
Let’s leave all that sort of stuff for someone else to worry about, and focus on share prices.<br />
<br />
Certainly, but you must admit it was an interesting coincidence. Still, moving on, and given that the trend was down across most sectors, it might lighten our readers’ days to hear first about companies which did not fall. There were a few interesting upward moves too that are worth talking about, thanks largely to discovery and production news.<br />
<br />
Top of the list was Navarre Minerals (NML), a company not mentioned here before. The company seems to have drilled through a few gold nuggets at its Bendigo North project in Victoria, sending the gold bugs in its home state into a frenzy. The official rise over the week was a gain of A20 cents to A31.5 cents, which translates to a rise of 173 per cent, though that tells only part of the story. On Friday alone, after a management requested trading suspension, Navarre rose by A17.5 cents, or 125 per cent on the day, with 17 million shares exchanged out of an issued capital of 25 million shares. Put another way, 68 per cent of the shares in issue were swapped in a trading flurry on a single day.<br />
<br />
Even so, and interesting as those market numbers are, it is worth pointing out that at its Friday closing price Navarre is still only capitalised at A$7.9 million, and while the top assay of 161.2 grams a tonne looks fabulous, the historic Bendigo goldfield is rich in nuggets, which will make it hard to ever prove a resource that satisfies modern banking or reporting requirements.<br />
<br />
That really is a rather silly state of affairs, isn’t it?<br />
<br />
Could not agree more. The gold is obviously there, but it’s in nuggets which do not fit comfortably into the code constructed by the Joint Ore Reserves Committee (JORC).<br />
<br />
There were some other eye-catching moves in gold too. Northern Star (NST), a company we will be hearing more about at our June 23rd forum, closed A10 cents higher at A50 cents, a 12 month high. Gold Road (GOR), which we took a closer look at last week, rose by A4 cents to A64 cents, but did get as high as A71 cents early in the week. And Kingsrose (KRM) recovered recently lost ground by adding A5 cents to A$1.43. Resolute (RSG) put on A6 cents to A$1.11.<br />
<br />
Best of the copper companies was Sandfire (SFR) which released a very positive feasibility study, adding A11 cents A$7.20. Metro Coal (MTE) was the strongest among the coal companies, putting in a rise of A12.5 cents to A63 cents. Alkane (ALK) led the way among the rare earth stocks with a gain of A21 cents to A$2.05.<br />
<br />
Time to call the card, starting with gold, and then roam across the other sectors, as you please.<br />
<br />
Notwithstanding the risers in gold that we’ve already mentioned, the trend was weaker. Among the handful of other companies that rose was Gryphon, up A4 cents to A$1.61, and Troy (TRY), up A1 cent higher to A$3.47. The fallers included Medusa (MML), down A17 cents to A$8.07, Integra (IGR), down A2.5 cents to A42.5 cents, Focus (FML), down A0.6 of a cent to A6.7 cents, Silver Lake (SLR), down A16 cents to A$1.71, and Kingsgate (KCN), down A27 cents to A$7.67. Beadell (BDR) was also weaker, down A4.5 cents to A78.5 cents, despite announcing a decision to mine its Tucano project in Brazil.<br />
<br />
After Sandfire, the best of the copper companies was OZ Minerals (OZLDA), which rose by A6 cents to A$13.61. Incidentally, the new code is a result of its recent one-for-10 share consolidation. Metminco (MNC) climbed a modest A1 cent to A36.5 cents, and Hot Chili (HCH) also managed a rise of A1 cent to A60 cents. Then came a long list of small fallers. Among them were Marengo (MGO), down half a cent to A29.5 cents, Horseshoe Metals (HOR), down half a cent to A24 cents, and Rex (RXM), down by A1 cent to A$2.66.<br />
<br />
Nickel companies were weaker across the board, as we’ve said. Only Mirabela (MBN) managed to rise, adding A4 cents to A$2.05. It was a mixed picture in the zinc space. Perilya (PEM) rose A5.5 cents to A64.5 cents. And Terramin (TZN) rose by A3.5 cents to A33.5 cents on news of a boardroom spill and speculation that former Normandy Mining boss, Rob de Crespigny, might be mixed up in the fracas.<br />
<br />
Iron and coal next, please.<br />
<br />
It was generally down in both of those areas. BC Iron (BCI) was the best of the iron ore companies, putting in a rise of A14 cents to A$3.00. Fortescue Metals (FMG) added A6 cents to A$6.46 after its founder, Andrew Forrest, shuffled the deck chairs and swapped the chief executive’s office for the chairman’s suite, in what most observers down this way see as a spot of window dressing ahead of a final legal decision on his future as a director. Among the fallers were Atlas (AGO), down A2 cents to A$3.58, Mt Gibson (MGX), down A7 cents to A$1.78, and Murchison (MMX), down A4 cents to A95 cents.<br />
<br />
In coal, Metro was the star, as we’ve said, but also on the rise were Carabella (CLR) and Aston (AZT). Carabella rose A6 cents to A$2.04 and Aston rose A10 cents A$10.00. Fallers included Macarthur (MCC), down A41 cents to A$11.25, Coal of Africa (CZA), down A1 cent to A$1.17, and Stanmore (SMR), down A13 cents to A$1.14.<br />
<br />
Uranium and minor metals to close.<br />
<br />
It takes a lot of finding, but there was one uranium company in the black. Extract (EXT) added A4 cents to A$7.76, even as it awaits the next instalment of its takeover travails. Berkeley (BKY) continued its slide, losing another A9.5 cents to A39 cents. Manhattan (MHC) dropped A15 cents lower to A42 cents, and Paladin (PDN) shed A18 cents to A$3.03.<br />
<br />
In potash, Potash West (PWN) caught the attention of a few punters after it put out a positive report on its west coast exploration program. Its shares hit a 12 month high of A31 cents, before closing the week at A25.5 cents, an overall gain of A6.5 cents.<br />
<br />
In minor metals, Metallica (MLM) released a positive report on its nickel, cobalt and scandium project, and also traded up to a A38 cents 12 month high, before closing at A37 cents for a rise on the week of A6.5 cents. Tin companies were weaker. Among the fallers was Venture (VMS), down A3.5 cents to A40.5 cents. Lithium companies also fell. Galaxy (GXY) slipped half a cent lower to A85.5 cents, and Orocobre (ORE) lost A1 cent to A2.15.<br />
<br />
<a href="http://minesite.com" target="blank">Source</a><br />
<br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-54129032332990799912011-06-06T08:25:00.000-07:002011-06-06T10:38:27.250-07:00Progress of a nuclear renaissanceFear of nuclear energy can be guessed. Disasters in Japan on March 11, has been withholding from the momentum accelerated nuclear renaissance. Over the past few years, nuclear energy has been promoted by its supporters as an alternative energy source that is clean, efficient, reliable and safe for dirty fossil fuels, and the world agrees.<br />
<span class="fullpost"><br />
A wave of new orders from BRIC countries as well as developed nations created a nuclear renaissance. Then over the past nine months, the price of uranium began to climb. Dormant since the 2008 recession, uranium rose from $42 per pound to a 52-week high of $72.65 in February.<br />
<br />
The spot price of uranium fell over 25 percent in the days following the earthquake and subsequent tsunami in Japan. Value investors helped the troubled commodity regain ground by buying the plunge. But the question is still on everyone’s minds: What’s going to happen from this point forward?<br />
<br />
On Monday, Germany announced it will shut down all of its nuclear reactors by 2022. The new policy is a complete reversal to the proposal to enhance Germany’s nuclear energy established by the government only seven months prior.<br />
<br />
German Chancellor Angela Merkel stated to reporters on Monday: “Our energy system has to be fundamentally changed, and can be fundamentally changed …. We want the electricity of the future to be safer and, at the same time, reliable and economical.”<br />
<br />
The decision by the German government to end its dependence on nuclear energy has once again riled the uranium market, but I believe the German decision is just creating short-term noise. Once this noise is gone, uranium stocks will once again reflect earnings – and while sales to reactors in Japan and Germany may slump, the world’s other 436 reactors will be as hungry as ever for uranium fuel.<br />
<br />
Because as people are recovering from the Japan disaster – and possibly hating nuclear power more than ever – the supply and demand fundamentals of uranium have not changed in a significant way. The bottom line is that even in the wake of the Japanese catastrophe, uranium’s supply crunch lives on.<br />
<br />
If we look out over the next eight to 10 years, which is the amount of time it takes a nuclear power plant to become fully operational, the market is still about 400 million pounds short of projected demand. The top 10 producers, which make up almost 90 percent of the uranium market, only produced 110 million pounds of uranium in 2010. In other words, uranium producers need to produce nearly four times the amount just to meet estimated new demand. The new supply will have to come from somewhere, or the price of the existing supply will need to increase to clear the market.<br />
<br />
For uranium miners, the market is red hot. For investors, shares of the best uranium mining stocks could represent the best energy investment opportunity in decades.<br />
<br />
The World Nuclear Association’s chart below sums up why now is the time to get into uranium-related investments. The world will be using more uranium for years to come, and many great investment opportunities appear in the midst of a supply crunch.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEju1bB9EOdt27ClZYQg4QD9uooObpgvmPLFmf9PlhAPZTj2mXWaXqPtKSXh_q2qnFQx4oAb_kxxBUQLu8VaHcookNEd3iW5alN3vjLE_uBqp6g1C2UJ0i2mBUoa0Mq7C1G4w0r3ObQ_euWz/s1600/uranium-chart.jpg" imageanchor="1"><img alt="uranium chart, uranium production vs reactor requirements" border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEju1bB9EOdt27ClZYQg4QD9uooObpgvmPLFmf9PlhAPZTj2mXWaXqPtKSXh_q2qnFQx4oAb_kxxBUQLu8VaHcookNEd3iW5alN3vjLE_uBqp6g1C2UJ0i2mBUoa0Mq7C1G4w0r3ObQ_euWz/s320/uranium-chart.jpg" width="320" /></a></div><br />
The supply crunch easily has the potential to become even more strained with 63 percent (note this is not the same as the top 10 producers mentioned above) of the current uranium production coming from only 10 mines worldwide. Additionally, the global supply of mined uranium is susceptible to supply shocks if one mine floods, or stops production for other reasons.<br />
<br />
The most direct way to profit from the coming growth in nuclear energy and the shortage in uranium is to buy shares in the most productive uranium miners in the world. As I stated over a month ago, the tragedy in Japan and subsequent fear in the market have presented us with the opportunity to invest in several well-managed and fundamentally sound uranium companies. For well-informed investors with the patience to tolerate volatility for a couple of months, I think this could potentially be the single best opportunity to buy and hold uranium stocks.<br />
<br />
<a href="http://miningspot.com/" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-19854697313438113232011-06-06T01:05:00.000-07:002011-06-08T02:37:05.609-07:00Canadian mining sector during last weekGood economic growth in India was more than offset by slowing manufacturing data out of China and weak job numbers out of the United States. So far the mantra of “sell in May and go away” seems to be holding up this year. Once all the trading was done this past week, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had dropped 2.14 per cent, while the TSX Gold Index had followed suit, having also lost 2.14 per cent.<br />
<br />
Was there any good news around?<br />
<span class="fullpost"><br />
Some. Shares of Sabina Gold & Silver managed to add a modest C$0.03 to close at C$6.89 after the company inked a deal to sell its Hackett River base metal project and a portion of its Wishbone greenstone belt in Nunavut to Xstrata Zinc Canada for C$50 million cash. Sabina also maintains reservation of a silver production royalty equal to 22.5 per cent of the first 190 million ounces of silver product and 12.5 per cent thereafter. For its part, Xstrata will spend at least C$50 million to complete a feasibility study on the project.<br />
<br />
And Augusta Resources had a good week after it announced that it had delivered its draft Environment Impact Statement for its Rosemont copper project in Arizona into the hands of the relevant authorities. These now have 30 days to provide final comments on the draft as part of the federal government’s National Environmental Policy Act. Augusta ended the week up C$0.14 at C4.44.<br />
<br />
But not all good news was favourably received. Fortuna Silver Mines failed to get a boost following news that it has achieved a better start-up production rate than it had previously hoped for at its the San Jose silver-gold mine in Mexico. The miner is producing at 1,000 tonnes per day and expects to hit a targeted 1,500 tonnes per day in the fourth quarter of 2013. Even so, Fortuna ended the week down C$0.40 at C$4.79.<br />
<br />
I think investors are more concerned about the future status of Fortuna’s Caylloma mine in Peru.<br />
<br />
The presidential election is on Sunday, and heading into the election the Peru government has suspended approval of all mining projects in parts of the southern state of Puno, which does not affect Fortuna but essentially halts Bear Creek Mining's Santa Ana silver mine project. Not surprisingly that news hit Bear Creek further, and its shares ended the week down C$0.78 at C$6.20.<br />
<br />
Any Yukon news this week?<br />
<br />
Not much. Capstone Mining rewarded shareholders by announcing that the Wildfire/Copper Keel area of its Minto mine in the Yukon will add 219 million pounds of copper to the overall resource at the Minto mine, using a 0.5% copper cut-off. But in spite of that Capstone ended the week unchanged at C$3.48.<br />
<br />
There was a bit more news from the Canadian-listed African miners. Shares of Semafo lost C$0.47 to close at C$8.08 after the he gold miner announced production of 60,000 ounces of gold in the first quarter at cash costs of US$654 per ounce. Of concern were the cash costs at its Amira Hill and Kiniero mines, which came in at US$950 per ounce and US$1,110 per ounce, respectively.<br />
<br />
Unrest in Burkina Faso, where Semafo has one of its mines, can’t have helped either.<br />
<br />
You’d think so, but another company working in Burkina fared well this week following good drilling news. Riverstone Resources tagged 38 metres of 5.6 grams gold per tonne on its Karma project in Burkina Faso. The junior closed at C$0.65 for a C$0.05 gain.<br />
<br />
Meanwhile, safely back in Canada, Grande Cache Coal announced profits of US$27.7 million or US$0.28 per share in the 12 month period ended March 31st, 2011. Coal sales for the year tallied 1.55 million tonnes, which was down on the 1.77 million tonnes tabled in the same period a year earlier. Grande Cache ended the week down C$0.28 at C$7.99.<br />
<br />
Elsewhere, in exploration news, Extorre Gold Mines hit 8.4 grams gold per tonne and 1,332 grams silver per tonne over eight metres at its new Zoe discovery on its Cerro Moro project in Argentina. The high flying company – which was spun out of Exeter Resources - also announced the discovery of silver-gold mineralization at its Puntudo project, near the Joaquin silver project owned by Coeur d'Alene Mines and Mirasol Resources, and 200 kilometres west of Cerro Moro. Highlights here included 42.3 metres of 0.6 gram gold per tonne and 16 grams silver per tonne. Extorre ended the week up C$0.11 at C$11.55.<br />
<br />
Also hitting some good intercepts was Torex Gold Resources. A step-out hole on the Morelos gold project in Mexico returned 2.7 grams gold per tonne over 44.28 metres. But the market failed to notice as Torex ended the week down C$0.07 at C$1.61.<br />
<br />
Staying in Mexico, Grayd Resource reported a 253 metres drill intercept running 0.88 grams gold per tonne from drilling in the Tarachi area of its La India property in Sonora State. Grayd ended the week up $0.08 at C$1.85.<br />
<br />
Poor job numbers out of the United States spooked investors on Friday and indications are that the markets will continue in skittish mood throughout the summer. We will see what next week has in store.<br />
<br />
<a href="http://minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-42204028776037320942011-06-03T22:22:00.000-07:002011-06-03T22:35:30.231-07:00U. S. Brent oil on weak economic dataOil prices rose on Thursday when a trade is not stable because of the weakening dollar and the euro rallied on news the euro zone officials have agreed the principal of a new program for Greece's debt-laden.<br />
<span class="fullpost"><br />
News of an explosion and fire at Chevron's (CVX.N) refinery at Pembroke in Wales also provided a lift. [ID:nLDE7511ZC]<br />
<br />
"It's another bail out boost. The dollar also got hammered by the Moody's warning about U.S. default and the Pembroke fire definitely provided some lift," said Phil Flynn, analyst at PFGBest Research in Chicago.<br />
<br />
Brent led the recovery after Brent and U.S. crude contracts felt pressure earlier as investors reacted to rising U.S. inventories and weighed OPEC sources' remarks indicating the group could hike output targets at a meeting next week in Vienna.<br />
<br />
Brent LCOc1 crude for July delivery rose $1.01 to settle at $115.54 a barrel, rallying after being pressured by the U.S. oil inventory data and pushing the Brent premium to U.S. crude CL-LCO1=R to over $15 a barrel.<br />
<br />
U.S. July crude CLc1 edged up 11 cents to settle at $100.40 a barrel.<br />
<br />
"Looks like Brent is following the euro rally on the Greece agreement in principle on dealing with their debt. There are still problems with Forties system also keeping North Sea firmer," said Tom Bentz, director of BNP Paribas Commodities Futures Inc in New York.<br />
<br />
Senior euro zone officials have agreed in principle on a new three-year adjustment program for Greece to run until mid-2014 and involve increased external funding, a source close to the negotiations said. [ID:nATH006131] <br />
<br />
The news helped push the euro scale a one-month peak against the greenback and the dollar also felt pressure after ratings agency Moody's Investors Service warned there is a small but rising risk of a short-lived default by the United States if the nation's debt limit is not increased in coming weeks. [USD/] [ID:nN02274698]<br />
<br />
A weaker dollar can lift dollar-denominated oil by attracting investors to commodities as a hedge against inflated currencies and by making oil less expensive to consumers using currencies other than the dollar.<br />
<br />
Premiums for North Sea Forties crude oil rose on Thursday on production problems at offshore oilfields combined with steady demand from European refiners. [ID:nLDE7511UQ]<br />
<br />
<a href="http://miningspot.com/wp-content/uploads/2011/06/economic-indicators.jpg"><img src="http://miningspot.com/wp-content/uploads/2011/06/economic-indicators-300x204.jpg" alt="economic indicators" title="economic indicators" width="300" height="204" class="alignnone size-medium wp-image-828" /></a><br />
key economic indicators <br />
<br />
<a href="http://miningspot.com/wp-content/uploads/2011/06/euro-zone-debt-struggle.jpg"><img src="http://miningspot.com/wp-content/uploads/2011/06/euro-zone-debt-struggle-300x201.jpg" alt="euro zone debt struggle" title="euro zone debt struggle" width="300" height="201" class="alignnone size-medium wp-image-829" /></a><br />
euro zone debt struggle <br />
<br />
<a href="http://miningspot.com/wp-content/uploads/2011/06/Middle-East-unrest.jpg"><img src="http://miningspot.com/wp-content/uploads/2011/06/Middle-East-unrest-300x208.jpg" alt="Middle East unrest" title="Middle East unrest" width="300" height="208" class="alignnone size-medium wp-image-830" /></a><br />
Middle East unrest <br />
<br />
OPEC MULLS RAISING TARGETS<br />
<br />
Oil investors eyed comments from OPEC sources, who said the group could lift production targets by up to 1.5 million barrels per day (bpd) to help bring down high fuel costs, though one delegate said a 1 million-bpd hike would be the likely outcome. [ID:nL3E7H20QC]<br />
<br />
"Oil prices are too high. $100 oil is scaring people," one delegate said, adding a rise of 1 million bpd in OPEC's output target would result in only a small increase in actual oil supply from the group.<br />
<br />
Ali Al-Naimi, top OPEC producer Saudi Arabia's oil minister, was cautious, repeating previous comments that the group would lift production if there was more demand for crude. [ID:nWSF010384]<br />
<br />
"If this is 1 million bpd on top of the targets from over two years ago, then it's meaningless. If it's 1 million bpd above current production levels, then it's exactly what the market needs," said David Wech, analyst at JBC Energy in Vienna.<br />
<br />
RISING U.S. INVENTORIES<br />
<br />
The U.S. Energy Information Administration's weekly report indicated no shortfall of oil in the world's top consumer, as the nation's inventories rose last week and put seasonal crude inventories at the highest level since 2006. [EIA/S]<br />
<br />
U.S. crude stockpiles rose 2.88 million barrels to 373.8 million in the week to May 27, against expectations stocks would be lower.<br />
<br />
Gasoline inventories jumped 2.55 million barrels, more than expectations, while distillate stocks fell just under a million barrels, more than forecast.<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
<br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-21334682715279803872011-06-02T21:50:00.000-07:002011-06-03T22:12:53.821-07:00Silver on the COMEX turnover tripled from last yearTrade volume this year experienced at least indicate the movement of the silver market is safer than gold as is often suggested<br />
<br />
Silver's high fix, when it was way overbought, was $48.70 on April 28<sup>th</sup>. Gold held up briefly as silver toppled over, but as the commodities sector as a whole got caught up in the onslaught, gold in particular, was sold in order to raise cash against margin calls. Gold's high fix was $1,546.50 on the morning of 3<sup>rd</sup> May.<br />
<span class="fullpost"><br />
The speed of the falls of these two metals is well-documented, but for the record, silver dropped to a low fix of $32.50 in 12<sup>th</sup> May, while gold fell to a low fix of $1,478.50 on 17<sup>th</sup> May. These were falls of 33% and just 4% respectively. On an intraday basis the price declines represented the unwinding of part of the most recent very sharp upward legs that had commenced in late January. Silver's move was unwound by 75% and while gold's correction was obviously much shallower, it was still over 40% of the post-January move.<br />
<br />
Gold's post-August 2009 uptrend has been by no means severed and in the immediate term gold would have to drop towards $1,450 before the support came under threat. Silver moved into more perilous territory, but here, too the overall medium term uptrend - discounting the March-April spike - is also intact.<br />
<br />
So what of the flows of funds in and out of the markets while these moves have been taking place? Silver is often cited as a much smaller market than gold, with this accounting in part for its higher price volatility. The approximate value of last year's mine production, for example (taking the annual average price) was $14.9 billion, while that of gold was $106 billion, seven times as large as silver. Trading patterns have been shifting and recent silver activity, on a pro rata basis compared with mine supply, has been much larger than that of gold. <br />
<br />
Gold turnover in the first-continuation on COMEX last year, at $5.5 trillion, was 4.1 times as much as silver's first-continuation turnover. Silver volumes have rocketed this year, however and gold turnover of 2.8 trillion in the year to late May was only 1.6 times as much as that of silver. Between the start of this year and the third week of May, silver turnover on Comex had reached $1.7 trillion, thus exceeding turnover of the whole year, while the daily average volume (based on turnover and daily close) at $17 billion, compared with $5 billion daily in 2010 - and this, it must be remembered, was merely the first-position contract.<br />
<br />
COMEX first-position silver turnover, contracts and $M<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFq5LMtBxWLr4XsxYOHihHsGgTAAbH0soaxIRCT_TepAkcshj84DN46YcMGutG_NSxlD6iwqwFeemE-lu85MfuzwQBI5Aj-asTPiRES_-YLMHzjynuIFSznqMi4RD4xuJQ1bJzyBzvVzUk/s1600/silver-position.jpg" imageanchor="1" style=""><img alt="Silver price future, silver price chart, silver market progress" border="0" height="183" width="303" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhFq5LMtBxWLr4XsxYOHihHsGgTAAbH0soaxIRCT_TepAkcshj84DN46YcMGutG_NSxlD6iwqwFeemE-lu85MfuzwQBI5Aj-asTPiRES_-YLMHzjynuIFSznqMi4RD4xuJQ1bJzyBzvVzUk/s320/silver-position.jpg" /></a></div><br />
Source: Thomson Reuters, MineWeb<br />
<br />
The gold:silver ratio since the start of this year has averaged 41.8:1 (compared with 62.1:1 in 2010), so this recent performance is pretty impressive; whether it can be sustained, however is open to some doubt as the metal's recent price performance is likely to deter some speculators and investors. Silver is renowned for this kind of capricious behaviour and this recent short sharp shock is likely to scare away more than just the faint-hearted, suggesting that the gold:silver ratio should continue to widen.<br />
<br />
COMEX speculators have already been voting with their feet. The CFTC figures for 24<sup>th</sup> May show that speculative silver longs were 9,386 tonnes and shorts were 3,949 tonnes, giving a net position of 5,437 tonnes. At its recent peak on 5th April, the net speculative long was 8,773 tonnes, comprised of 13,047 tonnes of longs and 4,273 tonnes of shorts. In other words, the combined speculative long+short position in early April was almost 17,200 tonnes and by late May it was down by 23%. The actual recent low was the previous week and there was a smidgeon of fresh long side interest in the following week so there is some tentative interest returning to the market, but we are unlikely to scale the April highs in the foreseeable future.<br />
<br />
Meanwhile in the major Exchange Traded instruments, the net inflow of funds into silver between late January and the price peak was $760 million. Some $1.4 billion left the funds during the correction, and a further outflow of more than $660 million has taken place since. Roughly $790 million when into the major gold funds while between late January and the peak in early May, while in the correction the funds lost $1.2 billion. Since then, however, although there were subsequent outflows the gold funds have stated turning round and have enjoyed fresh net investment of over $150M, giving us additional evidence that while gold is moving back into favour, silver market players may still tread with caution for the time being.<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-64319732088933502782011-06-01T22:13:00.000-07:002011-06-03T22:21:53.384-07:00Gold Currency increasingly wideWhen Gold has moved more like a commodity different from the currency in recent weeks, the correlation indicates that the relationship with the currency, the dollar in particular: The euro is tightening.<br />
<span class="fullpost"> <br />
While gold is clearly a monetary asset and will, if anything, extend its influence as the only non-fiat currency (especially following developments in Europe last week), it is clear that in recent weeks it has been moving more closely in line with the rest of the commodities sector than with currencies or other financial instruments. Correlation analysis however shows that the relationship with the $:€ rate is tightening, while that with the G6-trade-weighted rate appears to be relatively static. The price in euros, meanwhile, has been tightening its relationship with credit default instruments as concerns over European debt have intensified once more.<br />
<br />
Obviously risk appetite is an important driver of short term movements in the financial sector and this has been a key to the comparative homogeneity of the commodities sector, stretching back at least as far as the collapse of Lehman Brothers. The correlation table shown here does demonstrate, however, that "perception of risk" per se, as measured in this case by the VIX volatility index, is taking something of a back seat to currency movements, while gold and the equities are forging ever closer links - and there has been a sharp strengthening in the relationship with the ten-year bond. All of this tends to confirm the perception that investors remain nervous and this argues for further highs in due course. The path will not be a straight one, however, as there are still possibilities of the occasional bout of liquidation as a result of distress and in order to raise funds. Any dollar strength is likely also to see gold falter.<br />
<br />
Daily log-correlation of gold and other key asset classes<br />
<table border="0" cellspacing="0" cellpadding="0" width="393"><tbody>
<tr>
<td width="123" valign="bottom"></td>
<td width="74" valign="bottom">May</td>
<td width="98" valign="bottom">Since Mar 7</td>
<td width="98" valign="bottom">post-Lehman</td>
</tr>
<tr>
<td width="123" valign="bottom">Silver</td>
<td width="74" valign="bottom">64.5%</td>
<td width="98" valign="bottom">65.9%</td>
<td width="98" valign="bottom">57.4%</td>
</tr>
<tr>
<td width="123" valign="bottom">WTI</td>
<td width="74" valign="bottom">60.8%</td>
<td width="98" valign="bottom">54.6%</td>
<td width="98" valign="bottom">24.6%</td>
</tr>
<tr>
<td width="123" valign="bottom">Palladium</td>
<td width="74" valign="bottom">58.1%</td>
<td width="98" valign="bottom">62.2%</td>
<td width="98" valign="bottom">45.7%</td>
</tr>
<tr>
<td width="123" valign="bottom">Copper</td>
<td width="74" valign="bottom">52.1%</td>
<td width="98" valign="bottom">50.3%</td>
<td width="98" valign="bottom">31.4%</td>
</tr>
<tr>
<td width="123" valign="bottom">Platinum</td>
<td width="74" valign="bottom">49.5%</td>
<td width="98" valign="bottom">64.0%</td>
<td width="98" valign="bottom">53.2%</td>
</tr>
<tr>
<td width="123" valign="bottom">S+P</td>
<td width="74" valign="bottom">30.5%</td>
<td width="98" valign="bottom">19.0%</td>
<td width="98" valign="bottom">3.0%</td>
</tr>
<tr>
<td width="123" valign="bottom">€</td>
<td width="74" valign="bottom">-36.5%</td>
<td width="98" valign="bottom">-33.6%</td>
<td width="98" valign="bottom">-21.2%</td>
</tr>
<tr>
<td width="123" valign="bottom">G6</td>
<td width="74" valign="bottom">-34.5%</td>
<td width="98" valign="bottom">-34.5%</td>
<td width="98" valign="bottom">-25.5%</td>
</tr>
<tr>
<td width="123" valign="bottom">REIT</td>
<td width="74" valign="bottom">15.8%</td>
<td width="98" valign="bottom">18.2%</td>
<td width="98" valign="bottom">3.6%</td>
</tr>
<tr>
<td width="123" valign="bottom">VIX</td>
<td width="74" valign="bottom">-15.2%</td>
<td width="98" valign="bottom">-24.8%</td>
<td width="98" valign="bottom">-5.3%</td>
</tr>
<tr>
<td width="123" valign="bottom">Ten-year bond</td>
<td width="74" valign="bottom">14.9%</td>
<td width="98" valign="bottom">1.2%</td>
<td width="98" valign="bottom">-3.9%</td>
</tr>
</tbody>
</table>The $:€ rate has been one of the more important drivers of the dollar gold price during May at almost 37%, higher than the 34% correlation that has prevailed since the 7th of March when Greek debt was downgraded, and rather stronger than the 21% correlation since the day that Lehman Brothers filed for bankruptcy. The euro price itself, however, has scaled new heights in response to the further downgrading of Greek debt in the last week of May, not to mention prior downgrades elsewhere in Europe, and persistent disagreements within the Federal Open Market Committee about the outlook for the US economy and how to manage policy after the end of QE2.<br />
<br />
Sentiment would also have been boosted by more political debate following the progress in the European Parliament towards allowing clearing houses to use gold as collateral. The proposal has cleared one hurdle, with the Committee on Economic and Monetary Affairs voting to allow central counterparties to accept gold as collateral under the European Market Infrastructure Regulation. This now needs to go to vote in the European Parliament and the Council of the European Union in July. While unlikely to have any specific impact on the overall supply-demand dynamic, the approval of the use of gold as collateral would further cement the metal's role as a non-fiat currency.<br />
<br />
The close correlation with other commodity prices demonstrates mass movement of funds rather than the increased influence of any one individual element. Although the fall in silver was largely regarded as responsible for the rout in the commodities sector in the first half of May, the gold-silver relationship has always been a tight one. Gold drives longer-term trends on the back of financial and economic considerations, while shorter term moves in silver will often presage changes in trends among the two because of its higher volatility that often causes it to be used as a geared method of playing the gold price.<br />
<br />
For the time being the commodities are moving together although platinum and palladium are taking a slightly different course on the back of positive investor sentiment with respect to their fundamental outlook. For the time being, though, underlying shifts suggest that when it comes to gold it should also pay to watch the currencies, closely. It is arguable that gold had become overbought in euro terms and that a further correction is now likely. Finally, one of the keys to the $:€ rate is of course the state of sentiment over European debt woes and that, by definition, impinges on the gold price. The correlation between the euro-denominated gold price and the Greek CDS ten-year credit default swap has been an impressive 24% since the date of the March downgrade of Greek debt, compared with just 2% since the date of the Lehman Brothers' collapse Gold's influences are always many and varied; Europe is currently an important key.<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-90995380721680602462011-05-30T02:18:00.000-07:002011-05-30T03:30:13.131-07:00London’s mining sector over past weekLondon mining sector returned to normal after massive funding flushed into the flotation of Glencore, which closed out the first week on the market opened slightly weaker at 523p. That diversion of funds meant that any sellers found the market pretty weak, and the rumour was that short sellers were also out in force capitalising on that trend, and ploughing their profits back into Glencore. If so, as those positions unwind, there might be something of a bounce.<br />
<span class="fullpost"><br />
Commodity prices trended higher, led by precious metals. Gold climbed to US$1,537 per ounce while silver strengthened nearly three dollars to US$37.95 per ounce. Platinum rose to US$1,805 per ounce and palladium climbed to US$759 per ounce.<br />
<br />
In base metals, copper climbed to US$9,151 per tonne, or US$4.15 per pound, as concerns about supply in China dominated. Nickel continued to slide and closed at US$23,125 per tonne. Zinc closed higher at US$2,266 per tonne.<br />
<br />
The majors all moved higher. Rio Tinto closed 3.3 per cent higher at 4,249p, BHP Billiton climbed 1.4 per cent to 2,394p, Anglo American climbed 1.4 per cent to 2,992p and Xstrata gained 2.1 per cent to close at 1,424p.<br />
<br />
Amongst companies in the news, Lonmin became the latest miner to be struck by employee unrest as it was forced to start dismissing employees who have been taking part in industrial action at its Karee operations since 17th May. Karee employs around 9,000 people and the company plans to start recruiting replacements once the dismissals are complete. Markets shrugged of that news, and the shares followed platinum higher, closing up 3.2 per cent at 1,572p.<br />
<br />
There was happier news, though, for Eastern Platinum. Shares in Eastplats rose two per cent to 63p after it was able to resume operations at its Crocodile River mine after it reached a deal the National Union of Mineworkers on workers’ wages. Operations are returning to normal after the end of the occupation by 155 employees and a strike by a further 480 employees, which disrupted production and damaged underground infrastructure. Management estimates that this action will result in lost production of 7,000 ounces of platinum group metals.<br />
<br />
Gold producer Kirkland Lake Gold achieved record production of 10,175 ounces in April from its operations in Ontario, Canada. Quarterly production of over 10,000 ounces lifted total output in the year to April to 81,860 ounces. These are both record production figures for the company, and the shares closed 2.7 per cent higher at 906p.<br />
<br />
In Africa, Goldplat has completed the purchase of the Banka mining lease in Ghana from Gulf Coast Resources. Banka has a 10-year renewable mining lease for gold and associated minerals over an area of 29 square kilometres. Goldplat has previously been viewed as a waste recycler, but this is the company’s third mining project, so it’s now getting established among the ranks of the true miners. The company settled the US$1.6 million consideration out of internal resources. The shares climbed 3.6 per cent to 11.53p.<br />
<br />
Meanwhile, Greenland-focused Angel Mining has completed commissioning of the process plant at its Nalunaq project and is now producing gold. Production should ramp up to approximately 2,000 ounces of gold per month. Meanwhile, the company continues to progress construction of the upper terminal at its flagship Black Angel zinc mine. The shares slipped 2.8 per cent to 3.28p.<br />
<br />
Elsewhere, iron ore pellets exporter Ferrexpo issued a positive trading statement which confirmed that it has maintained production at full capacity and has increased sales. It’s also got rising input costs under control, in spite of higher commodity prices and rising inflation in Ukraine. The group confirmed that demand remains strong in a strengthening price environment, and that it is moving to pricing agreements that are adjusted quarterly in arrears with a one month lag. The shares closed 1.2 per cent lower at 436p.<br />
<br />
Amongst junior explorers, Stratex International has formed a strategic alliance with major copper producer Antofagasta to undertake exploration for copper and copper-gold deposits in Turkey, outside of Stratex’s existing licence areas. Under the agreement, Antofagasta will fund US$1 million during the first 16 months whilst Stratex manages initial target generation and exploration. Stratex slipped 1.1 per cent to 6.97p whilst Antofagasta climbed 8.7 per cent to 1,312p.<br />
<br />
Mwana Africa was one of the week’s biggest losers. Its shares shed nearly nineteen per cent to close at 4.88p after it raised £9.27 million via an institutional placing at 5p. The proceeds will help fund the drilling programme at the Zani-Kodo gold project and will pay for further exploration at the Semhkat base metals concessions in the Democratic Republic of Congo.<br />
<br />
In the far east of Russia, Amur Minerals has closed an early settlement for the equity swap agreement entered into with Lanstead Capital last July. This has allowed Amur to receive advance funds of £2.07 million. That positions the company nicely for the next stage of development of its Kun Mani nickel project, and the shares climbed nearly nineteen per cent to 15.41p.<br />
<br />
In South America, Herencia Resources has returned further encouraging exploration results from its Paguanta project in northern Chile, where results showed up to 2.6% per cent copper and 202 grammes per tonne of silver from surface sampling. That, say the boffins, considerably enhances the porphyry prospectivity of the project. The news was positively received and the shares climbed 26.5 per cent to 3.1p.<br />
<br />
Meanwhile, sub-sea pioneer Nautilus Minerals has launched a marketed public offering to raise around C$150 million to fund the development of the off-shore Solwara 1 project in Papua New Guinea, including its share of the costs of the vessel. Final pricing will be determined by market conditions and the shares firmed 2.8 per cent to 159p.<br />
<br />
Finally, a faint light flickered at the end of a very long tunnel for EMED Mining in its seemingly-endless efforts to secure permitting to restore production at the Rio Tinto copper mine in Andalucia, Spain. The company has received formal approval from the Department of Culture and Heritage of the Andalucían Government for its restart plans. This followed the government’s recent announcement that it would endeavour to facilitate the mine restart. EMED climbed 8.9 per cent to 10.89p. <br />
<br />
<a href="http://www.minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-35263904684946856182011-05-29T08:01:00.000-07:002011-05-29T08:17:33.775-07:00Australian Markets performed over the past weekIt might look that way if you use only the all ordinaries index as a guide. But a one per cent overall fall by the broadest measure of the market hid what was a modestly firmer tone among the miners, and an ever better tone among the gold companies. The metals index managed to post a rise of half a per cent. The gold index was up by 1.6 per cent thanks to the higher US dollar gold price, which offset a recovery in the exchange rate. The Australian currency rose by US2 cents over the week.<br />
<span class="fullpost"><br />
Before running through prices, perhaps a quick tour of the major news events among the miners.<br />
<br />
Tax, naturally, remains high on the agenda, though this week there was an interesting twist as the national government in Canberra hammered away at its problem state, Western Australia, and WA in turn, said it was turning its face more towards Beijing than Canberra.<br />
<br />
Now that is interesting, because WA is where you’re sitting.<br />
<br />
Precisely, and it is becoming a very interesting place to be as the mining boom, mark two, gathers pace. A few numbers tell the story of Australia’s two-speed economy, as the minerals and oil-rich west steams away from the rustbelt manufacturing east. Five years ago, WA accounted for around 30 per cent of Australia’s export income. That number, thanks to high iron ore and petroleum prices, has risen to 42 per cent, and by the end of the decade is tipped to pass 50 per cent. What makes that growth trajectory more significant is that so much of the country’s income is coming from a state with just 10 per cent of the population.<br />
<br />
Isn’t WA the state that has an active secession movement?<br />
<br />
We do, but no-one takes it seriously at a political level. It’s a totally different matter at the financial level, though, which is why the comment about looking more to Beijing than Canberra holds weight. One part of Australia is at the epicentre of a boom, and welcoming it. The other part is in a funk and can only think how to tax the bit that is performing strongly, without joining in the game by encouraging resource development in the south-east.<br />
<br />
You’re in for interesting times, hopefully without the troubles that the famous Chinese curse can bring.<br />
<br />
Oh, I think the interesting times have arrived. They’re just going to get more interesting.<br />
<br />
Enough chit-chat, time for prices, starting with the best of the movements and any companies that are doing something newsworthy.<br />
<br />
Among the gold companies that caught the eye last week was PMI Gold (PVM) which we took a close look at two weeks ago. On Wednesday PMI it reported a fresh suite of encouraging assays from its Obotan project in Ghana. The best intersections included a whopping 125 metres at 2.18 grams a tonne from a depth of 271 metres, with a rich eight meter zone towards the end of the hole running at 19 grams per tonne. The data from the current drilling will lead to a resource upgrade in the September quarter. On the market, PMI added A11 cents to close the week at A56 cents, but did get as high as A59.5 cents in early Friday trade, which is handsomely higher than A48 cents the shares were at when Minesite gave the stock a kick along.<br />
<br />
Hopefully a few readers took note. Back to prices now, please.<br />
<br />
There was a solid recovery from Allied Gold (ALD) which had been sold off as it contended with a few issues at its Pacific island mines. It gained A5.5 cents to A51.5 cents. Elsewhere, Cobar Consolidated (CCU), the pure silver miner emerging in New South Wales, added A3.5 cents to A88 cents after receiving government development approval for its Wonawinta mine. Meanwhile Medusa (MML) steamed ahead thanks to presentations made to London investors during the week, closing the week at A$8.24 for a gain of A34 cents, just short of its all-time high of A$8.38.<br />
<br />
Good price-news was harder to find outside of the gold sector, although one eye-catching move was a very sharp rise by Territory Resources (TTY), a small iron ore miner which has accepted a cash takeover offer from South Africa’s Exarro. That deal which boosted Territory’s price by A17.5 cents to A45.5 cents. Another company with iron ore we rarely hear from, Altura Mining (AJM), had a good week too, putting in a rise of A3.5 cents to A21 cents. Altura also has some coal, and speaking of which, two pure coal companies also generated a bit of investor interest. New Hope (NHC) hit a fresh 12 month high of A5.26, up A29 cents over the week, and Aston (ATZ) also reached a fresh high of A$9.90, up A49 cents.<br />
<br />
Let’s shift across to a call of the card, starting with gold.<br />
<br />
Most of the other moves were modest, but the direction was positive. St Barbara (SBM) rose A6 cents to A$1.87, while its takeover target Catalpa (CAH) added A2 cents to A$1.74. Azumah (AZM) rose by A2 cents to A56 cents. Gryphon (GRY) gained A4 cents to A$1.57. Kingsgate (KCN) continued its recovery with a rise of A21 cents to A$7.94. Northern Star (NST) put on A 2.5 cents to A40 cents. Beadell (BDR) added A3.5 cents to A83 cents. Gold Road (GOR) rose by a tiny half a cent to A60 cents, but is attracting increased attention as a drilling program at its Yamarna project gathers pace, and might be worth a closer look soon. Offsetting the gains were a number of gold companies in retreat. Adamus (ADU) lost A4 cents to A64 cents. Perseus (PRU) fell by A4 cents to A$2.68. Chalice (CHN) slipped A3 cents lower to A31 cents. Focus (FML) ended the week at A7.3 cents, down A0.2 of a cent, but with some interesting developments underway, and another company worth a closer look.<br />
<br />
Base metals next, please.<br />
<br />
It was a mixed picture in the copper space. Nickel trended down, and zinc stocks trended up, just. The best of the copper companies was Sandfire (SFR) which added A26 cents to A$6.90. Rex (RXM), the other near-term mine developer, rose by A8 cents to A$2.67. Other movers included CuDeco (CDU), up A10 cents to A$3.28, Exco (EXS), up A2 cents to A65 cents, and Horseshoe Metals (HOR), up A1 cent to A27.5 cents, and worth keeping an eye on. Offsetting the rises were declines by OZ (OZL), down A5 cents to A$1.34, Marengo (MGO), down A1 cent to A30 cents, and Metminco (MHC), down A2.5 cents to A35.5 cents. Hot Chili (HCH) called for suspension pending an announcement with a last sale at A61 cents.<br />
<br />
Mincor (MCR) was the best of the nickel companies, but its rise of just A1 cent to A$1.09 tells the story. Interest in Mincor was sparked by its move into a gold project in Papua New Guinea. After that it was all down, or flat. Western Areas (WSA) lost A10 cents to A$6.15. Panoramic was A6 cents lighter at A$1.94. Minara (MRE) eased back by A3.5 cents to A74.5 cents, and Mirabela (MBN) slipped A5 cents lower to A$2.01.<br />
<br />
Blackthorn (BTR), surprisingly, was the best of the zinc companies despite losing BHP Billiton as a partner in an exploration project. It added A1.5 cents to A56 cents. Perilya (PEM) firmed by A1 cent to A59 cents. Prairie Downs (PDZ), rose by A1.5 cents to A18.5 cents, and Ironbark (IBG) was A1 cent stronger at A28 cents.<br />
<br />
Over to iron ore and coal, please.<br />
<br />
After Territory and Altura most of the iron ore moves were negative. Atlas (AGO) fell A12 cents to A$3.60. Murchison (MMX) fell A8.5 cents to A$1.85. Grange (GRR) fell A3 cents to A59 cents. Gindalbie (GBG) fell A3.5 cents to A94.5 cents. Fortescue (FMG) fell A4 cents to A$6.40 after dropping a big debt raising that had been planned in the US, a sign that the appetite for high-risk bonds has faltered in New York.<br />
<br />
Coal companies traded on a more positive note. Aside from Aston and New Hope, which we’ve already mentioned, other moves came from Bathurst (BTU), up A13 cents to A$1.20, Stanmore (SMR), up A5 cents to A$1.27, and Coal of Africa (CZA), up by half a cent to A$1.18. Macarthur (MCC) went the other way, shedding A33 cents to A$11.66, and Coalworks (CWK), slipped A5 cents lower to A69 cents.<br />
<br />
Uranium and minor metals to close, please.<br />
<br />
There wasn’t much good news among the uranium companies, despite a small increase in the price of uranium. Berkeley (BKY) was hammered on news of trouble with its partner in Spain, plunging a painful A34 cents to A48.5 cent. Other falls included Manhattan (MHC), down A5 cents to A55 cents, Bannerman (BMN), down A3 cents to A31 cents, and Energy and Metals (EMA), down A1 cent to A17 cents.<br />
<br />
The minor metals were surprisingly quiet. Rare earth companies effectively marked time. Lynas (LYC) slipped A1 lower to A$2.28, while Alkane (ALK) added A1.5 cents to A$1.84. There was a mixed picture in tin. Venture (VMS) rose a healthy A6 cents to A44 cents, while Kasbah (KAS) lost half a cent to A24.5 cents. Wolf (WLF), which is more a tungsten than tin play was steady at A39.5 cents. Lithium companies weakened, as did the potash players.<br />
<br />
<a href="http://www.minesite.com" target="blank">Source</a><br />
<br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-66981785964205733312011-05-29T02:42:00.000-07:002011-05-29T08:01:40.175-07:00Canadian Markets performed over the past weekDespite a nice rebound in metal prices, the holiday-shortened trading week was rather uneventful. It could be the calm before the storm, though, as the highly-anticipated field season is just getting underway in Canada’s Yukon Territory. Once all the trading was done, the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had added 3.41per cent, while the TSX Gold Index had rallied 3.79 per cent.<br />
<span class="fullpost"><br />
Even so, it was a rough week for shareholders of Lundin Mining. The base metal miner has failed to find a suitable buyer for any or all of its assets. So for now it will be status quo for the company. That had those hopeful for corporate activity heading for the exits and Lundin ended the week down C$1.68 at C$7.16.<br />
<br />
But talking of corporate activity, I see the Zambian Competition and Consumer Protection Commission has given the green light to Barrick Gold's acquisition of Equinox Minerals.<br />
<br />
Yep, the one time suitor of Lundin is about to become part of the world’s largest gold miner. Go figure. Barrick has made suitably deferential noises as regards the CCPC’s ruling, and all-in-all now looks well positioned to close the deal. Barrick added C$1.98 on the week to close at C$46.36.<br />
<br />
Meanwhile, shares of Capstone Mining managed to add C$0.08 to close at C$3.48 after the company reported first quarter earnings amounting to US$18.9 million or US$0.08 per share. Copper sales rang in at 22.8 million pounds, and cash costs were US$1.59 per pound. For the year, Capstone expects to produce between 80 million and 85 million pounds of copper from its Yukon and Mexican operations.<br />
<br />
Ahead of presidential elections due on June 5th, Bear Creek Mining got some bad news from Peru. The Peruvian government has issued a decree setting up a 180-day multi-sectorial commission composed of ministers and elected local officials to assess all mining activities within the provinces of Yunguyo and Chucuito. The move is in response to two weeks of strikes in the region. Bear Creek’s Santa Ana project is located within the Chucuito province, and Bear Creek ended the week down C$0.75 at C$6.98.<br />
<br />
And speaking of strikes, Eastern Platinum added C$0.07 to close at C$1.03 after the company announced that the strike at its Crocodile River mine in South Africa was over.<br />
<br />
Any exploration news?<br />
<br />
Trelawney Mining and Exploration tagged 117 metres of 1.05 grams gold per tonne from its Chester project in northern Ontario. Trelawney ended the week up C$0.33 at C$4.28. Not to be outdone, Kimber Resources hit 51.9 grams gold per tonne and 1,076.7 grams silver per tonne over 5.2 metres on the Carmen deposit on its Monterde project in Mexico. Kimber closed out the week at C$1.64 for a C$0.39 gain.<br />
<br />
Elsewhere, shares of Claude Resources added C$0.07 to close at C$2.19 after the company reported a 3.2 metre intercept grading 84.66 grams gold per tonne on the Neptune target on its Seabee project in Saskatchewan. And Canaco Resources continued to deliver the goodies at its Hendeni gold project in Tanzania. The latest results included 23.96 grams gold per tonne over 17 metres. Canaco ended the week up C$0.59 at C$4.43.<br />
<br />
Meanwhile, no news was good news for plenty of Yukon-focussed investors. Shares of Kaminak Gold were on the move as the Yukon gold explorer gears up for a major drill program on its Coffee project. Kaminak ended the week up C$0.49 at C$3.74. Another major Yukon player to watch this summer is Atac Resources and its Carlin type targets. Atac ended the week up C$0.19 at C$6.60. Meanwhile, Rockhaven Resources has also jumped to life as it makes its own plans in the Yukon. The junior, which closed at C$1.43 for a C$0.23 gain, is about to resume drilling on its Klaza gold-silver property.<br />
<br />
Memorial Day weekend in the United States on Monday means that trading on the Canadian side of the border will be lighter than usual as the week kicks off. It has been abnormally quiet on the acquisition front but we know from past experience how fast that can change. We will see what next week has in store.<br />
<br />
<a href="http://www.minesite.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-55613676681985282732011-05-12T09:12:00.000-07:002011-05-15T09:19:42.395-07:00Other steps of the First QuantumHaving lost assets in the DRC in difficult circumstances, First Quantum has filed the best legs in Zambia, and reap the results of efforts<br />
<span class="fullpost"><br />
London- and Toronto-listed First Quantum this week posted solid results for first-quarter 2011, and headlined its objective to produce 300,000 tonnes of copper in 2011 as a whole, and 200,000 ounces of gold, extracted as by product from two of its copper mines.<br />
<br />
First Quantum's founding base of business, the central African copperbelt, straddling Zambia and the Democratic Republic of the Congo, has recently come into focus with the bid by Barrick, the world's biggest gold miner, for Toronto- and Australia-listed Equinox, which mines copper in Zambia, and is due to start mining copper in Saudi Arabia, where it also holds interests in gold-base metal projects. Barrick already produces copper, but is the first major gold miner to consciously bid for a copper miner.<br />
<br />
Good copper miners are making very good money. Cynics may well point to Barrick's spin off of African Barrick Gold in 2010, which was listed in London, and in which Barrick remains the biggest shareholder. The apparent contradictions are explained mainly by the above-average stock market valuations commanded by gold stocks, and the relative undervaluation of copper stocks, which can produce genuinely impressive cash flows and profits.<br />
<br />
The African copper belt boasts some of the world's highest in situ copper grades, and, in some cases, by-product cobalt, gold, or silver, and even uranium. First Quantum pioneered the resuscitation of the ruined once-nationalised copper mines in the central African copper belt, when it acquired Bwana Mkubwa in Zambia in the mid-1990s. First Quantum was soon mining just across the border in the DRC, at Lonshi, and achieved rapid growth on both sides of the border, attracting interest and investment to the broader area.<br />
<br />
But the DRC has proved a bitter pill for First Quantum, which saw its in-build KMT operation in the copper-rich southern Katanga Province seized in 2009, and onsold via a British Virgin Islands (BVI) shell structure. During 2010, First Quantum's Frontier mine was shuttered after further action by DRC authorities. It can be noted that upon the shuttering, various expats were noted on the mine premises, not least Tim Henderson and John Gross, who are, apparently, GM and metallurgist at a Glencore interest in the DRC, known as Mutanda Mine Mumi Copper/Cobalt Project. Approached at the time, early September 2010, for comment, Glencore politely declined.<br />
<br />
Both the KMT and Frontier cases are now in international arbitration, in Paris and Washington, respectively. First Quantum is separately suing London-listed ENRC over its announcement that it acquired a majority stake in KMT, via the BVI conduits.<br />
<br />
Some kind of revenge seems to be on the menu on the Zambian side of the border. First Quantum recently highlighted the award to it of fresh mining permits in Zambia, which continues to attract foreign investment despite heated debates, and action, and some retraction, on tax issues, over the past few years. In Katanga Province, the only major miner present at the operational level until recently was Freeport-McMoRan, the major shareholder in and operator of Tenke Fungurume, an inheritance, as such, from an earlier acquisition by Freeport-McMoRan.<br />
<br />
Earlier this month, First Quantum hosted a high profile groundbreaking at its Trident project in Zambia, where over 140,000 meters of drilling has been completed in more than 380 holes. Based on First Quantum's internally-generated resource estimates, the group is proceeding with the design of a project at Trident that could produce 150,000 tonnes of copper a year, initially, and then expand to 300,000 tonnes of copper. First Quantum is also headed towards producing material amounts of nickel, in Australia and Finland. While First Quantum heads back to its roots with Trident, its expansion from a small base in the mid-1990s has seen it become one of the world's most-demanded copper stocks.<br />
<br />
The first major miner to make conscious moves on the central African copperbelt, at least at the operational level, is Brazilian supergroup Vale, the world's No 2 miner, which recently bid for Johannesburg-listed Metorex, which operates in both the DRC (Ruashi) and Zambia (Chibuluma and Sable Zinc). Vale already has an interest in Zambia's Konkola North, which, according to Vale, ranks as the second-largest known resource on the Zambian copperbelt. This is an underground mine with estimated nominal production capacity of 44,000 metric tonnes a year of copper in concentrate, with production scheduled to start up in 2013. This project is part of a joint venture with Johannesburg-listed African Rainbow Minerals.<br />
<br />
Early in 2009, Vale acquired a 50% interest in a joint venture with ARM for CAD 81m, with the objective of looking at developing nominal production capacity of 65,000 metric tons of copper a year, at Konkola North and Kalumines. The joint venture also holds extensive further exploration interests.<br />
<br />
And then there is Toronto- and London-listed Katanga Mining, which was bailed out by Glencore in 2008 and 2009, in the wake of turmoil in markets generally. Early in 2008, Katanga Mining completed its merger with Nikanor, which held the giant KOV pit, adjacent to Katanga Mining's Kamoto interests.<br />
<br />
London-listed Nikanor raised USD 380m in cash upon listing in July 2006, and USD 777m a year later. Upon the business combination of Nikanor and Katanga Mining, USD 446m in cash was returned to Nikanor shareholders, as a capital repayment, or special dividend. The prime beneficiaries were the three major Nikanor founding shareholders: Beny Steinmetz, the UK-based Gertner family, and Daniel Gertler.<br />
<br />
JP Morgan Cazenove, pushers of the Nikanor float, were keen to remind investors that the KOV deposits boast one of the highest-grade major copper ore bodies in the world, with 172m tons of indicated mineral resources at an astonishing grade of 5.09% copper, plus a wonderful grade of 0.49% cobalt.<br />
<br />
And yet Katanga Mining continues to burn cash, even after yet another rights issue in 2009, which raised USD 245m, entrenching Glencore as the controlling shareholder. During first-quarter 2011, Katanga Mining produced copper metal and concentrate of 18,385 (first-quarter 2010: 12,458) tonnes and 635 (889) tonnes of cobalt. So-called C1 cash costs for the first-quarter 2011 were USD 1.82 (USD 1.34) per pound of copper.<br />
<br />
In a filing on 31 March 2011, Katanga Mining described its New Phase 4 expansion which, once completed, is expected to result in total plant capacity of 310,000 tonnes of copper a year. How this is to be financed is yet to be fully described. Equity investors in Katanga Mining have seen the company's issued shares increase from 78m in 2008 to 1.9bn at this point in time.<br />
<table border="0" cellspacing="0" cellpadding="0" width="454"><tbody>
<tr>
<td width="149" valign="bottom"><a href="http://www.katangamining.com/kat/about_us/comp_prof/" target="blank">Katanga Mining</a></td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="85" valign="bottom"></td>
<td width="76" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom">USD m</td>
<td width="72" valign="bottom">1Q11</td>
<td width="56" valign="bottom">1Q10</td>
<td width="69" valign="bottom">2010</td>
<td width="85" valign="bottom">2009</td>
<td width="76" valign="bottom">2008</td>
</tr>
<tr>
<td width="149" valign="bottom">Operating cash flow</td>
<td width="72" valign="bottom">60</td>
<td width="56" valign="bottom">81</td>
<td width="69" valign="bottom">167</td>
<td width="85" valign="bottom">-180</td>
<td width="76" valign="bottom">-45</td>
</tr>
<tr>
<td width="149" valign="bottom">Capital expenditure</td>
<td width="72" valign="bottom">-51</td>
<td width="56" valign="bottom">-31</td>
<td width="69" valign="bottom">-218</td>
<td width="85" valign="bottom">-118</td>
<td width="76" valign="bottom">-439</td>
</tr>
<tr>
<td width="149" valign="bottom">Free cash flow</td>
<td width="72" valign="bottom">9</td>
<td width="56" valign="bottom">50</td>
<td width="69" valign="bottom">-52</td>
<td width="85" valign="bottom">-298</td>
<td width="76" valign="bottom">-484</td>
</tr>
<tr>
<td width="149" valign="bottom"></td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="85" valign="bottom"></td>
<td width="76" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom">Equity raised</td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="85" valign="bottom">245</td>
<td width="76" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom"></td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="85" valign="bottom"></td>
<td width="76" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom">Cash on hand</td>
<td width="72" valign="bottom">44</td>
<td width="56" valign="bottom">127</td>
<td width="69" valign="bottom">30</td>
<td width="85" valign="bottom">77</td>
<td width="76" valign="bottom">32</td>
</tr>
<tr>
<td width="149" valign="bottom">Debentures</td>
<td width="72" valign="bottom">-124</td>
<td width="56" valign="bottom">-117</td>
<td width="69" valign="bottom">-120</td>
<td width="85" valign="bottom">-113</td>
<td width="76" valign="bottom">-258</td>
</tr>
<tr>
<td width="149" valign="bottom">Net debt</td>
<td width="72" valign="bottom">-81</td>
<td width="56" valign="bottom">10</td>
<td width="69" valign="bottom">-90</td>
<td width="85" valign="bottom">-36</td>
<td width="76" valign="bottom">-227</td>
</tr>
</tbody>
</table>For some investors, a pall remains over mining in the DRC, particularly in Katanga Province, not least on the kind of reception that the spat between First Quantum and ENRC has been given by parts of the London-based media. While Vale has shown something of an appetite for becoming involved in Katanga Province, its focus in the broader region is without question to the east in Tete Province, Mozambique, where Vale is busy commissioning the USD 1.7bn Moatize coal mine, alongside Toronto- and Australia-listed Riversdale's deposits.<br />
<br />
Moatize holds resources of more than 1bn tonnes; Moatize I has a nominal production capacity estimated at 11m tonnes of coal, 80% coking. The coal will be transported along the Linha do Sena railway to the historic Beira port. Earlier this year, the first train seen in 25 years arrived at Moatize town.<br />
<br />
At Beira, the Mozambique government is building a new facility to handle an additional 18 to 24m tonnes of coal a year. Other transnational companies with a presence in Tete include ENRC, Nippon Steel, Jindal and ETAStar.<br />
<br />
Vale, also a global leader in logistics, has bought a 51% stake in Sociedade de Desenvolvimento do Corredor do Norte SA (SDCN), which controls the Corredor de Desenvolvimento do Norte (CDN) and the Central East African Railways (CEAR). CDN holds a concession over 872km of railroad in Mozambique; CEAR holds a concession over 797km of railroad in Malawi. The "first prize" in the network would be access to Katanga Junction, which has historic railroads running in literally all directions. The vast majority are rusted and ruined.<br />
<br />
Riversdale and Tata earlier this year bought the balance of shares in Benga Power Project, a USD 1bn investment progressing to initial production in 2013-2014, to produce around 550MW of power, with the objective of increasing to 2,000MW. The miners are also looking at barging along the Zambezi River, following precedents from decades ago.<br />
<br />
Riversdale is, of course, headed towards delisting with transnational miner Rio Tinto now holding more than 70% of the shares in Riversdale. At the same time, Rio Tinto has sold out of the huge Chapudi coking coal deposit in South Africa, to Coal of Africa Limited. With corporate action in South Africa and Katanga Province likely to remain subdued for the foreseeable future, which could be quite a while, more corporate action with a Zambian focus could be on the cards.<br />
<br />
Which leads back to First Quantum, with its plans to grow to a remarkable 1m annual tonnes of copper, as early as 2015, from the 2011 outlook of 300,000 tonnes. The Kiwara PLC acquisition - now called Sentinel copper and Enterprise nickel - with USD 1bn of capex should add 400,000 tonnes a year of copper, plus, First Quantum has discovered a significant nickel orebody on the Zambian property, 150km from its flagship Kansanshi Mine.<br />
<table border="0" cellspacing="0" cellpadding="0" width="445"><tbody>
<tr>
<td width="149" valign="bottom"><a href="http://www.first-quantum.com/s/Home.asp" target="blank">First Quantum</a></td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="64" valign="bottom"></td>
<td width="72" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom">USD m</td>
<td width="72" valign="bottom">1Q11</td>
<td width="56" valign="bottom">1Q10</td>
<td width="69" valign="bottom">2010</td>
<td width="64" valign="bottom">2009</td>
<td width="72" valign="bottom">2008</td>
</tr>
<tr>
<td width="149" valign="bottom">Operating cash flow</td>
<td width="72" valign="bottom">379.3</td>
<td width="56" valign="bottom">164.7</td>
<td width="69" valign="bottom">731.3</td>
<td width="64" valign="bottom">562.6</td>
<td width="72" valign="bottom">765.4</td>
</tr>
<tr>
<td width="149" valign="bottom">Capital expenditure</td>
<td width="72" valign="bottom">-189.3</td>
<td width="56" valign="bottom">-44.8</td>
<td width="69" valign="bottom">-357.6</td>
<td width="64" valign="bottom">-361.8</td>
<td width="72" valign="bottom">-460.3</td>
</tr>
<tr>
<td width="149" valign="bottom">Free cash flow</td>
<td width="72" valign="bottom">190.0</td>
<td width="56" valign="bottom">119.9</td>
<td width="69" valign="bottom">373.7</td>
<td width="64" valign="bottom">200.8</td>
<td width="72" valign="bottom">305.1</td>
</tr>
<tr>
<td width="149" valign="bottom"></td>
<td width="72" valign="bottom"></td>
<td width="56" valign="bottom"></td>
<td width="69" valign="bottom"></td>
<td width="64" valign="bottom"></td>
<td width="72" valign="bottom"></td>
</tr>
<tr>
<td width="149" valign="bottom">Cash on hand</td>
<td width="72" valign="bottom">1486.4</td>
<td width="56" valign="bottom">548.4</td>
<td width="69" valign="bottom">1344.9</td>
<td width="64" valign="bottom">919.2</td>
<td width="72" valign="bottom">176.2</td>
</tr>
<tr>
<td width="149" valign="bottom">Debt</td>
<td width="72" valign="bottom">-530.9</td>
<td width="56" valign="bottom">-608.0</td>
<td width="69" valign="bottom">-613.1</td>
<td width="64" valign="bottom">-630.0</td>
<td width="72" valign="bottom">-385.7</td>
</tr>
<tr>
<td width="149" valign="bottom">Net cash/debt</td>
<td width="72" valign="bottom">955.5</td>
<td width="56" valign="bottom">-59.6</td>
<td width="69" valign="bottom">731.8</td>
<td width="64" valign="bottom">289.2</td>
<td width="72" valign="bottom">-209.5</td>
</tr>
</tbody>
</table>With the Ravensthorpe project in Australia (acquired from BHP Billiton) targeted to produce around 40,000 tonnes a year of nickel from the end of 2011, plus Kevitsa in Finland, at 10,000+ tonnes a year from mid-2012, First Quantum is building a significant nickel stream.<br />
<br />
The bottom line is that First Quantum has put the disappointment of losing its DRC assets far behind. First Quantum has firmly emerged as a challenger to London-listed Antofagasta's place as the No 2 base metal company in the world behind Freeport-McMoRan. When Barrick officially opens operational offices in Zambia, the game could well be on.<br />
<br />
Selected DRC/Zambia stocks<br />
<br />
<table border="0" cellspacing="0" cellpadding="0" width="412"><tbody>
<tr>
<td width="180" valign="bottom"><strong><em>Copper-cobalt</em></strong></td>
<td width="96" valign="bottom">Stock</td>
<td width="101" valign="bottom">From</td>
<td width="86" valign="bottom">From</td>
<td width="82" valign="bottom">Value</td>
</tr>
<tr>
<td width="180" valign="bottom"></td>
<td width="96" valign="bottom">price</td>
<td width="101" valign="bottom">high*</td>
<td width="86" valign="bottom">low*</td>
<td width="82" valign="bottom">USD bn</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.nfc.com.cn/" target="blank">NFC</a></td>
<td width="96" valign="bottom">CNY 33.27</td>
<td width="101" valign="bottom">-24.1%</td>
<td width="86" valign="bottom">200.8%</td>
<td width="82" valign="bottom">3.273</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.first-quantum.com/s/Home.asp" target="blank">First Quantum</a></td>
<td width="96" valign="bottom">CAD 127.92</td>
<td width="101" valign="bottom">-13.8%</td>
<td width="86" valign="bottom">165.4%</td>
<td width="82" valign="bottom">11.397</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.katangamining.com/kat/about_us/comp_prof/" target="blank">Katanga Mining**</a></td>
<td width="96" valign="bottom">CAD 1.97</td>
<td width="101" valign="bottom">-9.7%</td>
<td width="86" valign="bottom">239.3%</td>
<td width="82" valign="bottom">3.881</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.equinoxminerals.com/" target="blank">Equinox</a></td>
<td width="96" valign="bottom">CAD 8.09</td>
<td width="101" valign="bottom">-4.0%</td>
<td width="86" valign="bottom">163.5%</td>
<td width="82" valign="bottom">7.356</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.metorexgroup.com/" target="blank">Metorex</a></td>
<td width="96" valign="bottom">ZAR 7.13</td>
<td width="101" valign="bottom">-4.2%</td>
<td width="86" valign="bottom">132.2%</td>
<td width="82" valign="bottom">1.057</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.anvilmining.com/" target="blank">Anvil**</a></td>
<td width="96" valign="bottom">CAD 6.08</td>
<td width="101" valign="bottom">-15.8%</td>
<td width="86" valign="bottom">129.4%</td>
<td width="82" valign="bottom">0.989</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.mwanaafrica.com/" target="blank">Mwana Africa</a></td>
<td width="96" valign="bottom">GBP 0.07</td>
<td width="101" valign="bottom">-51.0%</td>
<td width="86" valign="bottom">5.8%</td>
<td width="82" valign="bottom">0.061</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.tigerresources.com.au/" target="blank">Tiger Resources</a></td>
<td width="96" valign="bottom">AUD 0.53</td>
<td width="101" valign="bottom">-18.0%</td>
<td width="86" valign="bottom">200.0%</td>
<td width="82" valign="bottom">0.377</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.africancopper.com/s/Home.asp" target="blank">African Copper</a></td>
<td width="96" valign="bottom">GBP 0.04</td>
<td width="101" valign="bottom">-45.7%</td>
<td width="86" valign="bottom">0.0%</td>
<td width="82" valign="bottom">0.049</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.africoresources.com/" target="blank">Africo**</a></td>
<td width="96" valign="bottom">CAD 1.16</td>
<td width="101" valign="bottom">-35.6%</td>
<td width="86" valign="bottom">52.6%</td>
<td width="82" valign="bottom">0.086</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.caledoniamining.com/" target="blank">Caledonia</a></td>
<td width="96" valign="bottom">CAD 0.11</td>
<td width="101" valign="bottom">-37.1%</td>
<td width="86" valign="bottom">100.0%</td>
<td width="82" valign="bottom">0.057</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.africaneagle.co.uk/" target="blank">African Eagle</a></td>
<td width="96" valign="bottom">GBP 0.11</td>
<td width="101" valign="bottom">-33.6%</td>
<td width="86" valign="bottom">206.9%</td>
<td width="82" valign="bottom">0.074</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.geovic.net/" target="blank">Geovic***</a></td>
<td width="96" valign="bottom">CAD 0.55</td>
<td width="101" valign="bottom">-44.4%</td>
<td width="86" valign="bottom">31.0%</td>
<td width="82" valign="bottom">0.059</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.elninoventures.com/s/home.asp" target="blank">El Nino Ventures</a></td>
<td width="96" valign="bottom">CAD 0.15</td>
<td width="101" valign="bottom">-21.6%</td>
<td width="86" valign="bottom">383.3%</td>
<td width="82" valign="bottom">0.018</td>
</tr>
<tr>
<td width="180" valign="bottom"><em>Averages/total</em></td>
<td width="96" valign="bottom"></td>
<td width="101" valign="bottom">-25.6%</td>
<td width="86" valign="bottom">143.6%</td>
<td width="82" valign="bottom">28.733</td>
</tr>
<tr>
<td width="180" valign="bottom"><em>Weighted averages</em></td>
<td width="96" valign="bottom"></td>
<td width="101" valign="bottom">-12.7%</td>
<td width="86" valign="bottom">171.2%</td>
<td width="82" valign="bottom"></td>
</tr>
<tr>
<td width="180" valign="bottom"><strong>Gold stocks</strong></td>
<td width="96" valign="bottom"></td>
<td width="101" valign="bottom"></td>
<td width="86" valign="bottom"></td>
<td width="82" valign="bottom"></td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.banro.com/s/Home.asp" target="blank">Banro**</a></td>
<td width="96" valign="bottom">CAD 3.40</td>
<td width="101" valign="bottom">-22.9%</td>
<td width="86" valign="bottom">112.5%</td>
<td width="82" valign="bottom">0.670</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.anglogold.com/default.htm" target="blank">AngloGold Ashanti</a></td>
<td width="96" valign="bottom">USD 45.59</td>
<td width="101" valign="bottom">-13.8%</td>
<td width="86" valign="bottom">19.8%</td>
<td width="82" valign="bottom">17.379</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.randgoldresources.com/" target="blank">Randgold Resources</a></td>
<td width="96" valign="bottom">USD 79.90</td>
<td width="101" valign="bottom">-24.9%</td>
<td width="86" valign="bottom">13.9%</td>
<td width="82" valign="bottom">7.273</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.mwanaafrica.com/" target="blank">Mwana Africa</a></td>
<td width="96" valign="bottom">GBP 0.07</td>
<td width="101" valign="bottom">-51.0%</td>
<td width="86" valign="bottom">5.8%</td>
<td width="82" valign="bottom">0.061</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.mexivada.com/" target="blank">Mexivada****</a></td>
<td width="96" valign="bottom">CAD 0.12</td>
<td width="101" valign="bottom">-36.1%</td>
<td width="86" valign="bottom">15.0%</td>
<td width="82" valign="bottom">0.006</td>
</tr>
<tr>
<td width="180" valign="bottom">Gilla Inc.</td>
<td width="96" valign="bottom">USD 0.02</td>
<td width="101" valign="bottom">-82.0%</td>
<td width="86" valign="bottom">42.9%</td>
<td width="82" valign="bottom">0.001</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.loncor.com/s/Home.asp" target="blank">Loncor Resources**</a></td>
<td width="96" valign="bottom">CAD 3.29</td>
<td width="101" valign="bottom">-12.3%</td>
<td width="86" valign="bottom">406.2%</td>
<td width="82" valign="bottom">0.196</td>
</tr>
<tr>
<td width="180" valign="bottom"><strong>Diversified</strong></td>
<td width="96" valign="bottom"></td>
<td width="101" valign="bottom"></td>
<td width="86" valign="bottom"></td>
<td width="82" valign="bottom"></td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.fcx.com/" target="blank">Freeport-McMoRan</a></td>
<td width="96" valign="bottom">USD 50.67</td>
<td width="101" valign="bottom">-17.4%</td>
<td width="86" valign="bottom">80.3%</td>
<td width="82" valign="bottom">48.004</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.omgi.com/" target="blank">OM Group</a></td>
<td width="96" valign="bottom">USD 36.91</td>
<td width="101" valign="bottom">-7.5%</td>
<td width="86" valign="bottom">68.0%</td>
<td width="82" valign="bottom">1.144</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.vedantaresources.com/" target="blank">Vedanta</a></td>
<td width="96" valign="bottom">GBP 21.70</td>
<td width="101" valign="bottom">-17.5%</td>
<td width="86" valign="bottom">20.9%</td>
<td width="82" valign="bottom">9.411</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.lundinmining.com/s/Home.asp" target="blank">Lundin</a></td>
<td width="96" valign="bottom">CAD 8.83</td>
<td width="101" valign="bottom">-5.2%</td>
<td width="86" valign="bottom">203.4%</td>
<td width="82" valign="bottom">5.310</td>
</tr>
<tr>
<td width="180" valign="bottom"><a href="http://www.enrc.com/output/Page54.asp" target="blank">ENRC</a></td>
<td width="96" valign="bottom">GBP 8.69</td>
<td width="101" valign="bottom">-24.5%</td>
<td width="86" valign="bottom">8.4%</td>
<td width="82" valign="bottom">18.253</td>
</tr>
</tbody>
</table>* 12-month ** DRC only *** Cameroon **** Congo-Brazzaville<br />
Source: market data; table compiled by Barry Sergeant<br />
<br />
<a href="http://miningspot.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-51120926002797739682011-05-10T20:55:00.000-07:002011-05-15T09:12:40.600-07:00Gold and silver markets in many perceptionsConditions when the price of gold and silver experienced a sharp correction was anticipated by some commentators, although the speed and depth of the sell-off might not be expected, but interesting now that some of those who called the top of the already suggested that it may be time to move back in.<br />
<span class="fullpost"><br />
Notable among these is Peter Grandich of the well respected Grandich Letter who recommended selling gold and silver right at the top and is already telling readers to start climbing back in. Grandich says: "After literally getting out within minutes of the top in silver and gold and then watching a decline I anticipated could take weeks or months happen in a matter of days, I believe it's time to go back in and buy back those positions. I may be 10% too early but we have plenty of room given what we sidestepped. So I'm now back in fully in gold and silver."<br />
<br />
Looking at what has happened in the past week, gold has lost, from peak to current levels, just under $100 - a fall of around 6% which is not massive in the scheme of things. Silver though has lost around 30% from its peak. Momentum had carried it up far faster than was reasonable and at least one commentator had described the silver price surge, and subsequent fall back, as "an accident waiting to happen". It had risen too far too fast and to an extent the euphoria so generated had probably been partly responsible for dragging gold up a little faster than expected, or warranted.<br />
<br />
In a similar manner, silver's initial stumble, and then sharp plunge, may have also been a factor in gold losing its lustre.<br />
<br />
But the sell-off hasn't just been in precious metals. Revived general doubts about global economic strength have run over into most commodities, with investors scrambling for what they see as a safe haven - but in this respect it has been the dollar they have turned to, rather than gold and there has been a recovery in the dollar index over the past day or so which has been another contributing factor in the precious metals' decline.<br />
<br />
More sober analysis suggests, though, that the dollar is not worthy of a revival as long as the U.S. Fed keeps on pumping money out to the banks, and then supposedly to the U.S. economy as a whole - although there are serious doubts about how much of this government largesse is actually filtering down the line. History tells us that money printing on this kind of scale eventually has to lead to inflation - indeed to severe inflation. Perhaps the banks' sticky fingers have to an extent prevented this from happening so far with the government money finding its way to the investment community and boosting the stock markets rather than the economy as a whole. - Another bubble waiting to burst?<br />
<br />
Indeed all the factors which had led to the rise of gold - we'll leave silver out of it for the moment because it was speculative fervour largely responsible for that metal's over the top advance - are still with us, and at some stage the investment community will recognise this and move back into gold as the haven of preference. Whether that will happen now - or later in the year, remains to be seen.<br />
<br />
Long term gold proponent, Jim Sinclair, who has quite a following, advises gold holders to "relax". He's looking for a major upturn in gold as soon as June and is still targeting $5,000 as a longer term objective. This seems far-fetched - but then people would have said that about $1,000 gold, let alone $1500, only two or three years ago.<br />
<br />
As for silver, will we see another meteoric rise if gold does recover first. Perhaps too many people got their fingers burnt in the recent rise for a similar surge to happen in the short to medium term, and there could still be ground here for further falls befor the price stabilises and starts to rise again. Maybe a return to a gold:silver ratio of nearer 45:1 or higher (currently 42.5) may be on the cards before real progress starts to be made again here.<br />
<br />
On the bearish side, however, there are those who suggest that the decline in gold and silver may not be done yet. Technical analyst, Dr Nu Yu, points to a "Three Peaks and a Domed House" chart pattern - I guess this means something to the technical analysis community - suggesting a gold price fall of 17% to around $1290 by June, but offers no further projections beyond then. His chart is shown below courtesy of <a href="http://www.munknee.com/" target="blank">www.munknee.com</a>.<br />
<br />
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKEkbgnRkg4KmGz2MJE5aa9UH7c2mFxt1nurZUP_Pe2Bl1uV3Gn0-wd0SWRiLR_C1fE0UoedmW1Mq2x8okg4ODN5J3oXpWhjMItBLF3RPLufTEosp4mY4qOM2GsDfku1DEf75EUWgVsRh8/s1600/gold-market-chart.jpg" imageanchor="1"><img alt="gold market analysis, gold market chart, gold trading trend" border="0" height="226" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgKEkbgnRkg4KmGz2MJE5aa9UH7c2mFxt1nurZUP_Pe2Bl1uV3Gn0-wd0SWRiLR_C1fE0UoedmW1Mq2x8okg4ODN5J3oXpWhjMItBLF3RPLufTEosp4mY4qOM2GsDfku1DEf75EUWgVsRh8/s320/gold-market-chart.jpg" width="320" /></a></div><br />
As with economists, so it is with gold analysts. There are always drastically opposing views.<br />
<br />
<a href="http://miningspot.com/" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-15052293511122293352011-05-10T08:27:00.000-07:002011-05-15T08:44:56.857-07:00Increasing cash flow eroded by other costsThe trend increase in income from 2010 that continued until 2011, became the savior for gold miners, but did not deny the increase in capital and operational costs have eroded some incoming cash flow, which is reflected in the quarterly report the latest bout of eight major gold producer.<br />
<span class="fullpost"><br />
So who wants to commandeer a major gold miner, or any gold miner, for that matter? Relative to the persistent gains in the dollar gold price over the past near-decade, listed major gold stocks experienced three relatively tight years from 2007 to 2009, from a free cash flow viewpoint: above all else, costs started to bite.<br />
<br />
But rising revenues came to the rescue, again, and 2010 was an excellent year, a trend which has largely continued into 2011, as reflected in the latest bout of quarterly reports from eight of the major gold producers.<br />
<br />
One conclusion to be drawn from the apparent fault lines is that while dollar gold bullion has been highly supportive for close on a decade, costs have indeed been increasing at a compound rate. Rising costs continue to erode operating cash flows, and also raise capital costs, whether at existing mines, or for new builds (where prior budgets are being persistently ratcheted upwards).<br />
<br />
If there is concern over the trends of gold majors seen in free cash flow generation, few would be likely to omit discussing Barrick's recent bid for Equinox, a copper miner. Freeport-McMoRan, which can be regarded as a gold major, given that Grasberg ranks as the world's biggest gold mine, generates the majority of its cash flow from copper. It is also No 1 in molybdenum and cobalt, a minor metal.<br />
<br />
Seen as a composite, Freeport-McMoRan generates astonishing amounts of cash, not only among miners of all kinds, but more so when compared to gold-focused miners. On this point, few major gold stocks are "pure"; Barrick and Newmont, among others, already produce material amounts of copper. In the first quarter of 2011, nearly a third of Goldcorp's turnover was from metals other than gold. And so on.<br />
<table border="0" cellpadding="0" cellspacing="0" style="width: 464px;"><tbody>
<tr> <td colspan="2" valign="bottom" width="216"><b>FREE CASH FLOWS, </b><br />
<br />
<b>USD m</b></td> <td valign="bottom" width="75"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="144"><b>TOTAL*</b></td> <td valign="bottom" width="72"><b>1Q11</b></td> <td valign="bottom" width="75"><b>1Q10</b></td> <td valign="bottom" width="80"><b>2010</b></td> <td valign="bottom" width="80"><b>2009</b></td> <td valign="bottom" width="80"><b>2008</b></td> <td valign="bottom" width="80"><b>2007</b></td> </tr>
<tr> <td valign="bottom" width="144">Operating cash flow</td> <td valign="bottom" width="72">6,139</td> <td valign="bottom" width="75">4,433</td> <td valign="bottom" width="80">18,345</td> <td valign="bottom" width="80">13,146</td> <td valign="bottom" width="80">9,003</td> <td valign="bottom" width="80">10,084</td> </tr>
<tr> <td valign="bottom" width="144">Capital expenditure</td> <td valign="bottom" width="72">-2,885</td> <td valign="bottom" width="75">-1,960</td> <td valign="bottom" width="80">-9,285</td> <td valign="bottom" width="80">-9,129</td> <td valign="bottom" width="80">-10,355</td> <td valign="bottom" width="80">-7,158</td> </tr>
<tr> <td valign="bottom" width="144">Free cash flow</td> <td valign="bottom" width="72">3,254</td> <td valign="bottom" width="75">2,472</td> <td valign="bottom" width="80">9,061</td> <td valign="bottom" width="80">4,017</td> <td valign="bottom" width="80">-1,352</td> <td valign="bottom" width="80">2,925</td> </tr>
<tr> <td valign="bottom" width="144"></td> <td valign="bottom" width="72"></td> <td valign="bottom" width="75"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td colspan="3" valign="bottom" width="291"><b>EXCLUDING FREEPORT MCMORAN</b></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="144">Operating cash flow</td> <td valign="bottom" width="72">3,780</td> <td valign="bottom" width="75">2,615</td> <td valign="bottom" width="80">12,108</td> <td valign="bottom" width="80">8,749</td> <td valign="bottom" width="80">5,633</td> <td valign="bottom" width="80">3,859</td> </tr>
<tr> <td valign="bottom" width="144">Capital expenditure</td> <td valign="bottom" width="72">-2,380</td> <td valign="bottom" width="75">-1,731</td> <td valign="bottom" width="80">-7,873</td> <td valign="bottom" width="80">-7,542</td> <td valign="bottom" width="80">-7,647</td> <td valign="bottom" width="80">-5,403</td> </tr>
<tr> <td valign="bottom" width="144">Free cash flow</td> <td valign="bottom" width="72">1,400</td> <td valign="bottom" width="75">883</td> <td valign="bottom" width="80">4,236</td> <td valign="bottom" width="80">1,207</td> <td valign="bottom" width="80">-2,014</td> <td valign="bottom" width="80">-1,545</td> </tr>
<tr> <td colspan="2" valign="bottom" width="216"><i>* For eight gold majors</i></td> </tr>
</tbody> </table>While free cash flow analysis suggests that gold majors have more than a few issues to ponder, the escalating cost of capital expenditure is really rearing its head. Net debt (including cash) for the gold majors peaked at the end of 2008, and has been falling nicely since. Net debt for the eight gold majors was around USD 750m on 31 March 2011, and USD 1.3bn if Freeport-McMoRan is excluded.<br />
<br />
This raises the issue of new, specifically additional or non-replacement, production, given the incessant demand for listed gold stocks to grow. The world's biggest gold projects are very big indeed, relative to the financing required. The budget at Cerro Casale (Barrick 75%, Kinross 25%) is USD 5.2bn; at Donlin Creek (Barrick 50%, New Gold, 50%) USD 4.5bn; at Pascua Lama (Barrick) USD 3.5bn; at Pueblo Viejo (Barrick 60%, Goldcorp 40%) 3.4bn, and at Tasiast (Kinross) USD 2.7bn.<br />
<br />
While not all projects ready for build have progressed to that stage, the outlook may now be characterised more by headwinds. Barrick, for one, has this year announced sharp increases in estimated capital outlays for some of its biggest projects. Seen broadly across the global sector, there are signs of projects being delayed; some may even be put into mothballs.<br />
<table border="0" cellpadding="0" cellspacing="0" style="width: 451px;"><tbody>
<tr> <td colspan="2" valign="bottom" width="218"><b>NET DEBT ANALYSIS</b></td> <td valign="bottom" width="86"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> </tr>
<tr> <td valign="bottom" width="123"><b>TOTAL*</b></td> <td valign="bottom" width="95"><b>1Q11</b></td> <td valign="bottom" width="86"><b>1Q10</b></td> <td valign="bottom" width="65"><b>2010</b></td> <td valign="bottom" width="65"><b>2009</b></td> <td valign="bottom" width="65"><b>2008</b></td> <td valign="bottom" width="65"><b>2007</b></td> </tr>
<tr> <td valign="bottom" width="123">Cash</td> <td valign="bottom" width="95">16,579</td> <td valign="bottom" width="86">11,868</td> <td valign="bottom" width="65">14,347</td> <td valign="bottom" width="65">10,386</td> <td valign="bottom" width="65">3,975</td> <td valign="bottom" width="65">6,789</td> </tr>
<tr> <td valign="bottom" width="123">Debt</td> <td valign="bottom" width="95">-17,329</td> <td valign="bottom" width="86">-18,452</td> <td valign="bottom" width="65">-18,515</td> <td valign="bottom" width="65">-20,301</td> <td valign="bottom" width="65">-17,468</td> <td valign="bottom" width="65">-16,114</td> </tr>
<tr> <td valign="bottom" width="123">Net debt</td> <td valign="bottom" width="95">-750</td> <td valign="bottom" width="86">-6,584</td> <td valign="bottom" width="65">-4,168</td> <td valign="bottom" width="65">-9,916</td> <td valign="bottom" width="65">-13,493</td> <td valign="bottom" width="65">-9,325</td> </tr>
<tr> <td valign="bottom" width="123"></td> <td valign="bottom" width="95"></td> <td valign="bottom" width="86"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> </tr>
<tr> <td colspan="3" valign="bottom" width="305"><b>EXCLUDING FREEPORT MCMORAN</b></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> <td valign="bottom" width="65"></td> </tr>
<tr> <td valign="bottom" width="123">Cash</td> <td valign="bottom" width="95">12,489</td> <td valign="bottom" width="86">8,826</td> <td valign="bottom" width="65">10,609</td> <td valign="bottom" width="65">7,730</td> <td valign="bottom" width="65">3,103</td> <td valign="bottom" width="65">5,163</td> </tr>
<tr> <td valign="bottom" width="123">Debt</td> <td valign="bottom" width="95">-13,745</td> <td valign="bottom" width="86">-13,667</td> <td valign="bottom" width="65">-13,760</td> <td valign="bottom" width="65">-13,955</td> <td valign="bottom" width="65">-10,117</td> <td valign="bottom" width="65">-8,903</td> </tr>
<tr> <td valign="bottom" width="123">Net debt</td> <td valign="bottom" width="95">-1,256</td> <td valign="bottom" width="86">-4,841</td> <td valign="bottom" width="65">-3,151</td> <td valign="bottom" width="65">-6,226</td> <td valign="bottom" width="65">-7,014</td> <td valign="bottom" width="65">-3,740</td> </tr>
<tr> <td colspan="2" valign="bottom" width="218"><i>* For eight gold majors</i></td> </tr>
</tbody> </table>Current trendlines suggest that gold companies may well again be more extensively examining taps available for external funding, viz., increased debt and, of course, rights issues. For the generalist investor, if this is indeed the case, it could be surprising, given years of headlines that have emphasised the multi year bull market in dollar gold bullion. Among the broad materials market, price trends for gold have been very well accompanied by other commodities. After all, gold mines must be run on more than just positive sentiment.<br />
<table border="0" cellpadding="0" cellspacing="0" style="width: 438px;"><tbody>
<tr> <td colspan="2" valign="bottom" width="228"><b>FREE CASH FLOWS, USD m</b></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.barrick.com/" target="_blank>Barrick</a></td>
<td width=" valign="bottom"><b>1Q11</b></a></td> <td valign="bottom" width="63"><b>1Q10</b></td> <td valign="bottom" width="80"><b>2010</b></td> <td valign="bottom" width="80"><b>2009</b></td> <td valign="bottom" width="80"><b>2008</b></td> <td valign="bottom" width="80"><b>2007</b></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">1,435</td> <td valign="bottom" width="63">1,130</td> <td valign="bottom" width="80">4,783</td> <td valign="bottom" width="80">2,899</td> <td valign="bottom" width="80">2,254</td> <td valign="bottom" width="80">1,732</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-1,071</td> <td valign="bottom" width="63">-709</td> <td valign="bottom" width="80">-3,323</td> <td valign="bottom" width="80">-2,358</td> <td valign="bottom" width="80">-1,776</td> <td valign="bottom" width="80">-1,046</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">364</td> <td valign="bottom" width="63">421</td> <td valign="bottom" width="80">1,460</td> <td valign="bottom" width="80">541</td> <td valign="bottom" width="80">478</td> <td valign="bottom" width="80">686</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.goldcorp.com/" target="_blank>Goldcorp</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">586</td> <td valign="bottom" width="63">282</td> <td valign="bottom" width="80">1,787</td> <td valign="bottom" width="80">1,270</td> <td valign="bottom" width="80">866</td> <td valign="bottom" width="80">651</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-352</td> <td valign="bottom" width="63">-298</td> <td valign="bottom" width="80">-1,228</td> <td valign="bottom" width="80">-1,349</td> <td valign="bottom" width="80">-1,372</td> <td valign="bottom" width="80">-871</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">234</td> <td valign="bottom" width="63">-16</td> <td valign="bottom" width="80">559</td> <td valign="bottom" width="80">-78</td> <td valign="bottom" width="80">-506</td> <td valign="bottom" width="80">-220</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.newmont.com/" target="_blank>Newmont</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">989</td> <td valign="bottom" width="63">715</td> <td valign="bottom" width="80">3,167</td> <td valign="bottom" width="80">2,947</td> <td valign="bottom" width="80">1,293</td> <td valign="bottom" width="80">663</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-402</td> <td valign="bottom" width="63">-309</td> <td valign="bottom" width="80">-1,402</td> <td valign="bottom" width="80">-1,769</td> <td valign="bottom" width="80">-1,870</td> <td valign="bottom" width="80">-1,672</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">587</td> <td valign="bottom" width="63">406</td> <td valign="bottom" width="80">1,765</td> <td valign="bottom" width="80">1,178</td> <td valign="bottom" width="80">-577</td> <td valign="bottom" width="80">-1,009</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.harmony.co.za/" target="_blank>Harmony</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">35</td> <td valign="bottom" width="63">43</td> <td valign="bottom" width="80">306</td> <td valign="bottom" width="80">204</td> <td valign="bottom" width="80">421</td> <td valign="bottom" width="80">-17</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-98</td> <td valign="bottom" width="63">-131</td> <td valign="bottom" width="80">-262</td> <td valign="bottom" width="80">-429</td> <td valign="bottom" width="80">-509</td> <td valign="bottom" width="80">-457</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">-63</td> <td valign="bottom" width="63">-88</td> <td valign="bottom" width="80">44</td> <td valign="bottom" width="80">-225</td> <td valign="bottom" width="80">-88</td> <td valign="bottom" width="80">-474</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.agnico-eagle.com/" target="_blank>Agnico-Eagle</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">171</td> <td valign="bottom" width="63">74</td> <td valign="bottom" width="80">483</td> <td valign="bottom" width="80">115</td> <td valign="bottom" width="80">118</td> <td valign="bottom" width="80">246</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-97</td> <td valign="bottom" width="63">-113</td> <td valign="bottom" width="80">-512</td> <td valign="bottom" width="80">-657</td> <td valign="bottom" width="80">-909</td> <td valign="bottom" width="80">-524</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">74</td> <td valign="bottom" width="63">-38</td> <td valign="bottom" width="80">-28</td> <td valign="bottom" width="80">-542</td> <td valign="bottom" width="80">-791</td> <td valign="bottom" width="80">-278</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.kinross.com/" target="_blank>Kinross</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">335</td> <td valign="bottom" width="63">229</td> <td valign="bottom" width="80">968</td> <td valign="bottom" width="80">786</td> <td valign="bottom" width="80">444</td> <td valign="bottom" width="80">341</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-256</td> <td valign="bottom" width="63">-94</td> <td valign="bottom" width="80">-564</td> <td valign="bottom" width="80">-481</td> <td valign="bottom" width="80">-715</td> <td valign="bottom" width="80">-601</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">79</td> <td valign="bottom" width="63">135</td> <td valign="bottom" width="80">405</td> <td valign="bottom" width="80">304</td> <td valign="bottom" width="80">-271</td> <td valign="bottom" width="80">-260</td> </tr>
<tr> <td valign="bottom" width="164"><a 64="" href="http://www.yamana.com/" target="_blank>Yamana</a></td>
<td width=" valign="bottom"></a></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">229</td> <td valign="bottom" width="63">141</td> <td valign="bottom" width="80">613</td> <td valign="bottom" width="80">528</td> <td valign="bottom" width="80">237</td> <td valign="bottom" width="80">243</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-105</td> <td valign="bottom" width="63">-78</td> <td valign="bottom" width="80">-582</td> <td valign="bottom" width="80">-499</td> <td valign="bottom" width="80">-497</td> <td valign="bottom" width="80">-233</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">124</td> <td valign="bottom" width="63">64</td> <td valign="bottom" width="80">31</td> <td valign="bottom" width="80">29</td> <td valign="bottom" width="80">-259</td> <td valign="bottom" width="80">10</td> </tr>
<tr> <td valign="bottom" width="164"><a href="http://www.fcx.com/" target="_blank">Freeport-McMoRan</a></td> <td valign="bottom" width="64"></td> <td valign="bottom" width="63"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> <td valign="bottom" width="80"></td> </tr>
<tr> <td valign="bottom" width="164">Operating cash flow</td> <td valign="bottom" width="64">2,359</td> <td valign="bottom" width="63">1,818</td> <td valign="bottom" width="80">6,237</td> <td valign="bottom" width="80">4,397</td> <td valign="bottom" width="80">3,370</td> <td valign="bottom" width="80">6,225</td> </tr>
<tr> <td valign="bottom" width="164">Capital expenditure</td> <td valign="bottom" width="64">-505</td> <td valign="bottom" width="63">-229</td> <td valign="bottom" width="80">-1,412</td> <td valign="bottom" width="80">-1,587</td> <td valign="bottom" width="80">-2,708</td> <td valign="bottom" width="80">-1,755</td> </tr>
<tr> <td valign="bottom" width="164">Free cash flow</td> <td valign="bottom" width="64">1,854</td> <td valign="bottom" width="63">1,589</td> <td valign="bottom" width="80">4,825</td> <td valign="bottom" width="80">2,810</td> <td valign="bottom" width="80">662</td> <td valign="bottom" width="80">4,470</td> </tr>
</tbody> </table><br />
<a href="http://miningspot.com/" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-41116259029892520282011-05-06T22:17:00.000-07:002011-05-07T11:50:16.574-07:00Investors lined up to buy shares GlencoreSwiss commodity trader Glencore GLEN.UL has lined up buyers for all of the shares in its planned $11 billion mega-float only a day into the sale process, two sources close to the deal said.<br />
<span class="fullpost"> <br />
Bucking a recent trend for struggling European listings, which have seen investors wait until very late in the typically two-week bookbuild to place orders, Glencore has already received demand for all the shares it is offering, including a 10 percent overallotment option, the sources told Reuters.<br />
<br />
"We had a good response on day one; there is a lot of pent-up demand," one of the sources said on Thursday.<br />
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The sources said it was too soon to say where in the indicated 480-580 pence per share range the much-anticipated offering would be priced on May 18.<br />
<br />
That range, announced on Wednesday, values the company at 36.5 billion pounds ($60 billion) at the mid-point.<br />
<br />
But a steep selloff in commodities over the past week, which accelerated into a near record slump on Thursday, may encourage Glencore to price the offering toward the lower end in order to retain buyer interest.<br />
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The 19-commodity Reuters-Jefferies CRB index .CRB wiped out more than two-thirds of its gains so far this year, shedding 5 percent on the day, its fifth biggest fall ever. Brent crude oil dived a record $12 at one point.<br />
<br />
"The books are covered on the full deal size, including the greenshoe," said one of the sources. "Given the amount of interest we have seen in the transaction, we thought we would be covered pretty early but I think it just reflects ... that the price range was the right price range."<br />
<br />
Demand for Glencore shares will also have been boosted by the fact it is due to be fast-tracked into the blue-chip FTSE 100 .FTSE index at the end of its first day of trading.<br />
<br />
FIREPOWER<br />
<br />
The London and Hong Kong listing, in which Glencore is looking to raise around $7.9 billion from new shares and $2.1 billion from existing shares, will boost its firepower for deals amid a boom in commodity prices. But it will also push it into the public eye after 37 years as a discreet private company.<br />
<br />
Glencore's estimate of its future market capitalization puts the company just above the mid-point of a wide $45 billion-$73 billion value implied in its intention-to-float last month. The mid-point of analyst research was around $60 billion, though that excludes proceeds from the offering.<br />
<br />
Before the start of bookbuilding on Wednesday, Glencore struck agreements with cornerstone investors who will collectively buy around 31 percent of the total offer, one of the largest cornerstone books to date.<br />
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The largest investor, Abu Dhabi's IPIC Aabar, which has already committed $850 million to the listing, also plans to invest an additional $150 million in the offering.<br />
<br />
The investors that Glencore is now courting are only being offered a small slice of the company.<br />
<br />
Cornerstones aside, if the IPO prices at its mid-point and without a greenshoe, new shareholders would own just 11.3 percent. And if all the owners of Glencore's convertible bond exercise their right to swap their bonds for stock, that figure falls to 10.7 percent, Reuters calculations show.<br />
<br />
Glencore's listing, which could be London's largest ever, will make several top directors paper billionaires, with 54-year-old Chief Executive Ivan Glasenberg set to be worth almost $10 billion.<br />
<br />
Citigroup (C.N), Credit Suisse (CSGN.VX) and Morgan Stanley (MS.N) are the joint global coordinators for the offer, joined by another 20 banks in lower ranking syndicate roles.<br />
<br />
Glencore was not available for comment.<br />
<br />
($1 = 0.6052 pound)<br />
<br />
<a href="http://www.reuters.com" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-1783865564874944852011-05-06T21:03:00.000-07:002011-05-07T11:12:49.452-07:00Reporting free cash flow systems from GoldcorpSeveral rating systems on the market with different parameters adopted by gold companies that will make it easier to make comparisons between companies.<br />
<span class="fullpost"> <br />
Barrick, the world's biggest gold miner by output and market value (capitalisation), formally introduced the reporting of "free cash flow" into its key statistics as of the release of its fourth quarter, and full year, 2010 results. Now Goldcorp, which boasts the second-biggest market valuation (capitalisation) of any gold-focused stock, has introduced the measure, in its first quarter 2011 numbers.<br />
<br />
Far from being a fad, this is one of the most useful moves by gold miners for a long time. Free cash flow cuts through marketing spin, whether from gold or matchstick makers. Its computation is easy; as Barrick puts it, "we deducted capital expenditures from adjusted operating cash flow to arrive at free cash flow". While the ongoing harmonization of accounting around the world under IFRS makes sense (US entities are starting to migrate from GAAP), income statements are arguably less useful than ever.<br />
<br />
This may be the irony of a case that's trying to please too many people for much, if not most, of the time. Cash flow, which is sacrosanct, has always been largely immune from manipulation, either by honest and well-intended standard setters, or by bent and twisted company bosses.<br />
<br />
AngloGold Ashanti also publishes free cash flow, but does not feature the measure. Another Johannesburg-based global Tier I gold miner, Gold Fields, publishes detailed numbers for what it describes as notional cash expenditure, (NCE). This it defines as operating costs (including general and administration) plus capital expenditure, which includes brownfields exploration.<br />
<br />
NCE per ounce, says Gold Fields, "influences how much free cash flow is available in order to pay taxation, interest, greenfields exploration and dividends".<br />
<br />
Reportage of free cash flow remains a rarity. Beyond the gold subsector, Alcoa, one of the doyens of global mining, believing since 1888 that it has been "inventing the future", adopted free cash flow reporting from second-quarter 2010. Alcoa says its management believes that free cash flow is a measure "meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures due to the fact that these expenditures are considered necessary to maintain and expand Alcoa's asset base and are expected to generate future cash flows from operations".<br />
<br />
For gold miners, free cash flow has additional significance. For years, many gold miners, and attendant investors and speculators, have obsessed over "cash costs per ounce", a measure heavily promoted by certain gold diggers, and one that has become increasingly misleading. The measure ignores capital expenditure, which is by definition omitted from income statements, but inevitably swallows significant cash sums (both for stay-in-business and new projects). As such, cash costs per ounce can be heavily understated, when seen at the group level.<br />
<br />
Second, gold companies that have strayed into producing other metals have often fallen to the temptation of using revenues derived from such metals as a credit to mining costs. Another impressive technique is to report production of "gold equivalent ounces", much along the lines of medieval alchemists, who claimed an ability to convert base metals to gold. Again, cash costs per ounce of gold tend to be understated.<br />
<br />
"Free cash flow" cuts through all the nonsense. Barrick explains that: "Free cash flow is a measure that management believes to be a useful indicator of the company's ability to operate without reliance on additional borrowing or usage of existing cash". The measure seems to be more relevant than ever, given the worrying escalation of cost estimates for building new mines.<br />
<br />
A low free cash flow number is not by itself a concern; it may be pressed down by a period of heavy capital expenditure which, in theory at least, will translate into enhanced shareholder returns in due course. And like many static numbers that present highly dynamic situations, free cash flows are most useful when seen over a period, preferably years.<br />
<table border="0" cellpadding="0" cellspacing="0" style="width: 632px;"><tbody>
<tr> <td valign="bottom" width="133"><a href="http://www.goldcorp.com/" target="blank">Goldcorp</a></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> </tr>
<tr> <td valign="bottom" width="133">USD m</td> <td valign="bottom" width="62"><b>1Q11</b></td> <td valign="bottom" width="62"><b>1Q10</b></td> <td valign="bottom" width="62"><b>2010</b></td> <td valign="bottom" width="62"><b>2009</b></td> <td valign="bottom" width="62"><b>2008</b></td> <td valign="bottom" width="62"><b>2007</b></td> <td valign="bottom" width="62"><b>2006</b></td> <td valign="bottom" width="62"><b>2005</b></td> </tr>
<tr> <td valign="bottom" width="133">Operating cash flow</td> <td valign="bottom" width="62">586.0</td> <td valign="bottom" width="62">282.0</td> <td valign="bottom" width="62">1,787.3</td> <td valign="bottom" width="62">1,270.2</td> <td valign="bottom" width="62">866.0</td> <td valign="bottom" width="62">651.0</td> <td valign="bottom" width="62">763.7</td> <td valign="bottom" width="62">465.8</td> </tr>
<tr> <td valign="bottom" width="133">Capital expenditure</td> <td valign="bottom" width="62">-352.0</td> <td valign="bottom" width="62">-298.0</td> <td valign="bottom" width="62">-1,228.3</td> <td valign="bottom" width="62">-1,348.5</td> <td valign="bottom" width="62">-1,372.0</td> <td valign="bottom" width="62">-871.0</td> <td valign="bottom" width="62">-472.2</td> <td valign="bottom" width="62">-277.5</td> </tr>
<tr> <td valign="bottom" width="133"><b>Free cash flow</b></td> <td valign="bottom" width="62">234.0</td> <td valign="bottom" width="62">-16.0</td> <td valign="bottom" width="62">559.0</td> <td valign="bottom" width="62">-78.3</td> <td valign="bottom" width="62">-506.0</td> <td valign="bottom" width="62">-220.0</td> <td valign="bottom" width="62">291.5</td> <td valign="bottom" width="62">188.3</td> </tr>
<tr> <td valign="bottom" width="133"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> </tr>
<tr> <td valign="bottom" width="133">Equity raised</td> <td valign="bottom" width="62">11.0</td> <td valign="bottom" width="62">6.0</td> <td valign="bottom" width="62">95.8</td> <td valign="bottom" width="62">79.1</td> <td valign="bottom" width="62">104.0</td> <td valign="bottom" width="62">70.0</td> <td valign="bottom" width="62">527.5</td> <td valign="bottom" width="62">44.0</td> </tr>
<tr> <td valign="bottom" width="133"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> </tr>
<tr> <td valign="bottom" width="133">Cash on hand</td> <td valign="bottom" width="62">1,280.0</td> <td valign="bottom" width="62">497.2</td> <td valign="bottom" width="62">556.2</td> <td valign="bottom" width="62">874.6</td> <td valign="bottom" width="62">262.0</td> <td valign="bottom" width="62">511.0</td> <td valign="bottom" width="62">526.3</td> <td valign="bottom" width="62">562.2</td> </tr>
<tr> <td valign="bottom" width="133">Debt*</td> <td valign="bottom" width="62">-705.0</td> <td valign="bottom" width="62">-732.6</td> <td valign="bottom" width="62">-747.1</td> <td valign="bottom" width="62">-735.7</td> <td valign="bottom" width="62">-5.3</td> <td valign="bottom" width="62">-1,065.0</td> <td valign="bottom" width="62">-925.0</td> <td valign="bottom" width="62"></td> </tr>
<tr> <td valign="bottom" width="133">Net cash/(debt)</td> <td valign="bottom" width="62">575.0</td> <td valign="bottom" width="62">-235.4</td> <td valign="bottom" width="62">-190.9</td> <td valign="bottom" width="62">138.9</td> <td valign="bottom" width="62">256.7</td> <td valign="bottom" width="62">-554.0</td> <td valign="bottom" width="62">-398.7</td> <td valign="bottom" width="62">562.2</td> </tr>
<tr> <td valign="bottom" width="133"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> <td valign="bottom" width="62"></td> </tr>
<tr> <td valign="bottom" width="133">Dividends</td> <td valign="bottom" width="62">-75.0</td> <td valign="bottom" width="62">-33.0</td> <td valign="bottom" width="62">-154.4</td> <td valign="bottom" width="62">-131.7</td> <td valign="bottom" width="62">-129.0</td> <td valign="bottom" width="62">-127.0</td> <td valign="bottom" width="62">-79.1</td> <td valign="bottom" width="62">-155.0</td> </tr>
<tr> <td colspan="2" valign="bottom" width="195"><i>* Including convertibles</i></td> </tr>
</tbody> </table><br />
<a href="http://miningspot.com/" target="blank">Source</a><br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0tag:blogger.com,1999:blog-7800050914340809005.post-28744813479437395872011-05-05T22:21:00.000-07:002011-05-07T10:40:28.740-07:00Platinum & Palladium Survey 2011 - GFMSGFMS, in its recently-published "Platinum & Palladium Survey 2011", is forecasting that platinum will sustain a gross surplus in 2011 of a similar magnitude to that of 2010. Mine production is expected to increase modestly this year, and while GFMS describes the situation in South Africa as "challenging", including risks surrounding this year's wage negotiations, the prospect of a repetition of the major disruptions of 2007 and 2008 is relatively low. The prospect of relatively buoyant prices also underpins increased supply from recycling and GFMS doubts that fabrication demand this year and keep pace with supply, let alone exceed it.<br />
<span class="fullpost"> <br />
Platinum's underlying fundamentals in 2010 are described as "distinctly lacklustre" and, as above-ground stocks increased for the sixth successive year, the momentum in platinum prices was arguably almost entirely a function of investor activity. GFMS identifies 550,000 ounces of ETF investment in 2010 as well as 76,000 ounces of retail investment (although this latter is taken above the line in the supply-demand balance), but even after this investment activity the market was left in a substantial residual surplus, suggesting that non-investment inventory has grown by over a million ounces in the past ten years. This increase is the equivalent of over two months' fabrication demand and gives the lie to suggestions that the platinum market is light on inventory.<br />
<br />
GFMS argues that the central planks of the case in favour of the precious metals sector are still intact and although the PGMs are primarily industrial metals, they have been benefiting from the factors bolstering gold investment. Indeed the case is made that investor sentiment in platinum has become increasingly influenced by the broader investment climate, and investor attitudes to gold in particular, given that one of platinum's drivers, the risk of supply disruptions and/or the economics of mine production has been broadly absent in the past two years, while the market has also been in surplus. <br />
<br />
Palladium's price increases, by contrast, have stemmed from a better set of underlying fundamentals, both existing and prospective, with a resultant higher percentage increase in price than platinum over the past two years, and a larger absolute gain in 2010.<br />
<br />
The Survey includes its usual in-depth analysis of all the aspects of the metals' markets and their fundamentals; there follows one interesting highlight in the shape of Chinese jewellery.<br />
<br />
Chinese jewellery has been one of the key stories of the platinum market over the past decade. After reaching almost 1.7M ounces in 2002, Chinese demand for platinum jewellery fell to 835,000 ounces in 2006, before starting a recovery. In 2009 it was close to the 2002 record at 1.6M ounces, but fell back to 1.2M ounces last year, or 62% of world jewellery demand and 18% of world fabrication demand. This 26% fall, accompanied by a small decline in Europe, while there were marginal increases in North America, meant that, with the exception of the petroleum sector, jewellery was the only end-use where demand contracted in 2010. The increase in North American demand came largely from a recovery at the luxury end of the market, rather than an overall lift.<br />
<br />
The Chinese market is price-sensitive and high prices accounted for a good part of last year's fall in the local jewellery sector, but GFMS also points out that the trade held high jewellery stocks at the start of 2010 and so there was little demand for any re-stocking, especially given the high price. (In fact there was little industrial re-stocking anywhere in the platinum using industries last year). The Group does underline the fact, however, that Chinese demand in 2009 was exceptionally high and that Chinese jewellery demand was, in 2010, the second-highest since 2004. Furthermore in metal value terms, demand was roughly level with that of 2009 and given that a good part of 2009 demand came from the trade's re-stocking, actual consumer expenditure was higher in 2010 than in 2009. GFMS produces an in-depth study of the sector and notes, inter alia, that after a rapid expansion in jewellery manufacture capacity towards the end of the past decade, retailers have had to cut margins in order to retain sales in the face of weakening consumer demand; one of the by-products of this has been a switch among manufacturers from PGM to gold and descries this shift to gold as "quite dramatic" in 2010.<br />
<br />
Although prices are expected to remain high and volatile in 2011, GFMS believes that robust economic growth and a return to normalisation of inventory replenishment by the trade will result in some modest growth in Chinese platinum jewellery offtake in 2011.<br />
<br />
GFMS is suggesting that the strength of the investment environment for the precious metals will again overpower platinum's unprepossessing fundamentals this year and that, despite the likelihood of a further significant gross surplus, prices will remain elevated. A high of $1,925 is suggested, most likely coinciding with a gold move through $1,600; while the downside is constrained to $1,675, a level that GFMS expects would be likely to attract considerable support from the jewellery market tin China, as well as renewed investment inflows.<br />
<br />
<a href="http://www.mineweb.com" target="blank">Source</a><br />
<br />
</span>jimhttp://www.blogger.com/profile/02535732082289477611noreply@blogger.com0