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Gold and Silver

Barrick Gold Corp is exploring selling part or all of one of its flagship mines in Peru, sources say (Financial Post/Reuters – March 17, 2017)

http://business.financialpost.com/

TORONTO — Barrick Gold Corp, the world’s biggest gold producer, is exploring options for its Lagunas Norte mine in Peru, including the sale of part or all of the asset, three people with knowledge of the matter told Reuters.

Barrick, which is working with Toronto Dominion Bank , may prefer to hold 50 percent of Lagunas Norte, but it was unclear if the company wanted to keep control of the open-pit mine as operator, the people added.

The mine could be worth about $1.4 billion, according to industry experts, based on about two times the net asset value ascribed to high-quality gold mines. A Credit Suisse analyst put the mine’s NAV at $711 million.

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Chile’s Supreme Court casts shadow over Barrick’s plans to restart Pascua-Lama – by Cecilia Jamasmie  (Mining.com – March 15, 2017)

http://www.mining.com/

Plans by Barrick Gold (TSX, NYSE:ABX) to revive its Pascua Lama gold, silver and copper project straddling the border between Chile and Argentina may once again be postponed after Chile’s Supreme Court revoked this week a temporary closure permit granted by the country’s mining regulator Sernageomin in 2015.

Such decision sought to relax certain requirements for Barrick to obtain a new environmental licence for the project, which the top court qualified as an irresponsible measure.

“It authorizes the temporary closure of Pascua-Lama mining operations, without having the necessary measures in place to ensure the physical and chemical stability of the water sources affected by the project,” the judge said according to local paper Diario Financiero (in Spanish). “[Sernageomin also failed to previously determine] the extent of the damage caused by the project through its innumerable environmental violations,” it added.

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Solving the Secret Behind the Chinese Gold Market – by Valentin Schmid (Epoch Times – March 13, 2017)

http://www.theepochtimes.com/

Expert estimates total holdings at 19,500 metric tons

The world is full of golden rules. There is one for every field—ethics, communication, fashion. But there is only one that counts: the golden rule of money, “Whoever has the gold makes the rules.” China, it seems, wants to make the rules in the international monetary system, which is why it has been acquiring vast amounts of gold through both private and official channels.

Because of the obscure nature of the Chinese gold market and the reluctance of Chinese officials to show their hand, nobody has been able to accurately calculate how much gold the Chinese have acquired since 2000, when they began amassing it.

Enter Koos Jansen, an analyst with Singapore bullion dealer BullionStar. He has studied the Chinese gold market for years and recently came up with an estimate of total Chinese gold holdings: 19,500 metric tons, or 21,495 U.S. tons, at the end of January 2017.

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Tanzania export ban threatens merger of Barrick subsidiary, Endeavour Mining – by Geoffrey York (Globe and Mail – March 15, 2017)

http://www.theglobeandmail.com/

JOHANNESBURG – A Tanzanian export ban has cast a shadow of doubt over a potential $4-billion (U.S.) merger between a Barrick Gold Corp. subsidiary and Toronto-listed Endeavour Mining Corp.

Toronto-based Barrick has been hunting for a buyer for its African subsidiary, Acacia Mining. The possible Endeavour deal could reduce its majority stake in Acacia to a minority holding, but the deal might now be delayed or scuttled by Tanzania’s unexpected move to freeze the export of gold and copper ore. Acacia and Endeavour had confirmed their “preliminary discussions” in January. A merger would create an African mining giant, with mines in five African countries.

But on March 3, the Tanzanian government announced the export ban. “It is expected that all the companies and individuals who were exporting concentrates and mineral ores to foreign countries for beneficiation (processing, smelting or refining) will immediately stop and start doing such activities within the country,” the announcement said.

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Eastern Canada attracting the most mining exploration dollars: S&P report – by Nelson Bennett (Business Vancouver – March 14, 2017)

https://www.biv.com/

British Columbia can still brag about how beautiful it is, but in terms of drawing investment in mineral exploration, it may no longer be as attractive as it once was. Recent reports offer the mining and exploration sectors some optimism that a four-year-long bear market has ended, although projections are that exploration spending in 2017 will be flat.

Canada has been leading the way in exploration spending, accounting for 14% of the global budget, according to S&P Global’s recent Worldwide Mining Exploration Trends report. But much of that new spending appears to be going to Ontario, Quebec and mining’s new darling – Saskatchewan. B.C. appears to have fallen out of favour with those holding the exploration purse strings.

Of the investment in exploration in Canada during 2016, 41% was in Ontario and Quebec, with gold exploration accounting for 50%. That is telling, because B.C., not Ontario, is the province with the largest significant gold deposits, according to an SNL Metals & Mining report last year.

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Ontario’s Hemlo gold mine could live longer – by Carl Clutchey (Thunder Bay Chronicle-Journal – March 12, 2017)

http://www.chroniclejournal.com/

Barrick Gold’s flagship Hemlo operation near Marathon could operate for nearly another 10 years if ongoing exploration and analysis at the site bears fruit, the company says. “If the study results are positive, the life of the mine could be extended to 2026, pending a positive investment decision,” Barrick spokesman Andy Lloyd said in an email on Friday.

News of the studies confirm what many locals have believed for the past year or so – that Hemlo still has a lot of life left if the price of gold remains above US $1,000 per ounce.

Hemlo, which consists of open-pit and underground operations at the 30-year-old Williams mine, is slated to run at least until 2021. Though the news sounds good, Lloyd said Barrick can’t yet say for sure that Hemlo will operate until 2026. “It’s important to stress that we are in the study phase, and we need to await the outcome of that work before we can make decisions on future development,” he said.

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Tahoe Resources reports strong gold production – by Len Gillis (Timmins Daily Press – March 11, 2017)

http://www.timminspress.com/

Tahoe Resources Inc., which has significant gold properties in Timmins, said Friday it has enjoyed one of its strongest gold production performances, thanks in part to the newly acquired gold operations in Timmins.

Tahoe is the gold and silver mining company that took over Lake Shore Gold operations in Timmins nearly one year ago, at the end of March 2016. Although earnings were down for Q4, the company reported strong earnings and dividends for the past year.

In the latest financial statement released this week, it was revealed that probable mineral reserves at the Bell Creek and the Timmins West mines have both been cut back to new, lower numbers.

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Gold miners must invest in emerging markets for future – Randgold – by Susan Taylor(Reuters – March 8, 2017)

http://uk.reuters.com/

TORONTO – The biggest risk facing the world’s top gold producers is their reluctance to hunt for big new discoveries in emerging markets, with most sticking to so called safe jurisdictions, said the head of Randgold Resources Ltd (RRS.L) on Wednesday.

The industry has since 2000 been mining gold at a faster rate than it finds new reserves and must intensify exploration and development in emerging markets to address supply problems, said Rangold Chief Executive Mark Bristow.

“What I’m preaching to the industry is the big guys have to go back to the emerging markets and invest long-term,” he said, following an investor presentation in Toronto. “It’s got to go beyond the comfort zone of the depleted and mature mining destinations of the past.”

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Sprott launches $3.1-billion hostile takeover of rival bullion fund – by Andrew Willis (Globe and Mail – March 9, 2017)

http://www.theglobeandmail.com/

Money manager Sprott Inc. launched a hostile $3.1-billion (U.S.) takeover offer Wednesday for Central Fund of Canada Ltd. (CFCL), the latest battle in Sprott’s two-year campaign to unite rival gold and silver bullion funds.

Toronto-based Sprott asked an Alberta court to allow all shareholders in Calgary-based CFCL to vote on a plan that will see their holdings exchanged for units in a new company, Sprott Physical Gold and Silver Trust. If successful, the takeover would make Sprott a leading bullion fund manager, adding $3.1-billion in CFCL’s portfolio to the $9.3-billion (Canadian) in assets under management at Sprott.

Sprott executive vice-president John Ciampaglia said in an interview the swap will unlock $304-million in value by eliminating the consistent discount to net asset value on CFCL shares, a discount that was at 9 per cent when the Toronto Stock Exchange closed on Tuesday. Units in Sprott’s bullion funds consistently trade at or above their net asset value.

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Small miners seen driving deal-making, repeating past mistakes – by Susan Taylor (Reuters – March 7, 2017)

http://www.reuters.com/

TORONTO, MARCH 7 – Bankers and stock markets are signaling an upcoming wave of mergers and acquisitions among small and mid-sized miners, but financiers worry that companies have not learned from costly mistakes made in the last commodity boom.

In a “recycling of assets,” smaller miners bulked up in recent years as the world’s biggest operators sold a string of assets to repair debt-loaded balance sheets and ride out anemic prices.

“They’re not going to sit still,” said TD Securities deputy chair of investment banking, Rick McCreary, at a Toronto mining conference on Tuesday. “You’re going to see consolidation in the mid-tier and junior space to create platforms for growth going forward.”

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Randgold’s Secret for Congo Mining: Fly People In, Gold Bars Out – by Thomas Wilson (Bloomberg News – March 6, 2017)

https://www.bloomberg.com/

Randgold Resources Ltd. had to haul heavy equipment more than 1,000 miles to build the roads and hydropower plants needed to construct its Kibali gold mine, the biggest in Democratic Republic of Congo.

The sprawling facility in a remote corner of a country the size of Western Europe is a high-tech operation. In one tunnel deep underground, a $1.3 million, 68-metric-ton remote-controlled digger heaves ore out of a cavernous blast hole. The ventilation system hums as 50-ton loads are slowly humped along the 3-kilometer (2-mile) track back to the surface.

The best-performing gold miner of the past decade, Randgold has built its success on getting complicated projects like Kibali into production on time and within budget. It’s the third major mine the company has brought on stream in five years, and it has indeed been a gold mine: It accounts for about a fifth of the company’s production, which tripled between 2010 and 2015 as revenue doubled to more than $1 billion.

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PDAC 2017 kicks off with mining investment seminars – by Frank Giorno (Sudbury Northern Life – March 6, 2017)

https://www.sudbury.com/

The 85th Prospectors and Developers Association of Canada convention, one of the largest mining shows in the world, with annual participants in the 25,000 to 30,000 range, officially kicks off the evening of Sunday March 5, with a reception for the army of media covering the event at the Royal York Hotel.

Jim Carr, the Canadian Minister of Natural Resources will be the featured speaker at the media reception. However, unofficially things got started on Friday with a mining investment conference at the Trump Toronto Hotel.

The investment conference known as the Red Cloud featured presentations from many mining exploration companies seeking and investors and investors looking for promising mining developments to build a fortune on.

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Three Ways to Value Gold. Three Conclusions. – by Mark Hulbert (Wall Street Journal – March 5, 2017)

https://www.wsj.com/

Where is the price of gold headed? Well, consider this: One closely followed statistical model concludes that bullion is 46% overvalued, while another says that gold is 35% undervalued. Which is closer to the truth? It’s impossible to say.

Gold poses more difficulty than almost any other financial asset when it comes to determining fair value. The reason that there can be such a divergence of forecasts, according to Campbell Harvey, a finance professor at Duke University’s Fuqua School of Business: “Gold is poorly understood. There are many forces driving the price of gold, and the importance of those forces changes through time…. This is very hard to model.”

Prof. Harvey says that when it comes to valuing a company, “we can look at the fundamentals, the sales, the margins, new investments, debt and dividends, and build a bottom-up valuation.” Or when looking at a country, he says, “we can do a similar exercise looking at GDP growth, indebtedness, consumer behavior, and get a sense of the value of sovereign debt or stock markets.”

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Gold price correction sinks mining stocks – by Frik Els (Mining.com – March 2, 2017)

http://www.mining.com/

In heavy volumes gold suffered its worst trading day of 2017 on Thursday with the metal coming under pressure from a rise in the US dollar to 2-month highs and a looming interest rate hike in the US.

Gold for delivery in April, the most active contract on the Comex market in New York with over 24m ounces traded by early afternoon, slumped to a low of $1,231.90, down 1.5% from yesterday’s close.

Gold’s negative momentum saw gold stocks selling off heavily on the day with the Market Vectors Gold Miners ETF (NYSEARCA:GDX), holding stock in the world’s top gold miners, dipping 4%, while the Philadelphia Gold & Silver Index (INDEXNASDAQ:XAU) fell at a similar pace, nearly wiping out is year-to-date gains.

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Gold Miners Running to Stand Still After Cuts, Franco CEO Says – by Danielle Bochove (Bloomberg News – March 1, 2017)

https://www.bloomberg.com/

The world’s gold miners will be running on the spot for years to come as a surge in gold prices prompts them to secure new production from less profitable projects, according to the largest mine streaming and royalty company. “In my mind, the industry is ex-growth,” said David Harquail, chief executive officer of Franco-Nevada Corp.

After a downturn that squeezed capital investments, most gold producers have no choice but to invest in new projects as existing mines are depleted, Harquail said Wednesday in an interview. They’ll be faced with options that are, cumulatively, unlikely to boost global gold production or lower the sector’s overall costs.

“None of those projects are really great,” Harquail said at the BMO Capital Markets mining conference in Florida. “They would have been built by now if they were.”

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