Gold and Silver – Page 224 – Republic of Mining

UPDATE 2-Barrick scraps co-president structure in management shuffle – by Euan Rocha (Reuters U.S. – August 18, 2015)

August 18, 2015

http://www.reuters.com/

Aug 17 (Reuters) – Barrick Gold Corp said on Monday that Jim Gowans, a veteran miner and one of its co-presidents, was retiring and that he would not be replaced, as the miner moves to thin out its ranks and create a leaner operating structure.

In the latest reshuffle, Kelvin Dushnisky, who has served as co-president with Gowans for a year, has been named as president and will continue to report to Executive Chair John Thornton, a former Goldman Sachs executive.

Toronto-based Barrick said Gowans would step down as co-president immediately, but stay on as an adviser to the chairman until he retires at the end of the year.

Analysts said the exit of Gowans, who has four decades of industry experience, leaves a void of first-hand mining know-how in Barrick’s senior ranks.

“The loss of a senior executive with the mining experience of Jim Gowans does reduce the ‘bench strength’ of the overall management team,” noted Barclays analyst Farooq Hamed in a note to clients on Monday.

COLUMN-Chinese gold demand limbers up for bull-bear tussle – by Clyde Russell (Reuters U.S. – August 17, 2015)

August 17, 2015

http://www.reuters.com/article

LAUNCESTON, Australia, Aug 17 (Reuters) – Gold investors are trying to work out whether the yuan’s depreciation and the recent turmoil in Chinese equity markets is good, bad or indifferent for demand for the precious metal in the world’s biggest buyer.

It’s possible to construct plausible-sounding arguments why the recent drama in China’s financial markets could be both bullish and bearish for gold.

At the heart of most of the arguments is a view on how Chinese consumers will respond to the recent developments but it seems this is largely guesswork on the part of analysts, as there are few precedents to serve as a guide to future behaviour.

One big question is whether the yuan’s sudden 3 percent decline against the U.S. dollar last week and the swings in equity valuations are likely to be important drivers of Chinese gold demand, or whether other factors with a lower media profile are at work.

Looking at the yuan depreciation first, and the important thing seems to be that the authorities are signalling the drop last week was a one-off move, not part of any sustained weakening.

Barrick Gold Corp shakes up management structure, drops co-president model- by Peter Koven (National Post – August 17, 2015)

August 17, 2015

The National Post is Canada’s second largest national paper.

Barrick Gold Corp. is scrapping its unusual “co-president” management structure less than a year after it went into effect.

Co-president Kelvin Dushnisky has been appointed Barrick’s sole president, the company said Monday morning. Until now, Dushnisky was sharing the president duties with Jim Gowans. Barrick announced that Gowans will retire at the end of this year, which was a surprise.

A couple of other management appointments were made in conjunction with these moves. Chief of staff Richard Williams has been named chief operating officer and will report directly to Dushnisky. Williams is a very unconventional choice for a COO, as he has a military background rather than a technical mining background. However, he will be assisted by Basie Maree, a mining veteran who was promoted to chief technical officer.

“As we work to accelerate Barrick’s return to the lean, decentralized model that drove the company’s early success, the time is right to put a structure in place that supports this vision,” chairman John Thornton said in a statement.

Northern Dynasty’s Last Stand – by Tommy Humphreys (CEO.ca – August 13, 2015)

August 14, 2015

http://ceo.ca/

Pebble’s new backers bet on EPA compromise and new JV partner for the world’s largest undeveloped copper-gold deposit

Two experienced mining financiers are making a $4.7 million bet that one of the world’s largest and most controversial minerals deposits is about to turn a major corner.

Frank Giustra and Gord Keep’s Cannon Point Resources (CNP.TSXv) is being acquired by Northern Dynasty Minerals (NDM.T) for a touch over its cash value (C$4.7 million). Pro forma, the deal would give Cannon Point about 8% of Northern Dynasty.

Northern Dynasty owns 100% of the Pebble Deposit in Alaska. The project saw over C$750 million of investment over the past decade and contains a jaw-dropping 107 million ounces of gold, 80 billion pounds of copper, 5 billion pounds of molybdenum, and over 500 million ounces of silver* and showed robust economics at $1050 gold and $2.50 copper in a February 2011 PEA.

Pebble is also vehemently opposed by the EPA, which began a process to veto the project in February 2014 and more recently has tried to impose development restrictions.

Moody’s downgrades Barrick credit to lowest investment grade rating – by Rachele Younglai (Globe and Mail – August 13, 2015)

August 13, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Moody’s Investors Service downgraded Barrick Gold Corp.’s credit to the lowest investment grade rating, a blow to the company that is on track to reduce its debt by $3-billion (U.S.) this year.

Barrick is rapidly selling mines to reduce its $13-billion debt load. But Moody’s said Barrick’s debt is still too high given the weak gold price.

“Material organic debt reduction is unlikely and production will start declining in the next several years,” Darren Kirk, Moody’s senior credit officer, said in a statement announcing the downgrade.

Moody’s changed the miner’s outlook to “stable” from “negative” and downgraded Barrick’s debt to one notch above junk status, a risky rating that would increase the company’s borrowing costs.

Gold mine spill shines light on practice of avoiding environmental assessment – by Nelson Bennett (Business Vancouver – August 11, 2015)

August 11, 2015

https://www.biv.com/

Pollution on a remote northern B.C. island only discovered after whistleblower reported improper practices

A small gold mine on an uninhabited island on B.C.’s north coast has some big problems. Just seven months after its Tel mine was declared to be in commercial production, Banks Island Gold Ltd. (TSX-V:BOZ) has been forced to shut it down, putting 100 people out of work and leaving investors with shares that fell more than 70% in value over the course of one week.

There is some question whether the mine can reopen, as the company had been struggling with a $14 million deficit before the mine was shut down and says it will need to seek “immediate financing” in order to restart.

The mine was ordered shut down for unauthorized discharges of effluent from its mine site that resulted from flooding. An inspection by the Ministry of Energy and Mines also found a number of permit violations, including the processing of ore from an unpermitted mine site.

The company is facing potential legal action from the Gitxaala Nation, which says the Banks Island Gold mine is an example of project splitting and scoping –

Major north American gold majors are under the pump – by Lawrie Williams (Mineweb.com – August 10, 2015)

August 10, 2015

http://www.mineweb.com/

While the major North American gold mining companies are successfully cutting costs to keep their heads above water, it’s far from all plain sailing.

LONDON – With the quarterly and half-yearly reporting season well under way we can report that most of the top North American gold miners, which have all now reported their 2nd quarter figures, have been continuing to make progress in cutting costs. Here we are looking at the gold miners projected to produce in excess of 1 million ounces (circa. 31 tonnes) of gold, or gold equivalent, in the current year.

All, bar Kinross Gold, have come in with All-In Sustaining Costs (AISC) guidance figures for the year at comfortably under the $1,000/oz ounce level which leaves them in a relatively strong position in the current weak gold price environment.

Indeed as multi-operational gold producers, they probably have more scope for further cost cutting should prices weaken further, although at the expense of reducing reserve levels in tonnage terms, and more flexibility in making potential closure or divestment decisions concerning marginal or unprofitable operations.

But so saying, while corresponding earnings figures may be better than might have been anticipated given the gold price falls, continuing write-downs are making financials look depressing in terms of the reported bottom line figures.

Whose Sovereignty? Gabriel Resources v. Romania – by Adam Cernea Clark (Huffington Post – August 6, 2015)

August 7, 2015

http://www.huffingtonpost.com/

Adam Cernea Clark is a writer on sustainable development issues and an environmental attorney.

Two weeks ago, a little-known Canadian gold mining company that has developed or operated exactly zero mines over 17 years announced to its investors that it had initiated international arbitration proceedings against the government of Romania for failing to permit what would be the largest open-pit gold and silver mine in Europe.

Claiming this right under Romania’s bilateral investment treaties (BITs) with Canada and the U.K. (the company consists of ten separate entities in half a dozen countries), Gabriel Resources opined that the Romanian government had unlawfully deprived them of their right to develop the project and extract the full value of their investment.

Using some 40 tons per day, Gabriel subsidiary Roşia Montana Gold Corporation’s project would have created a massive pool of cyanide over priceless archaeological gold mining sites dating back to the Roman Empire and possibly earlier. It would have destroyed the village of Roşia Montana and two adjacent villages, as well as four mountains in this remote corner of the Carpathians.

Almost two years ago, the project triggered historic street protests of tens of thousands of people around Romanian cities.

Embattled Barrick selling assets to cut debt, reduce costs – by Lisa Wright (Toronto Star – August 7, 2015)

August 7, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Gold miner cuts dividend and will shave another $2 billion from operations in pursuit of profitability.

Just about everything is for sale or on the chopping block – except for a handful of core mines – as Barrick Gold Corp. fights to stay atop the gold mining industry amid crippling debt and a tanking bullion price that has dragged its stock down to 26-year lows.

“If you have interested parties, be in contact with us please,” company co-president Kelvin Dushnisky said with a slight chuckle when an analyst asked on Thursday’s conference call if the miner’s equipment was up for sale at its now dormant Pascua-Lama site in Chile.

The Toronto-based gold miner said it will now target spending cuts across its operations at $2 billion before the end of 2016 — a move that tacks an extra $1 billion of cuts onto a previously announced target to lower expenses and improve productivity.

Canadian gold mine companies pull back with bullion at 5-year low – by Susan Noakes (CBC News Business – August 06, 2015)

August 6, 2015

http://www.cbc.ca/news/business/

Barrick and Goldcorp cut dividend 60%, Barrick sells assets

With gold selling at a five-year low, Canada’s gold companies are selling off properties and cutting costs in an effort to stay profitable.

Barrick Gold Corp., the world’s largest gold producer, announced Wednesday it would cut its dividend by 60 per cent after reporting a $9-million loss in the second quarter. The dividend falls from five cents a share to two cents a share.

Barrick is racing to pay down debt and has been selling assets — $2.45 billion to date – to reduce costs.

The Toronto-based company said it plans a further $2 billion in cuts by 2016, including possible sale of its U.S. properties in Nevada and Montana.

Nor is Barrick the only gold company to cut its dividend. Goldcorp, which on July 30 reported net earnings of $65 million or 8 cents per share, also cut its dividend by 60 per cent.

Barrick Deepens Cutbacks as Metal Meltdown Erodes Earnings – by Danielle Bochove (Bloomberg News – August 5, 2015)

August 6, 2015

http://www.bloomberg.com/

Barrick Gold Corp., the world’s largest producer of the metal, is intensifying efforts to strengthen its balance sheet as slumping metal prices squeeze margins.

The Toronto-based miner cut dividends, lowered its output forecast and is preparing to sell more U.S. assets as it targets $2 billion expenditures cutbacks by 2016, according to its second-quarter earnings report distributed after the close of trading Wednesday.

Barrick reported adjusted earnings that missed analysts’ estimates as previous measures to trim expenses and streamline operations failed to offset the price slide. Shares rose 1.6 percent at 9:30 a.m. in Toronto.

“We remain focused on improving productivity and driving down costs to ensure we can continue to generate free cash flow in the current gold price environment,” Barrick wrote.

Gold miners are battling to lower costs and debt levels after prices slumped to five-year lows as dollar gains and the prospect of higher U.S. interest rates reduce demand for alternative investments as an inflation hedge.

Lake Shore Gold wins bid for Temex Resources (Timmins Daily Press – August 6, 2015)

August 6, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

It looks like Lake Shore Gold in Timmins is able to expand local operations by taking over Temex Resources, a junior mining company that has been working historic mining properties in the East End of Timmins.

LSG is a mid-level gold producer with all its mining operations in Timmins, sees the Temex takeover as a ways to contribute more gold to the newly rejuvenated LSG Bell Creek milling complex in Porcupine, according to a company news release issued last month.

The new deal is based on terms agreed to in June. Under those terms of proposal, as outlined in an earlier news release, Temex shareholders would receive, for each Temex share, 0.105 of a Lake Shore Gold share, having a value of $0.13 based on the closing price of Lake Shore Gold’s shares on the TSX on July 15, 2015.

The Lake Shore deal was made at the end of June, in the midst of a pending deal Temex had with Oban Mining Corporation. As part of the new deal, Temex is now required to provide a termination payment to Oban of $691,896.

A big fall in gold output will come from mine closures – by Lawrie Williams (Mineweb.com – August 5, 2015)

August 5, 2015

http://www.mineweb.com/

Consultancy Metals Focus forecasts gold output to fall as unprofitable mines are shut.

LONDON – Taking All-in Sustaining Costs (AISC) figures, precious metals consultancy Metals Focus reckons that just short of a quarter of global new mined gold output is running at a loss at an $1100/ounce gold price, and falls below that level will add to this quite sharply.

The consultancy’s global cost curve covers gold mines providing around half the global gold output of 1,650 tonnes. Metals Focus estimates that as much as half of annual new mined production in their survey, i.e. 400 tonnes, will be uneconomic at current prices.

Presumably extrapolating this figure across total global gold output would thereby suggest that as much as 800 tonnes of production could currently be running at a loss.

But the consultancy notes, this doesn’t mean that any of the production will fall away through closures and cutbacks, not until the gold price downturn is more prolonged or more severe. It notes that there may be substantial costs involved in closing an operating mine down, which may mean it is less costly to keep the mine producing at some level – perhaps high grading where this is an option (which may actually increase output).

NEWS RELEASE: Guyana Goldfields Inc. Pours First Gold at its Aurora Gold Mine

August 5, 2015

http://www.guygold.com/s/Home.asp

TORONTO, Aug. 4, 2015 /CNW/ – Guyana Goldfields Inc. (TSX:GUY) (the “Company” or “GGI”) is pleased to announce that first gold production has been achieved on-time and on-budget at its Aurora Gold Mine (the “Project”) in Guyana, South America.

First gold production was attained through the gravity and saprolite production circuits which allowed for earlier gold production (pre-commercial production) through the processing plant. Initial start-up gold was captured by processing the lowest grade ore available and GGI is now progressing towards full saprolite circuit operation and will gradually feed the mill with higher grade material. The commissioning and startup of the hard rock crushing circuit is projected to be completed later in the third calendar quarter of 2015.

The Company expects to produce between 30,000 ounces to 50,000 ounces of gold in 2015, depending on how quickly full ramp-up is achieved, and approximately 120,000 ounces to 140,000 ounces of gold in 2016. GGI expects to issue an updated National Instrument (NI) 43-101 Technical Report Feasibility Study in the first quarter of 2016 for the Project which will reflect an extended open pit mining scenario while deferring the underground production until later in the mine life, as well as, current operating cost parameters, and an updated ore reserve metal price.

Centerra continues talks with Kyrgyzstan despite arrest of former CEO – by Seres Lu and Jeff Gray (Globe and Mail – August 5, 2015)

August 5, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Toronto-based Centerra Gold Inc. says it remains in talks with the government of Kyrgyzstan on the future of the company’s massive Kumtor gold mine in the mountains of the former Soviet republic, despite word that its former chief executive officer has been arrested on corruption allegations.

“We are committed to concluding these discussions,” John Pearson, Centerra’s vice-president of investor relations, said Tuesday, a day after the company disclosed that former president and CEO Leonard Homeniuk was detained in Bulgaria at the request of the Kyrgyzstani government.

Mr. Homeniuk, a Canadian mining executive who spent 16 years at the helm of the company as it developed the mine in Kyrgyzstan, retired in 2008. In a statement released on Monday, the company said he was picked up by Bulgarian authorities while on a family vacation. His photo was on Interpol’s website, saying he was wanted by Kyrgyzstani officials for “involvement in corruption.”

Mr. Homeniuk, 68, is now a director of Polymetal International PLC, a London- and Moscow-listed Russian gold and silver miner with operations in Russia and Kazakhstan. He is also listed as the founder and CEO of a private company, Polygon Gold, involved in Russian mining ventures.