Gold and Silver – Page 239 – Republic of Mining

Kinross Gold Corp puts massive Tasiast project expansion on ice – by Peter Koven (National Post – February 11, 2015)

February 12, 2015

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

TORONTO – Kinross Gold Corp. confirmed Tuesday it will not proceed with the massive Tasiast expansion project in Mauritania as the gold price remains weak and the company tries to preserve its balance sheet.

Chief executive Paul Rollinson described it as a “prudent” move that is in the best interests of shareholders. In an interview, he noted that the construction period at Tasiast is expected to last 35 months, and there is a chance the gold price could drop significantly during that period and leave the company short of capital to finish the job.

Gold needs to be higher for this project to make good sense. According to a technical report filed by Kinross last year, Tasiast has a net present value of just US$500-million at a gold price of US$1,200 an ounce (very close to the current level). That does not provide a great return on a project that is expected to cost US$1.6-billion.

“This is a major capital expansion and I want to be extremely disciplined as we contemplate embarking on that expansion,” Mr. Rollinson said in an interview. He added that he continues to look at ways to improve the project.

But this news closes the book on Tasiast for the time being. The project has simply been a disaster for Kinross. The Toronto-based miner acquired Tasiast in 2010 when it spent US$7.1-billion to buy Red Back Mining Inc.

Gold Miners Are on the Hunt for Assets as Prices Climb – by Jesse Riseborough, Kevin Crowley and Thomas Biesheuvel (Bloomberg News – February 10, 2015)

February 11, 2015

http://www.bloomberg.com/

(Bloomberg) — Gold producers with cash on hand are on the hunt for cheap mining assets as rising prices drive shares higher.

During a 12-year bull run that ended last year, about $30 billion in debt was racked up by companies that mine gold. Those that minimized borrowing then are in the best position now to scoop up mines from rivals with weaker balance sheets, said executives at the Investing in African Mining Indaba conference in South Africa, the biggest such gathering on the continent.

Already, $2.7 billion in deals have been announced or completed this year within the industry, including Monday’s $1.1 billion offer for Rio Alto Mining Ltd. by Tahoe Resources Inc. It’s an early leg-up on the $10.5 billion in deals last year.

“Gold is one of the brighter spots out there in the commodities space today,” said Rajat Kohli, head of metals and mining at Standard Bank Group Ltd., Africa’s largest lender. “I would expect corporate activity to be reasonably pronounced in gold, not just in Africa but globally. We will see a few transactions, definitely.”

The price of gold jumped 8.1 percent last month in the biggest rally since January 2012. Currencies in Europe and Asia are sliding, and as policy makers introduce stimulus packages to battle cooling growth, investors are flocking to the metal.

Tahoe to Buy Rio Alto for $1.09 Billion to Add Peru Gold – by Simon Casey and Liezel Hill (Bloomberg News – February 9, 2015)

February 10, 2015

http://www.bloomberg.com/

(Bloomberg) — Tahoe Resources Inc. agreed to buy Rio Alto Mining Ltd. for about C$1.35 billion ($1.09 billion) to add the La Arena mine in Peru in the gold industry’s biggest takeover in almost 10 months.
The cash-and-stock offer is valued at C$4 a share, or 22 percent more than Vancouver-based Rio Alto’s Feb. 6 closing share price, both companies said Monday in a statement.

Unlike many other precious-metal miners struggling amid recent commodity-price declines, Tahoe has gained financial strength after its Escobal silver mine in Guatemala started commercial production in January. The Reno, Nevada-based company’s cash balance jumped more than eightfold in the first three quarters of 2014. It announced its first dividend payment in November.

The enlarged company will have no net debt and its market capitalization will appeal to a larger group of institutional investors, attract more coverage from analysts and improve share trading liquidity, Tahoe and Rio Alto said.

“The combination would arguably create an intermediate multi-mine producer with low production costs, a strong balance sheet with net cash, and with a genuine growth profile,” said Daniel Earle, a Toronto-based analyst at TD Securities Inc.

Gold mining stocks massacred – by Frik Els (Mining.com – February 6, 2015)

February 9, 2015

http://www.mining.com/

Gold on Friday dropped more than 2% after a stronger than expected jobs report in the US rekindled fears that interest rates in the world’s largest economy may rise sooner than thought.

In afternoon trade on the Comex division of the New York Mercantile Exchange gold for April delivery shed 2.2% or $27.70 to $1,235.00 an ounce after earlier in the day falling to a low of $1,228 an ounce.

Gold’s 2015 gains – the metal is still up 4% or just over $50 since the start of the year – have been ascribed to safe haven buying amid currency turmoil, a slowing global economy and a debt crisis in the Eurozone.

But with the first hike in more than six year likely at the Fed’s June meeting raising the opportunity costs of holding gold because the metal provides no yield, gold traders refocused their attention on fundamental factors.

Higher rates also boost the value of the dollar – already trading at multi-year highs – which usually move in the opposite direction of the gold price. Investors have been worrying over further asset writedowns, a declining production profile and problems at board level.

Gangs Live Underground for Months to Feed Illegal Gold Trade – by Kevin Crowley (Bloomberg News – January 19, 2015)

February 9, 2015

http://www.bloomberg.com/

(Bloomberg) — Hein Westraadt, a security manager at South Africa’s largest gold producer, was finishing up some paperwork when a colleague rushed to his desk with a tip-off.

Thirty-three illegal miners had smuggled themselves into one of Sibanye Gold Ltd.’s biggest mines, and had been stealing ore undetected for three months, while living more than a mile underground.

Westraadt’s discovery is a window into South Africa’s illegal precious-metals trade, worth as much as $1.3 billion a year, spanning poor immigrants, mine employees, metal dealers, makeshift refineries and criminal gangs. The concoction of corruption and poverty that encourages men to mine illegally is spreading the problem from abandoned mines to working ones, threatening the operations of a 120-year-old industry that has produced a third of all the world’s gold.

“It’s a huge problem across South Africa,” said Graham Briggs, chief executive officer of Harmony Gold Mining Co., which shut Kusasalethu, its biggest operation, for two weeks in October after it was invaded by more than 100 alleged illegal miners. “There’s certainly more aggression and it’s more competitive. Any number of illegal miners can be a threat to your organization, especially from a safety perspective.”

Kazakhstan and the Emerging Market Gold Rush – by Paolo Sorbello (The Diplomat- February 4, 2015)

February 5, 2015

http://thediplomat.com/

Kazakhstan produces around 22 tons of gold each year, a figure comparable to neighboring Kyrgyzstan (18 tons), but only a quarter of Uzbekistan’s production (92 tons). Gold is not a major feature of Kazakhstan’s mining industry, which is dominated by chromium, copper, zinc, and uranium, but it is becoming a key asset for the country’s central bank.

All of the gold produced in Kazakhstan for the last two years has been bought out by the central bank, both under the supervision of former chairman Grigori Marchenko and through the orders of his successor, Kairat Kelimbetov. Albert Rau, Kazakhstan’s minister for investments, said that “given the turbulent global economy condition, the National [Central] Bank has been buying out all the fine gold produced.” The reason for this gold rush can be explained by a spiral of financial decisions by central banks across the world.

Gold prices suffered a hit as the U.S. Federal Reserve (Fed) was rumored to increase rates this year for the first time in nearly a decade. Apart from short-term fluctuations, however, the precious metal is still priced at just below $1,300 per ounce. The eurozone instability and the Swiss franc’s decoupling from a single-currency peg have turned gold into a more palatable commodity for investors.

Contextually, China, Russia, Belarus, Malaysia, Iran, Azerbaijan, and Kazakhstan have hoarded gold to diversify their portfolios and avoid excessive competition for the dollar that would only strengthen the greenback against their own currencies. Only countries that are financially stable – or that are trying to recover from shocks, like Russia and other oil-exporters – are in the market for gold. Financially weaker countries, such as Mozambique, Ukraine, and Tajikistan, had to reduce gold reserves to fuel their national economies.

Crashing Ruble Means Russia Has Cheapest Costs for Gold – by Andrey LemeshkoYuliya Fedorinova (Bloomberg News – February 3, 2015)

February 5, 2015

http://www.bloomberg.com/

(Bloomberg) — The ruble is crashing. Oil is at a five-year low, and economic sanctions have slammed the brakes on the economy. It’s a good time to mine gold in Russia.

With gold typically priced in dollars, and labor and other expenses paid in rubles, Russian mining companies led by Polyus Gold International Ltd. are gaining from the weak currency. It doesn’t hurt that the price of gold has climbed about 7 percent this year as slowing world economies spur demand for the metal.

Russia is the biggest producer after China and its mining companies now have the lowest costs in the world, according to BCS Financial Group, a Moscow-based investment company. What’s more, the country’s central bank is buying up gold from domestic companies as efforts to curb the economic crisis decrease its foreign currency reserves.

“This year may become historically best for the Russian gold producers in terms of margins,” said Kirill Chuyko, head of equity research at BCS Financial Group, in a telephone interview. “Despite the double-digit inflation, their costs may decline as much as 25 percent this year.”

Still, the gains may be less pronounced in the future, according to Natalia Orlova, chief economist at Alfa Bank in Moscow. The central bank’s gold reserves may now be adequate, she said, and its purchases may not climb at the same pace as in 2014.

FORD MOTOR COMPANY NEWS RELEASE: WHY BARRICK GOLD CORP. HAS ORDERED 35 ALL-NEW FORD F-150S AFTER SECRETLY TESTING F-150 ALUMINUM CARGO BOXES

February 5, 2015

FEB 2, 2015 | DEARBORN, MICHIGAN

Barrick Gold USA, one of three Ford customers chosen to blindly test two prototype F-150 pickups with experimental aluminum-alloy cargo boxes, has placed an initial order for 35 all-new 2015 F-150 trucks
Barrick testing helped improve the all-new, high-strength, military-grade, aluminum-alloy-bodied F-150 – the toughest, smartest, most capable F-150 ever
Barrick accumulated more than 100,000 miles on its two F-150 test vehicles, putting the trucks through the harshest challenges daily; workers would literally throw heavy pieces of equipment into the cargo bed, including large pumps, motors and specialty tools

After helping Ford torture test prototypes of aluminum pickup truck boxes, Barrick Gold USA is placing an initial order for 35 all-new F-150s – the toughest, smartest, most capable F-150 yet.

UPDATE: World top 10 gold producers – countries and miners – by Lawrence Williams (Mineweb.com – February 3, 2015)

February 4, 2015

http://www.mineweb.com/

The last year has seen some changes in global gold production rankings, both by country and by company.

It is interesting to see how the major producers of gold are faring in the grand scheme of things – both nationally and by company, given the continuing lowish gold prices pertaining over the past two to three years.

While one may sometimes argue with the methodology, and findings, of GFMS’ global gold supply/demand statistics the consultancy’s latest report on gold includes its estimates of the world’s top gold producing nations and companies which are not so controversial and there are some changes in position and outputs which are certainly worth noting.

We last produced a similar listing based on 2012/2013 figures from rival precious metals consultancy, Metals Focus, last May and while some of the GFMS statistics may vary a little from those of Metals Focus they broadly follow the same pattern and the overall figures are comparable – perhaps not too surprising given that Metals Focus was started by ex GFMS analysts and marketers.

Notably here, according to the GFMS estimates, China has continued to see increased gold output and remains comfortably the World No. 1. But the No.2 position is now occupied by Russia, which appears to have leapfrogged over Australia to attain this ranking with 9% output growth last year.

Valcourt says yes to second Nunavut gold mine – by Thomas Rohner (Nunatsiaq News – January 28, 2015)

February 4, 2015

http://www.nunatsiaqonline.ca/

AND minister accepts review board’s recommendations for Meliadine project

Nunavut’s future appears flecked with more gold after the process leading towards a second gold mine in the territory took a big step forward this week.

That’s after the federal government accepted the Nunavut Impact Review Board’s recommendations — submitted in October 2014 and anchored by 127 terms and conditions — to approve the Meliadine gold mine in the territory’s Kivalliq region.

“It is evident that the board met its primary objectives … to protect and promote the existing and future well-being of the residents and communities of Nunavut, to protect the eco-systemic integrity of the Nunavut settlement area and to take into account the well-being of residents of Canada outside of the Nunavut settlement area,” Bernard Valcourt, minister of Aboriginal Affairs and Northern Development, said in a Jan. 27 letter to the review board.

The board issued its own letter Jan. 27, emphasizing the importance of the terms and conditions attached to its recommendations for the proposed project, owned by mining firm Agnico Eagle — which operates Nunavut’s only working gold mine at Meadowbank, about 70 km outside Baker Lake.

Gold positioned for comeback: Goldcorp founder, CEO – by Robert Gibbens (Montreal Gazette – February 2, 2015)

February 3, 2015

http://montrealgazette.com/

Both the founder and the present CEO of Goldcorp Inc., now commissioning the big Éléonore mine in Northern Quebec, predict investors will soon start returning to the unloved gold mining sector.

“In the past two years, as bullion dropped from a record of almost US$2,000 an ounce, gold miners have dumped old management, slashed exploration spending, lowered operating costs and shifted to high-grade ore to focus fully on restoring cash flow,” said Rob McEwen, chairman of McEwen Mining Inc.

“You’ve got a serious gap developing between declining global output and steadily mounting demand from Asia where millions of new middle-class consumers are emerging,” he said in a recent telephone interview. “That gap could last several years.”

McEwen created Goldcorp via a string of mergers in the 1990s and left in 2005 after a disagreement over strategy. Goldcorp is now the world’s largest gold producer by market value.

He then formed McEwen Mining which plans to dig 96,500 ounces of gold and 3.12 million ounces of silver from mines in Mexico and Argentina in 2015 and aims at intermediate status with annual output of one million ounces of gold.

Local history: Ontario’s first gold mine near Madoc – by Susanna McLeod (Kingston Whig-Standard – February 3, 2015)

February 3, 2015

http://www.thewhig.com/

Hiking through scraggly scrub brush, clambering up jagged, rocky hills, and across grassy fields in the mid-1860s, the prospectors scrutinized each area carefully for signs of a soft reddish-orange mineral.

A copper mine would set a lot of people on the road to good fortune; in demand for coins, housewares, bathtubs, shipbuilding, the metal was indispensable in Canada. After months of exploring in the Madoc, Ont., region, about 115 km northwest of Kingston, the miners were at last tracing a potential mineral seam. The prize they found on John Richardson’s farmland wasn’t copper, it was gold.

Digging a shaft 15 feet down, “the seam was six inches wide at the top and was decomposed for six feet,” said prospector Marcus Herbert Powell in the First Report of the Bureau of Mines, 1891. “Then it was solid rock to 15 feet, where it suddenly opened into a cave 12 feet long, six feet wide and six feet high, so that I could stand upright in it.” It was a discovery that he literally fell into in the summer of 1866.

“The hanging wall was quartzite and the foot wall was granite, while the roof was composed of spar, talc and rocks of various kinds, and the floor of iron, talc, quartzite, black mica and other minerals,” Powell described. The gold was interspersed throughout the rocks “in the form of leaves and nuggets, and in the roof it ran through a foot thickness like knife blades.”

Goldcorp, Wabauskang sign agreement – by Staff (Northern Ontario Business – January 30, 2015)

February 2, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Goldcorp and Wabauskang First Nation have signed a collaboration agreement that paves the way for long-term economic benefits for the northwestern Ontario First Nation.

The new agreement, which marks Goldcorp’s sixth First Nation partnership in Canada, provides a framework for strengthened collaboration in the development and operations of Red Lake Gold Mines. A signing ceremony was held Jan. 29 in Wabauskang, located about 100 kilometres south of Red Lake.

Goldcorp now has collaboration agreements in place with all of the First Nations which assert Aboriginal and treaty rights in the vicinity of its active operations in Canada: Red Lake Gold Mines, Musselwhite Mine, Porcupine Gold Mines and Éléonore Mine.

“This new agreement is about so much more than economic benefits,” said Brent Bergeron, Goldcorp’s executive vice-president of corporate affairs and sustainability, in a news release. “It’s about long-term partnership, open dialogue and shared prosperity. It demonstrates our company’s ongoing commitment to develop Northern Ontario’s natural resources in a mutually beneficial and sustainable way, and will bring well-deserved recognition to the people of Wabauskang.”

Commodity prices tumble as gold rallies – Scotiabank – by Dorothy Kosich (Mineweb.com – January 30, 2015)

February 2, 2015

http://www.mineweb.com/

Scotiabank has revised the gold price forecast to an average US$1,250-1,275 for 2015-16.

A safe-haven bid has re-emerged for gold, lifting TSX gold stocks, Scotiabank economist Pat Mohr noted in her latest edition of the Scotiabank Commodity Price Index published Thursday.

“After retreating to quite low levels, silver prices have also firmed up to US$17-18 per ounce, a positive development for the world’s major producers in Mexico (Peñoles, Frisco) and Peru (Buenaventura, Antamina, Volcan, Hochschild and Milpo,” she added.

However, Mohr observed, “The sharp drop in oil prices noticeably sideswiped base metals and other commodities,” as “ongoing jitters over a slowdown in China also pulled down industrial minerals prices.”

In her analysis, Mohr said, “A fight for market share in international oil and iron ore markets as well as general unease over lackluster global economic conditions and an almost ‘deflationary’ environment—particularly in the euro zone and Japan—contributed to widespread softness in commodity prices.”

With the U.S. economy among one of the few major economics expected to have a brighter outlook this year, “the recent upward spike in the U.S. dollar has created headwinds for many dollar-dominated economies and, in some cases, may even be pulling prices down,” she suggested.