UN agency to study organized crime’s role in illegal gold mining – by Dorothy Kosich (Mineweb.com – August 26, 2014)

http://www.mineweb.com/

“These criminals are stealing the minerals of the country”, says Capt. Paul Ramaloko of the South African police force investigative unit, Hawks.

RENO (MINEWEB) – The United Nations Interregional Crime and Justice Research Institute (UNICRI) is reportedly launching a global study in September examining the role organized crime allegedly plays in the production and distribution of precious metals such as gold, according to the Wall Street Journal.

Although Mineweb could not find a reference to the new study on the UNICRI website, the organization’s magazine, Freedom From Fear, has an article on illicit trafficking in precious metals in its latest issue.

The agency claims that illicit trafficking of precious metals has become the focus of organized criminal groups “in producing countries such as South Africa, Africa, Russia, the USA, South America and China”.

“Unfortunately, law enforcement in general has not recognized the emerging pattern of this global crime yielding high returns on the black market that funds other types of organized crime and terrorism and has thus not accorded it the same priority as they have other series crimes,” said F3 magazine in an article by South African Peter H. Bishop.

Read more

Donlin gold mine brings hope of jobs — and fear of destruction – by Lisa Demer (Alaska Dispatch News – August 23, 2014)

http://www.adn.com/

DONLIN GOLD WORK CAMP — On a remote ridge in the big, open space between Bethel and Anchorage, where the land and minerals are owned by Alaska Native corporations, developers want to cut deep into the earth to extract microscopic bits of gold.

The Donlin Gold project is moving quietly forward. Backers are seeking key government permissions and trying to secure the trust of local residents.

Developers say the mine’s design will be the safest, most stable possible. A wealth of good jobs would open up in the cash-starved Western Alaska region if Donlin is developed, project sponsors say.

Still, the nature of large-scale gold mining incites anxiety and doubt among people who depend on the land and water as their sources of food.

The mine site is 10 miles from the Kuskokwim River near a salmon-producing stream, Crooked Creek. The project would disturb rock and soils laden with arsenic, mercury and other heavy metals; use cyanide in the production of the gold; bring barges loaded with diesel and other supplies upriver daily in ice-free months; and create a 2-mile-long, 1-mile-wide open pit where the hilltop used to be.

Read more

Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

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.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.”

Read more

U.S. Mining Winning The Costs Race – by Tim Treadgold (Forbes Magazine – August 13, 2014)

http://www.forbes.com/

Mining booms are nearly always driven by rising commodity prices but what’s happening in the U.S. today indicates that falling costs are the driving force behind a revitalized interest in all forms of resources, from oil and gas to gold.

Activist investors, sometimes criticized for being too aggressive, have spotted the value gap developing between international mining and oil operations and those in the country winning the low-cost race, the U.S.

Cliffs Natural Resources CLF -3.04% and Apache APA -0.67% Corporation have been targeted by activist funds demanding the sale of high-cost, low-profit, assets in Australia, with Cliffs under pressure to sell an iron ore mine in Western Australia, and Apache planning to sell a 13% stake in a big Australian liquefied natural gas project being developed by Chevron CVX -0.5% Corporation.

Both U.S.-based companies will probably re-invest the capital generated in U.S. projects in much the same way some industrial companies are shifting their international operations back to the U.S. because it has become the global go-to destination, in some cases surpassing the long-term low-cost leaders, China and Germany.

Gold Cheapest To Mine In The Americas

In the commodity world, the value-gap is best illustrated by that universal material gold, with the cost profile of one company demonstrating why the U.S. is a preferred destination for new mine developments.

Read more

Gold miners pressure suppliers for price cuts amid sector slump – by Rachelle Younglai (Globe and Mail – August 14, 2014)

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.

Goldcorp Inc. is leading an industry push to clamp down on suppliers, pressuring them to slash prices so the mining company can keep costs down amid the sector’s slump.

Miners are under siege after bullion lost about a third of its value over the past couple years. Big gold producers such as Barrick Gold Corp. and Kinross Gold Corp. overhauled operations and wrote down assets to mitigate the downturn. Smaller miners such as Iamgold Corp. have cut dividends to preserve cash. Now mining companies are pushing suppliers to slash prices on equipment, goods and services after years of escalating costs.

Goldcorp, a major producer and favourite among analysts and investors, is leaning on vendors to help reach the company’s goal of cutting costs by 17 per cent.

“We ask that you perform an immediate review of your costs and propose adjustments to your current pricing to meet our target,” the company said in a letter viewed by The Globe and Mail.

The pressure is bearing fruit. By the end of June, Goldcorp had realized $74-million in reductions from squeezing its supply chain – an area it has identified as “one source of significant cost savings.”

Read more

Gold royalty firms Franco Nevada, Sandstorm Gold team up for first time as business evolves – by Peter Koven (National Post – August 13, 2014)

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

Two mining royalty firms have teamed up in a financing deal for the first time, a signal their business is evolving and more cooperation is likely across this sector in the future.

Franco-Nevada Corp. and Sandstorm Gold Ltd. announced this week that they will jointly provide at least US$100-million to True Gold Mining Inc. for the company’s Karma gold project in Burkina Faso. The transaction has two key elements: a fixed repayment in gold, and a long-term streaming agreement in which the royalty companies will acquire a portion of the gold from Karma.

It is a small deal, but insiders said it provides a glimpse of how this business is rapidly changing as royalty deals start to resemble more conventional project financing.

The major royalty firms (Franco, Silver Wheaton Corp., Royal Gold Inc. and Sandstorm) have become an increasingly crucial source of capital for emerging mining companies over the last several years. They have stepped up and done a large number of transactions as the banks became reluctant to deal with any single-asset miners.

Traditionally, the royalty companies provided capital to miners in exchange for a passive royalty on future production. Over the last decade, they also did more active streaming deals, in which they acquired gold and silver from the projects they invested in.

Read more

Welcome to Guatemala: gold mine protester beaten and burnt alive – by David Hill (The Guardian – August 12, 2014)

http://www.theguardian.com/uk

Indigenous people speak out against the Marlin mine run by Canadian company Goldcorp

“They took him and poured gasoline all over him. Then they struck a match and lit him.”

Doña A – not her real name, for security reasons – was standing up, arms crossed, lightly leaning against a ladder, and speaking in her language, Maya Mam, while a friend, a relation by marriage, translated into Spanish. There were 20 or so Mams in the room – mostly women, some children, one elderly man – and we were in an adobe-brick house in the highlands of far western Guatemala, not far from the border with Mexico, and just around the corner from an open sky and underground gold- and silver-mine called Marlin.

The Mams had gathered there – at some personal risk – to speak about the mine and how it impacts them. “Her husband was killed by workers of the company,” someone had said suddenly, meaning Doña A, “but she doesn’t speak much Spanish”, although it was quickly suggested she could talk in Mam and a friend would translate for her.

“We heard the screams and the yellings but we didn’t know what was happening,” she continued. Her husband’s two brothers were with him: they had to run away or would be burnt alive too.

“He didn’t want to die,” she said. “It was the rainy season. There was a little bit of water which he tried to jump into and the fire sort of went away.”

Read more

One wedding ring’s journey from makeshift mine to fiancée’s finger – by Marco Chown Oved (Toronto Star – August 9, 2014)

 

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.

A Star reporter follows gold from a makeshift mine shaft on the edge of the Sahara desert all the way to his wedding ceremony, showing how dangerous practices continue in West Africa.

When I walk down the aisle this month, as is tradition, I’ll slide a gold band around my bride’s finger and then she’ll put one on mine.

But we didn’t pick out prefabricated rings at a local jewelry shop. Instead, they’re made from gold hammered out of the rock by barefoot miners in northern Burkina Faso, melted down in a shack in western Ghana and fashioned by a local jeweller in Ottawa.

Read more

Hambro’s Dream of Russian Gold Runs Into Mountain of Debt – by Thomas Biesheuvel (Bloomberg News – August 8, 2014)

http://www.bloomberg.com/

Peter Hambro dared to go where few others would, in search of gold in 1990s Russia. Investors who followed him reaped tenfold returns over eight years through 2010.

A repeat of that rich success now looks far away as Petropavlovsk Plc (POG), the company Hambro co-founded, confronts a mountain of debt.

The company was on the cusp of a place among the blue-ribbon names on London’s stock exchange until it borrowed more than $1 billion to expand production at its mines in far-eastern Siberia, six time zones from Moscow. The strategy unraveled when a dozen years of gains for bullion prices ended abruptly in 2013.

“The worst position you ever want to be in a falling commodity environment is having a half-built mine,” said Cailey Barker, an analyst at Numis Securities Ltd. in London. “It’s very hard to turn the Titanic around. It may be difficult to come back from here.”

In 2010, Petropavlovsk’s market value exceeded $3 billion and it was mentioned as a future member of the benchmark FTSE 100 Index. That’s shrunk to $111 million, dwarfed by about $819 million owed to banks that the company says now effectively control cash flow from its mines.

Read more

Door still open for mega-merger between Newmont Mining and Barrick Gold – by Peter Ker (The Age-Business Day – August 7, 2014)

 http://www.theage.com.au/business

A $US35 billion ($37.6 billion) merger of global goldmining companies Newmont Mining and Barrick Gold may not be dead, after the chief executive of Newmont told an audience in Melbourne that he would not “close the door” on a future deal.
The two North American gold companies conducted merger talks earlier this year but the deal fell over in April amid reports they had disagreed over how to handle their respective Australian assets.

While neither company is listed in Australia, a merged entity would wholly own the nation’s biggest goldmine, Boddington, and the nation’s second-biggest goldmine, Kalgoorlie’s Super Pit, as well as other smaller assets.
When asked if he had shut the door on the proposed deal, Mr Goldberg indicated a revival of the deal was not impossible.

“I wouldn’t shut the door on it – we are focusing on running our business as effectively and efficiently as we can going forward and we will see what happens,” he said.

“Clearly we overlap and we work together, [the Super Pit] is an example, and we have a joint venture in Nevada and I wouldn’t close the door on it at all.” But he said he had not heard from Barrick since April.

During a presentation to the Melbourne Mining Club on Thursday, Mr Goldberg said the deal had failed because there were not enough “redundancies” between the two companies.

Read more

Gold Industry Takeovers Climb to Highest in Three Years – by David Stringer (Bloomberg News – August 4, 2014)

http://www.bloomberg.com/

There’s no sign of a let up in gold industry takeovers as a surge in acquisitions by producers, led by Agnico Eagle Mines Ltd. (AEM) and Yamana Gold Inc. (YRI), has pushed deals to a three-year high.

Mid-sized and small producers are seizing on assets discarded by larger competitors as they trim portfolios to focus on their most profitable operations after gold last year notched up the biggest annual drop in more than three decades.

“The hunters have feasted for the last six months,” said Raleigh Finlayson, managing director of Saracen Mineral Holdings Ltd. (SAR), which in May completed a deal to buy OAO GMK Norilsk Nickel’s mothballed Thunderbox operations in Australia. “There are projects still out there and the field might have opened up for those that are left, so that’s an opportunity for some.”

Finlayson is among mining executives gathering this week in Kalgoorlie, the Western Australian town 595 kilometers (370 miles) east of Perth, for the annual Diggers & Dealers conference through Aug. 6. Former Bank of England governor Mervyn King addressed the forum ahead of presentations by executives from Fortescue Metals Group Ltd., AngloGold Ashanti Ltd. and Gold Fields Ltd. in coming days.

Deals worth about $14 billion have been announced or completed so far this year, according to data compiled by Bloomberg, the highest annual total in three years and led by Agnico Eagle and Yamana’s $3.44 billion acquisition of Osisko Mining Corp., the industry’s biggest deal since 2010.

Read more

Gold miners report weaker-than-expected earnings; Barrick names two new directors – by Peter Koven (National Post – July 30, 2014)

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

Canada’s gold miners maintain they are operating well and continuing to find ways to cut costs. However, their second quarter earnings still fell below expectations.

Barrick Gold Corp., Kinross Gold Corp. and Agnico-Eagle Mines Ltd. all had positive things to report as they released Q2 results on Wednesday evening. Notably, Barrick lowered its cost guidance for the year, while Agnico raised its production guidance. But the stocks dropped in after-market trading as each result was slightly below consensus analyst estimates.

Barrick’s earnings were highlighted by the surprise announcement that it is naming two new directors, one of whom is a longtime associate of chairman John Thornton.

Michael Evans was a Canadian gold medalist in rowing in 1984, and was formerly vice chairman at Goldman Sachs. He worked closely with Mr. Thornton in their Goldman days, and his appointment will likely fuel further speculation that Mr. Thornton is consolidating his power at Barrick . Some investors already believe that is the case following the gold miner’s move to replace chief executive Jamie Sokalsky with two co-presidents earlier this month.

The other new director is Brian Greenspun, a prominent publishing and telecommunications tycoon in Nevada, which remains Barrick’s most important mining jurisdiction.

Read more

Quebec lawyers optimistic about revived Plan Nord – by Julius Melnitzer (National Post – July 30, 2014)

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

Quebec’s mining lawyers are cautiously optimistic about the impact of the Liberal government’s revival of the Plan Nord mining project.

“What lies ahead for Quebec’s mining industry is better than what the future looked like during the last two years when there was no clear signal from the PQ that the mining industry was welcome here, ” said Jean-Philippe Buteau in Norton Rose Fulbright Canada LLP’s Quebec City office. “That’s not to say we’re just a few weeks or months from being back to the good old days, but now there’s a majority government that has both hands on the steering wheel.”

Indeed, the stars seem to be lining up. On July 8, Stornoway Diamond Corp. closed a $946-million comprehensive funding package for the construction of the company’s Renard Diamond Project in north-central Quebec.

“The government assisted Stornoway in building the access road to the project and was instrumental in obtaining financing,” said Michel Brunet in Dentons Canada LLP’s Montreal office. Significant support from the new Liberal government, then, was instrumental in the deal’s culmination.

“Stornoway is a great signal that Quebec will stand beside the mining companies if their business plan makes good sense and they are willing to play by the rules,” Mr. Buteau said.

About one month earlier, Agnico Eagle Mines Ltd. and Yamana Gold Inc. completed their acquisition of Osisko Mining Corp. The new owners will take over operation of the Canadian Malarctic gold mine located in the Abitibi-Témiscamingue region about 550 kilometres northwest of Montreal.

Read more

A year after brutal losses, Canada’s gold miners expected to see return to stable ground – by Peter Koven (National Post – July 30, 2014)

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

One year ago, the gold mining sector reported its most appalling quarterly earnings ever. A steep decline in the price of gold caught the industry off-guard in the spring of 2013, prompting some miners to report record writedowns and net losses in the second quarter. Barrick Gold Corp. led the way with an absurd quarterly loss of US$8.56-billion, the second biggest in Canadian history.

The senior gold miners are now set to report their latest Q2 results over the next two days. But thanks in part to the measures they took a year ago, their earnings should be a lot less noisy and a lot less troubled.

“I’m not looking for any big dislocations in this quarter,” Mackie Research Capital Barry Allan said. “Not a lot of ‘Oh my God, where did that come from?’”

When gold plunged 26% in April and May of 2013, the whole industry shifted focus. Instead of chasing production growth (as they had for many years while prices were rising), miners turned their attention to cost reductions and capital spending cuts.

At the time, the cost reduction announcements were overshadowed by some of the more ridiculous writedowns. But those moves are bearing fruit today.

The senior gold miners reported significant year-over-year reductions in all-in sustaining costs in the first quarter of 2014.

Read more

Scotiabank named in silver price-fixing lawsuit – by Madhavi Acharya-Tom Yew (Toronto Star – July 29, 2014)

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.

Bank of Nova Scotia, Deutsche Bank and HSBC named in suit.

A U.S. investor has accused the Bank of Nova Scotia, Deutsche Bank and HSBC of engaging in an ongoing conspiracy to fix the price of silver.

Investor J. Scott Nicholson alleges that thousands of small investors around the world have been put at a disadvantage by the secretive way in which prices for the physical metal, as well as futures contracts, are set by the financial institutions.

The three firms have knowingly engaged in “an unlawful combination, agreement, and conspiracy” to “intentionally manipulate” the price of physical silver and silver derivatives, including futures contracts, according to the lawsuit.

“We intend to vigorously defend ourselves against this suit,” a spokesperson for Toronto-based Bank of Nova Scotia said in an email.

None of the allegations have been tested in court. The lawsuit, filed in the Southern District of New York on Friday, seeks to establish a class action that could have thousands of members, the court filing states.

Read more