Gold and Silver – Page 259 – Republic of Mining

Goldcorp prepared to walk away from Osisko bid, CEO says – by Rachelle Younglai and Sophie Cousineau (Globe and Mail – February 26, 2014)

February 26, 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.’s chief executive says he is prepared to kill his hostile bid for Canadian rival Osisko Mining Corp. if it becomes too complicated or expensive.

“This is not the only opportunity in the world,” Goldcorp CEO Chuck Jeannes said in an interview Wednesday. “It may be the case that if this becomes too complicated that we go look at something else. That would be a very bad day for Osisko shareholders. They would probably see their stock drop by 20 per cent overnight,” he said.

Mr. Jeannes would not provide detail on his company’s other options. The unsolicited cash and stock bid is currently on hold because Osisko sued Goldcorp for allegedly breaching a confidentiality agreement between the two Canadian miners. A Quebec court will make a decision on the lawsuit next week, which could further delay Goldcorp’s bid.

For more than five years, Mr. Jeannes has tried to acquire Osisko for its massive Canadian Malartic mine in Quebec. The mine would add an additional 10 million ounces of gold reserves to Goldcorp’s portfolio of mines and projects in the Americas and Mexico.

Gold market breaches ‘covered up’ – by Andy Verity (BBC Newsnight – February 25, 2014)

February 26, 2014

http://www.bbc.com/news/

Dubai’s biggest gold refiner committed serious breaches of the rules designed to stop gold mined in conflict zones from entering the global supply chain, a whistleblower has revealed.

Amjad Rihan led an Ernst & Young team that audited Kaloti and found it was failing to carry out the proper checks. But after he told the Dubai regulator, it changed its audit procedures. He said that allowed details of the most serious findings to be covered up, with Ernst & Young turning a blind eye.

The regulator, Ernst & Young and Kaloti all say they acted properly. Mr Rihan told BBC Newsnight: “The risk of conflict gold entering Dubai and entering the global supply chain is extremely high.”

The audit team, which visited Kaloti last year, alerted the Dubai Multi Commodities Centre (DMCC) and also urged superiors at Ernst & Young to notify other regulators and the gold-buying public.

In May the DMCC’s guidance required the audit team’s initial findings to be made public but by November that requirement had disappeared.

Prospectors Say Drought Has Created California’s 2nd Gold Rush – by Art Barron (CBS Los Angeles – February 24, 2014) February 24, 2014

February 26, 2014

http://losangeles.cbslocal.com/

LYTLE CREEK (CBSLA.com) — Is 2014 a repeat of the great Gold Rush of 1849?

Prospectors in Southern California are heading to the hills, saying the severe drought has exposed gold that has never been touched by human hands. As water levels continue to drop more nooks and crannies are easier for these gold hunters to access.

“A lot of time you would just see a husband. Now you’re seeing the whole family out,” said Kevin Hoagland, of the Gold Prospectors Association of America.

Prospectors at Lytle Creek, 60 miles from Los Angeles in San Bernardino County, pan for gold, using metal detectors and sluice boxes. CBS2/KCAL9 reporter Art Barron witnessed veteran prospector Jack Barber pull up large pieces of the precious metal.

NEWS RELEASE: Revealed: Why Dubai’s first conflict gold audit never saw the light of day

February 26, 2014

http://www.globalwitness.org/

Download the Global Witness report City of Gold here: http://www.globalwitness.org/sites/default/files/library/dubai_gold_layout_lr.pdf

25th February 2014 – According to a former partner at Ernst & Young, the global accountancy firm turned a blind eye when a report of major audit failures at Dubai’s biggest gold refinery went unpublished. A Global Witness report released today, City of Gold, considers the implications.

Documents seen by Global Witness suggest that the local metals regulator, the Dubai Multi Commodities Centre (DMCC), changed its audit guidelines after becoming aware of negative findings in Ernst & Young’s report, with the effect that damaging results were not released.

Dubai is a key market – trading more than 20% of the world’s gold, worth $70 billion in 2012 – and Global Witness research indicates that it’s the main destination for Congolese conflict gold.

Mechanized mining could revive output in South Africa – by Geoffrey York (Globe and Mail – February 24, 2014)

February 24, 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.

WESTONARIA, SOUTH AFRICA — With a great clanking and an occasional dripping of water, the dimly lit elevator cage gathers speed and then plunges 2.4 kilometres below the earth’s surface in an ear-popping four minutes.

It’s one of the biggest and fastest vertical drops in the world, and it opens up an era of mechanized mining that could be the saviour of South Africa’s struggling gold and platinum sectors.

South Deep, once the property of Barrick Gold Corp. and now owned by Gold Fields Ltd., has been the future of South African mining for a long time – perhaps too long, according to analysts who question its persistent delays.

With more than $4-billion (U.S.) invested in it so far, South Deep boasts a huge reserve of 40 million ounces that could keep it in operation for 60 years or more, with its drills blasting up to three kilometres underground. It has been long viewed as the last great gold mine in South Africa, and potentially one of the lowest-cost producers in the world.

Mining for Gold at Minus 45 Celsius – by Alister MacDonald and John W. Miller (Wall Street Journal – February 23, 2014)

February 24, 2014

http://online.wsj.com/home-page

Meadowbank Project Is One Test of Whether Arctic’s Resources Are Within Reach

MEADOWBANK GOLD MINE, Nunavut—Gold miner Alain Belanger contends with 75 mile an hour winds, winter temperatures so cold they have cracked the steel on his 287-ton excavator and white-out blizzards that can halt mining for days.

This open-pit mine west of Canada’s Hudson Bay has had such steep construction and operating costs—flying workers in and out, stocking a year’s worth of food, employee turnover and battling snow drifts that can reach eight feet—that the project is unlikely to break even over the long haul, Agnico-Eagle Mines Ltd. AEM.T +0.37% executives now concede.

As the world warms, miners dream of unlocking trillions of dollars in diamonds, gold, nickel and other metals in the Arctic, a treeless cap that spans northern parts of Canada, Alaska, Russia and Scandinavian countries. So far, it has proved a quixotic quest for all but a few tenacious miners like Agnico.

“We know there is extreme wealth in the Arctic,” said Agnico’s Chief Executive Sean Boyd in an interview. “The reality, though, is you have to have a lot going for you to get it out the ground.”

COLUMN-Gold bulls hostage to uncertain China, India – by Clyde Russell (Reuters India – February 20, 2014)

February 20, 2014

http://in.reuters.com/

LAUNCESTON, Australia, Feb 20 (Reuters) – Gold bulls have been tempted out of hiding by bullion’s strong start to the year, but the basis for optimism looks unsteady and largely hostage to what happens in China and India.

Spot gold has gained 8.8 percent so far this year to end Feb. 19 at $1,311.32 an ounce, recovering almost a quarter of its 28-percent loss in 2013.

The World Gold Council (WGC), which represents producers, is unsurprisingly upbeat, with Marcus Grubb, the managing director for investment, saying 2014 is going to be “much better” for gold investment and returns will be positive. Notwithstanding that the council’s job is to portray gold in a positive light, it’s worth looking at why it thinks this is the case.

It basically comes down to three factors, ongoing strong demand from China, a recovery in Indian imports as the government relaxes restrictions and an improvement in investment demand, reversing 2013’s huge outflows from exchange-traded funds (ETFs).

China became the world’s top gold consumer last year, overtaking India, with demand rising 32 percent to 1,065.8 tonnes, according to the council’s Gold Demand Trends report on Feb. 18.

Exciting new gold mechanisation achieving more success – AngloGold – by Martin Creamer (MiningWeekly.com – February 19, 2014)

February 20, 2014

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – The demonstrably successful new AngloGold Ashanti gold-mining technology has produced 40 kg of gold from ore with enormously valuable gold grades of more than 200 g of gold for every ton mined.

The South African Technology, as it has been called, has so far mined only in no-go areas, which have been bypassed for conventional mining on the grounds of being excessively hazardous.

Revealing this after presenting a magnificent set of results with every metric excelling with the exception of the lagging gold price, AngloGold Ashanti CEO Srinivasan (Venkat) Venkatakrishnan told Mining Weekly Online that the company was now rolling out the technology on five sites using locally produced raise-boring equipment (also see attached video).

“We continue to invest in the South African technology piece,” he said, describing it as the “single key we have to improve productivity, which is the answer to a number of issues within the South African mining industry”.

‘You can forgive, but you don’t forget’: Goldcorp-Osisko friendly deal unlikely – by Nicolas Van Praet (National Post – February 19, 2014)

February 19, 2014

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

MONTREAL – The relationship between the management of Goldcorp Inc. and Osisko Mining Corp. has become so strained it’s difficult to imagine the two companies ever doing a friendly deal if Goldcorp’s current unsolicited bid fails.

For four years leading to the fall of 2013, the miners held enough on-again, off-again merger talks to develop a certain comfort with each other. A two-year confidentiality agreement under which they most recently shared private information had the sole purpose of evaluating a negotiated takeover.

But things soured after Goldcorp concluded that Osisko was no longer negotiating in good faith. Goldcorp went hostile with a $2.6-billion offer on Jan.14, with Osisko chief executive Sean Roosen getting less than 30 minutes of warning. Osisko countered with a lawsuit that alleges Goldcorp misused confidential information. It is asking the Quebec Superior Court to block the bid.

“Obviously we were not anticipating the hostile takeover given what we understood of the relationship and the effort and time that we were putting into that,” Mr. Roosen said in an interview Tuesday. “And you can forgive, but you don’t forget.”

Australians to dig Gold Fields out of trouble at mechanised mine – by Ed Stoddard (Reuters India – February 19, 2014)

February 19, 2014

http://in.reuters.com/

WESTONARIA, South Africa, Feb 19 (Reuters) – Down under the South African earth, Australian accents are leading a drive to unlock the wealth one of the world’s largest gold reserves.

Gold Fields has brought in a crack Australian engineering team to help overcome one of its most daunting challenges: ramping up production on its mechanised South Deep mine, its last and troublesome South African asset.

“With the improved operating skills that we’ll get, particularly with the Australian team, we think we can make it,” chief executive Nick Holland told journalists and analysts on Tuesday during a visit to the mine just west of Johannesburg.

He was referring to the South Deep target of full production of 700,000 ounces a year, which has been a moving one to the annoyance of investors, shifting from 2014 under previous owners to 2016 and now the end of 2017.

South Deep descends to three kms (almost two miles) and South Africa, with the world’s deepest mines, has over a century of experience when it comes to extracting ore far below the surface with a large, unskilled workforce.

Like it or not, Goldcorp factors into Quebec election – by Sophie Cousineau (Globe and Mail – February 19, 2014)

February 19, 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.

MONTREAL — Goldcorp Inc. had no way of crystal-balling Quebec politics when it launched its unsolicited offer for Osisko Mining Corp. in January. But what is now clear is that its hostile bid will land smack in the middle of the next election campaign.

The Parti Québécois’s minority government will unveil Thursday what is expected to be an electoral budget. Whatever doubts remained about an election call in March were dispelled with the latest Crop/La Presse survey that indicates a majority is within reach for Premier Pauline Marois. You can already hear the campaign buses revving up.

The coincidence is reminiscent of the 2012 elections, when American retailer Lowe’s Cos. Inc. tried to acquire Quebec hardware chain Rona Inc. before withdrawing its proposal in the face of heated opposition that crossed party lines.

Will Osisko become another Rona? And how will the elections affect the battle for the Malartic gold mine, Osisko’s only operation?

Quebeckers are quite attached to the Rona hardware stores that are found in just about every corner of the province. The same cannot be said of Osikso.

Barrick’s $10.4-billion loss caps brutal year for miners – by Rachelle Younglai (Globe and Mail – February 14, 2014)

February 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.

The gold industry’s growth binge is over, and mining companies have sobered up. After a dismal year in which bullion and mining stocks dropped sharply in value, gold companies are slowly regaining their footing and learning to live with the lower precious metal price.

Canadian gold companies, from heavyweights Barrick Gold Corp., Goldcorp Inc. and Kinross Gold Corp. to the smaller Agnico Eagle Mines Ltd., slashed their bullion reserves and collectively recorded $17-billion (U.S.) in impairment charges in 2013.

Barrick chief executive Jamie Sokalsky, who closed the book Thursday on a $10.4-billion net loss for the year, called it the most difficult year in the company’s 30-year old history and said it has gone through a “sea change.” The world’s biggest gold producer epitomized the industry’s mantra of “growth, growth, growth, growth” during the commodity boom. But in the past few months it has overhauled its board, sold expensive mines, put the brakes on a key project and paid down some of its debt while trying to calm shareholders irate with how the company was governed.

NEWS RELEASE: New ‘historic’ gold mine brings dual benefits

February 14, 2014

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Goldcorp’s Porcupine Gold Mines plan to develop an open pit mine on the site of the historic underground Hollinger gold mine brings a series of environmental and economic benefits to Timmins. The company has recently received its final environmental approval for the project.

The plan has been under development since 2006. The aim is to recover gold through an open pit operation from the workings of a historic underground gold mine while simultaneously eliminating legacy environmental concerns and carrying out mine reclamation activities.

The projected workforce of 180 people will open 60 new jobs and the open pit gold operation is estimated to have an eight year mine life. Marc Lauzier, General Manager of Goldcorp’s PGM, which is an Ontario Mining Association member, says the company has three main goals with this development – reclaim the land, return as much land as possible to public use and recover the gold that is in place.

Kinross slashes gold reserves by a massive 33% – by Peter Koven (National Post – February 12, 2014)

February 13, 2014

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

TORONTO – Kinross Gold Corp. has slashed its gold reserves by a staggering 33% as it focuses on mining high-grade ounces in a low-price environment.

The Toronto-based miner surprised investors on Wednesday by stating that its year-end reserves have dropped to 39.7 million ounces, down from 59.6 million at the end of 2012. It is a massive decline, particularly since Kinross used the same gold price in both years (US$1,200 an ounce) to calculate reserves.

Kinross said that part of the drop (6.7 million ounces) was due to the removal of its failed Fruta del Norte project in Ecuador, and part of it was simply depletion from mining. But the other key factor is its internal strategy.

The company wants to stick to mining high-margin ounces. As a result, it decided to calculate reserves using what it calls a “fully-loaded costing methodology” that factors in costs for sustaining capital, waste management and other work. The result is that millions of marginal ounces were dropped out of reserves.

Gold miners to slash reserves as price drop forces revision – by Rachelle Younglai (Globe and Mail – February 10, 2014)

February 10, 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.

After years of costly mistakes, the new chief executives of Barrick Gold Corp. and Kinross Gold Corp. have ushered in an era of austerity in the precious metal sector.

The results of their labour will be on display when Canadian mining companies report fourth-quarter earnings this week. Investors are already expecting gold producers to reduce their bullion reserves, write down more assets and record lower profits.

But the bad news may soon be ending with companies adjusting to the lower gold price. “The worst is over,” said John Ing, president of investment firm Maison Placements Canada Inc. in Toronto. That doesn’t mean the picture will be pretty this quarter.

Barrick CEO Jamie Sokalsky told investors that the company will use a $1,100 (U.S.) price to calculate its unmined gold. That is down sharply from the $1,500 price assumption used to calculate last year’s reserves.