Gold and Silver – Page 261 – Republic of Mining

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

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.

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

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.

Investors unclear on Barrick’s future direction amid CEO shakeup – by Rachelle Younglai (Globe and Mail – July 29, 2014)

July 29, 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.

On the eve of the first full meeting of Barrick Gold Corp.’s new board, investors are in the dark about the gold giant’s strategy.

Barrick’s new chairman John Thornton said he wants the miner, the world’s biggest gold producer, to be the “leading gold company” and a “leader” in copper. But what that means is unknown.

“I don’t think they have been clear, and I don’t think they have made up their minds yet,” said Michael Sprung, president of Sprung Investment Management, which has held Barrick shares for about five years.

The miner’s game plan has come under scrutiny after Mr. Thornton got rid of the company’s chief executive role. Instead, the company will have two co-presidents and the company’s chief financial officer will work closely with Mr. Thornton to develop strategy, he said. Barrick CEO Jamie Sokalsky will be leaving in September, just two years into his tenure.

The management shakeup will lead to further changes at Barrick, which is already in flux after a turbulent year. Directors who had served on the board with former chairman and founder Peter Munk since the beginning faced pressure to leave, and merger talks with Colorado-based gold company Newmont Mining Corp. blew up, with each side blaming the other for the collapse.

World’s Best Mining Debt Defies Gold Woe in a Volcano – by David Stringer and Benjamin Purvis (Bllomberg News – July 27, 2014)

July 28, 2014

http://www.bloomberg.com/

Newcrest Mining Ltd. (NCM) bonds are delivering the best returns this year among metal producers even as the gold miner prepares for new writedowns at a floundering asset inside an extinct volcano.

Debt securities issued by Australia’s biggest gold producer returned 24 percent this year through July 25, compared with 15 percent for the world’s largest extractor Barrick Gold Corp. (ABX), according to a Bank of America Merrill Lynch index of dollar notes sold by investment-grade miners. Falling costs have buoyed the company, which last week flagged a charge of as much as A$2.5 billion ($2.4 billion) mainly on its Lihir mine in Papua New Guinea.

While the writedown may raise Newcrest’s gearing by as much as 6 percent, the miner forecasts cash flow will stay positive after production costs fell 8 percent in the three months to June 30 and gold rose 3.4 percent. Output expenses have been helped by a decline in the Australian dollar, which averaged 10 U.S. cents less in the first half than it did in the same period a year earlier. For every one-cent drop in the Aussie, earnings before interest and tax are boosted by A$28 million, the Melbourne-based company said in February.

“Cost-cutting initiatives and the recent move in the Australian dollar have provided some relief,” Tariq Chotani, a credit strategist at Commonwealth Bank of Australia in Sydney, said in a July 24 interview. “The company’s plan to reduce capital expenditure has also been a credit positive overall.”

The Devil’s Miner [Child Bolivian Silver Miners] (Mining Documentary – 2005)

April 5, 2015July 28, 2014

http://en.wikipedia.org/wiki/Main_Page

The Devil’s Miner is a 2005 documentary film directed by independent film directors Kief Davidson and Richard Ladkani. The film follows a fourteen-year-old Bolivian boy named Basilio Vargas who along with his twelve-year-old brother Bernardino work in the mines near the city of Potosí. The film includes many subtle realities of the miner’s lives such as the need to chew coca leaves to numb the pain of hunger and the long shifts they work regardless of age.[1] The film made its world premier at the Rotterdam film festival and its U.S. debut at the Tribeca Film Festival.

The film concentrates on the concerns of local workers who have fear of what they call “Tio” or devil. In the film, an elder miner claims that over 8 million people have died in the unsafe mines. The workers believe this is because “Tio” controls the mine and that Christ has no power in the mine. The workers often give offerings such as coca leaves, alcohol, cigarettes and perform sacrifices, such as slaughtering a llama and applying its blood to the mine entrance to appease a makeshift statue of “Tio”.

Each mine has its own Tio which all of the workers pray to upon entering so that they may find a good vein of silver and so that they may be granted protection from explosions, toxic gas, silicosis, and falling rocks.

Mass grave with hundreds of skeletons found in Bolivian mining town – by Cecilia Jamasmie (Mining.com – July 27, 2014)

July 28, 2014

http://www.mining.com/

Construction workers in the southern city of Potosi, Bolivia, have uncovered the remains of hundreds of miners believed to be from the Spanish colonial era.

They mostly mined at Cerro Rico Mountain, home to what became the world’s biggest silver mine and provided the Spanish with so much of the precious metal to ship to Europe that people used to say a bridge of pure silver could be built from the top of hill to the royal palace’s entrance in Spain.

But that boom came at an extremely high price tag — an estimated eight million miners died in Potosi alone between 1500 and 1800. What it is still unclear is how those miners met their deaths.

Some say the area was an indigenous burial ground for slaves and indentured servants who may have worked in the mines.

Another explanation could be that the remains are linked to the collapse of a reservoir in Potosi during the 17th century, which killed around 2,000 people.

“We are talking about a common grave found at about 1.8 metres, and the human remains are scattered over an area of four by four metres,” Sergio Fidel, a researcher at a museum belonging to Potosi’s Tomas Frias University, told AFP.

African Barrick Gold: Better as she goes! – by Lawrence Williams (Mineweb.com – July 25, 2014)

July 25, 2014

http://www.mineweb.com/

African Barrick has achieved a seventh successive quarterly fall in AISC and has improved its guidance on both gold output and costs after another positive quarter’s financial and operating results.

LONDON (MINEWEB) – The measures being taken to bring African Barrick Gold (ABG) – Barrick Gold’s London quoted African gold mining arm – back towards decent profitability seem to be working and while there are still some hiccups – notably a fall in grades at its flagship Bulyanhulu gold mine – its Q2 production results showed substantial further improvement beating most analysts’ consensus with gold output of 178,000 ounces at all in sustaining costs (AISC) of US$1105 an ounce.

This compares with production of 168,000 ounces in Q1 and 164,000 ounces in Q2 2013 – while AISC have shown the best improvements down from $1404 an ounce a year earlier. Consequently it is upping its production guidance for the year and maintaining its guidance on cash and all in sustaining costs.

CEO Brad Gordon was obviously pleased with the latest figures, commenting “We are pleased to report strong results for H1 2014, with increased production and continued cost discipline enabling the business to return to cash generation.. We have now delivered our seventh successive reduction in quarterly all-in sustaining costs (AISC) as we continue to drive operational improvements through the business”.

Meliadine gold mine’s environmental impact statement short on traditional knowledge: KIA (Nunatsiaq News – July 25, 2014)

July 25, 2014

http://www.nunatsiaqonline.ca/

“Inuit communities of the Kivalliq region have many generations of accumulated observation”

While Agnico Eagle Mines has made efforts to incorporate Inuit Qaujimanituqangit in the research and development of its Meliadine gold project, the Kivalliq Inuit Association has asked the company to consider using more traditional knowledge as the company seeks approval to open its second gold mine in Nunavut.

The KIA is one of a handful of organizations that have submitted comments this month in response to Meladine’s final environmental impact statement (FEIS), which AEM released this past spring.

In a report prepared by Brenda Parlee, an associate professor in the University of Alberta’s department of Resource Economics and Environmental Sociology, the KIA suggests the mining company could benefit from traditional knowledge to identify what parts of the ecosystem are most valued by Inuit, and to better analyze past, current and future trends in the region.

“Inuit communities of the Kivalliq region have many generations of accumulated observations and consequent insights about the local study area and the regional study area,” reads KIA’s submission.

“In addition, Inuit land users, elders and youth have many relevant skills and capacities that can be key to successful long term monitoring.”

Third party probes [Timmins mine] blast – by Len Gillis (Timmins Daily Press – July 24, 2014)

July 24, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – It could take as long as week for Goldcorp Porcupine Gold Mines (PGM) to find out what went wrong Tuesday when a blast threw a piece of rock into the company’s parking lot at the old Hollinger Mine building.

PGM Timmins mine general manager Marc Lauzier revealed Wednesday that a third-party consultant is being brought in to try to figure how the rock escaped the blast zone during a routine blast Tuesday morning at the Hollinger open pit.

“We had a small blast of about 13,500 tonnes or so, near surface. A piece of flyrock was expunged from the blast and landed in the parking lot on one our employee vehicles,” Lauzier explained.

“Immediately we suspended all blasting activities. Of course public safety is our No. 1 concern, so I want to understand what caused a piece of rock to land in the parking lot and what is going to be done to prevent this in the future.”

The consultant will be reviewing blasting procedures and video of the incident, since Goldcorp makes a video record of every blast at the new mine. This is the first known incident involving flyrock landing outside the mining zone since the first blast at the Hollinger pit occurred back in February.

“So until I get the results of that investigation and we are comfortable that we can blast without this reoccurring, we won’t be blasting,” Lauzier said. “And so it will take about a week to do the investigation properly.”

Escalating Ukraine crisis could blow gold sky high – by Lawrence Williams (Mineweb.com – July 23, 2014)

July 23, 2014

http://www.mineweb.com/

Conflicting aggressive rhetoric from both Russia and the West could be precipitating us into a new Cold War and the ensuing financial dangers could see gold skyrocket.

LONDON (MINEWEB) – Far from coming to an end the Ukraine crisis could be far from over and as the West and Russia are embroiled in accusation and counter-accusation over the downing of Malaysia Airlines Flight MH17, the potential for escalation is perhaps getting more serious by the day.

It has brought a safe-haven focus back into the gold market which is probably likely to remain given Ukraine is not the only major flashpoint of worry with Syrian, Iraqi and Israeli/Gaza (Hamas) conflicts all raging and building up deep-rooted concerns and polarisation amongst those affected. Violence may well not offer solutions to these deep-seated problems but can only intensify hatreds amongst those innocents affected.

And it is difficult nowadays to know who or what to trust in terms of media reporting. We in the West are programmed to believe the spin put on things by the majority of our media, despite that this version of events is in turn spun to the media by the various governments involved. Meanwhile in Russia, and Russian-leaning countries the populations are being fed completely different interpretations of what is going on.

Most of us in the West don’t trust or believe anything which comes out of Russia, assuming it just to be propaganda, while in Russia, no doubt, the reverse is true –

Kinross Says BNP Paribas Helping on Tasiast Mine Funding – by Liezel Hill (Bloomberg News – July 22, 2014)

July 22, 2014

http://www.bloomberg.com/

Kinross Gold Corp. (K), the gold company with the cheapest shares among large producers, is working with BNP Paribas SA to arrange financing this year for a $1.6 billion expansion project in Mauritania.

The third-largest Canadian gold miner has taken more than $5.5 billion of writedowns on its Tasiast operation since its acquisition as part of an C$8.2 billion ($7.7 billion) purchase in 2010 of Red Back Mining Inc. Chief Executive Officer Paul Rollinson, who took over from Tye Burt two years ago, is trying to get funding to justify making Tasiast the company’s biggest mine.

“We think we’ll get pretty good terms,” Rollinson, 52, said last week in an interview at the company’s Toronto headquarters. “It just takes longer to structure when you’re working through government agencies and their systems and approval processes.”

The company expects to finalize the Tasiast financing toward the end of the year, Rollinson said. The lenders may include multilateral credit agencies, such as the World Bank’s International Finance Corp., and the funding may total about $700 million to $750 million, he said.

The company won’t make a final decision on the expansion until early 2015, he said. The project was delayed after Rollinson ordered fresh studies to reassess the design. “My theme there is, take the time to get it right,” he said. “Bigger isn’t always better.”

Tanzania: Red Tape Dogs Tanzania’s Leading Gold Mining Firm – by Henry Lyimo (All Africa.com – July 22, 2014)

July 22, 2014

http://allafrica.com/

African Barrick Gold (ABG) is negotiating with the government to recover a whopping US$ 65 million (about 107.9bn/) as Value Added Tax (VAT) refunds accumulated over years due to overly bureaucratic procedures for refunding.

The firm enjoys special VAT relief as part of various tax incentives and exemptions extended to investors in the mining sector. ABG is Tanzania’s largest gold producer and one of the five largest gold producers in Africa.

It currently operates three producing mines in the country — Bulyanhulu, Buzwagi and North Mara, as well as several exploration projects at various stages of development in Tanzania and Kenya.

The company listed on the London Stock Exchange and Dar es Salaam Stock Exchange (DSE) and is a constituent of the FTSE 250 Index. ABG is a unit of Barrick Gold Corporation, the largest gold mining company in the world, with its headquarters in Toronto, Ontario, Canada.

Tanzania is currently the fourth largest gold producer after South Africa, Ghana and Mali. The ABG Chief Executive Officer, Brad Gordon said they were in negotiations with the government to address the problem that is making procurement of local supplies expensive.

“The amount accumulated is very high and it seems its recovery would take long time.

Wary investors slow to warm to Barrick Gold’s latest shakeup – by Euan Rocha (Reuters U.S. – July 21, 2014)

July 21, 2014

http://www.reuters.com/

(Reuters) – Worried they are being given the cold shoulder by an imperious leadership, shareholders of Barrick Gold Corp, the world’s biggest gold miner, are taking a “show me” approach to the company’s latest management shakeup.

Barrick said last week that Chief Executive Jamie Sokalsky will leave the company in September. He will be replaced by two co-presidents, a move that concentrates power in the hands of Executive Chairman John Thornton, a man handpicked for the job by Peter Munk, who founded the company and ran it his way for decades.

“The concern in this situation is that the person setting the strategy does not listen to the shareholders, who are the real owners of the company,” said Chris Mancini, an analyst at Gabelli Gold Fund, which owns more than 2.4 million shares in Barrick according to Thomson Reuters data.

“There was a concern within the market that Mr. Munk was not listening to shareholders…And so if Mr. Thornton also doesn’t listen to shareholders that could be a problem again.”

Munk stepped down as chairman in April in the face of investor criticism, and with the exit of Sokalsky, Thornton is now both more free and under greater pressure to map out a clear strategy to cut Barrick’s lofty debt levels, boost profits and eventually raise dividends.

Gold Diggers Revive French Exploration as Prices Drive Hunt – by Francois de Beaupuy (Bloomberg News – July 21, 2014)

July 21, 2014

http://www.businessweek.com/

In a field near Saint-Pierre-Montlimart, a small hamlet with a turreted church in western France, Jack Testard and Patrick Lebret dig up some earth with an agronomic drill and put it in a plastic bag.

The president and the chief geologist of a French mining exploration startup owned by Australia’s Variscan Mines Ltd will send dirt samples from the field, which is in an area that was home to a gold mine until 1952, to a laboratory in southern France to look for “mineral anomalies” the company is betting will show evidence of the precious metal.

“There are a lot of attractive points to prospect in France,” Testard says, as he points to a map with yellow dots representing areas where traces of the metal have been found. “It’s a really interesting time to prospect gold because the price is higher than before” and extraction technologies “are much more modern.”

Although France hasn’t historically been a large producer of gold, soaring prices of the metal are bringing companies to its door. By granting the first exploration licenses in mainland France in more than two decades to Variscan, Economy Minister Arnaud Montebourg is trying to revamp the country’s mining industry and cut reliance on imports of metals such as rare earths critical for military equipment and renewable energy.

The French exploration push comes even as mining companies extend cuts in spending for a second year.

Osisko CEO touts new mining royalty firm with ‘a little extra punch’ – by Peter Koven (National Post – July 18, 2014)

July 18, 2014

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

The mining royalty space already has some serious players for investors to choose from, but Sean Roosen is convinced his new offering stands out from the pack.

“We’ve got a couple of areas where we think we bring a little extra punch to the table,” the chief executive of Osisko Gold Royalties Ltd. said in an interview.

The stock started trading last month and was well-received from the start, opening above the implied valuation at launch and remaining there ever since. The company does not even have a website yet (apart from a splash page), but has generated plenty of investor interest.

That is not surprising. The royalty firm was spun out of this year’s $3.7-billlion takeover of Osisko Mining Corp., which was one of the mining sector’s most successful companies of the past decade. The team at Osisko Mining, led by Mr. Roosen, found and built the massive Canadian Malartic mine in Quebec, a world-class gold mine.

Nearly all the key players behind Osisko Mining are working together again at the royalty firm, including Mr. Roosen, John Burzynski (senior vice-president) and Brian Coates (president). They have a dedicated investor following who made money with Osisko Mining and are keen to do it again.