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Gold and Silver

Romania’s gold mine project on hold after parliament rejects bill – by Luiza Ilie (Reuters U.S. – June 3, 2014)

http://www.reuters.com/

BUCHAREST, June 3 (Reuters) – Romania’s lower house of parliament rejected a bill on Tuesday that would have allowed Canada’s Gabriel Resources to proceed with plans to set up Europe’s biggest open-cast gold mine, putting the project on hold indefinitely.

The bill, which was initially approved by the leftist government of Prime Minister Victor Ponta, drew thousands of anti-mine protesters into the streets across the European Union country last year, prompting the senate to strike it down.

The lower house had the final say, and data it published on Tuesday showed deputies rejected the draft law with 302 votes against and one in favour.

Romania is one of Europe’s poorest countries but it is comparatively rich in natural resources, including gas, coal and gold. Tuesday’s vote has kicked into the long grass a project the government has said is vital to reviving an ailing mining sector in a Romanian region in dire need of jobs and investment.

Gabriel has been waiting for more than 15 years for approval to use cyanide to mine about 314 tonnes of gold and 1,500 tonnes of silver in the small town of Rosia Montana. The local unit of Gabriel Resources declined to comment on Tuesday.

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B2Gold strikes deal to buy Papillon Resources for $570-million in stock – by Peter Koven (National Post -June 4, 2014)

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

B2Gold Corp. has positioned itself to be a leading mid-tier gold producer after striking its fifth major acquisition in less than seven years. Now it just has to keep delivering for investors.

The Vancouver-based miner announced a US$570-million all-stock takeover of Papillon Resources Ltd. on Tuesday, a deal that gives it the promising Fekola gold project in Mali. It is another big milestone for B2 chief executive Clive Johnson, who is establishing himself as the single most prolific dealmaker in the sector.

“We are the fastest-growing profitable gold producer in the world,” Mr. Johnson said on a conference call. The recent history of M&A in the gold mining space has been mostly awful, with companies overpaying for assets and then recording massive writedowns on them.

Mr. Johnson acknowledged that some investors may be concerned about B2’s acquisition spree given this history of bad transactions in the sector. But he said that B2’s strong track record should give people comfort that his team chooses good targets and integrates them well.

“We’ve looked at literally hundreds of projects over the last six years or so at B2,” Mr. Johnson said. It’s alarming how few projects actually meet our requirements. This one [Fekola] definitely does.”

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Sentry launches proxy fight against Timmins Gold – by Peter Koven (National Post – June 3, 2014)

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

A large and traditionally passive Canadian investor has launched a proxy fight to overhaul a board, a relatively unique situation that experts believe could become more common in the future.

Sentry Investments Inc. announced plans on Monday to nominate six new directors to the board of Timmins Gold Corp., which it believes is underperforming. Sentry said it is calling for change after Vancouver-based Timmins ignored shareholder requests to allow potential acquirers to conduct due diligence.

Sentry’s portfolio managers are not to be confused with the Bill Ackmans and Carl Icahns of the world. The Toronto firm is a passive institution with more than $14-billion of assets, and has never shown interest in the nasty and very public game of proxy contests. But it owns 17% of Timmins and felt it had to do something major to create value.

Proxy fights have become common events in the Canada over the last several years, as markets have been volatile and investors have gotten increasingly frustrated with poor-performing stocks. The big Canadian institutions have not shown an appetite to lead these battles, but proxy guru Wes Hall of Kingsdale Shareholder Services said that attitude is starting to change.

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NEWS RELEASE: Premier Gold Proposes Mine with Significant Environmental Damage, Minimal Environmental or First Nations Scrutiny

FOR IMMEDIATE RELEASE

May 30, 2014 – Aroland First Nation, Ontario – Aroland First Nation is rejecting Premier Gold’s Hardrock Mine plans for an open pit mine near Geraldton, Ontario. The proposed mine will cause significant adverse environmental effects, including the destruction of a lake and major alterations to the TransCanada Highway for open pit mines.

Like the controversial Taskeo Mines Prosperity Mine proposed in British Columbia – a project that was twice rejected by the federal Ministry of the Environment – Premier Gold proposes to drain a 16 acre lake that supports important fisheries and fish spawning ground. Premier Gold also proposes a massive waste rock facility next to Kenogamisis Lake, one of Ontario’s most popular fishing lakes.

“My First Nation is generally supportive of sustainable mining development,” says Aroland First Nation Chief Sonny Gagnon. “Premier Gold wants to destroy Begooch Zaagaigan (pronounced “Be-gosh Zag-A-gan”), a lake that supports our Aboriginal fishery. They just put a number on this lake – A-322 – and tell us they’re going to fill it in with mine waste. This is one of the worst project proposals I’ve ever seen. They’re going to seriously impact our lands and resources. Such a large and destructive project should receive the maximum examination possible – but instead, very little is being done under provincial or federal environment assessment laws. And virtually nothing has been done to consult with and accommodate the many serious concerns of Aroland First Nation.”

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[Timmins] Lake Shore Gold predicting a good year – by Len Gillis (Timmins Times – May 31, 2014)

http://www.timminstimes.com/

A dramatic forty-dollar drop in the price of gold during Mine Expo week in Timmins no doubt sent a shudder through those in the local gold mining community in the past few days.

But gold mining executives, much like prospectors, remain an optimistic group. That was evident this week when Lake Shore Gold’s Mark Utting spoke at the opening of the Mine Expo.

Utting, the Vice President of Investor Relations for LSG, said 2014 is going to be a good year for his company here in Timmins. In a nutshell, company performance is improving, costs are down and Lake Shore is confident they will be finding more ore zones.

“Things are going extremely well for us,” said Utting. He said the multi-year construction phase for LSG is completed and the company is in full production mode.

“And that allowed us to significantly increase our production. Last year we did 135-thousand ounces. This year we will get a full year of full production so we will be close to 160 to 180 thousand ounces,” Utting said. He added that the company’s production cost for an ounce of gold is down and “well below a thousand dollars.”

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Citigroup: Don’t be tempted to buy gold stocks – by David Berman (Globe and Mail – May 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.

After getting slaughtered last year, gold mining stocks are showing modest gains in 2014 and are also outperforming gold by a narrow margin. That’s the good news. The bad news? Gold miners are still burning through cash, making them unattractive investments.

“Understandably, many shareholders are toiling with the idea of buying into gold equities given the past 12-month’s decline in share prices,” said Johann Steyn, an analyst at Citigroup, in a note. “We continue our theme of ‘don’t be tempted.’”

But rather than condemning all gold miners, Mr. Steyn holds out some hope for a select few that show more promise than their peers. These rare opportunities include Goldcorp Inc. and Barrick Gold Corp.

His negative assessment of gold miners in general comes at a time when the sector has been bloodied beyond recognition. When the price of gold fell 29 per cent in 2013, the NYSE Arca Gold Bugs index of 18 global producers plunged nearly 55 per cent, approaching 10-year lows.

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PRECIOUS-Gold slips to 16-week low on firm equities, steady dollar – by Clara Denina (Reuters U.S. – May 29, 2014)

http://www.reuters.com/

LONDON, May 29 (Reuters) – Gold extended losses to a third straight session on Thursday, hitting fresh 16-week lows on investor risk appetite and as the dollar hovered near a two-month high, while weak physical demand in top buyer China also weighed.

Spot gold fell to $1,251.50 an ounce – its lowest since Feb. 4 – in earlier trade and was down 0.4 percent at $1,253.33 by 1200 GMT. It dropped nearly 3 percent over the past two sessions.

U.S. gold futures for June delivery were down $6.20 an ounce at $1,253.10 an ounce. “Gold seems to have found a new level below its previous trading range between $1,280 and $1,310… and the next significant support lies around $1,238- $1,240,” Mitsubishi Corp analyst Jonathan Butler said.

The dollar hovered just below a two-month high against a basket of major currencies, but gains were capped by lower 10-year U.S. Treasury yields, which stood below 2.5 percent. Global shares traded near an all-time peak on bets the European Central Bank would unveil new stimulus measures next week.

ECB policymakers have opened the door to a rate cut and to a refinancing operation aimed at supporting businesses when its board meets on June 5.

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UPDATE 2-Barrick reaches initial deal with Pascua-Lama mine opponents -lawyer – by Fabian Cambero (Reuters U.S. – May 28, 2014)

http://www.reuters.com/

May 28 (Reuters) – Canadian miner Barrick Gold has come to an initial agreement with local indigenous peoples who have opposed its stalled Pascua-Lama mining project on the Chilean-Argentine border, the lawyer for the communities said on Wednesday.

Barrick, the world’s largest gold miner, halted the gold and copper project last year after investing $5 billion in it.

Development of the mine, which the local Diaguita people have strongly opposed, had been frozen by environmental regulators in Chile who demanded that infrastructure to prevent water pollution be built.

The memorandum of understanding that has now been struck between 15 of the 18 communities and Barrick is an initial step towards bringing the two sides together, Lorenzo Soto, the lawyer for the Diaguita, said on Wednesday.

“This is historical, never seen in Chile’s mining history,” Soto told Reuters in an interview. The “traditional model” of concession and environmental permits “that could go ahead even if it trod all over the rights of the local communities” has now changed, he said.

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Barrick Gold CEO Sees Growth in Nevada Following ‘Reset’ – by Liezel Hill (Bloomberg News – May 27, 2014)

 http://www.bloomberg.com/

Jamie Sokalsky has spent most of his tenure as Barrick Gold Corp. (ABX)’s chief executive officer retrenching and fighting fires. Now that the smoke is starting to clear, he’s refocusing on opportunities for growth.

The world’s biggest gold producer plans to expand in Nevada, where it got about 40 percent of its gold last year, Sokalsky said last week.

“Now that we’ve really reset the company, it’s time to talk about the future,” Sokalsky said in an interview on a Nevada hillside overlooking Goldrush, one of the projects at the top of the company’s investment plans.

Since Sokalsky, 57, took over in June 2012, Toronto-based Barrick has shed more than a quarter of its mines, raised $3 billion in a share sale and slashed its spending plans, while wrestling with a falling gold price. The company’s average costs in the first three months of 2014 fell to the lowest in at least two years, according to data compiled by Bloomberg.

While those austerity plans were overshadowed last month by news the company failed to buy its biggest competitor, Newmont Mining Corp. (NEM), Sokalsky says those talks are “finished” and Barrick is focused on its strategy as a standalone entity.

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Barrick, Newmont share a ‘co-operative spirit’ in Nevada – by Rachele Younglai (Globe and Mail – May 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.

Barrick Gold Corp. and Newmont Mining Corp.’s chief executives still want to find ways to join forces in Nevada after the gold companies’ plans to merge dissolved spectacularly.

“There are opportunities to work together from an operating standpoint, particularly in Nevada, given we are partners there and given we are neighbours,” Barrick’s chief executive, Jamie Sokalsky, said in an interview. “Both myself and [Newmont chief executive] Gary Goldberg are very open to reopening those discussions,” he said.

It’s been a month since Barrick and Newmont’s merger talks imploded with the companies’ chairmen publicly accusing each other of ruining their $13-billion (U.S.) union. Since then, the world’s two largest gold producers have taken a breather from each other and are mending their relationship, with Mr. Sokalsky and Mr. Goldberg as de facto emissaries.

Mr. Sokalsky said there “certainly aren’t any” merger discussions currently taking place. But he said there was a “friendly, co-operative spirit” between the companies after the public spat between Newmont’s chairman, Vincent Calarco, and Barrick founder Peter Munk and chairman John Thornton.

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Russia needs to change rules to encourage mining investment: Kinross CEO – by Peter Koven (National Post – May 23, 2014)

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

A geopolitical crisis and widespread boycott did not stop Paul Rollinson from traveling to Russia and offering some genuine criticisms of the host government’s mining laws.

Federal governments in Canada and the United States urged business leaders to skip an economic forum in St. Petersburg this week in protest of Russia’s seizure of Crimea. Some went along with the boycott, but Mr. Rollinson, the chief executive of Kinross Gold Corp., decided to attend. Russia is a crucial jurisdiction for Toronto-based Kinross, being home to the company’s lowest-cost mines.

With Crimea in the backdrop, there was more-than-usual interest in his presentation at the forum on Thursday.

Mr. Rollinson, who is cautious by nature, kept the geopolitics out of his speech. His message was that Russia has tremendous mineral potential, but needs to change the rules if it wants to attract more foreign mining investment. Kinross, which has expressed this view numerous times in the past, is the largest foreign miner in the country by far.

“We’re looking for certainty, transparency, stability and minimal red tape,” Mr. Rollinson said.

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Barrick named in class action suit over troubled Pascua-Lama project – by David Paddon (Globe and Mail – May 22, 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.

TORONTO — The Canadian Press – Several Canadian law firms are pursuing a class action against Barrick Gold Corp. (TSX:ABX) and some of its current and former senior officers, alleging they misrepresented how much risk the company faced when it undertook construction of the multibillion-dollar Pascua-Lama mine project in South America.

The project involves one of world’s largest deposits of gold, estimated at nearly 18 million ounces, but the company missed its original target of starting production in early 2013 due to opposition from local groups and Chilean authorities.

The suit, filed Wednesday with the Ontario Superior Court of Justice, alleges Barrick described Pascua-Lama as a feasible and highly economic project due to the low cost to construct the mine and to produce gold and silver from it, adding that the company knew or should have known that it would have to overcome significant obstacles.

“The mine is located underneath glaciers in the Andes mountains and the environment is subject to extreme temperature and weather changes. Barrick is a sophisticated mining company that has constructed and operated mines all over the world.

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Kinross Gold caught up in Canada’s tensions with Russia – by Carrie Tait and Rachelle Younglai (Globe and Mail – May 22, 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.

CALGARY and TORONTO — Kinross Gold Corp. is caught in a diplomatic row between Canada and Russia. A third of the Toronto-based company’s gold production is in Russia, and Kinross is trying not to inflame relations with Canada’s Conservative government while carrying out its fiduciary duties.

The company ignored the Harper government’s plea to boycott Russian events and is sending its chief executive officer to St. Petersburg for an economic summit this week. Its decision is seen as shrewd given that the company has a lower profile than other global companies like Morgan Stanley and Alcoa, which have heeded Western requests to stay away from high-profile events in Russia in protest against its aggression in the Ukraine.

“I don’t think it is going to cause blowback to Kinross,” said Ian Lee, a professor of corporate strategy and public policy at the Sprott School of Business at Carleton University. “They will win some kudos in Moscow, obviously, because they will be seen in Putin’s crowd to have stood up to the Canadian authorities who were pushing or promoting the boycott and the sanctions.”

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COLUMN – Modi the new hope for gold, but may disappoint – by Clyde Russell (Reuters India – May 21, 2014)

http://in.reuters.com/

LAUNCESTON, Australia – (Reuters) – Gold bulls tend to flit from one thing to the next in their search for a reason for the precious metal to rally, with the latest hope being Narendra Modi’s election victory in India.

The reasoning appears solid enough. Modi’s pro-business Bharatiya Janata Party is likely to roll back some of the tough measures taken by the former government to curtail gold imports as part of efforts to lower India’s current account deficit.

Gold is India’s second-biggest import by value behind crude oil and the former government progressively raised the import duty to 10 percent and imposed a rule that 20 percent of gold shipped in must be re-exported as jewellery.

These measures, which gold bulls had largely dismissed as irrelevant to Indian demand, served to crunch imports, which started dropping sharply from the third quarter of last year.

Indian demand fell 26 percent to 190.3 tonnes in the first quarter of 2014 from the same period a year earlier, according to data from the World Gold Council (WGC).

This followed falls of 16 percent in the fourth quarter of 2013 and 32 percent in the third quarter of last year, declines which saw India surrender its status as the world’s top gold consumer to China.

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Barrick Gold seeks to restart suspended Pascua-Lama project after meeting with top Chilean officials – by Alexandra Ulmer and Fabian Cambero (National Post – May 20, 2014)

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

Reuters – SANTIAGO — Barrick Gold Corp, the world’s No. 1 gold miner, has met with Chilean officials and is keen to move forward with its suspended Pascua-Lama gold and copper project, in which it has already invested more than US$5 billion, Chile’s new mining minister told Reuters.

Aurora Williams, who became minister in March after President Michele Bachelet assumed power, said in an interview on Friday the Toronto-based company wanted to resolve outstanding problems so it could continue with Pascua-Lama, which straddles the Chilean and Argentine border.

Barrick surprised financial markets in October, when it shelved the massive mine over problems, including political opposition, environmental permitting, labor unrest, cost overruns and a sharp drop in bullion prices.

“We received Barrick a few days ago,” Williams said in her first interview with a foreign news organization. “They’ve showed us their interest in solving (Pascua-Lama’s) problems and doing community work, which to us appears correct … What I understand is that there’s interest that the project continue.”

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