Gold and Silver – Page 271 – Republic of Mining

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.

Gold miner results to get ‘another kick in the pants’ on reserve losses – by Peter Koven (National Post – February 8, 2014)

February 10, 2014

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

Kinross Gold Corp. did the unthinkable last year: it consciously decided to own less gold. The Toronto-based gold miner went against conventional wisdom by maintaining a price of US$1,200 an ounce to calculate reserves, and US$1,400 for resources.

Given gold was closer to US$1,700 and on the way up, rivals were using much higher prices and, as a result, adding more low-grade ounces into their mine plans and boosting reserves.

The opposite happened to Kinross: its reserves fell by three million ounces. That is a traditional no-no in the gold sector, especially when prices are on the upswing.

“That was a tough decision, to hold the line and shrink the resource,” chief executive Paul Rollinson said in an interview last year. “But the good news is we created value because we’re not chasing those last marginal ounces at the bottom of a pit.”

Today, the other gold mining CEOs only wish they followed Kinross’s lead a year ago, because they are about to pay the penalty for being too aggressive back then.

Goldcorp using analytics to reduce harm – by Lindsay Kelly (Northern Ontario Business – February 6, 2014)

February 7, 2014

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 is undertaking a new kind of mining designed to improve the health and safety record across its operations. Data mining is the process of using analytics to find patterns or trends in data that can help predict outcomes and shape future actions.

Teaming up with financial advising firm Deloitte, Goldcorp undertook a pilot project to examine data gleaned from its Porcupine Gold Mine in Timmins. The goal was to help identify situations in which workers would be more vulnerable to being part of a serious accident.

“What we want to understand is why are some people more likely to put themselves in a situation where they’re vulnerable to something bad happening versus other people?” said Paul Farrow, Goldcorp’s senior vice-president for people and safety. “How can we change our training, our coaching, our leadership development programs to eliminate or, at a minimum, reduce that probability?”

Farrow said 90 per cent of the data examined already exists. Every mine keeps production and safety data, he noted. Analytics help find correlations amongst them.

Osisko-Goldcorp battle turns bitter (Northern Miner – February 6, 2014)

February 7, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

VANCOUVER – How quickly relationships between potential partners can sour.

For more than five years Osisko Mining (TSX: OSK) and Goldcorp (TSX: G; NYSE: GG) considered joining forces in a series of meeting that gained momentum as Osisko finished building and commissioning one of the world’s largest gold mines.

The Canadian Malartic mine in Quebec produced 475,277 oz. gold in 2013 at an average cash of $760 per oz. According to Osisko’s calculations, only 13 of the 55 gold mines owned by North America’s five largest gold miners produced more, and Osisko expects production to increase and costs to decline at Malartic in 2014.

Goldcorp is one of those five gold majors and it wants Malartic. The mine sits on more than 10 million oz. of gold reserves in a low-cost, politically stable environment, making it precisely the kind of asset gold majors are seeking today.

Goldcorp’s interest in Osisko is no secret. Osisko and Goldcorp talked informally but regularly between 2008 and 2012, a relationship that led to three separate takeover bids that Osisko rejected as inadequate.

Northern College Aboriginal grads working in mining – by Lindsay Kelly (Northern Ontario Business – February 6, 2014)

February 7, 2014

Northern College is experiencing another successful milestone in its legacy of miner training: nearly all recent graduates of its hard rock miner common core program are working, two-thirds of which have found employment in the Kirkland Lake area.

The success is thanks to a partnership between the college and AuRico Gold, which operates the Young-Davidson Mine 60 kilometres west of Kirkland Lake. Though the college has offered similar programs through partnerships with other mining companies in the past, this program is unique in that it was funded by the Mushkegowuk and Wabun Tribal councils and geared specifically towards Aboriginal students.

“With all the opportunities in mining and all the IBAs (impact benefit agreements), there are new opportunities there for the Aboriginal communities that weren’t there in the past,” said Bob Mack, Northern College’s vice-president of community, business development and employment services.

Goldcorp executive says standstill with Osisko was never discussed at key meeting – by Peter Koven and Nicolas Van Praet (National Post – February 7, 2014)

February 7, 2014

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

TORONTO and MONTREAL – As Goldcorp Inc. sees it, Osisko Mining Corp.’s lawsuit is based on a flawed analysis of a throwaway conversation that lasted less than a minute.

In fact, Goldcorp denies Osisko’s claim that a standstill agreement was even discussed in this conversation, much less agreed to.

Osisko launched the lawsuit last week to try to get the Quebec Superior Court to block a $2.6-billion hostile bid from Goldcorp. The key allegation is that Goldcorp misused confidential information when it made the bid.

It all revolves around a meeting the companies held last October at the Delta Calgary Airport Hotel.

The two miners held on-and-off merger talks since 2008, but this was a crucial meeting in which Montreal-based Osisko was prepared to hand over private data about its Canadian Malartic mine in Quebec. The companies were bound by a confidentiality agreement at the time, but a standstill agreement had expired, meaning Goldcorp could make a hostile bid.

[Timmins] Hollinger open pit project goes forward – by Lindsay Kelly (Northern Ontario Business – February 4, 2014)

February 6, 2014

Porcupine Gold Mines (PGM) has received its final environmental approval from the province, paving the way for work to start on its Hollinger open pit mine. The environmental compliance approval (ECA) focused on noise, vibration and dust associated with the project, and was awarded by the Ministry of the Environment in early December.

Located adjacent to Timmins’ downtown core, the Hollinger site involves the repurposing of an historic underground mine, which operated for close to 60 years before closing in 1968. PGM, a subsidiary of Goldcorp, has spent $8 million to fill subsidences and other hazards that remain on the property.

The new project proposes eliminating the remaining hazards by removing the land around them and creating one large opening. The openpit operation will recover the gold remaining underground over an eight-year mine life. Ore will be processed at the company’s mill located at its nearby Dome Mine.