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Gold and Silver

UPDATE 2-Ghana puts plans for mining windfall tax on hold – by Kwasi Kpodo (Reuters India – January 24, 2014)

http://in.reuters.com/

ACCRA, Jan 24 (Reuters) – Ghana has put on hold plans to introduce a windfall tax on mining profits, Finance Minister Seth Terkper told Reuters, a move that will delight struggling gold firms but could undermine efforts to reduce the country’s budget deficit.

Ghana is Africa’s second-biggest gold producer and the precious metal is a large source of revenues for the country whose government is seeking to maintain rapid economic growth while reining in the deficit and inflation.

But the decision comes after President John Mahama said this week his country had come under pressure from the industry over the planned tax, with companies warning it would lead to job cuts due to a steep fall in gold prices.

“It’s on hold in parliament and we are consulting,” Terkper told Reuters late on Thursday.

Terkper had told parliament during the annual budget in November that the government would impose the tax, which it has been trying to push through since 2012. No timeframe was given at the time.

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Gold production soars to record in 2013 despite price drop: study – by Peter Koven (National Post – January 24, 2014)

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

TORONTO – Despite plummeting gold prices, global production of the precious metal reached a record in 2013 for the fourth-consecutive year.

The result appeared in a report on Thursday from the precious metals consultancy Thomson Reuters GFMS. In addition to dispelling theories about “peak gold,” the study shows that gold miners are churning out the metal at a furious pace, even though they are facing severe margin pressure.

Total gold mine supply reached 2,982 tonnes last year, according to GFMS estimates, up 4.1% from 2012. But Rhona O’Connell, head of metals research and forecasting at GFMS, said the final number will likely be higher as fourth quarter production guidance from miners has been stronger than expected.

There are a few explanations for this uptick in production, which seems counter-intuitive in such a tough market.

According to GFMS, many mines boosted their output. In some cases, miners may be processing greater quantities of ore in order to maintain revenue and contain costs at lower gold prices.

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Barrick going lean at Hemlo – by Carl Clutchey (Thunder Bay Chronicle-Journal – January 24, 2014)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

While Barrick Gold sells off mines and other assets to remain profitable, the company’s renowned Hemlo camp remains one of its flagship operations. But to stay that way, it faces a lean 2014 in the aftermath of a steep plunge in the price of gold.

Hemlo operations general manager Andrew Baumen said the 30-year-old mining camp is going “crew by crew” to come up with ways to keep costs down and make the operation more efficient.

“That’s our big push right now,” Baumen said Thursday from the Highway 17 complex about 40 kilometres east of Marathon.
“This is all being driven by the collapse in the gold price,” he added. “We’re operating at a break-even point.”

Baumen said if Hemlo can realize $19 million in overall operational savings and efficiencies, it should be able to remain on track to continue operating for another five to six years as previously forecast.

Hemlo, which consists of the David Bell and William’s mines, remains a large employer with a combination of 800 direct employees and contractors.

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NEWS RELEASE: ROM’s New Interactive Gallery Explores The World Of Modern Mining

Barrick Gold Corporation Gallery Opens At the ROM

January 23, 2014 – The Barrick Gold Corporation Gallery is now open at the Royal Ontario Museum (ROM). The gallery, located in the ROM’s Teck Suite of Galleries: Earth’s Treasures (Level 2), is an interactive 600 square foot space, with multi-touch, animated displays, multi-media presentations and more.

This new permanent gallery showcases a range of mineral specimens as well as presentations on the global mining industry, including stories about mining, and how the mining industry impacts our daily lives. The digitally enhanced games and other interactives, such as a touch wall are the most advanced, hands-on, user-driven visitor experiences in the ROM.

“The ROM is delighted to share the Barrick Gold Corporation Gallery in our Teck Suite of Galleries with our visitors and inspire them to discover more about mining. From the interactive games to specimen displays, this gallery illustrates the importance of mining in our daily lives and discusses the social and environmental responsibilities surrounding mining as well as our responsibilities as consumers of products of the Earth. We are grateful to our partners and sponsors, including Barrick Gold Corporation and our Advisory Council, for their valued support,” said Janet Carding, ROM Director and CEO.

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INTERVIEW: McEwen on Goldcorp’s hostile bid, M&A opportunity and market bottoms – by Kip Keen (Mineweb.com – January 23, 2014)

http://www.mineweb.com/

Rob McEwen sees a market bottom forming and speaks about not missing it, among other matters.

VANCOUVER BC (MINEWEB) – Last Friday Mineweb’s Kip Keen spoke with Rob McEwen the chief owner of McEwen Mining. In a wide-ranging interview, McEwen weighs in on the impact of Goldcorp’s hostile bid for Osisko on the mining sector, growth through M&A at McEwen mining, assessment of junior companies and market bottoms. And not missing them.

Kip Keen: The Goldcorp takeover bid for Osisko has generated a lot of excitement. What are your thoughts on it?

Rob McEwen: The takeover in general is a symptom or an illustration of the consolidation that’s been happening in the industry. And I think it will pick up pace as we move into this year. It’s showing to investors that you can make money in this market; that it’s been overlooked with people thinking there’s no opportunity here. I think the biggest risk to investors is missing the run we’re going to have in these stocks.

KK: Do you think it’s fair to say that management teams and shareholders are more willing to accept M&A now after the long, tough couple of years we’ve had?

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Gold bull market ‘firmly in rear view mirror’: TD – by John Shmuel (National Post – January 22, 2014)

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

Gold investors hoping to make up last year’s massive losses may be in for a disappointment as analysts now expect gold prices to stay stagnant over the next couple of years.

TD senior economist Sonya Gulati said gold is likely to spend the next two years “stabilizing” after experiencing a serious rout in 2013. The precious metal declined 28% on the year to US$1,200 an ounce, a far cry from its all-time record of US$1,921.15

“We project that gold prices will stabilize over the next two years, hovering around US$1,175 in 2014, before rebounding to US$1,280 in 2015,” she said. Meanwhile, a Reuters poll released Tuesday shows that the 37 analysts surveyed are forecasting gold will finish 2014 at an average price of US$1,235 an ounce, while essentially remaining unchanged in 2015 at US$1,260 an ounce.

Furthermore, the spread between the highest and lowest forecasts is only half its usual size, which suggests most analysts believe gold prices will be little changed over the next two years, which would be a divergence from the extremes that gold prices have experienced in the past decade.

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UPDATE 1-Timmins Gold joins new mining rush to equity markets – by Euan Rocha (Reuters U.S. – January 22, 2014)

http://www.reuters.com/

Jan 22 (Reuters) – Timmins Gold Corp, which owns the San Francisco gold mine in Mexico, said on Wednesday it will sell C$25 million ($22.7 million) in equity to a syndicate of banks, the latest in a slew of recent share offerings from Canadian miners.

The Timmins deal, designed to strengthen its balance sheet, builds on a wave of offerings that may signal a thaw in the financing environment for miners, which have long been out of favor with investors.

The bank syndicate, led by RBC Capital Markets, will buy the shares at C$1.50 each, a significant discount to Timmins’ closing price of C$1.73 on the Toronto Stock Exchange on Tuesday. The transaction was done as a bought deal.

A bought deal occurs when an underwriter, or a syndicate, buy shares from an issuer before selling them to the public.

While these deals typically occur at a slight discount to a company’s last trading price, the large discount that Timmins agreed to underscores the challenges still facing gold miners.

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NEWS RELEASE: Osisko Board recommends shareholders reject Goldcorp’s opportunistic hostile offer

(Montreal, January 20, 2014) — Osisko Mining Corporation (“Osisko” or the “Company”) (TSX: OSK; Deutsche Boerse: EWX) announces today that its Board of Directors, on the recommendation of its Special Committee, unanimously recommends that Osisko shareholders (“Osisko Shareholders”) REJECT the hostile take-over bid (“the Goldcorp Offer”) launched by Goldcorp Inc. (“Goldcorp”) on January 14, 2014 and NOT TENDER their Osisko shares to the Goldcorp Offer.

After careful consideration and discussion, the Special Committee and Board of Directors have determined, following analysis by the Board of Directors with financial and legal advice, that the Offer is financially inadequate and not in the best interests of Osisko. Goldcorp’s Offer significantly undervalues Osisko’s world-class Canadian Malartic mine, and the rest of the Company’s portfolio of high-potential projects in North America. The premium offered by Goldcorp, as well as the transaction multiples implied by the offer, are both significantly below the relevant precedents.

The Board of Directors and management of Osisko remain focused on delivering superior value to shareholders. Osisko believes the true strategic value of the Company’s assets will be demonstrated as the review of value-maximizing alternatives progresses. It is important to note that, while Osisko has had several preliminary discussions with Goldcorp over the past five years, those discussions have never led to a credible proposal from Goldcorp.

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Bristow warns on Kibali gold mine – Don’t rock the boat! – by Lawrence Williams (Mineweb.com – January 21, 2014)

http://www.mineweb.com/

Building the big Kibali gold mine in the DRC has been a remarkable achievement but Randgold CEO, Mark Bristow, warns against the status quo being adversely affected by possible future legislation.

LONDON (MINEWEB) – In a media presentation in Kinshasa, Randgold CEO Mark Bristow has set out the company’s achievement in bringing the big Kibali gold mine in the north eastern Democratic Republic of Congo (DRC) into production and highlighted some specifics.

Commenting, though, that this remains very much a work in progress as development continues, he also used the presentation to perhaps advise the DRC government not to tinker with possible forthcoming new mining legislation so as to undo the great work done in building the new mining operation with all the advantages it has brought to the area in which the mine is located and to the DRC in general.

“At the national level” Bristow commented, “government is urged to take care that its proposed revision of the Mining Code does not deter further investment in the development of the country’s mineral wealth and rather work with us and other investors to build on what we have all worked so hard to deliver.” In other words – ‘please don’t rock the boat!’

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Goldcorp never made ‘reasonable’ takeover proposal, Osisko says as it rejects hostile bid – by Peter Koven (National Post – January 21, 2014)

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

TORONTO – Osisko Mining Corp. has launched a war of words with hostile suitor Goldcorp Inc., saying it never received a “reasonable” offer from the gold mining giant.

As expected, Osisko formally rejected the $2.6-billion offer from Goldcorp on Monday. But what stood out most was Osisko’s interpretation of prior negotiations with Goldcorp.

Last week, Goldcorp revealed that it made three separate takeover offers for Montreal-based Osisko in 2008 and 2009, and claimed Osisko “continually” refused to entertain them. It also said that Osisko refused to hand over private information, even after the two sides signed a confidentiality agreement.

The implication was that Osisko’s board was acting entrenched and not giving shareholders the chance to evaluate bids. Osisko chief executive Sean Roosen offered a vastly different take on Monday. He claimed all three of the proposals were “value destructive” and came at a discount to the current share price.

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Osisko harsh in its formal rejection of Goldcorp’s hostile bid – by Bertrand Marotte (Globe and Mail – January 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.

MONTREAL — Osisko Mining Corp. has unveiled a lengthy and harshly worded formal rejection of Goldcorp. Inc.’s hostile $2.6-billion bid for its smaller rival.

Montreal-based Osisko’s board of directors is unanimously recommending that shareholders reject the offer Vancouver-based Goldcorp launched on Jan. 14, calling it “financially inadequate” and saying it “significantly undervalues” Osisko’s main asset, the Canadian Malartic gold mine in northwestern Quebec.

Osisko also says the timing of Goldcorp’s offer is opportunistic because it is just before Canadian Malartic enters what Osisko expects to be its most productive years.

Goldcorp is offering a “meagre 15%” premium based on the closing prices of Osisko and Goldcorp on the Toronto Stock Exchange on Jan. 10, one that is “substantially below the premiums paid in other relevant metals and mining transactions,” Osisko said in a news release Monday.

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Alberta-shot Discovery Channel miniseries, Klondike, mixes history and melodrama – by Eric Volmers (Calgary Herald – January 16, 2014)

 

http://www.calgaryherald.com/index.html

Given its rugged nature, it’s not surprising that much of the chatter around the Discovery Channel’s Klondike has dealt with the more physical aspects involved in filming the six-hour miniseries last year in Alberta.

Actors climbed mountains, plunged into rivers, dodged (fake) avalanches, fought and shot each other and generally did their best to look gaunt, desperate and dishevelled when sloshing in the muck of a recreated Dawson City of the 1890s.

But star Richard Madden insists there was a more scholarly side to the shoot. In fact, to hear the 27-year-old Scottish actor talk about it, the set could become positively nerdy when it came to comparing notes on their characters.

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Is Goldcorp’s Osisko bid just the start of a gold M&A rush? – by Lawrence Williams (Mineweb.com – January 17, 2014)

http://www.mineweb.com/

While not the first recent takeover bid in the gold space, Goldcorp’s offer for Osisko suggests that the bigger players may now feel the decline in the gold price is near its end and could prompt others to follow.

LONDON (MINEWEB) – There has been considerable speculation as the gold price has fallen and previously profitable gold miners struggled to keep their heads above water that the predators with strong balance sheets are poised to strike and attempt to swallow up smaller – or just less well cashed up – miners in the gold space.

Goldcorp’s hostile bid for Osisko – the one time darling of the Canadian exploration and development sector, but now a mid-tier gold miner in its own right – could thus just be the start of a flood of M&A moves as the gold price looks to be nearing its bottom and gold stock valuations are seen as being close to their likely lows.

While there have already been other M&A moves in the space over the past year although mostly at a much lower level – Hecla’s ‘white knight’ acquisition of Aurizon, Centamin’s Ampella transaction and Asanko’s PMI takeover all immediately spring to mind. But none of these have had the impact of the Goldcorp bid given the sizes of the two companies involved.

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Is Silver Going Lower? – by Ryan Jordan (Silver News Blog.com – January 12, 2014)

http://silvernewsblog.com/

In both gold and silver, the New Year brings technical readings as oversold as those seen in the 1980-1982 bear market. Some technicians claim that they have never seen such oversold conditions in the mining equities- a pretty strong statement when you think about past bear markets in the mining stocks. In the gold market, ETF holdings, by some measures, are as low as early 2008—before the financial crisis.

Speculative positions on electronic futures platforms are also at lows not seen in over eight years. From the perspective of Wall Street, hedge funds, and other western commercial banks, it really looks as though the 2008 crisis is a distant memory. We can all just go back to making fortunes in the conventional stock markets and forget about the need for those barbarous, inconvenient, bulky hedges like gold and silver.

Yes, complacency reigns, as more and more people focus on the recovery (at least according to official data) here at home in the United States. This complacency has likewise triggered a parabolic move in the conventional stock market—although I admit that parabolic moves can last longer than anyone thinks possible. Yes, there is a longer term question as to whether or not we are seeing a secular bear market in gold and silver, coupled with a secular bull market in equities (think 1980s and 1990s). Still, the conventional stock market is seeing overbought technical readings consistent with prior market peaks (whether or not the longer term picture remains positive for equities.)

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Quebec’s Osisko comes out fighting against Goldcorp bid (CBC News Business – January 15, 2014)

http://www.cbc.ca/news/business

Calls $2.6B offer for gold miner too low and opportunistic

Osisko Mining Corp. is calling a hostile takeover bid for the company by Goldcorp Inc. “very low” and opportunistic. Company CEO Sean Roosen said Wednesday the Osisko board is continually seeks value for its shareholders.

“We’re shareholders of the company ourselves. We’re focused on shareholder value 365 days a year and seven days a week. We look at our valuations on a constant basis and so does our board,” Roosen said in an interview with CBC’s The Lang & O’Leary Exchange.

“Osisko’s board of directors noted that the 15 per cent premium to Osisko’s unaffected share price implied by Goldcorp’s offer is very low and the price opportunistic in light of Osisko’s proven high quality asset base,” the company said in a statement.

Osisko urged shareholders to hold off from accepting the $2.6-billion bid until the board, which has formed a special committee including five independent members to review the offer, makes a recommendation on the proposal.

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