Gold and Silver – Page 274 – Republic of Mining

Kinross defends Tasiast mine layoffs – by Geoffrey York (Globe and Mail – January 16, 2014)

January 16, 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.

JOHANNESBURG — Kinross Gold Corp., dogged by protests and controversy after dismissing nearly 300 workers at its Mauritania gold mine, insists that the layoffs will help safeguard its future at one of its highest-cost operations.

The Toronto-based company, one of the world’s 10 biggest gold producers, is in a serious cost-cutting drive after writing down much of its $7.1-billion cost of acquiring Red Back Mining, owners of the Tasiast gold mine in Mauritania.

But after announcing the layoffs at its mining operation in the West African country last month, Kinross has faced lengthy and bitter protests by the laid-off workers and their supporters. The protests have continued for weeks, triggering a heavy-handed police crackdown.

About a dozen protesters were arrested and a similar number were injured when the police raided the protest last week, according to local reports. Kinross will not comment on the police raid, but it has defended the layoffs, calling them a “difficult but necessary response” to ensure the future of the mine.

Takeover bids cut both ways in Quebec – by Peter Hadekel (Montreal Gazette – January 15, 2014)

January 15, 2014

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

There’s long been a circle-the-wagons mentality in Quebec about corporate takeovers. When a buyer from outside the province is interested in a Quebec company, a protectionist reflex often kicks in and calls are made for government action.

We saw it again this week when Vancouver-based mining giant Goldcorp Inc. made a $2.6-billion hostile takeover bid for Montreal-based Osisko Mining Corp., operator of the big Canadian Malartic gold mine in Abitibi.

The Board of Trade of Metropolitan Montreal was quick to ring the alarm bells, calling on the Quebec government to ensure that if the transaction goes through “it won’t harm the economy of Quebec and the metropolitan region.”

But for every Quebec company that gets taken over by outside interests, there’s one making a deal abroad. That’s how the market works in a global economy.

Widely-held Osisko is one of the few Quebec-based mining firms with operations and production in the province, said Board of Trade president Michel Leblanc.

NEWS RELEASE: ROM’s New Interactive Gallery Explores the World of Modern Mining: Barrick Gold Corporation Gallery Opens At the ROM

January 15, 2014

(Toronto, Ontario – January 14, 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.

Goldman’s Currie still looking for $1050 gold, bearish on all commodities – by Lawrence Williams (Mineweb.com – January 15, 2014)

January 15, 2014

http://www.mineweb.com/

Goldman Sachs’ Jeffrey Currie remains bearish on virtually all commodities, but particularly so on gold reiterating his prediction of last year that gold will fall to $1050 by end 2014.

LONDON (MINEWEB) – In a new interview with CNBC, Goldman Sachs Head of Commodities Research, Jeffrey Currie, was nothing but consistent in his 2014 gold price forecast and is sticking to his $1050 target for gold by end 2014 – a figure he first came up with in the first half of last year. Thus he feels that gold’s relatively strong start to the current year is likely to be shortlived and, as in 2013, gold will likely shed value throughout 2014.

Now, the principal problem for gold bulls with Currie’s forecasts is that they can tend to be self-fulfilling prophecies given the God-like status of Goldman Sachs in financial markets. Currie famously told clients to sell gold short in April last year – just two days before many big gold investors seem to have followed this advice and the gold price plunged.

Later in the year, in October, Currie told a conference panel in London that gold had to be a ‘slam dunk sell’ with the U.S. Fed likely to begin its tapering programme and reduce its $85 billion a month bond buying programme once the then prevalent budget impasse ended. This too generated gold price weakness, although perhaps not to the extent of his earlier ‘short gold’ call.

Goldcorp launched hostile bid for Osisko after repeated rejections – by Rachelle Younglai (Globe and Mail – January 15, 2014)

January 15, 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.

Five years of thwarted efforts to negotiate a friendly deal with Osisko Mining Corp. pushed Vancouver-based Goldcorp Inc. to launch a hostile $2.6-billion bid for its smaller rival this week.

According to Goldcorp’s formal bid filings on Tuesday, the miner describes how Montreal-based Osisko repeatedly rejected offers to merge and refused to provide key information after the companies signed a confidentiality agreement in the summer of 2008.

Calls to Osisko requesting comment were not returned. Goldcorp chief executive Chuck Jeannes has wanted to get his hands on Osisko’s giant Canadian Malartic mine in Quebec since 2008, when he was in charge of finding new projects as Goldcorp’s executive vice-president of corporate development.

In September of 2008, both Goldcorp and Osisko’s shares were volatile amid fallout from the U.S. housing crisis. Osisko, whose stock dropped as low as $1.86 a share, asked Goldcorp whether it would buy a small stake in the miner.

Osisko bid leaves Quebec with much to lose – by Sophie Coustineau (Globe and Mail – January 15, 2014)

January 15, 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 — Like a big rock that fell in a puddle of grimy slush, Goldcorp Inc.’s takeover offer for Osisko Mining Corp. has splashed Quebec Inc. in the face.

With the prospective loss of head office jobs and consultant work, hostile takeovers are never greeted like a cup of warm cocoa. But there is even more unease this time around.

Osisko is more than your regular mid-tier producer. It is Quebec’s biggest gold producer and the province’s best-known mining company – for some good and not so good reasons.

Its main gig is the Canadian Malartic gold mine, the country’s biggest open-pit mine that was dug smack in the middle of a small town in the northwestern Quebec region of Abitibi. The designing of this mine gave a new meaning to the “not in my backyard” knee-jerk reaction.

Gold mining: Squandered opportunity – by James Wilson (Financial Times – January 14, 2014)

January 14, 2014

http://www.ft.com/home/us

In the vast open pit at Goldstrike, electric shovels 20 metres tall crunch easily through the rock of northern Nevada. Three scoops fill a truck that hauls off 300 tonnes of gold-bearing ore, while underground teams nearby bore richer deposits at 25 metres a day.

The site, excavated over almost three decades, set Barrick Gold on its way to becoming the world’s largest gold miner. Yet more than 9,000km to the south, at a mine the company hopes will one day be as successful, things are very different.

Pascua Lama, 5,000 metres up in the Andes straddling Chile and Argentina, has been blighted by cost overruns and environmental disputes. Barrick has written off more than $5bn on the incomplete project: engineers are now putting it into what might be a long hibernation until the gold price – and the Canadian company’s balance sheet – recover.

The tale of two mines epitomises the profound change in fortunes for the gold mining industry. Barrick and its peers once enjoyed premium valuations as eager investors anticipated outsized returns from a climbing gold price. Profits flowed easily from the likes of Goldstrike’s 2m ounces of annual production in pro-mining and accessible jurisdictions such as Nevada. Now, mishandled investments and bloated projects have taken the shine off gold miners, which in recent years have generally underperformed the metal itself.

INTERVIEW-Gold miners should consider investors in reserves math-BlackRock – by Silvia Antonioli and Clara Denina (Reuters India – January 13, 2014)

January 14, 2014

http://in.reuters.com/

LONDON, Jan 13 (Reuters) – To attract shareholders in a climate of weaker bullion prices gold miners need to use more conservative price forecasts to determine how much ore is economical to extract, focusing on a return for investors rather than flat out production.

BlackRock fund manager Evy Hambro says miners have to shrug off habits formed when bullion prices were racing ahead in the last 12 years and to add a rate of return for shareholders when estimating production costs. Ideally that should be 20 percent.

At the beginning of each year gold miners calculate their reserves, or how much gold it is worth their while to produce, depending on their costs of production and based on average gold price assumptions.

This shift to refocus on shareholder return could mean reducing the amount of gold miners produce, but making profits on that output, rather producing gold that could end up being sold at a loss. Less focused miners could find themselves running short of investors.

Some investors have complained that miners’ price assumptions have been too optimistic in the last few years, while cost estimates have not included a rate of return for shareholders.

Goldcorp bid as good as it gets for Osisko: analysts – by Liezel Hill and Andy Hoffman (Bloomberg News/Montreal Gazette – January 14, 2014)

January 14, 2014

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

TORONTO — Osisko Mining Corp. investors wagering on a higher bid than Goldcorp Inc.’s $2.6-billion offer have few places to look other than Goldcorp itself.

Osisko closed yesterday 5.5 per cent above the C$5.92 a share value of Goldcorp’s unsolicited cash-and-stock offer. Based on closing prices before the deal was announced, the premium was 15 per cent, which could be viewed as low compared with historical gold-sector standards and might need to be raised to win over Montreal-based Osisko’s shareholders, said Michael Parkin, an analyst at Desjardins Group.

“There is room for Goldcorp to raise the bid, if needed,” Parkin said yesterday in a note. “With our view of a low potential for an emergence of a white knight, we view Goldcorp’s initial bid as a smart starting point.”

Gold-mining companies are reassessing their businesses following the biggest annual drop in the gold price in more than three decades. The companies are close to their cheapest relative to book value in at least two decades, according to data compiled by Bloomberg, providing opportunities for producers looking to replenish their reserves and acquire more profitable mines.

Goldcorp seizes opportunity with hostile bid for Osisko – by Peter Koven (National Post – January 14, 2014)

January 14, 2014

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

TORONTO – By bidding $2.6-billion for Osisko Mining Corp., Goldcorp Inc.’s chief executive Chuck Jeannes is taking advantage of poor gold market conditions and going after a mine he has craved for years.

Goldcorp has held on-and-off negotiations with Osisko Mining Corp. for several years, and owned more than 10% of the stock between 2009 and 2011 before selling it. Osisko became a rising star in that period as it brought the giant Canadian Malartic mine in Quebec into production.

Back then, a takeover of Montreal-based Osisko was a strong possibility. Both Goldcorp and Kinross Gold Corp. owned large blocks of Osisko shares, and with gold prices rising and consolidation happening across the sector, the stock soared above $16. But no takeover bid materialized, and as gold prices plunged and Osisko struggled to ramp up production at Canadian Malartic, its shares fell back to earth.

That brought Mr. Jeannes and Goldcorp back into the picture. On Monday, the Vancouver-based miner launched a hostile bid for Osisko valued at just $5.95 a share. While Goldcorp would almost certainly raise its cash-and-stock offer to get a friendly deal, it is still a relative bargain.

Goldcorp launches hostile $2.6-billion bid for rival Osisko Mining – by Rachelle Younglai and Bertrand Marotte (Globe and Mail – January 14, 2014)

January 14, 2014January 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.

Goldcorp Inc. has launched a $2.6-billion hostile bid for rival Osisko Mining Corp. in a deal that would boost Goldcorp’s reserves and give it control of one of the biggest gold mines in Canada.

The bid, valued at $5.95 a share, was a 15-per-cent premium for Osisko shares based on last Friday’s closing prices. Osisko’s stock price shot up 20 per cent to $6.24 Monday, higher than Goldcorp’s offer, suggesting investors expect a richer bid to emerge.

The takeover bid marks a rare move in the mining industry over the past year, as companies have focused largely on cutting costs and preserving cash amid a deep slump in gold prices and gold miners’ shares. The offer signals industry valuations have fallen to a level where it makes sense for some mining companies to make acquisitions after they spent the past two years writing down assets bought during the commodity boom.

Goldcorp’s chief executive Chuck Jeannes said the Osisko transaction is not about Goldcorp getting bigger.

He wrote the book on “$10,000 Gold” – and he’s sticking to it – by Lisa Wright (Toronto Star – January 13, 2014)

January 13, 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.

Despite coming off one of the worst years ever in the gold market, CEO of the Bullion Management Group sticks to his extremely bullish price prediction.

Nick Barisheff is the first to admit his golden gaffe. “Last year – a year that saw gold’s greatest decline in 32 years – my book $10,000 Gold was published. How’s that for timing,” the gold bug deadpanned to giggles from the Empire Club of Canada business audience Thursday.

But what he said immediately afterward in his speech to the Bay Street crowd at the Fairmont Royal York Hotel luncheon naturally raised a few eyebrows. “However, I’m confident that gold’s bullish fundamentals are still intact,” said Barisheff, CEO of Bullion Management Group Inc., a precious metals investment firm based in Markham.

In fact, despite the gloomy outlook among metals analysts as the price languishes at the $1,200 (U.S.) per ounce price range, he believes it will rise to $1,800 later this year – and that it remains on track for $10,000 an ounce by 2020.

Insight: Gold mine stirs hope and anger in shattered Greece – by Deepa Babington and Lefteris Papadimas (Reuters U.S. – January 13, 2014)

January 13, 2014

http://www.reuters.com/

OURANOUPOLI, Greece – (Reuters) – A Canadian quest to mine for gold in the lush forests of northern Greece is testing the government’s resolve to prove Europe’s most ravaged economy is open again for business.

The Skouries mine on Halkidiki peninsula – a landscape of pristine beaches and rolling hills dotted with olive groves – is among the biggest investments in Greece since it sank into a debt crisis four years ago.

But it has set Greece’s desperate need for finance to rebuild the economy against the interests of its vital tourism industry, and aroused anger on the peninsula – site of the famed Mount Athos monasteries – over the environmental cost.

Vancouver-based Eldorado Gold Corp took over the project in 2012, promising to invest $1 billion over the next five years as part of a plan to mine eventually source up to 30 percent of its global gold production in Greece. Yet preliminary work on the mine, which is supposed to open in 2016, has set off months of politicking and protests.

NEWS RELEASE: Goldcorp announces offer to acquire Osisko for C$5.95 per share in cash and shares

January 13, 2014

(All Amounts in U.S. dollars unless stated otherwise)

VANCOUVER, Jan. 13, 2014 /CNW/ – GOLDCORP INC. (TSX: G, NYSE: GG) today announced that it intends to commence an offer to acquire all of the outstanding common shares of Osisko Mining Corporation (“Osisko”) (TSX: OSK, Deutsche Boerse: EWX) for approximately C$2.6 billion in cash and shares (the “Offer”).

Under the terms of the Offer, Osisko shareholders will be entitled to receive 0.146 of a Goldcorp common share plus C$2.26 in cash for each Osisko common share. Based on Goldcorp’s TSX closing share price of C$25.29 on January 10, 2014, the total consideration offered to Osisko shareholders is C$5.95 per Osisko common share representing a premium of 28% over the 20-day volume-weighted average share price of Osisko from all trading on Canadian exchanges for the period ending January 10, 2014 and a premium of 15% over Osisko’s TSX closing share price on January 10, 2014.

Transaction Highlights

Consistent with Goldcorp’s strategy of disciplined portfolio enhancement, focus on gold and investment in low political risk jurisdictions.
Large ~10 million ounce gold reserve(1) that, with Goldcorp’s financial and technical resources, should support a long mine life and low all-in sustaining costs.

Goldcorp to spend US$570-million on Éléonore mine – by Robert Gibbens (Montreal Gazette – January 10, 2014)

January 13, 2014

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

Goldcorp Inc. said it is spending US$570 million this year on its Éléonore mine in Quebec’s James Bay region to get it into initial production of 40,000 to 60,000 ounces in the final quarter.

The new mine has a total capital cost of $1.8 billion to $1.9 billion, up from the last estimate of $1.75 billion, and targets average annual output of 600,000 ounces, Goldcorp CEO Chuck Jeannes said Thursday. (All figures are in US dollars.)

“We’re counting on strong cash flow from our other gold mines, including Red Lake in Ontario, with 2014 output of 440,0000-480,000 ounces, and Penasquito in Mexico with 530,000-560,000 ounces, to provide the liquidity to fund Éléonore and our other projects requiring total capital spending of $2.3 billion to $2.5 billion,” he said in a quarterly update.

Also, Goldcorp has a $2-billion undrawn credit facility available, he added. Overall, Goldcorp expects to produce 3 million to 3.15 million ounces in 2014, up 13 per cent to 18 per cent from 2013, and targets 3.5 million to 3.8 million ounces in 2018.