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Gold and Silver

Gold: A History, a Hunt, a Fever – An easy read, but fails to address obvious problems – by Douglas Bell (Globe and Mail – January 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.

The currency of journalism is impartiality. Ideally, it is practiced without fear or favour. When conducted at the behest of an a priori agenda, it is impotent (hardcore journalists are forever sneering at those who practice “advocacy”).

As a practical matter the difference is obvious. State owned and operated media in Russia don’t afford the same species of product as the BBC. An authoritarian oligarchy rigs its “journalism” to filter out inconvenient facts. The BBC enjoys credibility precisely because the broadcaster and its news service engineers a relationship at arm’s length from the state. In this sense, it’s not a stretch to suggest that Matthew Hart’s approach in reporting the global gold rush is, in spirit, nearer Moscow than London.

Formally Hart – himself a former producer at CBC news and an esteemed print journalist – is a fluent stylist and an adventurous reporter. In South Africa, he plummets into the earth more than a mile and a half (“My stomach sailed into my ribs. My ears blocked. Air whistled through the wire mesh”) aiming to investigate what it takes to dig the stuff out.

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FOOL’S GOLD: Panning Discovery Channel’s Klondike – by Chris Turner (Walrus Magazine – Jan/Feb 2014)

http://thewalrus.ca/

ONE DAY last spring, I made a trek to the Klondike. I had a map with a pair of cartoon trees that marked Dawson City—the Paris of the North, Canada’s own El Dorado, the booming, brawling centre of the last great gold rush. I was driving a Volkswagen station wagon with my eight-year-old daughter in the back. I brought her along to see the Klondike and to provide cover for my visit, which was unauthorized.

We drove west out of Calgary on the Trans-Canada Highway to Jumping Pound Road, turned south, briefly backtracked east, then through the gates of the CL Ranch—thankfully unbarred and thrown open—where dusty, zigzagging paths through the rolling Rocky Mountain foothills finally gave way to a broad expanse of dirt parking lot encircled by spruce trees, half-full of cars and pick-up trucks and trailers. At the far end, over a slight rise, the wood plank roofs of Dawson City came into view. We parked and strolled toward town as nonchalantly as we could. My daughter wondered if we would be arrested.

I explained that the worst they’d do is escort us off the set. It was the final day of shooting on Klondike, Discovery Channel’s first scripted drama, a six-hour miniseries based on historian Charlotte Gray’s book Gold Diggers: Striking It Rich in the Klondike. I had obtained a PDF of the map from an extra after Discovery representatives neglected to respond to requests for a set visit.

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Discovery Channel set to launch first-ever scripted miniseries ‘Klondike’ – by Bill Brioux (Canadian Press/CTV News – January 10, 2014)

 

http://www.ctvnews.ca/

PASADENA, Calif. — Is there gold in them thar miniseries hills?

Discovery Channel thinks so. The U.S. cable network is set to launch its first-ever scripted venture “Klondike.” The six-hour, three-night miniseries begins Jan. 20 on Discovery Canada before continuing the following Tuesday and Wednesday.

Scottish actor Richard Madden (“Game of Thrones”), Abbie Cornish (“RoboCop”), Tim Roth (“Pulp Fiction”), Sam Shepard (“August: Osage County”) and Augustus Prew (“Kick-Ass 2”) star. Ridley Scott, Paul Scheuring and David Zucker are among the executive producers. It’s all based on Charlotte Gray’s book “Gold Diggers: Striking It Rich in the Klondike.”

The cast and producers took questions from reporters Thursday as part of the semi-annual Television Critics Association press tour. A large, Klondike-themed casino was erected for an evening event on the back lawn of the tour hotel.

Shepard was a last-minute replacement for Chris Cooper, who had to withdraw with an illness right before production was scheduled to begin.

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Gold’s weakening outlook threatens miners’ credit ratings – by Rachelle Younglai (Globe and Mail – January 9, 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.

Moody’s Investors Service cut its gold price forecast for the year, putting the credit ratings of Canada’s largest precious metal producers at risk of a downgrade as they battle an industry slump.

Reflecting the sharp drop in gold prices, Moody’s on Wednesday said it will use an average bullion price of $1,100 (U.S.) an ounce instead of $1,200 to determine a company’s credit rating.

“The increasing risk of lower prices suggests that key credit metrics of certain producers are stretched for current ratings in the absence of mitigation through cost reductions or other actions,” Moody’s said in a report announcing the lower gold price outlook.

Last year, gold fell nearly 30 per cent to $1,200 an ounce and has traded close to that level for the past few months. The weaker price forced producers to write down assets, cut jobs, and suspend dividends and projects.

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Global Gold Rush: The Price of Mining Pursuits On The Water Supply – by Codi Yeager-Kozacek (Circle of Blue – June 15, 2012)

http://www.circleofblue.org/waternews/

Editor’s Note: While this posting is somewhat dated, it is definitely worth a read!

Circle of Blue, founded in 2002 and based in Traverse City, Michigan, is a non-profit affiliate of the Pacific Institute, and the premier news organization in the world covering freshwater issues

Water supplies remain key to the global boom in gold mining, driven by high demand and near-record prices.

Driven by historically high gold prices and increased interest from foreign investors, mining boomtowns are springing up all over the world and wreaking a rising toll on water resources and the environment. Many places where new mines are being opened and old ones expanded, local authorities and residents are reporting mounting evidence of severe water pollution from gold mining, which has intensified due to a nearly 50 percent per year increase in mining exploration budgets over the past two years.

In Romania, billions of Euros and thousands of jobs — a boon for an economically depressed region — are being weighed against the environmental impact of what would be Europe’s largest open-cast gold mine. In South Africa, the world’s fifth-largest gold producer, the government is struggling to deal with pollution from acid mine drainage and hundreds of tailings dams.

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Gold Mining Deals Seen Rebounding on Price Discount – by Liezel Hill (Bloomberg News – January 7, 2014)

http://www.bloomberg.com/

Investment bankers see gold-mining deals rebounding this year from a near-decade low as producers target assets at fire-sale prices after the metal plunged.

Gold-mining companies are close to their cheapest relative to book value in at least two decades, according to data compiled by Bloomberg. Meanwhile producers will be enticed to replace some of the output lost when they sold or curtailed less-profitable mines, said Barclays Plc’s Paul Knight.

“Majors who have done portfolio optimization will look at some of the juniors and say, ‘Here’s a chance for us to acquire a potentially better asset than we’ve sold and to mitigate the loss of production,’” Knight, a Barclays vice chairman and co-head of global metals and mining, said Jan. 6 by telephone. There were $10.1 billion of deals involving gold producers last year, according to data compiled by Bloomberg. That’s 4.4 percent less than in 2012 and the smallest since 2004.

While gold deals declined, there were signs of a resurgence of activity in December as the value of transactions reached the highest monthly level since February.

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Kirkland Lake shares fall as miner launches sale process amid challenging gold market – by Peter Koven (National Post – January 7, 2014)

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

TORONTO – With low gold prices and a tight balance sheet putting strain on the company, Kirkland Lake Gold Inc. has put out the “For Sale” sign and said it will consider takeover bids and other transactions as part of a strategic review.

But there is no guarantee that the Toronto-based miner will find a friendly offer in such a challenging gold market. And that means the company needs to turn around its operations and generate positive cash flow.

“There’s definitely challenges here, and if they were easy [to fix], somebody would have solved them long ago,” chief executive George Ogilvie said Monday in an interview.

Like other small gold producers operating in Ontario, Kirkland Lake is facing cash flow problems at gold prices below US$1,250 an ounce. While the company’s reported cash costs are roughly US$1,100 an ounce, it has also poured large amounts of sustaining capital back into its Macassa mine, meaning it is bleeding cash. It is also burdened with $120-million of debt.

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[McEwen] Mining’s golden boy – by Lisa Wright (Toronto Star – December 31, 2013)

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.

Ian Ball, 32, was just promoted to president of McEwen Mining Inc. in ageing world of mining.

When Ian Ball was 5, he earned an allowance moving rocks from the lawn of his Bowmanville, Ont., home back onto the gravel driveway for his parents.

It turned out to be quite a training ground. Lately, the 32 year old has been spotted driving a 100-tonne haul truck at the silver mine he discovered in Mexico, and the Bay St. hotshot makes a nice allowance for his work in this field, too.

But the road from junior rock picker to the top floor of Brookfield Place as the new president of McEwen Mining Inc. took a number of twists and turns — not the least of which is that he never planned on getting into the gritty gold mining game in the first place.

“I was a horrible student. I barely graduated high school,” Ball recalls candidly in an interview, impeccably dressed in a dark grey suit and golden yellow tie with his hair perfectly slicked back.

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[India] Bullion smuggling outstrips narcotics to feed gold habit – by A. ANANTHALAKSHMI AND SIDDESH MAYENKAR (Reuters India – December 4, 2014)

http://in.reuters.com/

SINGAPORE/MUMBAI – (Reuters) – Indian gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.

Stung by rules imposed this year to cut a high trade deficit and a record duty on imports, dealers and individual customers are fanning out across Asia to buy gold and sneak it back into the country.

Sri Lanka, Thailand and Singapore are the latest hotspots as authorities crack down on travellers from Dubai, the traditional source of smuggled gold. In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers.

“Gold and narcotics operate as two different syndicates but gold smuggling has become more profitable and fashionable,” said Kiran Kumar Karlapu, an official at Mumbai’s Air Intelligence Unit.

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Small-Scale Gold Mining Pollutes Indonesian Lands – by Joe Cochrane (New York Times – January 3, 2014)

http://www.nytimes.com/

CISITU, Indonesia — In the remote mountains of West Java, workers like 15-year-old David Mario Chandra are an integral part of Indonesia’s gold industry.

A workshop next to his family’s house in Cisitu, in Banten Province, contains machinery that turns gold ore into usable nuggets. The procedure seems simple enough: The crushed ore is tumbled with other ingredients in cylinders called balls until the valuable stuff is amalgamated. But there is a crucial material — and a final step — that alarms environmental and health experts around the world.

“We put 15 kilograms of gold ore and water into each ball, and we use 100 grams of mercury per ball,” or 3.5 ounces for 33 pounds of ore, said David, who runs the family’s workshop. Workers then purify the nuggets using an open flame, burning off the mercury in sites among residential areas throughout the village.

Yuyun Ismawati, an environmental campaigner based in Britain, says the scope of the problem is evident in the amount of mercury being exported from around the world to Indonesia, her home country. Most of it, she says, is brought in illegally.

According to the Indonesian Ministry of Trade, the country imported slightly less than one metric ton of mercury in 2012 through two local companies, primarily for commercial manufacturing, including the production of light bulbs and batteries, and for use in hospital equipment.

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Why many of Ghana’s gold miners are giving up – by Matthew Davies (BBC News – December 29, 2013)

http://www.bbc.co.uk/news/

Ghana – Kwaku Boham worries about the future. For years, he and his four fellow gold miners have scratched out a living on a tiny plot next to the roadside near Tarkwa in south-western Ghana.

All day in the tropical heat and humidity, they dig out the red soil and rocks and crush them in a noisy grinder, hoping to yield some small nuggets to cover their expenses and feed their families.

But they have no control over what they sell any nuggets for – that’s set in markets in New York and London. And over the past year, the price of gold has been falling.

On 1 January this year, the spot price of gold was $1,687.22 an ounce, this month it has been trading around $1,240 an ounce – a loss of around 25%. The outlook for 2014 is not much healthier. The reason gold is losing its lustre is that global economies are looking a lot healthier than they did a year ago.

The US economy grew by 3.6% in the third quarter of 2013, its best performance in 18 months, while unemployment, which hit a 26-year high at 10% in 2009, dropped to 7% last month – a five-year low.

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Tanzania: Gold Mine Boosts Villagers’ Livelihoods – by Mugini Jacob (All Africa.com – January 3, 2014)

http://allafrica.com/

Tarime — TARIME District Council has said it is now seeing remarkable development in the villages surrounding the North Mara Gold Mine at this time compared to the past.

Located in Nyamongo area, North Mara Gold Mine is one of Tanzania’s largest gold mines operated by African Barrick Gold (ABG) “There are big things happening in Nyamongo.

Nyamongo of today is not Nyamongo of the past”, Tarime District Council Chairman Mr Amos Sagara told a full council meeting at the District Council Conference Hall recently.

The latest full council meeting which sat to discuss development issues was attended by all Tarime councillors including those hailing from the villages around the mine and senior government experts based in the area.

The top council leader commended ABG, Tanzanian largest gold producer for speeding up implementation of Villages Benefits Implementation Agreements (VBIA’s) signed between the mine and surrounding villages late 2011.

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End of the gold rush – by Lisa Wright (Toronto Star – December 31, 2013)

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.

Interest in gold melting with its first annual price decline since 2000.

Stock markets are gaining, and people are optimistic about the economy, which means one other thing: the bad news bears are sniffing around gold. After 12 consecutive years of the price going like gangbusters, the shine has started to come off the precious metal. It has tumbled 30 per cent this year, and its prospects in the near term aren’t, well, golden.

Battered bullion is headed for its first annual price decline since 2000, signaling what some say is the end of the gold rush that saw the price surge six-fold and an unprecedented mining super-cycle.

“To me, it’s like the sound of a huge spaceship coming down,” says Matthew Hart, author of Gold: The Race for the World’s Most Seductive Metal. Though exploration and mine construction have pretty much dried up amid the metals-market downturn, Hart says the fickle yet fascinating commodity continues to capture the world’s imagination.

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Colossus shocks market with cancelled financing, low resource estimate – by Peter Koven (National Post – December 24, 2013)

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

TORONTO – A Canadian miner on the brink of financial collapse has surprised investors by releasing a shockingly low resource estimate for its flagship gold project.

Late Friday night, Colossus Minerals Inc. unveiled potentially fatal news to the market: that a desperation financing agreement with Arias Resources Capital Management has fallen apart. The Toronto-based miner, which has a small interest payment due on Dec. 31, warned it may not be able to raise capital to carry on business past that date.

Finding that money may not become any easier after what Colossus reported on Monday.

The company released a mineral resource estimate for its Serra Pelada project in Brazil that identified a miniscule 274,000 ounces of gold. Given that Colossus has raised more than $380-million for development of Serra Pelada, and the mine is close to production, this resource figure is absurdly low. Investors figured Colossus possessed millions of ounces at Serra Pelada, a past-producing property.

According to experts, that is likely the case.

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Americans’ appetite for bling on fire as gold prices sink – by Frank Tang (Reuters U.S. – December 23, 2013)

 http://www.reuters.com/

NEW YORK – (Reuters) – Tumbling gold prices, growing consumer confidence and aggressive discounting by retailers have Americans flocking to jewelers’ counters this holiday shopping season.

The U.S. gold jewelry industry is on track for its highest sales for the fourth quarter since 2010 and its first annual increase in gold sales in more than a decade, precious metal consultant Thomson Reuters GFMS has estimated.

“I always look for the price of gold in the news and pay attention to discounts and deals,” John Mora Gonzalez, a 31-year-old mechanic in New York, said after purchasing a necklace for his wife for Christmas. Mora had spotted J.C. Penney Co Inc’s 20-percent discount on fine jewelry, and paid $40 for a 10-karat gold necklace.

Gold prices have plunged almost a third this year, halting a 12-year run of gains. Bullion lost favor with institutional and retail investors as they braced for the U.S. Federal Reserve to reduce its monthly $85 billion bond-buying program, moving funds to equities and other riskier assets.

Renewed consumer appetite for gold is unlikely to counteract the lack of investment dollars and reverse the downward trend for prices.

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