Gold and Silver – Page 276 – Republic of Mining

Gold price plunge saddles miners with billions worth of writedowns – by Garry White and Emma Rowley (The Telegraph – July 21, 2013)

July 22, 2013

http://www.telegraph.co.uk/

The fall in the gold price is now being recognised in gold mining companies’ balance sheets – and it is hurting.

AngloGold Ashanti, the world’s third biggest gold producer, last Monday revealed itself as the latest to take a hit, predicting a writedown in the range of $2.2bn (£1.5bn) to $2.6bn (£1.7bn) on its mining assets, including its stockpiles of ore. The figure will be revealed in its financial results for the second quarter.

The company also said it would produce 4m to 4.1m ounces of gold this year, rather than the 4.1m to 4.4m ounces previously planned, in response to the fall in its product’s price.

“In light of lower and more volatile gold prices, capital expenditure is being focused on the group’s highest quality assets, while curtailing spending or suspending operations at projects that may yield lower returns,” it said. “In addition, we may seek partners for certain of our projects.”

The update hinged on the more than 30pc drop in the gold price from its peak of $1,900 (£1,243) in 2011, as the global recovery gains traction and central banks appear to signal an end to their inflationary stimulus efforts. Gold ended last week trading around $1,295 (£847) an ounce.

There’s gold in them thar hills – by Larry Meyer (The [Oregon] Argus Observer – July 21, 2013)

July 22, 2013

http://www.argusobserver.com/

Company could pull nearly $1 billion of gold from ground in Malheur County

If approved, a proposed gold mine in the middle of the remote Malheur County desert could produce more than 700,000 ounces of gold, according to estimates from the company seeking to build the mine.

At today’s current price of $1,290 per ounce, that would equal nearly a billion dollars, or $903 million, worth of gold in them hills.

The so-called Grassy Mountain gold mine, being proposed by Calico Resources, is still at least a couple of years away from actual production, but if all goes as planned, it could have a major impact on the region.

The Grassy Mountain mine site lies about 25 miles southwest of Vale and northwest of Owyhee Reservoir. The site of Calico’s claims covers about 62 acres. The total permit area is 270 acres, including a mill site and access road area.

Once up and running, Calico officials expect the mine to be in operation for eight to 10 years, but that could be longer if additional ore is discovered, according to Andy Bentz, the former Malheur County Sheriff, who is now public and governmental affairs officer for the company.

Gold Prices Will Rebound – by Frank Yu and Warren Song (Epoch Times – July 19, 2013)

July 19, 2013

http://www.theepochtimes.com/

The price of gold has declined more than 20 percent so far in 2013. At below $1,300 per ounce, a fair amount of discussion has been happening around the value of gold.

Since gold does not generate any income and it is relatively expensive to store, its valuation has historically been difficult to assess. Recently, with the U.S. dollar rising and interest rates edging up, hot money began to move out of gold exchange-traded funds (ETFs) and into other channels—notably, U.S. equities. Now let’s attempt to assess the value of gold.

Gold has always had its own unique value. Because central banks can print money in large quantities to stimulate the economy, gold, which has a finite supply, will always have followers who view it as a way to preserve monetary value. This is especially true in many less-developed countries where the majority of the population does not have freedom or access to move money and invest in the U.S. stock market.

Historically, families in many parts of the world pass part of their fortunes to the next generation in some form of jewelry and gold. In most developing countries, corruption is a major issue and an especially large portion of the wealth is concentrated in the hands of a small number of people.

Exclusive: Chile indigenous group likely to appeal Barrick ruling -lawyer – by Alexandra Ulmer (Reuters India – July 19, 2013)

July 19, 2013

http://in.reuters.com/

SANTIAGO – (Reuters) – A Chilean indigenous group will likely ask the Supreme Court to review a lower court decision on Barrick Gold Corp’s Pascua-Lama gold mine, because the ruling does not go far enough to protect the environment, a lawyer representing the group told Reuters on Thursday.

The appeal will probably also seek a re-evaluation of the suspended $8.5 billion project and ask that Barrick present a new environmental impact assessment study, a potentially lengthy and costly process, the lawyer, Lorenzo Soto, added.

The Copiapo Court of Appeals on Monday ordered a freeze on construction of the project, which straddles the Chile-Argentine border high in the Andes, until the company builds infrastructure to prevent water pollution.

“It’s very likely we appeal the decision,” Soto said. “What we’re interested in is that the project be re-evaluated. What is optimal, in our opinion, is for the project to present a new environmental impact assessment.”

Soto said the decision on whether to appeal would be made on Friday. The Diaguita indigenous group has until Monday to file with the court, he added.

Gold price headed north of $2 000/oz, even $5 000/oz – gold bull McEwen – by Henry Lazenby (MiningWeekly.com – July 17, 2013)

July 18, 2013

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – NYSE- and TSX-listed McEwen Mining chief owner Rob McEwen has plenty of faith that the gold price will, within the next two years, head north of $2 000/oz and even cross the $5 000/oz mark in the not too distant future.

In an interview with Mining Weekly Online, McEwen said that while there was a lot of sentiment out there that the gold price would go lower, he believed the price of the yellow metal would go much higher.

McEwen pointed to historical precedents where governments debased their currencies through monetary expansion in excess of their sustainable debt loads, which caused the currency to devalue relative to assets such as gold.

In the past, these happened in isolated cases, but were more commonplace these days, as many countries and regions, including the US and the European Union, were concurrently pumping cash into their economies to keep them buoyant.

In some cases, as in the US, debt was reaching unprecedented levels at around $17-trillion. He said it worked well when interest rates were low, but should rates climb to about 5%, the debt service costs alone would be about a trillion dollars, which would crowd out other essential public services.

Gold Imports by India Seen Shrinking as Curbs Increase Costs – by Swansy Afonso & Pratik Parija (Bloomberg News – July 17, 2013)

July 17, 2013

http://www.bloomberg.com/

Gold imports by India, the world’s biggest consumer last year, may tumble in the second half as the government curbs shipments to contain a record current-account deficit and stem a slide in the currency.

Inbound shipments may drop 22 percent to 372.5 metric tons in the six months through December from 478 tons a year earlier, according to a median of estimates from 10 importers, jewelers, analysts and trade groups compiled by Bloomberg.

That may still boost full-year imports to about 902 tons from 860 tons in 2012, according to Bloomberg calculations based on data from the World Gold Council and the All India Gem & Jewellery Trade Federation.

Falling Indian demand for physical gold may deepen a bear market in bullion as some investors sell the metal amid signs of an improving U.S. economy. Shoppers from India to China and Turkey crowded retail outlets to buy jewelry, coins and bars in April after the precious metal posted the biggest two-day loss in three decades. Goldman Sachs Group Inc. says that gold will reach $1,050 by the end of 2014, while Credit Suisse Group AG forecasts $1,150 in about a year.

“I see no reason to buy more gold,” said Bharti Chandra, a 38-year-old housewife, dressed in a salwar, who was selling an old necklace in Mumbai’s Zaveri Bazaar, the largest bullion market in the country.

Eldorado’s move to preserve capital signals what’s to come from other gold miners – by Peter Koven (National Post – July 17, 2013)

July 17, 2013

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

Falling gold prices have pushed miners to make drastic changes to their operating plans, but companies with healthy balance sheets and low cost bases should adapt without much trouble, experts said.

For the miners with marginal projects or weak balance sheets, it is a very different story. Precious metals companies have started to announce spending reductions, project deferrals and other adjustments in recent weeks as the gold price languishes below US$1,300 an ounce. Many similar announcements will be made when the senior and mid-size miners begin reporting second quarter results next week.

On Tuesday, Eldorado Gold Corp. provided a template for the types of moves its peers are likely to make. The Vancouver-based miner delayed three projects, deferred another and reduced its capital spending and exploration budgets for 2013 by a combined US$287.5-million (or 37%). Eldorado also said it will evaluate its dividend policy, though it did not announce any immediate reduction to the payout.

The company won praise from analysts and investors for making sensible moves that allow it to preserve capital while continuing to grow. “The revisions appear prudent and preserve balance sheet flexibility. More gold companies are expected to follow this trend given the low metal prices,” BMO Capital Markets analyst David Haughton wrote in a note.

AngloGold poised to write down value of assets by up to $2.6bn – by James Wilson and Andrew England (Financial Times – July 15, 2013)

July 17, 2013

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

London/Johannesburg – AngloGold Ashanti joined other goldminers in responding to the sharp fall in the price of the precious metal by writing down the value of assets by up to $2.6bn and curbing production plans.

The South African miner will take a writedown charge of $2.2bn-$2.6bn in its most recent quarter, which included the steepest one-day drop in the gold price in more than three decades.

Goldminers around the world have cut the value of their assets by billions of dollars in recent weeks. AngloGold, the third-largest producer by volume, joins rivals including Barrick and Newcrest in acknowledging the deterioration in prospects for the sector.

AngloGold would “tighten up on costs, overheads and capital”, said Srinivasan Venkatakrishnan, chief executive, after a $220 drop in the average quarterly gold price. Output this year would now be 4m-4.1m oz, AngloGold said, cutting previous guidance of 4.1m-4.4m oz.

The fall in the gold price has squeezed margins for miners, with South Africa’s Chamber of Mines on Monday warning that about 60 per cent of the nation’s gold mining operations are lossmaking at current prices as the sector enters critical wage talks.

UPDATE 4-Chilean court suspends Barrick’s Pascua-Lama mine project – by Erik Lopez (Reuters U.S. – July 15, 2013)

July 16, 2013

http://www.reuters.com/

SANTIAGO, July 15 (Reuters) – A Chilean appeals court on Monday suspended Barrick Gold Corp’s controversial Pascua-Lama gold mine until the company builds infrastructure to prevent water pollution, and ordered the mine’s environmental permit be reviewed.

In April, the Copiapo Court of Appeals temporarily and preventively froze construction of the $8.5 billion project, which straddles the Chile-Argentine border high in the Andes, while it examined claims by indigenous communities that it has damaged pristine glaciers and harmed water supplies.

On Monday, a three-judge panel of the appeals court, in a unanimous decision, ordered a freeze on construction of the
project until all measures required in the government’s environmental license for adequate water management, “as well as
urgent and transitory measures required by the environmental regulator,” are adopted.

Chile’s environmental regulator had already suspended Pascua-Lama, citing major environmental violations, and asked
Barrick, the world’s top gold miner, to build water management canals and drainage systems. “Barrick is committed to operating at the highest environmental standards at all of its operations around the world, including at Pascua-Lama, and is working diligently to meet all regulatory requirements at the project,” the Toronto-based company said in a statement on Monday.

South African gold output continues to fall – how much further? – by Lawrence Williams (Mineweb.com – July 12, 2013)

July 12, 2013

http://www.mineweb.com/

South Africa’s vitally important minerals sector saw further production falls in May with the once dominant gold sector declining by a further 14.6% year on year.

LONDON (MINEWEB) – How the mighty have fallen! Not so long ago South Africa dominated global gold output with the rest coming nowhere in comparison, but the country’s gold output has been on the decline since the 1970s.

It fell to fifth largest gold producer in 2012 when it was overtaken by Russia and on the latest output figures the country has drifted downwards towards being now only the world’s sixth largest gold producer, having been overtaken by Peru as well – however that is on production so far this year.

In yesterday’s publication of minerals output and revenues, Statistics South Africa noted that the country’s gold output fell again in May commenting that its ‘overall mining production decreased by 0.7% year-on-year in May.The largest negative growth rates were recorded for ‘other’ metallic minerals (-32.3%), diamonds (-19.7%) and gold (-14,6%). The main contributor to the 0.7% decrease was gold (contributing -2.4 percentage points). Manganese ore (contributing 1.5 percentage points) was a significant positive contributor.’

Romania eyes 78 pct of revenues from delayed gold mine project – by Luiza Ilie (Reuters U.S. – July 11, 2013)

July 12, 2013

http://www.reuters.com/

BUCHAREST, July 11 (Reuters) – Romania aims to bank as much as 78 percent of revenues from Europe’s biggest open cast mine being developed by Canada’s Gabriel Resources and will finish renegotiating terms of the long-delayed project by September.

Gabriel controls the project which aims to use cyanide to mine for a total 314 tonnes of gold and 1,600 tonnes of silver among a cluster of villages in the Carpathian mountains, known as Rosia Montana. It owns 80 percent in local unit Rosia Montana Gold Corporation (RMGC) with the Romanian government holding the rest.

The mine has been stuck in limbo for years, waiting for a key environmental permit, but Prime Minister Victor Ponta promised his cabinet will ask parliament to vote on whether to give the 14-year-old plan the green light in the fall.

On Thursday, the government said it aims to secure larger benefits for Romania from its natural resources, including “a bigger stake and higher royalty taxes on gold resources,” according to the national infrastructure ministry. “The government is renegotiating the Rosia Montana project in its entirety to ensure Romania gets maximum and fair benefits,” the ministry said. “We will get … 78 percent of what revenues the project generates.”

Detour chief confident despite plunging gold price – by Peter Koven (National Post – July 11, 2013)

July 11, 2013

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

Gerald Panneton winces every time he looks at his stock price. But the bottom line is that he is confident his company can thrive in the current gold price environment.

“Leave gold at US$1,250 and it doesn’t bother me,” the chief executive of Detour Gold Corp. said in an interview. “We can get through this no problem. We can adjust to the conditions of the market.”

The company’s Detour Lake mine, expected to be the largest gold mine in Canada, poured first gold in February and is gradually ramping up. This week, Detour reported second-quarter production results that showed good progress. The Ontario-based mine produced nearly 58,000 ounces of gold in Q2, and the mill was operating at more than 80% of planned capacity by the end of the month.

Production ramp-ups are almost always plagued with problems, and while the Q2 results were not as strong as Mr. Panneton hoped, they show the company is on track to reach commercial production in the current quarter. “We would suggest the ramp-up is going well,” TD Securities analyst Daniel Earle wrote in a note.

SA gold production plunges, total mining output down 0.7% – by Natasha Odendaal (MiningWeekly.com – July 11, 2013)

July 11, 2013

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Statistics South Africa (Stats SA) on Thursday said that mining output during May decreased 0.7%, after a 0.7% revised year-on-year improvement in April.

Gold production emerged as the highest contributor, at -2.4 percentage points, to the decline, while manganese ore, contributing 1.5 percentage points, was a significant positive contributor.

Investment bank Investec’s Kamilla Kaplan commented: “There was a continuation of the trend in gold production that has been in place for much of the last decade. Specifically, that production remained in contractionary territory”.

Gold output, which has been falling since May 2011, plunged 14.6% year-on-year during the month under review, compared with a 3% year-on-year decline reported in April. The gold sector remained a key mineral export, accounting for 8.8% of total export revenues in the first five months of this year.

“At the prevailing gold price, gold miners are already under pressure to sustain operations and will struggle to grant double-digit wage increases sought by the unions [in this year’s wage negotiations],” Kaplan pointed out.

Osisko Deposits Study Reporting Local and Regional Economic Impact of the Canadian Malartic Mine

July 11, 2013

MONTREAL, QUEBEC–(Marketwired – July 10, 2013) – Osisko Mining Corporation (the “Company” or “Osisko”) (TSX:OSK)(FRANKFURT:EWX) is pleased to announce that in accordance with its environmental monitoring plan (“EMP”), it has filed with the Ministry of Sustainable Development, Environment, Wildlife and Parks (“MDDEFP”), a study on Canadian Malartic mine’s local and regional economic impact. This study was conducted by the independent consulting firm KPMG-SECOR and reports the economic impact of the Canadian Malartic mine. The study has also been filed with the Town of Malartic, as well as with the Canadian Malartic Monitoring Committee.

Sean Roosen, President and Chief Executive Officer of Osisko Mining Corporation, commented: “The KPMG-SECOR study demonstrates the positive impact of Canadian Malartic in recent years on the economy of Malartic, Abitibi-Témiscamingue and Quebec. During the BAPE hearings in 2009, Osisko had estimated that the project would be an economic engine for local, regional and Quebec economies. This study confirms our assessment.”

The study shows that Canadian Malartic:

Supports nearly 1,600 jobs in Abitibi-Témiscamingue, including 635 direct jobs at the mine site;

NEWS RELEASE: Armistice Resources Begins Shipping Ore for Gold Processing at QMX Facilities

July 10, 2013

• Shipment of first 10,000 tonnes of gold-bearing ore begin from Armistice’s McGarry Gold Mine for processing at QMX Gold’s facilities in Val-d’Or Township, Quebec

• Armistice adopts temporary revised work schedule at McGarry Mine as maintenance program underway

Toronto, ON – July 8, 2013 – Armistice Resources Corp. (TSX: AZ), operator of the McGarry gold mine in Ontario’s Kirkland Lake area, today announced that it has begun shipping gold-bearing ore from the mine for processing by QMX Gold Corporation (TSX: QMX).

On June 14, 2013, Armistice announced that it had signed a custom milling agreement with QMX to begin processing ore from its McGarry Mine at QMX’s facilities in Val-d’Or Township, Quebec.

“With the construction of an impermeable pad at QMX’s facilities now completed, we have initiated shipment of the first 10,000 tonnes of ore from our McGarry mine for processing,” said Todd J. Morgan, chief executive officer and president of Armistice.

As previously announced, the processing agreement with QMX is for a term of at least one year and a minimum of 30,000 tonnes of ore to be delivered by Armistice.