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Gold and Silver

Golden opportunities in Timmins – by Benjamin Aubé (Timmins Daily Press – November 8, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – A junior mining company based in Timmins is voicing excitement about the potential for two projects that could leave their mark on the city for a long time to come.

Ian Campbell, president and CEO of Temex Resources, said the two biggest things the company has on its side are a pair of properties located in the heart of a region that has seen over a century of continuous mining activity.

“In the junior mining space, everybody knows there’s some issues going on, and that’s hard, but in our view, Temex stands our for a variety of reasons,” Campbell said to a crowd at an Inside Business luncheon hosted by the Timmins Chamber of Commerce. “We stand out because we’re not a junior relying on just one project. We’ve got two projects.

“Our focus is on the Whitney Project, in the East End of Timmins. It’s got all those things you need going for a project these days. It’s got high-grade (gold), it’s got location, it’s got the infrastructure to put something into production. Of course, we’re a small management team, and I’m focused on the efficient allocation of cash.”

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Is the tide turning for junior gold stocks? – by Lawrence Williams (Mineweb.com – November 6, 2013)

http://www.mineweb.com/

The AIM and TSXV junior mining indices appear to be flattening, or even beginning to pick up. Is this the time for investors to move in again, or is it another false dawn?

LONDON (MINEWEB) – Junior gold stocks remain close to rock bottom, although the scare stories of the demise of perhaps half the juniors on the TSX Venture exchange for example remain unfulfilled. According to Graham Dallas, Head of Business Development EMEA for the Toronto Stock Exchange, speaking at the Global Mining Finance conference in London yesterday, so far this year only six companies have delisted from the TSXV at their own request, and some of these are dual listed stocks which have reverted to their primary exchange as a cost-cutting measure.

Furthermore none so far have been delisted for failure to meet continued listing requirements. While the remainder of the year may indeed see more delistings it seems to this observer that the predicted junior gold stock Armageddon will not come about. Small juniors have the capability of reducing activities to an almost dormant state, cutting fieldwork, staff and executive salaries to a minimal level and conserving enough cash to pay for their listings and just hang in there until things improve.

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Barrick’s controversial deal raises the pressure on Peter Munk – by Boyd Erman (Globe and Mine – November 4, 2013)

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 pressure on Barrick Gold Corp. founder Peter Munk is becoming so intense that he may soon have to do what he has so far resisted – announce a timetable for his own departure from the company he built into the world’s largest gold producer.

Major Barrick shareholders are boycotting a huge $3-billion (U.S.) stock offering, demanding that the company speed up the pace of change on its board. The focal point of that board has always been one man, the charming tycoon who created Barrick.

Mr. Munk, who turns 86 on Friday, is a Canadian business legend, and rightly so for what he has built. Yet he has also become the symbol of a company that has beaten up shareholders through badly timed acquisitions, cost overruns at mines, writedowns and stock sales that dilute their ownership. The latest financing is earmarked to pay down a $15-billion debt load – much of it taken on for the disastrous purchase of Equinox Minerals Ltd. – and will increase Barrick’s share count by about 16 per cent.

Amid all that, Barrick’s board has done little to dispel the notion that Mr. Munk makes all the big decisions.

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UPDATE 1-China’s gold consumption to cool after surge this year -producer – by Judy Hua and David Stanway (Reuters India – November 4, 2013)

http://in.reuters.com/

TIANJIN, China, Nov 4 (Reuters) – China’s gold consumption is expected to climb to more than 1,000 tonnes this year, though the trend is not sustainable and could drop below this level from 2014, the country’s biggest gold producer said on Monday.

Meanwhile, gold output this year from China, the world’s top producer, is set to climb about 7 percent to another record high of 430 tonnes, Du Haiqing, vice general manager at China Gold Group Corp, said at an industry conference held in the northern city of Tianjin.

Gold demand from China has surged by more than half in the first six months of the year as sliding prices of the precious metal lured buyers, reinforcing expectations that China will overtake India as the top consumer this year.

Gold consumption in 2012 was 832.18 tonnes, according to data from the China Gold Association. Demand growth has dramatically outpaced production, causing imports from Hong Kong to surge and hover at more than 100 tonnes for five straight months up to September.

But this year’s consumption was “abnormal”, as a sharp drop in prices in April has sparked a buying frenzy, said Du.

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Barrick investors cool to stock sale, push for board revamp – Boyd Erman and Rachelle Younglai (Globe and Mail – November 2, 2013)

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.

Pressure is mounting on Barrick Gold Corp. to speed up changes in its boardroom, with some large investors demanding the company improve its governance before subscribing to the $3-billion (U.S) stock offering the gold miner launched to pay down its debt.

The banks underwriting the deal pushed hard to sell the 163.5 million shares on Friday, the day after the transaction was announced.

But by late in the day, the stock was not fully sold. Barrick shares closed at $18.02 on the New York Stock Exchange, 1.8 per cent below the offering price of $18.35.

The offering faces a number of hurdles. It is one of the largest stock sales in Canadian history, and Barrick’s share price has been in a long decline. On top of that, the price of gold fell Thursday and Friday.

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Barrick Gold Corp to raise more than US$3-billion in share sale, shelve Pascua-Lama mine – by Peter Koven (National Post – November 1, 2013)

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

Barrick Gold Corp. has launched a monster US$3-billion equity offering in an effort to repair its debt-laden balance sheet. The move was announced late Thursday afternoon, just hours after the Toronto-based miner said it is suspending construction of the troubled Pascua-Lama project.

“Both actions will radically improve Barrick’s balance sheet, which had become the major overhang to its outlook,” Deutsche Bank analyst Jorge Beristain wrote in a note.

Barrick shares were down more than 6% at US$18.15 in early trading Friday. It is the third largest bought deal in Canadian history, according to Financial Post data, and follows months of speculation that Barrick would tackle its debt load. The company is carrying US$15.4-billion of debt, much of it tied to the disastrous $7.3-billion takeover of Equinox Minerals Ltd. in 2011.

As gold prices declined this year, servicing that debt became more of a burden and pushed Barrick into action. The company plans to use at least US$2.6-billion of the proceeds from the offering to repay debt.

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Troubled Barrick launches $3 billion stock sale – by Lisa WRight (Toronto Star – November 1, 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.

The world’s largest gold mining company has decided to suspend construction of a mine that straddles the border between Chile and Argentina.

Barrick Gold Corp. announced one of Canada’s largest stock sales Thursday right after it shelved indefinitely its prized Pascua-Lama gold and silver project on the border of Chile and Argentina in a double-whammy to its already withering share price.

The TSX halted trading on the world’s largest gold company at 4:15 p.m. after Barrick announced it seeks to raise $3 billion in cash to reduce debt and strengthen a damaged balance sheet that has been under fire lately by increasingly disgruntled shareholders.

Shares of the cash-strapped Toronto miner – which has seen its share price cut in half over the last year — had fallen another 6 per cent earlier in the day as investors learned construction is now suspended on of one of the richest, untapped gold deposits in the world.

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Integrated approach required for modern mining, says CEO – by Lindsay Kelly (Northern Ontario Business – October 31, 2013)

http://www.northernlife.ca/

Training, infrastructure needed in Far North

“At the end of the day, it’s about the rocks.” It’s simple advice delivered by TMAC Resources CEO Catharine Farrow, but insight that’s carrying the company forward in its quest to become the next major gold mining camp in Canada.

As the second in a succession of visiting lecturers to the Goodman School of Mines at Laurentian University, Farrow spoke about how miners have to understand data gleaned from the rocks before they can be mined effectively, Farrow said.

Miners can no longer operate in silos, and integrating all the stages of mining, from exploration through to production and the selling of product, is integral, especially in the Far North territory of Nunavut, a developing gold mining jurisdiction.

“If you’re going to, in this day in age, manage your money and corporate strategy, and understand what you’re delivering to your shareholders, you really do have to have all of these working together,” said Farrow, the former chief operating officer of KGHM International and a current director at the Prospectors and Developers Association of Canada.

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Barrick Gold may raise Pascua-Lama costs once more – by Allison Martell (Reuters Canada – October 29, 2013)

http://ca.reuters.com/

TORONTO (Reuters) – Barrick Gold Corp (ABX.TO: Quote) will likely raise the cost estimate for its huge Pascua-Lama mine project in South America for the third time in less than two years when the world’s top gold producer reports results on Thursday.

Much has changed since November, when Toronto-based Barrick pegged the cost of the gold and silver project at $8.5 billion, and markets are anxious to see the company’s new capital cost estimate.

High in the Andes, on the border between Chile and Argentina, Pascua-Lama is Barrick’s biggest and most important growth project. It’s risky, but the potential is great: when and if the mine is completed, it is expected to have exceptionally low operating costs, which could pay dividends for years to come.

Since Barrick released its November estimate, regulators have halted construction on the Chilean side of the project, citing serious environmental violations. Barrick has agreed to build a new water management system to meet their concerns, and said in June it would defer some spending that had been scheduled for 2013 and 2014.

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The Pretium gold resource controversy in context and a letter from the frontline – by Lawrence Williams (Mineweb.com – October 25, 2013)

http://www.mineweb.com/

The disagreement between two respected engineering companies over the Pretium resource in BC, Canada has generated much controversy but should not detract from a still exciting project.

LONDON (MINEWEB) – The Canadian resource sector has been abuzz with people taking sides on the Pretium controversy over the Brucejack resource estimation and whether Strathcona, or Snowden, both highly respected engineering companies, are correct in their different handling of samples and results.

Personally, as a mining engineer by background, I suspect with a deposit of this type with a very large number of ultra-high grade gold intersections in its Valley of the Kings section, within a much lower grade more disseminated orebody, that neither will accurately represent ultimate mining grade terms and, if, and when, a mine is developed at Brucejack, selective mining methods could enable the orebody to be mined to a far higher grade than the bulk sampling would suggest, should economics suggest that is the most profitable long term route for shareholders.

Do I have an interest in Pretium? From a technical point of view perhaps yes – it looks to be one of the most exciting recent gold discoveries in Canada.

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Agnico delivers record gold production in third quarter – by Peter Koven (National Post – October 24, 2013)

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

TORONTO – Agnico Eagle Mines Ltd. kicked off the third-quarter gold earnings season with a strong result that sets a positive tone for the rest of the sector.

The Toronto-based miner’s adjusted earnings came in at US$60.5-million, or US35¢ a share, which was well above the highest analyst estimates. Agnico also boosted its full-year production guidance and announced deeper cost cuts.

The stock jumped more than 15% in early trading on Thursday. “We had some pretty solid production across the board,” chief executive Sean Boyd said in an interview, adding the company has said for months that the second half of 2013 would be stronger than the first half.

The results show gold companies can thrive in a weaker gold price environment, a major concern for investors over the past several months. Agnico’s gold production in the quarter reached a record 315,828 ounces, driven by a strong result from the Meadowbank mine in Nunavut, which opened in 2010. That mine performed poorly in its first couple of years of operation, but has turned a corner.

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Sprott open letter challenges WGC/GFMS gold demand figures – by Lawrence Williams (Mineweb.com – October 23, 2013)

http://www.mineweb.com/

Eric Sprott, challenges the most generally accepted data on gold supply/demand and feels that analyst reliance on this severely impacts their predictions and thus the gold price itself.

LONDON (MINEWEB) – Strong precious metals advocate, Eric Sprott, thinks there is something haywire in the gold supply/demand statistics published regularly by the World Gold Council and relying on data compiled for it by Thomson Reuters GFMS. In Sprott’s view, and this is accompanied by his own research figures, the GFMS data is flawed – yet it tends to be the industry standard taken as the definitive position by gold follower around the globe.

In this context, Sprott has written an ‘Open Letter’ to the World Gold Council, putting forward his company’s own take on the real position in the gold supply/demand equation and draws the conclusion that global gold demand exceeds available new supply by a substantial margin. To read the ‘Open Letter’ in full click here.

Indeed Sprott’s analysis of the position echoes, and expands on, some of the conclusions drawn by Mineweb in some recent articles – not least in terms of the gold flows to Asian and Middle Eastern nations in general, and to China and India in particular.

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Pretium shares sink as geologists declare ‘no valid gold’ at B.C. project – by Peter Koven (National Post – October 23, 2013)

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

The controversy around Pretium Resources Inc. is escalating after the miner revealed that a highly-respected team of geologists declared its entire resource to be invalid.

The judgment came from Strathcona Mineral Services Ltd., the Toronto firm that famously declared Bre-X to be a scam. Pretium shares plunged 28% to $3.45 on Tuesday as investors absorbed the news.

There is plenty of gold in Pretium’s “Valley of the Kings” discovery in British Columbia, but disagreement persists over how it should be measured. Strathcona, which was hired by Pretium to oversee a bulk sample program for the deposit, resigned two weeks ago because it disagreed with the company’s chosen methodology and found fault with its resource.

Strathcona President Graham Farquharson criticized Pretium management on Tuesday, saying his firm informed Pretium about its concerns several times and they were not immediately disclosed.

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NEWS RELEASE: More communities connect with gold miner-First Nations power partnership

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.

Five more First Nations communities in Northwestern Ontario have connected with Wataynikaneyap Power to strengthen its transmission initiative plans. Earlier this year, Ontario Mining Association member Goldcorp and 13 First Nations started this company to develop a transmission line. The goal is to connect remote communities to the provincial power grid and provide more reliable power to communities and companies already connected.

With Deer Lake, Keewaywin, McDowell Lake, North Spirit Lake and Poplar Hill First Nations coming on board, there are now 18 First Nations working with Goldcorp on this project. “Our communities require a reliable power source to be able to participate in economic development opportunities taking place in the region,” said Wataynikaneyap Power Executive Director Peter Campbell. “We look forward to benefiting from this very important infrastructure project.”

“Wataynikaneyap Power is an example of how industry and First Nations can work together on projects that are good for the economy and the environment while benefitting communities in the region for years to come,” said Gil Lawson, Mine Manager for Goldcorp’s Musselwhite Operation, when the power company was launched. Since then, Mr. Lawson has been appointed Vice President Operational Support Canada and U.S. for Goldcorp.

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Goldcorp shows council pit concept – by Benjamin Aubé (Timmins Daily Press – October 21, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Goldcorp has finally received a draft of its air and noise control permit from the Ministry of the Environment regarding the Hollinger open-pit mining project. The news was among the updates provided by Goldcorp/Porcupine Gold Mines general manager Marc Lauzier and superintendent of surface operations Paul Miller at city council on Monday.

“We’re hopeful this will move on fairly quickly,” said Miller, relating to the company receiving news on its MOE permit. “We’ll be stripping overburdens of old construction and getting into the mining activity.”

Also presented to council was an initial rendering of what the Hollinger open pit could look like while mining activity takes place there over a projected 10-year lifespan. Designs show three individual pits, which will be the focus of mining activity on the site.

Miller said the design might be modified as the project moves on. Lauzier added the shape of the pit could change “depending on the economics” and the price of gold.

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