Gold and Silver – Page 281 – Republic of Mining

Analysis: Lurching gold prices mystify traders, undermine confidence – by Frank Tang (Reuters Canada – October 18, 2013)

October 18, 2013

http://ca.reuters.com/

NEW YORK (Reuters) – In the early hours of the New York morning on Thursday, when scarcely a few hundred lots of gold futures are usually traded, a wave of buy orders worth over $2.3 billion surged into the market.

Prices soared 3 percent in just 10 minutes, setting the tone for the next 12 hours of trade – and puzzling many traders and investors who have been rattled by a series of similarly abrupt, and largely unexplained, trade surges over the past two weeks.

While sudden swings in the price of gold are nothing new, the usual causes – a shock in economic data or a “fat finger” erroneous trade – don’t seem to fit. While the U.S. dollar had also tumbled on Thursday, bullion’s move was far more extreme.

Some are pointing at spin offs from today’s predominantly 24-hour electronic trading, with a far smaller number of market makers on the trading floor to match orders and provide liquidity.

The half-dozen mammoth orders whipsawed prices and disrupted trade in the CME Group’s (CME.O: Quote) Comex futures, a market already edgy about bullion’s fading safe-haven appeal and its lackluster performance during the U.S. budget impasse.

Preventing and managing social conflict in Peru (Beyond Borders – July 2, 2013)

October 17, 2013

Beyond Borders is published by Barrick Gold Corporation: http://barrickbeyondborders.com/

Peru has one of the world’s fastest-growing economies, driven largely by its mineral wealth and the expansion of the mining industry. Today, most major global mining companies have operations in the country, including Barrick, BHP-Billiton, Newmont, Freeport McMoran, Glencore Xstrata and others.

Increased mining sector investment and revenues have provided significant benefits to Peru’s national economy. The sector’s contribution to total government revenue averaged 14 percent between 2000 and 2010. In 2010 alone, Peru mined $18 billion worth of minerals, accounting for 12 percent of the country’s gross domestic product. The mining boom has contributed to a marked reduction in Peru’s poverty rate to about 28 percent in 2011 from 42 percent five years earlier, according to The World Bank.

Barrick has been operating in Peru for the past 15 years and has two mines in northern Peru — Pierina and Lagunas Norte. The contribution of these operations to economic prosperity is significant. In 2012, Barrick paid nearly $400 million in taxes and royalties in Peru, and purchased approximately $340 million in goods and services in the country. Ninety-nine percent of the 1,200 Barrick employees who work at Pierina and Lagunas Norte are Peruvian nationals.

Special Report: The Darfur conflict’s deadly gold rush – by By Ulf Laessing (Reuters India – October 8, 2013)

October 9, 2013

http://in.reuters.com/

KHARTOUM – (Reuters) – With its scrubland, unpaved roads and mud brick huts, the Jebel Amer area in Darfur, western Sudan, can look like a poor and desolate place. Under the ground, though, lies something sought by people everywhere: gold.

In the past year or so the precious metal has begun to alter the nature of the decade-old conflict in Darfur, transforming it from an ethnic and political fight to one that, at least in part, is over precious metal.

Fighting between rival tribes over the Jebel Amer gold mine that stretches for some 10 km (six miles) beneath the sandy hills of North Darfur has killed more than 800 people and displaced some 150,000 others since January. Arab tribes, once heavily armed by the government to suppress insurgents, have turned their guns on each other to get their hands on the mines. Rebel groups that oppose the government also want the metal.

The gold mine death toll is more than double the number of all people killed by fighting between the army, rebels and rival tribes in Darfur in 2012, according to U.N. Secretary General Ban Ki-moon’s quarterly reports to the Security Council.

Where have all the mining towns gone? – by Ashleigh Gaul (Up Here Magazine: Life in Canada’s Far North – September 2013)

October 8, 2013

http://uphere.ca/

They’re toxic and deserted wastelands – but to those who once lived there, the remains of mining communities are worth holding onto.

In July Susan Mather packed her family into a motor home. She drove north from Calgary, four kilometres past Yellowknife, to a skeletal timber headframe so rickety that cranes can’t set demolition workers on top to assess just how rickety it is. At its base, a yellow-and black-painted board reads, “Giant Mines Yellowknife, Ltd. Last injury: May 1999.”

That was six months before the last gold brick was poured in Yellowknife, and three years after Mather left her first home. These days, when she wants to visit, she books in advance. A mine manager escorts the family through a line of buildings in various states of disrepair.

They’re given hardhats, safety glasses, reflective vests and a rundown of safety precautions, then asked to log in. When Susan fills out a single line on behalf of the whole family, her son Karl jokes, “This isn’t a guest book, mom, it’s a log. This is a worksite.”

Estimated to cost between $500 million and $1 billion, Giant Mine and the townsite it built to house its workers might be the single largest industrial cleanup in Canadian history.

Gold price is ‘bound to go through the roof’ – by Brendan Ryan (Business Day – October 7, 2013)

October 7, 2013

http://www.bdlive.co.za/ [South Africa]

GOLD bulls have had it rough this year but many would have found solace in the Precious Metals Round Table web-based conference call and presentation held recently by Sprott Asset Management.

About 6,300 participants logged on to listen to speakers like investment “guru” Marc Faber — publisher of the Gloom, Boom and Doom Report — and Toronto-based Sprott chief investment strategist John Embry, a regular keynote speaker at gold conferences.

The bottom line? Hang on to your physical gold and gold shares because the point is fast approaching when the gold price is going to explode.

That prediction is, of course, completely at odds with what has actually happened in the gold market this year, where the price has plunged from about $1,700oz to $1,200oz, before recovering marginally to just above $1,300oz.

Predictions from institutions such as Natixis are far more restrained. The recently published Natixis Metals Review predicts gold dropping back to lows around $1,170oz over the coming six months to a year and averaging $1,200oz for next year.

Two of Canada’s more isolated mines continue to impress: Raglan and Eleonore – by Russell Noble (Canadian Mining Journal – October 2013)

October 4, 2013

Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.

Nunavik and Quebec’s Raglan Mine and Éléonore, operated by Glencore and Goldcorp respectively, are two of the larger and more successful mining operations in the country, but their locations are about as unfamiliar to most people as the northern landscapes where they are located.

In other words, most people don’t have a clue where they are on the map, let alone what the surroundings are like that far north. Both mines are indeed, remote and somewhat isolated, but when it comes to mineral deposits, Raglan Mine and Éléonore are at the forefront and envy of the mining community across the country.

In fact, the world is also keeping watch as Glencore and Goldcorp continue to move towards making their Canadian operations two of the more productive mines on the globe.

Starting at the farthest point north at the Raglan Mine, which is located in Nunavik approximately 1800 km northwest of Montreal or, about the same as Cuba is to the south, is near Deception Bay on the Hudson Straight and is linked by all-weather roads to an airstrip at Donaldson.

Tracing the Chinese gold rush – by Jan Skoyles (Mineweb.com – October 1, 2013)

October 4, 2013

http://www.mineweb.com/

According to Jan Skoyles, 2013 will be remembered by the gold market as the year of China, but the Asian giant’s domination, while quick hasn’t happened overnight.

LONDON (THE REAL ASSET COMPANY) – The year 2013 in the gold investment market will be remembered as the year of China, so we’ve produced a stunning infographic detailing China’s great golden rise to power.

In just a few months the world’s largest country will overtake India as the biggest consumer of gold and its gold market continues to break records.

A country that already mines over 400 tonnes of gold a year, China still demands more physical gold no matter the price. Between January and July this year the Shanghai Gold Exchange delivered more than 1,333 tonnes to gold investors.

In the last 100 years China’s gold mine productivity has climbed from just 4 tons of gold in 1949 to an expected 440 tons this year, none of which is exported. Hong Kong imports have been over 600 tonnes this year alone, but still more gold is demanded.

Iamgold CEO committed to low-grade gold – by Allison Martell (Reuters U.S. – October 3, 2013)

October 3, 2013

http://www.reuters.com/

Oct 2 (Reuters) – Stephen Letwin is a man of conviction. The chief executive of mid-tier gold miner Iamgold Corp believes low-grade deposits are the future, whether the industry is ready or not.

With prices down and higher costs cutting into margins – already slim at many low-grade mines – explorers that once boasted about the size of their deposits are now wooing investors with tales of high-grade zones.

But Letwin, who was touting low-grade gold last year, before spot prices dropped more than 20 percent, sees no reason to change his tune. “I don’t care who you are – we are all migrating to lower grade,” he said in an interview. “It’s just a fact of life.”

Iamgold’s operations in Africa and South America have relatively low concentrations of gold. At the Rosebel mine in Suriname, for example, the reserve grade is one gram per tonne.

That is not far off the average reserve grades of the senior producers, but unlike some of those companies’ mines, Rosebel and Iamgold’s Essakane mine in Burkina Faso do not produce silver, copper or other valuable minerals that are often recovered with gold.

Alaska’s Zombie Gold Mine to Nowhere – by James Greiff (Bloomberg News – October 1, 2013)

October 3, 2013

http://www.bloomberg.com/

James Greiff is a Bloomberg View editorial board member.

What happens when the main financial backer pulls out of a project? The answer is usually clear: The deal fails, which is what the foes of a gigantic gold and copper mine in Alaska are counting on. But in this case the mine has only been dealt a setback and is far from dead.

That about sums up the state of play after last month’s announcement by Anglo American Plc that it would pull out of a partnership that planned to build what’s known as Pebble Mine, proposed for the Bristol Bay region of southwest Alaska. If the mine were developed, it would be the biggest of its type in North America — and located on the headwaters of rivers flowing into the world’s most productive salmon fishery.

Environmentalists, the commercial salmon industry and local indigenous tribes were ecstatic, as one might expect. They had argued — no doubt correctly — that the mine couldn’t be safely developed without damaging the salmon fishery, and they waged a savvy campaign that no doubt raised the stakes for Anglo American.

Red Lake housing shortage vexes officials – CBC News Thunder Bay (October 2, 2013)

October 3, 2013

http://www.cbc.ca/thunderbay/

The Municipality of Red Lake wants to build more housing so workers at the local mines can live in the community. A housing shortage is one reason that hundreds of contractors commute to their jobs.

Red Lake’s economic development officer said much of the land in the municipality is already staked for mining claims — meaning it can’t be built on. “Well, it might look open to the naked eye but, in truth … we cannot develop up here,” Bill Greenway said.

Mining company Goldcorp is currently building 10 homes, with another 40 planned for a subdivision. But that is just a start on what’s needed, Greenway said The cost of servicing a building lot on bedrock is in the tens of thousands of dollars, he noted.

“Infrastructure costs are probably the biggest detriment to development here, because you’re usually looking at using explosives to actually embed water, sewer lines,” Greenway said. Finding a solution to the housing shortage would make it easier for Ron Parks to attract staff to his Tim Horton’s store.

“The main problem here is they have a hard time finding a place to live,” Parks said.

Barrick Gold founder Peter Munk’s final play – by by Jonathon Gatehouse (MacLean’s Magazine – October 1, 2013)

October 1, 2013

http://www2.macleans.ca/

He’s fending off a shareholder revolt and fighting for a legacy

Back in 1996, Peter Munk sat down with one of his biographers and laid out his 34 “golden rules” for success in business. Some of them offer practical advice: “Always leave something on the table in a public issue. If you push for the last penny, it may hurt you the next time around.” While others border on fortune-cookie wisdom: “Time is short.

If you want to achieve much, you’ve got to run.” Taken all together, the list seems less like a coherent corporate philosophy than an odd mélange of exhortations to take risks and calls for fiscal prudence. But there was also an element of prophecy—at least when it comes to the current fortunes of the celebrated 85-year-old entrepreneur. “If you want to dream big, expect big problems,” states rule 30. “Big dreams challenge the fates.”

From its humble beginnings as an oil and gas play in 1983, Munk’s Toronto-headquartered Barrick Gold Corporation has grown into the world’s largest gold producer, with 24 mines operating on four continents, five more in development and ore reserves estimated at more than 140 million ounces. Characterized by the relentless pace and sheer scale of its acquisitions, including a 2011 foray into copper with the $7.66-billion takeover of Equinox Minerals Ltd., the company had been a darling of investors for more than two decades. At its peak in 2011, Barrick was trading at $53 a share and had a market capitalization of $54 billion.

Silicosis claims and the gold mines: To settle or not? – by Sarah Evans (Mail and Guardian – October 1, 2013)

October 1, 2013

http://mg.co.za/ [South Africa]

A recent settlement between miners and Anglo American could be a precedent as the gold industry prepares for a looming silicosis class action suit.

Despite being a landmark case, the confidential nature of a recent settlement between Anglo American and silicosis sufferers means there is little legal precedent for future cases, at least in terms of financial compensation.

But the agreement has other implications: as the number of silicosis damages claims against the gold mining industry piles up, and in the face of a looming class action suit, out-of-court settlements could become the norm as mining companies try to avoid bank-breaking court rulings.

In the weeks to follow, the high court in Johannesburg will decide whether to collate three class action claims against 30 of South Africa’s gold mines.

This comes on the back of a landmark settlement between Anglo American and 23 silicosis sufferers, seven of whom died waiting for the case to be finalised. Their claim was instituted in 2004 and was due to go to arbitration in 2014.

Why Miners Walked Away From the Planet’s Richest Undeveloped Gold Deposit – by Brad Wieners (Bloomberg Business Week – September 27, 2013)

October 1, 2013

http://www.businessweek.com/

Before pulling out of the Pebble Mine project last week, Anglo American (AAUKY), one of the world’s biggest mining companies, had invested six years and at least $541 million—in a partnership with Vancouver-based Northern Dynasty Minerals (NAK)—to develop the site in southwestern Alaska. Wait, pause on that number for a sec: $541 million.

That’s right, the London-based multinational and its U.S. subsidiary (AA Pebble) just forfeited a return on more than half a billion dollars of its shareholders’ money. By the end of its 60-day withdrawal from the project (mid-November), that figure will probably end up closer to $580 million. Anglo American has also indicated it will write down a $300 million loss (misreported as a “penalty” elsewhere) to remove the proposed mine as an asset from its books.

Although a far smaller player, Northern Dynasty will soon own 100 percent of the project, thought to be worth $300 billion or more, and vows to carry on. Having completed more than a million feet of exploratory, diamond-core drilling in 1,200 holes, the former partners also amassed a 27,000-page study of the terrain, but had not begun the formal permitting process. In fact, Northern Dynasty has plowed $180 million into Pebble since it first secured the rights to the region in 2001.

Huge mining consortiums frequently seed nine-figure projects, but $760 million-plus is still a large sum, so why did Anglo American bail now?

Newmont bids for Las Bambas to beef up copper assets – CEO Goldberg – by Dorothy Kosich (Mineweb.com – October 1, 2013)

October 1, 2013

http://www.mineweb.com/

Newmont, which began as a copper-gold miner in the early 1900s, is seeking to increase its copper mining operations as “pure gold plays” appear to be losing favor with investors.

RENO (MINEWEB) – In seeking to increase its copper holdings, Newmont Mining is apparently returning to its historic copper roots under the leadership of new CEO Gary Goldberg, a former copper mining executive for Kennecott Utah and Rio Tinto.

In an interview with the Financial Times published Monday, Goldberg said the company had expressed interest in the hotly sought after Las Bambas copper project in Peru. Mineweb was told of Newmont’s potential Las Bambas acquisition by a former top Newmont executive at last week’s Denver Gold Forum in Denver.

Newmont Founder, William Boyce Thompson, accumulated a large fortune by buying undervalued copper and gold claims through Newmont Mining. By the 1940s Newmont would become one of the world’s largest copper producers, eventually becoming a major shareholder in Magma Copper, which would be acquired by Australian uber miner BHP in the mid-1990s. By the 1960s, the company’s Carlin Trend discovered in northeastern Nevada would issue a new era for Newmont as a gold producer.