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Gold and Silver

Good news of gold in NOW (Thunder Bay Chronicle-Journal – September 16, 2013)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

This is the ninth instalment of a multi-part series looking at the mining sector in Northwestern Ontario and the Ring of Fire development.

“For more than 2,000 years, the natural properties of gold have made it man’s universal medium of exchange. In contrast to political money, gold is honest money that survived the ages . . .’’

Although not everyone might agree with this rather dramatic statement, it is difficult to deny the timeless allure of the yellow metal and its association with wealth, strength and excellence.

References to gold permeate our culture, hence terms like “gold seal of approval,’’ “good as gold” and the awarding of first-place gold medals to the best of the best.

Despite its vulnerability to interest rates and market fluctuation, German-born economist, Hans F. Sennnhotz (1922-2007) demonstrated his complete faith in gold as a universally enduring commodity when he made this statement. Gold remains a powerful economic driver and is still a monetary reference in many of the world’s economies, where the value of a bill still guarantees or is “backed up” by a certain amount of gold.

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Gabriel threatens Romania with billion-dollar lawsuit – by Eric Reguly (Globe and Mail – September 12, 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.

ROME — Canada’s Gabriel Resources Ltd. is issuing a stern ultimatum to the Romanian government: Approve the Rosia Montana gold mine or face a lawsuit for billions of dollars.

The strategy marks a stunning reversal for the Toronto Stock Exchange-listed company, which until recently had expected the government would approve a draft law that would allow the $1-billion (U.S.) mining development in Romania’s Transylvania to go ahead.

Then, on Monday, Romanian Prime Minister Victor Ponta said parliament would likely reject the draft law, a move that would kill Europe’s largest gold project. Gabriel shares went into freefall. The same day, Gabriel said it would “assess all possible actions open to it, including the formal notification of its intentions to commence litigation for multiple breaches of international investment treaties.”

On Wednesday, Gabriel chief executive officer Jonathan Henry vowed that the legal action would go ahead if the government does kill the mining project, and attached a big number to it.

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Protests, cyanide concerns may halt Canadian-Romania gold mine project – by Nick Logan (Global News – September 10, 2013)

http://globalnews.ca/

VANCOUVER – Anti-mining protesters appear to have won their battle against the Romanian government and a Canadian firm planning to build Europe’s largest open-cast gold mine.

At least for now.

After more than a week of rallies in the capital city of Bucharest and the country’s second-largest city of Cluj Napoca, Romanian Prime Minister Victor Ponta said Monday the project likely won’t get approval.

A majority of Romanian parliament members weren’t in favour of the mine proposal for the northwest mountain community of Rosia Montana, and Ponta asked parliamentarians to vote quickly on draft legislation that would have moved the proposal forward.

“There’s no point in wasting time, I want to make sure that the Senate and the Chamber of Deputies vote on the rejection and then this project is closed,” Ponta said, according to Bloomberg News on Monday. “I don’t want the government to be responsible for contracts undertaken by previous cabinets.”

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Gabriel shares plummet as massive project in Romania now on the rocks – Peter Koven (National Post – September 10, 2013)

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

The long-suffering shareholders of Gabriel Resources Ltd. two weeks ago received a brief glimmer of hope — a hope that now appears to be extinguished.

Shares of the Canadian miner plunged an astounding 53.7% to close at 68¢ on Monday after Romanian Prime Minister Victor Ponta reversed course and said the company’s giant Rosia Montana project should not go ahead. At one point, the stock was down as much as 72%.

While Mr. Ponta’s comments do not mark the end of Gabriel’s quest to build Rosia Montana, which could become Europe’s biggest gold mine if it is ever approved, the response from investors on Monday shows many of them have had enough of this saga.

Gabriel has been trying to win approval for the project since the late 1990s, but has faced vicious opposition from anti-mining activists along the way. The company battled back — it even helped fund a documentary called Mine Your Own Business, which portrayed the activists in a very negative light and suggested the mine is needed to create economic activity in an impoverished part of Romania.

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Hedge fund urges breakup of Barrick Gold to boost stock price – CBC News Business (September 9, 2013)

http://www.cbc.ca/news/business/

A small, U.S. hedge fund wants to break up Canadian mining giant Barrick Gold, saying its collection of mining assets is spread out over too broad of a geographic area, which has led to a disappointing shareholder return.

Mike Morris, co-founder of Two Fish Management, which is exposed to Barrick Gold through its options holdings, has written to Barrick CEO Jamie Sokalsky and other board members recommending that the North and South American assets of the mining company be split from the African and Australian Pacific holdings.

“Each distinct business unit has unique political environments, geologies, operating costs, reserve profiles, profitability, capital intensities and growth prospects,” he says in the letter.

Barrick Gold’s stock has fallen by nearly 50 per cent in the past year, as the gold mining company took massive writedowns and cut its dividend. The price of gold has been falling, but in addition, Barrick’s gold production per share fell 28 per cent from 2003 to 2012, Morris said.

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Standing up to big gold – by Roxana Olivera (United Church Observer – June 2013)

http://www.ucobserver.org/

A fight pitting Indigenous Peruvians against a multinational mining company highlights the real cost of the global boom in precious metals

n July 3, 2012, Peruvian police opened fire on a public demonstration in the Andean town of Celendin, killing four protesters. José Sánchez was shot in the throat; Eleuterio García in the chest; Faustino Silva in the head. César Medina — the youngest among the dead at only 16 years old — was also shot in the head. Dozens more were seriously injured, and several arrested without cause. They were among 3,000 people rallying against the Minas Conga, a proposed gold mine that threatens to contaminate their community’s water supply.

The government immediately called a state of emergency in Celendin and two other provinces, suspending civil liberties and mobilizing riot police and soldiers to the region. But the very next morning, police and soldiers again fired at unarmed anti-Conga demonstrators in the nearby town of Bambamarca, this time killing Joselito Vásquez, 26, and injuring and arresting several others.

News of the violence sparked indignation in Peru and abroad. Amnesty International and Human Rights Watch, along with a host of other human rights groups, condemned the brutality, calling for a thorough investigation.

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Gabriel Resources seeks Romanian clarification on key gold mine – by Bertrand Marotte (Globe and Mail – September 9, 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.

Gabriel Resources Ltd. is frantically trying to confirm statements by Romanian Prime Minister Victor Ponta and other ministers regarding rejection of a draft bill allowing the company to build Europe’s largest gold mine.

The Canadian mining company said Monday that it is “urgently seeking confirmation of the actual statements made and clarification of the impact on the proposed permitting of the Project.”

Media reports on Monday quoted Mr. Ponta as saying that the Rosia Montana gold-and-silver project in a small Romanian town is “case closed” after a week of protests by environmentalists and citizens throughout the country concerned over the use of cyanide in the extraction process.

The project, which Gabriel has been pursuing since the late 1990s, would also involve the razing of four mountains to allow for a giant open pit mine. Backers of the project say the mine would help boost the economically deprived region of northwest Romania and create much-needed jobs.

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Shawn Ryan’s new Yukon vision – by Gwen Preston (Northern Miner – September 4, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

DAWSON CITY, YUKON — Shawn Ryan could have retired. Ryan and his wife, Cathy Wood, are the Yukon prospecting team whose dedicated soil sampling led Underworld Resources to the million-ounce-plus White Gold deposit in 2009, a discovery that sparked a new Yukon gold rush. They also get credit for Kaminak Gold’s (TSXV: KAM; US-OTC: KMKGF) Coffee project, already at 3.2 million oz. and growing, and have at least another dozen soil anomalies on option to explorers across the White Gold district.

After years of scraping by on government grants and prospecting contracts, Ryan and Wood made it to the big leagues when Kinross Gold (TSX: K; NYSE: KGC) acquired Underworld for $138 million. With that payday, plus a steady stream of option payments, the team could easily have stepped back from the grind and enjoyed their just rewards.

Instead, Ryan and Wood spent the last 18 months figuring out how to make exploring for gold in the Yukon less expensive and more reliable. “I could see the crash coming and I could see there was so much money being wasted up here,” Ryan says in an interview in Dawson City. “So we took a step back and thought, ‘If we’re going to keep this momentum alive, we need to add something new — we need to figure out some simple new tools that will increase drilling confidence without costing millions.”

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EXPLORING for GOLD: Lac Seul holds shares in junior explorer AurCrest Gold; Webequie part owner of Cyr Drilling – by Bryan Phelan (Onotassiniik – Fall 2013)

 Onotassiniik is Wawatay’s new mining quarterly.

Ian Brodie-Brown’s first contact with Lac Seul First Nation stood out. Then CEO of Tribute Minerals, a junior exploration company, Brodie-Brown hadn’t just sent a letter to the band. He had sent it voluntarily. “He was the first guy that I’d ever seen – the first company representative – approach a First Nation without being told to by the Crown,” recalls Chris Angeconeb, Lac Seul’s lands and resources co-ordinator at the time.

The introductory letter arrived almost seven years ago. Exploring for base metals at Confederation Lake, in Lac Seul’s traditional territory, Tribute was “basically trying to drum up support for a micro-mine with small output; a little underground project,” Angeconeb says.

Brodie-Brown says he expected new provincial rules for mineral exploration and consultation with First Nations would come eventually (regulations for exploration plans and permits, under a modernized Mining Act, finally took effect this spring). Instead of waiting, “We just decided to take a proactive role,” he says.

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REFILE-UPDATE 5-S.African gold miners’ union offers some compromise as strike bites – by Xola Potelwa (Reuters India – September 5, 2013)

http://in.reuters.com/

WESTONARIA, South Africa, Sept 4 (Reuters) – A strike for higher pay hit production at most of South Africa’s gold mines on Wednesday, but the main union behind the stoppage said it was willing to relax some of its demands.

The stoppage, called by the National Union of Mineworkers (NUM), began at the evening shift on Tuesday, with many miners refusing to go underground.

Producers grouped in the Chamber of Mines said output at 16 of the 23 mines currently involved in talks was partially or severely affected on Wednesday morning. The operators of the mines include South Africa’s main producers AngloGold Ashanti, Gold Fields, Harmony Gold and Sibanye Gold.

“The majority of Harmony’s operations have been severely affected, although all essential services personnel are at work,” the company said in a statement.

However, the NUM, which represents two thirds of the country’s gold mine workers, has already opened the prospect of a compromise, saying it was prepared to lower its pay increase demands for some specific employee categories.

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U.S. hedge fund demands breakup of Barrick, additions to its board – by Canadian Press (Vancouver Sun – September 5, 2013)

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

A U.S. hedge fund is making a renewed call for changes at Barrick Gold, calling for the breakup of the company and the addition of a mining engineer and geologist to its board.

Mike Morris, principal and founder of Two Fish Management, said Wednesday that there is no compelling reason for Barrick to own a worldwide conglomerate of gold mines. “The market is essentially assigning a massive conglomerate discount to the company,” he said Wednesday.

Since Two Fish first wrote to Barrick demanding changes in April, the gold miner has agreed to sell off its Barrick Energy subsidiary in a series of deals worth a total of $455 million and three high-cost mines in Western Australia to South Africa-based miner Gold Fields Ltd. for $300 million.

But Morris and Two Fish wants more and to that end, the fund has produced a new 78-page presentation detailing the changes it thinks are needed. “This is Canada’s company and this is the world’s largest gold-mining concern and it doesn’t have a geologist or an engineer on its board,” he said.

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Gabriel Resources’ Rosia Montana gold mine rests in Romanian parliament’s hands – by Peter Koven (National Post – September 5, 2013)

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

After years of delays and political turbulence, Gabriel Resources Ltd. may finally be on the cusp of building Europe’s biggest gold mine.

Gabriel’s saga has been one of the longest and most disappointing in Canada’s gold sector. The Whitehorse-based company has been trying to develop the Rosia Montana gold project in Romania since the 1990s, but has faced vicious opposition from anti-mining activists, which spread rhetoric against the project. Successive governments were reluctant to give Gabriel the go-ahead amid such a heated environment.

Things have changed. Current Prime Minister Victor Ponta won a convincing victory in last year’s election, and has majority control over parliament. That has allowed him to be far more aggressive than his predecessors in approving large capital projects that can boost the economy.

One of his priorities is Rosia Montana. Last week, his government approved a draft law that sets out a course for development of the mine. It now needs to be approved by parliament.

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South African gold miners ease some wage demands as strike slams troubled industry – by Geoffrey York (Globe and Mail – September 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.

JOHANNESBURG — The vast majority of South Africa’s biggest gold mines have been severely affected by a national strike that began on Tuesday night by nearly 80,000 mine workers.

Of the 23 gold mines targeted by the strike, 17 have been forced to halt operations or have less than half of their workers on duty, according to reports on Wednesday as the strike entered its second day.

There was a glimmer of hope on Wednesday as the leading mine worker union reportedly offered to compromise by cutting its wage demands below its original call for a 60 per cent wage increase, although the details of its new demand were unclear. The seven gold mining companies – including AngloGold Ashanti and Harmony Gold – have insisted that they cannot offer anything more than a 6.5-per-cent wage increase.

The strike, expected to cost the South African economy about $60-million a day, has dealt another blow to a beleaguered industry that already suffers from rising costs and shrinking production. Some analysts predict that it could become the costliest strike in the country’s history. With the two sides far apart, a lockout is also possible.

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Europe’s Biggest Planned Gold Mine May Face Romanian Referendum – by Irina Savu (Bloomberg News – September 2, 2013)

http://www.bloomberg.com/

Romania’s President proposed a vote on allowing development of Europe’s largest gold mine project following protests against technology that made the country home to one of the continent’s worst environmental disasters.

A day after thousands of demonstrators rallied against the use of cyanide in gold mining, President Traian Basescu said he may call a referendum next year on the Rosia Montana mine. That may delay the project, for which Canada-based Gabriel Resources Ltd. (GBU) said it could “hopefully” receive approval by November.

The rallies followed the government’s unveiling last week of a draft law to raise the state’s stake in the project, rekindling anger over the 2000 Baia Mare spill. Listed by the United Nations Environment Programme alongside Chernobyl as one of Europe’s major human-caused disasters, the spill happened when a dam holding back mine debris burst, flooding the Somes, Tiza and Danube rivers with tens of thousands of tons of cubic meters of cyanide-contaminated water.

“The biggest scare about the Rosia Montana mine is the cyanide process, which should have been discussed with experts,” Basescu said on newspaper Adevarul’s website. He said “society is rightfully reacting to this” because Romania had suffered from the Baia Mare spill.

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Lancaster Co. proposal could affect future gold mining – by Sammy Fretwel (Herald On Line.com – September 2, 2013)

http://www.heraldonline.com/

That’s why plenty of people are watching Romarco Minerals Inc. these days. The fate of gold mining in South Carolina is tied to an ambitious plan by the company to offset wetlands damage at a huge mine it plans near Kershaw – and how well Romarco navigates the environmental permitting process, observers say.

More than 20 years after one of the state’s most prolific gold mines closed, Romarco Minerals Inc. of Canada is trying to persuade state and federal regulators to let it dig up and substantially expand the Haile mine in Lancaster County.

To do that, Romarco must convince regulators that the company has done all it can to avoid unnecessary damage to wetlands, streams, rivers and groundwater – and Romarco must offer compensation for the environmental impacts the mine will have. The company recently offered a wetlands offset package that could cost it $32 million.

Romarco’s efforts are expected to guide future company work in South Carolina, as well as those of other gold-exploration companies on whether to dig new mines. Some of Romarco’s competitors have been searching for gold in the Carolina Slate Belt, a rocky area that in South Carolina is largely between Columbia and Charlotte.

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