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Gold and Silver

1919 was a watershed year for Timmins – by Karen Bachmann (Timmins Daily Press – August 16, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Can you believe that summer is almost over – and if you are wondering “what summer?” I concur completely. In just a scant few weeks, everyone will be returning to school, be it for the first time or for the last, or for somewhere in between.

The rest of us will just “get on with it,” and enjoy the fall and the return to busy days. However, today is still mid-August, we have a few weeks of lollygagging left to us, so I will not spoil things just yet.

In keeping with the last lazy days of the season, I give you a totally irreverent article focusing on small town happenings back in 1919.

As always, a little context – the Great War to End All Wars came to an end on Nov. 11, 1918, so slowly but surely the armies were standing down and the young men and women who survived the conflict were finally on their way home.

Your heart has to go out to Pte. Manley Cole, a resident of Timmins. He served in all four years of the war, was wounded in battle not once but twice, each time recuperating quickly. 

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China and India may not be enough to rescue gold – by Clyde Russell (Reuters India – August 16, 2013)

http://in.reuters.com/

LAUNCESTON, Australia – (Reuters) – With gold demand slumping to the lowest in four years in the second quarter, bulls are grasping to hold on to anything positive and right now that means India and China.

If there was a bright spot in the World Gold Council’s (WGC)quarterly report, it was that demand in the world’s top two consumers surged.

India regained its lead over China by buying 310 tonnes in the second quarter, up 71 percent from the same period in 2012 and 21 percent above first quarter purchases.

China bought 275.7 tonnes in the second quarter, a jump of 87 percent from the same period last year, but 6 percent below the first quarter’s demand.

But even the strong demand in the Asian giants wasn’t enough to offset the dramatic outflows from exchange-traded funds (ETFs), which saw 402.2 tonnes of sales, more than double the 176.5 tonnes that flowed out in the first quarter.

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PRESS RELEASE: Detour Gold Achieves Commercial Production at Detour Lake

Aug. 14, 2013, 3:52 p.m. EDT

TORONTO, ONTARIO, Aug 14, 2013 (Marketwired via COMTEX) — Detour Gold Corporation CA:DGC +0.96% (“Detour Gold” or the “Company”) is pleased to report that its Detour Lake mine reached commercial production on August 12, having operated for a period of 60 consecutive days (commencing June 13, 2013) at an average of 41,428 tonnes per day (tpd).

The Company’s definition of commercial production states that commercial production will be declared on the first day of the calendar month following the mill having operated for a period of 60 consecutive days at an average of 75% or more of the designed production capacity, equivalent to 41,250 tpd. Consequently, the Company will commence reporting operating costs as of September 1, 2013.

During the 60 day period, the processing plant processed a total of 2,486,000 tonnes of ore, including 17 days where daily milling rates exceeded 50,000 tpd. For the first 11 days of August, availability improved to 80%. During the last four days of that period, the processing plant operated at an average of 52,900 tpd with an overall availability of 95%, which is closely approaching the nameplate capacity of 55,000 tpd. The ramp-up is also steadily progressing at the mine with mining rates averaging 180,000 tpd (total material mined = overburden, ore and waste) for the first 11 days of August.

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Indian and Chinese “strong hands” continue to boost gold demand – WGC -by Geoff Candy (Mineweb.com – August 15, 2013)

http://www.mineweb.com/

According to the World Gold Council, the gold market continues to re-balance and demand is moving distinctively from West to East.

Gold demand in India and China is expected to account for close to 45 to 50% of the total gold market by year end, the World Gold Council says, as consumer demand for gold continues to ratchet higher.

Speaking to Mineweb on the launch of the group’s Gold Demand Trend report for the second quarter, MD for investments, Marcus Grubb, explained that based on the figures for the year so far, the council has moved its range for total demand to roughly the same level – 900 – 1000 tonnes each.

Both markets are up roughly 45 to 50% for the year to date and “they are remarkably close together; they are still within about 35 tonnes of each other, which is very similar to where they were in the first half of last year (about 30 tonnes apart) in spite of being 50% larger this year.”

Grubb points out that this forecast implies a new all time high total demand figure for China, comfortably higher than the previous record of 776 tonnes.

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Owner puts Nunavut’s Lupin Mine project back into limbo – by NUNATSIAQ NEWS (Nunatsiaqonline.ca – August 13, 2013)

http://www.nunatsiaqonline.ca/

Elgin Mining posts $14.1 million loss for first half of 2013

Beset by financial losses and falling gold prices, the owner of Nunavut’s Lupin gold mine, Elgin Mining Inc., has put the property back into mothballs indefinitely, the company said Aug. 12 in a news release. “The Lupin camp was shut down in late April and will remain closed indefinitely,” Elgin Mining said.

The company said the Lupin camp and its infrastructure are in “excellent condition,” but that it will stay closed until the price of gold and other market conditions improve. To keep the site maintained, Elgin will spend less than $250,000 between now and the end of the year.

In 2011, when gold was trading at above $1,500 an ounce on global markets, Elgin Mining bought the property from MMG Resources Inc., the current developer of a set of lead-zinc projects in the western Kitikmeot.

At the time, Elgin planned to bring the mine, which had pumped out 3.5 million ounces of gold between 1982 and 2003, back into production.

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Losing Faith in Gold From Ghana to Vancouver Proves Rout – by Peter Robison & Ekow Dontoh (Bloomberg News – August 13, 2013)


http://www.bloomberg.com/

Akwesi Boahene’s gold dreams ended better than those of some people in Dunkwa-on-Offin, Ghana, whose riverbeds yield flecks of the precious metal to pickaxes. He still had his life.

Boahene, a satellite-television installer, and a partner pooled $10,000 two years ago to rent land and start a mining operation in a muddy West African town then booming with prospectors lured by what was gold’s longest bull market in at least nine decades.

In May, as prices sagged, his venture became another victim in a year of lost faith in the metal. Boahene shut down the no-longer-profitable business and told his 15 workers to stay home. When a former employee phoned one morning in June about returning to work, Boahene, 33, had no good news.

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Gold producers squeezed by rising costs and sliding prices – by Tim Kiladze (Globe and Mail – August 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.

Midway through his master’s degree in geology in the 1980s, Brian Christie trekked to the Red Lake gold mine in Northwestern Ontario as part of a research project. About 930 metres deep, more than one and a half times the CN Tower’s height, the remote mining project was a treat for a geology student eager to make his mark in the industry.

At the time, Red Lake was near the top of the list of the world’s most important gold mines in terms of grade and volume. Even today, after decades of production, some areas of the mine produce 57 grams of the gold per tonne – many multiples ahead of the industry average.

Yet the enthusiasm for projects such as that once drew Mr. Christie to research Red Lake has been undercut by a 10-month slide in gold prices and at least $23-billion worth of writedowns by Canadian gold miners over the past year and a half.

Today, Red Lake’s high-grade gold is found as far down as 2,350 metres, about four times the CN Tower’s height, which shows the difficulty gold miners face in trying to boost their stock valuations even if prices for the precious metal rebound.

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Mining the Gobi: The Battle for Mongolia’s Resources – by Bernhard Zand (Spiegel Online International – August 7, 2013)

http://www.spiegel.de/international/

Mongolia is over four times the size of Germany, with nearly 3 million inhabitants and a GDP of $10 billion (€7.5 billion) in 2012.

British-Australian mining corporation Rio Tinto employs 71,000 people in more than 40 countries and is worth about $60 billion.
These two unequal partners — a poor, potentially rich nation and the second largest mining corporation in the world — have joined together to mine one of the globe’s largest deposits of copper and gold. But will they be capable of distributing this wealth fairly?

The mine in question lies an hour’s flight south of the Mongolian capital Ulan Bator, near the border with China. There is enough copper in the ground here to build the Statue of Liberty more than 800,000 times over. Once the planned mine goes into full operation, it could increase the country’s GDP by a third. It could, at least in theory, bring prosperity to this country where many people still live in simple yurts and huts.

But in practice, the transaction between this global corporation and this country that is poor but rich in raw materials looks quite different. In fact, the project serves as a prime example of what is happening in a growing number of newly industrialized and developing countries.

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South African gold output continues its decline – where will it end? – by Lawrence Williams (Mineweb.com – August 9, 2013)

http://www.mineweb.com/

Statistics South Africa has just released its latest figures on the country’s metals and mineral output and they don’t make for happy reading with gold and platinum still on the decline.

LONDON (MINEWEB) – For South Africa, the latest figures from the country’s government statistical department, make fairly dismal reading, particularly with respect to its once word-dominant gold mining sector. The June figures, released yesterday, showed .that gold production continues to fall year on year – it was down 14% on that for June 2012 – and is now only the country’s fourth most important mined metal by value, having been overtaken by iron ore. Coal remains the most important metal or mineral by sales value, with platinum second, but the latter too is showing a year on year production decline.

According to the report the country’s overall mining production decreased by 6.2% year-on-year in June 2013. The largest negative growth rates were recorded by ‘other’ metallic minerals (-38.0%), diamonds (-22.9%), PGMs (-18.9%) and gold (-14.1%). The main contributors though to the overall 6.2% decrease were platinum group metals (contributing -4.6 percentage points) and gold (contributing -2.3 percentage points). Iron ore (contributing +2.0 percentage points) was the most significant positive contributor.

In value terms, the latest figures released are from May when overall mineral sales decreased by 8.5% year-on-year. The largest negative growth rates were recorded for gold (-42.6%), nickel (-20.0%) and ‘other’ metallic minerals (-15.5%). The major contributor to the 8.5% overall decrease was gold (contributing -10.0 percentage points).

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[Timmins] City to collect own data on open pit – by Benjamin Aubé (Timmins Daily Press – August 8, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – It’s another sign that the Hollinger Mine will soon be coming back to life, courtesy of Goldcorp/Porcupine Gold Mines.

As Timmins residents well know, with renewed activity at the historic gold mine will come daily blasts and the bustle of trucking and transporting its precious resources.

A big part of the success of the Hollinger open-pit project will depend on the company keeping noise, vibrations, dust levels and emissions to a minimum so as not to disturb the properties and daily lives of neighbouring residents.

Timmins city council ensured measures will be taken to monitor such levels, entering into an eight-year agreement with Aercoustics. The contract will give the city its own set of information regarding the mine’s activities.

“They will provide us with our own monitoring equipment so we can compare that information to the information collected by Goldcorp,” explained city head of public works and engineering Luc Duval.

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The Price Of Gold Is Dropping Like A Brick – by Mark Williams (WBUR Boston NPR – August 6, 2013)

http://www.wbur.org/

Watch out for that shiny pendulum because it’s swinging back fast. Investors are chasing stocks and real estate and fleeing gold. The two former asset classes have experienced solid returns since 2012 while gold has suffered double-digit declines.

Large cracks in the “go-long-gold” strategy are evident. Economic weaknesses in Europe remain but no financial Armageddon has emerged. Keynesian economics remain the drug of choice, Japan being the latest user, yet inflation is non-existent. The strength of the dollar and the increased willingness of the Fed to taper quantitative easing undermine higher gold prices. Investor support is crumbling and gold bugs, those believing it is a stable investment, should be nervous.

Since the historic highs of 2011, gold has dropped by over 30 percent. In 2013 alone, investors have begun to give back several years of gains. Recent paper losses for hedge funder John Paulson have topped $1 billion. In just the last six months, gold has dropped by 22 percent, the worst fall since modern trading commenced in early 1970s. Gold is locked in a bear strangle and prices have plenty of room to fall still further.

It has taken over a decade but the bubble has finally been pricked. The pin that popped this most recent asset swelling is not complicated.

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Mining engineer an “oddity” in Canada – Women in Mining: Imola Götz – by Liz Cowan (Northern Ontario Business – August 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Imola Götz’s choice to study mining engineering wasn’t an unusual one while growing up in Romania. “There were many mines around my home town and I knew the possibilities and thought this was a very interesting career,” said the chief engineer at Goldcorp’s Porcupine Gold Mines in Timmins.

It was not unusual to find women working in the industry, with many filling technical positions. However, when she immigrated to Canada more than two decades ago, she was surprised there were not as many women working in the industry or pursuing engineering.

“When I got to Canada I was an oddity and I often got asked why I chose mining,” said Götz. She has been with Goldcorp for nearly 10 years and previously spent about 15 years in Manitouwadge. Her husband, Laszlo Götz, also works for Porcupine Gold Mines as its environmental manager. The couple decided to leave Romania early in their careers since the communist regime was “getting more and more intolerable.”

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NEWS RELEASE: OMA member profile: Brigus Gold — expanding quantity and quality of reserves

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.

While the price of gold has slid recently, this doesn’t mean that precious metals explorers and developers have been operating in a holding pattern waiting for a price rebound. Companies have been making adjustments, striving to control costs, advancing projects and building reserves. They know vagaries of gold price movements can be volatile both in going up and tumbling down.

The second quarter of 2013 saw a 13% decrease in average gold prices to US$1,414 per ounce. This marks the largest quarterly decline in gold prices since 1980. During that period, Brigus Gold stayed on course for its exploration program, announcing increases in the quantity and quality of its ore reserves, and production targets.

The company recently updated the resource estimated of its Grey Fox discovery, which was first identified in December 2011. It announced a 31% increase in open pit indicated grade and a 14% improvement in its underground indicated grade. This increase in ounces of gold in the ground enhances the prospects of future production.

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[Hammond Reef] Gold project hampered by prices – by Bryan Meadows (Thunder Bay Chronicle-Journal – August 3, 2013)

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

Lower gold prices are impacting Osisko Mining Corp.’s plans for its Hammond Reef Gold Project near Atikokan.
In its second quarter report released Thursday, the company said that the Hammond Reef project requires higher gold prices to justify the investment on construction of a new mine there.

In addition, the company determined following a review of the project, that an impairment charge — a reduction on a company’s balance sheet that adjusts the value of a company’s goodwill — of $487.8 million was necessary. Accordingly, the project’s value recorded on the company’s books was reduced to nil, the report said.

Osisko acquired the Hammond Reef gold project, about 25 kilometres north of Atikokan in 2010, through the acquisition of publicly-traded Brett Resources Inc. for $375 million.

Hammond Reef is a large and growing development project with potential to become a substantial open-pit mine.
During the second quarter of 2013, Osisko invested $2.2 million, including working capital, on the property and focused efforts on the preparation of the feasibility study and the publication of the environmental assessment report.

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Barrick looks to cut high-cost mines – by Tim Kiladze (Globe and Mail – August 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.

After its second major writedown in just six months, Barrick Gold Corp. is trying to wooing back shaken investors by focusing on assets closer to home.

The world’s largest gold miner announced a hefty $8.7-billion (U.S.) after-tax impairment charge, leaving the company with a second-quarter loss of $8.6-billion.

Barrick also slashed its dividend by 75 per cent as part of its second quarter earnings. In response to the losses, the Toronto-based company plans to shed, suspend or shut high-cost mines and continue to cut costs.

Chief executive officer Jamie Sokalsky said he is considering changes to his lineup of high-cost mines, most of which are in Africa and Australia. On a conference call Thursday, he said is already “well-advanced in a process to sell certain Australian assets.”

The miner will also continue to slash expenses where possible, having already cut or deferred $4-billion in capital spending over the past year, half of which came in the first six months of 2013.

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