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Gold and Silver

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

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

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South African gold output continues to fall – how much further? – by Lawrence Williams (Mineweb.com – 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.’

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

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Detour chief confident despite plunging gold price – by Peter Koven (National Post – 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.

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

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

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;

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

• 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.

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The Guangxi miners in Ghana gold rush – by Anna Healy Fenton (South China Morning Post – June 4, 2013)

http://www.scmp.com/

Chinese President Xi Jinping ended his six-day visit to Africa on a high note, leaving behind signed deals and warm pledges. The Republic of Congo was his final stop, after Tanzania and South Africa. He’s committed to a river port in Oyo, Congolese President Denis Sassou Nguesso’s hometown, and a sea port in Pointe-Noire for exporting mineral ore.

Congo is already an established oil producer and China is already its biggest trading partner. Xi announced he wanted to raise ties with Congo “to a new and higher level”.

“We expect to work together with our African friends to seize upon historic opportunities and deepen cooperation … in order to bring greater benefit to the Chinese and African peoples,” he said in Brazzaville.

Fine words indeed. One place he did not go was Ghana, in West Africa, where he could have seen Chinese and African co-operation in action. This is the scene of the gold rush 2013 style, where about 50,000 migrants from Shanglin in southern Guangxi, have received welcomes a little less warm than Xi’s.

Natives of Shanglin, famous for producing and exporting gold miners, started heading to Ghana’s goldfields eight years ago.

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Get moving on Pebble Project permitting, mining plan! – Murkowski – by Dorothy Kosich (Mineweb.com – July 9, 2012)

http://www.mineweb.com/

U.S. Senator Lisa Murkowski urged the Pebble Partnership to set a timeline and stick with it for the benefit of Alaskans waiting nearly a decade for the massive copper-gold project.

RENO (MINEWEB) – The Ranking Member of the U.S. Senate Energy and Natural Resources Committee, Sen. Lisa Murkowski, R-Alaska, has urged the Pebble Partnership to release their mining plan for development of the Pebble copper-gold deposit in Southwest Alaska.

In a July 1st letter to Pebble Limited Partnership (PLP) CEO John Shivley, Anglo American CEO Mark Cutifani, and Northern Dynasty Minerals CEO Ron Thiessen, Murkowski said the partnership’s delay in describing the project and submitting permit applications has caused confusion and anxiety among Alaskans about the proposed mine, as well as allowed federal regulators to further muddy the water with several hypothetical mine scenarios.

Northern Dynasty and Anglo American are 50-50 partners in the massive project.

Murkowski said the partnership’s “failure to describe the project and submit permit applications” has deprived “relevant government agencies and all stakeholders of the specifics needed to make informed decisions.”

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Ghana’s Crackdown on Chinese Gold Miners Hits One Rural Area Hard – by Dan Levin (New York Times – June 29, 2013)

http://www.nytimes.com/

MINGLIANG, China — To the people of Shanglin County, gold is a curse. For nearly a decade, thousands of peasants from this rural speck in southern China’s Guangxi Autonomous Region borrowed heavily before boarding flights for Ghana, Africa’s second-largest gold producer, with glinting ambitions and no backup plan.

The Chinese found their gold, though trouble soon found them, in the form of crooked police officers and armed bandits who prowled the mining camps. Then, this month, the Ghanaian authorities declared the mines illegal and arrested more than 200 Chinese miners, accusing them of polluting the land and abusing local workers. Countless others fled as local residents armed with guns and machetes attacked the camps, robbing miners of their possessions and killing some who fought back.

After the crackdown, images of violent deaths and vandalized mining camps blazed across Chinese social media, fueling national anger and soul searching. But here in Shanglin, a mountainous county of 470,000 in one of China’s poorest regions, it is despair over financial ruin that is most pronounced.

“My son might be killed in Ghana, but if he comes back he’s dead anyway,” said Shen Aiquan, 65, whose family borrowed 3 million renminbi, or $489,000, to build a mining operation, though from whom exactly she did not know. All she could do was wait for her son, and the debt collectors who would surely follow.

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South Africa now only world’s sixth biggest gold producer – by (Mineweb.com/Reuters -July 8, 2013)

http://www.mineweb.com/

Thomson Reuters GFMS ranked South Africa sixth in global production in 2012, when it fell behind Peru and produced 177.8 tonnes of gold.

KROMDRAAI/JOHANNESBURG (REUTERS) – A hand drill lying in the hillside tunnel of a 19th-century South African gold mine testifies to the back-breaking labour by black miners that built what was once the world’s biggest bullion industry.

But even with basic tools and cheap labour, costs overran returns at the Kromdraai gold mine north of Johannesburg, which listed in London in 1893 and closed in 1914.

A century later, South African’s remaining gold mines, which still employ a mostly black and lowly paid workforce, look set to follow the same fate, as the sun sets on an industry that has produced a third of the bullion extracted from the planet.

Gold’s sliding price and surging costs are hitting an industry that laid the foundations for Africa’s largest economy but has been slowly dying for decades as ore grades decline and shafts reach depths of 4 kms, the world’s deepest.

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JIM ROGERS: Gold Mining Stocks Face Two Major Headwinds – by Mamta Badkar (Business Insider – July 7, 2013)

http://www.businessinsider.com/

As gold prices plunged, gold mining stocks have taken a beating too. We saw a brutal sell-off on Friday, and the Market Vectors Gold Miners ETF has been down 49.5% year-to-date.

In the second of our two-part interview with Jim Rogers, the commodities guru told us about the biggest headwinds for gold miners.

Also, he’s not convinced that the commodities supercycle has ended just yet. Business Insider: What’s next for gold miners and mining stocks? Jim Rogers: I don’t own gold mining stocks. There’s so many other easy ways for people to buy gold now that the miners have stiff competition. And there’s lots and lots of competitive situations in mining.

30 years ago if you wanted to buy gold, you were almost restricted to gold mining shares. That’s not true anymore. You can buy all sorts of coins. In those days only Krugerrands were available, 30 years ago. Nobody even made gold coins except Krugerrands. Now many countries have them. All sorts of ETFs, ETNs, futures, now there’s many ways to buy gold. So the miners have a serious competitive situation and of course there’s hundreds of them.

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Jim Rogers Correctly Predicted Gold Would Fall To $1200, And Now He Thinks It Could Go As Low As $900 – by Mamta Badkar (Business Insider – July 6, 2013)

http://www.businessinsider.com/

The price of gold peaked at just over $1,900 per ounce in the fall of 2011. And it was right around that time that commodities guru Jim Rogers began warning investors that the yellow metal could hit a low of $1,200 before the sell-off was over.

He was right. Gold prices entered a bear market (down 20% from its high) in April. And on June 27, they touched $1,200.

In a phone interview this week, Rogers explained to us how he arrived at the $1,200 figure. He also offers his outlook for gold as it continues its complicated bottoming process. Business Insider: Two years ago, you told us you could see gold going to $1,200. How did you arrive at that level?

Jim Rogers: I’m sure it was all based on intuition from Business Insider, but gold had been up at that point 11 – 12 years in a row which is an anomaly.

I don’t know any asset that’s gone up 12 years without a down year, and gold needed and deserved a correction. And, if it’s going to happen where would it go? $1,200 was between 35% – 40% and 35% – 40% reactions are commonplace, so that was the first number. I wish I could tell you I had a formula.

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A.M. Kitco Metals Roundup: Gold Sells Off Sharply on Stronger U.S. Jobs Data, Soaring U.S. Dollar Index – by Jim Wyckoff (Kitco News – July 5, 2013)

http://www.kitco.com/

(Kitco News) – Gold prices dropped sharply in the immediate aftermath of a U.S. employment report for June that showed better-than-expected jobs growth, including upward revisions for jobs in April and May. The U.S. dollar index pushed to a three-year high on the jobs data, which also helped sink the gold and silver markets.

August gold was last down $32.10 at $1,219.80 an ounce. Spot gold was last quoted down $31.60 at $1,221.40. September Comex silver last traded down $0.679 at $19.01 an ounce.

The U.S. Labor Department reported non-farm payrolls increased by 195,000 in June, which was significantly better than the 160,000 rise expected by the market place. The overall unemployment rate was unchanged from May, at 7.6%. The upward non-farm job revisions in April and May totaled around 70,000 for both.

The improving U.S. labor market lent additional weight to the hawkish camp of Fed watchers who think the Federal Reserve will start to back off on its quantitative easing of monetary policy (so-called “tapering”) as soon as later this year. That is seen as at least initially commodity-market bearish, including the precious metals. The very easy money policies of the major central banks of the world have boosted raw commodity prices in recent years.

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