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Gold and Silver

Despite writedown, Barrick digs in on Zambia copper play – by Pav Jordan (Globe and Mail – February 15, 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.

Barrick Gold Corp. says it can still make its African copper business pay off, despite a multibillion-dollar writedown on Zambian mines hit by skyrocketing costs.

Toronto-based Barrick said on Thursday it took a $3.8-billion charge on its copper business in the fourth quarter, marking the second Canadian miner to be shaken this week by bets made two years ago, when commodity prices were soaring.

The charge stoked some of the worst fears of investors who have long fretted that buying the assets in 2011 under the $7.3-billion acquisition of Equinox Minerals Ltd. was a mistake.

“Obviously I’m disappointed that we’ve had to take this impairment, and it’s a sizable impairment, in hindsight, in terms of what we paid for it,” Barrick chief executive officer Jaime Sokalsky said in an interview Thursday with The Globe and Mail.

“But it is a big asset in a world-class copper belt and ultimately, if we can get the costs under control and ultimately get a higher copper price down the road – which I think has a good likelihood of happening – this asset could be very very valuable for us.”

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Brazil wants more research on Amazon gold mine before Canadian company proceeds – by Tanya Talaga (Toronto Star – February 15, 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.

Brazilian government urges more studies on how Belo Sun Mining Corporation’s Volta Grande venture will affect the environment and indigenous peoples.

The Brazilian government wants to see more research on a massive gold-mining project near the Amazon River before the Canadian firm behind it goes ahead with developments.

Brazil’s Federal Public Ministry has asked state authorities to obtain more information on how the Belo Sun Mining Corporation’s Volta Grande venture, one of the largest gold mining projects near the Amazon, will affect the ecologically sensitive area and the indigenous people living there. It also wants details on any effects the project will have on the nearby Belo Monte dam, the third largest hydroelectric project in the world.

The Amazon River basin is one of the most precious ecosystems in the world. Deforestation and development in the area is a cause of global concern.

The Volta Grande is 60 kilometres southwest of the city of Altamira in the northern Para state. Belo Sun controls the mining and exploration rights covering 1,305 sq. km.

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China still unable to surpass Indian gold demand – but getting close – by Lawrence Williams (Mineweb.com – February 14, 2013)

http://www.mineweb.com/

Particularly strong demand for gold jewellery, a big jump in Q4 consumption in India and a continuing high level of Central Bank purchases offset a decline in investment during Q4 2012.

LONDON (MINEWEB) – Even the World Gold Council seems a little surprised by its latest gold demand figures for the October to December quarter, showing that Indian gold take-up has been particularly strong with Q4 gold demand rising by a huge 41.2% year on year, thus keeping India ahead of China as the world’s biggest gold consumer. China had been widely expected to surpass India this year, but according to the WGC figures lagged India by 88 tonnes over the full year.

The rise in Indian gold consumption over the quarter though may well not be repeated as it is thought that much of the increase was due to purchases being accelerated ahead of the onset of rises in gold import duty. Overall India consumed 864 tonnes of gold during the year, around 20% of global gold production.

However Indian statistics may well be difficult to analyse as the government tries to curb imports through duty hikes – the more the taxes take effect the more likely that smuggling of gold into the country will increase. Indeed there have been reports that gold smuggling into the country, primarily from the Middle East, has risen very sharply indeed – see Gold smuggling soars in India.

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Kinross takes $3.2-billion hit on African mines – by Pav Jordan (Globe and Mail – February 14, 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.

Kinross Gold Corp. is taking another massive charge on its African operations, slashing the value of its flagship growth properties to a fraction of the $7.1-billion it paid to acquire them just two years ago.

The Toronto-based miner said on Wednesday it would take an impairment charge of $3.206-billion (U.S.) on 2012 earnings, most of it attributable to the Tasiast project in Mauritania amid soaring capital and operating costs that have hit the entire mining industry.

That comes on top of a $2.49-billion charge on the assets a year ago. Altogether, Kinross has now cut nearly 80 per cent of the value of its takeover of Red Back Mining in 2011, which included Tasiast and Chirano, another mine in West Africa.

“It’s pretty darn sad that a company can be that wrong on an acquisition,” said George Topping, an analyst with Stifel Nicolaus in Toronto. “I think they’re pretty much telling you that they think it [the acquisition] is worth $1.5-billion, between Tasiast and Chirano, the two mines that they bought.”

Tasiast represents the company’s key growth driver.

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Barrick has done its best to improve human rights at mine in Papua New Guinea – Globe and Mail Editorial (February 13, 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.

Change hasn’t happened quickly enough in the global mining sector, despite prodding from advocacy groups concerned about environmental sustainability and human rights abuses. But when a mining company responds to pressure and makes changes for the better, that should be acknowledged, not dismissed as an empty public relations gesture.

Recent criticism by Mining Watch of Barrick Gold’s initiative to assist the women who were raped by local employees of its mine in Papua New Guinea is short-sighted. It has accused the company of “rushing” the women through the claims process, and of forcing them to sign away their legal rights.

That is stretching the truth. In fact, Barrick, the world’s largest gold-mining company, has done its best to clean up the mess at the Porgera gold mine. Since 2011, it has spent 18 months consulting with human-rights advocates and developed an opt-in program of remediation for the victims, offering them counselling, access to micro-credit and medical care. The program is administered by an independent team, including the former chief magistrate of Papua New Guinea.

The women are free to pursue action against any individuals involved but once they settle the grievance procedure with the company, they cannot make further legal claims against it. This seems fair.

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Goldcorp awaits open pit permit – by Benjamin Aubé (Timmins Daily Press – February 13, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – One of the most ambitious mining projects in Timmins history is off to a good start. Though major work and blasting has yet to begin on the Hollinger Mine open pit near the centre of town, Goldcorp is happy with progress and community response after closing the books on the first quarter of the project.

Construction of a noise-, sound- and dust-reducing berm has progressed as Goldcorp awaits environmental air compliance approval from the Ministry of the Environment (MOE). Goldcorp operations superintendent,Paul Miller expects the company will receive news on the permit to come by the end of February.

“Any on-site construction or mining activities, which includes berm construction, related drilling, blasting, hauling and loading activities will commence once the MOE has provided approval and posted the permit to proceed,” Miller said at city council on Monday night.

“Right now in terms of timing, we expect there’s going to be a period after we provide the updated models. We don’t know what that’s going to be, but we don’t think it’ll be before the latter part of March, early April before we see any activity on site based on our current knowledge.”

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Difficult public process for Goldcorp’s pit plans – by Liz Cowan (Northern Ontario Business – February 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. 

The process to operate an open pit mine adjacent to Timmins’ downtown core has been a long and difficult one. Goldcorp’s Hollinger project involves a 250-acre fenced property housing the former Hollinger Mine, which was shuttered in the late 1960s. It is expected to begin operations this winter.

Its underground workings have created sinkholes and subsidences in the area and millions of dollars have been spent filling them. Creating an open pit operation will remove the underground hazards and the land will be useable once a closure plan is complete.

The company received city council’s unanimous approval late last fall, along with the support of the Hollinger Project Community Advisory Committee (HPCAC).

“We can’t kid ourselves, any project like this is hard,” said Marc Lauzier, Porcupine Gold Mines general manager. “The public process was a difficult one, and we learned a lot throughout that process.”

For the past five years, Goldcorp has been advising the community of its plans for the Hollinger Project through open houses and other activities.

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NEWS RELEASE: Detour Gold Announces Start of Production at Detour Lake

TORONTO, ONTARIO–(Marketwire – Feb. 11, 2013) – Detour Gold Corporation (TSX:DGC) (“Detour Gold” or the “Company”) is pleased to report that the ramp-up of the first production line of the processing plant is advancing at its Detour Lake open pit gold mine in northeastern Ontario.

Ramp-Up Update

The first production line started with low-grade material on January 12, 2013 and was followed by ore grade material. The ramp-up of the first production line is progressing with the SAG mill, the pebble crusher, and the ball mill all in operation. After close to one month of operation, and despite the usual teething issues, the operation team is happy to report that the fundamental parts of the circuits operate well. Next step will be the start-up of the secondary crusher to increase throughput.

The gold inventory (in CIP and electrowinning) has been increasing in the circuit since start-up. It is expected to reach the level required to allow the first gold pour in mid-February.

In parallel, the electrical and instrumentation work on the second production line is progressing well and start-up is expected in March 2013.

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Mali turmoil bad for Canadian mining ambitions in West Africa: analysts – by Mike Blanchfield, The Canadian Press/CTV News – February 8, 2013)

http://www.ctvnews.ca/

OTTAWA, Ont. — As Islamist rebels controlled a chunk of Mali the size of France late last month, Toronto-mining analyst Pawel Rajszel honed his advice to investors on a leading Canadian mining company in the country.

Rajszel had previously told investors to “take their money and run.” His note of Jan. 24 concluded with one word: “Sell.”
Even after French and African troops routed al Qaeda terrorists from major cities in Mali’s north this week — and after French President Francois Hollande basked in the euphoria of a liberated Timbuktu — Rajszel was still unmoved.

“We haven’t changed our opinion,” Rajszel, head of the precious metals team at Veritas Investment Research, told The Canadian Press.

The Mali crisis and its spillover into West Africa are a monkey wrench in the Harper government’s ambitions for Canadian firms, especially in the mining sector.

The government is actively promoting Canadian business opportunities in Africa, but has no stomach for contributing troops to the French-led military campaign to drive al Qaeda-linked extremists out of northern Mali. Industry analysts say headlines about terrorists gaining a foothold in West Africa are chilling investors, and casting a pall over future prospects.

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Carlin Trend Co-Discoverer Livermore dead at 94 – by Dorothy Kosich (Mineweb.com – February 8, 2013)

http://www.mineweb.com/

Prospector, geologist, rancher and public resource advocate John Sealy Livermore was the last surviving member of three men considered the fathers of the Carlin Trend and “invisible gold” deposits.

RENO (MINEWEB) – John Livermore–the legendary American geologist who believed new gold mines could be developed from “invisible gold”—died in his sleep in his own bed Thursday after a short bout with cancer.

Guided by the ideas of U.S. Geological Survey geologist Ralph J. Roberts, Livermore and fellow Newmont geologist Alan Coope in October 1961 staked the claims that would become of one of world’s richest gold regions—the Carlin Trend. Livermore and Coope’s discovery was believed to contain 4 million ounces of gold. The entire Carlin Trend has produced well over 50 million ounces of gold.

Livermore remained with Newmont until 1970 when he returned to Nevada to form Cordex exploration. By 1970, only one other gold mine had been discovered in Nevada, the Cortez operation. However, Livermore felt a return to basic prospecting might lead to other economic gold discoveries.

He hired mining engineer Whit “Dee” DeLaMare, whose work led to the discovery of the Pinson, Preble, Sterling and Dee gold mines, as well as the development of the Getchell Trend. The Pinson Mine discovery enabled Cordex to get its capital investment back in 13 months, Livermore recalled in an oral history.

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The U.S. National Mining Hall of Fame & Museum Profile: John S. Livermore – Co-Discoverer of the Nevada Carlin Trend)

 The U.S. National Mining Hall of Fame & Museum – located in the famous 1880’s silver mining boomtown of Leadville, Colorado – is a monument to the memory of the men and women who pioneered the discovery, development and processing of our nation’s natural resources. http://www.mininghalloffame.org/

John S. Livermore, an exploration geologist working for Newmont, provided the drive that led to the 1961 discovery of the Carlin Mine in northern Nevada. Carlin became the first large gold mine on what is now known as the Carlin Trend. John subsequently played an energizing role in exploration that has established northern Nevada as one of the world’s premier gold districts.

Carlin-type deposits are characterized by extremely fine-grained gold — gold that cannot be seen by the human eye nor concentrated by panning. Nevertheless, several small Carlin-type deposits were discovered in northern Nevada and worked as mines prior to the discovery of the Carlin orebody. John Livermore examined one such deposit at the Standard Mine near Lovelock, Nevada in the late 1940s and believed that other, possibly richer, fine-grained deposits remained to be found. Where to look was an open question.

Ralph Roberts, a field geologist for the U.S. Geological Survey, provided the answer in a short paper, “Alignment of Mining Districts in North-Central Nevada,” which came to John Livermore’s attention in early 1961. Roberts pointed out that known deposits were associated with windows in the (coincidentally named) Roberts Mountain thrust fault — windows where older, over-riding rocks from the west had been eroded to expose younger rocks below.

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Silver Wheaton-Vale deal underscores opportunity amid mining firms’ suffering – by Peter Koven (February 7, 2013)

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

As mining companies suffer through rough market conditions, their royalty and streaming counterparts are taking advantage and striking the biggest deals in their history.

“We are busier than we’ve ever been,” said Randy Smallwood, chief executive of Silver Wheaton Corp. “And what’s more important is the quality of the assets that are being brought forward to us is better than I’ve seen in the past.”

This week, Vancouver-based Silver Wheaton announced a US$1.9-billion acquisition of gold streams from mining giant Vale SA of Brazil. It is by far the largest metal streaming deal ever done, surpassing the US$1-billion transaction between Franco-Nevada Corp. and Inmet Mining Corp. that was reached less than six months ago. The Vale deal also includes 10 million Silver Wheaton warrants.

Miners are turning to companies such as Silver Wheaton and Franco-Nevada for financing for a couple of reasons: issuing equity is extremely difficult and dilutive in this market, and capital cost pressures have made it more important than ever to share the financing risk on large projects. The fact that an enormous company such as Vale is giving up future cash flow to secure capital shows how challenging it is for the industry right now.

It wasn’t always this way for Mr. Smallwood. When he took over as CEO in April 2011, Silver Wheaton could not get a deal done with anyone. Precious metal prices were soaring at the time, and companies were demanding far too much money in exchange for their future gold and silver output.

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Canada’s Iamgold keen to stay in troubled Mali – by Reuters (MiningWeekly.com – February 7, 2013)

http://www.miningweekly.com/page/americas-home

MELBOURNE – Canadian gold miner Iamgold is committed to Mali despite the conflict in the African nation and poor production performance of its mining joint ventures there, its chief executive said.

While Mali, where French forces have been bombing sites controlled by Islamist insurgents, may appear unattractive to investors, it is one location in Africa where the company is eager to stay as the mines should be highly profitable, CEO Steve Letwin told Reuters in an interview on Thursday.

“I just think as an investment it is a good investment if we can all collectively get our heads around it and the Malians can get some semblance of stability,” Letwin said. The situation in northern Mali has not disrupted operations at Iamgold’s joint ventures — the Sadiola and Yatela mines in the south.

But its partner in the ventures, AngloGold Ashanti, is considering getting out as part of a broader revamp of its operations. Letwin said Iamgold is not big enough to take on AngloGold’s share.

“We have people who are interested, but they need to talk to Anglo, and I’m sure they have,” he said, declining to name who was interested. “I want to make it work, because it makes sense. I want to work with the Malians and whomever partner we have.”

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Does reality TV’s gold boom suggest an end to soaring prices? – by Colin Campbell (Maclean’s Magazine – February 5, 2013)

http://www2.macleans.ca/

Gold Rush fans may not want to change the channel just yet

Reality television’s latest obsession is gold. Jungle Gold, Gold Rush, Bering Sea Gold and Gold Fever are all shows documenting miners’ efforts to dig up flakes of the precious metal worth $1,700 an ounce. The last time TV was so caught up in a trend it was in the house-flipping genre (Flip This House, Flip That House), which seemed to hit its peak just before the U.S. housing market crashed. Is there a similar warning sign in the TV gold boom? Does all the mainstream fascination with gold suggest an overinflated interest and price?

Some analysts on Wall Street, at least, seem to think gold’s wild ride may be nearing its end. This week, Morgan Stanley lowered its gold-price forecast for the year by four per cent, to $1,773. Late last year, Goldman Sachs cut its target price for 2013 to $1,800 an ounce from $1,940, citing an improving U.S. economy. “The risk-reward of holding a long gold position is diminishing,” it said.

Gold is the ultimate safe-haven investment and has enjoyed an incredible rise in recent years. A decade ago, gold was worth little more than $300 an ounce. Since 2000, it has gone up every year for 12 years (a record) and in each of the three years after the 2008 crash, gold prices peaked to hit record highs. That gold might be finally losing some of its shine suggests fear of riskier investments may be ebbing. The S&P 500 index last week, for instance, cracked the 1,500 mark for the first time since 2007.

Not everyone is convinced the gold rush is finished just yet. Morgan Stanley said that despite its price cut, it still remains “bullish on the gold-price outlook,” citing an ongoing commitment in the U.S. to low interest rates and government stimulus spending in the face of “a below-par recovery.” Many central banks are also still buying gold. As Goldman admits, “calling the peak in gold prices is a difficult exercise.”

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Mongolia’s “ninja” miners help sate China lust for gold – by David Stanway (Reuters.com – April 19, 2012)

http://www.reuters.com/

Please note April, 2012 date, but a great read!

(Reuters) – In a hot, concrete hut filled with acetylene fumes, an elderly Mongolian miner struggles to contain her excitement as she plucks a sizzling inch-long nugget of gold from a grubby cooling pot and raises it to the light.

Khorloo, 65, and her sons spent the day scrutinizing half a dozen CCTV screens as workers at the Bornuur gold processing plant whittled 1.2 metric metric tonnes of ore down to 123 grams of pure gold that could earn the family as much as $6,000.

Near the plant, separated from Mongolia’s capital, Ulan Bator, by 100 km of rocky pasture and mostly unpaved road, life has remained largely unchanged since Genghis Khan’s “golden horde” rampaged across Asia nine centuries ago.

But Khorloo is a member of a new horde of at least 60,000 herders, farmers and urban unemployed trying to extract the riches buried in the vast steppe with metal detectors, shovels and home-made smelters.

In the last five years, dwindling legal gold supplies and a spike in black market demand from China have made work much more lucrative for Mongolia’s “ninja miners” – so named because of the large green pans carried on their backs that look like turtle shells. For thousands of dirt-poor herders, the soaring prices alone are enough to justify years of harassment, abuse and hard labor.

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