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Gold and Silver

Vale strikes gold deal – by Star Staff (Sudbury Star/Reuters – February 6, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale agreed Tuesday to sell 70% of the gold produced at its Sudbury mines over a 20-year period to Vancouver-based Silver Wheaton in a deal worth $570 million.

Silver Wheaton will also pay $1.33 billion for 25% of the gold produced at the Salobo mine in Brazil over its mine life, the companies announced. In total, the deal is worth $1.9 billion in cash. The Sudbury gold stream covers six producing mines — the Coleman, Copper Cliff, Creighton, Garson, Stobie and Totten mines — and one development mine, the Victor project.

From 2013 to 2015, the Sudbury mines are expected to average attributable production of approximately 30,000 ounces as the Totten mine gradually reaches full production. Gold production is expected to peak once the high-grade Victor deposit begins production.

The deal will immediately boost Silver Wheaton’s production by adding expected average gold production of 110,000 ounces of gold per year over the next 20 years, or 5.9 million silver equivalent ounces. The move into gold is a departure for Silver Wheaton, which has focused almost exclusively on silver stream financing deals.

“While we have traditionally focused on silver, we have never been averse to strategically adding ‘the right’ gold streams to our portfolio,” said Chief Executive Randy Smallwood in a statement.

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Taxpayer Twain wreck in Timmins – by Dean Beeby (Canadian Press/Montreal Gazette – February 1, 2013)

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

TIMMINS, Ont. — A tourist attraction celebrating country superstar Shania Twain has officially become a $10-million money pit of taxpayer’s cash worthy of a hurtin’ song itself.

The Shania Twain Centre in this northern Ontario community permanently closed its doors Friday — barely a dozen years after its grand opening — and will be demolished to become part of an open-pit gold mine.

A sinkhole of taxpayer money, the centre consumed some $10 million in government funds for its construction in 2000-2001, and racked up more than $1 million in operating deficits in the years since.

Grant applications to the Ontario and federal governments in the 1990s projected annual attendance of 50,000 tourists by 2005. Twain, now 47, grew up poor in Timmins, and got her start singing in local bars before striking it rich on the world stage in 1995.

But the sleek, modern structure — featuring displays of Twain memorabilia along with gold-mining artifacts — has drawn no more than 15,000 people in any year. In the end, every resident of this hardscrabble, century-old mining town of 47,000 was shelling out $7 a year just to keep the lights on. And by 2010, each visitor to the centre was being subsidized to the tune of $33.72.

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South Africa Faces Tax Dilemma as Mining Industry Costs Soar – by Mike Cohen & Paul Burkhardt (Bloomberg.com – February 5, 2013)

http://www.bloomberg.com/

South Africa’s government faces a dilemma: how to help mining companies weather surging costs and depressed commodity prices as the ruling African National Congress seeks to wring more revenue from the industry.

Upheaval has plagued platinum and gold producers since August last year, when thousands of workers staged a series of illegal strikes, winning pay increases of as much as 22 percent. Adding to mining costs, Eskom Holdings Ltd., which supplies about 95 percent of South Africa’s power, is seeking 16 percent average annual tariff increases until 2018 to fund expansion.

While Mining Minister Susan Shabangu says the government is committed to working with the industry, the ruling ANC wants the country to derive greater benefit from its minerals. At a conference in December, the party said a “resource-rent” tax, or higher royalties, were under consideration.

“I’m quite worried,” Nick Holland, the chief executive officer of Gold Fields Ltd. (GFI), Africa’s No. 2 gold producer, said in an interview yesterday at the Investing in African Mining Indaba, a gathering of more than 7,500 industry executives. “We can ill afford to accept any taxes beyond what we have. It’s just going to increase the speed of the decline of the mining industry.”

Mining output slumped 11 percent on a seasonally adjusted basis in the three months through November from the prior three months, government data show. Nine loss-making platinum-mine shafts were shut in the second half of 2012, according to the Department of Mineral Resources, while Anglo American Platinum Ltd. (AMS), the largest producer, last month announced plans to idle four shafts, which may result in as many as 14,000 job losses.

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Lassonde lambasts miners, industry for failures in gold hunting – by Kip Keen (Mineweb.com – February 1, 2013)

http://www.mineweb.com/

Pierre Lassonde calls on mining industry to fund research into new mining and exploration technologies that could create “paradigm shift” and fuel a much needed round of gold discoveries.

VANCOUVER, BC (MINEWEB) – In a wide ranging speech covering the dearth of gold discoveries in recent years and the case for a higher gold price, Pierre Lassonde, the chairman of Franco-Nevada, reiterated his call for mining companies to invest more in research in order to bring about a “paradigm shift” in mining and exploration technology.

Lassonde, speaking to a near capacity audience at the closing of AME BC’s Mineral Exploration Roundup in Vancouver, BC, was direct, even chastising in tone, as he outlined the crisis facing gold exploration.

The statistics, well circulated at numerous conferences in the past year or so especially, are sobering – perhaps a much needed tonic on the final night of a four-day long mineral exploration marathon.

To outline how bad it has become for gold exploration, Lassonde repeated some of the better known analyses on the success rate in gold exploration over the past few decades. The essence of the issue is this: in the past decade discoveries of multimillion ounce gold deposits – despite record exploration spending and a decade long bull run in the price of gold – have sloughed off to dangerously low levels.

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Gogama mine golden opportunity for Timmins – by Kyle Gennings (Timmins Daily Press – January 30, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Plans and preparation are falling into place for IAMGOLD’s Coté Lake project. The company is edging closer to the realization of its open-pit gold mine south of Gogama.

IAMGOLD representatives made a presentation at the Porcupine Dante Club on Tuesday as part of the Timmins Chamber of Commerce’s Inside Their Business luncheon series.

“We are a mid-tier mining company with many operations around the world,” said IAM representative Steve Wolfenden. “We have operations in Surinam, west Africa and two projects in Quebec and now we are bringing a major focus to expanding our presence in Ontario.

“The Coté Lake project is exactly how we are going to do just that.” Wolfenden spoke to a full house, which included representation from mining contracting and auxiliary services from Timmins.

“At this point in time we are trying to characterize what is to come,” he said. “We are deeply invested in our preliminary feasibility studies at the moment, working to assess what we have, what we need and what government requires of us.

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TIMMINS HISTORY: Mine mishap caused a stir – by Karen Bachmann (Timmins Daily Press – January 27, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Every community, from Paris to Timbuktu, from Toronto to Earlton, has its fair share of, for lack of a better word, “colourful characters” and eccentrics.

Kirkland Lake had Roza Brown (a woman way before her time who sure knew how to live). Elk Lake claims John Munroe (war hero, mining man, mayor and surely someone who could have been the first candidate for his own reality programme).

We here in the Porcupine seem to have an unending supply: Tommy Jack, Maggie Leclair, Sandy McIntyre, and, although not purely from the Porcupine, a celebrated priest known as Father Charles Paradis.

Notorious, revolutionary and with a blazing zeal to see the Northland colonized, Paradis has left his mark from Temiskaming up to the Porcupine. Recognized or not, we still live with his influence and his controversial views on land and river management.

Charles Paradis was born in Kamouraska, Que., in 1848. He completed his studies at the seminary in Sainte-Anne-de-la-Pocatière and headed to Ottawa where he taught art.

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Mining juniors in crisis – gold explorers particularly badly hit – by Lawrence Williams (Mineweb.com – January 25, 2013)

http://www.mineweb.com/

The junior gold mining and exploration sector is currently at a very low ebb – but the better juniors will survive regardless and now provide tremendous opportunities for the savvy investor.

LONDON (MINEWEB) – Feedback from the Vancouver Resource Investment meeting last week suggests the junior mining crisis is really hitting home and unless there is a turnaround soon a significant number of junior gold explorers in particular will no longer be with us even by mid-year, and certainly not by this time next year.

A conference and exhibition primarily involving junior miners and explorers, and particularly one taking place in Vancouver where the largest proportion of North American juniors are headquartered, is an excellent venue for judging the state of the industry.

And on reviewing this year’s Cambridge House event the junior mining sector is in a precarious state at present with companies finding it difficult, if not impossible, to raise new funds to keep themselves afloat.

Stock prices are so low that new share issues are not really an option, while banks and financial institutions are just not prepared to take the risk of lending to companies in a sector that, even in good times, can prove a risky one for which to provide finance.

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India tries to temper the hunger for gold – by Stephanie Nolen (Globe and Mail – January 24, 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.

NEW DELHI — In the glinting showroom of the Gem Palace in the city of Jaipur, Sanjay Kasliwal surveys his family business: strings of rubies, pearls the size of grapes, collars of emeralds and, everywhere, bright yellow gold.

The Gem Palace has supplied princes, prime ministers, socialites and no small number of families preparing for weddings, for hundreds of years. But in the past decade, the price of gold has surged to unprecedented heights – fetching close to $1,700 (U.S.) an ounce on Wednesday. Yet Mr. Kasliwal’s business has not faltered.

“People have a budget, but they’ll still put it in gold,” the jeweller said. “If the price goes up, they buy 490 grams instead of 500 grams, that’s all. The Indian hunger for gold, you can’t change that.”

That hunger for gold has also warped the country’s economy. The Indian government is growing increasingly alarmed about a current account deficit in the July-to-September quarter that accounted for a record 5.4 per cent of gross domestic product. This week it raised taxes on gold imports in an attempt to curb a shopping habit that goes back centuries.

That will be no easy task. Gold purchases make a lot of sense for Indians. Inflation has run at or near 10 per cent annually, while the best rate on a savings product from a bank returns 8 per cent. The stock market has had returns far below that in recent years.

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Iamgold to cut back Mali exploration activity – by Pav Jordan (Globe and Mail – January 24, 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.

A move by Iamgold Corp. to reduce exploration activity in Mali marks the latest move by the Toronto-based company to protect itself from political risk in the region.

Iamgold has operations in Canada, South America and Africa, but half its output comes from mines in Mali, and neighbouring Burkina Faso. In Mali it is a 41-per-cent owner in the Sadiola gold mine and a 40-per-cent owner in Yatela, also a gold mine.

“Although it is business as usual at the Sadiola and Yatela mines operated by the company’s joint venture partner and which are approximately 1,300 kilometres by road from the regions of conflict, the company is reducing its exploration activity in the region at this time as a precautionary measure,” Iamgold stated in a news release on Tuesday.

The company said, however, that production at the joint venture operations had not been disrupted by the conflict in Mali, where Islamic militants have taken over a large swath of the territory.

Iamgold, one of the largest mining companies operating in Mali, has been shifting its focus away from the African continent for the past two years, selling stakes in mines in Ghana in early 2011.

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Iamgold lifts Ontario project’s indicated resource by 114% – by Henry Lazenby (MiningWeekly.com – January 23, 2013)

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

TORONTO (miningweekly.com) – Canadian miner Iamgold on Wednesday said it had lifted the National Instrument 43-101-compliant indicated resource at its Côté gold project, in northern Ontario, by 114% from the previous resource estimate reported in October 2012. The company said most of the mineral resources at the project had now been upgraded to the indicated category.

The new Côté gold resource estimate incorporated assay results from 85 additional drill holes, comprising 47 325 m since the October 4, 2012 estimate, and now entails 269-million tons grading 0.88 g/t for 7.61-million ounces and an inferred resource of 44-million tons averaging 0.74 g/t for 1.04-million ounces.

The estimate used a cutoff grade of 0.30 g/t of gold, similar to the cutoff used in the previous resource estimate.

The company said a positive attribute of the Côté gold deposit is its accessibility for openpit mining. The deposit locally outcrops at surface and, based on the drilling to date, the depth of the barren overburden averages 5.8 m.

Meanwhile, Iamgold also reported the fourth quarter of 2012 was its strongest, during which it produced 214 000 attributable ounces, which brought its 2012 attributable gold production to 830 000 oz, below the low end of its revised guidance of 840 000 oz to 910 000 oz.

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

CANADIAN GOLD RUSHES/ NOAH TIMMINS (1867-1936)

The 19th century ended with Canada firmly in the world’s consciousness thanks to the fabulous Klondike gold rush. By the middle of the 20th century Canada would be established as one of the most powerful economies in the world and an important diplomatic player following its key roll on the Allied side in both world wars. The economic underpinning, which enabled Canada to advance to the edge of major power status, was mining. In 1900 the country produced minerals to the value of US$64 million – by the beginning of the Second World War that figure had risen to $567 million and today it is nearer to $45 billion.

Today Canada’s population is only around 35 million, making it very much a mid-range country in those terms, but it is a long-standing member of the Group of 7 (or G7), the meeting of the largest economies in the world. Its standard of living is amongst the highest in the world and its proximity to the world’s largest economy, the USA, is of major benefit as Canada is an exporter of high quality, high value, advanced products to its rich neighbour.

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Canadian miners caught up in Mali unrest – by Jessica McDiarmid (Toronto Star – January 23, 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.

Canadian miners in Mali are grappling with security as a French-led assault pushed rebel forces further away from the capital on Tuesday.

Some companies have reduced operations, cancelled exploration or pulled out foreign workers. But mining operations are still carrying on normally in Mali’s gold-rich southwest, where most companies work hundreds of kilometres from the fighting that has gripped the vast West African nation.

Toronto-headquartered IAMGOLD evacuated about six Canadian workers from several areas in early January when rebels began advancing southward toward the capital, Bamako, as a “precautionary measure,” said Bob Tait, vice president of investor relations.

It has cut some exploration activities but its two mines continue to operate normally, he said. IAMGOLD holds equal shares in the Sadiola and Yatela gold mines with AngloGold Ashanti, which operates both mines. Mali is Africa’s third-largest gold miner after Ghana and South Africa. Production — and investment — is rising as its government looks to take advantage of high metal prices worldwide.

As of 2011, Canadian mining assets in the country were nearly $500 million, ranking it ninth in Africa. There are more than 15 Canadian mining and exploration firms working in the country, according to Natural Resources Canada.

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Lake Shore anticipates ‘big year’ – by Benjamin Aubé (Timmins Daily Press – January 23, 2013)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Lake Shore Gold’s two superstar mines just keep on growing. The company’s vice-president of operations, Dan Gagnon, didn’t have very many negatives to present to Timmins city council during a review of 2012 and a look ahead to Lake Shore’s upcoming operations in 2013.

Gagnon said that while the Fenn-Gib property, East of Matheson, has “great potential for an open pit, our great focus will be on our two main assets, the Timmins West and Bell Creek complexes.” He called 2012 a “very exciting and good year,” and said the company is poised to reach new heights in 2013.

“We did a lot of mine building, a lot of mill construction over the past year, and a lot of improvement in our systems,” said Gagnon. “Now this year, I think we’re seeing the benefits of all that work. I think we’re poised for a break-out this year.

“We met production guidance and development and expansion objectives and expanded our milling capacity by 25%, and we’re looking to increase production capacity to 3,000 tons per day by second quarter of 2013.”

After processing 85,000 ounces of gold at the two mines last year, Gagnon said the company is expecting to produce up to 130,000 ounces in 2013 and 150,000 ounces by 2014.

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Timmins Gold producer St Andrew Goldfields puts a shine on OMA high school video competition

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.

Ontario Mining Association member St Andrew Goldfields (SAS) is once again offering tangible encouragement to the children of its employees to enter the high school video competition So You Think You Know Mining. However, this year it is expanding its support with incentives for teachers and schools.

SAS is increasing the stakes in SYTYKM. Any Ontario high school student of any SAS employee who produces a film and enters SYTYKM is eligible for a $250 cash prize from a random draw. The company is making the same offer with a second $250 prize for the children of Quebec-based employees even though they are not eligible for SYTYKM, which is only for Ontario students.

On top of this, which is what SAS offered last year, there is an opportunity for schools which support SYTYKM to earn a $1,000 grant. They are limited to one per school. “Our goal is to make equipment, resources, software or whatever tools you require available to you to assist with your submission. And your school can keep it,” said SAS in its promotional materials. Mentors – one per student film maker – will also be awarded a one-eight ounce gold coin.

“We are going outside our walls this year to offer up to $1,000 to Ontario schools supporting SYTYKM that our employee’s children attend. As well, a one-eighth ounce Canadian minted gold coin will be given to any teacher, staff or administrator who mentor one of our employee’s students through to the end and a video is submitted,” said Geoff Ramey, Vice President Human Resources at St Andrew Goldfields.

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Will gold’s 12-year continue in 2013 – by Ross Marowits (Toronto Star/Reuters – January 21, 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.

MONTREAL – Gold is expected by many to continue to sparkle as an investment opportunity over the next two years despite a 12-year bull run that briefly took the precious metal as high as US$1,900 an ounce before pulling back.

Investment strategist Gavin Graham says gold should rise from its current price of US$1,689 an ounce to approach the 2011 high price later this year before perhaps hitting US$2,000 in 2014.

“I know a number of people have got US$2,000 an ounce pencilled in at some stage over the next 18 months to two years and that’s not an unreasonable forecast,” the president of Graham Investment Strategy Ltd. said.

Gold saw its smallest price increase since 2008 last year and, adjusting for inflation, it remains below the real all-time peak of US$850 per ounce set in 1980. That’s equivalent to a nominal value of about US$2,500.

Once gold breaks through US$2,000, Graham believes it could attract skeptical buyers. “There’s still more legs in it even though it’s gone up a lot.” Serge Pepin, vice-president Investment Strategy of BMO Global Asset Management, also sees gold rising despite fears that India, the world’s largest buyer of the metal, could slap a bigger tax on gold imports.

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