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Gold and Silver

Barrick now eclipsed by Goldcorp for title of largest market cap – by Peter Koven (National Post – November 6, 2012)

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

Barrick Gold Corp. is by far the world’s largest gold producer. It has the most mines and the most reserves. But it is no longer No. 1 where it matters most.

In recent days, Barrick has been eclipsed by Goldcorp Inc. for the title of largest market capitalization in the gold sector. It is an embarrassing development for Barrick, and comes shortly after the company went through a CEO change and reported massive cost escalation at its key growth project.

Goldcorp enjoys a premium valuation that Barrick can only dream of right now. Pawel Rajszel, an analyst at Veritas Investment Research, calculated that Goldcorp trades at 10.7 times forward cash flows, compared to 5.3 times for Barrick. Mackie Research Capital analyst Barry Allan has Goldcorp trading right at net asset value, while Barrick is at a 20% discount.

Their relative valuations prove that production is only a small part of the story when investors compare senior gold miners.

Barrick is aiming to churn out 7.3 to 7.8 million ounces of gold this year, more than triple Goldcorp’s guidance (2.35 to 2.45 million). However, Goldcorp has the better growth profile. While Barrick plans to have a production base of at least eight million ounces by 2015, Goldcorp hopes to reach 4.2 million ounces by 2016, nearly double the current level. And since Goldcorp has much less production, each mine that comes onstream has a greater impact on its earnings and cash flows.

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Mining magnate emerges as major U. of Utah donor – by Brian Maffly (The Salt Lake Tribune – November 5, 2012)

http://www.sltrib.com/

Pierre Lassonde » After a career that included environmental and stockholder controversies, the Canadian gold guru is expanding entrepreneurship efforts at the U.

At his inauguration last month, new University of Utah president David Pershing highlighted gifts from the Huntsman and Noorda families, who have long-standing ties to the state. Other donor names familiar to Utahns — Eccles, Marriott, Sorenson, Skaggs and others — are emblazoned on buildings and programs throughout campus.

But it’s Canadian mining-magnate-turned-philanthropist Pierre Lassonde, far less known and with a more distant connection to Utah, who is now emerging as one of the U.’s most generous donors.

Pershing devoted the most literal “face time” to images of Lassonde during his inaugural address, hailing his “unbelievable commitment” to turning students into entrepreneurs. His latest gift will fund the proposed Lassonde Institute, which would provide housing for up to 400 students interested in adding entrepreneurship to their majors, whether or not they are focused on business.

After earning a master’s in business administration at the U. 30 years ago, Lassonde became an astute gold analyst and investor.

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The invisible gold rush – by Sean Phipps (The McGill Daily – November 5, 2012)

http://www.mcgilldaily.com/

Sean Phipps is a U2 Latin American Studies and Environment student. He can be reached at sean.phipps@mail.mcgill.ca.

Canadian imperialism and the gold mining boom

As I write this the price of gold is $1,776.80 an ounce, the highest it’s ever been, up from $1,023.50 in 2008 and $282.40 in 1999. Global economic instability has fueled this dramatic spike, and along with it a massive increase in gold production, an expansion that some have termed “an invisible gold rush.”

In Canada we – or at least some of us – directly benefit from this expansion. 75 per cent of the world’s mining companies (in both production and exploration) are Canadian registered, and several of the industry’s biggest players such as Barrick, Goldcorp, and Kinross are Canadian. And, with a government increasingly working to reflect the needs and interests of the extractive industry, these companies have emerged as key dictators of our country’s economic and foreign policy.

As a country, we are increasingly tied to gold. It is with this in mind that I chose to look at the long and often brutal history of gold mining, the way in which we have viewed gold over time, and to help piece together our strange relationship with this mineral.

Why gold? What has led us to value it above all other substances? Looking at a sample in the display cases in the Redpath Museum, it is hard to deny its beauty. However, gold’s real power has always been symbolic, for gold is wealth itself.

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Production, labour, cost issues weigh down the world’s top gold miners – by Lawrence Williams (Mineweb.com – November 2, 2012)

http://www.mineweb.com/

With the exception of Goldcorp, third quarter results from the big five global gold miners are looking pretty dire.

LONDON (MINEWEB) – This doesn’t look like being a good quarter for the world’s top five gold miners, with only Goldcorp the exception. Both Barrick and Newmont have published figures for the quarter which will have seriously disappointed analysts, while South Africa’s two top producers have of course been suffering badly from the wave of worker dissent in their main country of production which followed on from the platinum mine strikes and the Marikana massacre.

Let’s consider the major miners individually:

Barrick Gold, the world’s largest gold miner, not only saw third quarter earnings fall by 55% compared with a year ago – but also had to report yet another increased capital cost estimate for its massive Pascua Lama project straddling the Argentinean/Chilean border. The project cost now stands at an enormous $8-$8.5 billion, effectively $1billion more than the previous figures only re-estimated a quarter earlier, and getting on for three times the original cost estimate of only three years ago.

This does not bode well for the final project capital cost – indeed the company intimated in its quarterly announcement that even these figures were not necessarily final – and the history of cost pressures suggests that any further adjustments are more likely to be up than down.

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Costs rise again for Barrick’s Andes mine – by Pav Jordan (Globe and Mail – November 2, 2012)

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.

The Andean gold project that is key to driving future growth at Barrick Gold Corp. just got more expensive to build, and the company is still not done looking at costs.

The Toronto-based miner said the Pascua-Lama project, set in the mountains between Chile and Argentina, will now cost as much as $8.5-billion (U.S.) to develop. That’s higher than the shocking $8-billion price tag Barrick issued for the project in July, and more than double a $3-billion forecast when a construction decision was reached in 2009.

“You would expect that when they increased it by such a large amount a few months ago they would have been cautious so that they wouldn’t need to come back and disappoint us once again,” said George Topping, an analyst with Stifel Nicolaus who described the rise as “galling.”

Investors seemed to agree, driving the stock down more than 8 per cent on the Toronto Stock Exchange after Barrick announced the further cost overrun and said third-quarter profit fell by more than 50 per cent. Cash costs edged higher and the company sold less gold at lower prices. Shares of other gold miners also fell, dragged down by falling prices for the metal.

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Four greats to enter Canadian Mining Hall of Fame – by Northern Miner (October 29 – November 04, 2012)

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

The Canadian Mining Hall of Fame will welcome four new inductees at its twenty-fifth annual induction dinner on Jan. 10, 2013, at the Fairmont Royal York Hotel in Toronto. The new inductees are Charles E. Fipke, Gerald W. Grandey, Pierre Lassonde and James C. O’Rourke. The Northern Miner is a sponsor of the Canadian Mining Hall of Fame. For tickets and more information, visit www.mininghalloffame.ca.

Geologists and prospectors had searched for diamond deposits in North America for more than a century with only teasing hints of success until discovering a cluster of kimberlites in the Northwest Territories that became Ekati, Canada’s first diamond mine. This groundbreaking discovery, synonymous with the name “Charles E. (Chuck) Fipke,” was the culmination of Fipke’s relentless pursuit of elusive diamond indicator minerals for hundreds of kilometres from the Mackenzie River Valley eastward to their source near Lac de Gras. Other key contributors in his quest were his associate, geologist Stewart Blusson, economic geologist Hugo Dummett and University of Cape Town professor John Gurney. The discovery’s epic success — achieved on a shoestring budget through innovative science — sparked a staking rush, inspired other discoveries and created a new industry for Canada.

Born in Edmonton, Alta., Fipke earned a B.Sc. degree in geology from the University of British Columbia (UBC) in 1970. His adventurous nature took him to Papua New Guinea, South Africa, Brazil and other exotic locales, where he worked for senior companies such as Kennecott and Cominco, and became intrigued with the use of heavy mineral geochemistry as an exploration tool.

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Agnico surprises with third straight quarterly profit – Pav Jordan (Globe and Mail – October 29, 2012)

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 year ago Agnico-Eagle Mines Ltd.’s Meadowbank mine in Nunavut was producing more bad news than gold. But after ending 2011 with a loss, Agnico just reported its third consecutive quarter of profits, surprising analysts with higher-than-expected production from its large, open-pit operation.

“Big beat on Q3 production and costs,” Credit Suisse analyst Anita Soni wrote in a report after Agnico-Eagle results were published. “Meadowbank drives the beat, mine optimizations working.” According to chief executive officer Sean Boyd, it may not be the last surprise from the mine, which is Agnico’s largest producer.

“We began the year with this plan that on paper looked good,” Mr. Boyd said after the company reported record production of 110,988 ounces of gold at Meadowbank in the third quarter. The figure beat second-quarter production by 10 per cent and came after it mined higher grade pockets with greater success.

A secondary crushing unit at the mine helped it process about 11,000 tonnes of ore per day, the company said, compared with almost 10,000 tonnes per day put through the mill in the previous quarter.

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An invitation to attend 7th annual “Mining For a Heart of Gold” charity event

On Thursday November 1st, Canada’s most influential mining and junior resource stakeholders will play a leadership role in celebrating and supporting an outstanding charity at the Mining For a Heart of Gold event (www.mfahog.com). Some of the biggest names and companies in the mining and resource industry have helped Mining For a Heart of Gold raise more than $40, 000 per event.

The 7th Annual Mining For a Heart of Gold event at the Strathcona Hotel in Toronto will celebrate The Jean Tweed Centre for Women & Their Families (www.jeantweed.com) for the third year in a row.

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Solid Gold Resources Corp. News Release: Tyranny at Lake Abitibi

Toronto, October 19, 2012 – Solid Gold Resources Corp. (“Solid Gold” or “the Company”) (SLD:TSXV) reports that new regulations obligating proponents to consult with potentially-affected Aboriginal communities before conducting exploration activities in Ontario are scheduled to come into force on November 1, 2012.

“These regulations result in a total transfer of all natural resources to the control of hostile, third-party governments. It is my opinion that Canadians must do everything possible to stop this ill-conceived, race-based initiative”, stated Darryl Stretch, President of Solid Gold.

On January 3, 2012, in the absence of any supporting law, a Motions Judge in the Superior Court of Ontario ordered Solid Gold to stop all exploration work at Lake Abitibi and, together with the Province of Ontario, to consult and accommodate the Wahgoshig First Nation (“the WFN”).

Two days later, in reference to the order, Premier Dalton McGuinty of Ontario stated, “There is an important legal obligation now placed on businesses to consult in a formal and thorough way.”

There wasn’t a law or regulation in place on January 5, 2012 when the Premier of Ontario made that statement and, in fact, the law will not come into effect for another two weeks.

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In Russia, patience proves a virtue for Kinross Gold – by Eric Reguly (Globe and Mail – October 22, 2012)

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.

MOSCOW — Kinross Gold Corp.’s new chief executive officer had no speaking role at the Russian Prime Minister’s Foreign Investment Advisory Council meeting, but his mere presence a week ago at the table with Dmitry Medvedev said a lot about the company’s connections to the Kremlin elite.

Kinross occupies a curious and unusual spot in Russia, not just because its mines, in the country’s far east, are closer to Toronto than to Moscow. It is because the Canadian company is the only foreign gold miner in Russia and one of the few foreign companies of any description to operate without local partners. It is also the only Canadian company on FIAC, whose 40 members, from Pepsi to General Motors, represent the country’s top foreign investors.

“I believe it’s important to have a presence here,” Paul Rollinson, who replaced Tye Burt as Kinross chief in August, said on the sidelines of the annual FIAC meeting. “We are definitely on the radar at both the federal and regional government levels.”

At the FIAC event, Mr. Medvedev talked about Russia’s desire to attract more foreign investors. He needs them to modernize an economy whose industries rumble along like an old steam train compared to their Western, Chinese and Japanese equivalents.

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Timmins citizens grill Goldcorp over plans for Hollinger open pit mine – by Len Gillis (Timmins Daily Press – October 12, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

Uncertainty and mistrust were two of the overriding issues that seemed to dominate a public meeting held Thursday night in Timmins to discuss the plan by Goldcorp to turn the old Hollinger Mine property into a massive open pit operation.

The meeting was almost confrontational with at least one citizen pledging to become an outspoken “pain in the ass” to protest Goldcorp’s mining plan.

The meeting was hosted by the Hollinger Project Community Advisory Committee (HPCAC) as an 11th hour attempt to gather more public input on the project that Goldcorp is hoping to have up and running before Christmas.

Although the meeting at the McIntyre Ballroom lasted nearly three hours, there were less than 100 residents at the meeting. Those that did attend managed to pepper the Goldcorp and City of Timmins employees with a barrage of questions. One Goldcorp employee agreed the meeting was intense, but suggested it was “only a vocal minority.”

The uncertainty at the meeting appeared to come from the fact that many residents asked pointed questions about how the project might affect them, but Goldcorp staffers were unable to provide specific or absolute answers because there are many issues and studies not yet completed.

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Gold: The new asset class for the confused – by Diane Francis (National Post – October 13, 2012)

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

Pierre Lassonde, one of the world’s foremost experts on gold, says the only way is up for the shiny stuff.

He should know as he has made his fortune in the gold game. This week he spoke at a mining seminar in Toronto organized by mining consultant Terry Ortsland, chair of the Mineral Resource Analyst Group.

As a director of a gold company, I am fascinated with the shiny stuff. It’s a barometer of fear and a replacement for paper currencies. Its price moves up or down on bad news and good news and drives the value of gold stocks, but only to a certain extent. And in a tumultuous world of financial, stock market and sovereign meltdowns, gold has been a rising star. Investors have branched out from real estate, equities, bonds and art into gold. I call it the new asset class for the confused.

Lassonde is still a believer, but deconstructed shifts in its market. “There’s been a decoupling of equities from gold prices,” he said. The supply-demand situation is clearly pointing to ever-increasing prices but not necessarily for gold producers.

Lassonde ran Newmont Mining Corp for five years (“it nearly killed me”) and is currently chair of Franco-Nevada, a company he co-founded with Seymour Schulich in 1982.

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Fond farewell to an icon, friend [Hemlo co-founder John Larche] – by Benjamin Aubé (Timmins Daily Press – October 12, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – In the days after his death, he is being described by many as a hero and a legend, as a man of generosity and humility. But up until his final days, John Larche only ever saw himself as a simple prospector.

On Friday, Larche was laid to rest at the Timmins Memorial cemetery after a funeral mass at Église Notre-Dame-de-la-Paix. “My father’s biggest dream in life was not mining related,” said Larche’s son Paul. “His biggest dream was to raise his family with values that would carry them well through life so that they could realize happiness and the full potential of their aspirations, whatever they may be.

“Values you know my father for; honesty, integrity, humility, and a moral compass that pointed as true North as his prospectors compass.” Larche died peacefully on Thanksgiving Monday, Oct. 8 at the age of 84. Pre-deceased by his first wife, Violet, Larche is survived by his wife Dolores, his five children, Paul, David, Nicole, John and Lise, as well as his 16 grandchildren.

He was known largely for founding the famous Hemlo Gold Mine in the early 1980s near Marathon, Ont. with fellow prospector and business-partner Don McKinnon, who died just two months ago.

In 1983, Larche was named co-recipient of the Prospectors and Developers Association of Canada’s Prospector of the Year Award. From 1984-1988, he presided over the Prospectors Association of Canada and became the country’s top spokesperson in exploration.

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Goldcorp fined $350,000 [for fatal mining accident] – by Ron Grech (Timmins Daily Press – October 12, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Goldcorp Canada has been fined $350,000 in connection with a fatal accident that occurred underground at the Hoyle Pond gold mine in March 2011.

The company pleaded guilty in a Timmins court Thursday to a Ministry of Labour charge of failing to provide sufficient information, instruction and supervision to protect the safety of its workers.

The charge stems from an incident in which David Yuskow Sr., a 57-year-old electrician who worked at the mine, was crushed by a scoop tram at the 1,390-foot level.

Wes Wilson, special prosecutor for the Ministry of Labour, said the mine had a procedure for alerting scoop tram operators about “pedestrians” working nearby but, at the time, it was not enforced in the area where the accident occurred.

“The procedure required the placement of signs and amber lights to alert equipment operators to the presence and proximity of workers,” Wilson explained. “Signs and lights were readily available to the workers at the time of the incident.”

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Rainy River district rediscovers mining – by Ian Ross (Northern Ontario Business – October 2012)

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. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

What’s old is new again. For decades, the Rainy River district in northwestern Ontario had no operating mines even though the Fort Frances area held a rich legacy of gold mining dating back to the mid-1800s.

With 27 past-producing mines on the books, more than half of Ontario’s gold production came from here between 1890 and 1910. Small wonder as gold prices have shot up that the district has become an exploration hot bed. Now a new generation is learning all over again what the mining industry is about.

“It’s a forgotten industry for a lot of people here because pulp and paper, and logging have ruled the economic paradigm here for several decades,” said Kyle Stanfield, director of environmental sustainability with Rainy River Resources.

His company is advancing toward production of its flagship Rainy River Gold project, located in Chapple Township, 65 km northeast of Fort Frances. Part of the company’s outreach is teaching the locals how the mining cycle works.

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