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Gold and Silver

Vox: Gold equities: A less than glittery outlook – by David Milstead (Globe and Mail – September 13, 2012)

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.

The Denver Gold Forum should be a happy, happy place, what with the precious metal on a multiyear run to levels above $1,700 (U.S.) per ounce. But the forum is not a convention of hoarders of coins and bars; it’s an investment conference for the companies who pull the stuff out of the ground.

And since gold-producer equities have badly lagged gold’s gains over the past couple of years, there was less celebrating, and more head-scratching and soul-searching, in Denver this week.

Even Franco-Nevada Corp.’s Pierre Lassonde, known widely as an off-the-charts bull on the gold price, titled his talk “The best of times, the worst of times” – with gold prices the former, and gold equities the latter.

Why the disconnect? Well, as one company’s director of investor relations explained to me, it wasn’t so long ago that the typical buyers of the stocks were gold bugs who preferred production capability to profitability.

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Rob McEwen: gold should be in your portfolio and it’s going to $5,000 – by Lawrence Williams (Mineweb.com – September 11, 2012)

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In an upbeat presentation at the Denver Gold Forum, Rob McEwen forecast that gold is going to $5,000, while setting out the path forwards for the company which now bears his name – McEwen Mining.

DENVER (MINEWEB) – This year’s Denver Gold Forum kicked off yesterday morning and one of the early speakers was Rob McEwen of McEwen Mining.  He has a great name in the industry due to his long term stewardship of Goldcorp, which was largely responsible for building the gold mining major to the strong position it holds today. 

Nowadays he runs McEwen Mining – a U.S. headquartered and quoted developing gold producer for which he has the avowed intent of bringing into the S&P 500 by 2015 – and with one gold/silver mine in production, a second just starting up with its first gold pour expected in a matter of weeks, a third in permitting and a very significant copper/gold/silver project at the exploration stage he may be well on his way to achieving this aim.
 
But it is perhaps as an avowed believer in gold that McEwen attracts a strong following at a conference of this type, perhaps the most significant annual gold event in the calendar- and he opened his presentation with a strong statement of his beliefs in this respect.

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Gold miner Goldcorp is cornerstone of the Red Lake community

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 Goldcorp’s Red Lake Mines is the cornerstone of its namesake community in the northwestern corner of Ontario.  Though the impact of this mining operation is felt regionally, provincially, nationally and internationally, its role is the most profound within sight of its headframes.

Red Lake, which is located in the Central Time Zone, more than 1,900 kilometres north and west of Toronto, has a current population of about 5,200.  It is comprised of the communities of Red Lake, Balmertown, Cochenour, McKenzie Island, Madsen and Starratt-Olsen.  Goldcorp is the largest employer in the community with approximately 1,000 workers and 500 contractors on board.

Goldcorp’s operations, which are all underground, in this area are supported by four headframes and hoists and two milling facilities with a capacity of 2,800 tonnes per day.  Red Lake Mines is the largest gold producer among Goldcorp’s multiple operations in Canada, the United States and Latin America.  In 2012, Red Lake Mines is expected to produce between 460,000 and 510,000 ounces of gold.  In 2012, Goldcorp’s total production from all of its operations is expected to be between 2.35 and 2.45 million ounces of gold.

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Atikokan showcases itself for new construction – Ian Ross (Northern Ontario Business – September 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.

A slew of coming new industrial development has the Town of Atikokan rolling out the welcome mat to investors. The sleepy northwestern Ontario town of 3,300 is making early preparations to host one of Canada’s largest open-pit gold mines.
 
The municipality has released an accommodations study to entice builders to beat a path down Highway 11 to the former iron ore mining town, 180 km west of Thunder Bay. With a new mine on the horizon and several other job-creating developments on the schedule, the town anticipates a surge of construction workers arriving in the very near future, followed by the more permanent jobs in mining, power generation and wood pellet manufacturing.
 
A report by Crupi Consulting of Thunder Bay said Atikokan is facing a severe shortage of housing with “almost zero availability” for homes and rental units. Five major development projects, plus an addition onto the hospital, could create an estimated 1,500 to 1,700 construction jobs over the next five to seven years, followed by the promise of as many as 800 to 1,000 permanent jobs.

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Detour Gold set to open Canada’s biggest gold mine – Pav Jordan (Globe and Mail – September 10, 2012)

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.

Detour Gold is closing in on the opening of Canada’s largest gold mine in January, just as rallying gold prices set the stage for fat profits. “We’re in the last stretch,” said founder Gerald Panneton, a geologist and industry veteran who worked at global gold mining giants such as Barrick Gold Corp. before starting his own company in 2006 and taking it public in January, 2007. “We foresee that we will be completely finished building by the end of the year.”

The Detour Lake mine in the Cochrane, Ont., area marks the strongest sign yet of a trend toward massive, open-pit gold mining in Canada on a scale more commonly seen in desert geographies in Nevada or Chile or on the African continent. Other examples include Osisko Mining Corp. and its Malartic project in Quebec and San Gold Corp.’s Rice Lake mine in Manitoba.

“They really spearheaded this movement of going into old camps where you had traditionally high-grade narrow-vein type mines, and looking at the bigger picture and seeing whether or not that can be developed into a very large, open-pit style low-grade deposit,” said Mike White, chief executive officer of IBK Capital, the boutique investment bank that helped broker the consolidation of Detour Gold’s exploration properties for their former owner, Pelangio Mines Inc.

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South African police, security shoot and injure 4 at gold mine in latest mining clash – by Michelle Faul (The Associated Press/Regina Leader-Post – September 4, 2012)

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

JOHANNESBURG – South African police and security guards fired rubber bullets and tear gas Monday at sacked gold miners who were attacking colleagues to block them from working, the mine owner said. Police said four people were wounded at the mine that used to be partially owned by the president’s nephew.
 
The clash at the Gold Fields mine east of Johannesburg, reported by police and Neal Froneman, the CEO of Gold One International, was the latest violence to hit South Africa’s mines in months of unrest.
 
Company spokesman Sven Lunsche said some 12,000 of the company’s workers “continue to engage in an unlawful and unprotected strike” that began Wednesday. He said it involved an internal dispute between local union leaders and members of the National Union of Mineworkers, the country’s largest union.
 
After apartheid ended in 1994, South Africa pressed to share the country’s vast mineral wealth with its impoverished black majority. But the hoped-for result has not occurred. A small black elite has become billionaires off mining while most South Africans continue to struggle against mounting unemployment, deeper poverty and a widening gap between rich and poor that makes the country one of the most unequal on Earth.

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The fundamental attraction of gold and gold stocks – Don Coxe – by Peter Byrne (Mineweb.com – September 1, 2012)

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Don Coxe* explains how demographic shifts are affecting the price of gold and delves into the logic of investing in gold as a long-term strategy. Interview with The Gold Report.

TORONTO –  The Gold Report: What fundamentally attracts you to gold?
 
Don Coxe: There are many serious reasons why I like gold, but one very important reason has to do with the shift in the share of world gross domestic product away from the highly industrialized nations toward emerging economies in Asia. For thousands of years, people in China and in India have respected gold. The Western countries, on the other hand, were captivated some decades ago by economists who claimed that gold had become irrelevant as money. But the Chinese and Indian people hoard gold as a store of value and trade it as a treasured commodity.
 
TGR: Are the pricing mechanisms for gold shifting toward control by the East?
 
DC: Consider an art auction. If a bidder who 10 years ago only bought one painting suddenly buys 50 paintings, that bidder will greatly influence subsequent bids for the art. In China and India there are suddenly many more wealthy people than they’ve had for millennia.

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Gold, China and the commodities super cycle – Jim Rogers – by Geoff Candy (Mineweb.com – August 29, 2012)

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“The Chinese will buy a lot more gold over the next decade”

GEOFF CANDY: Welcome to this week’s edition of Mineweb.com’s Gold Weekly podcast. Joining me on the line is Jim Rogers – he’s a renowned author, commentator and investor. Jim, gold prices in dollars hit their highest point since mid-April on Monday, largely on hopes of further stimulus from the Federal Reserve. Are we likely to see these hopes dashed once more, do you think or are we likely to see something different post the Jackson Hole meeting?
 
JIM ROGERS: Well I have no idea what’s going to happen at Jackson Hole. I do know that the Federal Reserve is going to continue to print more money, whether they announce it or not because that’s all they know to do, it’s the wrong thing to do for all of us – for the world, but they don’t know any better. So whether they announce it or whether they call it something different, who knows. Until the world economy gets better these guys don’t know anything else to do so they’re going to print more money.
 
GEOFF CANDY: Is there any way to get the world economy better – one gets the sense that we’re almost at an impasse at this stage?

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Harper’s chief of staff faces scrutiny over Barrick Gold links – by Joan Bryden (Globe and Mail – August 28, 2012)

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.

Ottawa — The Canadian Press – Pointed questions are beginning to swirl around Nigel Wright, Prime Minister Stephen Harper’s chief of staff, and whether he used his position to further the financial interests of friends at Barrick Gold Corp.

Ethics commissioner Mary Dawson is following up with Mr. Wright after the disclosure that he was lobbied twice by Barrick, the world’s largest gold producer, in May.

Mr. Wright has known Barrick founder and board chairman Peter Munk for years and is particularly close to his son, Anthony, who sits on Barrick’s board of directors.

Indeed, in a 2011 magazine article, Peter Munk disclosed that Mr. Wright is godfather to Anthony Munk’s son. Mr. Wright worked with Anthony at Onex Corp., the private equity investment giant from which Mr. Wright has taken a leave of absence to work for Harper.

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Golden tour of Goldcorp – by Kyle Gennings (Timmins Daily Press – August 24, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – When most people think of industrial tours, they are often reminded of the story of Willy Wonka and the fabled golden ticket.
 
Standing outside of the Timmins Chamber of Commerce, with a ticket for the Goldcorp industrial tour, I laughed to myself about how true this golden ticket scenario was in my particular case. The humour carried me all the way to my seat and the less than comfortable school bus that would be our chauffeur for the afternoon.
 
“We will be touring the Dome open pit,” Nicole Charbonneau said as she addressed the bus load of people. “Then we will move out into the McIntyre, Conarium and Gillies reclamation sites, along with an overview of the Hollinger Pit preparations.”
 
Charbonneau, a environmental biologist for Goldcorp would be the guide for this three-hour golden tour. Her role in the management and continued development of the reclamation sites behind the McIntyre’s No. 11 headframe made her the perfect voice to speak on behalf of Goldcorp.

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AuRico Gold’s official opening of the Young-Davidson Mine spruces up regional economy

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.

Approximately 850 people were on hand for the official opening of Ontario Mining Association member AuRico Gold’s Young-Davidson Mine recently.  The new precious metals producing operation, which completed its first gold pour in April, is located near Matachewan in northeastern Ontario about 60 kilometres west of Kirkland Lake.

Rain didn’t spoil the enthusiasm of visitors from taking mill tours and visits to the open pit and a display site for underground mining equipment.  Guests included employees and their families, contractors and suppliers, seasonal cottagers, local First Nations residents, politicians from various levels of government and special guests associated with the history and development of the Young-Davidson property.

Various departments at the mine, including geology, environment, surveying and mine rescue, had booths set up to showcase what they do on the job.  A gold bar was on site, which proved to be particularly popular for photograph opportunities.  The local newspaper “Northern News” reported that “Young-Davidson employees, who were leading tours and at various displays, volunteered their time to be there.  That shows the pride the employees have in the mine.” 

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For Barrick, Tanzanian mines lose their lustre – by Geoffrey York (Globe and Mail – August 17, 2012)

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.

JOHANNESBURG — Barrick Gold Corp.’s mining operations in Africa have been a publicity nightmare for the company for years, but until now the company had always seemed confident that the mines were profitable enough to withstand the damage to its reputation.

With a steady drumbeat of violent clashes and civilian deaths in recent years, the company’s North Mara gold mine in Tanzania has been one of the most controversial Barrick mines in the world.

Protesters and activists in Canada and Tanzania have accused Barrick of turning a blind eye to human rights abuses at its African mines. Last year alone, at least five villagers were shot dead at North Mara when they invaded the site to steal waste rock.

A report by a respected Tanzanian group, the Legal and Human Rights Centre, concluded that 19 villagers were killed by police and security guards at North Mara from the beginning of 2009 to the middle of 2010. (Barrick says it disagrees with this estimate but won’t provide its own estimate.)

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Barrick eyes Africa sale as problems mount – by Pav Jordan, Jacqueline Nelson, Andy Hoffman (Globe and Mail – August 17, 2012)

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.

TORONTO, VANCOUVER — Jamie Sokalsky has made his first big move as Barrick Gold Corp.’s chief executive officer, putting the company’s high-cost Africa unit on the block as part of a larger shift in strategy.

The world’s largest gold miner is in preliminary talks to sell African Barrick Gold PLC to state-owned China National Gold Group Corp. A successful deal, which analysts expect would bring in about $2.5-billion, would give some financial relief to Barrick Gold as it struggles with billions in cost overruns at a key growth project in the southern Andes, and continues to absorb the $7.3-billion cash purchase of Equinox Minerals last year.

The negotiations, which the company said are “at an early stage,” are a signal of intent by Mr. Sokalsky, who was appointed in early June to replace Aaron Regent, who was sacked by the board. The new CEO has pledged to focus on generating higher returns from its projects, rather than simply increasing production. They also highlight China’s growing desire to be an owner of large-scale resource projects around the world, an ambition that led another state-owned corporation, CNOOC Ltd., to make a $15.1-billion bid for Calgary oil and gas producer Nexen Inc.

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Barrick Gold says in talks on African Barrick stake – Reuters (Business Network News – August 16, 2012)

 http://www.bnn.ca/Home.aspx

Barrick Gold (ABX-T 35.54 1.28 3.74%), the world’s largest gold miner, is in talks to sell a majority stake in its African unit to a Chinese buyer, the first move by new boss Jamie Sokalsky to clear out poorly-performing businesses and revive its flagging shares.
 
News of the talks with China National Gold Group, which bills itself as the country’s largest gold miner, saw African Barrick Gold shares closed down, as investors bet the buyer would pay a premium to help satisfy China’s insatiable appetite for the metal.
 
If it goes ahead, the sale would be one of China’s largest mining deals in Africa and its most significant incursion into large-scale gold mining on the continent to date.
 
Barrick is grappling with falling profit, soaring costs and the fallout from what some investors see as mistakes, including the takeover of copper miner Equinox Minerals.
 
Barrick ousted its previous chief executive in June, saying it was frustrated the stock had languished while bullion prices had surged. Its shares are down 30 percent over the past year, trading at levels last seen in late 2008.

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Barrick in talks to sell Africa stake to China Gold – by Pav Jordan (Globe and Mail – August 16, 2012)

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. is in discussions to sell the African assets as the world’s largest gold miner struggles to rein in massive cost overruns and focus on key projects.

In a statement on Thursday, Toronto-based Barrick said it was in preliminary discussions with China National Gold Group Corporation regarding its 74 per cent holding in African Barrick Gold PLC, spun off two years ago as it removed the higher cost mines from its books.

“Discussions are at an early stage, and there can be no certainty that these discussions will result in the acquisition of all or part of Barrick’s holding in ABG,” Barrick said in a statement.

“As noted in Barrick’s 2012 Second Quarter Report, Barrick has adopted a renewed focus on maximizing shareholder value through a disciplined capital allocation program which includes optimizing Barrick’s portfolio of assets and maximizing returns on investment and free cash flow.”

Barrick is struggling to right itself as it emerges from some of the most most tumultuous quarters in its history as one of Canada’s largest companies.

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