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Gold and Silver

Cost overruns, write downs leave Kinross Gold priced for takeover – by Pav Jordan and Euan Rocha ( Mineweb.com – March 19, 2012)

www.mineweb.com

With the miner’s stock having fallen by nearly half since September, bankers see it a target for bigger players who are always on the hunt for deposits to replenish their reserves.

TORONTO (Reuters) – Cost overruns and a massive writedown have knocked Kinross Gold’s stock so low that some bankers see it as Canada’s biggest potential takeover play, though obstacles to a bid for the senior gold producer may be too big to surmount.
 
Kinross, the world’s seventh-largest gold miner, owns some huge, largely unexploited assets spread across four continents, making it an appealing target for bigger players who are always on the hunt for deposits to replenish their reserves.
 
Despite a huge reserve base its stock, which traded for nearly C$19 at the start of 2011, closed at C$9.90 on Friday as mounting concerns about the cost of developing its flagship project sapped investor confidence.

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China consolidates position as World No. 1 gold miner – by Lawrence Williams (Mineweb.com – March 14, 2012)

 www.mineweb.com

China’s annual gold production continues to grow comfortably maintaining its position as the world’s biggest gold miner assuming official statistics tell the full picture – which they may not!

LONDON –  The most recent  figures from China’s Ministry of Industry and Information Technology note that China, already the world’s No. 1 gold miner since 2007, continued its dominance in world gold production with output rising last year by 5.89% to  360.95 tonnes.  The most recent statistics also show that the country’s gold mining sector continued to expand in January with a rise of about 3.69% from the same month a year ago, suggesting that we may well see further annual gold mine output growth in 2012.
 
China’s ever-increasing gold output though is still nowhere near the country’s huge appetite for consuming gold which rose to perhaps some 800 tonnes in 2011, although such figures tend to be speculative in nature as the officially reported statistics may not show the true picture.  There does seem to have been a fall-off in demand however at the end of last year and in the first two months of 2012 with official figures for imports through Hong Kong – the main import route – seeming to show a significant decline over the same period a year ago.

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Masterminds – Fool’s Gold [Bre-X Mining Fraud] (Mining Documentary – 2009)

This information below is from Wikipedia, the Free Encyclopedia: http://en.wikipedia.org/wiki/Main_Page

Bre-X was a group of companies in Canada. A major part of the group, Bre-X Minerals Ltd. based in Calgary, was involved in a major gold mining scandal when it was reported to be sitting on an enormous gold deposit at Busang, Indonesia (on Borneo). Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a penny stock, its stock price reached a peak at CAD $286.50 (split adjusted) in May 1996 on the Toronto Stock Exchange (TSE), with a total capitalization of over CAD $6 billion.[when?] Bre-X Minerals collapsed in 1997 after the gold samples were found to be a fraud.

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Conflict, confusion over provincial mining claims -(CBC Thunder Bay – March 1, 2012)

This article is from CBC Thunder Bay website: http://www.cbc.ca/thunderbay/

Ontario’s mining act being updated to address relations between exploration industry and First Nations

Last year, the exploration industry spent close to a billion dollars looking for minerals in Ontario. But some prospectors say the rules are not clear when it comes to staking claims — particularly on First Nation traditional territory.
 
That’s resulting in conflict and court cases. Mining companies or prospectors are granted exploration claims through the province.
 
But, traditional land surrounding First Nation territory is not marked on the province’s mining map — because the province can’t actually pin it down.
 
Clive Stephenson, a provincial mining recorder with the Ministry of Northern Development and Mines, said traditional territory is a relative term.

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Gold, Silver Juniors Should Shine in 2012: Mark Raguz – by Brian Sylvester (The Gold Report – February 24, 2012)

This interview is from The Gold Report website: http://www.theaureport.com/

After a tough 2011, Mark Raguz and his colleagues at Pinetree Capital are looking at the junior resource sector with renewed optimism. In this exclusive Gold Report interview, he names some of the plays that are fueling that sentiment, from gold names in Northern Ontario to silver names in Mexico.

The Gold Report: Mark, what do you think will determine Pinetree Capital Ltd.’s (PNP:TSX) success in 2012, especially regarding the junior resource sector?

Mark Raguz: What we need to see is the embracing of less risk aversion and the desire of investors to move further along the liquidity curve toward the junior resource space. There are signs this is starting to happen. In the meantime, we believe we can add value by drawing on our expertise in the resource sector and filtering out the best names, whose value might be realized over time.

TGR: How do you determine the best names?

MR: We see things very early and we look at a lot of different names. Finding the gems becomes a lot easier as we have a lot of experience in this area and a lot of comparables to use because of the amount of companies we look at. My goal is to draw out the best management teams with the best assets, given our exposure to most of the names in the space.

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The new Canadian gold rush [Detour Lake, Northern Ontario] – by Renata d’Aliesio (Globe and Mail – February 25, 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.

COCHRANE, ONT.— Scott Ulvstal had pretty much given up on the idea of settling down in his hometown in northeastern Ontario. He left with his girlfriend, Rosanna, a decade ago, hitting the road in a rented U-Haul truck after finishing his studies in graphic design.

There were few job prospects to keep them in Cochrane, a small blue-collar town surrounded by rugged wilderness, the last stop on a 755-kilometre rail line from Toronto. And the young couple were looking for adventure somewhere west.

Visits home over the years offered Mr. Ulvstal little hope of moving back. Shutdowns and layoffs at the sawmill and plywood plants had become routine. Grocery stores, restaurants and clothing shops closed as the community’s population dwindled. The town’s once-grand winter carnival had faded to a small gathering of residents.

“It was like a ghost town down there,” Mr. Ulvstal recalls of Cochrane’s main street. “I didn’t think there would be any work for us here.”

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How a novice miner survived a summer in the Klondike – by Jason Unrau (Globe and Mail/Report on Business Magazine – February 24, 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.

Twin turboprops roaring, our 40-seat plane begins its descent to Dawson City Airport. The clouds give way to reveal a pockmarked heritage landscape: the Klondike gold fields.

This is where, a hundred-odd years ago, a stampede of desperate men moiled—and sometimes died—for gold. Today the soaring price of gold has made Dawson a boom town again, a place that attracts, as in 1897, all sorts of slightly at-loose-ends types. Like me. I’m out of shape and out of dough—my paltry small-town newspaper salary having failed in a Sisyphean struggle to erase $10,000 of debt—and a season of mining sounds like the perfect corrective, or at least the most perfect corrective I’ll find in the Yukon.

For the next four months, Schmidt Mining Corp.’s Quartz Creek camp, tucked in the Indian River valley about 50 kilometres southeast of Dawson City, is where I’ll live and work.

Thankfully, I only have to fly in from Whitehorse. My antecedents risked it all, traversing mountain passes on foot and sailing down the Yukon River in makeshift boats to reach the Klondike.

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Mine Your Own Business (Mining Documentary – 2006)

This information is from Wikipedia, the Free Encyclopedia: http://en.wikipedia.org/wiki/Main_Page

Mine Your Own Business is a documentary directed and produced by Phelim McAleer and Ann McElhinney in 2006 about the Roșia Montană mining project. The film asserts that environmentalists’ opposition to the mine is unsympathetic to the needs and desires of the locals, prevents industrial progress, and consequently locks the people of the area into lives of poverty.

The film claims that the majority of the people of the village support the mine, and the investment in their hometown.[2] The film presents foreign environmentalists as alien agents opposed to progress, while residents are depicted as eagerly awaiting the new opportunity.[3]

Film content

The documentary follows Gheorghe Lucian, a 23-year-old unemployed miner from the Roşia Montană in northern Romania, whose chance of a new job disappeared after an anti-mining campaign orchestrated by foreign environmentalists.

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AngloGold CEO says Warren Buffett just doesn’t understand gold and gold investors – by Alec Hogg (Mineweb.com – February 16, 2012)

www.mineweb.com

Mineweb’s Editor-in-chief, Alec Hogg, interviews AngloGold Ashanti’s Mark Cutifani and hears some forthright views on Warren Buffet’s most recent attack on gold.

JOHANNESBURG –  Anglogold Ashanti’s CEO Mark Cutifani is to local South African gold mining what top South AFfrican asset manager, John Biccard is to the local asset management sector, the man other money managers would most trust to handle their savings. In mining, Cutifani’s astute management has raised the bar for an industry where performance was once measured by volume of rock through the mill rather than gold delivered.

The Australian-born head of Africa’s biggest gold producer has been walking on water lately. He took history’s biggest ever bet on the gold price by closing out the industry’s largest hedge book – at a cost of billions. As the gold price kept steaming ahead, that decision continues to reward Anglogold Ashanti. In the three months to end December it added another $200m to the bottom line.

Cutifani was clearly on a high during our chat this week after the release of his group’s December quarter results. Who could blame him? Apart from that $200m, costs were reasonably controlled, the company got more South African Rands for its gold and the result was a fresh record for profit in any three months. Shareholders joined in the applause when hearing that the yearend dividend was being doubled.

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Ontario First Nation wins injunction to stop gold drilling – by Tanya Talaga (Toronto Star – February 12, 2012)

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.

When members of Wahgoshig First Nation spotted a drilling crew on what they say is a sacred burial site, they demanded to know who the strangers were and what they were doing.

The Wahgoshig, whose Algonquin reserve of 19,239 acres is 113 km east of Timmins, running south from Lake Abitibi near the Quebec border, say they were met with silence. But what was happening on the land was anything but silent, according to court records.

The prospecting work involves clearing 25 sq. metre pads, clearing forest, bulldozing access routes to the drilling sites and the transportation and storage of fuel and equipment.

The workers were with Solid Gold Resources Inc., a junior mining firm that has a 200-square-kilometre prospect at Lake Abitibi near the Porcupine Fault zone. The land they were on, says Wahgoshig band chief David Babin, is not part of the reserve itself but does include the traditional lands the Algonquins have lived on for thousands of years.

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Nevada mining industry expects to add at least 1,200 jobs this year – by Sean Whaley (Foxreno.com – February 10, 2012)

www.foxreno.com

NV News Bureau

CARSON CITY – Nevada’s mining industry is stepping up to Gov. Brian Sandoval’s challenge asking businesses and all economic partners to help create 50,000 jobs over the next three years.

The Nevada Mining Association recently conducted an informal survey of its members and has estimated the industry will add 1,200 jobs this year, both in precious metal and industrial mineral production across the state. The survey could be underestimating the number of mining jobs being created this year since not all mining operations are members of the association.

This compares to 500 jobs created in the natural resources and mining sector reported in the 12 months through December 2011 by the Nevada Department of Employment, Training and Rehabilitation on Jan. 23. There were 12,900 jobs in this sector as of December.

Mining has remained a bright spot in the jobs arena during Nevada’s long running economic downturn.

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Gold cost profiles and nationalisation – Cutifani [AngloGold Ashanti CEO] – by Geoff Candy (Mineweb.com – February 10, 2012)

This interview came from: www.mineweb.com

In a wide ranging discussion, AngloGold Ashanti’s CEO Mark Cutifani talks about nationalisation, cash cost and the outlook for the gold price.

CAPE TOWN – GEOFF CANDY: Hello and welcome to this Mineweb.com Newsmaker podcast, my name is Geoff Candy and joining me from the Mining Indaba, in Cape Town, is Mark Cutifani, he’s the CEO at AngloGold Ashanti. Mark, I suppose the first question I wanted to ask you was if we look at where AngloGold is, one of the big unknowns at a macroeconomic level is what’s going to happen with oil and what I wanted to get a sense of from you is how much of an impact does oil play on your business and is this a concern?

MARK CUTIFANI: Ja, I think it is, it’s a concern for everyone. The good thing from an AngloGold Ashanti point of view is given the high proportion of underground operations that we have, oil tends to be less of an issue for us than, let’s say, compared to the North Americans, who have large open carts with lots of waste stripping and low grades but it’s still a 10% to 13% cost factor for us, so it’s material. But it’s not as material as, let’s say, for the North Americans but it’s one we watch carefully and if we saw a 20% rise, then from us that would have a 2% to 3% impact on our unit cost, so it’s one we watch fairly carefully.

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Gold miners need gold above $1,650 to keep nose above water – by Geoff Candy (Mineweb.com – February 8, 2012)

www.mineweb.com

According to a number of gold company CEO’s it costs about $1,200 to pull an ounce of gold out of the ground.

CAPE TOWN – For the gold industry to keep its nose above water and maintain the current production base, gold prices need to stay above $1,650 an ounce.

Speaking to Mineweb from the sidelines of the 2012 African Mining Indaba conference, AngloGold Ashanti CEO, Mark Cutifani, said, at a price of $1,650 per ounce, gold miners are “only just returning the weighted average cost of capital for the industry”.

This is the number that gold miners need to work from on a real basis he says, but added, “The average cost to produce an ounce of gold, all up, everything loaded in, is about $1,200 to $1,250.

Harmony Gold CEO, Graham Briggs, agrees with Cutifani saying, from Harmony’s perspective, the all-in cost to pull an ounce of gold out of the ground is around $1,250. This figure includes everything from the cost of the Harmony head office to maintenance and its exploration programme which is why it is higher than the $958/oz cash operating cost figure reported by the miner at its half year results on Monday.

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Ian Telfer helped ‘facilitate’ secret trades in insider tipping and trading scheme, OSC alleges – by Drew Hasselback (National Post – February 8, 2012)

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

Ian Telfer — one of Canada’s most prominent mining executives and chairman of Goldcorp Inc. — helped an old friend, the executive assistant of GMP Securities LP’s chairman, disguise an illegal insider tipping and trading scheme, the Ontario Securities Commission claims in a statement of allegations released Tuesday.
 
The OSC alleges that in at least two cases Mr. Telfer advised Eda Marie Agueci to communicate using her BlackBerry’s PIN-based messaging service to keep her activities secret from GMP. The securities regulator also alleges Mr. Telfer helped Ms. Agueci facilitate a secret trade in a company that eventually became Gold Wheaton Inc.
 
“His conduct was contrary to the public interest,” the OSC alleges.
 
The allegations against Mr. Telfer are part of a larger OSC case that names Ms. Agueci, who worked at GMP Securities for about 20 years, as the “central figure” in a scheme in which she is alleged to have used her position to access non-public information on pending deals, then pass this information to eight other individuals.

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The Devastating Costs of the Amazon Gold Rush – by Donovan Webster (Smithsonian Magazine – February, 2012)

This article is from: http://www.smithsonianmag.com/?ref=home

Spurred by rising global demand for the metal, miners are destroying invaluable rainforest in Peru’s Amazon basin

It’s a few hours before dawn in the Peruvian rainforest, and five bare light bulbs hang from a wire above a 40-foot-deep pit. Gold miners, operating illegally, have worked in this chasm since 11 a.m. yesterday. Standing waist-deep in muddy water, they chew coca leaves to stave off exhaustion and hunger.

In the pit a minivan-size gasoline engine, set on a wooden cargo pallet, powers a pump, which siphons water from a nearby river. A man holding a flexible ribbed-plastic hose aims the water jet at the walls, tearing away chunks of earth and enlarging the pit every minute until it’s now about the size of six football fields laid side by side. The engine also drives an industrial vacuum pump. Another hose suctions the gold-fleck-laced soil torn loose by the water cannon.

At first light, workers hefting huge Stihl chain saws roar into action, cutting down trees that may be 1,200 years old. Red macaws and brilliant-feathered toucans take off, heading deeper into the rainforest. The chain saw crews also set fires, making way for more pits.

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