| 05/24/2008
www.insidemetals.com |
Vol
3, Issue 10 |
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In
This Edition...
Precious
Metals Market Update Geopolitical View
Gold
Producer News
Website Updates
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| Dear
Subscriber, |
The
newsletter will be published next on June 7, 2008
|
| IN
THIS EDITION OF INSIDEMETALS |
|
In this edition of the
InsideMetals Newsletter, we'll take a look at the
possibility of $150 oil and $1000 gold, as well as
precious metals trends, gold producer news and
recent website updates, which includes updates on
our InsideMetals Quarterly Gold Stocks ScoreCard.
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|
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| In
This Issue |
| Precious
Metals Markets Update |
| 2007
Silver Nevada Miner Bar |
| Geopolitical
View |
| Whitney
& Whitney Inc. |
| NYSE
Gold Producer News |
| AMEX
Gold Producer News |
| NASD
Gold Producer News |
| InsideMetals.com
Website Updates |
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| |
| PRECIOUS
METALS MARKET UPDATE |
 Gold
closed at $922.75/oz (London Fix) on May
22, 2008. This is 5.2% higher than the $877.00/oz
(London Fix) closing price on May 8, 2008, when
data for the previous newsletter was gathered.
Silver
closed at $17.82/oz (London Fix) on May 22, 2008.
This is a 7.5% increase from the $16.58/oz (London
Fix) closing price on May 8, 2008.
Platinum traded
at $2192.00/oz (AM London Fix, close not reported)
on May 22, 2008. This is 9.5% higher than the
$2002.00/oz (London Fix) closing price on May 8,
2008.
Palladium
closed at $453.00/oz (London Fix) on May 22, 2008.
This price is 5.1% higher than the $431.00/oz
(London Fix) closing price on May 8, 2008.
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| 2007
Silver Nevada Miner Bar - 99.9% Pure 5 Troy
Ounces of American History |
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| GEO
POLITICAL VIEW |
 $150
OIL AND $1000 GOLD?
Early Wednesday, May 21, 2008, crude oil rose to a
then record price of $132 per barrel on the New
York Mercantile Exchange as the Department of
Energy reported a decline in crude inventories
following four straight weeks of gains. On news of
the declining crude inventory the Dow dropped
approximately 100 points. The Dow had dropped
nearly 200 points on the previous day on concerns
about rising oil prices and inflation. The rise in
crude prices on Tuesday was probably influenced by
the prediction made during a morning interview on
CNBC with billionaire oil investor, T. Boone
Pickens, who predicted that oil will rise to $150
per barrel in 2008.
As expected, with the rising price of oil, the US
dollar declined and the price of gold rose to $930
an ounce on Wednesday, to its highest level in
nearly a month. Overnight oil prices moved over
$135 per barrel before pulling back. The decline
in the oil price was followed by a decline in gold
and a weakness in the dollar. Refer to Figure 1
(30-Day GOLD vs. EURO/US$) below that displays the
price of GOLD and the EURO/US$ ratio over the last
30 days.
Fig. 1
Will the upward movement in the gold price be
short lived? On Tuesday, May 20, 2008, the World
Gold Council (WGC) reported that demand for gold
has dropped to a 5-year low as record gold prices
and a slowing US economy have reduced gold
purchases for fabrication purposes. Jewelry demand
was down by 21% year-on-year to 445 tons, the
lowest quarterly level since 1992. The only area
in which the demand for gold hasn't declined was
for investment purposes as a hedge against
inflation.
According to the WGC, global use of gold in the
first quarter was 773 tons of gold. This was a
decline of 16% from the year earlier quarter.
Consumption in India, the biggest consumer was
down 50% to 112.5 tons. The only increases in
consumption were seen in China (up 15%), Egypt (up
15%), Russia (up 9%), and Vietnam (up 71%). The
usage by China was 112.1 tons, nearly the same as
India's.
India is the most price-sensitive gold consuming
country in the world and has for the last 7 years
maintained a 20% market share of the world's
demand for jewelry. In the first quarter
consumption in India, as noted above, dropped 50%
in terms of tonnage and 28% in terms of dollars.
The demand for gold in Vietnam doubled to nearly
35 tons making it the largest investment market
for the quarter.
Gold supplies in the quarter increased 11% to 901
tons as metals from recyclers increased by 30% and
sales by central banks increased by 8%. GFMS, the
leading precious metals consultancy released its
annual review, Gold Survey 2008, and reported that
mine production in 2007 was at an 11-year low, and
in the second year of decline. The decline in mine
production will in time lead to supply concerns
which will sustain, and lead to higher gold prices
On May 6, 2008, Barrick Gold Corp. reported lower
gold production for the first quarter of 1.74
million ounces compared to production of 2.03
million ounces in the year earlier quarter, a
decline of 290,000 ounces of gold. The company
maintains that full year production will be in the
range of 7.6 to 8.1 million ounces of gold.
During their Annual Meeting, on Tuesday, in
Toronto, Goldcorp CEO Kevin McArthur commented
that he expects gold prices to again rise back to
the $1,000 per ounce level. Production for the
first quarter was down by 527,000 ounces as a
result of a slow start, but the company expects
production to increase in each of the remaining
quarters.
In 2007, South Africa, the long time world's
leading gold producer since 1905 was overtaken by
China following years of declining production.
On Thursday, May 22, 2008, at a gold conference in
Peru, Nick Holland, CEO for Gold Fields Ltd.
reported to Reuters that Gold Fields expects to
miss its gold production forecast for the year by
15% because of continuing power shortages in South
Africa. Gold Fields is the world's 4th ranked gold
producer. The company now expects to produce 3.6
million ounces, down 650,000 ounces from its
earlier projection of 4.25 million ounces.
Other companies operating in South Africa and in
neighboring countries will also have reduced gold
and platinum production. In light of continuing
demand and supply concerns as a result of
production declines and rising mining costs, the
price of gold should continue to climb.
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| Whitney
& Whitney Inc. - A Nevada Based
Management Consulting Firm |
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| NYSE
GOLD PRODUCER NEWS |
 May
13, 2008: Goldcorp Inc (GG) has poured its
first gold at the Penasquito project in Zacatecas,
Mexico. Over 2.2 million tons of ore has been
stacked on the heap leach pads. Percolation rates,
heap chemistry and gold recovery rates are meeting
or exceeding expectations. Construction for the
project remains on schedule and on budget. The
Penasquito is expected to produce over 400,000
ounces of gold and 30 million ounces of silver per
year, once commercial production is attained.
May 13, 2008:
Silver Wheaton Corp (SLW) has agreed to purchase
75% of the life of mine silver produced by
Farallon Resources Ltd. at its Campo Morado
property in Guerrero State, Mexico. SLW will pay
Farallon $80 million in order to acquire 75% of
the silver produced from the Campo Morado property
for the lesser of $3.90, or the prevailing market
price per ounce of silver delivered.
May 15, 2008:
AngloGold Ashanti Ltd (AU) has decided not to sell
its Morila mine in Mali, which is jointly owned
with Randgold Resources Ltd. (GOLD). Randgold
previously stated that it was interested in buying
AU's 40% interest. AU stated the value of the
offers did not meet what the company wanted.
May 16, 2008:
AngloGold Ashanti Ltd (AU) announced the
transaction with B2Gold, dated February 14, 2008
has been terminated, and their existing Colombian
joint venture has been modified. B2Gold has
acquired from AU additional interests in certain
mineral properties in Colombia that were not
included in the original joint venture. AU will be
issued 25 million common shares of B2Gold and 21.4
million share purchase warrants in B2Gold. Based
on shares issued, AU currently holds a 15.9%
interest in B2Gold, and upon exercise of warrants
held, AU can raise their interest to approximately
26%.
May 16, 2008:
Kinross Gold Corp (KGC) has subscribed to acquire
5,000,000 common shares of Rye Patch Gold Corp in
a private placement deal. KGC will hold
approximately 15.18% of the issued and outstanding
common shares. The subscription price for the
common shares is CDN$0.25 per common share for an
aggregate purchase price of CDN$1,250,000. The
private placement is subject to approval by the
TSX Venture Exchange.
May 20, 2008:
Goldfields Ltd (GFI) has agreed to increase their
stake in Sino Gold (ASX: SGX), after Sino has
closed out its hedge book. GFI currently owns a
15.5% stake in the Australian listed company and
has agreed to increase that stake to 19.9%. SGX
has been active in China since 1996 and owns 82%
of the Jinfeng gold mine in Guizhou Province in
southern China. The Jinfeng mine has Mineral
Resources containing 4.6 million ounces, and Ore
Reserves containing 3.2 million ounces.
May 20, 2008:
Barrick Gold Corp (ABX) has placed its Getchell
gold mine in Nevada on "care and
maintenance" shutdown status due to safety
concerns following three deaths over the past
year. This mine is a very small part of ABX's
portfolio and is near the end of its mine life.
May 22, 2008:
Goldfields Ltd (GFI) has decided to cut gold
production for 2008 by 15%, due to power shortages
in South Africa. GFI now expects to produce about
3.6 million ounces of gold, down from a previous
forecast of 4.25 million ounces.
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| AMEX
GOLD PRODUCER NEWS |
 May
14, 2008: Apollo Gold Corp (AGT) has filed
a preliminary short form prospectus dated with the
securities regulatory authorities in each of the
provinces of Canada regarding the issuance of new
common shares. The offering will be for a minimum
amount of CDN$25 million and a maximum of CDN$40
million. The offering will be used to fund the
acquisition of the St Andrew Goldfields mill
complex in Timmins, Ontario, development of the
Black Fox project and for general working capital.
May 16, 2008:
Gammon Gold Inc (GRS) has decided to expand its
2008-2009 Exploration Program from $26 million up
to $29 million. GRS will target reserve &
resource expansions at the Ocampo and El Cubo
mines as well as resource expansions at Guadalupe
y Calvo exploration property.
May 20, 2008:
Apollo Gold Corp (AGT) following the shutdown of
the mill at Montana Tunnels on April 27, 2008, the
ball mill repair was completed ahead of schedule.
The mill restarted production on May 17, 2008.
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| NASDAQ
GOLD PRODUCER NEWS |
 May
21, 2008: Lihr Gold Ltd. (LIHR) reported
that the company is on track to meet its
previously stated full year production guidance of
more than 850,000 ounces of gold.
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| INSIDEMETALS.COM
WEBSITE UPDATES |
 Paid
Subscriber's Resources: On May 8, 2008,
InsideMetals.com announced the addition of four
Junior Gold Companies to its Gold and Mineral
Stocks Shopping Mall. The companies are listed by
their stage of development (Prospector, Explorer,
and Developer) and by stock exchange(s) where they
are traded (NASDAQ, American Stock Exchange,
Over-the-Counter Bulletin Board, Toronto Exchange,
and Toronto Venture Exchange).
The companies
added include:
Explorers
Rye Patch Gold Corp. On May 12, 2008, Rye
Patch reported that 90% of the 625,517 gold ounces
reported as measured and indicated resources at
the Wilco project in Nevada can be described, on
the basis of geology, as gold ounces in the oxide
zone. Additional testing is needed to determine
percent of gold recovery via heap leaching.
Prospectors
Nevada Exploration Inc. On March 11, 2008,
Nevada Exploration announced that it has closed on
the second tranche of its previously non-brokered
Private Placement for total gross proceeds of
$790,000. Each unit, valued at $1.00/unit,
consists of one common share plus one-half warrant
to purchase a common share at an exercise price of
$1.50 per share for a period of 24 months.
New Dimension
Resources Ltd. On May 12, 2008, New
Dimension announced that it has arranged a
non-brokered private placement of 1,750,000
flow-through common shares at a price of $0.20 per
Flow-Through Share and 7,000,000 units at a price
of $0.15 per unit for total gross proceeds to New
Dimension of $1,400,000. Each unit consists of one
share plus one half of one transferable share
purchase warrant. Each warrant is exercisable into
one common share at a price of $0.25 per share for
a period of 24 months from closing.
Redstar Gold
Corp. On May 12, 2008, Redstar announced
that Gold Fields Netherlands Services BV, a
subsidiary of Gold Fields Ltd. has begun field
work on Redstar's 100% owned Richmond Summit and
Dry Gulch projects within the Carlin Trend in
Nevada. Gold Fields has committed to spend $1.4
million on the projects during the first year.
The Gold & Mineral Exploration Shopping Mall
is available to all viewers of the website and can
be accessed by clicking on its icon located on the
right side of the website's Home Page. The Gold
& Mineral Stocks Shopping Mall contains the
names of 125 exploration companies and links to
each company's website. The companies are
categorized as to whether they are exploring for
"Gold" (precious metals) or
"Other" (copper, lead, zinc, molybdenum,
and/or industrial minerals), and are classified as
Prospector, Explorer, or Developer to reflect the
stage of their project's progress toward becoming
a producing company. The exchanges where the
companies trade at are also listed and linked for
easy access.
The grouping of companies by classification on the
website allows the user to easily compare
companies at comparable stages of development.
Some companies are listed more than once as they
trade on multiple exchanges or they have projects
other than precious metals.
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We
hope you have enjoyed our newsletter.
The newsletter will be published next on June 7,
2008
Until next time!!!,
InsideMetals
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