| 07/12/2008
www.insidemetals.com |
Vol
3, Issue 13 |
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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 August 2, 2008
|
| IN
THIS EDITION OF INSIDEMETALS |
|
In this edition of the
InsideMetals Newsletter, we'll take a look at
investing using reserves, production, pricing and
news, as well as precious metals trends, gold
producer news and recent website updates.
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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 |
|
| PRECIOUS
METALS MARKET UPDATE |
 Gold
closed at $939.50/oz (London Fix) on July 10, 2008.
This is 4.3% higher than the $909.50/oz (London Fix)
closing price on June 26, 2008, when data for the
previous newsletter was gathered.
Silver
closed at $18.17/oz (London Fix) on July 10, 2008.
This is a 7.6% increase from the $16.88/oz (London
Fix) closing price on June 26, 2008.
Platinum
closed at $1999.00/oz (London Fix) on July 10, 2008.
This is a 3.3% decline from the $2068.00/oz (London
Fix) opening price on June 26, 2008.
Palladium
closed at $448.00/oz (London Fix) on July 10, 2008.
This price is 3.7% lower than the $465.00/oz (London
Fix) closing price on June 26, 2008.
2ND
QUARTER METAL PRICES
Gold closed
at $930.25/oz (London Fix) on June 30, 2008. This is
a 4.8% increase over the $887.25/oz (London Fix)
closing price on April 1, 2008, the first trading
day of the 2nd quarter of 2008.
Silver
closed at $17.65/oz (London Fix) on June 30, 2008.
This is a 5.4% increase from the $16.74/oz (London
Fix) closing price on April 1, 2008.
Platinum
closed at $2064.00/oz (London Fix) on June 30, 2008.
This is a 7.6% rise from the $1918.00/oz (London
Fix) opening price on April 1, 2008
Palladium closed
at $467.00/oz (London Fix) on June 30, 2008. This
price is 9.6% higher than the $426.00/oz (London
Fix) closing price on April 1, 2008.
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Ounces of American History |
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| GEO
POLITICAL VIEW |
 INVEST
USING RESERVES, PRODUCTION, PRICING & NEWS
The stock prices of precious metals producing mining
companies over time move up and down as a result of
earnings, and earnings are largely determined by the
price of the commodity being mined and the cost of
producing that commodity. For the first two quarters
of 2008 the price (London Fix) of gold and silver
being mined is reported in the following table for
each quarter.
Mining companies are able to sustain earnings by
increasing the amount of metal they control, and by
increasing the efficiency of their mining and
processing operations which will result in increased
production, which will increase earnings.
The reported 2006 reserve and production results of
the 35 listed InsideMetals.com precious metals
producing companies compared to their 2007 published
results are reported in the table below:
The
15 companies listed on the New York Stock Exchange
increased their gold reserves by 7%, their silver
reserves by 53%, and depleted their
platinum/palladium reserves by 8%. Two of these
companies had gold reserve increases of greater than
50%, and one company had a silver reserve increase
greater than 158%. In terms of production 5 of these
companies had production increases of greater than
40%.
The
15 companies listed on the American Stock Exchange
increased their gold reserves by 7% their silver
reserves by 0.43%, and their platinum/palladium
reserves decreased by 19%. Five of these companies
had reserve increases of greater than 50%. Five of
these AMEX companies had production increases
greater than 58%.
The
5 companies listed on the NASDAQ had a
decline in their gold reserves of -4%, and an
increase in their silver reserves by 7%. One of the
companies had a reserve decline of 28%. One silver
company had a production increase of 31.6%.
How did these reserve and production increases in an
environment where a 3.1% decline in the gold price,
and a 2.9% decline in the silver price affect the
stock prices of these precious metals producers? The
NYSE listed company which posted the best stock
price gain at the end of the 2nd quarter was
Goldcorp Inc., which increased their gold reserves
by 9.1% to 43.4 million ounces, and increased their
production by 40%, to 2.4 million ounces. The stock
price of Goldcorp was up 14% in the 2nd quarter.
NYSE listed Gold Field Ltd. had an impressive
reserve increase of 45% from 63.1 million ounces of
gold in 2006 to 91.6 million ounces as reported in
their 2007 annual report, along with a 5% increase
in production to 4.3 million ounces of gold.
However, the stock price of Gold Fields declined
14%, as power problems in South Africa in 2008
increased costs and reduced production.
AMEX listed Eldorado Gold Inc. had a stock price
increase of 16% as the company had been able to
increase its reserves 13% and its production by 98%.
Crystallex International Corp. is an example of a
company which increased its large reserve position
by 20% in 2007 to approximately 17 million ounces,
but had a significant decline in its stock price by
63% as the Venezuelan government has threatened the
company's mining permits.
From the above examples, investors need to become
aware of the importance of geopolitical stability
and news that can influence the performance of their
stocks. Stock price performance is more than reserve
and production statistics. InsideMetals.com provides
in its quarterly company profile updates important
news and comments that may affect the stock price
performance of listed companies.
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| NYSE
GOLD PRODUCER NEWS |
 June
27, 2008: Hecla Mining Co. (HL) has approved
a revision to its agreement with Rusoro Mining Ltd
to extend the closing date to July 8, 2008. HL
agreed to sell its mining and exploration
subsidiaries in Venezuela to Rusoro for $25 million.
The sale agreement was previously announced on June
19, 2008, with a closing date originally targeted
for today, June 27, 2008. The date was extended to
allow additional time to receive regulatory approval
on the transaction.
July 1, 2008:
AngloGold Ashanti Ltd (AU) and Golden Cycle Gold
Corporation (GCGC) announced that shareholders of
GCGC approved the merger with a wholly owned
subsidiary of AU at a GCGC shareholders meeting.
GCGC shareholders representing 7,036,949 shares of
GCGC common stock voted for the merger. AU
will acquire 100% of GCGC by way of a statutory
merger under Colorado law and subsequently, AU will
own 100% of Cripple Creek & Victor Gold Mining
Company.
July 3, 2008:
Compania de Minas Buenaventura SA (BVN) announced
their board of directors has approved a 2 for 1
stock split. The Board stated July 18, 2008 as
record date. On July 22, 2008 ADS holders will
receive one additional American for Depository Share
(ADS) each ADS held.
July 3, 2008:
Kinross Gold Corp (KGC) has subscribed for 5,000,000
units of Chapleau Resources Ltd in a non-brokered
private placement. Each unit consists of one common
share and one transferable share purchase warrant.
Each warrant allows the holder to purchase one
common share at an exercise price of CDN$0.70 during
the first year from the date of issue and at an
exercise price of CDN$1.10 during the second year
from the date of issue. After the warrants have been
exercised KGC will hold 10.16% of the outstanding
common shares of Chapleau. The price of the units
totals CDN$2.5 million.
July 4, 2008:
Iamgold Corp (IAG) has released an update on an
increase in mineral reserves at its Mupane Mine,
located in Botswana. The increase in Mupane's
mineral reserves is a direct result of IAG's
successful effort to convert the operation to owner
mining. The conversion to owner mining is expected
to add 30,000 to70,000 ounces of additional
production and would result in a 4-6 month extension
of the mine life. The update report indicates that
after producing 37,000 ounces in the first six
months of 2008, mineral reserves were increased by
27,000 ounces for an overall gain of 64,000 ounces
at a cash cost of under $450/oz which will extend
the operational life to Q2 of 2012. Mineral reserves
were calculated using a gold price of $US600 for
December 31, 2007 and $US650 for June 30, 2008.
July 9, 2008:
Kinross Gold Corp (KGC) launched a new gold
processing plant in Chukotka Russia. The plant will
process ore from the Kupol field, owned 75% by KGC
and 25% by the local government, which has the
potential to turn KGC into the second-largest gold
miner in Russia after Polyus Gold. KGC has said that
Gold Production from Kupol is expected to be around
550,000 ounces starting in 2009. Total investment in
the Kupol project is expected to be about $750
Million.
July 9, 2008:
Yamana Gold Inc (AUY) produced 260,000 Gold
Equivalent Ounces (GEO) at a cash cost of negative
$81 per ounce, as a result of by-product credits
during the second quarter. Sales of GEO during the
second quarter totaled 248,000 ounces not including
sales from the Alumbrera mine. AUY also produced
44.8 million lbs of copper, which included 36.6
million pounds from Chapada. Based on existing
resources and proposed increases at projects now
being evaluated, AUY now has a strategic objective
of producing 2.2 gold equivalent ounces in 2012.
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| AMEX
GOLD PRODUCER NEWS |
 July
2, 2008: Central Sun Mining Inc (SMC) has
released an exploration update for the Limon mine
area and the Orosi mine. SMC has completed 14
diamond drill holes totaling 14,570 feet of a
planned 33,000 foot program in the Limon Mine area.
The Santa Pancha orebody, which has the highest
grade within the Limon Mine area deposits, is
currently being mined on the 300-foot level at a
reserve grade of approximately 0.163 oz/ton. At the
Orosi mine exploration drilling is expected to total
a minimum of 33,000 feet. 40 holes, totaling 23,420'
have been completed to date, including the check
holes previously reported. Drilling of 12 holes
(6,680') has been completed to test the San Juan
vein structure, a potential open pitable target
located 3 miles south of the mine. These holes
tested the vein over 2,625'of strike length, and
tested to a vertical depth of 590'. All but one hole
intersected gold mineralized quartz veins/vein
breccias.
July 2, 2008:
Western Gold Fields Inc (WGW) announced during the
second quarter of 2008 the Mesquite Mine produced
28,524 ounces of gold, which was near the high end
of their forecast. During the quarter WGW sold
22,760 ounces of gold at an average price of $893
per ounce. Gold production has increased to over 600
ounces per day and is expected to remain at that
level the rest of 2008. Gold production in the 3rd
quarter is expected to be in the range of 55,000 to
60,000 ounces as higher grade ore from the Rainbow
pit is placed on the leach pad.
July 7, 2008:
North American Palladium (PAL) has settled a dispute
with its insurer relating to the failure of
PAL's primary crusher in 2002 at the Lac des Iles
Mine. Under the settlement, the PAL will receive a
cash payment of $14.5 million, which will be
recorded in the PAL's financial statements for the
second quarter of 2008. This payment is in addition
to the $7.1 million insurance recovery that was paid
in the third quarter of 2004, for a total gross
recovery of $21.6 million.
July 8, 2008:
Claude Resources Inc (CGR) announced first half gold
production totaled 19,953 ounces from the Seabee
mining operation, an increase of 17% over the First
Half 2007. CGR is on track with its forecast of
48,000 to 52,000 ounces for 2008. At the beginning
of 2008, CGR forecast that 40% of production would
take place in the first half of 2008 and 60% in the
second half. The 2008 target range represents an
increase of 8% to 17% over 2007 production.
July 9, 2008:
Eldorado Gold Corp (EGO) reached an agreement to
earn an interest in Brazauro Resources'
Tocantinzinho Project (TZ), in Brazil. This
agreement ensures that the TZ Project will be
explored and developed in a timely manner through
the access to EGO's exploration and project
development expertise in Brazil. EGO can earn up to
a 75% interest in the TZ Project by spending $9.5
million for exploration and development and making
payments to Brazauro totaling $90 million plus a
production decision fee of up to $10 million. EGO
will subscribe for 8,800,000 units of Brazauro at a
price of $0.95 per unit. Each unit is comprised of
one common share of Brazauro and one warrant. EGO
will incur a minimum of $9.5 million of expenditures
on the TZ Project within a 24 month period and will
then have the option to acquire an initial 60%
interest in the TZ Project by paying Brazauro $40
million. EGO will have a further option to increase
its interest in the TZ Project to 70% by making an
additional payment to Brazauro of $30 million within
90 days of the executive committee of the joint
venture approving the construction of the mine based
on a feasibility study.
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| NASDAQ
GOLD PRODUCER NEWS |
 July
3, 2008: Pan American Silver Corp (PAAS)
reported its Quiruvilca and Huaron mines in Peru
continue to operate normally in spite of the illegal
strike that was called by the National Mining
Workers Union, on Monday, June 30, 2008. PAAS's
Morococha operation, underground mining has been
reduced as both PAAS miners and contractor miners
have joined the strike. The Morococha mill had
continued to process at capacity from previously
stockpiled ore until July 2, 2008. PAAS continues to
monitor the situation and as of now is still not
expecting any material change to its annual forecast
production estimate for Morococha.
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| INSIDEMETALS.COM
WEBSITE UPDATES |
 PAID
SUBSCRIBER RESOURCES:
New Ranking Numbers
& Financials: All of the year-end 2007
annual reports and/or SEC 10-K' financial reports
have been filed by the InsideMetals.com Gold
Producer Stocks. Their financial data has been
compiled and is now scheduled to be posted to the
website in mid-July. The updated financial data can
be viewed by paid subscribers by using the
"Quick Nav Bar" on the Index Page and then
by going to the table that will link to the updated
data.
For each company new Ranking Numbers have been
computed that reflect their financial performance in
2007. A positive ranking number indicates that the
company generated a profit. Companies with more
positive ranking numbers will tend to perform better
as investments than companies with less positive
ranking numbers. Companies with negative ranking
numbers should be carefully studied using the
InsideMetals.com Business Summaries. There may be
factors that have resulted in positive stock
performance in anticipation of future results.
The Ranking Numbers and financials can be viewed by
going to the Index Page and navigating as explained
below:
To view an individual company's 2007 financial data,
go to the large table listing "All Gold
Companies" and click on "F."
To view the 2007 financial data, compiled by Stock
Exchange, go to that table and click on the link to
the appropriate exchange or click on the link to
"All Gold Companies."
The financial performance of the gold producing
companies to date, based on their 2006 financial
data can viewed by stock exchange or a compilation
of "All Gold Companies" by clicking on the
link that will display the performance over the
required time period..
For those newsletter subscribers who are not yet
subscribers to InsideMetals.com, the publication of
these ranking numbers in the website will assist
investors in identifying mining stocks that are
undervalued, especially as a result of the recent
decline in gold prices.
Mineral Producer
Stocks: On July 3, 2008, InsideMetals.com
added 4 coal producers to its list of Mineral
Producer Stocks. The newly featured coal companies
are described below:
Foundation
Coal Holdings Inc.: listed on the New York
Stock Exchange; engages in the production of steam
coal and metallurgical coal from surface and
underground mines. On June 9, 2008, Foundation
reported that James J. Bryja, senior vice president
of operations exercised options for 10,000 shares
under a prearranged trading plan.
Massey
Energy Company: listed on the New York Stock
Exchange; produces, processes and sells bituminous
coal through its subsidiaries. On June 17, 2008,
Massey reported that John M. Poma, its vice
president of human resources exercised options for
3,464 shares of Massey common stock at $39 per
share. These shares were sold on the same day for
$78.75 and $83.75 per share.
Westmoreland
Coal Company: listed on the American Stock
Exchange; mines, processes, and sells through its
subsidiaries bituminous, steam and industrial grade
coal. On June 16, 2008, Westmoreland announced that
a new 3-year collective bargaining agreement had
been reached at its Absaloka mine in Montana.
Yanzhou
Coal Mining Company Ltd.: listed on the New
York Stock Exchange; engages in underground coal
mining in China, and owns interests in several coal
mines in China and the Austar Coal mine in
Australia. On June 4, 2008, Yanzhou ADRs along with
other Chinese coal company ADRs declined as
the government moved to have the mines increase
production and lower prices.
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We
hope you have enjoyed our newsletter.
The newsletter will be published next on August 2,
2008
Until
next time!!!,
InsideMetals
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