| 09/13/2008
www.insidemetals.com
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Vol
3, Issue 16 |
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In
This Edition...
Precious
Metals Market Update Geopolitical View
Gold
Producer News
Website Updates
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| Dear
Subscriber, |
This
newsletter will be published next on September
27, 2008. (Due to updates in the Microsoft
Internet Explorer browser, text may be shown
as center justified)
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| IN
THIS EDITION OF INSIDEMETALS
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In this edition of the InsideMetals
Newsletter, we'll take a look at gold prices,
production, pricing and news, as well as
precious metals trends, gold producer news and
recent website updates.
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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 $740.75/oz (London Fix) on September
11, 2008. This is 11.1% lower than the
$833.50/oz (London Fix) closing price on
August 21, 2008, when data for the previous
newsletter was gathered.
Silver
closed at $10.66/oz (London Fix) on September
11, 2008. This is a 21.6% drop from the
$13.59/oz (London Fix) closing price on August
21, 2008.
Platinum
closed at $1170.00/oz (London Fix) on
September 11, 2008. This is a 17.1% drop from
the $1412.00/oz (London Fix) opening price on
August 21, 2008.
Palladium
closed at $232.00/oz (London Fix) on September
11, 2008. This price is 20.0% lower than the
$290.00/oz (London Fix) closing price on
August 21, 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
|
 GOLD
PRICES...UP OR DOWN?
On Thursday, September 11, 2008, gold futures
fell to the lowest level in a year as gold
fell for the ninth consecutive session, the
longest losing streak in eight years. Gold
contracts for December delivery fell to
$745.50 an ounce on the COMEX.. This is the
lowest level since October 2007.
The gold price had now fallen approximately
$270 an ounce (approximately 27%) from its
March 2008 high of $1011 an ounce. Gold
continues to trade lower as oil prices are
falling and the U.S. dollar is strengthening.
Refer to Figure 1 below that displays the Gold
vs. EURO/US$ chart over the last year.
Figure
1.
A rising U.S. dollar tends to decrease the
appeal of gold as an alternative investment.
The dollar had risen to $1.40 per euro, its
highest value in almost a year, and oil
contracts for October fell to $101.69 per
barrel. The correlation in the euro-dollar
exchange rate, and oil prices over the last
year has been very close.
The euro has dropped approximately 12% from
its mid-July all-time high of $1.6038. This
decline in the euro is evidence that the
economy of the 15 nation euro zone that uses
the currency is slowing. On September 10,
2008, William L. Watts, in MarketWatch,
reported that the European Commissions slashed
its growth forecast for the 27 nation European
Union to 1.4% for 2008, compared to its
previous forecast of 2%.
The slowing economy has dampened the demand
for petroleum. The U.S. Department of Energy
reported that last week crude inventories fell
by 5.9 million barrels compared to the
previous week, and gasoline inventories
dropped by 6.5 million barrels, and heating
oil and diesel fuel fell by 1.2 million
barrels.
The continuing uncertainty regarding the slow
down in the U.S. economy and financial
institutions is still hanging over the DOW.
For the month of September, to date, the DOW
has decline by almost 100 points. This
includes a nearly 160 point rebound on
Thursday (September 11, 2008) despite concerns
over the financial health of Lehman Brothers.
A number of other big name financials such as
Merrill Lynch (down 16.6%), and Wachovia Corp.
(down 5.3%) also dropped.
The rebound was a result of investor's
snapping up perceived bargains in the
financial sector.
Stocks finished a volatile session Friday with
a slight loss as gains in energy, utilities
and commodity sectors offset concerns over
Lehman.
In spite of the recent decline in the price of
gold, a number of analysts and mining
executives are bullish on the long term
prospects for a rise in the price of gold. On
September 9, 2008, Ivestec reported that
portfolio manager Daniel Sacks remains bullish
on the long-term outlook for the gold price,
which has fallen as a result of the
strengthening U.S. dollar. In the short term
Sacks thinks gold could consolidate in the
range of $750 - $1,000 per ounce. A floor of
$750 could result in some mine closures; thus
reducing the supply.
On September 11, 2008, in MarketWatch, Jeffrey
Chistian, managing director of commodities
consultancy CPM Group, reported that investor
demand for physical gold is still strong said.
In the last couple of months the world's
leading mining companies have had significant
losses in market capitalization. This includes
precious metals and base metals producers. The
junior exploration companies have had
significant stock price declines as financing
has become more difficult to obtain to advance
exploration projects.
Leading InsideMetals.com gold producer stocks,
Barrick Gold Corp. (ABX), Goldcorp Inc. (GG),
Kinross Gold Corp. (KGC), Newmont Mining Corp.
(NEM), and Yamana Gold Inc. (AUY) have had
steep stock price declines following their
earlier climb as gold peaked at $1,011 per
ounce on March 11, 2008. Refer to the table
below to view the percent decline of these
gold producers over the specified period.
Despite these declines executives of these
companies are bullish on gold, and will employ
measures to control costs and improve
profitability. Barrick plans to hedge nearly
one-third of its energy costs through the
acquisition of oil and gas assets, and expects
to control costs through opening new low-cost
mines.
In an interview at the Denver Gold Forum on
September 10, 2008, Kevin McArthur, CEO at
Goldcorp Inc. said that gold prices should
rebound soon, and could nearly double to
$1,500 an ounce over the next two years.
McArthur said that global supply will push
gold to high levels soon. McArthur also said
that Goldcorp's cost per ounce should trend
downward over the next four years as the
company opens newer low-cost mines and raises
gold production by approximately 50% over the
next five years.
Also, at the Denver Gold Forum, Richard
O'Brien, CEO of Newmont Mining Corp., during a
presentation regarding how cost pressures are
constraining development of the Boddington
mine project in Western Australia, he
reiterated that Newmont continues to be
bullish on gold prices due to a host of
factors which include problems in the
financial markets and declining world gold
production.
On Friday, September 12, 2008, gold features
rose for the first time in 10 days after 9
straight sessions of decline following a steep
fall in the U.S. dollar. Gold delivery
for December rose by $19 to $764.50 an ounce
on the COMEX. This rise ended the longest
losing streak in 8 years.
Could this mark the rebound in gold prices?
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| NYSE
GOLD PRODUCER NEWS
|
 August
25, 2008: Gold Fields Ltd (GFI) has
released a reserve and resource statement as
of June 30, 2008. Reserves net of depletion
have decreased from 94 million ounces of gold
to 83 million ounces of gold. GFI's total
resources have remained steady since December
31, 2006 at 251 million ounces of gold.
August 29, 2008 Iamgold Corp (IAG) has filed a
cash bid in France for Euro Resources S.A.
Euro Shareholders under the offer would
receive EUR1.20 per share and a premium of 30%
based on Euro's closing price on August 29,
2008. Euro currently has a participation right
royalty on production from IAG's Rosebel gold
mine that entitles Euro to payments of 10% of
the gold revenue received above $300 per ounce
for soft rock and $350 per ounce for
production from hard rock.
September 4,
2008: Agnico Eagle Mines Ltd (AEM)
released an update on its recent exploration
activities at the Kittila project in northern
Finland. The results yielded a significant
addition to the inferred resource category.
The recent program at Kittila has added 5.4
million tons grading 0.19 ounces per ton, or
1.0 million ounces, in the inferred resource
category. This brings the total mineral
inventory at Kittila to 3.0 million ounces of
probable reserves grading 0.15 ounces per ton.
Full results and details can be seen in AEM's
press release.
September 4,
2008: Agnico Eagle Mines Ltd (AEM) has
executed a new non-amortizing $300 million
revolving credit facility, maturing September
2010. Including AEM;s pre-existing credit
facility, they now have $600 million of credit
lines. The pre-existing facility is also a
non-amortizing $300 million revolving credit
line, maturing January 2013. Both credit
facilities are unsecured. The new facility is
being provided by a syndicate of international
banks from Canada and Australia.
September 4,
2008: Kinross Gold Corp (KGC) announced
that Aurelian shareholders have approved KGC's
$815 million bid for Aurelian Resources (ARU),
and will take control of the rich Fruta del
Norte gold deposit in Ecuador. The offer was
approved by 75% of ARU shareholders. With an
inferred resource of 13.7 million ounces of
gold and 22 million ounces of silver, Fruta
del Norte is one of the world's top
undeveloped deposits.
September 5,
2008: Barrick Gold Corp (ABX) announced
that approximately 56.1 million common shares
of Cadence Energy Inc. have been taken up
pursuant to ABX's offer to acquire all of the
outstanding shares of Cadence for $6.75 cash
per share. These shares represent over 94% of
the issued and outstanding common shares of
Cadence.
September 8,
2008: Hecla Mining Co (HL) has set the
price for its public offering of 31 million
shares of common stock. HL has granted the
underwriters a 30-day option to purchase up to
an additional 4 million shares of common stock
in case the underwriters require more, if any.
The shares are being offered to the public at
$5 per share. The offering is expected to
settle and close on September 12, 2008,
subject to customary closing conditions.
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| AMEX
GOLD PRODUCER NEWS
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 August
27, 2008: Apollo Gold Corp (AGT) has
repaid, earlier than expected, the balance of
the facilities agreement owed to RMB Resource
Inc. This debt of $1,654,000 was paid mainly
from proceeds from unwinding its hedge
position with a maturity date of September 26,
2008.
August 29,
2008: Eldorado Gold Corp (EGO) has
provided an update for the Efemcukuru Gold
project in Turkey, which is currently under
construction. EGO has reviewed the project and
based on the price of oil and exchange rates
the project will require a $142 million
capital investment ($38 million more than
previously estimated), and operating costs are
expected to be $285/oz opposed to the original
price of $227/oz of gold. The mine is expected
to start production in the first quarter of
2010.
September 2,
2008: Aurizon Mines Ltd (AZK) has
released an exploration update for its Casa
Berardi Mine in Quebec. AZK released the
results from 5 drill holes. One hole yielded
0.31 ounces per ton of gold at a width of 55.5
feet. Another hole yielded 0.60 ounces per ton
of gold at a width of 5.3 feet.
September 4,
2008: Aurizon Mines Ltd (AZK) has
released an exploration update for its Joanna
project in Quebec. To date 320 holes totaling
342,800 feet have been drilled. Results for
117 holes had been previously released and
results for an additional 165 holes can be
seen in AZK's press release. Infill drilling
has confirmed the continuity of the main area
of mineralization, and indicated that they
could be wider than previously depicted on
cross sections. Drilling in the South Zone,
North Zone, West Extension, and East Extension
has cut numerous intervals that assay 0.03 to
0.06 ounces per ton gold over 30 to 60 feet..
September 9,
2008: Eldorado Gold Corp (EGO)
announced the Board of Qinghai Dachaidan
Mining Limited (QDML), the joint venture that
owns the Tanjianshan gold mine, has declared a
$3.0 million dividend. The dividend has been
paid and EGO has received its 90% share of
funds through its Barbados subsidiary. The
QDML Board has also authorized payment of $8.0
million of inter-company debt to EGO.
September 8,
2008: Northgate Minerals Corp (NXG)
announced exploration drilling since February
2008 has identified approximately 970,000 tons
of additional mineral reserves at its Stawell
Gold Mine located in Victoria, Australia. The
newly defined reserves contain 140,000 ounces
of gold and will extend the current mine-life
by an additional 18 months until the fourth
quarter of 2011.
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| NASDAQ
GOLD PRODUCER NEWS |
 No
press releases have been issued for the NASDAQ
since the last newsletter.
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| INSIDEMETALS.COM
WEBSITE UPDATES
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 WEBSITE
UPDATES
PAID SUBSCRIBER RESOURCES: The Business
Summaries for Northgate Minerals Corp. (NXG)
and Coeur d'Alene Mines (CDE), have been
updated on the website. These summaries now
reflect their reported operating and financial
results for the 2nd quarter of 2008.
Paid subscribers can view this update by
clicking the "All Gold Stocks"
button bar under the "Subscribers
Resource" area on the left margin of the
website. This will take the user to the Index
of listed gold companies where the subscriber
can then use the "Quick Nav Bar" on
the Index Page and then click on "B"
to view the Business Summary for the requested
company.
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We
hope you have enjoyed our newsletter.
This newsletter will be published next on
September 27, 2008.
Until next time!!!,
InsideMetals
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