02/23/2008
www.insidemetals.com
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Vol
3, Issue 4 |
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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 March 8, 2008.
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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 how high
gold prices are detering 4th quarter jewelry
purchases, precious metals trends, Geopolitical
issues, gold producer news and recent website updates,
which includes an introduction to our InsideMetals
Quarterly Gold Stocks ScoreCard.
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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
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Gold
closed at $945.00/oz (London Fix) on February 21,
2008. This is 5.0% higher than the $899.75/oz (London
Fix) closing price on February 8, 2008, when data for
the previous newsletter was gathered.
Silver closed
at $17.98/oz (London Fix) on February 21, 2008. This
is a 7.7% increase from the $16.70/oz (London Fix)
closing price on February 8, 2008.
Platinum
closed at $2180.00/oz (London Fix) on February 21,
2008. This is a 19.3% increase from the $1827.00/oz
(London Fix) closing price on February 8, 2008.
Palladium
closed at $519.00/oz (London Fix) February 21, 2008.
This price is 23.3% higher than the $421.00/oz (London
Fix) closing price on February 8, 2008.
GOLD AND PLATINUM
FUTURES SOAR TO NEW RECORDS
Gold futures for April closed at $949.20 on February
21, 2008 after skyrocketing to a new record high of
959.40$/oz during trading hours on the New York
Mercantile Exchange. This high closing price was
boosted by weakness in the U.S. dollar and investors
using gold as a hedge against inflation. April
Platinum futures also hit a record high of $2194.80
before closing at $2188.20.
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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
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 HIGH
GOLD PRICES DETER 4TH QUARTER JEWELRY PURCHASES
The
World Gold Council (WGC) on February 20, 2008,
reported that demand for gold jewelry reached a record
high of 2,674.4 tons worldwide in 2007. This was an
increase of 17% over the 2,517.1 tons consumed in
2006. In 2007, gold jewelry consumption by India, the
world's largest gold buyer rose to 615.4 tons, up from
579.9 tons in 2006, even though 4th quarter demand
dropped by 67% to 59.5 tons. The year-earlier
4th quarter consumption was 182.4 tons.
The drop in 4th quarter demand was a consequence of
high bullion prices, which forced buyers to postpone
purchases or sell scrap to pay for new gold. The high
gold prices should reduce India's gold imports. India
accounts for about one-third of the world's retail
demand for gold (includes coins, bullion and jewelry).
Global gold prices increased by more than 30% in 2007,
the largest increase since 1979. These record prices
and price volatility have dampened demand in the 4th
quarter by most consumers. The demand in the U.S.
dropped 14% in 2007. A decline in demand also occurred
in Italy and the United Kingdom.
According to the WGC, gold jewelry demand in China
reached 333.2 tons in 2007, making China the second
largest retail jewelry market as it surpassed the
United States. Unlike India, and other consumer areas
in Asia, 4th quarter demand in China increased 18% to
84.5 tons.
Gold sales in the Middle East increased by 30% in
2007, as a result of strong regional economies
supported by high oil prices according to the WGC.
Fourth quarter demand in the region was similar to the
decline reported by all of the above countries except
for China.
The price of gold and other commodity prices will
continue to climb in the first half of 2008 as a
result of Asian demand, weakness in the U.S. dollar,
inflation concerns, declining production, and
political and financial instability that supports
higher bullion prices.
Refer to Figure 1,
Gold vs. Euro/U.S.$ below to see the 1 year movement
of gold and the value of the U.S. dollar that displays
the rise in gold price relative to a weak dollar.
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Whitney
& Whitney Inc. - A Nevada Based Management
Consulting Firm
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NYSE
GOLD PRODUCER NEWS
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 February
12, 2008: Coeur d'Alene Mines (CDE) has begun
pre-production activities at the San Bartolome silver
mine. The San Bartolome mine is expected to produce
over 10.0 million ounces of silver during its first
year of production.
February 14, 2008:
AngloGold Ashanti Ltd (AU) announced that it has
entered into a binding Memorandum of Agreement (MOA)
with B2Gold Corp (B2Gold). The MOA will facilitate the
amendment of the existing agreement between the
parties regarding the existing Colombian joint
venture. B2Gold will also acquire from AU additional
interests in certain mineral properties in Colombia.
In exchange B2Gold will issue to AU 25 million common
shares and 21.4 million common shares purchase
warrants in B2Gold. Refer to the press release for
pending actions covered by the MOA.
February 14, 2008:
Goldcorp Inc (GG) has completed its secondary offering
of 108,000,000 common shares of Silver Wheaton SLW at
a price of CDN$14.50 per share totaling
CDN$1,566,000,000. This sale of SLW shares represents
GG's entire 48% stake in SLW.
February 15, 2008: Agnico
Eagle Mines Ltd (AEM) announced an increase of 4.5
million ounces of gold reserves. AEM's gold reserves
now total 16.7 million ounces, which is a 33% increase
over 2006 reserves. Indicated and inferred gold
resources have also increased to 7.5 million ounces.
February 19, 2008:
Goldcorp Inc (GG) announced an increase in gold and
silver reserves. During 2007 GG's gold reserves
increased 9% to 43.4 million ounces. Silver reserves
increased by 37% to 1.1 billion ounces. The main
reasons for the gold reserve increase are the addition
of 3.1 million ounces at the Penasquito project in
Mexico and the addition of 1.1 million ounces at Los
Filos mine in Mexico. Acquiring full ownership of the
Porcupine and Musselwhite mines in Canada added nearly
2.0 million gold ounces to reserves.
February 21, 2008:
Barrick Gold Corp (ABX) has agreed to a purchase and
sale agreement with Kennecott Explorations Ltd to
purchase its 40% interest in the Cortez Joint Venture
in Nevada. The total cash amount is $1.695 billion.
The transaction is expected to be completed in the 1st
quarter of 2008. The deal will increase ABX's share of
the reserves by 4.6 million ounces to 11.5 million
ounces. Mineral resources will be increased by 1.4
million ounces to 3.5 million ounces. The Cortez Joint
Venture is comprised of the Cortez mine and the Cortez
Hills development project. Terms of the deal include a
sliding scale gross royalty on 40% of all future
production in excess of 15.0 million recovered ounces
from Jan. 1, 2008. A further conditional lump-sum
payment of $50 million will be payable in cash if and
when ABX adds an additional 12 million ounces of
contained gold resources to the Dec. 31, 2007 reserve
statement for Cortez.
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AMEX
GOLD PRODUCER NEWS
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 February
11, 2008: Crystallex International Corp (KRY)
has completed its offering of 32,890,000 units at
CDN$2.10 per unit for a total of CDN$69,069,000,
including 4,290,000 units to be issued upon the
exercise of the over-allotment option by the syndicate
of underwriters. KRY plans to use the proceeds from
the financing to develop the Las Cristinas Project,
for debt service and for general corporate purposes.
February 18, 2008: Northgate
Minerals Corp has completed the acquisition of
Perseverance Corporation Ltd. This was originally
announced on October 29, 2007 and was approved by
Perseverance shareholders in three separate Schemes of
Arrangement. NXG will include the results of its newly
acquired Australian operations in its consolidated
financial results for the period ending March 31,
2008.
February 19, 2008:
Endeavour Silver Corp (EXK) has acquired an option to
purchase the Navegantes silver properties, located
approximately 50 miles west of the city of Hidalgo de
Parral in Chihuahua State, Mexico. The 5 Navegantes
properties (1,160 acres) cover two historic silver
mines known for their "bonanza" grades. EXK
can acquire a 100% interest in the properties by
making $470,000 in escalating cash payments over a
2-year period.
February 19, 2008:
Richmont Mines Inc. (RIC) announced 2007 year-end
reserves at 361,000 ounces, up from 49,490 ounces
reported in 2006. This increase can be credited
largely by the addition of Island Gold, and a 53%
increase at the Beaufor mine. Gold production also
increased during 2007 to 45,304 ounces from 44,865
ounces in 2006. Beaufor Mine produced 26,204 ounces of
gold and Island Gold produced 7,348 ounces when
production started at the mine in the 4th quarter of
2007.
February 20, 2008:
Canyon Resources Inc (CAU) has entered into an option
agreement, whereby Golden Predator Mines US Inc. will
take over CAU's interest in the Adelaide and Tuscarora
gold exploration properties located in Nevada. Golden
Predator made an initial payment to CAU of
approximately $507,000 on February 15, 2008. Golden
Predator has guaranteed the second year work
commitment on the properties for $400,000. CAU will
also receive a second payment of $250,000 in either
cash or stock before December 29, 2008. If Golden
Predator decides to complete the assumed work
commitments under the Mineral Lease, CAU could receive
additional payments of approximately $800,000 in
either cash or stock of Golden Predator plus a
production payment and royalties. Canyon will retain a
net smelter returns royalty of up to 1.5% but not less
than 0.5% depending on the total royalty burden on
individual claims of the Properties and the prevailing
quarterly average gold price.
February 20, 2008:
Central Sun Mining Inc (SMC) has completed the first
three holes in a 32,000-foot drilling program. The
first 3 holes have successfully intersected a major
new zone that significantly extends the potential
downdip and on strike extensions of the Santa Pancha
orebody. Drill hole LM-08-003 intersected 0.132 oz
Au/t over a width of 50 feet within a strong
alteration zone 131 feet wide. Drill hole LM-08-003
extends the potential strike length of the new zone by
over 655 feet. Drill hole LM-08-003 is located
approximately 655 feet south of Hole LM-08-001, which
intersected 0.170 oz Au/t over a 40-foot true width
including 0.281 oz. Au/t (8.03 cut) over a 21-foot
true width. Drill hole LM-08-002 intersected a similar
width of quartz vein breccia as LM-08-001, but not as
strongly mineralized.
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| NASDAQ
GOLD PRODUCER NEWS |
 February
21, 2008: Pan American Resources Inc (PAAS)
announced its year-end 2007 silver reserves and
resources. PAAS replaced 100% of the 20.8 million
ounces of silver that was mined during 2007 and added
new proven and probable silver reserves of 14.5
million ounces and increased measured and indicated
silver resources by another 4.9 million ounces.
Reserves now total 227.8 million ounces compared to
213.3 million ounces in 2006.
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INSIDEMETALS.COM
WEBSITE UPDATES
|
 InsideMetals
Quarterly Gold Stocks ScoreCard: Precious metals
investors will be able to purchase online, for $49.95,
on February 28, 2008, InsideMetals' Gold Stocks
ScoreCard which presents a 34 company summary of 3rd
Quarter 2007 Operating & Financial results as a
PDF file that will be e-mailed to you. This Gold
Stocks Scorecard for the 3rd quarter presents in a
concise manner, revenue, earnings, ounces produced,
ounces sold during the quarter, and a forecast of
ounces produced in the 4th quarter based on company
forecasts or calculated by InsideMetals based on
company guidance for 2007 and actual reported 2007
quarterly results.
Companies that were profitable in the 3rd quarter
should report profits in the 4th quarter, or should
have had positive stock gains since the average price
of gold in the 4th quarter (London Fix) was $106 per
ounce higher than the average price of gold in the 3rd
quarter (London Fix). The same is true for silver
producing companies as the price of silver was $1.52
an ounce higher in the 4th quarter. Silver prices in
the 3rd quarter averaged $12.70 an ounce (London Fix)
while silver in the 4th quarter averaged $14.22 an
ounce (London Fix).
The data for the 34 Gold Producer Stocks is presented
as in the example below for Pan American Silver Corp.
Compiling this data for all 34 companies represents a
significant number of hours and can be purchased for
only $49.95
At the beginning of the 3rd quarter PAAS could have
been purchased for ~$26.75 per share, and could have
been sold at year end for ~$35.00 per share. This
would have resulted in a 30.8% gain. On January 10th,
the share price of PAAS reached as high as $38.10. A
PAAS share price of $37.00 would amount to an
additional gain of $2.00 per share or an additional
7.4%. PAAS had forecast that its 4th quarter
production would exceed its 3rd quarter production. PAAS
has reported a record 4th quarter production of 5.1
million ounces of silver on January 23rd, and the
stock moved back up $37.58 before a month end sell
off.
There are several other companies identified in the in
the Quarterly Gold Stocks ScoreCard that should
produce better returns based on 4th quarter production
forecasts. To date 15 of the 34 InsideMetals' Gold
Producer Stocks have reported their 4th quarter
production, and 9 of the 15 exceeded their production
forecast. The average stock price gain for these 9
companies from the beginning of the year, to date, is
up an average of 25.6%. The companies that didn't make
their forecast only had gains that averaged 8.6%.
Purchase the Quarterly Gold Stocks ScoreCard before
the remaining 19 companies report their 4th quarter
production and earnings.
Investors interested in purchasing the Quarterly Gold
Stocks ScoreCard and receiving the PDF by e-mail can
check the Home Page of the InsideMetals.com website
for a Shopping Cart link, which will be active on
February 28, 2008. Investor's who wish to order the
PDF with their credit card by telephone can call 775
689-7650 in Reno, Nevada
Paid Subscriber's
Resources: The Business Summary for Gold Field
Ltd. (GFI) has been updated on the website to reflect
its operating and financial results for its 1st
quarter 2008, which was completed on September 30,
2007.
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.
Potential subscribers can learn more about the Reports
and the "Gold Company Quick Nav Bar" by
going to "Tutorials" and clicking on the
"About the Reports Bar." Clicking on the
"How to use InsideMetals" bar in the
Tutorials section will explain many of the useful
features that InsideMetals.com offers to both Free and
Paid Subscribers.
Gold & Mineral
Stocks Shopping Mall: Since the last
newsletter, InsideMetals.com announced that it added 4
Junior Gold Companies to its Gold and Mineral 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:
Platinum
Explorers:
Anooraq
Resources Corp.
is listed on both the American and TSX Venture
Exchanges. On December 24, 2007, Anooraq Resources
announced that its principle shareholder, the Pelawan
Trust has exercised 167,000,000 common share purchase
warrants at a price per common share of C$1.35.
Franconia
Minerals Corp. is listed on the Toronto Stock
Exchange. On January 16, 2008, Franconia announced
that it has core drilled the longest, high-grade
mineralization to date at its Birch Lake
copper-nickel-PGM project in the Duluth complex in
Minnesota. This 246 foot intercept assayed at 0.77%
Cu, 0.21% Ni, and 1.15 grams per tonne PGM (Pt + Pd +
Au).
Platinum
Group Metals Ltd. is listed on both the
American and Toronto Stock Exchanges. On January 22,
2008, Platinum Group announced a progress update on
its Western Bushveld JV in South Africa. Refinements
to the mine plan to increase early production, to
optimize capital spending and reduce power
requirements have been recommended. Feasibility study
work will continue into the second quarter.
Platinum
Prospector:
Noront
Resources Ltd. is listed on the TSX Venture
Exchange. On February 7, 2008, Noront Resources
announced it had closed a private placement of
6,500,000 units of Noront for aggregate gross proceeds
of $26,000,000.
Gold & Mineral
Stocks Shopping Mall Quotes. InsideMetals is
pleased to announce for the convenience of
InsideMetals' subscribers and visitors that all of the
stock prices provided in the Shopping Mall are now
quoted in U.S. dollars on a 20-minte delay basis.
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We
hope you have enjoyed our newsletter.
The newsletter will be published next on February 9,
2008
Until next time!!!,
InsideMetals
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