The 30-Day trading pattern for a cross section of leading gold producers which includes AngloGold Ashanti Ltd., Barrick Gold Corp. (ABX), Goldcorp Inc. (GG), Kinross Gold Corp. (KGC), Newmont Mining Corp. (NEM), and Yamana Gold Inc. (AUY) exhibit a similar range-bound pattern, with a downward bias.

The entire commodity sector has been choppy as the U.S. dollar fluctuates in value against the euro.

On June 16, the International Monetary Fund (IMF) reported that the U.S. economy is recovering, although at an anemic rate that is unlikely to produce jobs or inflation. In its annual review of the U.S., the IMF forecast that the U.S. economy would contract by 2.5% this year. This is a slight improvement to the 2.8% decline that the IMF predicted in April. For 2010 the IMF also forecast that the U.S. economy would grow 0.75% compared to the zero growth also forecast in April.

According to the IMF the weak rate of improvement in the economy would keep inflation in control over the near term. For the long term, the IMF said the U.S. needs to develop a strategy for withdrawing monetary and fiscal stimulus in order to control rising interest rates as a result of increasing inflation and debt.

Strength in the U.S. currency makes all dollar priced commodities including gold and oil more expensive for holders of other currencies. The commodity sector has been choppy as the U.S. dollar fluctuates and there has been a recent consolidation in gold prices in the $930 to $940 per ounce range.

Despite the consolidation in gold prices investor interest remains high as both the SPDR Gold Trust, and the iShares Silver Trust have retained their holdings of gold and silver ounces at near record levels. The retention of these ounces expresses investor confidence in holding gold and silver, and investing in gold and silver stocks.

 

June 8, 2009: Agnico-Eagle Mines Ltd. (AEM) announced that they plan to more than quadruple output by 2010, largely as the Meadowbank project in Nunavut is expected to produce 350,000 ounces annually during the mines nine-year life. Production costs may rise to as much as $350 per ounce next year because of lower expected prices from byproduct metals. The cash cost of production was $162 per ounce in 2008. The cash cost is expected to be in the range between $300 and $350 per ounce next year, compared to a cash cost of $340 per ounce in the first quarter of 2009. The decline in zinc prices has been a major factor in a lower byproduct credits.

 

June 10, 2009: AngloGold Ashanti Ltd. (AU) reported that a series of seismic events located near the shaft infrastructure at the Savuka mine on May 22 did not damage the three-shaft system The primary and tertiary shafts were not damaged, but the sub-shaft barrel below the 100 level has been damaged, along with installations on the 101 and 102 levels. Operations staff is assessing the best ways to rehabilitate the sub-shaft infrastructure and to minimize the impact to production while work is undertaken. There will only be a low volume of production from the main shaft for the remainder of the second quarter.

 

June 10, 2009: AngloGold Ashanti Ltd. (AU) announced that it has formed an alliance with Thani Dubai Mining, a United Arab Emirates exploration company to develop and operate mines in the Middle East and parts of North America. AU has the opportunity to participate in any of the projects that Thani currently owns. Thani has one project at the pre-feasibility stage with recently defined measured and indicated reserves of 234,000 ounces of gold and an inferred resource of 930,000 ounces. Exploration is underway at other concessions in Yemen and Egypt. An initial investment of $15 million was made by both companies for business development.

 

June 10, 2009: Goldcorp Inc. (GG) reported that it lost its bid to get $50 million in compensation after a U.S. trade tribunal rejected claims that GG's operations were hampered by environmental regulations according to the U.S. State Department. The claims were filed by Glamis Gold before it was acquired by GG in 2006. Glamis argued that actions taken by the State of California and the U.S. Department of the Interior made it economically infeasible for the company to build a planned mine. Glamis claimed the actions were I n violation of the north American Free Trade Agreement.

 

June 10, 2009: Yamana Gold Inc. (AUY) announced that it will sell three mines to Aura Minerals for $200 million. The mines include the San Andres Gold mine located in Honduras and the Sao Francisco and San Vicente gold mines located in Brazil. AUY considered these mines non-core assets and the sale of these properties will result in lower cash operating costs, higher margins and increased production and cash flow per mine. The transaction includes $90 million in cash, $70 million in deferred cash payments, and $40 million in common shares of Aura Minerals at a price of C$0.40 per share. Additionally, AUY will receive a contingent cash flow that will provide payments of up to o$40 million based on these operations generating net free cash flow above certain milestones.

 

June 11, 2009: Yamana Gold Inc. (AUY). The $200 million sale of non-core assets will allow AUY to focus on its core assets and operating jurisdictions that favor development of high-returning projects. Sale proceeds will be used to lower cash operating costs, to improve margins, reserves, and production. AUY has now built up a war chest of approximately $1 billion in cash and equivalents, and un-drawn credits. The accumulation of credit may be an indication that an acquisition may be in the works.

 

June 11, 2009: Harmony Gold Mines Ltd. (HMY). South Africa's Chamber of Mines reported that HMY has indicated to the mineworkers unions that it would like to explore a wage offer increase on a bilateral basis. The Chamber, which negotiates collectively on behalf of gold producers, reported that producers except for HMY, made a 7% offer to unions. The unions rejected the 7% offer and called for arbitration.

 

June 11, 2009: IAMGOLD Corporation (IAG) announced that its Board of Directors approved a $28 million mill expansion and an $18.9 million Paste Backfill Plant addition to the Niobec Mine located near Chicoutimi, Quebec. The mill expansion will increase throughput by 24%, and the Paste Backfill Plant increases proven and probable reserves by 36% and inferred resources by 72%, as compared to reserves/resources reported on February 23, 2009. The Niobec Mill currently has an average throughput of 232 tons per hour, while the mining hoist has an average hoisting capacity of 287 tons per hour. The mine has traditionally been mined using a method of longhole, open stoping without backfill which results in significant ore grade rock being left behind as pillars. Utilizing paste backfilling will allow removal of more ore by elimination of pillar use.

 

June 15, 2009: Gammon Gold Inc. (GRS) announced that the strike at El Cubo has ended. The two parties have agreed to an 8% increase in basic wages and a 3% increase in benefits. The union agreed to the adoption of a continuous seven-day work schedule.

 

June 15, 2009: IAMGOLD Corporation (IAG) reported that it has increased the reserve estimate at its 90% owned Essakane gold project in Burkina Faso, West Africa. The company has increased the probable reserves at the site by 8% or 245,000 ounces to 3.37 million ounces of gold. It also announced an additional 201,000 ounces of in-pit indicated resources from the nearby Falagountou deposit. Production at Essakane of 375,000 ounces in the first year is now expected in August 2010.

 

June 16, 2009: Agnico-Eagle Mines Ltd. (AEM) signed a new credit facility with a syndicate of international banks that increased its credit line to over $900 million. The new facility is a non-amortizing $400 million revolving credit facility, maturing June 2012, replacing a pre-existing $300 million tranche of credit lines that would have matured September 2010.

 

June 16, 2009: Compania de Minas Buenaventura SA (BVN) reported that protestors have blocked access to BVN's Orcopampa gold mine in Peru. This blockade has affected production. The protest organized by people in communities near the mine is about labor and environmental demands. The protest was held even though Peru's largest mining federation called off a nationwide strike set to start on June 22, 2009.

 

June 17, 2009: Yamana Gold Inc. (AUY) said that work at its early-stage and development stage projects in Mexico, Brazil, and Chile has progressed and may soon raise its gold resource estimates at certain sites. Drill results at its Mercedes project in Mexico continues to show promising mineralization. AUY plans a feasibility study and construction decision for Mercedes by the first quarter of 2010. A pre-feasibility completed at the site yielded positive results and indicated an initial mine life of six years. AUY also reported that it has budgeted $4.1 million for exploration to accelerate its Pilar, greenstone-belt gold project in Brazil. A feasibility and construction decision is expected in the first quarter of 2010.

 

June 18, 2009: IAMGOLD Corporation (IAG) provided updated guidance for its 2009 production costs, capital expenditures and exploration. Guidance assumptions include a gold price of $900 per ounce and a fuel price of $55 per barrel. Full year production for 2009 is expected to be 910,000 to 920,000 ounces at an average cash cost of between $460 and $470 per ounce. Full year niobium production from the Niobec mine is expected to be 4,630 to 4,850 tons with operating margins of between $10 and $11 per pound.  Capital expenditures in 2009 are projected to be $448 million and greenfield exploration is expected to remain as forecast at $34 million.

 

June 18, 2009: Yamana Gold Inc. (AUY) reported that its second quarter 2009 dividend of $0.01 per share will be paid on July 14, 2009 to shareholders of record as of the close of business on June 30, 2009.

June 8, 2009: Aurizon Mines Ltd. (AZK) reported that a hole drilled on claims optioned from Alexandria Minerals Corp. intercepted 0.087 ounces per ton gold over 15.1 feet (includes 0.262 ounces per ton gold over 3.28 feet) .The property consists of 19 claims adjacent to AZK's Joanna gold deposit which contains a gold resource of 1.5 million Measured and Indicated ounces and 1.2 million Inferred ounces. AZK can complete its option agreement by completion of a C$650,000 exploration program and issuing common stock to Alexandria with a value of C$1.6 million by December 2010. AZK has already made to Alexandria a cash payment of C$400,000.

June 9, 2009: North American Palladium Ltd. (PAL) confirmed that it intends to reopen its Lac des Iles mine when palladium reaches about $800 per ounce. The mine was placed on care and maintenance in October of 2008 when palladium prices were approximately $192 per ounce. Palladium prices are currently at $242 per ounce. PAL believes the mine could be opened as early as 2010 as palladium prices have been rising as a result of safe-haven buying and stronger demand in China.

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