| 07/25/2009
www.insidemetals.com |
Vol
4, Issue 14 |
|
 |
In
This Edition...
Precious
Metals Market Update
Gold & Silver ETF's
Geopolitical View
Gold
Producer News
Website Updates
|
|
| Dear
Subscriber, |
| The
newsletter will be published next on August 8, 2009. |
| IN
THIS EDITION OF INSIDEMETALS
|
|
In this edition of the InsideMetals Newsletter,
we'll take a look at gold & silver ETF's,
production, pricing and news, as well as precious
metals trends, gold producer news and recent website
updates, which includes our new Advertising and Media
Kit information.
|
|
 |
| 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 $950.00/oz
(London Fix) on July 23, 2009, a 4.2%
increase from the $911.75/oz (London Fix)
closing price on July 9, 2009, when data
for the previous newsletter was gathered.
Silver closed at
$13.76/oz (London Fix) on July 23, 2009, a
6.7% increase from the $12.89/oz (London
Fix) closing price on July 9, 2009.
Platinum closed at
$1176.00/oz (London Fix) on July 23, 2009,
a 6.1% increase from the $1108.00/oz
(London Fix) closing price on, July 9,
2009.
Palladium closed at
$256.00/oz (London Fix) on July 23, 2009,
a 7.6% increase from the $238.00/oz
(London Fix) closing price on July 9,
2009.
ONE YEAR GOLD vs. EURO/U.S. DOLLAR
CHART
The gold price has risen from its October low
($712.50) and closed at $950.00 per ounce on July 23,
2009. Gold has been steadily rising since the October
lows, and briefly popped over a $1,000 per ounce in
late February, before declining to test the $870 per
ounce level. During this rise in the bullion price,
there were strong fluctuations in the U.S. Dollar. On
January 9, 2009 the Euro/$ was 1.3684 and the dollar
has increased in value to a Euro/$ value of 1.2555 on
March 5, 2009, as the dollar strengthened.
The Euro/$ value is now 1.4229. The dollar has
weakened compared to 1.392, when data was gathered
for the last published newsletter. The above chart
reflects the expected parallel consolidation in the
price of gold and the Euro/$ ratio as the U.S.
dollar has fluctuated in value over the last two
weeks.
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| Gold
& Silver ETF's |
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The SPDR Gold Trust (GLD) now controls over
34,935,507 ounces of gold. The gold holdings have
been steadily increasing since October and have been
recently consolidating as gold prices have been
fluctuating between $900 and $950 per ounce. The GLD
reached a record 36,450,190 ounces of gold on June
1, 2009, and has since declined to 34,935,438
ounces, a 4.2% decline from the record high, GLD
holdings were 35,681,507 ounces when this newsletter
was last issued.
The accumulation of silver by the iShares
Silver Trust (SLV) has been steadily increasing
since early 2008 in spite of declining silver prices
beginning in August through October. SLV silver
holdings and the price of silver moved upward in
mid-January. SLV silver holdings peaked on July 23
with a record 281,863,452 ounces.
Holdings in both the GLD and SLV are maintaining
as the price of both gold and silver has been
rising. This suggests that investors are betting
on the long term prospects for gold and silver as
a safe-haven investment.
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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 |
RESOURCE-RICH COUNTRIES WANT PRODUCTION NOW
Eighteen months ago mining companies were
turning rocks over around the globe in the
search for metals and minerals to satisfy
China's appetite for metals and minerals. The
collapse of the global economy has greatly
upset carts loaded with minerals and metals as
the world anxiously waited for the Chinese to
signal that they are ready to renew their
mineral and metal imports.
The resource-rich host countries that have
been counting on the exploitation and export
of their resources are now seeing declining
revenue streams and even worse, the cessation
of development. These countries are now moving
to rewrite mining contracts and to reclaim
concessions.
A case in point is the giant iron ore
concession that Guinea had granted to Rio
Tinto Plc., the world's second largest iron
ore producer. Rio spent over $450 million in
the last decade exploring for iron ore in
Guinea's Simandou Mountains. This exploration
effort has resulted, according to Rio, in the
discovery of the world's largest undeveloped
iron ore deposit estimated to contain
approximately 2.48 billion tons of iron ore
(May 29, 2008).
Rio had planned to spend a total of $6 billion
to develop the whole concession and projected
that production would commence in 2013 at 8.82
million tons annually.
In June 2008, Rio reported that it had
received a letter from the general secretary
of the Guinean president admonishing the
company about its lack of progress on
developing the mineral concession. By December
2008, a new president was in office and the
Guinean Council of Ministers had instructed
the Ministry of Mines and Geology to enact a
compulsory cessation of Rio's Simandou Mining
Concession.
Rio had been in active negotiations with the
government since receiving an August 2008
letter providing notice that it would lose the
north half of the concession. These
negotiations were not successful and Rio was
told that it must remove its equipment and
cede the concession to BSG Resources which is
owned by Israeli billionaire Benny Steinmetz.
On Friday, July 24, 2009, Rio agreed to remove
its equipment from the north half of the
concession.
Mining companies operating in other countries
are also receiving similar notices. Arcelor
Mittal, the giant Indian steel and mining
company received notice on July 17, 2008 from
the Russian government that its coal licenses
could be revoked.
On July 2, 2009, the government of Zimbabwe
stated that it would review all mining
contracts and impose strict "use or
lose" deadlines to force production and
to stimulate revenue.
Ivanhoe Mines Ltd. has reported a lack of
progress with the Mongolian government in
structuring an investment agreement with the
government on the $3 billion Oyu Tolgoi
copper-gold project. In 2006 the government
indicated that it would seek a stake of up to
50% in strategic mining projects as well as a
windfall tax. On July 22, 2009, Ivanhoe
reported that the government agreed to resume
negotiation next week.
Another indicator of the current economic
turmoil in resource-rich countries is the
labor strikes that are ongoing, especially in
the Mexico, and Central and South America. The
U.S. and Canada remain stable areas for
mineral and mine investment.
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| NYSE
GOLD PRODUCER NEWS |
July 13, 2009: Barrick Gold Corp.
(ABX) announced changes to its senior management and
its organizational structural. As a result, Gordon
File, Executive Vice President of Organizational
Effectiveness will be leaving ABX on July 31, 2009.
Mr. File has been with the company since 2002 and
has made valuable contributions to its evolution as
a global enterprise. Information Technology will now
be the responsibility of Executive Vice President
and CFO James Sokalsy. Supply Chain Management will
be the responsibility of Peter Kinver, Executive
Vice President and COO. The Human Resources and
Continuous Improvement function will now be led by
Don Ritz, who will be appointed Senior Vice
President, Safety and Leadership Development. ABX
also announced that Alex Davidson, Executive Vice
President, Exploration and Corporate Development
will retire effective August 31, 2009.
July 13, 2009: Goldcorp. Inc. (GG)
reported that construction of the sulfide process
line (Line 1) at its Penasquito Project in Zacateus,
Mexico has been completed and commissioning work is
advancing on schedule. The primary crusher is
complete and the coarse stockpile has been filled
with 253,580 tons of crushed ore in preparation for
milling. The Line 1 feeder, conveying system, SAG
mill and two ball mills have been completed and wait
commissioning. The next important milestone will be
reached with production and shipment of concentrate
during the second half of 2009, and the expected
commercial production in January 2010.
July 13, 2009: IAMGOLD Corp.
(IAG) announced that it has filed a preliminary
short form base shelf prospectus with securities
regulators in each province and territory of
Canada, except for Quebec, and a corresponding
registration statement with the U.S. Securities
and Exchange Commission. These filings when
approved will allow IAG to make offerings of
common shares, warrants, debt securities,
subscription receipts or any combination of up
to $700 million during the next 25 months in
Canada (except for Quebec) and the United
States. The proceeds from any of the above
offerings will be used to fund acquisitions, to
advance development projects, and to repay debt
and fund general corporate purposes.
July 14, 2009: AngloGold
Ashanti Ltd. (AU) announced resumption of gold
exports from its mine in Guinea following the
government ban on exports last month. Production
at its Siguiri mine was not stopped during the
period of the government imposed export embargo.
The government of Guinea holds a 15% interest in
the mine which produced 333,000 ounces of gold
in 2008, and 88,000 ounces in the first quarter
of 2009.
July 15, 2009: Gammon Gold Inc.
(GRS) provided a mid-year update on its ongoing
exploration program. In 2009, the Board of
Directors approved a $12.3 million exploration
program that includes 403,450 feet of drilling
at its Ocampo mine in Mexico, which is designed
to convert inferred pit resources to reserves;
to test for additional pit resources based on
surface sampling and satellite aster analysis;
to convert down-dip and on strike resources to
reserves; and to initiate new grass roots
targeting of veins based on surface mapping. As
of July 1, 2009, 11 diamond drills and reverse
circulation drills were working, and
approximately 50% of the program (203,675 ft.)
had been completed and numerous gold zones have
been identified. Refer to the press release to
view the reported assays which include zones of
mineralization greater than 15 feet in thickness
and gold grades greater than 0.085 ounces per
ton gold.
July 15, 2009: Gold Fields Ltd.
(GFI reported that its operations at the No. 4
shaft at the Kloof Mine west of Johannesburg,
South Africa has been suspended following a
fatality that killed a miner during an
underground cleaning operation. The accident is
currently under investigation.
July 16, 2009: Coeur d'Alene
Mines Corp. (CDE) announced that it has agreed
to sell back to Penilya Ltd., CDE's 100%
interest in the silver contained in the Broken
Hill mine in Australia for $55 million. CDE
originally purchased this property from Perilya
in 2005 for $36.9 million. This transaction is
expected to be completed on July 31, 2009.
July 17, 2009: Stillwater
Mining Company (SWC) is asking a federal
bankruptcy judge to reverse a move by General
Motors (GM) to cancel its precious metals
contract with SWC. GM indicates that it can get
the metals cheaper from overseas sources. SWC's
attorneys argue that the carmaker should be
compelled to stick with its sole U.S. provider
at a time when it is taking billions of dollars
in government loans.
July 20, 2009: Goldcorp Inc.
(GG) announced that drilling will commence on
the Lebel gold property that it has optioned
from Vault Minerals Inc. (VMI). The Lebel
property is situated in the prolific Kirkland
Lake gold camp. The upcoming drill program will
follow-up on drilling completed in December 2008
which identified a distinct mineralized corridor
hosted within a large feldspar-porphyry stock
which contained large quartz stock-work zones
with anomalous gold bearing zones. Under terms
of the option GG must spend an aggregate
$2,250,000 in exploration by October 2, 2009 to
earn an initial 60% interest in the property.
July 22, 2009: Harmony Gold
Mining Company Ltd. (HMY) announced the
strengthening of its executive team with the
appointment of Leon le Roux, executive
responsible for Risk Management and Engineering,
and Melani Naildoo-Vermaak as executive
responsible for the Environment. Le Roux has
nearly 30 years in the mining industry.
Naildoo-Vermaak, an MSc graduate is an
experienced environmental specialist.
July 22, 2009: Yamana Gold Inc.
(AUY) announced that its Gualcamayo mine reached
commercial production effective July 1, 2009.
Located in Argentina, the mine is expected to
contribute significantly to AUY's overall
production. Production in the first quarter was
20,000 ounces and has increased to 24,000 in the
second quarter. The cumulative weighted average
cash cost from February to June 2009 was less
than $450 per ounce. Production for 2009 is
expected to total 75,000 ounces.
July 22, 2009: Yamana Gold Inc.
(AUY) announced that its four newest projects
are expected to be online by 2013. The four
mines should add about 365,000 ounces of gold
per year by 2013, which will increase AUY's
total yearly production to 1.6 million ounces.
AUY is currently expecting to produce 1.2
million ounces in 2009. Two of the new projects
have been given corporate approval. These
projects are C1 Santa Luz in Brazil and Mercedes
in Mexico. Decision on Ernesto/Pau-a-Pique in
Brazil and the Minera Florida tailings project
in Chile are likely to be approved before the
end of 2009.
July 22, 2009: Stillwater
Mining Company (SWC) was informed that a federal
bankruptcy judge has granted General Motor's
request to drop its precious metals contact with
SWC.
July 23, 2009: Gammon Gold Inc.
(GRS) posted disappointing second quarter 2009
results as a result of lower than forecast
production at its Mexican mines which was down
25%. This decline includes Ocampo and El Cubo.
At the Ocampo mine a 13-day shutdown of
operations in a key part of the facility and the
processing of lower grade ore through the mill
contributed to setting the mine eight weeks
behind its ramp-up schedule. Gold production
topped out at 28,000 ounces, which was 26% below
forecast, while cash costs per ounce were 20%
higher. Silver production was also 30% below
estimates. Gold production was also down at El
Cubo which was impacted by a 45 day labor
strike. As a result of these set backs GRS cut
its 2009 gold equivalent production by 100,000
ounces to 235,000 to 265,000 gold equivalent
ounces.
July 23, 2009: Newmont Mining
Corp. (NEM) reported that its second quarter
profits dropped 40%, reflecting lower copper
prices and costs related to its $42 million
purchase of the remaining stake in Boddington,
an Australian gold project. For the quarter NEM
reported a profit of $162 million, which
compares to $271 million for the year earlier
quarter.
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| AMEX
GOLD PRODUCER NEWS |
July 14, 2009: Eldorado
Gold Corp. (EGO) announced that it has
amended its agreement with Gold Fields Ltd
whereby EGO will acquire 57.9 million shares
of Sino Gold Mining Ltd., which represents
19.9% of the issued and outstanding shares
of Sino Gold in exchange for 27,824,654
shares of EGO. The amendment provides for a
filing of a prospectus solely related to the
Gold Fields Transaction and extends the date
of closing prior to the end of July 2009.
July 14, 2009: Northgate
Minerals Corp. (NXG) announced positive
results from the Pre-Feasibility Study
recently completed on its 100% owned
Young-Davidson project in Macachewan,
Ontario. The study was prepared by AMEC
Americas Ltd., an independent and
internationally recognized engineering firm.
AMEC has also been commissioned to complete
a Feasibility Study by year-end. The
Pre-feasibility Study was based on a gold
price of $725 per ounce and an exchange rate
of US$/C$0.80. The project contains reserves
of 2.8 million ounces of gold; a 15 year
mine-life at a mill throughput output of
6,515 tons per day (6,000 tonnes); annual
gold production of 170,000 ounces of gold at
a net cash cost of $333 per ounce; an
initial capital cost of $293 million and a
sustaining capital cost of $159 million
during the life of the mine. The mine will
provide payback in 6.4 years after start-up.
The project will produce an Internal Rate of
Return of 13.2%.
July 15, 2009: Endeavour
Silver Corp. (EXK) reported that silver
production for the second quarter of 2009
from its two operating mines in Mexico,
Guanacevi in Durango State and Guanajuato
in Guanajuato State, totaled 578,541
ounces of silver, up 12% over the second
quarter of 2008. Gold production rose
sharply in the second quarter of 2009 by
61% to 2,750 ounces compared to the second
quarter of 2008. The company also
announced the signing of a new dore silver
refining contract with Met-Mex Penoles SA
de CV on terms more favorable to EXK.
July 16, 2009: Apollo
Gold Corp. (AGT) reported that it has
raised $11.6 million through the private
placement sale 12,221,640 common shares at
C$0.45 per share and 13,889,390
flow-through shares at C$0.54. AGT said
the proceeds from the flow-through shares
will be used to meet Canadian income tax
requirements, and the proceeds from sale
of the common shares will be used for
working capital and general corporate
purposes.
July 16, 2009: Eldorado
Gold Corp. (EGO) announced the closing of
its sale of its Macusani East uranium
project to Solex Resources Corp. The
property was acquired by EGO when it
acquired Frontier Pacific Mining Corp. EGO
received 11,820,487 Solex common shares
which represents 17% of the issued and
outstanding shares of Solex at a deemed
issue price of $0.14, a promissory note in
the amount of $2,000,000 payable on terms
(secured by a mortgage on the project) and
a uranium royalty on the project.
July 17, 2009: New Gold
Inc. (NGD) announced its second quarter
2009 combined gold sales of 68,617 ounces
at a total cash cost of $499 per ounce,
net of by-product sales. The production
and total cash cost provided in this
release are approximate and may differ
slightly from the second quarter earnings
report which will include results for the
period prior to the close of the business
combination with Western Goldfields Inc.
The combined production for the quarter
was 72,677 ounces. The Cerro San Pedro and
Peak Mines performed as expected for the
quarter and the six months ended June 30,
2009. The Mesquite mine has underperformed
which is largely due to equipment
availability issues, fewer gold ounces
than expected in an area of the Rainbow
pit, and increased consumption of cyanide
and lime. A change in tires from bias ply
to radial tires for the Mesquite truck
fleet will improve operations and provide
cost benefits. In order to catch-up on
waste stripping and to get the mine plan
back on schedule, a mining contractor has
been temporarily retained. 2009 guidance
for gold production is 330,000 to 360,000
ounces at a total cash cost of gold sold,
net of by-product sales is estimated to
range between $490 to $510 per ounce.
July 20. 2009: Claude
Resources Inc. (CGR) reported highlights
from its continuing 2009 underground
in-fill and exploration drilling program
at it Seabee Mine in Saskatchewan, Canada.
CGR has recently drilled 8 holes which
contain gold mineralization, including one
hole which intercepted 10.5 ft containing
0.41 ounces per ton gold. The drilling has
further defines the high grade 2C ore
shoot at the mine.
July 20. 2009: Northgate
Minerals Corp. (NXG) announced that it has
advanced discussions with Australian gold
miner Dioro Exploration regarding a
potential material transaction. Dioro has
asked shareholders to reject a takeover
offer from Avoca Resources Ltd., another
Australian gold producer. The management
of Dioro reported to shareholders that
NXG's offer is likely to be superior.
Avoca currently owns an 18% interest in
Diora and has offered one of its shares
for every 2.4 Dioro share. The Avoca offer
values Dioro at $68.5 million based on
Avoca's share price when the bid was made
in April. An offer from NXG is expected to
be announced in the next week.
July 21, 2009: Eldorado
Gold Corp. (EGO) announced that it has
filed a final short form prospectus dated
July 20, 2009 in British Columbia and
Ontario in connection with the share
purchase and sale agreement dated June 3,
2009, and amended July 10, 2009, with Gold
Fields Austalasia Ltd. to acquire 57.9
million shares of Sino Gold Mining Ltd.
The prospectus qualifies the 27,824,654
common shares of EGO to be issued to Gold
Fields.
July 22, 2009: Apollo
Gold Corp. (AGT) announced plans for a
second phase of core drilling at its Grey
Fox property in Ontario, Canada. This is
budgeted to fund 45,920 feet of core
drilling to follow up on positive drilling
results in 2008 which encountered several
high grade intercepts. This drilling
program is scheduled to start in early
August. The property is near AGT's Black
Fox mine which recently commenced
commercial production.
July 23, 2009: Eldorado
Gold Corp. (EGO) announced positive
drilling results at the Tocantinazinho
Gold Project in the Tapajos region of Para
state in Brazil, which is 100% owned by
Brazuro Resources Corp. EGO has the option
to acquire a 60% interest in the project
for $40 million by expending $9.5 million
over a two year period toward completing
an NI-43-101 compliant feasibility study.
EGO can increase its interest by 10% for
an additional $30 million once a
construction decision has been made
following the completion of a feasibility
study. EGO can purchase an additional 5%
of the project for an additional $20
million. If the feasibility study
identifies a reserve of 2.0 million to 2.5
million ounces of gold, the price will
increase by $5 million. If greater than
2.5 million ounces is identified the price
will increase to $10 million. The recent
drilling has identified five intervals in
the range of 398 feet to 900 feet which
contain 0.033 to 0.045 ounces per ton
gold.
|
| NASDAQ
GOLD PRODUCER NEWS |
 July
16, 2009: Randgold Resources Ltd. (GOLD)
announced that it has approached the Board of
Directors of Moto Goldmines Ltd. and proposed to enter
into an arrangement agreement providing for the
exchange of each common share of Moto for the
equivalent of C$5.00 per share (as of July 15, 2009).
Under the proposed transaction, Moto shareholders
would receive 0.07061 of an ordinary share of Randgold
per Moto share. In addition, Moto shareholders would
be provided with an option to elect to receive in lieu
of Randgold shares cash consideration of $4.47 per
Moto share. Assuming full take-up of the cash
alternative, Randgold would expect to issue a total of
approximately 3.9 million shares and pay a total cash
amount of approximately $244 million to Moto
shareholders. The proposed Randgold transaction values
Moto at approximately $489 million. The above
transaction will result in a joint venture with
AngloGold Ashanti Ltd. (AU). AngloGold has agreed to
fully fund the cash alternative described above for an
indirect 50% in Moto.
July 17, 2009: Randgold Resources
Ltd. (GOLD) announced development of its new gold
mine at Tongon in the Cote d'Ivoire is on track
for its first gold production in the fourth
quarter of 2010. Tongon is now a plus 3 million
ounce deposit, and ongoing exploration is focused
on expanding its resource base. The mine is being
built at a capital cost of $280 million.
July 20, 2009: Randgold Resources
Ltd, (GOLD). Chief Executive Mark Bristow said
that the company's exploration in Mali has been
responsible for making the country Africa's third
largest gold miner, and continuing exploration has
yielded major discoveries with the potential of
becoming world class mines. Randgold's Morilla and
Loulo discoveries are already world class deposits
and the company's Gounkoto project which falls
within the Loulo permit, and Massawa, a short
distance away across the Senegal border have
potential to become significant gold producers.
July 21, 2009: Lihir Gold Ltd.
(LIHR) put its Ballarat gold mine up for sell
after a review of the company's operations
indicated that that the project's production
volume would not meet the company's production
objectives. The sale of the property is likely to
result in a loss of 200 jobs and a write-off of
$250 million to $350 million in LIHR's upcoming
interim results. In spite of recent exploration
success to the north of the mine, a review of the
results indicated that the identified resources
are not sufficient to meet the company production
objectives
July 22, 2009: DRDGOLD Ltd.
(DROOY) reported that Mintails Limited, an
Australian listed mining company rejected
DRDGOLD's takeover offer for Mintails dump
retreatment assets. Mintails shareholders rejected
the A$0.06 for each Mintails share. Mintails is a
50/50 partner with DRDGOLD in the Ergo dump
retreatment joint venture on the East Rand.
DRDGOLD is entitled to all the earnings from the
project during the initial years of operation.
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