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In
This Edition...
Precious
Metals Market Update
Gold & Silver ETF's
Geopolitical View
Gold
Producer News
Website Updates
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| Dear
Subscriber, |
| The
newsletter will be published next on
September 26, 2009. |
| IN THIS
EDITION OF INSIDEMETALS
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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.
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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 $983.00/oz (London Fix) on September 3,
2009, a 4.5% increase from the $940.50/oz
(London Fix) closing price on August 20,
2009, when data for the previous
newsletter was gathered.
Silver closed
at $15.73/oz (London Fix) on
September 3, 2009, a 12.0%
increase from the $14.04/oz
(London Fix) closing price on
August 20, 2009.
Platinum closed
at $1241.00/oz (London Fix) on
September 3, 2009, a 2.6%
increase from the $1210.00/oz
(London Fix) closing price on,
August 20, 2009.
Palladium closed
at $290.00/oz (London Fix) on
September 3, 2009, a 6.2%
increase from the $273.00/oz
(London Fix) closing price on
August 20, 2009.
ONE YEAR GOLD vs.
EURO/U.S. DOLLAR CHART
The gold price has
risen from last year's low of
$712.50 (month of October) and
closed at $940.50 per ounce on
August 20, 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
1.4335. The dollar has
weakened compared to 1.424,
when data was gathered for the
last published newsletter. The
above chart reflects the
expected parallel rise in the
price of gold and the Euro/$
ratio as the U.S. dollar has
weakened over the last two
weeks.
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The SPDR Gold Trust (GLD) now controls
over 34,658,959 ounces of gold. The gold
holdings have been steadily increasing
since October and have been recently
consolidating as gold prices have been
fluctuating between $925 and $995 per
ounce over the last three months. The
GLD reached a record 36,450,190 ounces
of gold on June 1, 2009. GLD holdings
were 34,256,690 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 2008 through October
2008. SLV silver holdings and the price
of silver moved upward in mid-January.
SLV silver holdings peaked on July 31,
2009 with a record 283,831,312 ounces.
The SLV currently holds 278,586,722
ounces.
Holdings in both the GLD and SLV have
been relatively stable as the price of
both gold and silver has been
generally rising. This suggests that
investors are betting on the long term
prospects for gold and silver as a
safe-haven investment as the US Dollar
declines.
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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 |
CHINA IS GOING FOR THE GOLD
Gold soared to a three-month
high on Thursday and is poised to beak
through the $1,000 per ounce level as
gold closed at $983.00 per ounce (London
Fix), after rising to above $998.00 per
ounce. In the month of September (3-days
only) gold had risen over $40.00 per
ounce, a 4% rise. The steep rise in the
gold price reflects investor's concern
that global stocks and credit markets
may be nearing a slippery downhill
slope.
The US Dollar and the calendar are
both factors that are influencing
the gold price. September is
historically the worst month of the
year for stocks, and September is
typically good for gold and gold
stocks. The gold price has risen in
16 of 20 Septembers since 1989. Gold
prices typically move inversely to
the dollar, when gold moves up
sharply, the dollar moves down.
Patrick Neal, head of equity
strategy at Jefferies & Co. said
on September 4, 2009, in The Wall
Street Journal, "that while the
dollar did weaken on Wednesday,
there's not enough movement in the
dollar to explain the entirety of
gold's move."
Other factors in play that may have
pushed the gold price up include an
agreement between China and the IMF;
purchases of gold by China's
sovereign-wealth funds;
encouragement for the Chinese
populace to buy gold and silver for
investment; and option trading
activity in gold mining stocks.
The International Monetary Fund
reported on Wednesday that China
signed an agreement to purchase
approximately $50 billion in IMF
notes that are denominated in
Special Drawings Rights, a
quasicurrency issued by the IMF.
This action by China would diversify
its foreign asset holdings and
support promotion of the IMF
quasicurrency as a potential
replacement of the dollar as the
world's currency and provide a
potential means for China to reduce
its dollar holdings.
A reason for investors to buy gold
now is anticipation of an equity
market sell off. Gold is often used
as a hedge against inflation and as
a safe-haven investment. Recently
there has been a lot of talk about
central banks reducing their gold
sales, and reports that China's
sovereign-wealth fund may be buying
gold. This chatter has helped propel
the rise in gold. Patrick Neal sees
gold's run up as a bearish sign for
stocks.
On Thursday, Paul Mylchreest's
Thunder Road Report indicated that
China's Central Television
(state-owned) is pushing the buying
of gold and silver for investment
purposes by the general population.
If China's 1.3 billion citizens
start buying gold, even in small
quantities, there could be a strong
positive impact on the price.
On Wednesday, Tennille Tracy in The
Wall Street Journal reported that
strong option trading in gold stocks
occurred. Companies that had active
bullish options trading include Gold
Fields Ltd., and Yamana Gold Inc.
Trading in Gold Fields increased by
9X normal levels with traders
writing 24,000 calls to purchase the
stock, and 5,000 puts to sell the
stock. Traders of Yamana Gold
focused on September and October $10
calls.
As Chinese sovereign-wealth funds
dump the dollar for strategic
investments like gold, prices
will rise and so will precious
metals mining stocks in the third
and fourth quarters of the year.
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| NYSE
GOLD PRODUCER NEWS |
August 26, 2009: Harmony
Gold Mining Ltd. (HMY) has
reopened its Doorkop plant
outside Roodepoort, South
Africa, Tuesday evening,
following a fatality on Monday,
August 24, 2009. The fatality
was related to a conveyor belt
accident. The production at the
mine was not affected during the
plant's downtime, and ore
earmarked for production and
refining had been stockpiled
until the plant was reopened.
August 27, 2009: Harmony
Gold Mining Ltd. (HMY) announced
that it has expanded its
exploration activity in Papua
New Guinea (PNG) with the
acquisition of two new projects
in PNG. The acquired projects
are Amanab and Mount Hagen.
Amanab is located north of the
Ok Tedi copper/gold mine and the
exploration license comprises
333 square miles. The Mount
Hagen project comprises two
contiguous tenements
encompassing 425 square miles.
HMY purchased the two projects
from Frontier Resources for
A$300,000 and acquired the
rights to explore the adjacent
tenements over a four-year
period on conditions that its
exploration program meets a
minimum yearly expenditure. HMY
could exercise an option to buy
100% of the tenement for
six-million Kina.
August 28, 2009: Harmony
Gold Mining Ltd. (HMY)
announced that it will suspend
its efforts to negotiate with
the provisional liquidators
for the purchase Pamodzi Gold
Free State as a result of the
bid by China Africa
Development Fund (CADF) to
acquire all of the assets of
the Pamodzi Group. The CDAF
was placing a R626 million
offer to buy the full suite of
Pamodzi Group mines out of
provisional liquidation, and
simultaneously retain all
jobs. Acquisition by CDAF
would also be beneficial to
HMY which is also a senior
Pamodzi shareholder. The
acquisition by CDAF would
culminate in a R1.7 billion
settlement of all of the
Pamodzi Group financial
obligations.
August 31, 2009: AngloGold
Ashanti Ltd. (AU) announced
that it is moving forward with
exploration on its La Colosa
gold project in Colombia
despite virulent opposition
from local environmentalists.
The project could be a major
gold deposit that could
provide 4,000 jobs in
Cajamarca, a farming town of
about 20,000 residents, during
the estimated 20-year life of
mine operation if its 12.3
million ounces in unproven
reserves are confirmed, and
the project moves forward.
Between 38% and 42% of net
sales generated by the project
would go to the Colombian
government as taxes and
royalties. To date AU has
invested $35 million in the
project. The company estimates
that it will invest an
additional $250 million in
Colombia during the 2009-2011
period, of that amount, $200
million will be spent on La
Colossa
August 31, 2009: Yamana
Gold Inc. (AUY) announced the
appointment of Alex J.
Davidson to the Board of
Directors. Mr. Davidson was
the executive vice president
of exploration and corporate
development at Barrick Gold
Corp., where he spent 16
years. He has over 25 years of
international mining company
experience, and has earned a
B.Sc and M.Sc in Economic
Geology from McGill
University. AUY also announced
the promotion of Ludovico
Costa as president. Mr. Costa
has held the position of chief
operating officer and most
senior operations officer
prior to that since early
2006. AUY also declared that
it has achieved commercial
production at its Sao Vicente
mine effective September 1,
2009. The mine is located in
west central Brazil, close to
the Bolivian border.
Construction of the mine was
completed in less than two
years following a construction
decision made at the end of
2006. Construction was
completed in late 2008, and
the first gold pour was made
in January 2009.
September 1, 2009: AngloGold
Ashanti Ltd. (AU) plans to
raise $284 million to fund the
proposed acquisition of Moto
Gold Mines. AU plans to offer
7.62 million shares in the
form of ordinary shares or
American Depository Shares at
a price of $37.25 per share.
This price represents a
discount of about 3% to the
Monday (August 31, 2009)
closing price on the New York
Stock Exchange. AU will
acquire an indirect 50% stake
in Moto for $244 million in
cash AU had entered into an
agreement with Randgold
Resources in July to acquire
Moto which owns a gold deposit
in the Democratic Republic of
Congo. The combined bid is
worth C$546 million, and AU
would acquire an indirect 50%
stake for $244 million cash.
September 1, 2009: Yamana
Gold Inc. (AUY) announced its
third quarter dividend of
$0.01 per share to
shareholders of record at the
close of business on September
30, 2009. The dividend will be
paid on October 14, 2009.
September 3, 2009: AngloGold
Ashanti Ltd. (AU) entered into
an agreement with Commander
Resources Ltd. (TSXv: CMD)
whereby AU's subsidiary
AngloGold Ashanti Holdings
Ltd. may earn a 51%
participating interest in
CMD's Baffin Island Gold
Project by funding $20
million in exploration
expenditures over a six year
period and by completing a
$1.2 million private placement
in CMD. The exploration
commitment would require AU to
fund $5.5 million in
exploration within the first
two years. Once AU has a
vested 51% interest in the
property, a 51:49 Joint
Venture will be formed. Within
60 days of vesting, AU may
elect to increase its interest
to 70% by sole-funding all
on-going expenditures to
complete a feasibility study
within four years on at least
one of the proposed prospects
on the property.
September 3, 2009: Barrick
Gold Corp. (ABX) has
successfully appealed to a New
South Wales court decision
that will allow ABX to proceed
with an application to prolong
the mine life of its
Australian Cowal gold mine by
up to 11 years. The mine
produced 191,000 ounces of
gold last year. ABX has
planned modifications to the
operation that will allow gold
output at the mine to increase
to 3.5 million ounces from 2.7
million ounces. Following the
appeal to a land and
environmental court decision,
the NSW minister for planning
is now able to consider and
rule on the mine's application
for a modification.
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| AMEX
GOLD PRODUCER NEWS |
August 21, 2009: New
Gold Inc. (NGD) announced that
it has agreed to sell shares,
priced at a discount, to a group
of underwriters to raise capital
for general corporate purposes.
The company plans to sell 26.7
million common shares at C$3.75,
a discount of more than 6% to
the stock's Thursday (August 20,
2009) closing price of C$4.00.
The syndicate of underwriters
led by BMO Capital Markets and
GMP Securities LP will also have
an option to buy up to an
additional 15% of the offering
to cover over-allotments. The
deal should raise gross proceeds
of C$100 million.
August 26, 2009: Eldorado
Gold Corp. (EGO) agreed to
acquire Australia's Sino Gold
Ltd. in an all stock deal valued
at $1.8 billion. Sino's
directors unanimously
recommended the deal, under
which investors will receive
0.55 EGO shares for every Sino
Gold share held. The deal
represents a 21.3% premium to
the August 25 closing price. The
deal would create a firm with a
market capitalization of
approximately $5.9 billion. EGO
would become a leader among
international gold producers in
China. The company will seek an
Australian listing for EGO
shares.
August 27, 2009: North
American Palladium (PAL) has signed a
Letter of Agreement with Midland
Exploration Inc. to earn an interest in
the Laflamme gold property, which is
strategically located between PAL's
Sleeping Giant gold mine and the Cotois
gold deposit in Quebec's Abitibi region.
Laflamme consists of 410 claims covering
a surface area of approximately 85
square miles. A recent study conducted
by the Quebec ministry of resources has
identified numerous gold bearing targets
along major structures that occur on the
Laflamme property. PAL has several other
properties in the area for which the
company has budgeted $2 million for
exploration. PAL has the option to
acquire a 50% interest in the Laflamme
property over a period of four years.
PAL made a cash payment of $100,000,
including a $30,000 payment upon
signing. PAL is required to expend $1
million over four years, including
$300,000 in work expenditures during the
first year. PAL will serve as the
operator, and following the acquisition
of the initial 50% interest, PAL will
have the option to acquire an additional
15% interest upon delivery of a bankable
feasibility study.
September 1, 2009: Aurizon
Mines Ltd. (AZK) reported positive
results from its recent exploration
drilling along the newly completed
exploration drift on the 810 meter
level, at its Casa Berardi Mine in
northwest Quebec. Part of the current
drilling program is focused along Zones
118-120 located between a vertical depth
of approximately 650 and 1,100 meters at
a location approximately 650 meters east
of the West production shaft. Five holes
have been completed along the same
section in Zone 120, 650 meters east of
the shaft, and collared from the 810
meter level exploration drift. Two of
these completed holes returned high
grade intersections in quartz veins. One
hole returned 0.49 ounces per ton gold
over 17.4 ft. (true thickness), and the
other hole returned 0.55 ounces per ton
gold over 13.1 ft. Assays are pending
for the other three completed holes.
This drilling and previous exploration
drilling tends to firm up a 400 meter
wide mineralized corridor with a
moderate westerly plunge. The recently
completed 810 meter exploration drift
has completed a drilling platform that
provides access to 900 meters of
potentially mineralized rock.
September 1, 2009: Endeavour
Silver Corp. (EXK) reported that its
first drilling program on the recently
acquired Porvenir Cuatro property in
Guanacevi District, Durango, Mexico has
discovered a new zone of high grade
silver-gold mineralization. Drilling
highlights include 20.79 ounces per ton
silver and 0.112 ounces per ton gold
over a 18.6 foot true width in hole
PC50-2. Refer to the press release for
assay results for the four holes that
returned significant high grade
silver-gold mineralization greater than
30 ounces per ton silver. As a result of
the success of the Phase 1 drilling
program, a 17,000 foot, 16-hole drilling
program was recently approved and is now
underway.
September 3, 2009: North
American Palladium (PAL) has withdrawn
from a best efforts private placement of
up to $50 million after the final terms
prospectus proposed by its agent was not
satisfactory. On August 17, 2009, PAL
announced that it planned to sell up to
$50 million in 7% secured convertible
notes, and would use the funds to
finance exploration, development, and
the restart of both its Les des Iles
palladium mine and its Sleeping Giant
gold mine.
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| NASDAQ
GOLD PRODUCER NEWS |
 August
24, 2009: Randgold
Resources Ltd. (GOLD) announced that it
will hold follow-up meeting with the
government of the Democratic Republic of
the Congo (DRC) in Kinshasa this week to
agree to details of their cooperation on
the Moto gold acquisition by Randgold.
August 26, 2009: Lihir
Gold Ltd. (LIHR) reported its first
half 2009 financial results for the
six month period ended June 30, 2009.
LIHR reported a record underlying
profit of $154.9 million, up 130% from
the prior corresponding period which
reported a $67.4 million profit.
Revenues were up 87% to a record
$554.1 million for the half year, due
to an increase in gold sales which
rose by 99% to 614,000 ounces. On a
unit cost basis, costs declined
significantly in the half, with total
cash costs down 20% to $350 per ounce,
confirming LIHR's position at the
lower end of the global cash cost
curve. Gold production for the half
year totaled a record 612,000 ounces,
including 466,000 ounces from Lihir
Island and 138,000 ounces from Mt.
Rawdon in Queensland, Australia, and
Bonikro in Cote d'Ivoire. At Lihir
Island, Measured and Indicated
Resources increased 31% to 43 million
ounces, and Inferred Resources are up
62% to 5.5 million ounces. In Cote
d'Ivoire, Measured and Indicated
Resources were increased by 22% to 1.7
million ounces.
August 27, 2009: DRDGOLD
Ltd. (DROOY) reported that it will cut
jobs at its Blyvoor mine after a drop
in production and dim prospects for a
substantial rand gold price recovery
in the short term. The company's
74%-owned subsidiary, DRD Gold South
African Operations will conduct a
60-day consultation to determine the
future of affected employees. The
company blamed the decline in
underground production and the low
rand gold price as well as a 32%
increase in power costs from Eskom.
Underground mine production fell by 5%
to 21,349 ounces as a result of damage
to high grade ore panels following a
seismic disturbance. The average Rand
gold price had dropped by 16%, and the
underground operating cost increased
by 17%. DRDGOLD also cited the 6% wage
increase currently on the table for
discussions with the unions as a
factor in making decisions on sizing
the labor force at Blyvoor.
August 27, 2009: Royal
Gold Inc. (RGLD) announced that its
Board of Directors has declared a
fourth quarter dividend of $0.08 per
share of common stock payable on
October 16, 2009 to shareholders of
record at the close of business on
October 2, 2009.
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InsideMetals website, or in the
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The Advertising
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exploration companies.
If interested, please visit the following
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hope you have enjoyed our newsletter.
The newsletter will be published next on
September 26, 2009.
Until next time!!!,
InsideMetals
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