|
| 01/10/2009
www.insidemetals.com |
Vol
4, Issue 1 |
|
 |
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
January 24, 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 $855.75/oz
(London Fix) on
January 8, 2009.
This is a slight
increase from the
$855.25/oz (London
Fix) closing price
on December 18,
2008, when data
for the previous
newsletter was
gathered.
Silver closed
at $10.88/oz
(London Fix) on
January 8, 2009.
This is a 3.6%
decrease from the
$11.29/oz (London
Fix) closing price
on December 18,
2008.
Platinum closed
at $987.00/oz
(London Fix) on
January 8, 2009.
This is a 14.5%
increase over the
$862.00/oz (London
Fix) closing price
on December 18,
2008.
Palladium closed
at $199.00/oz
(London Fix) on
January 8, 2008.
This is a 11.8%
increase over the
$178.00/oz (London
Fix) closing price
on December 18,
2008.
For the Quarter
Ended December 31,
2008
Gold closed
the 4th quarter at
$869.75/oz (London
Fix) on December
31, 2008. This is
a 1.7% decrease
from the
$884.50/oz (London
Fix) closing price
on September 30,
2008 that marked
the end of the 3rd
quarter.
Silver closed
the 4th quarter at
$10.79/oz (London
Fix) on December
31, 2008. This is
a 16.7% decrease
from the $12.96/oz
(London Fix)
closing price on
September 30, 2008
that marked the
end of the 3rd
quarter.
Platinum closed
the 4th quarter at
$899.00/oz (London
Fix) on December
31, 2008. This is
a 10.5% decrease
from the
$1004.00/oz
(London Fix)
closing price on
September 30, 2008
that marked the
end of the 3rd
quarter.
Palladium closed
the 4th quarter at
$183.50/oz (London
Fix) on December
31, 2008. This is
a 7.8% decrease
from the
$199.00/oz (London
Fix) closing price
on September 30,
2008 that marked
the end of the 3rd
quarter.
ONE
YEAR GOLD vs.
EURO/U.S.
DOLLAR CHART
The gold
bullion vs.
the
Euro/U.S.
Dollar chart
displayed
below for
the last
year shows a
good
correlation
between
bullion and
currency.
Gold values
peaked in
March above
a $1,000 per
ounce,
consolidated
in the
second
quarter
below $900
per ounce,
and then
climbed
briefly back
above $950
per ounce in
July as news
about the
financial
crisis
intensified
during the
third
quarter.
In November
2008, the
U.S. dollar
index
climbed to a
two year
high against
a basket of
6
currencies.
The strength
in the U.S.
dollar
reflects
investor
flight to
safety and
corresponds
to the low
gold prices
for the year
that were
realized
during
October.
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|
| Gold
& Silver ETF's |
The SPDR Gold
Trust (GLD)
controls over
25,300,000
ounces of gold.
The gold
holdings have
been steadily
increasing since
October in spite
of significant
gold price
fluctuations. On
January 8, the
GLD reached a
record
25,322,282
ounces. When
this newsletter
was published
last on December
18, 2008, the
GLD held
24,927,686
ounces of gold.
.
The
accumulation
of silver by
the iShares
Silver Trust
(SLV) is
beginning to
decline as
silver prices
have risen
above $11.00
per ounce
level. Silver
holdings had
been strongly
building since
August in
spite of
declining
prices. Since
data for the
newsletter was
last gathered
on December
18, 2008, the
SLV controlled
217,412,904
ounces of
silver. As of
January 8,
2009 these
holdings have
increased to
218,315,291
ounces.
|
| 2007
Silver Nevada
Miner Bar -
99.9% Pure 5 Troy
Ounces of American
History |
|
|
| GEO POLITICAL
VIEW |
 GOLD
WILL SMOOTH OUT
THE BUMPY RIDE IN
2009
The Gold price
closed 2008 at
$865.00 an ounce
(London Fix), a 3%
increase from the
$840.75 an ounce
price that it
opened the year
with. Gold was the
only metal that
had positive price
growth in 2008.
All of the other
major metals had
significant price
declines. The
declines were not
limited to metals.
The Dow Jones-AIG
Commodity Index, a
broad benchmark
sustained the
worst loss since
the index was
created in 1998
--- a 37% loss.
All classes of
assets were
affected in 2008.
Almost everyone
that had any form
of an asset was
impacted. This
includes both
active investors
and passive
investors that had
stocks, bonds or
mutual funds in
investment and
retirement
accounts. The DOW
declined 4,301
points (33%) from
its January 2,
2008 close of
13,044 to today's
close of 8743.
Even the
long regarded safe
investment in real
estate was
impacted by the
sub-prime mortgage
crisis. Home
values throughout
most of the
country have
declined because
the high rate of
foreclosures have
brought down the
value of nearby
homes because
appraised values,
based on
comparable prices
that a distressed
house could be
purchased for
through
foreclosure or a
short sale through
a willing lender
have affected the
value of all the
adjacent homes.
The global
economic collapse
in 2008 has
brought down
highly regarded
financial
institutions to
their knees or
forced them to
align themselves
with stronger
partners, such as
the U.S. Treasury.
These companies
include such well
known names as
Bear Stearns,
Lehman Brothers,
Citigoup, Merrill
Lynch, and
American
International
Group. Even well
established,
efficient global
manufactures such
as Toyota and
Honda have had
down years, and
the Big 3 Detroit
auto companies
Chrysler, Ford,
and General Motors
are struggling to
avoid bankruptcy.
The global
economic collapse
has even impacted
the Chinese
economy as their
customers have
reduced their
imports. December
2008 marked the
first decline of
Chinese exports in
7 years, further
evidence that the
recession in the
U.S., Europe, and
Japan are
responsible for
the driving the
world's second
largest economy
into a slump.
China's economy
grew 9% in the
third quarter, the
weakest pace in 5
years. In
conjunction with
declining exports,
Chinese imports
also had the
largest decline
since 1995
(Bloomberg.com).
The previous
decline occurred 7
years ago.
The reduction in
Chinese imports
had significant
impacts on global
mining companies
that produced base
metals, iron ore,
and coal. Mega
miners BHP
Billiton Ltd.
(BHP), Companhia
Vale do Rio Dolce
(RIO), and Rio
Tinto Plc (RTP)
have all had
significant stock
price declines as
exports to China
were reduced.
Investors that
want to have a
position in
commodities in
2009 should
strongly consider
holdings in gold,
especially the
gold producers
Barrick Gold Corp.
(ABX), Goldcorp
Inc. (GG), Newmont
Mining Corp.(NEM),
Kinross Gold
Corp.(KGC), and
Yamana Gold Inc.
(AUY). All of
these companies
have had
significant stock
price gains since
gold has recovered
from the yearly
lows seen in
October.
The above
companies all have
significant gold
reserves, low cost
mines, and have
many years of
planned
production. These
stocks can provide
significant
returns when
acquired at the
proper entry
points when a
downturn in
bullion provides
buying
opportunities. The
above gains
greatly exceed the
change in bullion
from its October
24th low of $712
per ounce.
The financial
turmoil that has
taken place in
2008 has
undoubtedly shown
investors that
they need to have
a portion of their
investment
portfolio in
quality gold
stocks to provide
a hedge against
any remaining
financial
minefields that
haven't yet been
triggered.
|
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a world-wide
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| Whitney
& Whitney Inc. -
A Nevada Based
Management
Consulting Firm |
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|
| NYSE GOLD
PRODUCER NEWS |
 December
19, 2008: Kinross
Gold Corp. (KGC)
announced that it
has subscribed for
12,500,000 units
of Victoria Gold
Corp. pursuant to
a private
placement. Each
unit consists of
one common share
and one half of
one purchase
warrant. Each
warrant allows the
holder to purchase
one common share
at an exercise
price ofC$0.25
during the 24
months following
the closing of the
private placement,
subject to
acceleration in
certain
circumstances. If
KGC elects to
acquire all of the
Victoria Gold
common shares
pursuant to the
private placement,
it will hold 34.4%
of the outstanding
common shares of
Victoria Gold. The
investment in
Victoria is part
of KGC's strategy
to gain access to
quality
exploration
properties.
Victoria controls
17 exploration
properties in
Nevada.
December
23, 2008: Gold
Fields Ltd. (GFI)
updated its
operational
guidance for
Q2'09. GFI expects
its attributable
gold production
for the quarter to
be 840,000 ounces,
which is in line
with guidance
provided on
October 29, 2008.
Group cash costs
and Notional Cash
Expenditures are
expected to be
lower than the
guidance provided
on October 29,
2008 due to more
favorable exchange
rate changes
against the South
African Rand and
the Australian
Dollar since the
guidance was
provided.
December
23, 2008: IAMGOLD
Corp. (IAG)
reported that it
has entered a
definitive Option
Agreement to earn
a 50% interest in
the Sirbaya Gold
Project in Mali
West Africa, which
is 100% controlled
by Merrex Gold
Inc. The Sirbaya
Gold Project
consists of a 270
sq. mile land
package that
covers two major
regional
structures that
hosts significant
potential for gold
mineralization.
Merrex has spent
over $8 million to
date on the
project and has
intersected in
drilling
significant
intervals of gold
mineralization
along a .75 mile
segment of an
explored gold
trend. IAG can
earn its interest
by spending C$10.5
million over four
years. As part of
the agreement, IAG
completed a
private placement
of C$1.5 million
in Merrex by
subscribing for
4,285,714 units at
C$0.35 per unit.
Each unit is
comprised of one
common share of
Merrex and one 12
month warrant
exercisable at
C$0.45 per share.
IAG now holds
6.47% of the
outstanding common
shares of Merrex.
If IAG exercises
all its warrants
it would control
8,571,426 shares,
or 12.15% of the
outstanding shares
of Merrex.
December
23, 2008: Kinross
Gold Corp. (KGC)
announced that it
has entered into
contract
negotiations with
Colorado
Goldfields Inc.
for the
acquisition of
approximately 142
patented mining
claims in
proximity to
Colorado
Goldfield's
operation in
Silverton,
Colorado. The
properties include
the historic
Sunnyside Mine.
December
23, 2008: Barrick
Gold Corp. (ABX)
announced that it
has appointed
Aaron Regent as
its new Chief
Executive,
replacing Greg
Wilkins, who
stepped down
earlier this year
due to illness.
Regent, 43, is
quitting his job
as Co-CEO of
Brookfield Asset
Management's
infrastructure
group to take the
position on
January 16, 2009.
Regent, has an
accounting
background, and is
the former
president of
Canadian nickel
miner
Falconbridge. His
accounting
background is
consistent with
ABX's recent
history of having
finance people
hold the position
as ABX has been a
buyer of
properties rather
than an explorer.
December
24, 2008: Yamana
Gold Inc. (AUY)
announced that it
has completed its
previously
announced equity
financing and has
secured an
additional
$200,000,000
revolving credit
facility. The
credit facility
was jointly
arranged by Scotia
Capital and RBS
Greenwich Capital.
The funds will be
provided by a
syndicate of
international
banks. AUY now has
$500,000,000 of
available credit
under revolving
credit lines with
approximately
$250,000,000 which
has not been
drawn.
December
31, 2008: IAMGOLD
Corp. (IAG)
reported that it
has completed the
previously
announced purchase
of 71,428,571
common shares of
Orezone Resources
Inc., on a private
placement basis,
at a price of
C$0.28 per share
for gross proceeds
C$20 million. As a
result, IAG holds
approximately
16.6% of the
outstanding shares
of Orezone. On
December 11, 2008,
the companies
jointly announced
a business
combination. The
private placement
was completed
pursuant to the
definitive
arrangement
agreement dated
December 10, 2008,
whereby IAG would
acquire, via the
plan of
arrangement, all
of the outstanding
common shares of
Orezone. Total
consideration to
be provided to the
shareholders of
Orezone is valued
at approximately
US$139 million,
subject to the
approval of
Orezone
shareholders at a
special meeting.
The transaction is
expected to close
by the end of
February 2009.
Orezone's main
asset is the 4
million ounce
Essakane gold
resource located
in Burkino Faso,
West Africa.
Esskaane is
expected to
produce 300,000
ounces per year
over a minimum 9
year mine life
based on a $358
per ounce average
cash operating
cost, using a $600
per ounce gold
price. Full
production is
anticipated in
late 2010, and
will require an
estimated
remaining capital
expenditure of
US$350 million.
January
7, 2009: Kinross
Gold Corp. (KGC),
Canada's third
largest gold
producer reported
that it expects to
increase
production by as
much as 39% in
2009 as expansion
of a Brazilian
deposit, and new
mines in the U.S.
and Russia
increase output.
Production in 2009
will reach the
equivalent of 2.4
to 2.5 million
ounces of gold
compared to 1.9
million ounces in
2008. The company
will have strong
cash flow in 2009
as Paracatu,
Kupol, and
Buckhorn cut
operating costs.
Average production
costs for 2008
were $425 to $445
an ounce. These
costs were
consistent with
guidance provided
in 2008.
Production costs
are expected to
drop to $390 to
$420 per ounce in
in 2009. KGC
will take a
goodwill
write-down of $900
million to $1.2
billion in the
fourth quarter
related to the
acquisition of
Bema Gold Corp. in
2007.
January
8, 2009: Harmony
Gold Mining Ltd.
(HMY) reported
that its capital
expenditures would
remain intact
despite the credit
crunch, and the
company was on the
way to being debt
free by June 2009.
This was reported
by CEO Graham
Briggs HMY
has an active due
diligence team
that is looking at
assets around the
world that meet
the company's
investment
criteria, but the
company would not
make any
acquisitions
before June. Once
debt free the
company would look
to acquire
producing
properties.
January
8, 2009: Goldcorp
Inc. (GG)
announced record
fourth quarter
production of
692,000 ounces.
Gold production
for 2008 exceeded
2.3 million ounces
at $300 per ounce
on a by-product
basis as per
previously issued
guidance. The
determination of
operating costs
for 2008 will be
released in
February along
with the company's
year-end unaudited
financial
statement. The
company expects to
produce
approximately 2.3
million ounces in
2009 at a total
cash cost of
approximately $365
per ounce on a
by-product basis
and $400 per ounce
on a co-product
basis. Forecast
production
increases at most
GG mines are
expected to be
offset by
significant
planned declines
at Alumbrera and
El Sauzal. GG has
forecast
production
increases of
approximately
300,000 ounces per
year over the next
5 years to reach
approximately 3.5
million ounces in
2013.
|
| AMEX
GOLD PRODUCER NEWS |
 December
18, 2008; Apex
Silver Mines Ltd.
(SIL) reported an
update regarding
its November 14,
2008, non-binding
letter of intent
to sell its
interest in the
San Cristobal mine
located in Bolivia
to Sumitomo Corp.
for a cash
purchase price of
$25.5 million
payable at the
closing of the
sale. SIL will
continue to manage
the mine. SIL and
Sumitomo are
continuing to
negotiate
definitive
documentation
related to this
transaction. Upon
completion of the
sale, the holders
of the $250
million in
convertible SIL
notes would be
entitled, under
the existing terms
of the notes to
redeem them for
cash. The
non-binding letter
of intent is
subject to
significant
conditions,
including the
restructuring of
the SIL
convertible notes
in a voluntary
reorganization
under chapter 11
of the U.S.
Bankruptcy Code.
SIL, Sumitomo, and
Minera San
Cristobal, S.A.
(MSC) have entered
into agreements
with BNP Paribas
and Barclays PLC
for the
termination of
derivative
positions
established as a
requirement of San
Cristobal
financing
arrangements. SIL
has paid
approximately $59
million or 65% of
the final net
settlement amount
for the derivative
position, and
repaid $7.5
million for
funding provided
by Sumitomo to MSC
to settle
derivative
positions.
Sumitomo has
acquired 90% of
the San Cristobal
project loans from
the lenders at par
plus accrued
interest, together
with the rights to
exercise remedies
of the lenders
against MSC and
SIL and its
subsidiaries.
December
18, 2008: Western
Goldfields Inc.
(WGW) is pleased
to update the
status of its
recently initiated
fuel hedging
program. WGW
entered into a
diesel fuel
hedging program
for approximately
25% of the
Mesquite Mine's
diesel
requirements for
each of the next
two years. WGW
purchased
1,512,000 gallons
of diesel per year
at forward prices
of $1.82 and $2.00
per gallon in 2009
and 2010. In
addition to the
hedge price WGW
pays $0.15 per
gallon in
additional costs
which include
taxes and delivery
costs. These hedge
prices are
significantly
lower than the
costs budgeted by
the Company, $2.40
per gallon for
2009, and
$2.75 per gallon
thereafter
including taxes
and delivery
charges.
Approximately 20%
of Mesquites
operating costs
are attributed to
diesel
consumption.
December
22, 2008: Northgate
Minerals Corp.
(NXG) commented on
the heavy trading
volume and decline
in NXG stock which
occurred during
market hours on
Friday, December
19, 2008. NXG
believes the
activity was
related to the
dropping of NXG
from the
S&P/TSX
Composite Index,
and consequent
selling by index
based investment
funds. NXG
believes the
current share
price is
undervalued and
does not reflect
recent and
significant
developments which
includes the
doubling of the
gold resource at
Young-Davidson
property to over 4
million ounces;
the 18-month
mine-life
extension at the
Starwell Gold
Mineand the
dramatic
improvement of
operations at the
Fosterville Gold
Mine, which is
expected to
contribute to
record quarterly
gold production in
the fourth
quarter.
December
24, 2008: Central
Sun Mining Inc.
(SCM) reported
that the term of
its $8 million
loan has been
extended to March
9, 2009, with an
option to extend
it to June 8,
2009. The loan
extensions were
obtained by SCM
agreeing to pay a
cash fee and
issuing 1,000,000
SMC common shares.
SCM has also
agreed to amend
the 300,000
purchase warrants
held by the lender
to change the
exercise price of
C$1.99 per share
to C$0.14 per
share. Extending
the loan to June
8, 2009 would
require an
additional cash
fee and the
issuance of an
additional
1,000,000 SCM
common shares
December
29, 2008: Claude
Resources Inc.
(CGR) reported
that it has
successfully
completed the sale
of certain oil and
natural gas
assets. CGR's
working interest
in the Edison Gas
Unit No. 1 and the
Edison Gas Plant
have been
purchased by a
private Canadian
corporation for
gross proceeds of
$11.23 million.
December
31, 2008: Apollo
Gold Corp. (AGT)
announced that it
has completed its
private placement
in Canada of
flow-through
shares by selling
3,000,000
Flow-Through
Shares at C$0.30
per share for
gross proceeds of
C$900,000.
December
31, 2008: Endeavour
Silver Corp. (EXK)
announced that it
has closed two
private placement
financings
totaling C$3
million. These
private placements
resulted in the
issuing of
2,311,540 special
warrants valued at
C$1.30 each.
Salman Partners
was the lead agent
for the
company-brokered
private placement
of 1.775 million
special warrants
for gross proceeds
of C$2.3 million.
An additional
536,540 special
warrants were
placed privately
in a non-brokered
financing for
gross proceeds of
approximately
C$700,000. Each
special warrant is
exchangeable for
one common share
and one half share
purchase warrant.
Each full share
purchase warrant
can be exercised
to purchase an
additional common
share at an
exercise price
ofC$1.90 per share
withi a 5 year
period from the
earlier of the
closing of the
placement plus 60
days, or from the
issuance of a
final receipt for
a prospectus to
qualify the
special warrants
in all relevant
Canadian
jurisdictions.
January
6, 2009: Eldorado
Gold Corp. (EGO)
announced the
results from the
first 5 holes
drilled to test
the North Ore
Shoot at the
Efemcukuru Project
in Western Turkey.
The program is
designed to test
the lateral and
down plunge
extension of this
poorly defined
third ore shoot in
the Efemcukuru
mineral system.
The drilling
showed positive
results with gold
values ranging
from 0.283 to
0.717 opt gold
over and average
vein width of 10
feet, and silver
values ranging
from 0.726 to 2.41
opt silver.
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PRODUCER NEWS |
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press releases
issued.
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The Advertising
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basic demographic
information as to
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information as to
banner
advertisements and
placements in the
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special Gold and
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We
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The newsletter
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2009.
Until next
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InsideMetals
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InsideMetals
| 6490 S. McCarran Blvd. | Bldg.
C, Suite 23 | P.O Box 10725 |
Reno | NV | 89510
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