InsideMetals Newsletter - 01/24/2009 | Volume 4, Number 2 - Precious Metals Market Trends, Geopolitical View, Gold Producer News and Website Updates

January 13, 2009: Yamana Gold Inc. (AUY), Canada's fourth-largest gold producer, may accelerate plans to double output by acquiring smaller rivals that are struggling to finance development of their mines. AUY is on schedule to produce 2 million ounces in 4 years by developing its own deposits. After shunning acquisitions last year, AUY CEO, Peter Marrone, said in an interview that the company is now looking outward for bargains among mining companies in the Americas in order to reach this targeted production sooner. The global credit freeze has left many small mine developers and explorers without access to financing. Marrone said that acquisition candidates must be able to provide an internal rate of return significantly greater than 15%.

January 15, 2009: IAMGOLD Corp. (IAG) is pleased to announce positive results from the updated Preliminary Assessment Study on its 100% owned Westwood Gold Project located in Quebec, approximately 1.25 miles east of its producing Doyon Mine. The results of the study provide confidence that the project should be advanced with a target for production early in 2013. Westwood has the potential to produce 200,000 ounces per year at a cash cost of $290 per ounce. The proximity of Westwood to IAG's operating Doyon and Mouska is a significant advantage from the standpoint of infrastructure, manpower and experience. A budget of $86 million has been approved to advance the project in 2009. Refer to the press release for a detailed project update.

January 15, 2009: Agnico-Eagle Mines Ltd. (AEM) reported that it has poured the first gold at its new Kiittila mine in Finland, and has two other operations that will be in production this year. Start up had been delayed. The first concentrates were processed in November. AEM started production in 2008 at Goldex, Quebec. AEM still expects to meet the mines output forecast of 125,000 ounces of gold at a total cash cost of around $333 per ounce. AEM continues to ramp up its production at Goldex The company plans to start the Lapa mine in Quebec, in mid-2009, followed by Pinos Altos, in Mexico during the third quarter. A fifth new operation at Meadowbank, in Canada, at Nunavut is scheduled to come online in the first quarter of 2010. AEM said it expects gold production to double to 590,000 ounces in 2009, and to again double to 1.2 million ounces in 2010.

January 16, 2009: Barrick Gold Corp. (ABX). New CEO, Aaron Regent, has taken over the helm at ABX as the worst economic slow down since the Great Depression forces mining companies to conserve cash. The crisis has helped gold to its eighth straight annual gain as 2008 ended. On his first day on the job, Regent said there would be no major shift in strategy for the world's largest gold producer. Regent indicated that ABX is big enough to take on increased risk. The company is currently constructing three new mines: Buzwagi in Tanzania, Cortez Hills in Nevada, and Pueblo Viejo in the Dominican Republic with its joint venture partner Goldcorp Inc. In addition, ABX has seven projects in various stages of development. Not all of these projects in development are pure gold projects, they include the Sedibelo platinum project in South Africa, the Kabanga nickel project in Tanzania, and copper projects in Pakistan (Reko Diq) and Chile (Cerro Casale).

January 19, 2009: Newmont Mining Corp. (NEM) reported that it has elected to operate the Moorilda gold project in central west New South Wales, Australia. NEM will fund the first $3.8 million on exploration to earn a 51% interest in the joint venture with Alkane Resources Ltd. (ASX: ALK). NEM can elect to increase its interest by funding expenditure to the completion of a bankable feasibility study.

January 19, 2009: Harmony Gold Mining Ltd. (HMY) reported that it expects to lose up to 1,412 ounces of gold at its Elandsrand mine due to its 2 day closure following a fatal accident to allow for completion of the accident investigation that resulted from a ground fall following a seismic event.

January 20, 2009: Coeur d'Alene Mines Corp. (CDE) announced that it has received proceeds of $20.4 million from the early exercise of a warrant related to the Floating Rate Note it issued in October 2008. CDE is nearing the end of a intensive period of capital expenditures that will result in a 66% increase in silver production and and an 85% increase in gold production in 2009 compared to 2008. Production from the Palmarejo silver and gold mine in Mexico is only weeks away.

January 21, 2009: Kinross Gold Corp. (KGC) reported that it plans to raise about $360.5 million in a share offering to bolster its cash position following the purchase of Aurelian Resources for $815 million to acquire the Fruita del Norte gold deposit in Ecuador.

January 21, 2009: Kinross Gold Corp. (KGC) reported that a first pass drilling program was completed at the Thunder Mountain, Nevada gold project controlled by Midway Gold Corp. Seven reverse circulation drill holes totaling 3,440 ft. were completed in December 2008. Assay results are pending. KGC has added 103 claims to the project area. KGC can earn a 75% interest in the project pursuant to the joint venture exploration agreement by spending $3 million on the project within five years.

January 21, 2009: Coeur d'Alene Mines Corp. (CDE) announced that it has sold to Franco-Nevada Corp.(TSX: FNV), for $80 million, a 50% gold royalty stream in the gold and silver production from the Palmarejo project in Mexico. FNV will be paid based on the difference between the spot gold price and $400 per ounce (increasing by 1% per annum after the fourth anniversary of the closing). The attributable gold ounces will be the greater of actual production and a minimum amount. The minimum amount will be 50,000 ounces per annum until payments have been made on 400,000 ounces. The $80 million purchase price consists of a $75 million cash payment plus special warrants which are exercisable into 316,436 FNV common shares without additional consideration when the project achieves certain time based completion milestones.

January 22, 2009: Harmony Gold Mining Ltd. (HMY) expects its gold output to decline in its second quarter versus the first quarter which ended September 30, 2008. HMY is bullish on the gold price in the medium to long term. HMY milled less tons in the second quarter following a decline in gold grades while the rand per ounce cost rose as a result of lower output, and electricity and labor costs declined. HMY expects the gold price to be buoyed by fewer gold discoveries and the inability of junior miners and exploration companies to secure financing during the continuing credit crisis. HMY reiterated that it is on track to produce 2.2 million ounces by 2010. HMY is focusing on growing its output and expects its key Hidden Valley project in Papua New Guinea to yield 250,000 ounces of gold and 3.6 million ounces in silver each year for 14 years. The Hidden Valley project is 74% complete and is on targetfor commissioning in mid-2009.