02/07/2009                                     www.insidemetals.com Vol 4, Issue 3
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 February 21, 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
PRECIOUS METALS MARKET UPDATE
Gold closed at $920.00/oz (London Fix) on February 5, 2009. This is a 6.9% increase from the $860.00/oz (London Fix) closing price on January 22, 2009, when data for the previous newsletter was gathered. 

Silver closed at $12.40/oz (London Fix) on February 5, 2009. This is a 9.5% increase from the $11.32/oz (London Fix) closing price on January 22, 2009.
 
Platinum closed at $981.00/oz (London Fix) on February 5, 2009. This is a 5.5% increase from the $930.00/oz (London Fix) closing price on January 22, 2009.

Palladium closed at $200.50/oz (London Fix) on February 5, 2008. This is a 8.9% increase from the $184.00/oz (London Fix) closing price on January 22, 2009.

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 $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. 
 
Gold prices have risen from its October low ($712.50) and closed yesterday at $920.00 per ounce in spite of fluctuations in the U.S. Dollar. On January 9, 2009 the Euro/$ was 1.3684 and the dollar has increased in value to 1.2829 on February 5, 2009, due to a strengthening dollar. The rise in the gold price reflects investor flight to safety as investors still have reservations about the U.S. economy and continued problems with the banks and escalating job losses. The simultaneous strength in the U.S. dollar also reflects investor concern about the weakness in other currencies. The strong divergence in gold price and currency reflects the concerns of both bullion and currency investors.
The strength in the U.S. dollar reflects investor flight to safety as investors still have reservations about the U.S. economy and continued problems with the banks escalating job losses.
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Gold & Silver ETF's

The SPDR Gold Trust (GLD) controls over 27,500,000 ounces of gold. The gold holdings have been steadily increasing since October in spite of significant gold price fluctuations. The GLD now holds a record 27,881,022 ounces of gold.

 
The accumulation of silver by the iShares Silver Trust (SLV) is increasing as silver prices have risen above $11.00 per ounce level. Silver holdings had been strongly building since August in spite of declining prices through October. SLV silver holdings and the price of silver have moved upward in mid-January. As of February 5, 2009 these holdings have increased to a record 242,101,592 ounces.
2007 Silver Nevada Miner Bar - 99.9% Pure 5 Troy Ounces of American History
GEO POLITICAL VIEW
GEOPOLITICAL VIEWSAVE JOBS ... CUT TAXES

On February 6, 2009, the U.S. Department of Labor reported that employers slashed 598,000 jobs in January, the most since late 1974, as unemployment reached 7.6%, as the economic crisis is starting to cut deeper into the American work force. This monthly loss was worse than the 524,000 jobs that economists had expected. Job reductions in November and December were also deeper than previously reported.

In previous months, large and medium businesses were laying off workers. Pink slips are now being given to medium and small companies. The impact of the recession has spread to all corners of the economy.

The outlook for the U.S. economy is not good, and the actions proposed via the Democratic led authors of the stimulus package is not being viewed as job creating but debt encumbering as the proposed legislation promotes bigger, more intrusive government.

The economic turmoil is global, and not restricted to the United States. Manufacturing in China contracted for the sixth straight month in January, with employment continuing to decline amid the domestic economic slowdown in China.

The Purchase Managers Index issued by the China Federation of Logistics & Purchasing came in at 45.3 in January, compared to 41.2 in December, a 10% improvement. A PMI above 50 indicates growth in activity, while a number below 50 indicates contraction. The PMI has been less than 50 for six of the last seven months.

The recent PMI reports indicate deteriorating employment conditions, and declining demand for Chinese products. Chinese officials report that in the last several months 20 million migrant workers have lost their jobs. The government estimates that the total population of migrant workers is 130 million. Migrant workers are people who work outside their home villages. There is a concern in China that if these migrants can't find employment they will be a force for unrest as they are no longer able to send money home, and will return to their home villages.

China's growth has slowed to its weakest pace in 5 years, with output expanding to 9% in the third quarter, down from the 12% in the third quarter of 2007.

In November, China unveiled a $586 billion economic stimulus program designed to bolster domestic demand and to help avert a global recession. The plan includes spending in housing, infrastructure, agriculture, health care, and social welfare, and features a tax deduction for capital spending by companies.

Prospects for China's continued rapid growth have quickly deteriorated. Export orders from the U.S., Europe, and Japan are weakening and causing factories in China to trim work forces. Urban consumers are pulling back from the housing market causing new construction to collapse to its lowest level in a decade. The decline in construction has led to a decline in raw material imports which have had adverse affects on the global miners that have supplying raw materials to feed the once insatiable Chinese economy.

New measures, as part of the stimulus package, will result in a revamping of China's value-added tax system which will allow companies operating in China to deduct spending on capital equipment. The new measures which are already in place in some provinces would save companies a total of 120 billion yuan when fully rolled out.

The Chinese stimulus package is focused more toward the private sector than the social engineering, bigger government stimulus that the U.S. Congress is trying to get approved. It is interesting to note that Japan has a $51.5 billion package that largely consists of payouts to families and tax relief for businesses. Germany is moving on tax breaks and loans that will cost government around $29.9 billion over four years.

Shouldn't the focus be on creating jobs in the private sector through tax cuts?
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Whitney & Whitney Inc. - A Nevada Based Management Consulting Firm
NYSE GOLD PRODUCER NEWS
NYSE
January 26, 2009: Goldcorp Inc. (GG) announced that Les Mines Opinica, a wholly owned subsidiary of GG, has elected to terminate its right to increase its interest by 6.67% in the Elenore South Project in favor of proceeding with future exploration as a joint venture. Eastmain Resources Inc. will continue as the project's operator and manage the project. The project's ownership is distributed as follows: Eastmain, 33.34%; Les Mines Opinica (33.33%; and Azimut Exploration Inc. (33.33%). A minimum $1.5 million second phase diamond drilling program will be recommended to continue testing the JT Target area. Each partner is required to fund its portion of the program. In 2008, 16 drill holes totaling 10,263 ft. were drilled to test for "Roberto-type" sedimentary hosted gold mineralization. Seven of the holes collared in the JT Target area found gold bearing altered sedimentary rocks. 

January 26, 2009: Kinross Gold Corp. (KGR) and Polyus Gold, Russia's largest gold miner have signed a protocol to jointly develop the large Nezhdaninskoye deposit. Polyus and KGR jointly own the large Kupol deposit in Chukotka and plan to form a joint venture to develop Nezhdaninskoye, a large gold deposit in the far eastern region of Yakatia.

January 26, 2009: Silver Wheaton Corp. (SLW) has entered an agreement with a syndicate of underwriters to purchase 31.25 million shares of SLW for C$8.00 per share on a bought deal basis. This financing will raise C$250 million and could increase to C$287.5 million if the underwriters exercise an option to buy another 4.68 million shares on the same terms. SLW also reaffirmed that the company expects to have silver sales in 2009 in a range between 15 million to 17 million ounces. SLW expects silver sales to increase to approximately 30 million ounces by 2013. In the fourth quarter silver production attributable to SLW of approximately 3 million ounces was in line with previous guidance. SLW expects to report total silver sales of 11.1 million ounces for 2008, at an estimated total cash cost of $3.94 per ounce.

January 27, 2009: Yamana Gold Inc. (AUY) reported that it has decided to utilize a front-caving method of mining, with pillar recovery, to develop the QDD lower West underground deposit at its Gualcamayo mine in Argentina. AUY's study on the use of front-caving at the QDD Lower West deposit has indicated that targeted production would only begin in 2015, but would effectively extend the mine life from 9 to 13 years. Based on this mining method proven and probable reserves are currently estimated at 719,479 ounces of gold.

January 27, 2009: Newmont Mining Corp. (NEM) announced that it has entered into a definitive purchase agreement to acquire from AngloGold Ashanti Ltd. its 33.33% interest in the Boddington project, which is located in Western Australia. Upon completion of the acquisition, NEM will own 100% of the project, and NEM's proven and probable gold reserve at Boddington will increase by 6.6 million ounces of gold to 20.1 million ounces. Total consideration for the 33.33% interest consists of $750 in cash payable at closing, $240 million payable in cash and/or NEM stock, at NEM's option, in December 2009, and a royalty capped at $100 million, equal to 50% of the average realized operating margin (if any) exceeding $600 per ounce, payable on one-third of gold sales from Boddington. This transaction is expected to close in March 2009. NEM has received a commitment for $1 billion, through a 364 day bridge facility to support the transaction and for additional capital for the project.

January 27, 2009: Newmont Mining Corp. (NEM) announced that it had 2008 equity gold sales of approximately 5.2 million ounces at costs applicable to sales of $440 per ounce. With the start-up of the Boddington project in Australia, in mid-2009, the company expects continued operating performance improvements in 2009 that will take equity gold sales to 5.2 million to 5.5 million ounces with costs applicable to sales in the range of $400 to $440 per ounce. Consolidated capital expenditures in 2008 were approximately $1.9 billion. With completion of the power plant in Nevada, and the gold mill in Peru in 2008, and completion of the Boddington project in mid-2009, consolidated capital expenditures are expected to decline to $1.3 to $1.5 billion, on an equity basis. At year-end, NEM reported proven and probable gold reserves of 85 million equity ounces.

January 29, 2009: Barrick Gold Ltd. (ABX) announced that it will close its Kainantu gold mine in Papua New Guinea. This action comes 13 months after ABX purchased the mine from Australian miner Highlands Pacific Ltd. for $141.5 million. The mine which has been estimated to contain 5 million ounces of gold is being placed on care and maintenance pending a review of its long-term viability in light of low grades.

January 29, 2009: Gold Field Ltd. (GFI) reported that its second quarter earning which correspond to the quarter which ended December 31, 2008, rose more than four-fold on a weaker rand. GFI's attributable production for the second quarter rose 5% to 839,000 ounces at a total cash cost of $487 per ounce. GFI expects an increase of 14% in the third quarter to approximately 960,000 ounces. Lower copper prices and its impact on the conversion of the Cerro Corona mines copper into gold-equivalent ounces would prevent GFI from achieving its target of 1 million ounces. GFI forecasts a third quarter total cash cost of $440 per ounce.

January 29, 2009: Barrick Gold Ltd. (ABX), and Newmont Mining Corp. (NEM), joint owners of Australia's second largest gold mine, the Super Pit, announced they have received environmental approval to expand the open pit located near Kalgoorlie, in Western Australia. The Super Pit can be deepened to 1,958 ft., and waste dumps can be established that will contain 154 million tons of waste rock. The expansion will extend the mine life by up to 10 years, and will create more than 1,000 jobs.

January 29, 2009: IAMGOLD Corp. (IAG) reported gold production of 997,000 ounces in 2008, a 3% increase over 2007 production. The cost of this production is expected to be less than the most recent guidance of $480 to $490 per ounce.  IAG expects to produce 880,000 ounces of gold in 2009 at an average cash cost of $470 to $480 per ounce. The decline in production is a result of the completion of mining at the Sleeping Giant mine (in Q3'08), the closure of the Doyon mine by mid-2009, and lower gold grades at Sadiola and Mupane. The decline will be partially offset by throughput increases at Rosebel, and Tarwaka, and a grade increase at Yalela. Refer to the press release for details concerning project development at Essakane in Burkino Faso, Westwood, Ontario, and Quimsacoha, Ecuador.

January 30, 2009: Goldcorp Inc. (GG) reported that it will initiate a 9,185 ft. drilling program early in February 2009 to test several quality gold targets on the Wabamisk property in the James Bay region, in Quebec. The project is a joint venture between GG and Azimut Exploration Inc. Wabamisk is located 44 miles south of GG's Elenore property that hosts a Roberto-type gold deposit. The drilling program is designed to test induced Polarization (IP) anomalies in close proximity to a major northeast trending lineament with a minimum of 12 drill holes. The IP anomalies are often coincident with gold mineralization.

February 3, 2009: Newmont Mining Corp. (NEM) reported that it will raise about $1.7 billion through stock and a debt offering. NEM has offered 34.5 million shares of stock at $37 per share, and expects to raise $1.3 billion from the sale of these shares. NEM also expects to raise an additional $517.5 million from the sale 3% convertible senior notes due in 2012.

February 4, 2009: Yamana Gold Inc. (AUY) reported that it has completed a 10-hole, reverse circulation rotary drill-hole program (9,240 feet) at the Clover Project, a joint venture in Elko County, NV with Atna Resources Ltd. The Clover prospect is a low-sulfidation, vein-hosted epithermal prospect located adjacent to the Midas trough within the Northern Nevada Rift. The geology of the project is similar to Newmont's Ken Synder mine which is located 8 miles to the east. The 2008 drilling program has extended the Clover Hill structure to the north of AUY's 2007 drilling which included 35 feet grading 0.302 ounces per ton in drill hole CV006. AUY's 2008 drilling has extended gold mineralization in the structure approximately 650 feet to the north. The best intercept in this recently completed program is 15 feet assaying 0.403 ounces per ton in USCV012. Refer to the press release for details of the drilling program. AUY may earn a 51% interest in the project by incurring exploration expenditures of $3,300,000 and making payments to Atna of $635,000 before June 19, 2010. AUY may elect to increase its interest to 70% by completing a pre-feasibility study on the property.

February 5, 2009: Hecla Mining Company (HL) is forecasting a 20% increase in silver production for 2009. HL anticipates this production will be in the range of 10 million to 11 million ounces of silver. HL also expects to report an ore reserve increase of 80 million ounces for 2008 as a result of the Green's Creek Mine acquisition, and positive drilling at its Idaho operations. In spite of these positive results, HL anticipates that it will report a net loss of approximately $40 million to $42 million, for the fourth quarter as a result of negative price adjustments to final smelter adjustments of approximately $10 million and an estimated reduction in the value of deferred tax assets of $8.5 million. Estimated cash costs are expected to be $4.25 per ounce of silver, net of by-product credits. Cash costs were negatively impacted by the dramatic decline of lead and zinc prices.
AMEX GOLD PRODUCER NEWS
AMEXJanuary 26, 2009: Central Sun Mining Inc. (SMC) announced that it has regained majority control (60%) of the Cerro Quema gold property in Panama after the buyer defaulted on a December 31, 2008 payment. SCM had acquired the 60% interest in Cerro Quema from Yamana Gold Inc. through an equity asset transaction in 2006 and subsequently sold the property. SCM intends to immediately review the geological, engineering and construction work that has been completed on the property.  The 60% interest in Cerro Quema provides SCM an additional potential future stream of gold development and production opportunity in its core operating base in Central America.

January 27, 2009: Central Sun Mining Inc. (SMC) announced that B2Gold Corp. (TSX: BTO) has made a rival takeover bid for the company that is nearly 50% higher than the bid made by Linear Gold (TSX: LRR) in December 2008 that valued SCM at about $19 million. SCM said its board backs the BTO bid. LRR has the right to match the BTO bid until Friday, January 30, 2009.

January 30, 2009: Eldorado Gold Corp. (EGO) reported that the Sixth Department of the high Administrative Court in Ankara, Turkey delivered a positive decision in the case regarding the company's Environmental Impact Assessment certificate for the Efemcukuru project. The decision allows EGO to go forward with construction of the mine which is expected to be completed early in 2010.

January 30, 2009: Apex Silver Mines Ltd. (APXSQ) reported that it has received notice from the NYSE Alternext US LLC (the AMEX) that the company is not in compliance with exchange guidelines and will be delisted since it has sustained losses that are substantial to its overall operations and existing financial conditions. The company's stock is now trading on the pink sheets. On January 13, 2009, Apex filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

February 4, 2009: Apollo Gold Corp. (AGT) reported that it has terminated employment for 82 workers at its Montana Tunnels mine located approximately 25 miles south of Helena, MT. The termination of these jobs follows through on a 60-day layoff notice issued early in December. The 82 employees had not worked since the December notice, but have been paid. Montana Tunnels has a stockpile of ore which it will process through April for shipment to a smelter in Trail, British Columbia. Processing the stockpiles ore will keep 104 people working, but they will likely be given the 60-day notice the government requires when layoffs are anticipated. In November, AGT received federal approval to expand the pit, but this expansion was dependent on finding $70 million in financing. If financing is not obtained, the mine will be put on care and maintenance.
NASDAQ GOLD PRODUCER NEWS
NASD
January 26, 2009: DRDGOLD Ltd. (DROOY) reported that as a result of the lightening that caused a power outage at the No. 5 shaft and trapped about 275 people underground at Blyvooruitzicht, the company sustained a loss of approximately 1,095 ounces of gold production. Production has resumed at the No. 5 shaft.
 
January 27, 2009: LIHIR Gold Ltd. (LIHR) reported that a dispute between local land owners at Lihir Island has led to a temporary production interruption. The company is working with land owners and relevant authorities to resolve the dispute as quickly as possible.
 
January 28, 2009: LIHIR Gold Ltd. (LIHR) announced a third successive year of record annual production. Gold production for 2008 was up 26%, and the company predicts a 13% production increase in 2009. LIHR produced 315,000 ounces of gold in the fourth quarter of 2008, bringing total production for the year to 882,000 ounces of gold. LIHR expects production for 2009 to reach 1 million ounces. The cash cost of production for gold in the fourth quarter was $400 per ounce. A lower cash cost for production is expected for 2009, assuming stable oil prices and exchange rates.
 
February 5, 2009: Royal Gold Inc. (RGLD) reported that its earnings for its fiscal second quarter 2009, which ended December 21, 2009 was a net income of $21.4 million, or $0.63 per basic share, on royalty revenue of $14.6 million. Net income for the second quarter includes the effects of a one-time gain of $31.5 million, or $0.60 per basic share after taxes, resulting from the company's restructuring of the royalties at the Cortez Pipeline Mining Complex on October 1, 2008, and a decrease in revenue of $3.3 million, or $0.06 per basic share after taxes, due to pricing adjustments on the Robinson mine royalty resulting from the significant decrease in copper prices during the quarter. Royalty revenue for the quarter was largely driven by increased production at Leeville and Goldstrike mines, initial production at Benso, and $4 million in revenue from the Barrick portfolio which was acquired in October 2008. Gains in royalty revenue was offset by a significant decline in royalty revenue at Cortez and Robinson.
INSIDEMETALS.COM WEBSITE UPDATES
INSIDEMETALS WEBSITE UPDATESApex Silver Mines Ltd. has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code and will be dropped from the list of InsideMetals Gold Stock Producers. The company now trades on the Pink Sheets with the ticker symbol APXSQ.

InsideMetals has added to the Home Page of its website, an Advertising & Marketing Guide link for readers who may be interested in advertising their business on the InsideMetals website, or in the newsletter. The website has been visited by readers from more than 184 countries.

The Advertising & Marketing Guide contains basic demographic information as to the regions in the world from which the website is viewed; information as to banner advertisements and placements in the website and in the newsletter; and special Gold and Silver Medallion Advertising Programsthat are available to mining and exploration companies.
If interested, please visit the following links for more information:
 
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We hope you have enjoyed our newsletter.
 
The newsletter will be published next on February 21, 2009.
 
Until next time!!!,
 
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