InsideMetals Newsletter - 02/06/2010 | Volume 5, Number 3 - Precious Metals Market Trends, Geopolitical View, Gold Producer News and Website Updates

January 25, 2010: Newmont Mining Corp. (NEM) entered into an agreement with AMI Africa Exploration Ltd., through its subsidiary, Newmont Ghana Gold Ltd, whereby NEM can earn an initial 51% interest in the Anuoro license by spending $2 million in exploration expenditures and property payments during the first 3-year period. A minimum of $550,000 in work expenditures and property payments is required in the first year. Upon NEM earning a 51% interest, NEM and AMI will enter into a joint venture agreement under which NEM will have 90 days in which to elect to increase its interest in the project to 75% by spending an additional $2 million in work expenditures and property payments over the next 2 years.

January 26, 2010: Barrick Gold Corp. (ABX) and Newmont Mining Corp. (NEM), joint owners of the Super Pit, Australia's second-largest gold mine, won environmental approval to expand the site in Kalgoorlie, Western Australia. The Super Pit, which is managed by Kalgoorlie Consolidated Gold Mines Ltd. (owned by ABX and NEM) have approval to operate the mine until 2021, according to Norman Moore, Western Australia's Mines and Petroleum Minister.

January 26, 2010: Barrick Gold Corp. (ABX) has requested a U.S. court to issue a limited injunction at its Cortez Hills mine in Nevada to allow work to continue while additional environmental assessments are under way. In December, an appeals court in San Francisco ruled that the project, which has faced opposition from local native Indian leaders and environmental groups, requires additional environmental analysts by the U.S. Bureau of Land Management. ABX has reported to the court that the project employs 1,250 people, of which almost half of the workforce would lose their jobs within four months if the project were halted.

January 26, 2010: Newmont Mining Corporation's (NEM) will pay $4.9 million for a cyanide spill that occurred on October 8, 2009 at its Ahafo open pit gold mine in Ghana.

January 26, 2010: Barrick Gold Corp. (ABX) has agreed not to ship ore from its Cortez mine in Nevada to the processing plant 70 miles away until further environmental analysis is conducted to comply with an appeals court order.

January 26, 2010: Harmony Gold Mining Ltd. (HMY) reported that it is on track to reach its production target of 2.2 million ounces of gold per year by 2012, up from 1.5 million ounces produced in fiscal 2009 which ended in June. HMY has been conducting a further review of its operations after closing four marginal shafts. CEO Graham Briggs, in a media briefing said the goal is to produce more profitable ounces rather than producing more ounces. He also indicated that he is concerned about pending power costs as a result of Eskom's request for a 35% tariff hike annually for three years.

January 26, 2010: Yamana Gold Inc. (AUY) announced that it will start construction in mid-year at its Ernesto/Pau-a-pique gold project in Brazil, and expects to start production at the mine in 2012. The recently completed feasibility study estimated that the capital cost for the project will be $116 million, and will result in annual production of approximately 100,000 ounces of gold over a seven year mine life. This production will represent 8%-10% of AUY's annual production. The cash cost for this project is forecast to be $427 per ounce of gold, and will result in pay back in approximately two years. The project has a current mineral reserve of 710,000 ounces, and measured and indicated resources of 854,000 ounces. AUY also announced updated plans for its Agua Rica copper/gold/silver/molybdenum project in Argentina. AUY expects the mine to cost about $2.1 billion and to produce about 12.5 million tons of copper/gold concentrate, and 357.750 tons of molybdenum concentrates over a 26.5 year mine life. The by-product cash cost for copper, net of all by-product credits, including gold and silver are estimated to be approximately $0.30/lb.

January 27, 2010: Newmont Mining Corporation's (NEM) CEO Richard O'Brien, while attending the World Economic Forum in Davos, Switzerland, forecast that the gold price could range between $1,025 and $1,250 per ounce this year. He also said that the gold price could dip below the lower range briefly, but because of underlying demand, gold prices below the lower forecast range is not sustainable.

January 28, 2010: Eldorado Gold Corp. (EGO) provided an update on the company's Mineral Resources and Mineral Reserves as of year-end 2009. Measured and Indicated Resources have increased by approximately 80%, with 21% of this growth due to exploration success at the Kisladag and Efemcukuru projects in Turkey. The remainder of the increase is due to the acquisition of Sino Gold Mining Ltd. in December 2009, which added the Jinfeng mine, White Mountain mine, Eastern Dragon, and Beyinhar projects in China. Proven and Probable Reserves have increased by approximately 95%, with 32% coming from increases at Klisladag mine, Efemcukuru mine, and Perama Hill. Total gold reserves now stand at 15.1 million ounces with an additional 26.66 million resource ounces.

January 28, 2010: Gold Fields Ltd. (GFI) said that any changes to South Africa's mining law to encourage black investor participation should be sustainable to avoid damaging the country's mining industry. Shares of South African mining companies plunged in 2002 when laws compelling then to sell assets to black owners were first reported. The ruling African National Congress party passed legislation in 2004 forcing miners to sell 15% of their assets to black investors by 2009, and 26% by 2014. The government, mining companies, and labor unions will review South African legislation at a planned meeting in March. Gold Fields' CEO Nick Holland stated that if new measures are introduced following the March meeting, they need to be realistic and reasonable on how long to take to implement them, too short a period could be a recipe for disaster.

January 28, 2010: Kinross Gold Corp. (KGR) announced for 2009 that its total proven and probable mineral reserves increased by 5.4 million ounces to 51.0 million ounces of gold, an increase of 12% over 2008. This included its first declared reserve for the Lobo-Marte project in Chile of 5.6 million ounces grading at 0.036 oz/ton, and an upgraded mineral resource at Fruta del Norte in Ecuador of 5.7 million ounces grading 0.327 oz/ton. KGC has increased its gold reserves by 31 million ounces in five years, a compound growth rate of 21%. KGC also increased gold reserves at Cerro Casale by 1.2 million ounces due to engineering changes, project improvements and an increase in ownership from 48% to 50%.

February 1, 2010: Gold Fields Ltd. (GFI) reported initial drilling results from its El Paso Project in the Philippines. El Paso is one of three projects under joint venture with Mindoro Resources Ltd. GFI has been successful in finding significant mineralization in its drilling which includes 138.1 feet of 0.5% copper in drill hole EPD001. This interval also includes 0.001 oz/ton gold, 0.067 oz/ton silver, and 72 ppm molybdenum, which is anomalous. GFI may earn up to a 75% in the three Mindoro projects: El Paso, Lobo, and Talahib. GFI will commence drilling at Lobo in March 2010 when a large drill capable of drilling to 3,280 feet arrives. Refer to the press release for drilling details and information on Mindoro projects.

February 2, 2010: Newmont Mining Corp. (NEM) reported that its Newmont Nusa Tenggara, the joint venture which operates the Batu Hijau mine in Indonesia paid 3.9 trillion Rupiah in tax, non tax and royalty to the government in 2009. Under the work contract with the government, NEM is required to pay 35% of its revenues.

February 2, 2010: Newmont Mining Corp. (NEM) reported that it expects the first production from its Akyem gold mine in Ghana will occur in late 2013. The Akyem mine contains an estimated 8 million ounces of gold reserves, and should have a mine life of about 15 years.

February 2, 2010: Newmont Mining Corp. (NEM) reported that operations have returned to normal at Batu Hijau following a rock-slide accident last month that buried a dozer operator.

February 2, 2010: Newmont Mining Corp. (NEM) reported that its Boddington Mine is expected to surpass Kalgoorlie's famous Super Pit mine owned by NEM and Barrick Gold Corp. Boddington is expected to produce about 1 million ounces of gold and 30,000 tonnes of copper per year for the first 5 years. Average annual output during its 20 year mine life will be 850,000 ounces of gold and 35,000 tonnes of copper.

February 3, 2010: Coeur d'Alene Mines Corp. (CDE) announced the discovery of a new high-grade vein system at its Kensington Gold Mine in Alaska, which is scheduled to commence production in the third quarter of 2010 at the rate of approximately 120,000 ounces of gold annually. The new structure, named Kimberly is exposed in the decline between the mill and the mine. An eight-hole, phase-one, drilling program initiated in 2009 intersected significant gold mineralization. Assays ranged from 0.144 oz/ton to over 1.29 oz/ton. A total of 14 core holes totaling 4,080 feet were completed in the fourth quarter.

February 3, 2010: IAMGOLD Corp. (IAG) plans to increase its gold production to about 1 million ounces in 2010 from 939,000 ounces in 2009 after starting operations at its Essakane mine in Burkina Faso. IAG is also participating in joint ventures with AngloGold Ashanti in Mali and Gold Fields Ltd. in Ghana. A successful feasibility study will lead to construction in the fourth quarter of 2010 of the Sadiola Deeps project in Mali. IAG is also expanding its mill at its Niobec mine in Canada which should in the third quarter increase the mines niobium output by 25%.

February 4, 2010: Goldcorp Inc. (GG) has completed its acquisition of Canplats Resources and has thus acquired the Camino Rojo project which is located about 50 km southeast of GG's Penasquito mine in Zacatecas, Mexico. The Camino Rojo property nearly quadruples GG's total land package in a core district and includes the Represa Deposit which has reported measured and indicated resources of more than 3.4 million gold ounces and more than 60.7 million ounces of silver. Each Canplats share will be exchanged for C$4.60 in cash per the deal. Holders of each Canplats share will also receive a distribution from Canplats of one share in a new exploration company with a notional value of C$0.20 for total consideration of C$4.80 per share.

February 4, 2010: Gold Fields Ltd. (GFI) reported an increase in second quarter 2010 adjusted earnings of $1.45 per share from $0.89 per share from the previous quarter, but the company expects output from the third quarter to drop due to a slow ramp up after Christmas. Attributable production from the second quarter was 900,000 ounces, down slightly from the 906,000 ounces produced in the previous quarter. Attributable production for the third quarter is estimated at 850,000 ounces. GFI reported that its cash cost for the second quarter was down 5% to $613 per ounce due to a stronger rand and is expected to rise to $650 per ounce assuming a rand/dollar exchange rate of 7.45.

February 4, 2010: Gold Fields Ltd. (GFI) is one of the world's largest unhedged gold producers with attributable gold production of 3.64 million ounces of annual production from eight operating mines in South Africa, Ghana, and Australia. The company has attributable gold reserves of 83 million ounces and mineral resources of 251 million ounces. GFI reported a 40% increase in net earnings for the December 2009 quarter of $187 million.

January 25, 2010: North American Palladium Ltd. (PAL) continues to deliver excellent exploration results at its wholly-owned Lac des Iles (LDI) mine located northwest of Thunder Bay, Ontario, and as a result of exploration success, PAL has doubled its LDI exploration budget for 2010 to $15 million. PAL expects to file early in the second quarter of 2010, an updated NI 43-101 report on LDI that incorporates the 137,776 feet (86 drill holes) drilled in 2009. Exploration drilling conducted in the Offset Zone intersected high grades over long intersections. Some of the higher grade intersections at the Offset Zone are believed to be fault-displaced extensions of the Roby Underground mine and include the following intercepts:

· Hole 404: 62.3 feet grading 0.285 oz/t palladium (Pd), including 19.7 feet grading 0.486 oz/t Pd
· Hole 414: 62.3 feet grading 0.26 oz/t Pd

January 25, 2010:
Northgate Minerals Corp. (NXG) announced positive results from the Feasibility Study on its 100% owned Young-Davidson project in Matachewan, Ontario prepared by AMEC Americas Limited. The Feasibility Study confirms a 15-year mine-life with an average annual production of 180,000 ounces of gold at a cash cost of $351 per ounce. The Feasibility Study incorporates proven and probable gold reserves of 2.8 million ounces based on a gold price of $825 per ounce and an exchange rate of US$/C$0.90. The initial capital cost for the mine is $339 million, and requires a sustaining capital cost of $236 million during the life of the mine. The target date for production at Young-Davidson is 2012.

January 26, 2010: Endeavour Silver Corp. (EXK) announced that it has for the sixth consecutive year completed a successful exploration drilling program in Mexico, which is highlighted by the discovery of new high-grade silver-gold mineralization located near its two mining operations at Guanacevi Mines in Durango State, and Guanajuato Mines in Guanajuato State. In 2009, EXK drilled 61 holes totaling 59,000 feet on 6 exploration targets. At Guanacevi new silver-gold mineralization was found in the Santa Cruz vein on the Provenir Cuatro property located about 1.86 miles northwest of the Provenir mine along the strike of known mineralization. At Guanajuato a new discovery was made on strike 1640 feet to the southeast of the high-grade Lucero silver-gold vein. As of March 2009, EXK reported NI 43-101 proven and probable reserves at Guanacevi of 6.1 million ounces of silver, measured and indicated resources of 16.1 million ounces of silver and 12.7 million inferred ounces of silver, plus 8,400 ounces in gold reserves, 29,400 ounces of measured and indicated gold resources, and 20,100 ounces of inferred gold resources. As of March 2009, Guanajuato reported NI 43-101 proven and probable reserves of 1.7 million ounces of silver, 1.9 million measured and indicated ounces of silver, and 5.8 million inferred silver ounces, plus 15,100 ounces in gold reserves, 14,800 ounces in measured and indicated gold resources and 50,300 ounces in inferred gold resources. For 2010, EXK has planned a 125 drill hole (1

18,000 feet) drilling program to follow up on 2009 drilling results at Guanacevi and Guanajuato.

January 26, 2010: North American Palladium Ltd. (PAL) plans to sell up to $300 million in debt securities, common shares, warrants, and units over a period of 25 months. PAL will use the proceeds to fund exploration and development at its Lac des Iles mine in Ontario, and its Sleeping Giant mine in Quebec, and any future properties according to a filing with the U.S. Securities and Exchange Commission. Proceeds from the sale of securities will also be used to fund exploration and development costs at its Dormex and Discovery properties, and for general corporate purposes.

January 27, 2010: New Gold Inc. (NGD) announced that it has agreed to sell its Brazilian subsidiary, Mineracao Pedra Branca do Ampari Ltda., which holds the Ampari mine and other related assets to Beadell Resources Ltd. for $63 million. Beadell is an Australian listed gold-focused company with exploration and development assets in Western Australia and Brazil. NGD will receive $46 million in cash and $17 million in Beadell shares. The offer is contingent upon Beadell completing an A$75 million equity offering, and obtaining share holder approval. The transaction is expected to close by March 2010.

January 28, 2010: Apollo Gold Corp. (AGT) reported that its wholly owned and operated Black Fox mine and mill achieved its previously stated production goal of processing 2,205 tons per day (2,000 tonnes) ahead of the original 2,431 tons per day (2040 tonnes) year-end schedule. For the fourth quarter AGT produced 15,820 ounces of gold. AGT's total gold production for the fourth quarter was 17,850 ounces which included 2,031 ounces of lower grade Black Fox ore tolled at a nearby processing facility. AGT sold 21,124 ounces of gold in the fourth quarter which was sold against forward sales contracts at a realized price of $875 per ounce.

January 28, 2010: North American Palladium Ltd. (PAL) plans to drill 53,000 meters in 2010 as part of a $6.2 million exploration program that will focus on continued exploration directed toward expanding gold resources at its wholly-owned Sleeping Giant mine located in the prolific Abitibi region of Quebec. NAP will also conduct exploration at its adjacent Dormex prospect. Exploration at Sleeping Giant will seek to extend the 30 West Zone and the 3 Zone. At the 30 West Zone, 47 underground drill holes (25,585 feet) indicate that the zone extends below the 975 level, the mine's lowest level. The most significant intersections include hole 91-148-09, with 3.28 feet grading 3.62 oz/t gold, and hole 85-141-09, which assays 0.419 oz/t gold over 5.25 feet. A new zone called 785N, contained 0.467 oz/t gold over 5.9 feet that was found approximately 590 feet below the 975 level. As a result of positive drill results in its 2009 exploration program, PAL will commence deepening its mine shaft by 650 feet. The shaft deepening will be completed by year end and will allow for development on three new levels. The capital cost of the project will be approximately $4.5 million for the shaft deepening and an additional $1.5 million for auxiliary equipment. Refer to the press release for details on other NAP exploration projects.

February 1, 2010: Gold Star Resources Ltd. (GSS) provided an update on its continuing exploration at its Benso concession in Ghana. During 2009, GSS drilled 88 diamond drill holes totaling 27,060 feet. This drilling has successfuly extended mineralized zones along strike and down dip from known mineralization. Resource models are being updated with results from this completed drilling. Mineral resources and mineral reserves are expected to be updated from the Benso area in the second half of 2010. Refer to the press release for details on the completed drilling program at the Subrisco West pit.

February 2, 2010: Richmont Mines Inc. (RIC) announced that it will began a first phase 16,400 feet drilling program at its 100% owned Cripple Creek Gold Project located west of the Timmins Gold Camp in Ontario which has produced more than 70 million ounces of gold. Drilling on the 4.3 sq. miles property will test for mineralization below 1,300 feet. Mineralization has been found below 1300 feet on adjacent properties. The initial drilling will consist of 10 holes, including one hole planned for a depth of 2,300 feet, and will target the lateral extension of the 116 Zone to the west and the projected down dip extension of the Mahoney Zone. Mineralization found in these targets by previous owners of the property during the 1980s and 1990s include intervals ranging from 5 feet to 50 feet with gold grades from 0.035 oz/t to 0.198 oz/t.

February 2, 2010: Apollo Gold Corp. (AGT) reported that it has completed the sale of Montana Tunnels Mining Inc. (MTMT) to Elkhorn Goldfields LLC. Prior to the completion of this sale, MTMI was a wholly owned subsidiary of AGT and owned AGT's 50% joint venture interest in the Montana Tunnels mine and mill, the Diamond Hill mine and related mill and ancillary assets. The sale was completed on substantially the same terms as set forth in the letter of intent with Elkhorn as specified in the December 10, 2009 news release. In consideration of the sale, AGT received promissory notes held by Elkhorn and certain investors in Elkhorn or its affiliates from Calasis Resources Inc., Calasis Resources Colorado, Inc., and Aadvark Agencies Inc. with an aggregate outstanding balance of approximately $9.5 million.

February 3, 2010: Gold Star Resources Ltd. (GSS) reported that its Prestea South Project in Ghana would start open pit mining in 2011 if a mining permit is issued. The issuance of permits has been delayed since the administration in Ghana has changed. Previous mining at Prestea had been from underground operations, the surface oxide material had not been previously mined. Prestea South operations could produce another 75,000 to 100,000 ounces of gold per year. While waiting for permits to be issued, GSS will continue exploration activities in the Presteas project with an anticipated exploration budget of $3.2 million.