InsideMetals Newsletter - 04/03/2010 | Volume 5, Number 7 - Precious Metals Market Trends, Geopolitical View, Gold Producer News and Website Updates

March 20, 2010: Barrick Gold Corp. (ABX) reported that it raised about $887 million selling 25% of its shares in its African unit, African Barrick Gold, near the low end of its price range in the biggest London initial public offering since 2008.

March 22, 2010: Barrick Gold Corp. (ABX) and joint venture partner NovaGold Resources Inc. (NG) released an updated reserve/resource estimate for Donlin Creek gold project. The project is owned equally by ABX and NG, and managed by the JV, Donlin Creek LLC. Using a gold price of $825 per ounce, Proven & Probable reserves were increased by 4.3 million ounces to 36.6 million ounces. Donlin Creek also contains a Measured and Indicated resource of 4.29 million ounces, and 4.41 million Inferred resource ounces.

March 22, 2010: Eldorado Gold Corp. (EGO) reported net consolidated income of $102.4 million for 2009, compared to $163.7 million in 2008. Net income in 2009 included a net loss of $2.2 million reported by Sino Gold which was acquired by EGO in 2009. Net income for the fourth quarter 2009 was $33.3 million, compared to $28.2 million in the fourth quarter of 2008. Gold revenue in the fourth quarter of 2009 increased 126% over the previous fourth quarter of 2008 due to the higher price of gold. In 2009, EGO produced 363,500 ounces of gold, up from 308,802 ounces in 2008. Total cash cost of gold increased to $387 per ounce, up from $289 per ounce in 2008. Following the acquisition of Sino Gold, EGO forecasts production of 550,000 to 600,000 ounces of gold in 2010 at a cash operating cost ranging between $385 and $400 per ounce.

March 23, 2010: Barrick Gold Corp. (ABX) has commenced its 2010 drilling program at the company's Spring Valley project located near Lovelock, NV. On March 9, 2009, ABX entered into an agreement with Midway Gold Corp. (MDW) to explore and develop MDW's 18.4 square mile Spring Valley project. ABX has approved a budget of $5,000,000 to perform reverse circulation and core drilling on the property. Drilling is expected to last through the summer. ABX completed a $4 million, 34 drill hole program in 2009 that had positive assay and metallurgical test results. On November 30th, 2009, MDW reported significant drill intercepts which include 339.5 ft. of 0.037 opt gold (including 10 ft. of 0.485 opt gold) and 156 ft. of 0.028 opt gold in drill hole SV09-461C, and high grade intercepts which include a metallic screen assay of 52.5 ft. of 0.889 opt gold and 5 ft. of 9.101 opt gold in SV09-451C.

March 23, 2010: Gammon Gold Inc. (GRS) announced that it has signed a definitive purchase option agreement on a group of properties called the Mezquite Project in Zacatecas State, Mexico. The project covers 460 hectares and is located 45 km southeast of Goldcorp's Penasquito property and 22 km northeast of Goldcorp's recently acquired Camino Rojo property. The property lies within a 70 k m mineral belt that contains over 27.4 million ounces of gold and 1,611 million ounces of silver. The Mezquite property includes several properties with favorable geology, including Cerro La Liorona, a hill that consists of an altered intrusive with two adjacent breccia pipes cutting into skarn-altered and silicified Caracol Formation, a favorable host rock in the Conception del Oro district, as well as the colluvial-covered flat areas to the south. GRS's agreement includes a series of option payments that total $1.4 million over a 3-year period.

March 24, 2010: Gold Fields Ltd. (GFI) announced the appointment of Richard Weston as Executive Vice President of its Australasian Region effective May 1, 2010. Mr. Weston will be part of the company's Executive Committee reporting to CEO Nick Holland. Mr. Weston joins the company from Coeur d'Alene Mines Corp. (CDE). As Senior Vice-President of Operations at CDE, Weston oversaw a wide portfolio of gold and silver mines in North and South America.

March 25, 2010: Harmony Gold Mining Co. Ltd. (HMY) reported that a mine worker was killed on Thursday, in a rock fall at its Merriespruit 1 shaft in South Africa. An investigation into the accident will begin on March 26, 2010.

March 26, 2010: AngloGold Ashanti Ltd. (AU) has entered into a joint venture agreement with OKIMO, a state-owned gold mining company in the Democratic Republic of Congo (DRC), to develop a mine in the African state. The JV would be created to develop the Ashanti Goldfields' Kilo (AGK) project in the DRC. AU owns an 86.2% interest in AGK, while OKIMO owns the remaining 13.8%. The project area included Mongbwalu, where a mineral resource of approximately 3 million ounces has already been identified via past exploration. AGK will pay a total of $1.25 million to the DRC government and about $10.5 million to OKIMO as compensation for the loss of rent and payment for surface rights. If AU locates an inferred mineral resource of more than 1.5 million ounces, then the two parties will develop up to two such deposits as a separate joint venture.

March 26, 2010: Compania de Minas Buenaventua SA (BVN) reported that workers at the Antapite gold mine will stop work Friday, March 26,, 2010. Workers also plan to strike at the Uchucchacua silver mine and the Orcopampa gold mine on Saturday. Mine workers are demanding a larger share of profits in Peru.

March 26, 2010: Gold Fields Ltd. (GFI) announced that its third quarter output of 800,000 ounces of gold is in line with its revised (5% lower) previous guidance of 850,000 ounces of gold. Total cash cost and notional ("all in") cash expenditures for the quarter are expected to be approximately $695/oz and $995/oz respectively. Third quarter South African operations fell to 396,000 ounces from 523,000 ounces in the previous quarter due to an extended Christmas break and maintenance of the water column at its Kloof mine.

March 26, 2010: IAMGOLD Corp. (IAG) has increased its $140 million secured, revolving credit facility into a $350 million unsecured revolving credit facility. The new credit facility will expire on March 2013. The company also entered into a $50 million letter-of-credit facility supported by Export Development Canada that will facilitate the issuance of letters of credit in support of certain asset retirement obligations of the company.

March 27, 2010: Compania de Minas Buenaventua SA (BVN) reported that mine workers scrapped plans to strike at the Uchucchacua silver mine and the Antapite gold mine as management promised to negotiate better wage and working conditions. Workers did walk off the job at the Orcopampa gold mine as they demand a larger share of the company's profit.

March 29, 2010: AngloGold Ashanti Ltd. (AU) CEO, Mark Cutifani, said that AU has more sovereign risk in Australia than South Africa because of concerns over a number of Federal and State Government policies, including a proposed increase in Western Australian gold royalties. He said these policy concerns would affect the company's decision by year end to develop its massive Tropicana gold deposit in the eastern goldfields. The Australian Treasury chief Ken Henry is proposing to replace state-based royalty taxes on mining with a resource rent tax set at 40% of a mining company's profits at operating mines.

March 29, 2010: AngloGold Ashanti Ltd. (AU) CEO, Mark Cutifani, said the company does not plan to split its operations into two separate entities in the near future as recently reported by Reuters in order to increase shareholder value. Speaking to journalists in Perth, Australia, he also dismissed speculation that AU was looking to merge with Gold Fields Ltd.

March 30, 2010: Agnico-Eagle Mines Ltd. (AEM) CEO, David Garofalo, has set a goal for AEM to become the top yielding stock in the North American gold space. AEM is not planning any major acquisitions, but will look at "bite size" deals worth around 5% to 15% of AEM's market capitalization. AEM will focus on early stage projects. AEM is nearing the end of commissioning at its Meadowbank project in Canada's Nunavut Territory. Meadowbank's first gold bar was poured in late February and commercial production will soon be declared. Production by AEM operations is expected to double in 2010 to at least 1 million ounces of gold as new operations ramp up. AEM just announced a $600 million bond financing this month, which will free up available liquidity under its credit line which will facilitate growth.

March 30, 2010: AngloGold Ashanti Ltd. (AU) said operations at its Iduapriem mine in Ghana would resume in April after completing a temporary storage facility for environmentally harmful tailings at its mine until a permanent one could be built, now estimated to be ready in early 2011. The impact of this delay will lower estimated gold production by 20,000 to 25,000 ounces in the second quarter of 2010.

March 30, 2010: Gammon Gold Inc. (GRS) said that it discovered two new gold and silver deposits at its key mine in Mexico, and that it plans to begin drilling at its new exploration project, Guadalupa y Calvo, in April. GRS also discovered five new significant target areas at its Ocampo mine located in Chihuahua. GRS currently has eleven drill rigs working at Ocampo and El Cubo. The company will test at least twelve targets at Ocampo and ten at El Cubo. When drilling starts at Guadalupe and at Mezquite, the company will have 15 drill rigs working in Mexico during the second quarter.

March 30, 2010: Gammon Gold Inc. (GRS) reported that its profit for the fourth quarter of 2009 fell 57% from the year earlier quarter as a result of weaker US dollar and rising taxes. For the quarter that ended December 31, 2009, GRS earned $13.5 million, compared to $31.6 million for the fourth quarter of 2008. Operating revenue for the fourth quarter was $68.2 million compared to $48.3 million in the year earlier quarter. Revenues were based on a realized gold and silver price of $1,093/oz of gold and $17.54/oz of silver, compared to 2008 fourth quarter realized prices of $796/oz of gold and $10.05/oz of silver. GRS sold 38,249 oz of gold in the fourth quarter of 2009 compared to 41,004 oz of gold sold in the fourth quarter of 2008. GRS benefited in the fourth quarter of 2008 from a foreign exchange gain of $0.14 per share and future tax recovery of $0.08 per share. In the latest quarter, exchange rates cost it $0.01 per share and future taxes of $0.03 per share.

March 30, 2010: Gold Fields Ltd. (GFI) is self-arranging a loan refinancing of around $500 million. GFI last tapped the loan market in May 2009 for a one-year, $311 million financing via Barclays and the Royal Bank of Scotland.

March 31, 2010: Agnico-Eagle Mines Ltd. (AEM) announced that it is starting a new 4,200 meter drilling program on the Maritime-Cadillac Property (a joint venture with Midland Exploration Inc) which is contiguous to its Lapa gold mine property which has 800,000 ounces of proven and probable gold reserves, and achieved commercial production in May 2009. AEM entered into this joint venture agreement with Midland on June 1, 2006. On June 1, 2009, AEM fulfilled its obligation under the agreement that provided a $100,000 cash payment to Midland required $1,000,000 to be spent on exploration. AEM has earned a 50% undivided interest in the property, and has the option to increase this interest over three years to 65% by solely financing a bankable feasibility study or solely assuming all mining operations. AEM's interest can also be increased by 1% for every $1,000,000 spent on the property, up to a maximum of 15% by spending $15,000,000. Significant grades up to 3.3 grams/tonne gold over 14.65 meters were intersected in 2008 drilling along the Contact Maritime East horizon in drill hole 141-08-14B.

March 31, 2010: Harmony Gold Mining Co. Ltd. (HMY) reported that third quarter gold production, for the quarter ended March 31, 2010 would fall due to safety issues and shaft closures as a result of accidents, a slow start-up after the Christmas break lower grades, and other operational issues which affected some of its South African mines. Third quarter production would be down about 41,800 oz. The company also forecast a stronger fourth quarter output.

March 31, 2010: Kinross Gold Corp. (KGC) announced the closing of its sale of its 25% of its interest in the Cerro Casale project in Chile to Barrick Gold Corp. (ABX). The total transaction values the sale at $474 million ($454 million in cash after adjustments to working capital) plus the assumption by ABX of a $20 million contingent obligation. ABX now holds a 75% interest in the project. KGC has retained a 25% interest in the project.

March 31, 2010: Kinross Gold Corp. (KGC) and Laurentian Goldfields Ltd.(TSXv: LGF) have signed a Letter of Intent (LOI) to form the Goldpines North Joint Venture (GPNJV), which is the first JV to arise from the Uchi Exploration Alliance (UEAJV), which was formed by the participants on July 21, 2009. The UEAJV is an aggressive, one year grassroots exploration program based on geological concepts developed by LGF. The UEAJV is funded by KGC with $400,000 and LGF with $100,000. GPNJV was created to explore and develop a 200 square km gold/arsenic/antimony defined and staked by LGF along the contact of the Uchi and English River Geological Subprovinces (34 km south of Red Lake, Ontario). KGC currently owns a 50% participating interest in GPNJV. Laurentian holds the remaining 50% interest. KGC has the option to earn an additional 25% interest in GPNJV by funding $1.5 million within two years of the creation of the joint venture (with a minimum expenditure of $500,000 in the first year).

April 1, 2010: AngloGold Ashanti Ltd. (AU) reported the death of a mineworker following a gas ignition incident at its Tau Lekoa mine in the Vaal River area of South Africa. The worker died while being treated in a hospital for a week. The flammable gas ignition incident occurred on March 23, 2010. Two other workers remain hospitalized, one in critical condition, and the other in stable condition.

April 1, 2010: Yamana Gold Inc. (AUY) reaffirmed its previous issued guidance that gold production will be in the range of 1,030,000 to 1,145,000 gold equivalent ounces (GEO) at a Co-product cost of $360 to $400 per GEO; and a By-product cost below $200 per GEO. AUY also guided that copper production is expected to be 150-160 million pounds in 2010. Both copper and gold production is expected to increase quarter by quarter during the year with declining cash costs of production. First quarter gold production is expected to be approximately 240,000 ounces of gold and between 29 to 30 million pounds of copper.

March 19, 2010: Apollo Gold Corp. (AGT) and Linear Gold Corp. (TSX: LRR) announced the closing of the previously announced private placement whereby LRR has acquired 62.5 million common shares of AGT at a price C$0.40 per share for gross proceeds of C$25,000,000. The common shares of AGT were issued from their treasury under terms of a subscription agreement between the companies dated March 9, 2010. Upon completion of the merger the new company will have the following compelling characteristics:

· 2010 estimated production of 100,000 ounces from the Black Fox mine in the Timmins Mining District of Ontario
· Additional expected production of 70,000 ounces of gold per year beginning in 2013 from the Box Deposit at LRR's Goldfield Project in northern Saskatchewan
· Total reserves of approximately 2.3 million ounces of gold in Canada
· Excellent exploration within highly prospective land packages in favorable jurisdictions

March 19, 2010: Claude Resources Inc. (CGR) announced that it is putting its remaining oil and natural gas interests on the market to further execute its corporate strategy of monetizing non-core assets which include:

· A 1.82% working interest in the Nipisi Gilwood Unit No. 1 located 110 km northwest of Edmonton, Alberta; and
· A 6.29% working interest in wells near Zama, Alberta

March 22, 2010: Northgate Minerals Corp. (NXG) announced that it will be added to the S&P/TSX Composite Index effective when trading begins on Monday, March 22, 2010.

March 23, 2010: Richmont Mines Inc. (RIC) and Louvern Mines Inc. TSX: LOV) announced results from the recently completed surface drilling program at the Beaufor Mine in Quebec, Canada. LOV has a 50% in the Beaufor Mine and owns other exploration properties located near Val-d'Or in northwestern Quebec. RIC owns 70% of the outstanding shares of LOV. RIC completed a surface exploration program at Beaufor Mine in the fourth quarter of 2009, and in the first quarter of 2010, which included the identification of a promising zone - Zone 350 - which is located approximately 800 meters to the southwest of the mine's infrastructure. Eight holes totaling 2,904 meters were drilled in Zone 350 and several intercepts averaging 1.2 meters in true width contained gold values over 5.0 grams/tonne, including 0.91 meters grading 100 grams/tonne. The Beaufor Mine just reported that it produced its 1,000,000th ounce over its 27 year history. The mine produced 517,129 ounces during the period 1933 until 1995; and 482,871 ounces when production resumed in 1996 to date.

March 24, 2010: Apollo Gold Corp. (AGT) announced that underground development at the Black Fox mine is expected to commence in the second quarter of 2010, and initial production from the underground is expected to start during the third quarter of 2010. The Black Fox mine is expected to produce 100,000 ounces of gold from operating the mill at approximately 2,000 tonnes per day at an average grade of 4.3 grams per tonne. Total cash costs for 2010 are expected to be $500-$550 per ounce sold. Lower cash costs are expected in the second quarter as a result of higher production rates, and a new mine plan which includes underground production and improvements from grade control procedures. Underground efforts will result in 2,000 meters of development by the end of 2010, which will provide 16,000 to 18,000 ounces of additional gold output starting in the third quarter of 2010. Underground production is expected to reach a rate of 495 to 545 tonnes per day in the fourth quarter of 2010. Underground mining costs per tonne of ore are estimated to be between $95 and $105 per tonne in 2010.

March 24, 2010: Endeavour Silver Corp. (EXK) announced for the fifth consecutive year, record financial and operating results for the fourth quarter and fiscal year ended December 31, 2009. For the year, EXK generated Sales Revenue totaling $50.8 million at an average realized sales price of $15.49 per ounce of silver, compared to total Sales Revenue of $39.3 million for 2008 based on an average realized price of $14.51 per ounce of silver production sold. For 2009, the Cost of Sales was $29.5 million compared to 2008 Cost of Sales of $27.8 million. For the fourth quarter EXK produced 779,344 ounces of silver, up 12% from the year earlier quarter, at a cash cost of $4.96 per ounce, net of byproduct gold credits. Net earnings for the fourth quarter were $5.2 million, based on a realized average silver price of $17.95 per ounce, compared to a loss of $3.1 million from the year earlier quarter. Gold production in the fourth quarter rose 90% to 4,591 ounces, which were sold at a realized price of $1,108 per ounce. Silver production for 2009 rose 11% to 2.6 million ounces, and gold production rose 66% to 13,298 ounces. Proven and Probable silver reserves increased 113% to 16.6 million ounces. In 2010, EXK expects to deliver its sixth consecutive year of silver production growth by about 20% to 3.1 million ounces with approximately 15,000 ounces of gold. In 2009, EXK completed approximately 18,000 meters of exploration drilling (61 holes) and made two new high grade silver-gold discoveries.

March 30, 2010: Claude Resources Inc. (CGR) reported its 2009 financial and operating results. For the year ended December 31, 2009, CGR reported a net loss of $6.3 million, compared to net earnings of $0.4 million in 2008, after a gain of $6.5 million arising from the sale of certain natural gas assets. During 2009, the company improved operating and profit margins at the Seabee Operation. In 2009, CGR produced 46,827 ounces, compared to 45,466 ounces in 2008.

March 31, 2010: Aurizon Mines Ltd. (AZK) announced that it has filed its Annual Information Form 40-F for the year ended December 31, 2009 with the US Securities and Exchange Commission and Canadian securities authorities.

March 31, 2010: Minefinders Corporation Ltd. (MFN) reported positive drilling results from core drilling at its La Bolsa property in Sonora, Mexico. These results will be incorporated into the existing La Bolsa resource inventory and will be used for the construction of reserve blocks to be used in the pre-feasibility study to assess the economic viability of an open pit heap leach mine. Significant intercepts include 44.0 ft. containing 2.375 grams per tonne (gpt) gold with 57.3 gpt silver; 93.2 ft. containing 1.354 gpt gold with 17.4 gpt silver; and 158.1 ft.. containing 0.532 gpt gold with 5.3 gpt silver. As previously reported the gold-silver mineralization occurs within a shallow dipping, 3,000 ft. by 1,200 ft. mineralized oxidized blanket that is sub-parallel to topography and ranges in thickness from 30 to 165 ft.

March 31, 2010: New Gold Inc. (NGD) reported that it expects to receive about $10 million less from the previously announced sale of its Brazilian unit to Australia's Beadell Resources Ltd. (BDR) for $46 million in cash and $17 million in shares. As a consequence of market volatility NGD now expects to receive $37 million in cash and $16 million in BDR shares. The transaction is expected to close by mid-April. Under the new terms of the deal, NGD will hold approximately 19.9% of BDR shares.

March 31, 2010: Richmont Mines Inc. (RIC) plans to buy all the outstanding shares of Louverm Mines Inc. (TSXv: LOV) that it does not already own. LOV shareholders will receive one RIC share for every 5.4 LOV shares owned. The offering values each LOV share at C$0.76, representing a 49% premium over the yesterdays closing price on the Toronto Venture Exchange. RIC expects to issue about 1.4 million shares if the transaction is completed.