Randgold, Fresnillo, Petropavlovsk and Hochschild decline during week as gold and silver fall
Reported by Proactive Investors on Saturday, 31 July 2010 (on July 31, 2010)
Gold prices climbed at the end of the week, improving to US$1,180/oz after rising to US41,170/oz on Thursday. The yellow metal was recovering from the sharp falls it experienced this week as fears over Europe’s debt crisis and the slowdown of the economic recovery in the US were subdued by strong economic and corporate data released this week.
A survey by Bloomberg predicted an increase in gold prices next week, due to higher physical demand spurred by the currently low prices that dipped below US$1,160/oz at one point during the week.
Gold has been on the rise this year, hitting all time highs of US$1,265/oz in June as investors were increasingly pouring money into safe haven assets such as precious metals to hedge against the risks associated with volatility in equity and currency markets. Stock markets in Europe remained under pressure from the European debt crisis, which intensified after Greece accepted a multi-billion rescue package from the EU and the *International Monetary Fund (IMF)* to avoid bankruptcy, which was followed by speculation that Portugal and Spain could be next.
Concerns over the health of the banking system in Europe subdued after last week’s stress test results showed that just 7 out of the 91 banks tested failed to show they would withstand another crisis. At the start of this week, Basel Committee on Banking Supervision said it would relax its liquidity and capital requirements in its draft Basel III reform, providing strong support for the banking sector. Banks* UBS (NYSE:UBS)* and *Deutsche Bank (NYSE:DB) *posted strong quarterly results to further bolster the banking shares.
In another key economic update, the Fed’s Beige Book survey of regional economic conditions revealed growth in 10 out of the 12 Federal Reserve districts, however, the growth rate was “modest,” while the housing market and manufacturing remained weak. Employment data was mixed, revealing an increase of 81,000 in continuing jobless claims to 4.56 million, while initial claims decreased by 11,000.
Friday’s data was mixed as while Q2 US GDP failed to match expectations with a decline to 2.4% instead of the projected 2.5% and New York ISM index fell to 58.4 in July from 69.3 in June, the University of Michigan consumer confidence index was revised upwards to 67.8 from a previous reading of 66.5 for July and the *Chicago PMI (purchasing managers index) *beat expectations with an improvement from 59.1 to 62.3 in July.
The markets were still lacking direction with the *Dow Jones* and* S&P 500* indexes in the US closing flat on Friday to post modest weekly gains, while the* FTSE 100* dropped 1% over the past five trading days.
Gold lost support at US$1,200/oz last month after *US CPI (consumer prices index) *declined for the third month in a row, hitting bullion’s appeal as an inflation hedge.
*Gold* last traded at US$1,181/oz. *Silver *and *platinum* climbed to US$17.97/oz and US$1,569/oz respectively.
Gold prices climbed at the end of the week, improving to US$1,180/oz after rising to US41,170/oz on Thursday. The yellow metal was recovering from the sharp falls it experienced this week as fears over Europe’s debt crisis and the slowdown of the economic recovery in the US were subdued by strong economic and corporate data released this week.
A survey by Bloomberg predicted an increase in gold prices next week, due to higher physical demand spurred by the currently low prices that dipped below US$1,160/oz at one point during the week.
Gold has been on the rise this year, hitting all time highs of US$1,265/oz in June as investors were increasingly pouring money into safe haven assets such as precious metals to hedge against the risks associated with volatility in equity and currency markets. Stock markets in Europe remained under pressure from the European debt crisis, which intensified after Greece accepted a multi-billion rescue package from the EU and the *International Monetary Fund (IMF)* to avoid bankruptcy, which was followed by speculation that Portugal and Spain could be next.
Concerns over the health of the banking system in Europe subdued after last week’s stress test results showed that just 7 out of the 91 banks tested failed to show they would withstand another crisis. At the start of this week, Basel Committee on Banking Supervision said it would relax its liquidity and capital requirements in its draft Basel III reform, providing strong support for the banking sector. Banks* UBS (NYSE:UBS)* and *Deutsche Bank (NYSE:DB) *posted strong quarterly results to further bolster the banking shares.
In another key economic update, the Fed’s Beige Book survey of regional economic conditions revealed growth in 10 out of the 12 Federal Reserve districts, however, the growth rate was “modest,” while the housing market and manufacturing remained weak. Employment data was mixed, revealing an increase of 81,000 in continuing jobless claims to 4.56 million, while initial claims decreased by 11,000.
Friday’s data was mixed as while Q2 US GDP failed to match expectations with a decline to 2.4% instead of the projected 2.5% and New York ISM index fell to 58.4 in July from 69.3 in June, the University of Michigan consumer confidence index was revised upwards to 67.8 from a previous reading of 66.5 for July and the *Chicago PMI (purchasing managers index) *beat expectations with an improvement from 59.1 to 62.3 in July.
The markets were still lacking direction with the *Dow Jones* and* S&P 500* indexes in the US closing flat on Friday to post modest weekly gains, while the* FTSE 100* dropped 1% over the past five trading days.
Gold lost support at US$1,200/oz last month after *US CPI (consumer prices index) *declined for the third month in a row, hitting bullion’s appeal as an inflation hedge.
*Gold* last traded at US$1,181/oz. *Silver *and *platinum* climbed to US$17.97/oz and US$1,569/oz respectively.
Gold miner *Randgold Resources (LON:RRS) *declined from 6,030 pence to 5,730 pence, while silver miner *Fresnillo (LON:FRES) *fell from 1,091 pence to 1,031 pence. Platinum miner *Lonmin (LON:LMI)* did better, rising from 1,530 pence to 1,570 pence.
Midcaps retreated. Gold producer *Petropavlovsk (LON:POG)* declined from 1,100 pence to 1,010 pence. Silver producer* Hochschild Mining (LON:HOC)* moved down from 310 pence to 289 pence and was flat at *Aquarius Platinum (LON:AQP)* 274 pence.
Small Cap News
*Frontier Mining (LON:FML)* has now begun continuous leaching operations at the Koskuduk deposit on the Naimanjal licence in northeast Kazakhstan, after completing its second gold pour, for 329oz of gold and 1,000oz of silver. The company plans to leach 500,000 tons of ore in 2010, it has already extracted 135,000 tons, and 75,000 tons is currently on the leach pads.
West Africa focused gold miner *Goldstone Resources (LON:GRL)* has completed an electromagnetic survey to find extensions to the Homase concession in Ghana and hired a contractor to conduct a drilling programme to test the possible depth extensions to the ore body.
*Patagonia Gold (LON:PGL)* has acquired the freehold land rights over the Estancia El Rincon in the Santa Cruz province of Argentina - a 6,700 hectare area which hosts the Lomada de Leiva heap leach gold project, on the La Paloma concession - for US$804,000. The company initially acquired the Lomada project in 2007, with the purchase of the Paloma concessions form* Barrick Gold (NYSE, TSX: ABX)*.
*KEFI Minerals (LON:KEFI) *told investors that non-executive deputy chairman Ian Plimer yesterday bought 1.6 million further shares in the company at 0.8p each, raising his holding to 3.6 million shares, or 1.3 percent of the capital.
*African Aura Mining (LON:AAAM, TSX-V:AUR)* has started a first phase 4,200 metre initial resource definition drilling programme at its wholly owned Nkout iron ore project in southern Cameroon after an airborne geophysical survey returned “encouraging results”, defining a major iron ore target.
*Chaarat Gold’s (LON:CGH) *Chinese investment partner, China Nonferrous Metals International Mining Co Ltd (CNMIM), has decided to subscribe for new shares worth £2m. Through the transaction, CNMIM will maintain its 19.9% equity stake in the company following the recent £3.85m equity placing and the share-based acquisition of Kryex.
*Medusa Mining (LON:MML, ASX:MML, TSX:MLL)* has promoted Peter Hepburn-Brown from his role as a non-exec director to a new position of executive director of operations.
Ambitious mining junior *Horizonte Minerals (LON:HZM)* this morning unveiled terms of a ‘transformational’ deal that could create one of biggest nickel projects in Brazil.
*Noventa (LON:NVTA)* told investors that tantalum recovery at the Marropino Mine in Mozambique, has increased steadily since the re-start and has been at a consistent 51% since the end of June 2010, which is a significant increase over historic levels. The mine re-started operations in April, after spending just under a year on care-and-maintenance.
*Kryso Resources (LON:KYS)* has secured a £10.99m investment from China Nonferrous Metals International Mining (CNMIM) in a conditional placing of 73.27m shares at 15p each. The proceeds will help fund the development, and further exploration, of the Pakrut gold project and further exploration at the Hukas nickel-copper project, both in Tajikistan.
*Vatukoula Gold Mines (LON:VGM) *has raised £7.4m through an equity placing, to fund a two year exploration programme focused on the wholly-owned Vatukoula gold mine and the special prospecting licenses covering the Tavua Cladera mining area in Fiji. Investors welcomed the news, with shares rising just over 5% on London’s AIM market.
*Gemfields (LON:GEM) *achieved the highest auction revenues to date from its latest event in London, raising US$7.5 million as prices per carat achieved soared 83% from the previous auction of higher quality material held in November. The group noted that demand for Zambian emeralds has increased, while operating costs at the flagship Kagem mine nearly halved.
In its quarterly operations report, *Finders Resources (LON:FND, ASX:FND)* noted a solid performance as it moves the Wetar copper project in Indonesia towards commercial production. During the second quarter to end-June 2010, the company completed upgrades to Wetar’s demonstration plant ahead of schedule.
Turkey and Ethiopia operating gold miner *Stratex International (LON:STI) *said that latest drilling results from its Oksut gold project in Turkey showed potential for high-tonnage, low-grade gold deposit at Ortacam zone and phase two was underway on the first of five drill targets.
*Red Rock Resources (LON:RRR)* updated on progress on its operations, noting that initial results from a helicopter electromagnetic survey at the Migori gold project in Kenya are expected by the end of August 2010.
Africa focused nickel and gold exploration and development junior *Nyota Minerals (LON:NYO, ASX:NYO)* reflected on its performance in the quarter to end-June 2010, which saw an increase in the resource at the company’s flagship Tulu Kapi gold project and a discovery of new high grade structure.
Philippines focused gold producer *Medusa Mining (ASX:MML, LON:MML, TSX:MLL)* reported a production of 25,012 oz (ounces) in the fourth quarter to end-June 2010, helping it to a yearly record of 89,679 oz with further exploration planned for this year to further increase the resources and boost output.
*London Mining PLC (LON:LOND)* said it has entered into a joint venture with am unspecified Chinese and Chilean based partner to take advantage of several iron ore opportunities in the Atacama region of northern Chile.
Broker Edison Investment Research has published a note on* Goldplat (LON:GDP)* in response to the company’s securing of the mining lease for its Kilimapesa Hill gold project in Kenya, leaving the issuance of a mining right number from the director of survey the only remaining formality on its way to commencing commercial production.
European Nickel *European Nickel (LON:ENK) *reported on the progress made during the quarter ending June 30 2010, which saw the completion of the merger with Rusina Mining NL.
Western Australia operating *Norseman Gold (LON:NGL, ASX: NGL) *reported higher production and realized gold prices at lower production costs during the fourth quarter to end-June 2010, which helped it post EBIT (earnings before interest and taxes) of A$0.8 million from its flagship Norseman gold project.
Copper and gold miner *EMED Mining (LON:EMED)* has moved closer to achieving its ambitious goal of restarting production from the Rio Tinto copper mine in Spain in 2011 during this quarter, reaching “significant milestones” in the permitting process and securing access to the grid.
Fresnillo's Lomelin Sees Demand for Silver Increasing
Source: Bloomberg
Aug. 3 (Bloomberg) -- Jaime Lomelin, chief executive officer at Fresnillo Plc, talks about the outlook for silver and gold. The world's third-largest silver producer said first-half profit rose 82 percent after output and prices of the precious metal incr
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