Monday, April 30, 2012

NGEx intersects 1,090 metres at 0.69% copper equivalent at los helados copper-gold porphyry project, Chile

NGEx Resources Inc. (TSX:NGQ) ("NGEx" or the "Company") is pleased to announce outstanding results from the first 7 holes drilled as part the ongoing 2012 exploration program at the Company's Los Helados copper-gold porphyry project located in Region III of Chile.
Highlights from the results reported today include: LHDH17A with 1,090m of 0.69% CuEq (0.51% Cu and 0.26 gpt Au); LHDH23A with 937m of 0.66% CuEq (0.47% Cu and 0.27 gpt Au); and LHDH28 with 746.6m of 0.66% CuEq (0.54% Cu and 0.19 gpt Au).


Holes LHDH17A, LHDH23A and LHDH25A are extensions of previously released 2011 holes (LHDH17, LHDH23 and LHDH25) that bottomed in mineralization and were re-entered and deepened this year. Holes LHDH26, LHDH28 and LHDH29 are step-out holes to the west of the deposit and hole LHDH30 is a step-out to the north. Please see drill results table below and attached section and drill hole location map.


To view the section and drill hole map please visit the following link: http://media3.marketwire.com/docs/NGQ427I.pdf.


These new drill holes have expanded the Los Helados deposit to the west and north and demonstrate that the copper-gold mineralization extends from surface to a vertical depth of more than 1,000 metres. All holes in this release were terminated due to depth capacity of the drills and ended in mineralization.


Wojtek Wodzicki, President and CEO of the Company, commented, "We are very pleased with the initial results from this year's drill program at Los Helados which have significantly extended the mineralization both laterally and to depth. Including the drill holes released today copper gold mineralization has now been intersected over an area of approximately 1000 metres east-west by 750 metres north-south and over a vertical interval of approximately 1000 metres. The mineralization remains open in all directions and at depth and we look forward to continued expansion success. Copper-gold intercepts of over 1000 metres are extremely rare and the results announced today are highly encouraging and confirm Los Helados as a major copper gold discovery. We have an aggressive program underway with 11 rigs currently drilling on the project. We are very excited about today's results and in particular what it means in terms of the big picture as Los Helados is part of an extensive land package that also includes the Company's Josemaria and File del Sol projects copper-gold projects. Taken together we feel that these projects offer our investors exposure to an emerging deposit cluster that continues to deliver outstanding exploration results and has the potential to rank among the most significant in this prolific copper-gold belt."


The results reported today are from the first 7 holes from this year's drill program representing 6,708 metres of core drilling.
Source:
Marketwire

Wescan Goldfields Inc. announces year end results

Wescan Goldfields Inc. ("Wescan" or the "Company") reports the audited results of Wescan's operations for the year ended December 31, 2011 have been filed and may be viewed at www.sedar.com. The financial statements for the year ended December 31, 2011 are the Company's first annual consolidated financial statements prepared in accordance with International Financial Reporting Standard ("IFRS") issued by the International Accounting Standards Board and interpretations of the International Financial Reporting Interpretations Committee.

During the first part of 2011, Wescan focused on reviewing historical drill, geological and geotechnical data in order to plan the 2011 exploration activities on its portfolio of gold and coal properties. Based on this review, the Company undertook the raising of sufficient capital during the first quarter in order to finance the planned 2011 exploration programs. Following the completion of a $1.6 million financing on February 24, 2011, Wescan announced certain exploration programs for the year. The programs commenced in June of 2011 on the Company's portfolio of gold properties in the La Ronge Gold Belt innorthern Saskatchewan. The results and significant intercepts for the Jojay and
Jasper exploration program were released during the fourth quarter of 2011 (see Wescan News Releases dated November 18, 2011 and December 8, 2011,respectively). The Company raised an additional $1.0 million in late December of 2011 to continue the exploration of its gold properties, with the primary focus being the Jojay property.

A review was also conducted of all regional geophysical and geological data relating to the Company's coal exploration properties located near Hudson Bay and Pinehouse Lake, Saskatchewan. Based on this review, and also factoring in the additional expenses that would be necessary to convert the coal permits to more expensive leases during 2011 and 2012, the Company determined that its financial resources would be better served pursuing its gold properties. As a result, the Company allowed all coal permits to lapse.Although management considers the assumptions contained in forward-looking statements to be reasonable based on information currently available to it, those assumptions may prove to be incorrect. When making decisions with respect to Wescan, investors and others should not place undue reliance on these statements and should carefully consider the foregoing factors and other uncertainties and potential events. Unless required by applicable securities law, Wescan does not undertake to update any forward-looking statement that may
be made.

"Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release."

SOURCE Wescan Goldfields Inc.

Supreme court demands environmental reports used to approve Pascua Lama

The Argentine supreme court has ordered the national and the San Juan provincial governments to submit the environmental reports that were used to approve Canadian miner Barrick Gold's (NYSE: ABX) bi-national Pascua Lama gold-silver project, a source from the court confirmed to BNamericas.

The request is the result of a lawsuit submitted by a local community that is accusing the company of contamination on the Argentine side of the project.

Pascua Lama straddles the border between Argentina and Chile, with most of the designed open pit mine located on the Chilean side and the processing plants on the Argentine side.

The San Juan provincial government has been given 10 days to comply with the court order and submit the complete file of the environmental evaluation approval process.

The national government has also been given 10 days to inform the court if the environmental impact studies, set as a condition for its development as part of the agreement between Chile and Argentina to jointly host the project, were actually carried out.

Pascua Lama, currently under construction, involves pre-production capital cost of US$4.7bn-5bn, up from a previous estimate of US$3.3bn-3.6bn, as a result of inflationary pressures.

The project remains on track to start operating in mid-2013 and average annual gold production is put at 800,000-850,000oz in the first five years at negative total cash costs of US$225-US$275/oz.

Rio Tinto reviews options for future of its diamond business

Rio Tinto has begun a strategic review of its diamond business that will include exploring a range of options for potential divestment of its diamond interests.

Rio Tinto operates three diamond mines, Argyle in Australia (100 per cent interest), Diavik in Canada (60 per cent interest), and Murowa in Zimbabwe (78 per cent interest), as well as Bunder, an advanced diamonds project in India (100 per cent interest).

Harry Kenyon-Slaney, chief executive Diamonds & Minerals, said “We regularly review our businesses to ensure they remain aligned with Rio Tinto’s strategy of operating large, long-life, expandable assets.

“The diamonds market outlook is very positive, with demand growing strongly and lack of new discoveries limiting supply. We have a valuable, high quality diamonds business, but given its scale we are reviewing whether we can create more value through a different ownership structure.

“This process may take some time. We’re committed to keeping stakeholders informed about any key developments, and in the meantime are reassuring employees and the governments in the states and countries where we operate that it is very much business as usual.”
About Rio Tinto Diamonds

Rio Tinto operates a fully integrated diamonds business from exploration through to sales and marketing. It is one of the world’s major diamond producers through its 100 per cent control of the Argyle mine in Australia, 60 per cent of the Diavik mine in Canada, a 78 per cent interest in the Murowa mine in Zimbabwe. These three mines allow Rio Tinto to produce the full range of diamonds for all market segments. Rio Tinto also has an advanced diamond project, Bunder, in India.

Rio Tinto’s share of the production from its three operating diamond mines is sold through its sales and marketing headquarters in Antwerp, with representative offices in Mumbai, Hong Kong and New York. It also operates a niche cutting and polishing factory in Perth for the rare pink diamonds from its Argyle mine. Rio Tinto is a leading supporter of the Kimberley Process as well as a founding member of Responsible Jewellery Council. Website:

www.riotintodiamonds.com.

Source: Rio Tinto

Strait Gold provides update on projects in Peru

Strait Gold (TSX VENTURE:SRD) is pleased to provide this overview of the Company's projects in Peru. The Company has also filed on SEDAR its financial statements for 2011 along with management's discussion and analysis of those statements and its 2012 Annual Information Form. The statements, MD&A and AIF are also available at www.straitgold.com.

Strait is involved in four mineral exploration projects, all in Peru: Alicia, Caribe, Letra Rumi South and Culebrilla. The Company's main focus in 2011 was Alicia which has demonstrated potential to host a porphyry-style copper-gold deposit.

Alicia Project

The Alicia property is approximately 500 km southeast of Lima within an emerging copper belt that hosts a number of important deposits including Xstrata's Las Bambas, First Quantum Minerals' Haquira and HudBay Mining's Constancia. Strait Gold holds a 55% interest in Alicia and, having met its expenditure requirements, the Company is in a position to increase that interest to 100% by issuing 400,000 shares to the vendor any time before February 19, 2013.

Work is advancing well at Alicia. Detailed mapping of alteration and vein/stockwork is underway in the main Alicia intrusive and will be followed by detailed rock sampling along proposed drill sections in preparation for an upcoming 6,000-metre, 15-hole drill program.

An NI 43-101 Technical Report was filed in April, 2011, recommending further work, including 5,000 metres of diamond drilling. The Company proceeded with additional surface sampling and geophysical surveys throughout the balance of 2011 in preparation for additional drilling.

In December of 2011 the Company signed an option agreement with a subsidiary of Teck Resources Limited (the "Teck Agreement") giving the subsidiary the right to earn up to a 75% interest in the property by, among other things, (a) spending $30 million on exploration or (b) spending $10 million on exploration and delivering a pre-feasibility study. A pre-condition of the agreement required Teck to make a $600,000 equity investment into the Company which was done at a 100% premium to the Company's then-current share price. As part of the Teck Agreement, Teck's subsidiary is now funding a mandatory $2-million exploration program at Alicia in 2012 and paying the Company a 10% administration fee to manage the program.

A community agreement, which is required prior to drilling in Peru, was recently renewed between Strait Gold and the community until the end of February, 2014. Prior to entering into the Teck Agreement the Company applied to the Ministry of Energy and Mines for a permit to conduct up to 10,000 metres of core drilling which was approved by the Ministry in February, 2012. Subsequent to entering into the Teck Agreement, and in consultation with Teck, the Company revised its 2012 drill plan. The Company is preparing an application to the Ministry to modify the existing drill permit accordingly and will set up informative meetings with the community to comply with the legal regulations derived from the modification.

With 2012's $2-million exploration program at Alicia fully funded by Teck, the Company plans to allocate its financial resources to its Caribe, Letra Rumi South and Culebrilla properties.

Caribe Project

The Caribe copper-molybdenum property was optioned from a private Peruvian corporation in early 2012. Strait Gold can earn a 100% interest in the 200-hectare property over three years. Caribe is in the Region of Apurimac, approximately 80 km west of Alicia and within the same metallogenic belt.

Due diligence surface exploration was conducted by the Company, particularly in an area where informal mining is being carried out by local residents, but no systematic exploration program has been mounted yet. Initial discussions with the community, including informal miners, leads the Company to believe it will be able to reach a community agreement, and the signing of such a community agreement will then become the anniversary date of the three-year option agreement.

Porphyry copper-molybdenum mineralization at Caribe is associated with quartz porphyrytic intrusives that are extensively brecciated. Typical porphyry-style alteration is present including secondary biotite (potassic) and intense argillic alteration. Secondary enrichment zones composed of covelite-chalcocite-bornite and pyrite locally make up more than 10% of the rock. Historical assays of nine samples returned up to 4.5% copper, greater than 100 grams per tonne (g/t) silver and greater than 1% zinc in the secondary enrichment zone and up to 0.82% copper and 0.08% molybdenum in the primary sulphide zone. The porphyry system extends across the property in a northwest-southeast direction for more than 1,000 metres and is approximately 700 metres wide.

Recent reconnaissance mapping and sampling was conducted by Strait Gold geologists as part of the Company's due diligence. A total of 11 composite chip samples from panels of 1-4 square metres were taken intermittently over approximately 500 metres. Highlights include: one sample returning 5.38% copper, 1.405% molybdenum, 0.334 g/t gold and 63 g/t silver and another sample returning 3.88% copper, 1.055% molybdenum, 0.387 g/t gold and 31.8 g/t silver. Five of the 11 samples returned greater than 3.3% copper.

Under Peruvian law, small-scale or informal mining is governed by an environmental impact statement regime that is more lenient than that applicable to mid-scale and large-scale mining. Nevertheless, the Company intends to conduct exploration adhering to the highest Peruvian and international standards.

Strait Gold can earn its interest in Caribe by making option payments over a three-year period commencing upon the registration of a community agreement with Peruvian authorities (the "Anniversary Date") as follows: a non-refundable payment of US$20,000 to secure the option (paid); US$40,000 on the Anniversary Date; US$40,000 six months after the Anniversary Date; US$100,000 one year after the Anniversary Date; US$400,000 two years after the Anniversary Date; and a final US$600,000 three years after the Anniversary Date. The Anniversary Date will not be established until the Company negotiates and signs an agreement with the community. Please refer to the Press Release dated February 29, 2012.

There are no work commitments and no royalties and Strait Gold will not earn any interest until the final payment is made.

The Company also holds a 100% interest in both the 900-hectare Letra Rumi South base metals property and the adjoining 2,200-hectare Culebrilla precious metals property. Both are in the Region of Ancash approximately 250 km north of Lima and both are subject to the same 3% NSR royalty, two-thirds of which can be purchased for US$1-million per third.

Letra Rumi South Project

The Letra Rumi South concession was staked by the Company in 2007 to examine two gossan outcrops: Zone 1, which measures approximately 250x135 metres, and Zone 2, which measures approximately 315x110 metres. Ground geophysics included an induced polarization (IP) survey that indicated the presence of two strong chargeability anomalies corresponding with the two gossans.

Letra-Rumi South is drill ready, but work has been limited since 2009 when the Company began to focus on the Alicia Project.

Culebrilla Project

At Culebrilla, the Company intends a sampling program focusing on the Letra Rumi North area where previous work identified two copper-silver-gold-bearing quartz veins. Channel sampling and mapping of the entire length of the two veins is planned.
Mineralized showings in this area are polymetallic in nature. The southern vein is continuous over more than one kilometre in strike length and sampling along a portion of this vein returned values of 8.4% copper, 304 g/t silver and 0.8 g/t gold in one grab sample and 1.3% copper, 73.4 g/t silver and 0.7 g/t gold in a 1.3-metre chip sample.

Mineralized outcrops within the northern vein zone are discontinuous but may connect to form a single continuous vein at depth. Sample highlights from the northern vein include one grab sample that returned 847 g/t silver, 1.9 g/t gold, 1.6% copper and 0.3% lead and one 0.6-metre chip sample that returned 58.2 g/t silver, 0.5 g/t gold and 1.3% copper.

Newmont takes independent report on Conga EIS seriously

Newmont Mining Corp has said it is taking the report of the independent panel appointed to evaluate the environmental impact statement of its Minas Conga gold project in northern Peru seriously and is assessing the changes suggested by the panel.
The international panel’s report concluded that Conga’s environmental impact assessment “meets all the technical requirements for its approval” and conformed to both Peruvian and international standards, Newmont spokesman Omar Jabar wrote in an e-mail sent to Mining Journal.

The verdict of the report’s 258 pages boiled down to calling on the Newmont-Buenaventura joint venture to spare two of the four high mountain lakes that the Conga gold project will destroy and to nearly double the size of the four fresh-water reservoirs that will be built to provide a year-round water supply to area farmers and residents.
“We have agreed to President [Ollanta] Humala’s request to conduct a technical and economic analysis of potential alternatives for the Chica and Azul lakes,” said Mr Jabar. “The president’s request regarding Chica and Azul was based on the panel’s report, which suggested alternatives for the lakes be evaluated to see if they would be technically and economically viable.

“If alternatives for the lakes were not viable, the panel’s report suggested we explore other environmental mitigation and/or compensation,” he said, adding that the plans to double current water storage capacity in the lakes would allow for a year-round water supply for downstream users, “something they don’t currently have as a result of the dry season”.
The independent report was ordered by the president in February and delivered to the Peruvian government last week. The authors of the report are engineers Luis Lopez Garcia and Rafael Fernandez Rubio of Spain, and Portuguese geologist Jose Martins Carvalho.

Mr Fernandez Rubio said the report is the result of four trips to Cajamarca as well as discussions with experts that could provide information. “We have acted independently. It is not a political document,” he said.

The report also said the water in the four highland lakes is not fit for human consumption and called for more rigorous and complete methodologies and baseline measurements in the determination of the hydraulic flows of the mountainous area where the US$4.8 billion Minas Conga project will be located.

The report was embraced by Mr Humala, who stated in a nationally broadcast speech that the Conga project will be subject to “new conditions”, which include the creation of 10,000 jobs as well as the expansion of the four new reservoirs. He also said the company must promise to invest in schools, irrigation canals and drinking water infrastructure in Cajamarca, a farming region in the northern Andes, and must not dry up highland lakes.

The principal leaders of the opposition are Cajamarca regional president Gregorio Santos and environmental leader Wilfredo Saavedra, who maintain that the Conga project is not viable and have dismissed the report’s recommendations.

Read more Conga Project :

http://www.miningnewstoday.net/2012/04/peru-humala-says-newmont-mine-project.html

http://www.miningnewstoday.net/2012/04/minas-conga-3rd-party-technical-water.html

http://www.miningnewstoday.net/2012/04/inal-report-on-newmonts-48-billion.html

http://www.miningnewstoday.net/2012/02/peru-international-experts-appointed-to.html

Friday, April 27, 2012

The Gold is in a bubble?

Felix Salmon, blogger for Reuters and gold sceptic, decided to find out if gold really is currency and went shopping with one ounce of bullion in New York City.
“We are going to find out if I can spend this $52.86 on something real.”
Salmon was turned down after trying to purchase a case of beer, stamps and a toy. (One ounce of gold, on first glance, really doesn’t look like much of anything so it could partly explain people’s hesitancy.) On his fourth try Salmon was finally able to purchase some lobster rolls.
The challenge was a result of a debate that Salmon had with the Economist’s Matthew Bishop, author of In Gold We Trust?
“As the gold price goes up, it tells us we should worry about why it is going up, and it tells you something about the value of paper currencies. And what it tells you is that governments are taking a lot of risk with our currencies right now,” said Bishop during his debate with Salmon.
Joe Weisenthal at Business Insider says the video contains proof that gold is in a bubble:

Video:

Newmont Mining profit rises on higher gold prices

Newmont Mining Corp, the world's second-largest gold producer, said its quarterly profit rose as gold prices outpaced higher labor and power costs at its mines.

First-quarter earnings were $561-million, or $1.13 per share, compared with $514-million, or $1.04 per share in the year-ago quarter.

Revenue rose to $2.68-billion.

During the quarter, spot gold gained 8% -- from $1 563.80/oz to $1 688.29/oz on March 30. Copper climbed 11 percent, with benchmark May COMEX futures moving up from $3.44/lb to $3.82.

In February, Newmont said it expected a rise in costs for gold and copper in 2012, mainly due to higher labor and power prices and estimated lower production at a mine in Indonesia.

The Denver-based company also operates mines in Ghana, Peru, Australia and Nevada.

The company said gold production in 2012 was expected to be about 5 million ounces to 5.2 million ounces and copper production 150-million pounds to 170-million pounds.

It said 2012 costs applicable to sales for gold are expected to be between $625 and $675/oz, and copper between $1.80 and $2.20/lb. They were $591 per ounce and $1.26/lb respectively in 2011.

Newmont said the outlook also reflected lower expected production at its Batu Hijau mine in Indonesia, where the company is processing lower grade stockpiles until late 2013.

CST sells Mina Justa for US$505m

Hong Kong-based copper producer CST Mining Group Ltd said it would sell a 70% stake in the Mina Justa copper project to Peru-based base-metals firm Minsur SA, for a total US$505 million.

Located in southern Peru, Mina Justa has been estimated to hold copper reserves of 163Mt at 0.8%, and annual production was projected at 110,000t/y over 11.5 years, comprising 50,000t/y as cathode and 60,000t/y in concentrates.

The project was the subject of a US$475 million offer from Glencore last December, but the agreement was terminated after the commodities giant said that conditions of the deal were not met.

CST and Minsur said that details of the transaction would be released in due course, with Minsur to place a US$50.5 million deposit in an escrow account during the transaction.

Guyana Goldfields Inc. announces closing of private placement to raise $31,693,010

 

Guyana Goldfields Inc. ("GGI" or "the Company") (TSX: GUY) is pleased to announce that it has closed its previously announced non-brokered private placement (the "Offering") pursuant to which it has issued an aggregate of 10,891,069 common shares ("Shares") at a price of C$2.91 per Share to raise aggregate gross proceeds of approximately C$31,693,010.
The Baupost Group LLC ("Baupost"), a Boston, Massachusetts based institutional investor, purchased 7,891,069 Shares in the Offering for approximately $22,963,010 in aggregate proceeds. Upon the closing of the Offering, Baupost holds approximately 18.5% of the outstanding Shares, and has the right to appoint an independent director to the Company's Board of Directors.

In addition, funds managed by Franklin Advisors, Inc. ("Franklin") purchased an aggregate of 2,500,000 Shares in the Offering, and Mr. Patrick Sheridan who serves as the Chief Executive Officer and interim President and Chief Operating Officer of Guyana purchased an aggregate of 500,000 Shares in the Offering. Following the closing, Franklin and Mr. Sheridan hold approximately 11.2% and 5.8% of all of the issued and outstanding Shares, respectively.
The securities issued in connection with the Offering have a hold period expiring on August 25, 2012. The net proceeds of the Offering will be used towards the strategic plans for 2012 outlined in the Company's press release of April 11, 2012, and to continue exploration of the Company's portfolio of gold exploration properties in Guyana, South America. The Offering remains subject to the final approval of the Toronto Stock Exchange. The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States unless registered under the Act or unless an exemption from registration is available.

About Guyana Goldfields Inc.

Guyana Goldfields Inc. is a Canadian based company, primarily focused on the exploration and development of gold deposits in Guyana, South America where the Company has operated since 1996. The Aurora Gold Project in Guyana has a current measured and indicated resource of 5.71 million ounces gold (47.040 million tonnes at a grade of 3.83 g/t) (see press release dated September 9, 2011). The Company plans to issue a revised Aurora resource estimate mid-2012 and a new FS by year-end. For further details regarding the Aurora Gold Project, reference should be made to the technical report for the Aurora Gold Project on SEDAR at www.sedar.com and on the Company website at www.guygold.com.
At the Aranka Properties, the Company has discovered a deposit at Sulphur Rose and N-1 and other highly prospective targets within a 5-km radius have been identified for drill testing in 2012.

Forwarding-Looking Information
This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to the estimation of mineral resources. Often, but not always, forward-looking statements can be identified by the use of words and phrases such as "plans," "expects," "is expected," "budget," "scheduled," "estimates," "forecasts," "intends," "anticipates," or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved.
Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and are based on various assumptions.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of GGI to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the final findings set forth in the Feasibility Study , general business, economic, competitive, political and social uncertainties; the actual results of exploration activities; changes in project parameters as plans continue to be refined; accidents, labour disputes and other risks of the mining industry; political instability; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in GGI's annual information form. Although GGI has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking statements contained herein are made as of the date of this news release and GGI disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results, except as may be required by applicable securities laws. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward looking statements.

SOURCE Guyana Goldfields Inc.

We need to talk about how rare earth prices are imploding

Platts reports Thursday China will start forcing rare earth producers out of business if they don’t qualify for new value-added tax permits being allocated from May 1.

Officially it’s China’s latest bid to curb resource plundering, dangerous artisanal mining and widespread pollution.

China produces over 95% of the world’s REEs used in a variety of industries including green technology, defence systems and consumer electronics.

Platts quotes one Chinese industry source as saying: “We believe it is a start that China will undertake to regulate the country’s rare earth production, however there is a long way to go.”

Cleaning up the notoriously dirty rare earth business in China is laudable, but the latest regulations are probably aimed more at trying to stop chronic overproduction of REEs in Sichuan and Inner Mongolia, which have recently led to an implosion in export prices.

Official output quotas in place since 2007 are readily exceeded by 40% – 50% each year. While prices have been moderating since the record levels of Q3 2011, in 2012 prices for many rare earths are close to collapsing.

Abundant, less valuable REEs such as lanthanum have experienced the sharpest reversals.

Lanthanum oxide – used in ceramics and fuel catalysts – for example rose from a price of just $8.71/kg in 2008 to $117/kg in the third quarter last. At the start of 2012 it had pulled back to $66/kg.

Now it has halved again – on Monday a kilogram of lanthanum could be picked up for $26. That’s a 77% collapse in less than nine months. And consider that inside China that same kilogram costs half $13.15.

When export prices of lanthanum were at record highs of $117/kg domestic Chinese prices were less than $20. That differential has gone from almost 10 times to less than double.

This price behaviour can be seen across the board.

Cerium oxide used to polish TV screens and lenses is now also trading at $26 from all-time highs of $118 in the September quarter last year and just under $60 in Q4. The price for cerium oxide was $4.56 in 2008.

Heavy and scarcer REEs have generally held up better, but many have experienced price declines of 50% or more.

Neodymium oxide used in windmills have seen a dramatic slump – from $338/kg in Q3 2011 to $120/kg as at 23 April.

A hybrid vehicle ingredient, dysprosium rocketed from a price of $118.49/kg in 2008 to $921.20/kg in the third quarter of 2011 and $2,262/kg by September last year.

Dysprosium, also used in conjunction with vanadium and other elements in making laser materials, has now given up more than $1,000 per kilogram and went for $1,170 this week. The price is also now much more in line with domestic Chinese prices of $729/kg.

The reversal in europium oxide – the priciest REE which is used in medical imaging and the nuclear and defence industries – has been most startling.

The price of europium increased almost 10-fold from $492 in 2009 to average $4,900 in the third quarter of 2011. Three months later it dropped $1,100 in price and is now worth $2,420 a kilogram. Chinese domestic europium is another $1,000 cheaper at $1,315/kg.

While producers of flat screen TVs, hospital scanners, jet fighter electronics and sophisticated laser systems must be rejoicing rare earth mining heavyweights like Molycorp and juniors like Quest and Avalon cannot be too thrilled by events.

Thursday, April 26, 2012

Newmont Announces First Quarter Net Income from Continuing Operations Up 9% to $1.13 per Share

DENVER, April 26, 2012 /PRNewswire/ – Newmont Mining Corporation (NEM) (“Newmont” or the “Company”) today reported attributable net income from continuing operations of $561 million or $1.13 per basic share ($1.11 per share on a fully diluted basis), up 9% from $514 million, or $1.04 per basic share in the first quarter 2011. Adjusted net income[1] was $578 million or $1.17 per basic share in first quarter 2012, compared with $513 million, or $1.04 per share for the prior year quarter.
First Quarter Highlights:
  • Consolidated revenue of $2.7 billion, an increase of 9% from the prior year quarter;
  • Average realized gold and copper price of $1,684 per ounce and $4.01 per pound, up 22% and no change, respectively, from the prior year quarter;
  • Attributable gold and copper production of 1.3 million ounces and 35 million pounds, down 2% and 35%, respectively, from the prior year quarter;
  • Gold and copper costs applicable to sales (“CAS”) of $620 per ounce and $1.98 per pound, up 11% and up 78%, respectively, from the prior year quarter;
  • Cash flow from continuing operations of $613 million, down 38% from the prior year quarter;
  • Second quarter gold price-linked dividend of $0.35 per share, an increase of 75% from the prior year quarter; and
  • Maintaining 2012 Company-wide outlook for production, CAS and capital expenditures.
“We are pleased to announce another quarterly increase in our net income from continuing operations, up 9% over the prior year quarter to $561 million, or $1.13 per share. We also saw gold operating margin expansion of 29%, which outpaced the 22% increase in the average realized gold price from the prior year,” said Richard O’Brien, President and CEO. “During the first quarter, we continued to invest in the development of our Akyem project in Ghana, which remains on schedule for initial production in 2014. Regarding Conga in Peru, the project continues to be suspended pending further analysis of the economic and technical impacts from the recently released report from the independent panel,” added Mr. O’Brien.
[1] Non-GAAP measure. See page 10 for reconciliation.
Newmont is maintaining its previously announced 2012 outlook for attributable gold and copper production of 5.0 to 5.2 million ounces and 150 to 170 million pounds at CAS of between $625 and $675 per ounce (on a co-product basis) and $1.80 and $2.20 per pound, respectively.
Newmont is also maintaining its 2012 attributable capital expenditure outlook of $3.0 to $3.3 billion, or $4.0 to $4.3 billion on a consolidated basis. However, this estimate assumes the development of the Conga project in Peru proceeds as anticipated in connection with our original 2012 outlook provided in January 2012. As previously disclosed, development of the Conga project was temporarily suspended in November 2011 and recommencement and future development remains subject to certain risks, including political and social risks, and uncertainties, including those relating to the Environmental Impact Assessment (“EIA”) review. The Conga project’s EIA, which was previously approved by the central government of Peru in October 2010 after an extensive public engagement process, was subject to a review by independent experts during the first quarter at the request of the central government. The results of the independent review were released last week and confirmed that the reviewed sections of the EIA met Peruvian and international standards. The Company is currently in the process of evaluating the recommendations contained in the independent report, and additional recommendations from the central government related to the report, to assess the impact on the project economics. The Company will reevaluate its capital expenditure outlook after completing that evaluation process and when the development schedule of Conga is more clearly defined. Should the Company be unable to continue with the development of Conga, the Company may reprioritize and reallocate capital to other development alternatives in Nevada, Australia, Ghana and Indonesia.

As previously announced, Newmont’s Board of Directors approved a second quarter 2012 gold price-linked dividend of $0.35 per share[2] based on the Company’s average realized gold price of $1,684 per ounce for the first quarter of 2012, an increase of 75% over the $0.20 per share dividend paid in the second quarter of 2011.
Operations

North America
Nevada – Attributable gold production in Nevada was 435,000 ounces at CAS of $617 per ounce during the first quarter. Gold production was consistent with the prior year quarter due to higher grade ore mined as Gold Quarry resumed production, offset by lower underground ore grade mined at Leeville and Midas.
Costs applicable to sales per ounce decreased 4% as higher underground mining and milling costs were more than offset by an inventory build in 2012 compared to a drawdown of inventory in 2011.
The Company continues to expect 2012 attributable gold production from Nevada of approximately 1.725 to 1.8 million ounces at CAS of between $575 and $625 per ounce.
La Herradura – Attributable gold production at La Herradura in Mexico was 54,000 ounces at CAS of $581 per ounce during the first quarter. Gold production increased 10% due to higher leach placement at Soledad-Dipolos and first production from the Noche Buena pit. CAS increased 49% from the prior year quarter due to higher employee profit sharing costs and Noche Buena commencing production.
The Company continues to expect 2012 attributable gold production from La Herradura of approximately 200,000 to 240,000 ounces at CAS of between $460 and $510 per ounce.

South America
Yanacocha – Attributable gold production at Yanacocha in Peru was 188,000 ounces at CAS of $458 per ounce during the first quarter. Gold production increased 27% from the prior year quarter due to higher mill throughput, recovery and grade, partly offset by lower leach production from La Quinua, Carachugo and Yanacocha. CAS per ounce decreased 21% from the prior year quarter due to higher production, partially offset by higher labor, diesel, and workers’ participation and lower by-product credits.
[2] Payable on June 28, 2012 to shareholders of record as of June 12, 2012.
The Company continues to expect 2012 attributable gold production from Yanacocha of approximately 650,000 to 700,000 ounces at CAS of between $480 and $530 per ounce.
La Zanja – Attributable gold production during the first quarter at La Zanja in Peru was approximately 13,000 ounces.
The Company continues to expect 2012 attributable gold production from La Zanja of approximately 40,000 to 50,000 ounces.

Asia Pacific
Boddington – Attributable gold and copper production during the first quarter at Boddington in Australia was 162,000 ounces and 14 million pounds, respectively, at CAS of $782 per ounce and $1.94 per pound, respectively. Gold ounces and copper pounds produced were consistent with the prior year quarter as 17% higher throughput was offset by 15% lower grade and 2% lower recovery. Gold CAS increased 31% due to processing lower grade ore, higher milling and mining costs, a higher proportion of costs allocated to gold, and a stronger Australian dollar. Costs applicable to sales per pound decreased 11% mainly due to lower costs allocated to copper.
The Company continues to expect 2012 attributable gold production of approximately 750,000 to 800,000 ounces at CAS of between $800 and $850 per ounce and attributable copper production of 70 to 80 million pounds at CAS of between $2.00 and $2.25 per pound.
Batu Hijau – Attributable gold ounces and copper pounds produced during the first quarter at Batu Hijau in Indonesia were 11,000 ounces and 21 million pounds, respectively, at costs applicable to sales of $913 per ounce and $2.00 per pound, respectively. Gold and copper production decreased 76% and 49%, respectively, due to lower throughput, grade and recovery as a result of processing lower grade stockpiled material as Phase 6 waste stripping continues. Costs applicable to sales per ounce and per pound increased 184% and 108%, respectively, due to lower production, higher labor and diesel costs, and increased waste stripping costs.
 The Company continues to expect 2012 attributable gold production of approximately 45,000 to 55,000 ounces at CAS of between $800 and $850 per ounce and attributable copper production to be approximately 80 to 90 million pounds at CAS of between $1.80 and $2.20 per pound.
Other Australia/New Zealand – Attributable gold production during the first quarter was 265,000 ounces at costs applicable to sales of $757 per ounce. Attributable gold ounces produced decreased 11% due to a planned mill shutdown at Waihi, mill maintenance at Kalgoorlie and a build-up of in-process inventory at Jundee and Kalgoorlie, partly offset by higher grade at Tanami. Costs applicable to sales per ounce increased 35% primarily due to lower production, a stronger Australian dollar, lower by-product credits, and higher diesel and royalty costs.
The Company continues to expect 2012 attributable gold production of approximately 980 to 1.03 million ounces at CAS of between $810 and $860 per ounce.

Africa
Ahafo – Attributable gold production during the first quarter at Ahafo in Ghana was 175,000 ounces at CAS of $568 per ounce. Gold production decreased 6% from the prior year quarter due to lower mill throughput and grade, partially offset by a reduction of in-process inventory and higher recovery. CAS per ounce increased 26% from the prior year quarter due to lower production and higher labor, diesel, and royalty costs.
The Company continues to expect 2012 attributable gold production of approximately 570,000 to 600,000 ounces at CAS of between $500 and $550 per ounce.

Capital Update
Consolidated capital expenditures were $720 million during the first quarter. Newmont is maintaining its 2012 attributable capital expenditure outlook of $3.0 to $3.3 billion, or $4.0 to $4.3 billion on a consolidated basis. Capital spending through the first quarter of 2012 has been lower than expected across the portfolio, due to temporary suspension of development at Conga, but is expected to increase throughout the year. For the remainder of the year, 60% of 2012 consolidated capital expenditures are expected to be associated with major project initiatives, assuming the development of the Conga project in Peru proceeds as originally anticipated, while the remaining 40% is expected to be sustaining capital.

Red Lake troubles cost Goldcorp production but revenues still up 11%

Lower ore grades at its flagship Red Lake Mine in Ontario did not prevent Goldcorp (TSX:G) from achieving a $479 million profit in the first quarter.

Despite producing and selling less gold than the first three months of last year, the world’s second biggest gold miner posted revenues of $1.3 billion, an 11% increase from the first quarter of 2011. Silver production was up by half a million ounces compared to the same period last year.

Explaining the lower gold production (524,700 oz vs 637,000 oz in Q1 2011), Goldcorp CEO Chuck Jeannes said “Solid operating results throughout most of our mine portfolio were offset by a challenging first quarter at Red Lake.”

“Adverse ground conditions at Red Lake delayed the development of new mining faces in the High Grade Zone which, taken together with lower grade in other areas of the mine, led to our slow start to 2012.”

Gold production at the mine fell to 114,200 ounces compared to 186,100 oz in the first three months of 2011. Produced gold was also down at the Musselwhite mine, Los Filos, El Sauzal, Marlin, and Alumbrera, but up at the Wharf mine, Marigold, Peñasquito and Porcupine.

The company with mines and exploration projects in Canada, US, Mexico, Guatemala and Argentina said it is targetting 2.6 million ounces of gold production in 2012 at cash costs of $250-$275 per ounce.

Goldcorp stock rose 1.35% to close at $40.40 on Wednesday, clawing back some of the value lost earlier in the week when G closed down 3.3% and nearing the 52-week low of $39.12.

Investors take a $1 billion chunk out of Potashcorp after earnings drop 26%

Potash Corporation of Saskatchewan (TSX:POT) dropped 3.4% when markets opened on Thursday, after revising its earnings guidance for the year and announcing a 26% drop in earnings.

The world’s number one producer of potash revised its full-year 2012 earnings guidance to $3.20–$3.60 per share, down from $3.40 to $4.00 before and said quarterly EBITDA earnings crashed from $1.1 billion last year to $813 million.

In lunchtime trade the miner had recovered somewhat, trading down 2.8% at $43.02 on the Toronto big board. The mining sector was generally flat on the day with the TSX S&P Global Mining index giving up 0.3%

Potashcorp is still showing 2012 gains – it is up 4.4% year to date, giving it a value of $27 billion on the TSX.

The company expects a better second part of the year saying demand “took longer than expected to emerge,” but “fertilizer buyers are now fully engaged.”

Potashcorp forecasts total global potash demand of roughly 53–56 million tonnes this and expect its sales volumes for the year to be in the range of 8.8–9.2 million tonnes.

Need a mining job? Head to Ecuador

Ecuador needs at least 300 mining engineers and geologists in the near future to be able to deliver on its recent mining contracts, but only about 40 such professionals graduate annually from six universities that offer those programs, according to the agency that regulates Ecuador’s mining industry.

The Agencia de Regulación y Control Minero (ARCOM) says some of the reasons for the shortage of mining graduates include the limited number of academic programs offered in this area, the high cost to universities which offer them, and an overall lack of student interest in these professions.

Jaime Jarrin, ARCOR’s executive director, added yet another reason for the shortage is that mining engineers and geologists are also needed by Ecuador’s highway construction, petroleum extraction and hydroelectricity industries. Additionally, the country lacks other professionals with knowledge of the mining industry, such as economists and lawyers.

However, because of the mining sector’s increasing demand for skilled labour, and since the employment rate is high, these programs are becoming more popular with students.

“All of our graduates have jobs,” Carlos Ortiz, director of the Engineering Mining School at the Universidad Central en Quito, was quoted as telling BBC News earlier this month. “There isn’t a single one that is unemployed due to a lack of options in mining.”

Last month, Ecuador signed a contract with the Chinese company Ecuacorriente to develop the country’s fist copper mining megaproject. In addition, four more contracts are in the pipeline to be signed this year: Kinross Gold Corp’s Fruta del Norte gold mine; International Minerals’ gold and silver property, Rio Blanco; IAMGOLD’s Quimsacocha gold mine; and a second deal with Ecuacorriente around the major copper project Panantza-San Carlos.

In this context, Ecuador may have to import skilled mining labour to meet its mining obligations. According to Ecuadorian law, 80% of mining workers must be nationals, leaving 20 per of the jobs to be filled by foreigners.

“Our country is experiencing a new era in mining,” noted ARCOR’s Jarrin. “It is a reality that we need mining experts and our deficit in this area is one we must solve with the help of government, our universities and the private sector.”

Wednesday, April 25, 2012

Rio Tinto finalizes Guinea JV with Chinese aluminum giant

Anglo-Australian miner Rio Tinto announced today it has completed the formation of its joint venture with a group led by China’s Chalco, subsidiary of state-owned aluminum giant Chinalco, to operate the Simandou iron ore project in Guinea.

After receiving Chinese regulatory approval for the new company, Chalco gave Rio a $1.35 billion earn-in payment.

Rio Tinto is already working on the project, which includes developing the railway, mine and port in order to ship its first cargo of the steelmaking raw ingredient by mid-2015 and increase iron ore output to 95 million metric tons a year from Simandou in the future.

Rio and Chalco hold a respective 53% and 47% interest in the JV, which translates into a 50.35% and 44.65% interest in the project. The private sector arm of the World Bank, the International Finance Corporation, holds the remaining 5% of Simandou.

Guinea retains its options for participation in the project and is expected to take up its first share in the near future, Rio Tinto said.

Last year, Rio Tinto and Chinalco formed another joint venture to explore for copper and other metals in China.

“China is a vast country rich in minerals and it has the geological pedigree to produce significant world-class deposits. Exploration work carried out over past decades is a rich source of data and experience on which to build. With Rio Tinto’s industry-leading technology and global mining experience, the exploration JV will be able to drawn on the two parties’ strengths to achieve our common goal,” said at the time Rio Tinto managing director China Ian Bauert.

Peru's Humala says Newmont mine project needs work

Peruvian President Ollanta Humala said on Friday that U.S.-based Newmont Mining should carry out a more ambitious environmental mitigation plan if it hopes to build its $4.8 billion Conga gold mine project.

Humala, who urged community activists to stop protesting against the stalled mine's construction, said the government would make sure the company adheres to strict social, environmental and labor goals.

His comments to end a months-long impasse came two days after independent environmental auditors encouraged the company to build larger reservoirs to guarantee even more water supplies. They also said the company should preserve two lakes that would be displaced under the company's original plan.

"The company should meet the environmental and social recommendations made by auditors. And the capacity of the reservoirs should be at least four times greater than originally proposed by the company so as to benefit more townspeople," Humala said in a televised address.

Newmont's plan to replace four alpine lakes with artificial reservoirs fueled protests in the northern Cajamarca region late last year as some townspeople feared the most expensive mine ever attempted in Peru would leave local farmers without sufficient water supplies and cause pollution. The mine's construction has since been halted.

In a bid to gain confidence from locals, Humala's government asked three European auditors to issue an evaluation of the mine's environmental impact study, which was approved by the previous government.

Newmont has not yet responded to Humala's latest comments but has indicated it is willing to fine tune its mitigation plan. It has also said the reservoirs as planned would guarantee a year-round water supply for Cajamarca, whereas currently there is a lack of water during the dry season.

Peru's environment minister has said some of recommendations made by auditors would be relatively more costly and that the company would have to decide if it still wants to proceed after the government's recommendations.

Gregorio Santos, the president of the region of Cajamarca who has opposed construction of the mine even though it would generate some 10,000 jobs, said he was unmoved by Humala's comments - which also included a promise that the government would invest $1.9 billion in the region.

"No position has changed here," he said by radio from Cajamarca. "The Conga project isn't viable."

Patagonia Gold on track for gold production target of 200,000 ounces a year by 2015

Patagonia Gold (LON:PGD) (TSX:PAT), an Argentina-focused gold and silver producer, said today it achieved rapid progress in 2011 and is on track towards its goal of producing 200,000 ounces of gold per year by 2015.

In its 2011 preliminary results release, the company reported a wider loss for the year ended Dec. 31 as it increased exploration expenditures and said its total overall indicated resources for the Company increased by 67% to 1,247,837 ounces and total overall inferred resources rose by 202% to 435,935 ounces.

In April and May, the Company raised approximately $39.2 million in equity capital before expenses. These funds were expended in 2011 to finance the fast drilling program at the Patagonia’s flagship Cap-Oeste gold and silver project.

Mining at COSE, the firm’s second major project after Cap-Oeste, is scheduled to begin in early 2013.

The company, which started trading on the Toronto Stock Exchange on Dec. 7 last year, said it had $10.9 million in cash and cash equivalents, net of a bank overdraft as per Dec. 31.

CST Mining sells 70% stake in Peru copper mine for $505 million

CST Mining is selling its 70% stake in the Mina Justa copper project in Peru for US$505 million.

cHong Kong-listed CST Mining (Stock Code:985) which owns the Lady Annie copper mine in Queensland, said today it has entered into a share purchase agreement with a subsidiary of Minsur S.A., the world’s fourth largest tin producer and Peru’s largest tin miner by tonnage.

The price is a 6% premium on last year’s offer by commodities giant Glencore to buy the stake off CST Mining for $475 million- a deal that Glencore walked away from.

Reporting on today’s news, the Wall Street Journal (sub required) said selling the 400-million-tonne asset will allow CST to concentrate on its Lady Annie operation which aims to produce 30,000 tonnes of red metal this year.

CST Mining has as its executive vice chairman Owen Hegarty, who as WSJ points out, “famously built Oxiana from a mining hopeful in 1995 to a multi-billion company on the ASX.” Oxiana later combined with Zinifex for $12 billion to create OZ Minerals in 2008.

This Week's Fed Meeting Is Key For Gold And Silver

The headline "Gold and Silver Wait Patiently for More Easing" from this story at Commodity Online last week about sums up the current situation for precious metals investors and, whether it's good or bad, some news should come on that front in the days ahead as the Federal Reserve's policy committee again gathers to deliberate over whether another round of money printing might be necessary amid growing signs of a weakening U.S. economy.

As never before, precious metals are taking their cues from the Fed and, simply put, should the policy committee strongly hint at another round of quantitative easing this week and then follow through with action next month, gold and silver prices are likely to go much higher in relatively short order. But if the U.S. economy is seen as needing no help from the central bank over the near-term and with the Fed less likely to take action in the lead up to the fall elections (so as not to be seen as being politically motivated), it could be a long, difficult summer for gold and silver.

Last week, the gold price fell 1.0 percent, from $1,658.50 an ounce to $1,642.40, while silver rose 0.6 percent, from $31.50 an ounce to $31.70. Gold is up 4.9 percent so far this year, down 14.6 percent from its high last fall, and silver is up 13.8 percent in 2012, now down 36.0 percent from its peak last spring.

Of course, any talk that the secular bull market in gold and silver is now over, as some are now claiming in the financial media, is, in my view, pure nonsense and another bit of evidence in support of that view appears in the chart below.

(click to enlarge)

If September's gold price peak at just over $1,920 an ounce was the top, it was the most unspectacular end to any long-term bull market that I've ever heard of, paling in comparison to that seen in 1980.

The fact remains that elected officials in the U.S., Europe, and Asia are all just "kicking the can down the road" by printing money to paper over their financial woes and, when combined with the expectation that "financial repression" will go on for years, this virtually guarantees higher gold and silver prices.

But, the road ahead is likely to be increasingly volatile, the steady three-year rise in the gold price from $750 an ounce in late-2008 to over $1,900 an ounce last fall having set unrealistic expectations in the minds of many new gold investors as we move further into a period where larger, longer corrections will likely be the norm.

The Wall Street Journal provided this assessment of the gold market in a report on Monday that I thought was spot on:

Gold still is benefiting from concerns that the global economy remains fragile and a belief that governments will launch new rounds of stimulus, undercutting paper currencies. But that belief has been shaken with signs that the U.S. economy is stabilizing, giving investors fresh cause to wonder if there might soon be better returns elsewhere.

Since late February, hedge funds, pension funds and other money managers have slashed by 39% their futures-market wagers that gold will rise. In the same period, they increased by 87% their bets that prices will fall.

While there continues to be strong support from Asia at lower prices, it's worth remembering that futures prices - and hence the gold price - are set by the groups above and, until more Fed money printing is on the horizon or some other catalyst emerges, their interest will continue to wane.

As for silver, margin requirements were lowered again last week as stockpiles at Comex warehouses were reportedly at a 10-year high and, while gold ETF holdings have been remarkably stable, silver ETFs have seen steady outflows in recent weeks, the popular iShares Silver Trust ETF (SLV) shedding nearly 200 tonnes of the metal over the last three weeks as shown below per data at the iShares website.

A good indication that a bottom in the silver price may be near is the remarkable decline in the premiums paid for the Sprott Physical Silver Trust (PSLV) that tumbled to 4.27 percent on Friday, per data at the Sprott website.

After rising to nearly 30 percent a year ago when the silver price peaked near $50 an ounce, this is the lowest I recall ever seeing this premium and, while it could surely go even lower in the period ahead, it could also be signaling that a bottom is near.

The Silver Institute's World Silver Survey 2012 indicated the silver market will remain in a "substantial surplus" making investor demand the key price driver. The group said a move higher in the second half of the year is "probable", forecasting a high of just over $40 an ounce for the metal this year.

Short-term weakness and more volatile markets were also forecast for gold as the top five precious-metals analysts in a Bloomberg survey said the gold price will average $1,900 an ounce in the fourth quarter, citing investor demand and central bank buying as the key drivers.

This week, at the Fed's Wednesday meeting, the U.S. central bank could be a key driver for both gold and silver prices.

Gold Stocks Continue to Underperform Gold

have written (and warned my readers) several times about the weak performance of the HUI index compared to the price of Gold.
Despite general stock markets approaching pre-crisis highs and Gold holding up quite well so far, the HUI index has dropped quite substantially. The combination of weak performance of HUI stocks and the relatively “strong” action of Gold, caused the HUI index to underperform Gold dramatically.


Chart courtesy stockcharts.com

I have often compared the underperformance of the HUI index relative to Gold to the situation in 2008, right before the “big crash”.
Here it is once again:


Chart courtesy stockcharts.com

Now let’s suppose the pattern above takes place. How could we get there?
1) a severe market crash, just like in 2008;
2) a big drop in Gold prices, which would most likely lead to an even bigger decline in Gold stocks; OR
3) a HUGE rally in Gold prices.
How could that be? Well, in the late 1970′s, Gold rallied substantially, causing everybody to believe that those high Gold prices (and therefore mining companies’ margins) were not sustainable. They bought Gold bullion while they ignored the mining stocks.
Once it appeared clear that the high Gold prices WERE in fact sustainable, the Gold Stocks rallied. They even rallied to new highs AFTER the Gold price peaked in early 1980!

We might be in a similar situation today. Nobody wants the mining stocks. If Gold would rally to new highs, it could be on its way to $4,000-$5,000. Could it be that most people now think that those Gold Prices ($1,650 per ounce) are not sustainable?
What if Gold suddenly rallies to $4,000? Then suddenly everybody will start to chase stocks of the Gold Miners.

On the other hand, here’s another interesting chart, showing the BGMI-to-Gold (BGMI = Barron’s Gold Mining Index) from 1967 to 1980 (blue line) and the HUI-to-Gold ratio from 1993 until today. If this pattern continues, it could mean that the underperformance of the Gold Stocks is about to end.

However, it could therefore also imply that the top for Gold is set.
I definitely know that the Fundamentals for higher Gold Prices are there (think of all the money printing etc), but have a look at the following chart from James Paulsen, Chief Invest­ment Strate­gist at Wells Cap­i­tal Man­age­ment (Wells Fargo) recently shared:
Gold does look expensive based on these charts, doesn’t it?

For more articles, analyses & trading updates, please visit www.profitimes.com

Tuesday, April 24, 2012

Lara Exploration Ltd.: New targets and properties on the Sami Gold Project in Peru

Lara Exploration Ltd. (TSX VENTURE:LRA) ("Lara" or the "Company") is pleased to report very encouraging results from the 2011 exploration program its 100%-owned Sami Gold Project in southern Peru:

1. Pitusaja high-sulphidation epithermal target as defined by gold silver geochemistry and alteration has been extended to over 2 kilometres in size.
2. The Condorutca and Pitusaja Sur targets are interpreted as being part of the same alteration system as Pitusaja, suggesting potential for a much larger target part covered by recent sediments.
3. Systematic mapping and sampling has identified 15 new targets (for a total of 20) with evidence of epithermal and/or porphyry type alteration and mineralization.
4. New claims and acquisitions, covering extensions of Pitusaja and other target areas, have increased the property from 32,600 to 50,100 hectares in size.

Andre Gauthier, President of Lara, commented, "The number and quality of the targets we're finding at Sami is very exciting and we believe that the project has the potential to develop into a world class epithermal gold target and possibly also a porphyry copper district."

The Company has now completed systematic alteration, geological and structural mapping and collected a total of 1,862 rock chip samples (964 from the 2011 campaign). The exploration work has been focused on outlining and expanding high sulphidation epithermal gold anomalies like Pitusaja, but the Company's exploration teams have also identified low sulphidation epithermal gold-silver, copper-molybdenum porphyry and copper-silver vein-type alteration and mineralization, suggesting that Sami may host a well-preserved and extensive porphyry-epithermal system.

The Company is planning additional geology and sampling work as well as detailed ground geophysics over priority targets anomalies during 2012 to prioritize drill targets. Please visit the Company's website www.laraexploration.com for maps and to see more details of specific target areas.

Quality Control

Samples from Sami were sent to the Certimin Peru laboratory where they were systematically analyzed for gold by 50 gram fire assay with atomic absorption finish, 35 other elements using ICP and for mercury using the Aqua Regia cold vapor atomic absorption. Approximately 10% duplicate samples were checked at ALS Chemex in Peru with the same analytical methods.

Andre Gauthier, Lara's President and CEO, a member of the Quebec Order of Engineers, is a Qualified Person as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects and is responsible for the preparation and verification of the technical information in this release.

About Lara

Lara is an exploration company following the Prospect Generator business model, which aims to minimize shareholder dilution and financial risk by generating prospects and then exploring them in joint ventures funded by partners. The Company currently holds a diverse portfolio of prospects and deposits primarily in Brazil and Peru where it has signed agreements for fifteen joint ventures. Lara's common shares trade on the TSX Venture Exchange under the symbol "LRA".

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Source: Marketwire

Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS announces first quarter 2012 results webcast

BELO HORIZONTE, Brazil,- Usinas Siderurgicas de Minas Gerais S.A. - USIMINAS (OTC: USDMY, USNZY) (BM&FBOVESPA: USIM3, USIM5, USIM6) (Latibex: XUSIO, XUSI) announces the following Webcast:

Usinas Siderurgicas de Minas Gerais S.A. - Usiminas is one of the largest steel complex in Latin America, with nominal capacity to produce 9.5 million tons of steel per year, operating in the entire production chain from ore to steel. Its companies extracts the ore, transforms it into the highest quality steel , according to client's specifications, offers an efficient logistic and delivers finished products, which meet customers needs and are part of people's everyday life. With a broad portfolio of products – from slabs to coated steel - the companies from the group meet strategic segments, such as automotive, shipbuilding, oil and gas, civil construction, machinery and equipment, home appliance, distribution, among others.

Usiminas works in an integrated manner to offer products with high technological content and maximize value for shareholders, customers and society.

Usiminas – strong presence in businesses, in which steel occupies a strategic position.

SOURCE USIMINAS

Alacer Gold announces first quarter mine production of 100,290 ounces and increased production guidance

TORONTO - Alacer Gold Corp. ("Alacer") (TSX: ASR) (ASX: AQG) is pleased to announce first quarter 2012 mine production for its operations in Turkey and Australia. First quarter 2012 financial statements and the related management's discussion and analysis are planned to be released on May 15, 2012 (North America) and May 16, 2012 (Australia).
First Quarter 2012 Highlights
First quarter gold production totalled 100,290 ounces (attributable: 91,377 ounces) which was 12% less than the gold production of 113,861 ounces achieved in Q4 2011.
First quarter gold sold totalled 107,835 ounces (attributable: 97,857 ounces).
Çöpler Gold Mine gold production decreased to 44,564 ounces (attributable: 35,651 ounces) for the quarter compared to Q4 2011. Lower gold production was a result of challenging winter weather conditions, heavy snow fall and lower crusher throughput.
Despite lower first quarter production than planned, management is increasing 2012 production guidance for Çöpler to between 195,000 and 200,000 ounces, and overall to between 435,000 and 450,000 ounces, each on a 100% basis.
Development of Çöpler's Marble and Main Pits commenced during the quarter following the relocation of all the residents from the old Çöpler village.
Gold production from the Higginsville Operations was 33,329 ounces for the quarter as a crusher failure reduced throughput and processing of high-grade Trident ore towards the end of the quarter.
Ore mined from Trident was 250,066 tonnes for the quarter and productivity was near all-time highs not seen since the early days of mining the Trident orebody in 2008.
Chalice underground mine development is on schedule for ore production to ramp-up over 2H 2012.
At the South Kalgoorlie Operations ("SKO") production increased to 22,397 ounces of gold for the quarter, due to increased mill throughput from stockpiles and new open-pit ore sources.
Resources and Reserves as at December 31, 2011:
Çöpler Measured and Indicated Resources increased to 7.3 million ounces (100% basis).
Higginsville Proven and Probable Reserves increased by 23% to 875,000 ounces (100% basis).
Frog's Leg Proven and Probable Reserves increased by 36% to 385,000 ounces (Alacer's 49% share).
Alacer's attributable Proven and Probable Reserves total 5.3 million ounces.
Alacer's attributable Measured and Indicated Resources total 10.5 million ounces and attributable Inferred Resources total 3.4 million ounces.

Edward Dowling, President and CEO of Alacer, stated "Our active exploration program continues to bear fruit and during the quarter we announced increased resources for Çöpler, increased reserves for Higginsville and increased resources and reserves for Frog's Leg. Our teams have responded well to a challenging quarter for our Çöpler and Higginsville operations. This work has laid the foundations for quarterly gold production to increase over the course of 2012. The Çöpler 2012 mine plan has now been revised based on the recently updated resource model. Total gold production for 2012 is now forecast to increase to between 435,000 and 450,000 ounces on a 100% basis for the mines which we operate or 396,000 to 410,000 ounces on an attributable basis."
Revised 2012 Gold Production Guidance

As foreshadowed when the updated Çöpler Mineral Resource estimate was announced during the quarter, the increased grades in the new resource model have enabled the Çöpler 2012 mine schedule to be revised. Çöpler is now forecast to produce 195,000 to 200,000 ounces of gold during 2012 (previously 180,000 to 190,000 ounces). The guidance for Alacer's other operations remain the same.
Cautionary Statements
Certain statements contained in this news release constitute forward-looking information, future oriented financial information, or financial outlooks (collectively "forward-looking information") within the meaning of Canadian securities laws. Forward-looking information may relate to this news release and other matters identified in Alacer's public filings, Alacer's future outlook and anticipated events or results and, in some cases, can be identified by terminology such as "may", "will", "could", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "forecast", "projects", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts and include, but are not limited in any manner to, those with respect to proposed exploration, communications with local stakeholders and community relations, status of negotiations of joint ventures, commodity prices, mineral resources, mineral reserves, realization of mineral reserves, existence or realization of mineral resource estimates, the timing and amount of future production, timing of studies and analysis, the timing of construction of proposed mine and process facilities, capital and operating expenditures, economic conditions, availability of sufficient financing, exploration plans and any and all other timing, exploration, development, operational, production, financial, economic, legal, social, regulatory and, political factors that may influence, or be influenced by, future events or conditions. Such forward-looking statements are based on a number of material factors and assumptions, including, but not limited in any manner, those disclosed in any other Alacer filings, and include exploration results and the ability to explore, the ultimate determination of mineral reserves, availability and final receipt of required approvals, titles, licenses and permits, sufficient working capital to develop and operate the mines, access to adequate services and supplies, commodity prices, ability to meet production targets, foreign currency exchange rates, interest rates, access to capital markets and associated cost of funds, availability of a qualified work force, ability to negotiate, finalize and execute relevant agreements, lack of social opposition to the mines, lack of legal challenges with respect to any property or the Company and the ultimate ability to mine, process and sell mineral products on economically favorable terms. While we consider these assumptions to be reasonable based on information currently available to us, they may prove to be incorrect. Actual results may vary from such forward-looking information for a variety of reasons, including but not limited to risks and uncertainties disclosed in other Alacer filings at www.sedar.com and other unforeseen events or circumstances. Other than as required by law, Alacer does not intend, and undertakes no obligation to update any forward-looking information to reflect, among other things, new information or future events.
SOURCE ALACER GOLD CORP.

AuRico Gold announces details for first quarter financial results

AuRico Gold Inc. (TSX:AUQ) (NYSE:AUQ), ("AuRico" or "AuRico Gold" or the "Company") will release the Company's first quarter financial results for the three-month period ended March 31, 2012 after the market closes on Wednesday, May 9, 2012. The financial statements will be available on the Company's website at www.auricogold.com and www.sedar.com.
A webcast and conference call will be held on Thursday, May 10, 2012 starting at 10:00 a.m. Eastern Time. Senior management will be on the call to discuss the results.
About AuRico Gold
AuRico Gold is a leading Canadian gold producer with a diversified portfolio of high quality mines and projects in North America. Following the recently announced divestitures of AuRico's Australian mines and El Cubo, and the imminent achievement of first production at Young-Davidson, the Company will be focussed on 3 core operations including the Ocampo mine in Chihuahua State and the El Chanate mine in Sonora State. The exciting Young-Davidson gold mine in northern Ontario is expected to reach commercial production by the third quarter of this year and ramp-up to over 250,000 ounces of annual production by 2016. AuRico's strong project pipeline includes advanced development opportunities in Mexico and British Columbia as well as a number of highly prospective exploration properties. AuRico's head office is located in Toronto, Ontario, Canada.
SOURCE AuRico Gold Inc.

Gold Fields announces mineral resource and mineral reserve publications

Gold Fields Limited (Gold Fields) (JSE, NYSE, NASDAQ Dubai: GFI) has published its Mineral Resource and Mineral Reserve supplement to the 2011 Integrated Annual Review on the Gold Fields website at http://www.goldfields.co.za.
As at 31 December 2011, Gold Fields Limited had total attributable precious metal and gold equivalent Mineral Resources of 217.0 million ounces (31 December 2010: 225.4 million ounces) and Mineral Reserves of 80.6 million ounces (76.7 million ounces).
Notes to editors
About Gold Fields
Gold Fields is one of the world's largest unhedged producers of gold with attributable annualised production of 3.5 million gold equivalent ounces from eight operating mines in Australia, Ghana, Peru and South Africa. Gold Fields also has an extensive and diverse global growth pipeline with four major projects in resource development and feasibility, with construction decisions expected in the next 18 to 24 months. Gold Fields has total attributable gold equivalent Mineral Reserves of 80.6 million ounces and Mineral Resources of 217 million ounces. Gold Fields is listed on the JSE Limited (primary listing), the New York Stock Exchange (NYSE), NASDAQ Dubai Limited, Euronext in Brussels (NYX) and the Swiss Exchange (SWX).
Sponsor: J.P. Morgan Equities Limited
Source: Gold Fields Limited

James River Coal Company announces date of first quarter results

James River Coal Company (NASDAQ: JRCC), will release its first quarter results for 2012 before the market opens on May 3, 2012. The Company will hold its quarterly conference call and webcast on the same day at 11:00 a.m. Eastern Time.
The conference call will be open to the public. The toll free number is 877-340-2553. International callers please use 678-224-7860. The conference call can also be accessed via webcast on the James River Coal Company website at www.jamesrivercoal.com. A replay of the conference call will be available on our website, and can also be accessed at 855-859-2056. For international callers a replay of the conference call can be accessed at 404-537-3406. The passcode is 72023497.
James River Coal Company is one of the leading coal producers in Central Appalachia and the Illinois Basin. The company sells metallurgical, bituminous steam and industrial-grade coal to electric utility companies and industrial customers both domestically and internationally. The Company's operations are managed through eight operating subsidiaries located throughout eastern Kentucky, southern West Virginia and southern Indiana. Additional information about James River Coal can be found at its web site www.jamesrivercoal.com.
SOURCE James River Coal Company

Diamond Offshore announces first quarter 2012 results

Diamond Offshore Drilling, Inc. (NYSE:DO) today reported net income for the first quarter of 2012 of $185.2 million, or $1.33 per share on a diluted basis, compared with net income of $250.6 million, or $1.80 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2012 were $768.6 million, compared with revenues of $806.4 million for the first quarter of 2011. The sale of the jack-up rig Ocean Columbia was completed during the quarter, resulting in an after-tax gain of approximately $16 million, or $0.12 per share.
“Our ongoing efforts to control costs and maximize operating efficiency, expressed in terms of minimal rig downtime, enabled us to achieve favorable operating results for the quarter,” said Larry Dickerson, President and Chief Executive Officer of Diamond Offshore. “Our systems and employees continue to perform for our customers and shareholders.”

“Looking ahead, we are optimistic about future contracting opportunities for our fleet, given the continuing market strength in the offshore drilling industry,” noted Dickerson.
CONFERENCE CALL
Diamond Offshore will host a conference call to discuss first quarter results on Thursday, April 19, 2012 beginning at 9:00 a.m. CDT. A live webcast of the call will be available online on our Company’s website, www.diamondoffshore.com. Those interested in participating in the question and answer session should dial 800-247-9979, or 973-321-1100 for international callers. The conference ID number is 65195830. An online replay will also be available on www.diamondoffshore.com following the call.
Source: Business Wire

Friday, April 20, 2012

Chilean mining industry faces looming energy crisis

hile will not be able to keep mining for copper, gold and other minerals if the government does not address the country’s pressing energy needs, a mining conference in Santiago heard this week.

Fox Business News reported mining industry participants at CESCO saying that the country needs cheaper and more reliable power to mine the country’s vast copper reserves, which comprise a third of the world’s red metal. The country needs to double its energy capacity over the next decade.

State copper giant Codelco’s chief executive, Diego Hernandez, said Tuesday energy is the biggest challenge the Chilean mining industry faces. According to the chief executive of the company formally known as Corporacion Nacional del Cobre de Chile, electricity usage in the copper industry will increase 27% in coming years, as companies need more power to get copper out of the mined minerals.

Joaquin Villarino, the head of the Mining Council trade group, made a more desperate call. “Without a safe, accessible and inexpensive energy, mining companies’ investment plans won’t be able to materialize,” said Villarino.

But public opposition to more power is not helping to meet the shortfall. The Hacienda Castilla coal-fired power plant, a $5 billion plant to be built in northern Chile by Brazilian billionaire Eike Batista, has met with strident opposition from locals, as has the $3.2 billion HidroAysen project. The future of Castilla is currently in the hands of the Supreme Court while HidroAysen is still awaiting environmental approval after being submitted in 2008.

The warning about energy comes amid other challenges faced by Chile to meet its plan to boost copper output to 7 million tonnes a year, Reuters reported:

There are no easy fixes for tumbling ore grades at massive mines in northern Chile, protests over key energy projects that are threatening mining expansions and possible disruptions from extreme weather and labor unrest.

Chile’s copper exports fell 6.5% to US$10.5 billion in the first three months of 2012 from $11.2 billion in the same period last year, according to figures compiled by the country’s Central Bank.

Copper miners in Chile that are expected to underproduce, according to Reuters, include Codelco, Antofagasta Minerals, and Collahuasi.

Escondida, the world’s biggest copper mine jointly owned by BHP Billiton and Rio Tinto, saw a 25% drop in output last year due to a 2-week strike and a dip in ore grades. The companies are clearly bullish on the mine’s future, however, since they recently said they would spend $US 4.5 billion on an expansion - part of BHP’s $80 billion capital-spending plan through 2015.

Obstructions to Anglo American Minas-Rio iron ore project keep on coming

Anglo American’s CEO, Cynthia Carroll, said yesterday the company faces further disruption to its US$6 billion Minas-Rio iron ore operation in Brazil, although it hopes to resume construction at the site.

Since the start of activities, the project has been affected by seven interruptions relating to different environmental licences and permitting processes.

“We are currently in discussions about another legal interruption notification on a power transmission line licence, and we are confident construction activity on the line will resume soon,” the company (LON:AAL) said in a statement.

On Monday, the miner halted preliminary work for installation of a power line at its Minas-Rio iron ore project in Brazil, following a judge’s decision to suspend the installation licence for the line.

The diversified miner is not allowed to undertake new works at the site of its largest global investment, such as clearing vegetation, excavating and removing soil for the opening of the mine, until it is deemed safe for an archaeological site within its perimeter, said the prosecution service of Minas Gerais state last week.

Anglo American said it would challenge in court at least one of these setbacks: the public ministry decision that affects the line that will supply power to the project’s iron ore concentrator plant.

Strategic project

Bringing the Minas-Rio project into production is key for Anglo, which bought the project for nearly $5.8 billion in a two-stage deal that was wrapped up in August 2008, just before the commodities markets went downhill with the start of the financial crisis.

“At full production, the delivered cash cost to China will be around $45 to $50 a tonne. This is at the very low end of the cost curve,” said Carroll.

With Minas, the company is trying to get a share in a market dominated by local players, such as billionaire Eike Batista’s MMX Mineracao (MMXM3) & Metalicos SA and Ferrous Resources Ltd.

Anglo has raised its cost projection at least four times to as much as $5,8 billion in December last year, since it acquired Minas. This is more than double the figure planned when the company agreed to buy those assets in Brazil, the world’s second-largest exporter of iron ore.

The project includes construction of a mine, beneficiation plant, 525km slurry pipeline and port facility.

When completed the facility would process 26.5 Mtpa iron ore pellet feed. About 50% of the mine’s production will be sold to clients in the Middle East and the remaining 25% to Asian customers.

Wednesday, April 18, 2012

Copper surges on South Korea's plan to buy $300m of Chinese stocks

Copper prices climbed Wednesday led by news that South Korea's central bank will buy $300 million in Chinese stocks over the next three months.

SHANGHAI - Copper rose on Wednesday, led by equities on news that South Korea's central bank will buy $300 million in Chinese stocks over the next three months.

Traders say Shanghai copper rose in tandem with the Shanghai Composite index in midmorning trading, leading to plenty of short-covering on the ShFE and copper arbitrage trades on the LME.

Three-month copper on the London Metal Exchange rose 0.4 percent to $8,081 a tonne by 0421 GMT, shooting up nearly $90 in midmorning trading, going from a session low of $8,011.75 to a high of $8,100.

The most-active July copper contract on the Shanghai Futures Exchange gained 1.9 percent t o 57,620 yuan ($9,100) per tonne, after closing 0.3 percent lower in the prior session.

The contract rose over 1,000 yuan on Wednesday shortly after Reuters reported that South Korea's central bank would buy $300 million in Chinese stocks over the next three months.

The bank also has a licence to buy over $300 million in Chinese bonds, a senior Bank of Korea official told Reuters.

"The news gave a boost to Chinese equities and lifted Shanghai copper prices, which opened an arbitrage window for traders to sell on Shanghai and buy on London," said a Shanghai-based trader.

"It all happened very fast so I think some traders actually bought LME copper immediately on the South Korean news, expecting that Shanghai copper prices were going to rise," he added.

"We have also heard of a lot of short covering in copper on the ShFE. The euro moving up could have contributed too," said an LME trader, noting that LME copper prices began rising also around the same time as when the euro started paring losses.

A stronger euro makes dollar-denominated commodities cheaper for European investors.

Also helping to cheer markets was news on Tuesday that Spain sold a more-than-planned 3.2 billion euros ($4.21 billion) of 12- and 18-month bills on Tuesday due to good demand from domestic banks. This eased some concerns about the country's refinancing ability although yields rose sharply as expected.

A German ZEW survey of analyst and investor confidence unexpectedly rose in April to its highest level since June 2010, suggesting Europe's largest economy may be recovering from a weak spell.

But the world economy is not out of the woods yet even though global growth is slowly improving as the U.S. recovery gains traction and dangers from Europe recede, the International Monetary Fund said on Tuesday.

Risks remain high and the situation is very fragile, it added.

In line with that view was Thomson Reuters GFMS, which sees copper prices struggling to stay up this year as Europe's debt crisis and a cooling of the Chinese economy lead to demand worries.

The metals consultancy downgraded its average price forecast for the metal to $8,475 from its earlier prediction of $8,525.

Also moderating risk appetite was data showing that output at U.S. factories slipped in March and that builders started construction on fewer homes, offering cautionary signals for an economy that appeared to be gaining traction. [ID:nL2E8FGF7L

($1 = 6.3015 Chinese yuan)

GOLD NEWS - Today: Gold trades flat; fragile Euro weighs

GOLD NEWS - Today: Gold trades flat; fragile Euro weighs: Spot gold traded nearly flat on Wednesday after a successful Spanish debt sale eased fears about Europe's debt crisis but the euro remains u...

GOLD NEWS - Today: Gold investment demand to remain strong in 2012

GOLD NEWS - Today: Gold investment demand to remain strong in 2012: GFMS's Philip Klapwijk maintains that gold investment demand will stay healthy through the course of 2012 on the back of continued loose mon...

Newcrest Mining to maintain 400,000/oz gold profile in Indonesia

Executive general manager, Brett Fletcher, sees the steady gold output of 400,000 to 450,000 ounces continuing this year at its Gosowong mine in Indonesia.

Australia's Newcrest Mining, the world's no.3 gold producer, sees steady gold output of 400-450,000 ounces this year from its Gosowong mine in Indonesia, an executive said on Tuesday.

"We are producing about 400,000 this year, probably closer to 450,000. That's the sort of level we've had in previous years, and we're expecting to maintain a 400,000 profile going forward," said Brett Fletcher, executive general manager, at a mining conference in Jakarta.

Newcrest in January said it expects its total gold output for the year to June 2012 to fall to between 2.43 million and 2.55 million ounces, from 2.7 million ounces a year earlier.

Newcrest said last month it expected that its stake in the Gosowong mine will not be affected by a new Indonesian law limiting foreign ownership in mines to no more than 49 percent. Newcrest owns 82.5 percent with the rest owned by Indonesia's PT Aneka Tambang.

Minas Conga 3rd party technical water report to be made public Wednesday

Three international consultants have turned over to Peru's Council of Ministers their independent recommendations regarding further technical mitigation of the Minas Conga copper and gold project's potential water impacts.

A yet-to-be-released report says serveral aspects of the mitigation for mining-related water impact issues, outlined in the Minas Conga environmental impact assessment document, can be improved.

During a press conference late Tuesday afternoon, however, Peru's Environmental Minister, Manuel Pulgar-Vidal, did not go into detail about the study's specific findings and conclusions. He said the 260-page document will be posted online at Peru's Ministry of Environment's website Wednesday.

Pulgar-Vidal observed that the report "a highly technical document" for which a simplified analysis would be made available after the document is made public.

"I want to emphasize that this survey has been totally fair and transparent, in which our experts have been working to evaluate all environmental and technical aspects of this Conga project," he stressed. The study was authored by Luis Lopez Garcia and Rafael Fernandez Rubio, both from Spain and Portuguese geologist Jose Martins Carvalho.

"It's not our mission to say if the project is viable or not," said Lopez Garcia, "we've just tried to improve its technical aspects."

"Some measures could be implemented quite easily but others would require economic studies to see if they make sense," he added.

Peru's Prime Minister Oscar Valdes said the government hasn't yet made a decision but will review the consultants' recommendations. "This is going to be processed by the different ministries," he said.

Minas Conga is Peru's largest mining project and is being developed by Minera Yanacocha of which Newmont Mining holds a 51.35% interest and Compania de Minas Buenaventura with a 43.65% stake. The IFC owns the remaining interest.

Minera Yanacocha hopes to start production at Minas Conga in late 2014 or early 2015 with an average annual production ranging from 580,000 to 680,000 gold ounces and 155 million to 235 million pounds of copper in the first five years of mine life.

The project was suspended last November in the wake of protests by local politicians and residents who fear the mine will harm local water supplies. The third-party consultants' report focuses specifically on water issues.

However, Omar Jabara, Newmont's group executive for corporate communications, told Mineweb in an e-mail Tuesday, "Conga's reservoirs would more than double the current water storage capacity of the four lagoons in questions and would provide a reliable, year-round water supply to downstream users, something they don't currently have as a result of the dry season."

Newmont declined further comment on the third-party report until it is publicly released by the government.

Bloomberg reported Tuesday that Pulgar-Vidal revealed that the third-party consultants had recommended increasing water storage in reservoirs and delegating Peru's National Water Authority to monitor stored water usage.

The region of Cajamarca, in which Conga is located, had enacted an ordinance banning work on the mining project. However, Peru's highest court, the Constitutional Tribunal, Tuesday ruled against the ordinance.

The justices found that the Cajamarca government had exceeded its legislative powers, adding that the region has no jurisdiction over regulations affecting medium- and large-sized mining projects, such as Conga.

The court determined Peru's National Water Authority was the sole government agency that could rule on the viability of projects that involve Peru's water supplies.