China Data Signals Slowing Economy – Commodities Update – Oil, Iron Ore, Gold, Nickel, Copper

Copper lead most industrial metals lower after factory and retail-sales data signaled further slowing in China, the world’s biggest user.

Copper in London fell as much as 1 percent, while aluminum, nickel, lead and tin also declined. Industrial-output growth in China was the weakest in August since the global financial crisis, while investment and retail sales moderated, figures released Sept. 13 showed. Factory data due today from the U.S., the second-biggest metals user, will probably indicate activity in August slowed from the previous month, according to a Bloomberg News survey.

“The Chinese data over the weekend came in worse than expected,” Daniel Hynes, an analyst at Australia and New Zealand Banking Group Ltd., said by phone from Sydney. “It’s not surprising the base metals are weaker on the back of it.”

Copper for delivery in three months on the LME fell to as low as $6,770.75 a metric ton, the lowest intraday level since Sept. 11. Prices were down 0.5 percent at $6,804 a ton by 3:16 p.m. Hong Kong time, poised for the lowest close since June 19.

In New York, the December-delivery contract dropped 1 percent to $3.077 a pound, while in Shanghai the metal for delivery in November fell 0.4 percent to close at 48,380 yuan ($7,877) a ton.

Industrial output in China rose 6.9 percent from a year earlier in August, the National Bureau of Statistics said on Sept. 13. That’s down from 9 percent in July and the slowest pace outside the Lunar New Year holiday period of January and February since December 2008, based on previously reported figures compiled by Bloomberg.

On the LME, lead fell 0.6 percent to $2,110 a ton, while aluminum declined 0.4 percent to $2,020.50 a ton.

Vale’s View

Iron ore may rise to as much as $100 a ton by the end of the year because of declining inventory at ports, Vale Chief Executive Officer Murilo Ferreira told reporters on Sept. 12 in Beijing. Some producers are reducing exports given current prices, Ferreira said. China is the world’s largest buyer.

In China, there’s mounting evidence locally-mined supplies are starting to drop, Morgan Stanley’s Crane wrote. Output, when adjusted to show the equivalent of 62 percent content, fell 13 percent between April and July year-on-year, he said.

“Market participants appear split on the floor price,” Australia & New Banking Group Ltd. analysts including Mark Pervan wrote in a report today. While some are “thinking the resilience of Chinese iron ore supply will see prices fall below $80 a ton, while others firmly believe domestic output can’t sustain current price levels for much longer.”

Expanding Glut

Iron ore prices are unlikely to recover as the global surplus expands, Goldman Sachs Group Inc. said in a Sept. 10 report. The bank reduced its price forecast for the final three months of 2014 by 10 percent to $90, and also reduced full-year estimates for 2016 and 2017.

The structural nature of the surplus and a weak demand outlook in China make a recovery in prices unlikely, Goldman analysts Christian Lelong and Amber Cai wrote in the report. The global glut will more than triple to 163 million tons in 2015 from 52 million tons this year, and widen further to 245 million tons in 2016 and 295 million tons in 2017, it said

Oil Supply

Brent fell to $96.27 a barrel after settling at its lowest level since June 2012 amid concern global fuel consumption is slowing while output climbs. West Texas Intermediate crude sank 1 percent to $91.34 today, after slipping 0.6 percent Sept. 12. The International Energy Agency cut its global oil-demand forecast for 2015 last week.

Russia’s ruble slid as much as 0.5 percent to 37.0380 per dollar, a record low, before trading at 37.985. The euro bought 49.2745 rubles, the most since Sept. 1. The Micex Index climbed 0.2 percent in Moscow.

Copper for three-month delivery on the London Metal Exchange fell to $6,802.75 a metric ton, following last week’s 2 percent retreat. Lead dropped 0.6 percent to $2,108 a ton.

Gold for immediate delivery increased 0.4 percent to $1,234.98 an ounce after closing last week at $1,229.65, the lowest since Jan. 9.

Palladium climbed 1.3 percent to $848.50 an ounce.


2014-08-13 Reuters Gold Poll

Reuters quarterly interviews analysts to gather their gold price prediction. We have collected the forecasts made in 2014 and conclude that the sentiment has stabilized but the expectations for 2015 remain low.

THOMSON REUTERS 2014 Avg Gold Price Prediction 2015 Avg Gold Price Prediction No of Analysts interviewed
Q1 Poll Jan 2014 $1,235 37
Q2 Poll Apr 2014 $1,278 $1,250 28
Q3 Poll July 2014 $1,277 $,1250 31

 Nickel Falls a Fifth Session Amid China Slowdown Signals

Sept. 15 (Bloomberg) — Nickel and aluminum fell for a fifth session in London as industrial metals declined after factory and retail-sales data added to evidence of a slowing economy in China, the world’s biggest consumer. Copper slid.

Chinese industrial-output growth in August was the weakest since the global financial crisis, while investment and retail sales moderated, figures showed. Factory data due today from the U.S., the second-biggest metals user, will probably indicate activity in August slowed from the previous month, according to a Bloomberg News survey.

“Weak Chinese data weighed on base-complex prices,” RBC Capital Markets Ltd. said in a note today. Commodities slumped to the lowest level in more than five years.

Copper for delivery in December lost 0.8 percent to $3.081 a pound by 8 a.m. on the Comex in New York.

The metal for delivery in three months fell 0.4 percent to $6,808 a metric ton on the London Metal Exchange and lead touched the lowest price since June. An index of the six main metals traded on the LME slid the most since March last week.

Industrial output in China rose 6.9 percent from a year earlier in August, the National Bureau of Statistics said on Sept. 13. That’s down from 9 percent in July and the slowest pace outside the January-February Lunar New Year holiday period since December 2008, based on previously reported figures compiled by Bloomberg.

“Prices may well weaken further,” William Adams, an analyst at Fastmarkets.com in London, said in a note today. “We saw last week a combination of weakness and bouts of scale-down buying, and we feel we may see more of the same this week, especially in those metals that have seen strong price gains in recent months.”

Copper stockpiles monitored by the LME fell 0.1 percent to 156,375 tons, daily data showed. Orders to take the metal from warehouses rose to 40,250 tons on bookings in New Orleans and are up 40 percent in three sessions, the most since April 2013.

Tin and zinc declined in London.

The Gold Sector :The Worst Slump In Prices In 30 Years Will Continue

The gold industry, recovering from the worst slump in prices in 30 years, needs more mergers to help

improve investor returns and eliminate unprofitable mines or prices will continue to fall said Jack A.

Bass , author of The Gold Investors Handbook.

ABN Amro’s commodity analysts put it plainly last week. They expect gold’s 11% rise in the first-half of 2014 to be “temporary” because US Fed rates hikes are coming, while the outlook is “positive” for equities. Such thinking makes sense based on 2013’s example. Taper talk pushed bond prices down last year, nudging market interest rates higher. The S&P500 meanwhile returned 32%, a little more than gold prices fell.
Logic might also see a trade-off between gold and rising returns on other assets. Because the metal yields nothing and does nothing. It can’t even rust. Equities and interest-paying investments on the other hand work to increase your money. So gold prices should fall when equities rise, and also when the markets expect higher interest rates. Or so analysts now think.
GOLD was a universal “sell” for professional analysts at New Year, writes Adrian Ash at BullionVault.
Losing 30% in 2013, the gold price faced the long-awaited start of US Fed tapering – widely supposed to make fixed-income bonds go down, nudging interest rates higher – plus strong hopes for further gains in world equities. Who needed the barbarous relic?

Gold producers, which are gathering for the annual invitation-only Denver Gold Forum that began yesterday, cut budgets, sold assets and adjusted mine plans after the metal plunged 28 percent last year, prompting more than $26 billion of writedowns. The industry already has started a consolidation process.

“The industry did a very poor job from a capital-allocation standpoint, from a risk-management standpoint and from an operational-execution standpoint,” he said. “For long-term oriented investors it would be better for the industry to get more right-sized where companies are focused on generating profit at a conservative gold price assumption.”

‘Darwinistic Scenarios’

Combining companies can help eliminate their respective unprofitable operations, he said. Weak companies with good assets may also be targeted by stronger producers, he said.

“Or the least appealing of the Darwinistic scenarios is a company that has gotten all of those things — capital allocation, risk management and operational execution — wrong and they wind up going bankrupt,” he said.

There have already been some moves toward consolidation this year. Yamana Gold Inc. and Agnico Eagle Mines Ltd. bought Osisko Mining Corp. after beating out a hostile bid from Goldcorp Inc. Barrick Gold Corp. (ABX) and Newmont Mining Corp., the two largest producers by sales, also discussed a merger this year before breaking off talks in April.

“I do believe the gold industry is in the process of consolidating,” Wickwire of Fidelity  said.

‘Survivors and Thrivers’

Wickwire said as an investor he focuses on companies he terms “survivors and thrivers”: those with good management and strategy. He is also interested in enterprises that may have poor strategy or boards and management but own good assets that would be better operated by another producer. He declined to name specific companies.

The Fidelity Select Gold Portfolio rose 17 percent this year through Sept. 12, compared with a 2.4 percent increase in New York gold futures. The Philadelphia Stock Exchange Gold and Silver Index of 30 companies gained 8.9 percent.

Wickwire holds both bullion and gold equities in his fund. While gold miners underperformed the metal in the past two years, they can also outperform strongly when companies’ operations, capital allocation and risk-management decisions improve, he said.

“Under the appropriate backdrops, if you have a 10 percent movement in the gold price, some companies out there have the potential to generate 30 to 40 or 50 percent cash flow and earnings-per-share growth,” Wickwire said. “And when the companies are executing, the market rewards that dynamic aspect with a higher valuation.”

WTI – and Gold – Drops on Date – as Global Manufacturing Misses Estimates

West Texas Intermediate crude fell amid speculation that weakening manufacturing from Germany to China will cap global oil demand. Brent declined in London.

Futures dropped as much as 1.2 percent from the Aug. 29 close. Floor trading in New York was shut for the Labor Day holiday, and transactions will be booked for settlement purposes today. Purchasing manufacturing indexes for Germany, Italy, the U.K. and China all came in below estimates for August, while OPEC’s output increased to the highest level in a year.

“All eyes are on the demand side, and weaker statistics for example in China are bearish,” Bjarne Schieldrop, chief commodity analyst in Oslo at SEB AB, said by telephone. “The increase in tension between Russia and Ukraine is bearish for oil” because economic sanctions on Russia may eventually result in a slowdown in Europe, he said.

WTI for October delivery declined as much as $1.19 to $94.77 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.88 at 1:46 p.m. London time. The volume of all futures traded was more than double the 100-day average for the time of day. Prices decreased 2.3 percent last month and are down 3.6 percent this year.

Brent for October settlement was $1.11 lower at $101.68 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.83 to WTI, compared with a close of $7.23 on Aug. 29.

Factory Output

China’s manufacturing slowed more than projected last month, joining weaker-than-anticipated credit, production and investment data in indicating that the economy is losing momentum. The nation is the world’s second-largest oil consumer.

Markit Economics’ euro-area gauge slid more than initially predicted, with the index for Italy unexpectedly falling below 50, signaling the first contraction in 14 months. In the U.K., manufacturing expanded by the least in more than a year.

A final reading of Markit’s U.S. manufacturing PMI is due today, along with the Institute for Supply Management’s factory index for August, which economists forecast will drop to 57, from 57.1 in July.

“There are slowdowns occurring,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “OPEC is producing enough oil to placate any issues.”

Production from the 12-member Organization of Petroleum Exporting Countries rose by 891,000 barrels a day to 31 million in August, according to a Bloomberg survey of oil companies, producers and analysts. Nigeria, Saudi Arabia and Angola led supply gains as new deposits came online, security improved and field-maintenance programs ended. Iran and Venezuela were the only members to reduce output.

Ukraine warned of an escalating conflict in its easternmost regions as U.S. President Barack Obama headed to eastern Europe to reassure NATO members. Ukraine’s army will take on Russia’s “full-scale invasion,” Defense Minister Valeriy Geletey said on Facebook, a shift away from the government’s earlier communication that focused on battling insurgents.

Dollar Strengthens Before Data as Bonds Decline With Gold

The dollar strengthened to a seven-month high against the yen, government bonds tumbled and gold fell before data that analysts forecast will show expansion in U.S. manufacturing.

The dollar climbed 0.6 percent to 104.93 yen at 8:42 a.m. in New York and gained 0.4 percent to $1.6535 per British pound. Yields on 10-year Treasury notes increased four basis points to 2.38 percent. Futures (SPX) on the Standard & Poor’s 500 Index added 0.1 percent after the index rallied the most since February last month. Gold dropped 1.5 percent.

U.S. investors return after the Labor Day break with manufacturing and construction spending reports. Gauges of factory output in Europe and China signal slower growth, boosting speculation that policy makers will need to boost stimulus measures. European money markets are pricing in about a 50 percent probability that the European Central Bank will cut interest rates by 10 basis points this week, according to BNP Paribas SA.

“In the U.S. across the board we have had strong data,”said Niels Christensen, chief currency strategist at Nordea Bank AB in Copenhagen. “That will keep growth momentum going. We have had a positive dollar trend for the past two months. I find it difficult to see this trend is going to disappear in the short term.”

U.S. Reports

The Institute for Supply Management’s August factory gauge probably held last month near the highest since April 2011, according to the median of 70 estimates in a Bloomberg survey. Another report probably will show U.S. construction rebounded in July, a Bloomberg survey showed. Reports yesterday signaled manufacturing slowed in China, the U.K. and the euro area.

The yen fell to its lowest level against the dollar since Jan. 16 amid speculation Japan’s Prime Minister Shinzo Abe will appoint an ally to head the ministry in charge of reforming the Government Pension Investment Fund, potentially boosting investment overseas. The currency weakened to 105.44 on Jan. 2, a level not seen since October 2008.

The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, climbed 0.3 percent to 1,033.71 and touched 1,034.16, the strongest since January.

The pound weakened after a YouGov Plc poll showed growing support for Scottish independence before this month’s referendum. One-month implied volatility on sterling versus the dollar jumped by the most in almost six years.

Government Bonds

European government bonds fell as Germany’s 10-year yield increased four basis points to 0.91 percent and the U.K.’s rose five basis points to 2.43 percent.

The euro overnight index average, or Eonia, which measures the cost of lending between euro-area banks, fell to a record minus 0.013 percent yesterday.

Corporate borrowing costs fell to a record in Europe, with the average yield demanded to hold investment-grade bonds in euros dropping to 1.28 percent, according to Bank of America Merrill Lynch index data. The gauge declined 19 basis points in the past month on stimulus speculation.

The Stoxx 600 of European shares fell 0.1 percent after increasing 0.5 percent in the past two days.

Vallourec SA climbed 4 percent after UBS AG advised investors to buy shares of the French producer of steel pipes for the oil and gas industry. Weir Group Plc gained 2.9 percent after Credit Suisse Group AG raised its recommendation on the British supplier of pressure pumps to outperform from neutral.

Asanko Gold Inc. Spec BUY

AKG : TSX : C$2.50
AKG : NYSE MKT
SPECULATIVE BUY 
Target: C$3.25

COMPANY DESCRIPTION:
The combination of AKG and PMI created a significant gold
development company with 2P reserves of 4.8 Moz with a
permitted, financed (US$231M in cash, Q2/14) mine plan on half
the reserve (Obotan project) with the permit in hand with a permit
pending on the other half (Esaase project). All the assets are
within the Ghana, one of the premier jurisdictions in the entire
African continent.
All amounts in C$ unless otherwise noted.

Metals and Mining — Exploration and Development
GOLD ROYALTY ON PHASE 1 REDUCED FROM 7% TO 5% NSR
Investment recommendation
The company announced an agreement to buyback a 2% NSR reducing
the overall NSR from 7% to 5% for Phase 1 (Obotan) of the Asanko Gold
Mine in Ghana, West Africa. We view the acquisition of the NSR as a
strong positive and highly accretive given that the Phase 1 project is
breaking ground and close to production (H1/16E). We raised our target
(+C$0.10) accordingly to C$3.25, a 30% premium to current price levels,
and maintained our SPECULATIVE BUY recommendation. We anticipate
more construction updates leading to a resource update for Phase 1
followed by an updated mine plan (Q4/14E

Investment highlights
 Our revised target price is based on an increase in our NPV8% (+4%
to US$733 M) of the combined Obotan (Phase 1) and Esaase (Phase
2) gold projects, now known as the Asanko Gold Mine, related to the
reduction of the NSR at Phase 1 (Obotan) from 7% to 5%. On an
NPV8% basis, we valued the 2% NSR on Phase 1 at C$25-30 M (LT
US$1422) The drop in our NSR assumption from 7% to 5% for Phase 1 is
related to the recently announced purchase of the 2% Goknet
(privately held company) NSR for 1 M shares of AKG and cash (we
estimate US$1 M as the details were not disclosed). In addition, AKG
will transfer the rights to two exploration projects, Kubi and Diaso,
which the company deems as non-material.
 In November 2012, Asante Gold Corp. (ASE : TSX-V
offered to purchase half (1%) of the 2% NSR on the Obotan project
from Goknet for C$22.5 M via shares (45 Msh, C$0.50), which
would now be worth about C$4 M (for 1% NSR). The sale was never
completed

Detour Gold Corporation

DGC : TSX : C$14.90

HOLD 
Target: C$15.00

COMPANY DESCRIPTION:
Detour Gold Corp. is a gold development company presently focused on advancing the Detour Lake project in the Abitibi Greenstone Belt of northeastern Ontario.
All amounts in C$ unless otherwise noted.
Investment recommendation
We maintain our HOLD rating on Detour Gold but are raising our target
price to C$15.00 from C$11.00. The company has made considerable
progress in de-risking the balance sheet and ramping up the Detour Lake
operation. Year-to-date, the stock is up 234% relative to the S&P/TSX Gold
Index, highlighting the market’s favourable response to management efforts
in addition to potential M&A speculation. While progress-to-date has been
encouraging and the plant is expected to hit nameplate capacity by year-end,
we still see a long way to go before the ramp-up is complete. As per the
latest mine plan, the head grade is expected to gradually increase to reserve
grade in 2017 while mining rates are expected to continue to ramp-up to
peak at 389 ktpd in 2020.
Detour Gold currently trades at 0.81x P/NAV and 8.1x P/CF 2015 vs the
large cap producer average of 0.89x and 10.2x respectively. At this stage of
the ramp-up we believe the discount is justified – continued execution on the
mine plan and successful completion of the ramp-up could lead to a
meaningfully higher multiple over the next few years. Considering the stock’s
higher leverage to the gold price, we also see the potential for the share price to move higher if the gold price continued to increase.

Valuation

We have updated our valuation and forecasts to reflect our revised commodity and currency price deck. The stronger assumed C$ has had a negative impact on our valuation and forecasts, but offset by lower assumed sustaining capital forecasts and longer-term operating costs closer to the recent mine plan (We had previously modeled 20% higher LOM sustaining capital and 20% higher longer term site costs beyond 2020).
The combination of the encouraging progress to date, expected meaningful operational improvements in H2/14, greater comfort level following the recent positive site visit and productive meetings with management have resulted in us increasing our target P/NAV multiple to 0.85x from 0.70x which is the primary reason for the increase in our target price.
Our 12- month target price has increased to C$15.00 from C$11.00 based on 0.85x (previously 0.70x) our operating NAVPS estimate plus working capital and other adjustments.

Gold Investor’s Handbook – Top Pick

My personal top pick is B2Gold ( BTG in the U.S. and BTO.TO) – management built and then sold Bema Gold. The company’s most recent acquisition – at $125 per ounce shows their savvy . My article / blog ( yes less than humble me )with that news is at http;//http://www.amp2012.com June 13th article

AMP Gold and Precious Metals Portfolio: The Gold Investor's Handbook

http://www.amazon.com/gp/reader/0969031939/ref=sib_dp_pt#reader-link

 

M&A Activity Picking up in Gold Junior Space

from The Motley Fool

A few weeks ago, B2Gold (NYSEMKT: BTG   announced a $570 million acquisition of Papillon Resources (NASDAQOTH: PAPQF  . This merger seems to me a very bullish sign for emerging gold producers. Papillon was taken out at about $125/oz of gold. That’s $125/oz of measured, indicated and inferred resource. Papillon’s asset is located in Mali — yes, that’s Mali the country in western Africa. The project could be in production as soon as the second half of 2016. Again, I find this deal to be very bullish for the gold sector. Paying $125/oz for a project that’s at least two years from initial production and that has significant geopolitical risks says a lot about the state of the gold market.

When I read the news, I figured that Papillon’s project must be spectacular in some way, perhaps very high-grade or ultra-low cost — but it’s not. The ore grade is mediocre at 2.35g/tonne and the all-in sustaining cost at $725/oz is pretty good, but far from spectacular. These deal metrics for an asset in Mali really surprised me. Digging deeper, I spoke to some analysts who said that although Mali has overall Africa risk and infrastructure challenges, it’s one of the better countries to do business in, for Africa at least. For some reason, that wasn’t entirely comforting.

Reading between the lines, the real story here is that mid-tier and major gold producers are starting to look at their production profiles from 2016-17 on. There are going to be shortfalls as significant amounts of high-cost operations have been curtailed and development of projects with all-in costs north of $1,000-$1,100/oz are on indefinite hold. The one good thing about the Papillon project is that it’s of meaningful size, forecasted to produce 300,000 ounces per year from 2017 on.

Takeaway?
I think this deal shows that the writing is on the wall: Companies need to acquire near-term production. If B2Gold was willing to pay $125/oz for a non-spectacular (my opinion only) asset in Mali, what does that say about the possible takeout value of assets in North America? More specifically, there are a number of highly promising, low-risk, near-production plays in Nevada that really stand out compared to B2Gold’s acquisition of Papillon. Names that come to mind include Pershing Gold  (NASDAQOTH: PGLC  ) and Midway Gold (NYSEMKT: MDW  ), both of which will be in production next year, and Midway as soon as late 2014. Pershing already has fully built, 100% owned and paid-for processing facilities and heap leach pads. It should be in initial production in the second half of 2015 with a remaining capital cost of under $20 million, according to a recent research report by Cantor Fitzgerald.

Cantor forecasts all-in sustaining costs for Pershing of roughly $750/oz and 85,000 ounces of production for the full year of 2016, ramping up to 100,000 ounces in 2017. Call me crazy, but I will take Nevada production all day long over any production anywhere in Africa. Pershing’s Relief Canyon project is a past-producing mine, it has three open pits, roads, and other infrastructure already in place. The overall risk of getting Relief Canyon into production compared to that of Papillon’s project reaching production on time and on budget is like night and day.

Analysts and gold market pundits have noted the increase in suitors kicking the tires of assets in Nevada. It’s merely a question of when, not if, a wave of M&A sweeps over the state. Some deals of distressed juniors may occur at cheap valuations, but companies with highly experienced management teams, strong projects, near-term production and tangible assets will not be sold at fire-sale prices. Companies like Pershing, which has zero debt and a solid balance sheet, and Midway, with ample cash after issuing shares and obtaining an attractive debt financing package, are gems that should be valued at a substantial premium to emerging producers in Africa.

 

 

 

B2Gold Update

B2Gold Announces Otjikoto Project Update

6 hours ago – ACQUIREMEDIA

VANCOUVER, BRITISH COLUMBIA–(Marketwired – June 13, 2014) – B2Gold Corp.(TSX:BTO)(NYSE MKT:BTG)(NAMIBIAN:B2G) (“B2Gold” or the “Company”), is pleased to announce construction at the Otjikoto Mine in Namibia remains on budget and on schedule for completion in the fourth quarter of 2014. In addition the Company announces further high grade drilling results from the Wolfshag zone at Otjikoto.

Construction Update

Construction of the Otjikoto open pit gold mine remains on schedule to commence gold production in late 2014. All major excavations on the project are complete and the only substantial earthworks project remaining is the relocation of a gravel district road (scheduled to be completed in Q3, 2014). More than 16,000 cubic metres of concrete have been poured and less than 10% of the total volume remains outstanding. Steel erection continues on site and millwrights are currently installing the crusher and milling circuits. All material earthworks in the tailings pond have been completed and water has been captured from the rainy season to start the mill. Total employees and contractors on site now totals approximately 1,000.

Mining remains on budget with 2014 forecasts and more than 7.5 million tonnes have been moved since pit inception. The project team has recently begun to mine ore and is placing material on the stockpile in anticipation for start-up.

Based on the Feasibility Study, the projected average annual production for the first five years is approximately 141,000 ounces of gold per year at an average operating cash cost of $525 per ounce and for the LOM approximately 112,000 ounces of gold per year at an average operating cash cost of $689 per ounce. Total construction and development costs remain in line with the Otjikoto feasibility study released in February 2013, including pre-development costs of $244 million and deferred stripping estimates of $33 million. The Otjikoto feasibility study also assumed that a further $60 million in mobile mining fleet and power plant costs would be lease financed. Leasing arrangements were finalised in the fourth quarter of 2013 and will finance a total of $34 million of mobile mining fleet costs based on current foreign exchange rates. The balance of the fleet and power plant costs has been funded from the Company’s existing cash flows and credit facilities.

Given the discovery of the high grade Wolfshag zone near the planned open pit, the plant facility and support infrastructure will be built to support a plant expansion from the initial processing capability of 2.5 million tonnes per annum to 3.0 million tonnes. The increased throughput will be achieved through the installation of a pebble crusher, additional leach tanks and mining equipment at a total cost of approximately $15 million. Once the expansion is completed at the end of 2015, the Company expects that the annual gold production from the main Otjikoto pit would increase to approximately 170,000 ounces per year. The Company will rerun mine plans to include the higher grade Wolfshag zone.

Exploration Drill Results

The Company is also pleased to announce continued high grade results from the exploration drilling program on the recently discovered Wolfshag zone at its Otjikoto Gold Project in Namibia. The infill drilling on the Wolfshag zone continues to confirm the continuity of the main high grade shoots, WA and WB. The Wolfshag zone plunges at 10 to 15 degrees to the southwest and has been traced down plunge for 1,600 metres, and remains open to depth. Recent results are highlighted by hole WH14-162 which intersected 29.65 metres grading 9.53 g/t gold (7.70 g/t gold with assays capped at 45 g/t gold), including 15.30 metres at 17.34 g/t gold (13.78 g/t gold with assays capped at 45 g/t gold).

Drilling this year has concentrated on infilling the northern portion of the Wolfshag zone to allow for conversion of portions of the recently defined inferred resource of 6.8 million tonnes grading 3.2 g/t gold (703,000 contained ounces gold) (see B2Gold news release dated January 22, 2014) to an indicated mineral resource category. Conceptual studies for incorporation of the Wolfshag resource into the Otjikoto mine plan have started in support of the Otjikoto mine expansion. Results have been received from all but five holes of the exploration program completed to date. Select significant new results (uncapped) from the Wolfshag drilling include, from north to south:

--  WH14-155 with 8.95 metres at 4.37 g/t gold;
--  WH14-135 with 15.00 metres at 7.43 g/t gold, including 7.62 metres at
    12.91 g/t gold;
--  WH14-139 with 7.40 metres at 7.78 g/t gold; including 2.60 metres at
    11.07 g/t gold;
--  WH14-162 with 29.65 metres at 9.53 g/t gold, including 15.30 metres at
    17.34 g/t gold;
--  WH14-171 with 19.95 metres at 11.78 g/t gold; including 10.80 metres at
    20.58 g/t gold;
--  WH14-173 with 12.70 metres at 6.42 g/t, including 5.75 metres at 11.30
    g/t gold.
--  WH14-175 with 23.00 metres at 6.15 g/t gold, including 2.85 metres at
    19.09 g/t gold; and,
--  WH14-185 with 25.25 metres at 5.80 g/t gold, including 9.95 metres at
    8.49 g/t gold.

 

Exploration work is continuing on the Wolfshag zone with two drills currently active on infill drilling of the southern extensions of the zone to potentially allow for inclusion of this area into an inferred mineral resource class. Additional results will be released as they become available. Future work will continue to follow the Wolfshag zone at depth and to test several other targets and on the property.

2Gold's Quality Assurance/Quality Control

Quality assurance and quality control procedures include the systematic insertion of blanks, standards and duplicates into the core sample strings. The primary laboratory for Otjikoto is ALS Minerals in Johannesburg, South Africa, where samples are analysed by metallic screen fire assay and/or fire assay with atomic absorption finish and/or gravimetric finish using one assay tonne. Samples are prepared at ALS Minerals in Swakopmund, Namibia. Bureau Vertitas, Swakopmund, Namibia, is the umpire laboratory. All results stated in this announcement have passed B2Gold’s quality assurance and quality control (“QA/QC”) protocols. Tom Garagan is the Qualified Person as defined under National Instrument 43-101.

ON BEHALF OF B2GOLD CORP.

Clive T. Johnson, President and Chief Executive Officer

For more information on B2Gold please visit the Company web site at www.b2gold.com.

This press release includes certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”) within the meaning of applicable Canadian and United States securities legislation, including statements regarding anticipated exploration and development activities, completion of construction and the timing and amount of projected production at the Otjikoto Project, other operational and economic projections, and other anticipated developments on the company’s properties

You should not place undue reliance on forward-looking statements. B2Gold disclaims any obligation to update forward-looking statements, whether as a result of new information, events or otherwise, except as required by law.

 

FOR FURTHER INFORMATION PLEASE CONTACT:
B2Gold Corp.


Source: B2Gold Corp.

Trading alert : BTO

Iamgold says no news pending; no reason for stock surge

03 Jun 2014 – Reuters
UPDATE 1-Iamgold says no news pending; no reason for stock surge(Adds details from market participants, trading data, background)By Euan Rocha and Nicole Mordant

TORONTO/VANCOUVER, June 3 (Reuters) – Canadian gold miner Iamgold Corp said it was unclear why its stock had surged in late afternoon trading on Tuesday, and stressed that the company had no news pending at this time.

Toronto and New York listed shares in the stock both surged at around 1400 ET (1800 GMT). The stock rallied as much as 16 percent, before closing the day up more than 12 percent on both exchanges.

Market sources, who asked not to identified as it is against their firm’s policy on comment on individual companies, said the move might be tied to speculation around Iamgold’s long-planned sale of its Niobec niobium mine in Quebec.

However, Bob Tait, the company’s head of investor relations, stressed that Iamgold has nothing imminent to announce around that asset sale process.

The market sources said the surge may also be tied to B2Gold Corp’s move on Tuesday to acquire Australia’s Papillon Resources in a bid to gain access to its Fekola gold deposit in Mali.

Iamgold also owns interests in assets in Mali and Burkina Faso and market participants said there is speculation that the B2Gold move could spur other companies focused on West Africa to make a move on Iamgold, whose share price has fallen more than 70 percent in the last two years as the price of gold has slid.

However, the B2Gold deal was announced before market open on Tuesday, and the rally in Iamgold’s share price and the uptick in trading volumes began only in afternoon trading.

Trading data indicates that the vast majority of the spike in buying volumes on Tuesday afternoon was driven by brokerage firm CIBC Capital Markets, with other large firms like Jennings, ITG and National Bank selling positions in Iamgold’s stock.

A spokeswoman for CIBC was not immediately able to comment on the trading moves.

TRADING ALERT BTO

I have bee a fan – the Company headed by the management team that built and then sold Bema Gold is building production by acquiring mines for shares – not cash,

A recent news story announced a new acquisition – from amongst hundreds reviewed by BTO .

Production to rise from 400,000 to 700,00 in 2017.

B2GOLD CORP(BTO:TSX, CA)

2.56CADIncrease0.07(2.81%)Volume: 
Above Average
As of 10 Jun 2014 at 9:47 AM EDT.

QUOTE DETAILS

Open 2.54 P/E Ratio (TTM) 36.0x
Last Bid/Size 2.55 / 548 EPS (TTM) 0.07
Last Ask/Size 2.56 / 1077 Next Earnings
Previous Close 2.49 Beta 1.61
Volume 2,219,571 Last Dividend
Average Volume 6,729,937 Dividend Yield
Day High 2.56 Ex-Dividend Date
Day Low 2.52 Shares Outstanding 676.0M
52 Week High 3.69 # of Floating Shares 645.097M
52 Week Low 1.87 Short Interest as % of Float
chart
1 Day|5 Days

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March 21, 2013

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Goldman Sachs Calls for Gold Tumble to $1000

Gold is getting more attractive to hedge-fund managers even as Goldman Sachs Group Inc. says the metal’s surprising rally this year will soon fizzle.

Hedge funds and other speculators expanded bets on higher prices for a fourth week in New York futures and are now the most bullish since December 2012, government data show. While gold is off to its best start in six years after topping $1,350 an ounce, Goldman’s Jeffrey Currie says chances are increasing that prices will slump to $1,000 for the first time since 2009.

This year’s 11 percent rally came amid signs of weakening U.S. economic growth and Russia’s incursion into Ukraine. Investors who shunned the metal in 2013 are once more buying the biggest exchange-traded product backed by gold, with holdings poised for the first quarterly gain in a year. Hedge funds also are adding to bullish wagers on sugar, corn and coffee, driving combined wagers on a commodity rally to a record.

“The gains have been impressive,” said Chad Morganlander, a fund manager with Stifel Nicolaus & Co Inc. in New Jersey, which oversees about $150 billion of assets. “There’s been a perfect storm of geopolitical uncertainty as well as growth scares here in the U.S.”

Weekly Gains

Gold futures in New York climbed 1.3 percent last week, the eighth advance this year. The Standard & Poor’s GSCI Spot Index of 24 raw materials rose 0.6 percent, while the MSCI All-Country World index of equities increased 0.3 percent. The Bloomberg Dollar Index, a gauge against 10 major trading partners, slipped less than 0.1 percent and the Bloomberg Treasury Bond Index dropped 0.7 percent.

The net-long position in gold climbed 3.8 percent to 118,241 futures and options in the week ended March 4, U.S. Commodity Futures Trading Commission data show. Short holdings declined 15 percent to 26,321, the lowest since October. Net-bullish holdings across 18 U.S.-traded commodities rose 9.7 percent to 1.59 million contracts, the most since the data begins in June 2006.

U.S. service industries, which range from health care to finance and make up almost 90 percent of the economy, grew last month at the slowest pace in four years, data from the Institute for Supply Management showed March 5. Holdings through gold ETPs rose in February for the first time since 2012. Assets in the SPDR (GLD) Gold Trust, the biggest such fund, are up 0.9 percent in 2014 after a 41 percent plunge last year that wiped $41.8 billion in value.

Billionaire Paulson

Billionaire hedge-fund manager John Paulson, who holds the biggest stake in SPDR, posted gains in his firm’s main strategies in February partly as bets on gold paid off.

Russia said it may cut off Ukraine’s gas supplies, and the U.S. has threatened more sanctions after authorizing financial restrictions last week. The escalating tension also drove up prices for energy and grains amid concern that supplies would be disrupted.

The turmoil in Ukraine doesn’t change Goldman’s bearish view on gold, and the recent weakness in the U.S. economy is probably weather driven, not “real deterioration,” said Currie, the bank’s head of commodities research. Lower mining costs mean it’s more probable than it was six months ago that prices will drop below $1,000, he said in an interview.

February Payrolls

American employers added more workers than projected in February, indicating the U.S. economy is starting to shake off the effects of the severe winter weather, government data showed March 7. The China Gold Association says demand in the nation is poised to drop to 250 metric tons this quarter, down 17 percent from a year earlier.

“Some kind of middle-ground solution in Ukraine is probably the case at some point,” said Rob Haworth, a Seattle-based senior investment strategist at U.S. Bank Wealth Management, which oversees $115 billion. “For the two big commodities, oil and gold, we’ve probably seen relative highs for the next month. Once this geopolitical risk premium ebbs, I don’t see a lot of fundamental speculative support to push gold a lot higher.”

Bullish bets on crude oil rose 2.2 percent to 346,469 contracts as of March 4, the most ever in records going back to June 2006, government data show. West Texas Intermediate reached $105.22 a barrel in New York March 3, the highest since September. Russia is the biggest energy exporter.

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