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Gotta pass the torch.
Still holding but dont have the time to keep up with this board.
Good luck.
Id be happy if they could do 50 tons a day.
We will probably see more like 150 tons per week.
You have to start somewhere.
Gold's holding steady.
The waiting is a bit boaring.
Coming back slowly.
http://www.kitco.com/ind/Wallenwein/oct152008.html
Paper gold indeed.
I got a gold mustache. LOL
Nice to hear from you bob.
All is well . A gold mine awaits.
They have to weaken the dollar.
Dollar has never gotten strong from printing.
No puts was the way to play this market. Months ago. But now your going to pay up for puts when the market maybe close to or at a bottom.
Calls are the play today. 09. maybe 2010 calls would be a better buy. around march 2010 i think. Even march 09 is a good spec buy. GLTY
Good read.
Tue Sep 23, 2008
Rimfire and Northgate Commence Drilling at Boulevard, Yukon
Vancouver, BC -- September 23, 2008: Rimfire Minerals Corporation, TSX-V:RFM, is pleased to announce that in partnership with Northgate Minerals Corporation, TSX:NGX, drilling has commenced at its new gold discovery on the Boulevard Property. The Boulevard Property is located approximately 135 kilometres south of Dawson City, Yukon. Gold bearing mineralization, including 7.04 g/t gold over 6.0 metres, was discovered in two of three trenches over a 300 metre trend (see Rimfire news release PR08-12, August 20, 2008). The diamond drilling program will consist of 4 to 6 holes averaging 150 metres in length and is expected to be completed by mid-October.
The current program was initiated after this summer's discovery of gold-bearing mineralization in trenches testing anomalous arsenic-antimony-gold soil geochemistry at the Boulevard. Chip sampling from the first trench (TRBV08-01) yielded 7.04 g/t gold over 6.0 metres. One hundred metres southeast, trench TRBV08-02 returned 6.43 g/t gold over 2.0 metres. Gold mineralization is hosted in strongly sericite-clay altered schists with disseminated pyrite, arsenopyrite, stibnite and specular hematite that envelopes quartz and massive stibnite veins. Additional soil sampling undertaken in conjunction with trenching has now expanded the target to an area of 2.0 by 0.4 kilometres. Drilling will aim to test mineralization encountered in the trenches at depth. Soil sampling and a reconnaissance IP geophysical survey has commenced to help expand the target, as well as refine drill hole locations along trend.
This program is being conducted under an exploration alliance agreement with Northgate Minerals signed in December, 2005. The Boulevard Property is held jointly by Rimfire and Northgate, with each company having funded the initial $330,000 in targeting and exploration that led to staking of the property. To date, Northgate has funded approximately $435,000 of the required $1.5 million in exploration expenditures to earn an additional 10% interest (for a total of 60%) in the property.
This news release has been reviewed by Mark Baknes, M.Sc., P.Geo., VP Exploration of Rimfire Minerals, a Qualified Person for the purpose of National Instrument 43-101.
Mon Sep 8, 2008
Rimfire and Inmet Commence Drilling at Grizzly
Vancouver, BC -- Sept 8, 2008: Rimfire Minerals Corporation, TSX-V:RFM, is pleased to announce that in partnership with Inmet Mining, it has commenced the second phase of fieldwork at the Grizzly Property in northwest British Columbia. Phase 2 will consist of 1500 metres of drilling aimed at targets defined by the first phase program which included prospecting, mapping, soil geochemistry and a 32 line kilometre Induced Polarization (IP) survey. The drill program will test the Grizzly showing and targets on the Mirko Grid. The Grizzly copper-gold porphyry target shows a number of similarities to Teck Cominco/Novagold's Galore Creek deposit, including the volcanic host rocks, associated magacrystic syenite porphyries, regional magnetic signature and style and composition of hydrothermal alteration and mineralization. The Grizzly Property is approximately 50 kilometres east of the Galore Creek project and within four kilometres of the partially completed Galore Creek access road.
Previously reported mineralization from trenches at the Grizzly Showing returned results which included 38 metres averaging 0.74% copper and 1.1 g/t gold from continuous chip sampling. This copper and gold mineralization is reflected in the 2008 IP survey as chargeability values of 10 to 15 mV/V. This geophysical signature defines an area of potential copper -- gold mineralization that is 750 metres wide by 400 metres long and open to the northeast, east and to depth. This area of high chargeability is also coincident with a one square kilometre copper, gold and molybdenum soil geochemical anomaly which taken together define a compelling target. The 1500 metre drilling program directed at targets on both the Grizzly showing and the Mirko grid will be financed by Inmet Mining.
"We are very pleased that the IP has responded by highlighting and characterizing the surface mineralization at the Grizzly Showing," stated Jason Weber, P.Geo., President and CEO. "The knowledge we have gained by modeling the known mineralization with IP allows us to target aggressively within the large area of positive IP response in particular where those same areas coincide with strong copper and gold geochemistry."
The Mirko Grid
Soil sampling on the Grizzly property identified zones with anomalous copper, gold and molybdenum geochemistry two kilometres to the northwest of the Grizzly showing. This area (the Mirko Grid) is interpreted to be geologically similar to the Grizzly Showing based on airborne magnetic data and sparse outcrop; however the source of the soil anomalies is largely unknown due to poor exposure. Three consecutive 400 metre-spaced IP lines identified 100 to 200 metre wide zones with anomalous chargeabilities coincident with some of the highest molybdenum, copper and gold values in the Mirko soil geochemical anomaly. This pattern of coincident IP chargeability and anomalous soil geochemistry also provides the basis for a drill targets on the Mirko Grid.
The Grizzly project is being explored through a partnership with Inmet Mining announced January 2008. Under the terms of the agreement, Inmet Mining may earn up to a 60% interest in the property by funding at least $5 million in exploration at the Grizzly over four years. For additional information please see the press release dated January 31st, 2008.
This news release has been reviewed by Mark Baknes, M.Sc., P.Geo., VP Exploration for Rimfire Minerals Corporation, a Qualified Person for the purpose of National Instrument 43-101.
I think this is a good buy for Yamana or Kinross
It is an odd thing isnt it.
Future results will show the true value here.
Sit tight indeed,and watch the zeros add onto our debt.
Heard an estimate today that with everything added up we are looking at a national debt in the ballpark of 50 trillion dollars within the next 10 years.
Abuse of power and spending needs to stop.
Please feel free to add to or change the Ibox.
I think its hard to pass up a chance to buy Yamana below book value.
More inflation is coming i fear.
The thing that troubles me is. The "RESCUE" plan couldnt pass without 150 billion in extras attached to it.
10 million to hollywood? Come on
128 million to nascar
192 million to rum exporters.
This just turns my stomach. This country has gone off the reservation.
Montanore. Ive added you as an assitant. If your not intrested let me know. Thanks
Its nice to see some interest here.
And how does NXG find its way into that article?
HMMM ya gotta wonder a little.
No that would create the greatest buying op in our lifetime.
Better returns than even the dot com thing.
That relates to an article i read about how demand has silently outstripped supply by 13T a year.
I wish i still had it handy. But interesting things are coming for gold indeed.
Everything these guys have done in their short history has done them great justice.
They have built Yamana from a few small mines into a very strong company with a great future.
They have everything going for them and basically the price of gold,silver and copper against them.
They have the propertys to develop.
They have a new mine coming online end 08,early 09.
And i believe another short thereafter.
They have and are expanding their existing mines to higher output levels.
They pay a small dividend. Not much but something,and they just increased it.
Buddy if there is a mack truck about to run me down.
I swear i dont see it coming.
BTW. This is why i believe we are golden. Read below from web site. Agua Rica Quick facts
100% owned by Yamana Gold
Located in northwest Argentina, only 34 km from Alumbrera
Drill defined metal inventory of 21.8 billion pounds of copper, 13.3 million ounces of gold and 1.7 billion pounds of molybdenum
Estimated mine life of 23 years
Agua Rica's estimated rock value makes it one of the world's most significant undeveloped copper/gold/moly deposits known today
More than 176 holes drilled in excess of 65,000 metres
Completed positive feasibility study update in October 2006
Submitted Agua Rica Project Environmental and Social Impact Assessment to the Province of Catamarca, Argentina in July 2007
The Agua Rica deposit is located about 34 km from the Alumbrera mine in northwest Argentina, where the climate is generally mild and dry. There is road access to the Agua Rica site from the town of Andalgala (pop. 11,000) about 25 km away. The project has been advanced to the point where the Company now believes it could bring Agua Rica into production within four years for significantly less than any comparable development. The project's large metal inventory sits on the surface and is close to required infrastructure at Alumbrera that has the potential to dramatically reduce development costs.
I dont know if they can develop this major mine alone,but if their is a managment out there who can do it. This is the one.
Oh and i loved how they sold that crappy mine to Glen cairn before its faults showed through.
Anyways GLTY
LOL. They must protect the paper at all costs.
Which by the way is debt back by debt back by debt with a vauge promise thrown in there somewhere.
Yes. Only if the 700 billion here the etc..here stops.
Strange how the dollar can gain strength while a massive bailout...Printing is underway.
The strength in the dollar is going to be short lived.
The fed must lower to stimulate after such a big print.
JMO.
These are the times you need to have the sand to stand pat and step up.
This market will shake out the weak.
And only the true gold bugs will have the grit to ride it out.
The government prints and prints.
Golds about to grab hold and run.
Well...Im not a fortune teller. But even the dumbest economist can see gold going into the 1000's
INFLATION...
So the dollar had a short covering rally. It wont last
Ill be the first to say it.
Pull backs suck.
AUY is trading at a 25 P/E
Forward its a steal beyond a steal. WOW
You can now buy a share of yamana for less than book.
A Beauty indeed
This article to me shows just how valuable Yamana is as a stand alone miner and as a possible buyout target from the big boys.
As the precious metals summer doldrums come to a close, we need to assess the damage from another season of gold hatred and disdain. Like déjà vu for veteran gold investors, the mainstream financial media took advantage of gold’s seasonal weakness to proclaim the death of the Ancient Metal of Kings.
From a technical perspective gold’s summer activity indeed gave the naysayers fodder to jump on the “End of the Gold Bull!” and “Gold’s Bubble has Burst!” bandwagons. Gold’s $190 plunge from mid-July to mid-August saw it knife through a number of key support levels. This caused blood to flow in the streets even for the gold faithful.
Doldrums is an understatement for the rotten sentiment witnessed in the latter half of this summer. And honestly it is quite shocking to see the fear that $800 gold instills in folks. Investors are quick to forget that gold broke through $800 for the very first time in this bull less than a year ago. And it wasn’t until the first day of 2008 that gold reached the $850 level for the first time in 28 years.
From a strategic perspective gold is in fine technical shape. It was just about a year ago that it launched from $650 into one of its most powerful uplegs bull to date that saw it briefly eclipse $1000 in March. And while gold seems to be exhibiting gut-wrenching volatility, it has been consolidating on the high side of this most recent upleg and is likely positioning itself to launch into a glorious new upleg that I suspect will surpass the early-2008 highs.
While technicals are useful and give traders the opportunity to game the interim movements of this yellow metal, it is the core fundamentals that support the secular nature of gold’s bull. Gold is a commodity without equal and its myriad of fundamental drivers should continue to support a secular uptrend that is probably only near the halfway mark in duration. This is why after the carnage of summer it is vital to review the fundamentals that will continue to drive gold’s bull.
Of course the allure of gold is timeless. All throughout history the beauty, preciousness, and rarity of this metal has made it highly sought after. Gold continues to transcend time and to this day is still considered the ultimate store of wealth for people in every part of the world.
And these traits lead to one of gold’s strongest fundamentals, its value as a hedge against wildly inflating fiat currencies. Paper money not backed by gold has and will always fail, as proven throughout history. In fact the first stage of gold’s bull was primarily driven by the weakness of the world’s reserve currency, the US dollar.
Provocatively gold’s all-time nominal high achieved early this year is nowhere near where it needs to be to reach its high measured in constant 2008 dollars. Using the highly-flawed and ultra-conservative US Consumer Price Index we can inflate gold’s nominal price history and see that it is actually cheap at today’s prices. Gold would have to reach $2400 in order to achieve a real all-time high.
Ultimately currency inflation hedging and storing value are just a couple of gold’s many fundamental attributes. At Zeal we have been touting gold’s bullish fundamentals since the very beginning of its bull over seven years ago. And I encourage you to peruse our most recent fundamental essay that details the case for a secular gold bull.
But though there are many fundamentals that do support gold going higher, the one that reigns superior is economics. Economics is the most fundamental of fundamentals and its principles are the cornerstone of all market trends.
Supply and demand are of course the key components of economic fundamentals. If demand outpaces supply then prices will naturally rise as relatively more money chases after fewer goods. And inversely if supply outpaces demand prices will fall as relatively less money bids on more abundant goods.
When supply and demand are off kilter, the resulting economic imbalance has a near-term effect on prices that should appropriately adjust demand. Prices will either fall to grow demand or rise to decrease demand. And depending on how wide the gap is between supply and demand, prices can swing wildly in either direction in order to achieve an interim balance.
In gold we have seen these near-term economic trends play out very well. Since 2001 the price of gold has risen fast enough and high enough to quell the demand for jewelry, gold’s largest consumption category. According to data provided by the World Gold Council, compiled by GFMS Ltd., the demand for gold jewelry has fallen by 800 metric tons since 2000. While consumption has grown in other categories, this decrease in jewelry demand has for the most part bridged the supply/demand gap, but only temporarily.
In contrast to near-term price trends the long-term result of an imbalance is simply a matter of suppliers adjusting their output to meet demand. And in commodities a material change in output is indeed a long-term endeavor. So with the price of gold on the rise, resulting from supply not meeting demand through the course of this bull, suppliers have been tasked to grow their production of gold.
And in the gold trade the majority of supply comes from good-old-fashioned mining. About 70% of the world’s annual gold supply is extracted from the bowels of the earth. So with prices high and demand high, over seven years into this bull the gold miners should be quickly ramping up supply, right?
According to data compiled by the US Geological Survey, the mined supply of gold has been trending down since the beginning of this gold bull. This trend is astonishing, and really is counterintuitive to what you think would be happening this far into a secular bull.
Since 2001 the annual average daily price of gold has been trending higher each year, and has averaged an incredible $911 in the first half of 2008. Yet mine production is down! You would think these skyrocketing prices would be all the incentive miners need to ramp up supply and capture legendary profits for their shareholders.
And you don’t have to look very far to see that there is a disconnect at the production level. Take the world’s top-four primary gold miners for example. Barrick Gold (ABX-NYSE), Newmont Mining (NEM-NYSE), AngloGold Ashanti (AU-NYSE), and Gold Fields (GFI-NYSE) are collectively responsible for over a quarter of the annual mined supply of gold. And astonishingly these senior miners are projecting combined 2008 production to be 4.5m ounces less than what they produced in 2006, an 18% decrease.
To further buttress this disparity, according to GFMS the total supply of gold in 2007 from all sources was down by over 500 metric tons (16m ounces) from just two years prior. Now high gold prices have kept demand in check, thus leading to only a slight supply deficit in 2007, but this lack of production growth from the mining sector presents a serious structural problem.
Decreasing jewelry consumption has indeed allowed the economics of gold to stay relatively balanced in the interim, but this is not a perpetual trend. Gold jewelry consumption is back on the rise from its 2006 low, and will continue to rise as the world accepts higher gold prices. And interestingly this decrease in jewelry consumption has barely balanced growth on the investment front.
According to GFMS, the investment demand for gold has grown by nearly 500 metric tons since 2000. And as this gold bull continues to mature in Stage Two and eventually enters Stage Three, it is investment demand that will lead the charge on the growth front. And the investment demand for gold will be a lot less sensitive to price than any of the other consumption categories.
In the previous essay of this series I presented the case for why global per-capita gold consumption is likely to rise as a result of sharp demand growth from the world’s developing nations, particularly the Asian countries that have a cultural affinity for gold investment. If this trend plays out like I believe it will, the mined supply of gold will need to increase by at least 15% over the next 15 or so years.
So for the gold market to have any hope of balancing trade going forward, supply simply must rise. And this increase in supply has to come from the gold miners. The supply dilemma you see in the chart above needs to be confronted and corrected in order for this to happen.
Next week I plan on detailing the challenges that the gold mining industry is facing. There are of course many challenges that result from the economic and socioeconomic issues of today, but we are finding that years of underinvestment in infrastructure and exploration leading into this bull has taken its toll.
Mining in general is a tough business. The time and capital required to bring a mine to life from discovery to commercial production is extensive. And when you throw in scarcity, geopolitics, operating cost inflation, geological problems, labor shortages, and many more factors gold miners are faced with, it is apparent this industry is not for the faint of heart. This ongoing lack of production growth will continue to put a strain on the gold trade.
Shifting gears, a major fundamental factor to consider that feeds into the supply side of economics is longevity via the almighty reserves. Gold reserves are simply defined as a base of gold ore which can be economically extracted at the time of determination.
Reserves are the lifeblood of gold miners, as their operational and financial-market health is defined by these ounces in the ground. And since reserves feed production, miners must continually explore for and discover new reserves to replace those that are depleted.
When analysts and investors look at a mine or a mining company, fundamentals from operations (or projected operations) such as volume, operating costs, and profitability are important, but mining life draws the most attention. Mining life is simply reserves divided by annual production.
If a mine has 1m ounces of gold reserves and is producing 100k ounces of gold each year, it has a mining life of approximately 10 years. Companies can be looked at in the same fashion. Newmont for example has total gold reserves at all of its combined properties of 87m ounces. At a production rate of 5.1m ounces per annum, Newmont has a mining life of 17 years.
Global mining life can also be calculated thanks to reserves and production data provided by the USGS. As you can see in the chart below the USGS estimates that total global gold reserves in 2007 fall in the neighborhood of 42k metric tons (1.35b ounces). With annual mined production around 2500 metric tons (80m ounces), global mining life is about 17 years.
You will find that when you research the gold miners most of the quality companies have mining lives of at least 10 years, with many even over 20 years. And this USGS mining-life estimate is very representative of the average mining lives of those elite gold miners that trade in the HUI and XAU gold-stock indexes.
But there are a couple of things about this chart that I find disturbing. First you can see that a big drop in global reserves occurred in 2002. According to the USGS this resulted from a significant decrease in reserves reported from South Africa, the country that had long been the largest gold producer in the world until recently.
Not only has gold production been declining in South Africa for over 20 years running, a combination of lack of reserve renewal, high operating costs, labor problems, and declining ore grades has this long-standing gold powerhouse struggling to maintain its stature. Apparently in revaluing its assets South Africa came to the conclusion that its gold reserves were not as robust as originally thought.
But it is not this South African drop in reserves that is alarming to me. As you can see mining life has been consistent. But consistent is not good enough for how high gold prices have climbed. Since a reserve is a reserve based on economics, reserves should be growing with the price of gold.
In the simplest of terms, gold is only economical if production costs are less than what it can be sold for on the open markets. For example, back in 2001 when the average gold price was $270, in-ground gold was only a reserve if total operating costs were well under this price. But as prices climb higher, gold that is harder to extract and process, thus more expensive to produce, should become economical.
Before a reserve becomes economical, it resides in the ‘resources’ categories. And mining companies sit on a lot of resources in hopes that they become economical one day. At any given time resources are either waiting for the appropriate geological studies to deem them economical or they have failed studies that at the time determined the gold to not be economical.
Interestingly there is in fact a lot of gold in the earth, but much of it does not enjoy favorable-enough geological conditions to mine profitably. It takes a lot of expertise and even some luck to find gold deposits that are economical to mine. But the beautiful thing about mining is every resource has a price tag on it.
So if gold prices go high enough, those resources that are hard to get to or too low-grade, whether at existing mining operations or undeveloped discoveries, will eventually become economical. In going from $250 to $800, there should be a lot more resources that become reserves simply based on economics.
Those gold miners in 2001 sitting on resources that had projected operating costs of say $500, twice the market price, would never have dreamed of bringing a mine into production at the time. But in today’s environment, gold extracted at operating costs of $500 would be very profitable. Now granted there does need to be some inflationary adjustments for studies performed back when oil was $20, but operating costs are still not rising proportionately with gold.
So while the mining industry is performing sufficient-enough reserve renewal so that global reserves remain steady, the fact that reserves aren’t growing considering the massive increase in gold’s price is concerning. And no matter how you look at it, this does not bode well for the future of gold mining.
If you are at all attuned to the gold mining sector in the last couple years, you’re familiar with these companies’ CEOs’ constant grumblings about the existing gold mining environment and how difficult it is to find gold and develop mines these days. But in looking at the lack of global reserve and production growth, this isn’t just lip service to explain why they are struggling, this is reality.
It would be interesting to find out what percentage of today’s reserve renewal is upgrading already-discovered resources based on rising prices versus fresh new discoveries. I would lean more towards the former as gold discovery, especially large deposits, is just not prevalent these days. The easy gold has been picked over or is unattainable based on factors I’ll discuss next week.
Ultimately the trend of declining gold production and the lack of reserve growth is a huge boon for gold’s long-term fundamentals. And with the demand for gold expected to rise led by investment demand, the economics alone tell us this gold bull is nowhere near extinct.
After weathering the PM summer doldrums, the smart investors aware of gold’s fundamentals know to look past the hype and avoid the capitulation that is inflicting their comrades. Though the word bubble has been loosely tossed around in the same sentence as gold, this commodity is nowhere near bubble status. And when gold does eventually inflate into a bubble, it will be accompanied by uncontrollable greed and a popular mania. Gold has not been popular yet. It is still a contrarian play and should greatly reward those faithful that stick with it.
Big jump in gold sale spurs manipulation talk
Some analysts say only manipulation is government's attempt to take down oil
By Moming Zhou, MarketWatch
Last update: 7:54 p.m. EDT Aug. 29, 2008Comments: 255NEW YORK (MarketWatch) -- Recent heat from Congress and regulators, along with public speculation, over whether commodity prices are being manipulated has also reached gold pits, where the debate was stirred by a surge in bets last month that gold prices would fall.
"Congress is already investigating allegations of manipulation in the oil market, and it seems likely that it is only a matter of time before a similar investigation will be required in the precious metal markets," said Mark O'Byrne, executive director at Gold and Silver Investment.
Three unidentified U.S. banks held 86,398 short positions, or bets that gold prices will fall, in the COMEX gold market as of Aug. 5 -- 10 times more short positions than a month earlier, a government report showed.
The report by the Commodity Futures Trading Commission, which regulates U.S. futures markets, also showed short positions held by three U.S. banks in silver futures had increased more than four times during the same period.
"The data in the bank participation report is so clear and compelling that it is hard to conclude anything but manipulation," said Theodore Butler, a precious metals analyst, in a note.
The sudden jump in short positions coincided with a slide in silver and gold prices, which fell $12.30 an ounce in July and another $89.20 in August, their biggest monthly loss since at least 1984, according to Factset.
Manipulation vs. speculation
Taking a short position, even large amounts, however, doesn't equate to manipulation, which would imply collusion between several big players to influence prices one way or the other.
But the fact that three big banks were singled out in the CFTC report is nothing new. The regulator's reports always show the largest three players in futures markets in any given month.
"One can take any data and make it suit their argument," said Jon Nadler, senior analyst at Kitco Bullion Dealers.
"The theory that the market is somehow sinisterly manipulated, especially as it comes at a time when U.S. regulators are keeping a keen eye on the goings-on in the commodities and financial markets for just such type of evidence, is simply ludicrous and totally out of touch with market reality."
The talk of manipulation in metals markets follows similar allegations that crude oil and agricultural commodities prices were bid up by speculators, and were not the result of fundamental demand and supply situations.
As oil surged this year and almost reached $150 a barrel in early July, while food prices also kept on rising, cries grew louder in Congress that something had to be done.
The CFTC took steps to stamp out "excessive speculation" in the oil markets, while Congress also held numerous hearings and investigations into other futures market.
In July, the CFTC charged Dutch company Optiver Holding BV with manipulation of crude oil and of other energy futures. In at least five out of 19 attempts, the defendants successfully manipulated certain energy futures contracts, causing artificial prices, the CFTC alleged. See related story.
Of oil and elections
Some analysts say the surge in oil and gasoline prices earlier this year caused many worries in Washington, where all eyes were already turned toward the presidential elections in November.
"My gut feeling is that the Republicans wouldn't mind taking oil back down under $100 before the elections," said Paul Mendelsohn, chief investment strategist at Windham Financial Services.
Mendelsohn said he believes the government has tried to make the U.S. economy, oil, and markets appear in better shape and also to temporarily curb the immediate effects of the slumping housing market, of bad home loans and of the credit crisis.
In July, the Securities and Exchange Commission, the stock market regulator, limited so-called "naked" short selling of shares in Fannie Mae
The measure temporarily halted some financial stocks from falling further. But when the rule expired earlier this month, most stocks covered by the moratorium started dropping again. See related story.
Jeffrey Saut, market strategist at Raymond James, also believes that the commodities bull run may have run out of steam, even if only temporarily, because of the upcoming elections.
"There is a lot of nervousness, especially in energy pits, about the efforts underway to propose wrong-footed legislation from politicians who want to bring down the price of gasoline," said Jeffrey Saut, market strategist at Raymond James.
"I don't believe we have a speculative bubble, but these moves are going to drive a lot of hot money out of commodities pits between now and the elections," he told MarketWatch back in July.
Fundamentals
Many analysts also point to fundamental factors that helped bring down prices in commodities over the past month and a half.
"There is indeed a rational explanation for the decline in the price of gold and silver: the dollar has staged one huge rally, and fundamentals suggested the dollar should rally," wrote Mike Shedlock, an investment advisor at Sitka Pacific Capital Management, in an online blog post on Wednesday.
Dollar-denominated commodities, such as gold and crude oil, tend to fall when the dollar rises, as the commodities become more expensive to purchase for holders of other currencies.
The dollar has rallied against the euro and the British pound as European economies showing increasing signs of slowing down.
A slump in the dollar in the first half of this year, as the credit crisis flared up and the U.S. economy slumped, had helped push gold and silver prices to historic highs.
Banks and markets
As for the banks involved in the recent short selling of gold, they are only market makers, taking orders from large money players, such as hedge funds, said Jeffery Christian, founder of commodities research firm CPM Group.
Banks "stand to buy or sell the commodities, taking the other side from other people or institutions entering a market," said Christian. Gold and silver prices slumped recently "because investors, particularly short-term, technically-oriented funds, were selling."
Short-term funds tend to use over-the-counter channels to trade gold and silver and their positions were therefore not recorded by the CFTC.
"What you have here is the footprints of hedge funds exiting the commodities markets en masse," said Kitco's Nadler.
Banks, playing as a market maker to buy contracts from funds, hedge their risks by doing opposite trading in the futures market: They sell, or short, gold and silver contracts in the futures markets.
That explains the recent jump in banks' short positions, said Christian.
"Banks are the passive agents usually in markets," Christian added. "They make the markets, and take what is coming at them."
Moming Zhou is a MarketWatch reporter, based in San Francisco.
Shoshone Silver mining
is pleased to announce it has reached an agreement in principle whereby Shoshone Silver Mining will acquire 100% of the issued and outstanding shares of Kimberly Gold Mines, Inc., formerly of Post Falls, Idaho
After the acquisition is finalized, following approval of the Kimberly shareholders, Kimberly's Rescue Gold Mine property located in Idaho County in the south central part of Idaho, and the Kimberly Gold Mine property will become two of the key parts of Shoshone's new "Gold Division".
The high-grade Rescue Vein on the Rescue Mine property has yielded historical grades of nearly one ounce per ton with some 60% occurring as free gold. High grade samples have been taken at multiple locations along the vein.
The Kimberly gold mine is a former gold producer, and is also located in Idaho County, about 30 miles northeast of the Rescue mine. The property covers 480 acres and 24 unpatented claims and includes ten separate tunnels with 7,500 feet of workings that have access to four parallel, gold- bearing veins, including the Kimberly /Gold Crest vein. Kimberly has prepared a 43-101 compliant report for the Kimberly property.
The acquisition of Kimberly Gold Mines also brings to Shoshone a technical team that has a significant depth of experience in exploration, production, engineering, metallurgy, regulatory issues and international finance including:
Kevin Shiell, who has over 25 years operational mine experience at such majors as Stillwater Mining and Hecla Mining;
Don Rolfe, who has more than 30 years of engineering and mine management experience with mining companies such as Hecla Mining, Homestake Mining and Union Carbide.
Under the terms of the Letter of Intent, Shoshone Silver has offered one share of common stock for two Kimberly Gold shares of common stock. In addition, Shoshone Silver has advanced Kimberly Gold $200,000 to pay off their corporate debt. The $200,000 is secured by a promissory note.
This acquisition is subject to regulatory approval, and to obtaining approval through a special proxy balloting of Kimberly shareholders.
The board of directors of each company have unanimously supported the proposed transaction and believe the combined companies will provide shareholders with significant growth potential and a diversified asset base.
Other Highlights of the proposed acquisition include:
-- Significantly increased mill capacity for Shoshone;
-- Kimberly has an extensive inventory of mining equipment and assets with no outstanding debt;
-- Minimal corporate debt upon completion of the acquisition.
Shoshone President, Lex Smith stated "This acquisition represents another part of Shoshone Silver's strategic plans to focus on development activities and to diversify our asset base in past producing historic mining districts while maintaining a tight control over overhead cost and corporate debt."
Its always worth waiting for a good thing.
They are just caught up in the banking/mortgage mess.
Just an out of favor sector.
There is alot of value in Blackstone and thats why im here and will stay.
Must be me.
Nice web site.
Common sence tends to agree with you.
Im still in with even more.
So i wait.....
Is this something we want?
Lehman Brothers (LEH) is moving toward a possible sale of its investment management business, The Wall Street Journal reports. The firm has begun circulating financial information on the unit, which includes its Neuberger Berman unit, to a group led by private-equity firms Carlyle, Hellman & Friedman and General Atlantic, the Journal reports, citing people familiar with the situation. Other possible bidders include Blackstone (BX).
The news comes as Lehman weighs whether to seek a buyer or partner for the investment management unit as the firm’s financial woes mount. On Tuesday, JPMorgan became the latest firm to boost its estimate of the writedowns that lie in store for Lehman in the third quarter ending this month, to $4 billion.
Neuberger has been a strong performer since Lehman bought it in 2003, but Lehman’s big holdings of risky assets could expose it to outsize losses in coming quarters as house prices continue to fall, and Lehman has already raised capital three times this year. Like Merrill Lynch (MER), which last month ended up doing a dilutive stock sale and selling its stake in financial services company Bloomberg after saying repeatedly it would do neither, Lehman could end up having to sell some of its best assets simply to raise cash. Lehman, which fell 7% in trading Monday, should be in for another active session Tuesday
Wed Aug 20, 2008
Rimfire/Northgate Make Gold Discovery at Boulevard, Yukon
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PR08--12
Vancouver, BC -- August 20, 2008: Rimfire Minerals Corporation ("Rimfire") is pleased to announce the discovery of gold mineralization made during a trenching program conducted with partner Northgate Minerals Corporation at the Boulevard Property in Yukon Territory. The Boulevard Property is located approximately 135 kilometres south of Dawson City, Yukon. Gold bearing mineralization, including 7.04 g/t gold over 6.0 metres, was encountered in two of three trenches spaced 300 metres apart. A 1000 metre diamond drilling program to test this new discovery will commence September 1 of this year.
Chip sampling from the first trench (TRBV08-01) yielded 7.04 g/t gold over 6.0 metres. One hundred metres southeast, trench TRBV08-02 returned 6.43 g/t gold over 2.0 metres. A third trench located 200 metres northwest of trench TRBV08-01 appears to have been located off trend. Gold mineralization is hosted in strongly sericite-clay altered schists with disseminated pyrite, arsenopyrite, stibnite and specular hematite that envelopes quartz and massive stibnite veins. The work program, completed in July, targeted anomalous arsenic-antimony-gold soil geochemistry. Additional soil sampling undertaken in conjunction with trenching has now expanded the target to an area of 2.0 by 0.4 kilometres.
"This mineralization doesn't outcrop. It is a blind discovery that is the result of solid execution of classic grassroots exploration techniques," stated Jason Weber, President and CEO of Rimfire Minerals. "Together with Northgate, we have advanced the Boulevard from concept to discovery and we now look forward to the September drill program where we will test the extent of this mineralization."
This program was conducted under an Exploration Alliance with Northgate signed in December, 2005. This alliance targeted "Pogo-style" intrusion-related gold deposits in an area fitting the model criteria and possessing placer gold deposits without a known bedrock source. The Boulevard area was selected from a much larger regional compilation and reconnaissance silt sampling program that led to the identification of anomalous gold and pathfinder elements in creeks draining the Boulevard. Detailed soil sampling in 2007 outlined the multi-element geochemical anomaly that was the focus of the recent trenching program.
In light of these positive results, Rimfire and Northgate have added 96 claim units to the property and a follow up program is planned for early September. This program will consist primarily of diamond drilling with four to six holes (averaging 150 metres in length) to test the continuity of the mineralization at depth and on strike. Prior to drilling, reconnaissance IP geophysical survey lines will be completed to determine if IP will be an effective targeting tool. As well, auger soil sampling will be conducted over certain portions of the existing grid to recover higher quality samples from areas where permafrost and an ash layer have masked soil geochemical response.
The Boulevard Property is held jointly by Rimfire and Northgate, with each company having funded the initial $330,000 in exploration that led to staking of the property. To date, Northgate is has funded approximately $435,000 of the required $1.5 million in exploration expenditures to earn an additional 10% interest (for a total of 60%) in the property.
This news release has been reviewed by Mark Baknes, M.Sc., P.Geo., VP Exploration of Rimfire Minerals, a Qualified Person for the purpose of National Instrument 43-101.
About Rimfire
Rimfire Minerals Corporation is an aggressive, well-financed mineral exploration company with a portfolio of highly prospective gold and copper properties in western North America and Australia. Rimfire currently has in excess of two years of operating capital, and finances approximately 80% of its exploration through option and joint venture agreements. Current and former partners include AngloGold Ashanti Limited, Barrick Gold Corporation, Newmont Mining Company, Inmet Mining Corporation, Northgate Minerals Corporation, Fronteer Development Group Inc., Rubicon Minerals Corporation, American Creek Resources Ltd., Island Arc Exploration Corporation, Jaguar Minerals Limited and BWG.
Wed Aug 6, 2008
Luna Gold Intercepts 30.00 M Of 3.52 g/t Au And 40.00 M Of 2.01 g/t Au At Aurizona Demonstrating Vertical Continuity Of High-Grade Gold Mineralization
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View PDF Version of News Release
Vancouver, August 6, 2008 -- Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce new assay results from the Company's ongoing drill program at Piaba, the main gold deposit at its wholly owned gold project, Aurizona. Significant mineralized intercepts are highlighted below.
30.00 meters @ 3.52 g/t Au including 2.00 meters @ 28.29 g/t Au in hole BRAZD-262
7.00 meters @ 3.67 g/t Au in hole BRAZD-263
60.00 meters @ 1.39 g/t Au in hole BRAZD-264
12.00 meters @ 3.25 g/t Au and 40.00 m @ 2.01 g/t Au including 7.00 meters @ 7.06 g/t Au in hole BRAZD-265
Luna's CEO, Tim Searcy, comments "Drilling from the fresh rock zone, in the central portion of Piaba, continues to return grades that are well above average for the deposit. This, obviously, has very positive implications for continued resource growth at Piaba. Furthermore, these deeper intercepts are approximately 50m below the pit floor as modeled in Luna's recently delivered Feasibility Study (see press release dated July 7th) and represent excellent potential to enhance the project economics."
Complete assay results have been received for a further 5 holes totaling 978 meters drilled in the east-central portion of the Piaba deposit (assays for the full length of each hole will be available on the Company's website shortly, and will be updated as new information is released). All drill holes intersected gold mineralization. Significant mineralized intercepts are tabulated below.