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Glad to see you noticed, how do you like this new gold/currency format in the i-hub header...? Any suggestions? This is a custom made chart so I can include other currencies/gold...
Guess you already noted the Light Crude Chart, finally found a good chart for this...
gold and euro/RBC
http://www.thebulliondesk.com/content/reports/tbd/rbc/rbc.pdf
Here is my take on news release:
1) These are more surface trench results, not drill holes.
2) These surface trench results have extended the target, especially to the south.
3) The target area is certainly large enough to prove up 1M ounces of gold, if and only if, it is confirmed at depth via new drill holes.
In short, it's a nice size target area and getting larger but it means nothing unless we see drill hole results of .8g or more per tonne confirmed to a depth of 30 meters or more. These surface trench results show there is good mineralization at 3 meters depth, we need to know results for all 30 meters down.
New drill hole results will be released starting in July per the news release. The 4 holes drilled in 2004 had results over 1g per tonne. If these new 2005 holes are in line with 2004, then 1M ounces seems realistic.
Thanks Frank, figured it was something.
RNC Announces Further Confirmation of Bonanza Bulk Mineable Target
09:03 EDT Wednesday, June 15, 2005
TORONTO, ONTARIO--(CCNMatthews - June 15, 2005) -
Not for release in the United States.
RNC Gold Inc. (TSX:RNC) today announced results from an additional 1,500 geochemical analyses from the second phase of its trench sampling on the bulk tonnage gold target at the Company's Bonanza property in northeastern Nicaragua.
"This Phase 2 work helps to validate our theory that the gold mineralization within the target area is widely disseminated," said Thomas W. Lough, President & CFO, RNC Gold Inc. "In addition to further trenching, a Phase 1 reverse circulation drill program totaling 7,000-10,000 meters was initiated in early May 2005."
The drilling program is designed to delineate a resource that could be mined by open pit methods and heap leached on surface pads. To date, approximately 25 drill holes have been completed. Preliminary metallurgical leach testing is being conducted at RNC's La Libertad mine. The Company expects to begin releasing results from the drilling and leach tests in July 2005.
The principal findings of the Phase 2 trenching exploration program are:
- The latest in-fill trenching better defines the potential open pit target that now covers an area totaling approximately 300,000 square meters. The zone of surface disseminated gold mineralization in saprolite (weathered - oxidized bedrock) defines a 1 kilometer long by 150 meter wide zone merging with a southeast trending zone 600 meters long by 200 meters wide. The shape of the anomaly reflects the trend of the known underlying epithermal vein systems of the Panama Group of veins (where the northeast trending Neblina, Foundling NE, Cruzada and Neptune mineralized structures are intersected by the southeast trending Tesoro structure);
- Two of the trenches have extended the zone by 60 meters to the southwest where it remains open and 100 meters to the northeast where the zone tapers off into narrower northeast and southeast trends;
- The main northeast trend is slightly offset to the northwest of the projected surface trace of the Neblina structure and occurs on the hanging wall side of the steep northwest dipping structure, a typical feature of epithermal vein systems;
The program has revealed other areas of surface gold dissemination to the south and southeast of the current area. The areas are underlain by epithermal veins known from historical drilling and/or underground mining and warrant further investigation.
The table below illustrates the more significant gold values in saprolite from the latest 1,500 gold geochemical analyses.
----------------------------------------------------------------------
----------------------------------------------------------------------
Trench ID From (m) To (m) Int (m) Gold g/t Map Int.
----------------------------------------------------------------------
----------------------------------------------------------------------
L18+00E(north) 3.0 122.0 118.9 0.99 1(i)
----------------------------------------------------------------------
L18+00E(south) 6.1 234.8 228.7 1.17 2(i)
----------------------------------------------------------------------
L18+00E(south) 237.8 277.4 39.6 0.84 3
----------------------------------------------------------------------
L18+00E(south) 323.2 365.9 42.7 0.71 4
----------------------------------------------------------------------
L22+00E(south) 0.0 70.1 70.1 1.22 5
----------------------------------------------------------------------
L32+00E(south) 0.0 24.4 24.4 0.95 17
----------------------------------------------------------------------
L32+00E(south) 176.8 192.1 15.2 0.74 18
----------------------------------------------------------------------
L32+00E(south) 207.3 228.7 21.3 0.77 19
----------------------------------------------------------------------
L32+00E(south) 265.2 283.5 18.3 0.86 20
----------------------------------------------------------------------
L36+00E(south) 67.1 201.2 134.1 0.75 25
----------------------------------------------------------------------
L38+00E(south) 396.3 408.5 12.2 0.83 27
----------------------------------------------------------------------
L38+00E(south) 445.1 469.5 24.4 0.62 28
----------------------------------------------------------------------
L38+00E(south) 481.7 507.6 25.9 0.78 29
----------------------------------------------------------------------
L38+00E(south) 527.4 539.6 12.2 0.91 30
----------------------------------------------------------------------
L40+3150S(west) 22.9 27.4 4.6 3.07 35
----------------------------------------------------------------------
L42+00E(south) 12.2 115.9 103.7 0.75 36
----------------------------------------------------------------------
L42+00E(south) 332.3 372.0 39.6 1.58 37
----------------------------------------------------------------------
L42+00E(south) 387.2 411.6 24.4 0.89 38
----------------------------------------------------------------------
L42+00E(south) 475.6 533.5 57.9 0.78 39
----------------------------------------------------------------------
L42+00E(south) 634.1 686.0 51.8 0.65 40
----------------------------------------------------------------------
L42+00E(south) 704.3 725.6 21.3 0.80 41
----------------------------------------------------------------------
L49+00E(south) 94.5 176.8 82.3 0.92 45
----------------------------------------------------------------------
L49+00E(south) 213.4 240.9 27.4 0.67 46
----------------------------------------------------------------------
L49+00E(south) 490.9 500.0 9.1 2.05 47
----------------------------------------------------------------------
L49+00E(south) 655.5 664.6 9.1 1.41 48
----------------------------------------------------------------------
----------------------------------------------------------------------
(weighted averages using a lower 0.6 g/t gold cutoff grade and high
values cut at 4.0 g/t gold.)
The weighted averages calculated using the entire 5,493 geochemical analyses now available are illustrated on the attached map.
www2.ccnmatthews.com/database/fax/2000/rnc0615.pdf
(i) The gold results reported for the northwest end of trench L18E (intervals 1 & 2 in the above table and on the accompanying map) occur in material mechanically transported down-slope from the main vein and do not represent true mineralized saprolite. As such they do not form part of the mineralized zone. This area will be investigated further to determine the extent of this material that prevented the sampling of residual saprolite.
Sampling, analytical and reporting procedures
Weighted averages were calculated from the total 5,493 samples available using a cutoff gold grade of 0.6 g/t gold. Excessive spreading of the assay intervals was restricted by using minimum edge values equal to the lower cutoff gold grade and by cutting high values at 4.0 g/t gold.
Continuous 1.5 - 3.0 meter chip samples were collected in saprolite along trenches hand dug to a depth of 3 meters below the top soil. In some cases colluvium, (broken up bedrock fragments in soil), brown soil and/or fresh bedrock where saprolite was not available, was taken. For each sample three (3) to five (5) kilograms of material was bagged, and shipped in barrels to the CAS Laboratory in Tegucigalpa, Honduras, for preparation where the samples were dried and pulverized to a minus 150 mesh to produce a 300 gram pulp sample. The samples were then shipped to Acme Laboratories in Vancouver, B.C., Canada, for analysis by ICP-MS (induced coupled plasma) using splits of 0.5 grams leached in hot (95 degrees C) Agua Regia. Gold analyses were prepared using a larger 15 gram split size for a more representative sample. Samples duplicates are analyzed at regular intervals.
The qualified person on the project is Denis Francoeur, M.Sc, P.Geo., a practicing member (#0781) of the Association of Professional Geoscientists of Ontario.
About RNC Gold Inc.
RNC Gold Inc. is a gold mining company focused on projects in the Caribbean basin. From its current production base of 100,000 ounces of gold, RNC is positioned for growth through operational efficiencies, exploration potential on property surrounding its present mines, through construction of new mines and the acquisition of new projects. The Company's main assets include the La Libertad and Bonanza mines in Nicaragua, and the Cerro Quema project under construction in Panama as well as the option to acquire 25% of the San Andres mine in Honduras.
www2.ccnmatthews.com/database/fax/2000/rnc0615.pdf
yes, I meant C$ up against the US$
any news?
MFN is likely just waiting for another steel rate hike or two...
what did you Cannucks do overnight...?
C$ down over $.01, what happened...?
Gold Heart Index turning bullish/GEGFI
http://www.gold-eagle.com/charts/goldheart.html
some huge gaps in Gold/Euro
here is interesting article on Gold/Euro written in Nov 2004
http://www.dani2989.com/gold/goldeuros27112004gb.htm
thanks. how about edv...? this is a long term hold for me at average price of US$2.02, waiting for another semi-annual dividend check if and until EDV net asset value approximates share price.
http://www.endeavourminingcapital.com/nav.php
how does the RNC chart look to you...?
if ever in doubt, check here:
should have been in Swiss Franc gold today it appears..., why didn't you tell me...!!
Gold Weekly-US$/Euro/Yen/A$
clarify your question...
but found this
here's current quotes:
I was thinking the same: "btw, Louis must be making a killing."
Euro/Gold now above 350
agree, volume is key...
I also follow NEM volume and Schultz index for the more speculative juniors...
http://www.investorshub.com/boards/read_msg.asp?message_id=6113021
that 24 month low 0f 13 has yet to change...
Gold 65 from 62 on May 31 13 - 91
since you have been posting this data, I never recollect the low going below 60...?
May be some hope for ARQ/ANO
Ga-Pascha is ANO property...
______________________________
Giant's platinum projects back on the radar
--------------------------------------------------------------
The weaker rand is putting previously delayed platinum projects at the world's largest producer back into contention Mining Weekly can today report.
Market speculation yesterday was that Anglo Platinum would move on some of its halted expansion projects.
This follows a statement by Anglo Platinum CEO Ralph Havenstein in Business Day this week.
In addition, the long-delayed development of Pandora, in the North West province, a joint venture with Lonmin Platinum, has been named as a candidate for go-ahead.
Mining Weekly Online has been told of new capital approvals at board level, but was unable to obtain official confirmation.
Head of strategy Francis Petersen confirmed that previously shelved projects were back on the radar, but could not provide specifics.
He also could not confirm whether a board meeting had provided approval for specific projects but did add that a budget for all shelved projects already existed.
Petersen elaborated that much of the decision-making process depended on the rand's continued weakness.
While commissioning would take years; a planning and designing relook is expected soon.
Projects in the Anglo Platinum pipeline which have been in the stop mode include Twickenham - linked to the Ga-Pascha black economic-empowerment (BEE) joint venture, De Broche with BEE Booysendal, Paschaskraal and the large 28-kilometre strike Modikwa, where mining is currently taking place, but which is being rescoped.
All these projects are on the Eastern Limb, where platinum and palladium are in a one-to-one ratio.
Pandora, by contrast, is in the Western Limb of the Bushveld, close to Rustenberg.
It is believed that a senior project manager from a rival firm has been appointed to head up the dormant projects - a contention Petersen denied.
It appears that a tender process will start in the next few months and companies tipped to be in the running include Lurgi, Fluor or Foster Wheeler.
Mining Weekly Online's source speculated that costs would be in the region of R700-million for the process development and the same cost for mine development, due to the scale of the project.
Business Day this week reported Havenstein as saying that the recent rand weakness may encourage the company to save marginal projects and reverse expansion delays.
This, however, depended on the stability of the currency.
But he also remarked that the currency was likely to remain stable and that a downward movement of the currency was substantial for prices of platinum-group metals.
A platinum analyst has speculated that other projects, not BEE linked, may be easier to implement.
Absa corporate and merchant bank commodities consultant Hilton Ashton agrees with the rationale behind moving on some selected projects but that Pandora will not make sense for the company unless the rand falls to R7/dollar.
He does not, however, see any other operation coming on-stream in the near future other than Anglo Platinum's biggest opportunities.
In February the company announced the possibility of closing marginal shafts and delaying expansion.
Cost-cutting has been an ongoing exercise for the mining fraternity since the rand's upward surge.
Modikwa, one of two joint-venture mines in the company's stable, is owned in partnership with Patrice Motsepe-led African Rainbow Minerals and each party contributes half of the development cost.
In November 2004, the mine was ramping up to full production to produce an expected 162 000 oz of platinum and 156 000 oz of palladium a year.
Research indicates that, in 2003, Anglo Platinum had scaled down an expansion programme targeted at reaching 3,5-million ounces by next year.
Pandora's story is slightly different, a BEE mine, delays in obtaining necessary authorisation for the project shelved mine development.
The mine is owned in conjunction with Lonmin Platinum, Northam Platinum and the Bapo Ba Mogale Tribe.
Originally announced in 2002, capital costs at the time were in the region of R2,8-billion.
This had already moved to R3,3-billion by last year.
But the unforgiving economic environment and delays in authorisation proved to be a spanner in the works of the mine
Interesting remarks, POG goes up thus production down!!
Now what happens if the Gold price starts to rise ? Of course the Mine's Manager's first priority is to extract the extra ore which was 'waste' just a short time ago. What does it tell you ? It tells you that the mine's mill recovery rate will drop. OK, but what does that mean ? It simply means that mine output will drop since the rated mill capacity doesn't change overnight. This mechanism is described in detail in the comments below which I received from a geology dr who is president of a junior exploration company.
Eric,
I am the president of a junior exploration company. I have been in the business for over 30 years. I have a Bachelor degree in engineering, a Master's degree and a Doctorate in geology. I have worked in government, large and small companies.
I would like to bring to your attention one point that I feel is critical to the upcoming decline in gold production.
All mines are designed for a specific rate of production in tonnes mined and milled, not in ounces of gold produced. All mine's costs are measured per tonne of production, not in ounces of gold output. These mines optimize for longevity, not profit. What this means is as follows:
1. A mine is not homogeneous. It has reserve blocks that range from low-grade (for example 1 gpt), up to high-grade (for example 30 gpt). Unfortunately, there are generally many more low-grade blocks than there are high-grade blocks.
2. A mine's operating structure is generally set at initial design, in that it has a rated mill capacity of 100, 1,000, or 10,000 tonnes per day. Its cost structure is likewise set by design in that a tonne of ore costs $x to mine, $y to process with $z for G and A. Therefore, for example, a 1,000 tpd mine with $x+y+z equal to $100 per tonne must process ore of that minimum value to break even. No operator will survive for long processing sub $100 ore. At US$330 per ounce and assuming a 90% recovery from the mill, the minimum profitable grade is close to 13 gpt (or near 1/3 of an ounce per tonne). As such, the operator will optimize by mining from various orebodies and stopes to mine as much as possible above the 13 gpt cut-off. Rock with grades of 8 gpt are waste. Daily production might be economic down to as low as 300 ounces per day (1,000 tpd at 1/3 per ounce x recovery).
As the gold price moves to say $420 per ounce, few of the mine's costs change, but now the revenue is 30% greater. Consequently, the Mine Manager's first priority is to extract the extra ore that was a short time ago, waste. The cut-off or minimum grade mined goes from 13 gpt down to 9 or 10 gpt, so the mine's 1,000 tpd output now drops from 300 ounces per day to 280 ounces per day.
All gold mines operate this way! So as the price of gold goes up, primary mine production drops. The higher the price of gold, the grater the drop in primary mine production. There will be some mothballed facilities brought on stream, but the start-up capital these require generally makes these slow to get started.
The same is true in a falling gold market. Primary gold production initially increases during declining gold prices as operators "high-grade" to remain profitable.
Just some comments that are relevant.
yet another reason for US$ gap up:
"The White House announced today that they expect the economy to grow at 3.4%, slightly less than their previous figure of 3.5%. They expect an average of 178,000 being added in Nonfarm Payrolls each month, and an Unemployment Rate of 5.2%. Previous forecasts were of 175,000 and 5.3%. Their inflation estimate was raised to 2.3%. Energy prices were blamed for the cut in economic growth. There were reportedly several questions surrounding the size of the Federal Budget Deficit, but there were apparently no answers. As a result of this report, the markets sold off as treasury yields rose, and the US dollar turned losses into gains."
I am sticking with the hedge fund theory...
just let me know when to buy those Toll Bros Jan 2007 puts again... I sold at a tidy 40% profit (after your timely warning, thanks!) and want to re-enter timely...
yes, I saw the 5 year bond results and 50% indirect participation, but did not think this was the driver. could have been, however. will be interesting to see how the 10 year goes.
Thanks Frank. Your recent calls on gold/etc. have been great here recently. Thanks for sharing your opinion.
huge spike at 12 noon in US$, here is only news I could find, watch out for those hedge funds?:
________________________
Dollar rises on hedge fund demand
NEW YORK (MarketWatch) -- The dollar was higher against other major currencies late Wednesday, benefiting from hedge fund sales of the euro for the U.S. currency.
In recent trades the euro was down 0.04% at $1.2238 and the dollar up 0.6% at 107.24 yen.
The dollar, which was lower against the euro during morning trade, later reversed course to trade higher, lifted largely by hedge fund plays, according to Brian Dolan, head of currency research at Gain Capital.
"There's no real news prompting this," Dolan said. "It's just a market dynamic. The euro tested the $1.2340 to $1.2350 level, and then triggered some stop losses."
Nicaragua Politics: Interesting development
"On Jun. 5, Lewites and former PLC member and presidency secretary Eduardo Montealegre announced the formation of a unified front during an assembly of the Conservative Party"
I believe such a Lewites/Montealegre team stands a good chance of winning 2006 election.
_____________________________________
Nicaraguans Back New Challenge to Former Presidents
(Angus Reid Global Scan) – Many adults in Nicaragua agree with a politician’s call for a unified front against Arnoldo Alemán and Daniel Ortega, according to a poll by M&R published in La Prensa. 69 per cent of respondents support Herty Lewites’ idea to avoid a fraudulent election.
In 2001, Enrique Bolaños—candidate for the ruling Constitutionalist Liberal Party (PLC)—was elected with 56.3 per cent of the vote over former head of state Ortega of the Sandinista National Liberation Front (FSLN). The president lost the support of the PLC in January 2002, when his government decided to take legal action against Alemán.
In December 2003, Alemán—who governed the country from 1997 to 2002—was sentenced to 20 years in prison for fraud, money laundering and embezzlement. Justice Juana Méndez agreed to keep the former president under house arrest for medical reasons. PLC and FSLN lawmakers currently operate under a loose coalition in the National Assembly.
On Mar. 6, the FSLN officially designated Ortega as its presidential nominee for the November 2006 presidential election. Former Managua mayor Lewites had topped several voting intention polls, but was expelled from the FSLN in February.
On Jun. 5, Lewites and former PLC member and presidency secretary Eduardo Montealegre announced the formation of a unified front during an assembly of the Conservative Party (PC). Lewites called the two former president "mafia figures," while Montealegre said he wants to rid the country of "a two-headed dictatorship."
Polling Data
Herty Lewites has called for the formation of a unified front against the pact between former presidents Arnoldo Alemán and Daniel Ortega to avoid fraud in the 2006 presidential election. Do you support or oppose this proposal?
Support
69.0%
Oppose
27.5%
No opinion
3.5%
Source: M&R / La Prensa
Methodology: Telephone interviews to 778 Nicaraguan adults, conducted on Jun. 3 and Jun. 4, 2005. Margin of error is 3.3 per cent.
Last 10 Insider Trades - Canadian stocks
http://www.canadianinsider.com/coReport/allTransactions.php
Much easier to navigate than SEDI, but not as much detail...
Stockhouse board is more active, they stumbled upon this news on Friday via DSR news release. Have been posting over at stockhouse board, this link is at bottom of the i-hub header and also below.
http://www.stockhouse.ca/bullboards/forum.asp?symbol=RNC&table=LIST
This Zopilote Honduras acquisition news really not that significant or material, at least to me. That is, no near term impact. RNC needs to hit 2Q numbers, i.e. over 24,000 ounces production at cash cost = $286 AND needs to confirm the bulk tonnage target at Bonanza (i.e. over 750K ounces would be more than enough) to really get the share price moving.
Also, a San Andreas Honduras acquisition, a producing and profitable mine, would certainly be material and positive as previously posted, if acquired upon the terms anywhere near originally envisioned.
Hopefully we get at least 2 of the 3 in the next few months. Namely:
1) Hit budgeted production and cash cost for 2Q05
2) Good drill results at Bonanza
3) San Andreas acquisition on accretive terms.
Nicaragua Politics -Nicaragua under state of emergency
MANAGUA, Nicaragua (AP) -- Nicaraguan President Enrique Bolanos declared a state of emergency on Monday, suspending parts of the constitution in order to confront a crisis caused by rising energy prices.
The decree read over state radio said the measure was needed "to assure economic stability and flows of foreign aid."
Bolanos said he hoped to ensure that Nicaragua "does not return to the dark night," a barbed reference to the frequent power outages of the 1980s, when the left-wing Sandinista government was in power.
His decree imposes an 11.83 percent increase in electricity prices for consumers of more than 150 kilowatts a month, which he said affected only 25 percent of the population.
Prices for other consumers would remain the same.
Bolanos said he would also adopt measures to ensure that the country complies with its agreement with the International Monetary Fund, saying that without international financial cooperation, "the country would enter into chaos."
Under the decree, rights to protest would be limited for 180 days.
Bolanos must submit the decree to the opposition-dominated legislature, the National Assembly, within 72 hours, where it could be approved, modified or rejected.
Leaders of the two main parties, the Sandinistas and the Constitutionalist Liberals, have been steadily trimming Bolanos' powers and foreign aid donors have expressed alarm at the confrontation.
"I hope that they approve it, because if they reject it, it would damage the country," Bolanos said.
_____________________
Emergency Declaration in Nicaragua Not Necessary, Opposition Claims
Raul Garcia Alvarez
Managua, May 31 (Prensa Latina, Cuba)
Nicaraguan opposition legislator Agustin Jarquin stated Tuesday Nicaraguan President Enrique Bolaños has no reason to declare a state of economic emergency in Nicaragua.
Jarquin, a member of the Nicaraguan Congress Infrastructure and Energy Commission, told Prensa Latina it "is the wrong way" because it will favour transnationals.
Monday, Bolaños said he made this decision in view of the crisis provoked by the rise in the price of oil, and sought for support from the International Monetary Fund (IMF).
The emergency decree came into force Tuesday, and approved an immediate rise of 11.83 percent in electricity tariffs requested by Spanish transnational Union Fenosa, but which supposedly will protect nearly 75 percent of the users consuming up to 150 kw a month.
The document is expected to be sent to the Legislature within 72 hours to be evaluated by the plenary. The economic emergency will last 180 days.
Jarquin said that precise steps to avoid economic damage to the country should be taken, especially to the majority of the population living in various levels of poverty.
He said that although there is an energy crisis, generating plants have started to reduce their electricity delivery to Union Fenosa, because of lack of payment.
The ideal approach to the crisis, he maintained, would be for the government to particpate in an integrated national dialogue to seek solutions to this and other priority issues with delegates of the FSLN and of the Constitutional Liberal Party (PLC).
The representative estimates that "behind the crisis", FENOSA has initiated a process to demand an insurance of guarantee for some 100 million dollars that it has subscribed with the present government.
"It seems as if Union Fenosa wants to leave the country," he said.
For their part, Consumer Defense Organizations have announced the start of popular actions against the rise in the cost of electricity.
China may use forex funds to buy oil
By MarketWatch
Last Update: 12:43 AM ET May 31, 2005
TOKYO (MarketWatch) -- China is exploring ways to use some of its huge foreign exchange reserves to buy imported oil, according to a published report Tuesday.
The Shanghai Securities News reported, citing an unidentified source, that the plan was first proposed as early as 2000 and would help China attain the twin objectives of making better use of its foreign exchange and ensuring vital oil supplies, according to AFX-Asia.
The Chinese newspaper quoted Li Yang, a senior economist at the Chinese Academy of Social Sciences and a former member of the monetary policy committee under the central bank, as saying the plan to use foreign exchange reserves to build up strategic oil reserves is reasonable.
But Li said the biggest obstacle to the plan is coordinating the actions of various government ministries and departments.
China had foreign exchange reserves of $659 million as of the end of March. Some economists have recommended that China diversify its reserves, which are still heavily weighted in U.S. dollars.
In March, Guo Shuqing, director of the State Administration of Foreign Exchange, suggested China could use some of its foreign exchange reserves to purchase imported oil, AFX said.
China already plans to build a strategic oil reserve, though this plan is believed to be making slow progress.
Niu Li, a researcher on global oil issues with the State Information Center, was quoted in the Shanghai Securities News Tuesday as saying the government should speed up this plan to shift reserves into oil in order to reduce investment risk.
Martin M brief comments here
Digging deep: a closer look at gold
Kate McCaffery
(May 30, 2005) Although investing in gold is a highly-profitable endeavor for some, it remains a complete mystery to many investors. Adding to the confusion for would-be gold bugs is the way gold company shares behave. The sector isn't delivering much in the way of performance, despite the fact bullion prices appear to be holding steady above the $400 mark.
Several executives gathered at a Toronto CFA society luncheon on Friday attempted to demystify the different aspects managers and analysts need to consider when looking at gold company offerings, such as mining operations and development, as well as the role gold can play in an investment portfolio.
Versatile and flexible management teams are critical for any mining company, says Stephen Walker, managing director and head of global mining research at RBC Capital Markets. "One of the things we cannot underestimate is good management." He says good mine finders don't necessarily make good chief financial officers. At the same time, a strictly numbers person might not appreciate the different laws, jurisdictions and regions a mining company needs to operate in.
As well, typical valuation metrics do not always apply to the companies. "It's hard to determine upside potential," he says. Metrics like adjusted market cap for instance don't fully capture the huge financing needs gold companies tend to have. Similarly, he says earnings multiples are "not very useful. It's hard to get normalized prices in this business."
Steve Reid, executive general manager for Canada at Placer Dome, discussed the typical timeline and process for mine development, explained the physical and economic differences between open pit and underground mining and talked about the role of the World Gold Council in gold retail marketing.
Gold exploration, he points out, is a high risk operation from a finance point of view. "You need to kiss a lot of frogs to find the one that is going to turn into a mine," he says. Recently, companies have been spending more on existing mines. Reid and Walker both say the way companies transition between the different phases of mine development from exploration and development to full operation and the level of cooperation that exists between the different groups running the mining company, technocrats and finance for example, are both important considerations for the would-be investor.
Poor management in the mining industry, says Walker, has destroyed more shareholder value over the years than it has created. "You need to have a strong management team to truly create value for shareholders."
Martin Murenbeeld, chief economist at Dundee Wealth Management, rounded out the discussion with a technical analysis of gold and its relationship and reaction to different market movements. He forecasts gold will reach $450 by the end of the year.
In his discussion, Murenbeeld pointed out that gold is generally negatively correlated to financial markets. More recently however he says gold is moving more in sync rather than out of step with markets.
"You never quite know when you're looking at a gold equity if it's a proxy for gold bullion or just an equity behaving the way equities behave," he says. "A technical analyst (would say) we're a bit long in the tooth for this market."
thanks much, wonder what Martin M was thinking.
Excellent Nicaragua Politics article.
VIEW: Daniel Ortega rides again —Carlos F Chamorro
Ortega resembles a shoddy imitation of Fidel Castro without the oil wealth of Hugo Chávez. Lewites — like Vázquez, Lagos, Kirchner, and Lula — offers the possibility of a modern and democratic left, socially committed and at the same time capable of orchestrating national solutions while recognising and negotiating profound differences with the US and the IMF
With the left on the march in much of Latin America, it is no surprise that Nicaragua’s Sandinista leader Daniel Ortega is trying to make a comeback. But Ortega is creating a state of emergency in his party as he tries to diminish the threat posed by Herty Lewites, the former mayor of Managua and the country’s most popular politician. With one demarche, Ortega dismissed the need for a party primary and designated himself as the Sandinistas’ candidate for next year’s presidential election.
What’s striking about Ortega’s move is that he is ready to risk so much political capital, not only expelling Lewites from the party but cancelling his challenger’s permits to hold political rallies and forbidding him to use Sandinista party symbols. Yet, despite all this, Ortega has yet to diminish Lewites’s ability to rally the masses. Ortega’s display of raw power is thus merely a reminder of his autocratic ways.
This will be Ortega’s fifth run for the presidency, having lost his last three attempts. It plays handily into the Bush administration’s recall to office of veterans of the anti-Sandinista “Contra War” of the 1980s, including Elliot Abrams, John Negroponte, Roger Noriega, Dan Fisk, and Otto Reich. In a reminder of that confrontation, Ortega accused his old enemies in the United States of drafting a plan to assassinate him. US Undersecretary of State for Latin America Roger Noriega responded by calling Ortega a “hoodlum”.
Ortega is wagering that attacking Bush will resonate with the Sandinistas and provoke them to close ranks, thereby stifling internal party dissent. But in an already polarised environment, an Ortega-Bush standoff is nothing more than a self-fulfilling prophecy.
In arguing for his candidacy, Ortega wants supporters to believe that his presidential campaign is part of the wave of recent victories won by the Latin American left. But this is only half right.
A new Latin American left is developing, but Ortega is not part of it. In the context of the new Latin American left, Ortega resembles a shoddy imitation of Fidel Castro without the oil wealth of Hugo Chávez.
The standard bearer of Nicaragua’s new left is Lewites. Like Vázquez, Lagos, Kirchner, and Lula elsewhere in the region, Lewites offers the possibility of a modern and democratic left, socially committed and at the same time capable of orchestrating national solutions while recognising and negotiating profound differences with the US and the IMF.
These new leaders seek to deal with the US in a manner that avoids alienating a superpower and isolating their countries. To Ortega, such a posture reeks of betrayal, social democratic aberrations and imperialist tendencies.
But despite Ortega’s anachronistic politics, he has a good chance of winning the election in November 2006. He has only to keep his party united and the anti-Sandinista vote divided. Ironically, his principal ally in this adventure will be his old enemy, former president Arnoldo Alemán, who is under house arrest for corruption. Between them, the two caudillos control 90 percent of the parliament, the Supreme Court, and the Electoral Commission. Together, they can keep Nicaragua’s current president, Enrique Bolaños, in check indefinitely.
Alemán, too, faces a rebellion in his Liberal Constitutional Party (PLC), led by former treasury minister Eduardo Montealegre, a presidential hopeful popular in the party’s liberal wing. If Alemán blocks Montealegre’s candidacy in the PLC and pushes him to form another political party, Ortega’s chances for winning the presidency increase sharply. The business interests that finance political campaigns face a difficult dilemma: Is it preferable to align with a PLC dominated by a corrupt Alemán or support a new democratic force and risk helping Ortega win?
Although a three-way race is pure speculation at this point, it’s clear that it offers Ortega the best of all electoral worlds. It’s so tempting that Ortega is likely to help rehabilitate Arnoldo Alemán, betting that freeing him will serve his political interests. The main glitch in this scenario, however, is Lewites.
Polls show that an overwhelming majority of Sandinista voters prefers the former Managua mayor – 72 percent versus 18 percent for Ortega. If Lewites is able to organise nationally and maintain a presence in the streets, he could quickly become unbeatable. A poll conducted in January projected that in a four-way race, Lewites would come in first, followed by Montealegre. Ortega would manage only a third-place finish. Alemán, or his candidate, would run dead last.
If voters continue to lean toward Lewites and Montealegre, the two candidates could elect more deputies to the National Assembly than the Sandinistas and the PLC combined. Such an outcome would be a welcome end to the dominance of Alemán and Ortega, who have served Nicaraguans poorly.
While it’s premature to make definitive predictions, the Lewites and Montealegre rebellions have already done more in eight weeks to change the country’s political landscape than anything else in the last two years. As a result, Nicaragua’s people, not its strongmen, may yet choose the next president. —DT-PS
Carlos Chamorro is director of the Nicaraguan television programme ‘Esta Semana’, an editor of the weekly ‘Confidencial’ and former director of the Sandinista newspaper ‘Barricada’
Nicaragua Politics
Posted on Sun, May. 29, 2005
Odd alliance gains power
All of Nicaragua watches as Ortega-Aleman 'pact' plays out
BY HUGH DELLIOS
Chicago Tribune
MANAGUA, Nicaragua — They are the odd couple of Nicaraguan politics, two old enemies working together to take over the country.
One is former President Daniel Ortega, the leader of the Marxist Sandinistas who battled U.S.-funded contra rebels in the 1980s and is running for president again next year for the third time since being voted out of office in 1990.
The other is former President Arnoldo Aleman, leader of Nicaragua's right-wing Liberal Party, who portrayed himself as the country's savior from the Sandinistas in the 1990s but who appears to have softened his view since being imprisoned for embezzling $100 million.
Combining their party votes for a majority in the National Assembly, the two men have nearly paralyzed the government of President Enrique Bolanos. They have stripped his ability to oversee public services, solve land disputes and destroy old missiles the United States fears will fall into the hands of terrorists.
Ortega and Aleman say their cooperation is an attempt at U.S.-style bipartisanship. But critics believe "the pact," as their new alliance is known, is a trade-off for more selfish interests: Ortega's hunger for power and Aleman's desperation for freedom.
Popularly known by his nickname, "The Fat Man," Aleman is serving a 20-year prison sentence for his 2003 corruption conviction. Ortega could orchestrate his release because the Sandinistas fill most of the country's judge seats.
In fact, citing health reasons, one Sandinista-aligned judge ruled that Aleman could serve his prison time at home on his El Chile ranch, from which he runs his party and regularly holds meetings with his loyalists and even Ortega.
To many Nicaraguans, "the pact" resembles a devil's pact, although they might debate which one is the devil.
"These two have captured the politics of the country, them and their (political) machinery," said Sofia Montenegro, an academic who just completed a study of Nicaragua's political difficulties. "Everybody here is a prisoner of this situation."
The pact is not what most Nicaraguans had in mind in 1990 when they laid down their arms and began trying to build a democracy after a decade of war. And it has contributed to a raging political and constitutional battle here that is just one of several crises worrying authorities in Latin America.
At a time when U.S. officials are heralding signs of democratic change in the Middle East and elsewhere, officials in this region worry about a deterioration and manipulation of democratic reforms and institutions amid frustration that they have not helped solve poverty, corruption and other economic problems.
With Bolanos defying the Ortega-Aleman alliance, Nicaraguans fear that a coming clash between him and the assembly could threaten the stability maintained since the contra war ended.
Also at stake is international aid that Nicaragua, the second-poorest country in the Americas after Haiti, can ill afford to lose. Both the United States and the International Monetary Fund have threatened to cut off funds as the dispute has unfolded.
Another worry is that Nicaraguans, more concerned about working and surviving than about postwar politics, will become disillusioned with democracy. On the street, occasional whispers of nostalgia can be heard for the hard rule of Anastasio Somoza, the U.S.-backed dictator the Sandinistas overthrew in 1979.
"The people see us (politicians) as a bunch of crazies in another world. This looks like just a fight for power," said Lindolfo Monjarretz, Bolanos' spokesman. "Until now it hasn't affected the economy, but we are playing a dangerous game."
While some blame the crisis on missteps by Bolanos, others blame the fourth major player in Nicaraguan politics: the U.S. government. These critics, from left and right, say unrealistic U.S. pressure to marginalize the Sandinistas has contributed to a polarization and entrenchment of the country's politics.
In recent weeks, behind unspecified assertions of corruption, the Bush administration has stepped up a campaign of revoking Nicaraguan officials' visas to visit the United States. Earlier this month, the U.S. deported a Supreme Court justice from Aleman's party after he tried to enter the country through Miami.
Officials from Ortega's Sandinista Front for National Liberation, or FSLN, and Aleman's Constitutional Liberal Party, or PLC, deny assertions that Aleman's allies are surrendering more and more power into Ortega's hands in hopes of having their party leader freed.
Both parties deny Aleman's release is the quid pro quo, although the Liberals have repeatedly submitted amnesty legislation in the assembly that would pardon him and others.
Rene Nunez, a Sandinista who is president of the National Assembly under the pact, said the two parties are merely united against Bolanos and in support of a stronger assembly. They say Bolanos' government is ineffective, unwilling to cooperate and too beholden to the United States.
"The FSLN and the PLC are contradictory parties, but we have a nationalist sentiment that ties us together," Nunez said. Aleman "is anti-Sandinista, ideologically and sentimentally, but I believe he is a pragmatic man, and therefore the survival of his party comes before his anti-Sandinismo."
Some believe Ortega is holding off on deciding Aleman's fate until he can gauge the impact of the decision on next year's presidential campaign. For the first time, he is facing a real challenge for the left-wing vote from a popular former Managua mayor, Herty Lewites.
"The (pact) is a preventive movement for protection of their own interests," said Jaime Morales Carazo, a former Aleman aide who helped negotiate the initial pact but has since broken with Aleman. "The president is totally disarmed and caught between two lions."
EU Exit Polls
France 'rejects EU constitution'
French voters have rejected the proposed EU constitution in Sunday's referendum, according to an exit poll.
The poll quoted by French TV gives the "No" side 55% - in line with surveys published in the run-up to the vote.
If confirmed, the result will be a blow to President Jacques Chirac and France's two main political parties, which campaigned for a "Yes".
It could deal a fatal blow to the EU constitution, which the Union has been working on since the start of 2002.
The constitution cannot come into force unless it is ratified by all 25 EU members.
So far, nine countries have ratified it.
Eight other national referendums are still to come, including one in the Netherlands on Wednesday, where the "No" side is also leading in the polls.
Story from BBC NEWS:
_________________________
France Rejects EU Treaty in Setback to Chirac, Integration
May 29 (Bloomberg) -- France rejected the European Union's constitution in a national referendum, dealing a blow to President Jacques Chirac and European integration.
The vote was 55 percent against the treaty and 45 percent in favor, an exit poll by Ipsos in Paris showed. The defeat, the first veto of an EU pact by a founding member, kills the constitution, which requires the approval of all 25 nations.
The rebuff may end Chirac's hopes of seeking re-election in 2007 after his failure to curb unemployment at a 5 1/2-year high. The result also casts doubt on closer ties with members of the bloc that haven't adopted the euro and may set back plans by countries including Turkey and Croatia to join.
``The campaign was about French unease about the economy, globalization, and rapidly losing influence,'' said Hugo Brady, a researcher at the London-based Centre for European Reform, in an interview May 27. ``What is likely now is a government facelift.''
The euro fell to a seven-month low against the dollar May 26 on concern the French would reject the constitution. The Turkish lira has weakened 8 percent since March 1.
``We will have a problem with the euro'' following the French vote, said Guy Stern, who oversees $17.8 billion in assets as chief investment officer of Credit Suisse Asset Management's German business in Frankfurt. ``It could depreciate 5 percent to 10 percent.''
Polling stations closed at 10 p.m. Paris time. Final results will be published by the Interior Ministry in the coming hours.
European President
The constitution, signed by EU leaders in Rome in October, was the product of 2 1/2 years of negotiations led by former French President Valery Giscard d'Estaing. The 448-article accord was designed to make decision-making easier among 25 countries after the bloc's expansion last year.
It foresees an EU president and foreign minister, and boosts the European Parliament's power. It would also increase the voting weight of France and Germany.
Chirac's warning that a rejection would weaken the union and dilute support for France's social-welfare policies failed to persuade voters to back the constitution.
``The rejection of the treaty will be seen by Europeans as a `no' to Europe'' and ``would lead to a period of doubt and uncertainty,'' Chirac, 72, said May 26. ``Of course, we'll continue to fight. But do you really think we we'll be able to defend the common agricultural policy with the same strength?''
Party Divisions
The opposition Socialist Party split over the constitution, with its two leaders on opposing sides. Chirac on May 26 promised a new effort to address unemployment, signaling the impending ouster of Prime Minister Jean-Pierre Raffarin, 56.
Treaty opponents, including former Socialist Prime Minister Laurent Fabius, anti-immigration leader Jean-Marie Le Pen, the Communist Party, and anti-globalization campaigner Jose Bove, fanned worries about French jobs and sovereignty resulting from the bloc's expansion.
``What depressed me about the debate in France is that most of the politicians pushing the `no' vote did it for personal political gain and not because they think it's best for the citizens,'' said Patrick Ricard, 60, chairman of the French liquor maker Pernod Ricard SA. He intended to vote ``yes.''
U.S. Counterweight
The French decision may deepen the chasm between rich and poor EU states and between those that back U.S. foreign policy and those that oppose it. It also undercuts France's pretensions of turning the EU into a counterweight to the spread of American power and the rise of China.
``We need more time to work on a better Europe, a more social Europe,'' said Fabienne Balez, 42, a teacher in Paris who voted against the treaty. ``There are too many commercial imbalances in this world. There is a lack of democracy. Politics is all economics and politicians are like marionettes, acting up for the big companies.''
The defeat marks the third loss at the hands of voters for Chirac in the past 14 months and will lead to a ``political upheaval,'' said Emmanuel Ferry, senior economist at Exane-BNP Paribas SA on May 24.
Pollsters such as Bruno Jeanbart of CSA said Chirac's tendency to blame unpopular measures on the EU backfired against him and will probably result in Raffarin's departure.
Raffarin's Fate
The leading candidates to succeed to Raffarin, who held the post for three years, are Nicolas Sarkozy, the former finance minister and head of Chirac's governing party, and Interior Minister Dominic de Villepin, said Jean-Marie Lech, president of Paris-based polling firm Ipsos SA.
The setback at the polls and presidential elections in 2007 mean whoever replaces Raffarin will lack a mandate to revive a slowing economy, Europe's third largest, said Dominique Barbet, an economist at BNP Paribas SA in Paris.
Narrowing the budget deficit, boosting hiring, and selling state-owned companies such as Electricite de France are top priorities.
``We will most likely see a slowdown of reforms and a larger budget deficit,'' said Barbet. ``The approaching general and presidential elections in 2007 will close the window by the end of this year for unpopular structural reforms.''
To contact the reporter on this story: Emma Vandore in Paris (33-
Last Updated: May 29, 2005 16:02 EDT
Say it ain't so...
Arnold Ziffel is dead..., are you sure?