That million would be better spent on SOMA with the future prospect of buying out EQBM stake in Dalian. Larry needs to forget about EQBM for the time being and concentrate on revenues for SOMA. Two more months and Dalian starts to become profitable,maybe sooner if he can get more lines working.
China's Gold Production Jumps 16% in First Quarter
By David Harman
10 May 2007 at 09:30 AM GMT-04:00
SHANGHAI (Interfax-China) -- China produced 56.183 tonnes of gold in the first quarter of the year, up 15.99% from the same period last year, according to statistics released by the China Gold Association today.
Gold mining enterprises produced 36.875 tonnes of consolidated gold (gold bullion and compound gold) in the first quarter, up 9.21%. Smelting companies (nonferrous metals smelters and gold refinery plants) produced 29.767 tonnes of gold bullion, up 20.83% from the same period last year.
Nonferrous metals smelting companies produced 11.858 tonnes of gold bullion in the first quarter of this year, up 31.32%. The top five nonferrous metals smelters contributed 87.81% to the total gold output in the sector.
Gold refinery companies produced 17.909 tonnes of gold bullion in the first quarter, up 14.76% from the same period last year. The top five gold companies contributed 79.74% to China's total output.
China's gold industry reached a value of RMB 14.62 billion ($1.90 billion) in the first quarter, based on current gold prices, up 54.16% from the same period last year. Profits also surged 44.12% to RMB 1.58 billion ($205.29 million).
The Shanghai Gold Exchange, China's only precious metals trade platform, reported a gold trade volume of 360,365.90 kilograms in the first quarter, up 39.70%. Trade turnover amounted to RMB 58.37 billion ($7.58 billion), up 57.82%.
In other news, a large-scale gold deposit with proven reserves of 27 tonnes of gold and additional reserves estimated to exceed 50 tonnes has been discovered in southern China's Hunan Province, according to the China Gold Industry Association.
The gold deposit is located in Shaoyang City, within the White Horse Mountain and the Dragon Mountain gold metallogenic belt.
The deposit was initially discovered by the 11th Gold Reconnoiter Brigade of the People's Liberation Army (PLA) in 2001.
After five years of prospecting, 14 gold veins have been identified, with the main vein measuring 6,370 metres long and over 500 metres deep. The ore body is of a large size and has good continuity with a gold grade above 3 grams per tonne.
A comprehensive reconnaissance has recently started, with the PLA brigade focusing on analysis of the main gold veins and ore body in order to discover metallogenic patterns and identify higher grade gold reserves within the mine.
Commentary
China produced 240 tonnes of gold in 2006 representing a 7.15% yoy increase. A 16% production increase in Q1 of 2007 bodes well and output for the year could reach 280 tonnes.
News of fresh large scale discoveries underscore the belief that rich deposits are yet to be uncovered. Nevertheless, China will still have a shortfall of some 100 tonnes this year.
If this doesn't underpin price, talk of an increased ratio of international reserves may tip the scales considering that China, along with Japan, has less than 2% of reserves in bullion.
Compare that with European countries who, even after central bank selling, have way over a 50% ratio. In the U.S. it is more than 75%.
AI
