China refines its role in global gold market Feb 27th, 2012 - 08:35 by News 26-Feb (LA Times) —
A bit player only a decade ago, China has emerged as one of the most important forces in the global gold market, helping fuel the rising value of the precious metal.
Already the world’s largest producer — it overtook South Africa in 2007 — China is now bedecking itself in bling.
It’s on track to become the globe’s largest consumer of gold as early as this year, knocking off India — whose elaborate wedding dowries kept it on top for years.
Some of China’s gold is going to its central bank as the government quietly boosts reserves.
But the biggest driver is Chinese consumers. They’re snapping up jewelry, coins and bars as a hedge against inflation and to flaunt their rising wealth.
…Chinese demand reached nearly 770 metric tons last year, up 20% from the year before, according to the World Gold Council in London.
Desire for the yellow metal is so strong that China is buying record amounts from abroad because its mines can’t keep pace.
China imported more gold than India in the fourth quarter of 2011.
China's government is suspected of quietly stockpiling more gold to diversify its $3.2-trillion holdings of foreign reserves and reduce its reliance on the U.S. dollar.
China rarely discloses its purchases. But it's assumed the central bank holds a little more than 1,000 metric tons of gold — still a small fraction of government holdings in the U.S. and Eurozone.
Add in strong demand from gold-crazy consumers and "it's safe to say demand still has a long way to go in China," said Clark at Casey Research.
That's created a huge opportunity for retailers. Hong Kong's Chow Tai Fook plans to open 2,000 stores in China. The luxury brand already boasts revenue greater than Tiffany & Co. and raised $2 billion in an initial stock offering in Hong Kong in December.
But no gold merchant is better known in Beijing than Caishikou, whose core customers are working-class Chinese.
Formerly a traditional department store selling clothes and other goods, Caishikou now specializes in gold. It sells a dazzling array of ornaments and jewelry at prices that range from $63 chains to an elaborately detailed $135,000 dragon encased in glass. Everything is 24 karat, a prerequisite for Chinese buyers.
Fighting her way through the aisles recently was Li Jinfeng, a 45-year-old chicken farmer who had traveled from neighboring Hebei province to buy jewelry for her daughter's dowry. Business has been good, and Li didn't think twice about tapping her savings.
"In the old days, only the rich people in my village could have gold," said Li, whose pierced ears were adorned with flower-shaped gold earrings.
Nearby, Li Lei, a 49-year-old retiree, was picking out a pair of bright gold rings to give her parents on their 50th wedding anniversary.
"I feel obliged to buy something nice for them," Li said. "Money may lose its value, but gold will not."
Caledonia signs Memorandum of Understanding with the Government of Zimbabwe relating to the Indigenisation of the Blanket Mine -
TORONTO, Feb. 20, 2012 /CNW Telbec/ -
Caledonia Mining Corporation - ("Caledonia") (TSX: CAL) (NASDAQ-OTCQX: CALVF) (AIM: CMCL) announces it has signed a Memorandum of Understanding ("MoU") with the Minister of Youth, Development, Indigenisation and Empowerment of the Government of Zimbabwe (the "Government of Zimbabwe") pursuant to which Caledonia has agreed to sell 51% of the Blanket Mine in Zimbabwe ("Blanket") to Indigenous Zimbabweans for a paid transactional value of US$30.09 million on the following basis:
16% will be sold to the National Indigenisation and Economic Empowerment Fund; 10% will be sold to a Management and Employee Trust for the benefit of the present and future managers and employees of Blanket; 15% will be sold to identified Indigenous Zimbabweans; and 10% will be donated to the Blanket Gwanda Community Trust.
Caledonia will also make a non-refundable donation of US$1.0 million to the Trust as soon as it has been established. Caledonia will facilitate the vendor funding of these transactions which will be repaid by way of future dividends from Blanket. Caledonia expects to redeploy the sale consideration in its projects.
Caledonia has undertaken to complete the implementation of all the components of the indigenisation transaction as soon as possible.
The Government of Zimbabwe has agreed that implementation of the terms of the MoU will constitute full compliance by Blanket and Caledonia with the requirements of the Indigenisation Act.
Further details of the MoU are subject to a confidentiality agreement, and further announcements will be made when appropriate.
Blanket's unaudited revenues and profit after tax for the year to December 31, 2011 were US$56.6 million and US$19.2 million respectively.
Mr Stefan Hayden, Caledonia's President and Chief Executive officer said: "I am pleased we have signed a MoU which, when fully implemented, will represent the conclusion of the indigenisation requirements for Blanket.
The transaction will be concluded for a value which is close to Caledonia's current market capitalisation.
( Note CALVF Total Current Market Cap: $55,060,421.--
This is a significant achievement in the current environment and the transaction is neither an expropriation nor a partial nationalisation.
Excellent progress has been made at Blanket in recent years: gold production has increased by over 300% from 3,148oz in the first quarter of 2010 to 10,533oz in the fourth quarter of 2011 and cash operating costs fell by 27% from $804/oz in the first quarter of 2010 to $583/oz in the third quarter of 2011.
I hope that Blanket and Caledonia can now build on this track record of success. The indigenisation agreement, when fully implemented, will introduce new shareholders to Blanket and I am confident that their participation will enhance Blanket's further growth and development.
We look forward to working with our new shareholders in further progressing operations at Blanket for the benefit of all stakeholders."
Renmark Financial Communications Inc. John Boidman: jboidman@renmarkfinancial.com Nadia Marks: nmarks@renmarkfinancial.com Tel.: (514) 939-3989 or (416) 644-2020 www.renmarkfinancial.com
Newgate Threadneedle Communications Laurence Read, tel +44 207 653 9855 Beth Harris, tel +44 207 653 9853 Terry Garrett, tel +44 207 653 9845
Collins Stewart Europe Limited John Prior / Sebastian Jones Tel: + 44 20 7523 8350
Collins Stewart LLC Dan Mintz Tel: +1 212 389 8022 DMintz@collinsstewartllc.com
Further information regarding Caledonia's exploration activities and operations along with its latest financials and Management Discussion and Analysis may be found at
Caledonia Mining Corporation Nama Copper/Cobalt Exploration Project, Zambia: Summary of Results of the 2011 Exploration Programme and Outline of the 2012 Exploration Programme -
TORONTO, March 12, 2012 /CNW Telbec/ -
Caledonia Mining Corporation - (the "Company") (TSX: CAL) (OTCQX: CALVF) (AIM: CMCL) is pleased to announce the results summary of the 2011 exploration programme at its Nama Copper/Cobalt Project in Zambia and outline the exploration programme for 2012.
Highlights -
The results from the 2011 drilling programme demonstrate a new and very exciting aspect to the Nama Copper/Cobalt Project A new mineralised copper zone has been identified
Estimated weighted average copper grade - 0.47%
Estimated weighted average thickness - 41 metres
Intersected depths of between 280 and 450 metres
A sufficiently large, near-surface resource up-dip from the existing drill holes may provide the basis for a future open- pit mining operation -
The 2012 exploration programme will now commence as soon as possible and will include the following three phases of drilling:
Phase 1: 2,400 metre drill programme to explore for potential shallower up-dip continuation of the new mineralised zone to surface
Phase 2: 6,000 metre drill programme to explore for potential deeper down-dip continuation of the new mineralised zone
Phase 3: A possible resource drilling programme to quantify the shallower up-dip resources.
This phase cannot be finalised at this stage as the scope of this programme is entirely dependent on the evaluation of the Phase 1 programme results.
The costs of these drilling programmes will be fully funded from current cash resources.
Commenting on these exploration results, Stefan Hayden, Caledonia's Chief Executive Officer and President said: "The 2011 drilling programme at Nama identified a new and very exciting aspect to Nama. What we have found differs markedly in mineralisation style to other properties in the region in that the zone we have identified occurs in an atypical Copperbelt setting and occurs in rocks overlying the Ore Shale. This zone of mineralisation occurs at relatively shallow depth relative to the depth of the Ore Shale in the area and possibly extends to surface. A sufficiently large, near-surface resource depth may therefore provide the basis for a future open-pit mining operation.
"The 2012 exploration programme will commence as soon as the rains and ground condition allow during the second quarter. The results should allow us to confirm and further refine our model of Nama's geology and copper resources potential. Caledonia has sufficient cash to complete the 2012 exploration programme and intends to manage its cash resources so that it can undertake further work at Nama without raising new equity."
Background to the Nama Project -
Caledonia holds four, contiguous large scale mining licences covering approximately 800 square kilometres on the Zambian Copperbelt.
The northern boundary of Caledonia's licenced area is the DRC border and the eastern boundary abuts the licence area that is held by a joint venture between Vale and African Rainbow Minerals where a new copper mine is currently under construction.
Prior to the 2011 programme, exploration activities had defined three main styles of mineralization in the Nama Licence area:
a) "A-type" cobalt oxide mineralisation;
b) "D-type' iron oxide bodies which are mostly enriched in Cobalt; and
c) Copper dominated ore shale hosted copper-cobalt mineralisation, commonly observed elsewhere in the Copperbelt and which is being exploited by neighbouring mines to the east and south of the Nama Licence Areas.
2011 Exploration Programme
The 2010 exploration programme identified two resource targets at Nama (being "Konkola East" and "Kafwira") which were characterised as belonging to the ore shale-hosted copper- cobalt style of mineralisation.
The 2011 programme was focussed on Konkola East where a four- hole diamond drilling programme was carried out with the primary objective of confirming the existence of Ore Shale member of the Copperbelt stratigraphy. The results of this programme confirmed the existence of Ore Shale in all holes. The Ore Shale intersection in holes 1 & 2 was at depths and copper grades that do not merit further exploration at this stage.
Evaluation of the drill core extracted from holes 3 and 4 identified a zone of mineralisation which occurs at considerably shallower depths than the Ore Shale and does not occupy a specific stratigraphic layer as would be expected.
Assays of the mineralised zones identified in holes 3 and 4 were sufficiently encouraging to warrant a fifth hole being drilled in late 2011 and which also intersected the newly identified mineralised zone.
Preliminary Evaluation of the Results of the 2011 Drilling Programme
The new mineralised zone identified in holes 3, 4 and 5 is considered to be a contiguous zone.
The assay results for the three intersections have a weighted average of 0.47% copper over a weighted average width of 41 metres at depths of between 280 and 450 metres.
Holes 3 and 4 are approximately 1,650 metres apart representing a minimum strike length of the mineralisation.
The interpreted structure of the mineralised zone suggests that the zone may extend to surface within the Nama Licence.
Although the copper grades of the newly identified zone are lower than existing mines in the region, the zone is relatively shallow and the ore mineralogy appears particularly suited to low-cost metallurgical processing.
2012 Exploration Programme
Caledonia's Board has reviewed the results of the 2011 exploration programme and the recommendations of management and has approved an exploration programme for Nama in 2012 which has the following objectives:
Phase 1: drilling of additional holes comprising approximately 2,400 metres with the objective of identifying a continuation of the newly discovered mineralized zone towards surface.
This phase of the exploration programme is expected to start as soon as ground/weather conditions permit and results for this work are expected 4 to 5 months thereafter.
Phase 2: drilling of additional holes comprising approximately 6,000 metres with the objective of identifying the nature of a deeper continuation of the above mineralised zone.
This work will take place after completion of Phase 1 and is expected to take approximately 8 to 10 months.
Phase 3: Provided the results of the Phase 1 programme are positive, a drilling programme focussed on delineating and evaluating resources compliant with NI43-101 will be presented to the Caledonia Board for approval prior to possible commencement.
This Phase may commence during Phase 2 activities.
Substantial additional exploration work may be required in future years to arrive at a NI43-101 compliant resource statement.
Caledonia has sufficient cash resources to cover all of the exploration costs for 2012.
Caledonia intends to manage its cash resources so that it retains the financial capacity to progress this project as far as possible without requiring third party involvement or equity funding.
Dr Pearton, BSc Eng. (Mining Geology), PhD (Geology), and Fellow of the Geological Society of South Africa, is Caledonia's VP Exploration and a "Qualified Person" as defined by NI43-101.
Dr Pearton consents to the inclusion in the release of the matters based on his information in the form and context in which it appears.
Caution Regarding Forward Looking Statements:
Information included in this release constitutes forward-looking statements----be identified or that required regulatory approvals will be obtained.
Collins Stewart Europe Limited John Prior / Sebastian Jones Tel: + 44 20 7523 8350
Collins Stewart LLC Dan Mintz Tel: +1 212 389 8022 DMintz@collinsstewartllc.com
Further information regarding Caledonia's exploration activities and operations along with its latest financials and Management Discussion and Analysis may be found at