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September 24, 2012

Next Chinese #gold target - #Venezuela`s huge Las Cristinas project

Citic to develop the massive and frequently disputed, Las Cristinas gold mine. #GOLD NEWS 

Next Chinese gold target - Venezuela's huge Las Cristinas project
China has entered into a number of resource related deals with the Venezuelan government, key among which is for Citic to develop the massive and frequently disputed, Las Cristinas gold mine.

Posted: Monday , 24 Sep 2012
LONDON (Mineweb) -  Author: Lawrence Williams

Initially Chinese investment in foreign mining operations was largely focused on industrial metals - securing supplies to feed its huge industrial machine - but of late the emphasis on buying into mining outside the Middle Kingdom seems to have switched to gold.  Seemingly in quick succession we have seen Chinese companies moving into Norton Gold Fields, African Barrick and Focus Minerals, but now one of the biggest prizes of all looks to have also fallen into Chinese hands - the huge Las Cristinas gold deposit in Venezuela.Las Cristinas, which is considered to be one of the world's great undeveloped gold deposits, is to be developed by China International Trust and Investment Corp. (Citic) as one of a series of deals signed between Chinese and Venezuelan officials on Friday.
According to an Associated Press report, Venezuela's President Chavez announced the deal, although no financial details were given.  It was reported to specify engineering, construction and processing of the gold and associated copper in the deposit which is conservatively estimated to contain reserves of some 17 million ounces of gold (a reserve calculated at around $550 an ounce in 2008).  Chavez, not one short on hyperbole, called it "one of the biggest resources of gold that exists - not only in Venezuela, not only in Latin America, but in the world."
Las Cristinas has had a chequered history though and some consider the deposit cursed in that virtually every claim on it since its discovery has fallen through due to legal challenges, financial manoeuvrings and protracted disputes with Venezuelan government agencies and the country's President. It was originally supposed to have been given to the pilots who discovered the Angel Falls. After passing through a number of hands, including then mining major, Placer Dome (later taken over by Barrick Gold) ownership eventually ended up with Canadian junior Crystallex International which started to develop it, but was continually thwarted in its aims by the Chavez government which would not grant the necessary final permits for the mine's construction, and eventually effectively expropriated it.  (More details on the series of ownership changes and the problems faced by those who may have seemed to have gained title to the project were published here last November - see The curse of Las Cristinas. Gold miner Crystallex faces TSX delisting).
Crystallex has since sought international arbitration before the Additional Facility of the World Bank's International Centre for Settlement of Investment Disputes against the Venezuela Government.  It is seeking the restitution of its investments and the Mine Operating Contract and compensation for interim losses suffered, or, alternatively full compensation for the value of its investment in an amount in excess ofUS$3.8 billion.
The Venezuelan agreement with Citic certainly suggests that the restitution of the Mine Operating Contract is already a lost cause and even if the arbitrators find in Crystallex's favour, whether a Chavez government would be prepared to recognise the court's jurisdiction and/or honour anything but a trivial compensation award could be seen as doubtful.


Read the story online here: Next Chinese gold target - Venezuela`s huge Las Cristinas project - GOLD NEWS - Mineweb

September 20, 2012

Junior miners suffer financing drought |

80% of Canadian mining companies are struggling to raise capital - PDAC

Junior miners suffer financing drought

By Matthew McClearn  | September 20, 2012
(Photo: John Lehmann/Canadian Press)
Junior mining companies, for which Vancouver is a global hub, tend to swing to extremes. Buoyed by a commodities supercycle, a year ago even sketchier explorers could obtain financing on favourable terms. Today the entire sector is parched for capital as continuing turmoil in Europe and risk aversion throttle equity and debt markets. The Prospectors and Developers Association of Canada estimates 80% of Canadian mining companies are struggling to raise capital.
“Some juniors are still trying to raise money in the market, but at a reduced share price,” says Gavin Dirom, president and CEO of the Association for Mineral Exploration British Columbia. “Others have been able to build up enough resources in the prior year or two and weather the storm. Some are reducing the scope of work and trimming budgets.”
Junior miners seldom can rely on banks to see them through tough times. They instead traditionally turn to resource-centered mutual funds, strong-stomached private investors and boutique investment banks. This time companies are said to be turning to other sources, too, like Asian sovereign wealth funds.
The Halifax-based Metals Economics Group sees no relief this year. Analyst Justin Desrochers says that given the recent lull in bad news from Europe and the U.S., he sees light at the end of the tunnel. But it may not come soon enough. “A lot of juniors will try to raise money at the end of a calendar year when they have their exploration results from the summer in hand,” he says. “I don’t know if that’s going to happen this year.”

Junior miners suffer financing drought |

Coal in China

China's Coal Consumption

Coal is at the center of modern Chinese history. Without it, China's industrialization and massive economic growth over the past three decades -- which relied heavily on nearly unlimited access to cheap, domestically sourced coal -- would have been much smaller. Changes in the geography and structure of coal production, from the decentralization of the 1980s and 1990s to the current increase in centralization, reflect and shape changes in the Chinese political system. Over the past decade, as coal reserves in China's traditional mining hubs in the northeast and the central plains began declining, the bulk of new coal production and exploration has shifted westward to the sparsely populated provinces of Inner Mongolia, Ningxia, Gansu and Xinjiang. But as coal production moves away from traditional mining centers in provinces such as Henan, Shandong and Hebei, the construction of extensive new rail systems -- the chief means of long-distance overland coal transportation -- has become critical to mining companies and to China's energy security.

Coal in China
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Recession 2013: Here's What Jim Rogers is Doing | Resource Investor

not only is Recession 2013 unavoidable, it's going to be a doozy.

Recession 2013: Here's What Jim Rogers is Doing

Investing in Asian Mining Indaba 2012 Online Preview

If legendary investor Jim Rogers is right, not only is Recession 2013 unavoidable, it's going to be a doozy.
In recent interviews, Rogers has been predicting a 2013 recession, bowled over by a potential blowout in Europe and unsustainable spending by the US government.
"Be very worried about 2013 and be very worried about 2014, because that's when the next slowdown comes," Rogers told Reuters.
And while Rogers sees no true safe havens out there, a few investments can provide some comfort – specifically, commodities in the form of agriculture, gold, and silver.
Rogers' statements usually get lots of attention, mainly because he has an uncanny tendency to be right.
Together with George Soros, he founded the Quantum Fund in the 1970s and posted returns of 4,200% over 10 years. Rogers retired in 1980 at the age of 37, but remains active as a private investor.
Back in 1999, Rogers recommended gold when it was trading at $252 and silver at $4.
We all know what happened after that.

Read the rest of the article here:

Recession 2013: Here's What Jim Rogers is Doing | Resource Investor

The MasterMetals Blog

September 18, 2012

EIA Canada Country Analysis Brief - September 2012

Energy Information Administration (EIA) Logo - Need Help? 202-586-8800

Canada is the largest foreign supplier of energy to the United States and is an especially significant producer of conventional and unconventional oil, natural gas, and hydroelectricity. Canada's unconventional oil sands are a significant contributor to the recent and expected growth in the world's liquid fuel supply and comprise the vast majority of the country's proven oil reserves, which rank third globally.


For more information on Canada's energy sector, visit



September 13, 2012

#Gold: The investment for those who saw it coming -

why a disbelief that it would happen was partly responsible for the financial crisis and the reason behind many a decision not to invest in gold

Gold: The investment for those who saw it coming
Adrian Ash looks at why a disbelief that it would happen was partly responsible for the financial crisis and the reason behind many a decision not to invest in gold.
Author: Adrian Ash
Posted: Thursday , 13 Sep 2012 
And what do you do? - I ignore the biggest bubbles in history, ma'am...
SO, LIKE the Queen asked, why didn't anyone see it coming?
"At every stage," replied Professor Luis Garicano, showing Her Majesty the LSE's new £71 million ($140m) faculty building in November 2008, "someone was relying on somebody else and everyone thought they were doing the right thing."

The British press snarled and barked at his sorry excuse for an answer. But given a few days - and then a few months, and then a few years - the economics profession finally got its explanation together...
"The simple response is that many people did see it coming."
  - Prof.Garicano, defending himself in The Guardian a week later

"Many people did foresee the crisis...but nobody wanted to believe [it]."
  - Open letter to the Queen, summarizing a Royal Academy seminar of experts, July 2009

"The answer is extremely simple: no-one believed it could happen."
  - Mervyn King, governor of the Bank of England, BBC Today lecture, July 2012 (no doubt reprising his own 2009 audience with Her Majesty)
So many people, such simplicity! But oh, so much disbelief too!

Contrary to what celebrity-economists would have you think, most people did in fact see the crash coming. Ask anyone you know. I promise they'll say they knew what was coming. It's just that, well, they didn't do anything about it. It wouldn't have been a crash if they had. Because they would have got out of the way, or - if they had any say in the matter - they would have done something (raising interest rates, trading more cautiously, reining back lending standards) to stall the bubble long in advance.

But contrary to the professionals again, a few people most definitely did believe it would happen. What else do you think drove the 150% rise in gold and silver investing prices in the half-decade before Northern Rock blew up? Reviewing global finance in the August 2007 edition of his Gloom, Boom & Doom newsletter, Marc Faber - a long-time advocate of buying gold - listed 13 clear warnings of trouble ahead, starting with the 2001-2006 period.
"Ultra-expansionary US monetary policies," wrote Faber of Alan Greenspan's response to the Tech Stock Bust, "with artificially low interest rates lead to bubbles all over the world and in every imaginable asset class.
"First Warning: The price of gold more than doubles..."

That red line marks the credit crunch of 9 August 2007, which all too rapidly for the all-knowing disbelievers became the Northern Rock bank run of 14 September. Over the preceding half-decade gold and silver had doubled in price. Over the following 5 years, they've both gone on to triple again.

So being early was smart - or lucky...or just doom-n-gloomy...depending on whether or not you got in. But buying even as the crisis broke has seen gold and silver investing deliver as expected, albeit with ugly swings in the meantime just to keep new buyers on their toes.

"I realised early in 2007 that the economy was going south," writes John, a BullionVault user since September 2007. "I had an endowment that was going sour, so I cashed it in and bought my gold."

Phillip, who also began buying gold when Northern Rock hit the headlines - 5 years ago this Thursday - says that "The high level of personal and public debt had concerned me since 2004, and I realised that there was only one solution: money printing and currency devaluation. But it was only in 2007 that I found BullionVault and saw how simple it could be to own gold."

"Given what's happened in the last 5 years," adds Armand, a British user of BullionVault since September 2007 who now lives in Spain, "I'm surprised more individual investors haven't bought bullion as a direct result of the crisis.

"I'm not a doomer, it's a question of confidence. To me, owning gold and silver is the only option in a financial environment heading for collapse in one of two ways: rapid, unexpected hyperinflation, or a long, drawn-out decline."

Now, that kind of gloom might sound all too common today. Newspapers and their comments section are after all full of savers moaning about zero interest rates, politicians panicking over money-printing, and economists and investment strategists fretting about hyperinflation. But look again at the first 5 years of this financial crisis. How many of the new know-it-alls - who now say they saw it coming - have actually done something about it, and chosen to buy gold or silver, the best-performing asset class by a country mile since 2007's credit crunch began?
Sure, precious metals might be edging into the presidential debate. But amongst investors and savers, they remain very much a minority sport. No doubt because, quite simply, no one really foresees the crisis continuing. And amongst those who do, no one believes it. Not enough to take action.

To quote The Economist magazine's Free Exchange blog, 11 September 2012:
"We have learned that in most situations central banks are more than capable of controlling inflation on their own. Markets [today] show no sign of a fear of looming high inflation.
Phew! That's alright then. Economists and the financial markets don't believe there's a problem.
Adrian Ash is head of research at BullionVault - the secure, low-cost gold and silver market for private investors online, where you can buy physical gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees.
Gold: The investment for those who saw it coming - INDEPENDENT VIEWPOINT - Mineweb

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September 6, 2012

#Zimbabwe withdraws 340 EPO's to stop "imposters" #Mining

They'll start working the concessions when Mugabe leaves....

Zimbabwe withdraws 340 EPO's to stop "imposters"

Published Date: September 06, 2012

The Zimbabwean Government's recent withdrawal of over 340 Exclusive Prospecting Orders (EPOs) applications for several mining and prospecting companies could not have come at a better time to stop “impostors” holding on to the orders for speculative reasons.
The move by the Mining Affairs Board, a quasi-government unit responsible for the allocation of mining rights, to withdraw the EPO applications after the realisation that no prospecting had taken place represents a bid by government to deal effectively with speculative holding of mining rights in the capital-intensive sector.
EPOs are mining rights which are issued by mining companies to explore possible mineral deposits in different parts of the country. Among major mining companies whose orders were withdrawn were RioZim, Ashanti Goldfieds, African Gold and Metallon Gold Exploration.
There is no denying the potential that the country’s mineral sector has and its impact on the turnaround of the economy. But this will only happen if those holding claims start making use of them and not keeping them for no other reason, but to gather dust in their cupboards.
For years on end the government continues to argue that it has the potential to be one of the leading economic powerhouses on the continent, but that hasn’t happened.
We believe the revocation of the licences will send a strong signal to other companies that are yet to explore their claims that it’s time they acted knowing failure to do so will result in them losing their claims.
The sector, which is in recovery mode, contributes over 50% of export earnings at $1,8 billion, and employs over 45 000 people, excluding small-scale miners.
The contribution of mining to the gross domestic product, according to official figures, increased almost three-fold to over 11% from 4% in 1999. The mining sector is expected to grow by 16,7% in 2012, driven by strong growth in gold, platinum, nickel, coal and chrome output.
Indications by Nadia Piffaretti, the World Bank senior country economist for Zimbabwe, are that the sector could create more than 30 000 jobs and attract $15 billion worth of investment by the year 2018, driven by a projected growth in gold, coal and chrome output.
Given the above scenario if all claims lying dormant could be made use of, Zimbabwe’s economy could place itself on a successful recovery path.
Zimbabwe has over 40 base minerals and the second largest platinum reserves in the world after South Africa.
According to Piffarett, the country, which recorded its first positive economic growth rate in 2009 after a decade-long economic contraction, failed to take advantage of a global boom in mining prices.
We believe it’s time the abundant resources are fully made use off for the full benefit of the nation. Zimbabwe withdraws 340 EPO's to stop "imposters"

September 5, 2012

#Copper: The Essential Metal (Part 2) #infographic Visual Capitalist

Copper: The Essential Metal (Part 2) – Supply and Demand

Copper is one of the most widely used metals on the planet, and has been for more than 10,000 years. It’s history is rich and distinctive as its unique colour, and it is now indispensable in modern society.
In this infographic we explore why copper prices have increased by 4x over the course of 10 years. Major factors include lower ore grades, exploration pushed to higher risk areas of the globe, and growing Chinese demand.

Copper: The Essential Metal - Supply and Demand

Copper: The Essential Metal (Part 2) | Visual Capitalist

Commodity traders eye distressed assets -

Commodity traders eye distressed assets

The slump in metals prices could turn out to be a blessing in disguise for some of the world’s largest commodities houses. The trader-cum-producers are vulture buyers that use periods of stress to snap up assets on the cheap.
True, low commodities prices will hurt them in the short term. First, their profitability of production assets declines; second, weaker prices reduce the profits of trading. Yet, a weak market does provide a hidden opportunity.
Glencore is one of the traders that could profit, and others, including Vitol and Gunvor in energy, are already moving to snap up distressed assets cheaply. Thus, the current slump could help traders expand their fixed asset holdings, helping them move away from their reliance on the middleman business model.
Glencore’s experience in the global financial crisis in 2008 is a case in point. Ivan Glasenberg, the 55-year-old South African chief executive, used the sharp drop in copper and other metals prices to purchase stakes in miners running out of cash or struggling to raise finance in the capital market or the banking sector.
The trader’s 2008 booty includes some of its most promising assets, such as copper and cobalt mines like Katanga in the Democratic Republic of Congo. Now Glencore is once again circling assets in trouble. For example, the trader is likely to underwrite a rights issue by Australian miner Straits Resources. It is also looking at an aluminium smelter in trouble in Italy owned by Alcoa.
If the $70bn merger between Glencore and Xstrata falls through, expect the trader to concentrate in the next few months on acquiring medium and small-sized miners in financial trouble, rather than targeting global miners such as, say, Anglo American and Freeport-McMoRan.
Other commodities traders have already captured several prey as the market weakens. Swiss-based Vitol and Gunvor have used the crisis in the oil refining sector earlier this year to buy several large refineries previously owned by Petroplus, the bankrupt Swiss-based refiner, at minimal values.
The trend is set to gain pace if commodities prices remain weak because slow economic growth in China and the capital market remains firmly shut. If the financial pain is high enough, some natural resources companies could end up knocking at the door of the commodities trading house for help. If so, the traders could emerge from the current slump with a good collection of assets.
The Commodities Note is a daily online commentary on the industry from the Financial Times

Commodity traders eye distressed assets -

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