Rusoro says Venezuela will likely nationalise its gold assets, shares fall 12%
Vancouver-based Rusoro Mining is preparing to seek international arbitration to obtain compensation for the assets it expects to be nationalised after a deadline to negotiate with the government lapsed.
Author: By Nathan Crooks
Posted: Friday , 16 Mar 2012
VENEZUELA (Bloomberg) -
Rusoro Mining Ltd. (RML), the last remaining publicly traded gold miner in Venezuela, expects its gold assets in the South American country to be taken over after a deadline to negotiate with the government lapsed, Chief Executive Officer Andre Agapov said. The stock slid 12 percent.
Rusoro is preparing to seek international arbitration to obtain compensation for the assets as the Venezuelan government's joint venture offers undervalue the company's gold resources, Agapov said today in a phone interview from New York.
"As of today, all the assets will be nationalized and they will take control of operations," Agapov said.
Rusoro, based in Vancouver, began talks to form a joint venture with state oil company Petroleos de Venezuela SA and transfer 55 percent of its gold assets to the government in August after President Hugo Chavez nationalized the industry. Rusoro would be the fifth mining company seeking compensation from Venezuela through the World Bank's arbitration court following nationalizations.
The government made two verbal offers, including one presented two days ago, to compensate Rusoro for a reduced holding and didn't put any value on its gold resources or reserves, said Agapov. Yesterday was the negotiations deadline.
Rejected Offers
"In the past 180 days, we never saw an offer presented to us in writing," said Agapov. "There were several meetings and several proposals from their side and none of them were acceptable to Rusoro shareholders."
Rusoro fell 12 percent to 11 Canadian cents in Toronto trading as of 2:05 p.m. The stock has dropped 65 percent in the last year.
Rusoro, which has gold reserves of 5.6 million ounces, operates the Choco 10 mine and the Isidora mine in southeastern Venezuela, according to the company's website.
The company has the potential to produce a half million ounces of gold a year in Venezuela, Agapov said.
Rusoro officials met with Venezuela's Oil and Mining Minister Rafael Ramirez shortly after the gold nationalization law was passed and he promised to pay the company a fair value so capital markets would see that the Venezuelan government was willing to seek an adequate level of compensation, said Agapov.
Minister Meeting
"It was a very optimistic start, and then all the people who started to work with us on the settlement were proposing completely different things and much lower valuations," he said. "There was no way we could have accepted their numbers or conditions."
The company has until June 15 to file for arbitration with the ICSID, as the Washington-based arbitration court is known, said Agapov.
"If they would like to continue negotiations and reach an acceptable deal, of course we are willing," he said. "We have 90 days until we have to file for arbitration."
President Chavez in January said that Venezuela wouldn't accept ICSID rulings. The agency is overseeing about 20 cases filed since Venezuela in 2006 began nationalizing assets in industries including oil, mining, cement and telecommunications.
To contact the reporter on this story: Nathan Crooks in Caracas at ncrooks@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
Mineweb.com - The world's premier mining and mining investment website Rusoro says Venezuela will likely nationalise its gold assets, shares fall 12% - POLITICAL ECONOMY | Mineweb
March 17, 2012
Gold should not be following the Euro - they are in a different universe - INDEPENDENT VIEWPOINT | Mineweb
Tags:
Commodities,
News
Gold should not be following the Euro - they are in a different universe
The Eurozone crisis and its effects on global currencies and gold and silver is far from over. Gold has been following the Euro downwards, but it shouldn't be doing so.
Author: Julian Phillips
Posted: Saturday , 17 Mar 2012
BENONI -
I thought we could ignore the Eurozone debt crisis for a while, but it was not to be. The tone in Europe is not good. Apart from Italy paying Morgan Stanley $3.4 billion to exit derivatives they thought would help their debt burden it is becoming clearer that the trail blazed by Greece may be the one that Spain and Portugal may have to follow to their harm.
Let's face it if the recession in Greece is a depression then the protracted debt solution now achieved for Greece just won't work. Greece must default. But at least the long negotiations allowed the banks to get rid of a lot of debt and the E.C.B. has ensured no banking crisis will occur, but solutions, still elusive!
The euro's performance this week has reflected that tone, but amazingly the gold price has moved with the euro but in a more exaggerated way. Silver has been taken along with gold.
Gold is in a completely different world to the euro so it should not be following it.
Most observers have been conditioned to believe that gold will move in the opposite direction to the U.S. dollar. That's happened this week as the rise in Treasury yields attracts ‘carry trade' business home. But there is no ‘fundamental' reason why the dollar should rise. Yield rises pose great dangers to the U.S. and its economy. That's why the Fed wants rates held down for the next couple of years. They don't want the trouble higher interest rates will bring to the world. But they are coming.
Do yourself a favor and look at the structure of Indian gold Exchange Traded Funds. We thought they would never take off because of the link between government and the banks and the distrust Indians have in their own government. But these are very different from those in the developed world. These offer physical redemption of gold to investors. This allows the lines between long-term holding investors and the gold manufacturing industry to be blurred somewhat. But this still leaves control over investor's gold firmly in the hands of the banks. The banks hold that gold in a ‘pool' or allocated state.
Julian Phillips for The Gold and Silver forecasters - www.goldforecaster.com and www.silverforecaster.com
See the article online here: Mineweb.com - The world's premier mining and mining investment website Gold should not be following the Euro - they are in a different universe - INDEPENDENT VIEWPOINT | Mineweb
The Eurozone crisis and its effects on global currencies and gold and silver is far from over. Gold has been following the Euro downwards, but it shouldn't be doing so.
Author: Julian Phillips
Posted: Saturday , 17 Mar 2012
BENONI -
I thought we could ignore the Eurozone debt crisis for a while, but it was not to be. The tone in Europe is not good. Apart from Italy paying Morgan Stanley $3.4 billion to exit derivatives they thought would help their debt burden it is becoming clearer that the trail blazed by Greece may be the one that Spain and Portugal may have to follow to their harm.
Let's face it if the recession in Greece is a depression then the protracted debt solution now achieved for Greece just won't work. Greece must default. But at least the long negotiations allowed the banks to get rid of a lot of debt and the E.C.B. has ensured no banking crisis will occur, but solutions, still elusive!
The euro's performance this week has reflected that tone, but amazingly the gold price has moved with the euro but in a more exaggerated way. Silver has been taken along with gold.
Gold is in a completely different world to the euro so it should not be following it.
Most observers have been conditioned to believe that gold will move in the opposite direction to the U.S. dollar. That's happened this week as the rise in Treasury yields attracts ‘carry trade' business home. But there is no ‘fundamental' reason why the dollar should rise. Yield rises pose great dangers to the U.S. and its economy. That's why the Fed wants rates held down for the next couple of years. They don't want the trouble higher interest rates will bring to the world. But they are coming.
Do yourself a favor and look at the structure of Indian gold Exchange Traded Funds. We thought they would never take off because of the link between government and the banks and the distrust Indians have in their own government. But these are very different from those in the developed world. These offer physical redemption of gold to investors. This allows the lines between long-term holding investors and the gold manufacturing industry to be blurred somewhat. But this still leaves control over investor's gold firmly in the hands of the banks. The banks hold that gold in a ‘pool' or allocated state.
Julian Phillips for The Gold and Silver forecasters - www.goldforecaster.com and www.silverforecaster.com
See the article online here: Mineweb.com - The world's premier mining and mining investment website Gold should not be following the Euro - they are in a different universe - INDEPENDENT VIEWPOINT | Mineweb
March 15, 2012
Chile’s mining woe supports #copper prices - FT.com
Tags:
Commodities,
News
Chile’s mining woe supports copper prices
“Declining ore grades” is not a phrase to set the heart aflutter. Even investors in the metals and mining sector may struggle to get excited about the subject after years of hearing it being deployed as a justification for higher prices.
But the issue has rarely been such a potent force in the market. The fall-off in ore quality at ageing mines is behind a stagnation in copper production in Chile, the world’s top miner of the metal with a third of global output, since 2006.
The start of this year has seen an acceleration of the trend: Chilean copper production was down nearly 8 per cent year on year in January, and by about 20 per cent from December.
That is a shockingly large number. To put it in context: the drop in Chilean production in January is equivalent in terms of its impact on the copper supply-demand equation to a 5 percentage point acceleration in Chinese consumption growth.
Analysts have been scratching their heads ever since the headline numbers were reported a fortnight ago by INE, Chile’s statistics institute, to determine what could be behind the sharp decline.
The grim reality is that no single factor drove the fall: instead, according to mine-by-mine data recently published by Cochilco, Chile’s state copper commission, nearly every large mine in Chile suffered a fall in production in January from December. Most of Chile’s largest mines saw double digit percentage falls in output year on year.
Read the rest of the article online here: Chile’s mining woe supports copper prices - FT.com
“Declining ore grades” is not a phrase to set the heart aflutter. Even investors in the metals and mining sector may struggle to get excited about the subject after years of hearing it being deployed as a justification for higher prices.
But the issue has rarely been such a potent force in the market. The fall-off in ore quality at ageing mines is behind a stagnation in copper production in Chile, the world’s top miner of the metal with a third of global output, since 2006.
The start of this year has seen an acceleration of the trend: Chilean copper production was down nearly 8 per cent year on year in January, and by about 20 per cent from December.
That is a shockingly large number. To put it in context: the drop in Chilean production in January is equivalent in terms of its impact on the copper supply-demand equation to a 5 percentage point acceleration in Chinese consumption growth.
Analysts have been scratching their heads ever since the headline numbers were reported a fortnight ago by INE, Chile’s statistics institute, to determine what could be behind the sharp decline.
The grim reality is that no single factor drove the fall: instead, according to mine-by-mine data recently published by Cochilco, Chile’s state copper commission, nearly every large mine in Chile suffered a fall in production in January from December. Most of Chile’s largest mines saw double digit percentage falls in output year on year.
Read the rest of the article online here: Chile’s mining woe supports copper prices - FT.com
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