#Gold on track for 4 000 t market by year end – World Gold Council

Q2 gold uptake for jewellery rose 37% from the same period last year and demand for bars and coins soared to an all-time quarterly record of 507 t.Some country demand was staggeringly high, again based on the price drop, with consumers the world over coming into the market on the perception of gold at $1 280/oz and $1 300/oz being cheap.

Gold on track for 4 000 t market by year end – World Gold Council

By: Martin Creamer

 

JOHANNESBURG (miningweekly.com) – Gold demand was on track for a 4 000 t market by year-end, World Gold Council MD Marcus Grubb said on Wednesday.

Grubb, who was speaking to Mining Weekly Online from London, said gold’s major Q2 price fall had sparked massive consumer demand.

Q2 gold uptake for jewellery rose 37% from the same period last year and demand for bars and coins soared to an all-time quarterly record of 507 t.

Some country demand was staggeringly high, again based on the price drop, with consumers the world over coming into the market on the perception of gold at $1 280/oz and $1 300/oz being cheap.

Total demand for China and India was up 78% and 80% compared with Q2 last year and at the half year; Greater China took up 600 t and India 566 t, indicating failure of the Indian government’s constraining measures.

On the supply side, there was a major 21% fall in recycling amounting to 62.4 t less gold coming on to the market, the biggest fall since 2007.

If it were it to continue, there would be a 300 t recycling drop by year-end.

Mine supply, which rose 4% in the quarter, is poised to flatten and then decline as a consequence of planned production cutbacks.

Futures and exchange-traded funds (ETFs) sales triggered gold’s big Q2 price drop with 400 t of ETF gold going East into Chinese, Indian and Middle Eastern hands.

Q2 gold demand, which totalled 856.3 tons, was worth $39-billion, compared with Q1 demand of 963 t, worth $51-billion.

The 12% tonnage decline translated into the 23% value drop, with the $39-billion revenue line being the lowest for more than three years.

Q2 saw an absolute drop in the gold price of more than $400/oz – a double-digit decline in the average quarterly price compared with both Q1 this year and Q2 last year.

A price recovery is likely to be needed by recycling resurges, indicating a lower need for ‘distress selling’ in developed markets, particularly the US.

Recycling has generated, on average, 40% of total supply over the last five years.

Jewellery buying caused a rise in regional premiums on gold, as supply chain bottlenecks caused delays in meeting demand.

The gold price lost out largely as a result of many anticipating a recovery in the US market, where the Federal Reserve continues to back bonds at a significant rate.

With most gold producers focusing on lowering production, and recycling slowing, a gold supply deficit is expected in 2014 and 2015.

Read the article online here: Gold on track for 4 000 t market by year end – World Gold Council

@PacificRubiales optimistic it will get new contract on main Rubiales #oil field

In case you missed It, Ron Pantin the CEO said yesterday two things worth highlighting: they are looking at buying a light oil player to help with costs of blending their heavy oil. Most importantly, they expect their license on CP6 in the next 3 to 6 weeks and the CEO says he is very optimistic they will be able to get a new license on the main Rubiales field.

Even if the terms are not as favorable I would think a new contract with Ecopetrol on the main Rubiales field would be a huge plus.

(BN) Pacific Rubiales Scouring for Colombia Oil Acquisition, CEO Says

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Pacific Rubiales Scouring for Colombia Oil Acquisition, CEO Says
2013-08-14 04:00:00.11 GMT


By Andrew Willis
Aug. 14 (Bloomberg) -- Pacific Rubiales Energy Corp., the the world's fastest-growing major crude producer, said it's looking to buy a low-density crude producer in Colombia in a bid to reduce the cost of transporting its mostly heavy oil.
The company buys gasoline on the international market and blends it with heavier oil before sending the mix to port at a "huge cost," Chief Executive Officer Ronald Pantin said yesterday in an interview from his Bogota office.
"There are light oil companies in Colombia that it would be a no brainer to get their production," Pantin said. "We are looking. We are not in negotiations. The moment is now but you need two to tango."
Pacific, run by the ex-Petroleos de Venezuela SA executive who left in 2000 as then-President Hugo Chavez stepped up control of the state company, boosted output sevenfold over the past five years by plying the Rubiales field, Colombia's largest. Pantin didn't rule out a bid for Calgary-based Petrominerales Ltd. as he seeks new growth opportunities.
"It's a great company, they have a lot of light oil," he said. "I am not negotiating with them. I am keeping an eye on all of them."

Share Slump

Petrominerales, which produces mostly from fields in Colombia's Llanos basin, reported a 31 percent decline in second-quarter production. July output rose and the company has opportunities to continue growing, Petrominerales Chief Executive Officer Corey Ruttan said in an Aug. 9 interview.
Petrominerales shares have slumped 29 percent this year in Toronto and trade at 10.67 times estimated 2013 earnings, according to data compiled by Bloomberg. Pacific Rubiales has lost 14 percent and fetches 10.78 times forecast profit, the data show. Rubiales' market value is $6.23 billion compared with
$501 million for Petrominerales.
Pacific's compound production growth over the last five years is 47 percent, the fastest among 109 producers with a market value of at least $5 billion tracked by Bloomberg. The group average is 8.4 percent growth, the data show.
The company's shares fell last week after reporting net income of $57.6 million, or 18 cents a share, down from $224 million, or 76 cents, a year earlier. The fall was largely caused by a 5.1 percent drop in the Colombian peso, lower oil prices and a depreciation of assets.

Beating Target

Pacific will surpass its 2013 output target and is "sure"
it will secure soon a license for the CPE-6 block, Pantin said.
The top range of the company's forecast for this year is an average net daily production of 127,000 barrels of oil equivalent. Rubiales accounts for 65 percent of the company's production, according to a July presentation.
"We're going to be higher," Pantin said. "Why am I saying that? Because of Peru, Cajua, Sabanero and CPE-6."
Pacific Rubiales, which had licensing delays for its CPE-6 block in Colombia's Llanos basin, now expects a blanket exploration and development license from Colombia's environmental agency known as ANLA within three to six weeks, Pantin said.

License Expiry

"I'm sure we are going to get it," Pantin said. "I talk to ANLA every day. They are very pleased with the way meetings with local communities went."
Pacific Rubiales has identified CPE-6 as a key area for future production growth. The company's contract at the Rubiales field is set to expire in June 2016. Ecopetrol's board will decide whether to issue a new license in the field.
"I'm very optimistic," Pantin said. "Our proposal for a new contract is a good one. It will be production sharing with Pacific as the operator. It's beneficial for both Pacific and Ecopetrol."
Ecopetrol declined to comment on the contract in an e- mailed response to questions.

For Related News and Information:
Pacific Rubiales news: PRE CN <EQUITY> CN BN <GO> Top Latin American news: TOPL <GO> Most-read news on Colombia: MNI COLOM <GO>

--Editors: James Attwood, Jasmina Kelemen

To contact the reporter on this story:
Andrew Willis in Bogota at +57-1-313-7656 or awillis21@bloomberg.net

To contact the editor responsible for this story:
James Attwood at +56-2-2487-4019 or
jattwood3@bloomberg.net

The MasterCharts: #GOLD has crossed its 50 day Moving Avge

The MasterCharts: #GOLD has crossed its 50 day Moving Avge