Li Ka-Shing-Backed #Gold Investment vehicle #CEF comes out of the woodwork- Bloomberg

CEF Holdings Ltd., a venture between Li Ka-shing’s flagship company and Canadian Imperial Bank of Commerce, is looking to invest in gold mining companies after a slump in prices creates buying opportunities. 

Li Ka-Shing-Backed CEF Seeking to Make Gold Investments

By Michelle Yun - Aug 27, 2013

CEF Holdings Ltd., a venture between Li Ka-shing’s flagship company and Canadian Imperial Bank of Commerce, is looking to invest in gold mining companies after a slump in prices creates buying opportunities.
“Long term, gold is a good place to be,” CEF Chief Executive Officer Warren Gilman, 53, said in an interview in Hong Kong. Cheung Kong Holdings Ltd. (1), controlled by Li, Asia’s richest man, and CIBC each own 50 percent of CEF. The venture focuses on investing in resources companies globally.
Bullion is heading for its first annual decline since 2000 and has slumped 27 percent from a record $1,921.15 an ounce in September 2011. The plunge prompted investors John Paulson and George Soros to sell gold as mining companies cut jobs and the valuation of their mines.
“I was a little uncomfortable making investment in gold at $1,700 and $1,800 an ounce,” Gilman said yesterday. “The correction we’ve had this year from my perspective is great because we can hopefully fulfill that objective of making some gold investments.”
CEF recently made debt investments in Uranium Energy Corp. and Avanti Mining Inc., which is developing a molybdenum mine in Canada. Gilman declined to comment about CEF’s size or cash available for investments.
Li, 85, has an estimated net worth of $27 billion, according to the Bloomberg Billionaires Index. CEF Holdings was established in 1974 by Cheung Kong and CIBC, Gilman said.

Gold Price

Gold for immediate delivery fell 0.4 percent to $1,399.33 an ounce as at 12:46 p.m. Singapore time. The metal is down 16 percent this year as the dollar strengthened and amid concern that the Federal Reserve will begin cutting back its stimulus measures.
Prices may stay between $1,000 an ounce and $1,400 an ounce for “a couple of years and that’s predominantly because gold has to get used to, and it still seems to be adjusting, to the taper and rising real interest rates globally,” Gilman said. He previously co-founded CIBC’s global mining group and was later vice chairman of the bank’s CIBC World Markets.
Prices will average $1,300 an ounce in the fourth quarter, the median of 17 analyst estimates compiled by Bloomberg shows. Bank of America Corp. is the most bullish, predicting a fourth-quarter average of $1,495 an ounce, and JPMorgan Chase & Co. anticipates rising averages in every quarter through the end of next year.

Gold Rallies

Gold has rallied 13 percent since the end of June as lower prices boosted demand, particularly in Asia, with prices averaging $1,313.58 an ounce. Bullion will rebound as spending cuts by producers and the closure of costly operations brings better balance to supply and demand, the producer-funded World Gold Council said this month.
“It’s tougher and tougher to find economic gold deposits in safe jurisdictions,” Gilman said. “You see mine supply struggling to keep up with demand long term. That’s a great recipe for higher prices in the longer term.”
Gold mining companies have announced at least $26 billion of writedowns in recent months and are seeking to sell assets after prices declined.
Gold Fields Ltd. last week agreed to pay $300 million for three Barrick Gold Corp. mines in Australia. Norton Gold Fields Ltd., the Australian producer controlled by China’s Zijin Mining Group Co., said this month it’s seeking further acquisition targets as falling prices cut the value of mines.
To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net
To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

Li Ka-Shing-Backed CEF Seeking to Make Gold Investments - Bloomberg

Race for Resources: Warm to Investors, #Greenland Opens Up @WSJ

Geologists say Greenland potentially holds stores of iron, copper, nickel, zinc, rare-earth minerals, rubies, oil and gas. 

From the WSJ: Race for Resources: Warm to Investors, Greenland Opens Up

Race for Resources:
Warm to Investors, Greenland Opens Up

Prospectors Develop Projects to Mine Potential Bounty in Minerals

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By JAMES T. AREDDY

	James T. Areddy/The Wall Street Journal
	Geologists say Greenland potentially holds stores of iron, copper, nickel, zinc, rare-earth minerals, rubies, oil and gas. Above, the capital Nuuk.

ILULIALIK FIORD, Greenland—Geologists have long known that deep beneath the forbidding ice of this Arctic island lay buried treasure.
Below hundreds of feet of frozen water and ground, iron, copper, nickel, zinc, rare-earth minerals and rubies beckon. Oil and gas may sit offshore.
Fortune hunters taste opportunity. Prospectors from various countries, encouraged by Greenland's investment-friendly policies, have spent over $1.7 billion developing potential projects. A British company is going for iron ore. Scots are testing for undersea oil. Australians are pursuing rare earths. Canadians are digging for rubies, while giant Chinese mining and engineering concerns are jockeying for position.
In Greenland, the Arctic is in play.
Recent annual thaws make it possible for the Danish territory to contemplate exploiting these riches, even though the 56,000 people who live on the world's biggest island lack the means to build the ports, roads and power plants required to transform the fishing-based economy into a mining one.
Greenland's geologists had found many resources on the largely pristine island but never much pursued mining. Then, in 2009 Denmark freed the island to largely govern itself, permitting locals to decide how best to use the land. Greenland's ethnic Inuit welcomed mineral and petroleum investors as new patrons.
The islanders say they desire full independence but that it won't be possible until they achieve economic self-sufficiency from Denmark, which still provides hundreds of millions of dollars in annual support and basic services like policing.
One mine could fundamentally alter Greenland's $2 billion economy. Locals shudder at the alternative: continued dependence on seafood for almost 90% of the island's export earnings and handouts from Denmark worth over a third of the annual budget.
"It's quite a dynamic point in Greenland's history, politically, economically and culturally," says John Mair, executive director of a rare earth and uranium exploration company, Greenland Minerals and Energy Ltd.

New construction in Nuuk
Photos: James T. Areddy/The Wall Street Journal
London Mining's base camp

Led mainly by small Australian and Canadian companies, mining groups are currently exploring more than 100 projects. Small-time prospectors typically pave the way into untested markets like Greenland, documenting what is in the ground and forecasting the costs of removing it, in hopes of attracting deep-pocketed backers.
"Mining will come to Greenland," newly elected Prime Minister Aleqa Hammond declared in a recent interview with The Wall Street Journal.
Because China is the biggest importer of many natural resources, its companies factor into plans for many Greenland proposals, including as customers, according to interviews with dozens of executives and government officials.
In fact, this icy frontier's future may depend significantly on China's bankers, engineers, builders and buyers—and their government's determination to win influence at the top of the world.
Asked about China's role, Mrs. Hammond said "it's important Greenland allies with countries that have an interest in funding projects," and which ones don't matter. "We will not only be needing funds from outside," she said, "we will also be needing hands from outside."
Thus far, a fair share of deals-in-the-making hinge on China as a catalyst. One ore project, run by Britain's London Mining PLC, envisages taking advantage of new Greenland regulations designed to permit large-scale foreign employment by bringing in Chinese workers. In mid-July, Australia's Ironbark Zinc PLC said it is working with a Chinese company that might finance, build and patronize a $485 million base metals mine it proposes in northern Greenland. A week earlier, a delegation of Chinese miners and bankers visited Greenland's president and local prospectors. Officials at Canadian firm True North Gems Inc. say the group was enthusiastic about potential investment in its plan to excavate rubies, red stones that are especially popular in China and India.

Substantial Chinese economic inroads could redraw Greenland's political landscape. Historically, the island leaned toward the U.S. Relations built on American demand for a mineral called cryolite, once important to aluminum production, led to U.S. construction of ports and airstrips, and today Greenland hosts the northernmost U.S. military facility, Thule Air Base.

While Denmark officially welcomes these suitors, diplomats say a significant economic tilt toward China would discomfort Denmark and its ally, the U.S. The latest annual Danish Defense Intelligence Service risk assessment highlights Chinese interest in Greenlandic mining projects in saying, "Both the United States and Russia are highly skeptical of Chinese attempts at securing control over the region's natural resources."

When President Barack Obama in May signed a new U.S. Arctic strategy, he emphasized seizing "emerging economic opportunities." The 13-page policy lacks specifics, though in a paragraph about U.S. security interests, it makes a pointed distinction between the ambition of nations like the U.S., which have territory in the region, and so-called non-Arctic states. The distinction comes as Chinese publications increasingly refer to the Asian country as a "near-Arctic state," according to analysts.

Beijing, meanwhile, is sensitive to suggestions it harbors hidden agendas for the island. "Groundless hype," a Chinese foreign ministry spokeswoman scoffed in March.

In fact, Chinese fingerprints in Greenland can be hard to find. There's not even a Chinese restaurant in the island's main town.

Western miners own nearly all exploration licenses for Greenland. But amid sagging mineral prices and with capital in short supply, many say they are negotiating shareholding and funding deals in China. "The risk-willing money is in Asia," says Jens-Erik Kirkegaard, Greenland's industry and minerals minister.

James T. Areddy/The Wall Street Journal
Arent Heilmann of Greenland Mining Services advises projects.

Evidence of the mining ambition—and China's importance—is visible four hours by speedboat into Ilulialik Fiord. Here, house-size icebergs crash off a glacier into the ocean, tinting green the deep waters that teem with whales and seals.
On an incline above a bay still frozen in late spring, shipping containers break the vista—the unlikely staging-point for an iron ore mine, and possible Arctic foothold for China.
The shipping containers on the hilltop are the prep-station for a proposed $2.35 billion iron ore mine that Greenlandic officials indicate they will license by autumn. The project is owned by Britain's London Mining but was designed by an international team with prominent roles for Chinese government-run companies.
Mining iron ore above the fiord is a potential budget-buster, starting with plans to dynamite a plaster of ice 550-feet thick. Up to 3,000 Chinese laborers will endure raging winds and subzero temperatures to construct power and processing plants. A pipeline will snake 64 miles down the mountain to a new port. Ships loaded with ore would navigate to China, possibly on an increasingly viable summertime voyage that cuts near the North Pole and reduces Europe-China travel time by 40%.
"We recognize that it is a door-opening project for Greenland," says Graeme Hossie, chief executive officer of London Mining. "One needs to put together a lot of aligned interests to make it work."
Few "mineral hypermarkets," enthusiasts say, can rival Greenland in good governance—its Danish-standard political stability, predictable legal system and minimal corruption.
But bonanzas on frozen islands—"Ice Cold Gold," as one television show calls Greenland—also pose extraordinary risks.
"Opportunities are many but you also have to be realistic," says Arent Heilmann, a partner in Greenland Mining Services A/S, an adviser and supplier to several exploration projects. "The challenge here in Greenland is there is no infrastructure outside the towns."
Greenland is triple the size of Texas. But its population wouldn't fill Cowboys Stadium.
No roads link Greenland's isolated coastal hamlets. The airstrip in the capital Nuuk is too short to land Air Greenland's single jetliner. The Internet fails when icebergs snag its undersea cables.
Almost 30% of Greenlanders reside in compact Nuuk. Folks dress in bristly sealskin jackets, snack on rubbery whale fat seasoned with allspice and rush to the dance floor when accordionists strike up polka-sounding Greenland hits. A favorite is "Hvalen Hvalborg," a Danish ode to a whale.
Inuit often live in modern apartments featuring triple-paned windows and pastel exteriors. It is pricy to live here: a six-pack of beer is $18; five minutes of YouTube cost $1; a 45-minute domestic flight often tops $500.
Professionals are in short supply, including translators of Greenlandic, a language of multisyllabic words that can encapsulate an entire sentence in other tongues. To punctuate, you gasp.
Out where Greenland's resources are, challenges multiply so fast some doubt mining will ever be worth the risk. Miners pay $3,200 an hour for helicopters, ride boats in waters so cold that few bother with life jackets and haul equipment by dog sled. To keep equipment from freezing, drillers pour cocktails of salt and hot water into deep bore holes and never turn off their machines. On the ore site, huge sandbags anchor the containers against gales.
And yet tough jobs are increasingly getting done in the Arctic. For a new $180 million hydropower plant distant from the Greenland fishing town Ilulissat, 150 workers built a supply port and roads, tunneled almost 9 miles below a frozen lake and stretched transmission lines 30 miles. "Over mountains, over fiords, over lakes, over everything," says Henrik Estrup, chief executive officer of the utility, Nukissiorfiit.
New York-based Alcoa Inc. has made preliminary investments toward an aluminum smelter that would rely on Greenlandic lakes for hydroelectricity and be built by Chinese workers. More immediately, 46 cargo vessels sailed the Northern Sea Route during the annual thaw in 2012, and Norway's Centre for High North Logistics counts more this season preparing to make the shortest voyage between Europe and Asia.
A new era looks apparent to Johannes Heilmann, a grizzled 65-year-old nicknamed Akappiaq. He hunts birds in the winter, harvests lumpfish roe in spring, catches cod and seal through the summer and harpoons fin whales until December. He suspects few after him will carve out a living with a rifle and a skiff. Greenland, he says, is "changing from a fishing nation to a mining nation."

A version of this article appeared August 22, 2013, on page A1 in the U.S. edition of The Wall Street Journal, with the headline: Warm to Investors, Greenland Opens Up.

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From the WSJ: Race for Resources: Warm to Investors, Greenland Opens Up

The MasterMetals Blog

#Gold’s rebound: now @cnbc says it's believable this time

CNBC.com Article: Gold's rebound: Why it's believable this time

As investors shun risk assets such as emerging market equities and currencies, gold is quietly gaining traction, clawing its way back up to the $1400 level.

Full Story:
http://www.cnbc.com/id/100982767

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