Gold has done better in other currencies than in USD, but several charts are also at the point of breaking down.
 |
| #Gold in #Currencies other than USD |
October 15, 2014
September 29, 2014
#China's #gold demand -ScotiaBank
This from Scotiabank's China specialist Na Li:
- Na's China Express – Measuring China's Gold Demand: Overnight data shows that China's net gold imports from Hong Kong dropped to 21.134 tonnes in August, the lowest level since May 2011 (Exhibit 1 below). This data point supports our view that China is still in a destocking stage for gold and our relatively cautious "market weight" call on gold from a China perspective. However, we do caution that investors should no longer regard China's net imports from Hong Kong as an accurate proxy for China's gold import demand. This is because gold is increasingly flowing into the Chinese market through Shanghai and even Beijing. To understand China's real physical gold demand, investors should simply look at the weekly withdrawals from Shanghai Gold Exchange vaults (Exhibit 2). We visited the Shanghai Gold Exchange (SGE) in May and talked to the senior executives of the exchange. After reviewing the exchange's trading mechanism, we are of the view that the weekly withdrawal figures provide a much more accurate data series that reflects China's aggregate wholesale demand in a timely way. This is because for tax purposes all gold imported into China and all gold produced within China must pass through the vaults once, and only once, before reaching jewellery makers, investors, industrial users, and consumers. Exhibit 2 presents the weekly withdrawals from SGE vaults by numbered week (each calendar year has 50 trading weeks). As the exhibit shows, in recent weeks China's wholesale gold demand has actually picked up slightly. This is in contrast to the Hong Kong import data. Overall, by mid-September, China's cumulative wholesale demand in 2014 was down 16.2% YOY. This decline is much milder than the Hong Kong import number implies.
September 12, 2014
#Kinross Gold in talks to sell #Ecuador #Gold project FDN to Lundins
Tags:
Ecuador,
Gold,
Kinross,
Latin America,
Lundin,
Mining,
mining stocks
Seems like the cat is out of the bag. This news has been whirling around for some time in investment banking circles, now the MSM has gotten a hold of it.
In essence, this is Kinross continuing to de-risk after its failed acquisition spree under Tye Burt, its previous CEO . The Lundins are jumping on the opportunity. No surprise there- they tread where others fear to go, and reap the subsequent rewards.
Kinross Gold in talks to sell Ecuador project to Lundin family
The Globe and Mail
Kinross Gold Corp. is in talks to sell its mothballed gold project in Ecuador in a move that could see the Lundin family develop the deposit, according to people familiar with the matter.
For about a year, Kinross has been trying to exit Ecuador and divest the Fruta del Norte after clashing with the local government on the economic terms of the project.
The Ecuadorean government gave Kinross approval to sell Fruta del Norte last week, one person familiar with the matter said.
Fruta del Norte, also known as FDN, was at one time seen as critical to Kinross’s growth. The company acquired the precious metal deposit when it bought Aurelian Resources for $1.2-billion in 2008.
But after more than two years of negotiations with the Ecuadorean government, Kinross threw in the towel and said it was not going to waste any more capital developing the mine. It recorded a $720-million charge on the asset in 2013 and slashed its gold reserves by a third to reflect the loss of Fruta del Norte.
“We continue to work co-operatively with the Ecuadorean government on our exit from the country and the FDN project,” Kinross spokeswoman Andrea Mandel-Campbell said. “We do not comment on speculation,” she said.
It is unlikely Kinross will recoup much of the $1.2-billion it paid for Aurelian. But analysts said any sale was positive.
“Anything is better than nothing. If they can surface any value that is a positive,” said Pawel Rajszel, analyst with Veritas Investment Research.
It isn’t clear which Lundin entity would acquire Fruta del Norte if a deal is completed, or whether other potential buyers are in the mix. Lukas Lundin and his brother, Ian, run the Lundin Group of Companies, a conglomerate of mining and energy companies that was founded by their father. A spokeswoman for the Lundin Group declined comment.
If Lukas Lundin succeeds in getting his hands on Fruta del Norte, he will face the same obstacles Kinross had in Ecuador. The South American country is considered a risky place for foreign investment and has imposed a hefty tax on mining projects. The left-leaning government, however, said in June it plans to change its mining law and offer tax incentives to attract investors, according to Reuters.
The Fruta del Norte debacle is one in a series of setbacks for Kinross. The company incurred multiple writedowns on its Tasiast mine in Mauritania, erasing most of the $7-billion value it paid to acquire Red Back Mining, which owned the mine, in 2010.
Lukas Lundin has a history of working with Kinross. He was the chairman of Red Back Mining and helped engineer the sale of his company to Kinross while on a ski trip with former Kinross chief executive Tye Burt. Mr. Lundin briefly served as a Kinross board director. The Red Back deal eventually cost Mr. Burt his job.
Although Kinross has slashed costs to conserve capital and deal with the sharp drop in gold prices, the company can’t seem to catch a break. Nearly a third of Kinross's gold production comes from its two mines in Russia, which is locked in a diplomatic row with Canada and other Western countries.
The miner’s exposure to Russia has helped keep the company’s stock at multiyear lows. Its shares are down about 14 per cent so far this year to $4.03 a share at Wednesday’s close. In contrast, Kinross’s peer Goldcorp Inc. has gained about 15 per cent to $27.61.
The MasterMetals Blog
@MasterMetals
In essence, this is Kinross continuing to de-risk after its failed acquisition spree under Tye Burt, its previous CEO . The Lundins are jumping on the opportunity. No surprise there- they tread where others fear to go, and reap the subsequent rewards.
Kinross Gold in talks to sell Ecuador project to Lundin family
The Globe and Mail
Kinross Gold Corp. is in talks to sell its mothballed gold project in Ecuador in a move that could see the Lundin family develop the deposit, according to people familiar with the matter.
For about a year, Kinross has been trying to exit Ecuador and divest the Fruta del Norte after clashing with the local government on the economic terms of the project.
The Ecuadorean government gave Kinross approval to sell Fruta del Norte last week, one person familiar with the matter said.
Fruta del Norte, also known as FDN, was at one time seen as critical to Kinross’s growth. The company acquired the precious metal deposit when it bought Aurelian Resources for $1.2-billion in 2008.
But after more than two years of negotiations with the Ecuadorean government, Kinross threw in the towel and said it was not going to waste any more capital developing the mine. It recorded a $720-million charge on the asset in 2013 and slashed its gold reserves by a third to reflect the loss of Fruta del Norte.
“We continue to work co-operatively with the Ecuadorean government on our exit from the country and the FDN project,” Kinross spokeswoman Andrea Mandel-Campbell said. “We do not comment on speculation,” she said.
It is unlikely Kinross will recoup much of the $1.2-billion it paid for Aurelian. But analysts said any sale was positive.
“Anything is better than nothing. If they can surface any value that is a positive,” said Pawel Rajszel, analyst with Veritas Investment Research.
It isn’t clear which Lundin entity would acquire Fruta del Norte if a deal is completed, or whether other potential buyers are in the mix. Lukas Lundin and his brother, Ian, run the Lundin Group of Companies, a conglomerate of mining and energy companies that was founded by their father. A spokeswoman for the Lundin Group declined comment.
If Lukas Lundin succeeds in getting his hands on Fruta del Norte, he will face the same obstacles Kinross had in Ecuador. The South American country is considered a risky place for foreign investment and has imposed a hefty tax on mining projects. The left-leaning government, however, said in June it plans to change its mining law and offer tax incentives to attract investors, according to Reuters.
The Fruta del Norte debacle is one in a series of setbacks for Kinross. The company incurred multiple writedowns on its Tasiast mine in Mauritania, erasing most of the $7-billion value it paid to acquire Red Back Mining, which owned the mine, in 2010.
Lukas Lundin has a history of working with Kinross. He was the chairman of Red Back Mining and helped engineer the sale of his company to Kinross while on a ski trip with former Kinross chief executive Tye Burt. Mr. Lundin briefly served as a Kinross board director. The Red Back deal eventually cost Mr. Burt his job.
Although Kinross has slashed costs to conserve capital and deal with the sharp drop in gold prices, the company can’t seem to catch a break. Nearly a third of Kinross's gold production comes from its two mines in Russia, which is locked in a diplomatic row with Canada and other Western countries.
The miner’s exposure to Russia has helped keep the company’s stock at multiyear lows. Its shares are down about 14 per cent so far this year to $4.03 a share at Wednesday’s close. In contrast, Kinross’s peer Goldcorp Inc. has gained about 15 per cent to $27.61.
The MasterMetals Blog
@MasterMetals
Subscribe to:
Posts (Atom)
