Mining stocks climb as gold, silver and platinum rise on weaker US dollar

Precious metals performed well this week after getting a boost from last week’s agreement on EU financial aid for Greece, whose debt crisis has been pressuring the euro for weeks to boost the US dollar and push down gold, which is seen as a riskier alternative to the American currency and usually moves inversely to the US dollar.

The yellow metal rose to US$1,120/oz this week after slipping below US$1,090/oz last week amid lack of a consensus among euro zone leaders on financial aid for the debt stricken country. Calls form the European Commission to work out a bailout deal for Greece met with staunch opposition from German Chancellor Angela Merkel, who insisted that Greece did not need aid from the EU and would have to turn to the International Monetary Fund (IMF) before asking fellow euro zone states for help.

Merkel’s stance enjoyed broad public support in Germany as opinion polls continued to show strong opposition to Germany’s participation in any bailout deal.

However, last week’s two-day EU summit did result in a solution as EU leaders agreed to loan up to €22 billion to Greece jointly with the IMF in the event that the country is unable to raise enough money in the market.

The near-term outlook for Greece’s debt situation improved further after the country conducted a successful seven year bond issue to raise another €5 billion. However, gains in the yellow metal and the euro were limited as the long-term outlook for Europe’s debt problems still remained clouded with rating agency Fitch questioning the long-term effect of EU’s bailout deal for Greece.

Gold got more support early this week when the World Gold Council (WGC) predicted China’s gold demand to double in tonnage terms within the next decade after growing at an annual rate of 13% over the past five years, estimating that the country’s demand could mount to US$29 billion in current prices. Last month, Director of China’s State Administration of Foreign Exchange Yi Gang said its investment in gold will now be limited due to a “few factors,” including the inconsistency of the yellow metal’s price over the past 30 years that reduced its appeal as a long-term investment.

Apart from a stronger euro, the US dollar was pressured by economic data that came out in the US this week. The ADP employment report revealed 23,000 lost jobs in the private sector, while Chicago PMI and New York ISM indexes declined. The American currency retreated last in the week ahead of Friday’s US non-farm payrolls update.

Other precious metals also rose during week with silver and platinum improving to US$17.88/oz and US$1,671/oz respectively.

Mining stocks were in buying mode this week. Blue chip gold miner Randgold Resources (LSE: RRS) and peer from FTSE 250 Petropavlovsk (LSE: POG) both made good advances, as did silver producers Fresnillo (LSE: FRES) and Hochschild Mining (LSE: HOC). Platinum miner Lonmin (LSE: LMI) posted a small gain, while midcap Aquarius Platinum (LSE: AQP) improved from 413 pence to 447 pence.

Large and Mid Cap News

BHP Billiton (LSE: BLT, ASX: BHP) has moved away from the traditional annually priced iron ore contracts in favour of a shorter-term pricing system. The international mining giant announced that it has reached agreements to switch to the new system with a significant number of its customers throughout Asia. According to BHP, the structural change is consistent with its goal of achieving market clearing prices.

Vedanta Resources (LSE: VED) has announced an increased in its share repurchase programme from US$500 million to US$825 million after buying back 21.1 million shares for US$430 million, aiming to enhance its shareholder value.

Small Cap Movers

Discovery Metals (AIM: DME; ASX/BSE: DML) has received Scoping Study results from Snowden for an underground mine based on a portion of the currently defined Zeta Mineral Resource and deposit at the Boseto Copper Project on a standalone basis, that confirms the economic viability of underground mining operations at Zeta.

Norseman Gold PLC (AIM, ASX: NGL) said it was notified that non-executive director David Steinepreis last week bought 56,750 shares in the company on the market for a total of A$39,965, and he now holds 4,313,857 shares in Norseman.

Medusa Mining (ASX, AIM: MML), through its Philippines operating company Philsaga Mining Corporation, has announced an update of the Co-O mine surface drilling results for new holes MD 217 to MD 240 and some additional results from earlier holes received subsequent to the announcement of 17 December 2009.

Rambler Metals & Mining PLC (TSX-V: RAB; AIM:RMM) said it plans to raise approximately £2.7 million before expenses through a private placing of up to 8.6 million shares at 32 pence each, or approximately C$0.50 per share.

Stratex International (AIM: STI) has doubled its Ethiopian portfolio to 3,142 sq km (square kilometres) while reporting encouraging geochemistry results from its Megenta gold discovery in the Afar region of the country, with chip sampling returning grades of up to 3 g/t (grammes per tonne) gold.

In ist first-half results statement, Churchill Mining (AIM: CHL) said the development of its world-class East Kutai coal project (EKCP) in Indonesia continues to gather momentum. During the six months ended 31 December 2009, the company completed a maiden in-situ mining reserve of almost one billion tonnes of thermal coal and completed the project’s initial feasibility study.

Kenmare Resources (LSE: KMR) the open offer of its £179.6m placing and open offer fundraising announced earlier this month for its Moma titanium minerals mine in Mozambique received a take-up of 73.5% from qualifying shareholders.

Frontier Mining (AIM: FML) has received assay results for its first 3 holes of its infill drill programme at its Benkala copper project in north-western Kazakhstan. The main focus of the programme was to confirm the oxide section of the project, enabling Frontier to prepare for initial copper production using an SX-EW process. The first three holes, from the 54 hole program, have exceeded Benkala’s historic resource data.

Noventa (AIM: NVTA) confirmed that it will re-start production at its Marropino mine in Mozambique on or around 25 April 2010.  The production will be phased in with a three-stage process, beginning with the re-processing of mine tailings, followed by the processing of previously mined oversize material, and finally the processing of new material from the main ore body (Run-of-Mine).

Red Rock Resources (AIM: RRR) has issued approximately 4 million new shares to Kansai Mining Corp at 2.68p per share, to complete the acquisition of its interests in the Mid-Migori Mining Company. A further 1 million shares have been issued in satisfaction of advisers' fees. Mid-Migori Mining owns the beneficial title and mining rights to the Migori gold project in Kenya.

Mozambique operating tantalum mining company Noventa (AIM: NVTA) has appointed Kean Hua Chung as a non-executive director of the company with immediate effect. Chung joins the company following a successful career in the City as both an analyst and a fund manager.

European Goldfields (TSX, AIM: EGU) has secured a US$125 million debt financing facility with a group of financial institutions, to part fund the development costs of the Certej project in the Apuseni Mountains of Transylvania in Western Romania.

Maghreb Minerals (AIM: MMS) halved its losses during the six-months ended 31 December 2009. The company and its funding partner Firebird continue to pursue opportunities in the fluorspar sector, while the base-metals assets in Tunisia remain under care and maintenance.

Berkeley Resources (ASX/AIM: BKY) has completed the initial Mineral Resource Estimates, reported in accordance with the JORC Code (2004), for the Salamanca Uranium Project in Spain.

London Mining (AIM: LOND) has acquired the remaining 80% of Colombian coal producer International Coal Company (ICC), targeting production of 250 ktpa (kilo tonnes per annum) of coking coal within 18-24 months and up to 400 ktpa of coke with first production within 12months.

A revised resource estimate for African Diamonds (AIM:AFD) AK6 kimberlite in Botswana’s prolific Orapa district, submitted this week in Canada by African Diamonds new partner on the project, Lucara Diamond Corp (TSX-V: LUC), reported 51 million tonnes at an average grade of 22 carats per hundred tonnes (cpht) - 11.2 million carats - and a further inferred resource of 20 million tonnes at 19 cpht.   Most encouraging of all, the average modelled diamond value has jumped from $151 per carat to $194 per carat, giving an in situ value of the indicated resource of $2.2 billion.

In its results statement for the six months ended 31 December 2009, Red Rock Resources (AIM: RRR) said the period saw a recovery from the depressed conditions early in 2009, and the gradual maturing of the company's strategies. The company reported an interim pretax profit of £3.2 million compared with a loss of £1.9 in the comparative period of 2008.

In its interim report for the six-months to 31 December 2009, Firestone Diamonds (AIM: FDI) said that the period saw good progress in the development of its project portfolio in Botswana. Based on plans for selective mining and the presence of high grade grain flow deposits, the BK11 mine plan is now expected to result in approximately 11.5Mt (million tonnes) of kimberlite at an average grade of 8.5 carats per hundred tonnes (cpht), giving total production of approximately 1 million carats, which Firestone noted was a 22% increase on previous estimates. Furthermore, the overall value of BK11 diamonds is estimated to have increased approximately 13% since December 2009 to US$155/carat.

Caledon Resources (AIM: CND, ASX: CCD) released its annual financial report today, reporting lower revenues that resulted in a full year loss due to lower prices and unfavourable currency movements, but projecting a rebound in 2010 after growing production and cutting sales costs during 2009.

Solomon Gold (AIM: SOLG) said one of the company’s non-executive directors, John Bovard,  has taken a stake in the company. The director bought 300,000 Solomon Gold shares at a price of 7.5p per share, on 30th March 2010.

Junior gold outfit Kryso Resources (AIM:KYS) has noted that recent high grade drill results from Ore Zone 1 at its Pakrut gold project had shown that the mineralization widens at depth, sparking a rethink from the company and the Beijing General Research Institute of Mining & Metallurgy (BGRIMM) who are consulting on the study.

Amur Minerals (AIM: AMC) said it has now completed the transfer of fuel and materials via the ice road to its Kun-Manie nickel deposit to progress the 2010 field season at the Russian project.

Recent updates from London Mining (AIM: LOND) reflect a company in transition, as the company continues to delineate big iron ore resources at its key projects in Sierra Leone, Saudi Arabia and Greenland.

Ovoca Gold (AIM: OVG) has contracted a drilling company to start the planned diamond drill programme at the Rassoshinskaya property in April, and announced the appointments of a new chief financial officer, a non-exceutive director and a corporate secretary.

Pan African Resources (AIM: PAF, JSE: PAN) has agreed to acquire a 25% stake in RK1 Consortium, which operates a PGM (platinum group metals) concentrator plant from Ivanhoe Nickel & Platinum Limited for ZAR 53 million, or £4.8 million.

European Nickel (AIM, PLUS: ENK) is certainly juggling quite a few nickel balls at the moment. The company is progressing towards a merger with fellow nickel laterite specialist, Rusina Mining, and this week confirmed that it had extended financing discussions for its key Çaldağ project which contains a JORC proven reserve of 33.2Mt at 1.13% Ni, for a nickel content of 375,000 tonnes.

Norseman Gold PLC (AIM, ASX: NGL) said it was notified that non-executive director David Steinepreis last week bought 24,100 shares in the company on the market for a total of A$16,972, and he now holds 4,337,957 shares in Norseman. This follows Steinepreis’s purchase of 56,750 shares, also last week , which the group announced two days ago.

The board of ZincOx Resources (AIM: ZOX) has found reassurance among its major shareholders following a recent general meeting requisition to oust six directors by two minor shareholders with a combined 5% stake in the company. Today, Zincox said that it has received written confirmations representing more than 50% of the company’s issued shares.

Oxus Gold PLC (AIM: OXS) said chief operating officer John Donald will be retiring from the Oxus board with effect from 31 March 2010. He has agreed to consult for Oxus until 31 December 2010. The COO position will remain vacant pending completion of the CITIC Consortium funding it announced on 7 January 2010.

In the six months ended 31 December 2009, North River Resources (AIM: NRRP) has strengthened its position as emerging southern Africa focused resource company. Most notably with the acquisition of a highly prospective portfolio of Namibian base metal and gold assets from Kalahari Minerals (AIM: KAH) - which subsequently became the company’s largest shareholder with a 44.9% stake in North River.

For the six-months ended 31 December 2009, Regency Mines (AIM: RGM) reported a pretax profit of £388,164 compared to a £1.4m loss in the comparative period in 2008, and said it is loolking ahead with confidence.

Ariana Resources (AIM: AAU) has raised £1 million through a placing of 50 million new shares at 2p each to certain institutional investors. The proceeds will be used to progress the company’s ongoing gold and silver exploration and development work in Turkey.

Leyshon Resources (ASX/AIM: LRL) director Richard Seville acquired 750,000 ordinary fully paid shares in market purchases between March 29 and 31 at an average price of A$0.194 cents per share for a total of A$145,584.00.

Bellzone Mining (AIM: BZM) has commenced trading on the AIM market of the London Stock Exchange today, after placing 96 million new shares to raise £33.6 million for its project portfolio of assets in Guinea in West Africa that comprises more than 13 Bt (billion tonnes) of magnetite and 2.9 Bt of oxide ore.

Anglesey Mining (AIM: AYM) announced that the underwriters of the recent Labrador Iron Mines’ (TSX: LIM) CDN$35m fundraising have exercised their over-allotment option. Consequently, Anglesey has sold 810,900 of its LIM shares at C$5.55 per share, raising gross proceeds of C$4.5m (£2.9m). Following the exercise Anglesey Mining now holds approximately 17.7 million Labrador Iron Mine shares, or 41% of the company.