Precious metals plummeted at the end of the week with gold falling to US$1,136/oz, while silver and platinum declined to US$17.70/oz and US$1,689/oz respectively.
On Monday and Tuesday, gold remained steady around the 2010 highs reached last week amid increased physical buying and volatility in currency and equity markets, which prompted investors to pour money into precious metals, now seen as safe haven assets. Investors have been abandoning the euro as the European debt crisis unravelled with Greece and its massive debt taking centerstage, putting pressure on equity markets on the continent and its single currency. Late last week, rating agency Fitch cut Greece’s sovereign debt to BBB- from BBB+ after downgrading Portugal to AA with a negative outlook last month. The decision came shortly after President of European Central Bank Jean-Claude Trichet said that the debt-laden country did not require financial aid at this moment.
The move by Fitch made it harder and costlier for Greece to raise sufficient funds in the market, prompting European Union leaders to provide it with a €30 billion loan facility weeks after agreeing on a financial aid package, which would be used as a last resort if the country failed to raise enough money in the market.
Gold then briefly fell below US$1,150/oz as investors paused following a buying spree that sent the yellow metal to 2010 highs at nearly US$1,170/oz. However, gold came back in demand later after investors switched to riskier assets following a positive earnings report from chipmaker Intel (NYSE:INTC) and gains in the euro on Greece optimism following the bailout deal.
More bullish cues were provided by the world’s largest consumer India, which said that its demand for the yellow metal has grown further as the country’s gold imports increased to 27.7 tonnes in March from just 4.8 tonnes a year ago. Later, however, physical buying declined on lower demand from India as gold prices remained at a high level.
Gold weakened closer to the end of the week, but still managed to remain above the US$1,150/oz level despite a stronger US dollar as precious metals were sought by traders due to concerns associated with soaring sovereign debts in Europe and the US, triggering yet more safe haven buying.
On Friday, gold gave in to the pressure and decline as the American currency remained strong and the euro fell further on investor concerns over Greece’s fiscal situation. The spread between Greek and German bonds has reached record levels despite the EU bailout loan agreement.
The yellow metal then slipped to US$1,136/oz after SEC (Securities and Exchange Commission) charged Wall Street’s biggest investment bank Goldman Sachs (NYSE: GS) with fraud. GS has a large stake in SPDR Gold Trust (NYSE: GLD), the world’s largest gold-back exchange traded fund.
Major mining stocks were in decline this week, posting their biggest losses on Friday. Gold producer Randgold Resources (LSE: RRS) declined from 5,445 pence to 5,125 pence during the week, silver miner Fresnillo (LSE: FRES) declined from 880 pence to 844 pence and platinum producer Lonmin (LSE: LMI) fell from 2,111 pence to 2,027 pence.
In the FTSE 250, gold miner Petropavlovsk (LSE: POG) fell from 1,270 pence to 1,240 pence, silver producer Hochschild Mining (LSE: HOC) fell from 290 pence to 288 pence and Aquarius Platinum (LSE: AQP), however, went against the tide, inching from 450 pence to 450.6 pence during the week.
SPDR Gold Trust fell 2.1% on friday's news.
Small Cap News
Rambler Metals and Mining (TSX-V: RAB, AIM: RMM) has reached another development milestone, with the submission of the environmental registration for the Ming copper gold mine on the Baie Verte Peninsula of Newfoundland and Labrador, Canada. Subject to a satisfactory review of the proposal, the project should be released allowing the construction to begin. Rambler said it envisages a Q3 2010 start for the construction phase.
In an analyst report on Discovery Metals (AIM: DME, ASX: DML) Blackswan Equities commented on the potential of the company’s next phase of exploration. According to the Perth based stockbroker, Discovery’s new exploration expertise could unlock a second ‘Boseto-sized’ resource on the Kalahari copper belt.
Nyota Minerals (AIM & ASX: NYO) has optioned 45,000 sq km (square kilometres) of prospective ground in proximity of its flagship Tulu Kapi gold project in an area of Ethiopia which it said exhibited the same major geological structures thought to control mineralisation at Tulu Kapi and was “quickly gaining attention of a large number of exploration companies.”
Kalahari Minerals (AIM: KAH) said it is fully supportive of the changes being made to the board of its 40.37% owned associate, Extract Resources (TSX, ASX: EXT). Following today’s appointment of recently hired chief executive Jonathan Leslie to Extract’s board of directors, Rio Tinto’s (LSE: RIO, ASX: RIO) representative Chris McFadden will now step down from his position as one of Extract’s non-executive directors.
African Diamonds (AIM: AFD) informed investors that it has received notification on 9 April 2010 that Black Rock has joined the company’s significant shareholders' list with 4.07% of the company’s issued share capital.
Mercator Gold (AIM: MCR, OTC: MTGDY) updated investors on the progress being made by its associate Paniai Gold Ltd, which is currently developing the Derewo River gold project in Papua Province, Indonesia. Paniai has been making progress both on the ground and at corporate level with permitting and a public listing slated for later this year.
Anglo Asian Mining (AIM: AAZ) has achieved its full-year gold production target for its Gedabek gold/copper mine in Azerbaijan - three months ahead of schedule. At Gedabek total gold production has now reached 25,022 oz, exceeding the company’s production target for the mine’s first full year of operation to 30 June 2010.
Baobab Resources (AIM: BAO) announced that the International Finance Corporation (IFC), its joint venture partner for the Tete iron/vanadium/titanium project in Mozambique, has committed a pro rata contribution of US$700,000 for the project’s 2010 exploration programme.
Broker Fairfax has initiated coverage of Botswana focused kimberlite explorer DiamondCorp (AIM: DCP), calling its flagship Lace Diamond Mine a long-life mid-tier asset that could potentially turn the company into a takeover target if appropriate funding is secured for its development.
Anglo Asian Mining (AIM: AAZ) expects to issue a JORC-compliant report shortly which will upgrade the resource at its Gedabek gold-copper mine in Azerbaijan. Today, the company told investors that the initial results of a Phase I Realistic Mineral Resources Model Report indicates upgrades for the measured, indicated and inferred gold, copper and silver metal contents of at least 50%.
Atlantic Coal (AIM: ATC) has signed a strategic agreement with a private US coal marketing company, Xcoal Energy & Resources, to supply premium anthracite from Atlantic's Stockton mine in Pennsylvania. In a memorandum of understanding, Xcoal has agreed to purchase up to the greater of 150,000 tons per year and 50% of Stockton's annual anthracite coal production.
Discovery Metals (AIM: DME, ASX: DML) reported a strong balance sheet ahead of the commencement of construction work at the Boseto copper-silver project in Botswana, where significant progress has been made over the past quarter with the resource up 68% and the BFS (bankable feasibility study) components completed.
Fox-Davies Capital (FD Capital) issued a note on EMED Mining (AIM: EMED) today after the junior copper and gold miner outlined the current project timeline for its flagship Rio Tinto copper project in Spain, aiming to start production in Q3 2011 following the approval for the project anticipated at the end of 2010.
Goldplat (AIM: GDP) is implementing a phased exploration programme at its Nyieme gold project in Burkina Faso. In an update to investors the company said it plans to begin a Phase I trenching programme in May, with a 1,250m diamond drilling during Phase II scheduled for August.
Condor Resources (AIM: CNR) has been granted a 25 year exploration and mining concession over an area of 22.5 square kilometres in the La Libertad-Santo Domingo gold mining district of Nicaragua. The newly acquired Cerro Quiroz Concession contains a walk-up trench and drilling target defined by a previous explorer.
KEFI Minerals (AIM: KEF) updated investors on its Saudi Arabian operations, saying it has lodged a total of 21 exploration license applications (ELAs) covering 2,100 sq km (square kilometres), while reconnaissance and generative studies to identify other areas of interest in the country continued.
Mariana Resources (AIM: MARL) has signed a letter of intent with US based miner Cliffs Natural Resources Inc (NYSE: CLF) to explore for iron-oxide-copper-gold (IOCG) deposits in a 92,000 sq km (square kilometre) area in north-central Chile.
Medusa Mining (ASX, AIM: MML, TSX: MLL) has reported a company record level of gold production during the third quarter ended 31 March 2010, with 25,505 ounces of gold compared to 21,108 ounces produced in the previous quarter. The period also marked the completion of the Phase II expansion of the Co-O mine in the Philippines, on schedule, and the mine is now operating at a production rate that supports its target for 2010 of 100,000 ounces.
Patagonia Gold (AIM: PGD) said that results from the recently completed drilling programme on the Main Zone of La Manchuria gold project in the Santa Cruz province of Argentina confirmed the continuity of high grade gold and silver mineralisation, producing grades of up to 145 g/t (grammes per tonne) of gold.
In a report for investors, Cenkos Securities noted that DiamondCorp (AIM: DCP) has constructed and commissioned a highly efficient diamond recovery plant and carried out a significant amount of initial development work at its Lace mine property.
World Bank Group’s International Finance Corporation (IFC) is looking to make an investment into Nyota Minerals (AIM & ASX: NYO) and is currently seeking IFC board approval to take a placement for a 10% stake in the African focused nickel and gold exploration and development junior.
EMED Mining (AIM: EMED) has conditionally placed approximately 83.5 million new shares at 10.5p each, raising gross proceeds of £8.775 million. The new shares were placed with existing and new institutional investors principally in the UK and Canada. The proceeds will help fund the company’s two key projects the Rio Tinto project in Andalucía and the Biely Vrch gold project in Slovakia.
Firestone Diamonds (AIM: FDI) has conditionally placed 30 million new shares with institutional and other investors at 31.5p each to raise £9.45 million before expenses. The proceeds will be used in its operations to bring BK11 into production during Q2 2010, to cover certain costs of mines first year of production, and for the continued development of the Firestone project portfolio.
Herencia Resources (AIM: HER) will focus on advancing its 70% owned flagship Paguanta project in northern Chile to feasibility study this year, foreseeing the start of mining operations within the next 3-5 years when zinc, lead, silver and gold prices are expected to rise further after bouncing back in 2009.
In a note to investors, Astaire Securities highlighted that Baobab Resources (AIM: BAO) is positioned to take full advantage of the recent strength in iron markets and the expectation of sustained prices from Chinese demand. The stockbroker noted that the junior exploration company is partway through a two-year development plan at the Tete iron-vanadium-titanium project in Mozambique, which has the potential for a large resource.
In its results for Q3, Orosur Mining (AIM: OMI) said that it has made significant progress towards delivering its growth objectives. During the three months ended 28 February 2010, the company completed the acquisition of Fortune Valley Resources and subsequently began drilling at the newly acquired Pantillo gold property in Chile.
Medusa Mining (ASX, AIM: MML, TSX: MLL) is preparing to move from the AIM market of the London Stock Exchange to the Official List and the Main Market, which it said would help it to “raise its profile on a larger scale".
KEFI Minerals (AIM: KEFI) announced the sale of the Yatik gold project in Western Anatolia for US$150,000 in cash to a Turkish gold miner - Koza Altin Iş letmeleri AŞ. In addition to the cash payment, the company will also receive a 2.5% Net Smelter Return royalty on specified minerals such as gold, silver and base metals potentially produced from Yatik.
Persian Gold (AIM: PNG) announced it has received Foreign Investor approval in Iran under the Foreign Investment Protection legislation, for over US$1.5 million of investment made in the years 2005 - 2007. The approval is a state guarantee on a foreign company’s freedom to repatriate profits.
Mariana Resources (AIM: MARL) has completed a further 14 diamond drill holes at the Calandria Sur target at its wholly owned Las Calandrias Project in the Santa Cruz Province of Southern Argentina, bringing the total number of holes to 28 and 3,200m drilled. Assay results are expected from late April to late May.
Patagonia Gold (AIM: PGD) has announced that State Secretariat of Mining of the Province of Santa Cruz in Argentina has approved the environmental impact study and issued the necessary permit for the proposed trial heap leach operation at the Lomada de Leiva gold project, allowing the company to move forward with its operations there.
Beacon Hill Resources (AIM: BHR) has announced what it said was a “transformational acquisition", taking a substantial interest and management control of a coal mine in the Tete province of Mozambique after its 49% owned associate BHR Mining Ltd agreed to buy mine operator Minas Moatize for US$35 million in cash.
Herencia Resources (AIM: HER) has raised £750,000 and added a new significant shareholder - with 10.4% of the company - with Nyrstar (Euronext Brussels: NYR) agreeing to subscribe for 100 million new ordinary shares at 0.75p each. Consequently, Herencia said it will remain in a strong working capital position, with the ability to undertake additional work targeting the recently discovered 'New' vein at the Paguanta zinc-lead-silver-gold project in Chile.
Stellar Diamonds (AIM: STEL) informed investors that three of its directors have increased their stake in the company. Collectively the directors bought just over 68,000 at 14p per share.