Gold prices were in decline this week despite a massive selloff in global stock markets that has caused the UK’s FTSE 100 and the Dow Jones Industrial Average to plunge below 5,000 and 10,000 respectively. The yellow metal has reached all time highs in dollar terms this month, rising to US$1,250/oz on heavy safe-haven buying following a sharp decline in stock markets, which saw the Dow Jones index shed 1,000 points in a matter of minutes after Citi (NYSE: C) mistakenly sold US$16 billion worth of futures contracts instead of US$16 million.
Gold used to be seen as an investment alternative to the US dollar and usually moved inversely to the American currency and in tandem with the euro. Now, however, the yellow metal is increasingly seen as a hedge against risks in currency and equity markets, which have shown high volatility over the past months. But this week investors were dumping all assets amid rising uncertainty, including safe-haven precious metals.
The selloff in the market came amid uncertainty over Europe’s debt problems and even the €750 billion rescue fund that was agreed on by EU leaders failed to inspire confidence in the markets with investors questioning whether this would be enough to prevent the debt crisis that has nearly led to Greece’s bankruptcy from spreading into other euro zone states, most notable Portugal and Spain, which have recently been downgraded by leading rating agencies.
Physical buying has also decreased with the world’s largest consumer India purchasing less gold due to the high prices. At the same time, selling increased with investors reaping profits from their investments in precious metals that have performed very well this month.
As a result, gold posted the biggest weekly decline in five months, sliding from US$1,230/oz to the current US$1,175/oz. Silver declined to US$17.64/oz and platinum fell to US$1,505/oz.
Small Cap News
EMED Mining Public Ltd (AIM: EMED) updated investors on the progress of reports relating to the permitting of the Rio Tinto copper mine (Proyecto Rio Tinto or PRT) that are being submitted to the relevant regulatory authorities of the Junta de (Government of) Andalucía.
Southern Africa focused Chromex Mining PLC (AIM: CHX) said it has made the strategic decision to move away from the contractor based model for the processing of its chrome ore and developing its own in-house skills. In line with this strategy as of 1 June 2010, the company will be taking full operational control of the Stellite opencast chrome mine processing plant, located on the Western Limb of the Bushveld Complex in South Africa.
Shareholders in European Nickel (LSE:ENK) have been kept busy the last few days digesting two updates from the junior mining company. This morning European Nickel announced that project financing for the its key Çaldağ nickel laterite project in Turkey will be provided by a consortium of western banks – a new direction on previous discussions to forge a deal with a consortium of Chinese backers that was flagged by the company in March as a possible alternative financing route.
Shares in Chaarat Gold Holdings (AIM, CGH), the Kyrgyzstan-focused miner, rose more than 12 percent after the company said findings of the preliminary feasibility study at its Chaarat project indicate the potential of implementing an initial high grade, low-cost, open pit mine within the T0700 project area.
South Africa based coal exploration and production company Strategic Natural Resources (AIM: SNR), which has recently completed a £2.9 million fundraising, said it has commissioned Golder Associates to update the Competent Person's Report (CPR) with an additional 29 boreholes drilled, on its western area of its Phase 1&2 mining right, all yielding coal. The updated CPR is expected to be released later this year.
Philippines focused nickel and copper miner Metals Exploration (AIM: MTL) reported on a busy full-year to end-December 2009, a period which saw continued progress for its flagship Runruno gold-molybdenum project in the Philippines.
Commodity asset development company Mercator Gold (AIM: MCR) has placed 42.5 million shares to raise £425,000 to “satisfy institutional demand,” add and realise value from its existing portfolio of assets and “take advantage of opportunities as they arise".
Uzbekistan focused gold miner Oxus Gold (AIM: OXS) has recommenced mining at its 50% owned Amantaytau Goldfields JV (joint venture) in Uzbekistan after operations were suspended in March 2009 pending the refining of an accumulated stockpile of 18.2 tonnes of silver doré, which AGF had been unable to process through the Almalyk silver refinery on a timely basis. The Uzbek government holds the remaining stake in AGF.
Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) has commenced the 2010 exploration programme at its fully owned Öksüt high-sulphidation gold project located in central Turkey.
Gemfields (AIM: GEM) said that Rox Limited has purchased 4.7 million of its shares to boost its total interest to 205.3 million shares representing 63.4% of the company’s issued capital. The purchase price of 5 pence per share equals yesterday’s closing price.
Pan African Resources PLC (AIM: PAF, JSE: PAN) has pulled out of acquiring a 25 percent stake in the RK1 Consortium, which operates a PGM (platinum group metals) concentrator plant in South Africa, from Ivanhoe Nickel & Platinum Limited for £4.8 million.
Minera IRL Ltd (AIM, BVL: MIRL, TSX: IRL) clarified that its extraordinary general meeting (EGM) is to be held on Tuesday 25 May 2010 and not Wednesday 26 May 2010 as previously announced at the end of April.
Ariana Resources PLC (AIM: AAU) the gold exploration and development company focused on Turkey, said a 2,000 metres reverse circulation resource drilling programme is to commence immediately on the Banu and Derya veins of the Kiziltepe deposit, part of the Red Rabbit project.
Red Rock Resources PLC (AIM: RRR), updated on exploration of the Migori gold project in Kenya, saying it has received hand-grab samples collected from across the entire strike length of the Migori greenstone belt, samples from the December 2009/January 2010 reverse circulation ('RC') drilling programme and the samples drilled at the tailings dam.
Horizonte Minerals (AIM: HZM) said the exploration alliance with AngloGold Ashanti (LSE: AGG, NYSE: AU) is progressing well in the south Brazil. To date a large area of ground has been sampled which has resulted in the generation of a number of new gold anomalies. Exploration licences have been applied for over these new targets and follow up work will commence to define drill targets.
Düsseldorf-headquartered Tantalus Rare Earths AG (XETRA: TAE) has appointed business lawyer Andre Klupsch to the board as of May 15 to succeed Peter Küsters who recently informed the company of his intention to resign.
Central China Goldfields plc (AIM: GGG) said it has now completed the acquisition of its 50 percent interest in the Bullabulling gold project in Kalgoorlie in Western Australia following the payment of A$1.9 million in consideration to Auzex Resources Ltd (ASX: AZX). This includes the A$250,000 already paid to Auzex as announced in April 2010.
Pan African Resources (AIM: PAF) said that an updated resource statement compiled for its wholly owned Phoenix Platinum project in South Africa showed an increase in total resource of 15.8% to 469,000 oz (ounces) of 4E PGM (platinum group metals platinum, palladium, rhodium and gold), while in-situ grade improved by 2.6% to 3.15 g/t (grammes per tonne) PGM 4E’s.
London Mining (AIM: LOND) has upgraded the resource base at Marampa to 392 Mt (million tonnes) at 31% Fe (iron), marking an overall increase of 300%, while its Chinese business posted revenues of over US$3 million during the quarter to 31 March 2010.
Kyrgyzstan operating miner Chaarat Gold Holdings (AIM: CGH) has reported on the progress made in 2009, which saw a reduction of losses from US$11.36 million to US$7.4 million and an upgrade of the company’s JORC compliant resource to 4 Moz (million ounces) of gold, which it said contributed to the “positive sentiment around Chaarat” along with the strong gold prices and addition of a member of the China Nonferrous Metals Mining Corp to the shareholder register.
Argentina focused gold explorer Patagonia Gold (AIM: PGD) reported on its progress and financial performance in 2009 today, reiterating its operational timetable for 2010. Financings during the year to end-December and post-period will enable the company to achieve its goal to become a gold producer initially on a modest scale and to develop larger low production cost gold projects.
Uranium and copper explorer Kalahari Minerals (AIM: KAH) said Extract Resources (TSX, ASX: EXT) reported further exceptional assay results from the Rossing South uranium deposit at Extract's world-class Husab uranium project in Namibia, which “underlined its enormous potential,” with infill drilling returning grades of 2,243 ppm (parts per million) uranium over 73 metres.
Edison Investment Research has initiated coverage of Ariana Resources (AIM: AAU), saying the Turkey focused gold miner was well placed to minimize expenditure and explore its portfolio of licenses, which were acquired in the same geological province as Eldorado Gold’s (TSX:ELD, NYSE:EGO, ASX:EAU) 10 Moz (million ounce) Kisladag mine.
Platinum Australia Ltd (ASX, AIM: PLAA) said admission of its ordinary shares to trading on the AIM market of the London Stock Exchange will be cancelled with effect from July 2 2010, and the last trading day on AIM will be July 1 2010.