Gold Prices Rise on a Weakened Dollar
FinancialBuzz.com News Commentary
NEW YORK, August 22, 2018 /PRNewswire/ --
Gold price rose slightly on Tuesday as the Dollar weakened after the U.S. President criticized the Federal Reserve for tightening the monetary policy. Gold Spot was trading at USD 1,194.15 per ounce during the Tuesday trading session, while U.S. gold future for December delivery was up 0.49% to USD 1,200.40 per ounce. The Fed has increased interest rates twice in 2018 and analysts expect at least one more rate hike this year. Investors are closely watching the release of the Fed's FOMC minutes on Wednesday as well as the annual meeting of world central bankers at Jackson Hole, Wyoming later this week. Gold is sensitive to rising U.S. rates as it increases the opportunity cost of holding the precious metal. Sixty North Gold Mining Ltd. (OTC: SXNTF), Sibanye-Stillwater (NYSE: SBGL), McEwen Mining Inc. (NYSE: MUX), Hudbay Minerals Inc. (NYSE: HBM), NOVAGOLD Resources Inc. (NYSE: NG)
According to Kitco News, the demand for physical gold has picked up as the gold price is near its lowest in 19 months. Commerzbank said, "Gold demand in Asia is picking up again thanks to the low prices. This is reported for one thing by local traders, and for another is evident from the premiums. In India, the world's second-largest gold consumer after China, higher premiums have to be paid on the world market price as bullion dealers replenish their stocks. They are taking advantage of the low prices - gold in Indian rupees dropped for a time to an eight-month low last week."
Sixty North Gold Mining Ltd. (OTCQB: SXNTF) also listed on the Canadian Securities Exchange under the ticker (CSE: SXTY). Earlier this week, the Company announced that, "it has received the metallurgical test results from a quarter ton sample of the crown pillar of the A-Zone at the Mon Gold Property.
Three separate transects across the East Limb, Fold Nose (hinge) and West Limb of the A-Zone were sampled by mechanical hammer by the Company's CEO and director Ronald Handford and Dr. D.R. Webb. The material was bagged and tagged, and delivered to Bureau Veritas Laboratories in Yellowknife where it was shipped to their metallurgical testing lab in Richmond B.C. for testing by gravity and flotation methods.
Table 1. Summary results from metallurgical testing, 2018
Composite ID - Sample Weight Tested - Head Grade, g/t Au -----Gold Recover, %Au
(kg) Measured Calculated Gravity Flotation Overall
Composite 1 75.6 17.4 16.6 79.9 18.0 97.9
Composite 2 83.8 266.8 314.8 73.2 26.0 99.3
Composite 3 83.6 170.7 128.9 75.7 23.5 99.2
(Composite 1+2+3) 243.0 156.2 158.0 76.1 22.7 98.8
All assays by Bureau Veritas FAA550 1 assay ton sample. Average sample size=1.8 kg.
All samples were collected using an electric percussion hammer and located by tape and compass, bagged and tagged, sealed, delivered to Bureau Veritas Laboratories in Yellowknife and processed at their ISO/IEC 17025:2005 and ISO 9001:2015 metallurgical testing laboratory in Richmond, B.C. Bureau Veritas is independent of the Company. The sample was received, dried and weighed. Test grinds were completed and the samples were batched with a targeted grind of P80 -105µm."
Ronald Handford, CEO of Sixty North Gold, reports, "These results were expected based upon historic results and our recent trenching (News Release August 7th, 2018). The very high recoveries, both by gravity as well as the combined gravity plus flotation, averaging around 76% and 99% respectively are consistent with historic results. The former operators only ran a gravity mill on site. The simple mill circuit required to process this mineralization has been permitted and could be installed upon confirmation of a larger bulk sample. These results further differentiate the Mon Gold Property as an advanced exploration opportunity and past producer, and represent a significant milestone for the Company in its advancement of the project. The environmental benefits of achieving very high recoveries without the use of cyanide leaching is notable."
Mr. Handford further reports, "Crews have been on the property since June assessing all historic showings and identifying new zones. Sample results are being received and will be released upon completion and confirmation by our QP."
Sibanye-Stillwater (NYSE: SBGL) is the third largest producer of platinum and palladium, and features among the world's top gold producing companies. The Company recently announced that it has entered into an arrangement agreement with Regulus Resources Inc. and a newly formed subsidiary of Regulus, Aldebaran Resources Inc., creating a strategic partnership in order to unlock value at its Altar copper-gold project in San Juan Province, Argentina. This Arrangement creates a new, well-capitalized, Argentinean focused exploration company, Aldebaran, which expects to benefit from the synergies derived from exploring a multi-project portfolio. Aldebaran will be led by an experienced management team, who have a track record of creating value in South American projects through advancing these projects up the value curve. The Arrangement is subject to customary conditions for a transaction of this nature. Sibanye-Stillwater Chief Executive Officer, Neal Froneman, commented, "This transaction is consistent with our strategy of maintaining our focus and investment on our core mining operations. We believe Aldebaran possesses the vision, skills and experience to unlock the considerable upside potential of the Altar Project, in which, we will continue to hold a meaningful interest. Consistent with our vision, we believe this partnership with Aldebaran will deliver value for all stakeholders, as the Altar Project is progressed up the value curve".
McEwen Mining Inc. (NYSE: MUX) has the goal to qualify for inclusion in the S&P 500 Index by creating a profitable gold and silver producer focused in the Americas. McEwen has recently reported that it has closed the previously announced USD 50 Million senior secured 3-year term loan facility with Royal Capital Management Corp. as agent for the Lenders. As previously disclosed Rob McEwen, Chairman and Chief Owner of the Company, is participating as a Lender for USD 25 Million of the total USD 50 Million Term Loan. The Term Loan will be used to complete construction of the Gold Bar Mine in Nevada and for general corporate purposes. Construction of Gold Bar is advancing on schedule for completion by the end of 2018, targeting commercial production in the first quarter of 2019. The principal amount of the Term Loan will bear monthly interest at 9.75% per annum. Repayment occurs in twelve equal monthly installments of USD 2 Million during the third year, with the remaining balance due on maturity. The Term Loan can be retired in full or in part anytime during the first two years upon payment of the principal and accrued interest plus a fee linked to the remaining life of the Term Loan, and during the third year upon payment of the remaining principal and accrued interest plus a fee equal to 3% of the remaining principal.
Hudbay Minerals Inc. (NYSE: HBM) is an integrated mining company primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. Hudbay recently reported its second quarter 2018 financial results. Net profit and earnings per share in the second quarter of 2018 were USD 24.7 Million and USD 0.09, respectively, compared to a net profit and earnings per share of USD 19.1 Million and USD 0.08, respectively, in the second quarter of 2017. Recoveries of copper and silver were slightly lower in the second quarter of 2018, compared to the same period in 2017, while gold recoveries remain unchanged over the same period. Hudbay is implementing several metallurgical initiatives with the intention of increasing copper recoveries as anticipated in the recently filed 2018 Technical Report for Constancia. Production results to date are on track to meet 2018 Peru production guidance. During the second quarter of 2018, the Manitoba operations produced 33,170 tons of zinc, 10,807 tons of copper and 32,363 ounces of gold-equivalent precious metals. Production of copper was comparable to the same period in 2017, while production of gold and silver was 19% and 34% higher, respectively. Zinc production was 5% lower compared to the same period in 2017 as a result of lower zinc grades at Lalor, in line with the mine plan. "In the first half of the year, we delivered solid production results and growing free cash flow, and applied that cash flow to substantial net debt reduction and funding the development of our exploration pipeline," said Alan Hair, President and Chief Executive Officer.
NOVAGOLD Resources Inc. (NYSE: NG) is a well-financed precious metals company focused on the permitting and development of its 50%- owned Donlin Gold project in Alaska, one of the safest mining jurisdictions in the world. NOVAGOLD recently announced that the U.S. Army Corps of Engineers and the U.S. Bureau of Land Management (BLM) have issued a single Federal Record of Decision (ROD) for the Donlin Gold project following completion of the federal National Environmental Policy Act process. Along with the ROD, the Corps issued a combined permit under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. Additionally, the BLM issued the Offer to Lease for the right-of-way for those portions of the natural gas pipeline that would cross federal lands. Donlin Gold is located in Alaska, the second largest gold-producing state in the U.S. "The permitting process for the Donlin Gold project was very comprehensive and thorough," said Greg Lang, NOVAGOLD's President and Chief Executive Officer. "At various stages of this multi-year undertaking, all stakeholders had multiple opportunities to engage and make meaningful contributions to the final outcome. We would like to extend special gratitude to the Corps, BLM and other cooperating agencies for their successful navigation of this complex process. We would also like to thank Calista Corporation and The Kuskokwim Corporation, our Native Corporation partners, for their unwavering support and commitment to the project. Congratulations to the Donlin Gold team on achieving these important milestones. The ROD is a very detailed document, which serves as the foundation for issuance of the federal permits required for us to build a technically, environmentally, and financially responsible, as well as a socially sustainable, operation."
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