I have posted several times about Focus Minerals (FML) one of the mid tier gold producers I own….

Activities Report for the Quarter Ended
31 December 2010
HIGHLIGHTS

• 37% increase in gold production to 21,039oz (Sept 2010 Qtr: 15,300oz).
• Continued downward trend in cash costs to A$877/oz (Sept 2010 Qtr: A$932/oz).
• Sales revenue of A$27.2 million from gold sales of 19,570oz at an average received price of A$1,388/oz – average cash operating margin of A$511/oz.
• Record ore processing through the Three Mile Hill plant with 327,319 tonnes processed @ 2.2g/t Au.
• Record mine production of 151,412 tonnes @ 3.56g/t Au from the Tindals Underground Mine.
• Production from The Mount Underground Mine and Tindals Open Pits on track to commence in the June 2011 Quarter with ore recovery commencing at The Mount from March 2011.
• Outstanding results achieved from exploration work at the Treasure Island Project with surface samples of 58.9g/t Au, 48.4g/t, 41.3g/t and 39.8g/t.
• At 31 December 2010, Focus had total cash and equivalents of $8.68 million.

Focus Minerals Limited (ASX: FML) is pleased to report a record-breaking December Quarter that saw continued growth in gold production, expansion of mine development and a further reduction in cash operating costs, putting the Company on track to achieve its targeted annualised production rate of 100,000 ounces of gold during calendar 2011.

Mine development continued at an aggressive rate during the Quarter with record mine production of 151,412 tonnes at an average grade of 3.56g/t Au from the Tindals Underground Mine, including production of 60,300 tonnes at 4.8g/t for the month of December – well above the targeted monthly average of approximately 45,000 tonnes for 2011.

A record total of 327,319 tonnes of ore was processed through the Three Mile Hill Processing Facility during the Quarter, which is a record over its 15+ year history and equivalent to an annualised throughput rate of 1.3 million tonnes.

Gold production increased by 37% to 21,039 ounces for the Quarter with the resulting cash operating cost of A$877/oz continuing the positive trend of reducing cash costs.

Exploration and development work at the Tindals Mining Centre continued at pace and the Company remains on track for the planned commencement of open pit operations at Tindals in the June Quarter.

In preparation for the start of open pit mining, the Company undertook grade control drilling, resource/reserve extension drilling and approvals work for the open pit operations with grade control returning outstanding results in many pending pit areas including 3m @ 32.7g/t and 4m @ 23.4g/t.
The Mount Underground Mine, which represents a wholly new area of production growth for the Company, also kicked off its second phase in November, with a new box-cut being excavated and 185m of decline development completed. The new underground development will enable Focus to ramp-up to full-scale production from The Mount in the second half of the year.

With the addition of The Mount and the open pits at the Tindals Mining Centre, Focus Minerals remains on track to substantially increase its production capacity during the first half of 2011.

During the Quarter, Focus formally acquired a direct 75% interest in the Lake Cowan tenement which hosts the Treasure Island Project. Greenfields exploration at Treasure Island has delivered some exceptional results including surface rock chip sampling grades of 59g/t, 39g/t, and 41g/t over outcropping strikes of more than 200 metres in three closely linked areas.

These preliminary results highlight the potential for an exciting new exploration opportunity for Focus Minerals along the world class Boulder-Lefroy fault system.
Capital investment and exploration expenditure for the Quarter totalled $5.5 million, comprising $2.2 million of mine capital development and $3.3 million of exploration expenditure. This included $1.6 million relating to The Mount development. At the end of the Quarter cash and bullion held by Focus = $8.68 million.

Campbell Baird
Chief Executive Officer

Compiled in PDF form by the World Gold Council: World Official Gold Holding

“The decision to sell the reserves was approved by then RBA governor Ian Macfarlane and then treasurer Peter Costello.”
The RBA revealed in July 1997 that over a six-month period, it had sold 167 tonnes, reducing Australia’s reserves to just 80 tonnes. At this time, the value of its gold assets fell from $3.6bn to about $1.1bn. The RBA’s sales pushed the world gold price down to an 11-year low, returning just $2.4bn for the gold (worth $7.4b today) that was sold via a single broker engaged without a tender.

A board paper recommending the decision to sell conceded that gold served as “insurance against a breakdown in the international financial system”, but it then dismissed the need for holding this valuable asset. The paper has been obtained by The Australian under Freedom of Information laws.

People might not remember but it was a fashionable idea to discount the value of gold (barbarous relic) and several treasurers followed it. Gordon Brown also cost the UK billions.

What Costello didn’t know is that he would precipitate a decade long decline in the Australian gold mining industry that is only now getting back on its feet.

Read The Australian

“While silver’s bull run since late 2001 has been impressive, when rendered in real terms it looks positively tiny compared to silver’s last secular bull in the 1970s. The blue line below is CPI-adjusted real silver, while the light-red line is raw nominal silver prices for comparison. Is $30 silver in today’s dollars super-high in historical context? Hardly! Even now this metal has only started to crawl up its real chart.”
http://www.resourceinvestor.com/News/2011/1/Pages/Another-Review-of-Real-Silver-Highs–.aspx

It is a long story… but after showing my wife this image she just said: “Well we came in on silver and it would be nice to go out on silver”…… I invested in silver bullion several months before the Hunt Brothers’ adventure… the profits set us up with a house and a business…. we again invested in silver bullion over the last 3 decades (average price = $6.00 per oz) and if the chart above has some truth then we will be well pleased.

CGA mining seems to be firmly on track to produce 200,000 ozs per annum from its Masbate Gold Project. The last quarters increase to 50,330ozs makes it the seventh consecutive quarter of record production.

The increase to 200,000 ozs per annum production will take CGA mining to around 11 place for the ASX’s listed gold producers….

Masbate is the Philippines largest gold project with an estimated resource base of 4.5 million ounces with exploration upside to come.

However there is a lot more to the CGA story than gold production as it is on the verge of becoming a major copper play via the King-king copper gold project

For more information