Andean confirms, extends Cerro Negro gold, silver

Source: News Bites

Andean Resources Ltd has confirmed and extended the high-grade gold and silver mineralisation at its Cerro Negro project in Santa Cruz province, Argentina.

The discovery of the San Marcos, Mariana Norte, and Mariana Central vein systems 4-6km northeast of the Eureka deposit has lead to a focused drill program that is defining the shape and extent of these potential ore bodies.

Highlights from San Marcos include:

SDD-1004: 12.4m of 16.5g/t gold and 131g/t silver (Ag) from 143.6m

SDD-1005: 6.4m of 10.7g/t gold and 144g/t Ag from 142.7m

SDD-1007: 3.65m of 12.2g/t gold and 52g/t Ag from 108m

SDD-1008: 11.45m of 15.2g/t gold and 136g/t Ag from103.55m

Holes SDD-1010 and SDD-1012 extended the mineralisation in the San Marcos veins a further 100m to the east and may have intersected the veins at a shallower angle due to a potential change in the vein dip.

Vice president of exploration William Wulftange says Cerro Negro now has at least three distinct centres of mineralisation that include Bajo Negro and Vein Zone to the east, Eureka to the west and now the Mariana’s and San Marcos mineral system in the north central part of the property.

“The fact that all three systems have significant gold grades over broad widths is quite exciting and a very rare occurrence in the gold industry,” he said. “I believe that as the exploration program continues, Andean geologists will develop a geologic link between the three deposits that will help us find additional mineral zones outside of the current known deposit areas.”

Lihir Gold one of Australia’s most prolific gold producers has come under attack by another very large and powerful gold company Newcrest ASX: NCM.

NCM’s ~AUD$8.5B bid, probably the largest amount ever offered for an Australian gold miner has put LGL into play and LGL’s out of hand rejection seems to have initiated the beginning of “hostile” takeover attempt by NCM.

One wonders if there isn’t another player in the wings or that NCM needs to bulk up to protect itself from Newmont or perhaps even one of the major diversified miners.

What seems clear is that Friday’s 33% rise could be just the start of the action for Australian investors with LGL shares…. perhaps witnessed by even the Fat Prophets not calling it a sell as they seem so prone to do.. with their recommendations lately at the beginning of a takeover attempt to cut and run.

So more to come is my guess…..

I hold CDU and have done so quite some time.

They are an interesting compnay with a very large copper deposit and quite a large area of land that continually brings new drill results.

The last form the first pass drilling at their Wilgar area is simply as one Melbourne Broking house put it “amazingly rich”.

Silver (Ag) 4,030ppm (4.03kg/t)
Gold (Au) 12.6ppm (12.6g/t)
Molybdenum (Mo) 31,800ppm (3.18%)
Tellurium (Te) 2,640ppm (0.26%)
Uranium (U) 2,280ppm (2.3kg/t)
Selenium (Se) 9,780ppm (0.98%)

LMRC754 intersected;

Silver Intersection
Intersected 10m @ 457 g/t Ag from 44m – 54m (hole ended in mineralisation at 54m)
Including 2m @ 3260 g/t Ag from 52m – 54m
Including 1m @ 4030 g/t Ag from 52m – 53m

Gold Intersection
Intersected 10m @ 1.49 g/t Au from 44m – 54m (hole ended in mineralisation at 54m)
Including 2m @ 7.14 g/t Au from 52m – 54m
Including 1m @ 12.6g/t Au from 52m – 53m

Molybdenum Intersection
Intersected 2m @ 1.76% Mo from 52m – 54m (hole ended in mineralisation at 54m)
Including 1m @ 3.18% Mo from 52m – 53m

Uranium Intersection
Intersected 2m @ 1305ppm U from 52m – 54m (hole ended in mineralisation at 54m)
Including 1m @ 2290ppm U from 52m – 53m

Selenium Intersection
Intersected 2m @ 5415ppm Se from 52m – 54m (hole ended in mineralisation at 54m)
Including 1m @ 9780ppm Se from 52m – 53m

Tellurium Intersection
Intersected 2m @ 1500ppm Te from 52m – 54m (hole ended in mineralisation at 54m)
Including 1m @ 2640ppm Te from 52m – 53m

“”The Rainden Prospect is coincident with a major conductivity target which has been significantly extended by the new updated SAM Geophysical Survey area. To the north west of Rainden, the same conductivity signature continues for over 3.5km and intersects the polymetalic Wilgar prospect (copper/gold/uranium/silver). The Rainden conductivity target zone, is over 6km in total length and is considered a potentially significant target zone, hosting at least two known historic areas of mining, namely Rainden and Wilgar.”

Silver price bounces back
by Metals Place
Thursday, March 11, 2010

Silver is showing it’s still very much tied to gold, tracking the yellow metal down on price chopping news out of China, the oil trade and the currency markets. On Tuesday, gold fell as low as $1107.60 an ounce before rebounding later in the day to $1122.20.

Oil prices gave back almost 2 per cent of the last eight weeks’ gains on a stronger dollar and an anticipated increase in US crude inventories. Gold often follows oil bringing silver along for the ride.

The dollar grew strong as the euro weakened in the face of continuing debt concerns making commodities including gold and oil lose their luster.

“The euro is down and the dollar is up. Energy is down as well. So it’s making it real easy for the metals to come down,” said Patrick Lafferty, MF Global commodity trading adviser.

While the weak euro in relation to the dollar is pressuring precious metals prices, analysts view the ongoing debt crisis in the euro zone as price positive over the long-term.

China’s push back against rumours it’s looking to buy considerable gold supplies off the IMF also dampened gold’s shine.

“Gold is not a bad asset, but currently a few factors limit our ability to increase foreign-exchange investment in gold,” said Yi Gang, head of China’s State Administration of Foreign Exchange. Those factors include the relatively small size of the market and the potential impact on price.

Silver’s industrial role still weighing on outlook

Despite the gold market’s heavy influence over precious metal silver’s price actions, many analysts still see the white metal’s industrial side having a major impact on the market over the long-term.

The industrial metals sector as a whole is expected to improve this year and next as global economic growth improves, although the going will be slow.

“We’re not expecting particularly strong growth in the world outside China, but we are forecasting global growth will move from a decline of 1 per cent in 2009 to a gain of 3.7 per cent in 2010. That’s a strong inflection point,” said Bart Melek, global commodity strategist at BMO Capital Markets.

Casimir Capital research director Wayne Atwell expects a strong metals market over the next decade, but investors should still expect some “speed bumps” along the way.

RBC Capital Markets recently gave its perspective on the short- to medium-term silver market. Its analysts expect silver’s fundamentals to remain positive as industrial and investment demand increase and outpace new mine supply in 2010. RBC puts its average silver price forecast at $15 per ounce for 2010 and beyond.

In a recent interview with Resource Intelligence, Managing Director of CPM Group Jeffrey Christian showed his bullish side with a $20 to $22 an ounce silver forecast over the first four months of 2010 with an average price of $17 to $18 for the year.

Read more at http://www.proactiveinvestors.com.au/companies/news/5577/silver-price-bounces-back-5577.html

LME Al up 1.03%, Cu up 6.18%, Lead up 3.91%, Ni up 4.18%, Tin up 3.18%, Zn up 3.12%, Copper prices jumped the most since August on signs of increasing demand as bank loans increased in China, the world’s biggest user of industrial metals. (Copper has dropped 6.4 percent this year on signs of increasing supplies. Inventories in warehouses monitored by the London Metal Exchange have climbed 8.6 percent in 2010. On the LME, copper for delivery in three months jumped 6.2 percent to $6,939 a metric ton ($3.15 a pound), the biggest gain since March 19. Zinc, nickel, lead, tin and aluminum also climbed. An index that measures the six metals advanced 4.7 percent, the most since Nov. 16. )

Copper may reach US$10,000 on China demand, HFZ Capital says
Shanghai — Copper may rise to a record US$10,000 a metric ton this year, driven by industrial demand in China and rising commodity investments to hedge inflation, said Shen Haihua, an investment manager at HFZ Capital Management Ltd.

Refined copper consumption in China, the world’s largest user, may rise 8 percent to 6.99 million metric tons in 2010 from last year, as the economy accelerates, Shen said at a forum in Shanghai today. Hong Kong-based HFZ Capital was set up in 2008 by RK Capital Management LLP.

Copper in 2009 had its biggest annual increase in more than two decades as China boosted imports to a record on stimulus spending, state stockpiling and a lack of scrap. Economic growth accelerated to the quickest pace since 2007 in the fourth quarter, capping Premier Wen Jiabao’s success in shielding the nation from the first global recession since World War II.

China’s net imports of refined copper may be 2.19 million tons this year, down 30 percent from a year ago, Shen said. The amount is still “enough to be a key reason to drive copper to US$10,000” amid an inflationary global environment, he said. Shen said the contract may trade in a range between US$6,000 and US$10,000 a ton.

Three-month copper futures on the London Metal Exchange gained 1.6 percent to US$7,390 a ton yesterday. The contract advanced to as high as US$7,796 a ton this month, the highest since August 2008. It reached a record US$8,940 in July 2008.

Shanghai copper fell 2.6 percent to 59,360 yuan (US$8,695) a ton yesterday, declining for the second week amid concerns China will take more steps to curb bank lending and pare stimulus spending.

Cooling Credit

China’s central bank said last week the proportion of deposits banks must set aside as reserves must be increased by 50 basis points. The unexpected move to restrain lending foreshadows higher interest rates, according to JPMorgan Chase & Co. and RBC Capital Markets.

“Historically reserve-ratio and interest rate hikes can’t prevent inflation,” Shen said. “Inflation concerns increase appetite for risky assets such as commodities,” which is bullish for copper.

Chinese after-tax copper prices have been trading at a premium over London since December as “large inflows of speculative money” pushed up local prices, Shen said.

The country’s first-quarter imports may rise 23 percent to 750,000 tons from the previous quarter because of arbitrage trading, Shen said.

“It’s meaningless to speculate at what price China will stop buying,” he said. “China will always buy as long as domestic prices are stronger than overseas.”

Gold One International Ltd formerly BMA Gold, on the JSE in May 2009 and the subsequent acquisition by Gold One of all the issued ordinary shares in Aflease Gold Ltd by way of a scheme of arrangement.

The completion and commissioning of the company’s South African Modder East plant in late June 2009 was ahead of time and under budget.

A first gold pour from Modder East ore was achieved in late July 2009, one quarter ahead of schedule.

At the Ventersburg project in South Africa, the second phase of resource drilling started and a pre-feasibility study was initiated.

Gold One raised capital of $27 million by issuing 86.4 million shares from Australian and International institutions in August 2009.

Gold One 6,191 oz of gold (Au), from Modder East, nearby Sub Nigel and low grade commissioning ore during the September quarter.

As at the end of September 2009, Gold One had cash of about $30 million prior to the repurchase of bonds. Over $7 million of gold revenue had been received by Gold One in the September quarter and this revenue had been offset against the capital cost of the Modder East development.

At late October 2009, Gold One remained on track to produce its budgeted 20,000 oz Au for the 2009 ramp-up year. At htis time, the Modder East project was more than 95% complete and with the production of gold on a regular basis, the company had moved from being a developer to a producer.

For the December quarter of 2009, Gold One looked forward to declaring both continuous and commercial production at Modder East and also anticipated moving into monthly positive cash flow at the Modder East mine, with better than expected grade and wider than modelled channels.

A pre-feasibility study over the company’s Etendeka gold project in Namibia was due for completion in December 2009. In November the mine achieved a maiden operating profit, and commercial and continuous production were declared.

Forecasted gold production
16,000-20,000 oz of gold in 2009,
100,000-120,000 oz of gold in 2010
and 180,000 oz in 2011.

Mkt Cap `$230m

Cash ~$25m Zero debt

Caveats: Dependent on Gold price

Summary: The company has a history indicative of good management in that they bring their projects in on time. They are becoming a reasonably strong producer. No debt is a good thing. Cash costs well below $300 per oz and dropping. By 2011 earnings should be around 100m per annum.

Wide diameter Metallurgical PQ Diamond Core Hole (85mm), designed to retrieve samples for grade modeling and metallurgical test work of the Las Minerale bonanza copper zones, intersected significant widths of high grade copper minerals including massive native copper in numerous zones from 20m-109m, and massive chalcocite in numerous zones from 20m-113m. The hole ended in primary mineralisation at 130.2m. Visible gold was also identified.

The result of all this hard work will be a unique copper project at Rocklands, with bonanza-grade supergene enriched native copper zones and a traditional primary copper zone, which internal studies indicate will result in an extremely robust operation. Further,Diamond core drill rig on 24 hour shift—deep drilling under Las Minerale due to Copper mineralisation commencing at or near surface, initial indications point to very low strip ratios, enhanced even further due to the existence of parallel offset zones of Cu/Co/Au mineralisation to the north and south of Las Minerale. Each of these offset zones, known as the Northern and Southern Siltstone Units, will essentially be accessed for free as part of the normal strip-back and waste removal process already required to access the main Las Minerale mineralisation.

Read report: http://www.cudeco.com.au/pdf/CDUQuarterlyDecember2009.pdf

LGL Joins Ranks of 1 Million Ounce Producers

PORT MORESBY, PAPUA NEW GUINEA–(Marketwire – Jan. 21, 2010) – Lihir Gold (TSX:LGG)(ASX:LGL)(NASDAQ:LIHR) –

Fourth Quarter 2009 – Group Overview

* Annual gold production exceeded 1 million ozs for the first time in the history of the company, rising 27% to a record 1.12 million ozs, in line with market guidance.
* Quarterly gold production of 278,000 ozs, up 19% compared to the September quarter.
* Record average realized cash gold price of $1,096/oz for the quarter and $956/oz for the year.
* Total cash costs at $397/oz for the full year, excluding Ballarat, in line with market guidance and positioning the company at the lower end of the global gold production cost curve. Quarterly total cash costs at $454/oz, reduced from $487/oz in the prior September quarter.
* Operating cash margins increased 42% to $460/oz for the year.
* Expansion projects proceeding to plan:
o Lihir Island Million Ounce Plant Upgrade proceeding on schedule and within budget.
o Bonikro expansion feasibility study due for completion by year-end.

Outlook

* Operating capacity now raised to more than 1 million oz/pa, rising to 1.3 million ozs in 2012 as expansion projects lift output at Lihir Island and at Bonikro.
* Group production in 2010 forecast to be between 960,000 – 1,060,000 ozs
* Total cash costs per ounce for 2010 to be below $450/oz, assuming stable oil prices and exchange rates. Costs for Lihir Island and Bonikro to be below $420/oz.

The Fourth Quarter Production Report is now available on the LGL website at www.LGLgold.com.

A live webcast and conference call for analysts will commence at 9.30am AEDT (Syd / Melb time). For dial in details please contact [email protected].