ASX ANNOUNCEMENT 8 November 2012
ASX Code: BDR
DUCKHEAD HIGH GRADE RESOURCE
94,000 tonnes @ 30.9 g/t for 93,000 oz gold
Beadell Resources Limited (Beadell) is pleased to announce an exceptional preliminary open pit resource for the Duckhead deposit at Tucano in Brazil. A JORC Indicated and Inferred resource of 94,000 tonnes @ 30.9 g/t gold for 93,000 oz of gold defines one of the highest grade and lowest cost open pittable gold deposits in the world.
Beadell’s Managing Director, Peter Bowler commented “This is an extraordinary oxide open pit resource which is still expanding. We are liaising closely with Anglo Ferrous personnel to facilitate a timely commencement date for this extremely low cost gold resource. The reserve statement will be released shortly and with the inclusion of the significant amount of friable iron ore contained within the proposed open pit, which is compensated on a cost recovery basis by Anglo Ferrous under the Duckhead Agreement, will result in one of the lowest cost gold mining operations globally. Additionally, the new drilling results released today are highly significant and indicate that the Duckhead deposit will continue to grow with ongoing drilling.”
New drilling results from the recently discovered hangingwall lode are FVM59, 33 m @ 2.9 g/t from 16 m including 14 m @ 5.0 g/t gold from 17 m and FVM61, 43 m @ 1.7 g/t gold from surface including 7 m @ 3.1 g/t gold from 21 m. These new hangingwall intersections are located immediately southeast of the main high grade lode and are not yet included in the resource model (Figure 1). RC drilling is currently extending the hangingwall lode to the southeast.
New drill results were also received from a direct down dip extension of the main high grade lode. The result in FVM10 of 14 m @ 7.4 g/t gold from 152 m to bottom of the hole, including 4 m @ 23.0 g/t gold from 152 m represents the deepest intersection of the main high grade lode to date which remains in completely oxidised ore. Diamond drilling has commenced to further extend the main high grade lode and resource at depth.
Overview Beadell Resources Limited
UPDATE:
PERTH (miningweekly.com) – Gold developer Beadell Resources has started ore commissioning at its 7 MW semi-autogenous grinding mill, at its Tucano gold project in Brazil.
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CHINA’s GOLD PRODUCTION 2001 – 2011
Plus
China’s Gold Imports are soaring
And what comes next is that China is now firmly on the path of buying Australian gold miners. Focus Minerals has just sold 51% for $220m+ and I wonder who will be next?
But why is China buying gold….. well here is one reason.
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“When the Maastricht Treaty was signed in February 1992, one barrel of crude oil cost $19.00, €15.95 (Dm 31.30) or 1.67 goldgrams. Now it costs $91.79, €71.27 or 1.61 goldgrams, which makes clear that not only is gold useful in communicating prices, it preserves purchasing power. Gold has been useful in these ways for over 5,000 years, so it is logical to assume that gold will remain useful for the foreseeable future.” Read full article
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I have long been a silver bug and have owned silver for many years. This article references quite a lot of what I have learned since my first silver adventure in the days of Bunker-Hunt. Dr Jeffrey Lewis’ analysis is remarkably similar to my own….. Perhaps it is because we are both medical practitioners and we somehow have been trained to think in much the same way?
Why Samsung Is Not Buying Silver
By Dr. Jeffrey Lewis
September 28, 2012
Cluff Gold, a gold mining concern focused on West African assets, recently signed a Memorandum of Understanding with Samsung. Under the unusual agreement, the huge Seoul, South Korea based industrial company will be offering substantial funding to the mining concern to help develop its mining portfolio in the initial form of a $20 million unhedged loan facility.
This is the very first financing deal of its kind, where a non-mining concern has shown an interest in a mining company to help provide it with a reliable supply of bullion over the longer term.
For whatever reason, capital from outside the mining industry is now starting to become available to it. Interestingly, the well-known shorts in the mining shares could well be in trouble, although the fact that Samsung is buying into a gold miner highlights the fact that it is probably too late to do the same for silver.
Silver Miners are Spread Thin & at the Mercy of the Banks
Although a desperate need for consolidation exists in the silver mining sector, the capital to do so seems quite hard to come by since miners are typically viewed as risky borrowers by funding banks. This situation creates significant problems for the supply of silver going forward.
If a tech company announced a similar joint venture with a silver miner, it would very likely create an industrial panic and see the price of silver push sharply higher. This move could be large enough to break the global financial system, especially if the famously short bullion banks are not as hedged by offsetting transactions in the OTC sector as they claim to be.
Basically, the worldwide surge in investment demand for silver is competing with constant industrial demand for a metal that is universally believed to be vastly more ubiquitous than it is due to years of extreme price distortion.
Furthermore, silver’s monetary history ties it to gold, even though they have different intrinsic values. Nevertheless, no central banks own silver in comparable quantities to their gold holdings.
Impact of the Samsung/Cluff Gold Deal
Overall, as noted by many, including the legendary gold mining CEO Jim Sinclair, the story is a major game changer that demonstrates substantial international corporate investment in a monetary metal.
It also highlights the persistent undervaluation in the sector, and the desire by industrial concerns to secure their long term supply of a precious metal.
Furthermore, the creative financing deal demonstrates the recognition of the facts that:
(1) Gold mines mine money,
(2) The supply of gold is dwindling and
(3) Gold plays an important role in the high tech industry, which is actually quite minimal compared with silver’s broader industrial importance.
The deal also indicates that the precious metals bear market inflicted by widespread hedging of gold shares is now coming to a close. Just think about it, if Samsung or another large tech company tried to source silver in this way, it could very well trigger a spreading crisis.
Precious Metals in the Rehypothecation Era
The Samsung/CluffGold deal also comes in the era of rehypothecation, which involves a broker pledging as collateral for a bank loan the securities in customer margin accounts.
Basically, the rehypothecation of assets, which infinitely dilutes claims on real assets, can and will ultimately lead to total losses even for investors who thought that they had strong collateral backing.
Furthermore, the inventory of the world’s credible assets is literally evaporating in absence of CapEx spending, which is also one of the reasons behind the ECB’s seemingly endless lowering of its collateral requirements.
Why Buy Silver?
Within this investing and supply environment for silver, a substantial buying interest could well have a remarkable upwards impact on the price of silver for the following reasons:
(1) Not much silver left. This is the same reason that central banks are not buying silver. Basically, silver has been dis-hoarded and any major buyer would immediately induce a short covering panic that would end all panics.
(2) Silver miners are spread thin. The supply of silver is largely a byproduct of the mining of other metals because the primary silver producers are still viewed as risky. They also often have trouble finding funding for their mining operations and exploration activities.
(3) Strategic threat. No one wants to be the one that blows the silver market sky high with large purchases, so gradual accumulation often seems a more prudent investment strategy in the relatively thin silver market.
Although Samsung may not be buying silver – yet – this innovative deal with Cluff Gold indicates that conditions are favorable for more “finance for supply” transactions of this type over the years to come
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China to surpass India in Gold consumption this year: Deutsche Bank
Mainland China is poised to overtake India as the world’s largest consumer of gold, said Deutsche Bank in a special report.
Asian demand in particular has grown dramatically, where China is expected to become the world’s largest buyer of gold as soon as this year, the German bank added.
“We would argue that China’s long-term strategy on trade and finance likely includes a definitive position on gold. Given the possibility that China’s could be the world’s largest economy in the second half of the century we expect that at some point over the long-term the RMB may be in a position to challenge the USD as the world’s reserve currency,” the German bank added. “If this is envisioned by the PBOC we would expect that in preparation for such an event and to support reserve currency legitimacy in the eyes of its trading partners, the country (China) may see a stock-pile of gold rivaling that of the US as a requirement. On this basis we would expect that China could be quietly building its gold reserves,” they added. (Commodity Online)
From the charts below if China is to have gold reserves equal to that of the USA then they have a massive task ahead.
And China will not be able to amass enough gold to equal the USA’s reserves by production meaning that it will have to buy massive amounts of gold over the next few decades.
Gold Production by Country 2011 -2012
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Focus Minerals 10 minute presentation video
Boardroom Radio Interview with Focus Chairman Don Taig
Click here to listen to the Boardroom Radio interview with Don Taig, Chairman of Focus Minerals in regards to the plans to raise $227.5M through a Placement to Shandong Gold
FULL-YEAR GROSS PROFIT DOUBLES AFTER LAVERTON OPERATIONS TURN TO PROFIT; GOLD PRODUCTION RISES
Circa $225M Placement to Shandong Gold
Subsequent to the end of FY2012, Focus Minerals announced, that it has entered in to a Share Subscription Deed with Shandong Gold International Mining Corporation Limited (“Shandong Gold”), under which Shandong Gold has agreed to subscribe for new fully paid ordinary Focus shares to raise circa $225 million (see ASX release dated September 20, 2012). The Board is recommending the Placement in the absence of a superior proposal and subject to an independent expert opining that the terms of the Placement are reasonable
The investment by Shandong Gold will enable Focus to pursue organic and non-organic growth opportunities, and represents the start of a long-term, mutually beneficial relationship which will allow Focus to unlock the potential of its large tenement holdings. Only 4% of Focus’ significant land holdings have so far been explored.
Focus’ large landholding in the two major gold precincts of Coolgardie and Laverton provide the potential for the Company to significantly grow its resource base through targeted exploration. “To capitalise on this opportunity for shareholders we clearly need capital to expand reserves and develop more resources hence the strategic placement opportunity we are putting before shareholders,” said Mr Baird.
Primary areas of exploration focus for the group will be Laverton and Burtville, the Greater Coolgardie area and the Treasure Island Gold Project on the Boulder-Lefroy Fault. Mr Baird said the group’s focus in FY2013 will be to deliver consistent and reducing cash costs with attention to operational improvements and efficiencies and stable production from existing mining centres. More specifically, the Company will develop the low strip ratio Burtville mining centre at Laverton to create a third major project area and transition the Coolgardie base load from the Tindals Underground mine to the Greenfields open cut.
To read more please click here
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Today’s announcement of Integra’s (ASX: IGR) merger with Silver Lake (ASX: SLR) along with Alacer (ASX: AQG) emerging from the recent merger of Anatolia Minerals Development, a TSX listed company and Avoca Resources Limited plus Evolution Mining creation in late 2011 to form a mid-tier Australian gold producer through a merger of Catalpa Resources Ltd and Conquest Mining Ltd and the concurrent acquisition of Newcrest Mining’s interests in the Cracow and Mt Rawdon mines; Indicates that we are now seeing a wave of gold mining mergers creating a new class of 400,000 per annum mid-tier Australian gold producers.
Next up and squarely in the firing line are ASX: FML and ASX: RMS. I’m not saying that these two will merge but that they are targets. But it wouldn’t be a stretch to postulate that Alacer (ASX: ACQ) could take out Focus as they have adjacent resources and some outstanding synergies.
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I was told by a friend in the park last night that gold was going to plunge… he was convinced that gold would go below $850 – his charts had told him so. This along with the plethora of negative stories about gold and silver that is washing around the internet world makes me think that many of the former gold and precious metal bugs have now left the field.
And I must say that excites me as when everyone is on one side of the boat it is time to move across to the other side. And it seems that I’m not altogether alone:
“Gold is considered one of the most popular “safe havens” during times of financial uncertainty. However, since March, gold has been in a slump and it has many investors questioning where else they could put their money. U.S. Treasuries just are not cutting it right now as yields are low and do not provide a big enough return to entice investors.
As of late investors have been turning to utilities and high grade corporate debt for their safe haven needs but history suggests that gold could be due for another bullish leg up, according to Martin Grubb, the managing director of investments for the World Gold Council.
Grubb says that it is not unusual for gold to have a delayed reaction to macro events. In this case, gold has certainly had a very limited response to the European debt crisis. However, let’s look at a historical timeline to determine whether or not Grubb’s case is valid.” http://seekingalpha.com/article/723861-gold-rally-on-the-way?source=email_portfolio&ifp=0
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