gold-seasonality

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Allison Jackson | April 02, 2009
Article from: The Australian

EXPORTS bounced 4 per cent in February on soaring gold export prices and a weaker Aussie dollar, widening the trade surplus to $2.1 billion.

Economists had expected the trade surplus to shrink to $700 million from $926 million in January.
Imports slipped 1 per cent, figures released today by the Australian Bureau of Statistics showed.

Gold exports soared 55 per cent in February as nervous investors sought shelter in the safe-haven asset, and was the main reason for the turnaround in total exports.

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China ‘place to be for gold miners’
Wednesday April 1, 2009, 4:21 pm

China is the place to be for gold miners, Sino Gold Mining Ltd says, with cheap and abundant debt financing on offer for the right projects.

President and chief executive Jake Klein told the Paydirt Gold Conference in Perth on Wednesday that Sino Gold, which was the first foreign entrant to China’s gold sector in 1995, was benefiting from the Asian superpower’s ready access to capital.

“Here’s a bold prediction: Chinese gold companies and the Chinese gold industry is undergoing a revolutionary rate of change and what is going to be a major catalyst for change is access to capital,” Mr Klein said.

“Sino Gold – not even a local, domestic company – has benefited from that access to capital.”

He said it had raised more than one billion renminbi (more than $A175 million) from Chinese banks at an interest rate of less than seven per cent to fund several projects.

These included its five million ounce (Moz) Jinfeng mine – China’s second largest gold mine and Sino Gold’s flagship operation – and its one Moz second mine, White Mountain.

“So cheap access to capital is available in China, not only if you’re state owned but for every company operating in China,” Mr Klein said.

“And I think you’re going to see state ownership reduce, access to capital increase and those companies are going to get more and more confident, using their production base to expand outside of China and we’re reading about that all the time.”

Mr Klein said China, currently the largest gold producing country in the world, was highly prospective for the precious metal but under explored.

About 10,000 gold deposits had been identified within its borders so far, he said.

And while Australian gold production had steadily declined since 2005, China’s gold production continued to grow.

“It’s the tip of the iceberg,” Mr Klein said.

He said Sino Gold was moving toward developing its third gold mine, Eastern Dragon, where an initial 0.8 Moz resource is expected to grow through near mine exploration.

Sino Gold is hitting its nameplate annual production rate of 180,000 oz at Jinfeng, up from 150,928 in 2008, and expects to encounter higher grade ore at depth.

“Jinfeng has not yet told its full story in terms of geology,” Mr Klein said.

AAP

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Nobody knows whether the current Washington bailout plans will work quickly, at all or at what cost to the U.S. currency.

The future is always a matter of opinion, as is political competency, which is why it’s a good idea to own a little gold.
That may be a leap to most people, but the facts are that protecting yourself against the vagaries of markets, leaders and capitalist running dogs has never been more important or perilous. Best advice I’ve come across is to divide your asset mix into four classes: real estate, stocks, bonds and gold (probably bullion or coins not stocks).
bullion

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I have been agitating for a “flow through share relief scheme” for Australia’s junior explorers for a couple of years…. Our Federal govt. is dragging its feet thus allowing our exploration juniors to go broke, suspend operations or be bought out. Surely Martin Ferguson can and should do better…. he seems so switched on…. got to wonder why he isn’t pushing harder.

July 1 start date for Trevor Manuel’s new junior mining incentives
By: Martin Creamer
19th March 2009
Updated 2 hours 37 minutes ago

JOHANNESBURG (miningweekly.com) – South African Finance Minister Trevor Manuel’s new incentives for investors in junior mining will be implemented from July 1.

A Government Gazette notice outlines the proposed new legislation that will see a payback on investments in junior mining exploration companies.

Rejected is the previously discussed possible copying of the flow-through share system that is in force in Canada, which has led to a culture of investment in mining exploration that is largely absent in South Africa.

The gazette defines a junior-mining company as any unlisted company or a JSE-listed AltX company, resident in South Africa and engaged solely in mining exploration or in mining production.

The company may not be part of a group and must have its tax affairs in order.

Keaton Energy CEO Paul Miller told Mining Weekly Online that he needed time to study the gazette notice before he could comment.

The same sentiment was expressed to Mining Weekly Online by TWP finance CEO Dean Cunningham.

Several other mining companies that Mining Weekly Online approached for comment were unaware of the gazetting.

The deduction to be allowed during a year may not exceed R2,25-million.

Manuel, in his 2008 Budget speech, called the incentive a “50% deduction”, and Treasury officials told Mining Weekly Online at the time that this meant that government would effectively reimburse investors in local junior mining exploration firms one-half of their investment.

In 2006, government said that it was looking at the potential benefits of introducing the Canadian model of flow-through shares to South Africa, in a bid to increase the availability of financing to strengthen the local exploration sector.

It later formed a National Treasury-chaired working group, including the Department of Minerals and Energy, to examine the possible benefits of such a move.

However, a National Treasury official said thereafter that the group found that launching flow-though shares would be “an administrative nightmare”.

This was because the South African Revenue Service would end up with an excessive amount of paperwork.

Flow-through shares were pioneered successfully in the Canadian exploration sector, where an exploration company’s costs flow through to the shareholders’ books so that they can claim tax benefits.

A Treasury official said that, while the scheme could cost government a significant amount of money in the short-term, the long-term rewards would outweigh the short-term expense.

Junior mining firms in South Africa have repeatedly decried the problems they encounter in obtaining mining finance, as local investors have little appetite for exploration risk.

Access to equity finance by small and medium-sized businesses has been cited as one of the main challenges to the growth of the junior mining sector.

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cto-comp

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Few of today’s headlines

Good Chance That Silver and Gold Prices Bottomed Today
Gold Price – ‎4 hours ago‎
Good chance that silver and gold prices bottomed today. Might not have looked like, seeing that waterfall down 26.10 in the gold price to 912.90 and the …

Cramer: Silver: A Fresh Look at a Shining Commodity
MainStreet – ‎12 hours ago‎
By Jim Cramer Okay, I need to brush up on my Hemingway—maybe a trip to Key West to get away from the snow would do the trick—but you get the picture. …

‘World has 5 times more gold than silver’
TopNews – ‎Mar 2, 2009‎
In a world where everyone is going crazy over gold, at least one man wants us to buy silver instead. World gold inventories, including jewellery, …

It’s Not Too Late to Buy Gold
Contrarian Profits – ‎15 hours ago‎
It’sa recession but Byron King tells us that it is not too late for gold investing. He has been encouraging gold bugs for over ten years now. …

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Demand for gold at an all-time high
Demand for gold reached a record high in the third quarter as investors sought refuge from the financial crisis and volatile stock markets, according to the World Gold Council.

By Paul Farrow
Last Updated: 4:25PM GMT 26 Feb 2009

The WGC said demand for gold reached an all-time quarterly record of $32bn between July and September as investors around the world sought refuge from the global financial meltdown. This was 45pc higher than the previous record in the second quarter of 2008.

Demand for gold via exchange traded funds (ETFs) and bars and coins was the biggest contributor to overall demand during the quarter.

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Australia’s gold output is now at a two-decade low, having fallen to 219 tonnes in 2008, and down 27 percent from 2007 output, as mining companies dug up more lower grade gold bearing ores in response to rising bullion prices.

South Africa’s 2008 gold output was the lowest since 1922 due to power shortages, dwindling grades, and the closure of several mines. South Africa’s Chamber of Mines reports a 13.6 percent decline in annual gold output in 2008, helping to push the price of the precious metal higher.

The world’s largest gold refinery increased coin output to the highest level in 23 years as the demand for South African Krugerrands rose. The refinery has doubled weekly production to 20,000 ounces of blank coins for minting as of January 2009. In addition, the U.S. Mint has sold 93,500 ounces of its popular American Eagle gold coin in the first seven weeks of this year, the same amount it shipped during the whole of 2007.

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