Metals Economics Group

Metals Economics Group Reported in 2007 that discovered deposits of more than 2,5 million ounces, enough to attract the interest of major gold producers, were not adequate to replace their production. To make the discrepancy worse, only 52% of the discovered resources had been upgraded to reserves. They expect an average increase in mined gold production of about 3% annually from 2007 to 2010.

World Gold Council

World Gold Council Gold Supply and Demand – Year 2006: 2006 demand for gold hits record of US$65bn, despite fall in tonnage and reduced supply-Industrial demand highest ever at 458 tonnes-Jewellery sales at all time record in US$ terms at $44bn -Investment demand 7% higher than 2005 in tonnage terms and 45% higher in dollar terms-Supply fell 13% in tonnage terms including a sharp reduction in net selling by central banks.

GFMS-Precious Metals Research & Consultancy

GFMS-Precious Metals Research & Consultancy Gold Survey 2007: The gold price will surpass the 1980 record average of $614,50/oz in 2007 and it could also breach 2006's 26-year high of $725. Whether it would get close to the all-time high of $850 is more doubtful, but it is expected that the upward price trend will continue on into 2008.

Resolute Mining

DRD Gold

DRD Gold (South Africa, Nasdaq:DROOY; JSE:DRD) mines in South Africa, Papua New Guinea and Fiji. The Australasian assets represent roughly two million oz of reserves out of the DRDGOLD’s attributable 8,9 million oz of reserves, and seven million oz of its 47,6 million oz resources. DRD Gold subsidiary Emperor Mines entered into an agreement in 2007 to sell its 20% stake in the Porgera gold mine in Papua New Guinea to its partner in the project, Barrick Gold, for $250m, erasing all its debt and leaving it cash positive. Following completion of the transaction, Emperor will have no debt and will have cash resources of approximately A$130 million.

Cambior

Cambior (TSX:CBJ.TO, now IAMGOLD) (Canada) mines in Canada, Suriname and Guyana

Centerra Gold

Centerra Gold (Canada, TSX:CG) mines in the Kyrgyz Republic and Mongolia. Centerra was launched on the Toronto Stock Exchange in 2004, when it took over the assets of Cameco Gold Inc., a wholly-owned subsidiary of Canadian uranium producer Cameco Corporation. Cameco, which still holds a 53% stake in Centerra, has stated that it wish to divest its interest in the company. The 2006 production of 586,000 oz was lower than the 2005 production of 787,275 oz and the company expects to increase 2007 gold production by 19 to 23% to about 700,000 - 720,000 oz.

For the full year of 2007, net earnings before unusual items were $39.1 million or $0.18 per common share on revenues of $373.5 million and cash provided by operations amounted to $41.3 million. During the year, the Company recorded unusual items of $131.6 million resulting in a net loss of $92.5 million or $0.43 per share. Consolidated gold production totalled 555,410 ounces in line with the Company's third quarter outlook, at a total cash cost of $442 per ounce. In the comparable period of 2006, Centerra reported net earnings of $60.6 million or $0.28 per common share on revenues of $364.5 million and cash provided by operations of $80.3 million. In 2006, consolidated gold production was 586,384 ounces at a total cash cost of $386 per ounce.
Proven and probable ore reserves total 7.0 million ounces of contained gold at the end of 2007. The 718,000 ounces of contained gold mined in 2007 were replaced. Measured and indicated resources at the end of 2007 total 5.8 million ounces of contained gold on a 100% project basis (Centerra's share is 5.3 million ounces), an increase of 139,000 ounces over 2006.

IAMGOLD Corporation

IAMGOLD Corporation (Canada, TSX:IMG; NYSE:IAG) mines in Mali (Sadiola and Yatela) and Ghana (Tarkwa and Damang); explores in Tanzania

Zijin Mining Group Company Ltd

  • Zijin Mining Group Company Ltd (China) mines in China. China yielded 240.078 tonnes of gold bullion in 2006, up 16.028 tonnes or 7.15% from 2005. Gold smelting companies produced 73.011 tonnes of gold bullion with 13.55% gains over the previous year. The top five gold companies contributed 83.89% of the country's total output by gold smelting companies.According to a statement by the National Development and Reform Commission, China has increased its estimated unmined gold reserves by 700 tonnes and plans to boost output of the precious metal 8,3% in 2007 to 260 tonnes. China, the fourth-biggest gold producer in the world, has about 4,000 tonnes of unmined gold. It is reportedly the world's third largest gold consumer with an annual consumption of about 200 tons.

Companhia de Minas Buenaventura ADR

  • Compania de Minas Buenaventura ADR (Peru) mines in Peru. It is Peru's largest publicly-traded precious metals company and a major holder of mining rights in Peru. The Company is engaged in the mining, processing, development and exploration of gold and silver and other metals via wholly-owned mines as well as through its participation in joint exploration projects. Buenaventura currently operates three mines in Peru and also has controlling interests in four mining companies as well as a minority interest in several other mining companies in Peru. (Julcani, Recuperada, Uchucchacua, Orcopampa, Antapite, and Ishihuinca; controlling interests in mining companies which operate the Shila-Paula and Colquijirca mines.) The Company owns 43.65% in Minera Yanacocha S.R.L. (a partnership with Newmont Mining Corporation), an important precious metal producer and 18.50% in Sociedad Minera Cerro Verde, an important Peruvian copper producer. It sells its metal concentrates to smelters, traders, and banks principally in Peru, Europe, North America, Asia, Oceania, and South America. The company was founded in 1953 and is headquartered in Lima, Peru.

Lihir Gold Ltd

Lihir Gold Limited (Australia, Nasdaq:LIHR) mines in Papua New Guinea. Lihir produced 651,000 oz of gold in 2006. A merger between Lihir Gold Limited and Ballarat Goldfields NL, with gold projects in Australia, was completed on 8 March 2007.

Lihir Gold stock price plunges

Lihir rattles investors with a production downgrade, and it’s not the first one in 2007.

Author: Barry Sergeant (Mineweb)
Posted: Friday , 14 Dec 2007

JOHANNESBURG -

Lihir (LGL AU, A$3.47 a share), which has sometimes topped the 2007 ladder of performance among global Tier I gold stocks, this week dropped a bombshell production downgrade, triggering an 11% decline in its stock price over Thursday and Friday. Initial production guidance of 800,000 to 830,000 ounces for calendar 2007 was already cut, in October, to 750,000 ounces. The latest guidance has lowered 2007 production to 700,000 ounces.

A note from RBC Capital Markets describes the latest production downgrade as a "disappointment within three weeks of an analyst site visit, which we attended". The latest downgrade is seen as underscoring the risk that has emerged in Lihir this year.

The latest reduced guidance from Lihir is put down to several unforeseen factors, not least current mining of harder ore, resulting in lower plant throughput. Blending of hard ore with softer ore has produced lower grades of 4.4 grams a ton, against an expected ~6 grams a ton. Equipment failure in Lihir's new oxygen plant has also undermined production. None of the issues are likely to be resolved soon.

Lihir Gold operates one of the world's largest gold mines and processing facilities on the island of Lihir, 900km north-east of Port Moresby in the New Ireland province of Papua New Guinea. The Lihir ore body is substantial and rich by global standards, with an estimated 40m ounces in resource including 23.6m ounces in reserves.

Over the past two months, Newcrest (NCM AU, A$33.25) has generally been favoured above its Australian peer. However, the past two days of turmoil have not only seen the Lihir stock price plunge, but switching into Newcrest has seen it take leadership of global Tier I gold stocks. There is an element of déjà vu here, given the now-historic two years of production downgrades from Newcrest.

Tier I gold stocks

Stock

From

Value

price

high*

US$bn

Goldcorp

$32.63

-14.4%

23.03

Harmony

$10.15

-39.2%

4.06

Lihir

A$3.47

-22.0%

5.82

AngloGold Ashanti

$43.64

-12.5%

12.11

Barrick

$38.22

-19.9%

33.20

Newcrest

A$33.25

-7.3%

13.26

Gold Fields

$15.31

-26.0%

9.99

Kinross

$17.84

-16.2%

10.75

Newmont

$48.82

-13.4%

21.14

Street ETF

$78.50

-6.1%

15.73

Average

-19.0%

* 12-month high

Meridian Gold

Meridian Gold (Canada, TSX:MNG.TO) mines in the USA and Peru. Yamana Gold Inc, a Canadian gold producer with significant gold production, gold development stage properties, exploration properties, and land positions in Brazil, Argentina and Central America, made a takeover bod for Meridian in 2007. Pending completion of the Meridian Gold takeover transaction, the company's portfolio will also include mines and properties in Chile, Mexico and the United States. Yamana is producing gold at intermediate company production levels in addition to significant copper production.

Kinross Gold Corporation

Kinross Gold Corporation (Canada, TSX:K; NYSE:KGC) mines in Canada, USA and Brazil and has projects in Russia. The company plans to produce 1,5 million gold equivalent ounces in 2007 at a cost of $320 to $330/oz. This does not include the impact of the Bema acquisition. In May 2007 the company forecasted its gold output will rise 60 per cent by 2009, with 40 per cent produced for less than $200 (U.S.) an ounce.
The company's Bema Gold Corporation acquisition — which brought with it the open-pit Kupol gold project in northeastern Russia — is powering up its cash flow and will help Kinross with low-cost production.
Kinross, the fourth-largest primary gold producer in North America, expects to produce 1,7 million ounces in 2007, but expects to boost that to about 2,1 million ounces in 2008, and to about 2,6 or 2,7 million in 2009.
As of December 31, 2006, Kinross’s total proven and probable mineral reserves amounted to 27,9 million ounces of gold. Reserves increased at seven properties. Measured and indicated mineral resources at year end increased to 8 million ounces of gold, compared to 6,1 million ounces at year end 2005. Silver reserves at the end of 2006 were reported at 27,8 million ounces, using a price of $7 an ounce. Gold reserves were estimated at a price of $475/oz while resources were estimated at a $525/oz price. Kinross Gold and Goldcorp announced on 26 September, 2007, that they had entered into a binding agreement, which allows Goldcorp to acquire Kinross's 49% share of the Porcupine gold mine in northeastern Ontario, and Kinross's 39% share of the Musselwhite gold mine in northwestern Ontario. The swap increases Goldcorp's reserves by 5.6 million oz at an estimated acquisition cost of $37/oz.
Meanwhile, Kinross will gain Goldcorp's stake in the La Coipa silver-gold mine in Chile and $200 million in cash.

Kinross expects '08 output to rise 20% as new mines come onstream

Canadian gold-miner Kinross Gold expects ouput to rise by about 20% this year, to between 1,9-million and 2-million ounces, as production is boosted by new mines in Russia and the US, as well as an expansion in Brazil.

“We expect to bring all three of our new, lower-cost development projects into production on schedule...setting the stage for expected production of 2,5-million to 2,6-million ounces in 2009, a 60% increase over 2007 production," president and CEO Tye Burt said on Friday.

In 2007, Kinross produced some 1,6-million gold-equivalent ounces, in line with its own forecasts. The company includes silver production as gold-equivalent output.

The miner said that it expected to report 2007 costs at the high end of, or slightly above, forecasts of between $355/oz and $365/oz.

Costs were expected to average between $365 and $375 in 2008, but would decrease over the year, to between $325/oz and $335/oz in the fourth quarter.

"We expect our costs to decrease significantly over the course of 2008, especially in the fourth quarter, as the new projects reach full production,” Burt said.

Kinross said that production from the new projects in 2008 would more than compensate for a slight decline in output from existing operations, which it attributed to a recent asset swap with fellow Canadian Goldcorp and lower grades being milled at its Fort Knox and Round Mountain operations.

Gold miners around the world are racing to bring development projects into production to capitalise on record gold prices.

Kinross plans to start commissioning the Kupol (Russia) and Buckhorn (US) mines this year, and is also on track to complete an expansion project at its Paracatu mine, in Brazil.

The project will increase gold production at Paracatu from some 175 000 oz last year to between 305 000 oz and 335 000 oz in 2008.

The Kupol mine is expected to contribute as much as 390 000 oz to group output this year, while the Buckhorn project, which is scheduled to start production in October, will add between 25 000 oz and 30 000 oz, the company said.

Kinross is Canada's third-largest miner by market capitalisation, after world-number-one Barrick Gold and Goldcorp.

The group expects capital expenditure for 2008 to reach some $600-million, including $190-million for Paracatu, $100-million for Kupol, and $27-million for Buckhorn.

Kinross shares fell 5,5% on Friday morning, to C$20,26 a share by 11:28 EST. The S&P/TSX Global Gold Index was down 2,25% by the same time.

Glamis Gold

Glamis Gold (TSX: GLG.TO, now Goldcorp) (Canada)- See Goldcorp

Newcrest Mining Ltd

Newcrest Mining Ltd (Australia, NCMGF.PK) mines in Australia and Indonesia.

M&A RUMOURS

Newcrest, Australia's last big gold gun a takeover target?

The rumour machine cranked up in the holiday lull today to claim that Newcrest, the only surviving Australian-controlled gold producer of size, was in the gunsights of one or all of the three big international producers already operating in the country.

Author: Ross Louthean (Mineweb)
Posted: Wednesday , 02 Jan 2008

PERTH -

Australian listed gold companies generally appreciated today on thin post New Years Day share trading and a buoyant start to the gold price. Newcrest Mining (ASX: NCM) was no exception starting the day at $A33.10/share ($US29.13) and, after a significant rise, finished at an easing $A33.80 ($US28,74) - with added rocket fuel from speculation about it being a takeover target.

Takeover talk is not new but it had some unlikely armour plate when the international gold miners were picking up big miners like Normandy Mining (Newmont Mining Corp) Acacia Resources (AngloGold Ashanti), and Plutonic Resources (Homestake then taken over by Barrick Gold, which also picked up big Australian-Canadian miner Placer Dome.

That armour plate at the time of these takeovers was a toxic hedge book for more than a decade, which Newcrest has now disposed of after a massive capital raising last year that allowed it to close out 2.3 million ounces of hedging and gold loan contracts, as well as $A-denominated gold bullion sales for 507,000 oz at an average $A824/oz ($US725.12/oz). Remaining hedge positions of 1.15 M oz will be closed over this year.

Newcrest was seen as the survivor of the great Australian gold industry takeover by internationals because they saw Australian assets as undervalued, largely because of the lower price/earning ratios on the Australian, as compared to the North American and London bourses.

If Newcrest does fall in 2008, as the News Ltd daily The Australian suggested today was possible, then that would leave Australian owned gold production in the 15% range, taking into account some other Australian listed companies moving into production this year.

The Australian named as potential predators Barrick Gold, Newmont and AngloGold Ashanti.

Newcrest also listed in New York as American Depository Receipts (NCMGY), currently has a market capitalisation of over $A14 billion ($US12.32 B), has six operating mines that are either long life, low to medium cost producers or high grade operations where relatively short lives have already been extended.

Gold reserves total 33.2 M oz while copper reserves at the Cadia gold, New South Wales operations and Telfer gold operations in Western Australia's Pilbara hinterland total about 2.7 Mt contained.

Production in 2006/-07 was 1.62 M oz gold and 88.9 kt of copper and the forecast output for 2007/08 has been put at between 1.81-1.89 M oz gold and 86.6-90 kt of copper.

The company mines gold and gold-copper in Australia and gold in Indonesia and had an aggressive exploration budget of $A85 M ($US74.8 M), exploring on 25 Australian properties, eight in the American State of Nevada, four in Peru, and one in each of Chile and Indonesia.

Big mine developments or expansions were the Ridgeway Deeps development in the Cadia Valley, advancing a pre-feasibility on the next big Cadia open cut, the Cadia East project, and a pre-feasibility on the new 82.5% owned Kencana K2 epithermal gold project on Gosowong in the Indonesian Halmahera island group.

Harmony Gold Mining

Harmony Gold Mining (South Africa, NYSE:HMY; JSE:HAR) is the fifth largest gold producer in the world, with operations and projects in South Africa, Senegal, Australia and Papua New Guinea. The Hidden Valley Project in PGN comprises the Hidden Valley/Kaveroi and Hamata open pits, a 43 million tonne tailings facility and associated infrastructure, the mine will produce approximately 300,000 oz of gold and 4 million oz of silver over a 10-year life.The Golpu copper gold project in the Morobe Province of Papua New Guinea, resource stands at 163 million tonnes at 1,1% Cu, 0,6 g/t Au and 132 parts per million molybdenum containing 3,9 billion pounds of copper, 2,96 million oz of gold and 47 million pounds of molybdenum. Harmony has announced plans to dispose of less profitable mines and assets for sale include its South African Kalgold open pit mine and its Australian mines. Harmony aggregates its Free State operations into total resources of 94,5-million oz and the mines in its Freegold operation have total resources of 111,5-million oz, including surface stockpiles. Harmony's Target mine has total gold resources of 92-million oz. Harmony’s gold output fell to 2.334 million oz in 2007 from 2.387 million oz the year before. Cash operating costs shot up by 27% because of increased input costs and decreased production. Exploration activities at Evander South and Target North were slowed down, and activities in Senegal and West Africa suspended in October, 2007. Harmony spent R1.17bn on its five growth projects, half of which went on Hidden Valley in Papa New Guinea. The projects are designed to lift Harmony’s output to 3.1 million oz by 2011.
Harmony Gold announced in November, 2007, that it had agreed to sell its Australian Mount Magnet operations to ASX-listed junior Monarch Gold for A$65-million, or nearly R400-million, as part of its 2007 rationalisation strategy.

Harmony sells uranium asset stake for $252m (Mining Weekly)
By: Reuters
Published: 19 Dec 07 - 13:47

Harmony Gold has sold a 60% stake of a new company it formed to house uranium assets for $252-million to Africa's biggest private equity fund, Pamodzi Resources Fund, Harmony said on Wednesday.

Harmony said it had launched the venture to take advantage of buoyant uranium prices and would retain a 40% stake in the new company, which it said may be listed in the future.

The world's fifth biggest gold producer said cash from the sale would be used for capital expenditure and to pay off debt.

South Africa's Harmony wants to revive production of uranium -- which is used to fuel nuclear reactors -- as a by-product of gold mining and valued the new, unnamed firm at $420 million.

Graham Briggs, Harmony's acting chief executive, said the new company would seek funds to build a uranium plant with an output of 500,000 tonnes of ore a month and a new gold waste site at a cost of about 1.7 billion rand.

The plant would produce 185,000 pounds of uranium yellow-cake a month or 2.2 million pounds a year, at a cash cost estimated at $30-35 per pound. The yellow-cake would be exported, and there were no immediate plans for it to be enriched in South Africa, Briggs said.

"It (the deal) crystallises out uranium assets and puts money into Harmony's pockets to support its existing capital projects," Briggs told a teleconference.

Harmony said the new uranium company's output would be 2 percent of the world's total uranium production.

Using 2006 output figures, the new firm would rank ninth in global output after Canadian miner Uranium One, Harmony said on its Web site.

The new company would also eclipse the world's third largest gold producer AngloGold Ashanti's uranium output, and become the largest black-owned South African uranium producer.

Pamodzi, which has U.S.-based backers and a war chest of $1.3 billion in funds available for investment, is a prominent black-owned investment group focused on the resource sector. The uranium deal is its first since its creation in August.

"We are confident that energy demand will multiply in the next few years, and we see a number of nuclear plants coming up in South Africa, China, Russia and elsewhere," Gerard Kemp, Pamodzi's chief investment officer, told Reuters.

He said Pamodzi was keen to invest in coal, iron ore and platinum ventures in the future. Pamodzi is supported by a consortium of U.S. investors including affiliates of American Metals & Coal International, Inc. (AMCI) -- a leading international energy and resources sector investor.

The new uranium firm will operate the Cooke Section of Harmony's Randfontein mine, 35 km (22 miles) south-west of Johannesburg.

The deal would also give a new lease of life to the uranium and gold assets at Cooke, Harmony said, noting a sharp increase in the uranium spot price over the past four years from about $10 per pound to a spot price around $90 per pound.

Harmony's gold resources of 30 million ounces would rise to 40 million ounces, including its uranium resources of about 108 million pounds, which were 10 million ounces of gold equivalent resources, he said.
Harmony's rivals, AngloGold and Gold Fields, are also seeking ways to cash in on a bull market for uranium.

Edited by: Creamer Media Reporter

New Harmony CEO plots future
Allan Seccombe (MiningMx)
Posted: Wed, 02 Jan 2008

[miningmx.com] -- HARMONY Gold is charting a new course as it looks to cut costs, restructure its assets, bring in a partner on its Papua New Guinea projects and repay two large debts over the next couple of years, newly appointed CEO Graham Briggs said on Wednesday.

Briggs was appointed caretaker CEO of the world’s fifth-largest gold producer in August after the sudden resignation of Bernard Swanepoel, the man largely seen by the market as the driving force behind the creation of the company from a single mine.

News of Swanepoel’s departure knocked billions of rands off Harmony’s market capitalisation within the hour.
we have got caught in big capital expenditure
Briggs, who headed Harmony’s Australian operations and appointed group CEO with effect from 1 January 2008, says it is going to take time to complete the restructuring of the company’s mines and restore them to profitability.

Part of the restructuring is the decision on what to do with the marginal mines, which have generally underperformed in a record rand gold price environment.

“The first and biggest challenge is to put in place a strategy for the company going forward. We have a mixture of assets and some great challenges, like costs,” Briggs told Miningmx in an interview.

“The marginal assets should, with these gold prices, be generating good profits, but because of our lack of cost controls, that’s not happening,” he said.

The marginal assets could either be farmed out to other smaller producers or sold, as Harmony has done with the Orkney mines in a deal with Pamodzi Gold, separately list them or keep them within the group to turn them back into cash generators.

“A lot of those assets have great potential going forward, but we have got caught in big capital expenditure in the last couple of years and in the future. We therefore cannot afford to spend capital on the poorer assets,” Briggs said.

Harmony spent R1.2bn on five growth projects in financial 2007 and foresees group capital expenditure of R3.8bn in financial 2008.

“Those assets are by no mean no-hopers. In the right hands -- and those could be our hands -- they can be good money spinners. It’s just the timing of when we spend capital on them is not great.”

Speculation has run rife in recent years that Harmony will house its marginal mines in a separate company and list it, giving shareholders the choice of investing in high-quality mines or the more marginal plays, which should be strong cash generators in a high gold price environment.

Asked specifically about the separate listing option, Briggs said, “It could certainly happen and it’s one of the options. But where do you call the split? A lot of these are interdependent locally, so that’s something you’d have to look at.”

Harmony’s five growth projects will lift gold production to 3.1 million oz by 2011. Harmony expects gold output in 2008 to be less than the 2.334 million ounces generated in 2007.

The strategy will have to take into account the timeframe to bring production to account from the growth assets because some of the marginal, short- to medium-life mines are supporting those projects.

In Papua New Guinea, Harmony has drawn up a shortlist of five potential partners for the Hidden Valley and Wafi/Golpu projects, whittling the list down from more than 20 before the year-end.

“We hope to introduce the partner by the end of the first quarter of 2008,” Briggs said.

“We are not going to sell our Papua New Guinea assets. The strategy behind the partnering is that we want to grow in that region but we can’t afford all the capital to get the full benefit from all these projects.”

The undeveloped Wafi/Golpu copper porphyry faces expenditure of $100m on a feasibility study and a further $1bn to build a mine. Harmony is looking for a partner that could reduce capital expenditure and possibly revisit the planned mining methods.

While Harmony doesn’t need to come to the market this year for its capital expenditure, the picture is likely to change. Harmony needs to repay a bank loan of R2bn at the end of calendar 2008 and in May 2009 there is a convertible issue for about R1.7bn.

“These are crunch years and we need to get our act right before then,” Briggs said. One of the options to settle this heavy demand on its cash could be a rights issue.

Harmony is realising some R1.6bn from vending its Randfontein uranium assets into a new company in which it will hold 40%. The money will go towards the growth projects as well as repaying debt.

“We are at the moment focussing more on properly structuring our operations. It takes a long time to turn these ships around,” he said. Harmony is decentralising services and it has asked for voluntary retrenchments.

Harmony switches offshore strategy
Allan Seccombe
Posted: Tue, 15 Jan 2008

[miningmx.com] -- HARMONY GOLD will actively hunt for acquisitions in South East Asia once it has fully disposed of its Australian mines, the newly appointed MD of Harmony’s international arm, Johannes van Heerden, said on Tuesday.

As part of portfolio restructure, it must find a partner for its multi-billion rand Papua New Guinea (PNG) projects, he said.

Harmony plans to produce 500,000 oz of gold from its international division, which so far, includes just PNG, by 2012. Van Heerden said bringing in a partner to equally share the Hidden Valley and Wafi/Golpu projects in PNG would still leave it on track for that target.

“Buying in reserves will help us get to our target of 500,000 oz,” Van Heerden said during a visit to Harmony’s PNG projects.

Harmony will soon be hosting site visits to the remote and geographically challenging sites after it whittled down a list of potential partners to five.

The gold, copper, silver, molybdenum and zinc deposits lie on the same mineralised belt that stretches southeast from neighbouring Indonesia, home of the Grasberg mine, and includes the Ok Tedi, Porgera and Tolukuma gold mines.

Harmony isn’t naming companies courting Harmony for a role in the PNG projects but analysts speculate they could include Barrick Gold, Newmont, AngloGold Ashanti and possibly even one of the major diversified resources companies.

“No partner has been selected yet and we won’t have selected someone in the next week or month. By June 2008 we will have concluded the transaction in its entirety,” van Heerden said.

Hidden Valley

Harmony is constructing the Hidden Valley project, which is expected to pour gold in March 2009 and ramp up to full production of 280,000 oz by June.

The capital cost to build a mine and plant at the predominantly copper deposit at Golpu is estimated at $1.3bn, the Wafi gold project will add another $500m, while a bankable feasibility study on the two neighbouring prospects will cost $120m. It’s the kind of money Harmony just doesn’t have and can’t raise, Briggs said.

The reason for the large capital spend at Golpu is the current mine plan to use the block cave method, which requires capital to be spent up front, as well as the need to sink a decline shaft as part of the feasibility study.

Harmony has already spent R1.3bn in PNG over the past two years and needs a further R1.2bn between January and June of this year.

Harmony wants Wafi to be a 350,000 equivalent oz mine by 2012, something van Heerden admits is a “very tight target”.

By bringing in a partner, Harmony’s capital expenditure on the projects could come to nil depending on the financing arrangements to bring in the other company.

“If, for example, the partner farms into the projects, they’d have to put in, say, $450m over a few years for 50%. Then our capex would drop to zero,” said Harmony CEO Graham Briggs.

Harmony finances

Harmony’s financial models from the June 2008 year end are modelled on the company not paying any more towards PNG, he added.

Money will be diverted into further exploration of the eight tenements, outside the one mining lease, and more land coming in from five more exploration applications in the Morobe province of PNG. “We have more exploration targets here than we can fund,” van Heerden said.

Free cash will also go towards three South African growth projects, which have their highest capital demand this year and next, Briggs said.

In the 2008 financial year to end-June, the capital budget is R3.8bn, dropping to R1.8bn in the next and then down to R800m a year after that, said acting financial director Frank Abbott.

Harmony has agreed to sell its Mount Magnet and South Kal mines in Australia, and the ownership transfer of the mines has yet to be completely finalised.

Harmony needs to clear the decks of these two transactions before it can look from its regional offices in Brisbane for further growth in South East Asia, pushing its output higher with the acquisition of a project that can produce 200,000 oz or more.

It is unlikely to be a large acquisition, given the current gold price making such a transaction too expensive. Harmony is looking at a possible joint venture with a junior company, for example.

Harmony mine passes milestones

Posted: Fri, 18 Jan 2008

[miningmx.com] -- HARMONY Gold is creating a number of firsts at its Hidden Valley mining project in the deep jungle of Papua New Guinea (PNG).

The project, which begins production in March 2009 and is set to reach full production in June, will be the first major opencast mine in PNG for at least 15 years and it is the first to pass the new environmental act. Unlike its peers in PNG, Harmony is the first since the failed attempt by Ok Tedi, more than a decade ago, to build major tailings dams. Other miners dump their tailings into rivers or into the sea, aggravating communities and environmentalists. The A$489m mine will produce 3.4 million oz of gold and 49 million oz of silver over its 13 year life according to the feasibility study based on current reserves as well as expectations that the Karevoi ore body will generate between 800,000 and one million oz of reserves from the latest drilling programme. At current prices, the payback is expected to be three years.
Low cost

“Hidden Valley is going to be a great, low-cost, safe mine. It’s open pit, international and this all adds up for Harmony. It’s going to generate money,” said CEO Graham Briggs. The drilling programme at Hidden Valley will result in an upward revision in the reserves statement in June this year, and Hidden Valley’s mining manager Brennan Lang said there will be a “dramatic increase” in reserves. Using a conservative silver price of $8/oz, the by-product credit from the metal brings cash costs at Hidden Valley down to an average $246 from the $362 it would be without it. The current silver price at around $16 will bring costs down further, making it the lowest cost producer in PNG where costs run at $250 or more, Briggs said. This project and the exploration prospect at the Wafi/Golpu polymetal copper and gold deposit has caught the attention of other companies, which have applied to partner Harmony is its PNG ventures.
Seeking partner

Another constraint is the lack of tailing dam space near the project. Harmony is seeking a partner on the nearly $2bn Wafi/Golpu project because it doesn’t have the cash and the partner will join it on Hidden Valley and all its other exploration plays. The companies to have made the short list of five are thought to include Barrick Gold, which is aggressively growing its presence in PNG and could be the forerunner in the race to be Harmony’s 50% partner, Newmont, Newcrest and AngloGold Ashanti. Harmony has undertaken a marvel of engineering at Hidden Valley, which at its highest point is 2,800 metres above sea level, lying atop a range of steep sided, cloud-covered hills in the middle of tropical jungle, winning praise from hardbitten analysts. “This is extremely impressive. It’s an awesome project,” said David Davis, a gold analyst from Credit Suisse Standard Securities who visited the site two and a half years ago, when a tiny camp had been carved out of the jungle. In the space of two years, Harmony has built a A$20m, 40km road through the hills and valleys to the mine; all the on-site roads; accommodation for 2,000 people, and over-burden stripping. It has also prepared platforms or level ground for processing plant; ore stockpiles and tailings dumps. “The infrastructure surrounding the mine is robust given that real estate is at a premium in the valleys and peaks of the area,” Davis said. The 4.2 million tonne per annum processing plant can possibly be squeezed to handle another 10% of material, but that is the maximum because the lack of space on the platform for any major additions. The two planned dams can handle 42 million tonnes, but Harmony has a longer-term scheme to build another tailings dump. It will hold up to 70 million tonnes, some 20km away, and involves tunnels and pumping. It will also allow it to seek out and exploit high-grade satellite pits. The metallurgical plant has been designed to cater for a number of types of gold mineralisation which includes sulphitic material, manganese and haematite present in the Hidden Valley, Kaveroi and the nearby Hamata ore body. “This mixture will be blended prior to processing, but could present some problems in the commissioning phase,” Davis said. Hidden Valley and Kaveroi are open at depth and are thought to join down dip underground. The ore bodies will be mined in a single pit while exploration will explore the coalescence of the deposits.

Goldcorp Inc

Goldcorp Inc (Canada, TSX:G; NYSE:GG) mines in Canada, USA, Mexico, Guatemala, Honduras, Brazil, Argentina, Chile and Australia and has development projects in Canada, USA, Mexico, Guatemala and the Dominican Republic. The company produced 1,7 million oz of gold from 13 operations in 2006. It expects to produce, with the acquisition of Glamis Gold, 2,5 million oz in 2007 at a total cash cost of approximately $150 per gold oz.

 Goldcorp eyes 1m gold ounces in Mexico in 2014

The Canadian gold miner has invested around $200 million in the country this year.
Author: Reuters
Posted: Thursday , 02 Oct 2014

MEXICO CITY (Reuters) -

Goldcorp said on Wednesday, 1 October 2014, it expects to produce around 1 million ounces of gold in the Mexican region this year, or around a third of the gold giant's total estimated output for 2014.

Canada's Goldcorp Inc, the world's most valuable gold miner by market capitalization, has said it expects to produce between 2.95 million and 3.10 million ounces of gold this year, up on 2.67 million ounces last year.

Tomas Iturriaga, vice-president of Goldcorp in Mexico, told reporters on the sidelines of BNamericas mining summit in Mexico City that the company had invested around $200 million in the country this year.

(Reporting by Tomas Sarmiento)

Cash-flush Goldcorp sees 'significant opportunities' for growth
By: Liezel Hill (Mining Weekly)

Published: 5th May 2008

Canada's second-biggest gold-miner, Goldcorp, sees “significant opportunities” for growth initiatives at its existing assets, CEO Kevin McArthur said on Monday.

These included an openpit mine at the company's Red Lake mine, in Canada, underground mining opportunities at the Penasquito mine, in Mexico, and possibly even generating its own power at Penasquito.

However, the potential projects were “too fuzzy right now to talk about in any detail”, McArthur said.

The company is in a comfortable financial position, as it is debt free and has about $1,2-billion on its balance sheet, after selling its 48% holding in silver reseller Silver Wheaton, plus annual cash flow of about $1-billion, CFO Lindsay Hall pointed out.

While Goldcorp also continued to keep an eye on acquisition prospects in the areas surrounding its mines, it was more focused on exploiting the potential upsides at the assets it already owns, McArthur said.

Goldcorp has operations in Canada, the US, Mexico, Guatamala, Honduras, the Dominican Republic, Argentina and Chile.

In the last three years, the company has transformed itself from a single-mine producer to the second-biggest Canadian gold-miner, first acquiring a number of assets inherited by Barrick Gold when it bought Placer Dome in 2005, and then by merging with rival Glamis Gold in 2006.

Goldcorp, which, like its peers around the world, is scrambling to boost production to take advantage of record bullion prices, expects capital expenditure to reach $1,2-billion this year, not including spending on the co-owned Pueblo Viejo project, which McArthur indicated could be about $300-million in 2008.

The group is targeting production of 4-million ounces a year by 2012.

It has several green- and brownfields projects under way, including the $1,5-billion Penasquito project, in Mexico, where it has started heap leaching and expects to pour the first gold from oxide ore before the end of the year.

The company announced in December last year that it had increased the planned output of its Penasquito project by 30 000 t/d of ore, or 30%, but that the expected capital outlay for the mine's construction had leapt by 69%.

Goldcorp and partner Barrick Gold also announced in February that they had submitted a feasibility study for their $2,7-billion Pueblo Viejo project to the government of the Dominican Republic.

A feasibility study is currently under way for the Élóonore project, in Quebec, Canada, but McArthur said on Monday that the study would take longer than expected, as more time was needed to study the deposit.

"We feel that making an investment in additional time to get this right is the prudent course," he said.

In the meantime, the company was going ahead with permitting applications for infrastructure, including a permanent airstrip and access road.

Once in production, Goldcorp hopes the Élóonore mine will produce between 250 000 oz and 350 000 oz, "with a long mine life".

CANADA DISAPPOINTS

Goldcorp reported an 84% increase in net earnings year-on-year, to $229,5-million, after higher gold prices and the Silver Wheaton disposal buoyed profit.

Goldcorp realised its highest-ever average gold price, of $932/oz, during the quarter, which boosted revenue 32%, to $626,7-million, offsetting lower production numbers.

Gold sales declined to 517 800 oz, from 527 000 in the first three months of 2007, after production declined at the group's Canadian mines.

The firm's Red Lake mine produced 128 500 oz of gold in the first quarter, compared with 179 400 oz a year ago. The decline was primarily a result of "mine sequencing issues", Goldcorp said, which the company hoped would be resolved over the rest of the year.

However, on the other side of the coin, the new Los Filos mine, in Mexico, which had its first full quarter of commercial production, had more than met expectations, and was on track to be the largest gold producer in Mexico this year.

"Goldcorp's Latin American assets were our strongest performers against a backdrop of record-high realised gold prices in the first quarter," McArthur said.

Group cash costs also increased by 32% to $240/oz, as a result of a strengthening Canadian dollar, and rising costs for labor and consumables.

However, McArthur was confident that production and costs would improve across the board quarter on quarter, throughout the remainder of the year.

Toronto-based Barrick, the world's biggest producer of the yellow metal, is scheduled to report its first quarter results on Tuesday.

Goldcorp production in '07 increased 35 per cent, '08 forecast 14 per cent

Published: Tuesday, January 8, 2008 | 8:56 AM ET

VANCOUVER - Goldcorp Inc. (TSX:G) says its gold production increased 35 per cent in 2007 to 2.29 million ounces, at the high end of its forecast, as the fourth quarter produced a record 633,000 ounces.
Production is expected to rise by 14 per cent this year, Vancouver-based Goldcorp said Tuesday.
And the capital spending budget for 2008 will be US$1.2 billion this year, dipping to US$1.1 billion in 2009.
Total cash costs for 2007 have not yet been compiled, but are expected to be slightly higher than the guidance of $150 per gold ounce, due primarily to lower copper prices during the fourth quarter.
"Goldcorp ended the year with its highest quarterly gold production ever," CEO Kevin McArthur said in a release.
"We believe 2008 will extend our peer-leading growth profile, with gold production expected to increase 14 per cent over 2007. This growth comes from high quality, long-lived assets with intriguing exploration potential and strong cash flows."
McArthur said Goldcorp's business continues to expand with big mines in "safe countries," with over 80 per cent of its gold production expected from NAFTA countries in 2008.
In 2008, the company expects to produce about 2.6 million ounces of gold at a total cash cost of about $250 per ounce.
Production is expected to rise throughout the year as cash costs decrease due to a sequential ramp-up in production at Los Filos in Mexico and increased second-half production at Red Lake after a mine expansion project.
Red Lake, in northern Ontario, is Canada"s largest gold mine.
Goldcorp's Canadian mines will represent over half of the company's 2008 gold production. Forecast gold production at Red Lake of 740,000 ounces is expected to increase in the second half as the company concludes its expansion project.
Opportunities to grow production at the company's two other large Ontario mines, Musselwhite and Porcupine, are currently being evaluated. The Eleonore project in Quebec is expected to be Goldcorp's next gold mine in Canada, with completion of a feasibility study at year end.
Los Filos reached commercial production on Jan. 1 and gold production is expected to ramp up throughout the year.

Gold Fields

Gold Fields (South Africa, NYSE:GFI; JSE:GFIELDS) mines in South Africa, Ghana (Tarkwa and Damang), Australia and Venezuela with projects in Peru, the Dominican Republic, Kyrgyzstan, Burkina Faso and Congo (Kinshasa). The company produces about 4,1 million oz annually from its operations.
Gold Fields issued 145 million shares to buy out
Barrick in the South Deep mine project in South Africa and to raise $1.2 bn to fund the project and others. South Deep has 28 million oz of gold. Gold Fields said in December, 2007, its total attributable ore reserves, including copper as gold equivalents, fell by 2% as of June 30 from Dec. 31, 2006, to 91.6 million oz.
The company said the updated ore reserves reflect increased costs and a higher gold price. Attributable depletion accounted for 2.2 million ounces, while lower pay limits, limited remodelling and discoveries contributed an additional 0.3 million oz. Gold Fields estimated total resources of 252-million oz of gold in 2007.
Canadian-listed Rusoro Mining agreed to buy Gold Fields' Venezuelan assets including the Choco 10 mine for $150m in cash, $30m in a convertible vendor loan and 140 million Rusoro shares in October, 2007.
Choco 10 is Gold Fields' smallest operation and has had operational problems recently. Gold Fields bought the mine for $360m from Canada's Bolivar Gold in March 2006.
Following the transaction, Gold Fields will own 38% of Rusoro, a junior gold producer with a large land position in the major mining districts in Bolivar State, Venezuela. Gold Fields also sold its 60% stake in the Essakane gold prospect in Burkinp Faso in 2007 to Orezone for $200m and will use the funds to pay down debt and inject into its large capital expenditure programme.

Gold Fields to lose up to R1bn in power crisis (Source: Miningmx)

Allan Seccombe
Posted: Thu, 31 Jan 2008

[miningmx.com] -- SOUTH African gold output at Gold Fields will be reduced by up to 164,250 oz worth R1bn at current prices because of the power crisis in that country amongst other issues, CEO Ian Cockerill said on Thursday.

A 10% reduction in power usage by mines demanded by South African power utility Eskom will reduce gold production and lead to shaft closures and restructuring, Gold Fields said in December quarter results, which showed a three percent decline in output, tightly contained costs and a massive leap in net earnings.

Eskom on 25 January declared force majeure on its power supply, causing mines across the country to shut their operations. Power has been steadily increased to the mines since then and is currently between 80% and 90% of normal usage.

lead to shaft closures and restructuring
"At the South African operations, subject to the availability of power, which at the time of writing is 80%, production is likely to be about 20 to 25% lower than the December quarter," Cockerill said in the results.

"This is due to various factors, the slow start up after the Christmas break, the week-long stoppage due to the power shortage in January, and production losses across all the South African operations due to continued power shortages." An analyst pointed out that holiday breaks during the March quarter generally resulted in a reduction of between eight and 10% reduction in output anyway. "It puts that figure from Gold Fields into perspective and I think this is the company preparing for a round of retrenchments," the analyst said.

Production at the South African operations decreased to 657,000 oz from 689,000 oz in the September period. Attributable international output increased to 303,000 oz from 297,000 oz.

Eskom and the mining industry have agreed that the mines, amongst the largest users of power, will cut their demand by 10%.

“The 10% reduction by Eskom will impact on gold production and may regrettably lead to shaft closures and restructuring,” Cockerill said. “Current power shortages in South Africa will impact production in the March quarter and into the foreseeable future.”

“The ongoing power shortages in South Africa will require a combination of aggressive energy saving and energy efficiency projects to achieve a 10 per cent reduction in electricity use, and possible participation in Eskom’s Emergency Demand. “

Gold Fields’ net earnings shot up to R1.94bn in the quarter against the previous quarter’s R429m and R767m in the same period a year earlier.

Gold output was down three percent to 960,000 oz, mainly because of reduced output from the South African operations offsetting a net recovery in the offshore mines.

“During the December quarter we saw a welcome recovery at our international operations. Regrettably the South African operations, in particular Driefontein, were adversely affected by a number of safety related work stoppages,” Cockerill said.

Total cash costs were up just three percent in the quarter.

Cockerill said of the outlook for the international operations in the March quarter: "Production is forecast to increase marginally and costs will be slightly higher due to increases in power and diesel input costs."


Gold Fields lifts stake in Canadian explorer to 10,85%

Gold major Gold Fields announced on Wednesday that it had upped its stake in Canadian explorer GoldQuest Mining, which is searching for gold and copper in the Dominican Republic, to 10,85%.

This was after it excercised its options to acquire a further 1,2-million common shares in the firm for US30c a common share, amounting to $360 000, for the additional 2,24% in the company.

Gold Fields Exploration, a wholly owned subsidiary of Gold Fields, originally acquired the GoldQuest warrants on August 8, 2005, as part of a private placement.

“While Gold Fields Exploration has no current intention to acquire additional securities of GoldQuest in the immediate future, it may increase or decrease its interest in GoldQuest at prices which it determines to be attractive at any time,” the gold major said in a statement to shareholders.

GoldQuest is an exploration company focused on the Dominican Republic.

Through regional grass-roots generative exploration and new geological models, the company has built a portfolio of new gold and copper discoveries.

Gold Fields signs options to earn into Carlin Trend prospects

Gold major Gold Fields has signed option agreements giving it the right to earn up to 70% in two Nevada gold properties in Nevada.

A subsidiary of the group, Gold Fields Netherland Services, can earn an initial 60% in Vancouver-based Redstar Gold's Richmond Summit and Dry Gulch properties over four years, by making cash payments of $480 000 and spending a total of $5,5-million on exploring and development the properties.

Gold Fields, which has committed to spend $1,4-million on exploration in the first year of the agreements, can also earn a further 10% interest in the properties by spendign a further $7,5-million at Richmond Summit, and/or $5-million at Dry Gulch.

Both properties are located on Nevada's reknowned Carlin Trend, which has already produced more than 50-million ounces of gold.

"These agreements with Redstar present Gold Fields with exciting opportunities to develop and test high quality exploration targets within the prolific Carlin Trend,” Gold Fields exploration VP Tommy McKeith said in a statement.

AngloGold Ashanti

AngloGold Ashanti (South Africa, NYSE:AU; JSE:ANG) mines in Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania and the USA. AngloGold Ashanti's gold production fell to 5,6 million oz in 2006 from 6,2 million oz in 2005. The seven underground mines in South Africa produced 2,554 million oz in 2006, five percent less than the previous year, at a total cash cost of $285/oz. AngloGold Ashanti had 181,6-million oz of gold resources globally at the end of December, 2006. About 83-million of AngloGold's gold resource oz are in South Africa. Anglo American said on I October, 2007, it would sell about half of its stake in gold miner AngloGold Ashanti as part of its strategy to focus on core commodities.
Anglo holds a 41.8% stake in South Africa's AngloGold, the world's third-biggest gold producer. Anglo said it plans to sell 61 million ordinary shares, worth about R18.8bn, and that its remaining representatives on AngloGold's board would resign once its stake falls below 20%.

AngloGold to shed 400k oz in 2008

Julie Bain
Posted: Thu, 07 Feb 2008

[miningmx.com] -- ANGLOGOLD Ashanti will suffer a production shortfall of about 400,000 oz of gold in 2008 owing to power supply shortages, the company said in comments to its December quarter results announcement.

"In respect of the 2008 outlook the company is expecting to produce between 4.8 million and 5.0 million ounces," it said. Mark Cutifani, AngloGold Ashanti CEO, said the company had "a great deal of work to do". The company also reported lower profits for its 2007 financial year.

The production shortfall is based on the assumption that the company will operate at 90% normal power capacity. However, a number of mining industry sources are already questioning whether state-owned power company, Eskom will be able to maintain this level of supply ahead of the South African winter, starting about June, when electricity demand will peak.

Cash costs would range between $425/oz to $435/oz, based on currency assumptions to the US dollar of R7.35/$, A$/$0.88, BRL1.81/$ and Argentinean peso 3.10/$," AngloGold said.

Gold output in 2007 fell 3% to 5.48 million ounces in the 2007 financial year when total cash cost rose 16% to $357/oz. Headline earnings for the company's financial 2007 were $278m.

"We have a great deal of work to do on our operational and cost performance. We are focused on putting specific plans in place to improve performance throughout our assets, in particular where recent performance has been unacceptable," said Cutifani who has been AngloGold's CEO for about four months.

Like many mining companies in South Africa, AngloGold highlighted the difficulties that the country's power crisis is causing. The outages mean lower production and higher costs. Cash costs in the final quarter were $404/oz mainly because of lower production but the AngloGold said it also had to buy uranium to fulfil contracts.

"The uncertainty around Eskom power supply is having a significant impact on our operations in South Africa," said Cutifani.

"This uncertainty means that our South African business faces very particular challenges right now and we're working constructively with organized labour, Eskom and the government to ensure that we find sustainable solutions that protect the reserve integrity and potential of these operations," he said.

In the final quarter of the year the company recorded a headline loss of 1,099 South African cents/share, offering no improvement on the previous quarter.

Adjusted headline earnings were $82 million. This comes at a time when it was receiving a rand gold price of R149,312.oz. Gold output in the quarter fell 5 % to 1.37 million ounces after safety stoppages and operating problems at Geita, said AngloGold.

The company had, however, reduced its hedged gold position – metal bought forward at a pre-determined price often a price lower than the current gold price. The total net hedge 10.39 million ounces at the end of December, down from 10.58 million ounces at the end of the third quarter last year.

The company its mineral resources increased by 34.1 million ounces to 207.6 million ounces, based on a resource planning assumption of $700/oz. Greenfields explorations activities at Tropicana in Western Australia, Mongwalu in the DRC and at Gramalote in Columbia contributed 6.95 millino ounces attributable inferred resource.

A dividend of 53 South African cents per share (or 7 US cents per share) was declared for the six months ended 31 December 2007, resulting in a total dividend of 143 cents per share (or 20 US cents per share) for the year, said AngloGold.

AngloGold Ashanti has seized leadership of global Tier I gold stocks, with promises of more to come.

Author: Barry Sergeant (Mineweb)
Posted: Tuesday , 04 Dec 2007

JOHANNESBURG -

A few weeks after 31 July, when AngloGold Ashanti (AU, $48.39 a share) chairman Russell Edey announced that Bobby Godsell would be retiring on 30 September, the Tier I gold producer's stock price started to re-rate. In the past few weeks, AngloGold Ashanti has seized leadership of Tier I gold stocks, in terms of stock price performance.

AngloGold Ashanti's outperformance has not come without pain, including the increasingly dark clouds hanging over deep level mining in South Africa. On that score, however, the group is less exposed than its South African-based Tier I peers, Gold Fields (GFI, $16.52), and Harmony (HMY, $10.60). During 2006, AngloGold Ashanti produced 5.6m ounces of gold, of which 2.6m (45%) were dug out from deep-level hard-rock operations in South Africa; the balance of 2.5m ounces (45%) was sourced from shallow and surface operations, and 0.5m ounces (10%) from underground operations around the world.

Today, AngloGold Ashanti maintains 21 operations located in 10 countries on four continents, along with an attractive project pipeline and a focused, global exploration program that is increasingly attracting investor interest. It's no secret that all this, and more, is now carefully marketed to key investors by Mark Cutifani, AngloGold Ashanti's new CEO.

On the operational front, Cutifani shows a strong appetite for change. On 12 November, AngloGold Ashanti announced that its chief operating officer structure was being made redundant with immediate effect with Neville Nicolau resigning the COO post.

There have been other resignations. On 9 October, Cynthia Carroll, the relatively new CEO of Anglo American (AAL.L, £31.21) resigned, along with Réne Médori (Anglo American financial director) and Peter Whitcutt (head of finance at Anglo American). This followed the 2 October disclosure that Anglo American had sold 67.1m AngloGold Ashanti shares, cutting Anglo American's stake in AngloGold Ashanti from 41% to 17.3%. While Anglo American's intention to exit its holding in AngloGold Ashanti has long been in the public domain, it was AngloGold Ashanti that arranged this substantial secondary placement, one of the largest in the history of mining.

While the Anglo American overhang in AngloGold Ashanti remains, the magnitude of the overhang has dimmed to the point where serious investors essentially disregard it as a potential negative for the AngloGold Ashanti stock price. The stock's free float is now at least 83%.

Then there is the matter of making profits, which is no laughing matter among gold stocks. In the 2007 third quarter, AngloGold Ashanti posted a 6% increase in gold output to 1.43m ounces, with cash costs at $357 an ounce (7% up on annual wage increases, higher power tariffs and consumable costs, plus increased royalty payments). The group's adjusted headline earnings were at $81m, in line with the previous quarter.

While the general mining environment in South Africa continues to be a cause of concern, AngloGold Ashanti owns and operates some of the best quality gold mines known in South African history, having disposed of more marginal units in recent years. Cash costs on the South African operations (during 2006) ranged from $237 an ounce, at Mponeng, to $440 an ounce at Tau Lekoa, one of the less large operations. Recovered grades range from 3.76 grams a ton at Tau Lekoa to an industry-superior 10.18 grams a ton, at TauTona, one of the bigger producers.

On the issue of unmined gold, AngloGold Ashanti holds one of the world's leading positions, with reserves of some 67m ounces, and resources of more than 181m ounces. However, the pressure to find new gold ounces remains; during 2006, the group spent $103m on exploration, with $52m going to brownfields, and the balance mainly to three key greenfields areas, viz., the Tropicana joint venture in Western Australia, in Colombia, and in the Democratic Republic of the Congo. Exploration is also underway in Russia, China, the Philippines and Laos. Exploration expenditure is expected to increase to $163m this year.

AngloGold

Posted: Tue, 15 Jan 2008

[miningmx.com] -- ANGLOGOLD ASHANTI was offering to buy Golden Cycle Corporation, its co-shareholder in the Cripple Creek & Victor Gold Mining Company in the US for $149m in shares, said Business Day citing the company.

The transaction would increase AngloGold's ownership to 100% of Cripple Creek from 67% previously, the newspaper said.

"Successful completion of this transaction will enable us to consolidate the full mineral endowment at CC&V over the remainder of the mine's life, while simplifying the ownership of this long-life North American asset," AngloGold executive vice-president Richard Duffy said.

Newmont Mining Corporation

Newmont Mining Corporation (United States, NYSE: NEM) mines in the USA, Peru, Bolivia, Australia, New Zealand, Uzbekistan and with projects in Ghana. The company has reserves of 95 million oz. Newmont was the world's largest gold producer before Barrick's $US10 billion purchase of Placer Dome in 2006. In 2006, Newmont's gold sales fell to 5,87 million oz from 6,49 million oz in 2005 as the company mined less ore at its Peruvian, Australian and New Zealand mines. Newmont expects gold sales in 2007 to fall further, to between 5,2 million oz and 5,6 million oz, as it plans to mine less ore at Yanacocha in Peru and existing mines in Australia. However, that trend will reverse in 2008 as newer mines go into full production. The company will spend millions of dollars on its Phoenix and Leeville mines in Nevada and its Ahafo mine in Ghana to get them to full production. The three mines could produce close to 1 million ounces of gold in 2007.
The Boddington mine in Australia is scheduled to become one of Newmont's most important assets in the coming years. The mine, expected to go online in late 2008 or early 2009, could produce up to 700,000 ounces per year. Newmont Mining agreed in October, 2007, to buy Miramar Mining of Vancouver, British Columbia, for about 1.5 billion Canadian dollars ($1.52 billion) in cash to gain access to the target's reserves in the Canadian Arctic. The proposed acquisition of Miramar gives Newmont the chance to establish a new, core gold mining district in the largely underdeveloped and still prospective territory of Nunavut. The Hope Bay Project alone extends over 1,000 square kilometers and encompasses one of the most prospective undeveloped greenstone belts in North America. The project alone is believed to contain a resource of 10.7 million oz of gold.

Newmont Sells 5.3 Million Equity Ounces of Gold in 2007 and Expects Comparable Gold Sales in 2008

DENVER, Feb. 7 /CNW/ -- Newmont Mining Corporation (NYSE: NEM) today announced 2007 operating and reserve results as well as the Company's operating outlook for 2008. For the quarter ended December 31, 2007, the Company reported equity gold sales of 1.4 million ounces at costs applicable to sales of $384 per ounce. For the year ended December 31, 2007, the Company reported equity gold sales of 5.3 million ounces at costs applicable to sales of $406 per ounce. Richard O'Brien, President and Chief Executive Officer, said, "We are pleased with our operating results from the fourth quarter, resulting in gold sales performance consistent with our original expectations for the year. We expect our 2008 gold sales performance to be comparable with our 2007 results, with equity gold sales expected to be between 5.1 and 5.4 million ounces at costs applicable to sales of between $425 and $450 per ounce. Building on our strong operating performance from the third and fourth quarters of 2007, as well as the momentum we established with the completion of our Miramar acquisition and the sale of our royalty assets an certain other equity interests in December, we have embarked on 2008 with a renewed focus on operational and project execution as well as financial performance."

[......]

2007 EXPLORATION AND RESERVE RESULTS

The Company reported year end 2007 proven and probable reserves of 86.5 million equity ounces compared with 93.9 million equity ounces at the end of 2006. As shown in the chart on the following page, during 2007 the Company added 4.2 million equity ounces of gold reserves due to margin changes and additional drilling. The gold price basis for the Company's reserve calculations increased to $575 per ounce in 2007 from $500 per ounce in 2006. Gold reserves were revised down at Ahafo in Ghana by 2.4 million equity ounces due to increasing operating and capital costs, by 0.8 million equity ounces at Nevada due to geotechnical and metallurgical changes, as well as higher operating costs, and by 0.2 million equity ounces at various locations due to operating cost inflation. Gold reserves were also impacted by 0.9 million ounces as a result of the previously announced reduction of the Company's economic ownership at Batu Hijau in Indonesia and by the sale of Pajingo in Australia. For 2007, the reserve additions from exploration of roughly 3.5 million equity ounces were primarily due to further extension drilling at Boddington, Jundee and Tanami in Australia, with 2.5 million equity ounces added to reserves in 2007, and the remaining additions coming from Batu Hijau, several open pit and underground sites in Nevada, and La Herradura in Mexico. For 2007, the Company's reserve grade remained relatively constant at 0.033 ounces per ton compared to 0.034 ounces per ton in 2006 in spite of downward pressure on grade due to both higher metal prices and the average depletion grade of 0.042 ounces per ton in 2007.

[........]

Newmont completes $1.5 billion takeover of Miramar Mining
By THE CANADIAN PRESS
Friday, January 18, 2008



DENVER - Newmont Mining Corp. (TSX:NMC) says it has completed its $1.5 billion takeover offer for Miramar Mining Corp. (TSX:MAE) after receiving 96 per cent of shares by Friday deadline.

Newmont extended the deadline earlier this month after increasing its ownership to about 93 per cent.

The takeover offer is worth $6.25 per share and gives Newmont a new foothold in Nunavut’s core mining district.

Miramar controls the Hope Bay project in Nunavut, one of the largest undeveloped gold sites in North America.

Miramar shares closed at $6.24 on the Toronto Stock Exchange Friday, up a cent, while Newmont shares closed at $54.33, down 16 cents.