Has Mineweb effectively disappeared as an international site?

Time was when Mineweb.com, based in South Africa and owned by South Africa’s Moneyweb, run by well known journalist Alec Hogg, was arguably the world’s top independent international mining industry website.  It was edited and managed by myself out of London and carried international mining sector coverage perhaps unequalled anywhere in the world at the time.  We had some great internationally-based writers and it was supported by advertising from mining and associated companies from several countries – and in at least one year its revenues were such that they were instrumental in keeping its parent company viable.  The bulk of its income came in in US and Canadian dollars which for a company domiciled in South Africa, with a depreciating domestic currency, was doubly valuable.

Recently, having been asked by several people what had happened to the site, I clicked on Mineweb.com to see how it was faring, to find it was nowadays only a subsection of its parent, Moneyweb.co.za, and was only publishing a handful of articles.  The first featured article on the Mineweb site’s homepage was a Reuters article on Anglo American’s 2016 performance, dated January 26th, almost 6 months earlier and the second featured article was also a Reuters story on Goldman Sachs’ copper price predictions for 2017 – which was even older!

Scrolling down through the site I did find a couple of articles written in the current month, both Reuters stories on Sibanye Gold’s Cooke Section problems, but it appears that original articles written by Mineweb reporters are nowadays effectively non-existent- or at least that is the way it appears.

So what happened to Mineweb?  The initial nail in its coffin was that Alec Hogg lost control of the parent company and was ousted from its board. (Alec has since set up, and runs, www.biznews.com – a direct competitor to Moneyweb in South Africa). I was still editor of Mineweb at the time, but was soon replaced in that position by Warren Dick in Johannesburg and became just a correspondent for the site.  Our key Reno-based writer, Dorothy Kosich was let go and my position gradually became untenable as the site became more and more South African focused and we agreed to part ways.  That left one directly employed internationally-based writer, Kip Keen in Canada, and eventually he was let go too.

Most of the mining based advertising had disappeared, along with our key advertising salesperson, Jan Chadwick, who resigned when she saw the direction the site was taking.  She is now semi-retired occasionally helping out her husband, John Chadwick on mining conferences for his own mining publication, International Mining, now probably the world’s top mining monthly magazine.

So Mineweb still exists, but only as a section on its Moneyweb parent site, and publishes little of its own material, relying primarily on the Reuters and Bloomberg services for its articles with occasional input from its parent company’s correspondents on South African mining matters – and even then, as with the Sibanye articles mentioned above it may well use one of the international wire services. That, in my opinion, is a great shame.  Its readership outside South Africa is a tiny fraction of what it used to be – there can now be few, if any, international readers who have Mineweb as their own initial go-to webpage, and its independent editorial coverage of the global mining sector is mostly long gone.  A cautionary tale about what happens to  a niche business when it is taken over by a much larger company which doesn’t see it as a core part of their operation!

Three gold articles just published on Sharps Pixley

Links to three of my articles published on the Sharps Pixley website over the past two days which readers of Lawrieongold may find of interest – particularly given the strong performance of the yellow metal over the past few days:

 Lewitt, Minsky, Williams and gold

06 Jun 2017 – Two very erudite newsletter writers give their uncompromising views on the direction of central bank policies and their conclusions are disturbing.

Lawrence Williams

Gold – Scenarios from $700 to $5,000

05 Jun 2017 – The latest In Gold We Trust magnum opus comes up with pricing scenarios ranging from a low of $700 to a high of $5,000, and levels in between but the report’s authors put the probability at the higher levels.

Lawrence Williams

Could gold hit $1,300 this week?

05 Jun 2017 – Potential Black Swan events are lining up which could drive the gold price through $1,300. None of these are in any way certainties but in combination they could contribute to the kind of unease which could restimulate safe haven investment.

Lawrence Williams

Abitibi Royalties – A gold royalty company with unusual growth possibilities

In a presentation in London, Abitibi Royalties(TSXV:  President and CEO Ian Ball put forward an ambitious slogan – To Build the Best gold company – not the biggest, Abitibi Royalties will never be that, but the Best in terms of stock appreciation, and it has a good track record of so doing since its inception as a spin-off from Golden Valley Mines back in 2011, although has been mostly underperforming its peer, and larger, royalty companies in the current year.  It has a strong core asset in a 3% net smelter return (NSR) royalty on the eastern portion of the Canadian Malartic mine (owned and operated by Agnico Eagle and Yamana Gold), which includes the Barnat Extension and Jeffrey gold deposits. The NSR also includes the exciting new Odyssey North discovery that was announced in 2014 which gives it some good growth potential assuming these extensions to the Canadian Malartic property pan out as anticipated as the mine progresses from a large scale open pit to an equally large scale underground bulk mining operation as the pit section is depleted.

Ball describes the changes ahead as a ‘paradigm shift’ which may just be CEO talk, but with Agnico Eagle (which has some existing  bulk underground mining expertise) the main driving force behind the change could just be an apt description.  The new sections of Canadian Malartic, Canada‘s largest gold mine certainly have potential but whether they offer the paradigm shift Ball talks about is, as yet, unproven.

While the royalties in and around the Canadian Malartic property do underpin Abitibi Royalties’ earnings prospects, it also has an unusual (among royalty companies) policy of buying low cost royalties on ground held adjacent to known high potential deposits – mostly in Canada, but also a royalty in a big ground holding which almost surrounds Eldorado’s Efemcukuru gold mine in Turkey.  The Canadian near-mine royalties include ground close to the Red Lake and Rainy River deposits.  These royalties have been picked up at extremely low cost and even if only one of them comes good then that would be a potentially good investment.

Ball, a former associate of Rob McEwen, who himself is a major shareholder in Abitibi Royalties, says he does not take a salary from the company, but ploughs any earnings into buying additional stock, and also says he has no intention of widening the share base – currently around 11.3 million shares outstanding – indeed currently plans to reduce it by buying back stock with a target of bringing it down to 10 million shares outstanding over a three year buy back programme.  Abitibi Royalties has a strong balance sheet with Can$7.7 million in cash and no debt.  Its market cap is currently around Can$100 million, with a stock price of a little over Can$9 at the time of writing.

Royalty companies tend to be a relatively low risk way of investing in mining and Abitibi Royalties is no exception with its big underlying Canadian Malartic net smelter royalty underpinning earnings.  It does have potential in terms of improving shareholder value, but remains perhaps more speculative than most of its royalty company peers due to unknowns in the tenor of some of the areas for potential royalty growth.  A strong gold price should see it grow regardless, but there remains a downside risk from a weakening gold price – and if none of its prospective royalty growth areas pan out.  But adding an additional risk element to a royalty company with strong baseline earnings could well have an appeal to less risk averse investors.

SGE revises 2017 gold withdrawals downwards

We had previously noted some anomalies in the reported figures for China’s gold withdrawals from the Shanghai Gold Exchange (SGE) and are pleased to note that a recheck has shown that the monthly and cumulative figures as announced by the SGE have been revised and now tally.  Earlier the announced cumulative total appeared to have been substantially adrift from that suggested by the monyh-by-month reported figures.The principal change is a sharp downwards revision of the gold withdrawal figures for February – a month where figures tend to be somewhat anomalous anyway because of the Chinese New Year holiday.  February figures have been revised downwards sharply from 179.24 tonnes to 148.24 tonnes, while the initially reported April figure of 171.17 tonnes has been adjusted downwards to 165.78 tonnes.  This brings the cumulative total for the year to date to 690.68 tonnes –only marginally higher than at the same time a year ago, and well down on the record 2015 figure.

Table: Revised SGE Monthly Gold Withdrawals (Tonnes)

Month 2017 2016 2015 % change 2016-2017 % change 2015-2017
January 184.41 225.08 255.42 – 18.1%  -27.8%
February* 148.24 107.60 156.36 +37.8% -5.2%
March  192.25 183.24 213.35  +4.9%  -9.9%
April  165.78 171.40 195.45  -3.3%  -15.2%
May   147.28 162.15    
June   138.51 195.67    
July   117.58 285.50    
August   144.44 265.27    
September   170.90 259.98    
October    153.25 176.29    
November    214.72 202.71    
December    196.37 228.21    
Year to date 690.68 687.02 820.58 +0.5% – 15.8%
Full Year    1,970.37 2,596.37    

Source: Shanghai Gold Exchange, Lawrieongold.com

For additional comment click on:

China’s SGE revises gold withdrawals lower

121 Mining Investment Event to Hit New York in June

For those lawrieongold readers interested in the junior mining sector and within easy range of New York City, we would recommend attendance at the first North American 121 Mining Investment event.  This will be held at the Westin, Grand Central on June 6th and 7th.  Having personally attended events in Cape Town and London I can highly support the format, which comprises brief corporate presentations, interspersed with expert analysis and panel discussions – and then the opportunity to network with the presenting companies on a one-to-one basis so you can delve deeper into their operations, performance and potential.

The group running the 121 events cut their teeth with the organisation for several years of the highly successful Mines & Money conferences in London and Hong Kong, before breaking away and launching the 121 series of events – initially in Hong Kong, and then Cape Town and London – back in 2014/2015.  Now 121 Mining Investment New York brings the tried and trusted 121 event format to what the group describes as the world’s leading mine finance centre, although others may argue with that description.

This investment series is thus organised by 121 Group applying a successful invitation only mode that focuses on pre-scheduled 1-to-1 investment meetings with mining management teams. Set over a two-day conference delegates will also gain insight through investor led panel discussions and analyst briefings on commodity trends.

By the date of the New York conference, 121 events will have featured more than 300 mining company presentations and brought together over 1200 investors to discuss the latest trends and opportunities in the sector.

What sets the 121 Mining Investment events apart from the competition?

  • Targeted networking– Two days of pre-arranged 1-2-1 meetings allowing miners to and capital providers to connect face-to-face in meetings relevant to their needs
  • Exclusivity – Entry is restricted to qualified investors, analysts, senior mining company executives and relevant mining investment professionals only
  • Market intelligence– Interactive two-day programme where presenters and panellists actively engage with the audience to create a two-way conversation
  • Convenience– Located in Midtown Manhattan within walking distance of many of the key mining investment houses

Mining corporates – Present project updates and meet with leading experts from New York’s mining and investment community –  Submit your interest in presenting at the 2017 summit here

Mining investment and finance experts – Share insights with your peers and receive project updates from the management teams of mining production, development and exploration companies gathered together in a convenient Midtown Manhattan location – Passes for institutional investors are free  – Click here to register

With limited space available, register now for this exclusive event.

121 Mining Investment New York is part of a highly successful global series, with events held in London, Cape Town and Hong Kong – Click here for more details

China and India step up to the gold demand plate

 My latest article on Sharpspixley.com

As always appears to be the case, statistics on gold demand can be contradictory which is perhaps why gold’s fundamentals are so difficult to tie down.  Take the World Gold Council (WGC)’s latest Gold Demand Trends report which suggests global gold demand fell by 18% (228 tonnes) during Q1, compared with the admittedly very high (record) figures achieved in Q1 2016.  But within the report there do appear to have been some major anomalies.

Firstly, the slump in assessed demand was largely for two reasons – sharply reduced gold ETF inflows and a fall in Central Bank gold reserve increases.  But, it should be noted, that gold inflows into the ETFs did remain positive over the quarter and the Central Bank figures were skewed by China’s non reporting of any gold reserve changes since its currency was accepted as part of the IMF’s Special Drawing Rights (SDR) in October last year.  In Q1 2016, China had announced additions of 35.2 tonnes to its official reserves – some 15% of the fall in assessed gold demand during the latest quarter.  If one takes China out of the equation other Central Bank gold additions came to a positive 7.4 tonnes – and on its reserve reporting track record China’s zero reserve addition figure has to be considered suspect.

Coming back to Central Bank shortfalls, can we believe the China figures at all?  One should recall that up until July 2015 China only reported any reserve increases at five of six year intervals maintaining the pretence that it was not adding to its reserves monthly, as it obviously was.  But, in the immediate run up to the IMF decision to re-jig its SDR make-up to include the yuan, the Asian nation began announcing monthly reserve increases.  Once the yuan officially became a part of the SDR, China has reported zero gold reserve increases.  Can this just be coincidence?

China is known to favour building its gold reserve as an important facet of securing its place in the global trade picture and its whole gold reserve adding policy has always been shrouded in secrecy.  Some China-watching  analysts will argue that, in fact, its real gold reserve is far higher than the officially stated figure of 1,842.6 tonnes.  After all it has been the world’s largest gold producer for some years now….

Randgold Q1 2017 Highlights

Generally the Q1 figures this year were better than Q1 2016 in terms of production, revenue and costs, but down on the record Q4 2016.  The quarterly highlights as reported by the company were as follows:

KEY PERFORMANCE INDICATORS FOR THE Q1 ENDED 31 MARCH 2017• Gold production up 10% on corresponding quarter of prior year and down 15% on record Q4 2016
• Profit up 33% on corresponding quarter of prior year and down 10% quarter on quarter
• Total cash costs per ounce down 4% on corresponding quarter of prior year and up 13% quarter on quarter
• Cash increases 16% quarter on quarter to $600 million, with no debt
• Another solid operating quarter at Loulo-Gounkoto supported by high recoveries
• Morila tailings retreatment operation starts to deliver on plan and Domba project approved
• Tongon delivers steady performance with good cost control
• Kibali tracks guidance as it works to deliver on underground plan
• Group attributable reserves replaced at higher grade
• Busy quarter for greenfields exploration complemented by good progress on brownfields targets
• Shareholders approve 52% increase in annual dividend to $1.00 per share
Randgold Resources

Thus the company presents the figures in a positive light despite financials down on the previous quarter and cash costs up, although the latter will be partly due to the lower gold output. Net cash available increased to $600 million though which leaves the company well placed to take advantage of any M&A or new development and expansion opportunities without having to resort to borrowing.

Company CEO Mark Bristow is due to present to analysts in London at midday today and undoubtedly we’ll learn more about what is expected for the rest of the year then.

Update on Africa’s biggest gold mine

Randgold Resources, the biggest London listed gold miner by market capitalisation and the 14th largest gold producing company in the world, currently operates the two biggest gold mines in Africa according to consultancy Metals Focus – the Loulo-Gounkoto complex in Mali and Kibali in the DRC – and both are among the world’s Top 20 gold producing operations – See: World Top 20 Gold Miners and Mines.

Last year Loulo-Gounkoto, at No. 13 on the global list, was the bigger producer, but Kibali was experiencing some technical and operational  difficulties which reduced its output a little, but still came in as the world’s 16th largest gold mine by production.  It is currently  putting the problems behind it as its underground operations build up to full output and it should regain its top spot among African gold mines by the end of the current year.

The mine is owned 45% by Randgold, 45% by Anglogold Ashanti, with the remaining 10% by DRC parastatal, Sokimo.  Randgold built the mine – located in one of the most remote areas of the African continent close to the DRC’s north eastern border with South Sudan – and operates it.

The company’s latest statement on the mine and its progress is published here in full, but note CEO Mark Bristow’s warning about possible DRC governmental goalpost-moving on the country’s mining code:

The Kibali gold mine’s underground operation, which will significantly increase production, is on track to start commissioning in the third quarter of this year, Randgold Resources chief executive Mark Bristow said at a media briefing.

The mine is forecast to deliver approximately 610,000 ounces of gold this year, up from 585,000 ounces in 2016, but annual production is scheduled to rise to around 750,000 ounces from 2018, when the underground operation will make it fully functional.

Bristow noted that Kibali ended 2016 with a creditable performance after having to contend with a range of operational challenges as well as the constraints imposed by limited open pit mining flexibility.  In addition to dealing with these issues, the Kibali team succeeded in keeping the underground development on track, successfully constructing and commissioning four ultrafine grind mills in the metallurgy circuit, as well as progressing work on the mine’s second new hydropower station which was commissioned in February this year.  The third and last of the new hydropower stations is currently being built by an all-Congolese contracting group.

“Kibali has stayed on course to become one of the world’s great gold mines despite the challenges of last year and the volatile political climate in the DRC at present,” he said.

“Randgold remains committed to the DRC and is confident that its government, politicians and civil society have the will as well as the capacity to work together to secure the country’s future.  We therefore continue to invest in exploration here and to lead the way in developing the north eastern DRC as a major new gold mining region.  Our engagement with the country and its people is also evident in our substantial investment in local economic development and community upliftment programmes.  These include macro and micro agribusinesses designed not only to provide regional food security but to generate surplus produce for export.”

It was a source of concern, however, that the DRC government had once again signalled its intention of reviewing the country’s 2002 mining code with the clear intention of maximising state revenue, Bristow said.  This could have a very negative impact not only on the mining industry but also on the economy.

“Now more than ever the DRC should be focused on retaining its existing investors and attracting new ones.  It’s certainly not the time to harvest more from less for short term gain.  It’s my sincere hope that this time round the government will engage the mining sector fully in the proposed review to achieve an outcome that will be in the best interests of the Congolese economy as well as the country’s mining sector,” he said.

“The existing code is in fact a good one but it is not always being applied effectively and there are still many mining operations that do not operate under the code.  There are also a number of issues and challenges which mining companies are having to face which make operating in the DRC more challenging.  In Kibali’s case, these issues include more than $200 million in unpaid TVA and duty refunds.”

Correction and Update: Writing for US Gold Bureau

Corrected link to US Gold Bureau below.  Apparently the one I published originally won’t work.

Just to let readers know that I will be writing occasional original articles for Austin, TX based US Gold Bureau.  The articles, by agreement with US Gold Bureau, will not appear here.  The US Gold Bureau website https://invest.usgoldbureau.com is blocked from being viewed by computer users who do not have North American IP addresses as US Gold Bureau only provides its services in North America so isn’t interested in accesses from elsewhere.  However,  because lawrieongold has strong North American readership it may be worthwhile for my North American readers to log on to the US Gold Bureau site.  There is a work-around for those without North American IP addresses, if interested, through setting up and utilizing the Tor Browser which can be configured to make it appear you have an IP address anywhere in the world.

My first article on the US Gold Bureau site, is titled: What the FBI Investigation Into the Trump Campaign Could Mean for Gold.  If you have a North American IP address you should be able to read it by clicking on the link.

A second article looking at the importance of Swiss gold imports and exports and their significance in terms of global gold flows is also up on the site:  Switzerland is Key to Global Gold.  Again you’ll need an american IP address  – or a work-around – to access it.

World Top 20 Gold: Countries, Companies and Mines

Herewith a series of tables, all gleaned from Metals Focus’ Gold Focus 2017 report released last week, which between them confirm that Peak Gold is not with us quite yet, although probably getting very close.

Table 1.  Top 20 Gold Producing Nations 2015/2016 (Tonnes)

Rank Country 2015 Output 20 16 Output %  Change
1 China 460.3 463.7 +1%
2 Australia 279.2 287.3 +3%
3 Russia 268.5 274.4 +2%
4 USA 215.5 225.7 +5%
5 Peru 170.6 166.0 -3%
6 South Africa 165.1 165.6
7 Canada 157.7 162.1 +3%
8 Mexico 131.7 128.4 -2%
9 Indonesia 114.2 109.5 -4%
10 Brazil 95.4 96.8 +1%
11 Ghana 95.4 95.6
12 Uzbekistan 85.5 86.7 +1%
13 Papua New Guinea 58.1 60.4 +4%
14 Argentina 63.8 59.6 -7%
15 Tanzania 53.2 55.3 +4%
16 Kazakhstan 51.0 52.6 +3%
17 Colombia 49.2 51.8 +5%
18 Mali 49.2 50.1 +2%
19 Burkina Faso 38.6 41.6 +8%
20 Chile 42.5 40.7 -4%
  Others 57.5 58.1 +1%
  Total 3,220.2 3,255.4 +1%

Source: Metals Focus

Table 2.  Top 20 Gold Producing Companies 2015/2016 (Tonnes) (1 tonne= 32150.7 troy ounces)

Rank Country 2015 Output 2016 Output %  Change
1 Barrick Gold 190.3 171.6 -10%
2 Newmont Mining 156.6 162.9 +4%
3 AngloGold Ashanti 122.8 112.8 -8%
4 Goldcorp 107.8 89.4 -17%
5 Kinross Gold 78.9 83.3 +6%
6 Newcrest Mining 77.4 76.7 -1%
7 Gold Fields 67.2 66.7 -1%
8 Polyus Gold 54.8 61.2 +12%
9 Navoi MMC (est) 61.0 61.0
10 Agnico Eagle Mines 52.0 51.7 -1%
11 Sibanye Gold 47.8 47.0 -2%
12 China National Gold 41.5 42.1 +1%
13 Yamana Gold 38.9 39.5 +2%
14 Randgold Resources 37.7 39.0 +3%
15 Shandong Gold 36.0 37.1 +3%
16 Zijin Mining 37.2 36.1 -3%
17 Harmony Gold 33.3 33.2
18 Glencore 30.0 31.9 +7%
19 Freeport McMoran 35.5 30.8 -13%
20 Fresnillo 23.7 29.1 +23%

Source: Metals Focus,

Table 3.  World’s 20 Largest Producing Gold Mines 2016 (tonnes of gold)

Rank Mine Name Country Operator 2015 Output 2016 Output %  Change
1 Muruntau Uzbekistan Uzbek Govt. 61.0 61.0
2 Pueblo Viejo Dominican Rep Barrick 29.7 36.3 +22%
3 Goldstrike USA Barrick 32.8 34.1 +4%
4 Grasberg Indonesia Freeport 38.3 33.0 -14%
5 Cortez USA Barrick 31.1 32.9 +6%
6 Carlin USA Newmont 27.6 29.4 +7%
7 Olimpiada Russia Polyus 23.6 29.3 +24%
8 Lihir PNG Newcrest 25.0 28.1 +12%
9 Batu Hijau Indonesia Amman Mineral 21.0 26.7 +27%
10 Boddington Australia Newmont 24.7 24.9 +1%
11 Cadia Valley Australia Newcrest 19.8 23.5 +19%
12 Super Pit Australia Newmont 19.9 23.3 +18%
13 Loulo-Gounkoto Mali Randgold 19.6 22.0 +12%
14 Kupol Russia Kinross 21.6 20.7 -4%
15 Yanacocha Peru Newmont 28.6 20.4 -29%
16 Kibali DRC Randgold 20.0 18.2 -9%
17 Canadian Malartic Canada Osisko 17.8 18.2 +2%
18 Tarkwa Ghana Gold Fields 18.2 17.7 -3%
19 Kumtor Kyrgyzstan Centerra 16.2 17.1 +6%
20 Sukari Egypt Centamin 13.7 17.1 +26%

Source: Metals Focus, Lawrieongold

To read additional comment on the above, Lawrieongold readers should click on the following links:

 Top 20 Gold Producing Nations See Small Gain in Output in 2016

World Top 20 Gold Miners and Mines





Peak Gold:  Not there yet!

The first paras of a new article posted on the info.sharpspixley.com website

There have been a number of commentators out there telling us that the global gold mining industry has already reached peak output (Peak Gold), but according to Jeff Christian, one of the most astute gold analysts out there, we have not actually reached this yet.  Jeff runs the New York based CPM Group metals analysis consultancy which is due to release its Gold Yearbook 2017 later this week.*

Jeff differentiates between what he calls Peak Gold and Peaking Gold.  The former he describes as the concept that the world is running out of mineable gold deposits, which he refers to as ‘hokum’. There are many well known projects and deposits, he says, and also estimates and geologically based scientifically supported views that there is plenty of gold in mineable deposits yet to be discovered around the world. Some are in remote places that have not been adequately explored, like eastern Russia and much of China, the Tibetan plateau, the inner Amazon. Some are likely in plain sight, but may be uneconomic to mine, or too costly to develop, with current technology and at current metal prices.

He goes on to comment that any failure to find new gold orebodies reflects human missteps, not a lack of geological deposits. When you take current exploration expenditures and (a) deflate them for inflation and (b) adjust them for fluctuations in the quality and quantity of data parsing, you find that the amount of real money being spent on exploration for metals in general and gold in particular actually is a fraction of what it was in the glory days of discoveries in the 1980s and early 1990s. Furthermore, an increasing proportion of ‘exploration’ expenditures is being sucked up in costly computer modeling programs. Computer models are based on past discoveries. Just as  the pharmaceuticals industry is suffering from a dearth of new drug discoveries because it has shifted from laboratory work to computer generated concepts and models, so too the mining exploration industry is consigning itself to only discovering deposits similar to ones discovered in the past. If you only look for those types of deposits, you will not find new ones. So, the failure the find new gold deposits is not a geological paucity of deposits, but rather a function of human behavior.

In terms of ‘Peaking Gold,’ CPM Group sees gold mine production as having actually risen by 2.5 million ounces, or 2.8%, in 2016, and to rise by another 500,000 ounces, or 0.6%, in 2017.  The Group sees production peaking in the 2017- 2019 period, and then declining………..

To read full article click on:

LAWRIE WILLIAMS: Peak Gold: Not there yet! – CPM Group


PDAC Take-Away. Optimism for gold and mining in general

Another excerpt from a posting by me on the Sharps Pixley website.  Although unable to attend this year’s PDAC due to my recent stroke, one is able to get a good impression of the general air of optimism overhanging this year’s Mecca for the juniot mining and exploration sector. Attendance was up and gold, as usual, was leading the way for the junior explorer in particular.

But beware the scammers and the pump-and-dumpers.  Good stories abound, but few will stand up to detailed scrutiny!  To get a heads-up on just a tiny number of those setting out to fleece the unwary investor I suggest you subscribe for free to the Inca Kola News daily blog. While this looks primarily at Latin American mining, it also highlights, with no pulled punches and some sometimes rather forthright language, some of the more unsavoury elements of the Canadian junior mining scene.  Forewarned is forearmed.

Here follow the first few paras of the Sharps Pixley article:

The annual Prospectors and Developers Association of Canada (PDAC) Convention is truly something special.  Although unable to attend this year I have been watching reports on the event with considerable interest as it is very much a bellwether of the mineral exploration sector – and that is itself a great indicator of the strength, or otherwise, of the global mining industry and where it is headed.  This year’s PDAC took place from March 5th-8th inclusive.

I had been attending the PDAC since 1977 and it has always been one of the industry’s highlights.  Back then the whole event took place in the Royal York Hotel and attendance rose to around 7-8,000 at its peak before it transferred to the nearby Toronto Convention Centre, since when it has grown enormously to become what is probably the world’s biggest annual mining event.  Numbers of attendees peaked four years back at around 32,000 when the industry – and gold mining in particular – had been riding high, although had been beginning to turn down.

Gold exploration and mining has always been the principal driver of PDAC sentiment – and attendance.  At the time of the 2013 PDAC Convention the gold price was at just under $1,600 on its way down to a low of around $1,060 by December 2015, and numbers attending the event had fallen accordingly, but this year 22,000 delegates were expected, in line with the 2016 figure, and in the event 24,161 passed through the doors indicating a more optimistic outlook for the industry……………..

To read the full article click here 

Lies, Damn Lies, Fake News, Fake Views and Gold

Excerpt from my latest article on the Sharps Pixley website:

So much of the data we are fed by governments and quasi-governmental outfits like the US Fed are so massaged in favour of trying to maintain a positive sentiment among the great unwashed that they cannot be seen as comparable with supposedly the same stats from the the past.  I am indebted once again to Grant Williams (no relation) who points some of these anomalies out in great detail in his latest Things than make you go hmm… newsletter entitled ‘Fake Views Part II’ bringing the oft-quoted  “There are three kinds of lies: lies, damned lies, and statistics” into mind.  Interestingly the quote is often attributed to Mark Twain but he himself is said to have attributed it to British Prime Minister Benjamin Disraeli who may have been ahead of his time in forecasting statistical manipulation as political spin!

To illustrate his point Grant draws heavily on data and charts provided by yet another member of the Williams clan, John Williams (again no relation to Grant or myself) who runs the fascinating ShadowStats website which calculates government data the way it used to be calculated before the current era of using statistics as political weaponry.  This has distorted the figures used by US government entities, on which many, or most, of their economic decisions are justified, beyond recognition.  Indeed a significant part of the problem is that those making these decisions no longer question government-provided economic data but automatically assume its accuracy.

Take the cost of living for example.  If one goes by Fed figures CPI is growing at an annual rate of around 1.8-2% – a figure few consumers would recognise as applying to them!  If one calculates the Cost of Living index the way it was calculated back in 1980, inflation is actually rising on that basis at the much more recognisable figure of nearer 9% per annum – see the Shadowstats chart below:

To read the full article click here

Three articles on gold, the dollar and the Fed effect on them

While I may not have been publishing much on lawrieongold.com in the past few weeks or so,  I haven’t been being non-productive but have been publishing my own articles elsewhere while using this site for what I deem to be some pertinent independent comment.  Readers may thus like to have their attention drawn to a series of three articles, all published on www.info.sharpspixley.com looking at the effects on the gold price and the U.S. dollar of various statements by US Fed Board members and Heads of Regional Feds, which in concert suggested that rather than wait until June to implement the next Fed rate rise, which had been the consensus, that it was now likely to occur at the March meeting of the FOMC, which is now due in 10 days time.  The effect of these statements has been to drive the dollar index higher and the gold, and other precious metals prices, downwards.

In chronological order the three articles are as follows – click on the article titles to read in full:

1.       Gold price knocked on renewed talk of March Fed rate rise

President Trump’s address to Congress, and perhaps even more so statements by US Fed officials, saw the gold price drop more than $10


2.       Gold and silver holed by the Fed – again

The odds of the US Fed implementing a rate increase as early as the March FOMC meeting in 2 weeks’ time have increased to over 80% with gold and silver prices suffering accordingly.


3.       Gold, the dollar and the Fed. Fortunes made and lost?

The latest series of hawkish forecasts on a probable March interest rate rise could have given anyone with foreknowledge the opportunity to make enormous monetary gains.


Readers may also like to view articles I’ve been publishing on Seeking Alpha.  The latest of these is: Gold And Silver Stock Picks: How Are We Doing So Far. Which looks at the performance of some stock picks I made on December 30th – but be advised the article was written immediately before the various Fed grandee statements knocked the gold price back sharply.  However I still stand by my recommendations.

Chinese gold consumption: Far higher than most analysts and media tell us

Edited version of article which first appeared on news.sharpspixley.com on Feb 15th

Once again we are indebted to Koos Jansen for crunching the numbers on China’s gold imports in 2016.  He has added together direct imports to mainland China from the following nations/areas which publish detailed export statistics – namely Hong Kong (771 tonnes), Switzerland (442 tonnes), Australia (53 tonnes up until September – October to December figures not yet available) and the UK (only 15 tonnes, although most UK gold exports to China now seem to be being routed via Switzerland where the refiners take good delivery gold bars from the UK and re-refine them to the sizes and purities demanded in the East).  Jansen sees little more going directly into mainland China from other sources and allowing for around 20 tonnes going in from Australia for the final quarter of the year comes up with a grand total of Chinese gold imports at approximately 1,300 tonnes. (See: CHINA Net Imported 1,300t Of Gold In 2016)

In addition – the USA will have exported around 4.5 tonnes direct to the Chinese mainland, and Jansen also comments that South Africa doesn’t break down its gold export figures so he may well suspect that some is going in from there too – but the amounts will be relatively small so we can stick to 1,300 tonnes as a nice round figure.

Add to that China’s own gold output, estimated by Jansen at 453 tonnes and there will also have been a scrap gold element to be taken into account.  This suggests that China ‘consumed’ around 2,000 tonnes of gold in 2016, which equates quite closely to the Shanghai Gold Exchange (SGE) gold withdrawals figure for the year of 1,970 tonnes – (See: 2016 SGE gold withdrawals lowest for four years).  This would seem to confirm Jansen’s oft-made assertion that SGE gold withdrawals are equivalent to total Chinese gold demand – a premise largely dismissed (perhaps without any adequate reason) by the major gold consultancies which virtually all put Chinese demand at less than 1,000 tonnes.

In part, this discrepancy relates to what the major consultancies label as ‘demand’.  They tend to ignore what Jansen labels as institutional demand which he puts at at least 778 tonnes plus, depending on the amount of supply from scrap sources.

In terms of Chinese gold flows though, all the above figures ignore Chinese central bank demand.  While this, at least in terms of reported additions to its gold reserves, appears to have slipped in 2016, it still came to a little over 80 tonnes – so overall gold flows for China last year look to have been in excess of the 2,000 tonnes noted above, although not by much.  This equates to 60% plus of the total of global new mined gold in 2016.

One other point from the latest statistics is the continuing reduction of the proportion of gold flows into the Chinese mainland via Hong Kong.  Too often we still see media headlines suggesting Chinese gold demand has risen, or fallen, purely based on the stats coming out of Hong Kong.  Based on the gold import figures alone, Hong Kong now accounts for less than 60% of the gold going into mainland China.  Thus the Hong Kong figures can no longer be considered a proxy for total Chinese gold imports.  As Jansen points out in his article:

Most likely Hong Kong’s position as the largest gold exporter to China will slowly fade in the coming years, as the State Council is stimulating gold freight to go directly to Chinese cities (hoping the Shanghai International Gold Exchange will eventually overtake Hong Kong’s role as the primary gold hub in the region). Consequently, gold exports to China are increasingly bypassing Hong Kong.  In December 2016 we got a preview of what is about to come: Switzerland net exported an astonishing 158 tonnes directly to China, up 418 % from November 2016, up 168 % from December 2015, and 106 tonnes more than Hong Kong did.”

See our own take on the Swiss December figures: China 154, Hong Kong 39.  Swiss Dec gold exports show remarkable gold flows.  We have long been pointing out the decline in importance of exports from Hong Kong to the mainland in the overall Chinese gold import figures.  Perhaps our message will eventually get through to much of the mainstream media – and some ‘expert’ commentators and analysts – who continue to ignore this point and continue with headlines which appear to collate Chinese total gold imports with those coming in from its Special Administrative Region!

Get It, Got It, Gold 2 – The Presentation

Nearly a couple of months ago now we reported on Grant Williams’ December Things that make you go hmm…(TTMYGH)  newsletter entitled Get it, Got it, Good  which in turn was based on Grant’s presentation at last year’s Mines and Money London given in December, shortly after the election of Donald Trump as President of the USA. To read the original article click here.

We would highly commend Grant’s newsletter – it’s one of the few I get which I always read from start to finish as it gives a unique, and hugely valuable analysis of geopolitics, and geo-economics.  The reason I am returning to this is that Grant has now published the full video of his Mines & Money presentation without it being behind his newsletter subscription wall and I would commend all Lawrieongold readers to view it.  To do so click here.  The presentation highlights how Trumponomics differs from Reaganomics, although there are some common angles, and how much U.S. and global geopolitics/economics have changed since President Reagan’s policies set the U.S. economy on its then upwards path.  Don’t necessarily expect the Trump version to do the same is one of the messages.

Obviously I have altered the title here to insert ‘Gold’ instead of the ‘Good’ of Grant’s original – a title based on a verbal exchange between Danny Kaye and Basil Rathbone in the 1955 film – The Court Jester. This is because part of the comment involves the gradual demise of the petrodollar and the likely positive effects on gold of what Grant sees as the possibility for effectively exchanging oil for gold via the Shanghai Gold Exchange and a fully convertible yuan. A number of countries are now attempting to bypass the petrodollar and, at the same time, reduce their proportions of holdings of U.S. Treasuries in their foreign exchange totals as perhaps the world starts reducing its reliance on the greenback in global trade.  Grant sees all this as gold positive in the long term.

As an aside, the other newsletters I tend to read from start to end every issue are Otto Rock’s (pseudonym) often irreverent Inca Kola News daily blog posts digest – to keep abreast of the nefarious goings on within the Canadian junior mining markets, with particular reference to Latin American pump and dump operations and other scams.  Otto often uses language I would hesitate to  use myself – but which almost always makes for extremely interesting, and often amusing,  reading.  If you are interested in the Canadian junior miners sector this should be must reading in helping you sort the wheat from the chaff: Click on http://incakolanews.blogspot.co.uk/ .  The IKN daily digest is free, but Otto also publishes a paid weekly newsletter which offers specific investment advice.

I also read Ed Steer’s daily paid newsletter.s gives a somewhat right wing view on geopolitics and precious metals, but that covers angles often ignored by the mainstream media so is invaluable in highlighting aspects that one might otherwise not have access to without trawling through dozens of websites on a daily basis.  It also carries daily informed commentary on what is going on in the U.S. precious metals futures markets.