Denver Gold Forum coming up ahead

The by invitation only Denver Gold Forum (DGF), held each year in September, has been the prime conference for the world’s top gold and silver miners to present their cases to an audience of their peers, leading specialist precious metal investors as well as generalist institutional investors and hedge funds. Buy- and sell-side analysts from around the world make up the balance of the participants.. It reckons to be the world’s single largest gathering of precious metal equities and showcases seven-eighths of the world’s publicly traded gold and silver companies when measured by production or reserves.

This year’s event will take place in Denver from September 20th-23rd and numbers the CEOs from virtually all of the West’s quoted  top and mid tier primary gold and silver miners and the top royalty companies, among its speakers and participants, as well as a platform of additional keynote specialist speakers covering various aspects of the industry.  In recent years it has also added involvement from top explorers and developers who meet the DGF’s strict participation criteria, many of whom will be presenting at the various parallel sessions, or participating in the evening receptions.

As a networking event it is almost unparalleled and it has been noticeable that at past forums a number of executives from companies which may not meet the DGFs entry parameters will frequent the lobby bar at the conference hotel in hope of catching up with some of those attendees they would like to talk to!

I will be attending the event again this year and it will be good to catch up with old friends and acquaintances.  Any readers of lawrieongold, or of my columns on Sharppixley.com which I have been writing recently, do email me if you are also attending and you’d like to make contact.

To learn more about the Denver Gold Forum and to see the full preliminary programme for this year’s event – and check out the qualification criteria to gain an invitation to attend, go to the Denver Gold Forum’s website by clicking on the highlighted link.

 

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Gold mining’s enormous positive impact on global economy – WGC

A report issued today by the World Gold Council (WGC) demonstrates the massive economic impact of gold mining on the global economy – and with a hugely positive social and economic effect for many otherwise poor host nations which have seen tremendous benefits from the production of the yellow metal.  Overall, the report, looked at large scale commercial operations in 47 countries accounting for around 90% of global gold output.  It showed that gold mining contributed US$171.6 billion to the global economy in 2013 in direct and indirect values.  The WGC’s release on this is set out below with links for those interested to be able to view the full report.

A new report released today from the World Gold Council, produced in association with Maxwell Stamp, a leading international economics consultancy, reveals that the gold mining industry directly contributed around US$83.1 billion to the global economy in 2013. Once the indirect economic impact is taken into account, this figure increases to US$171.6 billion. The social and economic impacts of gold mining report builds on previous research, including studies by the World Gold Council, to provide an understanding of the socio-economic impacts of the commercial gold mining industry at both a global, national and host community level.

The report’s analysis of the impacts of large-scale commercial gold mining in 47 gold producing countries (accounting for over 90% of the world’s gold production) shows that gold mining companies in total contributed over US$171 billion to the global economy in 2013 when the value created by support services and indirect employment is taken into consideration.

Globally, gold mining companies directly employed over one million people in 2013, with over three million more people employed as a result of the industry’s suppliers and support services.

The report shows that gold mining has made good progress in seeking to develop local human capital and skills. In most gold producing countries, over 90% of the industry’s employees are local workers. Although gold mining jobs are not as numerous as jobs in other industries, they are of high value as they consistently pay above-average wages – significantly above-average in less developed countries where each worker typically supports a high number of dependents.

Commenting on the launch of the report, John Mulligan, Head of Member and Investor Relations at the World Gold Council, said:

“This report shows that the total economic impact of gold mining is significant and substantial – at US$171.6 billion, it is greater than the GDP of over 150 different countries and considerably larger than the total value of global overseas aid in recent years. Our findings highlight that commercial gold mining is a major source of income and driver of economic growth, playing an important role in supporting the sustainable socio-economic development of host nations and communities.”

Over 60% of the countries covered in the report are low or lower-middle income with substantial socio-economic development needs. However, the report indicates that growth in the economic contribution of gold mining often coincides with a marked improvement in income status of host nations.

70% of the value that gold mining companies distribute within an economy relates to payments to local suppliers and employees.  Interestingly, the majority of government revenues from gold mining are derived from sources, such as corporate and income tax rather than from money relating to permits and royalties.

The social and economic impacts of gold mining also shows that gold mining’s direct economic contribution to the global economy has increased seven-fold from 2000 to 2013 – greater than the rise in value of gold over the same period.

Andrew Britton, of Maxwell Stamp, who authored the report, commented: “While there has been major progress in recent years in attempting to measure gold mining’s economic impacts, this has often been piecemeal or confined to a specific country. The lack of information has held back constructive debate on how to make the most of the shared value that a responsible gold mining industry can create for host nations and communities. By building on previous research and identifying industry-wide thematic trends, this work has made substantial progress in bridging the information gap. We hope it will help foster productive engagement between gold mining companies and the industry’s wider stakeholders.

The social and economic impacts of gold mining report can be viewed at http://www.gold.org/gold-mining/economic-contribution/social-economic-impact and on iOS and Android apps.

The WGC has also produced a video which can be seen here: http://www.gold.org/research/social-and-economic-impacts-gold-mining-video.

Randgold’s Tongon gold mine on track to meet this year’s target production.

Randgold Resources’ Tongon gold mine in Côte d’Ivoire is on track to achieve its production and cost guidance for 2015 after a year in which its management made significant progress in dealing with the recovery and throughput challenges that had hampered the operation in its early stages, CEO Mark Bristow told a meeting in Abidjan, capital of Cote d’Ivoire.

Although Tongon is smaller than Randgold’s big Kibali gold mine in the DRC and its Loulo-Gounkoto complex in Mali, Tongon is still a major world class gold mine in its own right and its host country’s biggest gold producer.  However it has had to overcome a number of problems since its start-up in 2010 – initially logistical as a result of civil conflict, and then technical, and it has yet to reach its initially planned full gold output potential of around 300,000 ounces a year.  However at long last it does seem to be getting close.

Speaking at the mine’s quarterly update for local media, Bristow noted that the commissioning of its new flotation circuit and the ongoing expansion of the crushing circuit were having the anticipated impact on production and costs, steadily lifting Tongon towards its designed performance level.  The construction of the upgraded flotation circuit is complete and automation and optimisation are underway.  At the same time, Sandvik and Randgold are still jointly working on optimising the crushing circuit upgrade to meet Tongon’s planned production outputs.

Following the recent dry season’s impact on the Ivorian power utility’s power generation capacity, there has been constructive cooperation between the utility and mine to minimise the impact.

The mine is forecasting production of some 260 000 ounces of gold at a total cash cost of $820 per ounce in 2015.  At the current gold price, it should be able to repay its capital this year as scheduled.  In the meantime, continuing exploration has replaced all the reserves consumed by mining in 2014, effectively extending Tongon’s life by another year.

Bristow said that with operational pressure easing, management had been able to advance Tongon’s ambitious social initiatives, designed to develop a sustainable agribusiness as the mine’s economic legacy to the community.  The strategy has two components: an industrial agribusiness to replace the mine after its eventual closure and a community agribusiness based on small farming operations.  Work is underway on the construction of a fish farming project capable of delivering almost 10 tonnes of fish per year, while several women’s market garden projects have already produced their first crops.

In February the Ivorian Prime Minister, Daniel Kablan Duncan, and the Minister of Industry and Mines, Jean-Claude Brou, accompanied by high-ranking officials, visited Tongon, and Bristow said he was heartened by their interest in and support for the sustainability initiatives.

“Ultimately projects like these succeed only when there is a significant engagement by government, at central as well as local level, and when the local community is actively involved,” he said.

To continue building a good working relationship with local businessmen, Tongon hosted an on-site lunch for 35 entrepreneurs from the Korhogo region in March, providing them with an overview of the operation and identifying opportunities for co-operation.

Gold’s global top 10 by country and company

The past year has seen some changes in global gold production rankings, both by country and by company.  Edited, expanded  and updated version of article recently published on Mineweb.com.  To read original click here.

Lawrence Williams

It is interesting to see how the major producers of gold are faring in the grand scheme of things – both nationally and by company, given the continuing lowish gold prices pertaining over the past two to three years. Currently gold is wavering around the $1260 level and while this is perhaps better than its lows of last year, it is much lower than it was a couple of years ago and is now beginning to have an impact on global gold output.

While many assumed that the lower gold prices would lead to an immediate fall in world gold production as miners struggled to remain profitable, it has to be remembered that some major new mines were already under construction having been launched when prices were much higher.  Meanwhile marginal operations have been mining higher grades, at the expense of a reduction in longer term mine life, to maintain profitability.  Higher grades at a maintained mill throughput level means higher production so we have the anomaly that falling gold prices may actually lead to increased output.

But this all takes time to filter through and we are quite probably seeing peak gold being attained this year.  Global production growth has been falling so global gold output only rose by around 2% last year according to the latest analyses, and this year production is expected to remain flat.

While one may sometimes argue with the methodology, and findings, of GFMS’ global gold supply/demand statistics the consultancy’s latest report on gold includes its estimates of the world’s top gold producing nations and companies which are not so controversial and there are some changes in position and outputs which are certainly worth noting.

We last produced a similar listing based on 2012/2013 figures from rival precious metals consultancy, Metals Focus, last May (see: World top 10 gold producers – countries and companies on Mineweb) and while some of the GFMS statistics may vary a little from those of Metals Focus they broadly follow the same pattern and the overall figures are comparable – perhaps not too surprising given that Metals Focus was started by ex GFMS analysts and marketers.

Let’s take the top 10 country-by-country producers first, showing changes in position based on GFMS 2013 figures and 2014 estimates:

Table 1. Top 10 World Gold Producing Countries 2013/2014 (tonnes) 

Rank Country 2013 output 2014e output Change Y/Y
1 China 438.2 465.7 +6%
2 Russia 248.8 272.0 +9%
3 Australia 268.1 269.7 +1%
4 USA 228.2 200.4 -12%
5 Peru 187.7 169.3 -10%
6 South Africa 177.0 164.5 -7%
7 Canada 133.3 153.1 +15%
8 Mexico 119.8 115.7 -3%
9 Indonesia 109.2 109.9 +1%
10 Ghana 107.4 106.1 -1%
World 3049.5 3109.0 2%

Source: GFMS

Notably here, according to the GFMS estimates, China has continued to see increased gold output and remains comfortably the World No. 1. But the No.2 position is now occupied by Russia, which appears to have leapfrogged over Australia to attain this ranking with 9% output growth last year. Former World No. 1 for most of the last century, South Africa, is nowadays only in sixth place – and is evenin danger of being overtaken by Canada this year, which has seen particularly strong growth in the past couple of years while South African output continues to slip. Indeed Canada provided the strongest growth (15%) amongst the major producing nations.

Among the top producing companies, there have been some substantial gold output drops from the biggest miners, mainly due to divestments and closures – see table below.  While this may mean output has fallen for the two top gold miners, Barrick and Newmont, the divested operations are still producing, but for companies further down the food chain.

Table 2.World Top 10 Gold Miners 2013/2014 (tonnes)

Rank Company 2013 output 2014e output Change Y/Y
1 Barrick Gold 222.9 194.4 -13%
2 Newmont 157.5 151.2 -4%
3 AngloGold 127.7 136.9 +7%
4 Goldcorp 82.9 89.3 +8%
5 Kinross 77.7 80.4 +3%
6 Navoi (Uzbek) 70.5 73.0 +4%
7 Newcrest 73.5 72.0 -2%
8 Gold Fields 58.1 62.6 +8%
9 Polyus Gold 51.3 50.8 -1%
10 Sibanye Gold 44.5 50.1 +13%

Source GFMS

As can be seen, Barrick has recorded the biggest fall, while Newmont is in danger of being surpassed by AngloGold Ashanti as world No. 2 if 2014’s percentage increase and decrease figures are replicated again in the current year. Others which showed good production rises are Goldcorp, Gold Fields and the latter’s South African spinoff Sibanye Gold. Indeed if these two latter miners had remained combined they would together have been comfortably in the world No. 4 slot, well ahead of Goldcorp. The only change in ranking here is that GFMS reckons Uzbekistan’s state mining company, Navoi MMC, with a 4% increase in production, mostly from its massive Muruntau operation, has moved above Australia’s Newcrest, which is estimated to have recorded a small fall in output.

With GFMS now reckoning that the pent-up growth in global gold output may well have peaked last year with the various big, and small, new gold projects in the pipeline having mostly now reached full capacity, we could well see some further production downturns from some of the big miners this year, although their financial positions could be improving regardless given the recent concentration on cutting all-in costs – aided in many cases over the past year by the big fall in oil prices and the strength of the U.S. dollar for production from outside the U.S. itself.

Randgold says troubled Tongon gold mine to deliver this year

Randgold Resources’ Tongon gold mine in northern Cote d’Ivoire has been underperforming primarily due to some technical problems, but now, according to the company these problems are behind it and it is now geared to build up to full design capacity this year.  This has involved replacing its crusher circuit and installation of a flotation section which between them should see a boost in mill throughput and an improvement in recovery.  At full capacity Tongon should produce in excess of  260,000 ounces of gold a year – currently it is languishing at around 30,000 ounces or more short of this target.  Even so it has been a profitable, and significant, gold producer and Cote d’Ivoire’s biggest gold mine.  More information should be available with the publication of the Randgold’s Q4 and 2014 results next Monday when company CEO, Mark Bristow, will be presenting these in Cape Town on the sidelines of the big Mining Indaba conference.

Read Randgold’s latest release on Tongon issued today, and set out below

Randgold Resources’ Tongon gold mine is poised to deliver on its designed capabilities in 2015, chief executive Mark Bristow told a media briefing here today.

Bristow said the mine’s management team had spent the past year building a solid foundation for Tongon’s future growth by dealing with some serious technical issues such as the replacement of a faulty crushing circuit and generally improving efficiencies while curbing costs.

“Towards the end of last year the recovery programme was producing signs of improvement in key areas such as throughput and recovery.  By now the beneficial effects of those improvements are real and the full flotation circuit upgrade is on track for completion by the end of the quarter,” he said.

“While ramping up production at Tongon, we’ll also continue working with the Ivorian government in their drive to position the country as a preferred destination for new investment in gold exploration and mining.  Côte d’Ivoire’s new mining code is investor-friendly but it should now be actioned as a matter of urgency.  We’re still waiting for the approval of our new permits that will enable Randgold and Côte d’Ivoire to start reaping the benefits of all the good work that has been done.”

Bristow pointed out that Tongon’s tax holiday ends this year.  At the same time, it is forecast to pay back its capital, which means that the State should start to share in the value created in the form of corporate taxes and dividends, on top of the revenue from royalties and other taxes and duties.

China’s largest gold miner buys into Pretium

Zijin Mining is to take a 9.9% strategic stake in Canada’s Pretium, developer of the exciting high grade Brucejack project.

Author: Lawrence Williams

LONDON (MINEWEB) –

Zijin Mining, one of China’s biggest mining companies (it is the country’s largest gold producer, second largest copper producer, and a significant zinc, tungsten and iron ore producer) is to take a 9.9% ‘strategic’ stake in Canada’s Pretium Resources (TSX: PVG), developer of the ultra high grade Brucejack gold project in British Columbia. Pretium has agreed to issue to Zijin, by way of a private placement, 12,836,826 common shares of the company at a price of Can$6.30/share to raise approximately $80.9 million. Once the transaction is completed – expected in January – Zijin will be entitled to a seat on the Pretium board.

Pretium said, in a statement, that the amount to be raised through the offering would provide a significant portion of the planned equity component of the financing required to bring the Brucejack Project into production. It intends to use the proceeds to fund capital expenditures including the procurement of long-lead items and camp infrastructure.

Pretium’s Brucejack project is perhaps Canada’s most exciting new gold project by virtue of the remarkable high grade gold intersections the company has delineated by drilling on the deposit.  Many of the Pretium drill cores have to be seen to be believed given the amount of visible gold which is evident!  The high grades are within a much lower grade matrix but even so the average resource grades are impressive……………

To read full article on Mineweb click here