Eldorado Gold reports in-line 2017 gold production

Shares in Eldorado Gold (TSX:ELD)(NYSE:EGO) were slightly up on Tuesday after the company announced full-year production that came in line with production guidance, but suspended its semi-annual dividend payment “pending the results of the technical reports and potential subsequent capital requirements.”

In a press release, the Vancouver-based miner revealed that, including pre-commercial production from the Olympias project in Greece, its gold output was of 285,919 ounces in 2017, while the revised guidance range was of 280,000 to 310,000 ounces. All-in sustaining costs are expected to come in at ~$900/oz., also in-line with the revised guidance.

Source: Google Finance.

The company reported that it also produced 7,061 ounces of gold in the fourth quarter from a bulk sample at its newly acquired Lamaque project in Quebec. Pre-feasibility and construction works are already taking place at the eastern-Canada mine, in parallel with the refurbishment of the associated Sigma mill, Eldorado stated.

One of the reasons why 2017’s output did not surpass the guidance was that the firm’s flagship gold mine in Turkey, Kisladag, produced 171,358 ounces when its guidance was between 170,000-180,000 ounces of gold at cash costs of $500-550 per ounce. The flat result was caused by lower than expected recovery rates and slower leaching from sections of the leach pad. Average ore grade placed on the leach pad during the year was 1.03 grams per tonne gold and the average cash operating cost was $500 per ounce.

In Greece, despite the fact that the Olympias Phase II project achieved commercial production by the end of last year, the company had to deal with a legal arbitration started in September by the Greek Ministry of Finance and the Ministry of the Environment and Energy. Both government agencies allege that the technical study for the Madem Lakkos Metallurgical Plant for treating concentrates from the Olympias and Skouries mines was deficient and therefore in violation of the Transfer Contract and the environmental terms of the project.

Also in Greece, Eldorado saw a slowdown in its Skouries project due continued permitting delays. In response, the company announced its intention to move it into care and maintenance and expects to fully ramp it down in Q1 2018.

“2017 was a year that was overshadowed by political headwinds in Greece and technical challenges at Kisladag,” said the company’s President and CEO, George Burns, in the media brief. Burns added that 2018, although starting up as a busy year, is expected to generate positive results given the new or updated technical studies underway at the Lamaque, Skouries and Kisladag sites. “Our overarching goal for 2018 and beyond is to move Eldorado back into a growth phase and create value for all our stakeholders,” he added.

Since metallurgical testwork on the Kisladag orebody is still underway, Eldorado decided to provide partial operating and financial guidance for 2018, with the promise of notifying full guidance at the end of the first quarter. “Full year gold production of 160,000-190,000 ounces is expected from Olympias Phase II, Efemcukuru, and pre-commercial production at …read more

Barrick just makes 2017 production guidance

Shares in Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) retreated slightly in after hours trade on Tuesday after the company announced full year production that came in at the lower end of production guidance.

Barrick, the world’s top producer of gold, is up 5% since the start of the year in line with a stronger gold price which set fresh 4-month highs around $1,340 an ounce on Tuesday. The Toronto-based company is now worth $18.4 billion in New York.

According to a statement preliminary full year gold production for 2017 came in 5.32 million ounces at the bottom end of its 5.3-5.5 million ounces guidance; a number twice adjusted downwards from its outlook at the start of the year of a range of 5.6–5.9 million ounces.

Barrick sold 50% of the Argentina mine to China’s Shandong Gold for $960 million mid-year

Only Barrick’s flagship Nevada operations managed to increase output last year adding 157koz. Lower output compared to 2016, when the company produced 5.52 million ounces of gold, was also the result of a stake sale in its Veladero mine in Argentina. Barrick sold 50% of the mine to China’s Shandong Gold for $960 million mid-year.

A steep decline at its 64%-owned Acacia unit in Tanzania, which has been at loggerheads with the East African nation’s government over tax payments, and lower output at its Turquoise Ridge mine also depressed full year results.

Preliminary fourth quarter gold production was 1.34 million ounces, and preliminary fourth quarter gold sales were 1.37 million ounces. Barrick said preliminary full year gold sales were 5.30 million ounces. Barrick achieved an average market price for gold in the fourth quarter of $1,275 per ounce.

Preliminary full year copper production was 413 million pounds, which was slightly below the company’s adjusted guidance of 420-440 million pounds for 2017, but in line with Barrick’s original full year guidance of 400-450 million pounds.

Preliminary full year copper sales were 405 million pounds. Preliminary copper production in the fourth quarter was 99 million pounds, and preliminary copper sales in the fourth quarter were 107 million pounds. The average market price for copper in the fourth quarter was $3.09 per pound.

Barrick said fourth quarter and full year financial results will be released February 14.

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Rio’s Oyu Tolgoi mine in Mongolia hit with $155 million tax bill

Shares in Rio Tinto-controlled Turquoise Hill (TSX, NYSE:TRQ) were hit Tuesday after the miner revealed its massive Oyu Tolgoi copper and gold mine in Mongolia has been handed a $155 million tax bill.

The Vancouver-based company said the amount relates to an audit on taxes imposed and paid by the mine operator between 2013 and 2015.

Amount relates to an audit on taxes imposed and paid by the mine operator, Oyu Tolgoi LLC, between 2013 and 2015, said Turquoise Hill.

“Turquoise Hill is of the firm view that Oyu Tolgoi LLC has paid all taxes and charges required under the Investment Agreement (and reconfirmed in the Underground Mine Development and Financing Plan) and Mongolian law,” Turquoise said in the statement.

Shares in the miner were almost 5% down on Tuesday in Toronto at 11:03AM, and had lost 2.7% of their value in the New York exchange by 11:20AM.

Situated in the southern Gobi desert of Mongolia, about 550 km south of the capital, Ulaanbaatar and 80 k north of the border with China, Oyu Tolgoi is jointly owned by the government of Mongolia (34%) and Turquoise Hill (66%), of which Rio Tinto owns 51%.

The $6 billion Oyu Tolgoi first-stage open pit mine began producing in 2013, when the project logged a $90 million full-year loss. A planned underground expansion was put on hold shortly after, as the Mongolian government became concerned that cost overruns would cut into profits.

The project was resumed in 2016 and, currently, the mine is expected to be world’s third-largest copper operation at peak production in 2025, with output of over 550,000 tonnes per year.

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These four factors will boost gold demand in 2018 — WGC

These four factors will boost gold demand in 2018 — WGC

Gold demand is set to jump this year thanks to government policies targeted at transparency and economic growth, the World Gold Council said Tuesday in its annual outlook report.

In particular, the industry body believes that gold will maintain its relevance as a strategic asset in 2018 thanks to four key trends — synchronised global economic growth, shrinking central bank balance sheets, rising interest rates, insubstantial asset prices and market transparency.

“Our research shows that continued economic growth underpins gold demand,” the WGC said. “As incomes rise, demand for gold jewellery and gold-containing technology, such as smart phones and tablets rises.”

Income growth also spurs savings, helping increase demand for gold bars and coins.

Monetary policy tightening in the countries including the US and Britain pushed up short-term bond yields across the board last year and, logically, the group expects that trend to continue favouring gold.

“In our view, the potential headwinds to gold may not be as strong as some think.  Gold can help investors manage financial market risks,” it said

The council also expects China’s economy to continue expanding, but the nature of growth is changing from investment-driven growth to a consumption-led model.

“This could affect the economic growth rate, but even if the Chinese economy grows at a slower rate than in the past, we see a more balanced model, aided by further global integration through its One Belt One Road initiative supporting a sustainable growth trajectory,” it added.

Demonetization and tax implementation that shocked the market last year are now expected to boost gold consumption in India, where mandatory jewellery hallmarking will put an end to under-carating, the WGC said.

Finally, the report also spells out four reasons why investors should hold on to gold: “It has been a source of return for investors’ portfolios; its correlation to major asset classes has been low in both expansionary and recessionary periods; it is a mainstream asset that is as liquid as other financial securities; and it has historically improved portfolio risk-adjusted returns,” it concludes.

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European metals technology companies want to lead anti-corruption fight

Following the 2016 launching of the Collective Action Initiative for the Metals Technology Industry, the program announced today that it has added Techint Group’s Tenova S.p.A. as a new member.

Tenova is a mechanical engineering company for the steel and non-ferrous metals processing industry headquartered in Castellanza, Italy. The other three members of the initiative, Danieli & C Officine Meccaniche SpA, Primetals Technologies Limited and SMS GmbH, are based in Buttrio, London, and Düsseldorf respectively.

According to a press release distributed on Monday, the MTI Collective Action Initiative is facilitated by Swiss-based non-profit anti-corruption International Centre for Collective Action, which operates within the Basel Institute on Governance. The goal of the initiative is to provide a forum for the members to develop anti-corruption compliance best practices and ensure fair competition in the metals technology industry in the countries in which they operate.

In the media statement, Tenova’s CEO Andrea Lovato said that the objectives of the anti-corruption group fall within his firm’s code of ethics. “All companies in the metals industry face similar corruption risks around the world. We immediately saw the benefits of joining forces with other industry leaders in harmonising our anti-corruption management approach,” he said.

In reaction, Gemma Aiolfi, Head of Compliance, Corporate Governance, and Collective Action at the Swiss institute said that the addition of new members encourages others to continuously improve their anti-corruption compliance systems.

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Following detention, journalist publishes controversial story about Venezuela’s Mining Arc

Dutch journalist Bram Ebus has just published an entire website dedicated to Venezuela’s Mining Arc, a mega project that is at the centre of a national controversy given the devastation to both the natural environment and local communities that it is causing, as well as the innumerable allegations of rampant corruption surrounding it.

Ebus spent three months investigating the many different aspects of the Mining Arc, which is located in the southeastern Bolívar state. His presence in the area caused nervousness among military officials operating there and he was detained for 24 hours, for no apparent reason, back in September. Those officials have been accused by opposition MPs of smuggling minerals to different islands in the Caribbean.

Despite the incident with the Venezuelan National Guard, the reporter went ahead with his work and forged a partnership with the Pulitzer Centre, a digital platform called InfoAmazonia and local newspaper Correo del Caroní.

In the lengthy piece released today, he reveals how the 111,843 Sq.Km-concession area destined for mining gold, diamond, iron, copper, bauxite, coltan, and other resources has become a dangerous cocktail of violence, armed gangs, deforestation, foreign companies, guerrilla groups, corruption, military officials, malaria, three-digit inflation and many of the other concerning situations taking place in the cash-strapped country.

According to Ebus, Venezuela’s failed petro-economy, disastrous governmental policies, and nonexistent job market are driving people en masse and despite the risks towards remote mining locations. He says many of them belong to different Indigenous tribes and their goal is to eke out a hardscrabble living and feed their hungry families. However –the journalist writes– “violence against, and conflicts with, indigenous communities can be expected to escalate as Venezuelan armed gangs and military organizations, and Colombian guerrilla groups continue to expand their presence in the region, and flex their muscles in the mining areas.”

Photo from Virginia Behm’s report.

Partner Correo del Caroní states that the Mining Arc came to institutionalize the ecologic and social devastation already taking place in southern Venezuela. “In this region, mercury and blood get mixed together. As are violence, anarchy, and impunity.”

However, President Nicolás Maduro says that the Arc would help curb long-standing illegal mining practices taking place in the southeastern Guayana region, whose reserves have been estimated by the government in 7,000 tonnes of gold. But different sources interviewed by Ebus for his story, such as former military officials, lawyers, and environmental and human rights activists, say not much is known about mining in a country that has built its entire economy on its nationalized oil industry. Their conclusion is that the Mining Arc is Maduro’s last-ditch attempt to inject the broken economy with any sort of capital at any cost.

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Despite 42-day strike, Gran Colombia surpasses 2017 production guidance

Canada’s Gran Colombia Gold (TSX:GCM) announced today that its total gold production for 2017 was 173,821 ounces, up 16% over 2016 and surpassing its guidance for the current year which was estimated between 150,000 and 160,000 ounces of gold.

Only in the fourth quarter of 2017, the company produced 51,699 ounces of gold, up 26% over the fourth quarter of the previous year.

Despite the fact that it underwent a 42-day strike during the summer, Gran Colombia’s Segovia operations continued to be the key catalyst for the firm’s growth with 148,659 ounces of gold produced, up 18% over 2016 and above guidance for the current year.

The Segovia mine complex is located in the historic gold district of Antioquia, a northern area where both artisanal and industrial mining have been a way of life for more than 150 years. Generations of families in the communities of Segovia and Remedios have worked in Gran Colombia’s mines and currently over 2,500 informal miners operate within the company’s title.

Starting in mid-July 2017,  many of them performed rallies and blockades against both the Toronto-based company and Bill 169 which, according to the Colombian government, is aimed at curbing illegal extractive activities. Artisanal miners, however, claimed the new law would forbid them from working independently.

Protests in the towns of Segovia and Remedios became violent at one point. Photo from Noticias Caracol.

Once the protest action came to an end in September, Gran Colombia started negotiating specific operating contracts with each of the mining collectives that have interests in its property. And the decision paid off.

According to the firm, contract mining production totalled 98,411 ounces in 2017, which is a 2% rise compared to 2016. Under this new scheme, Gran Colombia retains between 10% and 60% of the spot price for each ounce of gold produced.

In the same region, the Providencia operation produced 50,248 ounces, up 67% over 2016, the miner said. Further south, the Marmato project located in the Caldas department, which is the heart of the Middle Cauca gold district, produced 25,162 ounces of gold in 2017, up 7% over 2016.

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Acacia Mining's Q4 output down on Tanzania export ban

JOHANNESBURG, Jan 15 (Reuters) – Acacia Mining said on Monday said fourth-quarter production fell by a third on the previous year due to a ban on exports of gold and copper concentrates in Tanzania.

The London-listed miner said production in the three months to December fell 30 percent to 148,477 ounces compared with a year ago and 22 percent from the previous quarter. This brought 2017 gold to 767,883 ounces, ahead of its expectations of 750,000 ounces.

The company shut its flagship Bulyanhulu mine in September as the miner bled cash due to the government export ban that was introduced in March.

Tanzania believes it is not getting enough revenue from its minerals and is encouraging the construction of a local smelter.

“We are also continuing to support efforts towards achieving a negotiated resolution with the Tanzanian government,” said interim chief executive Peter Geleta.

The cash balance as at December stood at $81 million after a $15 million outflow in the fourth quarter.

The all-in sustaining cost of producing an ounce of gold, an industry benchmark, fell to 779 per ounce compared with 952 per ounce a year ago.

(Reporting by Zandi Shabalala, editing by Louise Heavens)

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Tahoe cutting 250 jobs at Escobal mine in Guatemala on reopening delays

Canada’s Tahoe Resources (TSX:THO)(NYSE:TAHO) is laying off 250 employees, or roughly a quarter of the staff from its flagship Escobal silver mine, in Guatemala, as a legal battle to having the mining license for the site reinstated drags on.

The Vancouver-based company had to halt operations at the mine last July after the country’s Supreme Court provisionally ordered so following an appeal from environment and human rights organization CALAS. The group alleged the Ministry of Energy and Mines had not consulted with the Xinca indigenous people before awarding the license to Tahoe’s local unit, Minera San Rafael.

Tahoe says the Guatemalan Constitutional Court heard appeals of the Supreme Court’s decision to reinstate the Escobal mining license on Oct. 25, but has not issued a verdict of its own despite being required to do so within five days of the public hearing.

If the Escobal licence is reinstated in the next several weeks, the need for future job cuts could be eliminated, Tahoe said.

Originally, Tahoe was prepared to face a three-month mine suspension, period during which 5.1 million ounces of silver production were expected to be deferred, and about $10 million lost. But after six months of waiting, the company had to take cost-cutting measures and warned it may have to lay off even more people down the road.

Escobal, the world’s third largest silver mine, began commercial production in 2014 and drove Tahoe’s record cash flow and strong first quarter 2017 results. Prior to the licence suspension, it employed 1,030 people, 97% of whom are Guatemalan, with at least half of them from the Santa Rosa region. 

The underground operation, located in southeast Guatemala, about 3 km from San Rafael Las Flores, produced a record 21.2 million ounces of silver in concentrate in 2016.

But it has also been a source of polemic. Last summer, protesters blocked access to the mine, delaying shipments and supplies. Tahoe is also facing action in Canada’s court system by a group of Guatemalan for alleged violence at a protest outside Escobal in 2013.

The mining licences of the Tahoe’s Escobal unit as well as the smaller Juan Bosco have both been suspended since July 5.

If the court decides to reinstate the licence in the next few weeks, the need for additional job cuts could be eliminated, the company said.

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McEwen 2017 output fails to impress, but gold prices boost shares

Shares in Canadian precious metals producer McEwen Mining (TSX, NYSE:MUX) were up Monday as gold prices touched the highest level since early September during the European trading session, and the company reported 2017 and Q4 results.

The Toronto-based company said it produced 109,947 gold ounces and 3,178,742 silver ounces, last year, roughly in line with full-year guidance of 109,500 ounces of gold and 3,337,000 silver ounces.

The firm’s El Gallo mine in Mexico achieved production of 19,893 gold equivalent ounces in Q4, successfully recuperating lost production due to equipment failure in July.

McEwen Mining aims to make it to the Standard & Poor’s 500 Index, which groups the 500 largest companies that list either in the NYSE or NASDAQ.

Canada’s Black Fox had a good three months following the transition to MUX ownership. The newly acquired properties near Timmins, Ontario, produced 14,279 gold equivalent ounces.

McEwen’s San José Mine, in Argentina, had one of the best performances last year compared to the company’s other operations. It produced was 49,233 gold ounces or 6% more than in 2016, though it yielded 3,159,352 silver ounces, down 4% from the previous year.

Rob McEwen, who built Goldcorp into a top gold producer before stepping down as CEO of the Vancouver company in 2005, told MINING.com in 2017 his goal was to take McEwen Mining to the Standard & Poor’s 500 Index, which groups the 500 largest companies that list either in the NYSE or NASDAQ.

He noted he was giving himself two-to-three years to make that happen through a combination of organic growth in production as well as mergers and acquisitions.

The company has been moving in the right direction. In April, it acquired junior exploration company Lexam VG, which gave McEwen access to mineral properties in advanced exploration stage in the heart of Timmins Gold Camp, northern Ontario. And in October, it completed the acquisition of Black Fox.

Shares in the miner were up 1.68% to Cdn$ 3.03 at 9:32AM ET in Toronto, while they had jumped by 2.38% in New York, trading at $2.38 by 9:50AM ET.

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New indicated resource points to expansion at New Century Zinc Mine

The re-start of a mothballed zinc mine in Australia is turning out to have a strong upside for both the mining company and its investors.

New Century Resources (ASX:NCZ) announced the completion of resource definition drilling at the South Block portion of the Century Zine Mine.

The mine was the third largest zinc mine in the world prior to its closure in 2016. New Century acquired its interest in 2017 and on November 28 completed a feasibility study into a restart of the mine and recommissioning of the existing processing plant. The company raised $52.9 million in the fall for the re-start, through a private placement.

In a news release Monday, NCZ said it drilled two diamond holes through the central part of the South Block deposit, to get representative samples to check historical drilling data. The samples were used to validate the Indicated Mineral Resource estimate, and provide samples for metallurgical test work and recoveries.

Highlights of the results:

New Century defines a new Indicated Mineral Resource (JORC 2012) at South Block
6.1Mt at 6.8% zinc (Zn) + lead (Pb) (5.3% Zn, 1.5% Pb, 43 grams per tonne (g/t) silver (Ag)); containing 322,000t zinc, 90,000 tonnes lead and 8.5Moz silver.
Preliminary metallurgical testwork demonstrates recoveries of up to 82% zinc, 85% lead and 83% silver through the existing Century Processing Plant;
Total Indicated & Inferred Mineral Resources (excluding tailings Ore Reserve) now: 9.3Mt at 10.8% Zn+Pb (6.1% Zn, 4.7% Pb, 66 g/t Ag); containing 568,000 tonnes zinc, 433,000 tonnes lead and 19.9Moz silver.
New Century’s total contained Mineral Resources complement its existing Proved Ore Reserve of 77.3Mt at 3.1% ZnEq, containing 2.3Mt zinc and 29.7Moz silver
Expansion Feasibility Study to assess potential for insitu resources to increase Century mine life and increase zinc & lead metal production

The company said it will now initiate an Expansion Feasibility Study to assess the incorporation of these insitu resources into upcoming operations of the Century Zinc Mine. It says the study has the potential to increase the previously announced (tailings only) 6.3 year mine life at 264,000 tonnes per annum full scale zinc metal production. The study will begin in the second quarter and is expected to be finished by year-end. Mining of the tailings at New Century Mine is on track to start in the third quarter.

In October New Century, then a 70% owner of the open-pit mine, took over the remaining 30% through the purchase of privately-owned Century Bull. The mine is 25 kilometres northwest of Mount Isa in the Lower Gulf of Carpentaria.

During its 16 years of operations, starting in 1999, Century processed an average 475,000 tonnes per annum zinc concentrate and 50,000 tpa lead concentrate. The product was transferred in slurry form via a 304-km underground pipeline to Century’s port facility at Karumba for shipping to smelters in Australia, Europe and Asia. In 2016 the mine closed due to depleted reserves.

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China imported a record amount of iron ore in 2017

Hunger for high-quality iron ore from Australia and Brazil pushed Chinese imports of the steelmaking ingredient to a record high in 2017.

While shipments were down 11% in December, the full-year totals rose 5% to 1.075 billion tonnes, exceeding a billion tonnes for the second year, according to Reuters trade data.

“Big miners have expanded their production and shipments while China’s crackdown on illegal furnaces that use scrap for production in the first half spurred demand for seaborne iron ore”: CRU analyst Wang Di

“Big miners have expanded their production and shipments while China’s crackdown on illegal furnaces that use scrap for production in the first half spurred demand for seaborne iron ore. Appetite for imported iron ore from Chinese steel mills remains strong,” Hellenic Shipping News quoted an analyst with CRU in Beijing, Saturday.

The need for foreign iron ore is explained by China’s aggressive campaign to clamp down on polluting domestic steel mills; higher-grade ore limits emissions and boosts productivity. China’s position as the largest consumer of seaborne iron ore has moved prices considerably. Global prices jumped 46% last year while Chinese iron ore prices were up 16%.

While the China Metallurgical Industry Planning and Research Institute said it sees iron ore demand and steel output continuing to increase this year, Australia, one of the country’s top importers, said Monday it expects prices to fall to $51.50 a tonne in 2018, a 20% drop from last year. This is due to increased world supply and less Chinese demand.

On Friday the prediction appeared to ring true, with the benchmark price for 62% fines falling 1.3% to $78.05 a tonne – the biggest decline since December 27. The weakness was due to slowing demand for steel product, according to Business Insider Australia.

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