Sunday 20th September 2020

Resource Clips

Week in review

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Switzerland, ranking 95th for population and 19th for GDP, placed sixth for gold reserves (1,040.1 tonnes), an amazing feat even if it is the world’s private banker, the article said.

Although Switzerland was selling the stuff from 2003 to 2008, “China added some 454 tonnes of gold between 2003 and 2009.” It now ranks number 5, just slightly above the alpine repository with 1,054.1 tonnes. Although China has the world’s largest population and second-largest GDP, “whenever the yuan truly floats, China will have to have more hard assets and more transparent economic readings to support it.”

Second-place Germany (3,395.5 tonnes) has the world’s 16th-largest population but fourth-largest GDP. The country “is supposed to be a gold seller under the Central Bank Gold Agreement,” 24/7 Wall St. explained, “but it is likely to hold what it can as a buffer in case the euro breaks up or in case it needs to raise quick bailout cash for the PIIGS.”

First place goes to the U.S., with a $15-trillion GDP and reserves of 8,133.5 tonnes.

As for India, it “became an aggressive buyer in 2009, when it spent almost $7 billion to buy 200 tonnes of gold, which the IMF sold to raise capital.” With 557.7 tonnes the country holds 10th place, corresponding with its 10th-place, $1.82-trillion GDP.

Oddly enough, Brazil didn’t nearly make the list despite its sixth-place GDP of $2.5 trillion. With just 33.6 tonnes, it “ranks a surprising 52nd in the world among gold holders,” reported 24/7 Wall St. Friday’s Bloomberg dispatch, however, noted that Brazil is now adding to its reserves for the first time since December 2008.

But do central banks and the International Monetary Fund really have the gold they claim to have? In a Thursday GoldSeek post Lars Schall quotes financial analyst and investment manager Marshall Auerback, who said they might “in a strict accounting sense.” But he believes they’re leasing the gold. “From a flow standpoint, it’s irrelevant whether the gold is sold or lent, as it still appears as supply in the market.”

He added, “Gold that has been lent out and melted down to become, say, part of some Indian bride’s dowry will not be coming back into the market. Ultimately, I think, the central banks will ratify this in an accounting sense by reclassifying the leased gold as sold, so from a stock standpoint, that will validate [the Gold Anti-Trust Action Committee’s] argument that there is far less gold being held by the central banks than is commonly believed.”

Schall tried posing some GATA questions to key institutions. As his correspondence shows, answers weren’t forthcoming.

No more Hana Banana in Botswana

Under a definitive agreement announced Wednesday evening, Cupric Canyon Capital LP will acquire 100% of Hana Mining Ltd TSXV:HMG in an all-cash deal worth $0.82 a share or approximately $67 million. Cupric already holds an 18.6% interest in the company. After closing Wednesday at $0.455, Hana shares shot up to a Thursday high of $0.82, then settled at $0.79 until Friday’s close.

Subject to shareholder and regulatory approval, the agreement will deprive mining writers of a significant source of repetitive rhyming. Hana’s Ghanzi Copper-Silver Project in northwestern Botswana has provided a steady stream of news, much of it from the Banana Zone.

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