Thursday 8th December 2016

Resource Clips


Posts tagged ‘switzerland’

How a Brexit could affect the gold price

July 7th, 2016

The precious metal’s recent run could just be getting started

by SmallCapPower.com | July 7, 2016

Gold was already one of the best-performing asset classes in 2016 before British citizens unexpectedly voted to leave the European Union on June 23. We believe this will turn out to be the most important catalyst for the precious metal since it began its most recent bull run.

How a Brexit could affect the gold price

Despite beginning the New Year below $1,100, gold had failed a few times to hold above the $1,300 level since its upward move began back in January. We feel confident that the Brexit uncertainty will hang over the markets for at least the remainder of 2016, providing a firm support above $1,300.

The most immediate catalyst likely coming gold’s way is U.S. employment data for the month of June, which is expected to be released on July 8. The Labor Department expects 170,000 new jobs to be created during the month.

Given May’s dismal 38,000 employment gain, only a figure well above 200,000 will create any potential headwinds for the precious metal.

This all leads to the next U.S. Federal Reserve meeting that is happening during the final week of July. Minutes from the last Federal Open Market Committee meeting (released on July 6) suggested that the impact of a Brexit would need to be more certain before the Fed would decide to raise interest rates again, all of which is good news for gold bulls.

Also helping gold is negative interest rates on long-term debt in Germany, France, Japan and, most recently, Switzerland, which has seen its 50-year interest rates go negative for the first time.

Could the United States be next? In fact, that country’s 10- and 30-year interest rates on July 6 reached all-time lows of 1.32% and 2.1% respectively. According to data released by Fitch Ratings, a record US$11.7 trillion of global sovereign debt has dipped to sub-zero yield territory.

Continue reading this article on SmallCapPower.com.

The world’s most popular mints: Key facts and comparisons

June 1st, 2016

Story by Jeff Desjardins, Visual Capitalist | Infographic by JM Bullion

In the precious metals industry, trust is paramount. That’s why if you own gold or silver bullion, there is a good chance it comes from one of the world’s few internationally recognized mints.

This infographic from JM Bullion highlights key facts and comparisons about some of the world’s most popular mints, including the United States Mint, the Royal Canadian Mint, the Perth Mint, PAMP Suisse and Sunshine Minting.

The world’s most popular mints: Key facts and comparisons

 

Some quick facts on each of the world’s most popular mints:

The United States Mint was founded in 1792 and now has minting operations in Philadelphia, Denver, West Point and San Francisco. The mint produced more than 17 billion coins for circulation in 2015, the fastest annual pace since 19.4 billion coins were struck in 2001. Legend holds that George Washington donated some of his personal silver to the mint for manufacturing early coinage.

The Royal Canadian Mint was founded in 1908 in Ottawa. It produces over one billion coins per year, with the Silver Maple Leaf as its signature bullion offering. In 2007, the Royal Canadian Mint created the largest coin in the world—a 100-kilogram, 99.999% pure, $1-million gold bullion coin.

The Perth Mint was founded in 1899. It was originally built to refine metal from the gold rushes occurring in Western Australia, while also distributing sovereigns and half-sovereigns for the British Empire. In 1970, the mint’s jurisdiction was moved to the state government of Western Australia. The Australian Kookaburra (1990-), Koala (2007-) and Kangaroo (1990-1993, 2016-) are some of the mint’s most popular products among bullion buyers.

PAMP Suisse, a private mint, was founded in Switzerland in 1977. The mint refines an impressive 450 tonnes of gold annually, and much of the gold used for worldwide jewelry production comes from PAMP. The mint also produces the popular Fortuna bar, which is available in gold, silver and platinum, with sizes ranging from one gram to 100 ounces.

Sunshine Minting is another private mint. Founded in Idaho in 1979, Sunshine mints 70 million ounces of bullion each year, including its version of the popular Silver Buffalo Round. Sunshine Minting is also the primary supplier of one-ounce silver planchets (round metal disks, ready to be struck as coins) to the United States Mint.

Story by Jeff Desjardins, Visual Capitalist | Infographic by JM Bullion

Back on the autobahn

November 2nd, 2015

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

by Greg Klein

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Overseas investors once again get to meet Canadian juniors in person, as prospect generator Zimtu Capital TSXV:ZC and 11 of its holdings visit four European cities from November 5 to 11. Now in the event’s fifth year, company reps will hold conferences in Munich, Geneva, Zurich and Frankfurt to largely institutional audiences, demonstrating the wide-ranging interest in exploration opportunities.

“Essentially it’s a commitment by Zimtu and all the participating companies to keep the European investor informed about what the companies are doing, to meet the management and form a relationship with the guys who are going to be making the decisions, effectively spending their money,” says Zimtu president Dave Hodge.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

The Zimtu bus arrives as crowds enter
Munich’s Edelmetallmesse in 2014.

“Many of the investors who are still interested in the sector had made great money in the past and experienced tremendous upside in some stocks. Certainly the Canadian junior market is very unique globally and provides that opportunity for the European investor to speculate on discovery.”

Describing himself as a “grizzled veteran of the Zimtu bus,” Chris Berry acts as MC, moderator and keynote speaker. The president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal says, “I like to go back and get a sense of what institutional investors in those cities are thinking about, not just about commodity markets but central bank policies and the macro economy.”

His talk will briefly review the perspectives he offered last year then “challenge the audience” with four questions to consider in 2016. “It’s really more of a discussion than a lecture and I hope there’s a lot of pushback and debate. That gets people thinking and hopefully planning for better times next year.”

While the downturn’s all too obvious, several Zimtu holdings have made impressive strides over the last year. Some of the more remarkable stories include the creation of ALX Uranium TSXV:AL after Lakeland Resources and Alpha Exploration won overwhelming shareholder approval to combine their companies. The result is a distinguished team overseeing one of the Athabasca Basin’s largest and most prospective portfolios.

Competing for flagship status are a number of drill-ready projects including Kelic Lake, where a rig’s currently at work. Gibbon’s Creek has a ground gravity survey underway to follow up on last winter’s 2,550-metre program on a property hosting some of the Basin’s highest radon levels. The company’s Carter Lake and Hook Lake properties feature around 15 kilometres of untested corridors on strike with the Patterson Lake South, Arrow and Spitfire discoveries. Other drill-ready projects include Newnham Lake and Lazy Edward Bay, a 60% stake in the Carpenter Lake joint venture and an 80% share of the Gorilla JV.

Well financed for additional campaigns, the ALX team has been poring over property data to further establish priorities.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

Commerce Resources addresses last year’s Munich conference.

Focusing on a rare earths project with relatively simple mineralogy, Commerce Resources TSXV:CCE continues to make progress with drilling, metallurgy and community engagement as its Ashram deposit in northern Quebec moves towards pre-feasibility. Last month the company increased rare earth elements recovery from 71% to 76% at a high grade of 42% total rare earth oxides, while also simplifying the plant’s flowsheet. The most impressive concentrates so far have graded 48.9% TREO at 63% recovery and 45.7% TREO at 71% recovery.

Following high-grade, near surface assays from the winter/spring drill program, Commerce has a summer/fall campaign targeting around 32 holes for 3,000 metres. A new infrastructure model indicates cost-cutting potential. The company’s commitment to social responsibility won an award from l’Association de l’exploration minière du Québec.

In British Columbia, Commerce’s Blue River tantalum-niobium project achieved its preliminary economic assessment in 2011.

Recognizing that the great nickel deposits of Sudbury, Norilsk, Thompson and Raglan occur in clusters, Equitas Resources TSXV:EQT acquired the recently assembled Garland project in Labrador, 30 kilometres from Voisey’s Bay. Then, for the first time, Equitas subjected Garland to modern geophysics. Now a drill program under the supervision of Voisey’s veteran Everett Makela has 12 VTEM anomalies targeted.

With over $3.8 million raised since September, the company continues drilling while awaiting initial assays.

Inspired by China’s allure for the beauty and practical qualities of B.C. jade, Electra Stone TSXV:ELT intends to create a vertically integrated nephrite jade mining, trading and marketing platform. The company began by acquiring properties as well as expertise, and has so far confirmed jade at two of six projects before winter conditions ended exploration.

Eager to make contact with potential buyers, Electra bought and shipped an 18-tonne cargo of jade to Shanghai in September and is now preparing a second shipment. The company also produces chalky geyserite, or aluminum silica, from a Vancouver Island quarry. The product’s U.S. customer collaborated with Electra on a drill program last summer to study the project’s expansion potential.

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May 22nd, 2015

“Lean and mean” is the secret to junior mining equity success: Thibaut Lepouttre Streetwise Reports
Australian government rules out iron ore inquiry NAI 500
Swiss bank UBS forks over $545 million to settle U.S. market manipulation cases Stockhouse
Strict specifications: UK frac sand potential Industrial Minerals
China’s silk road economic project will include gold GoldSeek
Plenty of competitors for Tesla in home energy storage market Equities Canada
Great deposits of the world—Hishikari, Japan Geology for Investors

May 21st, 2015

“Lean and mean” is the secret to junior mining equity success: Thibaut Lepouttre Streetwise Reports
Australian government rules out iron ore inquiry NAI 500
Swiss bank UBS forks over $545 million to settle U.S. market manipulation cases Stockhouse
Strict specifications: UK frac sand potential Industrial Minerals
China’s silk road economic project will include gold GoldSeek
Plenty of competitors for Tesla in home energy storage market Equities Canada
Great deposits of the world—Hishikari, Japan Geology for Investors

May 20th, 2015

Swiss bank UBS forks over $545 million to settle U.S. market manipulation cases Stockhouse
Strict specifications: UK frac sand potential Industrial Minerals
Eric Coffin: Mining companies with resources that are right for today’s market Streetwise Reports
China’s silk road economic project will include gold GoldSeek
Goldman says iron ore’s rally presents “window to go short” NAI 500
Plenty of competitors for Tesla in home energy storage market Equities Canada
Great deposits of the world—Hishikari, Japan Geology for Investors

Blood diamonds prominent as multi-billion-dollar Swiss Leaks scandal hits HSBC

February 9th, 2015

by Greg Klein | February 9, 2015

HSBC’s secret Swiss bank accounts facilitated billions of dollars in money laundering, tax evasion, fraud, arms trafficking and possibly terrorism, a team of investigative journalists reported February 8. Almost 2,000 of the account-holders are associated with the diamond industry.

The probe began in 2008 when a former HSBC employee handed files over to French tax authorities. After Le Monde got ahold of the info the paper turned to the International Consortium of Investigative Journalists, which assembled a team of over 140 reporters from 45 countries to “sift through the data from all angles.” Excerpts from their Swiss Leaks report were released February 8 and 9.

Their revelations have rich and famous—from celebrity athletes to politicians, and from rock stars to royalty—running for their spin doctors. Diamonds were central to several enormous crimes.

Diamonds have a long history of being linked to conflict and violence. The ease with which diamonds can be converted into tools of war, when not sourced responsibly, is astonishing.—Michael Gibb
of Global Witness

The report noted that the HSBC files “document huge sums of money controlled by dealers in diamonds who are known to have operated in war zones and sold gemstones to finance insurgencies that caused untold deaths.”

A co-founder of the Kimberley Process, Ian Smillie, told the ICIJ that “diamonds are a great way to launder money, to hide money, to evade taxes and all the rest.” Referring to wars financed by conflict diamonds, he added, “Half a million died in the Angolan civil war. Tens of thousands died in Sierra Leone, Congo and elsewhere. It was a huge humanitarian crisis that destabilized huge regions.”

One HSBC client, Emmanuel Shallop, got a six-year prison sentence and lost $59 million in diamonds and real estate to Belgian authorities in 2010 after being convicted of crimes related to blood diamonds from Sierra Leone.

“Diamonds have a long history of being linked to conflict and violence,” the report quoted Michael Gibb of the human rights group Global Witness. “The ease with which diamonds can be converted into tools of war, when not sourced responsibly, is astonishing.”

HSBC replied that it has “taken significant steps over the past several years to implement reforms and exit clients who did not meet strict new HSBC standards.” Its Swiss unit has shed about 70% of account-holders, the bank added.

Read more about the ICIJ Swiss Leaks report here and here.

Year in review

December 23rd, 2014

A mining and exploration retrospect for 2014

by Greg Klein

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Another difficult year notwithstanding, the resource sector failed to meet its apocalyptic doom. With a mixed bag of good, bad and quirky news, ResourceClips.com looks at some of the stories that helped characterize 2014.

Mount Polley to the breach

Even British Columbia’s environment minister called it a disaster. The August tailings dam collapse at Imperial Metals’ (TSX:III) Mount Polley copper-gold mine presented Canada’s mining industry with its own Exxon Valdez as a river of effluent, later estimated by the company at 24.4 million cubic metres, poured into the once-pristine Quesnel Lake watershed.

The dam’s original engineer was quick to disassociate itself. The current engineer and Imperial each implied the other might be at fault. There were suggestions that the company and the province should have known something was wrong as far back as 2010.

A mining and exploration retrospect for 2014

B.C. appointed a panel of engineers to investigate. B.C.’s Inspector of Mines began a separate investigation. And B.C.’s Information and Privacy Commissioner launched its own investigation—into the government.

B.C. also ordered third-party inspections of 98 tailings facilities at current and former mines. The Canadian Nuclear Safety Commission requested companies report on their uranium tailings facilities.

Alaskans, meanwhile, questioned whether B.C. had the wherewithal to prevent downstream pollution from potential mines in the province’s northwest. A Vancouver Sun study found that the BC Liberal government cut mine inspections by more than half since coming to power in 2001.

Imperial has so far committed $67.4 million towards the disaster. In late December the company announced the sale of a 93-kilometre transmission line extension to the government-owned BC Hydro for $52 million.

B.C.’s performance as a mining jurisdiction

Mount Polley’s shutdown brings to mind the governing BC Liberals’ frequent reminder that more mines closed than opened when the NDP held power. So how’s the province doing under the current regime? According to a list provided by the Ministry of Mines and Energy, seven mines opened since 2001, when the BC Liberals gained power, while five shut down. One mine closed and re-opened. Another seven mines opened and closed. At least one omission in the last category, however, was Treasure Mountain which opened, closed, re-opened and re-closed.

Of course metal and coal prices play a crucial role. But during that period permitting problems plagued other potential operations, like Taseko Mines’ (TSX:TKO) New Prosperity gold-copper project and Pacific Booker Minerals’ (TSXV:BKM) Morrison copper-gold-molybdenum project. Both were refused environmental permits, arguably on non-environmental grounds—New Prosperity by the feds and Morrison by the province.

On a more positive note, Imperial has its Red Chris copper-gold mine now in development. (Please get it right this time.) Seabridge Gold TSX:SEA won provincial environmental approval in July and federal approval in December for Kerr-Sulphurets-Mitchell (KSM), which the company says hosts “one of the largest undeveloped gold and copper reserves in the world.”

An engineering marvel puts Cigar Lake in operation

Evidently the mining industry calls for optimism and perseverance in abundance. That, along with innovation, is what it took for Cameco Corp TSX:CCO to finally bring its Cigar Lake uranium project into production in March. Encouraging the heroic endeavour is an ore grade 100 times the world average, suggesting that high grade is the mother of invention.

The Saskatchewan mine’s 33-year saga began with a 1981 discovery, then continued with a number of setbacks that stalled construction. Even after the mine’s widely celebrated opening, Cigar Lake shut down from mid-July to early September for remedial freezing. Majority-owner Cameco injects and freezes a brine solution around the rock body to prevent flooding through the Athabasca sandstone. Water jet boring then pummels the ore into a slurry.

But the company’s determination seems at odds with uranium’s price. When a Scotiabank analyst asked why Cameco was bringing new uranium into an oversupplied market, president/CEO Tim Gitzel replied, “We need the pounds. We’ve got sales commitments for those pounds.”

The uranium price tease

A mining and exploration retrospect for 2014

Chart: Ux Consulting

Among the most vociferous prophets of a new uranium order, Paladin Energy TSX:PDN managing director/CEO John Borshoff keeps revising his gotta-happen-soon predictions of rising prices. He’s not the only one, so Borshoff was probably more frustrated than embarrassed when uranium once again proved him wrong.

The recalcitrant commodity seemed to perk up in early August, with a spot price indicator that rose 25% by late October. A nearly 90-degree ascent to $44 by mid-November seemed to justify Borshoff’s outlook. Alas, fickle uranium let down its believers, along with its price.

Borshoff’s boosterism, however, is backed up by others including Cameco’s Gitzel and David Talbot of Dundee Capital Markets, who in November stated, “We have always said, just like in 2006-2007, when [longer-term] contracting begins and the price moves, it will move fast.”

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Nein, non, no—Switzerland votes against central bank gold referendum

November 30th, 2014

by Greg Klein | November 30, 2014

Gold bugs lost decisively in a November 30 referendum as the Swiss turned yellow on metal. Some 77% of voters rejected a proposition that would require the country’s central bank to convert at least 20% of its assets to gold, the Telegraph reported. The proposal would also have required the bank to repatriate its gold, none of which it could ever sell.

Nein, non, no—Switzerland votes against central bank gold referendum

“The people have decided against the initiative,” said a statement by the Save Our Swiss Gold campaign. “This means the Swiss franc is now strongly tied to the euro and ECB policy. It is now up to the [Swiss National Bank] to prove the people right and manage its way.”

The group maintains that the defeat will cause more money-printing and steeper inflation, while the SNB will hold at least 400 billion francs in EU bonds “that could become worthless.” A franc is worth about $1.18.

Voters also rejected two other referenda—a proposal to remove tax benefits for rich foreign residents and another to limit immigration. The latter initiative came from an environmental group.

Read more about the Swiss gold referendum.

Gold goes to a vote

November 28th, 2014

Is the Swiss referendum a battle of monetary theories or competing faiths?

by Greg Klein

A Yes vote in Switzerland’s November 30 gold referendum should accomplish three goals—the country’s overseas bullion would come home, the Swiss National Bank would convert at least 20% of its assets to gold and the bank would be forbidden to sell any of it, ever. That’s all in the name of a stronger currency. The fact that citizens can vote on ideas now considered so radical has supporters delighted and opponents terrified. Not surprisingly, pre-plebiscite debate shows the two sides poles apart in a campaign with potentially international ramifications.

Is the Swiss referendum a battle of monetary theories or competing faiths?

That might explain why the Swiss National Bank made its case in English as well as German, French and Italian. To protect Swiss exports from an excessively strong domestic currency, the SNB buys and sells foreign exchange to keep its franc no higher than €1.20. The proposed changes, the bank argues, would destroy its flexibility to do so.

Gold supporters prefer bullion to the fiat euros the SNB has accumulated. The bank counters that it would lose potential profits from holding interest-bearing foreign bonds. Forced to raise money by issuing interest-paying debt, the SNB says it might have to print more money itself.

In a worst-case scenario, the central bank would be stuck with an increasing supply of “unsellable gold.”

Of course a 20% minimum wouldn’t turn the franc into a gold-backed currency. But there’s considerable creepage potential in the no-sale requirement. Any increase in the SNB’s overall assets would require a proportional increase in gold reserves. That proportion would increase beyond 20% when the overall assets decrease.

This intrinsically useless form of money in the Isle of Yap is in all essential respects equivalent to gold today in the wider world. Another example would be pet rocks, as long as the rock in question is rare and costly to get into its final shape.—Willem Buiter, chief economist
for Citigroup Global Markets

And it would be worthless. So says one especially blistering polemic. “The gold stock can never be used for foreign exchange market interventions and it cannot be used as collateral,” writes Citigroup Global Markets chief economist Willem Buiter. “The gold becomes useless as a store of value of any kind. The gold has no consumption value to the central bank. Its value is therefore zero.”

He’s just warming up. Whether sellable or not, gold is intrinsically useless, he maintains. A fiat commodity vastly inferior to fiat currency, “gold is very close therefore to the stone money of the Isle of Yap.”

Buiter describes Yapese currency as “large doughnut-shaped, carved disks, consisting usually of calcite, that can be up to 4 m (12 ft.) in diameter, although most are much smaller.” A Wikipedia entry agrees, coincidentally in almost exactly the same words.

“This intrinsically useless form of money in the Isle of Yap is in all essential respects equivalent to gold today in the wider world,” Buiter declares. “Another example would be pet rocks, as long as the rock in question is rare and costly to get into its final shape. Another is Bitcoin, a fiat virtual currency.”

He does offer gold bugs some encouragement, however. “Until the risk of serious inflation is removed from the medium-term outlook for the U.S., the UK and other fiat currencies, gold could be a relatively attractive store of value despite the cost of storing it.”

Furthermore, “if gold has positive, albeit wildly fluctuating value, it is because we are in a benign bubble for gold…. The gold bubble is, of course, pretty impressive. Intrinsically useless gold has positive value. It has had positive value for nigh-on 6,000 years. That must make it the longest-lasting bubble in human history.”

Deficit spending is a method for expropriation. Gold stands in the way of this insidious process. It should stand as a protector of property rights. If one understands this, there should be no difficulty understanding the hostility of the financial planners against a gold standard.—Lukas Reimann,
Swiss People’s Party MP

Even so, “that bubble may well be good for another 6,000 years,” Buiter concedes. “Its value may go from $1,200 per fine ounce to $1,500 or $5,000 for all I know. Investing a vast amount of money in something whose value is based on nothing more than a set of self-confirming beliefs will make for an exciting ride. Whether that is enough to impose it as a requirement on one’s central bank is another matter.”

Among those who wouldn’t be surprised by the intensity of Buiter’s remarks is Lukas Reimann. An MP for the Swiss People’s Party that triggered the referendum, he told Switzerland’s Federal Assembly, “Deficit spending is a method for expropriation. Gold stands in the way of this insidious process. It should stand as a protector of property rights. If one understands this, there should be no difficulty understanding the hostility of the financial planners against a gold standard.”

The SNB attributes 1,040 tonnes to Switzerland’s gold reserve. Various commentators estimate that to be somewhere between 7.5% and 8% of total SNB assets. A Yes vote would require the purchase of roughly 1,560 additional tonnes by the five-year deadline, assuming stability in the value of the SNB’s overall assets.

Last year’s global mine production came to 2,982 tonnes, according to Thomson Reuters GFMS. Scrap and implied net disinvestment brought 2013 supply to a total of 4,736 tonnes.

About five million people qualify to vote in a plebiscite that, unlike most of Switzerland’s many referenda, will be watched all over the world. Gold supporters need to win a majority of Switzerland’s 26 cantons, as well as a majority of votes cast.