Gold price plunge afflicts Glass Earth

Small goldmining and exploration company Glass Earth has been hit by a dramatic drop in the price of gold and lower-than-expected productivity and grade at its loss-making Otago alluvial mine, near Alexandra.

In what it called a “highly challenging” March quarter, Glass Earth made a loss of $820,000, compared with a loss of $1.2 million in the same period last year.

Glass Earth has alluvial gold operations in Otago in an area between Alexandra and the Macraes Flat goldmine, owned by OceanaGold Corporation.

Glass Earth is also exploring gold prospects in both the South Island and North Island, looking for large gold systems in the Hauraki region like the active Martha Hill goldmine.

Glass Earth chief executive Simon Henderson said yesterday: “The uncertainties around the price of gold remain a major concern.”

The company forecast “modest” profits in the next quarter and positive cash generation based on a price of US$1400 an ounce, which he said was “sustainable”.

At the start of the year, the price of gold was US$1680 an ounce and is now about US$1390, down almost 17 per cent, after 12 years of annual gains.

Glass Earth shares last traded at 5.5 cents, down from 16c at the start of the year and a peak above 70c in 2007.

Mining revenues in the three months were almost $1.4m, compared with just $167,000 last year. But revenues in the March quarter were outweighed by mining costs of $1.6m.

The company said management had devoted a considerable amount of time to setting up “placer” (alluvial) mining, but profits had been disappointing.

The alluvial mine sustained a cash loss of $246,000 for the quarter, but cash losses were expected to be smaller in the June quarter.

In the quarter, the company recovered 830 ounces of gold, which was 20 per cent under budget and the main reason for the cash loss.

Instead of working at two sites during the day only, the company will now work at one site 24 hours a day, seven days a week, from the end of this month to cut leased equipment costs and improve efficiencies.


PH 2012 gold output sinks over 50%

GOLD MINE. Gold production nosedives in 2012. Newsbreak file photo GOLD MINE. Gold production nosedives in 2012. Newsbreak file photo

Philippine gold production i 2012 slid over 50% while copper rose marginally, the government’s Mines and Geosciences Bureau (MGB) said.

The MGB said gold production in the country, one of the most highly mineralized in Asia, dropped to 15,762 kilograms from 31,120 kgms in 2011.

The bureau blamed the fall in gold on a slump from small miners and traders selling to the country’s Central Bank after the government tightened the collection of taxes.

“The Bureau of Internal Revenue strictly imposed the collection of the 2% excise tax and 5% creditable withholding tax from small-scale gold producers/traders,” an MGB statement said.

Obliquely, the MGB also pointed to the executive order signed by President Benigno Aquino III for the sour, depressed mood in the mining industry which was not lifted until the government removed the moratorium on new mining applications.

The MGB quoted industry analysts as saying the order “set a new investment climate for mining in the country, posing a big challenge to the industry in the short- to medium-term.”

The bureau said another factor for lower gold output would include the accident in the country’s biggest gold miner Philex Mining Corp, which had to shut when a tailings pond spilled, and negative growth in miners Apex Mining Company Inc. and Philsaga Mining Corp.

Copper production for 2012 rose a modest 2.52% to 65,444 metric tons, from 63,835 tons. Nickel and chromite also posted gains in 2012, but not enough to cushion the impact of falling gold output.

Mining has become a controversial industry in the Philippines, with activists, the Catholic Church and several local officials trying to block the opening of some mines and challenging the constitutionality of the law in the country’s Supreme Court.

Aquino’s government has been criticized for its indecisive stance on the issue, seeking to curry favor with the anti-mining groups and mining companies/investors at the same time.


Incredibly Important Developments In Gold & Silver Markets

Today King World News is reporting on incredibly important developments taking place in the gold and silver markets.  Acclaimed commodity trader Dan Norcini spoke with KWN about the amazing action in both of these key markets and provided four tremendous charts.  Below is what Norcini had to say in his interview.

Norcini has been stunningly accurate in his predictions of the movement in the gold and silver markets.  Now the acclaimed trader discusses these incredibly important developments in both of these markets:  “Gold appears to have successfully retested its former spike low down in that important support level between $1320 – $1340 and held. What is important from a technical analysis perspective is that the volume completely dried up as price worked its way back into that critical support zone noted on the 4 hour price chart.


Bears were hoping to be able to recruit a wave of fresh converts to their side and give them the firepower to pressure the market down through this level, thereby touching off another wave of sell stops and setting up a fresh new leg lower in price. Obviously, there appears to have not been a large contingent of traders interested in selling gold aggressively down at these levels right now. That gave some would-be longs the excuse they were looking for to re-enter the market plus stirred some mild, but not aggressive short covering on the part of the bears. However that all changed rather abruptly!

As you can see on the following two minute chart below, after the initial fireworks that occurred in early Asian trading last evening, volume died off in the Comex gold futures and continued to remain lackluster until around 11:00 AM CDT. Out of nowhere, the market surged $32 higher in the matter of a mere six minutes on huge volume. Notice that volume leaped to over 10,000 contracts trading hands in one 2 minute interval. That is short covering and some serious short covering at that.

There does not appear to have been any particular catalyst for the move higher other than the fact that the US Dollar was weaker. However, I noticed a couple of things that merit some mention. The first of these is the performance of crude oil. It was lower early in the session but as the stock market continued its one way trip into the outer regions of space, crude reversed those losses and moved higher. At one point is was up over 1% on the day reaching a peak of $97.11 before drifting a bit lower.

Also, the bond market, which was also higher early in the session, lost those gains and began moving lower with interest rates moving up correspondingly. I am very hesitant to say this, but maybe, just maybe, we are watching some incipient signs of a shift towards inflation on the part of some larger traders. Honorable mention must go to copper which also refuses to break down. Strength in copper is generally beneficial towards silver….