Archive for July, 2016

IS NEWMONT TO BE THE WORLDS LARGEST GOLD PRODUCER

Friday, July 29th, 2016

kalgoorlie-super-pit image www.www-globalcommodities (2)

The world’s number one and two gold producers both released second quarter results and production guidance the past week.

For Barrick Gold, 2015 year was the last period of 6m-plus ounces of production which was already substantially down from its peak of 7.7 million ounces in 2010 and 2011.

While its financials came in slightly below expectations the Toronto-based company stuck to its annual output forecast of between 5 million and 5.5 million ounces.

Barrick has been shedding assets at a clip in an effort to tackle its heavy debt load and to achieve its 2016 target will have to find another $1 billion before the end of the year.

Earlier this week there were reports the miner is close to selling its 64% stake in Tanzania’s Acacia Mining (LON:ACA) for as much as $1.9 billion. And buried in Barrick’s Q2 release was an announcement that it’s looking for a buyer for half of Australia’s Kalgoorlie Consolidated Gold Mines.

This deal will make Newmont the world's top gold minerNewmont Mining owns the other half and Barrick handed over operational control of the the iconic mine called the Super Pit to Denver-based Newmont a year ago. The mine some 600km west of Perth has produced 50 million ounces over 30 years and fully developed the cut will be 3.6 kilometers long, 1.6 kilometers wide and up to 650 meters deep.

Newmont would be the natural buyer and has expressed interest in the mine in the past which could fetch as much as $1 billion. The company sports one of the stronger balance sheets in the sector having embarked on a debt reduction program earlier than its rivals and recently selling its Indonesian Batu Hijau copper-gold operation for $1.3 billion.

Unlike many of its rivals Newmont has been building its portfolio and last year acquired the Cripple Creek & Victor gold mine in Colorado. Newmont also has five key projects that are in execution stage including the Turf Vent project in Nevada and Merian mine in South America expected to start production late in 2016.

Newmont said in its results its Northwest Exodus project in Nevada is approved and will start production this quarter. In addition unapproved projects “represent upside of between 200,000 and 300,000 ounces of gold production beginning in 2018.”

While far from certainties should Barrick’s deals go ahead, Newmont picks up Kalgoorlie, the companies’ production guidance pans out and all things being equal (which they never are in gold mining) next year Denver and not Toronto will be the home of the world’s number one gold mining company.

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Henry Sapiecha

Dominion Diamond to go ahead with Ekati mine expansion in Canada

Thursday, July 7th, 2016

dominion-diamond-to-go-ahead-with-ekati-mine-expansion image www.www-globalcommodities.com

Canada’s Dominion Diamond (TSX, NYSE:DDC) has decided to proceed with a key expansion for its Northwest Territories-based Ekati mine, which would help keep the iconic operation in production until 2033.

The decision of moving forward with the development of the Jay pipe, located near Ekati’s existing Misery pit, was based on positive feasibility study results, the company said in a statement.

Dominion also expects to begin construction of a fourth pipe at its 40%-owned Diavik mine, Canada’s largest diamond mine and one of the oldest.The project, which includes building a dyke, draining part of a lake and digging an open pit, will be funded from existing cash and internal cash flow, Dominion said. Without the expansion, Ekati would have run out of its existing reserves by 2020.

In a separate statement, the company said it would focus on developing its core assets in the Lac de Gras region of the Northwest Territories and on buying back shares. As part of the plan, Dominion also expects to begin construction of a fourth pipe at its Diavik mine, Canada’s largest diamond mine and one of the oldest, which it co-owns with Rio Tinto (ASX, LON:RIO).

Additionally, the firm announced that chief financial officer Ron Cameron would step down on July 15 and vice president Group Controller Cara Allaway would take over as interim CFO.

Dominion is also selling its office building in downtown Toronto. That transaction, said the diamond miner, should be completed in the third quarter of fiscal year 2017.

The company is still assessing damage after a fire halted processing operations at Ekati on June. It is believed that more than 300 employees and contract workers are at risk of being laid off as a result.

www.worldwidediamonds.info

www.gem-creations.com

www.www-gems.com

DDD

 

 

 

 

Henry Sapiecha

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