Member Info for Cowichan

Hi Goldgnome,
I've been watching the ongoing drought in the Murray-Darling basin with much curiosity and concern. It looks to be a precarious situation for farmers and city dwellers alike if the rains won't cooperate. But as to your open question:

WHAT WILL THE MARKET LOOK LIKE WITHOUT THE MANIPULATION? ANY TAKERS?

One word. Up.

Sept 16, 2019
Egyptian investors and economists are expecting that the country’s new mining law will open the way for more investments in the field of mineral exploration and extraction and therefore boost the national economy and state revenues.

“The Ministry of Petroleum’s sector development strategy aims to achieve tangible results in the short term, in addition to achieving a quantum leap in the performance of the mining sector by 2030, including the contribution of the sector to the national income by $7 billion, creating 110,000 new jobs, and attracting investments worth $700 million,” he said.

Fekry Youssef, undersecretary of the Ministry of Oil for Mining Affairs, said Egypt is rich in precious metals that were dealt with randomly before the amendment of the law; the previous approach meant that Egypt did not always make the best use of the country’s treasures buried in the desert in various provinces.

“Now the government believes that the development of mineral wealth is a national goal, and hence began to think about re-modernizing the mineral wealth sector through the development of new strategies for its advancement. This came mainly through the adoption of the new mineral wealth law,” he told Al-Monitor.

The new law, he added, should facilitate matters for investors and businessmen and encourage them to inject their money in the mining sector. “The new law includes 34 articles that are enough to preserve the country’s wealth of minerals and exploit them in a scientific and practical way,” Youssef said.

He added that the new law would help satisfy the country's needs for mineral resources, and would help establish industrial projects based on these available minerals to achieve the optimal economic exploitation of this wealth.

Read more: https://www.al-monitor.com/pulse/originals/2019/09/egypt-law-mining-sector-investments-economy.html#ixzz5ziiyWY5j

For all those irascible souls who chastised Tibbs and others over their assertion that the gold markets might be manipulated...

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Sept 16, 2019
Two current and one former precious metals traders at JPM*rgan Ch*se & Co. were charged with manipulating futures markets in what prosecutors described as a massive, multiyear racketeering conspiracy run out of the bank.

The U.S. Justice Department said Monday that the three men ripped off market participants and even clients as they illegally moved prices for gold, silver, platinum and palladium. One of those indicted is Michael Nowak, 45, who ran JPM*rgan’s global precious metals desk. Nowak was placed on leave last month, a person familiar with the matter has said.

Their actions spanned eight years and involved thousands of unlawful trading sequences, the Justice Department said. The men were indicted on multiple fraud and conspiracy charges, including racketeering.

“These charges should leave no doubt that the Department is committed to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets,” Assistant Attorney General Brian Benczkowski said in a written statement.

https://www.bloomberg.com/news/articles/2019-09-16/precious-metals-traders-charged-with-rigging-futures-contracts

For those of us who ponder whether there is a conspiracy among Centamin's management to conceal lower grades, hide dire technical issues and otherwise bamboozle investors into believing all manner of untruths — I submit the following: It is but human nature to think the worst and attribute malfeasance to an otherwise innocuous event.

Now don't get me wrong. It is obviously in the best interest of management to paint a rosy picture, to maximize their credit and minimize their responsibility but at some point we just have to see the current production situation for what it is — completely normal.

Per ounce costs have increased and that hurts our bottom line but at least we can now see there is a master plan to add high grade ore. Will it be possible to hit 490k by December? Who knows, and does it even matter when you consider the tenement area is likely to produce gold for another 40 years?

And while we're on the subject of setbacks, perceived incompetence and geopolitical risk let's remember it's by no means a phenomenon unique to Centamin or Egypt...

Sept 16, 2019 Mexico
An earlier blockade began on March 27, led by a trucking contractor and some members of the Cedros community who had separate concerns over water supply issues, with Newmont suspending operations on April 29.

The mine came back online in mid-June after the blockade was lifted and government-sponsored dialogue was established.

However on Sunday, Newmont said the dialogue had been suspended and the blockade had resumed.

"The company remains willing to continue good-faith discussions and will be available to resume the dialogue once the other parties recognise their interests are best served by returning to the government-sponsored discussions and not through illegal and unproductive blockades that hurt local communities," Newmont said.

"In order to ensure the safety of people, assets, and the long-term viability of Peñasquito, the company has temporarily suspended operations for as long as the illegal blockade persists."

https://www.mining-journal.com/gold-and-silver-news/news/1371610/newmont-suspends-pe%C3%B1asquito-again

Sept 16, 2019 Greece
Eldorado Gold Corp is open to discussions on potentially paying higher royalties in Greece as it seeks permits needed to restart work at its stalled Skouries development, chief executive officer George Burns said on Monday.

The Canadian miner will also seek a strategic partner to help fund the $680 million remaining development cost for the project, Burns said on the sidelines of the Denver Gold Forum.

Greece’s new conservative government wants to secure higher royalties from its mining development projects and new jobs, Energy Minister Kostis Hatzidakis said on Monday.

https://www.reuters.com/article/us-gold-conference-eldorado-gold/eldorado-open-to-greece-royalty-talks-seeks-partner-at-skouries-idUSKBN1W124N?il=0

September 14 2019 09:37 PM
Executives headed to the Denver Gold Forum a year ago were hit with a startling bit of news as they stepped off their planes: A merger made public that afternoon was set to create the world’s biggest gold company.
Now, a year after Barrick Gold Corp agreed to buy Randgold Resources Ltd, and in the wake of a second huge megamerger, executives are once again travelling to the Denver meeting, which opens today. Only this time, the industry will be watching to see if mid-tier miners concerned about losing out to larger rivals are ready to jump into the M&A game....

article continues/ link

https://www.gulf-times.com/story/641638/Gold-s-mix-of-low-reserves-and-high-prices-seen-dr

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Will there be any big deals announced this year?

Here's some thoughts for my fellow investors as we mourn the latest assault on our share price.

1) Up until now there has been no hurry for management to explore/drill/develop any of the multiple high grade outcrops in and around Sukari hill. Ask yourself why? Might I suggest that the economics of the old (current, soon to be old) mining agreement meant it was better to leave it in the ground?!
2) All that has changed now that the new mining law has passed. Now Centamin is 3D geo mapping the entire tenement and begun resource drilling VShear with others to follow. Now begins change. Now begins fresh investment. Now begins expansion. Now begins a new agreement that will benefit Egypt and shareholders like never before. The folly of looking myopically at the forecast for Q3 is to miss the bigger picture.
3) For those with trouble imagining my last point just take a look at the latest presentation. Find the outline of the current final open pit design. Then trace a new final pit design with your finger which includes everything below the Cleo decline and Amun Deeps. Call it stage 8, 9, 10, 11, 12 and so on. The open pit resource at Sukari is surely double current estimates. Or maybe it is triple. Then factor in the potential of VShear, Quartz Ridge, Kurdemon etc. etc.

And that is only the Egyptian perspective of why I see myself holding this investment for a very long time. Have a good weekend all!

Good point Rebess, if they've got something disappointing to announce (ie Q3 less than Q2) why risk a double hit? Now it seems funny I posted about even the best miner's missing the mark yesterday - I must have jinxed things!

But the presentation wasn't all doom and gloom, there is potential upside in the short term too...
Upside drivers
- Improvement in underground grade
- Ongoing open pit optimisation
- Commence Cleopatra stoping **
- Other: marginal dump leach contribution

They mention the commencement of Cleo stoping which one would imagine adding at least 150k pa or 35k per quarter - the question is when will it actually begin!

My Thoughts: For those who follow Rob McEwen's career this is yet another blow. Just goes to show that even the best managers, planners and companies will face unexpected setbacks and outright failure. Could it also be an indication of lax oversight, incompetence or laziness? Sure, but certainly not always.
Best practice is to take sufficient time to develop properties and temper expectations with a good dose of Murphy's Law...

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Production at McEwen Mining’s (NYSE: MUX) (TSX: MUX) new Gold Bar and Black Fox mines has been a “big disappointment”, chairman and chief owner Rob McEwen stated in an exploration and operations update Tuesday.

As a result, the company has lowered its 2019 guidance for Black Fox to between 36,000 and 40,000 oz, and Gold Bar to between 30,000 and 33,000 oz. Overall, the company’s gold production guidance has been reduced to between 131,000 oz and 138,000 oz, while the guidance for silver remains unchanged.

“Unanticipated natural and operational issues coupled with start-up delays at Gold Bar have pushed some of its production from 2019 into 2020,” McEwen explained. “At Black Fox, production has been adversely impacted by slower-than-planned underground development.”

“However, site management has been making steady progress towards resolving these production issues,” he added.

https://www.mining.com/mcewen-mining-cuts-guidance-as-production-at-new-mines-disappoints/

That's all!

ChasPB - do you have the link for those who would like to read the update too? thx!

Interview with Aton Resources CEO Mr. Mark Campbell re: Egypt changes to mining law Sept 5, 2019

https://www.youtube.com/watch?v=wJL_1Cx753U&feature=youtu.be

And I think Rebess is correct — Tibbs has done so much in terms of advice, research and advocacy on behalf of all Centamin shareholders . I know this has been a very long term investment for some of us (me included) and I don't know if I would have persevered without the camaraderie of this board and our golden flip flop drum major. Have a good weekend all
( ?° ?? ?°)

My Thoughts: a key detail in the new mining legislation is the ability of the EMRA to negotiate different terms for each concession - presumably based on the development costs and perceived profitability, etc
Also, there is suddenly a marked increase in the Egyptian gov't focus on the potential of mining to equal and overtake oil/gas revenue, provide a boatload of well paid jobs and put Egypt on the mining investment map globally - which all bodes well for us!
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Thursday 05 September 2019
A large number of investors and international companies are awaiting the issuance of the executive regulation of the new mineral wealth law, which was ratified by President Abdel Fattah El Sisi last month, with the aim of exposing large investments in the field of mining and gold exploration in Egypt, after the new law granted them new facilities and privileges to encourage them to invest The government aims to exceed 600 million dollars to create more than 100,000 jobs.

The law gives the Egyptian General Authority for Mineral Resources the right to negotiate with the licensees regarding the application of rental values ??and royalties on the license of research and exploitation, up to their fair value.

Major General Tadros Kaldas, a member of the House Energy Committee, said that more than 90% of the land that contains mineral wealth is not exploited at all, although if invested well will be pumped to the public treasury billions of dollars more than what is achieved by gas and oil, there is land World renowned for its minerals, most notably the Red Sea, Delta and the Golden Triangle.

Kaldas called for granting incentives and privileges to businessmen investing in the mining sector, to encourage them to pump money into this vital sector, and attract the largest amount of qualified international companies to pump foreign currency through it, calling for the establishment of a separate ministry of mining,

https://www.elwatannews.com/news/details/4326856

I think it all comes down to the gov't taking a smaller piece of the pie.

A 50/50 profit share was too much to attract anyone but Centamin.

We'll see what the combined total of taxes & royalties & fees adds up to but with all the time and professional input the EMRA received the end result should be much more competitive.

Bottom Line: I'll be surprised if Centamin isn't the first company to sign a new exploration agreement (it's probably awaiting director approval !! )

My comments: Sawiris makes some very positive statements, likely encouraging the powers that be to present a royalty structure on the low end of the range to compete with the West Africa mining boom.

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Last Updated: Monday 2 Muharram 1441 - September 02 2019 KSA 15:49 - GMT 12:49

Sawiris is specifically keeping his eye on the royalty fees and customs and tax rates that will be laid out in the regulations. Under the new act, companies will have to pay a minimum royalty of 5% of annual production, with the cap set at 20%. The Egyptian Mineral Resources Authority (EMRA) is also reportedly planning to abolish the bidding system for gold exploration licenses next year and allow investors to apply for a license covering a specific area or up to six years.

All praise for the new legislation: Sawiris lauded the new act’s decision to scrap the production sharing agreement system, which he says held back investors in the gold mining sector. He also said that the amendments are a “bold” step from the government to reform the industry, and could put Egypt’s mining industry in a position to be as big a source of income for the country as its oil and gas industry.

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If you can understand Arabic the audio interview is here
https://www.alarabiya.net/ar/aswaq/economy/2019/09/02/%D9%87%D9%84-%D9%8A%D9%8F%D8%B3%D8%AA%D8%AE%D8%B1%D8%AC-%D8%A7%D9%84%D8%B0%D9%87%D8%A8-%D9%85%D9%86-%D9%85%D8%B5%D8%B1-%D8%A8%D9%83%D9%85%D9%8A%D8%A7%D8%AA-%D8%B9%D8%A7%D9%84%D9%85%D9%8A%D8%A9%D8%9F-%D8%B3%D8%A7%D9%88%D9%8A%D8%B1%D8%B3-%D9%8A%D8%AC%D9%8A%D8%A8

Al Arabiya TV (watch, runtime: 3:44). The details of the regulations have the potential to spur or discourage investments depending on how friendly they are to investors, particularly as companies have several other potential gold mining destinations around the world they could opt for if Egypt’s regulations prove to be discouraging, Sawiris says.

Hi Rebess,
I agree with the others that commented (ie it can't be worse than before & the majors will probably play wait and see!)
Only other point to make is there now seems to be little standing in the way of progress so theoretically development can move along quickly. And with the price of gold - look out!
All the best!

Egyptian Mineral Resources General Authority to end bidding system for gold exploration licenses and instead allow investors to apply for a license covering a specific area for up to six years, a source told the local press.

The exploration and production phases will be separated under the new system, meaning that investors will need to have a development plan agreed with the ministry and approved by parliament should they make a commercial discovery.
Investors will not need to sign an agreement with the government, and the Oil Ministry will issue licenses without the need for legislation.

Exploration licenses will be granted for an initial two-year period, renewable for another two two-year terms subject to evaluation. Investors are currently allowed to explore a concession for up to 30 years without making commercial discoveries. The ministry will grant investors tax breaks and customs exemptions if they make discoveries, and will revoke licenses if they fail to find anything during the license period.

Background: President Abdel Fattah El Sisi ratified the Mineral Resources Act two weeks ago, which introduces additional incentives for companies to invest in the mining sector.

https://menafn.com/1098949257/Egypt-EMRA-to-replace-biing-system-with-6year-gold-exploration-license-Source

In China, almost all exports of gold are banned as part of the country’s strict, longstanding controls on capital movements. That, market analysts say, has spurred demand among well-to-do Chinese who want to send money out of the country to find ways to smuggle it.

An estimated 400 to 600 tonnes of gold are snuck every year across the border from mainland China to Hong Kong in car boots and delivery vans, most of it in kilobars, said Cameron Alexander, head of precious metals research at consultants GFMS Refinitiv, which conducts detailed studies of global gold flows.

J.P. Morgan supplies gold from major refiners for many of the world’s biggest banks, jewelers and investors, and the discovery of the forged bars in its vaults triggered a full review of the gold it held, market sources said. One said this sweep unearthed around 50 fraudulently-branded bars. Another said it found several hundred. J.P. Morgan did not comment.

People in the industry familiar with the matter said the number of forged bars, and their high quality, meant their production must be well organized. An analysis of the bars’ movements suggested they had been made in Asia, probably China, they said. But the gold in them could have been melted and re-melted after being mined anywhere.

J.P. Morgan responded to its discovery by deciding to stop buying any gold in Asia that had not come freshly made from a small clutch of refineries it trusted, five people familiar with the decision said. J.P. Morgan declined to comment.

https://www.egypttoday.com/Article/3/74267/Exclusive-Fake-branded-bars-slip-dirty-gold-into-world-markets

My Thoughts: I remember when some of us were concerned about the Egyptian news media willing to stir up controversy regarding Centamin in the court of public opinion — looks like extortion is still alive and well in Egypt.

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EGYPT POLITICS + ECONOMICS
Egypt blocks two news websites after Huawei complains of attempted extortion
News websites Al Akhbariya and Al Sabah News have been blocked by the Supreme Council for Media Regulation following a complaint from Huawei, Al Masry Al Youm reports. Huawei accused the editor-in-chief Marwa Abu Zaher of extorting the company by threatening to publish false news unless they paid money. The council has claimed that the allegations have been substantiated, something that Abu Zaher has denied.

https://www.almasryalyoum.com/news/details/1421837

My comments: So we've been waiting for this a looong time and it looks like Sawiris will in fact jump into Egypt with both feet running...

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CAIRO, Aug 26,2019 (Reuters) - Egyptian billionaire Naguib Sawiris said on Monday he intended to invest in gold and copper mining in Egypt but was waiting to see the details of a new mining law designed to attract more investment.

The law has been approved but final details are yet to be published in the official gazette.

“We’re looking at investing in mining in Egypt because we invest in mining around the world. They’re changing the mining law here and we hope to be investors here too,” Sawiris told Reuters.

“We’re waiting for the details of the law. They issue a law and then the devil is in the details. Once this is done, we intend to look for gold and copper.”

https://af.reuters.com/article/egyptNews/idAFL5N25M4LY