Kerr Anderson c/o iii16 Feb 2011 10:20
February 15, 2011
Gold Companies Predominated At Our 76th Minesite Forum, But There Was A Smattering Of Zinc, Iron Ore, And Tungsten Too
By Alastair Ford
Gold ticked up to US$1,375 an ounce on the morning of 15th February, a movement that coincided nicely with the appearance of several junior gold miners at our 76th Minesite Forum.
The thinking on the market in recent days had been that renewed confidence in the global recovery might well balance out any fear of a renewed eruption in the Middle East.
But reports of a flare up in Iran, even as the army in Egypt moves to restore order to the streets of Cairo, has temporarily at least, tipped the balance in favour of those seeking a safe haven.
That plays directly into the hands of the gold bulls, and is no doubt music to the ears of companies like our presenters Ormonde, Yellowhead, Griffin, Condor, Galantas and Northland, all of which offer exposure to gold somewhere in their portfolios.
Alright, Northland’s gold credit at the Hannukainen iron ore project in Finland is only material in a distant sort of a way at the moment, but the gold credit there will at least bring down the production costs per tonne of iron ore from around US$50 to around US$30.
Sooner or later, someone’s going to start banging the drum about that in a big way, although most of the early focus will be on the company’s flagship project, the Kaunisvaara iron ore development, across the border in Sweden.
Here, the company is only a couple of years away from production, and is hoping to hit output of five million tonnes per year by2014.
And so far so good, if the words of chairman Anders Hvide are anything to go by.
The first eight years of production from Kaunisvaara has already been sold via off-take agreements, and arrangements are now well advanced for a US$400 million debt facility which will go towards financing the construction.
Operating costs at Kaunisvaara, where there’s no gold credit, will be higher than at Hannukainen, at around US$53.80 per tonne over the 19 year mine life, but with the current iron ore price at more than US$50 per tonne higher than that, there’s plenty of room for manoeuvre.
What’s more, the Kaunisvaara ore will probably be of a premium quality, and fetch a higher price.
No wonder there was plenty of interest in Northland over lunch afterwards.
But Northland wasn’t the only company on peoples’ lips over sandwiches and mini quiches. Kerr Anderson of Ormonde Mining was another man much in demand.
His presentation of the Ormonde story had kicked off proceedings in lively fashion earlier in the day.
He told how Ormonde’s Barruecopardo tungsten project is gradually progressing towards a production decision, and in the context of a rising tungsten price.
The plan is to build a mine that will eventually account for eight per cent of non-Chinese global mine tungsten supply, for the relativ
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