sumisu
14 years ago
You've heard of peak oil. How about peak gold?
Solid gold in the shape of Japan's Mount Fuji
Output hit a record in 2001 and has since been in decline
Martin Mittelstaedt
From Tuesday's Globe and Mail
Published on Tuesday, Apr. 13, 2010 12:00AM EDT
Last updated on Tuesday, Apr. 13, 2010 7:24AM EDT
http://www.theglobeandmail.com/report-on-business/youve-heard-of-peak-oil-how-about-the-impact-of-peak-gold/article1532444/
The idea of peak oil has helped light a fire under the price of petroleum, but now, another peak theory has emerged, this time involving gold.
Many precious metals analysts and gold miners are taking a cue from the claims that global oil production will exhibit a peak, and then begin an inexorable decline accompanied by sharply higher prices. They're starting to say the same concept applies equally well to bullion and may lead to outsized investment returns from buying the yellow metal.
Believers in peak gold say that mining has a number of uncanny similarities to oil extraction.
Just like the slow output declines and dwindling reserves observed at aging oil fields, many of the best gold deposits are exhibiting the same sort of geriatric tendencies, with their highest grades extracted long ago.
Another resemblance is that in both industries, the pace of new elephant-sized discoveries has decreased, despite rapidly expanded exploration budgets and the spur of sharply higher prices, which in gold's case have risen about 350 per cent since the metal's bull run began in March, 2001, when prices were under $260 (U.S.) an ounce.
While the jury is still out on whether oil production has reached its ultimate high point, world gold output reached its record level in 2001, and has generally fallen since then.
The peak gold debate
"There are a lot of people that subscribe to [peak gold]," comments Jason Goulden, researcher at Metals Economics Group, a Halifax-based firm that tracks trends for the mining industry, but doesn't take a formal position on the debate over whether gold output will enter a long period of decline.
Others aren't so reticent about saying that peak oil has a close cousin in peak gold. "I think it's similar to oil," says Ronald-Peter Stöferle, international equities analyst at Erste Group Bank, an Austrian-based bank.
"Peak gold is only one part of my really positive scenario" for the metal, Mr. Stöferle notes, adding that he believes gold could ultimately double from current price levels, to $2,300 an ounce, the inflation-adjusted high it attained way back during the inflationary days of early 1980.
Besides dwindling output, Mr. Stöferle is basing his bullish call on the traditional view among some investors that the yellow metal is a refuge in times of financial uncertainty over debt and paper currencies.
Some of the same people who've pioneered and popularized peak oil have also recently turned their sights on the precious metal, giving the idea further credence.
Jean Laherrère, an influential petroleum engineer who presciently predicted the end of cheap oil in the late 1990s, last year posted a 66-page report on the Oil Drum, a peak oil website, discussing whether global gold output will follow the same scenario being outlined for oil. He speculated gold reached its maximum output back in 2001. Mr. Laherrère could not be reached for comment.
A copycat move?
The notion that oil supplies would eventually peak and then fall was first advanced by U.S. geophysicist M. King Hubbert, who accurately predicted in the late 1950s that U.S. oil production would max out around 1970, and then go into permanent decline. The prediction was based on models that show the production at individual oil fields always traces a bell-shaped curve, with rapidly increasing output for a time, followed by a plateau, and then a gradual, permanent decline as reserves are exhausted.
Because oil is consumed and can never be recovered once burned, it's a scarier prospect than having dwindling gold output. Almost all the gold ever mined is around in bars, coins and wedding rings, and could be recycled, if need be, so the world will never really run out of the yellow metal.
The argument for peak gold has some peak oil advocates viewing it as a copycat move, a self serving justification for hopes of higher prices.
"I'm sure that you'll find that many in the resource industry will claim that they are now on the back side of their own Hubbert curve," says Jeff Rubin, former chief economist of CIBC World Markets, who has written a book about the end of the cheap oil era.
Sharp fall in output
According to the peak oil theory, as long as big new fields are being continually discovered, the date when maximum output occurs will be postponed.
In the gold market, the trend in recent discoveries has been disappointing. Metals Economics tracks new large gold deposits of more than two million ounces, and in recent years, the pace has been meagre.
Of the 62 major discoveries made from 1997 to 2008, almost half were found in the first three years - from 1997 to 1999.
"There used to be discoveries of four or five a year. Now, there are maybe one, two max a year," says John Ing, a mining analyst at Maison Placements Canada Inc. who is another believer in peak gold.
Those contending peak gold has already arrived also point to the sharp fall in output among many of the major producing countries. South Africa, long the top global producer, peaked back around 1970, and has been falling ever since. In more recent years, production has generally been declining in Canada, the U.S., Australia and Russia.
Some of the slack has been taken up by China, the new top producer, but there is skepticism the country can keep growing production.
Mr. Ing says many gold deposits there have poor reserves and are being rapidly depleted. "Their No. 1 ranking is very, very tenuous."
"The world as we know it does not need gold," he says. "The global economy could run perfectly well without gold if we decided to go to a total fiat currency. But the fact is that the world economy does not run without oil."
****
THE GROWTH APPEAL OF JUNIORS]
One investment implication of peak gold is that it makes big producers unable to replace mined out reserves relatively less attractive than promising juniors sitting on newly discovered ore bodies. It also makes companies with new deposits takeover targets.
Investors "are shying away from the big caps and the mid caps now because of the lack of growth," mining analyst John Ing says. Typical of the trend away from big producers, he notes, was the sale last month by NovaGold Resources Inc. of $175-million in new stock to two savvy hedge funds, Soros Fund Management and Paulson & Co. The Soros Fund is run by billionaire investor George Soros,dubbed the man who broke the Bank of England in 1992 through a massive sale of British pounds, while John Paulson made a killing off the collapse in the U.S. housing market.
Novagold's major attraction is its stake in Alaska's Donlin Creek, one of the world's largest undeveloped gold deposits.
Mr. Ing says investors can pick up gold reserves in the ground through junior companies at the equivalent of $100 to $200 an ounce, a far cheaper way to play the trend to higher prices than buying bullion around its recent retail price of $1,150 an ounce.
If your view of the future is driven by concern about inflation, then Novagold is a good hedge, writes Lou Schizas
****
A less golden future
World gold production peaked in 2001, as a result of declining output in a number of major producing countries. The trend has caused some analysts to speculate that gold output is in a long-term decline, similar to the theory of peak oil that has been applied to falling petroleum output.
Total gold production in 2001 was 2,600 tonnes
, , , , , Big Four*
* South Africa, United States, Australia, Canada
2008 mine production
Total: 2,260 tonnes
China /12.2%
U.S. / 9.9%
S. Africa / 9.8%
Australia / 9.6%
Peru / 7.4%
Russia 7.0%
Canada / 4.2%
Indonesia / 3.8%
Uzbekistan / 3.6%
Ghana 3.4 %
Other / 29%
CARRIE COCKBURN/THE GLOBE AND MAIL 66 SOURCES: GFMS; U.S. GEOLOGICAL SURVEY
sumisu
15 years ago
Barrick shuts hedge book as world gold supply runs out
Global gold production is in terminal decline despite record prices and Herculean efforts by mining companies to discover fresh sources of ore in remote spots, according to the world's top producer Barrick Gold.
By Ambrose Evans-Pritchard, International Business Editor
Published: 7:20PM GMT 11 Nov 2009
http://www.telegraph.co.uk/finance/newsbysector/industry/mining/6546579/Barrick-shuts-hedge-book-as-world-gold-supply-runs-out.html
Liquid gold: Gold is poured from the induction kiln Photo: JULIAN SIMMONDS
Aaron Regent, president of the Canadian gold giant, said that global output has been falling by roughly 1m ounces a year since the start of the decade. Total mine supply has dropped by 10pc as ore quality erodes, implying that the roaring bull market of the last eight years may have further to run.
"There is a strong case to be made that we are already at 'peak gold'," he told The Daily Telegraph at the RBC's annual gold conference in London.
Gold: how high can the price go? "Production peaked around 2000 and it has been in decline ever since, and we forecast that decline to continue. It is increasingly difficult to find ore," he said.
Ore grades have fallen from around 12 grams per tonne in 1950 to nearer 3 grams in the US, Canada, and Australia. South Africa's output has halved since peaking in 1970.
The supply crunch has helped push gold to an all-time high, reaching $1,118 an ounce at one stage yesterday. The key driver over recent days has been the move by India's central bank to soak up half of the gold being sold by the International Monetary Fund. It is the latest sign that the rising powers of Asia and the commodity bloc are growing wary of Western paper money and debt.
China has quietly doubled holdings to 1,054 tonnes and is thought to be adding gradually on price dips, creating a market floor. Gold remains a tiny fraction of its $2.3 trillion in foreign reserves.
Gold exchange-traded funds (ETFs) – dubbed the "People's Central Bank" – have accumulated 1,778 tonnes, making them the fifth biggest holder after the US, Germany, France, and Italy.
Ross Norman, director of theBullionDesk.com, said exploration budgets had tripled since the start of the decade with stubbornly disappointing results so far.
Output fell a further 14pc in South Africa last year as companies were forced to dig ever deeper - at greater cost - to replace depleted reserves, not helped by "social uplift" rules and power cuts. Harmony Gold said yesterday that it may close two more mines over coming months due to poor ore grades.
Mr Norman said the "false mine of central banks" had been the only new source of gold supply this decade as they auction off reserves, but they are switching sides to become net buyers.
Barrick is moving fast to wind down the remaining 3m ounces of its infamous hedge book over the next twelve months, an implicit bet on rising gold prices over time.
Mr Regent said the company had waited too long to ditch the policy, which has made the company enemy number one among 'gold bug' enthusiasts. The hedges oblige Barrick to deliver part of its gold into futures contracts set long ago at levels far below today's spot prices.
The strategy worked well in the falling market of the 1990s, but has cost the company dear in lost profits this decade. "Hindsight is always 20/20," said Mr Regent, who was appointed from the outside earlier this year.
Barrick bit the bullet in the third quarter, taking a $5.7bn charge against earnings on hedge contracts. Liberation is at last in sight. In 2001 the hedge book topped 20m ounces.
Mr Regent said the hedge policy has weighed badly on the share price and irked investors, becoming a bone of contention at every meeting. The financial crisis brought matters to a head as markets fretted about counterparty risk. "It was clear to me that there were a significant number of institutions who wouldn't invest in Barrick because of the hedge book," he said.
Barrick produced 1.9m ounces of gold last quarter, down from 1.95m a year earlier. Costs have been "trending down" to $456 an ounce, though rising energy prices pose a fresh threat. Total reserves are 139m ounces, far ahead of rival Newmont Mining at 86m.
The hedge book venture has not been a happy one, but those who predicted that Barrick would eventually "blow up" on its contracts may owe the company an apology.
sumisu
16 years ago
Standard & Poor's Announces Changes in the S&P/TSX Venture Composite Index
Thursday July 3, 5:17 pm ET
http://biz.yahoo.com/cnw/080703/s_p_index_changes.html?.v=1
TORONTO, July 3 /CNW/ - Standard & Poor's will make the following changes in the S&P/TSX Venture Composite Index after the close of trading on Thursday, July 3, 2008:
The shares of Peak Gold Ltd. (TSXVN:PIK) will be removed from the index. The company will be delisted from the TSX Venture Exchange following its merger with New Gold Inc. (TSX:NGD) and Metallica Resources Inc. (TSX:MR).
Company additions to and deletions from an S&P equity index do not in any way reflect an opinion on the investment merits of the company.
About Standard & Poor's Index Services
Standard & Poor's Index Services, the world's leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Its family of indices includes the S&P 500, an index with $1.32 trillion invested and $4.91 trillion benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices. For more information, please visit www.standardandpoors.com/indices.
About Standard & Poor's
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP - News), is the world's foremost provider of financial market intelligence, including independent credit ratings, indices, risk evaluation, investment research and data. With approximately 8,500 employees, including wholly owned affiliates, located in 23 countries, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for more than 140 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions. For more information, visit: www.standardandpoors.com.
For further information
Tony North, (416) 507-3200, sp_index@standardandpoors.com
Dave Guarino, (212) 438-1471, dave_guarino@standardandpoors.com
--------------------------------------------------------------------------------
Source: Standard & Poor's Canadian Index Operations
sumisu
16 years ago
Metallica Resources, New Gold and Peak Gold Announce Signing of Definitive Agreement for US$1.6 Billion Business Combination
Monday May 12, 7:30 am ET
http://biz.yahoo.com/cnw/080512/peakgold_agreement.html?.v=1
VANCOUVER, May 12 /CNW/ - Metallica Resources Inc. ("Metallica Resources") (TSX - MR and AMEX - MRB), New Gold Inc. ("New Gold") (TSX and AMEX - NGD) and Peak Gold Ltd. ("Peak Gold") (TSXV - PIK) are pleased to announce that they have signed a definitive agreement in connection with the previously announced business combination (the "Transaction").
Each of Metallica Resources, New Gold and Peak Gold have scheduled shareholder meetings to be held on June 17, 2008 at which they will seek their respective shareholder approvals required in connection with the Transaction. It is anticipated that materials for such meetings will be mailed to shareholders on or about May 26, 2008. The Transaction is expected to close on or about June 30, 2008.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information
Rhonda Bennetto, Director Investor Relations and Corporate Communications, Metallica Resources Inc., Direct: (303) 640-3292, Toll-free: 1 (888) 933-0313 x5, Email: rmbennetto@metal-res.com, Website: www.metal-res.com
Laura Sandilands, Manager of Investor Relations, New Gold Inc., Direct: (416) 977-1067, Toll-free: 1 (877) 977-1067, Email: lsandilands@newgoldinc.com, Website: www.newgoldinc.com
Melanie Hennessey, Vice President Investor Relations, Peak Gold Ltd., Direct: (604) 696-3024, Toll-free: 1 (888) 220-2760, Email: info@peakgold.com, Website: http://www.peakgold.com
--------------------------------------------------------------------------------
Source: Peak Gold Ltd.; New Gold Inc.; Metallica Resources Inc.
sumisu
16 years ago
Neo-Wheaton Rebirth Clearer as Old Hands Merge Peak, Metallica & New Gold
By Tim Wood
31 Mar 2008 at 01:43 PM GMT-04:00
http://www.resourceinvestor.com/pebble.asp?relid=41565
St. LOUIS (ResourceInvestor.com) -- Today’s $1.3 billion all-stock merger of New Gold [AMEX:NGD; TSX:NGD] with Peak Gold [TSX-V:PIK] and Metallica Resources [AMEX:MRB; TSX:MR] presents a familiar scenario for natural resource investors. The most powerful mining capitalists in North America are assembling a metal operation using much the same model as Wheaton River Minerals. Wheaton emerged from the industry backwaters to become the effective controlling interest in Goldcorp, a company today worth almost $30 billion.
The New Gold brand is being retained in a deal that sees stockholders receiving one tenth of a New Gold share for each Peak share they own, and nine-tenths of a New Gold share for every Metallica share owned.
According to a statement the new company is projecting gold production of 297,000 ounces of gold this year and 335,000 ounces in 2008 from operations in Australia, Brazil and Mexico. As with Wheaton, copper and silver by-product revenues will keep reported costs extremely low; at just $340/oz of gold according to the companies. The new company boasts an adequate mine life of around 10 years thanks to reserves of 3.2 million ounces of gold 65.3 million ounces of silver, and 986 million pounds of copper.
Little surprise then that the stock prices for all three entities increased as the market digests a board comprised of Clifford Davis, Robert Gallagher, Pierre Lassonde, Craig Nelsen, Paul Sweeney and Ian Telfer.
Lassonde and Telfer are the hinges here, just as they were with Wheaton. In the climate of the current credit crisis, their connections to mining’s financing aristocracy are especially valuable. Ironically, it may have been New Gold’s disastrous flirtation with collateralized debt obligations that opened the door more fully for the current deal.
New Gold had to impair $50.1 million last year on failed investments in non-bank sponsored asset backed commercial paper.
Take careful note of the involvement of Endeavour Financial and GMP Securities. Both firms were critical to Wheaton’s ability to funnel vast amounts of premium scrip to the institutional and retail markets. In an era when it is more difficult to raise competitive financing, an arterial connection to Canada’s money machine is imperative.
Of course, the Wheaton team’s read of market sentiment was the foundation for all that jobbing: 1) that metal prices would continue to rise strongly; 2) that investors would pay a premium for companies able to achieve large percentage increases in output; 3) that paying takeover multiples frightening to competitors was not an impediment to future deals or stock ratings; 4) that investors could be promoted on a “gold company” that included base and other metals in its assets; 5) that low unit costs were an important psychological component of the story; 6) that exotic destinations and assets needed to be avoided; 7) that competent managers and operators wouldn’t have to fear being on the wrong side of a takeover.
It’s notable that the deal does not offer Metallica and Peak shareholders the sort of premiums that have become de rigueur lately – the +30 percentage points that have had investors salivating about takeover wars. Metallica stockholders get just 13% more than Friday’s closing price and Peak’s shareholders get 15% more.
Investors must be wary of assuming New Gold is Wheaton II on autopilot. That experience is unlikely to ever be repeated, and we would argue that the signal booster on Wheaton’s share price was the cash flow from its share in the Alumbrera operation. In 2003 it paid a hindsight’s pittance for one quarter of Rio Tinto’s [NYSE:RTP; LSE:RIO] share in Bajo de la Alumbrera. When copper prices starting multiplying a short time after the deal closed, Wheaton had the firepower to act more aggressively, and attract higher stock ratings.
There is no obvious equivalent asset in the mix for New Gold. However, the dearth of significant new metal discoveries, and diminishing pool of companies available for resource investors to participate in, means New Gold will attract a takeover / merger premium.
sumisu
16 years ago
Gold, Silver Futures Climb as Dollar Declines Against Euro
By Pham-Duy Nguyen
http://www.bloomberg.com/apps/news?pid=20601012&sid=aZdX.r7F7DfY&refer=commodities
March 26 (Bloomberg) -- Gold rose for the second straight day in New York as the dollar dropped against the euro. Silver also gained.
The euro climbed as much as 1,2 percent versus the dollar after jumping 1.5 percent yesterday. Gold reached a record $1,033.90 an ounce on March 17 as the euro traded at an all-time high of $1.5903.
``It almost always comes down to the dollar for gold,'' said Marty McNeill, a trader at R.F. Lafferty Inc. in New York. ``Gold's going to probe to the upside and see if it can get to $1,000 again.''
Gold futures for April delivery advanced $14.20, or 1.5 percent, to $949.20 an ounce on the Comex division of the New York Mercantile Exchange. The price has climbed 13 percent this year.
The dollar fell against the euro after reports showed German business confidence increased in March and orders for U.S. durable goods dropped in February, fueling speculation that interest rates in the U.S. may continue to decline, while borrowing costs in Europe remain steady. The euro rose as high as $1.583.
The Federal Reserve has cut the U.S. benchmark rate six times since September from 5.25 percent to 2.25 percent. The European Central Bank has kept its main lending rate at a six- year high of 4 percent since June.
Silver Gains
Silver futures for May delivery climbed 58.3 cents, or 3.3 percent, to $18.383 an ounce. The metal has gained 23 percent this year.
The price has fallen 0.3 percent in the past week. Silver will climb to $19.50 within a month and to $21 in three months, UBS AG said yesterday.
Silver has gained 9.1 percent this week. The metal plunged 18 percent last week after the Fed's latest cut in borrowing costs was less than investors anticipated, boosting the dollar.
Gold has climbed 3.2 percent this week after tumbling 8 percent last week.
``The long-term bullish trend for gold remains fully intact and is all the healthier because of the liquidation last week,'' said Dennis Gartman, an economist in Suffolk, Virginia and editor of the Gartman Letter. ``The massive liquidation that came following the Fed's decision has turned on a dime with the market now understanding that this is inflationary and supportive of commodity prices.''
Precious metals had rallied for seven straight years as a falling dollar and higher commodity costs boosted demand for an inflation hedge.
Crude-oil futures climbed as much as 4.9 percent today, leading commodities higher for a third straight day.
Investment in Barclays Plc's iShares Silver Trust, the biggest exchange-traded fund backed by silver, has remained unchanged at a record 5,579 metric tons since March 18.
Investment in the StreetTracks Gold Trust, the biggest exchange-traded fund backed by bullion, was unchanged at 634 tons in the past two days. It reached a record 663.8 tons on March 17.
To contact the reporter on this story: Pham-Duy Nguyen in Seattle at pnguyen@bloomberg.net.
Last Updated: March 26, 2008 15:20 EDT
sumisu
16 years ago
Peak Gold announces stock option grants
Thursday March 20, 7:05 pm ET
http://biz.yahoo.com/cnw/080320/peak_gold_options.html?.v=1
VANCOUVER, March 20 /CNW/ - Peak Gold Ltd. (PIK:TSX-V) ("Peak Gold")announced today that it has granted options to purchase an aggregate of 7,318,000 common shares of Peak Gold to certain officers and employees in accordance with its stock option plan. The options are exercisable at a price of $0.62 which was the last closing price on March 19, 2008. The options granted are for a term of five years, expiring on March 20, 2013.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
For further information
Mélanie Hennessey, Vice President, Investor Relations, Peak Gold Ltd., 3110-666 Burrard Street, Vancouver, British Columbia, V6C 2X8, Telephone: (604) 696-4100, Toll-free: (888) 220-2760, Fax: (604) 696-4110, Email: info@peakgold.com, Website: www.peakgold.com
Vanguard Shareholder Solutions, 1205-1095 West Pender Street, Vancouver, British Columbia, V6E 2M6, Telephone: (604) 608-0824, Toll Free: (866) 398-1088, Email: ir@vanguardsolutions.ca
--------------------------------------------------------------------------------
Source: Peak Gold Ltd.
sumisu
16 years ago
Peak Gold earns $14.6 million in Company's first year
Monday March 17, 9:00 am ET
http://biz.yahoo.com/cnw/080317/peak_gold_2007_result.html?.v=1
(All figures are in US dollars unless stated otherwise)
VANCOUVER, March 17 /CNW/ - Peak Gold Ltd. (PIK:TSX-V) ("Peak Gold") today reported net earnings of $14.6 million or 3 cents per share for the thirteen months ended December 31, 2007. Production in 2007 from the date of acquisition of the Amapari and Peak mines was 149,830 ounces of gold at a total cash cost of $349 per ounce.
2007 Financial and Operational Highlights
The highlights presented below include the operating results of the Amapari and Peak mines from the dates of their acquisition, which are April 3, 2007 and April 27, 2007, respectively.
- Net earnings of $14.6 million after charges of $6.2 million i stock-based compensation
- Gold production of 149,830 ounces
- Total cash costs of $349 per ounce (net of by-product sales) (1)
- Consolidated operating cash flow of $26.6 million
- In April 2007, Peak Gold completed a Cdn$326.5 million financing of 435 million subscription receipts (each subscription receipt comprised of one common share and one-half of one common share purchase warrant of Peak Gold) at a price of Cdn$0.75 per subscription receipt. The proceeds were used to partially finance the acquisition of the Amapari and Peak mines for consideration of 155 million common shares with a value of $100 million and $200 million in cash
- In November 2007, Peak Gold completed a financing of 147,723,334 special warrants for net proceeds to Peak Gold of Cdn$104.2 million. On February 28, 2008, the special warrants were automatically exercised into 147,723,334 common shares and 73,861,667 common share purchase warrants of Peak Gold. The proceeds will be used for future acquisitions of mineral properties and capital expenditures
Fourth Quarter Highlights
- Net earnings of $14.8 million after charges of $1.0 million in stock-based compensation
- Gold production of 53,430 ounces
- Gold sales of 52,351 ounces
- Total cash costs of $398 per ounce (net of by-product sales) (1)
- Consolidated operating cash flow of $12.9 million
Robert Gallagher, Peak Gold President and CEO, made the following comments in relation to year-end and the fourth quarter results:
"Following the acquisition of the company's first operating assets in April, strong cash flow generation and improving operating costs have characterized Peak Gold's first year of operation. At the end of a year in which management and operating teams were strengthened and two financings were completed, the company is well positioned for future growth both internally and externally. With our operating assets continuing to generate strong cash flow to the company, full exposure to the gold market and cash and short term investments of $182 million, Peak Gold is well positioned for what should be an exciting 2008."
Operational Review
The full year operational highlights for the Amapari and Peak mines, which include the period prior to their acquisition by Peak Gold, are as follows:
- Gold production for 2007 was 212,933 ounces compared to 206,800 ounces in 2006
- Gold sales for 2007 were 214,398 ounces compared to 200,000 ounces in 2006
- Copper production for 2007 was 7.5 million pounds with sales of 7.3 million pounds compared to 6.5 million pounds produced and sold in 2006
- Total cash costs in 2007 were $364 per ounce compared to $355 per ounce in 2006 (net of by-product sales) (1)
For the full year at Peak Mines in Australia, including the period prior to acquisition by Peak Gold, production was 116,533 ounces of gold and 7.5 million pounds of copper. Record annual mill throughput of 709,230 tonnes reflects consistent underground production and increased milling capacity.
Production for the fourth quarter was 29,030 ounces of gold and 1.8 million pounds of copper. Total cash costs for the full year were $243 per ounce and for the quarter were $258 per ounce. The strengthening of the Australian dollar throughout the year negatively impacted total cash costs per ounce sold. Operating costs were reasonably consistent through the year with cost control remaining a key focus for management.
Production for the full year at the Amapari mine in Brazil, including the period prior to acquisition by Peak Gold, was 96,400 ounces, a 15% increase from 2006. Production for the fourth quarter was 24,400 ounces. Total cash costs for the year were $515 per ounce and for the quarter were $583 per ounce.
Cash costs in 2007 were adversely affected by the strengthening of the Brazilian currency (real) related to the U.S. dollar. The Brazilian currency strengthened by approximately 16% during the year. Peak Gold continues to study the viability of alternative processes to improve the efficiency and costs of its operations at Amapari.
Gold and copper production in 2008 for both the Amapari and Peak mines are expected to be in line with 2007 production. Production in 2008 is expected to be 210,000 to 220,000 ounces at a cash cost of $345 to $365 per ounce. Cash costs in 2008 are expected to decline from 2007 levels as a result of cost saving programs implemented in 2007. A further weakening of the U.S. dollar will continue to have a negative impact on Peak Gold's cost structure. A significant increase in gold production is expected from 2009 onwards.
Peak Gold will hold a conference call on Monday, March 17, 2008 at 10:00 a.m. Pacific time to discuss these results. You may join the call by dialing toll free 1-888-789-9572 or 1-604-639-5228 for calls from outside Canada and the U.S. You can listen to a recorded playback of the call after the event until April 17, 2008 by dialing 1-800-408-3053 or 1-416-695-5800 for calls outside Canada and the U.S. Passcode: 3252883 followed by the number sign.
Click here to view the unaudited Statement of Operations, Other Comprehensive Income and Deficit, Statement of Cash Flows, Balance Sheet and Financial/Operational Highlights.
http://files.newswire.ca/692/summarizedfinancial.pdf
http://files.newswire.ca/692/operationalreview.pdf
The Audited Financial Statements and Management Discussion & Analysis will be filed on SEDAR in approximately one week.
Peak Gold is a new intermediate gold producer with a strong foundation for growth. To learn more about us, please visit our website at www.peakgold.com.
(1) Peak Gold has included a non-GAAP performance measure, total cash costs per gold ounce, throughout this news release. Peak Gold reports total cash costs on a sales basis. In the gold mining industry, this is a common performance measure but does not have any standardized meaning, and is a non-GAAP measure. Peak Gold follows the recommendations of the Gold Institute standard. Peak Gold believes that, in addition to conventional measures, prepared in accordance with GAAP, certain investors use this information to evaluate Peak Gold's performance and ability to generate cash flow. Accordingly, it
is intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This News Release contains "forward looking statements", within the meaning of applicable Canadian Securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold and copper, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward looking statements can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Peak Gold to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade or recovery rates; failure of plant; equipment or processes to operate as anticipated; accidents; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in Peak Gold's Annual Information Form dated December 18, 2007 and revised on February 25, 2008, available at www.sedar.com. Although Peak Gold has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such statements will prove to be accurate. As actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.
For further information
Mélanie Hennessey, Vice President, Investor Relations, Peak Gold Ltd., 3110-666 Burrard Street, Vancouver, British Columbia, V6C 2X8, Telephone: (604) 696-4100, Toll-free: (888) 220-2760, Fax: (604) 696-4110, Email: info@peakgold.com, Website: www.peakgold.com
Vanguard Shareholder Solutions, 1205-1095 West Pender Street, Vancouver, British Columbia, V6E 2M6, Telephone: (604) 608-0824, Toll Free: (866) 398-1088, Email: ir@vanguardsolutions.ca
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Source: Peak Gold Ltd.
sumisu
17 years ago
Peak Gold enters into an investor relations agreement with Vanguard Shareholder Solutions
Tuesday August 28, 7:43 pm ET
http://biz.yahoo.com/cnw/070828/peak_gold_ir_vanguard.html?.v=1
VANCOUVER, Aug. 28 /CNW/ - Peak Gold Ltd. (PIK:TSX-V) ("Peak Gold") is pleased to announce that it has entered into an investor relations agreement (the "IR Agreement") with Vanguard Shareholder Solutions Inc. ("Vanguard"). Vanguard was founded in 2001 by Mr. Paul Lathigee, President of Vanguard, and has offices located at Suite 1205, 1095 West Pender Street, Vancouver, BC, Canada. Vanguard is not related to Peak Gold, does not have any direct or indirect material interest in Peak Gold or its securities, other than the stock options as described below, and does not have any right or intention to acquire any such interest.
Vanguard is an investor relations company and will provide a variety of promotional and investor relations services to Peak Gold, including assisting with the dissemination of news and information to the public and initiating and maintaining contact with brokers.
The initial term of the IR Agreement is six months. Peak Gold will pay Vanguard a fee of $12,500 per month, payable on the first business day of each month. Peak Gold has also granted Vanguard 400,000 stock options that are exercisable at a price of $0.65 per share, subject to a twelve month vesting schedule, until the earlier of three years from the date of grant and 30 days following termination of Vanguard's services. Peak Gold will also reimburse Vanguard for its reasonable expenses incurred in connection with its services under the IR Agreement.
Peak Gold is a new intermediate gold producer with a strong foundation for growth. With a solid approach to acquisition and a commitment to value, Peak Gold's goal is to significantly increase production by 2008. To learn more about us, visit our website at www.peakgold.com.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This News Release contains "forward-looking statements", within the meaning of applicable Canadian Securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the future price of gold and copper, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "does not anticipate", "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", "will", "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Peak Gold to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents; labor disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Risk Factors" in Peak Gold's Filing Statement dated April 2, 2007, available at www.sedar.com. Although Peak Gold has attempted to identify important factors that would cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated, or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking that are incorporated by reference herein, except in accordance with applicable securities laws.
For further information
Mélanie Hennessey, Vice President, Investor Relations, Peak Gold Ltd., 3110-666 Burrard Street, Vancouver, British Columbia, V6C 2X8, Telephone: (604) 696-4100, Fax: (604) 696-4110, e-mail: info@peakgold.com, website: http://www.peakgold.com
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Source: Peak Gold Ltd.
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