Tuesday, 31 May 2011

St Andrew advances ramp development at Smoke Deep, mining to start by Q4

St Andrew Goldfields (TSE:SAS) said Tuesday that ramp development at its Smoke Deep Zone, part of the Holloway Mine in northeastern Ontario, has advanced to the point where the company can begin excavating to provide access to the western portion of the target.
At the end of June last year, the company made a decision to advance efforts at Smoke Deep by developing an underground ramp, designed to conduct definition drilling to test the extension of the zone, which had never before been tested.
Ramp excavation began last July, and as of this month, development crews started excavating the first crosscut to provide access to the western part of the zone.
The company said that definition drilling has started and development work is expected to be conducted during the third quarter, in order to facilitate the start of mining from Smoke Deep by the fourth quarter of this year.
Ramp development will also continue until it reaches the eastern extent of the zone, which is expected to be completed in the fourth quarter as well, at which time drilling platforms will be put in place to allow access for continued exploration, with the next phase of drilling due to begin in 2012.
2012 exploration drilling will focus on testing mineralized zones where they remain open along strike, down dip and eastwards, and where previous drilling encountered signficant results, including 5.83 g/t gold over 35.0 metres and 8.84 g/t gold over 14.0 metres.
"We are excited to see what continued exploration will return once exploration drilling resumes," said president and CEO Jacques Perron.
"While the definition drilling will provide us with the information for near term mining at Smoke Deep, the future exploration drilling has the possibility to increase the current level of resources and to extend the mine life of the Holloway Mine."
St Andrew is a gold explorer and producer with an extensive land package in the Timmins mining district, northeastern Ontario, which lies within the Abitibi greenstone belt.

Bacterin International receives $1m from Lincoln Park Capital, additional $30m in the cards

Bacterin International Holdings (AMEX:BONE), which develops bone graft material and anti-infective coatings for medical applications, said Tuesday that Chicago-based asset manager Lincoln Park Capital has invested an initial $1 million into the company through an equity financing, and has committed to contribute a further $30 million.

Under the terms of the deal, Belgrade, US-based Bacterin received $1 million through the sale of shares to Lincoln Park at a price of $3.06 each, together with warrants to purchase an additional 130,719 shares at the same price. The price was consistent with the market price of Bacterin's shares on May 26.

In addition, Lincoln Park has committed to invest up to an additonal $30 million over the next three years through further equity financings, with no additional warrants to be granted.

Together with a previously announced capital raise, Bacterin has recently raised just over $3 million with Lincoln Park's $1 million investment.

Bacterin said the agreement with Lincoln Park can be cancelled at any time, at no cost to the company.

Xtra-Gold Resources drills high grade gold at Kibi project

Xtra-Gold Resources (TSE:XTG) (TSX:XTG-S) (OTCBB:XTGR) reported Tuesday further significant drill results from the Big Bend Gold Zone on the company's Kibi project in Ghana, West Africa.
The company said that results from six new diamond core holes, which covered 1,308 metres, continue to confirm the "down-plunge continuity" of mineralization, and show the presence of higher grade gold within the Big Bend system.
Highlights from the holes reported today include 52 metres grading 2.42 g/t gold in hole KBDD11113, including 27 metres at 3.58 g/t gold and 6.09 g/t gold over 12 metres.
In addition, hole KBDD11110 intersected 50 metres of 1.64 g/t gold from 158 metres down hole, including 24 metres at 2.45 g/t gold; and hole KBDD11114 returned 50 metres at 1.31 g/t gold from surface, including 20 metres at 2.21 g/t gold.
The latest drill results are part of a 20,000 metre exploration program initiated in mid January, designed to define the Big Bend Gold Zone, as well as test other prominent gold systems on Zone 2 of the company's Kibi project.
To date, significant gold mineralization has been traced over a 300 metre strike length, and roughly 360 metres down plunge from surface along the Big Bend gold zone.
Xtra-Gold has completed 34 holes totaling 8,550 metres thus far in its current 20,000 metre program.
The company's shares rose more than 3.5% on the results, to trade at $2.02 as of 10:34am EST in the US.

Scotiabank's Q2 profit jumps 40%

The Bank of Nova Scotia (Scotiabank) (NYSE:BNS) (TSE:BNS) announced Tuesday a 40% increase in second quarter profits, mainly due to strong growth in its international banking and global wealth management divisions, as well as $286 million accounting gain.
For the three months ending April 30, the third-largest bank in Canada reported a net income of $1.54 billion, or $1.36 per share, up from last year's $1.1 billion, or $1.02 per share.
The bank said that it benefited from a $286 million, or 26 cent per share, accounting gain due to two recent acquisitions, including the remaining 82% stake in DundeeWealth, as new Canadian accounting standards required all acquisitions to be recorded at fair value.
A gain of $260 million was recognized on the re-valuation of the bank's original 18% stake in DundeeWealth, it said.
Excluding these gains, earnings were $1.10 per share, beating analyst estimates by one cent.
Total revenue jumped 17% to $4.52 billion from $3.87 billion a year earlier. Provisions for credit losses, or money the bank sets aside to cover bad loans, were $262 million, a 22% drop from last year's $338 million.
The company attributed its succes during the quarter to increased profits from wealth management and international banking, offset by higher non-interest expenses and lower trading activity.
International banking's bottom line increased 68% to $402 million, as strong commercial and retail lending, particularly in Asia, Peru, Chile and the Caribbean, helped push income forward. The division benefited from the acquisition of Puerto Rico's R-G Premier Bank.
"International Banking's business . . . has benefitted from widening margins in certain key markets. In addition, recent acquisitions continue to provide a meaningful contribution to overall results," said president and CEO, Rick Waugh.
Scotiabank's wealth management segment saw profits rise to $489 million from $199 million in the year-ago period, helped by the acquisition of the remaining 82% of DundeeWealth. This also pushed assets under management to more than $100 billion.
Meanwhile, Canadian banking reported a 2% drop in net income to $444 million as Scotia saw higher wholesale funding costs and a consumer preference for lower yielding variable rate mortgages.
The Scotia Capital unit also recorded an 8% drop in net income to $357 million, largely due to lower lending volumes, especially corporate loans and acceptances.
However, total revenue reported by global corporate and investment banking within the unit was virtually unchanged from last year, as lower lending volumes were offset by higher investment banking revenues, including record results from Scotia Waterous.
Scotiabank's shares on the Toronto Stock Exchange responded well to the company's quarterly results, increasing 1.2% to $59.69 per share.

Li3 reports positive NI 43-101 compliant findings from technical report on Marincunga

Li3 Energy (OTCBB:LIEG) announced Tuesday the findings of an NI 43-101 compliant technical report on its Maricunga lithium brine property in northern Chile, independently ranked as one of the top ten lithium projects in the world.
The report, conducted by Hains Technology Associates, concludes that Maricunga can be considered a "property of merit", as it holds sufficient exploration potential to warrant further cost to advance the project to pre-feasibility stage.
Indeed, the property, in which Li3 has a controlling interest, has the potential to be a source of lithium, potassium and boron. The company recently signed a deal with one of the world's largest steel manufacturers, South Korea-based POSCO (NYSE:PKX), to jointly explore and evaluate the development of the Maricunga project, including the establishment of a commercial plant.
This is because one of the primary uses for lithium is in the production of batteries for hybrid and electic vehicles. As demand for these cars increase, so will the world's requirements for lithium, resulting in many battery and automakers in Korea and Japan partnering with lithium exploration companies to ensure a steady supply.
Maricunga covers an area of approximately 1,438 hectares, comprising six concessions, and is located in the northeast section of the Salar de Maricunga in Region III of Atacama.
According to the NI 43-101 compliant report, exploration work at Maricunga has indicated that the brines are enriched in lithium and potassium, from which lithium can be recovered at a good rate.
The company also noted the relatively high boron concentration in the brine, which should permit high extraction rates for the recovery of boric acid, a valuable co-product.
Historical work over Maricunga has calculated a non compliant mineral resource of 224,300 tonnes of lithium and 3.27 million tonnes of potash. The recent report estimates that it is possible to develop an NI 43-101 compliant resource similar to the historical one.
Initial drilling at the property estimated assay values of 1.1g/L lithium, 7.93 g/L potassium, 1.81 q/L boron and 6.6 g/L magnesium.
In addition, production from the property is expected to be lower cost than other Chilean salars, as sulphate in the brine is unusually low, reducing the need for additional reagents for sulphate removal. Electrical and road infrastructure is also in place to support preliminary development.
"The findings of the NI 43 -101 and other preliminary data support our opinion of the strength of this strategic asset," said COO Tom Currin.
Other data compiled from earlier findings is expected to be further validated with the completion of a preliminary economic assessment report for Maricunga, which Li3 is anticipating by the end of the 4th quarter.
"Armed with this data, Li3 looks forward to the future and unlocking the full potential of Maricunga, commercializing the asset and creating value for all of our stakeholders and strategic partners," added CEO Luis Saenz.
Li3, which looks for lithium properties in Peru, Argentina and Chile, has begun the initial $3.8 million development work program on the project.

Extorre Gold releases further high grade gold-silver results from Cerro Moro

Extorre Gold Mines (AMEX:XG) (TSE:XG) reported Tuesday that it has continued to drill high grade gold-silver results from the Zoe discovery, part of the Cerro Moro project in Santa Cruz, Argentina.
Notable intersections included 8.00 metres at 84 grams per tonne (g/t) gold and 1,332 g/t silver, or 35.0 g/t gold equivalent in hole MD1220, including 4.15 metres at 15.2 g/t gold and 2,419 g/t silver, or 63.6 g/t gold equivalent.
Other significant results included hole MD1234, which intersected 2.00 metres at 36.3 g/t gold and 1,858 g/t silver, including 0.90 metres at 63.5 g/t gold and 3,135 g/t silver; and hole MD1253, which returned 2.00 metres at 37.0 g/t gold and 1,924 g/t silver, including 0.90 metres at 80.4 g/t gold and 4,023 g/t silver.
The company said that a total of 34 diamond drill holes now define the Zoe structure over a strike length of roughly 1.5 kilometres, one kilometre of which shows high grade gold-silver mineralization that is peripheral to a "central, bonanza grade zone".
"As with the Martina and Escondida Far West zones located west of Zoe, we are finding the near surface mineralization is generally significantly lower grade than what is found at depth," said Extorre's project manager, Fernando Chacon.
"We will therefore begin step back drilling to test for high grade mineralization at more favourable depths."
Indeed, management said it is considering moving two drill rigs to Cerro Moro from the company's other Puntudo project, which is located around 220 kilometres to the west. The move is planned for mid-June.
Of the 34 holes completed to date at the Zoe discovery, 22 have now been publicly released. Currently, there are four rigs operating at Cerro Moro, with three at the Zoe target.
Last April, the company announced that Cerro Moro had estimated indicated resources of 357,000 ounces of gold and 15.3 million ounces of silver, or 612, 000 ounces of gold equivalent, plus inferred resources of 190,000 ounces of gold and 12.0 million ounces of silver.
A preliminary economic assessment on the project last October also highlighted the robust economics of Cerro Moro, as the mine is expected to produce an average of 133,500 ounces of gold equivalent during its first five years of operations, at a cash cost of just US$201 per ounce.

Monday, 30 May 2011

Great Western Minerals to acquire 100% of Rare Earth Extraction Co

Rare earths processor Great Western Minerals (CVE:GWG) said Monday that it has initiated the process to acquire the remaining shares not already held by the company in Rare Earth Extraction Co. (Rareco), resulting in a 100% stake.

To date, Great Western holds 93.1% of Rareco, having progressively increased its holding in the company, which owns the Steenkampskraal rare earth mine in South Africa, since last year.

In late November, Great Western, which at the time held nearly 21% of Rareco, announced that it intended to make an all-cash offer to purchase all of the shares it did not already hold at a price of 3 South African Rand per share, or US$0.43.

"Moving to acquire 100% of Rareco furthers our company's ability to execute its fast track schedule for the Steenkampskraal property," said president and CEO Jim Engdahl. 

"In conjunction with the recent approval from the National Nuclear Regulator of South Africa for Great Western's work program at Steenkampskraal, our company is in a very strong position to continue its rapid advancement, having executed the steps to acquire Rareco, right on schedule," he added.

In April, Great Western announced that it has fast-tracked its development plans for Steenkampskraal, now targeting the start of underground mining operations in the first quarter of 2012.

The company has also nearly doubled the planned level of production at the site to approximately 5,000 tonnes of rare earth oxides (REO) per year, up from the 2,700 tonnes originally anticipated.

Great Western intends to immediately begin the refurbishment of the previously-producing mine shaft at the Steenkampskraal site.

The company's specialty rare earth alloys are used in the battery, magnet and aerospace industries. The company also holds interests in seven rare earth exploration and development properties in North America.

Capstone adds 219 million pounds of copper to Minto Mine's measured and indicated resource

Capstone Mining (TSE:CS) announced Monday that the addition of the Wildfire/Copper Keel area to a previous resource model has increased the measured and indicated resource base by 219 million pounds of copper at its Minto Mine.
The company said that at a 0.5% copper cut-off grade, the total mineral resource estimate for the whole Minto Mine, which is located in the Yukon Territories, now exceeds 1 billion pounds of copper.
New drill holes from this year and last in the Wildfire/Copper Keel area indicated that both these regions were a southeast extension of the previous resource model for the Area 2/118 deposit, and not separate deposits as originally thought.
As a result, roughly 134 new drill holes were added to the existing database of 235 holes for Area 2/118, and were combined into one deposit, known as Minto South.
"The exploration success at Minto continues to be translated into mineral resource additions that support the near term growth strategy at our mining operations," said vice president of exploration, Brad Mercer.
"Since 2006, the Minto Mine has realized steady expansion through a program of discovery and feasibility in a series of phases that have increased mine life and throughput."
Indeed, additional mineral resources from the Wildfire and Copper Keel areas boosted total measured and indicated resources for Minto South to 36.4 million tonnes at 1.03% copper, 0.35 g/t gold and 3.5 g/t silver, for 827.2 million pounds of contained copper, 413,000 ounces of gold and 4.1 million ounces of silver.
The Vancouver, B.C.-based company said it plans to begin a new pre-feasibility study in the third quarter. Capstone's shares were last trading at $3.48 each on Friday.

Fortis to buy Vermont's largest electric utility in $700m deal

Fortis (TSE:FTS), the largest investor-owned utility in Canada, said on Monday that it is buying Central Vermont Public Service (NYSE:CV) (CVPS), Vermont's largest electric utility, in a $700 million deal.
Fortis will pay CVPS shareholders $35.10 per share, representing a 44% premium over CVPS' closing price of $24.32 on Friday.
The $700 million deal, which saw Fortis beat out several bidders in a confidential sales process, includes the assumption of approximately US$230 million of debt.
The acquisition is expected to add to Fortis' earnings in the first full year of ownership, it said.
St. John's-based Fortis, with assets of $13 billion and fiscal 2010 revenue totalling $3.7 billion, has regulated utility companies operating in five provinces: British Columbia, Alberta, Ontario, Prince Edward Island and Newfoundland, as well as three Caribbean countries. The company serves about 2.1 million gas and electricity customers.
CVPS, which employs about 520 people, serves nearly 160,000 customers in 163 cities and towns across Vermont.
"CVPS is a well-run utility whose operations and operating philosophy are very similar to those of our Canadian regulated utilities," said Fortis president and CEO Stan Marshall.
"The commitment of CVPS to customers, as evidenced by the company's stellar customer service record, is very much aligned with the operating philosophy of Fortis."
Under the deal, CVPS will remain headquartered in Rutland and operate autonomously, with its own board of directors and management team. Fortis said that no job losses are anticipated with the transaction. Larry Reilly is to remain president and CEO of CVPS.
"Fortis brings financial strength to CVPS, giving us strong access to capital markets not available to smaller utilities," Reilly added.
The deal, which is expected to wrap up in six to 12 months, is subject to the approval of CVPS shareholders, as well as the approval of state and U.S. federal regulators.

Creso Exploration reports surface sampling results at Downey, returns 266 g/t gold

Canadian junior Creso Exploration (CVE:CXT) (OTCQX:CRXEF) has announced the results of 30 rock chip samples taken from its Downey property in northeast Ontario, averaging 12.01 grams per tonne of gold on an uncut basis.
The property, which is part of the Shining Tree project in Asquith Township, returned a single sample of 266.0 g/t goldbn as the highest, with the second highest sample running 73.6 g/t gold.
The company said that fifteen, or half, of the samples taken have assays higher than 0.10 g/t gold, and occur throughout an area of 60 metres by 120 metres. The area is within a broader zone of mineralization, which has a strike extent of more than 500 metres and width of roughly 100 metres.
A total of 30 samples of quartz veins and host rock were randomly collected at the prospect, of which 23 were taken on the main showing, and averaged 15.65 g/t gold, or 6.01 g/t gold when samples were cut to 60 g/t gold.
The company said the surface sampling will be followed up with a drill and rock-saw channel sampling program, which is also planned for the Moore-MacDonald, Buckingham, and Bennett properties, all in the western half of the Shining Tree District.

Friday, 27 May 2011

Héroux-Devtek posts 75% increase in Q4 profits

Héroux-Devtek (TSE:HRX) announced Friday that it nearly doubled its net income in the fourth quarter, results that beat out analysts' estimates, as sales rose despite currency fluctuations.
For the three months ending March 31, the Canadian aerospace and industrial product manufacturer reported a fourth quarter profit of $7.7 million, or $0.25 per share, a 75% increase from the year-ago period's $4.4 million, or $0.14 per share. Analysts estimated fourth quarter earnings of $0.20 per share.
Sales for the quarter improved 24% to $106 million, including $12.8 million in revenue from Eagle Tool & Machine Co, which Héroux-Devtek acquired in April 2010.
Fluctuations in Canadian and U.S. currencies reduced sales in the quarter by $2.3 million, the company said.
The negative result of the poor dollar was offset, however, by a 26% increase in sales from the company's core aerospace segment to $99.5 million, and an 11.2% growth in industrial sales to $6.5 million.
"Héroux-Devtek concluded fiscal 2011 with the strongest quarterly results in its history, as all of our product lines solidly contributed to sales and operating income," said president and CEO, Gilles Labbé.
The Longueuil, Quebec-based company's stock was last trading on May 26, 2011 at $8.42 per share.

RIM prepares to defend itself against class action lawsuit, claims it misled investors

RIM (NASDAQ:RIMM)(TSE:RIM) said Friday that it plans to "vigorously" defend itself against a class action lawsuit, which claims that the BlackBerry maker misled some of its investors with regards to the company's financial condition.
The lawsuit, filed in the US District Court for the Southern District of New York, alleges that during the period from December 16, 2010 through April 28, 2011, RIM and certain of its officers made "materially false and misleading statements" regarding the company's financial condition and business prospects.
The class action case, filed on behalf of shareholders during this period, seeks unspecified damages, the Waterloo, Ontario-based smartphone maker said. RIM also said in its statement Friday that it believes the allegations are without merit.
The lawsuit comes at a time when analysts are increasingly concerned over the company's ability to remain on top of its game in the face of tough competition from Apple. RIM's PlayBook tablet generated little hype when it launched in April, compared to a craze of customers that lined up for days to purchase Apple's IPad 2.
In late April, RIM also lowered its outlook for its fiscal first quarter, due to lower than expected BlackBerry shipment volumes and a shift towards cheaper handsets.
For the three months ending May 28, it now expects earnings per share to be in the range of $1.30 to $1.37, down significantly from its previous guidance in March of between $1.47 to $1.55 per share.

Curis Resources set for long-term growth, to build shareholder value in near-term

Curis Resources  (TSE:CUV) said yesterday in a recent letter to shareholders that it expects the next several months to be "particularly strong" in building value for the company, as it progresses with the development of its flagship Florence copper project in Arizona.
The 100%-owned Florence copper project is a 3+ billion pound development-stage property in central Arizona, roughly 65 miles southeast of Phoenix, with first phase construction on track to begin in early 2012.
The asset is unique, as its in-situ leach production plan, as opposed to conventional open pit, stands to benefit from buoyant copper prices, while at the same time delivering low capex and operating costs.
This is because in-situ leach recovery of copper does not require mining trucks, milling equipment, or even mining engineers, nor does it necessitate waste stripping or exposure to long-lead time equipment.
Despite a minor pull back over the last few weeks, Curis noted that copper markets remain strong, and are expected to further strengthen over the next few months, particularly as the company advances to the third and fourth quarter. Long term predictions of copper prices are now ranging between $2.75 and $3.00, which make the potential economics of the Florence project even more robust.
Indeed, Curis expects to complete an optimization program on the project, including metallurgical, power and acid trade-off studies, by the third quarter. It also anticipates the release of a positive feasibility study by the fourth quarter, and the receipt of amended operating permits for the property, all developments that are expected to boost the company's share price.
Over the past two months, the company has received independent analyst coverage from brokers, with a 12-month price target ranging from $5.60 to $5.75 per share. Currently, its share price stands at around $2.17, indicating a bullish stance.
Curis maintained in its letter that as the Florence project advances over the next six to nine months, the company's market value should reflect a closer correlation to its net asset value, which ranges between $360 and $530 million, based on varying copper prices.
Given that the company's market capitalization is currently around $120 million, there is definitely significant room for the share price to spike in the near term.
Aside from Florence, Curis has looked to bulk up in other copper assets, having made several strategic new hires over the past several months, positioning the company for future growth.

Graham Corp's Q4 profit surges, sales rise 88%

Graham Corporation (AMEX:GHM) said Friday that fourth quarter profit more than quadrupled, boosting the company’s shares as sales climbed 88% during the period due to strong organic growth and acquisitions.
Shares in the company were up 10.62%, trading at $23.44 as of Friday 10 a.m. EST.
In the first three months ending March 31, the Batavia, New York-based vacum and heat transfer equipment manufacturer reported net income of $2.7 million, or 27 cents per diluted share, way up from $0.6 million, or six cents per diluted share, in the prior-year period.
The company more than beat analyst forecasts of 21 cents per share.
Net sales jumped 88% to $25.9 million, compared with $13.8 million in the year ago period, driven by organic growth of 51%.
The company said the December acquisition of Energy Steel & Supply Company, a specialty machining company targeted for the nuclear power industry, also contributed $5.1 million to fourth quarter sales.
Orders during the fourth quarter were $26.8 million, up 47% over orders in the prior year period. Approximately 20% of the total order value in the latest quarter was won by Energy Steel, benefiting the company's nuclear power market segment, said Graham.
According to the company, strong activity in the alternative energy markets allowed Graham to secure orders for geothermal and biomass power-generating facilities in Asia and the U.S.
The company said that sales to the refining industry also accounted for more of total revenue at 38%, reflecting certain large Middle Eastern projects advancing, as well as increased maintenance activity in the US market.
Higher sales and an improving economy drove the improvement of operating margins to 15.4%, compared with 8.6% a year before.
For the next few years, Graham said it expects an increase in orders to come from international customers in its traditional oil refinery and petrochemical markets, while the addition of Energy Steel is expected to continue to improve U.S. order rates from the nuclear power generation market. At quarter-end, the company had a backlog of $91.1 million.
"The first half of fiscal 2011 was the tail end of the trough of the recession for us. The second half of the year clearly demonstrated the early signs of a strengthening market," said president and CEO, James R. Lines.
"Our fourth-quarter results were a strong indication of this early recovery.”
Looking ahead, the company predicts sales for fiscal 2012 to be in the range of $95 and $105 million, an improvement of about 30% to 40% from fiscal 2011. It expects gross margin to be in the range of 29% to 32% for the year.
"While we expect strong growth in fiscal 2012, the health of our markets and the strength and sustainability of the economic recovery can impact our results," added Lines.

SelectCore announces new patent-pending technology for prepaid cash network

SelectCore (CVE:SCG) announced Friday its patent-pending technology that is designed to allow any retail location to use the company's ReCash network, which allows consumers to load and reload cash onto their prepaid credit cards, through a point-of-sale terminal.
The new patent-pending technology will allow any merchant to become a ReCash agent, as it requires no new hardware, no integration or capital investment from the merchant, and can be processed with existing point-of-sale devices through traditional debit transactions.
The provider of prepaid telecom and financial services said merchants are expected to benefit from the technology by increased traffic and a new, high-margin revenue stream.
"With the significant influx of prepaid card users across North America, the shift to a cashless society is becoming more and more evident," said CEO Keith McKenzie.
"Consumers want to shop online, pay for gas at the pump, book travel, and soon 'fund their mobile wallets'."
SelectCore said it hopes to monetize this technology through organic expansion and global licensing arrangements.
News of the company's expansion prompted its shares on the TSX Venture Exchange to hike 10% to $0.66 per share.

Gold Resource Corp to distribute 11th special cash dividend in as many months

Mexico-focused Gold Resource Corp (AMEX:GORO) announced Friday that it will be distributing its eleventh special cash dividend to shareholders, benefiting from the start of commercial production at its El Aguila project last July.
The cash dividend, which has been increased to $0.04 per common share, will be paid to shareholders of record as of June 13, payable on June 17, 2011. The dividend, the eleventh in as many months since commercial production, is a direct result of cash flow generated from the company’s El Aguila operations, located in the southern state of Oaxaca, Mexico.
The total dividends declared since production now stands at $0.35 per share.
Gold Resource owns five potential high grade gold and silver properties in Oaxaca.

Great Basin Gold’s production ramp up gathers pace

Great Basin Gold (TSE: GBG, AMEX: GBG, JSE: GBG) is a emerging mid tier gold producer that is in the early stages of  gold production from the Hollister Mine, located on the Carlin Trend in Nevada, USA  and the Burnstone Mine, located in the Witwatersrand goldfield in South Africa. Annualized production is expected to reach 364 ,000 ounces of gold in 2013 from both mines, drawing from a total resource base of 23.4 million ounces of gold, with 7.3 million ounces currently in reserve status.

The Company has just reported its March quarter results for 2011, reporting record first quarter revenues of $26.4 million, from the sale of 17,324 gold equivalent ounces from the Hollister Mine, as well as 2,794 ounces from the Burnstone Mine. These 20,188 gold equivalent ounces were sold at an average price of US$1,328 per ounce. Approximately 11,000 gold equivalent ounces worth an estimated $15 million were also delivered to refiners and will be accounted for in the next quarter.

The Company also completed a successful equity raise of $86.3 million, issuing 33.8 million shares at C$2.55, and holds $68 million in cash that will be sufficient to fund development of the Burnstone Mine, which is the first new mine to open in the Witwatersrand basin for more than 30 years. This low-cost, long life, shallow mine has a targeted average annual production rate of 254,000 gold ounces over 25 years at a life of mine cash cost of US$450 per ounce.

The Burnstone metallurgical plant and other capital projects were commissioned in January, allowing the recovery of 5,511 gold ounces and sold 2,794 ounces to record maiden revenue of $3.8 million. Cash cost was $68 per tonne of ore, which is in line with estimated production start up costs that included substantial amounts of barren development ore, with only 26% of contained ounces extracted from stoping. This dilution reduced gold recoveries to 83% on a head grade of 0.03 oz/t Au / 1.03 g/t Au, and is reflected in a cash production cost of $1,344 per ounce for the quarter.

Gold recoveries are expected to improve to 95% as head grade increases and the quantities of development ore diminish substantially, with forecasts that head grades will reach 4.5 g/t Au by the end of calendar 2011, milling of 375,000 tonnes of ore that will drive cash operating costs below $487 per ounce of gold produced.

The Project is heavily mechanized with 3,288 meters developed against a planned 3,600 meters for the quarter for a total of 12,402 meters, of which 6,855 meters are on reef. Team efficiencies are improving on a monthly basis and development rates are expected to increase from a monthly average of 1,000 meters in the first quarter of 2011 to 3,000 meters by the end of calendar 2011. Additional travel ways and material handling systems are being developed around shaft bottom to maximize hoisting of ore through the vertical shaft on the 40 to 41 levels.

The Burnstone Mine has significantly increased reserves of total proven and probable reserves by 55% from 4.1 million ounces to 6.4 million ounces of gold, based around further underground development and drilling as well as inclusion of additional reserves from Area 2. The adoption of long hole stoping to extract ore has also had a positive impact on reserves due to the reduced dilution that increased the average grade of proven and probable reserves from 4.25 g/t to 4.47 g/t Au.

The Hollister Mine produced 17,324 equivalent gold ounces along with an additional 11,000 gold equivalent ounces delivered to the refiner for processing. Gold recoveries have increased with the continued installation of an acid regeneration plant at the Esmeralda Mill, where loaded carbon is shipped to the refiner in the place of doré bars, and has created a delay in recognizing revenue from gold sales. The interim plan to continuously introduce new carbon has boosted gold recoveries to 88% and 70% for silver, and has now exceeded 90%. Gold recoveries during 2010 ran between 77% to 80%.

The Hollister Mill processed 21,634 tonnes during quarter, with an average head grade of 32.15 g/t gold ounce equivalent. Cash production costs of $670 per ounce were impacted by lower recoveries and cost of replacing carbon, but these should drop in the next quarter.  The acid regeneration system should be completed in the third quarter of 2011.

Total proven and probable reserves at Hollister increased to 832,100 ounces of gold and 5 million ounces of silver or 907,000 gold equivalent ounces, at a grade of 0.8 oz/t which is an increase of 13% from reserves of 803,000 ounces announced in 2009. This is sufficient for an annualized production rate of 110,000 ounces for 8 years, at a cash cost of US$527 per ounce. Hollister has exceptional production and exploration growth with conceptual target zones identified over an 8,000 meter long strike line, with a width of 1,000 meters, and open at depth.

Raymond James noted this transformational year, with production increasing from 88,500 gold equivalent ounces in 2010 to more than 200,000 gold equivalent ounces in 2011, placing an outperform rating with a 6 to 12 month price target of US$4.30 on Great Basin Gold. Analysts at MLV are even more bullish, placing a price target of $5.50 based on the very significant increase of 2 million ounces of gold reserves at Burnstone.

Regardless of which analyst you believe, if Great Basin Gold delivers on its production forecasts, the company will be in for a significant re-rating.

Thursday, 26 May 2011

International Tower Hill Mines’ Livengood Project is attracting a lot of attention from analysts

Vancouver based International Tower Hill Mines (TSE:ITH; AMEX:THM) is focused on the development of its 100% owned Livengood Gold Project near Fairbanks, Alaska. The Livengood Project marks one of the largest new discoveries in recent years and is being advanced by veterans of the industry -- newly appointed CEO James J. Komadina, who was previously Chief Operating Officer of Brazauro Resources and President & CEO of AngloGold, North America, while President and COO Carl Brechtel was formerly the prefeasibility study manager at AngloGold Ashanti.

Gold has lost a bit of its luster these last few weeks as commodities in general have come down from recent highs. Interestingly, analysts have noticed divergent market action between metal prices and stock performance of miners. For the past month or so, mining stocks have dropped while gold headed toward record highs. The recent decline in gold prices has only exasperated the fall in shares of mining companies, even as gold still trades over $1,500 per ounce.  

International Tower, which has a market cap of approximately $690 million, has not been immune to the recent divergence between gold and gold companies.  Most recently traded at $8.00, the company’s share price is down more than 20% from its high of $10.49 reached in mid-April. Gold on the other hand is down a mere 4% from its record settle of $1,566.70 per once.

International Tower’s emerging production status has attracted the attention of the analyst community – it is covered by at least seven analysts, several of whom issued new reports following a new resource update at Livengood. The report updated total resources to 20.2 million ounces, with a healthy 51% in the measured category, 24% indicated and 24% inferred. This equals 7.4 million ounces measured, 3.2 million ounces indicated, and 2.7 million ounces inferred gold.

Canaccord Genuity, Credit Suisse, and Macquarie each have “buy” or “outperform” recommendations on International Tower with price targets ranging from C$12.00 to C$13.00.

BMO Capital Markets maintained a Market Perform status on the stock with no price target, but noted the new resource as having a positive impact. Analyst John Hayes further noted intermediate producers trade on average at a 29% premium to its 0% NAV estimates while International Tower is trading at a 20% discount to its estimated 0% NAV.

Analyst recommendations or not, International Tower is moving quickly to advance its Livengood Project. The current resource is located on a parcel measuring approximately 1 km by 2.5 km within a much larger land package of 145 km squared.  Gold is found disseminated or in veinlets hosted in sedimentary and volcanic rocks.  So far, 98% of the 600 holes drilled were within the 2.5 km square resource and mineralization extends along a 10 km unexplored trend, indicating potential for greater discovery on the land package.

Infill and step-out drilling is ongoing to expand and upgrade the current resource. Geotechnical drilling is also underway, as well as a highly anticipated pre-feasibility study, expected to be completed by Q4 2011.  Approximately $7.5 million is being spent on the 45,000 meter infill/expansion drill portion and $2.4 million for a 10,000 meter new discovery and district wide target generation program. 90% of the 145 square km land package is unexplored. A total of seven drill rigs are in operation.

In early May, the company released results from 29 holes from its Winter 2011 drill program focused on confirming the continuity and grade of the mineralization of its existing deposit as well as follow-up exploration of a new, deeper higher grade zone showing mineralization.

Management believes the configuration and characteristics of the main deposit make it potentially amenable to high volume open pit mining. Based on a Preliminary Economic Assessment (PEA) completed in September 2010, when fully operational the mine could run at a rate of up to 100,000 to 130,000 tons per day. In ongoing processing reviews, average mill recovery is estimated to be about 81%.

By 2012, International Tower will be working towards permitting and by 2014 construction is expected to begin. Gold production is penciled in for 2016. At a production rate of a whopping 833,000 ounces per annum, the mine has an expected life of 12.6 years.

The Livengood sits near quality infrastructure, with direct access to paved highways. Alaska provides the ultimate in political stability as well as a highly trained work force.  While a multitude of permits, the state’s well-defined permitting path makes dealing with the government a smoother and manageable process.

International Tower is sitting on a very large resource that has the potential to expand further. It is focused on quickly developing the project and beginning production in as little as five years to become a mid-tier producer. The company is well capitalized with $120 million in cash - enough to see it through to 2013. In the meantime, investors can look forward to oodles of drill data, a feasibility study and the advancement of the one of Alaska’s largest gold discoveries.