Gold posts weekly losses as US inflation stays unchanged, euro falls on Greek debt worries

Gold prices fell sharply late on Friday after climbing for most of the week to reach US$1,130/oz and then stabilize at around US$1,125/oz. The yellow metal was pushed lower by India’s decision to hike its repo rate, which is charges banks for short term loans, to 5% and its reverse repurchase rate that it pays banks for loans to 3.5% in what was explained as an attempt to curb inflation.
India is the world’s largest buyer of gold, followed by China, which has recently introduced a wave of measures to prevent the rapidly growing economy from overheating and reported an increase in its annualised inflation rate to 2.7% in February, triggering speculation of further monetary policy tightening.
This means that gold has returned to Monday’s levels, when it was negatively impacted by speculation of the possible launch of a European Monetary Fund to help the euro zone deal with its debt problems. The fund would be back by the vast gold reserves of the euro zone states.
Gold was supported by gains in the euro, which, however, found itself under pressure after Greece said it was unlikely that it would receive aid from the European Union and could eventually turn to the International Monetary Fund (IMF) for support. The German government later said that it did not rule out IMF aid for Greece.
The uncertainly over Greece’s debt crisis has kept the euro under pressure for weeks, though worries eased two weeks ago when the debt laden country introduced a fresh package of economic austerity measures aimed at saving some €4.8 billion and conducted a successful bond issue to raise another €5 billion to meet its near term commitments. However, last week rating agency Fitch triggered another wave of jitters by promising to cut the current AA rating of another troubled euro zone country Portugal if its fiscal consolidation proceeds at a slow pace and proves insufficient. Portugal also conducted a bond issue, raising US$1.34 billion.
A stronger US dollar weakens gold, which is seen as a riskier alternative and usually moves inversely to the American currency.
Gold was supported by the Federal Reserve’s decision to leave its interest rates at the current ultra low levels, which increased the yellow metal’s appeal as a dollar and inflation hedge. However, an update that came out later in the week showed that US inflation stayed unchanged after increasing in January, which further weighed on gold as it lost support at US$1,130/oz and ultimately at US$1,120/oz.
Gold miners headed in different directions as while blue chip Randgold Resources (LSE: RRS) tracked the yellow metal’s movements, falling sharply at the end of the week, peer from the FTSE 250 Petropavlovsk (LSE: POG) posted a weekly gain.
Gold traded at US$1,108/oz on Saturday. Other precious metals also declined as silver moved down to US$16.96/oz, while platinum retreated to US$1,605/oz.
Silver miners fell with both Fresnillo (LSE: FRES) and Hochschild Mining (LSE: HOC) posted weekly losses. Platinum producer Lonmin (LSE: LMI) posted a small gain during the week, while midcap Aquarius Platinum (LSE: AQP) fared better, climbing from Monday’s 393 pence to the current 416 pence.
Large and Mid Cap News
Now that China appears to be repairing bridges with Australia in general, and Rio Tinto (ASX:RIO, LSE:RIO) in particular, there is strong speculation that Rio may be taking co-operation with the Chinese to the next stage by partnering with Chinalco in its investment in the giant Oyu Tolgoi gold/copper project in Mongolia, close to the Chinese border.
Hochschild Mining (LSE: HOC) has filed suit against Minera Andes Inc (TSX: MAI; OTC: MNEAF) of Alberta, Canada and its subsidiary Minera Andes SA in the New York State Supreme Court, asking that Minera Andes be required to execute formal loan agreement documents for the $65m project financing loan which was provided by Hochschild to the San José gold and silver project in Argentina.
Relations between Australia and China appear to be thawing quickly, just as Rio Tinto (LSE, ASX:RIO) and Chinalco, China's largest aluminium producer, start to look at ways to co-operate again on large undeveloped projects.
Small Cap News
Diamondcorp (AIM:DCP, JSE:DMC) that is has conditionally raised £7.1 million (£6.6 net) at 7 pence per share.  Looking at the chart of Diamondcorp since listing (February 2007), it is pretty clear that this junior diamond company has had its fair share of difficulties. Perhaps more pertinent however is the fact that Diamondcorp is still listed, and is now in a position to issue more than 100 million shares – double the current number outstanding – to move its Lace Diamond Mine in South Africa closer to production. Granted the placing was completed at a 26% discount, and the dilution is eye watering for current shareholders, but it is no mean feat raising more than double the current market capitalisation of your company. It is also worth noting that approximately 70% of the new money was raised from current shareholders, reflecting a hefty amount of faith in the management to deliver.
Firestone Diamonds (AIM: FDI) said it intends to apply for a secondary listing on the Botswana Stock Exchange (BSE), and has appointed Capital Securities of Botswana as its sponsoring broker for the proposed listing. The listing application is expected to be made shortly, and the company’s shares are expected to join the exchange in Q2 2010.
Metals Exploration (AIM: MTL) has been awarded he Environmental Compliance Certificate (ECC) for the Runruno gold-molybdenum project on the island of Luzon in the northern Philippines following a positive evaluation of the project’s environmental impact statement by the Environmental Management Bureau (EMB).
Landore Resources (AIM: LND) said that an independent technical study at the Lamaune iron prospect  at the Junior Lake property in Ontario has identified an exploration target of 545 Mt (million tonnes) at an average grade of 29% Fe (iron).
In an update to investors, Stellar Diamonds (AIM: STEL) said it has moved quickly to restructure its operations and fast track production following the completion of its reverse takeover of West African Diamonds in February. The company said it is harnessing operational and corporate synergies resulting from the merger, and also noted that it has benefited from a strong recovery in the rough diamond market, as reflected in recent sale prices.

Iron ore focused investor Red Rock Resources (AIM: RRR) said samples from a percussion drilling programme at its Migori gold project in Kenya are being prepped for ICP (inductively coupled plasma) analysis and gold and base metal assaying at the laboratory in Mwanza, while samples from reverse circulation (RC) drilling completed in late 2009 and early 2010 are being prepared for transportation to the laboratory to undergo an assay. The company has also received results from 2007 drilling at Migori.
Blackswan Equities retailed in 'buy' recommendation for Discovery Metals (AIM: DME, ASX: DML) and target price of A$0.90 per share after the Botswana operating nickel and copper miner last week reported on the results from 26 exploration drill holes at the Boseto mine, which Blackswan said demonstrated “significant potential to add existing resources and extend Boseto’s mine life".
Altona Energy (AIM: ANR) has appointed Peter Fagiano as senior executive in charge of project technology to join the Arckaringa Joint Venture (JV) management committee, which is responsible for the JV’s operations and decision making on all key matters.
Medusa Mining (ASX, AIM: MML, TSX: MLL) said the commissioning of the mill expansion is at the Co-O mine in the Philippines is progressing well and the company is set to meet its targeted  production of 25,000 ounces of gold this quarter.
Goldplat PLC (AIM: GDP) said it has, through its Ghanaian business Gold Recovery Ghana Ltd (GRG), signed an ongoing agreement  with AngloGold Ashanti Ltd’s (LSE, ASX: AGG; NYSE: AU) unit in the country to purchase gold bearing materials for processing at its operations in Tema, Ghana.
Vatukoula Gold Mines (AIM: VGM) has finalised the Vatukoula trust deed and made the first payment of Fiji$1.5 million (US$0.77 million) to the trust account of the Social Assistance Trust, formalising a number of key concessions and exemptions to the company’s wholly owned subsidiary Vatukoula Gold Mines in Fiji.
Finders Resources (AIM&ASX: FIN) has released its financial report for the six months to 31 December 2009 to  comply with AIM regulations after changing its financial year-end from 30 June to 31 December.
Rusina Mining (ASX: RML; AIM: RMLA) has focused its efforts on developing projects with shorter pay-off period in the six months to 31 December 2009, while raising funds to improve its cash balance.

Red Rock Resources’ (AIM: RRR) associate Resource Star (ASX: RSL) has signed a joint venture agreement with Globe Metals & Mining (ASX: GBE), to earn up to 80% interest in the advanced Livingstonia uranium project in Malawi. The AIM listed company also noted that, through two transactions this month, it has increased its shareholding in Resource Star to 26.3%, up from 24.4% when its associate relisted on the ASX in February.
Institutional investment bank Fairfax has issued a positive note on Medusa Mining (ASX, AIM: MML, TSX: MLL) following the company’s update on the commissioning of mill expansion at the Co-O mine in the Philippines earlier today.
Gemfields (AIM: GEM) has held its first rough emerald and beryl auction of 2010 in Jaipur, India, from 11-15 March, selling 89% of material by value for US$7.2 million and setting what the company said was a world record in terms of the volume for Zambian emerald and beryl on offer by weight, at 5.78 tonnes of material on offer.
Strategic Natural Resources (AIM: SNRP) (SNR) said it is raising £2.9m through a placing of 19.1m new shares at 15p, and plans to use net proceeds to fund the development and commercialisation its mining assets in the Eastern Cape of the Republic of South Africa, and to enable it to repay a short term debt facility.
African Aura Mining (AIM: AAAM, TSX-V: AUR) said its Putu iron ore project was fully on track as the target of at least 1 billion tonnes of NI 43-101 compliant resource has already been achieved, with a “significantly larger” resource anticipated by the company and its joint venture partner Severstal.
Forte Energy (AIM, ASX: FTE) has had a busy first half in which it undertook extensive exploration. During the period to end-December 2009, the company completed the second tranche of a US$12 million capital raising to help fund its accelerated exploration activities in West Africa. The company had cash of US$5.9 million at the end of the period compared to US$4.2 million a year earlier and US$6.6 million at 30 June 2009.
Range Resources (AIM: RRL, ASX: RRS), the diversified oil and gas junior with assets in Somalia, Georgia and the United States, narrowed its net loss in the first half to end-December 2009 to US$1.7m compared to US$5.59m in the comparable period of 2008. In terms of its operations, the company noted considerable progress during the period.
Chaarat Gold Holdings Ltd (AIM: CGH) said it was notified that on 17 March 2010, finance director Linda Naylor bought 35,500 ordinary shares in the company at  55.375 pence each. She now has a beneficial interest in 78,000 shares representing approximately 0.07 percent of Chaarat's issued share capital.

Berkeley Resources (ASX:BKY, AIM:BKY) has received drill results from exploration at the Águila and Alameda areas and final results from the program at the Alameda South deposit at the Salamanca Uranium Project in Spain.
In its interim results statement, African Diamonds (AIM: AFD) said the pace of development at the AK6 diamond mine in Borswana is accelerating, with the mine expected to come on stream in 2011 and within previously set cost parameters.
London Mining (AIM: LOND) said its full year loss narrowed to US$28.6 million in 2009 from US$36.8 million in 2008, helped by the first net earnings of US$6 million booked from its Chinese joint venture China Global Mining Resources (CGMR), which has produced 136,500 tonnes of iron ore attributable to the company since the US$44.5 million acquisition last April.
EMED Mining (AIM: EMED) said its addtional listing on the ASX (Australian Stock Exchange) planned for the second half of the year is on track, following consultations with the exchange, its advisers and institutional mining-specialist investors.

Herencia Resources (AIM: HER) has decided to assay all samples from the current 2010 diamond drill program at its Paguanta project in Chile for gold in addition to assaying for base metals.  After the majority of holes within the existing resource envelope intersected gold mineralisation, the company is seeing growing potential for gold credits to enhance future project economics.
Metminco (ASX: MNC) has announced its intention to list on London’s AIM market, after it exercised its option to acquire a controlling interest in un-listed Hampton Mining, whose main asset is the Los Calatos copper-molybdenum porphyry deposit in southern Peru. The company has simultaneously undertaken a capital raising in support of the UK listing and the acquisition.
ZincOx Resources (AIM: ZOX) informed investors that, on the 16 March 2010, it  received notice of requisition for a general meeting from two of its shareholders which together hold 5% of its issued share capital.
Cluff Gold (AIM: CLF; TSX: CFG) said the levels of production at the Kalsaka and Angovia mines are above the company’s current target of 100,000 ounces in 2010, and Cluff produced a total of 19,288 fine ounces of gold in January and February 2010. The gold was subsequently sold at an average price of US$1,112 per oz, and the company’s cash position improved by US$3.4m in the two month period ro stand at to US$5.7m on 28 February 2010.

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