Gold in a bubble? Not in Europe, where public can't sell fast enough

Section:

Italy's Top Gold Scrap Buyer Sees Booming Business

By Svetlana Kovalyova
Reuters
Wednesday, February 1, 2012

http://www.reuters.com/article/2012/02/01/us-italy-gold-idUSTRE81020H201...

MILAN, Italy -- OroCash, Italy's biggest buyer of used gold jewelry, expects business to flourish this year with the opening of 150 new collection points in Italy and abroad as high gold prices and unfolding economic crisis prompt people to sell family assets.

Recycled gold accounts for more than a third of global gold supply and is a major driving force on precious metal markets. Gold scrap volumes in Europe jumped 12 percent to record highs in 2011 on the back of rising metal prices, according to data from metals consultancy Thomson Reuters GFMS.

"People are no longer so emotionally attached to their old jewelry as in the past. Jewelery has become an accessory. People buy and sell it as easily as they buy and sell shoes," Marco Agostoni, OroCash commercial director, said on Wednesday.

... Dispatch continues below ...


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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf



OroCash, which opened its first collection point for used jewelery in 2000, estimates that volumes of its gold business rose by at least 15 percent in 2011 from 6 tons in 2010, its top managers told Reuters in an interview.

"Of course, the crisis has helped" to boost business "but it is not the main reason. Gold prices are high and people sell jewellery they have accumulated over the years and no longer need," Agostoni said.

About 20-25 percent of people who sell their gold jewellery do it because they are forced by dire economic circumstances, up from about 15 percent before the crisis, OroCash managers said citing their internal statistics.

"People get divorced and they want to free themselves from old memories. Or they inherit jewelery that they don't want to keep," Agostoni said, brushing off estimates by some sector analysts that most available gold scrap has already hit the market after a prolonged period of high prices.

OroCash which operates 350 collection points in Italy and about 100 shops in Spain, Portugal, Ireland, and Austria, plans to open about 150 new shops this year on its home turf and abroad betting on people's desire to cash on high gold prices.

Countries favored by the group are often referred to as weak links in Europe. Italy, the euro zone's third-biggest economy, has been struggling to stave off a debt crisis which is engulfing Greece and forced Portugal and Ireland to seek international bailouts.

Gold prices rallied on Wednesday adding to an 11 percent rise in January, the largest one-month gain since August 2011 and the largest for the month of January since 1980, thanks the weak U.S. dollar and central bank purchases.

Used gold jewelery collectors, known as "Compro Oro" shops, have mushroomed in Italy since 2000 when the country liberalized its gold market allowing private operators to trade in precious metals.

The number of Italian Compro Oro shops is estimated at 5,000-8,000 at present with an annual turnover of 2-3 billion euros, while total volume of gold scrap in the country is estimated at 85-90 tons in 2010, according to the Italian goldsmiths' federation Federorafi.

OroCash refines its precious metal scrap in Switzerland, which has high-quality refining facilities, its managers said.

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Prophecy Coal (TSX: PCY) Wins Positive Feasibility Study
for the 600-MW Chandgana Power Plant in Mongolia

Company Press Release
January 17, 2012

VANCOUVER, British Columbia, Canada -- Prophecy Coal Corp. (TSX: PCY, OTCQX: PRPCF, Frankfurt: 1P2) has received a positive feasibility study for the company's 600-megawatt Chandgana Mine-Mouth Power Project in central Mongolia. The report was independently prepared by Ralf Thomsen, project manager at Steag, a German firm specializing in the planning, financing, construction, and operation of highly efficient thermal power plants for fossil fuels.

The study covers technical specifications, deployment, and financial analysis of a 4x150-mw thermal power plant to be built adjacent to Prophecy's Chandgana Tal coal deposit, which contains 140 million tonnes of measured coal. Last year the power plant received a construction license and the coal deposit received a mining license. Engineering, procurement, and construction management selection and project financing discussion have begun and are expected to be concluded this year.

Construction is planned to start in April 2013, with the first 150-mw unit being commissioned in October 2015 and subsequent units to start in April 2016, October 2016, and April 2017. With proper maintenance the project will have 30 years of commercial operation.

For the complete statement from the company, including maps and charts, please visit:

http://www.prophecycoal.com/news_2011_jan17_prophecy_receives_power_plan...