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Swiss National Bank vows to keep holding franc down
By Alice Ross
Financial Times, London
Monday, September 3, 2012
http://www.ft.com/intl/cms/s/0/23278860-f5df-11e1-bf76-00144feabdc0.html
The head of the Swiss National Bank has vowed to continue its policy of halting rises for the franc against the euro and has warned that a stronger currency would be a "substantial threat" to Switzerland's export-dependent economy.
Thomas Jordan, in a speech in Zurich on the challenges for Switzerland as a financial centre, warned of the negative effect of the eurozone crisis and the damage to the Swiss economy that a stronger franc could create.
"In the current situation, a further appreciation of the Swiss franc would constitute a very substantial threat to the Swiss economy and would carry with it the risk of deflationary developments," Mr Jordan said.
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"With this in mind, we will continue to enforce the minimum exchange rate with the utmost determination."
He added that economic uncertainty in the eurozone was of "great concern" to Switzerland and the bank, underlining the role of the franc policy as an attempt to reduce the negative implications for the country.
Mr Jordan's comments were made almost a year after the SNB introduced its policy of keeping the franc weak by maintaining an exchange rate of SFr1.20 against the euro.
The move, introduced on September 6 last year, was put in place following overwhelming demand for Swiss assets from foreign investors seeking a haven amid the eurozone crisis.
The SNB was viewed as so credible in the markets that its franc policy was not tested until May, when growing fears that Greece could leave the eurozone prompted fresh demand for the currency.
The central bank has since spent tens of billions each month buying euros to weaken the franc and hold the exchange rate at SFr1.20.
That has helped the SNB's foreign currency reserves to rise to record levels. The most recent figures show SFr406 billion ($425.9 billion) in forex reserves on its balance sheet at the end of July, an increase of 71 per cent over a three-month period.
However, foreign currency analysts believe the foreign exchange reserve figures for August, due to be published in coming days, will show that the pressure on the SNB has abated in recent weeks amid a period of relative optimism over the euro.
UBS analysts pointed to a slowdown in weekly deposit data at the bank during August, in contrast with higher weekly inflows in June and July.
The forthcoming anniversary of the bank’s decision to set a ceiling for the franc has prompted questions over how much longer it can continue with the costly policy.
"We expect the SFr1.20 floor to hold indefinitely, notwithstanding the buildup of foreign exchange reserves," Credit Suisse analysts wrote in a note on Monday.
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Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment:
38% Pre-Tax IRR, $3.0 Billion NPV, and a 37-Year Mine Life
Company Press Release
VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory.
The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57.
The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows:
Payback period: 3.55 years
Initial capital investment: $863 million
IRR pre-tax (100% equity): 38 percent
NPV pre-tax (8% discount): $3 billion
Mine life: 37 years
Total mill feed: 405.3 million tonnes
Mill throughput: 32,000 tonnes per day
Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics."
For the complete press release, please visit:
http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...
