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Gold gains as central banks stock up
'Stock up'? 'Stop dishoarding' is more like it.
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By Javier Blas
Financial Times, London
Tuesday, September 14, 2010
http://www.ft.com/cms/s/0/f99f518a-c025-11df-b77d-00144feab49a.html
Gold prices have pushed to a fresh record amid forecasts that central banks will be net buyers of bullion this year for the first time in two decades, the clearest sign of the rehabilitation of bullion after the financial crisis.
The shift marks a turnround after heavy disposals by European central banks over the past 10 years, when gold was seen as a non-yielding unattractive asset. Monetary institutions then swapped their bullion for yielding sovereign debt.
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Sona Resources Expects Positive Cash Flow from Blackdome,
Plans Aggressive Exploration of Elizabeth Gold Property
On May 18, 2010, Sona Resources Corp. (TSXV: SYS, Frankfurt: QS7) announced the release of a preliminary economic assessment for gold production at its flagship Blackdome and Elizabeth properties in British Columbia.
Sona Executive Chairman Nick Ferris says: "We view this as a baseline scenario for gold production. The project is highly sensitive to the price of gold. A conservative valuation of gold at $1,093 per ounce would result in a pre-tax cash flow of $54 million. The assessment indicates that underground mining at the two sites would recover 183,600 ounces of gold and 62,500 ounces of silver. Permitting and infrastructure are already in place for processing ore at the Blackdome mill, with a 200-tonne per day throughput over an eight-year mine life. Our near-term goal is to continue aggressive exploration at Elizabeth and develop a million-plus-ounce gold resource, commencing production in 2013."
For complete information on Sona Resources Corp. please visit: www.SonaResources.com
GFMS, the consultancy that compiles benchmark statistics for gold, said that central banks would buy about 15 tonnes of bullion on a net basis this year, a situation last seen in 1988. The swing comes on the back of buying by Russia and several Asia-based central banks and the collapse of sales in Europe.
The shift in central banks' attitude toward gold, coupled with renewed US dollar weakness on Tuesday, propelled gold prices to a fresh nominal high of $1,274.75 a troy ounce, up nearly 2 per cent on the day. Gold prices have risen about 15 per cent since January, boosted by worries about sovereign risks. Adjusted for inflation, gold prices are, however, still a long way from their all-time high above $2,300 in 1980 reached during the Soviet invasion of Afghanistan.
Philip Klapwijk, GFMS chairman, said gold prices could set fresh highs in the near term, trading above $1,300 an ounce, on the back of uncertainty about the global economy and concerns about high levels of debt in developed countries.
China, India, Saudi Arabia, and other countries have announced large additions of gold to their reserves since the start of the financial crisis in 2008, providing a psychological boost to bullion.
The consultancy said that even if current net buying by central banks remains relatively low, the shift is an important departure from the past decade, when central banks sold on average 442 tonnes of gold per year, equal to about 10 per cent of total bullion demand.
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Prophecy to Become Coal Producer This Year
with 1.5 Billion Tonnes of Resource
Prophecy Resource Corp. (TSX.V: PCY) announced on May 11 that it has entered into a mine services agreement with Leighton Asia Ltd. to begin coal production this year. Production will begin with a 250,000-tonne starter pit as planned in August, with production advancing to 2 million tonnes per year in 2011. Prophecy is fully funded to production and its management team includes John Morganti, Arnold Armstrong, and Rob McEwen.
For Prophecy's complete press release about its production plans, please visit:
http://www.prophecyresource.com/news_2010_may11.php
