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Nepal will put FX reserves into gold and rig domestic market
Nepal Government Adopts New Gold Policy
From Xinhua News Agency, Beijing
Saturday, September 25, 2010
http://news.xinhuanet.com/english2010/business/2010-09/25/c_13528683.htm
KATHMANDU, Nepal -- In a strategic move, Nepal's government has decided to bolster gold reserves to back up macroeconomic stability and manage the market after poor management of the gold trade fueled a balance-of-payments deficit posing challenges to stability for about a year.
According to Saturday's Republica daily, Ministry of Finance and Nepal Rastra Bank, the central bank of the country, have endorsed a new policy on gold under which they have converged on maintaining separate reserves of monetary gold and 24-carat pure gold.
"We will bolster reserves of monetary gold to back up currency and the additional 24-carat pure gold reserve will be maintained to intervene in the market in case of distortion," said a highly placed source at the Ministry of Finance.
... Dispatch continues below ...
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
Currently, the central bank has more than 6 tons of gold in its reserve. While five tons of the reserve is in Nepal, another 1.2 tons is deposited in Luxemburg against the interest return of 2 percent per annum. The interest is received in gold.
"We have set a target to add 3 to 4 tons of yellow metal in the monetary gold reserve every year once we attain balance-of-payment surplus, " said the source. This means that the policy has adopted a strategy of using surplus in balance of payments to procure gold. At present the surplus is maintained in foreign currency.
The government decided to adopt the new approach mainly because the rate of return on gold in recent years has remained much higher than the rate of return on currency.
The government has banned the import of gold after it failed to re-impose a higher import duty, which was necessary to plug the duty differences on gold between Nepal and India. But that caused supply shortages and sparked illicit inflow of gold from India.
Nepal's gold imports in 2009/10 had touched 41.63 billion Nepali rupees ($570 million) as substantial duty differences on gold between Nepal and India spurred smuggling from Nepal to India.
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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
