Gold Summary for March 24, 2015
2015-03-24 20:22 ET - Market Summary
by Stockwatch Business Reporter
New York spot gold closed up $3.90 to $1,193.20 Tuesday, rising with the U.S. dollar after some pleasing economic reports. Both new home sales and manufacturing are on the rise. Here in Canada the TSX Venture Exchange added 3.64 points to 674.20, while the TSX Gold Index lost a fraction to 165.90.
Canadian gold miners ended some down, others up. Goldcorp Inc. (G) lost 31 cents to $24.32, Agnico Eagle Mines Ltd. (AEM) lost 22 cents to $37.81, Yamana Gold Inc. (YRI) added 12 cents to $5.21 and Eldorado Gold Corp. (ELD) gained 26 cents to $6.59.
Cliff Davis's Eritrean gold and copper miner, Nevsun Resources Ltd. (NSU), rose four cents to $4.47 on 798,000 shares. Yesterday, the company said it had "experienced an act of vandalism" at its Bisha plant, which was already shut for some mechanical repairs. African media outlets, however, are reporting that the "vandals" were Ethiopian fighter jets trying to bomb the Bisha mine because it is one of Eritrea's larger sources of revenue. Fortunately, Nevsun does not seem too concerned, noting that the vandalism was minor. It still aims to resume production next week. Ethiopia and Eritrea have been at war for years. Nevsun last had to suspend work at Bisha because of violence in 1998 through 2001. By the time it started production in 2011 president Davis said, "I feel as safe [in Eritrea] as I do in Vancouver." He chalks up the negative Eritrean attention to outsiders misunderstanding the country. For his work in misunderstood Eritrea, he receives around $1.35-million a year. The Canadian government advises its citizens to avoid all non-essential travel.
Over the border in Ethiopia, Andrew Lee Smith and Jingbin Wang's East Africa Metals Inc. (EAM: $0.065) is busy drilling at its two gold properties, Harvest and Adyabo. The company has yet to experience any local violence. It has $13.5-million in working capital, 102 million shares outstanding and one other gold project, Handeni, in Tanzania, where a Chinese joint venturer is paying for everything as it earns a 55-per-cent interest. Handeni used to belong to Mr. Smith's Canaco Resources Inc., which spun it and the two Ethiopian projects to East Africa in 2013. That was a busy time for Mr. Smith, who was defending himself (along with three other former Canaco directors) at the British C olumbia Securities Commission. The commission had accused the men of granting themselves stock options in late 2010, before releasing a series of material drill results, staggered to maximize stock-price increases. Canaco hit an all-time high of $6 in December, 2010, up from 30 cents a year earlier. The company's lawyer, Hein Poulus, argued that all of the drill results were from infill drilling and therefore immaterial. He also showed that no insiders profited from the stock options, which the company repriced, to $4.88 from 32 cents, at the behest of the TSX-V. The commission ended up dismissing all allegations in August, 2013; a vindicated Mr. Smith called the ordeal "a misguided, expensive and wasteful regulatory process." He receives $157,000 a year for his services to East Africa Metals, down from the $286,000 he received at Canaco in 2012 and the $360,000 he received in 2011.
Don Dudek's Savary Gold Corp. (SCA) remained unchanged at 7.5 cents on 498,000 shares. The company has $3-million, after selling 60 million units at five cents. Investor Ross Beaty bought 28 million units, giving him a 19.9-per-cent interest in the company and an up-to-27-per-cent interest should he exercises his 14 million warrants. Savary's stock has woken up over the past several months, rising from a penny as the company started exploring at its Karankasso target in Burkina Faso. Karankasso is a joint venture with Andrew Dinning's Sarama Resources Ltd. (SWA: $0.085), and the property sits just south of Endeavour Mining Corp.'s (EDV: $0.59) Hounde project, where Endeavour is planning a $315-million gold mine.
Savary's Mr. Dudek has one other deal, Alder Resources Ltd. (ALT: $0.01), which is looking for gold Nicaragua. The company, with negative $200,000 in working capital, would also benefit from the support of a shareholder like Mr. Beaty. He has been bullish on gold juniors the past year, personally investing over $21-million in five different companies, all at different exploration stages. Besides Savary, he invested in Chilean gold explorer Arena Minerals Inc. (AN: $0.15), Yukon gold explorer Kaminak Gold Corp. (KAM: $0.91), Irish gold explorer Dalradian Resources Inc. (DNA: $0.91) and Ecuadorian gold explorer Odin Mining and Exploration Ltd. (ODN: $0.40). He bought his Odin shares first, 26 million at five cents last summer. That investment has since risen by $9.2-million in value.
Finally, Alexander Massoud's Alexander Nubia International Inc. (AAN: $0.07) has sampled up to 82.4 grams per tonne gold at its Fatiri gold project in Egypt. New exploration manager Danae Voormeij says it is likely that Romans once started to mine at Fatiri, stacking the ore into neat piles before leaving. "Veni, vidi, vici," she says, "They came, they saw, they commenced extraction of the ore and then left the place for some reason." Geologists rarely spice up their technical jargon with Latin, but Ms. Voormeij is no ordinary geologist. The Netherlands-born, Vancouver-raised exploration manager says she prefers work in exotic locales, especially Africa, where she says the locals treat her as a big sister. She has spent much time in the bush in Liberia, Ethiopia and Uganda, as well as in Mongolia, Papua New Guinea and the Philippines. Those interested in learning more about how to explore for gold in tropical countries can take her on-line EduMine course for $404.
Returning to Alexander Nubia, the company has $1.05-million from a financing it closed earlier this month, just before it rolled its shares back 1:5. The money will ensure that the company can pay president Massoud's $258,000-a-year salary. Alexander Nubia is Mr. Massoud's first public company, and it has suffered from bad timing. Shortly after he listed it in late 2010, violence broke out across Egypt and the Arab Spring ousted former president Hosni Mubarak. |
