AGORACOM Small-cap Investor Relations Blog

SPONSOR: Labrador Gold – Two successful gold explorers lead the way in the Labrador gold rush targeting the under-explored gold potential of the province. Exploration has already outlined district scale gold on two projects, including over a 40km strike length of the Florence Lake greenstone belt, one of two greenstone belts covered by the Hopedale Project. Click Here for More Info

• At all-time highs in six of the world’s top currencies
• Gold is up 25% in sterling; 22% in the yuan; 21.5% in euros; 19.7% in Australian dollars; 18% in rupee; 13% in Canadian dollars and 12% in Japanese yen

The charts posted immediately below tell one of the quiet, but perhaps most important stories unfolding in the world of high international finance. Gold has appreciated sharply in the currencies of all of the world’s top economies.  In five of the top eight economies – the United Kingdom, Japan, Canada, Australia, and India – it is priced at all-time highs. In short, as currencies race for the bottom, gold is racing to the top. Investors everywhere are moving to insulate their portfolios against the combined threats of recession, plummeting yields, currency depreciation, and stock market instability. An over-arching nemesis not likely to relinquish its place any time soon has unleashed those four horsemen – the burgeoning trade and currency war. 

Gold is up 25% in sterling; 22% in the yuan; 21.5% in euros; 19.7% in Australian dollars; 18% in rupee; 13% in Canadian dollars and 12% in Japanese yen.  It is up sharply against a long list of emerging country currencies as well. By way of perspective, gold is up 16% in U.S. dollars thus far in 2019. “A host of global factors mean gold’s price is set to maintain its strength at least for the next six to 12 months,” said Howie Lee, an economist at Singapore’s Oversea-Chinese Banking Corporation, in a recent CNBC interview. “The world right now is in a precarious state and gold is due to benefit from this situation,” With the world – from Asia to Europe, the United States and a long list of emerging countries – now acutely attuned to gold ownership, it might not be long until we begin to see strains on the limited physical supplies. 

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Source: https://www.usagold.com/cpmforum/anv-august/

SPONSOR: Labrador Gold – Two successful gold explorers lead the way in the Labrador gold rush targeting the under-explored gold potential of the province. Exploration has already outlined district scale gold on two projects, including over a 40km strike length of the Florence Lake greenstone belt, one of two greenstone belts covered by the Hopedale Project. Click Here for More Info

• Recognizes a lack of early-stage development projects in the sector.
• Blames consolidation in the mining sector for a steep decline in greenfield discoveries
• “The industry as a whole needed to step up in the wake of a lost decade in exploration “

Rio Tinto has blamed consolidation in the mining sector for a steep decline in greenfield discoveries as it flags a steady build up of its much-hyped Winu copper-gold find in Western Australia.

The mining giant’s head of growth and innovation, Stephen McIntosh, said headwinds pushing against discovery success were stronger than ever as he bemoaned a lack of early-stage development projects in the sector.

Mr McIntosh said the industry as a whole needed to step up in the wake of a lost decade in exploration. He said something had gone wrong as exploration spending failed to translate into discoveries.

His warning, in a speech to the Diggers & Dealers mining conference in Kalgoorlie on Monday, comes with Rio drilling its largest number of greenfield targets in almost two decades.

The drilling includes the company’s Winu copper-gold discovery in WA’s Paterson Range.

Mr McIntosh said Winu was a “rare and exhilarating” case where the first drill hole was the discovery hole.

He gave fresh insight into how highly Rio rates Winu, saying none of the company’s existing tier 1 assets started life that way and some projects needed ongoing development and exploration to grow into that status.

“It is important with Winu that we look for a case that is bankable, relatively low capital and low risk,” he said.

“As such, we are primarily focused on defining a potential open pit starter case.”

‘Every hole is telling us something new’

Rio released the latest set of drill hole results for Winu last week, which continue to indicate wide intersections of vein-style copper mineralisation associated with gold and silver beneath relatively shallow cover.

Winu is named after the local Aboriginal word for thirsty and Rio is just that for a big copper discovery now that is in greater demand with the rise in renewable energy and electric vehicles.

“We have an extensive drilling program this year with 12 drill rigs on site and a 190-person camp,” Mr McIntosh said.

“Every hole is telling us something new and slowly we are pulling together the story of the Winu deposit.”

Rio increased its footprint in the Paterson Range from 1000 square kilometres to 12,000 square kilometres after drilling just three holes at Winu in 2017 in a sign of how excited it was about the potential prize.

The company defines tier 1 assets as low-cost, expandable resources that are profitable at all points in the price cycle and deliver a sustainable competitive advantage.

Every bit of data that points to Winu approaching that status will be welcome good news for Mr McIntosh and his growth and innovation division that is in the spotlight over its role in managing the troubled multibillion-dollar Oyu Tolgoi project in Mongolia.

Rio boss Jean-Sebastien Jacques said last week he had no plans to take Oyu Tolgoi off Mr McIntosh’s hands and put it under the control of the copper division despite cost and schedule blowouts.

Rio spent $281 million on greenfield exploration in 2018 with a focus on copper and diamonds.

Decline in discoveries

Mr McIntosh said the reasons for a steady decline in discoveries across the industry were complex but included consolidation.

“The industry consolidation through the 80s, 90s and into the early-mid 2000s saw the focus on early stage exploration start to fall away,” he said.

“The new mid-tiers and super majors were driven to generate synergies from M&A or harvest opportunities in the orbit of their operations.

“The downside is that slowly we saw fewer and fewer large regional exploration programs, an overall lowering of domain expertise and a reduction in professional development.

“So just when life gets tough and we need to move beneath cover in the well-explored parts of the world, we find very few companies with the requisite finances and domain expertise to take this on.”

Mr McIntosh said that post the Global Financial Crisis there had been a steady and precipitous decline in discoveries even though exploration funding peaked in 2012.

“Many of the discoveries of the early-mid 2000s came from work done in the prior decade. Based on this, we should now be seeing a solid pipeline of early stage projects starting to emerge. We are not,” he said.

“So clearly something has gone wrong. The reasons are likely to be many and complex, ranging from industry capability, land access challenges through to gaps in our targeting capabilities.”

SOURCE: https://www.afr.com/companies/mining/rio-tinto-laments-lost-decade-in-exploration-20190803-p52dm9

SPONSOR: Labrador Gold – Two successful gold explorers lead the way in the Labrador gold rush targeting the under-explored gold potential of the province. Exploration has already outlined district scale gold on two projects, including over a 40km strike length of the Florence Lake greenstone belt, one of two greenstone belts covered by the Hopedale Project. Click Here for More Info

• China has been quietly stockpiling gold for years now
• No one knows just exactly how much gold China has amassed
• Lots of other countries are rapidly buying up gold, too, including – Serbia, Greece, Ecuador, Mexico, Kazakhstan, Kyrgyzstan, and Tajikistan.
• The Russian central bank has almost doubled its gold holdings within the last 5 years to 1,094.8 tonnes in June of this year

A larger global currency shift is underway… And it may be happening much more quickly than anyone has realized.

Things are definitely in motion. Call it a game of musical chairs, or an exercise in rearranging chairs on the Titanic, or just that a tilting balance of power. Just don’t make the mistake of thinking this is all routine.

As Michael Snyder just reported:

The absolutely stunning decision by the Swiss National Bank to decouple from the euro has triggered billions of dollars worth of losses all over the globe. 

[…]

And these are just the losses that we know about so far.  It will be many months before the full scope of the financial devastation caused by the Swiss National Bank is fully revealed.  But of course the same thing could be said about the crash in the price of oil that we have witnessed in recent weeks.  These two “black swan events” have set financial dominoes in motion all over the globe.  At this point we can only guess how bad the financial devastation will ultimately be.

The key to understanding how the hammer will fall may lie in: gold.

In the material world that governs politics and economics, there has always been one golden rule: he who has the gold makes the rules.

Put China at the top of the next generation of rule makers, then.

China has been quietly stockpiling gold for years now. In fact, it is stockpiling so much gold that many have speculated that it may be building a gold-backed yuan currency that would make the Dollar pale in comparison on the global market.

Bottom line: no one knows just exactly how much gold China has amassed:

Buying surreptitiously allows Beijing to buy bullion at bargain prices; if the world knew how much gold China was really amassing, a run on gold the likes of which the globe has never seen would likely ensue. “We believe China is controlling the gold price because it is buying in such a way so as not to push prices up.” That’s the opinion of respected precious-metals analyst Julian Phillips of The Gold Forecaster, along with a host of other informed sources. (source)

It is widely believed that China has accumulated larger – possibly much larger – reserves since. (source)

Lots of other countries are rapidly buying up gold, too, including – Serbia, Greece, Ecuador, Mexico, Kazakhstan, Kyrgyzstan, and Tajikistan.

But reportedly no one is buying gold at a faster pace than Russia.

Back in August it was reported that:

Russia’s increase is the most dramatic, according to the recent report from the IMF. The Russian central bank has almost doubled its gold holdings within the last 5 years to 1,094.8 tonnes in June of this year. China’s Central Bank followed with an increase of 75% from its holdings in 2009.

Bloomberg reported in November:

The country has tripled its gold reserves since 2005 and is holding the most since at least 1993, IMF data show.

There is little doubt that gold plays a major factor in Russia’s posturing during a global showdown that involves proxy war and military tensions in the Ukraine, Syria, Iraq and other parts of the globe.

Moscow’s purchase of bullion and the assault on the bank can be seen as tactics of a single strategy designed to break the monopoly of the dollar. Gold is Russia’s hedge against that hegemony; it can’t be hacked.

More than that, Putin has been positioning his motherland to team up with China to solidify the emerging BRICS system which aims to thwart decades of Anglo financial dominance with a un-dollar currency system that will also include a development bank.

Russia’s response has been to buy gold and turn east, cementing deals with China and, it would seem, firing the opening salvos in a cyber currency war with the U.S. (source)

Warnings have sounded about a tipping of the global balance:

Russia is also increasing its gold reserves. China and Russia have been exchanging their U.S. dollar reserves and buying physical gold. Last year we speculated that this dynamic would create a shortage in gold leading to much higher prices. Russia and China now rank in the top ten countries by gold reserves.

With Russia now in what appears to be a currency war with the U.S., they may find a willing partner in China to create an alternative international financial system that does not rely upon or use the dollar. Irrespective of either country’s intentions, their physical gold buying sprees continue unabated. (source)

To that end, Russia has been amassing as much gold as possible, in a bid to outmaneuver its enemies in a silent economic war to hold onto its independence and further project its status.

Nearly every bit of gas and oil that Russia sells to neighbors in Europe and Asia is converted from dollars into gold reserves – and even with the collapsing oil price, that amount could still be staggering.

Many have pointed to the gold and oil trade off as Putin’s grand chess strategy:

Thus, the Western world, built on the hegemony of the petrodollar, is in a catastrophic situation. In which it cannot survive without oil and gas supplies from Russia. And Russia is now ready to sell its oil and gas to the West only in exchange for physical gold! The twist of Putin’s game is that the mechanism for the sale of Russian energy to the West only for gold now works regardless of whether the West agrees to pay for Russian oil and gas with its artificially cheap gold, or not.

Source: http://heartlandpreciousmetals.com/russia-and-china-furiously-buying-up-gold-as-a-global-currency-crisis-albeit-unstated-is-underway/