Gold And Silver Headlines

Second Mine Tailings Spill Signals Tougher Permitting Ahead (Fox News)

A second significant mine tailings spill within a week, this time in Mexico, follows headline-grabbing news of a tailings breach at Imperial Metals’ Mount Polley mine in British Columbia. This is sure to raise even more concern about the environmental impact of mine site accidents today, making already difficult permitting even harder. It’s still early days for both accidents, and actual facts are still few and far between, but it’s clear that the bar is going up, adding value to projects already permitted or in production.

We’ll be keeping a close eye on this and will inform readers of any necessary changes in investment strategy.

Cost Discipline Tempts Investors Back into Gold Mining Shares (Reuters)

Gold mining shares are bouncing back from a disastrous 2013 and are expected to far outperform the price of the metal in coming months, as company efficiency measures lure investors back to the sector.

Years of over-spending on expansion projects and disruptive merger activity fell heavily on miners last year, just as the gold price posted its biggest annual drop in 32 years. Eight months into 2014, the gold mining sector is rapidly making up some of the lost ground with a 22% gain to date, outperforming global mining shares overall.

“The equities are trading at historically low valuations and offer investors the ability to participate in miners’ significant cash-flow leverage to small positive changes in the gold price,” said Ani Markova, fund manager at Smith & Williamson Investment Management.

We couldn’t agree more.

Central Banks Continuing to Boost Gold Reserves (Mineweb)

In its recently released International Financial Statistics report, the IMF reports that the Russian central bank increased its gold holdings by 16.8 tonnes in June, to 1,094.8 tonnes.

Indeed, most central banks are increasing their gold reserves; IMF data shows that Russia, Mexico, Kazakhstan, Kyrgyzstan, Tajikistan, Serbia, Greece, and Equador all reported higher gold reserves for June.

Between Q1 2009 to Q1 2014, Russia’s gold reserves almost doubled to 1,040.71 tonnes, while India’s central bank increased its gold reserves 56% to 557 tonnes. China’s central bank, on the other hand, increased its gold reserves 75% to 1,054 tonnes when it last stated official reserves in 2009, data showed. It is widely believed that China has accumulated larger—possibly much larger—reserves since.

Jeff outlined a few weeks ago what China might be doing about their gold reserves.

Japan, Chile Sign Mining Deals (Mining.com)

Japan and Chile seem to be forging their ties in the mining sector, as the Asian Prime Minister Shinzo Abe and Chilean President Michelle Bachelet just signed a series of deals on science and technology, mainly centered on the copper industry.

Japan, which already allocates 90% of its investment in Chile to mining, may soon be increasing its presence in the South American nation following Mitsui deal with Chilean state copper giant Codelco. The companies will work on technologies aimed to improve mining efficiency. They said they would also perform research on new, higher-value-added applications for the red metal.

The Japanese authority was on a five-country Latin American and Caribbean tour that came just after China’s President Xi Jinping wrapped up his own visit to the region.