Will She, Won’t She? China’s Gold Dance!

February 26, 2010

LONDON – No sooner had most Western pundits come to the conclusion that China was unlikely to buy the IMF’s  remaining 191.3 tonnes of gold for sale, with reports in China Daily lending support to this interpretation of Chinese buying policy, than the Russians in the form of Pravda published an article saying that China was in talks with the IMF to relieve that august body of this bullion which is obviously burning a hole in its pockets.

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Do We Really Want $5,000 Gold?

February 26, 2010

LONDON – General talk of gold as a potentially spectacular investment as opposed to an inflation hedge glosses over the true picture.  Over the ages, gold has kept up with inflation pretty well, and it will probably continue to do so in the future, but it may not make you wealthy, just protect whatever wealth you have.  True there have been periods when gold has outpaced the decline in currency values due to inflation, but that is usually when it is playing catch-up from a period of underperformance.

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Victoria Gold Reports Another Exceptional Gold Intersection at Santa Fe

February 25, 2010

According to Chad Williams, President and CEO of Victoria Gold, “BH-4 is clearly another exceptional exploration hole from Santa Fe and adds an important new dimension to what appears to be a very large gold system.”

In short, the Company has identified 1.63 g/t gold across 231.6 meters.   Again, these results are absolutely terrific.  I hope by now everyone can see what’s going on at Victoria.  For the slower ones like myself, here’s the scoop.  Victoria seeks to have in future operation two, lower-risk mines with aggregate production of at least 200,000 ounces per year in top jurisdictions (Eagle Gold in the Yukon and Cove in Nevada).  Eagle Gold is very large, will create a critical mass, will offer steady production, with above-average gold price leverage and obvious exploration upside.  In terms of production at Cove, the project has high grades, low capital expenditure requirements, which should result in significant free cash flow, not to mention the tremendous exploration upside available there as well.

But Victoria is not going to turn its back on its exploration roots.  Oh no.  As illustrated by today’s announcement, the Company will surely continue its exploration efforts at Santa Fe, which has several fantastic initial holes and appears to be a very large system.  But, the Company has several other high impact properties which are drill ready as well.  So look for the drills to keep turning in 2010.  

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Concerns Grow Over China’s Sales of US Bonds

February 25, 2010

A front-page story in the state’s China Information News said the record $34bn sale of US bonds in December was a “commendable” move. The article was republished by the National Bureau of Statistics, giving it a stronger imprimatur.

It follows a piece last week in China Daily, the Politburo’s voice, citing an official from the Chinese Academy of Sciences praising the move to “slash” holdings of US debt. This was published on the same day that US President Barack Obama received the Dalai Lama at the White House, defying protests from Beijing.

“There are ongoing spats between the US and China on so many fronts so you have to assume that this is some sort of implicit threat,” said Neil Mellor, a currency expert at the Bank of New York Mellon, who cautioned that it can be hard to read the complex signals from China.

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China to Purchase IMF Gold

February 25, 2010

China has confirmed the intention to purchase 191.3 tons of gold from the International Monetary Fund at an open auction, Finmarket news agency said.

World central banks started to increase their gold reserves after prices on gold began to climb in 2001. The IMF sells gold within the scope of a program to diversify sources of income and achieve an increase in lending.

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Dejour Secures Mezzanine Financing For Project Expansion

February 24, 2010

Calgary, AB, February 24, 2010 — Dejour Enterprises Ltd. (NYSE-AMEX: DEJ / TSX: DEJ) announces it has signed a binding commitment letter securing a $5MM line of credit from an Alberta-based mezzanine lender. The first $2 million of this resource will be available upon closing and used to refinance Dejour’s existing bank facility and fund its working capital. The remainder of the line will be accessible, subject to additional lender review and approval by the Dejour Board of Directors, to finance project expansions currently being considered by Dejour at its Drake/Woodrush facility.

“This interim financing provides Dejour with an important, non-dilutive credit facility that allows for the seamless transition of its future requirements to a senior conventional lender, once the 2010 production enhancements at Woodrush have been successfully concluded”, commented Hal Blacker, Dejour’s President and COO.

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New Client Profile: Maudore Minerals Ltd. (TSX-V: MAO)

February 23, 2010

Over the last 12 months, we descended into the Earth’s core more than 450 metres on a mine visit in Mexico, we attended most of the major North American mining conferences, we’ve spoken with most of the leading industry experts, and we’ve studied the precious and base metals markets to no end.  And we do that, in part because we love it, and in part for the benefit of our BabyBulls’ subscribers.

With that said, we have identified our next fully profiled company.  And with gold down from its high, but poised for future growth, we thought it was an opportune time to introduce you to Maudore Minerals Ltd (TSX-V: MAO), a gold company engaged in the exploration and development of its 100% owned Comtois Property.  Comtois is a high grade gold property with an inferred mineral resource of 808,000 tonnes at 20.2 g/t gold or 524,000 ounces of gold based on only 66 drill holes.  As impressive as that is, the Company has now drilled more than 340 holes, the results of which will be incorporated in an updated resource estimate due this spring.

There are many reasons to like Maudore, our top three are as follows:

Location, Location, Location – Comtois is located in the Abitibi Greenstone belt of Quebec, Canada, which in terms of gold production is second only to that of Witwatersrand, South Africa.  Quebec offers a politically and economically stable environment and a mining friendly attitude, including exploration cash rebates of nearly 50% of exploration expenditures.

Aggressive Drill Program (and the cash to execute it) – Maudore has a well-managed balance sheet with recent cash on hand of approximately $8 million.  On top of the soon to be released updated resoure report, the Company is in the midst of an aggressive drill program with 4 drill rigs at work.

Got Gold? – Gold is off its recent high but seems to have support at the $1,100 level and most analysts and experts continue to predict that gold will eclipse the $1,300 to $1,500 mark in 2010.

For additional information about Maudore Minerals, please visit us at www.babybulls.com or visit the Company’s Website at www.maudore.com

Want to read more exclusive material from BabyBulls? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our blog page at BabyBullTwits.

London Firm Created to Route Cash

February 23, 2010

Greece’s fiscal woes, the exposure of the European financial system to them and the role played by Wall Street in hiding the problems all converge in a fifth-floor office near London’s Liverpool Street station where a company called Titlos PLC was created in early 2009.

Just 22 days after Titlos was born, the National Bank of Greece SA and Goldman Sachs Group Inc. arranged for the company to sell €5.1 billion, or about $6.96 billion, in notes, according to U.K. and U.S. documents.

But Titlos wasn’t a real company and the notes weren’t designed for ordinary investors. Titlos doesn’t make anything and its only directors are two British executives who work for a firm that specializes in the formation of corporations and the sale of pooled assets.

1,001 Reason to Own Gold

February 22, 2010

Tracking the numerous ongoing bullish factors for gold is quite a chore. There are, quite literally, so many compelling arguments for holding our favorite metal that I used to catalog them each month in our letter.

The reason there are so many “reasons” is because gold is unlike any other asset. It. . .

  • responds to its own supply and demand
  • protects against short-sighted government actions and interventions
  • is a bellwether of market sentiment and economic outlook
  • protects against currency devaluation and inflation
  • is global
  • is one of the most beautiful metals ever found in the earth’s crust
  • is a store of value
  • is timeless
  • is money

How many assets can you say have all those characteristics?

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Peak Gold Theory Gaining Popularity

February 22, 2010

RENO, NV – Global market strategist Don Coxe, chairman of Coxe Advisors, said he believes in “a hitherto-undiscovered erogenous zone in gold bugs: peak gold-which could be the latest Big Thing since peak oil.”

In his latest Basic Points, Hard Rocks and Hard Shocks, Coxe credits “Aaron Regent, Barrick’s market-savvy new CEO” for “fueling the flames of desire” through the concept of peak gold.

Regent has noted “that new mined production of gold has been declining for a decade,” suggesting this could prove to be the equivalent of peak oil, the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline.

Much of the recent commentary on gold, Coxe said “is that Obama’s deficits, coupled with Bernanke’s money-printing, could produce either a Depression or runaway inflation. To us, this is an argument investors really should take seriously.”

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