Wednesday, July 30, 2008

AngloGold to Post Loss on Quarter Ending June 30

AngloGold Ashanti Ltd., the largest gold producer in Africa, will probably post a loss of $3.43 (25.46 rand) for the quarter ending June 30, according to four analysts surveyed. Last quarter they posted 2.88 rand in earnings. They'll release their earnings on July 31.

In the second quarter the company suffered a $1.1 billion before tax loss after forward sales were cut by 39 percent in the first half. AngloGold has the largest hedge book (forward sales) of any gold producer in South Africa. If gold gains in price, the hedge increases along with losses.

Major rivals Gold Fields LTD and Harmony Gold Mining Co. are expected to post a profit for the quarter.

South African utility problems still continue to allow the mines to run at 90 percent of regular consumption.

Tuesday, July 29, 2008

Corn Futures Increase on Weather Concerns, Export Demand

Noting that higher temperatures could cause problems in the corn yield, the price of corn futures increased today, closing up by 12 cents to $5.94 a bushel. December corn also increased by a little over 12 cents, finishing the session at $6.13 1/2.

The concern is over how well the corn pollinates during this crucial time, as too warm weather could hamper the yield results.

Even with the strong response of buyers, the warm weather isn't anticipated to stay too long, and hopefully will just be a temporary blip.

Drew Lerner, an agricultural meteorologist at World Weather Inc. said, "We shouldn't have more than just a few days of stressful conditions in the eastern part of the corn belt."

Other factors were concerns by end-users that other variables like a late growing season, early frost and increased export demands could impact them down the road, so they wanted to lock inventory in so they don't lose out later in the year.

Silver Wheaton Increases Profit 2 Percent for Quarter

Silver Wheaton CEO Peter Barnes

While Silver Wheaton (SLW.TO) experienced lowers sales volume than anticipated for the quarter, the higher price of metal allowed it to enjoy a 2 percent increase in profit for the second quarter.

The Canadian-based company ended with earnings of $23.3 million, in contrast to $22.9 million a year ago for the quarter ending June 30.

The company average a selling price of $17.35 an ounce for its silver sales, on the 2.9 million ounces it sold. The 2.9 million ounces sold was down by 13 percent from its projections. Last year they sold 3.1 million ounces during the same period.

According to Wheaton, the reason was the quality of the ore mined at Goldcorp's (G.TO) Luismin mine in Mexico, which was lower-grade ore.

CEO Peter Barnes noted in a press release that "This past quarter, we negotiated more silver stream agreements than any other quarter in our history.

"With eight silver agreements completed and another soon to be, we have diversified our portfolio and expanded our relationships within the industry."

Projections are for annual sales to reach somewhere between 13- to 15 million ounces sold in 2008.

Strengthening U.S. Dollar and Decreasing Oil Demand Lowers Prices

September delivery for light, sweet crude dropped by $2.54 today, to close at its lowest level since June 10, settling at $122.19 on the Nymex. It dropped as low as $120.75 during the trading hours; something it hasn't done since May.

The higher cost of fuel has caused consumers to drive less, which has lowered the demand for oil; one of the major factors in its decline.

A stronger U.S. dollar has also been a factor, as investors abandoned commodities today to put their capital in equities, which drove up the DJIA by 266 points.

Sunday, July 20, 2008

Corn Prices Come Crashing Down to Earth, Lost Over 11% in Week

Even though the flooding in June wiped away some cornfields, the warm weather after the flood receded has helped corn surge back, resulting in the steep drop in price.

December delivery for corn dropped 21 cents to finish at $6.29 a bushel on the CBOT. That's the lowest price point since May 30.

The flooding had driven up prices in June to as high as $7.96 a bushel; more than a 20 percent increase.

The specific corn-related reasons for the decline the good weather is expected to help the corn to pollinate great during the July 20 to July 30 period. That's the most critical period for the pollination period, which determines what the extent of the corn yield will be.

Another reason for the decline in prices is the decreased demand, which has offset the lower production levels.

The year-end corn production is projected at 11.7 billion bushels by the USDA. That's about 20 million bushels less than its June forecast.

Ethanol no more than Heavily Subsidized Cash Crop Supported by Powerful Lobby

So said one writer recently, and I think he's right.

While the usual proliferation of polls - that can no longer be trusted - have been recently thrown out as evidence the American people are behind the corn-based ethanol fiasco, it's only because of the way the poll is worded, as well as marketing campaigns from the dubious, but powerful corn lobby.

The rise in food prices directly related to the overgrowing and overuse of corn, has resulted in less acreage for other crops, and higher costs of seed as well. Some places in the world have dramatic food shortages as a result of this politically motivated, misguided policy.

Another less-than-honest reality is the performance of ethanol, which is far less productive than regular gasoline, and takes much more to make up the lower mileage difference ethanol gets.

As Bob Sommer, writing for Midwest Voices said, "... as long as every politician, Republican or Democrat, who sets foot in Iowa or Nebraska or any corn-producing state thinks the way to solve the energy and climate crises—and get elected in the bargain—is to drink the ethanol Kool-Aid, our future will look dim indeed."

Many of the polls I've seen in support of ethanol have come from ethanol-backed coalitions that have financial stakes in the continued tax-payer subsidy of the alternative fuel. Here's one as an example.

Monday, July 14, 2008

Wheat Crop 62 Percent in, Compared to 67 Percent Last Year

The winter wheat harvest has fallen behind last years pace, as the USDA reports as of Sunday, only 62 percent is in the bins, while last year at the same time 67 percent had been stored.

It is also significantly below the 5-year average of 70 percent. The good news is it did increase by 10 percent over last week.

Silver Falcon Mining Says Ready to begin Transporting

Per a deal with Earll Excavation and Bill Earll, Silver Falcon Mining (SFMI.PK)announced they're ready to go forward with the first phase of their business plan.

Pierre Quilliam, President of Silver Falcon Mining, Inc., said, "Now that the roads are open all the way to our mines, we can proceed with the first phase of our business plan. We are very excited to join with Earll Excavation, Inc., an experienced hauler, which gives us insurance of continuous production in our Melba mill for the next 24 months."

Earll Excavation is well respected in the industry, and has successfully loaded and transported tailings for a number of companies.

The agreement calls for loading and transporting tailings from the "Belle Peck" adit to SFMI's mill in Melba, Idaho. There it will be stockpiled by Earll.

President Bush Lifts White House Offshore Drilling Ban - Puts Pressure on Democrats

President Bush sent a message to the Democrat-controlled Congress today, putting the pressure on them to respond by opening up offshore drilling that could bring billions of barrels of oil to Americans in the not-too-distant future.

It wouldn't do much in the short-term, but it beats what is being done now: nothing!

You can't call the misguided attempt at pushing ethanol forward something, as it has done more harm than good, as food prices skyrocket. The subsidy to farmers needs to be repealed.

Democrats are already whining about this, but their inept answer is to drill in areas the oil companies own where there aren't any proven reserves. Oh yeah, Obama's solution is to tax the oil companies. That'll bring more oil to the market.

The Democrat-controlled Congress needs to now get some guts and also lift the ban on drilling; not just offshore, but across Alaska and in the continental U.S.

Billions of proven oil reserves are there for us to use.

Saturday, July 5, 2008

The Luck of the Irish: A Million Ounces of Gold found under Small Village of Clontibret

In a formal statement to the London Stock Exchange, Conroy Diamonds and Gold, a mining company based in Dublin, Ireland, announced it has discovered about a million ounces of gold under the tiny village of Clontibret. It's reputed to be the largest gold find in British history.

The chairman of the company said, "There's never been a gold mine anywhere near this size in Ireland and the UK.

"The Company's exploration programme in Ireland is focussed on the Longford-Down Massif. The Company at an early stage recognized the significant gold potential of the Massif. It is engaged in active exploration there which has already led to the discovery of a series of gold targets along a 30 mile (50km) strike length stretching from County Armagh across to Counties Monaghan and Cavan.

"At the most advanced of these targets, Clontibret in County Monaghan, a mineral resource of over 1 million ounces of gold (Indicated 440,000 ounces, Inferred 590,000 ounces) has been estimated for an area representing less than 20 per cent of the target. Drilling has commenced in the remaining 80 per cent of the Clontibret target anomaly, which is expected to further increase this resource. This is the largest gold resource reported to date in Ireland or the UK."

Estimates of the value of the gold deposits were set at £450 million based on today’s gold price.

In other British gold news, the Cononish mine near Tyndrum, in Stirlingshire is scheduled to reopened after being shut down for ten years because of low gold prices. Now that the price of gold is sure to hold for some time, investors are reopening the mine, which has "an estimated £76m worth of gold and silver embedded in the quartz rock."