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Progress in China-U.S. Trade Talks Leads to Gold Price Surge

C.SXTY, T.AGI, T.SSL, HMY, GFI

FinancialBuzz.com News Commentary

PR Newswire

NEW YORK, August 17, 2018 /PRNewswire/ --

The gold price rose on Thursday as the U.S. Dollar softened on news that the United States and China will resume trade talks later this month. Gold Spot rose 0.34% to USD 1,178.90 per ounce during the Tuesday trading session, while U.S. Gold future for December delivery was up 0.11% to USD 1,186.30 per ounce. According to CNBC, White House economic advisor, Larry Kudlow, confirmed that the U.S. and China will discuss trade issues this month. In the last two months, the U.S and China had placed higher tariffs worth Billions of Dollars on each other's goods. During that time the Chinese currency, the Yuan, has fallen nearly 8% against the U.S Dollar. The stronger Dollar has made it more expensive for other currency holders to buy gold. Sixty North Gold Mining Ltd. (OTC: SXNTF), Alamos Gold Inc. (NYSE: AGI), Sandstorm Gold Ltd. (NYSE: SAND), Harmony Gold Mining Company Limited (NYSE: HMY), Gold Fields Limited (NYSE: GFI)

A rising U.S. Dollar and an increasing U.S. interest rate are the biggest headwinds for gold. Progress on the trade talks may ease some pressure on the commodity markets in the next weeks, but the currency pressure will still exist. According to CNBC, Ole Hanson, Head of Commodity Strategy at Saxo Bank, said, "For a significant gold recovery we need to see the Dollar lose some of the strength that has built up. The risk to emerging market growth from currency pressures is not going away immediately."

Sixty North Gold Mining Ltd. (OTCQB: SXNTF) also listed on the Canadian Securities Exchange under the ticker (CSE: SXTY). Earlier this week, the Company announced that, "it has received the metallurgical test results from a quarter ton sample of the crown pillar of the A-Zone at the Mon Gold Property.

Three separate transects across the East Limb, Fold Nose (hinge) and West Limb of the A-Zone were sampled by mechanical hammer by the Company's CEO and director Ronald Handford and Dr. D.R. Webb. The material was bagged and tagged, and delivered to Bureau Veritas Laboratories in Yellowknife where it was shipped to their metallurgical testing lab in Richmond B.C. for testing by gravity and flotation methods.

Table 1. Summary results from metallurgical testing, 2018


    Composite ID - Sample Weight Tested - Head Grade, g/t Au ----- Gold Recover, %Au


                       (kg)  Measured   Calculated   Gravity   Flotation   Overall

    Composite 1        75.6      17.4         16.6      79.9        18.0      97.9

    Composite 2        83.8     266.8        314.8      73.2        26.0      99.3

    Composite 3        83.6     170.7        128.9      75.7        23.5      99.2

    (Composite 1+2+3) 243.0     156.2        158.0      76.1        22.7      98.8


    All assays by Bureau Veritas FAA550 1 assay ton sample. Average sample size=1.8 kg.  

All samples were collected using an electric percussion hammer and located by tape and compass, bagged and tagged, sealed, delivered to Bureau Veritas Laboratories in Yellowknife and processed at their ISO/IEC 17025:2005 and ISO 9001:2015 metallurgical testing laboratory in Richmond, B.C. Bureau Veritas is independent of the Company. The sample was received, dried and weighed. Test grinds were completed and the samples were batched with a targeted grind of P80 -105µm."

Ronald Handford, CEO of Sixty North Gold, reports, "These results were expected based upon historic results and our recent trenching (News Release August 7th, 2018). The very high recoveries, both by gravity as well as the combined gravity plus flotation, averaging around 76% and 99% respectively are consistent with historic results. The former operators only ran a gravity mill on site. The simple mill circuit required to process this mineralization has been permitted and could be installed upon confirmation of a larger bulk sample. These results further differentiate the Mon Gold Property as an advanced exploration opportunity and past producer, and represent a significant milestone for the Company in its advancement of the project. The environmental benefits of achieving very high recoveries without the use of cyanide leaching is notable."

Mr. Handford further reports, "Crews have been on the property since June assessing all historic showings and identifying new zones. Sample results are being received and will be released upon completion and confirmation by our QP."

Alamos Gold Inc. (NYSE: AGI) is a Canadian-based intermediate gold producer with diversified production from four operating mines in North America. Alamos recently announced that it has been granted the GSM (Business Opening and Operation) permit required for the development of its Kirazlı project, by the Çanakkale Governorship in Turkey. As outlined in the 2017 feasibility study, Kirazlı has a 44% after-tax internal rate of return and is expected to produce over 100,000 ounces of gold during its first full year of production at mine-site all-in sustaining costs of less than USD 400 per ounce. This is expected to bring consolidated production to over 600,000 ounces per year, while significantly lowering the Company's cost profile. The Company will be mobilizing for full-scale construction activities over the next two months. The initial capital estimate for Kirazlı is USD 152 Million of which USD 50 to USD 60 Million is expected to be spent in 2018, inclusive of USD 10 Million spent through the first half of 2018. The bulk of the remaining initial capital will be spent in 2019 and the first half of 2020. Based on the current timelines, the Company expects initial production from Kirazlı in the second half of 2020. "We are very pleased to have achieved this key milestone. With the Environmental Impact Study and Forestry Permits having been previously approved, we have all the required permits to ramp up full-scale construction activities. As one of the lowest-cost and highest return gold projects in the world, Kirazlı will be a significant driver of free cash flow growth with initial production expected in 2020," said John A. McCluskey, President and Chief Executive Officer.

Sandstorm Gold Ltd. (NYSE: SAND) is a gold royalty company that provides upfront financing to gold mining companies that are looking for capital and in return, receives the right to a percentage of the gold produced from a mine, for the life of the mine. Sandstorm recently announced its results for the second quarter ended June 30th, 2018. Sandstorm's revenue during the second quarter of 2018 was USD 2.9 Million higher than the comparable period in 2017, driven by a 13% increase in the number of attributable gold equivalent ounces sold and a 4% increase in the average realized selling price per ounce of gold. On June 26th, 2018, the Company announced the results of the Hod Maden Pre-Feasibility Study. The PFS projects a pre-tax NPV (5% discount rate) of USD 1.4 Billion and an IRR of 60%. The study also outlines total production of more than 2.6 Million gold equivalent ounces over an 11-year mine life and it is expected that gold will be produced at an all-in sustaining cost, on a co-product basis, of less than USD 400 per ounce. Sandstorm acquired 8 royalties on exploration-stage projects in Burkina Faso, Egypt and Côte d'Ivoire. The Company now has 188 royalties in its portfolio. Based on the Company's existing royalties, attributable gold equivalent ounces sold is forecasted to be between 54,000 - 60,000 for 2018 and between 63,000 - 73,000 ounces in 2019. The Company is forecasting attributable gold equivalent production of 140,000 ounces in 2023.

Harmony Gold Mining Company Limited (NYSE: HMY) is a world-class gold mining and exploration company with operations and assets in South Africa and Papua New Guinea (PNG). Harmony has more than 60 years' experience in the industry. Company assets include one open pit mine and several exploration tenements in PNG, as well as 10 underground mines and 1 open pit operation and several surface sources in South Africa. Additionally, Harmony owns 50% of the significant Wafi-Golpu copper-gold project - a tier 1 asset - in a joint venture in PNG. The Company recently announced that its Hidden Valley operation reached commercial levels of production in the month of June 2018. Engagement with the Papua New Guinea government on the application for a special mining lease (SML) for the Wafi-Golpu project is progressing well. On June 25th, 2018, the Wafi-Golpu Joint Venture (WGJV) submitted an Environmental Impact Statement (EIS) for the Wafi-Golpu Project to the relevant Papua New Guinean regulatory authority, Conservation and Environment Protection Agency (CEPA). The EIS has been prepared as the statutory basis for the environmental, social and cultural heritage assessment of the Wafi-Golpu Project under the Environment Act 2000 and will inform a decision by the Papua New Guinea Government whether to grant an Environment Permit and, if so, under what conditions. "The investment in the stage 5 and 6 cutback was delivered safely, on schedule and below budget and we are confident that Hidden Valley will produce more than 180 000oz in FY19" said Peter Steenkamp, Chief Executive Officer of Harmony.

Gold Fields Limited (NYSE: GFI) is a globally diversified gold producer with seven operating mines in Australia, Ghana, Peru and South Africa, and a total attributable annual gold-equivalent production of approximately 2.2 Million ounces. Golf Fields recently announced the completion of the Joint Venture transaction with Asanko Gold, with Gold Fields acquiring a 50% stake in Asanko's 90% interest in the Asanko Gold Mine in Ghana. Gold Fields is expected to equity account its share in the Joint Venture, with attributable production and costs incorporated into the Group numbers from completion. Asanko's published guidance for 2019-2023 is average annual production of 253koz (100% basis). Gold Fields and Asanko have established various working groups to ensure that the Asanko Gold Mine continues to operate in an efficient manner. Nick Holland, Chief Executive Officer, said: "The closing of the transaction with Asanko gives us exposure to a great camp, with long-life, low-cost production, with significant exploration potential in a country we know well and have operated in for 25 years. The Joint Venture bolsters the Ghana region, with Tarkwa providing the base load production and Damang providing growth through the reinvestment plan currently underway. We look forward to working closely with our new partners."

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