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Orvana Announces Preliminary Economic Assessment for Copperwood Project

Orvana Minerals Corp announced today the highlights of their 43-101-compliant Preliminary Economic Assessment of the Copperwood copper project, Upper Peninsula, Michigan, USA.

The study contemplates a 10-year underground operation that applies room-and-pillar mining. A trade-off study determined that the most economic mining method is the use of a continuous miner, which is commonly used in coal, salt, trona, and potash underground mines. Processing would be by froth flotation.

Copperwood is an attractive copper project and we will work towards applying for a mine permit next spring, said Roland Horst, Chief Executive Officer of Orvana.
The state of Michigan considers mining essential to their future economic growth, and Copperwood can definitely be a part of that growth. We are encouraged by the communities’ support to develop the deposit and look forward to working with them to put the mine into production

Full release

Oceana to Join S&P/TSX Composite Index

It is now official, as we reported on September 2nd, OceanaGold is to be included in the S&P/TSX Composite Index.
OceanaGold is not only being added to the S&P/ASX 200 index after the close on September 17, the company is also joining the S&P/TSX Composite Index. This is great news and significant when getting a valuation more in line with peers.

Executive Chairman, Jim Askew commented, “We are very pleased to be included in these three additional S&P indixes. In particular, the addition to the TSX Composite and ASX 200 indexes which are the key benchmarks for the Toronto and Australian Stock Exchanges will assist in further broadening our shareholder base and increasing share liquidity”.

Full release (S&P)

Full release (Oceana)

S&P/TSX index information page

OceanaGold in the Media

Miner tips $30m boost to profits

OceanaGold’s 2010 bottom line is forecast to be boosted by about $30 million at current gold prices due to the miner’s decision to buy back its hedge cover from March 31 this year.

The company’s investor relations vice-president, Darren Klinck, was in the South Island last week visiting operations on the West Coast and said there had been no impact on OceanaGold’s mines from the recent 7.1 magnitude earthquake.

OceanaGold had paid US$72m (NZ$99m) to buy back its hedge book at the end of March. It was making the $30m bottom-line prediction based on the fact that it now made extra upside on gold prices above NZ$1565 an ounce.

The company ran a C$85m (NZ$113m) capital raising to buy back the hedge book.

“Now we’re completely 100 per cent unhedged. We closed the book out at an average of NZ$1565 per ounce and the gold price since then has been as high as the high $1800s,” Klink said.

With gold price now around NZ$1770 an ounce, it was making $200 more an ounce than it would have under the hedging arrangement. That figure was multiplied against an expected production of 150,000 non-hedged ounces to give the $30m boost to the bottom line.

The NZX-listed company was forecasting gold production of 270,000 to 290,000 ounces in the year to December 2010.

Klinck said international institutional investors were more interested in gold companies in a non-hedged position. The stock now also had more liquidity.

OceanaGold was also aware of a lot of corporate merger and acquisition and takeover activity within the global gold miner sector.

Already Newcrest mining had merged with Australian producer Lihir Gold to create the world’s fourth-biggest gold company. Newcrest would produce in the order of three million ounces annually on an unhedged basis.

“I think companies are quite bullish on gold and looking to increase production and increase resources … the underlying sentiment is you could see continued merger and acquisition activity here as we move forward, provided the gold market remains strong,” Klinck said.

Asked if OceanaGold could be in merger talks or be a merger target of another company, Klinck said the company was focused on its own growth plans.

“As far as the M&A [merger and acquisition] goes, from a company perspective you can’t spend your time looking in your rear-view mirror. You’ve always got to look forward and run hard. That’s what we’re doing.”

The company was focused on expanding its own resource base and had 10 drill sites working in the South Island. It had in excess of 25,000 metres of drilling planned in New Zealand in 2010 both at its Macraes open cut & Frasers underground mine in Central Otago and at its Reefton open cut mine on the West Coast.

“We’ll spend between US$9m and US$10m this year on exploration. So that’s a very significant investment.”

With a market capitalisation of around A$740m at the end of last month, OceanaGold was also evaluating options for its Philippines-based Didipio gold and copper project.

It was talking to potential joint venture and strategic investment partners, and in 2007-2008 spent around US$80m on initial mine work.

“Unfortunately the capital cost to complete that project blew out of control  this is when oil was going to US$150 a barrel … we had to lock it down and put it on care and maintenance. We’ve now gone back and looked at it.”

The miner has estimated reserves of 1.94 million ounces of gold here, and 190,000 tonnes and 1.65 million ounces of gold in the Philippines.

Full article

Yuan Trading Against Russian Ruble Said to Start Within Weeks in Shanghai

China and Russia plan to start trading in each other’s currencies as the world’s second-biggest energy consumer and the largest energy supplier seek to diminish the dollar’s role in global trade.

China may start trading its currency against the ruble within weeks, three bankers with knowledge of the matter told Bloomberg, and sent out a document last week allowing lenders to apply for ruble trading licenses, one of them said. Russia’s Micex Stock Exchange is making preparations to trade the ruble against the yuan in an initiative that has the backing of the country’s central bank, Ruben Aganbegyan, the head of the bourse, told reporters at a conference in Moscow today.

“Given the risk to the dollar and U.S. assets from their fiscal position they want to reduce their dependence on the dollar as an invoicing currency,” Bhanu Baweja, global head of emerging markets fixed income, currency and credit research at UBS AG, said in a phone interview from London. “It makes sense for two large economies to exclude a third, overly dominant economy from their trading equation.”

In the wake of the global financial crisis, which forced the U.S. economy into recession, both China and Russia have called for the dollar’s role in the financial system to be diluted. Volatility in major currencies is putting the global recovery at risk Zhang Ping, the head of China’s National Development and Reform Commission, said last month. President Dmitry Medvedev last year suggested Russia, holder of the world’s third-largest foreign-currency reserves, reduce its holdings of dollar.

Yuan-Ringgit Trading
The yuan slid 0.06 percent to 6.7953 per dollar today paring its gains since the central bank ended a two-year dollar peg on June 19 to 0.4 percent. Russia’s ruble weakened 0.3 percent to 30.9225 per dollar by 2:15 p.m. in Moscow today, and has fallen 2.1 percent versus the greenback so far this year.

The euro gained 0.2 percent to 1.2712 per dollar today, and jumped 2.5 percent against the U.S. currency last year.

The People’s Bank of China started yuan trading against the Malaysian ringgit between banks on Aug. 19. It already allows trading of the renminbi versus the dollar, the Hong Kong dollar, Japanese yen and the euro on its interbank market and China’s Foreign Exchange Trading Center provides daily reference rates for these currencies. The yuan is a non-deliverable currency that is managed by the central bank to prevent volatility.

Fully Convertible
The ruble, which Bank Rossii targets against a dollar-euro basket, is a “fully convertible” currency and some Chinese banks have already been allowed to open ruble trading accounts, Russia’s Deputy Finance Minister Dmitry Pankin told reporters in Moscow today. The opening of cross-currency trade between the yuan and the ruble is more important for China, he said. “They are gradually allowing more currency operations with yuan,” he said.

China overtook Germany as Russia’s second-largest trading partner in the first six months of the year, helped by exports of Russian commodities such as aluminum, nickel and oil and gas. Trade between China and Russia jumped 50 percent to $30.7 billion in the first seven months of this year, compared with the same period in 2009, China’s Ministry of Commerce said in a statement on Aug. 21.

The world’s fastest-growing economy is seeking to eliminate the need to convert yuan holdings in to dollars before converting in to rubles to pay for Russian commodities, Baweja said.

Dollar Elimination
“China wants to reduce the volatility in its access to primary goods,” he said. “They want to reduce their dependence on the dollar in trade transactions.”

HSBC Bank (China) Co. and Bank of Communications Co. completed the first yuan-ringgit transactions, according to the Foreign Exchange Trading Center, which is affiliated with the central bank. The central bank was investigating the possibility of offering new currency pairs on the interbank market, including ruble, won and ringgit, an unnamed official at the center said in April.

“Gradually the dollar is being eliminated from the foreign-trade settlement flows,” said Dariusz Kowalczyk, a Hong-Kong based senior economist at Credit Agricole CIB. “People are beginning to trade Asian currencies without intermediation via the dollar.”

Bloomberg, full article

IMF Sells 10 Metric Tons of Gold to Bangladesh

The International Monetary Fund, which set out a year ago to sell about 13 percent of its gold holdings, sold 10 metric tons to Bangladesh for $403 million.

The transaction brings total central bank purchases from the fund to 222 tons, according to fund data. India has bought 200 tons, Sri Lanka 10 tons and Mauritius 2 tons. A further 88.3 tons has been sold under the agency’s “on-market” sales program, it said in a statement yesterday.

The lender’s executive board approved the sale of 403.3 tons of bullion on Sept. 18 last year as part of a plan to shore up its finances and lend at reduced rates to low-income countries. After selling only to central banks, it expanded sales to the open market in February.

The transaction “will push gold higher as central bank purchases have traditionally been a major factor fueling the price,” said Hwang Il Doo, a senior trader at Korea Exchange Bank Futures Co. in Seoul. “Central banks want to diversify their reserves because of the unstable dollar and we may see more buying down the road.”

Gold for immediate delivery gained 0.2 percent to $1,246.45 an ounce today, and is about $19 below its record $1,265.30 an ounce on June 21. The price dropped 0.9 percent yesterday, the biggest decline since July 27, as a rally in equities reduced investor demand for wealth protection.

The “on-market” sales don’t “preclude further off-market gold sales directly to interested central banks or other official holders,” the fund said.

“Whenever these things come out, they tend to be relatively supportive of the gold price,” said Darren Heathcote, head of trading at Investec Bank (Australia) Ltd. in Sydney. “It’s not huge. It will add more support to what is already a well-supported market.”

Calls by Bloomberg News to the phone listed on the central bank’s website for M. Abdul Haque, general manager for the Forex Reserves and Treasury Management Department, were unanswered.

Bloomberg, full article