All posts by Admin

Avion Gold Corporation: Tabakoto South Intercepts Expand Extent of Higher Grade Gold Zones

Avion Gold Corporation is pleased to announce new drill results for the area just south of the Tabakoto Pit. This area hosts the Tabakoto South Trend northeast-trending cross structures that combined have been traced for 450 metres along strike and to 250 metres depth

Intercept highlights include the following:

  • 9.09 g/t Au over 8.0 metres
  • 17.86 g/t Au over 2.4 metres
  • 21.4 g/t Au over 6.2 metres
  • 16.86 g/t Au over 5.7 metres
  • 80.86 g/t Au over 2.3 metres

The Tabakoto South Trend lies approximately 260 metres southeast, and is parallel to the NE1 zone described in Avion’s News release dated September 9th, 2010. Within this trend, two coherent, partially overlapping zones of higher grade mineralization have been identified: the Tabakoto South and Dabo zones (see figures). A summary of drill hole intercepts are presented in a table at the end of this release.

The Tabakoto South zone, was tested with fourteen holes in 2010 and has been traced for approximately 300 metres along strike, to 275 metres below surface and is open to depth (see Figure). This year’s program has demonstrated that higher grade portions of the zone are predictable along a moderate to steep east plunge and that the zone is open down plunge. Two of the deepest holes returned intercepts of 16.86 g/t Au over 5.7 metres and 5.06 g/t Au over 5.6 metres. 

The Dabo zone has been traced for approximately 250 metres along strike, to 250 metres depth and is open down plunge below the deepest hole which returned 11.83 g/t Au over 9.2 metres. Drilling to extend this zone down dip and along strike to the west did not extend the zone.

The Tabakoto South and Dabo zones lie along a four kilometre long northerly trend that is cut by both northeast- and northwest-trending cross structures that often host high grade gold mineralization. These structures are the focus of Avion’s Tabakoto pit area exploration plans and underground mine development at Tabakoto. Exploration in 2010 has focused drilling on seven of these cross-structures, in the immediate Tabakoto pit area. Two additional cross structures are highlighted in this release.

Subsequent exploration updates on the remaining two major cross-structures are planned once the drilling is completed and the results are available. Future Tabakoto area exploration will continue to focus on systematically defining the known cross structures and tracing them along strike and down plunge.

Drilling also intersected several other cross structures with an intercept of 6.8 g/t Au over 4.0 metres in hole T-10-36 and a fourth zone near the top of the hole T-10-47 where an intercept of 1.89 g/t Au over 5.7 metres was returned. Drilling will be required in order to determine the strike extent of these mineralized intercepts.

John Begeman, Avion’s President and CEO, stated: “As expected, the cross structures continue to return exceptional drill results and demonstrate that the mineralized system is still open to depth and that the potential for the discovery of new zones is high. Avion’s management believes that continued exploration will continue to turn up new structures that can potentially add to our ability to increase our overall resources.”

In 2010 Avion has completed over 440 core and reverse circulation drill holes totaling approximately 53,300 metres of drilling, at its Tabakoto and Hounde properties. This work has focused predominantly on the Dioulafoundou, Tabakoto, Djambaye II, Ségala and Vindaloo areas. Drilling will recommence on the Houndé property, Burkina Faso, which Avion is in the process of acquiring (See News Release dated July 5, 2010), in October, 2010 with approximately 4,000 metres of drilling planned. Drilling is planned for the Kofi property, Mali, once the concession permits are transferred to Avion (See News Release dated March 31, 2010).

Full release

They Are Printing Too Much Money

By James Turk, on September 20th, 2010

There is too much money being printed.  No rocket science is needed to reach that conclusion. The markets are giving us a clear message.

For example, gold is trading at a record high, while silver has reached a 30-year high.  Those new high prices are happening for a reason.  The precious metals are sensitive to changes in inflation, both actual as well as future expectations.

Rising precious metal prices tell us that there is a lot of inflation in the pipeline, but they are not alone in giving us this message. More generally, look at the trend in commodity prices over the past few months in the following chart of the CRB Continuing Commodity Index, which is based on the price of 19 different commodities.

On June 4th the CRB Index closed at 450.24.  Here we are just 3-1/2 months later, and the CRB Index closed Friday at 530.24, up 17.7%.  That is a HUGE jump in prices in such a short period of time.  To put this price rise into perspective, it is a 61.8% annual rate of “appreciation” – though we should call it by what it really is, namely, “price inflation”.

Commodity prices are not rising because of good economic activity, which remains in the doldrums with high unemployment throughout most of the world.  Commodity prices are rising because too much money is being printed.  But the Federal Reserve reports that M1, a narrow measure of the total quantity of dollars in circulation, rose only by a 9.1% annualized rate in the three months from May 2010 to August 2010, and M2 rose by even less.  So why are commodity prices rising by an even faster rate than money growth?  There are two reasons.

1) Because too much money has been printed for years, not just over the past three months, which can be illustrated by comparing M3 to the total US population.  In 2000 there were $26,977 in circulation, as measured by M3, for every man, woman and child in the United States.  That amount has ballooned to $46,538, a 7.1% annual rate of growth, which is more than 7-times the 0.9% annual rate of population growth during this period.

2) Demand for money is usually ignored, but it is an important part of the equation.  Unfortunately, demand cannot be measured, so we again need to rely on observations of market prices to determine the prevailing trend in the demand for dollars at any moment.

So, for example, let’s look at the US Dollar Index, which measures the dollar’s rate of exchange against a basket of currencies. While commodities have been rising since June 4th, the Dollar Index has been falling.  It is down 7.9% over this period, a 27.6% annualized rate of decline.  Given that people are opting to hold other currencies in preference to the dollar, as evidenced by the dollar’s falling exchange rate, it is clear that the demand for the dollar is falling.

Thus, the dollar is being hit by both rising supply and falling demand.  We know from Economics 101 that this condition results in falling prices, which when applied to money means declining purchasing power, or what today is usually called “inflation”.  If monetary policy is not corrected and inflation is not reversed, in time hyperinflation will be the inevitable result.

I have been warning about hyperinflation since March 2, 2009 when I wrote that the dollar was on the cusp of hyperinflation.  I noted that “the federal government has embarked on a course of runaway spending, and it is runaway government spending that causes runaway inflation”, which if left uncontrolled leads to hyperinflation.  The trend has not changed for the better.

From February 28, 2009 to August 31, 2010, runaway federal government spending has resulted in a $2.57 trillion increase in the national debt.  But over this period GDP increased by about $0.5 trillion, and the increase in economic activity is even less after adjusting for inflation.  So clearly we need to ask ourselves, what have the bailouts and stimulus programs really accomplished?

The answer is very little in terms of economic activity, but there is an ominous consequence from this foolish binge by policymakers of soaring debt and reckless money creation.  Given that these dollars are not being used to generate economic activity, they are now sloshing around the globe looking for a safe home.  Tangible assets are one of the safest places to be to protect your wealth from a currency whose purchasing power is eroding.

The result is that the commodity markets are on fire.  Prices are not rising because of a shortage of commodities, but rather, there is a surfeit of dollars.  Too much currency has been created, relative to current economic activity.

Without an abrupt about-face to end the wrongheaded policies being followed by policymakers, there can be only one conclusion. The dollar is headed toward hyperinflation.  The new record highs in gold and silver, an across-the-board rise in commodity prices and the renewed downtrend in the dollar’s rate of exchange are the ‘writing on the wall’.

This article is written by James Turk and with his kind permission, O B Research has been privileged to publish his work on our website. To find out more about his work, please visit:


The “Deleveraging” Deception

By Michael Pento, September 20, 2010

There is wide agreement among economists and the financial media that our lackluster economic performance stems from continued “deleveraging” among consumers and businesses. Although it is certainly true that after decades of overly speculative borrowing, individuals and corporations are paying down debt, rebuilding their savings, and generally repairing their respective balance sheets. But these activities cannot be faulted for our economic malaise.  

In fact, as a country, we haven’t deleveraged at ALL. All the moves made by the private sector have been vastly outpaced by the federal government’s efforts to add leverage to the economy. The net result is that we are much more indebted now than we were before the recession began; as a result, we are digging ourselves even faster into debt.

The good news is that households paid down debt for the 9th quarter in a row. In Q2, they deleveraged at a 2.3% annual rate, as their total debt outstanding dropped from $13.52 trillion to $13.45 trillion from Q1. That’s still around 92% of GDP, which is way up from the 48% level in 1980, but the direction is positive. Ultimately, the message here could not be clearer: American households have decided – either voluntarily or involuntarily – that it is in their best interest to quit borrowing money and reduce their debt levels in order to reconcile their balance sheets. The bad news is that most economists view this as a pernicious tendency.

To counter the trend, economists have called for government to provide the spending that others have deferred – and the feds have been thrilled to comply. In fact, during Q2, Washington accumulated debt at a 24.4% annualized rate! So, even though households and state and local governments have begun to learn some valuable lessons, DC still managed to increase the overall level of non-financial debt in the US to a record $35.45 trillion. In an era of supposed deleveraging, the rate of debt accumulation has increased from 4.5% to 4.8% annualized over the past quarter.

By focusing solely on the behavior of the private sector, and ignoring the equally important fiscal habits of government, the financial media and mainstream economists have displayed a dangerous blind spot in their thinking. They fail to understand or acknowledge that borrowing done by a household or a government is virtually the same thing. The US government does have any independent means to generate wealth to pay off debt. It doesn’t own factories or mines, and it does not operate a profitable service-sector business. It does not have an independent store of savings in another dimension, from which it can produce goods outside the bounds of economic law.

In the real world, all government stimulus comes from borrowing, spending, or printing, or to put it another way: deferred taxation, capital redistribution, or inflation. That means all US debt is ultimately backed by the tax base of the country. Therefore, whether the consumer or the government that does the borrowing is really unimportant because, in the end, it is the consumer that will receive the bill.

Meanwhile, government interventions are particularly pernicious because they encourage short-sighted behavior in the private market as well. It was reported today that corporations are using the rock-bottom interest rate environment to execute leveraged buybacks of their shares. While this temporarily increases shareholder value, it ultimately leaves the corporations – and the broader economy – even further in debt.

As of Q2 2010, total non-financial debt is rising at a 4.8% annual rate but GDP is growing at only 1.6% annualized. US debt as a percentage of GDP continues to climb, which should put to bed any talk of a deleveraging or deflating economy. Consumers are clearly only part of the equation – and, for now, the smaller part. The US government, in fighting the claimed deleveraging, is sending the total debt level into the stratosphere. As we watch it soar upward, the dollar steadily drifts downward.

This article is written by Michael Pento of Europac and with their kind permission, O B Research has been privileged to publish their work on our website. To find out more about Europac, please visit:

How High Will Gold Go This Fall?

by Jeff Clark, Senior Editor, Casey’s Gold & Resource Report

 

The gold price has been hitting ever-new records over the past couple weeks, now closing in on the $1,300 mark. Some gold followers are saying this is extremely bullish for the near-term price since it broke so decisively through its June 28th high of $1,261. If they’re right, how high might this particular surge go?

While the endgame for gold is far off in my opinion, it’s worth looking at short-term surges, especially if you’re trying to determine to buy at a particular level. Plus, it’s just darn fun.

I looked at all major surges in the gold price since 2001. What constituted a “surge,” in my opinion? Any large jump or uptrend that’s clearly visible on an annual chart. So instead of looking at yearly gains or seasonal tendencies, I simply measured the percent gain of all big upswings that were the most obvious, regardless of when they occurred.

I put the findings to a chart.

You can see there haven’t been that many large price advances, about one annually until last year. You’ll also notice the biggest “surge” this year is comparatively small. In fact, you have to go back to mid-2001 to find one that didn’t advance at least 20%. Meaning, we may very well be in for a bigger surge yet this year. 

The average of all surges in the gold price since 2001 is 23.5%. If we hit the average, gold would spike to $1,428 in the current run-up. Note that I measured from the bottom of the surges, not the breakout point; the bottom I used in our case was $1,157 on July 28.

If our current surge were to match the 35.5% biggie, gold would hit $1,567. A 20.8% advance (the smallest of those greater than 20%) would take it to $1,397. With these numbers, Bud Conrad’s call for $1,350 gold by year-end would be met and surpassed.

The only caveat I’d point out is that we logged three surges last year, the only time that occurred in the current bull market. On that basis, it’s certainly possible we could be due for a breather this year and have thus seen our biggest advance. But given the current global economic and monetary circumstances, I wouldn’t place a bet on that. A survey of 29 analysts by Bloomberg a couple weeks ago reported they see gold averaging $1,500 in 2011 – and most analysts tend to make conservative projections.

Note that there were always small pullbacks in the time periods I looked at; it was never a straight line. So the recent minor drawdown was typical of what occurred during these surges. Also, there were always corrections or at least periods of consolidation after the surge and before the next big upswing.

Regardless of what gold does over the next few months, I think 20%+ surges will continue throughout this bull market, with the occasional 30% punch. And a doubling of the gold price in a matter of months is also likely in our future, a sure sign of the Mania phase. Gold surged 128.5% from October 8, 1979, to January 21, 1980. A similar vault today would have the price jumping from, say, $2,400, to $5,484 in less than four months. Yes, I think that’s entirely possible and perhaps probable.

How high will gold ultimately go? I look at it this way. The sovereign debt crisis in Europe isn’t over. The sovereign debt crisis in the U.S. hasn’t started. We will almost certainly see more quantitative easing (i.e., money printing). We have artificially low interest rates. The U.S. dollar is basically at the same level it was two years ago. We have no official inflation and certainly no big inflation. Less than 5% of U.S. citizens own any form of gold. Central banks are widely expected to be net buyers of gold again this year. Investment demand for gold is still only 32% of all uses of gold, a far cry from the 54% level reached in 1979. I could go on, but you get the idea.

The only way you can benefit from these surges is to be long gold. If you haven’t been a part of one, I guarantee you it’s a lot of fun. Gold is more important than that, of course; it’s your personal safe-haven asset. Buy on pullbacks, slowly increasing your holdings so that what you own makes a difference in your portfolio, both for asset protection and profit potential.

And then, hang on.

 

OGC Announces Didipio Gold Copper Project Optimisation

OceanaGold Corporation is pleased to announce completion of an internal economic and technical re-optimisation study for its Didipio Gold-Copper Project located in Luzon, Philippines. The 2010 Study addresses a review of mining method, schedule, process plant layout and infrastructure requirements and associated capital to recommence construction and complete the Project.The 2010 Study has been undertaken by a variety of specialist consultants familiar with all aspects of project development in the Philippines. In accordance with Canadian regulatory requirements set out in National Instrument 43-101, the Company will file with Canadian securities regulators an updated NI 43-101 compliant feasibility study relating to the Didipio Project within 45 days.

Some highligts include 20 years minelife, remaining capex US$140 million, reserves containing 1.41 million ounces of gold & 374 million pounds of copper.

Jim Askew, Chairman, commented, “The updated technical and economic study for the Didipio Gold- Copper project demonstrates, in our view, a robust project with a long mine life, decreased capital costs and strong economics. The potential to move to sub-level open-stoping for the underground mining method also further de-risks the project once the operation transitions to an underground operation, though it reduces feed to 1.2 Mtpa. The adjacent near surface porphyry prospects already identified within the Didipio caldera, are expected to be a source of additional feed to supplement underground production, provided they can be proven through additional exploration that further enhances the project economics and metal output in later years.

He went on to say, “With steady operations in New Zealand, a strengthened balance sheet and increasing mine life at the operations in New Zealand, the Company has a variety of options to unlock the embedded value at Didipio. We have also advanced the recruitment of key project management personnel to oversee the Project once development is re-commenced.

For full release, see pdf