Tag Archives: Peru

Lagarde Says Fed Hike, Slower China to Test Global Economy

Bloomberg, Sep 30, 2015


* World growth will only modestly accelerate next year
* China faces ‘delicate’ task of moving to new growth model

Global growth will only modestly accelerate next year as the world grapples with the twin prospects of rising U.S. interest rates and slowing expansion in China, International Monetary Fund Managing DirectorChristine Lagarde said.

The likelihood that the Federal Reserve will tighten monetary policy, coupled with China’s slowdown, “are contributing to uncertainty and higher market volatility” in the global economy, Lagarde said in a speech in Washington on Wednesday. The IMF will host its semi-annual meetings next week in Peru.

The fund’s World Economic Outlook, to be released Oct. 6, will confirm that the global growth rate is expected to be weaker this year than in 2014, she said. In July, the Washington-based IMF projected world growth of 3.3 percent this year, down from 3.4 percent in 2014, and accelerating to 3.8 percent next year.

The IMF now expects only a “modest acceleration” in 2016, Lagarde said on Wednesday. She didn’t provide a specific forecast.

Disappointing and Uneven

“We see global growth that is disappointing and uneven,” Lagarde said. “The ‘new mediocre’ of which I warned exactly a year ago — the risk of low growth for a long time — looms closer.”

Fed ChairJanet Yellen said Sept. 24 that the central bank, which has held rates near zero since late 2008, was likely to begin tightening policy later this year if the economy stays on track. Lagarde has previously urged the Fed to delay liftoff until 2016.

While emerging markets are generally better prepared for higher U.S. rates than in the past, rising borrowing costs and a stronger dollar “could reveal currency mismatches, leading to corporate defaults — and a vicious cycle between corporates, banks and sovereigns,” Lagarde said.

More broadly, most advanced economies should continue to keep monetary policy loose, while incorporating “spillover” risks into their decision making. Emerging economies need to improve their monitoring of the foreign exchange exposures of majorcompanies, while countries with room to raise public spending should try to boost growth by increasing investment, especially in infrastructure, she said.

The growth potential of the world economy is being held back by low productivity, aging populations, and legacies of the financial crisis, such as high debt, she said.

Modest Pickup

The fund’s latest World Economic Outlook will show evidence of a “modest pickup” in advanced economies, with the euro-area recovery strengthening andJapan returning to growth, she said. However, expansion in emerging economies will likely decline for the fifth straight year.

While India remains a “bright spot,” countries such as Russia and Brazil are facing “serious economic difficulties,” said Lagarde. Growth in Latin America continues to “slow sharply.”

In addition, reforms in China to lift incomes will lead to “slower, safer and more sustainable” growth, she said, adding thatChinese policymakers “are facing a delicate balancing act: they need to implement these difficult reforms while preserving demand and financial stability.”


NEWS: AM Gold Shareholders Approve Sale of Pinaya Copper-Gold Project in Peru to Kaizen Discovery

Sep 8, 2015

Kaizen Discovery Inc. (TSX VENTURE:KZD) is pleased to announce that AM Gold Inc. shareholders passed a special resolution to approve the previously announced sale to Kaizen of Canper Exploraciones S.A.C., a Peruvian subsidiary of AM Gold whose material asset is the Pinaya Copper-Gold Project.

The special resolution was approved by 99.9% of the votes cast by AM Gold shareholders.

The closing of the transaction with AM Gold is subject to certain other closing conditions, including (i) approval of the transaction by the TSX Venture Exchange in respect of both Kaizen and AM Gold; (ii) delivery of a title opinion for the Pinaya Project acceptable to Kaizen, and (iii) no material adverse effect upon closing for Kaizen, AM Gold or Canper.

The Pinaya Project covers 192 square kilometres and includes more than 25 kilometres of strike length within the emerging Andahuaylas-Yauri Porphyry Belt in southeastern Peru. This belt hosts numerous productive and world-class porphyry and skarn systems, including Las Bambas, Tintaya, Constancia and Haquira.

More information on the planned transaction with AM Gold and the Pinaya Project is available in Kaizen’s July 6, 2015 news release available at www.kaizendiscovery.com.

Full release

NEWS: Kaizen Discovery Enters Into Definitive Acquisition Agreement With AM Gold to Acquire the Pinaya Copper-Gold Project in Peru

Jul 6, 2015

* Pinaya’s existing Measured and Indicated Mineral Resources include 293 million pounds of copper and 616,000 ounces of gold
* Additional Inferred Mineral Resources include 318 million pounds of copper and 353,000 ounces of gold
* The 192-square-kilometre project area also holds significant exploration potential

Kaizen Discovery Inc. (TSX VENTURE:KZD) and AM Gold Inc. (TSX VENTURE:AMG)(FRANKFURT:AMX) jointly announced today that they have entered into a definitive acquisition agreement that will provide Kaizen with 100% ownership of the Pinaya Copper-Gold Project (the Pinaya Project) in Peru’s provinces of Caylloma and Lampa (see figure 1 below).

The Pinaya Project covers 192 square kilometres and includes more than 25 kilometres of strike length within the emerging Andahuaylas-Yauri Porphyry Belt in southeastern Peru. This belt hosts numerous productive and world-class porphyry and skarn systems, including Las Bambas, Tintaya, Constancia and Haquira.

The Pinaya Project contains Mineral Resources within three zones that are essentially contiguous over a 1.7-kilometre strike in the central part of the property. The Western and Northwestern porphyry zones hold estimated Measured and Indicated Resources of 32.3 million tonnes at 0.39% copper and 0.44 grams per tonne (g/t) of gold, for contained metal of 280 million pounds of copper and 452,000 ounces of gold. These porphyry zones also have additional Inferred Resources of 35.4 million tonnes grading 0.40% copper and 0.27 g/t gold, containing 314 million pounds of copper and 307,000 ounces of gold.

The Gold Oxide Skarn Zone has Measured and Indicated Resources of 6.4 million tonnes at 0.80 g/t gold and 0.092% copper, containing 164,000 ounces of gold and 13.0 million pounds of copper. This zone also has an additional Inferred Resource of 2.38 million tonnes grading 0.60 g/t of gold and 0.081% copper, containing 46,000 ounces of gold and 4.3 million pounds of copper.

Previous drilling on the property was focused mainly on defining the current resources and much less on systematic regional exploration. Regional soil geochemical and geophysical surveys have identified multiple, untested targets along and across strike of the resource. Kaizen believes there is significant potential for additional mineralized systems to exist within the property.

“The planned acquisition of the Pinaya Project is a major step forward for Kaizen on its growth path of assembling a diversified portfolio of high-quality mineral projects in the Americas and the Pacific Rim,” said B. Matthew Hornor, Kaizen’s President and CEO.

“Given the size and quality of the resource delineated at Pinaya, and the significant potential to discover additional mineralized systems, we expect our acquisition of the project will gain the support of Kaizen’s strategic Japanese financing partners in furthering the pursuit of Kaizen’s long-term objective of delivering key minerals to Japan’s industrial sector,” Mr. Hornor added.

John Fiorino, CEO of AM Gold, stated, “Kaizen has a strong balance sheet, an experienced exploration and development team, and also has access to capital to continue advancing the Pinaya Copper-Gold Project. Completion of this planned transaction will enable AM Gold to unlock Pinaya’s present, inherent value. In addition, through a significant share position in Kaizen, AM Gold also will have exposure to the growth of a diversified exploration company.

“AM Gold’s board and management strongly recommend that our shareholders approve the proposed transaction, and looks forward to Kaizen using its capital and technical resources to begin to realize the Pinaya Project’s production potential.”

To view Figure 1: Location of the Pinaya Copper-Gold Project in Peru, please visit the following link: pdf

Under the provisions of the acquisition agreement, Kaizen will acquire Canper Exploraciones S.A.C., a Peruvian subsidiary of AM Gold. The Pinaya Project is Canper’s principal asset.

As part of the agreement, AM Gold will receive 15,384,615 common shares of Kaizen – representing 9.7% of Kaizen’s current issued and outstanding common shares on an undiluted basis – and a cash payment of C$500,000. Post-closing, AM Gold is expected to hold approximately 8.8% of Kaizen’s then issued and outstanding common shares, on an undiluted basis.

The transaction is expected to close in early September, 2015, subject to the receipt of required approvals.

Kaizen also has entered into a concurrent agreement with Rokmaster, under which (i) Kaizen will purchase certain of Rokmaster’s equipment located in Peru and (ii) Rokmaster will, among other things, terminate the arbitration proceedings with AM Gold and Canper. The consideration payable by Kaizen to Rokmaster is two million common shares of Kaizen and C$300,000. AM Gold and Rokmaster have been engaged in commercial arbitration since November 2014, seeking to resolve differences regarding payments under a 2012 option and joint-venture agreement that would have entitled Rokmaster to earn up to a 75% interest in the Pinaya Project.

Upon closing of the Pinaya transaction, Rokmaster and AM Gold, and their respective Peruvian subsidiaries will release each other from certain claims and terminate both their present arbitration and the existing option and joint-venture agreement between AM Gold, Canper and Rokmaster. AM Gold and Canper will not make any payment to Rokmaster pursuant to the terms of the settlement agreement.

Major terms of the Pinaya transaction

The aggregate consideration payable by Kaizen to AM Gold to acquire Canper consists of:

  • the issuance by Kaizen to AM Gold of 15,384,615 Kaizen common shares;
  • payment by Kaizen to AM Gold of C$500,000; and
  • reimbursement of certain property-maintenance payments that AM Gold will incur between April 1, 2015, and the closing of the transaction.

The total deemed value of the transaction is approximately C$4.5 million.

Other provisions of the acquisition agreement include:

  • The directors and executive officers of AM Gold who own AM Gold common shares, along with certain principal shareholders, will be required to enter into voting and support agreements to vote in favour of the transaction at AM Gold’s shareholder meeting.
  • The Kaizen common shares to be issued to AM Gold are subject to escrow trickle-out provisions under which 10% of the Kaizen common shares will be released from escrow to AM Gold on and following the first anniversary date of the closing of the transaction. A cumulative and further 10% will be released on each three-month anniversary thereafter, ensuring that all Kaizen common shares issued to AM Gold will be released from escrow 39 months after the transaction’s closing date.
  • Kaizen will acquire a 100% interest in Canper, whose material asset is the Pinaya Copper-Gold Project. Canper also holds two Peruvian satellite greenfield projects: La Mamita in Corongo province and Minas Luchos in San Román province.

The Kaizen common shares to be issued to Rokmaster as part of the arbitration settlement agreement also are subject to escrow trickle-out provisions under which 25% of the Kaizen common shares will be released to Rokmaster on and following the first trading day after the expiry of the four-month hold period under applicable securities laws. A cumulative and further 25% will be released on each subsequent three-month anniversary.

The Kaizen common shares to be issued to Rokmaster also are subject to a placement right, permitting Kaizen to arrange the sale of the escrowed Kaizen shares, provided the sale price is at least equal to the 30-day volume-weighted average price prior to such release date.

AM Gold approvals and other conditions

AM Gold will hold a shareholders’ meeting to consider and approve the Pinaya transaction no later than September 3, 2015. The terms of the transaction will be described in further detail in AM Gold’s Management Information Circular to be filed with regulatory authorities and mailed to AM Gold shareholders in accordance with applicable securities laws. Materials relating to the transaction will be filed by AM Gold with securities regulatory authorities in Canada when they become available. Copies of these documents will be available on SEDAR at www.sedar.com.

The closing of the transaction is subject to a number of conditions, including: (i) shareholder approval in respect of both AM Gold and Canper; (ii) the entering into of the voting and support agreements; (iii) approval of the TSX Venture Exchange in respect of both Kaizen and AM Gold; (iv) delivery of a title opinion for the Pinaya Copper-Gold Project acceptable to Kaizen; (v) the entering into of an agreement among AM Gold, Rokmaster, and their respective subsidiaries with respect to the termination of the arbitration and the option and joint venture agreement; and (vi) no material adverse effect upon closing for Kaizen, AM Gold or Canper.

This announcement is for informational purposes only and does not constitute a solicitation or a proxy.

Qualified Person and Mineral Resources

The scientific and technical information in this news release has been reviewed and approved by C. M. Rebagliati, P. Eng., a Qualified Person under the terms of National Instrument 43-101. Mr. Rebagliati has verified the technical data disclosed in this news release.

The Mineral Resources disclosed in this news release are reported in the NI 43-101 Technical Report dated May 30, 2011 “Updated Resource Estimate on the Pinaya Gold/Copper Property, Caylloma and Lampa Provinces, Peru for AM Gold Inc.” by Messrs. Brian Cole P.Geo and Ronald Simpson P.Geo. For detailed information about QA/QC procedures, data verification measures and other parameters used to estimate these Mineral Resources, please refer to such technical report that is available on the SEDAR profile of AM Gold.

About Kaizen

Kaizen is a Canadian mineral exploration and development company. Kaizen entered into a collaboration agreement with ITOCHU Corporation of Japan in January 2014 and has access to HPX TechCo’s proprietary, geophysical, Typhoon technology under a dedicated services agreement. Kaizen’s long-term growth strategy is to work with Japanese entities to identify, explore and develop high-quality mineral projects that have the potential to produce and deliver minerals to Japan’s industrial sector.

More information on Kaizen is available at www.kaizendiscovery.com.

Full release

China’s big chess move against the U.S.

CNN Money,  Mar 4, 2015

china latam us

China is making friends right under America’s nose.

Latin America is China’s latest business buddy. Chinese banks increased investments in Latin America by 71% last year, and the country plans to double its trade volume with the Central and South American region over the next decade.

This comes as U.S. power in the Americas is starting to erode. U.S. cash is actually fleeing the region as investors see better deals at home or elsewhere.

China doesn’t appear as worried about the short-term.

“What we’re looking at is not simply an economic play. It’s an economic play that also has political and strategic undertones,” says Ilan Berman, vice president of the American Foreign Policy Council in Washington.

Outside of economic ties, Berman points out that China has helped fund Argentina’s nuclear power plant, launched Bolivia’s first satellite and is rumored to be helping Venezuela start its own drone program.

But for now, the relationship is mostly economic.

Trading Places: Although America is still the No. 1 trade partner with Latin America, China is already beating it in some places. China is ahead of the U.S. in trade with Brazil, Argentina, Peru and Venezuela, according to M.I.T. data.

It’s a win-win for China and Latin America for many reasons. China needs all of Latin America’s abundant commodities, like oil and soybeans, while some Latin countries are desperate for cash, which China is happy to provide.

In a sign of the shifting alignments, Latin American countries formed an alliance in 2010 called CELAC (Community of Latin American and Caribbean States), which excludes the U.S. and Canada.

Two months ago, the CELAC countries held a big meeting. Instead of going to Washington, they went to Beijing for the first formal conference between China and the region.

Of course, the new friendship isn’t entirely sunny. Chinese and Latin American economies are slowing down. Demand for goods is declining in China, and Latin America is at the end of a commodity boom, straining ties.

But the potential for long-term ties is strong. China’s President Xi Jinping has vowed to double trade between his country and Latin America over the next decade to $250 billion.

“China provides a source of financing and export markets without pressures to adhere to practices of transparency, open markets, and Western style democracy,” says Evan Ellis, a Latin American expert and professor at the U.S. Army War College.

Venezuela is a good example. As the country’s economy flounders — some have even dubbed it the worst in the world — China stepped in, lending the South American nation billions in exchange for oil.

maduro jinping
Venezuelan President Nicolas Maduro, left, shakes hands with China’s President Xi Jinping.

Money talks: China’s banks lent $22 billion to Latin America last year. That’s more than the World Bank and Inter-American Development Bank sent to the region combined, according to Margaret Myers, an expert at the Inter-American Dialogue, which is not associated with the bank.

“These countries have really welcomed China with open arms,” says Myers.

Meanwhile, U.S. businesses are losing interest in Latin America. Direct investment from U.S. firms to Latin America has declined almost 20% since 2011, according to Commerce Department data.

Despite the recent Cuba announcement, Latin America remains low on America’s policy priorities, some say. Its sleepy attention toward Latin America has allowed China to capitalize.

“As western capital retreats from Latin America…there’s a vacuum there. Why wouldn’t the Chinese want to fill that?” says David Morton, an emerging market expert and chief equity strategist at Rocaton Investment Advisers.