Polyus to launch covid-19 response fund in Russia

Polyus announced that, in cooperation with the Far East Development Fund (“FEDF”), it will co-found a fund to finance activities aimed at preventing the spread of covid-19 in the Russian Far East.

The size of the fund is expected to reach RUB 1 billion (about $12 million) reflecting donations from different parties.

FEDF and Polyus will donate a total of RUB 250 million under the first tranche which will be used to finance initiatives to help prevent the spread of the virus, the companies said in a media release.

A portion of the first tranche will be allocated to the Magadan region and Yakutia, Polyus’ principal regions of operations in the Russian Far East, and will be used for the procurement of personal protective devices and medical equipment for local hospitals.

The remaining portion of the first tranche will be directed to all other regions of the Far Eastern Federal District.

Polyus is the largest gold producer in Russia.

Covid-19 pandemic hits Caterpillar supply chain

Caterpillar (NYSE: CAT) announced this week that the continued spread of the covid-19 is starting to impact its supply chain.

Caterpillar said it is continuing to run the majority of its US domestic operations and plans to continue operations in other parts of the world but is temporarily suspending operations at some facilities in affected areas.

In February, Caterpillar said its machine sales dropped 11% on a rolling three-month period. Isolating the Asia-Pacific region, sales fell 17% – the largest drop in four years.

“The company is monitoring the situation closely and supply chain teams have been executing business continuity plans, which include, but are not limited to, being alert to potential short supply situations, and, if necessary, utilizing alternative sources and/or air freight, redirecting orders to other distribution centers, and prioritizing the redistribution of the most impactful parts,” Caterpillar said in a media release.

Caterpillar said its financial position remains strong. On a consolidated basis, the company ended 2019 with $8.3 billion cash and available global credit facilities of $10.5 billion.

Fortuna resumes operations at San Jose mine

Fortuna Silver (NYSE: FSM, TSX: FVI) announced on Thursday that the blockade of the roads in the municipality of San José del Progreso which prevented access to the San Jose Mine has been lifted.

A group led by San Jose del Progreso’s former mayor had blockaded roads to protest the action taken by Oaxaca state’s electoral tribunal that revoked his appointment as mayor.

Operations at the mine will resume today, starting with the night shift.

San Jose is expected to produce 6.6M-7.3M oz. of silver and 41K-45K oz. of gold this year.

Fortuna also updated mineral reserve and resource estimates, reporting combined proven and probable mineral reserves for San Jose and the Caylloma mine in Peru totaling 6.4M tons containing 37.2M oz. of silver and 220K oz. of gold, representing respective year-over-year declines of 18% and 19% in contained silver and gold oz.

Centerra reports net loss for 2019, declares dividend

Centerra Gold (TSX: CG) reported on Thursday a net loss for 2019 of $94 million.

Gold production for the fourth quarter was 194,507 ounces and gold production for the year was 783,308 ounces, Centerra said.

Copper production for the quarter was 18.1 million pounds and copper production for the year of 71.1 million pounds.

Centerra said its board of directors authorized a dividend of four Canadian cents per share, amounting to C$11.8 million ($8.2 million).

“For 2020, we are estimating consolidated gold production to be in the range of 740,000 to 820,000 ounces combined with 80 million to 90 million pounds of payable copper production,” Scott Perry, president and CEO said.

Centerra has experienced no operating or production disruptions nor any supply chain interruptions or impact due to covid-19

Centerra operates the Kumtor Mine in the Kyrgyz Republic, the Mount Milligan Mine in British Columbia, Canada and now has a third operating gold mine, the 100%-owned Öksüt Mine in Turkey, which began production in January 2020.

Centerra said it has experienced no operating or production disruptions nor any supply chain interruptions or impact due to covid-19.

However, the company has decided to undertake a reduction of manpower and operations at the Öksüt Project on March 31, 2020 for an initial period of two weeks, in response to recent Turkish government initiatives aimed to reducing the spread of the virus.

Yamana to suspend operations at Canadian Malartic

Yamana Gold (TSX:YRI, NYSE:AUY) announced on Tuesday that will scale back operations at its Canadian Malartic mine.

The decision follows discussions held with representatives of the Government of Quebec, that ordered temporarily restriction to all non-essential business until April 13, due to the coronavirus outbreak.

Yamana operations will be on care and maintenance and minimal work will be taking place until the date specified in the order, the miner said.

Canadian Malartic, a 50-50 joint venture with Agnico Eagle, it is the largest gold mine in Canada

Canadian Malartic, a 50-50 joint venture with Agnico Eagle, it is one of Canada’s largest gold mines, and produced 170,084 ounces of gold in the fourth quarter of 2019.

There are currently no suspected or confirmed cases of covid-19 at Canadian Malartic or any Yamana operation, and a return to full capacity at Canadian Malartic is expected to occur in an expedited manner as soon as the temporary restriction is lifted, the company said.

Yamana has also temporarily demobilized operations at the Cerro Moro mine in Argentina.

Sibanye to put South African operations on hold

Sibanye-Stillwater (JSE: SSW, NYSE: SBSW) announced on Wednesday that has begun implementing measures to place its South African gold and PGM operations under temporary care and maintenance, in accordance with the nation-wide lockdown for 21 days, effective midnight on Thursday.

“This suspension of operations will adversely impact on production at the South African mines and shareholders are therefore cautioned that production for 2020 may differ from previous guidance,” Sibanye said in the media release.

In South Africa, the company’s gold operations consist of underground mining and surface treatment facilities at Beatrix, Driefontein and Kloof in the Witwatersrand Basin.

The company’s SA operations produced 1,176,600 oz of gold in 2018

The company’s SA operations produced 1,176,600 oz of gold in 2018.

Sibanye’s Southern Africa PGM operations consist of underground mining operations and surface sources at Kroondal, Rustenburg and at Marikana. The company also has a 91% stake in the Platinum Mile tailings retreatment facility near Rustenburg. These operations produced 1.18 million oz in 2018.

The company also reduced the number of people at its US operations on a temporary basis due to the coronavirus outbreak.

Systemic shocks will lead to a loss of trust in Central Banking – Ronald-Peter Stöeferle

The senior advisor to Erste Group Ronald-Peter Stöeferle discussed the upcoming annual report “In Gold we Trust” on Palisade Radio and how last year’s report had a focus on the coming breakdown of trust in society.

According to Ronald-Peter, there are a lot of economic experiments occurring right now.

Synopsis

We saw equity markets and real estate markets at all-time highs just a month ago. We’ve seen massive price inflation in assets, and now we have a gigantic deflationary reaction. Multiple shocks are in progress including, a global demand crisis, deflationary reactions in assets, a global supply crisis, an oil collapse, a rising U.S. dollar, and a credit shock.

Politicians and central bankers are in a state of action but also helplessness. Measures taken recently with proposed helicopter money shows that we are moving into a new era.

This crisis will mean less globalization, higher inflation rates, and increasing fiscal stimulus. We should expect additional central bank actions like MMT and helicopter money before this market bottoms, which could lead to stagflation.

Commodities have only been lower twice in history. Worldwide currency shocks are ongoing, and U.S. dollar strength is resulting in weak commodities, but that trend will eventually reverse.

Trump would prefer a lower dollar, but that may be difficult to achieve.

Silver is a bargain relative to gold, along with many of the positive cash-flow producers like Newmont, who can only do even better with low oil prices.

Ronald feels there are some excellent opportunities right now. The worst may be priced into the market, and as a result, things could quickly become positive again after Easter.

Time Stamp References:
0:40 – Trust breakdown in society.
3:00 – Unorthodox solutions being discussed.
7:30 – Recessions and opportunity.
8:55 – Outlook for gold, silver and energy.
13:10 – Mining stocks and silver.
15:30 – Producer Fundamentals
16:50 – Opportunities in down markets.
19:30 – Highlights from the coming gold report.
21:40 – Optimism toward gold and bitcoin.

Talking Points From This Week’s Episode
• A possible breakdown in public trust for central banking.
• Multiple shocks are affecting global markets.
• Bankers and politicians are helpless and trying numerous actions.
• Additional central bank actions are coming.
• Markets could turn positive after Easter.

Ronald-Peter Stöeferle is a Chartered Market Technician and a Certified Financial Technician. During his studies in business administration and finance at the Vienna University of Economics and the University of Illinois at Urbana-Champaign, he worked for Raiffeisen Zentralbank in the field of Fixed Income/Credit Investments. After graduating from university, Stoeferle joined Vienna based Erste Group Bank, covering International Equities, especially Asia. In 2006 he began writing reports on gold and gained media attention when he expected the price of gold to rise to USD 2,300/ounce when the current price was only at USD 500. His six benchmark reports, called “In Gold We Trust,” drew international coverage on CNBC, Bloomberg, the Wall Street Journal, Economist, and the Financial Times.

In 2013 he became managing director and partner of Incrementum AG, based in the Principality of Liechtenstein. The company focuses on asset management and wealth management and is one hundred percent owned by its partners. He continues to write the annual “In Gold We Trust” as a senior advisor to Erste Group.

Syrah suspends Louisiana operations

Syrah Resources (ASX: SYR) announced on Tuesday that will suspend its Battery Anode Material plant in Vidalia, Louisiana, to assess and manage potential operational risks from covid-19.

According to the company, this will delay the distribution of purified natural graphite samples for qualification with potential customers.

The Balama graphite operation in Mozambique remains operational.

Syrah produced over 100,000 tonnes of natural graphite in 2018. Balama is the largest and first major new natural graphite operation developed outside of China.

Hecla to suspend operations at Casa Berardi

Hecla Mining (NYSE:HL) announced Tuesday it is suspending operations at Casa Berardi until April 13, 2020 to comply with the Government of Quebec’s orders.

“The Government of Quebec ordered the mining industry to reduce to minimum operations as part of the fight against the Covid-19 virus, so we are suspending our Casa Berardi operations,” said Phillips Baker, Hecla’s president and CEO.

The company’s estimates for production and cost will be reviewed with the first-quarter earnings release.

Casa Berardi produced 134,409 gold ounces in 2019. The company’s estimates for production and cost will be reviewed with the first-quarter earnings release, it said.

OceanaGold puts Waihi operation on hold

OceanaGold (TSX: OGC, ASX: OGC) has announced that the Waihi gold operation in the North Island of New Zealand will temporarily suspend the ongoing development of the Martha Underground Mine and go into care and maintenance for four weeks, in response to Covid-19 measures put in place by the New Zealand Government.

The miner is working with the New Zealand government to determine what exemptions may be available for the Macraes Operation in the South Island of New Zealand.

OceanaGold’s CEO, Michael Holmes, said the company was supportive
of the government’s aim to protect the health and safety of all New Zealanders.

“We recognize strong decisions will be made to slow down the spread of COVID-19,” Holmes said.

The Waihi gold mine is an underground and open pit operation and it had a production of 83,492 oz gold in 2018.