Canadian Malartic mine put on temporary care and maintenance

Intermediate precious metal royalty company Osisko Gold Royalties announced on March 25 that, following the announcement by Agnico Eagle Mines and Yamana Gold – the operators of the Canadian Malartic Mine – operations at the mine would be ramped down and placed on care and maintenance until April 13. As instructed, minimal work will take place during that time, in compliance with the most recent Québec government order in an effort to contain the Covid-19 outbreak.

Sibanye prepares South African ops for downtime, warns of depressed guidance

Following President Cyril Ramaphosa’s announcement of a nationwide lockdown from March 26 to slow the spread of Covid-19 in South Africa, JSE-listed gold and platinum group metals (PGMs) miner Sibanye-Stillwater is preparing its local mines to be wound down. The lockdown will be in effect until April 16, and applies to any citizen or foreigner currently in South Africa, except for those deemed to provide an essential service, such as medical personnel.

Record high gold prices are coming: analysts

By Ellsworth Dickson

In a world of collapsing stock prices due to the coronavirus (COVID-19), March 24 was a great day for mining stock investors and gold bugs. The TSX Composite Index was up 1,342, or +11.96%, and the junior miner-heavy TSX Venture Exchange was up a healthy 29.56 points.

March 24 also happened to be the day that the New York-based CPM Group held their webinar on the heels of publishing their Gold Yearbook 2020 as the price of gold increased by US $78.70 to US $1,630 an ounce.

Like many stocks and other securities, the recent price of gold has also been very volatile, probably more so than at any other time. Its big price drops were due to margin calls and other money demands from highly leveraged positions and related reasons.

While physical gold and silver demand had been low for some time, the coronavirus caused demand to pick up sharply. According to the CPM webinar, this has resulted in physical gold coin and bar dealers selling out who are now finding it hard to replenish their stock to meet the increased demand. This is attributable to three major Swiss refineries – which account for over one-third of world supply – closing due to the virus. Other smaller refineries around the world have also closed.

CPM noted that due to the coronavirus investors are buying gold as a safe haven which was aided by the Fed’s actions to print as much money as needed (open-ended quantitative easing) to get through present difficulties. Other factors driving gold’s price increase was strong gold ETF demand, Central bank demand coupled with less gold sales on their part.

“CPM Group expects gold prices to continue on their upward trajectory during 2020 and to reach new record highs in the medium term,” stated the Yearbook.

Other analysts concur. A new Goldman Sachs report entitled Time to buy the currency of last resort noted that gold acts as a hedge against the debasement of currency when governments need to print massive amounts of money to deal with unprecedented economic problems.

Goldman Sachs is of the view that “both the near-term and long-term gold outlook is looking more constructive, and we are increasingly confident in our 12-month target of US $1,800 an ounce.”

Analysts at Sprott Asset Management agree, who noted in a report that “gold continues to deliver strong relative performance and was up 2.37% on a year-to-date basis through yesterday’s close. This compares to -33.74% for the S&P 500 Index.

Chief Investment Officer Whitney George reflected on markets and the COVID-19 crisis: “We are in a paradigm shift right now, one that may have taken us all a bit by surprise. I expect that central banks will shortly provide the liquidity required to settle the markets, an accomplishment that will be very favorable to gold.”

He went on to say that “Sprott is focused on hard asset investments, specifically gold and precious metals. Hard assets have two key advantages. They represent ownership of something finite and tangible. When the paper you use to purchase it is infinite, hard assets like gold can help to preserve real wealth.”

George remarked that “Right now, we are recommending to clients to own some physical gold, along with physical silver. These are proven safe haven investments. Mining equities would be another place to look for those who are more opportunistic…”

Sibanye warns of lower activity from Blitz mine

To further proactively manage the Covid-19 threat at NYSE- and JSE-listed Sibanye-Stillwater’s platinum group metal operations in the US, the company has decided to reduce the number of people working at some of its sites. The company will take specific actions including demobilising contractors involved in growth capital activities, facilitating remote work for personnel that are not required on site, prohibiting face-to-face contact with external parties and restricting site access to employees.

AMCU reports fatalities at AngloGold, Sibanye mines

The Association of Mineworkers and Construction Union (AMCU) reported on Friday afternoon that it had learnt of fatalities at AngloGold Ashanti’s Mponeng mine, in Gauteng, and Sibanye-Stillwater’s Thembelani shaft, in the North West. The union said in a statement that the AngloGold incident happened on March 16 when a locomotive operator was fatally injured as he was caught between a material car and a loader.

Gold miner Polymetal gains exposure to ‘EV revolution’

Precious metals miner Polymetal will buy a 9.1% stake for $20-million in ThreeArc Mining – a company that owns the Tomtor niobium and rare-earth element (REE) project (Tomtor), in north-west Yakutia, Russia. The acquisition provides Polymetal with a "high-quality exposure to the electric vehicle (EV) revolution” by establishing strategic beachhead in the niobium and REE markets, CEO Vitaly Nesis said on Thursday.

Endeavour Silver says updated Terronera PFS disappoints

An updated prefeasibility study (PFS) for the Terronera silver/gold mine, in Mexico, has returned less robust economics than a prior study, prompting the Vancouver-based company to initiate an internal review of the PFS before proceeding to a full independent feasibility study. Endeavour Silver explains that significant changes were made to the operations plan, capital and operating costs compared with the previous PFS, which was published in 2018. Although still positive, the new PFS returned less robust economics, the company said, without stating what those were.

Sibanye tweaks agreements with Amplats

JSE-listed precious metals miner Sibanye-Stillwater has reached agreements, in principle, with fellow listed Anglo American Platinum (Amplats) for the treatment of material following Amplats’ force majeure declaration earlier this month. Amplats temporarily shut its subsidiary Rustenburg Platinum Mines’ converter plant as critical repairs have to be made to a second converter plant that had water ingress, while the primary converter plant was damaged in an explosion in February.

World’s biggest precious metal industry readies for coronavirus

Platinum and gold mines in South Africa, which together make up the world’s biggest precious metals industry, are gearing up to try and minimise a local outbreak of the coronavirus that could disrupt operations where hundreds of thousands of people work in close proximity. Companies including Anglo American Platinum and Sibanye-Stillwater are preparing a range of measures, from checking the temperature of workers before they enter narrow elevators to descend up to 2.4 miles underground to encouraging employees to find out their HIV status. They’re also distributing flu shots and changing the way statutory medical examinations are done.