Gold started the week by edging higher Monday, trading around $1475 per ounce by lunchtime in London, as stocks also gained, US Treasuries were broadly flat and the Euro edged higher against the Dollar following news that Italy’s borrowing costs have fallen.

Strong demand for physical gold from private households meantime continues to cause bottlenecks and price premiums.

“The increased physical demand seen since the price correction supports the metal and affects the trading premiums,” says a note from German refining group Heraeus.

Gold traders in Dubai meantime continue to report premiums over the spot gold price of up to $10 an ounce for physical bullion.

“Retail demand…will be the key support for gold and is the main reason we expect prices to stabilize and move slowly higher,” says a note from HSBC, which this morning cut its 2013 average gold price forecast to $1542 an ounce, down from $1700 an ounce, while cutting its silver forecast from $33 an ounce to $26 an ounce. “The capitulation in the gold price dealt a severe blow to investor confidence, which may take many months restore. Unless significant institutional demand returns to the market, we believe prices will struggle to get over the top end of our range of $1625.”

The world’s biggest gold exchange traded fund SPDR Gold Trust (ticker: GLD) saw a further 7.2 tonnes of outflows Friday, taking the total holding of bullion to back its shares to 1083.1 tonnes. Since the starts of the year the GLD’s holdings have shrunk by nearly a fifth.

“In the past two weeks, as global economic data have generally underwhelmed, the ETF selling actually increased in velocity,” says a note from Nomura. “This does not bode well for the remainder of 2013 for the ETF demand category…the recent downward move in inflation expectations and the lack of price reaction to both the Cypriot bailout and the changes in the Japanese monetary base have put gold’s investment rationale somewhat under pressure.”

On the New York Comex meantime, the so-called speculative net long position of gold futures and options traders fell to its lowest level since November 2008 in the week ended last Tuesday, weekly data published by the Commodity Futures Trading Commission show.

The spec net long – calculated as the difference between the number of ‘bullish’ long and ‘bearish’ short contracts held by traders classified by the CFTC as noncommercial – fell by 21% to the equivalent of 260.3 tonnes.

“The preceding week’s fall in net speculative length appeared relatively mild, so perhaps this past week’s decline was a catch-up,” says Standard Bank commodities strategist Marc Ground. “Clearly, the futures market was not convinced that gold could sustain its upward momentum.”

The reported size of noncommercial futures and options positioning rose above 90,000 contracts for the first time since mid-February, only the second time this has happened since at least 2004.

Looking just at the CFTC’s Managed Money category, which includes players such as hedge funds, the Tuesday-reported number of short futures contracts in 2013 has averaged more than 50,000. Between June 2006 and the end of 2012 the average was less than 16,000 contracts.

“The key question in the near term is whether retail and jewelry demand can continue to counter [exchange traded fund] outflows and the rise in [Comex] gross shorts,” says a note from Barclays.

Silver meantime rose above $23.30 an ounce while the picture was mixed for other industrial commodities, with copper gaining but Brent crude oil down.

“We feel we are due for some sideways consolidation,” says the latest technical analysis note from bullion bank Scotia Mocatta. “Resistance is at $24.25…[while] support is at the recent low of $22.07. If we breach support, the risk is an eventual target of $17.73, a full retracement back to August 2010.”

Italy saw its borrowing costs fall to their lowest level since October 2010 at an auction of 5 and 10-Year bonds this morning. The yield on 5-Year debt fell to 2.84%, down from 3.65% at a similar auction last month, while 10-Year yields fell from 4.66% to 3.94%.

Since last month, Italy’s parliament has re-elected Giorgio Napolitano as president, who in turn has nominated Enrico Letta as prime minister. Letta reached agreement on forming a government over the weekend, following a two-month deadlock after February’s inconclusive general election.

Any decision by Cyprus meantime to sell some of its gold bullion reserve would not necessarily be “the thin end of the wedge” that led to gold sales by other Euro members, according to Rhona O’Connell, senior analyst at metals consultancy Thomson Reuters GFMS.

NEWS RELEASE.

April 29, 2013: Vancouver, B.C. – Cardero Resource Corp. (Stock Profile – TSX:CDU & NYSE-MKT:CDY) announces that all motions put forward for approval at its 2013 Annual General Meeting held April 25th in Vancouver, British Columbia (“AGM”) passed with significant shareholder support.

2013 Annual General Meeting Results

At the AGM, the following individuals were re-elected as the directors of the Company: Paul Matysek, Stephan Fitch, Ryan Dunfield, Leonard Harris, and the Company’s President & CEO, Hendrik Van Alphen. All directors were re-elected with the support of over 97% of the votes cast. PricewaterhouseCoopers, LLP, Chartered Accountants, were also appointed as the auditors of the Company for the fiscal year ending October 31, 2013.

The Company’s shareholders also approved an amendment to the Articles of the Company which implements a requirement for advance notice in connection with the nomination of individuals for election as director of the Company (“Advance Notice Requirements”). The purpose of the Advance Notice Requirements is to provide shareholders, directors and management of the Company with a clear framework for nominating directors of the Company.

Issuance of Bonus Shares to Luxor Capital Group, LP.

The Company also announces that, on April 25, 2013, the Company issued 2,000,000 common shares of the Company (the “Bonus Shares”) to affiliates of Luxor Capital Group, LP. The Bonus Shares were issued in connection to a placement of senior secured notes (“Notes”) in the aggregate principal amount of USD 5,500,000 with certain affiliates of Luxor Capital Group, LP. The Notes were issued on April 22, 2013, have a one year term and were issued at a 9.1% discount to net the Company USD 5,000,000 ($5,077,020) with interest accruing at the rate of 10% per annum, payable semi-annually (13% after an event of default). The Bonus Shares will be subject to a hold period in Canada of four months from the date of issuance, plus additional restrictions under United States securities laws.

Mr. Henk Van Alphen, President and CEO of the Company, stated: “We are extremely happy to have the Luxor Capital Group as our major shareholder (12.3%), and now, with their participation as a lender to the Company, it confirms the confidence they have in the Carbon Creek Metallurgical Coal Project. Luxor Capital Group is a well-known mining investor with approximately $5BB in capital under management. They made their first investment in Cardero in 2008 and have been a consistent supporter of our Company and our management team.”

To learn more about Cardero – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 23, 2013: Vancouver, B.C. – Cardero Resource Corp. (Stock Profile – TSX:CDU & NYSE-MKT:CDY)  has successfully completed a private placement financing of senior secured notes to raise net proceeds of $5,077,000 ($5-million (U.S.)). A portion of the net proceeds of the private placement was advanced to Cardero Coal Ltd., thereby enabling Cardero Coal Ltd. to exercise its option to acquire the shares of a private company that holds four coal licences which form part of the Carbon Creek metallurgical coal project.

Exercise of Coal Licence Option

Cardero Coal Ltd. exercised its option to acquire the shares on April 22, 2013. Consideration for the exercise was payment of total consideration of cash in the amount of $5-million (of which $2-million had been previously paid and $3-million was paid on the exercise of the option) plus the issuance by the company of 400,000 common shares of Cardero to the optionor. Immediately following the exercise of option, the private company has been wound up and the coal licences and other assets of the private company were transferred to Cardero Coal Ltd.

To read more about the financing – CLICK HERE.

CompanyFeed™

In 2012 world gold production reached 2,700 tonnes of gold (USGS) – slightly higher than production in 2011 and marginally higher than 2,600 tonnes of gold in 2001 (previous highs). This increase masks major changes in the structure of production costs for gold mines around the world. In 2001, for 2,600 tonnes, an ounce of gold was worth $271. In this past year it was worth $1,669. For 3.8% of additional production, the price of an ounce of gold has risen 615%.

China is the world’s largest gold producer in 2012 with 370 tons produced. It remains at the forefront since 2007. Its production has increased threefold since 1991 and by fifty times since 1980. This increase in Chinese gold production is not miraculous. In 1980 production was largely ignored by the rest of the world. China has been a major producer of gold for centuries, this increase is the result of the “formalization” of its production and the modernization of its mines.

The second largest producer is Australia with 250 tonnes of gold. Gold production in Australia is slightly higher than its low in 2008 with 233 tons but below its peak in 1998 with 312 tons of gold.

USA is third with 230 tonnes of gold. The situation in the United States is similar to Australia. Their production is slightly above the low of 2008 (223 tons of gold) and below the peak year of 1998 (366 tonnes of gold).

With annual production of 205 tonnes of gold, Russia is the fourth largest gold producer in the world. Despite steady growth since 1998, Russian gold production is still below past levels of production from the Soviet Union.

South Africa is the fifth largest gold producer in the world with 170 tonnes. This represents only 17% of the past production from 1969 to 1970, which was 1,000 tonnes of gold. 1,000 tonnes of gold is the historical record, no country in the world has never produced as much gold in a single year. South Africa lost its crown as the leading producer of gold in 2007 after a century of rule.

Sixth, the gold production of Peru is close to that of South Africa with 165 tons of gold produced in 2012.

Gold production in Canada was 102 tonnes, it is the seventh largest producer of gold. Despite a small increase this year, today’s production rates are well below the 166 tonnes of gold produced in 1998.

Eighth position goes to Indonesia with 95 tons of gold. This level is far below its peak production of gold in 2006 at 203 tonnes.

Production from these eight major gold-producing countries continues to decline. They represent more than 59% of world gold production against 92% in 1970. Today, gold produced from these eight major countries and more than a hundred smaller countries is required to match the record production from South Africa in 1970.

The inexorable decline in gold production in South Africa and the stagnation/decline from historical producers such as USA, Australia, Canada, Peru and Indonesia have lead to radical changes in the structure of production costs. The growing trend towards the fragmentation of world gold production has many consequences, for example, a decrease in the resilience of gold mines in the event of lower gold prices. In other words, less profitable mines will close faster if a decline in the price of gold continues.

From 2008 to 2012 world gold production increased from 2,260 tonnes to 2,700 tonnes of gold. Gold production was driven by an increase in demand and a temporary decrease in production costs due to the 2008 crisis. We currently have a reverse situation, the price of an ounce of gold is in a weak position (average annual decline in 2013) while production costs have increased.

If these trends continue, mine closures as a result of lower gold prices and higher production costs should initiate a decline in world gold production for 2013.

To view MiningFeeds comprehensive list of publicly traded gold companies arranged by market capitalization – CLICK HERE.

Pretivm Resources’ Valley of the Kings discovery on the Brucejack property in Northern B.C. is just about the best Canadian gold project in the hands of a development company right now. It’s got grade, size, low CapEx and ease of permitting all going for it.

The recent sell off in gold and related equities has taken no prisoners — like most other companies in the market, Pretivm shares have fallen over 60% this year (Stock Profile – TSX:PVG & NYSE:PVG) .

In light of the downturn, we wanted to get a better sense of the project and the opportunity it offers, so we turned to CEO Bob Quartermain for the Pretivm lowdown. We also had the privilege of getting a better sense of the veteran explorer behind the project along the way.

Pretium’s Quartermain

Born and raised in New Brunswick, Canada, Bob Quartermain developed a passion for the Canadian north as a young man, and has been an exploration geologist focused there ever since. His big break happened in 1980 with the Hemlo gold discovery in Northern Ontario. Quartermain, as project manager, spent three years drilling off the David Bell mine for Teck Resources (Stock Profile – TSX:TCK.B & NYSE:TCK) and contributed to the underground mine plan that would eventually yield one of Canada’s most profitable gold mines.

It was a phone call from the young Quartermain that set off the market frenzy — he and Bruce Durham were the first to recognize the significance of the First Goliath drill core. “You could just see it. It was this moly-rich, sucrosic, beautiful, grayish-blue gold bearing rock. We started opening drill core boxes — and each box contains 15 feet of core — and we ultimately opened up six of them: 90 feet in total, and it was all the same moly-rich rock.”

The young geologist went to the nearest payphone to relay a rough visual assay of 90 feet of 1/4 ounce per tonne gold to his employer Teck. “The person on the other end of the phone didn’t seem so impressed,” Quartermain recalled. But by the time he got back to his hotel room, there were frantic messages for him to call the president of the company.

The market in Vancouver went wild. Soon, penny shares of Hemlo area companies were trading as high as $90. When true assays of the drill core came out to 92 feet of .256 ounces gold, Quartermain’s intuition was validated. From that point on, his company and others trusted him.

After Hemlo in 1985, the humble Maritime geologist took the reigns of Silver Standard (Stock Profile – TSX:SSO & NASDAQ:SSRI), another Teck company. By the time Bob retired in 2010, it was a $2 billion silver producer; it had started at just $1.8 million.

“When I came to Vancouver, I didn’t own a suit, I’d never read a balance sheet, never met a lawyer, and I only knew one broker. But they threw me in the fray of running a junior company, and it panned out, because we focused on sound geology.” With the backing of investors like Rick Rule and Jim Blanchard, the company grew by exploration and acquisition.

Sound geology is what led Quartermain to purchase the Brucejack property from Silver Standard in 2010. He wanted out of retirement and was convinced it was one of the best gold exploration projects in the world.

Brucejack was sold, along with the neighboring Snowfield project (which contains a staggering 34 million ounces of low grade gold — a proxy on a higher gold price) to Pretivm for approximately $450 million in cash and shares. But the focus has always been on locating the potential high grade gold at Brucejack.

In the two and a half years since the sale, Pretivm has defined a spectacular high-grade resource. “In 2009 we had 400,000 ounces of gold and 16 million ounces of silver at Brucejack. The Valley of the Kings area at that time just had a half a dozen drill holes. Between 2010 and 2012, we drilled 174,000 meters and now have over 8.5 million ounces at 16.4 grammes per tonne gold open at depth and in all directions.”

In this day and age, gold projects with the richness and size of Brucejack and the jurisdictional advantage of being in Canada and close to current and former mines like Eskay Creek are rare. Pretivm is in a league of its own among junior companies.

Analysts at BMO seem to agree, commenting that Brucejack is “the right size for the current market environment.” Its underground mine will be finished in 2016; Quartermain says it is projected to cost approximately 600 million dollars and yield over 400,000 ounces of gold per year.

Pretivm clearly beats out the other large-scale gold projects in Canada — almost all of which are low grade, requiring Capex in the multiple billions, which isnt realistic in today’s market environment.

Presently, ten research firms are covering the company with an average target price of greater than $20 per share. Shares in PVG last traded at $6.01.

We contacted economic geologist and editor of Exploration Insights’ Brent Cook to explain this disconnect. Cook told us, “The question everyone has is continuity of the high grade. Bob is addressing that via a bulk sample. The results should answer a lot of people’s questions. I’m actually pretty interested in Brucejack and would love to visit the project this year.”

Results from a 5×5 meter bulk sample from the pay zone at the Valley of the Kings are expected in the second half of 2013. A feasibility study on the economics of Brucejack is also expected early this summer, rounding out the near-term catalysts.

Infrastructure (there is road access), water (they’ll likely generate their own water underground – it’s a wet area), permitting and politics are less of a worry to Quartermain and analysts. Grade continuity is the main focus. If demonstrated, along with expected and positive economics, Brucejack could be one of the few bright spots in the mining industry in 2013.

I asked Quartermain whether his plan was to sell Brucejack or develop it into a mine. He told me his plan is to get the best value possible. “Two years ago, selling the project may have been very likely,” he said. “Right now the major companies are focusing on organic pipelines, and their interest will depend on the bulk sample and feasibility. If they both deliver what we feel they will, the project will be very robust, and we think they’ll be interested.”

The fact that Quartermain built Silver Standard into a profitable precious metals producer makes us confident that if they can’t find a buyer, they can move toward its stated 2016 production commencement timeline on its own.

We chatted for a few more minutes before Bob had to leave Vancouver for Europe, then on to the Middle East to catch up with investors. “It’s important to see the owners of the company, and we like to visit our large investors a few times per year,” he told us.

“There hasn’t been another Hemlo find, and I was fortunate to sit on that discovery. Brucejack may be as significant,” Quartermain said. “I should be so lucky.”

The Prospectors and Developers Association of Canada seem to agree with Quartermain, having awarded Pretivm the 2013 Bill Dennis Award for a prospecting success.

Spot market gold prices fell to a fresh two-year low in Tuesday’s Asian trading, dropping to $1322 per ounce, before rallying back above $1386, as stock markets extended yesterday’s losses.

Silver dropped to its lowest level since September 2010 at $22.10 an ounce before it too recovered some ground. Oil was down on the day by lunchtime in London, while copper ticked slightly higher.

Since Friday morning, the value of total above-ground stocks of gold bullion, estimated by metals consultancy Thomson Reuters GFMS at around 174,000 tonnes, has fallen by more than $1 trillion.

Based on PM London Fix prices in Dollars, gold on Monday was down 9% from the Friday afternoon fixing, the biggest one-day drop since February 28 1983, when gold dropped 12% in a day. That in turn was the biggest single day drop since January 1980, when gold fell more than 13% one day after hitting its then all-time high of $850 an ounce.

On a two trading day basis, gold was down almost 11% by Monday afternoon’s fixing, with 1983 again being the last time gold saw steeper two-day drop. By comparison, gold fell more than 18% in the two days following the January 1980 high.

“The aftershock of the previous two trading days will likely continue today with investors caught off guard and now ready to press sell buttons in any renewed weakness,” said one London-based trader this morning.

The CME Group, which runs the Comex exchange in New York on which gold and silver futures are traded, raised its margin requirements Monday, following a similar announcement by the Shanghai Gold Exchange. The gold margin, which determines the amount of collateral that must be posted to cover potential losses, was raised by 19%, while silver margins went up 18%.

“At some stage [the selling] will start to dissipate,” adds David Govett at brokerage Marex Spectron. “I am sure we will see a rally at some stage this week. But given the current mood, this will no doubt be sold into as soon as it runs out of steam… A major part of this fall has been the snowball effect of people attempting to pick lows and being forced out of positions in quick order. This will discourage any bargain hunting and gold’s only hope rests with physical demand.”

“We continue to see the potential for lower prices,” says Tyler Broda at Nomura. “The lack of investment demand so far in 2013 has pushed gold out of equilibrium and a price as low as $1050 an ounce is possible should we see significant disinvestment occur. We are now on this path, in our view.”

The world’s largest gold exchange traded fund SPDR Gold Trust (NYSE:GLD) continued to see outflows Monday, though at a slower rate than on Friday, with holdings falling by 4.1 tonnes to 1154 tonnes, their lowest level since April 2010.

Since the start of 2013 the GLD has seen the amount of gold held to back its shares fall by nearly 15%.

The GLD’s biggest holder, hedge fund boss John Paulson, has lost around $1 billion of his personal wealth since Friday morning as a result of gold’s price drop, according to news agency Bloomberg.

“While gold can be volatile in the short term and is going through one of its periodic adjustments, we believe the long-term trend of increasing demand for gold in lieu of paper is intact,” says an emailed statement from Paulson & Co. partner John Reade. “Federal governments have been printing money at an unprecedented rate creating demand for gold as an alternative currency for individual and institutional savers and central banks alike.”

Along with gold and silver, industrial commodity prices fell Monday, while stock markets also traded lower.

“Weaker-than-forecast data releases in China and the US weighed heavily on market sentiment,” says a note from Credit Agricole, “supporting the theory that the global economy is repeating the pattern of first-quarter strength followed by weakness over the remainder of the year.”

Here in the UK, inflation remained steady at 2.8% last month, according to figures published Tuesday, while Eurozone core consumer price inflation ticked higher to 1.5%, up from 1.3% in February.

Economic sentiment in Germany and across the Eurozone as a whole meantime has fallen this month, according to the ZEW survey.

Italy should look to use some of its gold reserves to recapitalize its banking system, Il Sole 24 Ore reports. The report cites proposals to use the gold to back a so-called EuroUnionBond rather than selling it.

Gold market development organization the World Gold Council has argued that governments should consider using gold to back bond issues, and last month commissioned a poll that found 91% of Italian business leaders and 85% of citizens agree that the country’s gold reserves should play a part in economic recovery.

NEWS RELEASE.

April 16, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) Golden Arrow Resources Corp. will loan to Carlos Fernandez Mazzi, president and chief executive officer, sufficient funds for Mr. Fernandez to purchase 750,000 units of Golden Arrow, pursuant to a private placement, at the price of 30 cents per unit.

Each unit will consist of one common share of Golden Arrow and one non-transferable share purchase warrant. Each whole warrant will entitle Mr. Fernandez to purchase one additional common share of Golden Arrow for a period of 24 months at the price of 37 cents per common share. The loan will be non-interest bearing unless there is a default in repayment, and will be secured by a first priority charge and security interest over the units acquired by Mr. Fernandez. This loan and private placement are subject to acceptance for filing by the TSX Venture Exchange. The company’s recent share buyback of 13.44 million shares has reduced the outstanding number of shares and limited the stock option pool available to serve as a long-term incentive. As the company’s healthy treasury precludes any financings at this time, this transaction has been structured primarily for this purpose.

Golden Arrow also announces that it has retained Zoppa Media Group to act as an investor relations consultant to the company, to assist with corporate finance and investor relations programs. Zoppa Media Group has been engaged for a term of one year at a monthly fee of $4,000. Except for the investor relations services agreement, Zoppa Media does not have any interest, directly or indirectly, in the company or its securities. Zoppa Media’s appointment as an investor relations consultant to Golden Arrow is subject to regulatory acceptance of applicable filings with the TSX Venture Exchange.

To learn more about Golden Arrow Resources – CLICK HERE.

CompanyFeed™

U.S. dollar gold prices fell below $1550 an ounce Friday morning, though they remained above last week’s low, as stocks and commodities also fell and the Dollar strengthened, with Eurozone finance ministers set to discuss Cyprus, Ireland and Portugal today. 

“Current momentum favors a test to the downside,” say technical analysts at Scotia Mocatta, “but we would not expect significant liquidation until a break of $1500.”

Analysts at Barclays Capital meantime say gold should hit support around last week’s low of $1540 an ounce, but ad that there is tough resistance around $1590.

“It’s a thin market,” one dealer in Singapore told newswire Reuters this morning. “Buying is not exceptionally high from India. I would say there isn’t anything unusual yet.” 

Gold in Sterling meantime fell to its lowest level this year on the spot market at £1006 an ounce, only just above its December low and close to its lowest level since July last year.

Gold in Euros dropped to €1185 an ounce, a two-month low and nearly 15% off its all-time high set last September.

Heading into the weekend, the Dollar gold price looked set for its third straight weekly drop, down 2% on where it closed last Friday, the steepest drop since February.

Silver meantime fell back below $27.50 an ounce, though it remained slightly up on the week by Friday lunchtime in London.

On the currency markets, the Euro fell against the Dollar this morning, handing back all of yesterday’s gains, amid fears that Cyprus’s bailout may not be large enough.

Germany’s government said Friday that the €10 billion figure for bailing out Cyprus is “not up for negotiation” following news that the country needs to find €23 billion to meet its financing needs over the next three years.

“We cannot do any more,” agreed Luxembourg finance minister Luc Frieden, attending today’s Eurogroup meeting of single currency finance ministers.

Eurogroup president Jeroen Dijsselbloem meantime said he was “very optimistic about helping Portugal and Ireland,” adding that an agreement will “hopefully” be reached to extend loans to those countries by seven years. Dijsselbloem denied that the subject of bad loans in Slovenia’s banking sector was due to be discussed at the meeting.

Elsewhere in Europe, British prime minister David Cameron traveled to Berlin Friday to discuss European Union reform with German chancellor Angela Merkel.

The Bank of Japan meantime has taken “all necessary steps to achieve [its] 2% inflation [target] in two years,” BoJ governor Haruhiko Kuroda said Friday. “But it’s not appropriate to limit our policy to two years…we will not hesitate to adjust policy in the future as the economy is like a living thing.”

The BoJ’s promise last week to spend $1.4 trillion of newly-created money on various assets “does not appear to have been bullish for Japanese gold demand” says a note from Credit Suisse this morning.

“Record prices of gold in yen have seen a marked increase in sales of both bars and scrap as investors realize gains…the BoJ’s efforts to displace Yen from JGBs [Japanese Government Bonds] and into other avenues are likely to exaggerate the global hunt for yield and real returns by Japanese individuals and institutions…we think it more likely that will be reflected in rising equity prices and falling bond yields abroad than in accelerating gold demand domestically.”

The Tokyo Stock Exchange suspended JGB futures trading Fridays following a sharp drop in prices.

NEWS RELEASE.

April 11, 2013: Vancouver, B.C. – Golden Arrow Resources Corp. (Stock Profile – TSXV:GRG) Golden Arrow Resources Corp. has released the results of the final 19 drill holes from the 35-hole phase two program at the Chinchillas silver project in Jujuy, Argentina, 30 kilometres northeast of Silver Standard Resources Inc.’s Pirquitas silver mine and 85 kilometres north of Glencore International PLC’s Aguilar silver-lead-zinc mine. Golden Arrow has drilled 13,500 meters (76 holes) during Phase I and II drilling. The mineralized zone begins at surface and continues at depth and remains open to expansion at depth and to the north, east and west.

Drilling highlights include:

-108m @ 125 g/t Ag, 1.2% Pb in CGA-77, including:

-3m @ 712 g/t Ag, 7.7% Pb

-And 10m @ 308 g/t Ag, 1% Pb and 0.7% Zn

-20m @ 379 g/t Ag, 2.1% Pb in CGA-89, including:

-3m @ 1593 g/t Ag, 2.2% Pb

-93m @182 g/t Ag, 1.4% Pb, 0.5% Zn, in CGA-90 including:

-2m @ 2614 g/t Ag, 5.3% Pb, 1.6% Zn

The Company’s Phase II drill program at Chinchillas has successfully concluded, with a total of 7,286 metres completed. Results from the program will be combined with results from the previous 41 drill holes, for a total of over 13,500 metres of drill data. This data will be used to define the first NI 43-101 compliant silver-lead-zinc resource and complete the associated technical report, which is underway. The technical report will include the results of metallurgical testing, for which the final results are pending. A Phase III drill program is also being planned, and will proceed following the completion of the resource estimate work.

“We are excited with these results which expand the known mineralization by as much as 220 metres from the previously defined Silver Mantos zone, and indicates a large high grade silver area in the basement of the zone, which will be included in our next drill program.” stated Brian McEwen, VP Exploration and Development.

To see the complete results – which include 108 metres of 125 g/t silver – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 11, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY)  released the results of an independent valuation on the Renard 65 bulk sample diamonds recently recovered at the Renard diamond project in north-central Quebec. The valuation was undertaken in Antwerp, Belgium by WWW International Diamond Consultants (“WWW”) utilizing their March 2013 price book. Highlights are as follows:

An average price of US$250 per carat on the total Renard 65 parcel of 997 carats. A diamond price model for Renard 65 of US$180 per carat, with a “High” sensitivity of US$203 per carat and a “Minimum” sensitivity of US$169 carat. Valuations of US$8,500 per carat and US$5,900 per carat on the two largest stones of 9.77 carats (G colour) and 6.40 carats (F colour) respectively.

Matt Manson, President and CEO commented “This new valuation work has confirmed a high quality diamond population at Renard 65 that we anticipate will now allow the addition of a substantial quantity of new, open-pit resources to the project’s mine plan. Two features of this work stand out. Firstly, the two large stones in the sample, previously announced by Stornoway, have been confirmed by WWW as amongst the most valuable stones recovered at the project to date. Their large impact in the parcel valuation has been tempered, appropriately, in the recommended base case price model, but their presence confirms a key characteristic of the Renard Project: upside value potential in large gems. Secondly, the WWW work has determined that Renard 65 possesses a diamond population with a different, and generally better, assortment of qualities than is seen in the other Renard kimberlite pipes. This has prompted a re-evaluation of the valuation models used in the project generally, which have previously been based on the assumption that Renard exhibits a single diamond population sampled by multiple pipes. The consequences of these findings for the project are significant, and positive.”

To view how the results relate to the Renard 65 mine plan – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 10, 2013: Vancouver, BC – Goldgroup Mining Inc. (Stock Profile – TSX:GGA & OTC:GGAZF) are pleased to announce that, further to the binding letter agreement between them (see News Release dated January 28, 2013), the Companies have now signed a formal purchase agreement for Goldgroup to purchase from Oroco a 100% interest in the Cerro Prieto Project. The closing of the transaction is subject to approval by the shareholders of Oroco and the TSX Venture Exchange as well as standard closing conditions.

Oroco will seek the approval of its shareholders at a general meeting of its shareholders expected to be held in June, 2013. Oroco also announces that it has obtained binding lock-up agreements in support of the transaction from shareholders representing not less than 22% of the outstanding shares of the Company.

About Goldgroup

Goldgroup is a well-funded Canadian-based gold production, development, and exploration company with significant upside in a portfolio of projects in Mexico, including its flagship 100%-owned advanced stage gold development project Caballo Blanco in the state of Veracruz, and a 50% interest in DynaResource de Mexico, S.A. de C.V., which owns 100% of the high-grade gold exploration project, San José de Gracia located in the state of Sinaloa. The Company also operates its 100%-owned Cerro Colorado gold mine in the state of Sonora.

Goldgroup remains in a flexible financial position with a strong cash balance, no debt and no gold hedging. The Company is led by a team of highly successful and seasoned individuals with extensive expertise in mine development, corporate finance, and exploration in Mexico. Goldgroup’s mission is to increase gold production, mineral resources, profitability and cash flow, building a leading gold producer in Mexico.

To visit Goldgroup’s website – CLICK HERE.

CompanyFeed™

NEWS RELEASE.

April 5, 2013: Vancouver, BC – Balmoral Resources Ltd. (Stock Profile – TSXV:BAR & OTCQX:BALMF)announced today that it has completed the winter 2013 drill program on its Detour Trend Gold Project in Quebec. Drilling was focused in and around the high-grade Martiniere West Zone and Bug Lake area gold discoveries and on exploration targets on the broader Martiniere Property. The expansion and exploration drill program was completed on time and on budget.

In total, approximately 13,600 metres of drilling were completed in 50 diamond drill holes. Twenty four holes focused on lateral and depth extensions of the Bug Lake and associated zones of gold mineralization (results pending), nine holes on vertical and lateral extensions of the West Zone at depths below 150 metres (results pending) and eighteen first pass exploration holes which were completed outside the areas of previous testing on the Property (results of sixteen holes (MDX-13-08 to -23) have now been received and reported).

Results received to date (see: News – March 4, 2013) have indicated that high-grade gold mineralization can now be traced for over 850 metres along the trend of the Martiniere West Zone, more than doubling the previously known length of this trend and extending to over 2,000 metres the northeast-southwest strike extent of the Martiniere gold system. As well, recently received results indicate the discovery of a new area of anomalous gold mineralization located approximately 500 metres northeast of the Bug Lake Zone in an area of the property which had not been previously.

For more information on the results – CLICK HERE.

CompanyFeed™

I had the chance yesterday to speak with technical gold trader Gary Savage, publisher of the “Smart Money Tracker”, daily gold market commentary and trading service, which has outperformed most of the world’s hedge funds in 2011 and 2012.

It was a powerful conversation as Gary commented on the panic selling we’ve seen over the last few days, sharing his view that “once this bottom is formed, we may never see gold at these levels ever again.”

Despite continued and relentless selling, Gary commented that, “Gold isn’t in a bear market, it’s [just] been in a consolidation since the top of September 2011. If you pull up a 13-year chart, it shows that gold is not in a bear market, not even close. The miners however, are in bear market, and they have been for 19 months now, and they’ve lost 50%. That’s about an average cyclical bear market…[So] I think the miners are [primed] to bottom along with gold at this yearly cycle low, which I don’t think occurred today, but I think we’re within a day or two of that final bottom.“

When asked about valuations on mining stocks at these levels, Gary said that, “The valuations in the miners are absurd. The gold XAU ratio is higher than it’s ever been before in history. This is coming at a time where the miners have gotten the hint…management is cleaning up their act…[and] the sector is doing what it needs to do to turn itself around. [But] since the trend is down, people just invent reasons for why the miners should continue to go down. Eventually rationality is going to return, people will recognize that mining stocks are not going bankrupt, and they’re just too insanely cheap.”

In terms of the big picture following this grueling correction, Gary said, “We definitely started a [panic selling climax] today in my opinion. The volume on GDX and NUGT was just through the roof, [but] we’re close [to a bottom]…If you have the emotional ability to buy at those bear market bottoms, that’s where the really big money is made…[and] once this [bottom] is formed…we will probably never ever see gold back below this level again.”

As a final call, Gary concluded by saying, “The gold bull cannot end until the fundamentals change, and they have not changed, they’ve only gotten better…[So] I think we’re about to leave these levels behind forever.”

“We were almost killed several times,” Frank Giustra tells me. He’s recalling his first trip to Colombia in 1994 with his friend Serafino Iacono. FARC guerrillas and cocaine traffickers had made the country the most dangerous in the Americas, but it seemed like nothing could stop the two young natural resource promoters’ quest for the next big score.

Fast forward twenty years, and Frank Giustra has been involved in the creation of at least four multi-billion dollar companies.

Serafino Iacono and his longtime partner Jose Francisco Arata’s five-year-old Pacific Rubiales Energy (TSX:PRE) has a market cap of approx. $7 billion — and a 2012 net income greater than Facebook (age 9) and Linkedin (age 10) combined.

Fino

“Fino,” as Iacono is known in Colombia, is a larger than life figure. He talks constantly, gesticulates insistently, and is always smoking a menthol. In a voice that booms with the New York accent he picked up as a kid, Fino seems to start off all his conversations with “We are the biggest,” “This is the first,” and “We are the only.”

Iacono saw opportunity in the Colombian raw materials sector before anyone else. This is why he’s one of the country’s most successful entrepreneurs today — one who has, for example, Colombian presidents both past and present on speed dial. And Frank Giustra, his closest backer, has provided valuable financial and political capital along the way.

The Pacific Group

The Pacific Group — Iacono’s companies in Colombia and elsewhere — are known by their common name, most having “Pacific” in their title. The Group’s holdings encompass mining, energy, agriculture, infrastructure, and beyond. Anchored by the wildly successful mid-tier oil producer Pacific Rubiales, the Pacific Group is one of Colombia’s largest conglomerates.

Joining Pacific Rubiales in the public portfolio is Pacific Coal Resources (Stock Profile – TSXV:PAK) and Gran Colombia Gold (Stock Profile – TSX:GCM), both of which are suffering, like most other junior miners in this nasty market. Today, both PAK and GCM trade at just a fraction of the the capital invested in each project.

Blue Pacific — Iacono and Giustra’s private company led by Jaime Perez Branger — owns ports under construction in Cartagena and Barranquilla, as well as power plants, farms, mines, and other infrastructure assets scattered across the country. I was able to tour several of these with Fino and Frank late last week.

Why Colombia?

Colombia has made a radical transformation over the past decade. A partial result of Fino’s regional oil discoveries, Colombia has seen a great reduction in guerrilla and drug-related violence, and a subsequent increase in domestic production.

“Colombia is the longest standing democracy in South America,” Fino tells me, his ever-present security detail hovering ominously at our periphery. “I never feel like I’m in danger here.”

“People also forget that, even in the worst years of the violence, Colombia’s banks paid their bills,” he says. According to Business Monitor International (BMI), the country “boasts an unblemished debt record and looks set to improve its budget deficit significantly over the medium term.”

Further, Colombia’s labor force is both highly qualified and competitive. “We expect the infrastructure, mining, and oil and gas sectors will continue to receive significant amounts of investment from abroad. The country’s vast untapped oil & gas reserves, combined with a favourable business environment and investment-friendly government licensing programmes, will continue to attract foreign investment into energy companies,” said BMI.

The recent US Congressional ratification of the US-Colombia free trade agreement is another shot in the arm for the country, enabling further infrastructure improvements.

It’s no mystery, then, why the BMI declared that Colombia is one of its favourite infrastructure markets in the region, and forecasted an average 5.4% growth between 2013 and 2017.

Net net, the future is bright for Colombia, and Fino and Frank’s Blue Pacific is moving along at a rapid pace.

Related Industries

“In the resource business, you have to look at the related businesses of each of these commodities.” Fino tells his guests over whisky with coconut water one night. “The other products and materials used in production, the infrastructure… Do you have any idea how much lime it takes to produce gold at our mines, and how big of an opportunity there is in the lime business in South America, along with all the gold production coming on stream?” he continued. “Do you know how many steel valves we use at Pacific Rubiales? How much light oil we need as a diluent for our heavy oil production?”

Of all the companies in Frank and Fino’s portfolio, Petroamerica Oil (TSXV:PTA) is the one they’re most excited about. “There’s a huge opportunity for Petroamerica to be the consolidator of light oil projects in Colombia,” Fino says. “CEO Nelson [Navarette] is the top oil executive in Colombia, with the best connections in the country. This is the next Pacific Rubiales.”

Frank and Fino are two of the largest holders of PTA shares, last at 32 cents.

Public vs. Private

As for the state of public markets for junior resource developers, project valuations have become irrational. “This is the worst I can remember it,” Fino tells me.

“A bull market will always go higher, and a bear market will fall farther than you expect it will,” Giustra tells me on Friday. We’re in a SUV in a police-led motorcade, on our way to a soccer match in Barranquilla. Fino adds: “That’s why we’re doing our infrastructure investments in Blue Pacific private for now. So we can focus on creating value, and not the share prices.”

“The past decade was the greatest bull market of all time in our sector, it was almost ridiculous,” Giustra continues. “Shells used to go to 80 cents on anticipation of something happening, and that’s what the market is coming to terms with now.”

Mining stocks have fallen so far that Giustra, one of the most successful market timers in the precious metals sector, has begun to sell his bullion position in favor of the gold miners.

When an investor with a track record like Frank Giustra’s makes a market call like that, it’s worth taking notice.

Gran Colombia Gold

The subject changes to the challenges facing Gran Colombia Gold, the nation’s largest gold producer. With a current market cap of only ~$100 million, GCM reminds us just how small the Colombian gold industry is, despite numerous projects currently in development represented on the TSXV.

“We have invested hundreds of millions of dollars in Gran Colombia and have increased our production and enhanced our profitability this year. But the market is not impressed,” Fino said.

The company has missed expectations, and like other producers, has reminded investors that gold mining is a difficult business. But to Fino’s credit, Gran Colombia is financed to get back on track in 2013 and 2014 with the assistance of gold and silver notes, a recent debt financing.

Be Bold

One of my biggest takeaways from Colombia is that if you want to be a real resource developer — and not just a promoter of moose pasture — you need the vision and the guts to chase the impossible.

But more than anything, you need the right people around you.

“Our silver notes are trading at only .70 cents on the dollar, Frank, can you believe that?” Fino says from the front seat of the SUV. Sitting beside me in the back seat, Giustra pulls out his Blackberry dismissively. A minute later he says, “I just bought $500,000 of the silver notes at .70, Fino.” He obviously thinks his friend is good for it.