Ballarat Gold Share Discussion Threads

[jed tinsel] 04/2/2006 22:30

12vic,

Thank you for posting the above article.

1.1 million ounces - very nice.

;-)

[12vic] 04/2/2006 22:14

Here's an excellent article found by Laserdisc which I've copied from another site .

Modern gold rush tapping historic veins
Rick Wallace
January 14, 2006
VICTORIA is in the grip of a second gold rush, with the opening of new mines under its historic gold towns set to deliver a $700million-a-year boom.

Deep beneath Ballarat and Bendigo, workers are tapping into reefs of gold-bearing quartz that the miners of yesteryear were unable to recover and which have lain dormant for more than a century.

The Victorian Government predicts these new mines and a string of others across the historic goldfields will deliver a further 80 million ounces - or $56 billion worth - of gold, and turn the state into one of the world's key gold producers.

That is a similar amount to the haul dug up during the last gold rush, when the fields supplied 40per cent of the world's gold.

And in another throwback to bushranger days, the state is appointing a goldfields detective - a position partly funded by the mining companies - to ensure safe passage of the precious metal to Melbourne.

With the gold price soaring to more than $700 an ounce, at least eight mining projects are under way in Victoria, with several hundred thousand ounces already being dug out of the quartz reefs.

Shares in the companies operating most of the mines have risen rapidly, and in several cases their price has more than doubled in the past year, sometimes before production has even begun.

In a mine beneath Ballarat, the town where disgruntled miners staged the Eureka Stockade uprising in 1854, Ballarat Goldfields is about to start work on extracting an estimated 1.1-million-ounce gold deposit.

Also in Victoria's famed Golden Triangle, Bendigo Mining expects in June to start extracting an estimated 10-million-ounce reserve directly beneath the colonial streets of the 1850s town.

The Bendigo mine - which yielded a massive 22 million ounces in the previous gold rush - is predicted to be the third-biggest gold resource in Australia, after two West Australian projects, and the seventh-largest new gold resource in the world.

Miners in both mines are using modern techniques and equipment to go beneath the old workings, which petered out around 700m, and extract what their forebears left behind.

State Energy Minister Theo Theophanous, who has been spruiking Victoria's gold boom to investors and supplying geological data to encourage new miners, expects the modern rush to generate thousands of jobs.

"Victoria's second gold rush promises to be an exciting time for our state. We are again emerging as a major gold producer," he said.

"Just like the gold rush in the 1850s, we expect a boost in jobs and economic activity from this massive growth in the gold mining industry."

With mines in South Africa close to the end of their lives, Victoria's importance in the gold market is set to increase if the results match the predictions made by the Government and the mining companies.

The companies have had to battle skills shortages, forcing them to recruit foreign personnel from the African goldfields and elsewhere. But the unique location of Victoria's goldfields, in picturesque historic towns less than two hours' drive from Melbourne, has proved an asset for luring and retaining staff.

Residents in several towns have criticised the mines for endangering the environment and creating an eyesore, but there is also strong community support for the wealth and employment they have brought to the old goldfields.

Mines at Stawell and Fosterville in central Victoria have delivered large amounts of gold in recent years and have been given a new lease of life by the rising gold price.

New mines are being investigated in the goldfields town of Maldon and in remote country in the Victorian Alps northeast of Melbourne.

Leviathan Resources, which operates the Stawell mine , expects it to have yielded 115,000 ounces over the year. Perseverance's Fosterville mine has produced more than 30,000 ounces since it poured its first ingot in May

[jed tinsel] 03/2/2006 09:07

Credit Agricole's Brokerage Declares "Start Hoarding" Gold!

By Jon A. Nones
02 Feb 2006 at 06:00 PM EST


St. LOUIS (ResourceInvestor.com) -- Cheuvreux, the equity brokerage house of the French bank Credit Agricole, distributed a 56-page report today endorsing the findings of the Gold Anti-Trust Action Committee (GATA) that the price of gold has been surreptitiously suppressed by Western central banks and that those banks do not have the gold they claim to have.

The report, written by Cheuvreux's mining sector analyst in London, Paul Mylchreest, is titled "Remonetization of Gold: Start Hoarding." It repeatedly cites GATA by name and foresees an "unprecedented" rise in the gold price. But what is more, the report accuses central banks of "covert selling."

According to the report, Cheuvreux has raised its mid-cycle gold price estimate to $900/oz from $750/oz, and sees the possibility of a spike to $2,000/oz, or higher.

"Covert selling (via central bank lending) has artificially depressed the price for a decade," wrote Mylchreest.

According to the IMF, the official figure for gold held by central banks in their vaults is 31,000 tonnes, but the reality is much lower, asserts Cheuvreux.

"Central banks have 10,000-15,000 tonnes of gold less than their officially reported reserves of 31,000," Mylchreest wrote.

This gold has been lent to bullion banks and their counterparties and has already been sold for jewellery, etc., according to the report.

The report begins by saying that back in the 1980s, central banks began to deposit part of their gold holdings with leading bullion banks (such as JPMorgan Chase, Goldman Sachs, Citibank, etc.) in return for a fee.

"The gold lent by central banks was in addition to the well-publicised official selling by many of them, including the U.K., Switzerland, Netherlands, Australia and Canada," wrote Mylchreest.

These central banks were able to depress the gold price by lending and selling gold to bullion banks, according to the report. But when these bullion banks sold off the gold they borrowed, this dramatically increased liquidity in the market.

With low lease rates and the gold price expected to remain weak, hedge funds and the proprietary trading desks of banks saw huge profit potential in the 1990s. However, "when the price started to rise, the bullion banks and their counterparties had built up substantial short positions and were 'caught'."

"Non-gold producers account for most and may be unable to cover shorts without causing a spike in the gold price," Mylchreest wrote.

Therefore, gold-lending policies of central banks distort the supply and demand picture for the gold market, according to the report. Gold borrowed from central banks and sold into the market has the effect of increasing supply in the short term and depressing the gold price.

Cheuvreux notes a supply deficit in the gold market of around 1,300 tonnes per year before any central bank selling, and perhaps 700 tonnes per year after official sales - but still before covert selling. This compares with world gold mine output of only 2,500 tonnes per year.

"If gold demand is rising and producers are reducing forward selling at the same time, as is currently the case, the deficit in the gold market will become more exaggerated," wrote Mylchreest.

According to the report, this summarizes a potential gold derivatives banking crisis as outlined by GATA. The net position of all the longs and shorts in the derivative market, including all forwards, swaps and options, must balance out.

"It is clear from the above that the foundation of liquidity in the gold derivatives market is the short position created by central bank lending," Mylchreest wrote.

Thus explains Cheuvreux's assertion that gold could rise to $2,000, or higher. Too ambitious?

Gold climbed as high as $579.50 an ounce on the New York Mercantile Exchange today before easing back a bit to close at $576.80, up $2.80. It's trading at levels not seen since January 1981.

[arja] 03/2/2006 08:22

a bit disappointing as up only .5 cent ! But most gold stocks fell with the general market and the 200 index was down over 50 points at one stage .

[12vic] 03/2/2006 07:57

+ 0.5 cents in Oz - probably not enough to change price in UK , still moving right direction .

[arja] 02/2/2006 21:16

Gold still holding above $570 although BGF did not seem to react instantly to gold price movement in recent past . OZ chart still in uptrend although failed to hold the 47.5 level as day traders took their profits . I think the worst case scenario is for a pullback to 43 cents before moving higher but more likely to hold the 46 level tonight or even move higher . I am a bit concerned that UK listed gold stocks such as POG succumbed to profit taking today as the DOW tumbled - maybe BGF could do the same! But the big picture looking alright as those who study fundamentals on this board have pointed out .

[12vic] 02/2/2006 16:16

Cheers laserdisc - had never heard of the White Marubozu before !

[laserdisc] 02/2/2006 15:51

another 20k gone through

[jester jim] 02/2/2006 15:42

looking very good,- steady solid performance

[laserdisc] 02/2/2006 15:21

candelsticks say hold

[laserdisc] 02/2/2006 15:16

yes just seen it go through... i like the fact that ballarrat does not hedge its production gold looking strong

[jed tinsel] 02/2/2006 15:10

Helped myself to another 50k.

;-)

[12vic] 02/2/2006 14:15

Hello Laserdisc - things are shaping up quite nicely what with new high today and obviously plenty of good sentiment pushing the price up in OZ . Tonight's Australian trading may give a clear indication of future movement , a drop or no change in price would suggest the start of a consolidation phase say 44 - 46 cents , but my hope is a break through to 50 cents+ may soon be achieved .

Posters on Australian Bulletin boards are setting Targets of around 60 cents , some even now talking about 1$ - this is obviously little more than guess work and maybe even wild hope , but the volume and interest is present to suggest this might be possible .

The charts must be suggesting continued upward movement otherwise I don't believe Arja would have bought in again .

[laserdisc] 02/2/2006 10:29

12vic i am interested thanks for all your posts on fillyaboots

[arja] 02/2/2006 10:03

12vic,
Yes, looking good and may be a takeover prospect as you say . I re-entered at 45cents when it opened . i should have had your patience and kept part of those i bought on Uk market !! As you say , spread here makes it uneconomic to trade them and jump in and out as one can do in OZ.

[12vic] 02/2/2006 08:07

20p offer !

[12vic] 02/2/2006 07:27

Hi Tonystringy ,

Well done on your other investments - gold shares ?

Arja - really positive movement yesterday , ASX down but BGF up 1.5 on 14million volume , strong signs that any large volume sellers may have now been taken out . Can't help thinking some background activity may be pushing this . Could hit 20p soon on offer !

[tonystringy] 01/2/2006 21:57

Just dropped in to say-

Many congrats 12vic!

Never got back in here unfortunatly but doing well elsewhere of late so can't complain really.

Great find!

[12vic] 01/2/2006 21:20

Am still holding the shares and will continue to do so unless any trading opportunities arise but I think it may start to get harder and harder to reenter this one in the short term so will probably hold , excellent profit so far so am content to ride any small drops . Any feelings about the take over rumours , WMC the last company Mr Laufmann worked for were recently taken over by RIO Tinto , so there are certainly possibilities of something going on in the background with a major producer . I also believe that Goldfields may have exploration projects near to Victoria / Ballarat - another major company who would certainly have it within their means to purchase BGF . All speculation of course but would add a bit of sparkle if this turned out to be more than a whisper .

[arja] 01/2/2006 18:34

12vic,
Interesting to read the link you posted and the way it might affect the gold shares. I looked at POG some time back with it's lovely chart . Am kicking myself that I did not buy a few !! Maybe the spread put me off but it turned out to be academic !!

[arja] 01/2/2006 18:28

12vic,
I see the UK price reacted to the OZ move up . If I re-enter , it will be on OZ market to avoid the MM spread here . OZ chart looks promising but the large volume of shares traded means is struggles to add a cent or so . Good luck with your shares .

[12vic] 31/1/2006 17:39

.... and also worth a read , an article valuing gold companies in relation to potential increases in gold price - BGF is listed in the table with potential share price movement forecasts at $600 and $750 gold - very interesting !

[12vic] 31/1/2006 13:08

Have to post this after last night's activity in Oz on no news - perhaps this could be explanation ?

West Australian exerpt Jan 31 2006.

RUMOUR OF THE DAY

"Talk around the traps is some corporate activity looming for emerging Victorian gold miner Ballarat Goldfields. One source was talking about it being taken over but others say it is a bit more complicated and could involve chief executive Richard Laufmann, a former WMC executive, making a return to his WA Goldfields stamping ground....."

[12vic] 30/1/2006 08:08

Excellent Comprehensive Update released today of last quarter activities see news above . Fully recommend a visit to BGF website www.ballarat-goldfields.com where the PDF format can be downloaded complete with pictures of progress being made - more good drilling results + visible gold .