Geopolitical Concerns and Weaker Dollar Puts Spotlight on Gold

NEW YORK, April 19, 2017 /PRNewswire/ --

Gold climbed higher on Tuesday due to a weaker dollar and geopolitical uncertainties. Spot gold rose 0.4 percent to $1,289.83 an ounce by 4:41 p.m. EDT on Tuesday after it hit its peak at $1,295.42 in prior session. Concerns about growing tensions between the United States and North Korea drove the demand for the yellow metal. In addition, worries over the upcoming French presidential election also helped push gold prices higher. Gold is often viewed as a safe-haven asset in times of geopolitical and financial turmoil and year to date; Gold is up about 12 percent. Kenadyr Mining Holdings Corp. (TSX-V: KEN), Gold Resource Corporation (NYSE: GORO), McEwen Mining Inc. (NYSE: MUX), Gold Fields Limited (NYSE: GFI), Harmony Gold Mining Co. (NYSE: HMY)

The price of gold was lifted by a weaker dollar as the dollar index fell to a three-week low after the Commerce Department posted disappointing U.S. housing starts data. Gold prices could benefit from a weaker dollar as it makes other currencies holders cheaper to buy dollar-denominated commodities. "Short-term risk is skewed to the downside but underlying support is there with the focus on political uncertainties. We see the yen continuing to strengthen, and a strong yen and strong gold have gone hand-in-hand since November," said Saxo Bank's head of commodity strategy Ole Hansen, reported by Reuters.

Kenadyr Mining Holdings Corp. (TSX-V: KEN) announced yesterday, "It has finalized a drill contract with Quest Exploration Drilling ('QED'). Kenadyr is in a strong position to embark on this upcoming program, having a strong balance sheet, no debt nor significant payments owing, a strong institutional shareholder base and a management team with extensive in-country operational experience, and merger and acquisition expertise."

QED and its predecessor company have a 30 year history and QED has grown their business to be an industry leader in the provision of drilling services to varied clients. QED's services includes diamond drilling, reverse circulation (RC) drilling, RC grade control, geothermal, geotechnical drilling, water boring and slope stability solutions. QED acts as a drill contractor for multiple public and private companies around the world including major, mid-tier and exploration focused companies.

Drilling is expected to commence within the next 90 days and the updated contract with QED reflects a focus on high impact areas of the project. The drill program will include both core drilling and reverse circulation drilling. A focus of the initial drill program is to establish correlation between extensive previous historical Soviet drilling and modern drilling. Drilling at the Borubai project has the potential to increase both the size, and the grade, of the mineralization (from historic numbers) as a result of increased core recovery and modern drilling and assaying (Fire Assay versus ICP analysis) techniques. Core recovery during Soviet drilling averaged only 60%.

In addition to initial drilling in the high priority South Zone, an area of mineralization directly adjacent to the Zijin Mining Group Co Ltd.'s ('Zijin') Taldy-Bulak Levoberejny ('TBL') mine, Kenadyr will undertake drilling, bull dozer trenching and sampling cuts on the SS Zone and SS Trend. As well as drilling, the Corporation intends to take approximately 1,250 channel samples and 2,200 soil geochemistry samples in this area.

Dr. Alexander Becker, Kenadyr Chief Executive Officer, states, "The underlying geology within this belt is conducive to large size and high grade. Based on this, the strategic location and the immense amount of historical investment in drilling to guide us, we are enthusiastic about the start of this work program. Kenadyr will seek to confirm and enhance past historical estimates of both size and grade."

Gold Resource Corporation (NYSE: GORO) on April 18th reported preliminary production results for the first quarter ended March 31, 2017 of approximately 6,747 ounces of gold, 427,890 ounces of silver and significant base metals. Gold Resource Corporation is a gold and silver producer, developer and explorer with operations in Oaxaca, Mexico and Nevada, USA. The Company has returned $109 million to shareholders in monthly dividends since commercial production commenced July 1, 2010, and offers shareholders the option to convert their cash dividends into physical gold and silver and take delivery. Preliminary first quarter production at the Company's Oaxaca Mining Unit totaled approximately 6,747 ounces of gold, 427,890 ounces of silver, 220 tonnes of copper, 927 tonnes of lead and 2,644 tonnes of zinc. The Company maintains its 2017 Outlook of 27,500 gold ounces and 1,850,000 silver ounces.

McEwen Mining Inc. (NYSE: MUX) February and Lexam VG Gold Inc. have entered into an agreement pursuant to which McEwen Mining would acquire all of the issued and outstanding securities of Lexam by way of plan of arrangement and Lexam would become a wholly-owned subsidiary of McEwen Mining. The proposed arrangement is subject to approval by the shareholders of Lexam. "Lexam's assets include multiple advanced exploration projects located in the prolific gold camp of Timmins, Ontario. Lexam's primary projects are past producers with defined resources and excellent infrastructure. The proposed transaction would give the Lexam shareholders access to McEwen Mining's technical and financial resources enabling the projects to be advanced towards production. Lexam shareholders will also gain exposure to a growing gold and silver producer, with a diversified portfolio of projects throughout the Americas," commented Rob McEwen, Chief Owner of both McEwen Mining and Lexam. 

Gold Fields Limited (NYSE: GFI) revealed this February the results of the South Deep Rebase Plan. The mine entered a critical stage of its evolution at the beginning of 2015 when Gold Fields made the decision to take a step back and fix the base at the mine before determining the new long-term steady state profile. As part of this process, the company removed the previous production and cost targets to afford the new South Deep management team the time to get the basics right and determine the way forward. However, in the absence of long-term production targets, Gold Fields Limited stated that it was their goal to get the mine to cash breakeven by the end of 2016, a goal that the company has achieved. For FY 2016, South Deep generated net cash flow of US$12m. Even after stripping out the benefit of the rand hedge, the mine achieved cash breakeven for the year. 

Harmony Gold Mining Co. (NYSE: HMY) announced last year, the official transfer of seven projects to the community in and around its Doornkop mine on the West Rand, not far from Soweto. The projects, in which community members are already active and participating, were officially handed over today by Harmony's Chief Executive Officer, Peter Steenkamp, at a function attended by delegates from The Department of Mineral Resources, The City of Johannesburg Metropolitan Municipality and members of the community. The seven projects, which are now self-sustainable, involve a range of activities. They include the hydroponic cultivation of vegetables, the manufacturing of protective clothing, uniforms and curtains, bee-keeping, a multi-purpose sports facility as well as three digital hubs. These hubs provide IT support to small businesses, youth and community organizations.

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