Interfax: Metals Newsletter Vol. 3

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Russia Mining and Metals (other russian metals news click here)Canada’s Kola Mining acquires gold ore field in Krasnoyarsk Territory

MOSCOW. (Interfax) - Canada’s Kola Mining signed an agreement to acquire OOO Artel Staratelei Angarskaya Proizvodstvennaya Kompania for 24 million rubles, which holds a license for the Bogunay gold ore field in the Krasnoyarsk Territory, Kola Mining said in a statement posted on its website.

It was earlier reported that the license for the Bogunay field belongs to Britain’s Trans-Siberian Gold (TSG).

The statement said: "The area had been closed due to its proximity to a Soviet strategically sensitive location until 2002, at which time a license to conduct exploration and subsequent production of gold was issued. It is in effect until 2026. Since the issuance of the license, more than US$2 million has been invested in exploration of the licenses. This work has included drilling, ground and airborne geophysics, trenching and chip sampling, environmental and as well as several other studies. This work has led to the estimation of potential gold summarized above." The statement said: "Under the terms of the agreement Kola will pay the vendor approximately 24,000,000 Russian Rubles (approximately US$700,000). OOO also has an outstanding loan with a third party for US$1,100,000, of which $550,000 must be repaid by January 2010 and the balance by October 2010. Kola will also pay a finder’s fee of US$25,000 to a third party."

The statement said: "Based on non-compliant (and therefore not disclosable) Russian resource estimates and other historic information the Company has estimated a potential target ranging in tonnage from 5,800,000 to 9,400,000 tonnes, at grades ranging from 2 to 10 g/t Au, for total contained gold ranging from 22.2 tonnes to 40.1 tonnes or 648,000 ounces to 1,171,000 ounces. The area includes the Bogunay mine area, old mine tailings and other exploration targets within the property boundary."

The statement said: "Kola plans to process old mine tailings utilizing a local mill. It is also considering using this mill along with contract miners to start early production from the old mine which could generate near term cash flow for the Company

China Metals News (Click HERE for more China Metals news) In the latest Interfax metals guest column, Fan Runze, an analyst with Beijing Antaike Information, discusses surging nickel prices on the domestic market and the fundamentals of China’s nickel market. Translated from the original Chinese by Ginger Ding.

Shanghai. April 23. INTERFAX-CHINA - Domestic nickel prices have surged from RMB 90,000 ($13,178.12) per ton to almost RMB 130,000 ($19,035.07) per ton, following a recent rally of international nickel prices. Asia’s largest nickel producer Jinchuan Group also hiked its ex-works nickel price four times since April 13 to RMB 128,000 ($18,742.22) per ton on April 20, up 40 percent over the week. It is widely acknowledged that the majority of nickel buyers on the market at present are not downstream users, but speculators. Due to rising nickel prices, traders have become reluctant to rush their sales, while speculative investors have purchased large quantities of Jinchuan nickel, resulting in tightened nickel supply. However, the actual consumption and purchase by downstream users has yet to step up. After thorough analysis, I believe there are several reasons behind the price increase.

Firstly, when copper prices, the leading indicator of commodity prices, exhibited stable rebounds, nickel on the London Metal Exchange, which had been trading at between $9,000 per ton and $10,000 per ton since the Chinese New Year, followed suit and started to rise at the beginning of April.

Also, the commodities market, including the nickel market, regained some confidence on the back of improved global economic data, in particular, the fact that China’s economy may have already bottomed out.

Furthermore, investors anticipated tight domestic nickel supply, as more nickel smelters were believed to have suspended production due to prolonged downbeat nickel prices. It has been speculated that domestic individual investors have nickel stockpiles as high as 50,000 tons on expectation that prices will rise further. Domestic nickel prices were also boosted by speculation that the Chinese government would purchase nickel for strategic reserves.

Kazakhstan Mining news latest.... President urges DBK to give funds for polysilicon plant project

Kazakh president Nursultan Nazarbayev had talks with the chair of the board of directors of Lancaster Group, Nyrlan Kapparov in Astana on Tuesday.

Kapparov briefed the president on the progress of the breakthrough projects implemented by the company inducing a polysilicon plant in Astana, Syrymbet tin deposit in Akmola oblast and Yerasai project. The president requested the Development Bank of Kazakhstan (DBK) to tackle the issue of financing the polysilicon plant as soon as possible," according to a press release.

The total value of the projects is $1 billion that is raised from private borrowings and DBK investments.

Lancaster Petroleum, part of Lancaster Group, the sole operator for the exploration and development of Kokzhide, Kumsai, Mortuk oil fields in the Aktobe region and North Karpovskiy exploration block in Uralsk region of the Republic of Kazakhstan.

Other market roundup news:

Ruble posts major gains, dollar decreases for 2nd day in a row

MOSCOW. April 23 (Interfax) - The U.S. dollar and euro both posted substantial losses in MICEX trading on Thursday as the ruble strengthened its position against the bi-currency basket following rising oil prices and positive foreign market indicators. The Central Bank of Russia lowered interest rate, which, according to experts, could help stabilize the currency market.

The dollar lost 32 kopecks to close at 33.66 rubles/$1 while the euro went down by 19.74 kopecks to 43.847 rubles/EUR1.

The bi-currency basket went down by 25 kopecks to 38.34 rubles. The euro held at $1.3-$1.308 for the day on the Forex.

The dollar’s average weighted exchange rate on the MICEX went down by 29.5 kopecks to 33.7287 rubles/$1 in Today deals on Thursday and by 31.51 kopecks to 33.6958 rubles/$1 in Tomorrow deals. Combined dollar trading on the MICEX amounted to $3.122 billion, of which $718.2 million were Today deals and $2.404 billion were Tomorrow deals.

The euro’s average exchange rate decreased by 3.06 kopecks to 43.9887 rubles in Today deals and 1.98 kopecks to 43.9561 rubles/EUR1 in Tomorrow deals. Total euro trading came to 172.9 million euro, of which 65.7 million euro were Today deals and 107.2 million euro were Tomorrow deals.

The MosPrime rate for the day decreased by 97 basis points to 9.13%.