Monday, February 16, 2009

Oil, gas firms to invest $14b in 2009

Oil and gas firms have proposed to invest US$14 billion this year, about 15 percent higher than the $13.15 billion calculated last month. 

Last month’s figure was based on submitted Work Program and Budget (WP & B) proposals from the majority of 203 contract holders. More contractors have submitted their business proposals since, says upstream oil and gas regulator BPMigas.

“WP & B consists of the contractors’ projected work programs and their budgets. BPMigas must approve the proposals prior to their execution,” said Achmad Luthfy, BPMigas deputy chair for planning, Sunday, as reported by Antara news agency.

Last year, oil and gas contractors spent $11.5 billion in the sector from January to October. 
He said that approved work programs would be called “Petroleum Operation” and the expenses spent for them called “Operating Cost”.

Luthfy said the higher investment levels would help the country achieve its 2009 oil production target of 960,000 barrels of oil per day (bopd).

The production target is lower than the country’s average last year of 978,000 bopd.

BPMigas Chair Priyono said last month declining oil production by PT Chevron Pacific Indonesia, a local subsidiary of the US’ second largest oil company, was among the reasons for the potentially lower output in 2009. 

Chevron’s oil production makes up around 40 percent of the country’s oil output. 

“Their production is declining because of aging fields. As the company output is very big, about 400,000 bopd, their decline is difficult to set off against finding new fields,” Priyono said.

Chevron recently said its Duri and Minas concessions in Sumatra might only show production of 405,000 bopd last year, lower than the government-targeted 408,000 bopd and far from the 425,000 bopd pumped in 2007.

Priyono said most investment would focus more on production rather than exploration. 

“Exploration activities gave very good results last year. So we expect to see more drilling and other exploratory activities this year,” he said when asked to judge this year’s business prospects as compared to those in 2008.

BPMigas external division head Amir Hamzah said there was a slight difference in how the contractors’ WP & B were arranged compared to previous years.

“Previously we held separate discussions for the Authorization for Expenditure (AFE) and for the WP & B. But starting this year we will discuss both subjects simultaneously in the beginning of the year. This will make for faster approvals on proposals,” Hamzah said.

Hamzah also said that WP & B could function as a pre-auditing tool for the government because its principles cover cost recovery, profit sharing and tax components.

Cost recovery is an incentive mechanism under which the government recovers oil block operators’ spending during exploration only after the block starts producing to bolster investment in the sector.
Source: The Jakarta Post , JAKARTA | Mon, 02/16/2009 11:21 AM | Business 

Saturday, February 7, 2009

Low cost Eastern Dragon resource - third gold mine for Sino Gold

Sino Gold Mining Limited (Sino) is an Australia-based company. The principal activities of the Company are mining and processing of gold ore, and sale of recovered gold, and exploration and development of mining properties. The Company mined 692,000 tons of ore through open-cut mining during the year ended December 31, 2007. At December 31, 2007, Sino had acquired a 94% interest in Golden China Resources Corporation. The operation in Jinfeng Mine achieved commercial production on September 1, 2007. A total of 449,000 tons of ore were treated during 2007, with an overall recovery of 71.9% producing 56,981 ounces of recovered gold. In 2007, 43,483 ounces of gold were sold. As of December 31, 2007 the 230 meter of underground development was achieved in White Mountain. Compulsory acquisition of Gold China Resource Corporation was completed on January 16, 2008.
Sino Gold (ASX:SGX/SEHK Code:1862) has released an initial Eastern Dragon Ore Reserve of 2.0 million tonnes at 8.4g/t gold and 70g/t silver, containing 0.5 million ounces gold and 4.4 million ounces silver.

Highlights of recent work:

- Approximately 90% of Measured and Indicated Resources convert to Ore Reserves.
- Initial Eastern Dragon Mineral Resource totals 3.4 million tonnes at 7.1g/t gold and 66g/t silver, containing 0.8 million ounces gold and 7.2 million ounces silver.
- Potential to increase the resource through further drilling, especially of the recently discovered second mineralised vein (Lode 5-1).
- Initial 25% interest acquired in the surrounding 53 km2 Exploration Licence.
- Sino Gold aims to bring Eastern Dragon into production as quickly as possible to become Sino Gold’s third operating mine.

Sino Gold Chief Executive Officer, Jake Klein said, "our work during 2008 has confirmed that Eastern Dragon is a very valuable gold deposit that is both high grade and straight forward to develop into a very low-cost mining operation.

“The quality of the deposit is demonstrated by 90% of Measured and Indicated Resources converting to Ore Reserves. Further drilling will be undertaken during 2009 with the aim of both upgrading and extending the resource, with the mineralisation primarily remaining open to the north.

“The very attractive project economics have been detailed in the recently completed Chinese Feasibility Study (“CFS”). The high silver grade of the orebody provides significant revenue to supplement the gold revenue. Including these silver credits, Eastern Dragon cash operating costs are estimated to be only US$100 per ounce.

“Our team is continuing to progress the required permitting and further studies that are aimed at enabling the Sino Gold Board to commit to develop the Eastern Dragon Project during 2009 to become Sino Gold’s third operating mine as rapidly as possible.” Sino Gold was trading at $4.95.

by Proactive Investors


Wednesday, February 4, 2009

Gold Resource Corp

Gold Resource Corporation (GRC) (OTC BB: GORO) has been engineered to maximize shareholder value by emerging in the elite class of low-cost gold producers and focusing on cash flow and potential dividends. GRC targets gold production at the low cash cost of $100 per ounce by mid-2009. Cash flow from near term gold production coupled with tremendous exploration potential position Gold Resource Corporation as a premier investment for exposure to the gold space.

Company Statement:
Focusing on financial performance, Gold Resource Corporation has been engineered from day one to maximize shareholder value with:
• Tight capital structure resulting in only 36 million shares outstanding
• High-grade, low cost mining projects that must be able to repay the capital invested in 
  those projects in one year or less (100% IRR)
• Establishing production at the earliest point in time so the Company can be built with 
  cash flow and not continued equity sales
• Increasing resources, increasing production and increasing cash flow

Production funding for the Company’s flagship El Aguila Project, in southern state of Oaxaca, Mexico, include well known gold funds like Tocqueville Gold Fund (U.S. based) as well as Hochschild Mining Plc (premier precious metals producer). Other institutional investors include Heemskirk Consolidated (an Australian global mining house), Range Capital and Golden Prospect (both London based resource funds), as well as many other resource focused institutions. 

It is also important to note that GRC’s management team is not only a large shareholder of Gold Resource Corporation but they have also put 6 mines into production with their previous company. GRC’s El Aguila Project will be management’s 7th producing mine.

Gold Resource's Objective

Gold Resource Corporation's objective is to create shareholder value by establishing production and generating superior financial performance through the development of gold and silver projects that feature low operating costs and produce high returns on capital. Management's commitment to shareholder value is reflected in the disciplined approach it has taken to the Company's capital structure, its focus on rapid project execution and its goal of meaningful dividend distributions.

GRC's initial exploration efforts have been focused on the El Aguila project, a property featuring high-grade gold and silver mineralization located in Oaxaca, Mexico. Recent discoveries indicate the project is well suited for GRC's performance targets. An independent scoping study indicated cash production costs of approximately $100 per ounce of gold, and an annual return-on-capital of greater than 100%, indicating a capital payback of less than one year.

Management has established an aggressive schedule for the El Aguila project and targets production the second half of 2008.

Three additional project opportunities have been established in relatively close proximity to El Aguila: the Las Margaritas silver property, the El Rey gold property, and the Solaga silver property. Collectively, they provide the Company with a pipeline of potential projects that would expand and diversify the Company's precious metal production profile. The Company plans to have four high-grade properties feeding one mill.

GRC's project opportunities are enhanced by the very favorable price environment for gold and silver. The Company's high-grade projects also offer the opportunity to maintain profitability when the metal-price cycle turns downward.

Why Mexico? : Mexico is one of the world's leading venues for mineral potential and has a 500 year history of mining. The Fraser Institute's 2004/2005 Mining Survey ranked Mexico fifth out of 64 worldwide venues in current mineral potential. Additionally, Mexico ranked eighth in the same survey for composite policy and mineral potential.

Current Operations:

El Aguila Project: Exploration: The El Aguila Project, located 120 kilometers southeast of the capital city of Oaxaca, Mexico, is a significant, newly discovered high-grade gold and silver system. The property has yielded several exceptional gold and silver surface samples, including a 36 grams-per-ton (g/t) gold sample and a 3,100 g/t silver sample. (Read More)

Las Margaritas Project: Las Margaritas is a high-grade silver property in which GRC holds a 100% interest. It comprises the four northwest kilometers of the important N 70 W structural corridor, which is an extension of the El Aguila system. In addition, Las Margaritas occupies ground within an inferred caldera (collapsed volcanic center). (Read More.. http://www.goldresourcecorp.com/project-lm.php)

El Rey Project: El Rey is a high-grade gold property in which GRC has a 100% interest. While the site has been mined previously, very little information is known about the property. GRC has taken two selective grab samples from the dump material around the original shaft. The two samples assayed 80 and 85 g/t of gold, indicating that the samples are of potential vein material. (Read More.. http://www.goldresourcecorp.com/project-er.php)

Solaga Project: Solaga is a high-grade silver property in which GRC holds a 100% interest. The 400 hectare property was previously mined in the 1980's. Initial high-grade selective sampling ran 15 kilo's (15,000 grams / tonne or 488 oz/ton or 1.5%) silver per tonne. (Read More.. http://www.goldresourcecorp.com/project-so.php)

Management
William (Bill) Reid - President, CEO and Director
David Reid - Vice President of Exploration and Director 
Jose (Pepe) Perez Reynoso - Manager of Mexican Operations
Jason Reid - Vice President of Corporate Development 
Monty Jennings - CFO
Bill M. Conrad - Director
Gold Resource Corporation
Jason Reid, Vice President / Corporate Development
222 Milwaukee Street, Suite 301
Denver, Colorado 80206
303-320-7708 Office
303-320-7835 Fax
719-330-0258 Cell

Source: http://www.goldresourcecorp.com/ and http://www.proactiveinvestors.co.uk/companies/sponsors_landing/8777/gold-resource-corp-8777.html