Market Focused on Chinese REE Strategic Reserves

It was a quiet week on the pricing front, but China still managed to snag headlines and pique investor interest in the rare earths market.
A state-backed newspaper revealed that China has started stockpiling rare earths for strategic reserves in a move that may once again raise concerns over Beijing's control of the rare earth element (REE) market.
The announcement comes days after the Information Office of the State Council published the country's first ever white paper outlining its national rare earth industry.Hot Sale Quartz Crushing Processing Plant
The report confirmed that China had already begun the purchase and storage of REEs, but did not outline exactly when the initiative was launched. State funds will be used to supplement companies that help secure the resources and 11 mining zones have been allocated to the project.
Last month, the REE mining giant announced its intention to build a strategic reserve system, but had not publicly confirmed that it had started stockpiling until now. The newspaper added that weak prices for REEs prompted the move and that reserves could be used to address future shortfalls.
The move to stockpile rare earth elements will add to investor worries that China is pursuing a backdoor strategy of hoarding the metals in order to influence their prices. China's policy of restricting REE exports has already prompted complaints to the World Trade Organization that China is trying to deliberately inflate prices.
Some speculators argue that China's goal is to create the ultimate monopoly by driving up export costs to the point that manufacturers are forced to relocate their facilities to the People's Republic.
Hot Sale Granite Processing PlantJapan's first large scale REE deposit
Earlier this month, a team of researchers from Tokyo University claimed to have discovered a 6.8 million ton REE deposit in an area near Minamitorishima Island in Japan's exclusive economic zone. Professor Yasuhiro Kato told media sources that he estimated that the deposit, located 5,600 meters beneath the seabed, hosts enough dysprosium, used in lasers and commercial lighting, to satisfy Japanese demand for the next 400 years.
According to the team, REEs with an average concentration ranging from 1,000 parts per million (ppm), or 0.1%, to as high as 1,700 ppm, were found and it estimates that beds of mud containing REEs are spread over an area as wide as 1,000 square miles.
"I would like to see the Japanese government recognize the existence of the rare earth deposits and soon start making in investment in developing the area," said Kato. "We can start drilling in the mud, using oil extraction technology, within three years at the earliest and start producing rare earth minerals within five years."
Japan's Minister of Economy, Trade and Industry Yukio Edano responded by stating: "This is welcome news. But the professor also says that a more detailed survey is necessary and that technology has to be developed to make commercial development possible."
The discovery would be the first large-scale rare earth deposit in Japan.
Was Molycorp acquisition poorly timed?
Michael Gambardella, an analyst at JPMorgan (NYSE:JPM), has questioned the timing of US-based Molycorp's (NYSE:MCP) takeover of Canadian rare earth processor Neo Material Technologies (TSX:NEM), that created an integrated mine-to-magnets rare earth company.
He noted that since March 31st, export prices have dropped for key metals such as cerium (down 11 percent), lanthanum (down 9 percent), and neodymium (down 26 percent) which raises questions about whether Molycorp overpaid in the deal.Hot Sale Sand Making Plant
"While Q2 is typically stronger than Q1 from a seasonal perspective and lower prices for rare earths should be helping demand, rare earth prices have not seemed to benefit from either of these potential catalysts," he wrote in a note.
Gambardella added that while the acquisition gives Molycorp a large base in China, he felt that the price of the takeover may turn out to be too high if the market becomes oversupplied and prices keep plunging. He lowered his price target on Molycorp to $19.50 a share from $23, and maintained a neutral rating.
Company News
Mkango Resources Ltd. (TSXV:MKA) announced that the results for five holes from its second phase drilling program at its Songwe project, located in Malawi, include 95.8 meters grading 1.7% total rare earth oxide (TREO), 100.8 meters grading 1.7% TREO, and 332.7 meters grading 1.4% TREO.
According to a press release, all holes from Stage 2 have intersected broad zones of rare earth mineralization and mineralization occurs at surface in broad outcropping zones of carbonatite on the northern slopes of Songwe hill and extends to a vertical depth of at least 350 meters.
U.S. Rare Earths, Inc. (OTCBB:UREE), announced details of its 2012 drill program. The program will focus on the company's properties at Diamond Creek, Lemhi Pass and North Fork in Idaho in 2012. In late 2012 and 2013, the company will focus on the Sheep Creek and Last Chance properties in Montana.
"With the recent reports of China now moving to stockpile a critical group of Heavy Rare Earths, U.S. Rare Earths is aggressively entering into a drill program to explore its properties for a reliable domestic source of light and heavy rare earths, with our primary focus on the heavy rare earth elements," said CEO Michael D. Parnell.
Avalon Rare Metals Inc. (TSX:AVL) reported an updated resource estimate for its Nechalacho Deposit. Analysts estimated measured mineral resources of 8.90 million tonnes grading 1.64% TREO and 21.7% Heavy Rare Earth Oxide (HREO)/TREO using the base case $260/ton Net Metallurgical Return (NMR) cut-off for the key Basal Zone part of the deposit.
The updated resource estimate for the Basal Zone has also resulted in an increase in the total indicated mineral resources in the deposit to 63.76 million tons, grading 1.52% TREO with 21.41% HREO/TREO.

Cascadero Copper Corporation: Gold Fields Mobilizes for MEX Cu-Au Porphyry Prospect Toodoggone Project in North Central British Columbia

Hot Sale Gold Crushing Plant In NigeriaVANCOUVER, BRITISH COLUMBIA--(Marketwire - July 10, 2012) - Cascadero Copper Corporation (TSX VENTURE:CCD) -
Gold Fields is mobilizing a drill crew to the MEX Cu-Au-Mo porphyry prospect on Cascadero's Toodoggone Project in north central British Columbia, Canada, for continued exploration.
The 2012 program will consist of approximately 2,000 metres of core drilling and is expected to be completed by 15 August 2012. The 2012 expenditure program is expected to achieve the C$5 million threshold that will vest Gold Fields with a 51% interest.
In 2011, Gold Fields drilled 7 core holes on the MEX porphyry system for a total of 2,447.9 metres. The area explored by drilling is approximately 500 metres northeast to southwest by 900 metres northwest to southeast. The 2012 program will further test this area as well as other undrilled geophysical anomalies.
On March 6th 2009, Cascadero signed an Option and Joint Venture Exploration Agreement (the "Option Agreement") with Gold Fields. Pursuant to the Option Agreement, Gold Fields can earn a 51% interest in Cascadero's Toodoggone Project by spending at least C$5 million over an initial three-year option period. Gold Fields can earn a further 24% interest by completing a feasibility study or sole funding a further C$15 million expenditure. Gold Fields' exploration expenses to date are approximately C$4 million.Hot Sale Granite Crushing Plant In Nigeria
Due to an indigenous complaint in 2010, the agreement was subject to force majeure and a full exploration season was lost. The agreement was mutually extended for one year - 2012 is thus the third year of Gold Fields' option. Gold Fields holds a three-year British Columbia N.O.W. permit.
The property is located in the Toodoggone region in north-central British Columbia, which is about 550 km north of Prince George. The MEX prospect is approximately 16 km northeast of the Aurico Kemess mine property, formerly owned by Northgate Minerals. The area has excellent infrastructure including a 52,000 tonne flotation-concentration mill that is on care and maintenance.
ABOUT CASCADERO COPPER
Cascadero Copper is an integrated prospecting and mineral exploration business with offices in North Vancouver, BC, Canada, Sudbury, Ontario, Canada and Salta City in the province of Salta, Republic of Argentina. The Company generates, acquires and explores mineral properties and is active in the three jurisdictions.
In north central British Columbia, the Company has a 100% interest in a 31,000 hectare property in the Toodoggone region, which is prospective for copper gold porphyry systems. This property is subject to a C$20 million Joint Venture with Gold Fields.
In Ontario, the Company holds or has the right to acquire a 100% in 17 properties in the Sudbury, Swayze and Timmins camps, which are volcanic and sediment hosted copper gold prospects.Hot Sale Gold Crushing Plant In Ghana
In north western Argentina, the Company holds a 50% interest in a 46 property portfolio, which consists mainly of bulk mineable copper-moly-gold porphyries and bulk mineable sediment hosted silver-gold plus base and rare metals.
Cascadero's commodity focus is gold, silver, moly, copper, base and rare metal hosted in large-scale bulk mineable mineral systems.
In 2009, the Company discovered Taron, a large bulk mineable sediment hosted epithermal rare metal deposit in Argentina. In 2011, Cascadero discovered Las Burras, a new Argentine Cu-Mo-Au porphyry.
The Company holds a large claim block that adjoins Lumina Copper's Taca Taca Bajo Cu-Mo-Au deposit. Several copper and gold showings exist on these claims. A first stage geochemical program is complete.
In 2012 to 2013, Cascadero intends to conduct exploration in three core areas: Pancho Arias Cu-Mo-Au porphyry District, the Taca Taca Mineral District and the bulk mineable sediment hosted silver prospects in the El Oculto District. Exploration is also planned for Taron, an exciting large-scale sediment hosted rare metal discovery.

Neither the TSX Venture Exchange nor its Regulation Service Provider accepts responsibility for the adequacy or accuracy of this release.

Myanmar's Copper Potential Shines

Myanmar's top brass have high hopes about developing the country's mining sector. This month, Rangoon will be hosting its first major industry conference since sanctions on the country were lifted by the United States, European Union, Japan, Canada, and Australia this spring. While the government's reasons for wanting to tap into Myanmar's natural resource wealth are obvious, its potential in copper, natural gas, and precious stones like rubies means that now may also be a good time for investors to step forward.Hot Sale Granite Mills In South Africa
As the once-pariah state attracts international attention not only from diplomats, but also from the business community, Myanmar's challenge will be to move toward economic growth while ensuring that natural resource profits are distributed so that they benefit the population at large. There are certainly ample opportunities for the private sector to develop Myanmar's mining sector, and investors will be closely watching the Myanmar Mining Summit, which will be hosted in Rangoon by the Ministry of Mines from July 22 to 25.
In addition to Union Minister of Mines U Thein Htike and U Aung Naing Oo, director general of the Directorate of Investment and Company Administration, Owen Hegarty, former managing director of Rio Tinto Asia (LSE:RIO,ASX:RIO,NYSE:RIO), and Marc Rathbone, a counsel at Clifford Chance's Singapore office, will also be speaking at the summit. Over 200 participants from over 22 countries are expected to attend the event.
Myanmar produced about 7,000 metric tons of copper in 2008, 54 percent lower than the previous year, and only about a quarter of the 28,000 metric tons produced in 2002, according to the US Geological Survey. Analysts broadly agree that the country's copper and mineral wealth clearly exists and could easily rebound at least to its former levels now that sanctions have been lifted. However, the country sorely lacks infrastructure,Hot Sale Cement Mills In Pakistan including roads and a steady energy supply. By encouraging more foreign investment, the country will not only be able to cash in on its mineral wealth, but will also be able to secure much-needed assistance for infrastructure development.
For the private sector, Myanmar's allure is on the rise. The Japan External Trade Organization(JETRO) estimates that the average monthly salary in Myanmar was about $95 last year, or about one-fifth of the average in China. JETRO also expects Myanmar's GDP to reach that of Vietnam in 13 years' time, and that of Thailand in 30 years. Japanese companies have certainly been eager to invest in the country; trading group ITOCHU (TSE:8001) has been exploring the country's rare earth potential since May, while its rival Marubeni (TSE:8002) is planning to put its money into energy development. China, however, takes the lead in investing in Myanmar, having put in about $8.2 billion since 1990. Japan's total is about $200 million thus far, JETRO reported.
Myanmar not only holds natural resource potential, but is also a "market that has a lot of potential which is still not fully uncovered," said one JETRO official.
Vancouver-based Ivanhoe Mines (NYSE:IVN,TSX:IVN), has a history in the region, along with the world's third biggest miner, Rio Tinto.
In 2011, Ivanhoe sold its 50 percent stake in the Monywa copper project to a Chinese consortiumled by Chinese defense group China North Industries, better known as Norinco, for $103 million. Ivanhoe secured its 50 percent share in the copper mine in 1994; the remaining 50 percent was held by the Burmese military regime. In 2006, Ivanhoe partnered with Rio Tinto to develop Mongolia's Oyu Tolgoi mine, and Rio Tinto agreed to dispose of Ivanhoe's Burmese assets, which were put into the Monywa Trust in 2007 as part of the deal, according to Wikileaks. As a result, China's Norinco is currently the country's biggest copper mine operator.Hot Sale Limestone Crushing Plant In Paraguay
But given that Myanmar has a mining ministry as well as separate ministries for coal, forestry, and energy, it is clear that the government is eager to encourage the development of its mining potential moving forward. Yet Aung San Suu Kyi, the leader of the opposition and the country's top stateswoman, pointed out the need for the government to be strategic in developing the private sector.
"We do not want investment to mean greater inequality. And we do not want investment to mean greater privileges for those already privileged," she said at the World Economic Forum on East Asia, held in Bangkok from May 30 to June 1. She also cautioned against unrealistic expectations both from Myanmar's citizens and the business community, commenting, "[o]ptimism is good but it should be cautious optimism. I have come across reckless optimism. A little bit of healthy skepticism is in order."
Political risks also remain, even as the country begins to embrace a more democratic political process. Vice President Tin Aung Myint Oo's resignation in early July has made it possible for Suu Kyi's opposition to perhaps work in parliament for the first time. Yet "there has been speculation within the country that President Thein Sein's reforms over the past year, which have seen the lifting of international sanctions, opening up of foreign investment and the re-engagement of opposition leader Aung Sun Suu Kyi, will lead to a confrontation between the reformists in the government and the military, who remains the key player in Myanmar politics and remains opposed to unlimited reform," stated London-based intelligence group Exclusive Analysis.
With or without risks, Northeast Asian investors are stepping up their efforts to put money and manpower into Myanmar and are hoping for greater returns.

Drill Results for Gold, Precious Metals Explained

Press releases detailing drill results are full of jargon that is not easily understood by investors. Words like grade, strike, reverse circulation drilling, and others mystify investors looking to invest in juniors. Even a cursory knowledge of these terms would help investors better understand what a company is talking about when it presents drill results.
coal crusher for saleResource Investing News talked with Christopher Ecclestone, principal and mining strategist at New York-based Hallgarten & Company. Ecclestone, who is also a director ofMediterranean Resources (TSX:MNR), a gold mining company listed on the Toronto Stock Exchange, answered questions that will help investors better understand the drill results of gold and precious metals miners.
Ecclestone pointed out, "mining results are all about grade, grade, and more grade. But then, after the grade, the length of the intercept is important. One should also look for lots of drill holes."
RIN: What are the different types of drill programs that companies engage in (diamond, reverse circulation, step out, etc.)? What is the difference between them?
Christopher Ecclestone: Reverse circulation does not provide results that are as comprehensive as diamond drilling. It is a way to find some preliminary material. And if you have something substantial, you might start diamond drilling.
In the scale of things, diamond is an A-grade and reverse circulation is a C-grade drill hole.
RIN: What do drill maps showing drill holes tell investors?tantalite ore crusher for sale
CE: In a drill map, investors should look for the patterns that are there. If you have a situation where there are five drill holes stretched out over a mile, you could ask if they accurately reflect the deposit. If there are not enough drill holes, the deposit may not be as comprehensive as you think it is.
RIN: Is there a set standard for the number of holes that should be drilled?
CE: It does not work like that. What is important is how close the holes are to each other, what the grade is, and what the depth is. If you have a drill that is 300 meters deep and if you get mineralization in the last 10 meters, it is not very good. You cannot do an open pit, you will have to go underground, and it might not be worth the depth.
Drilling is a lot cheaper if the deposit is shallow.
RIN: Why is it important for investors to see the angles the holes were drilled at and to see cross sections of such maps?
CE: It is not that important for investors. Some investors, what they want to do is see if there is a significant pattern there to determine if there is enough mineralization all over the place.tin ore crusher for sale
RIN: Can you briefly explain grades? What are the benefits of a high-grade, low-grade deposit?
CE: If it is a high-grade deposit it is a good indicator of the extent of mineralization. If the grade is small, it may not be worth drilling. In gold mining, 10 g/t is a high-grade deposit for gold. 1 g/t is a low grade that shows the area is not very densely populated with gold.
But it all depends on the price of gold. At current prices, even lower-grade deposits make sense to drill as the price justifies the expense involved in drilling.
Silver grades work differently and are in ounces per ton and also involve the different by-products such as nickel and lead, and also whether there is gold in the mix. But multiple ounces per ton is a good grade deposit.
RIN: Do different types of deposits (poryphyry, vein, etc.) affect the type of grade?
CE: Poryphyry tends to be massive, so it is a large lump of mineralization. A deposit is either poryphyry or vein. Despite a deposit being poryphyry or vein, what's important is the grade of the deposit. Different companies can make a success of either type of deposit.
A poryphyry could be spread over kilometers.marble crusher for sale
Veins are not that large. They can be thick, but not that thick that you will get a 30-foot wide vein. A half-meter, meter, or two-meter vein is regarded as thick.
RIN: What is a strike and why should investors pay attention to its length?
CE: The strike is the part where you have encountered the mineralization. When you drill barren rock, strike is where you drill the mineralized ore.
A vertical strike length of 300 meters means the deposit is 300 metres deep. A vertical strike length of 50 meters means the deposit is 50 meters from the top of the deposit to the bottom. It's not that one is better than the other.
A horizontal strike length shows how far the area of mineralization is spread over.
RIN: What does the phrase "at depth" mean? Why should investors watch for specific depths?
CE: At depth means that the deposit keeps going down. "Open at depth" means that drilling has not defined yet where the deposit bottoms out.
RIN: What does "drill intercept" mean? For instance, "drill intercepts included 52.5 m of 2.1 g/t gold which included 2.6 m of 5.2 g/t gold."
CE: It means that at 52.5 meters there was a good strike of ore, but also that there was a richer hit of ore over a subset of 2.6 meters in the larger mineralized length.
RIN: Can you explain concentration of ore? For instance, is 237.6 g/t from a hole a good concentration of gold? What about 2.1 g/t?
CE: That is a bonanza grade. The higher the concentration, the higher the grade, the richer the deposit is. But you have to take into account intercepts and depths of the concentration.

Argentina: New Law Hampers Silver Miners

Argentina is rich in natural resources. The nation ranked10th among the world's silver producers in 2011, but its mining industry is considered underdeveloped when compared to peer nations such as Chile and Peru. As a result, one of the risks associated with mining investment in the country is uncertainty about the stability of laws regulating the industry. Recent legislative activity in the province of Chubut and on the national level provides glowing examples.bauxite ore crusher for sale
Martin Buzzi, the governor of Chubut, submitted a draft law to the provincial legislature. The proposal includes the anticipated zoning that will allow open-pit mining, which has been been banned in the province since 2003. This legislation should be good news for Pan American Silver (NASDAQ:PAAS,TSX:PAA) as it is planning to develop its Navidad project in the province as an open-pit mine. Instead, it may render the projectuneconomic.
The pending proposal includes significant cost increases in the form of:
A 5 percent net smelter return royalty (NSR), which is to be paid in addition to the current 3 percent NSR.
A requirement for Petrominera, the provincial resource company, to receive a minimum of 4 percent of total sales.
An additional requirement for Petrominera to receive a 7 percent direct carried net pre-tax profit interest. If a company demonstrates that the 4 percent sales requirement makes a project uneconomic, it will be reduced by up to 75 percent, but the pre-net profit interest will be increased to at least 12 percent.
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Pan American Silver noted that these costs would be in addition to the 10 percent export duty on concentrates and the 35 percent income tax rate. The company also said that this level of government participation and tax burden is unprecedented relative to any of the other jurisdictions where it operates.
President and CEO Geoff Burns did not conceal his disappointment that the company's multimillion dollar investment in Navidad did not even warrant the courtesy of consultation.
He described the proposal as an incredibly unfortunate development for the mining industry in Chubut and Argentina.
"Since acquiring Navidad, we established a policy of open and honest communication with all levels of government as to our progress and plans and were surprised that we were not consulted on the economic effects that proposed legislation would have on Navidad's development," he said.
Perhaps input from the mining industry would have impacted the details of the Chubut proposal. Then again, a recent decision on environmental legislation reveals that even when the industry's objections are well known, officials will not always act in its favor.
National Glacier Act
In September 2010, the Argentinian government approved a body of environmental legislationaimed at protecting glaciers and periglaciers – which are considered "strategic freshwater reserves" – for purposes such as human consumption, agriculture, and tourism.
For 2011, the CIA estimates that agriculture composed 10 percent of Argentina's GDP.barite crusher for sale The World Travel and Tourism Council reported that direct and indirect tourism generated 10.5 percent of the nation's GDP, compared to 7.2 percent from mining.
Though smaller than these other industries, mining is not negligible, especially on the provincial level. Both miners and government officials have recognized its importance and have used it as grounds to oppose this legislation. In 2008, President Cristina Fernandez de Kirchner vetoed a similar law shortly after it was approved, arguing that it would hamper economic development.
The current glacier law was successfully reintroduced in 2010. It requires an inventory of glaciers and periglaciers along with details for adequate protection, monitoring, and control. Moreover, it restricts and bans activities such as mining when they pose a threat to these forms or the water that they provide.
Barrick Gold (NYSE:ABX,TSX:ABX) got the federal court to temporarily suspend implementation of the law in San Juan after successfully arguing that it is unconstitutional because it would block economic activity.
Impact of controversial legislation
Earlier this month, the Supreme Court reversed the injunctions against the National Glacier Law in San Juan, technically forcing mining companies to fully comply.kaolin crusher for sale
According to some, this action should halt Barrick's operations since exploitation and exploration are banned in areas where protected glaciers exist. But Barrick says the decision will not impact its Pascua-Lama gold and silver project, which is scheduled to go into production next year, or its Veladero mine, where production is currently underway.
According to Barrick, its projects do not occur on glaciers and thus do not have a negative impact on them. Pascua-Lama is one of the most thoroughly evaluated mining projects in the world and was designed to ensure that the environment is protected, a company statement says.
In Argentina, provinces possess the authority to regulate the resources in their jurisdictions. The Supreme Court must still render a decision on the challenge to the constitutionality of this federal law.
There is a chance that the Chubut legislation will be modified as the proposal makes its way through a parliamentary subcommittee before being put to the full legislature for debate and a vote.
Pan American Silver warned that the the legislation in its current form, when coupled with the current inflationary environment, will render the Navidad project uneconomic at any reasonable estimate of long-term silver prices.

Volatile Crude Market Bringing Out the Bears

The current oil market has been privy to some of the most volatile price movements in recent history.
While there are multiple reasons for these price shifts, three fundamental issues seem to be driving market sentiment: Iranian tensions, European economic concern, and record US inventories.iron ore crusher for sale
Iranian tensions
Earlier this year, the European Union's decision to implement Iranian oil sanctions resulted in substantial crude price reactions. Prices for West Texas Index (WTI), a grade of crude used as a benchmark in oil pricing, peaked well above $100 per barrel, and fears that Iran might cut supplies to global markets by blocking off the Strait of Hormuz helped propel the price of a barrel of Brent crude, sourced from the North Sea, to over $128.
Iran sparked a substantial price increase earlier this year as it sparred with the western world over its nuclear program. When it held military exercises in the Gulf, oil prices surged, while fears of a prolonged conflict – and what that might do to global supplies – eventually drove WTI oil to $110 per barrel. Fast forward five months and the market is currently focused less on Iran and more on global economics.gypsum crusher for sale
"Iran is still trash talking, but what's even more frightening is the bigger picture," said Tom Kloza, chief oil analyst at Oil Price Information Service. "The economy just hasn't looked good. There's a sense that this malaise will march on."
Over the past few months, market sentiment has undergone a dramatic transformation, with a glut-like scenario very much in the cards. For the quarter, spot Brent and US oil futures fell 20.4 percent and 17.5 percent respectively - their steepest quarterly percentage drop since the 2008 financial crisis.
European concerns
zinc ore crusher for saleAdding to these issues are macroeconomic concerns exuding from Europe. While the recently signed Euro Accord does not necessarily change what is causing the financial crisis, it has notably affected oil pricing. Slowing European demand, coupled with parts of Europe being in recession, has meant that less oil is being consumed, which in turn has caused price falls.
Meanwhile, a strike by oil workers in Norway, the largest oil exporter in Western Europe, has helped support prices over the past few weeks.
"There really is very little comfort out there for any bulls that remain in the market," said energy consultancy KBC. "The economic outlook remains bleak, oil demand growth is faltering … and crude supply is high despite the ongoing strike in Norway and the loss of Iranian exports."
Brimming inventories
Brimming US inventories have also caused prices to stumble. Inventory levels are at their highestlevels in 22 years even though the domestic refinery rate has increased from 85 percent in January to 92 percent in July, according to the US Energy Information Administration. From an investor standpoint, too much unsold product is never a good thing.
In the short term, trends are pointing to an overstocked market; however, inventory buildup can be traced back to the mid-2000s when a combination of high prices and new technology – fracking and horizontal drilling – began triggering structural changes to crude supply and demand. Add to these changes the expansion in North America's productive oil capacity (using unconventional processes such as oil sands), and a renaissance in oil output can be noted.
The crude market is a shadow of its former self, and without a miraculous economic recovery or sudden supply shock, the benchmark price of a barrel of WTI is likely to reach a new range of $70 to $90 per barrel. From an investment standpoint there is still ample upside to the range, but if prices continue to dip some oil juniors may very well find themselves in the uncharted territory of being supply rich, yet cash poor.lead ore crusher for sale
Company news
TAG Oil (TSX:TAO), a Canada-based production and exploration company focused on operations in New Zealand, reported its operating highlights for the year ending March 31, 2012.
Results include an increase in proved and probable reserves to 6.624 million barrels of oil equivalent (boe) compared to 1.68 million boe a year ago (82 percent oil). Production revenue increased to $43 million from $13 million for 2011, and net income was $18.92 million compared to $1.29 million for 2011.
This reserve assessment was confined to shallow formations and does not include the higher-impact, deep liquids-rich gas prospects that TAG plans to drill within the next year.
Suroco Energy (TSXV:SRN) announced that the Cohembi-4 appraisal well in Colombia encountered 18 feet of very high-quality oil pay approximately 1.2 kilometers northwest of the closest producing well.
Open hole logs indicate 18 feet of oil pay in the Villeta N sand (true vertical thickness) and porosities that are equal to the best encountered in the Cohembi Field so far. As with all the previously drilled wells in the oil field, no oil-water contact was encountered within the reservoir sand.
The remainder of the company's 2012 program will focus on delineating the southern extent of the field from the existing Cohembi-2 pad and the planned Cohembi-6 multi-well surface pad. Preparations are complete to facilitate two new locations at Cohembi-2, and the Cohembi-6 lease is expected to be completed in September.

Gold Falls, Investors Wait on US Jobs Data

Gold prices were down on Thursday, trading below $1,610 following the ECB's 0.75 percent interest rate cut and another round of QE by the Bank of England. Spot market gold prices ended the day at $1,604 per ounce in New York, a 0.79 percent drop from Wednesday's high of $1,623.80.different ore crusher for sale
Investors will be eyeing the US Bureau of Labor's June jobs report, released today. The report is expected to reflect how the European crisis is weighing down on the US economy, and will likely indicate whether or not the Federal Reserve should take steps to stimulate economic growth – a move that would be positive for gold. A fresh round of quantitative easing would boost inflation and ratchet down the value of the US dollar, sending investors back into the arms of gold and other precious metals.
Jim Wyckoff, writing for Kitco News, predicted that bullion will rise slightly in the near term, commenting, "[t]echnically, August gold futures bulls and bears are on a level near-term technical playing field but the bulls still have some upside momentum. talc crusher for sale The gold bulls' next upside price breakout objective is to produce a close above solid technical resistance at the June high of $1,642.40."
Nader Naeimi, senior investment strategist with AMP Capital, said that gold prices will have a much better second half. "We are still in an environment with central banks injecting quite a bit of liquidity, and real interest rates are still negative. Until that [trend] changes, I think the fundamental backdrop for gold prices will likely be positive. Gold will be an asset that you buy in weakness, not during the momentum and frenzy."
Company news
AngloGold Ashanti's (NYSE:AU) CEO, Mark Cutifani, is more concerned with Australian tax royalties than the potential nationalization of South African gold production. Though Cutifani noted that construction and mining costs in South Africa have increased by as much as 15 percent this year, creating difficult operating circumstances, Australia's new taxation policy is more worrisome. Effective from the start of this month, Australian iron and coal mining companies that realize annual profits of more than $75 million will be subject to an additional Minerals Resource Rent Tax of 30 percent. gold ore crusher for sale This punishing regulation has already resulted in earnings downgrades for some of Australia's biggest mining companies, including global top mining producers BHP Billiton(NYSE:BHP,ASX:BHP,LSE:BLT) and Rio Tinto (LSE:RIO,NYSE:RIO,ASX:RIO).
Investors will note that higher taxes and growing positive sentiment toward the nationalization of resources are both contributing to the creation of challenging operating environments for some gold producers. Margins will potentially contract for some gold producers, but relatively strong balance sheets, diversified projects, and geographical risks may provide some downside protection. The key is to be selective in creating a framework to evaluate risks and reconcile them with opportunity cost.
Gold Fields (NYSE:GFI) announced that its Q2 gold production was in the range of 862,000 troy ounces of gold. The estimate falls approximately in line with the 872,000 troy ounces of gold it produced last year. feldspar crusher for sale Production saw a 4 percent increase compared to the first quarter.
Junior company news
Samco Gold (TSXV:SGA) announced the completion of the first phase drill program of its principal El Dorado Monserrat project.
Barkerville Gold Mines (TSXV:BGM,FWB:IWUB) announced a NI 43-101 compliant indicated resource estimate for the Gold Quartz open-pit model on Cow Mountain as well as a NI 43-101 compliant estimation of the geological potential of the 6.4 kilometer Island Mountain, Cow Mountain, and Barkerville Mountain trend. This trend is the central portion (where the company has focused its exploration activities) of a larger 67 kilometer trend on the company's 1,118 square kilometer property.

2012 Copper Q2 Market Trends and Outlook-2

Yet even as Rio Tinto struggles to meet shareholders' demands, it is expected to remain committed to developing its Oyu Tolgoi copper mine in Mongolia, which will produce about 8 percent of the world's total copper output once it begins production next year. Rio Tinto and other mining companies heavily invested in Mongolia have been closely monitoring the country's elections at the end of June, in which no group won a majority.feldspar crushing equipment Nonetheless, the opposition Democratic Party has expressed confidence about being able to form a ruling party, and investors will be focused on how the new government will use profits from its mineral wealth, which is estimated at $1.3 trillion.
Qatar Holding's call for better returns means that Glencore International (LSE:GLEN) continues to struggle in its $30 billion bid for Xstrata (LSE:XTA). The government of Qatar owns 11 percent of total shares in Xstrata through its investment fund, and has demanded 3.25 new Glencore shares for every Xstrata share. The current offer is for 2.8 shares.
Q3 and FY 2012 outlook
Looking ahead, many investors expect an upturn in the global economy, which in turn will drive up copper demand. So while Goldman Sachs lowered its third quarter price target to $8,000 per metric ton from $9,000 a ton, it expects the market to be balanced this year as supply tightens.copper ore beneficiation equipment
"Given continuing disappointments in the supply growth of oil and some of the key base metals, this moderate pace of world economic growth is sufficient to tighten markets during the second half of this year, creating the need for higher prices to balance supply and demand," Goldman stated.
TD Securities' head of commodity strategy, Bart Melek, is also upbeat about base metals and commodities in general. He expects "better commodity prices in the final three months of 2012 and into 2013," and believes that "the key catalysts are – a rising probability of outright US balance sheet expansion (Treasury, MBS, agency paper purchases), Chinese monetary/fiscal stimulus and the authorization of some sort of direct sovereign debt purchasing." He added that "consumption of materials associated with industrial fabrication should all improve as a result, lifting prices. Those commodities with weak supply fundamentals such as copper and palladium should benefit most."
Similar sentiment was echoed by Rio Tinto CEO Albanese, who told investors in Sydney in early May that "the next five years [are] going to be a supply story; the last five years [have] been a demand story. I am not sure the economic forecasters have cottoned on to that observation yet."dolomite mining equipment
Certainly, the government of Australia is upbeat about the outlook. The Bureau of Resources and Energy Economics expects overall natural resource exports to reach a record $209 billion for 2012 to 2013, with particularly strong copper exports rising 10 percent from current levels.
"Despite the uncertainty surrounding the outlook for some European economies, Australia's export volumes for most commodities have remained strong throughout 2011–12, while prices for many commodities have remained at elevated levels relative to historical norms," said Professor Quentin Grafton, the bureau's executive director and chief economist.

2012 Copper Q2 Market Trends and Outlook-1

Copper took a beating in the second quarter, falling over 9 percent from the previous quarter as global worries about Europe's sovereign debt crisis continued to rise. The red metal did, however, bounce back from its 2012 low at the end of June when European leaders agreed to give Eurozone nations easier access to emergency funds. These factors, together with hopes for greater economic stimulus from China and steady gains in US growth, are keeping analysts broadly upbeat about copper's outlook.diamond beneficiation equipment
Copper reached its year-to-date low of $3.26 a pound in early June as worries about the spillover effects of a financial meltdown not only in Greece, but also in Spain and Italy, escalated. In addition, the first rate cut by China's central bank since 2008 sparked worries that the Chinese economy is more vulnerable than expected. Yet copper enjoyed its biggest one-day rally in seven months on the last trading day of the quarter, gaining over 4 percent on news of the latest European deal, which will help banks recapitalize by giving them direct access to bailout funds from the European Stability Mechanism.
hot sale gold mining equipmentChinese rate cut, mixed bag of US data
While the People's Bank of China's decision to cut its benchmark one-year deposit rate by 0.25 percentage points to 3.25 percent in early June was expected, the first rate cut since 2008 nonetheless initially struck fear in the hearts of many analysts who worried that the state of the Chinese economy was worse than expected. Given that the country accounts for over 40 percent of global copper consumption, China's appetite for the red metal is a key price driver. Expectations have since improved in anticipation of Beijing taking measures to continue propping up any slack in continued growth.
In the United States, the Federal Reserve's decision to extend Operation Twist, its bond-buying program, was welcomed by commodities investors as the program lowers longer-term borrowing costs. Also on a positive note, a number of indicators suggest that the US economy is in better shape now than previously expected. This is particularly true for the housing sector; in May, single-family home sales rose 7.6 percent to reach a two-year high of 369,000 units. However, hopes that the Fed would introduce a new round of quantitative easing to jump start growth were quashed in the second quarter, and investors remain cautious about the US housing market and employment situation, especially as jobless claims still remain close to their 2012 high.hard rock mining equipment
Corporate developments
As commodities prices across the board slumped in the second quarter, BHP Billiton(ASX:BHP,NYSE:BHP,LSE:BLT) and Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) said they would hold off approving mega-projects for the next few months as shareholders' disgruntlement over the mining giants' financial performance grew. JP Morgan expects BHP to delay the expansion of its $20 billion Olympic Dam copper and gold project for another three or four years. Analyst Lyndon Fagan stated in early June that "of all the major projects in the growth pipeline for BHP and Rio Tinto, the Olympic Dam expansion has the least attractive risk- return trade-off." Rio Tinto's CEO Tom Albanese said that he recognizes investors' need for better returns, but also stressed that the company needs to put money into its projects. Together, Rio Tinto and BHP Billiton are expected to account for about one-third of overall capital investment in the mining sector worldwide this year.