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This week, silver prices were brought down by a policy statement from the US Federal Reserve, while silver streaming company Silver Wheaton was hurt by negative news about Barrick Gold’s Pascua-Lama project.
On Monday, silver saw little action, trading between $22.42 and $22.63 ahead of a two-day Federal Reserve meeting set to begin the next day. Tuesday was much the same, though the white metal did drop a little further, hitting $22.31 early in the morning. Capital Trading Group notes in its report for that day that one bright spot was that silver did not fall as much as gold, an indication that it may have been “attempting to track its physical commodity market fundamentals.”
Wednesday, the white metal finally saw some movement. It rose to $23.05, its high for the week thus far, midway through the morning, boosted by a new report showing that private employers added 130,000 jobs in October, down from 145,000 the previous month. However, that rise was not to last. That afternoon, the Fed expressed a “surprisingly bullish view of the U.S. economy” in a policy statement, as per The Wall Street Journal. Many investors had expected a more dovish tone and as a result lowered their precious metals holdings.
Silver prices fell all through today, eventually closing at $21.92.
Whistleblower Maguire comes forward
Earlier this week, Silver Investing News reported on claims from CPM Group’s Jeffrey Christian that Andrew Maguire, who in 2010 came forward to tell the Commodity Futures Trading Commission and Gold Anti-Trust Action Committee (GATA) that he could prove “that gold and silver prices are manipulated by the likes of JPMorgan Chase,” in fact has no background as a metals trader.
At the time, GATA’s chairman, Bill Murphy, had said only, “[a]s far as I know, what [Maguire] told me is true. If he is faking it, he is awfully good at it.” Now, however, Maguire himself has posted a rebuttal on GATA’s website.
In it, Maguire clarifies his work history and notes that he “was never directly given the opportunity to rebut the recent charges before they were published.” He ends by stating, “[t]hese attacks tell me I am succeeding and I am very encouraged to continue the pursuit of the truth exposing a very opaque and protected cabal of banks that increasingly are being caught manipulating world markets.”
He does not plan to comment further on the allegations.
Company news
Silver Wheaton (TSX:SLW,NYSE:SLW) announced this morning that because Barrick Gold (TSX:ABX,NYSE:ABX) has decided to temporarily suspend construction at its Pascua-Lama project, the two companies have amended their silver streaming agreement.
Under the new agreement, Silver Wheaton is entitled to production from Barrick’s Lagunas Norte, Pierina and Veladero mines until the end of 2016 “to the extent of any production shortfall at Pascua-Lama.” Previously, Silver Wheaton was entitled to production from those mines “to the extent of any production shortfall at Pascua-Lama, until Barrick satisfies the completion test” only throughout 2014 and 2015.
Randy Smallwood, president and CEO of Silver Wheaton, expressed support for Barrick’s decision, commenting, “[w]e see Barrick’s decision to suspend operations until they have full access to the Pascua-Lama site as a fiscally prudent approach, which under the current circumstances, should enhance the project’s capital efficiency and improve the project’s economics going forward.”
Barrick has not given a definite restart date, only stating that the decision to do so “will depend on improved project economics such as go-forward costs, the outlook for metal prices, and reduced uncertainty associated with legal and other regulatory requirements.”
Silver Wheaton is currently down 7.54 percent, trading at $23.66.
Junior company news
On Monday, MAG Silver (TSX:MAG,NYSEMKT:MVG) announced that Fresnillo (LSE:FRES), its joint venture partner on the Mexico-based Juanicipio project, has started underground development at the project, which Fresnillo operates. The news follows “a year of engineering, hydrological and environmental studies in support of required permits,” all of which have now been attained.
The same day, NSX Silver (TSXV:NSY) acquired two contiguous mining concessions in Sonora, Mexico that together cover 856 hectares. The acquisition was made by request to the Mexican government, and NSX continues to look for further acquisition opportunities in the country.
Tuesday, Trevali Mining (TSX:TV,OTCQX:TREVF) revealed that recent underground development at the Rosa zone, located in the Magistral North deposit of the company’s Peru-based zinc–lead-silver Santander mine, has been developed on four sub-levels in preparation for mining. The results suggest that “there is a trend of increasing grades and thickness of mineralization at depth,” as per the company’s press release.
Also that day, Northern Vertex Mining (TSXV:NEE) filed its financial results for the 2013 fiscal year, providing financial and operating updates as well as an update on its plan for reactivating the Moss Mine gold-silver project, located in Arizona. Summarizing the company’s work on the project, Dick Whittington, Northern Vertex’s president and CEO, commented, “[l]ast year at this time, the Company was still in the exploration phase and focused on drilling. Since then, we’ve raised capital, implemented a business plan and affected that plan on the ground. Today we are already through to Phase I – Pilot Plant Operations.”
The next day, IMPACT Silver (TSXV:IPT) provided initial results from the first phase of the drill program taking place at its Mexico-based San Juan project. Highlights include hole Z13-44, which intersected 1,409.8 grams per tonne silver over 2.07 meters true width. In response to that result, IMPACT has begun a “program of detailed geological mapping along with rock sampling, prospecting and surveying in this area.” Further drilling is also being carried out.
Earlier today, Dolly Varden Silver (TSXV:DV,OTCBB:DOLLF) released results from an underground sampling program undertaken at its British Columbia-based Dolly Varden property. Ron Nichols, the company’s president and CEO, commented, “[w]ork this season has mapped a long-lived fault system that acted as a hydrothermal conduit for the various phases of silver mineralization, including a late-stage introduction of native silver that resulted in some of the highest-grade silver mineralization at Torbrit mine.”
Dolly Varden expects to release the final results for its 2013 diamond drill program next week.
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Related reading:
Silver Boosted Above $22.50 by US Jobs Data
CPM Group, GATA to Go Head-to-Head on Manipulation at Silver Summit
Silver Summit 2013: Will the Real Andrew Maguire Please Stand Up?