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By Melissa Pistilli-Exclusive to Resource Investing News Gold Investing News China’s Northwest Nonferrous International Investment Company was looking to purchase 51 per cent of US-based miner Firstgold [TSX: FGD], which has four properties in gold-rich Nevada. If the deal were to go through, it would have given China its first mining purchase in the US. …
China’s Northwest Nonferrous International Investment Company was looking to purchase 51 per cent of US-based miner Firstgold [TSX: FGD], which has four properties in gold-rich Nevada.
If the deal were to go through, it would have given China its first mining purchase in the US.
However, The Committee of Foreign Investment in the United States (CFIUS) let it be known that it would recommend President Obama reject the bid on the grounds that it threatened national security. It seems Firstgold’s properties are in too close proximity, says the CFIUS, to the Fallon Naval Air Station where the US Navy conducts tactical aviation training.
The deal has since been terminated.
This isn’t the first time a foreign investor has faced opposition in the name of national security. During the Bush Administration fervent protest blocked a Dubai-based company from purchasing dozens of port terminals.
While that example may have actually posed some serious risks, some find it hard to see any threat from China’s involvement in Nevada and are surprised at the CFIUS conclusion.
If it becomes a trend, xenophobic reactions like this by governmental agencies may have a negative impact on recovery in the economically weakened US.
A stronger dollar continued to place downward pressure on gold prices early this week and Wednesday saw gold dip as low as $1081.90 an ounce before rebounding slightly to close at $1087.10 on a stalling dollar. There is speculation in the market that the dollar’s latest rally is unsustainable and that has lent support to gold’s safe haven status.
Analysts are still forecasting further drops in the price of gold before the year is out; however bargain hunting long-term investors should provide support keeping prices above the $1,000 level.
It all adds up for lithium.
Consolidated Spire Ventures Ltd [TSX-V: CZS] has received approval from the TSX to acquire lithium mineral claims totaling 164,072 acres near Fox Creek, Alberta.
Altair Venture Inc [TSX-V: AVX] has closed its second and final non-brokered private placement financing with proceeds of $416,250.
First Gold Exploration Inc [TSX-V: EFG] has commenced digging on its Pivert/Rose lithium property (85 per cent share) and reports that every sample has tested positive for lithium.
Rock Tech Resources Inc [TSX-V: RCK] has announced chemical assay results indicate an average of 2.12 per cent lithium oxide and anomalous values of other rate earth elements on its Georgia Lake Lithium Project in North Western Ontario.
Recovery in China’s economic growth is expected to fuel a rebound in the moly market. China is the world leader in steel and is responsible for about 40 per cent of global production, twice as much as the European Union. And steel manufacturing requires molybdenum.
In the past five years, Chinese moly demand has increased 27 per cent annually compared to only 4 per cent worldwide. While the recent recession has dampened demand, we can expect it to pick up alongside a recovery in China’s economy.
Sichuan Hanlong Group is giving a ten-year interest bearing loan of $60 million to and paying $140 million for a 54 per cent share of Moly Mines Ltd [TSX: MOL], which is developing a molybdenum and copper project in Australia.
Hanlong will also assist Moly Mines with $500 million in debt financing in the next six months and will receive 35.5 million in unlisted three year options exercisable at C$1 share for their trouble.
Russia is bringing back its 5 per cent export tax on nickel in January after a 6-month hiatus. Russia’s OAO GMK Norilsk Nickel is the world biggest producer of the metal.
The news, along with rebounding stainless steel demand, pushed nickel prices higher. On Monday, nickel surged 4.9 per cent to $17,950 a tonne on the LME. Tuesday brought an additional 3 per cent hike, with nickel as one of the markets strongest performers.
After posting gains in early trading Monday, silver quickly reversed direction as a rebounding dollar forced both precious metals down, bring silver as low as $16.93 before closing at $17.01 an ounce.
On Tuesday, silver fell further against a stronger dollar, dropping as low as $16.73 before closing at $16.95 an ounce.
The dollar is continuing to rally this week after hitting a 15-month low November 26. Traders are betting Fed rates will rise in 2010 as the US economy improves. The debt problems of nations like Greece and Dubai are also adding to the dollar’s momentum.
The greenback is expected to continue pressuring precious metals prices as we head into January, but analysts say both gold and silver will receive some support from bargain hunting speculators and long-term investors.
We may see the gold to silver ratio narrow dramatically in 2010 as depressed supplies due to production cuts in both mining and in end-use applications meet growing demand from emerging and recovering industrial markets.
On Wednesday, silver recovered along with gold on a reversing dollar. The price of silver per ounce reached as high as $17.23 before closing at $17.11 an ounce.
Russia’s quest for world dominance in the uranium and nuclear sectors has spread further across Central Asia into Kazakhstan.
Russian-state owned uranium miner ARMZ has gained a nearly 20 per cent stake in Canadian producer Uranium One, which has a 30 to 70 per cent share in three other properties in Kazakhstan besides the now 50 per cent share it has in the Karatau mine. The mine entered production last year and produced 655 tonnes of U308 in 2008.
ARMZ director general Vadim Zhivov and another Russian representative with take a seat on Uranium One’s board.
As with any Russian deal of late, there is a bit of controversy involved. Some videos of former Kazakhstan state-owned uranium producer KazAtomProm, Mukhtar Dzhakishev, now on trial for allegedly selling state uranium deposits for personal gain, have popped up on YouTube and have given a whole new dimension to the drama.
According to Dzhakishev, who fervently contests the charges against him and whose supporters say is the latest victim of politically motivated arrests in Kazakhstan, he was actively opposed to Russia acquiring a stake in Uranium One on the grounds that it would pose a serious threat to his nation’s nuclear industry.
As Joanna Lillis of EurasiaNet points out in her interesting exposé, further controversy lies in the fact that the son of KazAtomProm’s new head, Vladimir Shkolnik, is the husband of ARMZ director Zhivov’s daughter.
Update: ARMZ responds to Khan Management’s Call to Reject Bid
ARMZ issued a response yesterday to Khan Resources recommendation that shareholders reject the all-cash offer, which expires February 1.