Caterpillar sees 'some signs of improvement' but expects mining companies to further reduce costs in 2014 |
- Caterpillar sees 'some signs of improvement' but expects mining companies to further reduce costs in 2014
- Gold price gains halted as ETF investors sell into rallies
- VIDEO: Australia's Wolf Minerals ready for construction of UK tungsten mine
- DRC mining billionaire turns 29,900% profit on oil deal
- Fission Uranium drills 'one of the very best holes' in Athabasca basin
- Implats and Transition Metals strike platinum in Ontario
| Posted: 27 Jan 2014 04:49 PM PST
The company sees "some signs of improvement in the global economy," which should help its construction and power systems segments, but expects sales and revenues to be similar to 2013 as sales to the resource industry decline modestly. "We expect sales of mining equipment will remain weak in 2014 and our outlook reflects a sales decline of about 10 percent in Resource Industries," Caterpillar said in its end of year results. The company expects profit per share of $5.85 this year – not including restructing costs – compared with $5.75 and $8.48 in 2012. Restructuring costs could affect this by about 55 cents per share. Caterpillar also said it will repurchase about $1.7 billion of stock during the first quarter of 2014 and an additional $10 billion over the next four years – "a result of our record cash flow, the strength of our balance sheet and our confidence in the long-term future of Caterpillar," the company noted. This will complete a $7.5 billion repurchase originally approved in 2007. The new $10 billion authorization will expire in December 2018. The announcement bumped the firm's share price by nearly 6% to trade at $91.29 per share. Looking back at 2013, Caterpillar says the year "turned out to be worse than we anticipated." Sales and revenue were $55.7 billion for the year, down 16% from 2012, driven by a drop in sales of new mining machines. But the company beat analysts' expectations: According to the AP, a FactSet survey put the equipment maker"s Q3 2013 profit at $1.27 per share. Caterpillar actually reported $1.54. At $56 billion in sales forecasted for 2014, the company's anticipates a slightly better year than 13 estimates compiled by Bloomberg. CEO Doug Oberhelman said cost flexibility was critical this past year to maintaining profitability. The cost-cutting measures included several rounds of lay-off, affecting nearly 10,000 workers. "Cost flexibility is critical to our strategy and was a significant focus in 2013 as we took substantial actions to help maintain profitability as sales declined," Oberhelman said. "It wasn't easy, especially for our employees who endured an incredibly tough year, but the actions we initiated helped us deliver strong operational performance in 2013."  |
| Gold price gains halted as ETF investors sell into rallies Posted: 27 Jan 2014 03:56 PM PST The recent rally in the price of gold came to a halt Monday ahead of a two-day US Federal Reserve meeting starting on Tuesday and amid continued outflows from gold-backed ETFs. In late trade on the Comex market in New York, February gold futures changed hands at $1,255.20 down $8.30 or 0.7% from Friday's close after earlier in the day climbing to a fresh two-month high above $1,270. The sell off on financial markets on Friday which continued into Monday saw gold gaining for five straight weeks and trade 5% higher year to date. Gold's 28% price drop in 2013 were marked by a rotation out of gold-backed ETFs into riskier assets like equities and despite gold's strong performance in 2014, investors continued to pull their money out of ETFs. Over the past four weeks, holdings dropped by 28.1 tonnes to 1,739 tonnes across the more than 100 gold-backed ETFs listed around the globe. Holdings peaked in December 2012 at more than 2,600 tonnes. Holdings of the world's largest gold ETF – SPDR Gold Shares (NYSEARCA:GLD) – dropped 6.6 tonnes last week – as the price of gold was rallying. At 790.4 tonnes GLD holdings are at the lowest level since January 2009 after a whopping 552 tonnes left the fund last year. The Federal Open Market Committee meeting which wraps up on Wednesday is widely expected to deliver another $10 billion reduction to the $75 billion a month purchases under its quantitative easing program that has pumped $4 trillion of easy money into the US economy. Monetary expansion in the US and around the globe, particularly since the financial crisis, has been a massive boon for the gold price. Gold was trading around $830 an ounce before Chairman Ben Bernanke announced Q1 in November 2008. Should the Fed announce that it is throttling the program back at an increased rate which would boost the dollar, it could spell trouble for the price of gold. Charles Plosser, president of the Philadelphia Federal Reserve, recently said asset purchases should be wound down sooner than the end of the year, while Dallas President Richard Fisher said he wanted the taper to be double the size it was, that is $20 billion. |
| VIDEO: Australia's Wolf Minerals ready for construction of UK tungsten mine Posted: 27 Jan 2014 03:27 PM PST Australia's Wolf Minerals is currently developing a major tungsten operation in south west England and recently announced that construction will begin during the second quarter this year. The Hemerdon project received its final environmental permit last month. It's believed to be the third largest tungsten resource in the world. As with many other commodities, China dominates tungsten production. The Asian giant holds about 60% of known tungsten reserves – considered a strategic metal by many countries – and accounts for more than half of the world's demand. According to Wolf, demand is expected to increase at almost 6% per year until 2016. The Financial Times recently visited the moorland in Devon, UK where the Hemerdon project is about to start up. See the video here: If the video doesn't load, please click here |
| DRC mining billionaire turns 29,900% profit on oil deal Posted: 27 Jan 2014 02:57 PM PST Billionaire mining financier Dan Gertler has been accused by human rights group Global Witness of a strip and flip transaction in the Democratic Republic of Congo. Bloomberg reports according to official records Nessergy, an oil driller owned by the Israeli businessman, paid $500,000 for 95% of Congo's portion of the offshore block in 2006. Congo's government paid $150 million to buy it back last year, according to le Soft, a Kinshasa-based newspaper, but none of the details of the transaction has been made public despite DRC government regulations requiring large contracts involving the country's natural resources be made publicly available within 60 days. Bloomberg could not secure comments from either Nessergy nor the African nation's Oil Minister, while Gertler's financing firm, the Fleurette Group, said it is protected by confidentiality agreements with the DRC and Angola, which are jointly developing the field. Reuters quotes a Fleurette spokesperson as saying the $500,000 signing bonus was "the standard amount companies paid to Congo for oil rights at the time the contract was agreed" and that the block's value had risen sharply since discoveries in nearby Angolan fields. It is not the first time Gertler's name has been mentioned with regard to questionable natural resource deals in the DRC. Gertler is the grandson of Moshe Schnitzer, Israeli diamond exchange founder, and arrived in the Congo in 1997 shortly after the military coup that put current president Joseph Kabila's father in charge of the resource rich country which is almost the size of Western Europe. Gertler is said to have used his relationship with the younger Kabila and his now late adviser Augustin Katumba Mwanke to bag mining projects "by stripping from others if necessary, only to sell them on at great profit." Now delisted Kazakh mining group ENRC, was forced to pay out $1.25 billion to Canadian mining firm First Quantum in 2012 after the DRC government expropriated First Quantum's Kolwezi copper projects in the country only to sell them onto ENRC via Gertler. ENRC acquired a 50.5% stake in Camrose, a company controlled by the Gertler family trust, for $550 million last year. Camrose owns a stake in Africo Resources, listed in Toronto, which partners with DRC's state-owned Gecamines in various copper-cobalt, gold and iron projects and dominates the DRC diamond trade. Kabila has on occasion dispatched Gertler as special peace envoy for the DRC and Gertler answers his critics by saying he's attracted $7 billion worth of much-needed investment to the war-torn country. Image of street scene in the DRC capital of Kinshasa by Tomas |
| Fission Uranium drills 'one of the very best holes' in Athabasca basin Posted: 27 Jan 2014 11:54 AM PST Fission Uranium Corp (CVE:FCU) jumped as much as 6% on Monday on massive volumes after announcing a fresh set of off-scale mineralization from the first five holes of its $12 million winter drilling program at its PLS property in Saskatchewan abutting the Athabasca Basin. By early afternoon the Vancouver-based explorer retreated from its highs reached in morning trade to change hands at $1.23, up 3.4% on the Toronto venture board. A whopping 5.1 million shares in the $385 million company had changed hands by 2:00 pm EST on Monday compared to the daily average volume of 1.3 million. Thanks to a string of strong drill results showing mineralization at shallow depths from the Paterson Lake South property first identified in 2008, Fission has more than doubled in value over the past year and sparked a staking frenzy in the surrounding area. Highlights of the latest set of drill results which is part of a 30,000 metre, 90-hole program, include hole PLS14-129, which returned a composited radioactive interval of 111.5 metres comprising of nine variably radioactive mineralized intervals ranging in width from 0.5 metres to 38.0 metres, starting at a downhole depth of 56 metres. This includes 36.7 metres of composited "off-scale" intervals of greater than 9999 counts per second radioactivity occurring in non-contiguous discrete intervals ranging from 0.5 metres to 9.5 metres wide. This hole represents the widest intersection of composite mineralization and strongest off-scale scintillometre results so far encountered at the PLS property, exceeding readings derived from hole PLS13-175 by more than 50%, which assayed 54.5 metres grading 9.08% U3O8 including 21.5 metres grading 21.76% U3O8. Other significant results from the latest set include hole PLS14-126, which intersected 64.5 metres of total composited mineralized intervals from a downhole depth of 131.0 metres to 374.0 metres. Ross McElroy, President, COO, and Chief Geologist for Fission, said "Considering drill-hole PLS13-075 is on a level with the very best holes in the Athabasca Basin district, this is an incredible start to the winter program. Today's results also narrow the gaps between the zones substantially… further evidence that the system consists of one very large zone." To put Fission's drill results into perspective 1% uranium at $50 per pound is the equivalent of gold at 25.2 g/t, silver at 56 oz/t, copper at 15.4% and nickel at 8.2%. Fission has also intersected molybdenum, cobalt and gold at PLS. Gold has been mined as a byproduct in the past at a number of the uranium properties in the region. Fission Uranium drills biggest hole recorded at PLS in Canada's Athabasca Basin from Fission Uranium on Vimeo. |
| Implats and Transition Metals strike platinum in Ontario Posted: 27 Jan 2014 11:03 AM PST Discovery-focused Transition Metals (TSXV:XTM) says it has intersected "significant" platinum group metals mineralization at its Sunday Lake project in Ontario, a joint venture with the world's second biggest platinum producer, Impala Platinum (Implats). Of the six drill holes completed during the fall 2013 drilling program, "four returned intersections containing significant platinum-rich mineralization including hole SL-13-002 which intersected 20.2 meters containing 3.22 g/t combined precious metals," Transition wrote in a news release on Monday. The Sunday Lake property is located about 25km west of Panaromic Resources' Thunder Bay north deposit which is currently under development.
Transition Metals is a project-generator, meaning that it focuses exclusively on the discovery stage of mining operations. Through the 50:50 Sunday Lake partnership, Implats provides $1.3 million of exploration funding per year over three years. Implats can now decide whether to inject more cash into further exploration. The Africa-focused miner has been struggling with production lately due to labour issues in South Africa. A spokesman for Implats said last week that many platinum mines in South Africa "are not making any money," Times Live reported. |
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