Gold Price Expected to be Affected by Inflation Rates

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Mar 08, 2017, 08:00 ET

NEW YORK, March 8, 2017 /PRNewswire/ --

Expectations for an interest rate hike this month and the strength of the U.S. dollar continued to put pressure on gold price in the short term. The yellow metal traded lower on Tuesday after a more than 2 percent decline last week. Comments from Federal Reserve Chair Janet Yellen on Friday boosted the odds of a rate hike at the Fed's March 14-15 meeting. Gold is highly sensitive to interest rates as a higher rate will increase opportunity cost of holding non-yielding metals. Traders are waiting for more hints on economic data that may change the outlook, includes the non-farm payrolls on Friday. Bravura Ventures Corp. (OTC: BRVVF) (CSE: BVQ.CN), Asanko Gold Inc. (NYSE: AKG), B2Gold Corporation (NYSE: BTG), Golden Star Resources Ltd. (NYSE: GSS), Timmins Gold Corporation (NYSE: TGD)

Gold is considered as safe haven asset in times of geopolitical uncertainty. Recent geopolitical tensions over North Korea's latest missile test and European election in the Netherlands, Germany potentially may be a source of global uncertainty. The yellow metal is also used to hedge against inflation. According to the Labor Department's report published earlier this February, the consumer price index rose 0.6 percent in January, and the fastest pace in nearly four years. While the year-on-year inflation rate increased to 2.5 percent from 2.1 percent, the largest gain since March 2012. The Fed has a target inflation of 2 percent. Investors expect that the new Presidential administration's fiscal stimulus package, including tax cuts, infrastructure spending and less regulations, may further boost the inflation.

Bravura Ventures Corp. (OTC: BRVVF) (CSE: BVQ.CN) recently on February 15th the company announced that, "the filing on SEDAR of a National Instrument 43-101 report on its Musgrove Creek gold project near Salmon, Idaho."

This report, titled "Musgrove Creek Project, December 2016 Summary Report", provides an independent comprehensive review of historical mining and exploration activity at Musgrove Creek, describes the geology as it is currently understood, and proposes a program for continued gold exploration and resource definition by Bravura during 2017.

Musgrove Creek is an advanced-stage exploration project for which Bravura controls a 100% operating interest. The project contains an "historic" resource estimate at Johny's Point of 8 million tonnes at 1.22g/t Au at a gold cut-off of 0.8 g/t, for a total of 9,761 kg (313,822 oz) of gold at zero dilution. Originally modeled and calculated by David Makepeace, P. Eng. of Geospectrum Engineering in 2004 using Surpac International's Vision mining software package, and disclosed on SEDAR by prior operator Wave Exploration Corp., this resource calculation is now considered an "historic" resource as a qualified person has not done sufficient work to classify the historical estimate as a current mineral resource or mineral reserve (the historic resource was disclosed in a report titled "Technical Report on the Musgrove Creek Gold Project, Salmon, Idaho", by W. Gruenwald and D. Makepeace, February 25, 2004). Bravura intends to re-model the mineralization in the Johny's Point zone and calculate a new mineral resource upon completion of additional definition drilling and the acquisition of high-quality topography (LIDAR or orthophotography derived). Therefore, Bravura is not treating the historical estimate as current mineral resources or mineral reserves.

Asanko Gold Inc. (NYSE: AKG) is a mid-tier gold mining company. The company has a flagship project that is the multi-million ounce Asanko Gold Mine located in Ghana, West Africa. Asanko is managed by highly skilled and successful technical, operational and financial professionals. The Company is strongly committed to the highest standards for environmental management, social responsibility, and health and safety for its employees and neighboring communities. The company had measured and indicated resources of 7.34 million ounces at 1.44 g/t Au and Inferred Resources of 1.43 million ounces at 1.43 g/t Au, as at the end of 2016. Asanko also increased its exploration program in highly prospective belt that is expected to add additional ounces in 2017.

Gold mining company, B2Gold Corporation (NYSE: BTG) has four operating mines, one mine under construction and numerous exploration projects in various countries, including Nicaragua, the Philippines, Namibia, Mali and Burkina Faso. Construction of B2Gold's Fekola mine in southwest Mali is on budget and ahead of schedule and is planning for an October 1, 2017 production start. As a result, B2Gold is well positioned to maintain its low-cost structure and growth profile. The company's Kiaka Project is located in southcentral Burkina Faso. Kiaka is one of the largest undeveloped gold resources in West Africa, and contains measured mineral resource estimates of 27.3 million tonnes at 1.09 g/t gold for 953,000 ounces; indicated mineral resource estimates of 96.8 million tonnes at 0.96 g/t gold for 2.99 million ounces; and inferred mineral resource estimates of 27.3 million tonnes at 0.93 g/t for 815,000 ounces.

Golden Star Resources Ltd. (NYSE: GSS) has reported the remaining results from the in-fill drilling program at its Wassa Underground Gold Mine in Ghana. During the second half of 2016 Golden Star conducted an in-fill drilling program to further delineate the first planned transverse stopping areas of the B Shoot zone. In December 2016, Golden Star reported the first nine holes of this program and the results of the remaining 15 holes have now been received. They continue to confirm the wide zones of high grade gold mineralization in this area. This program has also defined the contacts and geometry of the high grade zones so that detailed mining plans and schedules can be assembled in advance of mining. "As well as confirming the high grade nature and continuity of the B Shoot, the results from the most Northern holes of this program suggest that the high grade zones continue up plunge to the North. As part of the design update work, which will be conducted with this new drilling data, we will assess the viability of adding additional stopes to the North of the current mine plan with the intention of increasing Wassa Underground's Mineral Reserves," said President and Chief Executive Officer of Golden Star, Sam Coetzer.

Timmins Gold Corporation (NYSE: TGD) is a gold production and development company operating exclusively in Mexico. The Company owns and operates the San Francisco open pit, heap-leach gold mine in Sonora State and is also developing the economically-robust Ana Paula growth project in Guerrero State. Production guidance for 2016 includes producing between 90,000 and 100,000 ounces of gold with cash costs of $750-$800 per ounce. During the first half of 2016, the company generated approximately $14 million in operating cash flow. The Ana Paula Project located in Guerrero State, is currently in the feasibility and permitting stage. With no secured debt a strengthening balance sheet and a strong presence and network in Mexico, the Company plans to advance Ana Paula to a construction decision by Q1 2018. Ana Paula remains a priority for Timmins as it is expected to become a very profitable mine given its high grade, capital efficiency and low capital requirements.

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