Kruggerrand Demand Pushes Output of Gold Coins to 23-year High

By Carli Lourens

 

Feb. 23 (Bloomberg) - - Rand Refinery Ltd., the world's largest gold refinery, increased coin output to the highest in about 23 years as demand for South African Kruggerrands rose.

 

The Johannesburg refinery last month doubled weekly production to 20,000 ounces of blank coins for minting by the State's SA Mint as Kruger coins, Johan Botha, head of precious metals sales, said by phone from the city today.

 

Gold, the best-performing metal in 2009, is trading near its March 17 record of $1,032.70 an ounce as investors seek safer bets than equities and currencies.  Goldman Sachs Group Inc. raised its three-month gold forecast by 43 percent to $1,000 an ounce this month.

 

"Demand for our blanks is higher than we've seen since 1986" Fourie said.  "In the early 1980's gold then was a novelty and people wanted to own physical gold."

 

Rand Refinery has manufactured, marketed and delivered more than 46 million ounces of Kruggerrands since the gold coin was introduced in 1967, according to t he company's web site.

 

"Record stock market lows are translating into record highs for gold and Kruggerrands,"  Alan Demby, chairman of the South African Gold Coin Exchange, said in and e-mailed statement last week.  Investors are "Piling into Kruggerrands and Nelson Mandela gold medallions," he said.

Gold & Molybdenum Conversion Factors

Understanding assays and exploration results can get confusing when everyone, it seems, are using different units of measurement. The purpose of this write-up is to explain in simple, concise terms, the difference between a troy ounce (oz), gram (g), Mo and MoS2.

Precious metals such as gold and silver are typically sold by the troy ounce. Many people don’t realize that an ounce of gold (and other precious metals) is measured using a different weighing system called "troy weights".

A troy ounce is more than the standard ounce found at the grocery store. Here in North America we often use the avoirdupois (standard) ounce for everyday weighing. Every time you step on the scale at home, or weigh food found in the grocery, you use the avoirdupois ounce weight system. 1 avoirdupois ounce = 28.35 grams.

1 troy ounce = 31.1034768 grams (31.1 rounded).

St. Elias announced on Feb 17, 09 an average grade of 0.94 oz/t over 217 tons from the Tesoro. This equates to 29.24 g/t using the troy ounce conversion factor above. St. Elias also announced a grade of 1.66 oz/t assayed using grab samples from the Beaverdell Property. 1.66 oz/t multiplied by 31.1034768 = 51.63 g/t.

Molybdenum

To convert from Mo to MoS2 – Multiply by 1.6681

In a news release dated August 28, 2009, St. Elias announced preliminary resource estimates from the Carmi Property in British Columbia. The results were stated in Mo. These numbers can be converted to MoS2 using the preceding formula. See the calculations below made using the numbers from the August 28-09 news release.

Classification	Tonnes	Mo (%)	MoS2 (%)
Indicated	12,906,000	0.058	0.097
Inferred	27,385,000	0.056	0.093

 

NEWS RELEASE - Beaverdell Gold/Silver Property, B.C.

Beaverdell Gold/Siver Property

 

In a news release today, St. Elias announced results of an exploration program on the Beaverdell Gold/Silver Property in southcentral British Columbia.  The program returned results up to 1.66 oz ton gold and 103.9 oz/t silver.  Although the results are preliminary or "early stage", they are very promising.  The gold (and silver) had to have come from somewhere?

Barrick's Munk worries about gold obsession

The Financial Post reports in a Bloomberg dispatch Friday that Barrick Gold chairman Peter Munk said an "unpleasant and frightening" trend may help push gold over $1,000 an ounce.

Bloomberg's Stewart Bailey and Erik Schatzker write, "Mr. Munk said he has received an increasing number of calls from wealthy investors looking for ways to buy bullion." While that is positive for the metal market, it is a "sad part of a civilized society," Munk said.

"That's not where you want to be; it's alarming," he said in an interview from Davos, Switzerland. "Do I personally believe gold will break through $1,000? It's not a question of if, it's a question of how soon."

The strong demand is being mirrored among professional investors whose funds are buying gold and shares of the companies that produce it. That helped the metal to its eighth straight annual gain last year and has driven a rally in gold stocks in recent months.

Gold is "the obvious counterweight" to currencies, Mr. Munk said. The metal has reached record levels in Indian rupees and Russian rubles, among others, as investors outside the United States demonstrate a greater affinity to buying the metal as a hedge against currency declines.