Engineering & Mining Journal

AUG 2017

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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2 E&MJ • AUGUST 2017 FROM THE EDITOR Last month, we wrote and committed resources to the pro- posed mining charter in South Africa. In the time between E&MJ being printed, mailed and readers receiving the maga- zine, sanity prevailed. South Africa reversed course (See Lead- ing Developments, p. 5) and the news story had run its cycle. A former E&MJ editor would occasionally cite the expression that "today's news is tomorrow's birdcage liner," and I immediately thought of him when the news broke. We are happy for the South African miners and we apologize for the inconvenience. People receive input instantaneously and can react upon it just as quick. It has reshaped how news is delivered and it's having a similar impact on traders as well as algo trades. Precious metals traders have been discussing the recent downward "spikes" in late June and the fi rst half of July. For example, on June 26, Ross Norman, CEO, Sharps Pixley, reported that at "9:00 [London, GMT+1] gold was rocked by a 56-[met- ric-ton] (1.8 million ounce) gold sale — but it remains a mystery who ... and why." London is arguably, the global capital for gold trading and prices for the yellow metal immediately dropped $20/ounce (oz) from $1,255/oz to $1,235/oz when this news broke. "This bears the hallmarks of a fat fi nger 'muppet' — a trade of 18,149 oz would be a very typical trade, but a trade of 18,149 lots of a futures contract (which is 100 times bigger) would not be... it leaves us wondering if a junior got confused between ounces and lots," Norman wrote. Sharps Pixley is a London-based gold bullion broker. The price of gold has recovered and now stands at $1,268/oz (See Markets, p. 96). Was this a mistake or something more? Suspicion and conspiracy theories run deep among precious metals traders. Norman admitted that the sale could have been made by a trader squaring away a large position or a central bank, both of which would have likely taken place at a different times. It could have been someone opening a short position, in which case it had the desired effect in catching the market by surprise, but Norman stuck with his muppet theory. Eventually, the CPM Group weighed in on the discussion. They pointed out that the discussions only followed the downward spikes and ignored similar upward spikes in the prices, which is typical of conversations run by conspiracy theorists who only look at downward moves. They said that these moves were not really fl ash crashes. The moves, they explained, appeared to refl ect the effects of a combination of program trading, stop-loss order practices and an infl ux of institutional money into these markets. Keith Weiner, CEO, Monetary Metals, has a similar view with a more complex expla- nation. On Thursday, July 6, in the late afternoon [GMT+9], the price of silver moved lower dramatically from $16/oz to $14.40/oz and less before recovering to around $15.80/oz. He analyzed the trades that took place millisecond by millisecond during that silver "crash." "At this time scale, we can see there are upticks," Weiner said. "Yes, even in a crash like this one, there are upticks." While traders agree that regulations drive down liquidity for markets, no one knows for sure if these price moves were triggered by stop-loss orders or something more nefarious. For mining companies, which have a longer-term vision of pricing and com- mitment to the market, a $0.20/oz price fl uctuation for silver in a day and its roundtrip might seem to be a tempest in a teapot, but it also might be something worth keeping an eye on. Enjoy this edition of E&MJ. Price Swings and the Digital Age Last month, we wrote and committed resources to the pro- posed mining charter in South Africa. In the time between E&MJ zine, sanity prevailed. South Africa reversed course (See Lead- ing Developments, p. 5) and the news story had run its cycle. A former Steve Fiscor Publisher & Editor-in-Chief Steve Fiscor, Publisher & Editor-in-Chief sfi Mining Media International, Inc. 11655 Central Parkway, Suite 306; Jacksonville, Florida 32224 USA Phone: +1.904.721.2925 / Fax: +1.904.721.2930 Editorial Publisher & Editor-In-Chief—Steve Fiscor, sfi Associate Editor—Jennifer Jensen, Technical Writer—Jesse Morton, Contributing Editor—Russ Carter, European Editor—Simon Walker, Latin American Editor—Oscar Martinez, South African Editor—Gavin du Venage, Graphic Designer—Tad Seabrook, Sales Midwest/Eastern U.S. & Canada, Sales—Victor Matteucci, Western U.S. & Canada, Sales—Mary Lu Buse, Scandinavia, UK & European Sales—Colm Barry, Germany, Austria & Switzerland Sales—Gerd Strasmann, Japan Sales—Masao Ishiguro, Production Manager—Dan Fitts, dfi Engineering & Mining Journal, Volume 218, Issue 8, (ISSN 0095-8948) is published monthly by Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 ( Periodicals Postage paid at Jacksonville, FL, and additional mailing offi ces. Canada Post Publica- tions Mail Agreement No. 40845540. Canada return address: Station A, PO Box 54, Windsor ON N9A 6J5, Email: Current and back issues and additional resources, including subscription request forms and an editorial calendar, are available on the World Wide Web at SUBSCRIPTION RATES: Free and controlled circulation to qualifi ed sub- scribers. Non-qualifi ed persons may subscribe at the following rates: USA and Canada, 1 year, $82.00, 2 year, $139.00. Outside the USA and Cana- da, 1 year, $134.00, 2 year, $249.00 surface mail (1 year, $191.00, 2 year, $352.00 airmail delivery). For subscriber services or to order single copies, write to E&MJ, 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA; call +1.904.721.2925 (USA) or visit ARCHIVES AND MICROFORM: This magazine is available for research and retrieval of selected archived articles from leading electronic databases and online search services, including Factiva, LexisNexis, and Proquest. For mi- croform availability, contact ProQuest at 800-521-0600 or +1.734.761.4700, or search the Serials in Microform listings at POSTMASTER: Send address changes to E&MJ, P.O. Box 1337, Skokie, IL 60076 USA. REPRINTS: Mining Media International, Inc., 11655 Central Parkway, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, PHOTOCOPIES: Authorization to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clear- ance Center (CCC) at +1.978.750.8400. Obtain further information at EXECUTIVE OFFICE: Mining Media International, Inc., 11655 Central Park- way, Suite 306, Jacksonville, FL 32224 USA phone: +1.904.721.2925, fax: +1.904.721.2930, COPYRIGHT 2017: Engineering & Mining Journal, incorporating World Mining Equipment, World Min- ing and Mining Equipment International. ALL RIGHTS RESERVED.

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