What's Iran doing with Turkish gold? Accepting payment for oil

Section:

By Humay Guliyeva and Pan Kwan Yuk
Financial Times, London
Monday, July 9, 2012

http://blogs.ft.com/beyond-brics/2012/07/09/whats-iran-doing-with-all-th...

What’s Iran doing with Turkish gold?

That is the question [the] Beyondbrics [column] found itself asking after it had a look at Turkey's latest trade figures.

According to data released by the Turkish Statistical Institute (TurkStat), Turkey's trade with Iran in May rose a whopping 513.2 per cent to hit $1.7 billion. Of this, gold exports to its eastern neighbour accounted for the bulk of the increase. Nearly $1.4 billion worth of gold was exported to Iran, accounting for 84 per cent of Turkey's trade with the country.

So what's going on?

In a nutshell -- sanctions and oil.

... Dispatch continues below ...



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Sona Discovers Potential High-Grade Gold Mineralization
at Blackdome in British Columbia -- 13.6g over 1.5 Meters

From a Company Press Release
November 22, 2011

VANCOUVER, British Columbia -- With its latest surface diamond drilling program at its 100-percent-owned, formerly producing Blackdome gold mine in southern British Columbia, Sona Resources Corp. has discovered a potentially high-grade gold-mineralized area, with one hole intersecting 13.6 grams of gold in 1.5 meters of core drilling.

"We intersected a promising new mineralized zone, and we feel optimistic about the assay results," says Sona's president and CEO, John P. Thompson. "We have undertaken an aggressive exploration program that has tested a number of target zones. Our discovery of this new gold-bearing structure is significant, and it represents a positive development for the company."

Sona aims to bring its permitted Blackdome mill back into production over the next year and a half, at a rate of 200 tonnes per day, with feed from the formerly producing Blackdome mine and the nearby Elizabeth gold deposit property. A positive preliminary economic assessment by Micon International Ltd., based on a gold price of $950 per ounce over eight years, has estimated a cash cost of $208 per tonne milled, or $686 per gold ounce recovered.

For the company's complete press release, please visit:

http://www.sonaresources.com/_resources/news/SONA_NR18_2011-opt.pdf



In recent months, Western powers, notably the US and the European Union, have tightened financial sanctions on the Islamic regime in an attempt to force Iran to scale back or halt its efforts to enrich uranium.

In March, Iran was cut off from from Swift, the global payments network, effectively blocking the country from performing any international financial transactions.

With Tehran struggling to repatriate the hard currency it earns from crude oil exports -- its main foreign currency earner and the economic lifeblood of the country -- Iran has began accepting alternative means of payments -- including gold, renminbi, and rupees, for oil in an attempt to skirt international sanctions and pay for its soaring food costs.

"Iran is very keen to increase the share of gold in its total reserves," says Gokhan Aksu, vice chairman of Istanbul Gold Refinery, one of Turkey's biggest gold firms. "You can always transfer gold into cash without losing value."

Turkey's gold exports to Iran are part of the picture. As TurkStat itself noted, the gold exports were for "non-monetary purpose exportation." Translation: They were sent in place of dollars for oil.

Iran furnishes about 40 percent of Turkey's oil, making it the largest single supplier, according to Turkey's energy ministry. While Turkey has sharply reduced its oil imports from Iran as a result of pressure from the US and the EU, it is unlikely to cut this to zero. The country pays about $6 a barrel less for Iranian oil than Brent crude, according to a recent Goldman Sachs report.

According to Ugur Gurses, an economic and financial columnist for the Turkish daily Radikal, Turkey exported 58 tonnes of gold to Iran between March and May this year alone.

"I saw the surge back in March, when gold exports increased by 36 times compared to March 2011," Gurses told Beyondbrics. "I waited to see if the trend would evolve. Effectively, Iran converted $3 billion of its reserves into gold through financial operations with Turkey, bypassing sanctions."

Iran's woes have proved to be a boon to Turkey's current accounts. Turkey's trade deficit narrowed by $1.6 billion in May, compared to the same period last year. For the year to end of May, the deficit narrowed by $8.3 billion, compared to the same period last year.

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Prophecy Platinum Announces Wellgreen Preliminary Economic Assessment:
38% Pre-Tax IRR, $3.0 Billion NPV, and a 37-Year Mine Life

Company Press Release

VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) reports the results of an independent NI 43-101-compliant preliminary economic assessment for its fully owned Wellgreen nickel-copper-platinum group metals project in the Yukon Territory.

The independent assessment, prepared by Tetra Tech, evaluated a base case of an open-pit mine (with a mining rate of 111,500 tonnes per day), an on-site concentrator (with a milling rate of 32,000 tonnes per day), and an initial capital cost of $863 million. The project is expected to produce (in concentrate) 1.959 billion pounds of nickel, 2.058 billion pounds of copper, and 7.119 million ounces of platinum, palladium, and gold during a mine life of 37 years with an average strip ratio of 2.57.

The financial highlights of the preliminary economic assessment, shown in U.S. dollars, are as follows:

Payback period: 3.55 years
Initial capital investment: $863 million
IRR pre-tax (100% equity): 38 percent
NPV pre-tax (8% discount): $3 billion
Mine life: 37 years
Total mill feed: 405.3 million tonnes
Mill throughput: 32,000 tonnes per day

Prophecy Chairman John Lee says: "We are pleased with the preliminary economic assessment results. The numbers indicate that Wellgreen is one of most exciting mineral projects in the Yukon. The company is drilling to upgrade and expand the resource base. The infrastructure is excellent as the project is only 1,400 meters in altitude and 14 kilometers from the paved Alaska Highway, which leads to the Haines deep seaport. Discussions are under way with support from local stakeholders regarding permitting and logistics."

For the complete press release, please visit:

http://prophecyplat.com/news_2012_june18_prophecy_platinum_announces_res...