South Korean central bank says it bought 16 tonnes of gold in July


Real gold or paper gold? And who has actual custody of it? Nobody's asking so the central bank isn't telling. So much for financial journalism.

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By Christine Kim
Thursday, August 2, 2012

SEOUL, South Korea -- South Korea's central bank said today it bought 16 tonnes of gold in July as easing financial markets after a turbulent June allowed it to push
ahead with efforts to diversify its massive foreign exchange reserves.

It put the total value of the purchase, which was made on multiple occasions during July and boosted its gold holdings to 70.4 tonnes, at $810 million, slightly less than $850 million it spent buying 15 tonnes of gold in November last year.

"The markets were stable in July and we judged the conditions were good for us to make the purchase then," said Lee Jung, head of the Investment Strategy Team at the Bank of Korea's Reserve Investment Division.

... Dispatch continues below ...


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:

Lee declined to provide the exact net purchase price per ounce it paid for the bullion, typical of most central banks, although he said price was not a major factor in the decision to make the purchases.

Calculations from the total value and volume of the purchase show that the Bank of Korea paid about $1,582 per ounce on average, compared with an average spot price of about $1,592 for the month.

Increased volatility in the global financial markets and falling confidence in the U.S. dollar have persuaded central banks to diversify their foreign reserves away from the U.S. currency and government debt securities.

Central banks became net gold buyers in 2010 for the first time in two decades and have remained buyers since, with an easing of prices this year helping the cause to accumulate more of the safe-haven reserve asset.

South Korea is Asia's fourth-largest economy and its foreign reserves of more than $300 billion ranked the seventh in the world and were equivalent to about 30 percent of its annual gross domestic product.

Gold accounted for 0.9 percent of the value of South Korea's total foreign reserves at the end of July, up from 0.7 percent a month earlier, the central bank said. The total book value of its gold holdings was at $3.0 billion, it added.

The South Korean central bank said it now ranked 40th in the world in gold holdings at the end of July, up from 43rd in June.

It announced the gold purchases when it made a scheduled release of the country's latest foreign exchange reserves data, which edged up to $314.35 billion at the end of July from $312.38 billion at the end of June.

South Korea, the fourth largest economy in Asia, had the seventh largest foreign exchange reserves in the world as of the end of June, of which securities including government bonds made up 91.1 percent, it added.

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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: