Bundesbank says New York Fed will help meet gold audit request

Section:

By Rainer Buergin and Stefan Riecher
Bloomberg News
Friday, October 26, 2012

http://www.bloomberg.com/news/2012-10-25/new-york-fed-to-help-bundesbank...

BERLIN -- The Bundesbank said the Federal Reserve Bank of New York will help it meet auditing requirements related to its gold reserves that were demanded by Germany's Audit Court.

"We have been in discussions with the Federal Reserve Bank of New York about the Bundesbank's holdings of gold," the Bundesbank said yesterday in a letter to the German parliament's budget committee. "The discussions have been fruitful and the Federal Reserve has expressed a commitment to work with the Bundesbank to explore ways to address the audit observations, consistent with its own security and control processes and logistical constraints."

The agreement is part of a compromise between the German central bank and the Audit Court, which has called on the Bundesbank to take stock of its gold holdings outside Germany, saying it has never verified their existence.

... Dispatch continues below ...



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The Bundesbank distributed the letter to reporters after board member Carl-Ludwig Thiele and the Audit Court's head Dieter Engels testified to budget committee lawmakers in the lower house of parliament in Berlin.

The Frankfurt-based central bank on Oct. 23 issued a statement saying that "the Bundesbank and the Federal Court of Auditors have different opinions" on the matter. The central bank manages Germany's gold reserves, which amounted to 3,396 tons as of Dec. 31, 2011. The gold is kept at central bank vaults in Frankfurt, New York, Paris and London.

The New York Fed held the largest share of reserves at the end of 2011, or 45.2 percent with a value of 60.1 billion euros ($78 billion), according to a statement sent to the German parliament. The Bundesbank held 30.5 percent, worth 40.5 billion euros, in Frankfurt.

Engels told reporters "we've found a compromise" on the matter, adding he's "very" reassured after the meeting. It makes no sense to fight over details that are controversial even among legal experts, he said.

"We're in negotiations with our partner central banks to develop auditing rights, and that's been agreed in principle," said Thiele. "In parallel, we will, over the next three years, transfer 50 tons of gold each year from New York to Frankfurt, which is an additional way to create confidence."

The Bundesbank is grateful that its partner central banks were willing during the Cold War to guard German gold and make sure it's available to Germany even in times of tension, Thiele said. The legal disagreement with the audit court has been overcome through "practical action," he said.

Engels said the Audit Court "had no doubts about our American partners, at no point in time. For us it's a question of regularity and how we'll proceed in the future."

Norbert Barthle, budget spokesman for Chancellor Angela Merkel's Christian Union bloc, said he has "full trust in the German Bundesbank and are sure that the German gold reserves are safely stocked in the U.S., France, and London." The Union welcomes the Bundesbank's decision to "bring back to Germany and examine part of the gold," he said.

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Prophecy Platinum Intercepts Best Pt+Pd+Au Grades Yet
at Wellgreen Project in Yukon Territory: 5.36 g/t

Company Press Release
Tuesday, September 11, 2012

VANCOUVER, British Columbia -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) announces more results of its 2012 drill program on the company's fully-owned Wellgreen platinum group metals, nickel, and copper project in southwestern Yukon Territory, Canada. Four surface holes and four underground holes all intercepted significant mineralized widths, ranging from 28.5 meters (WS12-201) and up to 459.5 metres (WS12-193). Highlights include WU12-540, which returned 8.9 metres of 5.36 grams per tonne platinum, palladium, and gold; 1.73 percent copper; and 1.01 percent nickel within 304.5 meters of 0.66 g/t platinum-palladium-gold, 0.20 percent copper, and 0.27 percent nickel.

The surface drill program started in June and has completed 16 holes (assays pending for 12 holes) with two rigs now on site. The surface program continues to progress at a steady pace.

Prophecy Chairman John Lee commented: “Wellgreen is a very large nickel, copper, and platinum group metals project with near-surface high-grade zones. High-grade intercepts will be incorporated into resource modeling and mine planning in the pre-feasibility study. We expect further positive drill results from Wellgreen shortly.”

Wellgreen features a low 2.59-to-1 strip ratio, is situated at an altitude of 1,300 meters, and is only 15 kilometers from the two-lane paved Alaska Highway. Those factors significantly minimize the project's indirect costs.

For the complete company statement with full tabulation of the drilling results, please visit:

http://prophecyplat.com/news_2012_sep11_prophecy_platinum_drill_results....