Will Asian ETF help Morgan rig gold's most prospective market?


New Gold ETF Set for Launch on NYSE

By Alix Steel
Thursday, January 13, 2011


NEW YORK -- ETF Securities is adding one more gold ETF into the mix, but this time the gold is stored in Singapore.

ETFS Physical Asian Gold Shares is slated to debut on the New York Stock Exchange on Friday under the ticker symbol AGOL and ETF Securities is hoping that the lure of gold stored in Asia will help jumpstart investor demand.

The gold will be held by JPMorgan Chase in a recently purchased vault in Singapore under the London Bullion Market Association's rules for good delivery.

The impetus for the ETF, says Will Rhind, head of U.S. operations for the company, was new investors not wanting gold that was stored in London -- SPDR Gold Shares, GLD, iShares Gold Trust, IAU; the United States, IAU; or Switzerland, ETFS Physical Gold, SGOL.

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Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20.

Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia."

The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies.

For the complete press release, please visit:


ETF Securities launched SGOL in September 2009 and currently has $1.13 billion in assets and holds 820,739.304 ounces of gold.

These physically backed exchange-traded products aren't like closed-end funds; they buy gold only if demand rises and they need to issue more shares. Roughly for every share you own, you own one-tenth of an ounce of gold, but this ratio deteriorates over time as the issuer must sell shares to pay for daily expenses.

Both gold ETFs will be audited bi-annually by an independent third party and all gold bar numbers are published daily on their website.

I asked Rhind on the conference call if two gold ETFs would be dilutive -- basically, are they overdoing it? Rhind maintains that storing gold in Asia would be "highly complementary" to its Swiss-based ETF.

"Investors may [also] have reached particular internal holding limits and need other gold options that are not Europe or the U.S.," says Rhind. According to the company, Asian investors have also expressed interest in gold ETFs where the gold is stored locally.

It will be hard to guess how much demand will come from Asia, but the region's thirst for gold and gold products has been on the rise, especially on any gold price correction. China alone imported 209.7 metric tons in the first 10 months of 2010, or 7.4 million ounces, and the country has been promoting gold investing and buying by offering different gold funds and giving investors access to overseas products.

Gold ETFs are not typically redeemed for the physical metal, however, as investors must redeem in whole lots, sometimes as much as 50,000 shares, or $6.8 million. Although you don't get to touch the metal, you are taxed as if you do. Profits are subject to a 28-percent collectables fee.

Aside from SGOL and now AGOL, there are two other physically backed gold ETFs: GLD and IAU. GLD is the biggest with $56.5 billion under management and 1,271 tons, while IAU is the cheapest with an expense ratio of 0.25 percent versus 0.40 percent for the GLD and 0.39 percent for SGOL and AGOL.

When asked on the conference call, ETF Securities said it's not interested in lowering its cost to compete for IAU but instead wants to concentrate on offering different products.

IAU has been the popular ETF of late especially as gold prices popped 26 percent in 2010. The ETF added 37.85 tons in 2010, a 47 percent increase, while the GLD added only 14 percent.

In the U.S., ETF Securities also offers ETFS Physical Platinum (PPLT), ETFS Physical Palladium (PALL), ETFS Physical Basket (GLTR), comprised of all the precious metals, and ETFS Physical WM Basket (WITE), a basket including silver, platinum, and palladium.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

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