Is Mexico starting to buy silver too?

Section:

Could that ever-exploited country have begun to start standing up for itself? Are its authorities finally listening to their unsung patriot, Hugo Salinas Price? Note the Bank of Mexico's refusal to comment about its gold purchase. At least Reuters tried putting a question to a central bank this time.

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Mexico Ramps Up Gold Reserves at Dollar's Expense

By Dave Graham
Reuters
Wednesday, May 4, 2011

http://www.reuters.com/article/2011/05/04/mexico-gold-idUSLDE7431OZ20110...

MEXICO CITY -- Mexico massively ramped up its gold reserves in the first quarter of this year, buying over $4 billion of bullion as emerging economies move away from the ailing U.S. dollar, which has dipped to 2 1/2-year lows.

The third biggest one-off purchase of gold by any country over the past decade took Mexico's reserves to 100.15 tonnes -- or 3.22 million ounces -- by the end of March from just 6.84 tonnes at the end of January, according to the International Monetary Fund and Mexico's central bank.

... Dispatch continues below ...



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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:

http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf



Gold has gained 11 percent this year, driven by concern over euro zone debt and the violence in the Arab world, as well as by the U.S. dollar's 7.6 percent decline against a basket of currencies.

Sergio Martin, chief economist for HSBC in Mexico, said the government probably saw gold as a highly liquid asset that would reduce exposure to the falling greenback.

"They're probably thinking that getting out of dollars and into gold makes sense because we know that the dollar has some trend to depreciate in the near future at least," said Martin. "I don't think they're going to lose money with this."

Mexico's foreign currency and asset reserves hit a record $128 billion in April, making the gold purchased mostly in February and March worth nearly 4 percent of that total. Mexican central bank data on gold holdings only exists through March.

The central bank did not respond to a request for comment.

According to the International Monetary Fund, Latin America's No. 2 economy now owns $4.93 billion worth of gold, which hit a record $1,575.79 an ounce on Monday.

Other emerging economies such as China, Russia and India have also beefed up bullion reserves over the past few years.

Credit Suisse precious metals analyst Tom Kendall said it was worthy of note that Mexico, whose economy is very closely tied to the United States, had taken this step.

The size of the purchase "is certainly pretty chunky to have been accomplished in that space of time. So it certainly gives another sizable layer of support to gold's position in the international reserves system," he added.

George Milling-Stanley, managing director of government affairs at the World Gold Council industry group, said Mexico was following a recent trend among central banks to restore a "prior balance between gold and currency reserves."

"This is further supported by the fact that the May IMF numbers show continued buying by Russia and Thailand of 18.8 tonnes and 9.3 tonnes respectively," he added.

Mexico's reserves rank it 33rd among the top official holders of gold. The United States is the largest official holder of gold, with 8,133 tonnes, which account for 73.8 percent of its total international reserves.

China is the sixth largest holder of gold, with 1,054.1 tonnes, or just 1.6 percent of total reserves, while eighth-ranked Russia now has some 811 tonnes of gold, up from 788.78 in January, according to the IMF data.

Silver, which hit a record price earlier this year, may also have been on Mexico's buying list, said Martin at HSBC.

"I think Mexico has moved from second to first place in the list of global silver producers, so they may have been buying silver to help the price," he added.

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Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

http://prophecyresource.com/news_2011_jan18.php