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Central banker berates Indians for preferring gold to a crappy currency

Section: Daily Dispatches

RBI Advises Against Gold Investment

From The Times of India, Mumbai
Friday, September 7, 2012

MUMBAI -- On a day gold prices touched a new high, the Reserve Bank of India urged the public against choosing gold as an asset for savings or investment.

"Because interest rates are very low, people are investing in gold. But the poor should never invest in gold, for whenever they have purchased gold, it either lands up in the temple or in the hands of the moneylender or, at most, it may be given away during a daughter's marriage," said RBI Deputy Governor K.C. Chakrabarty.

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Speaking at a function that marked the eighth edition of the M.R.Pai Awards, given in memory of the founder of the All-India Bank Depositors Association, Chakrabarty said that this is one area in which the association needs to educate the public.

"How many poor people," Chakrabarty asked, "have managed to save money by buying gold? Banks are selling gold, but do they buy it back? And if they do, at what price?"

The deputy governor added that the $60 billion worth of gold India imported annually was one of the main reasons behind the current account deficit.

This is the second time that the deputy governor has spoken out against investing in gold. At an event in Delhi in July, he said that there was a need for a socio-cultural revolution to help Indians overcome their love for gold.

India is the world's largest consumer of gold and is estimated to have imported close to a thousand tonnes in 2011. Although imports have dropped following the increase in customs duty in the 2012 budget, the value of imports continues to remain high thanks to the rise in prices and the weakening rupee.

Despite the import drop, domestic gold prices continue to rule high with the yellow metal being seen as a strong hedge against inflation.

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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: