don't give up on gold

8/2/2019 Don't Give Up on Gold

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-Dont Give Up On Gold!

Casual observers of gold typically fall prey to the simplistic notion that fear is theprimary motive behind decisions to acquire gold exposure. The only times I haveobserved fear among gold investors have been during the periodic correctionsthat test their confidence in the long-term bullmarket trend, tempting them to sellinto weakness.

Because the early 2012 rally that preceded the "Leap-Year Gold Massacre" wasso short-lived, following as it did a prolonged period of weaknessin the secondhalf of 2011, the latest breakdown is a source of understandable frustration forgold investors. The related mining equities have been underperforming for quitesome time, and lately it seems they've been producing more disappointment thangold. Major asset writedowns have hammered Kinross Gold (NYSE: KGC ) andNewmont Mining (NYSE: NEM ) , and severe cost inflationhas challenged eventhe large-scale development projects at Barrick Gold (NYSE:ABX ) .

More recently, the charts have turned uglier still, opening the possibility that goldand related equities could be in for a bit more near-term weakness before staginganother reversal. Furthermore, as the financial world ebbs and flows with eachchange in the perceived likelihood of additional quantitative easing by the FederalReserve, some gold investors will undoubtedly throw in the towel.

Gold falls prey to unfounded pessimism. Courage and conviction are required tostand strong with gold exposure in the face of dramatic declarations like letter-writer Dennis Gartman's recent assertion that the gold bull marketended all theway back in August of 2011. Interestingly, in the days following the Feb. 29

collapse in gold that so impaired the near-term technical landscape, Gartmanhimself pondered "the prospects that something manipulative and perhaps evennefarious took place Wednesday in the gold market." John Embry, chiefinvestment strategist at Sprott Asset Management, slammed Gartman's bearishcall in an interview with King World News, stating: "Given Dennis's unbelievablyinept record at calling the gold price, in both directions, I regard this event aswildly bullish."

Of course, I am convinced that Gartman's grossly premature call will suffer thesame fate as Nouriel Roubini's claim in 2009 that "those people who deludethemselves that gold can go to $1,500 or $2,000 are just talking nonsense." At the

time, I took Roubini to task for what I considered his "worst call ever" andencouraged my readers to instead heed the bullish outlook offered by JimRogers. History has already settled that score, but the exercise provides a timelyreminder for investors to reassess their resolve in response to the bustedsentiment, intimidating headlines, and unfriendly charts that periodically test themettle of long-term gold investors. With much attention heaped upon the bearishperspectives of late, I will present below a set of opinions that underscore theresiliently bullish long-term outlook for gold.
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Commodityguru Jim Rogers remains resolute in his bullish long-term outlook forgold and silver, indicating last week that he intends to buy more on any furtherprice weakness. While anticipating some additional near-term decline in prices,Rogers approaches the pullback with the opportunistic perspective that Iconsider paramount to successful navigation of bull markets as inherently

volatile as those for gold and silver.

According to newsletter writer Richard Russell, China is operating under a similarstrategy. Russell referred last week to a "Chinese put" under the gold price,adding: "China is moving in to scoop up gold on any gold weakness. At the low1600s and below 1600 -- it's 'enter the dragon.'"

Economist Marc Faber has identified two "huge bubbles" -- one in U.S. publicspending and governmentdebt, and another in "the wealth and the income of thesuper-wealthy" -- but he vehemently resists the notion that gold is a bubble.Faber appears utterly unfazed by the recent weakness in gold:

For the last 40 years in my business I've seen people always lose money whenthey put too much money into something and then it goes down. They panic andsell, or they have a margin call to sell -- and lose money. I own gold. It's mybiggest position in my life. The possibility of the gold price going down doesn'tdisturb me. Every bull market has corrections.

And then there are the banks, which are finally adapting to the new reality of goldafter failing to prepare their clients for the initial stages of the monetary metal'sascent. Morgan Stanley reiterated its bullish outlook, stating: "We believe that therecent weakness in gold is a good entry point as some elements of the recent

selling pressure appear to be at odds with the FOMC's still-dovish position."Standard Bank expects an average gold price of $1,790 for 2012, which wouldimply substantially greater strength during the second half of the year than wehave seen thus far. Japanese firm Nomura characterized its price forecast for$1,791 in 2012 and $2,063 in 2013 as being "in line with consensus estimates."BNP Paribas is substantially more bullish, targeting average prices of $1,850 for2012 and $2,225 for 2013. Goldman Sachs recently issued a buy recommendationfor gold with a six-month price target of $1,840 per ounce.

Deep value in quality miners is a safe haven while awaiting QE3For many gold investors, the doubt that periodically sets in revolves arounddynamic projections regarding the likelihood that the Federal Reserve and otherkey central banks will engage in further accommodative policy interventionthrough some combination of liquidity injections, zero-bound interest rates,quantitative easing, etc. That's a topic for another day, but I think PIMCO co-founder Bill Gross summed it up nicely last week when he tweeted: "Centralbanks are where badbondsgo to die. Without QE, the financial markets & thenthe economy will falter."
http://wiki.fool.com/Commodity?utm_source=Fool&utm_medium=links&utm_campaign=Commodity&source=ihlsitlnk0000001http://wiki.fool.com/Commodity?utm_source=Fool&utm_medium=links&utm_campaign=Commodity&source=ihlsitlnk0000001http://wiki.fool.com/Debt_vs._Net_Worth?utm_source=Fool&utm_medium=links&utm_campaign=debt&source=ihlsitlnk0000001http://wiki.fool.com/Debt_vs._Net_Worth?utm_source=Fool&utm_medium=links&utm_campaign=debt&source=ihlsitlnk0000001http://wiki.fool.com/Debt_vs._Net_Worth?utm_source=Fool&utm_medium=links&utm_campaign=debt&source=ihlsitlnk0000001http://wiki.fool.com/Margin_call?utm_source=Fool&utm_medium=links&utm_campaign=margin%20call&source=ihlsitlnk0000001http://wiki.fool.com/Margin_call?utm_source=Fool&utm_medium=links&utm_campaign=margin%20call&source=ihlsitlnk0000001http://wiki.fool.com/Liquidity?utm_source=Fool&utm_medium=links&utm_campaign=liquidity&source=ihlsitlnk0000001http://wiki.fool.com/Liquidity?utm_source=Fool&utm_medium=links&utm_campaign=liquidity&source=ihlsitlnk0000001http://wiki.fool.com/Interest_rates?utm_source=Fool&utm_medium=links&utm_campaign=interest%20rates&source=ihlsitlnk0000001http://wiki.fool.com/Interest_rates?utm_source=Fool&utm_medium=links&utm_campaign=interest%20rates&source=ihlsitlnk0000001http://wiki.fool.com/Bill_Gross?utm_source=Fool&utm_medium=links&utm_campaign=Bill%20Gross&source=ihlsitlnk0000001http://wiki.fool.com/Bill_Gross?utm_source=Fool&utm_medium=links&utm_campaign=Bill%20Gross&source=ihlsitlnk0000001https://twitter.com/#%21/PIMCO/status/187540360602460161https://twitter.com/#%21/PIMCO/status/187540360602460161http://wiki.fool.com/Long-Term_Loans_Vs._Bonds?utm_source=Fool&utm_medium=links&utm_campaign=bonds&source=ihlsitlnk0000001http://wiki.fool.com/Long-Term_Loans_Vs._Bonds?utm_source=Fool&utm_medium=links&utm_campaign=bonds&source=ihlsitlnk0000001http://wiki.fool.com/Long-Term_Loans_Vs._Bonds?utm_source=Fool&utm_medium=links&utm_campaign=bonds&source=ihlsitlnk0000001http://wiki.fool.com/Long-Term_Loans_Vs._Bonds?utm_source=Fool&utm_medium=links&utm_campaign=bonds&source=ihlsitlnk0000001https://twitter.com/#%21/PIMCO/status/187540360602460161http://wiki.fool.com/Bill_Gross?utm_source=Fool&utm_medium=links&utm_campaign=Bill%20Gross&source=ihlsitlnk0000001http://wiki.fool.com/Interest_rates?utm_source=Fool&utm_medium=links&utm_campaign=interest%20rates&source=ihlsitlnk0000001http://wiki.fool.com/Liquidity?utm_source=Fool&utm_medium=links&utm_campaign=liquidity&source=ihlsitlnk0000001http://wiki.fool.com/Margin_call?utm_source=Fool&utm_medium=links&utm_campaign=margin%20call&source=ihlsitlnk0000001http://wiki.fool.com/Debt_vs._Net_Worth?utm_source=Fool&utm_medium=links&utm_campaign=debt&source=ihlsitlnk0000001http://wiki.fool.com/Commodity?utm_source=Fool&utm_medium=links&utm_campaign=Commodity&source=ihlsitlnk0000001


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Because I am as convinced today as I have ever been that gold will trade to$2,000 per ounce and well beyond, and given the extreme undervaluation Iperceive among a broad swath of the related mining equities, I remain steadfastlyinvested in the space. The standout bargains are frankly too numerous tomention, but Primero Mining (NYSE: PPP ) remainsa strong favorite of mine. Of

the larger producers, Goldcorp (NYSE: GG ) isthe first coin I would stash in mypot of gold.I have issued bullish CAPScalls for both stocksand selected them astop picks within my Motley Fool CAPS portfolio. I am 100% unshaken by thislatest corrective phase, and I believe quality gold-mining equities at currentvaluations will someday be seen as one of the great market opportunities of ourera.

Looking for more ideas? Download The Motley Fool's special free report, "TheTiny Gold Stock Digging Up Massive Profits." Our analysts have uncovered alittle-known gold miner that we believe is poised for greatness. Find out whichcompany it is and why we strongly believe in its future --for free!

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Dont give up on gold just yet

March 12, 2012, 4:00 PM

Gold appears to have lost its steam, with prices trading slightly lower for themonth so far, after a disappointing 1.7% loss in February, but Dillon Gage Metalsexpects prices to reach new heights later this year.

Gold prices weakened Monday. April gold futures GCJ2 +0.15% closed at$1,699.80, down $11.70, Monday.

A strengthening safety net for Europes debt crisis and improving economicconditions outside Europe could dampen investors interest in acquiring gold fornow, said Terry Hanlon, president of Dillon Gage Metals, in a press releaseMonday.

But other factors are supportive for the yellow metal, he said, adding thatgeopolitical conditions, most notably tensions in the Middle East, will continue tobuoy gold and crude oil prices this year.

Hanlon highlighted data showing strong global gold demand last year and risingpurchases from central banks.
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Global gold demand reached 4,067 metric tons in 2011 to reach a record annualvalue for gold demand of $205.5 billion 29% above the 2010 value, according torecent statistics from the World Gold Council.

Central banks continued to be net buyers of gold, with purchases by central

banks growing to nearly 440 metric tons last year, from 77 metric tons in 2010and gold used in global electronic also rose 1.1% in 2011, the WGC reported inmid-February.

I look for gold to advance in 2012 and to take out its 2011 peak at $1,895 anounce, Hanlon said. I expect the 2012 high to be made in the latter part of theyear, as it was in recent years. Gold may be able to reach a record $2,000 or$2,100 an ounce then.

It's been a rough road for gold and silver investors lately, and the thoroughlydistressed valuations pervading the related production and exploration entities is

enough to try the patience of even the most seasoned market participants.

I am here to remind Fools that the purpose of a corrective pause in a long-termbull market is to periodically shake-out the weaker hands, and as long-terminvestors we never want to play that role. My longstanding readers will recall mydiscussions of the 2006 gold correction, which struck a short time after Iincreased my precious metal allocation from somewhere around 40% to roughly70%. I recall feeling an odd sense of relief when I sold some positions intoweakness to place a limit on my losses, but ultimately I ended up buying backsome of those positions at higher prices as my ongoing research and developingunderstanding of the fundamental outlook enhanced my confidence in the

inevitability of the next major breakout.

The lessons learned through that experience served me well during the 2008crisis and associated collapse of the precious metals and their equities. I watchedwith unbroken confidence in the long-term bull market as that brutal correctionerased more than half my portfolio's market value and sent my CAPS scorecareening from the top to the bottom of the pack. I learned a different lessonduring that chapter, which was to always build a cash position into strength sothat I would never again be forced to watch a stock like Silver Wheaton fall to$2.51 per share without having the means to average down into my position.

The current correction in gold and silver has put all these lessons into practice,though the brief nature of the early-year rally only permitted a modestaccumulation of cash reserves, and they have mostly been reinvested at thisjuncture. But since every stock purchase of late has been accompanied by afeeling of deep satisfaction at the values thus obtained, I have no regrets forhaving essentially depleted my cash reserves here. Physical buying is verystrong beneath $1,650, and would only get stronger if gold were to test the $1,550to $1,600 range (which I am not saying will happen). Because of the technical


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damage imparted by the recent break below $1,650, any failure to recapture$1,680 in short order does indeed keep the $1,550 to $1,600 range within therealm of possibility. I do not consider anything beneath $1,500 even remotelypossible, and I consider it far more likely than not that the $1,600 level will hold.

I wrote the following article for you, my community of fellow gold and silverinvestors here on CAPS, to offer an encouraging word of reassurance during aperiod of weakness that has rattled the confidence of many gold and silverinvestors. I encourage you to see straight through the noise portrayingreluctance by the FED to engage in further QE, and to understand instead justhow inevitable further easing remains given the prevailing circumstances. Iintend to write a follow-up piece specifically on that point, but rest assured thatfurther easing will come from the FED. Additional measures of an unappetizingscale will likewise be forced upon the European continent. None of thesemeasures will solve the underlying structural deficiencies infecting the globalfinancial system, but rather will only buy the central banks some time.

http://www.fool.com/investing/general/2012/04/11/dont-give-up-on-gold.aspx

While a few good reasons exist behind the dramatic underperformance of theprecious metal equities to date, for the most part I believe that prevailingvaluations are a result of unjustified indifference toward the industry by financialmarkets that have still not internalized the full scope and longevity of the ongoingbull market trend. The time will come when gold and silver do begin to exhibitcharacteristics of a maturing bull market through the increased participation ofinvestors, and because that is likely to occur in the midst of a meaningfulbreakout in the underlying metal prices, the corresponding appreciation in the

quality shares out of such a deeply impaired state is likely to yield gains on ascale that seems difficult to contemplate while we remain mired here in relativeweakness. Rising costs are a problem, but nothing that higher prices can'talleviate. The prolonged nature of this impaired state, furthermore, will feedbackinto the supply equation as mine supply will not be able to meet growinginvestment demand without substantial investment capital behind every tier ofthe equity space.

The gold and silver equities have enjoyed a few brief moments of remarkablestrength within an otherwise dismal trajectory, and in no way does thatexperience correspond to the end-stages of bubblemania that some bearswrongly perceive in gold. We have not only a complete absence of speculativefroth in the equities, but a longstanding indifference that points to the oppositeextreme. Meanwhile, the more noteworthy speculative froth in the paper gold andsilver markets occurs on the short side. Until we find long-side commitment on ascale to match the price-crippling shorts, we will not have even reached thematuring stages of a secular bull market. In the meantime, savvy marketparticipants, including sovereign banks in China and elsewhere, continue to
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offload physical supply while the high-frequency circus continues with its papergames.

So stand strong with gold and silver. I stand with you. Don't let up on thediscipline that keeps you intent on permitting only the most attractive and most

carefully vetted companies into your portfolios. Remember the feelings you feelin the midst of this correction, as that memory will serve you well the next timegold enters another inevitable corrective pause. When we do finally get abreakout, remember to raise some cash into strength in preparation for the nextpause. That cash position makes all the difference between mere frustration anddespair. $2,000 remains an absurdly conservative price target for gold, but onethat I retain nonetheless until such time as we strike through it. Until then, and infact for some time beyond, please, don't give up on gold.

How to Purify Gold

Purifying gold

Before gold is sold on the market, it has to go through a purification process.This process is quite complex and dangerous. It needs to be done under the rightcircumstances and with the utmost care in safety precautions. It is notrecommended to try this process unless you have experience working withharmful chemicals.


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Instructions

1.o 1

Prepare your beakers. Place your gold ore into one of the beakers. Inyour second beaker, mix three parts hydrochloric acid to one partnitric acid. Be very careful when mixing your acids, as both are quitetoxic and can be dangerous. Be sure that you are also wearingprotective eye wear as well as gloves that can hold up against acid.

o 2

Mix your acid beaker with your ore beaker and simmer. Be careful todo this quite slowly and carefully. Once you have combined your twobeakers, simmer the mixture on a hot plate until all of the nitric acidhas been boiled off. If most of the liquid evaporates before the nitricacid is gone, you can add a small amount of hydrochloric acid tokeep the ore covered in liquid.

o 3

Filter the solution. Use a strainer to filter off any of the solid that maybe left from the boiling process. Do not dispose of the solid without

first treating it with a solution, such as lime juice, to neutralize it.After you have strained out the solid, add equal amounts of distilledwater, as there is liquid in the beaker.

o 4

Check for silver. Before you can extract the gold, you must firstextract any silver that may be present in the ore. Slowly drop smallamounts of the un-iodized salt into the mixture. This should causelittle white particles of silver chloride to drop to the bottom of thecontainer. You can then use a coffee filter to strain out the liquid

from the silver particles. Set the silver aside. Be sure to keep theliquid that you have strained off because it still will contain the gold.

o 5

Check for gold. Put the remaining acid mixture back into a beaker.Slowly add sodium sulfite to the mixture. This will cause the gold tocontinue to add the sodium until the gold stops moving to the


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bottom of the beaker. Filter the solution again using a coffee filter.Rinse and dry the filter containing your gold.

o 6

Heat the gold. Now that you have your separated gold, put the filterinto a clay crucible and set the filter on fire to get rid of it. Cover thegold and the filter with borax and place it in a furnace that is capableof reaching temperatures of 2,000 degrees F until the gold is smooth.Pour into a mold and let it cool.

Tips & Warnings

These chemicals are very dangerous. Mixing them wrong or inhaling theirfumes will not only hurt you, but some can even kill you if ingested. Take

every precaution possible and do not attempt this process unless you arean experienced chemist or goldsmith.

How to Refine Gold

Refining gold

There are several things you will need in order to refine gold. Be sure to haveeverything at hand and that you have a large enough area to work. You may wantto do this on a long table outside where you will get plenty of ventilation. Theodor can sometimes be rather suffocating, especially if you try do this in a closedroom.


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Things You'll Need

Rubber gloves Goggles Rubber apron

Instructions

1.o 1

Put your gold in a container. For every ounce of gold, you will need acontainer that is the size of 300 milliliters. Add nitric acid to the goldin the container. For every ounce of gold, you will add 30 milliliters ofnitric acid. Then let it sit for at least 30 minutes.

o 2

Add 120 milliliters of hydrochloric or muriatic acid for every ounce ofgold in the container. The mix will turn brown and become very hot.You will want to wait at least an hour before filtering the acid. Youcould wait overnight for this part.

o 3

Pour the mixture into another container by filtering any particles thatcould contaminate the gold. The acid will become a clear emerald

green color. If it isn't clear and it appears cloudy or musty, re-filterthe mixture.

o 4

Take a quart of water and boil it. Add 1 pound of urea, which is usedto adjust the pH level of the acid. Slowly add the water and urea mixto the acid. The acid will foam, so don't add the mix too quickly,otherwise it could overflow and you could lose some gold. Once theacid stops foaming, stop adding the water/urea mix. You will haveraised the pH level from .1 to 1.0. This kills the nitric acid, but not the

hydrochloric acid.

o 5

Take another quart of water and boil it. Add an ounce of stormprecipitant for every ounce of gold in the container. Add this solutionto the acid slowly to prevent overflow. The acid will change to amuddy color. Particles of gold will be forming in the water. Wait 30


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minutes, then test the acid for any presence of dissolved gold. Useprecious metal detection liquid in order to detect dissolved gold sothat none is thrown away.

o 6

Pour the acid into another container by filtering. You will have whatlooks like mud on the bottom of the container and you do not want topour this out. This is gold. Once you poured out all of the acid, addwater to the mud and stir. Take the muddy particles out of thecontainer and proceed to rinse three to four times and then pouraqua ammonia on the gold. White vapors will the appear and you willneed to rinse again and then let the gold dry.

How to Refine Gold With Nitric Acid

Chemical refinement is a common way of increasing gold purity.

As valuable as pure gold is, gold is rarely pure. Gold ore found in the ground isbound to other (often undesirable) minerals, and even refined gold used injewelry often has contaminants in it. While nitric acid alone can dissolve someunwanted minerals (such as pyrite) from gold ore, it is unable to penetrate largegold bodies or refine relatively pure gold. Aqua regia -- a mixture of nitric acidand hydrochloric acid -- can dissolve gold itself, allowing pollutants to be filteredoff so that very pure gold can be extracted as a precipitate.

Instructions

1. Dissolving and Filtering Gold


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o 1

Put on safety goggles, rubber gloves and a rubber splash apron.Choose a work station in a well-ventilated area -- either under a fumehood or an isolated location outdoors.

o 2

Determine the weight of the gold product in ounces -- you will need aPyrex beaker with 300 milliliters of capacity for every ounce of gold.Put the gold in the beaker and carefully add 30 milliliters of nitricacid for every ounce of gold. Allow the acid to sit for at least 30minutes -- avoid inhaling any fumes emitted by the acid.

o 3

Add to the beaker 120 milliliters of hydrochloric acid for every ounceof gold -- the mixture will get very hot as the gold begins to dissolve.Allow the beaker to sit undisturbed overnight to ensure that all of thegold is fully dissolved. Strain the acid through a Buchner filter funnelto remove particles of undesirable minerals -- repeat until the acid isa transparent green color. Pour the acid into a larger Pyrexcontainer.

o 4

Boil one quart of water and remove it from its heat source. Mix one

pound of urea with the water. Pour the mixture -- very slowly andcarefully -- into the acid until it stops foaming.

2. Retrieving the Purified Goldo 5

Boil one quart of water and remove it from its heat source. Add to thewater one ounce of precious metal precipitant for every ounce ofgold -- do not inhale any fumes produced by the solution.

o 6

Add the solution to the acid -- very slowly -- this will cause the acidto become a brownish color as the dissolved gold binds to theprecipitant. Allow the acid solution to sit for at least 30 minutes.

o 7


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Dip a stirring rod into the acid solution and dab the end of the rodonto a paper towel. Apply a drop of a precious metal detection liquidto the spot on the paper towel -- if the liquid becomes a dark purplecolor, then gold is still dissolved in the acid and the solution shouldbe given more time to work. Test the solution again after another 30

minutes -- if gold is still detected, then add additional precious metalprecipitant solution to the acid. Repeat until the detection test comesup negative.

o 8

Run the acid solution through a Buchner filter funnel to extract thebrown particles of gold and put the remaining acid solution aside forlater neutralization.

o 9

Put the brown gold particles in another Pyrex beaker. Cover theparticles with tap water and stir them thoroughly. Strain the waterthrough another filter -- put the brown gold particles in anotherbeaker and set aside the water for later disposal. Repeat this processseveral times.

o 10

Pour a small amount of aqua ammonia on the gold particles toremove lingering impurities and neutralizing any remaining acid on

the particles. Filter strain the gold particles from the aqua ammonia.Rinse the particles with distilled water and filter strain them onemore time.

o 11

Add a small amount of distilled water to the gold particles and pourthem into another Pyrex beaker -- make sure to get all of the goldparticles out of the original beaker before putting it aside. Put thebeaker on a hot plate and turn it on to boil away any remaining waterand dry the gold particles.

o 12

Melt the gold particles and cast the now-pure gold however youwish.

3. Neutralizing the Acido 13


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Pour a large amount of water (at least twice as much water as thecombined acid volume) in a large plastic bucket. Add sodiumbicarbonate (baking soda) to the water until the water is completelysaturated and a pile of baking soda is seen at the bottom of thebucket. Stir the mixture thoroughly.

o 14

Pour the water that was used to distill the gold particles into thebucket to neutralize any lingering acid that may be present.

o 15

Pour the remaining acid into the bucket very slowly and carefully --the mixture will heat up and fizz, possibly violently. Add additionalbaking soda if the mixture continues to fizz after pouring all of the

acid.

o 16

Wait until the mixture is no longer fizzing and then pour it down adrain. Flush the drain with copious amounts of water afterward.Rinse all of the beakers and equipment that may have come incontact with any acid (nitric, hydrochloric, or the combined aquaregia) thoroughly and with caution.

Tips & Warnings

Be careful when melting the gold particles -- you don't want the force of atorch blowing them around. Melt them in a secure crucible or metal-meltingpan.

Use extreme caution when handling nitric acid, hydrochloric acid and thecombined aqua regia -- all three can produce hazardous fumes and all threecan cause severe burns upon exposure to eyes or skin. Use safetyequipment at all times when handling these acids. Do not dispose of anyacid without neutralizing it first.

When mixing water and acid, always add the acid to the water -- never addwater to acid. If a violent reaction occurs, it is better to be splashed by

water with a small amount of acid in it than acid with a small amount ofwater. Use caution when using hot plates -- always assume that a hot plate is hot.

Turn off and unplug a hot plate after use.


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1.

o Gold is purified through a process of high temperature heating orchemical exposure, depending on the purity of the mined gold,according to ResponsibleGold.org.

Initial Processing of DifferentTyes of Ore

o If the gold is a low grade ore, then it is broken up into chunks thatare then put in carefully lined pads and treated with a dilute cyanidesolution, which dissolves the gold. For high grade ore, the metal issent to a grinding mill and made into a powder. Refractory orecontains carbon and is heated to over 1000 degrees F, whichremoves sulfide and carbon. The resulting oxide ore is directed tothe leaching circuit. Sulfide refractory ore that contains no carbon isoxidized in an autoclave to free gold from sulfide minerals, then it issent to the leaching circuit.

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Further Refining

o At this point, treated high grade ore is leached with cyanide and gold

is collected onto activated carbon with the cyanide solution beingrecycled. The gold-carbon mixture is put in a vessel where the goldis removed chemically. The carbon is then recycled. The gold is thenextracted from the solution by electrolysis or chemical substitution.

Purifying the Gold

o At this point, the gold is melted into dore bars composed of 90percent gold. The bars are then sent to an external refinery to makethem 999.9 parts per thousand pure gold.

Other Means of Refining Gold

o According to Hoover and Strong, a refiner and manufacturer ofprecious metals, they produce 98 percent pure gold using the Millerprocess. After a sample of treated impure gold has been tested in alab for purity, the gold is melted in a furnace, then chlorine isbubbled through the liquid. The chlorine attaches to elements in thegold that then become solid and move toward the top of the furnace.
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They are skimmed off. Electrolysis is ultimately used to purify thegold.

The Role of Gold in Modern Society

Gold mining's value to developing countries

Gold mining is vital to the fragile economies of many impoverished countries,which account for roughly two-thirds of global gold production. In addition togenerating export revenue in these countries, gold production provides royaltyand tax income to their governments, technology transfer, worker training andthe creation of a skilled workforce. Gold mining can also bring substantialimprovements in physical, social, legal and financial infrastructure. In many ofthese countries, gold mining is a foundation industry that often provides thecritical mass for the development of electricity, water, road and rail transport in aregion, that are the essential foundations of an economy.

Developing countries accounted for 72% of global output in 2004. Most of thiscame from low-income or lower-middle-income countries that together accountedfor two thirds of global output.

The strongest rise in output has been seen in Heavily Indebted Poor Countries(HIPCs), whose gold production rose by 84% between 1994 and 2004. Of the 38HIPC countries, 14 are significant gold producers with lesser or minor productionin at least another 14 countries. There is potential for substantial additionalproduction in several other countries.

The rise in HIPCs' output has been paralleled by rising export dependence ongold. In 2003, gold accounted for 13% of goods (merchandise) exports of the 14significant producers and 10% of their exports of goods and services. For HIPCsas a group, gold accounted for nearly 8% of goods exports and over 6% ofexports of goods and services. It is one of the most important exports for HIPCs.

Gold is the leading export for Mali (59% of goods exports in 2003), Tanzania(44%), Ghana (32%), Guyana (26%) and the second most important for Guinea(23%). A $10 fall in the gold price would cause a loss of around $75m in HIPCs'export income.

For the 27 HIPC countries that have reached decision or completion point (thosethat receive at least some debt relief under the HIPC initiative), gold exports in2003 amounted to 87% of debt service payments.


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Gold is equally important to other low-income countries that are not HIPCs.Among those considered by the World Bank to be severely or moderatelyindebted, gold is the leading export for Kyrgyzstan (around 45% of total goodsexports in 2003) and Papua New Guinea (36%), the second most important exportfor Mongolia (20%) and Zimbabwe (11%) and one of the two leading exports for

Uzbekistan. Among lower-middle-income countries, gold is the leading export forboth South Africa (13% of goods exports in 2003) and Peru (17%).

Gold mining companies source supplies locally where possible and employ locallabor where possible. Thus, even allowing for some necessary imports and forthe remittance of profits and dividends, their impact on a developing country'sbalance of payments is strongly positive. Gold mining, and metals mininggenerally, is essentially free of the distorting subsidies applied by somedeveloped countries to agricultural production.

Export revenue is not the only benefit gold mining brings to a developing

country. It provides royalty and tax income to governments, technology transfer,skilled employment and training for local populations, together with further jobsthrough the multiplier effect. In one or two cases it has provided the foundationfor a significant jewelry manufacturing industry.

Gold mining can also bring substantial improvements in physical, social, legaland financial infrastructure. The establishment of a formal mining industry can bethe first step in a country's industrial development. Mining is a foundationindustry that often provides the critical mass for the development of electricity,water, road and rail transport in a region. This characteristic of the industry isparticularly important in Africa where lack of infrastructure has been identified as

one of the major hindrances to economic development.

Gold is often thought of as synonymous with wealth. Yet gold coins, bars andhigh-carat jewelry play a crucial role as a means of saving and defense againstmisfortune to many of the poor of the world. Similarly gold mining brings benefitsto poorer nations. It will continue to have a role to play in fostering economicdevelopment.

Gold's value to consumers and investors in developing countries

In much of Asia, the Middle East, and the Indian subcontinent, gold is the best

possible protection against upheaval, both political and economic. For men andwomen throughout the developing world, gold is still one of the most liquid andwidely accepted forms of exchange, quite simply the most efficient store of valuethey possess. Around two thirds of the jewelry purchased in the Middle East andAsia is used as a means of saving in addition to its function as an adornment.The use of jewelry as savings is often important in rural areas where access to areliable and appropriate banking system is difficult or impossible. Gold also


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offers protection against a weak currency or high domestic inflation levels, whichare prevalent and persistent problems in the developing world.

Around two thirds of all jewelry manufacture takes place in the developing worldand the proportion is rising. Countries such as Turkey, India, China and Thailand

have all seen their exports to developed countries rise in the last few years,generating export earnings and employment. Gold jewelry sales to tourists arealso important for Turkey, Egypt and Dubai.

While inflation has essentially been non-existent until recently in most developedcountries, in many developing countries, inflation and the attendant currencydepreciation have been rampant, causing hardship to millions, if not billions, ofpeople. The US dollar price of gold did not perform well for 20 years from 1980 to2000, but gold was an excellent investment in terms of for, example, the Indianrupee, the Turkish lire, or the Vietnamese dong. Where men and women do nothave easy access to liquid markets in company stock or government bonds, to

US dollar bank accounts, or even any bank account at all, gold has proved overand over again to be the most valuable financial asset to own.

For example, in Vietnam, gold plays an important role in the purchase of a home.Buying a home in Vietnam takes time, as is the case in most countries. From themoment a buyer and seller agree on a price to the day the paperwork and sale arecompleted takes a month or longer. During this time, the value of the Vietnamesecurrency may have fallen sharply, as the current rate of currency depreciation inthat country is very rapid. Accordingly, the buyer will arrange financing with abank not in terms of the Vietnamese dong, but in gold, which holds its value interms of purchasing power. This arrangement means the buyer will still have

enough to pay the agreed price when the sale is consummated.

Gold's value to women living in developing countries

In the Middle East and the Indian sub-continent gold plays an important role inthe financial security of women. Historically, jewelry was often the only asset aMuslim or Hindu woman could own in practice, and in more traditional familiesthis is still very much the case, especially in rural areas. A woman's gold cantherefore be her only protection against personal misfortune. Hence, the practiceof giving an Indian bride gold, which is considered Streedhan, or "property of thewoman".

India is the world's largest market for gold jewelry, accounting in 2004 for onefifth of the global total.

Gold's important role in society's long-standing customs

Gifts of gold make a vital contribution as tokens of love and precious souvenirson those emotional occasions that bring people together - weddings,


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anniversaries, birthdays, Christmas and other religious holidays, graduations,Mother's Day, birthdays, religious ceremonies such as baptisms, and many more.

Gold's function as an adornment, as jewelry, has been in existence for over 6,000years. The earliest gold jewelry dates from the Sumerian civilization that

flourished in the fertile basin between the Tigris and Euphrates rivers around4,000 BC.

Why is gold so coveted? Since the beginning of time, the intrinsic beauty,warmth, sensuality and spiritual richness of gold has earned it pride of place asthe favorite metal of jewelers. Gold has inspired craftsmen to create objects ofdesire that unite us with our emotions. In the Middle Ages, alchemists attemptedto use their magic to make gold from other metals. They believed that gold was asource of immortality, and so it was used in medicines designed to fight old ageand prolong life.

Today, consumer demand for gold jewelry is growing by over 20% per annum,demonstrating the confidence that women around the world have in gold. Thislevel of demand far outstrips the supply for gold that mines can produce.

Gold as a preserver of value (inflation hedge, safe haven, etc.)

Gold is an effective hedge against inflation. In addition, gold is inverselycorrelated to the US dollar, making it a good currency hedge. As an asset class,gold has all the advantages of being universally regarded as a currency, withoutwhat are all too often the disadvantages of being subject to the economic andmonetary policies of one particular country's government.

Gold's value as an effective portfolio diversifier

Gold is a highly effective portfolio diversifier due to its low to negative correlationwith all major asset classes. Over the last 20 years, gold has shown nostatistically significant correlation with equities. That applies not just to domesticUS equities, but also to international equities, including those traded in London,Tokyo, Frankfurt, and so on.

Gold has also shown no statistically significant correlation with other mainstreamasset classes, such as US Government bonds, Treasury Bills, and equity real

estate investment trusts. The fundamental reason for this lack of correlation isthat the factors driving the gold price are not the same as the factors thatdetermine the returns on other assets. Obviously, there are some economicfactors that influence the performance of all investments. But equally obviously,changes in gold supply and demand have no influence over the other assetclasses.


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As a rule, gold shows no statistically significant correlations with mainstreamasset classes. However, there is evidence that when equities are under stress, inother words when shares are falling rapidly in value, an inverse correlation candevelop between gold and equities. And this aspect of gold's behavior runsdirectly counter to the way other asset classes perform in stress situations.

Gold's value as a currency reserve

Gold is still considered an important reserve asset by most central banks, eventhough it is no longer the center of the international financial system. The mostimportant reason is that gold is the only reserve asset that is no one's liability.This means that, unlike a currency, the value of gold cannot be affected by theeconomic policies of the issuing country or undermined by inflation in thatcountry.

Gold has a track record of holding its real value over the centuries. Since gold is

no-one's liability, it can not be repudiated and holding it is a safeguard againstpotential unforeseen crises. Gold also brings much needed diversity to a centralbank portfolio due to its low correlation with key currencies and its stronginverse correlation with the US dollar. The central bank of Argentina, for example,when diversifying a portion of its reserves away from 100% reliance on the USdollar in 2004, included gold in its purchases.

Gold accounts for 9% of reserves held by central banks (valued at market prices).

Gold's value in industrial applications

Gold ranks among the most high-tech of metals, performing vital functions inmany areas of everyday life. Gold's unique properties make it useful in medicalapplications, pollution control, air bags, mobile telephones, laptop computers,space travel, and many other things we consider indispensable to our modernlives. Approximately 12% of demand for gold comes from industry.

Medical Applications

Because it is "biocompatible", gold plays an important role in medical implants.For example, gold-coated "stents" are inserted into clogged arteries to clear theflow of blood. Also, because gold is opaque to x-rays, surgeons are able to place

a stent with the utmost precision, which helps ensure optimal effectiveness.Other medical implants that contain gold are pace makers and insulin pumps.Gold is used in these devices because of its high level of reliability in microelectronics.

Gold possesses a high degree of resistance to bacterial colonization, andbecause of this it is the material of choice for implants that are at risk of infection,


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such as the inner ear. Gold has a long tradition of use in this application and isconsidered a very valuable metal in microsurgery of the ear.

Gold is being used increasingly in pharmaceutical applications. Gold is ideal fordelivering biologically active materials directly into the target tissues in the

human body, without damaging the tissues themselves, or altering the biologicalactivity of the material being delivered. Gold helps doctors to deliver precisedoses of powerful drugs to the parts of the body where they are required. This isimportant in the treatment of a range of diseases, including cancer and HIV, thevirus that causes AIDS.

On the molecular level, gold has applications through its organic and chemicalcompounds used in medical science: for instance, anti-cancer drugs. Or in whatdoctors have started to describe as a "pharmacy on a chip" - a tiny covering ofgold is used to encase micro doses of drugs on an electronic chip that isimplanted in the body. When the chip is electronically activated to dissolve the

tiny casing of gold, an appropriate dose of drug is released.

In a similar way, gold is the preferred material for a branch of medical researchthe scientists call "biolistics", because it is a marriage of biology and ballistics.Strands of DNA are blended with microscopic gold powder and injected into theskin in search of targeted cells, so that the researchers can observe the reaction.In this application, three of gold's attributes are crucial: first, its non-reactiveness. Second, the fact that it is opaque means it can be precisely located,just as with the stents. And finally, the fact that gold is dense - it has a high ratioof mass or weight to volume - means the compound can achieve the high speedrequired to penetrate the targeted cell.

Environmental Applications

Recently, it has been discovered that gold nanoparticles, measuring only 25nanometres across, can split oxygen atoms, thereby facilitating oxidationreactions, which create useful organic products as oxygen atoms and carboncompounds combine. New research published in the top scientific journal Naturehas revealed that gold catalysts can clean up an important chemical process thatis used every day to produce tons of pharmaceuticals, detergents & foodadditives.

As a chemical catalyst, gold is playing an important role in new environmentalapplications, such as pollution control (mercury emissions) and fuel cells. By wayof example, the Institute for Green Technology in Tokyo has 30 scientists workingon gold catalysts for environmentally sensitive, or "green", technologyapplications.


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To give you an idea of the importance of catalysis, it has been estimated thatabout one trillion dollars of the Gross Domestic Product of the United States isderived from processes that use some form of industrial catalysis.

In recent years, catalysts using gold have become a very hot topic of research.

There have been breakthroughs in research studies that have shown gold to bean excellent catalyst in a number of important chemical reactions. Some of thepotential applications include:

Pollution control in diesel-powered vehicles, and in the environment; Clean energy generation, by means of fuel cells; Sensors, for detecting gases in industrial processes; And as catalysts for chemical and petrochemical processes. Gold may lead

to new routes for the manufacture of many vital chemicals.

Other Applications

The standard touch-tone telephone would not function without the 33 contactsmade from gold it contains. Air bag systems fitted in more than 30 million carsaround the world rely on gold-coated electrical contacts. And every time youtouch a key on your computer it strikes a gold circuit that relays your commandto the computer's microprocessor.

Gold is one of the most effective conductors of electricity known to man, and itsreliability compared with other metals such as palladium or copper is increasedby the fact that gold is also an excellent conductor of heat. Gold is also inert and,therefore, does not react when it comes into contact with other substances. In

addition, Gold does not corrode or tarnish, so it is much more reliable than othermetals in electronic applications.

Gold Production & Refining

The top three gold producing countries in the world are South Africa, the UnitedStates and Australia in that order.

According to the U.S. Geological Survey, Nevada is the largest U.S. gold-producing state. Other top U.S. gold producing states are Alaska, California,Colorado, New Mexico and Utah.

For more statistical information about gold and silver production in the UnitedStates:http://www.nma.org/statistics/pub_gold_silver.asp

Most gold in the United States is produced at above ground surface (open pit)mines. While mining and production methods vary from location to location. Thefollowing is a generic description of how gold is mined and produced around theworld at modern operations.
http://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asp


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How Gold is Produced

This chart illustrates the generalsteps in open-pit gold mining. The specifics ofthe process vary from mine to mine.

Geologists use the latest technology, such as satellite surveys andgeochemistry, to locate an ore deposit.

Computers are used to design the mine, which requires precise and accuratemeasurement of the ore deposit. Construction begins following the lengthyprocess of receiving permits.

Samples of ore are examined to determine grade andmetallurgical characteristics. Broken rock is marked by type for efficientprocessing.

Based on its metallurgical makeup, a dispatcher directs truck operators todeliver the ore to the correct processing location.

Low Grade Ore is roughly broken into small chunks and placed on carefully linedpads where a dilute cyanide solution is distributed over the surface of the heap.


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The solution percolates through the heap and the cyanide dissolves the gold.This solution containing dissolved gold is then collected.

High Grade Ore is delivered to a grinding mill, where the ore is pulverized

to a powder. Depending on its metallurgical characteristics, the ore may be

treated in one of three recovery circuits.

Refractory ore containing carbon is roasted to over 1,000 degrees Fahrenheit,

burning off the sulfide and carbon. The product of this process is an oxide ore,

which is routed to the leaching circuit.

Oxide ore is sent directly to the leaching circuit where cyanide dissolves the gold.

Sulfide refractory ore without carbon is oxidized in an autoclave to liberate the

gold from sulfide minerals, then it is sent to the leaching circuit.

Treated, high-grade ore is leached with cyanide.


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The gold is absorbed (collected) out of solution onto activated carbon. Theremaining cyanide solution is recycled.

The gold loaded carbon is moved into a vessel where the gold is chemicallystripped from the carbon which is then recycled.

Gold is precipitated from the solution electrolytically or by chemical substitution.

The pure gold is then melted into dore' bars containing up to 90 percent gold.Dore' bars are then sent to an external refinery to be refined to bars of 999.9 partsper thousand pure gold.

Reclamation is a long-term investment made by every gold mining company, andcan cost anywhere from $2,000 to $10,000 per acre. It is the cornerstone of everymine plan and is considered the first and last step of the mining process. (For


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more information on reclamation, see the Reclamation section of the NMAWebsite.)

* For information on how gold is used in electronics, telecommunications andmedicine, see NMA'sgold uses page.

* For statistical data on the economic impact of gold production, see NMA'sFactsAbout Gold and Silver.

Gold is produced at some mines as part of the process of mining and refiningother metals, such as copper. At those operations, gold is refined to anacceptable purity as part of the copper production process. At most gold mines,the gold "dore" is sent to a refinery for further processing.
http://www.nma.org/policy/reclamation/index.asphttp://www.nma.org/policy/reclamation/index.asphttp://www.nma.org/policy/reclamation/index.asphttp://www.nma.org/about_us/publications/pub_gold_uses.asphttp://www.nma.org/about_us/publications/pub_gold_uses.asphttp://www.nma.org/about_us/publications/pub_gold_uses.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/statistics/pub_gold_silver.asphttp://www.nma.org/about_us/publications/pub_gold_uses.asphttp://www.nma.org/policy/reclamation/index.asphttp://www.nma.org/policy/reclamation/index.asp


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Chain of Custody

Unlike many other commodities, gold is not sold by the producer to the customer.Rather, gold moves through a number of complex commercial transactions thatare depicted in the following chart.

Chart provided by Gold Field Minerals Service.

Laws & Regulations

U.S. gold mining operations must comply with a broad range of local, state andfederal laws and regulations that govern how mines are operated and how mined

land is reclaimed for other beneficial uses. The General Mining Law (the 1872Mining Law), which regulates access to federal lands, is specific to metalsmining. Requirements affecting environmental performance and public comment,for example, apply to mining as well as the rest of American industry.

Most metals mining in the United States occurs in 12 western states, where muchof the land is owned by the federal government. This land-covering approximately700 million acres-is the responsibility of the Bureau of Land Management (BLM)
http://www.responsiblegold.org/images/Gold_Field_chart_hr.gif


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of the U.S. Department of the Interior. Roughly half of that land is either totallywithdrawn or entry, leasing or sale is restricted. Of the remaining land, the BLMor the U.S. Forest Service oversees a variety of federal land uses, includingranching, mining, forestry and railroad rights of way, for example.

Recently, the National Academy of Sciences (NAS) evaluated whether metalsmining and mined land reclamation should be subject to a uniform set of lawsthat covered only mining, or if the current system of state and federal laws andregulations was more protective of the environment. The NAS found that becauseof varying topography and climate conditions, soils composition, processingtechnology and metals chemistry, it was not possible to develop a uniform set ofstandards and recommended the current approach as the preferred alternative.

For a more comprehensive overview of the laws and regulations governing goldmining in the United States: U.S. Laws and Regulations Governing Gold Miningon Private and Federal Lands

MicroSoft Power Point Presentation (PPT), 724 KB

For the position of the U.S. mining industry on a national minerals policy andmining law reformhttp://www.nma.org/policy/legislative/mining_law_reform.asp.

Codes & Initiatives

In addition to compliance with applicable laws and regulations of local, state,regional and national governing bodies, mining operations also have committedto a number of voluntary codes and initiatives aimed at responsible miningpractices and sustainable development. While varying in scope, these initiativesintegrate environmental, social and economic principles. Mining companies maybe involved in one or more efforts based on the countries in which they operate.

Here is information on some of the prominent codes of conduct and voluntaryinitiatives in which gold producers are involved.

International Compacts

Initiative Sponsor Scope Endorsements

Global

Compact

United Nations 10 principles. Annual

reporting on progress

required.

AngloGold Ashanti

Ltd., Barrick Gold

Corporation

(Peruvian

Subsidiary),

Newmont Mining
http://www.responsiblegold.org/documents/laws_and_regulations.ppthttp://www.responsiblegold.org/documents/laws_and_regulations.ppthttp://www.responsiblegold.org/documents/laws_and_regulations.ppthttp://www.nma.org/policy/legislative/mining_law_reform.asphttp://www.nma.org/policy/legislative/mining_law_reform.asphttp://www.nma.org/policy/legislative/mining_law_reform.asphttp://www.nma.org/policy/legislative/mining_law_reform.asphttp://www.responsiblegold.org/documents/laws_and_regulations.ppthttp://www.responsiblegold.org/documents/laws_and_regulations.ppt


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Corporation, Placer

Dome Inc.

International

Cyanide

Management

Code

Six gold mining

companies and

producers (code

developed with

UNEP, NGO, labor

and financial

institutions

participation)

Best practices and

management standards

for cyanide use in gold

mining. International

Cyanide Management

Institute finalizing

implementation

protocols, standards of

practice, and certification

process.

AngloGold Ashanti

Ltd, Barrick Gold

Corporation,

Kinross Gold

Company, Newmont

Mining Corporation,

Placer Dome Inc,

Rio Tinto, CyPlus,

DuPont, Orica

MineCertification

Evaluation

Project

(MCEP)

World WildlifeFund, Oxfam

Community Aid

Abroad and other

NGO's,

organizations and

mining

companies

Research project toinvestigate potential for

certification of mining

industry based on the 10

principles and 46

elements of the

International Council for

Mining and Metals

(ICMM). Initially focused

on Australia. Draft criteria

developed, being testedat 5 sites in Australia.

BHP Billiton Ltd.,Newmont Mining

Corporation, Placer

Dome Inc, Rio Tinto

Ltd and WMC

Resources Ltd

Voluntary

Principles on

Security and

Human Rights

US and UK

governments,

NGO's and mining

companies

Likely to be incorporated

into WB safeguard policy

and Equator principles.

Program being

implemented.

Freeport McMoRan,

Rio Tinto Ltd and

Newmont Mining

Corporation

Mining Industry Initiatives

Initiative Sponsor Scope Status or

Endorsements

Minerals

Council of

Minerals Council of

Australia and

Sustainability

performance

Members of MCA

including AngloGold


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Australia

(MCA)

Sustainability

Framework

member companies standards.

Reporting required.

Framework replaces

the MCA

Environmental

Code.

Ashanti Ltd., Barrick

Gold, Kinross,

Newmont, Placer Dome,

Rio Tinto and others @

www.minerals.org.au

Global

Reporting

Initiative

GRI and ICMM

member companies

Develop mining

sector sustainability

reporting indicators

(Mining and Metals

Sector Supplement).

Closely linked to

ICMM charter

principles.Indicators being

developed by multi-

stakeholder task

force.

Members of ICMM

including AngloGold

Ashanti Ltd., Freeport

McMoRan, Newmont,

Placer Dome, Rio Tinto

and others @

www.icmm.com

"Towards

Sustainable

Mining"

Mining Association

of Canada and

member companies

Sustainability

performance

standards.

Reporting required.

Condition ofmembership.

Members of MAC

including Barrick Gold

Corporation, Kinross,

Newmont Mining

Corporation, PlacerDome Inc. and others @

www.mining.ca

Sustainable

Development

Principles

National Mining

Association (NMA),

USA

Commitment to

integrate 20

environmental,

social and economic

principles in mining

operations from

exploration through

reclamation and

post closure.

Members of NMA

including Barrick Gold

Corporation, Kinross,

Kennecott, Newmont

Mining Corporation,

Placer Dome Inc. and

others @ www.nma.org

ICMM

Sustainable

ICMM Commitment to 10

high level principles

Members of ICMM

including AngloGold
http://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.htmlhttp://www.mining.ca/english/tsm/index.html


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Development

Charter

covering ethics,

integrating

sustainable

development,

human rights, risk

management, health

and safety,

environmental

performance,

biodiversity and

land use, product

stewardship,

community

development, and

disclosure.


McMoRan, Newmont,


and others @

www.icmm.com

Protected

Areas

ICMM/International

Union for the

Conservation of

Nature (IUCN)

Agreement not to

mine or explore in

UNESCO designated

world heritage sites.

Plans to discuss

other protected

areas and

biodiversity.

Members of ICMM

including AngloGold


McMoRan, Newmont,


and others @

www.icmm.com

Community

Development

Good Practice

Tools

ICMM and World

Bank

Community

Development Best

Practice Guidance.

Members of ICMM

including AngloGold


McMoRan, Newmont,


and others @

www.icmm.com

Good Practice

Website

ICMM, UNEP, DFID

and UNCTAD

Under construction Members of ICMM

including AngloGold


McMoRan, Newmont,


and others @

www.icmm.com


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Emergency

Response

APELL Project

ICMM and UNEP In Development. Members of ICMM

including AngloGold


McMoRan, Newmont,


and others @

www.icmm.com

Financial Sector Initiatives


Endorsements

World Bank

(WB)

Safeguard

Policies and

Guidelines

World Bank

and

International

Finance

Corporation

Updates and new safeguard

policies or guidelines

expected on cyanide, tailing

disposal, waste

management, closure, ARD

and submarine tailing

disposal, security and

human rights, community

roles in monitoring projects,

core labor rights, and

indigenous peoples rights.Application in developing

countries. Policies being

drafted by World Bank staff.

Projects with World

Bank or International

Finance Corporation

funding. Application

to other projects

through Equator

Principles (see

below).

Equator

Principles

Major

international

banks.

Incorporates WB safeguard

policies for all projects

greater than $50 M.

Leading financial

institutions are

signatories to these

principles. Program

being implemented.

Other Initiatives


Endorsements


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Extractive

Industries

Transparency

Initiative

UK

government

along with

other

institutions

(WB etc.)

"Publish what you pay"

guidelines developed on

payments made by

companies to

governments. Initial

implementation

underway. Expected to

be included in Mining

and Metals Supplement

of GRI.

Members of ICMM

including AngloGold


McMoRan, Newmont,

Placer Dome, Rio

Tinto and others @

www.icmm.com

International

Standard on

Social

Responsibility

International

Standards

Organization

(ISO)

Developing a standard

for social responsibility.

Working group and task

force to be established todevelop standard.

ICMM monitoring

initiative development

WEF Anti-

Corruption

Initiative

World

Economic

Forum (WEF)

Set of business

principles to counter

bribery and corruption.

Two codes of practice

developed.

ICMM monitoring

initiative development

Corporate Initiatives

Initiative Sponsor Scope Status

Environmental,

Safety and

Corporate Social

Responsibility

Reporting

Corporate and

site level

sustainability

reporting.

Companies

issuing

annual

reports

AngloGold Ashanti Ltd,

Barrick Gold Corporation,

Freeport McMoRan,

Kinross, Newmont Mining

Corporation, Placer Dome

Inc, Rio Tinto, Goldfields

Jewelery Sector Initiatives

Initiative Sponsor Scope Status or Endorsements

Council for Jewelers Promotes responsible Fourteen founding


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Responsible

Jewelery

Practices

(CRJP)

of

America

ethical, social and

environmental Practices

throughout the diamond

and gold jewellery supply

chain from mine to retail.

members include

bhpbilliton, Newmont, Rio

Tinto, ABN-AMRO,

Cartier, DTC, rosyblue,

Signet, Tiffany and Zale

don't give up on gold

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