Thursday, May 28, 2015

China's Revenge Serves Body Blows to BHP and Rio

China's revenge serves body blows to BHP and Rio

It's taken six years, but China is slowly turning the tables on the heavyweight iron ore miners.

In 2009, iron ore giants BHP Billiton and Rio Tinto decided they wanted to take advantage of China's soaring demand for iron ore, which was pushing prices ever higher. So they ditched the 40-year old system of setting annual contract prices in favour of using spot pricing for the majority of their iron ore shipped to China from 2010.

Needless to say, China's steel mills weren't very happy about that. BHP's previous CEO Marius Kloppers is widely acknowledged as the man most responsible for bringing about the change. With BHP and Rio filling a huge amount of China's demand, the steelmakers had little choice but to acquiesce. 

The changes, and China's thirst for iron ore, saw the iron ore price soar as high as US$191 per tonne in February 2011, from around US$60 per tonne in 2008. Rio Tinto produced record underlying earnings of US$15.5 billion in the 2011 financial year, with iron ore contributing US$12.9 billion. BHP, for its part, saw net profit rise 74 per cent to US$21.7 billion as revenues rose 36 per cent.

China may also still be sore over aluminium giant Chinalco's aborted US$19.5 billion investment in Rio Tinto back in 2010, which was aimed at gaining resource security. At the time, reports suggest Chinese officials feared that China was too vulnerable to both Rio and BHP, even separately. Rio's board canned the deal, and announced that it was instead forming an iron ore joint venture with BHP. That deal never went ahead – much to the relief of China.

The giant (re)awakens

But China has never forgotten, and appears unlikely to forgive. Now the sleeping giant has awakened, and looks set to turn the tables on Rio and BHP.

Firstly, China needed to loosen its dependence on the two Australian iron ore miners, so it has turned to Brazil's Vale. For many years Vale was snubbed by the Chinese. The iron ore giant had built a number of very large ore carriers to ship ore to China, but they have been banned from docking at Chinese ports since 2012.

Now, China hasn't just removed the restrictions but Vale has also sold 4 of the ore carriers to two of China's biggest shipping companies. Each carrier can transport up to 400,000 tonnes of iron ore, and could reduce Vale's production costs by as much as 25 per cent, according to some estimates. That would bring Vale's landed costs around the same as BHP and Rio's.

Vale also has a 25-year shipping agreement with China Cosco to transport iron ore from Brazil to China. China has gone another step further too, loaning Vale US$4 billion to help fund a US$16.5 billion project, known as S11D.

S11D is expected to produce 90 million tonnes of very high quality iron ore each year, taking Vale's production to 450 million tonnes of iron ore within the next few years.

In two moves, China has decreased its dependence on BHP and Rio, loosening their control over the iron ore market, and thanks to the increase supply of iron ore, achieved lower prices.

One last dance? 

Fairfax Media reports today that Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment with Australia's self-styled 'new force in iron ore' Fortescue Metals Group.

Fortescue, with its US$7.7 billion in net debt, could strengthen its balance sheet with a capital injection, either to pay down debt in return for an equity stake, or refinance existing debt at lower rates. The miner recently issued US$2.3 billion in senior secured notes, but is paying a whopping 9.75 pe cent interest rate, at a time when interest rates around the world are at record low levels.

Fortescue could struggle to repay its debt load if iron ore prices continue to trade at or under US$60 per tonne, with some estimates putting the miner's breakeven price around US$70 per tonne. The company may well be amenable to a deal with the Chinese, particularly after the recent kerfuffle over the iron ore inquiry that was going ahead, but was cancelled.

Sunday, May 17, 2015

Andrew Forrest Makes Surprise Investment in Atlas Iron (AGO)

Andrew Forrest Makes Surprise Investment in Atlas Iron (AGO)

Mining billionaire Andrew Forrest has emerged as a new investor in rival Atlas Iron, despite continuing to serve as the chairman and major shareholder in Fortescue Metals Group.

Speaking after Atlas announced a strategy to restart mining through lower contracting fees and an equity raising of up to $180 million, the miner's chairman David Flanagan revealed that Mr Forrest had promised to participate in the raising.

"I am just so pleased to be able to announce that Andrew Forrest was the first person to put his hand up and say he was going to invest personally in that raising," he said.

"It is through one of his holding companies, whichever it will be ... we are not going to be sort of a subsidiary of Andrew Forrest Holdings, but it is meaningful in the extent of what we are doing going forward and that is all I can say.

"Thanks again to Andrew for backing Atlas."

Mr Forrest does not currently own shares in Atlas according to Bloomberg records, and the move continues a recent string of investments made by Mr Forrest in small miners.

Mr Forrest last week invested in small Victorian gold producer A1 Consolidated via his private company Minderoo Resources, and also has exposure to uranium play Vimy Resources and nickel junior Poseidon.

Mr Forrest declared earlier this year that he was setting up a new company designed to buy assets during the commodity price downturn, and some believe that company is Minderoo Resources.

Upon launching that new company in March, Mr Forrest vowed it would not compete with Fortescue's current or future strategies.

"A process has been put in place to ensure that if any possibility of doubt regarding conflicting interest arises, the matter will be resolved independently and quickly. I have written to the FMG board asking them to approve this process, and they have returned with their full support for our venture and its governance procedures," said Mr Forrest in March. 

When asked about Mr Forrest's investment in Atlas on Sunday, Fortescue chief financial officer Steve Pearce said he had "nothing to add".

"It is not a Fortescue investment," he said.

Mr Flanagan has announced his support for a federal government inquiry into iron ore, which Prime Minister Tony Abbott announced on Friday after listening to the thoughts of Mr Forrest.

BC Iron chairman Tony Kiernan and Cliffs Natural Resources chief executive Lourenco Goncalves also threw their support behind the inquiry on Sunday, along with Queensland University associate professor of regulator economics, Flavio Menezes. 

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Friday, May 15, 2015

Silver Buying Only Starting

Silver Buying Only Starting - Silver Investment News

Silver has enjoyed a fantastic week, awakening from its bottoming slumber to surge with gold. And this strong silver investment demand is likely only starting. American stock traders and futures speculators control two of the world’s largest pools of capital active in the silver market. And the former group still remains woefully under-invested in silver, while the latter still has massive short positions left to cover.

The global leader in fundamental silver analysis is the venerable Silver Institute, a think tank primarily funded by the world’s biggest and best silver miners. Every year, it publishes excellent comprehensive data on global silver supply and demand. Last year, total worldwide silver demand ran 1067m ounces. But investing in silver coins, bars, and ETFs only accounted for 197m, less than 1/5th of total demand.

Silver investment’s relatively small slice of that demand pie implies it isn’t important, but nothing could be farther from the truth. Silver’s two largest demand categories are industrial fabrication and jewelry, weighing in at about 4/7ths and just over 1/5th respectively. But these are very inelastic, they just don’t change much regardless of silver’s price. This is readily evident in the Institute’s past decade of data.

The average silver price in the last 10 years has been a roller coaster, skyrocketing from just over $7 in 2005 to over $35 in 2011 before collapsing back down near $19 in 2014. Yet global industrial demand was 639m ounces in 2005, 628m in 2011, and 595m last year. There is often no substitute for silver in manufactured products, and they use so little per unit that companies really don’t care what silver’s price is.

But silver investment demand varies dramatically with the shifting whims of traders’ sentiment towards this volatile metal. Over the past decade it has ranged from 52m ounces on the low side in 2005 to 289m on the high side in 2008, an incredibly volatile range! And since any market’s prices are effectively set by marginal new buying and selling, nothing is more important for silver prices than investment demand.

The past decade’s average annual silver investment demand was 196m ounces, which 2014’s 197m is dead on. For our purposes today, let’s round that to 200m ounces per year. That works out to under 17m per month. This basic background knowledge of global silver investment demand is essential in order to understand just how bullish silver looks today since this latest round of buying is likely only starting.

Traditional silver investing in physical coins and bars is the largest category of investment demand, averaging 136m ounces per year over the last decade. But it’s challenging to track, since the myriads of silver dealers and investors around the world don’t have to report their transactions. Silver ETFs, on the other hand, report their holdings daily and are easily collated. Their demand averages 67m ounces per year.

The world’s flagship silver ETF is the mighty iShares Silver Trust, which trades as SLV in the States. Its holdings this week were nearly 324m ounces, the equivalent of about a year and 2/3rds of worldwide investment demand. Launched in April 2006, it is the easiest, fastest, and cheapest way for American stock investors to gain silver exposure in their portfolios. This opened silver up to vast new pools of capital.

Silver has always had a zealous hardcore base of investors who decry any type of “paper silver”, which includes ETFs. If it’s not physical silver in their own possession, they want nothing to do with it. While I’ve always personally used and recommended that classic method of silver investing, it’s not for everyone. A lot of investors ranging from hedge funds to institutions legally can’t buy or don’t want the hassles of physical.

And silver ETFs are a perfect alternative for them. These investors buy ETF shares for a trivial fraction of what the premiums run on physical silver, and SLV in particular tracks the silver price perfectly. This can only happen because SLV is a conduit for stock-market capital to flow into and out of physical silver bullion. SLV’s managers have to constantly adjust SLV’s holdings to keep their ETF’s price mirroring silver’s.

When stock traders buy SLV shares faster than silver itself is being bought, they threaten to decouple to the upside. So SLV’s managers issue enough new ETF shares to offset this excess demand. Then they plow the proceeds directly into physical silver bullion held in trust for their shareholders. Thus any differential buying pressure on SLV shares directly bids up the underlying global physical silver market.

And just as silver is on the verge of a major breakout following this week’s sharp rally, American stock investors owning silver via SLV are still woefully underinvested by recent standards. This first chart looks at SLV’s silver-bullion holdings, with SLV’s price superimposed on top. And it reveals big room for new SLV buying, which will shunt stock-market capital directly into silver and accelerate its price gains.

Despite the very weak silver prices in recent years and resulting extreme bearishness on this precious metal, SLV’s holdings have actually risen on balance. They have enjoyed an exceptionally well-defined uptrend channel in the last several years, which seems pretty amazing. But realize that as silver’s price dropped, the amount of stock-market capital invested in SLV shares still contracted though its holdings grew.

Over this chart’s span, silver peaked just under $37 per ounce in late February 2012. That day SLV’s holdings of 313m ounces were worth $11.6b. Silver’s brutal bear market finally looks to have bottomed in early November 2014 at just over $15 per ounce. By that day SLV’s holdings had grown to 343m ounces, but this hoard was only worth $5.3b. So the SLV holdings’ uptrend is not as counter-intuitive as it seems.

Though SLV’s holdings climbed 9.7% between silver’s two extremes of recent years, the value of that silver plummeted 54% which was right in line with silver’s 58% loss over this span. So American stock investors certainly haven’t been hot on silver. In the middle of this week, as silver surged 3.8% to retake $17, SLV’s holdings were worth just $5.5b. That is vanishingly small, a trivial drop in the stock-capital bucket.

For comparison, of the 500 companies included in the benchmark S&P 500 stock index, only 26 had market capitalizations of $5.5b or less as of the end of last month. So American stock investors still have virtually nothing invested in silver. As silver continues rallying, they will start getting interested and then excited and buy in. And that differential buying will catapult silver higher, accelerating its rally and allure.

Only time will tell how much SLV buying we’re going to see, but it has the potential to be really big. This ETF’s peak silver holdings of just over 366m ounces came back in late April 2011 as silver was rocketing up over $48 in a speculative mania. That day SLV’s holdings were worth $17.2b, or 3.1x higherthan this week’s levels! But it could take massive silver gains over years to fuel such a big jump in stock capital invested.

More interesting for the near-term is the SLV-holdings uptrend. Silver has remained epically out of favor since its dismal bottom late last year. Since then its price has largely languished in a super-low trading range, mostly grinding listlessly sideways. So American stock investors have had no incentives at all to up their silver exposure. But this week’s young rally is already starting to change that bearish psychology.

SLV’s holdings around 324m ounces in the middle of this week certainly reflect the universal apathy and antipathy towards silver. As sentiment shifts from extreme bearishness back towards neutral, SLV is likely to see serious differential buying pressure on its shares. Remember that if stock traders bid up SLV shares faster than silver itself is rallying, SLV’s managers have to issue shares to buy more silver bullion.

Today the upper resistance of SLV holdings’ uptrend of recent years is around 352m ounces. Regaining that level would require over 28m ounces of differential buying. And even in silver’s dark recent years, SLV has witnessed multiple holdings surges from support to resistance that didn’t take much time at all. They happened in early 2013, mid-2013, and mid-2014, and each only took a couple months or so.

So the near-term silver buying potential from American stock traders is great. They remain woefully underinvested in silver right as it’s starting to surge, and they are likely to buy SLV shares aggressively enough to force a holdings build on the order of 28m ounces in a couple months. Remember that global monthly investment demand averages under 17m, so that’s a colossal boost from SLV buying alone.

Running these numbers, enough SLV differential buying merely to return its holdings back up to recent resistance would boost global silver investment demand by 85% for a couple months! That’s one major reason why I suspect the recent silver buying is only starting. And the really bullish and exciting thing is nothing begets buying like buying. The more silver rallies, the more investors will notice it and start to chase it.

But despite that large pool of capital by silver’s standards deployed in SLV, there’s another pool that just dwarfs it. There’s no one on the planet that moves more capital into and out of silver than the American futures speculators. They aggressively trade silver’s flows and ebbs with extreme leverage, exerting the greatest influence on silver’s daily price action. And theirshort positions are the key to silver’s near-term fortunes.

This next chart looks at the total levels of long and short silver futures contracts held by these dominant American futures speculators. This data is published weekly by the US Commodity Futures Trading Commission in its famous Commitments of Traders reports. And the latest read current to last Tuesday reveals high short positions remaining in silver futures. These large bets will soon have to be covered.

While silver’s long-term price levels are ultimately a function of global supply and demand, in the short term American futures trading is the whole game. Note the super-strong inverse correlation between the SLV price in blue and speculators’ total silver-futures short contracts in red. Silver plunges when they aggressively short it, and then rallies when they subsequently scramble to exit those leveraged bearish bets.

This outsized influence of futures shorting on silver’s price is primarily a function of two things. First, as silver has fallen deeply out of favor in recent years investing interest has dramatically waned. So the influence of futures speculation on silver prices rose proportionally. Second, futures trading is a hyper-risky zero-sum game played with extreme leverage. That gives futures speculators outsized silver-price impact.

Each silver futures contract controls 5000 ounces of silver, which is worth $85,000 even at this week’s still-terribly-depressed silver prices. Yet speculators only need to keep $7700 in their accounts for each silver contract they own, the current minimum maintenance margin. That means they can run leverage of up to 11x, which is extreme. In the US stock markets, leverage has been legally limited to 2x since 1974.

At 11x leverage, a mere 9% move by silver against speculators’ positions will wipe out 100% of the capital they risked. And they could lose even more than originally bet if they face margin calls! Silver has always had a well-deserved reputation as an exceedingly-volatile metal, so 9% moves are nothing. This past Tuesday and Wednesday, silver surged 5.4% and that was modest by silver’s wild standards.

Speculators shorting silver, betting on its price falling, effectively have toborrow that silver before they sell it. This saddles them with the legal contractual obligation to buy that silver back to repay their silver debt. So high silver-futures short positions by this group of traders are very bullish for this white metal since they represent guaranteed near-future buying. As this chart shows, silver soon rallies after major shorting.

While speculators’ silver-futures short positions today aren’t extreme by recent years’ epic levels, they are still very high. As of last Tuesday’s CoT data, the latest available when this essay was published, American speculators held 49.6k short-side contracts. That is a huge bearish bet on silver prices. Between 2009 to 2012, the last normal years for the precious-metals markets, their short-side bets averaged just 21.5k.

The reason silver collapsed in early 2013 was because gold suffered its worst quarterly loss in 93 years thanks to the Federal Reserve’s radically-unprecedented QE3 manipulations in the financial markets. As the Fed levitated the general stock markets, demand for alternative investments led by gold withered. And silver is ultimately a leveraged play on gold, amplifying the yellow metal’s price action in both directions.

But even since then in the Fed’s epically-distorted markets, speculators’ total silver short contracts have rapidly contracted to or near 27k four separate times. This is support for speculator shorting in recent years. So it’s highly likely this group of traders’ downside silver bets will once again sharply fall back to these levels in the coming months. And that represents incredible levels of buying to catapult silver higher.

As of that latest CoT report, American speculators would have to buy to cover 22.6k contracts merely to return to that 27k short-side support level. And in the futures markets, the price impact of buying a long contract to offset and cover an existing short and buying a new long contract is identical. With each short contract representing 5000 ounces, this support approach would require an amazing 113m ounces of buying!

Now remember annual global silver investment demand averages around 200m ounces, so this short covering alone is equivalent to about 7 months of normal demand. And as the chart above shows, once these short-covering episodes get underway they unfold fast. The more speculators who buy to cover, the faster the silver price rallies. And the sharper silver’s climb, the more pressure on remaining traders to cover.

It’s only taken two or three months in recent years for speculators to buy back enough of their shorts to drive them back down to that 27k-contract support line. And that was from even higher total-short levels. So let’s assume a couple months for this next support approach. Run the numbers on that, and this coming short covering equates to staggering buying of over 56m ounces per month. That’s incredible!

During that short-covering frenzy, silver demand from this mandatory futures buying would run 3.4x the normal monthly average just under 17m ounces! If investors are migrating back into silver at the same time, both in physical and ETF terms, silver is going to power dramatically higher during that brief span. And investors returning becomes more and more likely with each passing day of silver rallying on balance.

So looking at SLV holdings and American speculators’ silver-futures shorts alone, silver buying is only starting. Both groups of traders are likely to shift large amounts of capital into silver in a short period of time, on the order of a couple months. And they will soon be joined by investors from around the world, in a surge of new buying that will almost certainly ignite silver’s next major upleg. Its upside potential is great.

Investors can certainly play this in traditional physical silver coins and bars or through the ETFs led by SLV. Since silver is so universally loathed these days, investors have forgotten that its price averaged over $31 in 2012 before the Fed’s extreme stock-market distortions. And as those are gradually unwound, starting with the coming rate hikes, precious metals should mean revert back up to pre-QE3 normal levels.

But however great silver’s coming gains will be, the beaten-down silver stocks will achieve multiples of that. This entire sector has been left for dead, but has extreme profits leverage to these dismal silver-price levels. At Zeal we recently finished a 3-month research project to uncover the silver stocks with the best fundamentals to thrive. Our dozen favorites are profiled in depth in a popular new report. Buy yours today and get deployed before silver’s upleg accelerates and silver stocks soar!

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The bottom line is the recent silver buying is likely only just starting. American stock investors remain woefully underinvested in silver, while American futures speculators remain heavily short it. Even in the anomalous recent years, it’s only taken a couple of months or so for both extremes to normalize. And that buying alone would run multiples of normal global silver investment demand over that span.

The resulting silver rally will probably be quite big and strong emerging from such bearish sentiment extremes. And it will motivate legions of investors around the world to redeploy in silver again. The more they buy, the faster silver will rally. And that will attract in even more investors, once again forming that very powerful bullish virtuous circle that silver is so famous for. Silver has real potential to surprise on the upside.

Atlas Iron Digs in to Get $180 Million Life Support

Atlas Iron Digs in to Get $180 Million Life Support
Atlas Iron appears to have defied the odds and secured its future — albeit one that could leave the ­existing holdings of its investors massively diluted — on one of the brighter days in recent times for Australia’s smaller iron ore ­miners.

Atlas yesterday said it would raise up to $180 million in new ­equity to help retire its hefty debts after securing a series of novel agreements with its contractors that will allow it to reopen its ­Pilbara iron ore mines.

The breakthrough at Atlas came as Tony Abbott confirmed he was open to an inquiry into the industry, ­responding to pressure from Fortescue Metals Group’s billionaire chairman Andrew ­Forrest for government action.

Atlas, which at its peak was worth more than $3 billion, had looked all but dead and buried last month when it suspended its shares and announced the planned shutdown of its three Pilbara iron ore mines amid the slump in the iron ore price. Atlas had been burning through its cash and appeared to have little hope of repaying more than $300m in debt.

But the plans provide a path for Atlas to resume full production across its three mines, return to profitability and retire most of its outstanding debt.

Atlas said its Abydos mine was already back in production while its Wodgina operation would restart next week. The Mount Webber mine will come back on line in the September quarter.

The plans will save more than 700 jobs. Under the new structure, Atlas said its mines would be able to break even at a benchmark spot price of just $US50 a tonne. Iron ore is currently trading around $US62 a tonne.

The changes will clear the way for Atlas shares — suspended early last month — to ­resume trading by the end of next month.

“We basically reckon we’ve got the operating platform that’s going to provide a lot more ­sustainability and stability through the business,” Atlas ­managing director Ken Brinsden told The Weekend Australian. “It’s a bloody good deal.”

Key to the rescue of Atlas was a restructuring of agreements ­between the miner and contractors McAleese Group, Qube Logistics and MACA that will see them reduce the rates they charge Atlas, but share in any future ­upside as prices improve. The ­relief from the contractors was flagged by The Australian’s DataRoom column last month.

The contractors have also agreed to subscribe for $30m in new Atlas shares at a price of ­between 5c and 10c a share as part of the miner’s recapitalisation. McAleese — which had the most to lose from a shutdown of Atlas — will fund its purchase of $14m in Atlas stock entirely through debt. Shares last traded at 12c.

The equity raising from the contractors will supplement by a broader share issue to existing shareholders and new investors of up to $150m.

Each of the new shares, including the contractor shares, will come with one attaching option.

While the final price and full extent of the equity raising is yet to be determined, the number of Atlas shares on issue could ­increase from 919 million to as much as 4.5 billion as well as ­another 3.6 billion in options.

If fully subscribed, the Atlas ­equity raising would be the largest by an Australian miner this year.

The turnaround at Atlas has also been boosted by the WA government’s decision to cut port charges at the Utah Point port ­facility used by Atlas and fellow miner Mineral Resources by $2.50 a tonne.

The port discount comes on top of royalty relief already extended by the government to smaller iron ore miners. West Australian Resources and Finance Minister Bill Marmion said the relief package would also include the deferral of $12m in haulage fees for 12 months. “This is about doing our best for Western Australian workers and their families, by providing measured support for smaller companies that contribute so much to our communities,” Mr Marmion said.

Atlas chairman David Flanagan said that while the company was yet to receive any firm commitments to the proposed equity raising outside the contractors, he expected the raising to be well supported.

“How many companies would be making 20 per cent cash margins in any mining business right now? Not many. That’s what we’re making,” he said.

Mr Flanagan said that it was unlikely that Atlas would look to issue the full amount of equity flagged yesterday, but was instead seeking maximum flexibility.

“It’s not going to be a snowstorm of paper, it’s going to be a light sprinkling,” he said.

The new funding will be used to retire debt, while the attached options could provide another leg of funding for the company down the track. Mr Flanagan said he expected Atlas’s debt holders to view the proposed raising favourably, although he noted there was no requirement for the lenders to approve the plan.

“It will make their debt trade at a higher price, so it’s a win-win deal,” he said.

The equity raising will draw support from Atlas directors, with Mr Flanagan committing to spend $200,000 on new shares, Mr Brinsden $125,000, Jeff Dowling $30,000 and recently appointed director Cheryl Edwardes $10,000.

Mr Flanagan said Atlas’s near-death experience had reinforced the importance of forging tight bonds with the company’s various contractors. “This is what seems to happen to us every year or two. When we started our first mine, everyone was piling shit in front of us and we had to eat our way through it. Then there was another one, and another one, and this is just another one.”

Tuesday, May 12, 2015

2015 Australian Wedge-Tailed Eagle 1oz Silver Bullion Coin

2015 Australian Wedge-Tailed Eagle 1oz Silver Bullion Coin from the Perth Mint
The Perth Mint is delighted to offer investors a new bullion coin featuring this majestic bird which is known to soar to dizzying heights.
The coin’s reverse depicts an impressive Wedge-tailed Eagle in mid-flight as it prepares to land on a tree branch. The design also includes the inscription AUSTRALIAN WEDGE-TAILED EAGLE, the 2015 year-date and The Perth Mint’s ‘P’ mintmark.
Each bullion coin is presented in an acrylic capsule, from an unlimited mintage.
2015 Australian Wedge-Tailed Eagle 1oz Silver Bullion Coin

2015 Australian Wedge-Tailed Eagle 1oz Silver Bullion Coin

One of our favourite silver bullion coins of 2014, indeed of modern times, the Wedge-Tailed Eagle coin designed by John Mercanti for the Perth Mint had its debut last year. First released as high-relief silver and gold coins with mintages of 10,000 and 1,000 respectively back in January 2014, they followed up with a standard silver proof and a fantastic five-ounce high relief coin last May. This year will almost certainly see new releases of most, or all of those.
The bullion coin, while not as impressive as the completely sublime High-Relief versions, remains a beautiful piece, and if last years mintage limit is repeated, a relatively rare one by bullion standards.

COIN Specifications

Metal Content (Troy oz)1.000
Fineness (% purity)99.90
Minimum Gross Weight (g)31.135
Monetary Denomination (AUD)1.00
Maximum Diameter (mm)40.600
Maximum Thickness (mm)4.000

About the Wedge-Tailed Eagle
The Wedge-tailed Eagle is Australia’s largest bird of prey and one of the biggest eagles in the world. Found throughout mainland Australia, Tasmania and southern New Guinea, the Wedge-tailed Eagle has a wingspan of up to 2.7 metres, and displays a long, wedge-shaped tail and feathered legs.
Last year, 10% of the 50,000 mintage was sold by Australian dealer Ainslie Bullion but we’re currently unsure when or if they will be the dealer selling them this year. We understand that any Australian issued coin has to have 10% of its mintage sold in Australia, thus explaining why GovMint don’t get all the coins to themselves. This would indicate that the same would be the case this year, but GovMint do not list a mintage for the 2015 release, so how many an Australian dealer would get is unclear at present. We’ll try to find out.

Friday, May 8, 2015

Chinese Demand for Silver Bullion Bars Halved in 2014

Silver bars weren’t very popular last year — especially in China, where demand fell by half.

Chinese demand for silver bullion bars dropped 52% in 2014 from a year earlier, to 6.2 million ounces, according to the The Silver Institute’s annual World Silver Survey, which was produced by the GFMS team at Thomson Reuters. That was the lowest level since 2010.

“The sharp decline was attributed to the continual implementation of the anticorruption policy, which served a severe blow to the gifting sector, including bars,” according to the survey, which was released Wednesday.

A steep drop in silver prices certainly didn’t help. Silver futures SIN5, +0.79% on Comex fell nearly 20% last year, following a 36% plunge in 2013.

Total global demand for silver bullion bars fell 31% last year to 88.4 million ounces — in value, that’s about a $1.7 billion drop, the survey said.

Andrew Leyland, manager for precious metals demand at Thomson Reuters GFMS, told MarketWatch in an interview that he was surprised to see how weak demand from China actually was.

The government crackdown in gifting and its anticorruption campaign, along with a “softening of economic sentiment through the course of 2014,” impacted bar buying in China, he said. “A lot of luxury goods sectors didn’t have a particularly good year.”

Globally, investment in silver coins and bars fell by 20% last year to 196 million ounces, the survey said.

There was a slowdown in European buying of silver bars and coins, primarily due to an increase in sales tax in Germany that was applied to silver from the beginning of 2014, Leyland said.

He pointed out, however, that the market was coming from a record base year in 2013. Last year’s bar and coin investment figure was still the second highest on record.

And though the world’s silver mine production was up a 12th straight year in 2014 and supplies of the metal were at their highest in about 4 years, the market still saw a supply deficit of 4.9 million ounces last year.

Looking ahead, Leyland expects silver-mine supply to decline and is looking for growth in a number of demand sectors. He forecast an average silver price of $16.50 an ounce for this year.

Prices will see some short-term weakness, but are likely to end the year at more than $17 an ounce, with a couple of years of modest price increases to follow, he said.

Anzac Circulating Commemorative 50c Coin New Zealand

The Anzac commemorative coin is New Zealand’s first circulating coloured coin, and was minted by the Royal Canadian Mint

Anzac Circulating Commemorative 50c Coin New Zealand

One million Anzac coins have been minted and will be released to coincide with the 100th anniversary of the landing of Anzac troops at Gallipoli. This number represents the size of the New Zealand population in 1914, of which 10 percent served in the First World War. The coin was coloured using a revolutionary high-speed pad printing solution, developed by the Royal Canadian Mint and technology partner TECA.

Capable of producing circulation coins with vibrant, photo-quality images, in multiple varieties and blends of colour, and with superior wear resistance, this unique technology is exclusive to the Royal Canadian Mint. 

The high-resolution design of the coin was made possible by an integrated system incorporating specially developed inks, robotics for speed and precision control, as well as advanced vision inspection for quality assurance. 

The significance of the Anzac coin

The Anzac coin honours the spirit of Anzac that was formed 100 years ago, and continues to live on today.

The Anzac coin was launched in February 2015, by His Excellency Lieutenant General The Right Honourable Sir Jerry Mateparae, GNZM, QSO, Governor-General of New Zealand.

It is the first time in New Zealand's history that a coloured circulating coin has been produced. The coin will be in circulation as legal tender and available for collectors.

The Anzac coin design features a New Zealand and Australian soldier standing back to back with their heads bowed in remembrance. The mangopare (hammerhead shark) pattern symbolises strength and determination, and the silver fern reflects New Zealand’s national identity.

Availability and Distribution

One million Anzac coins have been minted to coincide with the 100th anniversary of Gallipoli. This number represents the size of the New Zealand population in 1914, of which 10 percent served in the First World War.

The Anzac coin was released into circulation as legal tender on 23 March 2015. It is being sold at its 50 cent face value.

New Zealand Post Group is coordinating the release and distribution of Anzac coins. Coins can be purchased at PostShop or Kiwibank branches, or via NZ Post’s website.

Groups representing former and current armed forces, including Returned Services Association members and Defence Force personnel, were given the opportunity to pre-order limited numbers of coins before they were released publicly.

For more information about the Anzac coin and other comemmorative coins available as part of New Zealand Post’s five-year Anzac commemorative stamp and coin programme, see

The Reserve Bank of New Zealand does not have Anzac coins available for distribution.
How the Coin is Made

The Anzac commemorative coin is New Zealand’s first circulating coloured coin, and it was minted by the Royal Canadian Mint.

The Anzac circulating coin has the same specifications as the existing 50 cent coin and testing has shown it will be accepted in coin and vending machines.

The coin was coloured using a revolutionary high-speed pad printing solution, developed by the Royal Canadian Mint and technology partner TECA. Capable of producing circulation coins with vibrant, photo-quality images, in multiple varieties and blends of colour, and with superior wear resistance, this unique technology is exclusive to the Royal Canadian Mint.

The high-resolution design of the coin was made possible by an integrated system incorporating specially developed inks, robotics for speed and precision control, as well as advanced vision inspection for quality assurance.

Coin Specifications:

Alloy: Plated steel 
Diameter: 24.75mm 
Weight: 5.00g 
Design: The Anzac coin design features a New Zealand and Australian soldier standing back to back with their heads bowed in remembrance. The mangopare (hammerhead shark) pattern symbolises strength and determination, and the silver fern reflects New Zealand’s national identity. 
Edge thickness: 1.70mm Edge treatment: Unmilled

The Reserve Bank of New Zealand has prepared an Anzac Coin Fact Sheet explaining how the coin is made and detailing its specifications.

Yamaguchi Silver 1oz Proof Coloured Coin 2015 - Prefectures of Japan

Yamaguchi Silver 1oz Proof Coloured Coin 2015 - Prefectures of Japan

The Mint of Japan have announced their latest prefecture silver coin which features a well-known landmark or structure as its obverse design. 

This coin features the Kintaikyo Bridge, in the prefecture of Yamaguchi which is a historical wooden structure that consists of a series of five wooden arches and spans the Nishiki River in Iwakuni City. Built in 1673 by Kikkawa Hiroyoshi, the third lord of the Iwakuni domain, this bridge is known as one of the three most beautiful or unique bridges in Japan and was designated as a place of scenic beauty by the national government.

The obverse design includes a depiction of the Kintaikyo Bridge and the Akiyoshidai Plateau, which is the largest area of karst topography in Japan, located almost at the center of Yamaguchi Prefecture, and designated as a Quasi-National Park and a Special Natural Monument.

The common reverse design of 1000 yen silver coin: Snow crystals, moon and cherry blossoms. Latent image technology is applied to the center of the largest snow crystal to show the numerals of “47” representing the number of prefectures in Japan, and “60” representing the 60th Anniversary of Enforcement of the Local Autonomy Law appear alternately when viewed from different angles.

Coin Specifications:

1000 ¥en.999 silver31.1 grams40 mm.Proof & Colour100,000
The coin, which is the 39th consecutive issue within the series, will be available to order from now until the 30th June when the coin will officially be issued. A 500 Yen bi-metallic coin intended for circulation with the same design though not colorized is also to be issued at the same instance as the silver coin.
For more information on this and other coins available from the Mint of Japan, please visit their website at: 
For international distributors of Mint of Japan coins, please visit: Information offered in English and Japanese

Wednesday, May 6, 2015

2015 Agro Junior 1oz Silver $5 Proof Coin

The Mint’s collaboration with Australia Zoo, the sixth coin in the popular Australian Saltwater Crocodiles series features our favourite crocodile of the moment, Agro Junior.
Becoming fearfully lifelike on the newest coin, the meticulous high relief technique has allowed our coin designer to provide much more depth to the design.
Appearing like a scene captured from Australia Zoo’s Crocoseum, Agro Junior lies eagerly in wait on a creek bed. With an extremely low mintage of only 1500 and an unheard-of price for a strictly limited edition product, this stunning coin will not be lurking around for long.
2015 Agro Junior Silver $5 Proof Coin
Product Information:
  • Issue Mint: The Royal Australian Mint
  • Legal Tender: Australian $5
  • Mintage: 1,500
  • Material: 99.9% Silver
  • Condition: Brand New in original issue condition.
  • Issue Price: $100.00 AUD
Whether you call it the saltwater crocodile, the estuarine crocodile or crocodylus porosus, it is the largest reptile roaming the earth today. Lurking in dark and murky waters around the northern areas of Australia, they can surprise and terrify a wide range of prey. Anything that flies, swims or roams in its watery region is fair game for this formidable creature.
Since 1988, 37 year-old Agro has lived in the comfort of Australia Zoo’s Crocoseum. This 15 foot wonder was captured from the wild to protect him from the hunters who were stalking his Cattle Creek home. Not only did he find a new home, but he found love with Cookie, a ten-foot lady crocodile who is the calmest and gentlest of crocs in the enclosure.
Agro and Cookie raised a son, Agro Junior, the star of this new collectable coin.
• A new coin in the Australian Saltwater Crocodile series, continuing a proud collaboration with Australia Zoo
• High relief coin captures Agro Junior in stunning detail, to the Royal Australian Mint’s exacting proof standards
• Strictly limited edition of 1500
• The coin and packaging features images of one of Australia Zoo’s beloved crocodiles, Agro Junior
• Minted in precious silver
• Packaged in an attractive presentation case with outer box
• numbered certificate of authenticity
• Obverse features Queen Elizabeth II effigy sculpted by Ian Rank-Broadley
• Australian legal tender
Coin Specifications:
  • Denomination: $5
  • Metal : 999 Fine Silver
  • Diameter: 32.00 mm
  • Mass: 1 oz
  • Finish: Proof
  • Mintage: 1500