by Stockwatch Business Reporter
New York spot gold closed up $3.50 to $1,620.50 Friday, as the U.S. dollar rose alongside concerns over rising food prices. The United States Department of Agriculture has cut this year's corn crop estimate, because of the drought in key corn-growing areas. Corn prices peaked at $8.47 a bushel today, up from $5 in June. In Canada, the TSX Venture Exchange slipped two points to 1,191, while the TSX Gold Index added one point to 297.
Canadian gold miners gained slightly Friday. Iamgold Corp. (IMG) rose 17 cents to $11.38, Eldorado Gold Corp. (ELD) rose 14 cents to $11.38, Agnico-Eagle Mines Ltd. (AEM) added 12 cents to $45.06, Yamana Gold Inc. (YRI) added six cents to $15.22
Peter Hawley's Scorpio Gold Corp. (SGN) sank to an intraday low of 56 cents before closing down 14 cents to 60 cents on 1.14 million shares. The company has reduced its 2012 gold production target, to 35,000 ounces from 40,000 ounces, after running into problems at its Mineral Ridge mine in Nevada. (Scorpio already halved the target from 80,000 ounces earlier this year.) The company says it made an error estimating the amount of contained gold it placed on its leach pad in the first quarter; instead of earning $4.8-million, it earned only $2.9-million. A lower number of ounces on the leach pad, means that Q1 cash costs were $904 an ounce, instead of $674. Scorpio has also had to reduce its gold inventories by $4.4-million to $11-million, which accounts for today's cut in guidance. President Hawley assures investors that this will not happen again, as the company has recalibrated all its mining equipment. However, there is more bad news. Mineral Ridge produced only 7,400 ounces of gold in the second quarter, up from 7,200 ounces in Q1, but still well under the aimed-for 10,500 ounces. The company needs to mine 3,500 ounces a month for four months consecutively before it can declare commercial production, after which its interest in the mine increases to 80 per cent from 70 per cent. Scorpio had hoped to declare commercial production in September.
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