GOLD PRICE NEWS – The gold price climbed $17.79 to $1,368.20 Wednesday, a new all-time high, as the price of gold benefited from a further sell-off in the U.S. dollar and a broad-based expansion of risk appetite. After hovering near $1,355 per ounce in overnight trading, the gold price surged to a new record as the U.S. Dollar Index (DXY) fell 0.2% to 77.22. With today’s gold price advance, the price of gold extended its month-to-date and year-to-date gains to 4.6% and 24.9%, respectively.
Gold mining companies rallied alongside the gold price, with many continuing to post gains exceeding that of the price of gold. Two companies that advanced Wednesday were San Gold (SGR.TSXV) and Aura Minerals (ORA.TSX), after each reported encouraging drill results. In morning trading shares of SGR.TSXV rose 3.2% to C$3.51, while ORA.TSX climbed 4.0% to C$4.14 per share.
San Gold announced initial drill results from underground exploration drilling of the L4 Zone Discovery below its Hinge Mine in Manitoba, Canada. The company announced that consistent and superior widths and grade have been encountered, highlighted by an intercept of 29.1 grams per tonne (0.85 oz./ton) over 6.8 meters (22.3 ft) including a high grade section containing 92.8 g/t (2.71oz/ton) over 1.7 meters (5.6 ft).
The Canadian-based gold miner went on to report that “the L4 zone begins at approximately 170 meters (550 ft) below surface and is located immediately south of the lowest current operating levels of the Hinge Mine. The L4 zone remains open along strike in both directions as well as to depth…The L4 zone has already been accessed from the Hinge decline and initial mine development is underway…Drilling continues in and below the L4 zone while a second underground drill rig is focused on the definition and extension of the L10 zone.”
Aura Minerals (ORA.TSX) announced an additional 58 drill holes from the ongoing infill and extension drilling program at its wholly-owned copper-gold-silver Aranzazu Project in Zacatecas State, Mexico. The most recent drilling has targeted zones southeast along strike, from along the Glory Hole-Tiro Azules zone to the Cabrestante zone. The company reported that drilling continues to demonstrate the high-grade potential of Aranzazu, with 41 of the 58 reported drill holes having intercepts of more than 1.0% copper with significant gold and silver values.
Highlights from Aura’s results occurred at hole AZC-093, which interceptd 2.61% copper, 2.99 g/t gold, and 39.33 g/t silver over 13.5 meters. Commenting on the results, Patrick Downey, Aura Minerals’ President and CEO, stated that “Drilling results from our Aranzazu Project continue to be excellent. The resource continues to grow along strike and at depth. In regards to the restart of the Aranzazu operation, the commissioning of the new mill is well underway, with all systems operating as designed. We are very pleased with the progress to date and expect to ramp up to full throughput by Q1/2011.”
With the gold price on track for its tenth consecutive year of gains, investors have sought out leverage to the price of gold through shares of emerging gold miners such as San Gold and Aura Minerals. While inherently carrying more risk than the gold price itself, the potential rewards offered by these companies has risen substantially with the price of gold at a new all-time high near $1,370 per ounce.
