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15 Feb 2005 17:20

15.02.2005 16:52:41 S.Africa holds two Americans on gold fraud charge

JOHANNESBURG, Feb 15 (Reuters) - Two U.S. nationals were arrested by South Africa's elite crime fighting unit on Tuesday on suspicion of defrauding gold miners, including Harmony Gold (HARJ.DE), a total of 100 million rand ($16.54 million).

A spokesman for the crack Scorpions unit said the two Americans had purchased gold from South African gold firms intending to process it into jewellery for sale in North America, but failed to pay for the gold.

Scorpions spokesman Makhosini Nkosi said the two were being held on charges of fraud and would appear in court on Wednesday.

He said the two were directors of SARM (South Africa Royal Manufacturers) and VDO (Via D'oro).

Ferdi Dippenaar, spokesman at the world's sixth biggest gold producer Harmony, said his firm had asked the Scorpions to investigate the two men after they failed to pay the firm 68 million rand for gold sales.

"We became uncomfortable with their business practices. Their company had bought gold from Harmony over a couple of years, and SARM owed Harmony 68 million rand," Dippenaar said.

South Africa's Industrial Development Corporation (IDC) said it held a 40 percent stake in SARM, described as a Canadian-South African partnership to create a gold chain and jewellery manufacturing facility, but declined to comment.

($1=6.045 Rand)

© Reuters 2004

15 Feb 2005 17:45

15.02.2005 17:32:04 Commodities News Summary

TOP NEWS
> 3rd Iraq purchase of US wheat; tally tops $35 mln [nN15231229]

WASHINGTON - Iraq's grain-buying agency made its third purchase of U.S. wheat in three weeks with the exporters reporting the sale of 100,000 tonnes of hard red winter wheat to Baghdad on Tuesday.

Some 315,000 tonnes of U.S. wheat have been sold since Jan. 25 to Iraq. The grain is worth $35.7 million at current prices at the Chicago Board of Trade.

- - - -

> Gold under dollar-led pressure in Europe [nL15275689]

LONDON - Gold prices were lower in Europe on Tuesday in choppy, currency-led trade, with the market abandoning a struggle to break higher when the dollar stood firm.

In other precious metals, platinum fell sharply as Asian selling overnight was compounded after a report from refiner Johnson Matthey, which continued to see the global market moving towards surplus this year.

- - - -

METALS > Matthey sees platinum surplus despite firm demand [nL15716505]

LONDON - The world platinum market is seen moving toward surplus this year, with prices falling despite strong demand, precious metals refiner Johnson Matthey said on Tuesday.

JM maintained its view on the market in an update to its Platinum 2004 Review, adding that prices should stay in a $760-$880 range into mid-May of 2005 -- but it also pointed to uncertainty on new mining projects.

- - - -

> Messina Platinum says workers on illegal [nL15103105]

JOHANNESBURG - South Africa's Messina Platinum said on Tuesday it had been hit by an illegal strike at its mining operations, eroding its shares.

Messina, 91.5 percent owned by Canada's Southern Platinum Corp , said 138 rock drill operators who had laid down tools had been dismissed over the weekend and were expected to be replaced.

- - - -

GRAINS/OILSEEDS/LIVESTOCK > EU wheat prices firm, exports buoy London futures [nL15138946]

PARIS - European wheat prices edged up on Tuesday, supported in Britain by good export demand and in France by short-covering, sellers' reluctance to trade as well as a higher close in Chicago, traders said.

- - - -

> Oil World cuts soy crop forecast on Latam weather [nL14448696]

HAMBURG - Oil World has cut its forecast of the world 2004/05 soybean crop to 221.75 million tonnes, down by 1.6 million on its previous estimate two weeks ago.

- - - -

> Ukraine aims to export 5-10 mln T grain a year [nL15264037]

KIEV - Ukraine, which plans to produce over 40 million tonnes of cereals annually, should export between 5.0 million and 10.0 million tonnes of grain each year, President Viktor Yushchenko said on Tuesday. "The world has to know that Ukraine is the country which will export 5-10 million tonnes of grain annually," Yushechenko told a farmers' meeting in Kiev.

- - - -

> Tunisia buys 50,000 T feed barley in tender [nL15153313]

HAMBURG - Tunisia's state-run Office des Cereales bought 50,000 tonnes of optional-origin feed barley in a tender for the same volume which closed on Tuesday, traders said.

It was purchased in two 25,000 tonne consignments priced at $163.72 and $164.72 a tonne C&F.

- - - -

SOFTS > Pakistan removes 6-pct tax on sugar import-ministe [nISL45283]

KARACHI - Pakistan said on Tuesday it has withdrawn withholding tax -- a six percent levy on the value of cargoes -- on sugar import to cover an expected shortfalls and check runaway prices.

Jehangir Khan Tareen, Minister for Industries and Production, said the government expects sugar import would speed up after the removal of the withholding tax.

- - - -

15 Feb 2005 21:08

15.02.2005 20:42:32 NY gold closes flat, other precious metals mixed

NEW YORK, Feb 15 (Reuters) - U.S. gold futures settled flat on Tuesday in choppy, currency-based activity as the market was reluctant to make bold moves before two days of testimony from Federal Reserve Chairman Alan Greenspan, dealers said.

Silver showed that its recent rally still had some strength as prices ended at two-month highs, but platinum fell sharply.

"A wild day today," said Leonard Kaplan, president at Prospector Asset Management, who cited gyrations in the currencies as the dominant feature in the session.

"Everyone in the market is waiting for Alan (Greenspan) to talk tomorrow," he added.

Benchmark April delivery gold finished steady at $427.30 an ounce on the New York Mercantile Exchange's COMEX division, after trading between $425 and $428.70 -- its highest mark since Jan. 31.

Profit taking and a whippy dollar combined to cap a broad-based, 3-day rally in the precious metals after prices last week bounced from oversold levels, floor traders said.

Market participants also opted not to take on big positions in the dollar-sensitive metals, as Greenspan was preparing to speak before Congress on Wednesday and Thursday.

"I think what he's going to talk about is the Fed will continue to raise rates," said Kaplan. "If he does, then the dollar gets supported and gold goes lower."

A stronger U.S. currency makes dollar-denominated precious metals more expensive for traders holding foreign money.

Technically, gold needed to break above significant resistance between $428 and $430, Kaplan added. "If it gets over $430, we could run a bit, but we'll have to see."

As to support, brokers have pegged key levels in gold at $425-424, and then at $422-418.

Spot gold priced at $425.50/426.20 an ounce, up from $425.25/6.00 at Monday's New York close. London's afternoon fix was at $424.40.

The euro stuck near $1.3010 at midafternoon, up from $1.2969 late on Monday.

On the economic side of the ledger, net inflows of capital into U.S. assets in December slid to $61.3 billion -- near expectations and enough to finance the nation's current account deficit that month.

Separately, U.S. retail sales dipped 0.3 percent in January as auto sales tumbled, but purchases outside the car sector gained a healthy 0.6 percent.

Silver's rally slowed after prices gained more than 75 cents in a three-day bounce from support near $6.50 an ounce.

March silver rose 2.0 cents to conclude at $7.36 an ounce, trading from $7.405 to $7.21. Spot was at $7.32/35, versus $7.31/34 late on Monday. The fix was flat at $7.245.

Support in silver was seen at $7.09, $6.89 and $6.75/80, with resistance at $7.35/40 and $7.50/60 and then $8.235.

Speculative selling hit platinum after a report by refiner Johnson Matthey forecast the global market moving toward surplus this year, despite firm demand.

NYMEX April platinum dropped $22.20 to $852.90 an ounce. Spot fetched $850/854.

March palladium was down $2.80 to $185.35 an ounce. Spot was worth $180/184.

16 Feb 2005 09:59

16.02.2005 06:09:13 Gold flat in Asia trade, seen in $424-$428 range

(Updates to afternoon)

SINGAPORE, Feb 16 (Reuters) - Gold was little changed in Asia on Wednesday and was expected to remain within a slim $424 to $428 per ounce range ahead of remarks by Federal Reserve Chairman Alan Greenspan, which should offer fresh leads for the dollar, traders said.

Spot gold was quoted at $425.40/425.90 per ounce by 0436 GMT, against $425.50/426.20 late in New York.

The market paused for breath after the metal hit $426.85 on Tuesday, its highest in nearly three weeks and not far from resistance of $428.

Indeed, dealers expect limited price movements ahead of Greenspan's congressional testimony on the state of the U.S. economy later in the day and on Thursday.

"We are looking at the upside of $428 and I think we should stay above $422 an ounce," said Beh Hsia Wah, a dealer at United Overseas Bank in Singapore, a centre for bullion trading in Southeast Asia.

"It's very quiet over here but premiums remain high."

Indonesia's healthy appetite for gold was compensating for slow demand from other Asian consumers after the Lunar New Year holidays, traders said. That helped support gold bar premiums at 50 U.S. cents an ounce to London spot prices .

Fears of inflation amid a prospect of rising domestic fuel prices have encouraged gold purchases in Indonesia, Southeast Asia's largest consumer of the metal, dealers said.

In the currency market, the euro was steady at $1.3019.

In other precious metals, spot silver was at $7.22/7.24 an ounce, against $7.32/7.35 late in New York.

Platinum was at $856/861, against $850/854.

The precious metal, which has lost nearly three percent of its value since hitting a two-month high of $882 in early February, was weighed down by reports of a possible surplus.

Precious metals refiner Johnson Matthey said on Tuesday the world platinum market is moving toward a surplus in 2005, with prices falling despite strong demand.

JM maintained its view on the market in an update to its Platinum 2004 Review, adding that prices should stay in a $760-$880 range into mid-May of 2005 -- but it also pointed to uncertainty on new mining projects.

Sister metal palladium was at $182/187 an ounce, compared with $180/184 late in New York.

In Tokyo, the benchmark December gold futures contract rose three yen per gram to 1,439 yen.

On Hong Kong's Chinese Gold and Silver Exchange, tael gold (37.5 gramme ingot) was quoted at HK$3,947 by midday, compared with an opening of HK$3,944.

16 Feb 2005 11:43

16.02.2005 10:36:08 Tokyo gold up, technical glitch limits some activity

TOKYO, Feb 16 (Reuters) - Yen-based gold futures edged up on Wednesday, supported by the recent weakness of the dollar and lingering geopolitical wariness, but activity was restrained by a computer problem at the Tokyo Commodity Exchange.

The key December gold contract closed at a session high of 1,441 yen per gram but failed to break through 1,442 yen, this year's peak matched on Tuesday as traders waited for remarks by Federal Reserve Chairman Alan Greenspan later in the day.

"Gold is still firm and in a bullish trend, but there were few incentives to buy further," said Koji Suzuki, manager at Star Futures Securities.

"People are waiting for a clearer direction in the dollar to judge whether to hold more positions in gold."

Traders said the market's mood was depressed after system problems forced TOCOM to suspend for several hours trading of all gasoline futures contracts for a second straight day.

Because of the glitch, TOCOM imposed temporary trading restrictions that forbid traders from changing bid and offer numbers for orders placed for all other energy and metals futures contracts.

Traders said TOCOM's measures had made fund operators, who trade in large lots, less active.

Other gold contracts rose one to five yen. The key December contract closed up five yen from Tuesday's close of 1,436 yen.

At 0811 GMT, spot bullion was quoted at $425.25/6.00 an ounce against $425.50/6.20 in New York.

The dollar was around 105 yen , up from 104.40 yen late in New York, while trading little changed against the euro at $1.3020 .

The dollar traded around 106 yen and around $1.2730 against the euro just a week ago.

Funds also remained keen to hold positions in gold amid concerns about the nuclear ambitions of North Korea and Iran, traders said.

TOCOM silver futures posted solid gains for the fifth straight session.

The December silver contract rose to a two-month high of 243.2 yen per 10 grams as fund operators continued to boost positions in the grey metal.

The daily limit was raised to 10.5 yen from seven yen from Wednesday after most silver futures contracts hit the daily limit high in the past two days.

TOCOM silver faced some profit-taking pressure around highs on Wednesday, but sentiment remained strong, traders said.

December silver closed 3.6 yen higher at 242.5 yen. It had moved in a range of 239.1 to 243.2 yen.

Platinum futures found support after rounds of heavy liquidation sent the key contract below a technically important level of 2,800 yen, traders said.

On Tuesday, key December platinum futures tumbled after hitting a three-month high of 2,884 yen, but failed to hit the closely watched 2,900 yen level, traders said.

December platinum ended at 2,835 yen per gram, up 10 yen from Tuesday's close of 2,825 yen. It had moved in a range of 2,791 to 2,835 yen.

Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.

Closing prices are in yen per gram except for silver, which is in yen per 10 grams:

For open interest details please click

Closing price Turnover (lots)
GOLD 1,441 (up 5) 53,251
SILVER 242.5 (up 3.6) 13,054
PLATINUM 2,835 (up 10) 52,759
PALLADIUM 618 (down 10) 658

16 Feb 2005 14:38

16.02.2005 12:47:29 Europe gold drifts lower, market eyes Greenspan

LONDON, Feb 16 (Reuters) - Gold prices were down slightly in Europe on Wednesday as the dollar steadied ahead of testimony from Federal Reserve Chairman Alan Greenspan that may touch on the U.S. current account deficit, dealers said.

Silver was falling fast as technical selling emerged after the market reached overbought territory.

Spot gold eased to $423.90/424.60 per troy ounce by 1127 GMT from $425.50/426.20 late in New York on Tuesday. Silver was down at $7.12/7.15 from $7.32/7.35.

"Gold could get sucked into liquidation, especially if Greenspan says something dollar-positive later today," a dealer said.

Investors were waiting to hear if Greenspan would reiterate his recent upbeat comments about the U.S. current account deficit, the size of which has fanned deep market concerns and drove the dollar to record lows versus the euro last year.

The dollar's losses were a significant factor behind gold's rise to a 16-1/2-year peak in December at $456.75 given the inverse relationship between the two.

The euro was last at $1.3028.

Greenspan is due to testify on monetary policy before the Senate Banking Committee from 1500 GMT. He will make the second part of this twice-yearly testimony on Thursday.

Analysts were still maintaining a bullish picture for gold, despite the possibility of short-term losses.

"On the charts resistance at $428, and beyond that $431 (a pivotal technical point), continues to cap the market and a retracement back towards $420 is likely if these hurdles are not overcome," Standard Bank said in a daily report.

For silver an extended period of consolidation between $7.00 and $7.35 was seen after aggressive selling in Asian trade overnight, it added.

Platinum edged up to $859.00/864.00 from $850.00/854.00 late in New York on Tuesday.

The market was steadying from Tuesday's sharp drop compounded by a report forecasting a platinum market surplus from refiner Johnson Matthey.

Palladium dipped to $178.00/183.00 from $180.00/184.00.

17 Feb 2005 09:36

17.02.2005 09:13:28 Tokyo gold climbs to 1-½ month peak, hits barrier

TOKYO, Feb 17 (Reuters) - Tokyo gold futures advanced to a
fresh 1-½ month high on Thursday but gains were capped by light
profit-taking as the market lacked fresh incentives to convince
fund operators to build more long positions.

Traders were careful about selling gold heavily given lingering geopolitical concerns as tensions rise over the nuclear ambitions of Iran and North Korea.

Gold was also supported as the outlook for the dollar remained unclear after comments by U.S. Federal Reserve Chairman Alan Greenspan the previous day.

December gold on the Tokyo Commodity Exchange (TOCOM) hit a session high of 1,445 yen -- the highest since Dec. 28 -- but the market struggled to extend gains since the contract had jumped more than 4 percent in less than 10 trading sessions.

"Gold has turned bullish based on technical trends but the market lacks new factors to buy more," said Tatsuo Kageyama, analyst at Kanetsu Asset Management.

Key TOCOM gold futures closed up one yen at 1,442 yen. Other contracts closed unchanged to up two yen.

Having broken through this year's high of 1,442 yen, the market is looking at 1,457 yen, which is the 100-day moving average, as the next key technical level.

At 0713 GMT, spot bullion was quoted at $424.50/5.25 an ounce against $425.50/6.20 in New York.

The dollar was quoted at 105.31/32 yen from 105.42 yen in New York, and $1.3042/45 against the euro , also little changed from late U.S. trade.

Gold traders said Greenspan's testimony before the Senate Banking Committee failed to move the dollar or gold as his comments were in line with market expectations.

Greenspan said U.S. interest rates remained "fairly low" at 2.5 percent after six consecutive rate rises by the Federal Reserve since June.

The December TOCOM platinum contract closed down six yen at 2,829 yen per gram. It had moved in a range of 2,808 to 2,834. Other contracts closed up two yen to down 16 yen.

Platinum continued to slump after dropping from a three-month high of 2,884 yen on Tuesday, reflecting a report issued this week by precious metals refiner Johnson Matthey that forecast a possible surplus in supply in 2005.

But the key platinum contract found support around 2,800 yen on concerns about supplies, with the world's biggest producer limiting output due to the strength of the South African rand currency.

On Monday, Angloplat said it had cut its 2006 production target for the second time in just over a year to 2.7-2.8 million ounces from the previous target of 2.9 million. It pegged 2005 output at 2.6 million ounces.

Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.

Closing prices are in yen per gram except for silver, which is in yen per 10 grams:

For open interest details please click

Closing price Turnover (lots)
GOLD 1,442 (up 1) 53,018
SILVER 243.8 (up 1.3) 3,103
PLATINUM 2,829 (down 6) 22,266
PALLADIUM 613 (down 5) 367

17 Feb 2005 12:58

17.02.2005 12:48:51 Europe gold firm as dollar falters, eyes Greenspan

LONDON, Feb 17 (Reuters) - Gold picked up in Europe on Thursday as the dollar failed to hold gains made after U.S. Federal Reserve Chairman Alan Greenspan said the country's interest rates would continue rising.

Greenspan, who made his comments in Congressional testimony on Wednesday, is due to testify again at 1500 GMT.

Spot gold stood at $426.60/427.35 per troy ounce by 1124 GMT, from $425.50/426.20 late in New York on Wednesday.

A weaker U.S. currency supports dollar-priced gold, making it cheaper for those holding other currencies.

"Gold seems to have firmed a touch -- really the market is just following the euro up and waiting for what Greenspan might say this afternoon. I can't see anything drastic before then really as the market is still in recent ranges ($421-$428)," one dealer said.

The euro was last at $1.3061.

Greenspan provided no surprises in his testimony as he reiterated that the U.S. economy was expanding at a healthy pace and that the fed funds rate remained low in real terms despite recent rises.

Analyst James Moore of TheBullionDesk.com said in a report that with Greenspan's Wednesday speech now out of the way, gold could be edging eventually to $445 -- just over $10 from the 16-1/2-year peak of $456.75 scored in December.

"With the dollar seeming back under pressure gold will now look to work higher," he said.

But the market would continue to find resistance around $428.90, which was the 100-day moving average price, and $432.

Short-term falls could not be dismissed, he added, led by the dollar or any fresh comments about the proposals on using some of the IMF's huge gold reserves to help fund Third World debt relief.

In other precious metals spot silver was flat against late New York levels on Wednesday at $7.24/7.27.

Spot platinum moved up to $861.00/865.00 from $854.00/858.00, rallying from pressure seen in the Tokyo futures market overnight.

Global number-two platinum producer Implats (IMPJ.J) posted flat headline earnings for the first half on Thursday and said growth was unlikely in the second six months, hitting shares.

Analysts said higher metals prices were offset by a buoyant rand currency that cuts export revenues and which also resulted in a bigger-than-expected foreign exchange loss. [nL17704029]

Platinum hit a 24-year peak last year at $942 per ounce.

Palladium was steady at $179.00/183.00 from $178.00/183.00 previously.

17 Feb 2005 16:41

17.02.2005 16:36:59 NY gold ticks higher early on dollar and data

NEW YORK, Feb 17 (Reuters) - U.S. gold futures edged higher Thursday morning, mostly fading the dollar's small moves, as players waited to hear a second day of congressional testimony by U.S. Federal Reserve Chief Alan Greenspan.

Gold for April delivery was up $1.30 at $428.20 an ounce by 10:27 a.m. EST (1527 GMT) on the New York Mercantile Exchange's COMEX division, dealing within a range of $425.50 to $428.80.

Dealers said the influence was from the greenback, which was near a two-week low against the euro after Greenspan on Wednesday did not modify the Fed's plan to steadily raise interest rates.

Greenspan said in testimony Thursday morning that rates remain "fairly low."

"There is not much going on. We're in a waiting period," said a gold broker. "Gold has leaped back into the range we were in for most of January, but it looks like we sort of reversed our downtrend from the last three months last week, so I would expect see the market move up."

He added, "But you have to keep an eye on the euro, in particular, which seems to have broken out of a down-wedge as well."

The euro was quoted at $1.3059 versus $1.3030 late on Wednesday.

A weaker dollar, especially against the euro, tends to support dollar-denominated gold because it becomes cheaper for traders holding foreign currencies.

Prices firmed a little after U.S. January leading indicators fell 0.3 percent.

In other data, U.S. first time claims for U.S. state unemployment insurance aid fell to 302,000 as of Feb 12 -- a four-year low -- from 304,000 previously, and compared with expectations for a rise to 315,000.

Traders also were eyeing the fund players in gold, who could start to rebuild some of the large position in the market that recently was trimmed back.

After the sharp rally of last fall, open interest dropped about 120,000 contracts in a corrective move, dealers said, and less open interest is usually bullish for prices.

Brokers said COMEX gold futures were stuck in a trading range from about $424 to $430, while bullion was moving between $421 and $428.

Spot gold changed hands at $425.95/6.70 an ounce, off from the New York close on Wednesday at $425.50/6.20. Thursday's afternoon fix in London was at $426.25.

March silver rose 6.0 cents to $7.315 an ounce, moving from $7.175 to $7.325. Spot touched $7.29/32, up from $7.24/27 previously. The fix was at $7.255.

NYMEX April platinum rose $6.50 to $862.50 an ounce. Spot was at $862/867.

March palladium fell $1.05 to $182 an ounce. Spot fetched $179/183.

17 Feb 2005 17:09

17.02.2005 17:05:26 Commodities News Summary

TOP NEWS
> CBOT soybeans rally early on Brazil, technicals [nN17649028]

CHICAGO - Soybean futures at the Chicago Board of Trade rallied early Thursday amid concerns about dryness in southern Brazil, where soybeans are in their final growth stage, traders said.

- - - -

> COMEX copper climbs off lows early, follows London [nN17372931]

NEW YORK - U.S. copper futures opened down but managed to climb to higher ground early Thursday on some local and fund buying, as the market took its cue from firmer overseas markets.

- - - -

> UPDATE 1-Europe gold firm in ranges [nL175651]

LONDON - Gold traded higher on Thursday in Europe but the going was choppy as prices followed currency moves and struggled to break free of well-worn ranges.

- - - -

> France's ONIC says EU bans grain bids publication [nL17621973]

PARIS - French grains office ONIC said on Thursday it would not publish as usual details of grain bids ahead of the European Union's weekly export tender after new instructions from the European Commission.

- - - -

> Exotic metals for hi-tech world on price upswing [nL17592631]

LONDON - Prices for exotic metals that go into flat-screen TVs and other hi-tech goods are booming and will continue to rise as tight supply and Chinese demand push up prices, traders and analysts say.

- - - -

METALS > Mitsui Mining to produce zinc at full capacity [nT275189]

TOKYO - Mitsui Mining & Smelting Co. Ltd. , Japan's top zinc refiner, will continue to produce at full capacity to meet firm domestic demand, although China's voracious appetite will keep supplies tight this year.

- - - -

> China iron ore licences powerless to stop surge [nHKG175521]

HONG KONG - Import licences will do little to slow China's rocketing iron ore consumption, with the world's top steel producer and consumer set to suck in more of the raw material after last year's record haul of 208 million tonnes.

- - - -

> UPDATE 1-Barrick fourth-quarter earns double [nN17290509]

TORONTO - Barrick Gold Corp. (ABX.TO) doubled its fourth-quarter profit on Thursday, helped by higher gold prices even as production slipped.

- - - -

> UPDATE 3-Implats disappoints with flat profit [nL17704029]

JOHANNESBURG - Global number-two platinum producer Implats (IMPJ.J) posted disappointing flat headline earnings for the first half on Thursday and cautioned growth was uncertain in the second six months, hitting its stock.

- - - -

> UPDATE 3-SAfrica's Kumba lifts earnings 34 pct [nL17400235]

JOHANNESBURG - South Africa's biggest iron ore producer, Kumba Resources (KMBJ.J), posted a 34 percent jump in 2004 headline earnings thanks to high global prices, but a bullish rand cut into revenue, the firm said on Thursday.

- - - -

> INTERVIEW-Rhodium could soar to peak of $2,000/oz [nL17701038]

JOHANNESBURG - Rhodium prices, which have already rallied by a quarter this year to $1,650 per ounce, could spike to $2,000 this year, global number two platinum producer Implats (IMPJ.J) said on Thursday.

- - - -

> Russian Renova plans mining S.African platinum [nL1711549]

MOSCOW - Russian oil-to-metals group Renova, controlled by tycoon Viktor Vekselberg, expects to mine platinum in South Africa, Director for Strategic Planning Andrei Shtorkh said on Thursday.

- - - -

GRAINS/OILSEEDS/LIVESTOCK
> UPDATE 1-Philippines buys China feed wheat [nSP78632]

SINGAPORE - The Philippines has struck a deal to buy 30,000 tonnes of feed wheat from China for April shipment, the first purchases from the Asian supplier this year, a senior feed trade official said on Thursday.

- - - -

> EU wheat markets flat, awaits exports tender [nL17707926]

AMSTERDAM - European wheat prices were hardly changed on Thursday as most players remain unconvinced that the European Union wheat export subsidies would rise soon, giving the market a boost, traders said.

- - - -

> French wheat exports up 10 pct to Jan 1- customs [nL17474861]

PARIS - French soft wheat exports to January 1, halfway through the July-June season, stood at 7.83 million tonnes, 10 percent up on last season, customs data published on Thursday showed.

- - - -

SOFTS
> UPDATE 1-Iraq issues tender to buy sugar [nL17614228]

LONDON - Iraq's State Company for Foodstuff Trading (SCFT) has tendered to buy around 25,000-50,000 tonnes of 45-ICUMSA white sugar, its website said.

- - - -

> UPDATE 1-Indonesia to import 200,000 tonnes sugar [nJAK84196]

JAKARTA - Indonesia will issue a total of 200,000 tonnes of white sugar import permits soon to cover a shortage of domestic stocks, Trade Minister Mari Pangestu said on Thursday.

- - - -

> UPDATE 1-EU sees sugar intervention offer [nL17685589]

BRUSSELS - EU intervention agencies have received offers for sugar this week, with more expected, the first such offers since 1986, a senior EU source said on Thursday.

- - - -

> Brazil new CS sugarcane crop seen record 358 mln T [nN17248967]

SAO PAULO, Brazil - Brazil's 2005/06 sugar cane crop that will begin harvesting in April is seen at a record 358 million tonnes, up 9.3 percent from 327.5 million for the previous crop, analysts Datagro said on Thursday.

- - - -

> INTERVIEW-UPDATE 2-Ghana cocoa purchases slow [nL1732342]

ACCRA - Cocoa purchases in Ghana, the world's second biggest producer, have slowed in recent weeks, but are expected to pick up again from mid-March, the chief executive of regulatory body Cocobod said on Thursday.

- - - -

18 Feb 2005 09:03

18.02.2005 08:57:01 Tokyo gold up to highest since Dec, trend strong

TOKYO, Feb 18 (Reuters) - Tokyo gold futures rallied to their highest level since late December on Friday after the dollar- denominated spot price notched up solid gains, with brighter technical prospects drawing fresh purchases from fund operators.

The benchmark December gold futures contract on the Tokyo Commodity Exchange hit a fresh 1-1/2-month high of 1,452 yen per gram, with the market keen to test the contract towards its 100-day moving average of 1,457 yen.

"On the charts, it's more likely that we will see gold climb towards the 1,460-1,480 yen-range in the long run, although we've seen some profit-taking around highs today," said Kaname Gokon, research section manager at Okato Shoji Co. Ltd.

December TOCOM gold futures closed eight yen or 0.55 percent higher at 1,450 yen per gram.

Other contracts closed up eight to 10 yen.

TOCOM futures were supported by bullish spot gold and COMEX prices, traders said.

At 0718 GMT, gold was quoted at $427.30/7.80 per ounce, against the late U.S. level of $427.10/7.80.

Traders said the technical trend for spot gold brightened even more after hitting a three-week high of $428.20 in New York on Thursday.

Funds have been reshuffling part of their portfolios after closely watched congressional testimony by Federal Reserve Chairman Alan Greenspan this week offered few surprises.

Precious metals prices had advanced as the dollar posted losses of a half a cent versus the euro over Greenspan's two days of testimony, despite his hints that U.S. interest rates would continue to go up, which is seen as dollar-positive.

The euro was quoted at $1.3074/78 , little changed from late New York levels. It traded around $1.2730 just a week ago.

Investors also were keen to rebuild positions in gold due to increasing tensions between the United States and nations including Iran, Syria and North Korea.

"A lot of attention is on the dollar to find a direction for gold, but gold looks supported with a solid floor seen around 1,430 yen as there is plenty of interest in buying gold for safe-haven purposes," Gokon said.

TOCOM silver hit a fresh two-month high, boosted by strong gains made in New York the previous day.

Speculative funds continued to flood into the grey metal, having seen the dollar-based spot silver price gain more than 12 percent in just a week, traders said.

December TOCOM silver futures ended 3.8 yen higher at 247.6 yen per 10 grams -- the highest since Dec. 8.

Other contracts closed up 3.1 to 5.0 yen.

Platinum and palladium also rose in line with other precious metals, although activity was thin.

TOCOM platinum closed up nine yen at 2,838 yen. Other contracts closed up five to 21 yen.

Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.

Closing prices are in yen per gram except for silver, which is in yen per 10 grams:

For open interest details please click

Closing price Turnover (lots)
GOLD 1,450 (up 60,062
SILVER 247.6 (up 3.8) 4,229
PLATINUM 2,838 (up 9) 20,970
PALLADIUM 615 (up 2) 644

21 Feb 2005 10:45

21.02.2005 09:26:28 TOCOM gold rises for ninth day in row, trade thin

TOKYO, Feb 21 (Reuters) - Tokyo gold futures inched up on Monday, extending gains for a ninth straight day on a weak yen in range-bound, thin trade that lacked firm direction due to a market holiday in the United States.

The benchmark December gold contract on the Tokyo Commodity Exchange finished up four yen per gram at a session high of 1,454 yen. The day's trough was 1,451 yen.

The TOCOM gold benchmark, which has climbed about 3.9 percent over the past two weeks, is at its highest level since rising to 1,483 yen on Dec. 28.

Other months rose by two to five yen.

"It looks like there will be more moves to cover shorts ... and I think therefore that there is room for a further rise," a Tokyo analyst said.

U.S. gold futures ended lower but held near a three-week high on Friday, supported by strong base metals and a flat dollar in thin trade ahead of the President's Day holiday on Monday.

Gold for April delivery on the New York Mercantile Exchange's COMEX division inched down 20 cents to $428.40 an ounce, after rising as high as $429.40.

The session high fell short of Thursday's peak of $429.80, which was gold's loftiest level since Jan. 27.

New York metals trading closed on Friday around noon, and will remain shut for Monday's holiday.

Spot gold was fetching $426.30/$426.70 an ounce at 0630 GMT, down a touch from last U.S. levels of $427.05/$427.80.

Total gold turnover on TOCOM was estimated at a moderate 45,070 lots, down from Friday's 60,062 lots.

The analyst said that TOCOM trading activity was slow due to the U.S. market holiday.

In the currency market, the yen hovered near a 1-1/2-month low against the euro on Monday, meeting cross-selling pressure from higher yielding currencies and amid signs of weakness in the Japanese economy.

The yen was hobbled by last week's data that showed Japan was in a recession for most of 2004, while traders sided with currencies like the Australian dollar, which was boosted by expectations for rising interest rates.

At 0630 GMT, the euro was around 137.97/138.02 yen , versus a 1-1/2-month high of 138.30 struck on Friday.

The dollar was little changed at 105.68/105.73 yen .

Benchmark December platinum futures closed down one yen at 2,837 yen, after moving between 2,826 yen and 2,850 yen.

Market participants said the metal lacked the momentum to move higher due to an absence of fresh supportive factors.

Other contracts were either flat or fell by five or six yen.

Spot platinum was at $858/$863, easing down from New York levels of $863/$868 an ounce.

Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.

Closing prices are in yen per gram except for silver, which is in yen per 10 grams: For open interest details please click

Closing price Turnover (lots)
GOLD 1,454 (up 4) 45,070
SILVER 248.3 (up 0.7) 2,333
PLATINUM 2,837 (down 1) 23,014
PALLADIUM 620 (up 5) 602

21 Feb 2005 14:46

21.02.2005 12:32:50 Europe gold steady in quiet trade, eyes dollar

LONDON, Feb 21 (Reuters) - Gold prices were steady in Europe on Monday in line with tightly traded currencies, with activity sapped by a public holiday in the United States.

Dealers and analysts were mildly bullish due to a slightly weaker outlook for the dollar, but expected prices to stay in a well-trodden $421-$428 trading band.

Spot gold stood at $427.10/427.80 an ounce by 1124 GMT from $427.05/427.80 in New York on Friday, where markets close early ahead of the long weekend.

"Direction over the coming week will continue to be largely dollar led...I think gold will struggle to clear the band of resistance between $428-32 and is likely to consolidate further in the current $420-28 range," James Moore of TheBullionDesk.com said in a daily report.

The dollar held broadly steady as markets sat back to await this week's U.S. data for clues on the pace of interest rate rises there. The euro was last at $1.3058.

U.S. consumer price data on Wednesday will be closely watched, as higher inflation could prompt the Federal Reserve to accelerate its tightening campaign.

Higher U.S. interest rates tend to boost demand for the dollar and dull that of gold for non-U.S. investors.

Gold market analysts have maintained a bullish picture for bullion this year, with the market seen possibly moving beyond last December's 16-1/2-year peak of $456.75 as they expect the dollar to fall.

Alexander Zumpfe of Dresdner Kleinwort Wasserstein said the short-term outlook was neutral to cautiously bullish, with the next upside target at $432 -- last seen in early January.

"The overall upward trend remains intact with trend indicators like moving averages...pointing to the upside. However, for a significant move higher it requires the usual support from the currency side," Zumpfe said in a report.

Spot silver was slightly lower at $7.36/7.39 from $7.37/7.40 in New York on Friday.

Platinum fell to $860.00/865.00 from $863.00/868.00, while palladium eased to $178.00/182.00 from $179.00/184.00. 00.

21 Feb 2005 18:49

21.02.2005 17:40:26 Gold arbeitet sich im ruhigen Handel ein wenig höher

London/Zürich, 21. Feb (Reuters) - Der Goldpreis ist am Montag leicht gestiegen. In einem wegen der geschlossenen US-Märkte ruhigen Handel habe einzig die Währungsentwicklung für ein paar Anregungen gesorgt, die allerdings Gold-positiv ausgefallen seien, so Händler. Ein Ausbruch aus der Spanne der letzten Tage von 421 bis 428 Dollar je Feinunze sei jedoch nicht zu Stande gekommen. Der Markt habe nur den Euro verfolgt, und der sei gestiegen, womit auch das in Dollar gehandelte Gold für Anleger aus anderen Währungszonen billiger geworden sei.

Insgesamt sei der Gold-Ausblick Neutral bis leicht positiv, wobei der nächste kritische Widerstand bei 432 Dollar liege, so Alexander Zumpfe von Dresdner Kleinwort Wasserstein.

Die Feinunze Gold notierte zum europäischen Handelsschluss bei 427,00/427,70 nach 426,90/427,60 Dollar zum Freitagsschluss.

Das zweite Fixing in London erfolgte bei 427,15 Dollar nach 427,10 Dollar am Vormittag und 427,10 Dollar am Freitagnachmittag.

Eine Schweizer Grossbank gab den Gold-Kilopreis mit 16.123/16.373 (Vorabend 16.141/16.391) sfr an.

pma/och

22 Feb 2005 08:53

22.02.2005 08:05:25 Gold rises strongly as dollar slides against euro

* Gold rises strongly in early European trade on Tuesday at $429.30/430.00 per troy ounce by 0700 GMT, from late London's $427.00/427.70 on Monday.

* Gold initially advances in Asia on Tuesday after edging lower in early trade as the dollar's fall against the euro induces active stop-loss buying after the metal broke through an important technical level.

* The euro rebounds more than three percent from a three-month low around $1.2730 hit earlier in the month.

* At 0700 GMT, the euro was around $1.3170 -- its highest level in four weeks.

* Spot silver up at $7.47/7.50 from $7.39/7.41.

* Spot platinum higher at $868.00/873.00 from $860.00/865.00. Palladium up $1 at $180.00/185.00.

22 Feb 2005 09:39

22.02.2005 09:30:54 TOCOM gold down on firm yen, ends 9-day bull run

TOKYO, Feb 22 (Reuters) - Tokyo gold futures eased on Tuesday, ending a nine-day bull run on pressure from a firmer yen, but steady spot bullion prices provided support as traders waited for the U.S. market to provide fresh direction.

New York metals trading closed early on Friday and remained shut on Monday due to the President's Day holiday.

The benchmark December gold contract on the Tokyo Commodity Exchange finished down seven yen per gram at 1,447 yen, just one yen above the day's trough.

The session high was 1,452 yen.

Other months fell by five or six yen.

"A firm yen and a weak dollar were behind the decline in the absence of fresh news," a Tokyo analyst said.

The market was slow and trade was range-bound in the absence of fresh incentives to provide a cue.

"We're all waiting for the New York market to resume trading," the analyst said.

Spot gold was fetching $429.00/$429.70 an ounce at 0630 GMT, up slightly from the late European level of $427.00/$427.70.

Total gold turnover on TOCOM was estimated at 50,124 lots, up a touch from Monday's 45,070 lots.

In the currency market, the dollar fell to a five-week low against the euro as profit-taking on carry trades and the break of key technical levels triggered waves of buying in the yen and the single European currency.

The dollar fell to as low as 104.58 yen , easing one yen from the session's high.

In other precious metals, December TOCOM silver was up 1.8 yen per 10 grams at 250.1 yen, after moving between 247.3 yen and 250.7 yen, rising on the back of steady spot prices.

The TOCOM benchmark silver contract continues to hover at its highest level since hitting 256.8 yen on Dec. 8.

Spot silver was at $7.47/7.50 an ounce versus $7.38/$7.41 in Europe.

The benchmark December platinum futures contract closed up 13 yen at 2,850 yen, after moving between 2,835 yen to 2,858 yen.

Spot platinum was at $868/$873, up from $860/$865 in Europe.

Below are closing prices for TOCOM's most active precious metals contracts, with the day's turnover for each metal.

Closing prices are in yen per gram except for silver, which is in yen per 10 grams: For open interest details please click

Closing price Turnover (lots)
GOLD 1,447 (down 7) 50,124
SILVER 250.1 (up 1.8) 3,472
PLATINUM 2,850 (up 13) 31,253
PALLADIUM 612 (down 974

22 Feb 2005 10:08

22.02.2005 08:54:55 Indian gold, soyoil, sugar futures rise early

BOMBAY, Feb 22 (Reuters) - Indian bullion, soyoil and soybean futures climbed early on Tuesday in line with gains overseas, while sugar rose on local supply concerns, brokers said.

The market mainly tracks global trends as India imports about 70 percent of its annual gold needs of more than 700 tonnes and nearly half of its edible oil consumption of 10 million to 11 million tonnes.

April gold on the Multi Commodity Exchange (MCX) was traded at 6,190 rupees ($141.55) per 10 grams at 0630 GMT, up 0.63 percent from Monday's close.

The most active March gold futures at the National Commodity and Derivatives Exchange (NCDEX) rose 0.58 percent to 6,197 rupees per 10 grams.

MCX's March silver futures gained 1.7 percent to 11,040 rupees a kg, while NCDEX March silver was up 1.6 percent at 10,975 rupees.

Spot gold prices firmed in Asia after edging lower in early trade as the dollar's fall against the euro induced active buying. A weaker dollar makes dollar-priced gold cheaper for holders of other currencies.

At 0636 GMT, spot gold was quoted at $429.40/$429.90 an ounce, against the late European level of $427.00/7.70. Spot silver was traded at $7.47/$7.50 an ounce.

Indian gold futures are expected to trade between 6,160 rupees and 6,190 rupees on Tuesday, dealer Prithvi Raj Kothari said.

Soybeans and soyoil futures were also helped by reports of some damage to Indian oilseed crops due to hailstorms in the past week.

March refined soyoil on the MCX rose 0.64 percent to 376.60 rupees per 10 kg, while April soybeans were up 1.27 percent at 1,275 rupees per 100 kgs.

Chicago Board of Trade soybean futures prices surged by more than 2 percent in Asian trading as funds covered short positions amid worries about dryness in some regions of Brazil, the world's second-largest grower.

Brokers said sugar futures extended gains this week on market talk that the Indian government was expected to give more time to millers to offload their quota.

Sugar trade in India is controlled by the government, with the authorities setting the quantity that producers can sell each month.

NCDEX's March sugar opened at 1,906 rupees per 100 kg, up from the previous close of 1,902 rupees. ($1= 43.73 Indian rupees)

Hecla Reports Year End 2004 Results; Updates Reserves and Resources; For the Period Ended December 31, 2004
COEUR D'ALENE, Idaho--(BUSINESS WIRE)--Feb. 22, 2005--Hecla Mining Company (NYSE:HL) today reported increased sales and gross profit in 2004 compared to 2003. A decrease in silver and gold production was offset by increased precious metals prices during the year. In 2004, Hecla's net loss was $6.1 million, compared to a net loss of $6 million in 2003. Hecla's income for 2004 was $23.3 million, before accounting for exploration and pre-development expenses and a noncash environmental accrual for closed operations. This compares to income before environmental accruals and exploration and pre-development expenses of $28.1 million in 2003.

Hecla's President and Chief Executive Officer Phillips S. Baker, Jr., said, "Today we hold property in five world-class mining districts. To maximize our opportunities on these excellent exploration properties, we increased our exploration spending in 2004 to $16 million, and spent $4 million in pre-development expense -- more than we've ever spent in our history. Our robust operating cash flow and promising exploration targets give us the opportunity to make a concerted effort over the next three to four years on exploration, growing our resource base and leading to increased production in the future. We were successful in 2004 and have created a platform for continued success in 2005 and beyond."

Hecla maintained its position in 2004 as the lowest-cost primary silver miner and one of the lowest-cost gold miners in the business. The company produced nearly 7 million ounces of silver in 2004, at an average total cash cost of $2.02 per ounce, and about 190,000 ounces of gold, at an average total cash cost of $180 per ounce, a strong performance relative to the rest of the industry. Production for the fourth quarter and year was lower than expected, as a strike by workers at the Velardena mill during virtually the entire fourth quarter of 2004 reduced planned production from the San Sebastian mine in Mexico. The mine at San Sebastian continued to operate and stockpile ore in preparation for processing when the strike is concluded. Company-wide 2005 production is estimated in the same range as 2004, at about 6.5 million ounces of silver at an average total cost of less than $2.50 per ounce and approximately 190,000 ounces of gold at an average total cash cost of $180 per ounce, assuming the strike is resolved. Hecla's estimate of cash cost per ounce of gold is based on an effective Venezuelan currency exchange rate of 2,500 bolivares to US$1. The company is currently evaluating several significant changes to the exchange control rules applicable to exports of goods, services or technology scheduled to go into effect in Venezuela in mid-March, which could cause total cash costs per ounce of gold to be 10% to 20% higher.

Hecla's reported ounces of silver produced in the fourth quarter of 2004 was 1.3 million, compared to 2.3 million in the same period last year, and 35,736 ounces of gold in the fourth quarter of 2004, compared to 51,724 ounces of gold in the fourth quarter 2003, with lower production in 2004 due to lack of milling facilities at San Sebastian. The net loss in the fourth quarter of 2004, which included $7.2 million in exploration and pre-development expenses, was $3.8 million, compared to net income in the fourth quarter of 2003 of $2.2 million, which included just $2.7 million in exploration and pre-development expenses.

Hecla's balance sheet is extremely healthy. The company is debt-free, and cash, cash equivalents and short-term investments totaled $80.8 million at the end of 2004.

2004 HIGHLIGHTS

-- Began development of Mina Isidora gold mine in Venezuela, with
commercial production as part of the La Camorra unit scheduled
for 2006

-- Expansion commenced at the Lucky Friday silver mine in
northern Idaho to double production to 4 million ounces
annually in 2006; increased the strike length on the Lucky
Friday deposit

-- Feasibility work initiated at the Noche Buena gold property in
Mexico

-- A new significant mineralized structure discovered on the
Block B property in Venezuela (Twin Conductora)

-- Began excavation of the underground exploration ramp at the
Hollister gold project in Nevada

-- Replaced reserves mined during 2004 at all properties except
San Sebastian

-- Produced approximately 7 million ounces of silver at an
average total cash cost of $2.02/oz, and 189,860 ounces of
gold at an average cash cost of $180/oz

-- Noncash environmental accruals of $8.4 million in the third
quarter

-- Successful exchange of preferred stock for common stock, with
accompanying $10.9 million noncash dividend charge on the
income statement

-- Debt-free, with $80.8 million in cash and short-term
investments at the end of 2004

OPERATIONS

SILVER

Hecla produced 6,960,580 ounces of silver in 2004 at an average total cash cost per ounce of $2.02. Fourth quarter production was 1,310,178 ounces at an average total cash cost of $2.92. Higher fuel, steel and transportation costs impacted costs per ounce across the board for Hecla, as well as the rest of the mining industry, in the latter part of 2004.

Increased costs and decreased production of silver compared to 2003 were also affected by a strike during the fourth quarter at the mill in Velardena, Mexico, which processes the ore from Hecla's San Sebastian mine. The strike at the mill occurred because the national union wants to unionize the mine. Mine workers have informed the company, the union and the Ministry of Labor they do not want to unionize. The company is meeting regularly with government and union officials to resolve the issue. The mine continued to operate at a normal rate during the fourth quarter, stockpiling ore in preparation for future processing. The mill can process the ore at a much faster rate than it is mined once the strike is resolved, although the company is also looking for contract custom milling facilities that can process the ore. At the end of the year, 30,000 tons of ore-grade material had been stockpiled, containing an estimated 350,000 ounces of silver and 12,000 ounces of gold. The Francine and Don Sergio veins at the San Sebastian mine will be exhausted by mid-2005 and the mine will cease production. Work is continuing on the deeper part of the Francine vein, known as the Hugh zone, but is not far enough along to allow uninterrupted production. As expected, the ore grades are decreasing as the mine life winds down. Baker said, "San Sebastian has been a tremendously profitable mine for Hecla. Given the prospects on our 200-square-mile property, I expect we will soon discover the next deposit, develop the Hugh zone, or both. We expect to be exploring and mining in Mexico for a long time to come."

The Lucky Friday silver mine in northern Idaho produced 2 million ounces of silver during 2004, at an average total cash cost of $5.12 per ounce. As expected, cash costs were higher than in 2003, as mining gets deeper and more costly until the new access is completed on the 5900 level. Lucky Friday personnel did a good job of controlling costs in 2004, considering price increases for fuel and steel, and increased manpower as the Lucky Friday gears up for higher production levels at the end of 2005. When complete, the new 5900-level drift will bring lower costs and higher production. About $3.8 million was spent on this expansion during 2004. By the third quarter of 2005, miners should be drifting on the new vein. Some production will come out of the new area before the end of 2005, with full production by early 2006. Cash costs are expected to decrease by as much as $1 per ounce with full production from the 5900 level. During 2004, Lucky Friday was able to more than replace the reserves it mined during the year and added almost a year to proven and probable reserves. Lucky Friday's estimated 2005 production is approximately 3 million ounces of silver.

In Alaska, Hecla's Greens Creek silver mine produced 2.9 million ounces of silver and 25,624 ounces of gold, at an average total cash cost of $1.13 per ounce of silver for Hecla's account. Hecla holds about 30% of the project, partnering with Kennecott Greens Creek Mining Company, a subsidiary of Rio Tinto. Production at the mine was down slightly compared to the previous year due to lower ore grade, but cash costs per ounce for the year decreased, in part due to increased by-product metals prices. In the fourth quarter alone, costs increased compared to the fourth quarter of 2003 because of a lower ore grade and higher dilution from pillar extraction. Anticipated production in 2005 at Greens Creek is 2.8 million ounces of silver and 23,000 ounces of gold. During 2004, the Greens Creek tailings facility was expanded and some mill improvements were implemented. Greens Creek obtained ISO (International Organization for Standardization) 14001 certification on its first attempt in 2004, which is a major environmental achievement. ISO is a global organization and the certification recognizes that Greens Creek comprehensively addresses environmental protection and pollution prevention.

GOLD

Hecla produced 189,860 ounces of primary and by-product gold in 2004. Of the total, 130,437 ounces were mined in Venezuela at an average total cash cost of $180 per ounce.

At the La Camorra mine in eastern Venezuela, the ore grade was more than two-thirds of an ounce of gold per ton. La Camorra is an underground gold mine, accessed through a decline ramp. At the mine, haulage times continue to increase as the mine's ramp goes deeper. Increased haul distances affected costs at the mine, as did increased maintenance issues during the year. To offset higher costs experienced over the last few quarters and expected through midyear that are associated with the deepening of the mine, Hecla started construction of a 2,000-foot production and ventilation shaft in 2004. The new shaft, scheduled to go into service in the second quarter of 2005, will help maintain lower costs at the mine. Between La Camorra, a small number of ounces from Mina Isidora and custom milling for small miners in the area, Hecla expects to produce 140,000 ounces of gold out of Venezuela in 2005. Costs were expected to be about the same as 2004, but may increase due to changes in Venezuela's currency exchange controls.

Mina Isidora, a new gold mine that Hecla is developing in the El Callao gold district about 70 miles north of the La Camorra gold mine, is on schedule to begin full production in 2006. Some production from the area accessed by the Pozo de Agua incline shaft is expected before the end of 2005. The mine will have two points of access, a main ramp and a small, rehabilitated incline shaft. The shaft rehabilitation is about 90% complete, and this shaft will allow Hecla to gain early access to high-grade gold ore in Mina Isidora. The Mina Isidora ramp is more than halfway to the vein. Approximately 350,000 ounces of proven and probable gold reserve with an average grade of 1 ounce per ton has been identified at Mina Isidora, with the deposit remaining open at depth.

Hecla started its custom milling business in 2004, providing technical assistance to 20 small mining cooperatives. Baker said, "Realizing that these miners are an integral part of the gold mining industry in Venezuela and lending a helping hand has created incalculable goodwill from the communities and the government toward Hecla. We recently received recognition from the Governor of the State of Bolivar for our model economic programs and integration of the small miners into our business."

RESERVES AND RESOURCES

Hecla replaced or increased the proven and probable ore reserves mined in 2004 at each operation except for San Sebastian in Mexico, where ore reserves will be depleted and mining will be finished in mid-2005.

ESTIMATED ORE RESERVES
(as of December 31, 2004)
Proven and Probable
----------------------------------------------------------------------
Gold Silver Lead Zinc
Mine - (Hecla interest in %) Tons (oz/ton) (oz/ton) (%) (%)
----------------------------------------------------------------------
Lucky Friday Unit, USA 757,700 - 14.7 7.9 2.4
Greens Creek (29.73%), USA 2,358,189 0.11 14.1 3.9 10.2
San Sebastian Unit, Mexico 30,300 0.29 15.4 - -
La Camorra Unit, Venezuela 695,157 0.81 - - -

----------------------------------------------------------------------

ESTIMATED ORE RESERVES
(as of December 31, 2004)
Proven and Probable
------------------------------- ------------------------------
Gold Silver Lead Zinc
Mine - (Hecla interest in
%) (ounces) (ounces) (tons) (tons)
------------------------------- --------------------------------------
Lucky Friday Unit, USA - 11,150,368 59,888 18,047
Greens Creek (29.73%),
USA 261,604 33,334,025 92,916 240,467
San Sebastian Unit,
Mexico 8,600 465,400 - -
La Camorra Unit,
Venezuela 563,791 - - -
TOTAL 833,995 44,949,793 152,804 258,514
------------------------------- --------------------------------------

Mineralized Material (1)
----------------------------------------------------
Gold Silver Lead Zinc
Mine - (Hecla interest in %) Tons (oz/ton) (oz/ton) (%) (%)
----------------------------------------------------------------------
San Sebastian Unit (2) 33,000 0.33 20.6 - -
La Camorra Unit (3) 571,272 0.39 - - -
Lucky Friday Unit (4) 5,221,315 - 9.3 5.1 2.6
----------------------------------------------------------------------

(1) Securities and Exchange Commission guidelines do not allow the
company to complete the calculation of tons multiplied by grade to
equal contained ounces in the "mineralized material" and "other
resources" categories.

(2) In situ Francine vein and Don Sergio vein, diluted to assumed
mining width and adjusted for expected mining recovery.

(3) In situ resources, Canaima Lower and Middle veins, diluted and
factored for mining recovery (90%) and Isidora in situ M and S
vein.

(4) In situ Measured and Indicated resources from Gold Hunter and
Lucky Friday vein systems, diluted and factored for expected
mining recovery.

Other Resources(1)
-----------------------------------------
Gold Silver Lead Zinc
Mine - (Hecla interest in %) Tons (oz/ton) (oz/ton) (%) (%)
----------------------------------------------------------------------
San Sebastian Hugh (2) 478,837 0.02 8.6 5.4 6.7
San Sebastian DS & F (3) 83,000 0.35 8.6 - -
Lucky Friday Unit (4) 2,623,560 - 10.3 6.2 2.6
Greens Creek (29.73%) (5) 785,276 0.13 14.0 4.0 11.1
La Camorra Unit (6) 616,486 0.62 - - -
Noche Buena (7) 9,349,737 0.03 - - -
----------------------------------------------------------------------

1) Securities and Exchange Commission guidelines do not allow the
company to complete the calculation of tons multiplied by grade to
equal contained ounces in the "mineralized material" and "other
resources" categories.

(2) Inferred resources, Hugh zone (Deep Francine).

(3) Inferred resources, Francine and Don Sergio veins diluted to
assumed mining width and adjusted for mining recovery.

(4) Inferred resources, diluted to assumed mining width and adjusted
for mining recovery.

(5) Inferred resources, East, West, SW, NWW, 9A, and 200S orebodies,
factored for dilution and mining recovery.

(6) Indicated resource, diluted and factored for mining.

(7) Indicated and Inferred resources inside dipper pit.

Baker said, "In 2005, we expect to spend approximately $23 million on exploration and pre-development expense. With this expenditure, our goal is to add reserves and resources during 2005, with further additions in future years. This would allow us to increase our gold production and see the silver side of our business grow through quality, low-cost production." In 2005, Hecla plans exploration expenditures of approximately $1.5 million in the United States, $4 million in Mexico, $5.5 million in Venezuela, $3 million on unallocated projects, and $9 million in pre-development at the Hollister Development Block project.

VENEZUELA EXPLORATION

In Venezuela, drilling in 2005 is expected to expand the reserve at Mina Isidora on the Block B property near El Callao. In 2004, exploration drilling to the east of Mina Isidora identified potential for a new ore shoot beneath the old Chile mine, where a number of ore-grade intercepts returned values up to 15 grams of gold per tonne over 6.71 meters. This ore shoot would be accessible from Mina Isidora and drilling is planned this year to further test the area.

Elsewhere on Block B, Hecla will continue work on the Twin Conductora system, where drilling in 2004 has identified a previously unknown mineralized structure. Drilling has returned a number of ore- grade intercepts, where the best assay interval is 16.2 grams of gold per tonne over a width of 6.78 meters. The mineralized structure has been traced over a strike length of 700 meters, and down dip over 350 meters. The structure is open in all directions. According to Baker, "Our first two exploration attempts on Block B have arguably been wildly successful, resulting in the development of Mina Isidora and now the identification of a large new mineralized structure. This is very prospective property, and we've now begun evaluating the geophysics and geochemistry results to point us to additional targets on Block B."

At the La Camorra mine, deep directional drilling will continue to be employed to test targets on the east flank of La Camorra's Main vein and at depth beneath the current resource limits.

MEXICO EXPLORATION

In Mexico, exploration drilling in 2004 has identified a new silver resource deeper on the Francine vein, which has been called the Hugh zone. Drilling will continue in 2005 to further define the resource. The Hugh zone is the first priority on the Mexican property. However, other high priority targets are also being drill tested to the west and north of the mine. That program will be continued in the second and third quarters of 2005.

Hecla added to its already large land position in central Mexico with the acquisition of the La Roca concessions during the fourth quarter. La Roca is a historic mining district that lies to the northeast of San Sebastian and has potential for both silver and gold.

At Noche Buena, a potential surface heap leach gold operation in northern Mexico, work is on schedule to complete a feasibility study in the third quarter of this year. The resource model has been completed and the pit design, engineering and metallurgical test work are underway. The current resource at Noche Buena is 9.3 million tons at a grade of 0.03 ounce of gold per ton.

UNITED STATES EXPLORATION

More than 500 feet of advance has been made on the decline at the Hollister Development Block gold exploration project in Nevada. This underground exploration project, an earn-in to a joint venture with Great Basin Gold, is located in northern Nevada, near the Carlin trend. Surface facilities are 90% complete. Access to the deposit via the ramp, exploration drilling and drifting, and a feasibility study leading to a decision on production are on schedule to be completed in approximately 18 months.

During 2004, exploration drilling at the Lucky Friday in northern Idaho led to a 12.5% increase in the strike length of the silver deposit on the mine's 5900 level. In 2005, additional drilling at depth will test other targets for similar styles of mineralization to the east of the identified reserve and elsewhere on the property.

The Greens Creek mine in Alaska also reported progress on its exploration program in 2004. Underground drilling targeted the mineralization intersected west of the Gallagher fault in early 2004. Nine holes have been drilled and all have intersected significant mineralization. Two zones of mineralization have been intersected in a number of the holes, with the longest continuous intercept of mineralization being over 280 feet in length. Assay results for the holes are still pending, however the sections have coarse grain galena, sphalerite and rare ruby silver as well as electrum and acanthite, which is usually an indication of promising metal grades.

OTHER

In the fourth quarter, Hecla declared a dividend of $0.875 per share on the outstanding Series B Cumulative Convertible Preferred stock. The cash dividend, totaling approximately $0.1 million, was paid on January 3, 2005. There are 157,816 shares of the Preferred B stock outstanding.

A milestone for Hecla was reached during the fourth quarter, as the company celebrated 40 years of listing on the New York Stock Exchange. Hecla CEO Phil Baker, along with former Hecla CEO William Griffith and former CEO and current Chairman Arthur Brown, rang the closing bell at the NYSE in October 2004 to commemorate the event.

Long-time Hecla director Joe Coors, Jr. retired from the board of directors in February 2005. After 15 years of dedicated service to Hecla, Coors has decided to focus on other projects and opportunities.

Hecla Mining Company, headquartered in Coeur d'Alene, Idaho, mines and processes silver and gold in the United States, Venezuela and Mexico. A 114-year-old company, Hecla has long been well known in the mining world and financial markets as a quality silver and gold producer. Hecla's common and preferred shares are traded on the New York Stock Exchange under the symbols HL and HL-PrB.

Cautionary Note to Investors -- The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this news release, such as "resource," "other resources" and "mineralized materials" that the SEC guidelines strictly prohibit us from including in our filing with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K. You can review and obtain copies of these filings from the SEC's website at http://www.sec.gov/edgar.shtml.

Statements made which are not historical facts, such as anticipated payments, litigation outcome, production, sales of assets, exploration results and plans, costs, prices or sales performance are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, and involve a number of risks and uncertainties that could cause actual results to differ materially from those projected, anticipated, expected or implied. These risks and uncertainties include, but are not limited to, metals price volatility, volatility of metals production, exploration risks and results, political risks, project development risks and ability to raise financing. Refer to the company's Form 10-Q and 10-K reports for a more detailed discussion of factors that may impact expected future results. The company undertakes no obligation and has no intention of updating forward-looking statements.

Hecla Mining Company news releases can be accessed on the Internet at: http://www.hecla-mining.com.

22 Feb 2005 15:43

22.02.2005 15:40:45 UPDATE 1-Europe gold hits fresh peaks on sliding dollar

(Updates to afternoon)

LONDON, Feb 22 (Reuters) - Gold spiked to its highest in almost two months above $430 on Tuesday, with dealers looking for further gains as the dollar tumbled and made bullion more attractive to non-U.S. investors.

"The euro is moving in the right direction so things are looking very positive -- there's not much in the way of resistance before $440," HSBC metals analyst Alan Williamson said of the gold price.

Spot gold was at $433.10/433.60 per troy ounce by 1437 GMT, having hit a high of $433.90 -- last seen in early January when bullion scored its highest for the year at $437.50. That compared with $427.00/427.70 at the London market close on Monday.

Dealers said near-term dips on gold could not be ruled out, but the market seemed to be gathering momentum to test higher ground.

"Maybe we will come back to $430 as things calm down, where gold will be a buy again -- I can't see that the market will give up all of these gains," a dealer said.

The dollar nursed broad losses on Tuesday as concerns that central banks were diversifying from dollar assets pushed the U.S. currency through key technical levels.

South Korea's central bank said on Monday it planned to diversify its currency reserves, which are the world's fourth largest, into a greater variety of currencies.

Bahrain's central bank governor told Reuters on Tuesday he saw a growing role for the euro in international reserves as Europe's economy started to grow and capture a bigger part of world trade.

Gold analysts have said that bullion, which has struggled to rally decisively since hitting a 16-1/2-year peak in December at $456.75, should gain further this year as they expected the dollar to slide further.

Barclays Capital said in a daily report that current modest levels of speculative exposure on the New York futures market provided the fuel for a further test towards $434.

Also on Tuesday, world gold mining companies' de-hedging activity hit a record level in 2004, but the trend was seen slowing this year, a report sponsored by trade house Mitsui Precious Metals said. [nL21679365]

Silver also burst higher to hit a six-week peak of $7.54, lifted by gold's advance and by price gains in the industrial metals market, where copper futures touched 16-year highs on the shifts in currency values.

Silver stood at $7.49/7.52 by 1437 GMT from $7.38/7.41 late in London on Monday.

Platinum group metals also strengthened, with platinum up at $872.00/876.00 from $860.00/865.00, while palladium was at $181.00/185.00 from $180.00/185.00.