The pending litigation would become one of several class action lawsuits which have been filed against the Vancouver-based junior gold miner stemming from statements it made regarding the costs, progress and viability of the Galore Creek copper and gold project.

The law firm of Wolf Haldenstein is investigating whether American investors who bought NovaGold securities between January 24, 2006 through November 25, 2007, may have been mislead by statements made by NovaGold officers and directors concerning the costs, progress and viability of its Galore Creek project.

The original Hatch Galore Creek feasibility study estimated the capital costs for the project to be C$2.2 billion.  Galore Creek has been projected to produce 423 million pounds of copper, 341,000 gold ounces, and four million ounces of silver annually during the first five years of an estimated 20-year mine life.

"The results of the feasibility study enabled the company to successfully fend off a hostile takeover bid by mining giant Barrick Gold at $16 per share and allowed the company to raise hundreds of millions of dollars in an April 2007 secondary stock offering," the law firm said in a news release Thursday.

However, on November 26, 2007, "the company shocked investors when it announced that it would suspend activities at Galore Creek based on the results of an updated feasibility study, which estimated the capital costs for the Galore Creek project to be C$5 billion-approximately 127% greater than previously estimated," the lawyers claimed. "Upon this disclosure, the company’s shares decline $10.76 per share or more than 53% to close on November 26, 2007 at $9.48 per share, on unusually heavy trading volume."

Wolf Haldenstein joins original plaintiff Rudolph T. Texter, who sued NovaGold in August 2008, in the U.S. District Court in the Southern District of New York also over the valuation of the Galore Creek project.

A local government police and firemen pension fund on behalf of the City of Inkster Policemen and Firemen Retirement System also filed a class action suit against NovaGold in September 2008 stemming from the statements regarding the NovaGold Galore Creek project.

Crude-oil futures dropped as much as 1.8 percent in New York on concern that the U.S. economic recovery may stall, limiting fuel demand in the world’s biggest economy. Gold is set for a sixth weekly gain in seven as oil has climbed more than 5 percent this week.

“Lower oil prices usually signal less inflationary pressures,” Peter Fertig, the owner of Quantitative Commodity Research Ltd. in Hainburg, Germany, said Friday by phone. “That is a bit negative for gold.”

Immediate-delivery bullion lost US$1.42, or 0.1 percent, to US$997.78 an ounce by 11:58 a.m. local time. The commodity is up 0.7 percent this week. December gold futures were 0.2 percent lower at US$998.50 an ounce on the New York Mercantile Exchange’s Comex division.

The metal slipped to US$998 in the morning “fixing” in London, used by some mining companies to sell production, from US$1,004.75 at Thursday’s afternoon fixing. Spot prices have fallen 2.6 percent since climbing to an 18-month high of US$1,024.28 on Sept. 17.

The dollar rose as much as 0.3 percent to a three-week high against the euro before a U.S. report forecast to show the jobless rate climbed to a 26-year high. Gold typically falls when the currency strengthens.

“The gold market will probably be relatively quiet until the release” of the jobs figures, GoldCore Ltd., a brokerage in Dublin, said Friday in a note. Gold is “still continuing to knock on the door and consolidating near the psychological US$1,000 an ounce mark.”

Among other precious metals for immediate delivery in London, silver fell 0.6 percent to US$16.255 an ounce. Platinum was 0.6 percent lower at US$1,271.75 an ounce, while palladium was unchanged at US$291.50 an ounce.

After a months-long rally to a 10-month high in early August, steel prices in China have turned lower and prices of benchmark hot-rolled coil fell to around 3,617.5 yuan ($529.7) a tonne this week from 3,645 yuan last week quoted in south and east China, for a drop of 16 percent in just one month, data from Metal Bulletin showed.

For a graphic on China’s steel prices, click here

"Traders have high inventory and they are unlikely to resume buying actively until stockpiles are lowered to a more appropriate level," said a trader at an international trading firm.

Inventories of construction and flat steel products in Chinese merchant warehouses reached nearly 11 million tonnes last week, up 54 percent from a year ago and close to this year’s peak hit in March, as mills continue production at record rates and demand weakened on a sustained fall in steel prices.

Chinese steel output jumped 22 percent on the year to a record 52.3 million tonnes in August, marking a fifth monthly rise, and production in the first 10 days of September totalled 16.66 million tonnes, suggesting output growth would stay robust this month, although some mills have started cutting output.

But some small mills in China’s top steel-producing province have cut output due to lower steel prices, which a Macquarie analyst estimates would reduce China’s steel output by 2-3 million tonnes in September.

"We expect the (Chinese) steel prices to consolidate until October given that… inventory level is still high," Deutsche Bank analysts said on Thursday.

But the demand side is seen continuing its improvement, bolstered by the government’s stimulus package and recovery in the auto and home appliances sector.

Lakshmi Mittal, chief executive of ArcelorMittal, said on Wednesday Chinese steel demand would rise more than 15 percent this year, up from his previous forecast 10 percent growth this year.

In the Shanghai Futures Exchange market, rebar futures for October delivery SRBV9 fell 3 percent to 3,693 yuan on the week and September wire rod futures SWRV9 shed 2 percent to 3,625 yuan.

In Japan, August steel output fell 18 percent from a year ago, but it rose 8.5 percent from July, as big mills including Nippon Steel (5401.T) have boosted output to meet a pick-up in orders from auto makers and exporters.

 "Much of the capacity that was idled is being restarted but if companies find that it is not that easy to get production back on line smoothly, actual supply in the market may not rise as much as expected," Goldman Sachs analysts said in a note.

Nippon Steel, the world’s No.2 steelmaker, said on Wednesday it would restart a blast furnace at its Kimitsu plant early next month, as another furnace at the plant was continuing to suffer problems.

Construction of the site infrastructure would now start, and the prestrip of the openpit would begin in October. The company reported on Friday that the first ore production was expected during March or April next year, and would coincide with the completion of the Cosmic Boy nickel concentrator.

The Spotted Quoll deposit was discovered in 2007, and a mineral resource of about two-million tons, at an average grade of 6,2% nickel containing 125 500 t nickel has already been defined down to the 650 m vertical depth.

The ore reserve for the Spotted Quoll openpit is estimated at around 386 000 t at an average grade of 5,1% nickel containing 19 900 t nickel. Target production was 8 500 t nickel during 2010 and 9 800 t nickel in 2011.

Western Areas noted that the openpit was expected to be a robust project with estimated cash costs of less than $2/lb nickel in concentrate. The total life-of-mine capital cost, including surface infrastructure, was estimated to be A$36-million.

The 150-m deep openpit represented only 16% of total contained nickel in the current mineral resource, and a feasibility study was in progress for an underground mine, which was planned to be accessed from the openpit. A site for the decline portal has already been defined and underground development was expected to start in early 2011.

The openpit would employ over 80 people during development and to 65 people during sustained production.

Bullion closed above GBP 1,000 for a fifth day yesterday as the Dollar Index, which gauges the strength of the U.S. currency against those of six major trading partners,  dropped to the weakest level in almost a year yesterday.

Good news from the U.S housing market and reports that manufacturing in the Philadelphia region expanded more than forecast came with signs that a recovery could be imminent.

Trading prices on Immediate-delivery gold held steady at USD 1,014.10 an ounce at 2:36 p.m. in Singapore after rising as much as 0.2 per cent. The metal ended last week at USD 1,005.20 an ounce. The vast majority of traders and analysts expect bullion prices to rise next week, said Bloomberg.

According to research firm EPFR Global, commodity sector funds took in more than USD 1 billion in the week through Sept. 17 for the first time since records began in the first quarter of 2006. Exchange traded funds topped the list of funds attracting investment into commodity funds, pushing inflows above USD 9 billion this year.

The rising price of bullion is likely to encourage the sale of scrap gold, said an analyst, which could hold back the trading price of gold.

Among other metals for spot immediate delivery, silver fell 0.6 per cent to USD 17.18 an ounce, platinum gained 0.1 per cent to USD 1,336.75 an ounce and palladium lost one per cent to USD 310.25 an ounce, said Bloomberg.

Despite some technical indicators suggesting the market may be overbought, sentiment remained firm, analysts say, and many market participants still expect gold to break through its record high of $1 030,80 an ounce.

Spot gold was at $1 012,25 per ounce as of 0330 GMT, slightly up from New York’s notional close of $1 011,45. It is on track to post a 0,7% rise for the week.

"It’s still well above the $1 000 mark… I’m sure there will be ups-and-downs day by day, but I expect upward pressure on gold to stay for a while," said Tatsufumi Okoshi, a senior economist at Nomura Securities Co.

"There are opportunities for investors to take advantage of increasing liquidity provided by major central banks. But the situation is the same as before — there’re few attractive assets other than gold," he said.

Trade in Asia was relatively slow ahead of a long weekend in Japan. Tokyo’s financial markets are closed from Monday to Wednesday next week for national holidays.

On Thursday, gold hit a high of $1 023,85 per ounce, a hefty $74,2 above the level at the end of August. It topped $1,020 for the second straight day, when a measure of global equities reached an 11-month high.

But data showed there was no money inflow into the world’s largest gold-backed exchange-traded fund on Thursday, suggesting that the day’s rally was mainly driven by short-term investors building up long gold futures positions.

The SPDR Gold Trust said its holdings stood at 1 086,479 tons on Thursday, unchanged from a day earlier and up about 22 tonnes from the end of August.

US gold futures for December delivery stood at $1 013,90 an ounce. On Thursday the contract fell $6,70 to settle at $1 013,50 on the COMEX division of the New York Mercantile Exchange after hitting a high of $1 025,80.

Gold has benefitted from a lack of investor confidence in prospects for the global economy and will likely do so until company managers boost earnings forecasts, Nomura’s Okoshi said.

In addition, increasing debt issues by the US Treasury and diversification fears undermining the U.S. currency mean gold often attracts the most of safe-haven demand, traders said.

The US currency has retreated broadly since March as investors shifted into riskier assets due to increasing signs that the global economy was on the mend.

This is despite the animosity apparent when McEwen left.  The company still looks for low cost operations in low political risk areas and is virtually totally gold focused.

True it is bringing silver into the mix through Penasquito, which is just gearing up towards first concentrate production, but in its rationale it still views Penasquito as a gold mine with substantial silver, plus lead and zinc as a byproduct - and these days McEwen’s new flagship U.S. Gold also has a silver mining project!

Speaking at the Gold Forum, Jeannes pointed to solid production currently slightly ahead of forecast and what he described as "an outstanding present, very promising future" and as "being the fastest growing and lowest cost senior gold producer, with zero net debt."

All Goldcorp’s current operations are in the Americas and while there is no set policy not to look elsewhere Jeannes reckons they just haven’t come across anything which meets their very strict criteria for investment.

The company is also not interested in raising new capital to take advantage of the much higher gold prices and the considerable interest in gold at the moment says Jeannes.  It already has sufficient new production in its pipeline which is capable of seeing it through the next several years giving it a growing production profile that it can finance out of its own resources.

Indeed Goldcorp’s forward gold output predictions are impressive with a 50% increase in gold production scheduled over the next five years as its current projects come on stream.  Forecast gold output for the current year is 2.3 million ounces and this may well be exceeded although not significantly.  Beyond 2013 there is another slate of significant gold projects waiting in the wings.

The first main element in forward growth is Penasquito where the first milling line is due to start producing concentrate imminently.  There is a 5.8 million ton stockpile of ore ready for processing to see the plant through its commissioning stages.  A second mill line is due to come on stream next year.  Annual life of mine output is planned at 500,000 ounces of gold a year, 31 million ounces of silver and 400 million lbs of zinc.  Reserves are currently at 17.4 million ounces of gold and 1.05 billion ounces of silver.

Next in line is an expansion at Red Lake which Goldcorp calls the highest grade gold mine in the world and then the 40% share in Pueblo Viejo, being developed by Barrick in the Dominican Republic. Musselwhite then follows on, finalizing the build-up to 3.5 million ounces a year in 2013.

Beyond that, Goldcorp has a string of potential projects  to keep output rising - these include Cochenour, adjacent to the Red Lake mine, Eleonore in a newly discovered gold district in Quebec, a probable ‘super pit’ at Red Lake, Cerro Blanco, Hollinger and then the development of the underground potential at Penasquito.

Most of Goldcorp’s exploration budget is being spent in the vicinity of its existing and forward projects.  Jeannes told Mineweb it is more efficient to leave grassroots exploration to juniors which seem to be more successful and more efficient than the majors in finding new significant deposits.

So, all in all, Goldcorp has its future well planned out and manageable with existing funding, plus its cashflow development being seen as sufficient for at least its immediate needs. These conservative policies, and the emphasis on low cost production have stood the gold miner in good stead in the past and should continue to do so going forward under current management.

This is another big gig, with potential fees for liquidator running to R100m and beyond. There are no minimum requirements for registration as a liquidator, not even a basic literacy test, yet the cream of this so-called profession are among the highest paid individuals in the country. They waltz around with a coterie of favoured sidekicks and - of course - lawyers.

The roots in this story are growing ever-deeper. Picture a scene in early August 2009, at a creditor’s meeting at a venue in Gauteng, where creditors to a big property company, placed in provisional liquidation, are proving up their claims. Motala arrives, apparently in his personal capacity, along with his brother, and four others. These guys mean business.

One is Leon Lategan, an erstwhile long-time senior employee in the Pretoria Masters Office, the branch of the judicial system responsible for appointing liquidators to any given case. For some years now Lategan has worked under the Motala umbrella. Chris Edeling, an erstwhile advocate, is also there. Then there is Stan Rothbart, a practicing attorney, and longstanding personal representative of Motala.

Finally, Stephan du Toit, a practicing senior counsel advocate, who also acts personally for Motala, and somehow appears in many cases where Motala is a liquidator. It turns out that Motala is submitting creditor’s claims of no less than 170 "casual" employees of the construction company.

If these claims are accepted, then Motala will be appointed as a liquidator to the case. This is another big one; Philken, the beleagured construction company, owes one bank, alone, R550m, and that is only the start of it. Certain events that we need not go into here transpired. The bottom line is that Motala and his team departed, empty handed.

This is a story but few have heard of, but Motala has meanwhile cranked up the attention on his illustrious activities by making lots of noise around the Pamodzi Gold debacle. Motala first rode the high horse early this century by rising to prominence in and around the R1bn RAG bankruptcy, where the name of Penuell Maduna, justice minister at the time, was mentioned more than once.

Sadly, Motala had not been appointed as an original liquidator to RAG. In one of the many court cases spawned by that ugly story the Durban High Court noted evidence presented by Jeremy Gauntlett, senior counsel: "Uniquely, [Maduna] also sought the appointment of [Motala] - and only [Motala] - as a liquidator. [Maduna] . . . proceeded to appoint [Lategan], an additional Master in Pretoria, as a Master in this province [KwaZulu Natal] for the purposes of this liquidation, and this liquidation only". Motala was appointed an additional liquidator to RAG.

In the bankruptcy of MP Finance, more popularly known as Krion, a R1.7bn Ponzi scheme, four liquidators were originally appointed in August 2002. On January 6, 2004, Lategan appointed two further Krion liquidators. One of them was, of course, Motala. And so it goes.

In October 2003, Mike Tshishonga, then MD of the Master’s Office, publicly launched a raft of accusations against his political boss, Maduna. Tshishonga accused Maduna of attempting to provide "illicit favours for his close friend and confidant," Motala. However, Tshishonga also emphasized that Motala was not the sole abnormal beneficiary of an industry "littered with examples of nepotism and corruption." Those were the days, all right. For rookies, welcome to the rose-tinted world of South Africa’s liquidations sector, the very conscience of the country’s constitution.

With valuations on gold equities stretched above the historical average, market watchers see little support for the group, whose shares have surged along with other major developing world stocks.

Gold-mining companies, many of which are either based in or do their business in developing countries, are now trading at more than 27-times forward-looking earnings. That’s a considerable premium for the group, which has traditionally traded with a P/E ratio in the low 20s, according to analysts at Thomas Weisel Partners.

"Many of these stocks are ferociously expensive," said Christopher Ecclestone, an equities strategist with Hallgarten & Co., who is establishing a Latin America hedge fund focusing on mining companies.

Now that gold prices have hovered around the psychologically important $1,000- per-ounce level, chart watchers say there may be room to run higher.

Typically, the gold market is hit with profit-taking when approaching $1,000, but not this time, said Trenton Kimminau, a broker with Global Futures Exchange & Trading.

Kimminau said he sees that upward trend continuing, especially since the weakening of the dollar doesn’t look like it’s about to end.

Despite that, Hallgarten’s Ecclestone said he would rather invest directly in gold through the SPDR Gold Trust (GLD), because the higher risk and premium tied to mining stocks is no longer attractive.

To be sure, investors in gold stocks have been rewarded handsomely in the past year, supported by a weaker dollar and a recovery in metals across the board.

Peru’s Compania de Minas Buenaventura SA (BVN) and South Africa’s AngloGold Ashanti Ltd. (AU) have seen their shares jump 81% and 91%, respectively. Randgold Resources Ltd. (GOLD), which mines for gold in West Africa, has more than tripled from its October 2008 low.

These advances soar past the SPDR Gold Trust, which has gained 30% in the last 12 months.

Indeed, some miners offer a dividend but returns on them are less than 1% per year, at current prices.

"You’re better off buying Treasurys," Ecclestone said.

Still, Thomas Winmill, portfolio manager at Midas Funds in New York, said mining stocks could stand to gain anywhere from 5% to 10% in what remains of the year.

He said demand for the precious metal looks to be holding up and said he takes comfort in moves by gold miners to unwind their hedge positions on the precious metal.

Late last week, Barrick Gold Corp. (ABX) became the latest to eliminate its hedges, following an industry-wide trend. That is seen by many as a testament to their bullishness on the metal.

Gains in gold prices would mean additional revenue for miners, some investors said, meaning that earnings projections could be revised higher and bring valuations back into check.

Inflation-hedge buying on lingering enthusiasm following Tuesday’s comments by Federal Reserve Chairman Ben Bernanke that the recession is likely over also boosted gold. Participants were selling the U.S. dollar and buying the metal in anticipation of higher consumer and producer prices down the road.

Most-active December gold rose $13.90 on the Comex division of the New York Mercantile Exchange to settle at $1,020.20 an ounce, its fourth consecutive close in four-digit territory. Meanwhile, thinly traded nearby September futures hit an intraday high of $1,019.80, surpassing the all-time front-month high of $1,014.60, set in March 2008. The most-active futures record of $1,033.90 was also set that month.

Positive price sentiment is building as front-month futures continue their longest-ever streak of days above $1,000, with Wednesday marking the first day nearby prices didn’t spend any time below that level.

With the Fed likely to leave interest rates alone for the time being and participants seeing more of an economic recovery, they are buying gold in anticipation of rising inflation, said Michael Gross, broker and futures analyst with OptionSellers.com.

"People are buying gold to get out of the dollar," said Andrew Montano, director of precious metals at Scotia Mocatta.

The U.S. dollar slipped against its major rivals Wednesday after a fresh show of strength in U.S. manufacturing buoyed stocks and encouraged sellers of low-yielding assets. Shortly after gold closed, the ICE Futures U.S. dollar index was down 0.272 point.

"We’re seeing a lot of problems with the dollar," a trader said.

Gold is often bought and sold inversely with the dollar since the metal is considered a dollar hedge and, more broadly, an alternative currency. Some participants also believe the metal will hold its value more strongly than other assets in times of rising producer and consumer prices.

However, the rally is coming amid stagnating gold exchange-traded fund buying and poor jewelry demand from India, the world’s largest buyer of the metal for jewelry. Mine supply is also on the rise.

"It is taking place amid really poor fundamentals," Kitco Metals analyst Jon Nadler said. "That’s why I’m ready to call it a bubble."

Rather, Nadler said speculative funds - which primarily trade futures for profit rather than obtaining physical product - are behind the rally as the dollar weakens and participants anticipate rising inflation, despite current data.

Wednesday data showed the U.S. consumer-price index rose 0.4% in August. Core CPI, which excludes food and energy prices, increased 0.1%, as expected. Despite the monthly increase in the overall index, consumer prices were down 1.5% compared to one year ago.

On Tuesday, data showed the U.S. producer price index for finished goods rose 1.7% on a seasonally adjusted basis in August, after falling 0.9% in July. Last month’s increase was bigger than the 1% gain predicted by economists. However, PPI was still down 4.3% from August 2008.

Meanwhile, the gap between yields on 10-year inflation-linked Treasury securities and nominal bonds, known as the breakeven rate, stood at 1.86 percentage points, a sign that investors expect the inflation rate to average 1.86% over the period - in line with the Fed’s preferred core inflation rate of around 2%. Five-year breakevens stood at 1.37 points Wednesday, implying an even lower inflation rate.

That contrasts with consumers’ inflation expectations, however: Friday’s University of Michigan sentiment survey showed five-year inflation expectations at 2.8%.

"Inflation-anticipatory dollar-selling has been the pivot point around which the current rallies have orbited," Kitco Metals analyst Jon Nadler said.

The metal is continuing its technical breakout after breaching resistance around the $990 level, the trader said.

Most-active December gold futures on the Comex division of the New York Mercantile Exchange last week breached $1,000 for the first time in six months. Previously, the contract topped $1,000 and subsequently fell back in March and July 2008 and again in February.

"You’re seeing some follow-through buying now that gold is holding $1,000," said Carlos Sanchez, associate director of research with CPM Group.

Silver futures gained with gold prices. Participants were also purchasing the gray metal - which is more widely used in industrial applications than is gold - because of anticipated continued economic recovery.

"People are speculating that demand is going to pick up," Gross said.

Comex December silver rose 43 cents to settle at $17.43 an ounce.

Continued weakness in the U.S. dollar also supported platinum and palladium futures. Nymex October platinum rose $29.80 to $1,350.10 an ounce, while December palladium on the exchange gained $4.25 to $300.50 an ounce.

Higher gold prices also supported the platinum group. "It’s on the back of gold trying to make a push toward its all-time high," a trader said.

 
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,015.75; previous PM $996.00
Spot gold at 1:34 p.m. EDT: $1,018.35, up $12.45; Range: $1,006.57-$1,020.55
Dec gold $1,020.20, up $13.90; Range $1,007.90-$1,023.30
Dec silver $17.430, up 43 cents; Range $17.035-$17.580
Oct platinum $1,350.10, up $29.80; Range $1,324.60-$1,351.60
Dec palladium $300.50, up $4.25; Range $294.50-$304.80
 

@ Dow Jones Newswires