Gold In Arabic

Geography 

Saudi Arabia is about the size of Western Europe, covering four-fifths of the Arabian Peninsula. The Red Sea lies on the West coast and the Persian Gulf Bahrain, Qatar and the United Arab Emirates on the East. Saudi Arabia has borders with Yemen and Oman in the South, and Jordan, Iraq and Kuwait in the North. There are four geographical regions: Hejaz (North-West), Asir (South-West), Nejd (Central Plateau) and Al Hasa (Eastern Province). Most of the population is concentrated in Jeddah and Mecca in the West, Riyadh in the centre and Dammam and Al Khobar in the East. Saudi Arabia's Empty Quarter is the largest sand desert in the world and is the size of France. Summer temperatures inland can reach 50°C during the day, but can fall dramatically to below 30°C at night. In winter they can be close to freezing in the desert. The coastal temperatures are more moderate but humidity is high.

Geology

Saudi Arabia is divided geologically into four distinct and extensive terrains:

    * the Proterozoic Arabian Shield, comprising metamorphosed volcano sedimentary successions intruded by granite and gabbro;

    * the Phanerozoic Arabian platform of clastic, calcareous, and evaporitic successions dipping gently eastward away from the Shield;

    * the Tertiary 'harrats' (extensive basalt plateaus) mainly overlying the Shield; and

    * the narrow Red Sea coastal plain of Tertiary and Quaternary sedimentary rocks and coral reefs.

The primary interest in metallic minerals is in the Proterozoic Arabian Shield although base metal deposits are known to exist in the Phanerozoic and the Red Sea terrains. The Precambrian (Proterozoic) contains most of Saudi Arabia's known metal deposits of gold, silver, copper, zinc, iron, and magnesium. The Phanerozoic cover contains the oil resources and deposits of bauxite, phosphate, clay, limestone, silica sand, and lightweight aggregate that are of increasing importance to the industrial development of the Kingdom.

History

Modern Saudi Arabia was formed in 1932 when Abdul Aziz bin Abdul Rahman Al-Saud united different regions of the Arabian Peninsula into one nation. All of Saudi Arabia's rulers since 1932 have been descendants of Al-Saud. During his rule, King Abdul Aziz laid the foundations for the modernisation of his country. He began to build the country's infrastructure, first establishing roads and basic communications systems, and later introducing modern technology and improving education, health care and agriculture.

In November 1953, King Abdul Aziz died and was succeeded by his eldest son, Crown Prince Saud bin Abdul Aziz Al-Saud. The new King's brother, Faisal bin Abdul Aziz, was named Crown Prince. King Saud established the Council of Ministers and the Ministries of Health, Education and Commerce. The Crown Prince became King Faisal in 1964. To deepen links between Islamic nations, he travelled throughout the Arab and Islamic world.

In 1975, King Faisal was assassinated by his nephew, Faisal bin Musa'id bin Abdul Aziz. He was succeeded by his brother, King Khalid bin Abdul Aziz, whose reign lasted until 1982, when he died of a heart attack. His brother, Fahd, who had been made Crown Prince on King Faisal's death, succeeded him. In 1986, King Fahd stopped using the title 'His Majesty' and took the title 'Custodian of the Two Holy Mosques'. Since 1996, Crown Prince Abdullah increasingly took on more responsibility after King Fahd suffered a stroke and upon the death of King Fahd on 1 August 2005, Crown Prince Abdullah became King and Prince Sultan became Crown Prince.

Economy

Saudi Arabia has the largest proven oil reserves in the world and is by a long way the largest exporter of oil. Oil was discovered in 1938, and production began under the then US-controlled Aramco (Arabian American Oil Company). Saudi Aramco, now nationalised, controls all onshore oil and has the largest reserve base of any company in the Exporting Countries (OPEC). It has always been the dominant player within OPEC in adjusting production in line with market stability.

Large oil earnings, particularly since the oil price rises of the early 1970's, have allowed the Government to spend heavily to look after the people and to build the infrastructure of a modern economy.

In the 1980's and 1990's economic growth was barely fast enough to keep up with population growth, but very high oil prices in 2003-2005 have made possible a strong resurgence in growth.

Saudi Arabia has long had a very liberal policy on the use of foreign workers, who form the vast bulk of the private sector workforce. However, the Saudi population is rapidly increasing and policy is now focusing on the need to create more jobs for young Saudis. 

Gold Mining in Sudan

The northeastern African country of Sudan is the largest country in Africa and the Arab world, and the tenth largest in the world by area.  More well known for civil conflict than resources, the country possesses significant mineral wealth within its territory including: petroleum, natural gas, uranium, tin, silver,  manganese, zinc, iron, lead, copper, cobalt, nickel and gold.

Last November, Sudan signed 10 agreements for gold and iron mining, as the African nation plans to more than double its gold output to 50 metric tonnes in the current year. Four of the agreements were signed with international companies including a Sudanese subsidiary of the Guernsey-based Toro Gold Ltd. and a division of Rika Global Impex Ltd., based in Mumbai. The agreements grant the companies exploration rights in the states of Northern Kordofan, Al-Shamaliya, Nahr al-Nil and the Red Sea, which are all located in the north of the country. Sudan expects to sign 50 additional agreements in 2011 as it is experiencing “a rush” from foreign companies for gold exploration, including from Australia, Europe and the US, according to Sudan’s Mining Minister, Abdel Baqi al-Jailani.  Mr. al-Jailani said that “over 200,000 of Sudan’s artisanal miners, who camp in arid land in search for gold, have produced 23 metric tonnes of gold between January and October.”

Political Question Mark

For investors with a relatively high appetite for risk, some consideration should still be accounted for with regards to the Darfur conflict aftermath, the lack of basic infrastructure in large areas, and a reliance by much of the population on subsistence agriculture ensuring much of the population will remain at or below the poverty line for years despite rapid rises in average per capita income over recent times.

According to Sudan’s Finance Minister, Ali Mahmoud Abdel Rasoul the country relies too heavily on oil exports for most of its foreign currency earnings and is planning to diversify its economy to expand into gold mining and agriculture in the country’s north as the oil-rich region of Southern Sudan prepares for an independence vote this month.  The BP Statistical Review of World Energy lists Sudan as sub-Saharan Africa’s third largest crude producer, pumping about 490,000 barrels a day.

The independence referendum is considered a key component of a 2005 peace agreement which ended the two decade civil war between Sudan’s Muslim north and the south, where Christianity and animist beliefs dominate. Sudan’s north and south have not agreed on post-referendum arrangements such as responsibility for foreign debt and how to share the nation’s oil wealth with both sides currently splitting revenue from oil pumped in the south.

Potential Opportunity

La Mancha Resources (TSE:LMA) is currently producing gold at the Hassaï mine and intensively exploring and developing the volcanogenic massive sulphide (VMS) deposits underlying the Hassaï mine open pits.  The Hassaï mine in Sudan has been in operation since 1992, with 18 open pits developed over the years to extract high grade oxide ore. The company is expecting to have produced 30,000 ounces of gold for 2010 with the ore coming from an enriched upper zone of a much larger mineralized system.

La Mancha anticipates this exploration will represent the cornerstone of its mid-term growth. They are also investigating the potential of exploration tenements in the Nuba Mountains region, in the archaeologically significant Arabian-Nubian Shield of central Sudan.  The company operates two producing gold mines in Africa, and a third in Australia. It also has one other mining project under development in Australia (White Foil), and holds a portfolio of some 30 exploration projects in Africa, Australia and Argentina.

Junior Gold Mining Stocks

According to a recent report by Casimir Capital, constituents in the proprietary Casimir Junior Gold index outperformed both senior gold producers and physical gold during 2010. The Casimir Junior Gold index rose 47.6 percent during 2010, compared with 29.4 percent for the Major Gold share index and 29.7 percent appreciation for bullion. The junior index constituents include operating pure junior gold mining companies that went public prior to 2005 that currently have a market capitalization of between $75 million to $1.2 billion, with a latest monthly average volume of shares traded greater than 150,000.

Casimir Capital is anticipating another strong year for both junior companies and physical gold, primarily driven by the same underpinning fundamentals that guided gold prices loftier during the previous year. Factors include Casimir’s forecasts for the continuity of relatively high US budget deficit  at approximately 8 percent; US government spending to attribute for a high percentage of GDP at 23-24 percent, and for growth in the US federal debt as a percentage of GDP. European Union sovereign debt and US dollar weakness will continue to be themes which should bolster the Casimir bullish investment thesis on the 12 month future value of gold.