Sufiy's  Instablog

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Few more pieces of the Puzzle is getting into their place now. Currency wars will claim the US Dollar Reserve Status as its first collateral damage.

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"We all can have the different views on Anonymous, but timing of all recent events is pointing out to the very serious financial situation underlying the so apparent manipulation in the Gold market these days. If it takes Years for Germany to bring its Gold back - how much Gold Is There If Any Left?

And here we go with another twist to the Friday's Gold Wash Out Special Op - ZeroHedge reports on another direct currency swap line established by China with France. This is just getting more serious day by day - US Dollar is under threat as the Reserve Currency of Choice, which is No More Wanted. The question is: will other Central banks join the FED in order to Kill the Confidence in Gold to protect the US Dollar Status now?"

"We are trying to verify this information. If it is true - to call it The Groundbreaking will be the understatement of the year. Welcome to the Currency Wars at its Prime."

CNBC:

Earth shattering monetary stimulus from theBank of Japan, a threat to the safety of European deposits (courtesy of the Cyprus bailout), weeks of fretting over U.S. spending cuts - 2013 has given financial market participants an awful lot to digest so far.

This probably explains why perhaps the most significant story of them all seems to have passed most people by - China, and the increasing role its currency is having in the world.

Few would dispute China's end goal of having its currency, the yuan, become a genuine world reserve currency. Who wouldn't want cheap access to world capital markets that reserve currency status brings? Not to mention cheaper transaction costs on international trade.

Indeed most spectators also understand China's political motives in achieving reserve currency status for the yuan (more voting rights at IMF, World Bank etc). However, what does seem to be lost on the financial world right now is how quickly they are getting there.

Before we assess the steps China is taking to achieve this end, let's get reacquainted with the world of foreign currency reserves.

(Read More: How the Yuan Could Take the Dollar's Crown)

According to IMF data there is currently approximately $11 trillion of foreign exchange reserves sitting in the coffers of the world's central banks. $6 trillion of this is referred to as "allocated reserves" where the currency composition is known. Most of the remaining $4-5 trillion "unallocated reserves" are owned by China who choose not to divulge the currency composition of their foreign loot.

We know roughly 62 percent of "allocated reserves" are held in U.S. dollars, 23 percent in euros, 4 percent in yen, 4 percent in sterling with the Swiss franc, the Aussie and Canadian dollars making up the tiny remaining balance.

(Read More: Watch This Currency If You Want to Trade China)

The most striking aspect of these allocations is how uncorrelated they are to one distribution of international trade and two to distribution of world gross domestic product (GDP).

Most recent International trade data show the largest volume of trade of goods are distributed as follows - European Union 12.3 percent, U.S. 11.3 percent, China 11.3 percent, Japan 5 percent, U.K. 3.3 percent and South Korea 3.3 percent

As regards with world GDP, the order of distribution is not un-similar - E.U. 23 percent, U.S. 21 percent, China 10 percent, Japan 8 percent and U.K. 3.3 percent.

(Read More: Not Our 'Currency War': New Zealand Finance Minister)

Those reserve allocations just don't seem right do they?

Of course this issue is far from new - long have central bankers, politicians and economists mooted a fairer and more representative reserve currency system, with SDR (the IMF's Special Drawing Rights) often mentioned.

Well now it seems China's time has come.

Growth in global foreign currency reserves has exploded - the $11 trillion in central bank coffers today is over three times what it was 10 years ago. The dawn of monetary debasement via the printing press has rocked confidence in all the major currencies. Even gold no longer cuts it. The world is crying out for a new store of value - and the Chinese know it.

The Chinese yuan is not freely traded on the open market and its capital markets are far from fully open - so how is the yuan getting into the hands of those desperate to diversify reserves into this currency which offers fundamentally better value?

Stealth - that's how.

As with all matters of strategic importance, China is following a well-planned and controlled path in pushing the yuan to the forefront of the currency world. The authorities in Beijing have been very prescriptive in setting up swap lines between their own central bank (the People's Bank of China) and central banks of their trading partners (swap lines are direct channels between central banks to exchange currency). It is via these swaps line that yuan flows out of China and into the hands foreign corporates, financial institutions and households.

(Read More: A Lot More 'Juice' in the Yuan Trade)

Consider Mr Tan in Singapore who wishes to have some of his savings in yuan rather than 100 percent in his native currency the Singapore Dollar. He walks into his local bank branch, converts some of his savings into yuan and leaves it in a newly opened account earning a better interest rate that he was getting on his Singapore dollars.

His local bank branch is able to acquire the yuan on his behalf from the Singapore central bank - which in turn was able to acquire it from the Chinese Central bank via the swap line. This process has seen the yuan deposit base outside of China grow substantially, particularly in Hong Kong, Singapore and Taiwan.

Away from retail banking, the offshore yuan deposit base has also seen strong growth via accounts held by corporates. Consider the export company in Singapore trading with mainland China - they may choose to accept payment in yuan and keep it in an account set up in Singapore. Why convert it back to any other currency when the yuan offers better fundamental valuation and a better interest rate on deposits?

(Read More: China as World's Biggest Economy? Not So Fast)

Recent data tell us this process is rapidly accelerating - and of course Singapore is just one country among many where yuan is being held as a store of value within its borders. The first such swap lines were set up in 2008 but many have been added last year and we expect many more to be added, with the U.K. and France imminent.

So where do central bank reserves fit into all this?

The world's central banks' appetite to diversify reserves into the "under-valued" yuan is clearly there. Only a few weeks ago the Reserve Bank of Australia announced it plans to diversify 5 percent of its reserves into yuan - and that's just the start. Many of the smaller central banks in Asia have already been seen buying yuan through banks. As more bilateral swap lines are set up and China moves further down their path of capital market liberalization, central banks' appetite to own this currency will unfold.

(Read More: Will Asian Currencies Forever Disappoint?)

If we assume reserve allocation comes into line with China's share of international trade and GDP (approximately 10-11 percent) then about $700 billion worth of yuan will be purchased by central banks alone!

We hear the arguments that China's capital markets have a long way to go before being able to accommodate such a quantum of reserves - but let's not kid ourselves, the process is well underway and further down the path than many think.

China is getting its yuan into the hands of many entities in many countries. Controlled, prescriptive, pervasive and stealthy are all valid descriptions of this process - but it is happening nonetheless.

Based in Singapore, Stuart Oakley runs the global Asian forex cash trading business at Nomura. He has worked in financial markets since 1995 and has spent most of his career trading Emerging Market currencies and interest rates, previously at Barclays Capital and Credit Suisse in London."

"Vancouver B.C. April 3, 2013: International Lithium Corp. ("ILC" or the "Company") (ILC: TSX-V) is pleased to announce lithium and associated rare metal assay results from the remaining eight drill holes of the recent 19 hole (2,075 metre) diamond drill program on the lithium and rare metals pegmatite field spanning the contiguous Fairservice and Mavis Lake claim blocks near Dryden, Ontario.

Key Highlights

1.34% Li2O over 8.50m intersected in MF-12-33

1.05% Li2O over 10.85m intersected in MF-12-34

1.06% Li2O over 10.75m intersected in MF-12-36"

International Lithium Presentation.

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Vancouver B.C. May 10, 2013: International Lithium Corp. ("ILC" or the "Company") (ILC: TSX-V) is pleased to announce that Jiangxi Ganfeng Lithium Co. Ltd. ("Ganfeng Lithium") has agreed to lend ILC a total of $2,289,000 to advance the Company's Mariana Lithium-Potassium Brine project in Argentina and for ILC to provide the outstanding scheduled cash payments to secure an unencumbered 100% ownership of the Mariana project. Subject to final approval by the TSX Venture Exchange and Ganfeng Lithium's shareholders, Ganfeng Lithium will advance ILC a total of USD$2,289,000 ("Loan"). USD$1,199,000 will be advanced within two business days of Ganfeng Lithium receiving shareholder approval ("First Advance"), and a further advance of USD$1,090,000 will follow in May 2014 ("Second Advance"). The Loan will mature two years following the date of the Second Advance and during the term of the loan ILC will pay interest of 10% per annum on the balance of the Loan, payable quarterly.

In lieu of receiving repayment of the loan, Ganfeng Lithium may elect to convert into an interest in the Mariana Property. The loan agreement contemplates that Ganfeng Lithium may convert what would otherwise be ILC's repayment obligation for the First Advance into a 26% interest in ILC's rights in the Mariana Property. Likewise, instead of receiving repayment of the Second Advance, Ganfeng Lithium may convert into a 25% interest in ILC's rights to the Mariana Property, for a total interest of 51%. If Ganfeng Lithium elects to convert up to a 51% property interest, at that time, the parties would enter into a joint venture relationship for the operation of the Mariana Property.

"This latest transaction demonstrates the confidence and continued support ILC has received from our strategic partner Gangfeng Lithium, providing us with the resources to move in course with exploration plans and operations that will allow us to unlock the potential value in the projects that we have been advancing since the formation of the company." States Kirill Klip, President of International Lithium Corp.

About GanfengLithium Co. Ltd.

Ganfeng Lithium based in Xinyu, Jiangxi Province, China, is a professional producer of lithium products which has developed a comprehensive product chain, including lithium metal and alloys, inorganic and organic lithium chemicals, supplies a wide range of lithium products for primary and secondary lithium battery market, pharmaceutical and new material industries. Ganfeng Lithium's principal market is in China with international exports to Europe, Japan, the USA and India. Ganfeng Lithium was founded in 2000 and listed on the Shenzhen Stock Exchange in August 2010, notably as the first publicly listed lithium company in China and has experienced rapid continuous growth over the last 12 years.

About International Lithium Corp.

International Lithium Corp. is an exploration company with an outstanding portfolio of projects, strong management ownership, robust financial support and a strategic partner and keystone investor Jiangxi Ganfeng Lithium Co. Ltd., a leading China based lithium product manufacturer.

The Company's primary focus is the Mariana lithium-potash brine project in Argentina within the renowned South American 'Lithium Belt' that is host to the vast majority of global lithium resources, reserves and production. The 160 square kilometre Mariana project strategically encompasses an entire mineral rich evaporite basin that ranks as one of the more prospective salarsor 'salt lakes' in the region.

Complementing the Company's lithium brine projects are rare metals pegmatite properties in Canada and Ireland that have revealed through recent highly positive results a clear potential that the Company will advance with the support of its strategic partner, Ganfeng Lithium. These projects can add distinct value as the Company strives to source rare metals to help meet the increasing demand through the growth in global technologies that utilize the rare metals suite of elements.

With the increasing demand of high tech applications in battery and vehicle propulsion technologies, lithium and other rare metals are no doubt the metals of tomorrow's green tech economy. By positioning itself with solid development partners and projects with significant resource potential, ILC aims to be the green tech resource developer of choice for investors and build value for its shareholders.

International Lithium mission is to find, explore and develop projects which have the potential to become world class lithium, potash and rare metal deposits.

On behalf of the Board of Directors,

KirillKlip

President, International Lithium Corp.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Statements in this press release other than purely historical information, historical estimates should not be relied upon, including statements relating to the Company's future plans and objectives or expected results, are forward-looking statements. News release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the Company's business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements."

Please Note our Legal Disclaimer on the Blog, including, but Not limited to:

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.

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Now you can slice and dice it: what will be the price for Los Azules and what will be the effect on McEwen Mining and, particularly, TNR Gold valuations and market caps. All slides are from McEwen Mining presentations.

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From McEwen Mining:

Los Azules Copper Project, Argentina (100%)

Los Azules is one of the world's largest and highest grade undeveloped copper porphyry deposits. This drill seasons exploration program, with a budget of $25 million, was completed in April.McEwen Mining has begun work on an updated Preliminary Economic Assessment (PEA), which is expected to be completed in Q3 this year. The updated PEA will be based on a significantly larger mineral resource. It will evaluate the possibility of (1) increasing the daily throughput; (2) producing copper cathode instead of a concentrate and (3) processing low-grade mineralized material not previously considered, via a heap leach. The advantage of being able to produce a copper cathode is that it would eliminate the contemplated slurry pipeline through Chile and would reduce Argentina's current export tax on concentrate."

In a separate release of Q-10 McEwen Mining has confirmed that new resource estimate on Los Azules will be released by the end of May 2013.

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"Vancouver B.C., May 08, 2013: TNR Gold Corp. (the "Company" or "TNR") Is pleased to announce that it has retained the services of PI Financial Corp. to provide financial advice regarding the sale of its back-in right to the northern portion of the Los Azules copper project in Argentina. TNR has a back-in right (TNR press release February 5, 2013) allowing it to acquire a 25% interest in certain mineral concessions at Los Azules that includes the northern portion of the deposit (the "Northern Portion")."

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TORONTO, ONTARIO--(Marketwired - May 9, 2013) - McEwen Mining Inc. (NYSE:MUX)(TSX:MUX) is pleased to provide a summary of significant developments and first quarter operating results during Q1, 2013. (All Amounts in US Dollars Unless Otherwise Stated)

Q1 Highlights

• El Gallo 1, our 2nd mine began commercial production.
• Gold equivalent production increased by 31% to 29,839 ounces (17,001 gold ounces and 667,555 silver ounces) versus Q1, 2012.
• On target to produce 130,000 gold equivalent ounces this year.
• Cash costs totaled $885 per gold equivalent ounce. Costs increased due to the work stoppage at San José (which added $55 per ounce) and inventory adjustments (which added $60 per ounce). Lower costs are expected for the remainder of the year.
• Total sustaining costs totaled $1,507 per gold equivalent ounce. Costs increased due to development being ahead of schedule (which added $90 per ounce), additional exploration drilling at El Gallo 1 (which added $35 per ounce), timing of sales (which added $40 per ounce) and the items outlined in the bullet above (which added $115 per ounce). Lower costs are expected for the remainder of the year.
• Increased the mineral reserve and resources, including grade, at San José. Mineral resources are at record levels.
• At March 31, 2013 Financials: $50.6 million in liquid assets and no debt.
• El Gallo 2 received its Municipal construction permit. Targeting end of Q3 for remaining approvals."

Please Note our New Legal Disclaimer on the Blog, including, but Not limited to:

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

Please, do not forget, that we own stocks we are writing about and have position in these companies. We are not providing any investment advice on this blog and there is no solicitation to buy or sell any particular company.