Hedge funds’ bullish bets on gold jump to four-year high
Hedge funds and other large speculators boosted their net-long position in gold.
American Bonanza Gold Corp. (TSE:BZA) shares fell by more than 50% on Friday in heavy volumes, after the company announced its Copperstone mine in Arizona is being placed on care and maintenance.
The Vancouver-based company, which was in the ramp-up phase at the 100%-owned Copperstone mine said it made the decision because it has been forced to cut costs amid declining gold prices.
The gold price is down 23% year to date. The 2011 feasibility study for Copperstone shows reserves of 256,000 ounces with 90% gold recovery.
American Bonanza will now seek additional capital to bring the underground mine to its designed capacity and in the meantime suspend mining and milling operations.
“While the suspension of operations may be considered a setback in the company’s goal of achieving commercial production at Copperstone, the company believes it is necessary in order to achieve that goal,” the company said in a statement adding that “operating costs have reached unsustainable levels for various reasons.
