Patagonia Gold will be takeover target: Hallgarten & Co.

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Patagonia Gold (PAT-T, PGD-L), one of the largest landholders in the Argentine province of Santa Cruz and an exploration company that is likely to have three mines in production within the next three years, could be a takeover candidate in the foreseeable future, mining analyst Christopher Ecclestone of Hallgarten & Co. argues in a new research report.The London-headquartered company’s COSE project in the southern Patagonia region is expected to begin generating free cash flow in 2013; its Lomada project is forecast to begin gold production in the fourth quarter of 2012; and its flagship Cap-Oeste project, which has yielded strong exploration results, could be in production within two years.And despite all the bad press about Argentina over the years, Ecclestone argues, “the country still manages to get the pulse racing of mining insiders with a string of deals continuing to surprise the naysayers out there.”Among these deals he cites Pan American Silver’s (PAA-T, PAAS-Q) bid for Aquiline, Goldcorp.’s (G-T, GG-N) bid for Andean Resources (“a stunning development for a project that had not been on many gold investors’ radars in a country that was regarded as tough going”); Stillwater Mining’s (SWC-N) bid for Peregrine Metals and Yamana Gold’s (YRI-T, AUY-N, YAU-L) bid for Extorre Gold Mines.“All of these deals were of note for ranging from the hundreds of millions of dollars to the multi-billions, not exactly the type of bets that are laid on the table when governments are perceived to be fickle or rapacious,” he continues.Patagonia Gold is focused on the Deseado Masif, a Jurassic Age volcanic complex that Ecclestone describes as an area that has “evolved into a hunting ground for those companies seeking out a new epithermal gold-silver mining district,” and Patagonia, he adds, is “the sole near-producing play in the region.”Other companies and projects in the area include AngloGold Ashanti’s (AU-N) Cerro Vanguardia mine; Goldcorp’s Cerro Negro, Pan American Silver’s Manantial Espejo project; Hochschild Mining (HOC-L) and McEwen Mining’s (MUX-T, MUX-N) San Jose mine, MInera IRL's (IRL-T, MIRL-L) Don Nicolas project, and Coeur D’Alene Mines’s (CDM-T, CDE-N) Mina Martha.http://www.northernminer.com/news/patagonia-gold-will-be-takeover-target-hallgarten-co/1001722184/

Spanish Scare Roils Europe Markets

Madrid's Borrowing Costs Rise as Investors Fear It Will Delay Bailout Request; Exchanges Fall as 'Draghi Effect' Wanes

By STEPHEN FIDLER and JONATHAN HOUSE

Spain's borrowing costs rose and its stock market fell sharply on the eve of Madrid's announcement of new austerity measures, putting the shaky economy again at the center of Europe's race to preserve its currency union.Spain's benchmark IBEX-35 index fell 3.9% and other European exchanges posted losses as well. The government's 10-year borrowing costs rose nearly one-third of a percentage point, to above 6%, placing renewed pressure on Madrid to find a way out of its debt crisis and appearing to crimp its prospects for avoiding a bailout from its euro-zone partners.The euro fell to a two-week low against the dollar. Interest rates for Italy, whose government is also burdened by high borrowing costs, also rose.Antiausterity demonstrations continued for a second day in Madrid, after protests turned violent in front of the Spanish Parliament on Tuesday. In Athens, too, tens of thousands of demonstrators took to the streets against anticipated budget cuts.Wednesday's market moves marked a sharp correction to the boost delivered by European Central Bank chief Mario Draghi's promise on Sept. 6 to buy bonds of euro-zone governments that request bailouts and submit to economic-reform programs. Like previous relief rallies that came after European leaders announced new crisis-fighting measures, the so-called Draghi Effect has also continued to dissipate.The ECB's early September announcement lifted the sense of impending crisis in the euro zone, and Spain's borrowing costs fell. That raised concerns among officials and analysts over whether its move was lifting pressure on debtor countries like Spain to take action and on creditors such as Germany to make concessions that are necessary to heal the failings in the currency union.Enlarge ImageReutersRiot policemen are engulfed in flames after protesters threw petrol bombs in Athens's Syntagma square.

More

• Bond Yields Up in Spain Italy on Bailout Fears
• Spain's Rajoy Outlines Fresh Overhauls
• Why the Crisis Is Back
• Heard: Who Should Pay Spain's Crisis Costs?
• Live: Europe's Debt Crisis Stream

Comments by Spanish Prime Minister Mariano Rajoy on Tuesday fanned concerns that Madrid would procrastinate in requesting a rescue package from the euro-zone bailout fund, analysts said. In an interview with The Wall Street Journal, Mr. Rajoy said Madrid would surely ask for help if Spain's borrowing costs remain "too high for too long."Some predicted that the spreads between Spanish bonds and lower-risk German bonds would continue to widen if Madrid fails to move. "As long as the government refrains from asking, we will see Spanish spreads widen. The market will push Spain into asking for a bailout," said Alessandro Giansanti, a senior interest-rate strategist at ING.

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The Dow industrials fell, as the U.S. posted disappointing housing data and the euro zone looked increasingly unstable. Matt Jarzemsky reports on the News Hub. (Photo: Reuters)Investment strategist Michael Gayed joins the News Hub to discuss what investors should keep an eye out for this fall. (Photo: Reuters)Enlarge ImageMr. Rajoy's government has a new chance to shore up investor confidence in the economy when it announces its 2013 budget plan on Thursday, together with other changes aimed at improving the way the economy functions. Analysts said investors will be watching the announcements as an indication of whether Spain is laying the groundwork for a bailout request.Wednesday's general pessimism was compounded by a report from the Spanish central bank, which said the recession-bound economy continued to contract at a significant rate in the third quarter.Another blow to Spain was delivered Tuesday as finance ministers of Germany, Netherlands and Finland cast doubt on whether the government would, after all, be able to shift the burden of bank bailouts to the region's bailout fund.Such a hope had been fostered by a declaration at a June European summit that leaders intended to break "the vicious circle" caused by weak governments having to shore up the finances of shaky banks. But in Tuesday's joint statement, the three finance ministers said the new bailout fund should directly recapitalize banks only for new problems. The three ministers said national governments should continue to be responsible for resolving so-called legacy problems created by past bad lending decisions.http://online.wsj.com/article/SB10000872396390444549204578020573542546716.html

Asian shares capped by Spain, Greece debt jitters

(Reuters) - Asian shares were capped on Thursday as uncertainty over a bailout for Spain bailout dented sentiment, while global lenders' wrangling over Greek debt restructuring highlighted Europe's apparent difficulty to reach a unified approach to tackling its debt crisis.The MSCI index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was nearly unchanged, after hitting its lowest point since September 14 on Wednesday.The index has almost wiped out all the gains made after markets rallied on the U.S. Federal Reserve's new QE3 job-boosting stimulus.Australian shares .AXJO inched down 0.1 percent and South Korean shares .KS11 eased 0.4 percent."Foreign investors' diminishing risk appetite and increased sell orders from equity funds have weighed on the index," said Lee Sun-yup, an analyst at Shinhan Investment Corp, of the Korea Composite Stock Price Index (KOSPI).Japan's Nikkei stock average .N225 opened down 0.6 percent to hit a fresh two-week low. .TAs protestors against severe austerity measures took to the streets and clashed with police in Spain and Greece, European equities saw their worst day in two months, while the euro hit a two-week low against the dollar and Spanish 10-year bond yields rose back above 6 percent.Spanish 10-year yields had held below 6 percent since the European Central Bank said on September 6 it would buy sovereign bonds of euro zone states which request a bailout, aiming to trim borrowing costs."The recent dose of central bank support has kept broader markets well-behaved for the time being," Barclays Capital said in a note."The announcement of detailed stress test results, the 2013 budget, and a structural reform package from the Spanish government are expected before the end of the week. These will be crucial in determining whether the current episode intensifies or not," it said.http://www.reuters.com/article/2012/09/27/us-markets-global-idUSBRE88901C20120927