By: Dylan Sikes - AllPennyStocks.com News

Tuesday, February 17, 2015

It has been an interesting year for gold prices in 2015 so far. Unlike industrial metals, the precious metal has been steady since the start of this year. Gold had finished 2014 nearly flat after falling almost 30% in the previous year. However, since the start of the year, concerns over the state of the global economy has boosted gold’s safe haven appeal. And with the crisis in the euro zone continuing, investors could continue to put some money in the precious metal. Gold will also remain strong due to solid physical demand in India, which has seen a bit of a revival in its economy. Also, from March, the European Central Bank (ECB) is going to start its quantitative easing, which will mean excess liquidity in the market. Some of that liquidity will flow into gold.

The only concern for gold is a strengthening dollar. However, gold seems to have a strong support at $1,100 an ounce. Miners therefore have some certainty over future cash flows.

Gold miners have been focused on bringing down costs and concentrate on properties that have lower cost of extraction. This way they can keep their margins healthy even in a low price environment.

This morning, Luna Gold Corp. (TSX:LGC), a Vancouver, Canada-based company provided an update on its operations and corporate activities. Luna Gold is engaged in the operation, discovery and development of gold projects in Brazil.

Earlier today, Luna Gold said that it has commenced the process of suspending mining operations at Aurizona by February 15. After the mining operations are complete, the ore stockpile will have some 470,000 tons of mixed soft and hard saprolite ore with an average head grade of 1.12 grams per ton and 390,000 tons of transitional ore with an average head grade of 1.06 grams per ton.

In addition, LGC also said that it is continuing with cutbacks in mine site personnel. The cutback in workforce will allow the company to better align the remaining workforce for processing stockpiled ore at the plant and associated activities.

LGC has already halted all non-essential capital programs in order to conserve capital. This is the right move in the existing price environment. LGC is also continuing its strategic review process with Canaccord Genuity acting as an advisor.

LGC is expected to remain in focus going ahead as the company focuses on cost-cutting efforts. The company will release its fourth-quarter results on Monday, March 16, 2015. The results should give an idea about how the company’s efforts to reduce cost are progressing.

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