Bering Sea Gold is running on the Discovery Channel and is premiering today.

Small crews operate make-shift floating barges that dredge placer gold. The show highlights the challenges the private owners face, improvising equipment and the boom and bust of the daily gold hunt.

The Washington Post gives the new reality show a thumbs up:

“Bering Sea Gold,” like its Discovery forebears, does a great job of conveying the angst, financial risk, suffering and physical demands of this annual dredge. The gold-hunting season, which is short already, can be curtailed by bad weather and rising swells. And, as with the network’s “Gold Rush Alaska,” “Bering Sea Gold” features a maddening litany of mechanical breakdowns and human ineptitude.

On a converted, ramshackle catamaran called the Wild Ranger, a bellicose captain-for-hire named Scott Meisterheim positions himself as the show’s alpha male, until reality (or some edited form of it) intervenes. The more he rages at the broken-down boat and his gleefully contrarian shipmates, the less gold his crew finds. It’s almost comically satisfying to watch them return to harbor each day with barely enough gold to dust Wolfgang Puck’s latest a la mode. Meisterheim keeps reminding the camera that he has to strike it rich or else he’ll go to jail for not paying his child support. And whose fault is that, sir? It’s not like the ocean owes you its nuggets.

Read more here.

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Underwater miners off Nome, Alaska, get a reality show

Increases in demand from China and India have driven a 7.5 percent increase in demand for gold jewelry during the first half of the year despite a 25 percent increase in the price, according to a report released this week from GFMS. However, much of India’s potential gold demand remains untapped.

Toussaint highlighted an interesting fact: Of the roughly 800 tons of gold imported to India each year, only the top 40 percent of Indian households purchase all of the country’s gold, says Toussaint. The other 60 percent of Indians, who may have the same adoration for gold and celebrate Ramadan and Diwali, historically may not have had access to purchase gold. This large population represents a huge untapped market. To fulfill demand, the WGC has created a program with Indian post offices to distribute coins and small pieces of gold. Toussaint says right now there are 700 post offices in the rural areas servicing 90,000 customers and he expects that number to grow. This market is worth pursuing based on McKinsey’s research that a “huge wealth creation wave” is developing in India. As Toussaint puts it, “if purchase patterns continue, we will see from 2005 to 2025, a four times larger gold market in India.”

This is a fascinating idea because very few entities other than the post office have the network and infrastructure necessary to reach beneath the surface of the world’s largest gold market.

India may be the world’s largest gold market, but in China, gold buying has become so significant that the country has become the fastest-growing market for gold jewelry in the world. Not only are Chinese purchasing increasing amounts of gold, they prefer pure 24-carat gold. This high-quality gold is given to celebrate special occasions, such as birthdays, and purchased for a bride at her wedding. In 2010, 6.6 million brides will make gold a part of their ritual as the yellow metal signifies the importance of a long-term relationship, says the WGC website.

While jewelry represents a large percentage of gold purchases in the country, Chinese can also purchase gold at their local bank. WGC formed a partnership with the Industrial and Commercial Bank of China (ICBC Bank), the largest bank by deposits in the world. They began offering a “Gold Accumulation Plan” that lets investors buy and accumulate small portions of gold over time. Similar to a bank account, people participating have access to the underlying gold or the cash value at any point. Since it was launched in December 2010 through this summer, the ICBC has an estimated 1.7 million accounts, with an accumulation of more than 12,000 kilograms of gold.

After India and China led the global demand for gold, accounting for 52 percent of 2010 tonnage, the GFMS says the two Asian countries have “continued impressive growth” this year. Gold buying in India jumped 38 percent during the second quarter alone. GFMS reported China’s gold purchases jumped 90 percent on a year-over-year basis through June. This is a follow up to the 75 percent increase in gold demand the country experienced last year.

This share tops all of North America, which accounts for 8 percent, Europe and Russia, which account for 13 percent, and even the Middle East and Turkey, which together account for 12 percent. North American gold demand fell 12 percent during the first half of 2011 due to the slumping U.S. economy and rising prices.

In 2011, the average annual base salary for Canadian mining CEOs was $486,000 in 2011, similar to $480,000 in 2010. Of the 95% of CEOs who were eligible for cash bonuses, 85% reported receiving payouts averaging 76% of their base pay (compared to 88% in 2010 and 61% in 2009) with the highest cash incentive percentage totalling 300% of base pay. The average actual cash bonus payout in 2011 was $412,000, compared to $540,000 in 2010. The average total cash compensation package (including annual base salary and cash bonus) was $826,000, similar to $840,000 reported in 2010 and well above the $670,000 figure seen in 2009.

This year’s survey has seen a rise in Canadian CEOs earning in excess of $1 million:

• 56% (compared to 52% in 2010 and 51% in 2009) have annual compensation packages (base pay + bonus + equity-based pay) over $1 million
• 35% (compared to 32% in 2010 and 22% in 2009) have annual compensation packages (base pay + bonus packages) over $1 million
• 10% (on par with 2010 and 9% in 2009) have an annual base pay in excess of $1 million

“Mining CEOs are still riding a wave of high salaries and cash bonuses on the backs of overall solid company performances and strong prices for certain commodities over the past year,” says Lou Vujanich, survey leader and principal of Coopers Consulting. “The question is now whether these high salaries and bonuses, which are tied to company and market performance, will remain as strong next year.”

“What kept compensation from increasing dramatically are rising operational costs and some softening in the equity markets,” adds Len Boggio survey contributor and senior partner in PwC’s mining practice. “Although the Canadian mining sector is overall very stable and in a position for continued growth, the confused capital markets could ultimately impact the sector and put a lid on compensation.”

High salaries lower down the hierarchy 

In 2011, across the full range of salaried staff positions found at a mine site, over 80% of positions are eligible for some form of incentive plan, such as an annual cash bonus, gainshare plan or productivity improvement plans. This is a significant change compared to as recently as 2002 when eligibility hovered at only 59%.

“The increase in compensation incentives for salaried positions lower down in the hierarchy is a philosophical change for Canadian-based mining companies,” says Vujanich. “Fierce competition to attract and retain qualified mining professionals across the spectrum of positions is driving up compensation costs for mining companies.”

“For mining professionals, the competition for talent and uptick in compensation paints a positive picture for job seekers,” adds Boggio. “To keep up with competition and to attract talent to work in rural or remote areas, companies are raising the incentives for potential and current employees, which often translate into more financial reward.”

The study also found new graduate mining engineers can reasonably expect a starting salary in the range of $70,000—a figure that jumps to about $75,000 after one to two years of experience. By region, Western Canadian mining operations generally pay more than their Eastern Canada counterparts. Compensation data also shows companies that mine coal, industrial and other minerals generally pay more across the board, while base metal mining operations generally pay less.

Survey Methodology

The Coopers Consulting and PwC survey this year covers 53 typical salaried corporate office positions, 58 mine site positions and 14 field exploration positions. The 2011 Mining Industry Salary Survey database contains information on 17,329 incombents—7,800 are based in Canada and 9,529 from the United States. In total, 154 North American companies are represented in the 2011 update (of the 154, 111 provided Canada based incumbent data while 68 provided United States based incumbent data). The figures are current to the end of the second quarter of 2011.

For more information about the report findings, contact Lou Vujanich at lou.vujanich@coopersconsulting.com.

Follow PwC on Twitter at @PwC_Canada_LLP and on Facebook at http://www.facebook.com/pwccanada.

About Coopers Consulting
Coopers Consulting Ltd. is a B.C.-registered limited liability company founded in 2002 by the former National Director and three Principals of the Mining Management Consulting practice of PwC. The Principals of Coopers Consulting have significant mining industry experience and offer a wide range of management consulting services to the global mining community.

About PwC
The firms of the PwC network provide industry-focused assurance, tax and advisory services to enhance value for clients. More than 161,000 people in 154 countries in PwC firms across the PwC network share their thinking, experience and solutions to develop fresh perspectives and practical advice. In Canada, PricewaterhouseCoopers LLP, an Ontario limited liability partnership, and its related entities have more than 5,700 partners and staff in offices across the country. See www.pwc.com/cafor more information.

“PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.

Note to Editors: PwC changed its name from PricewaterhouseCoopers to PwC in the fall of 2010. “PwC” is written in text with a capital “P” and capital “C.” Only when you use the PwC logo is the name represented in lower case.

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.
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More Canadian mining CEOs join the millionaires club in 2011

BitCoin, which is well-examined in an article by James Surkowieki, is an alternative form of currency exchange.

“Bitcoin is a peer-to-peer digital currency created in 2009 by Satoshi Nakamoto. Peer-to-peer means that no central authority issues new money or manages transactions—these tasks are carried out collectively by the network. It is also the name of the open source software designed in order to use this currency,” according to the organization’s website.

The advantage of Bitcoin is that  people avoid bank fees and can transact anonymously. It also provides an alternative to government-backed currency.

Krugman argues that the true utility of any medium of any currency exchanges is based on its ability to allow for transactions to occur, which in turn helps grow the economy. However, Surowiecki finds that people are more interested in using Bitcoins to get rich.

True believers in Bitcoin’s usefulness prefer to deny that speculation is driving the action in bitcoins. But the evidence suggests otherwise. The value of the currency has been tremendously volatile over the past year. A bitcoin has been worth as little as a few pennies and as much as $33, and after seeming to stabilize at around $14 over the summer, the bitcoin’s value tumbled by almost 50 percent in a matter of days in August.

Krugman sums up.

“So to the extent that the experiment tells us anything about monetary regimes, it reinforces the case against anything like a new gold standard – because it shows just how vulnerable such a standard would be to money-hoarding, deflation, and depression.”

Photo from Prolineserver