January 22, 2012 – Republic of Mining

5 Gold Miners Become Takeover Targets – by Marc Courtenay (Seeking Alpha.com – January 22, 2012)

May 16, 2012January 22, 2012

This commentary came from: http://seekingalpha.com/

What investors really get paid for is holding ‘dogs’. Small stocks tend to have higher average returns than big stocks, and value stocks tend to have higher average returns than growth stocks. – Kenneth R. French–Dartmouth Economist NBER

Like an old familiar song, it seems that as soon as a company which is making money announces some bad news and disappointing “guidance”, the stock price craters. Like “blood-to-hungry sharks”, this brings the company to the attention of larger “fish” who may gobble it up for its cash and holdings. This is exactly what has happened to Kinross Gold (KGC). The company had disappointing news released on Monday and Tuesday, January 16 and 17th that caused its shares to plunge to a new 52-week low of $9.96. This was a 24% drop from its January 12th high of $13.11.

The Canadian gold producer said Tuesday that it expects production to be flat to slightly higher this year, while production costs will rise between 12% and 19% due to higher labor and mine expenses. Kinross also said it expects to record an accounting charge, mostly related to a decline in the value of one of its mines.

Rhetoric over substance: Obama and the Keystone XL decision – by Duggan Flanakin and Redmond Weissenberger (Troy Media – January 22, 2012)

January 22, 2012

This article is from: http://www.troymedia.com/

The Keystone XL project would ensure the U.S, jobs, affordable energy and national security, which Obama purports to support

TORONTO, ON, Jan. 22, 2012/ Troy Media/ – Oilfield workers in Alberta, refinery workers in Texas and countless factory workers have now learned that the White House will not allow construction of an oil pipeline that would bring over half a million barrels of oil a day from Canada’s Alberta Province and North Dakota’s Bakken Field to refineries in Texas and Louisiana.

The job-killing decision was a victory for radical environmentalists and well-heeled U.S. foundations that have long battled Canadian oil sands companies and the U.S. oil and gas industry. Not in “the national interest”

U.S. President Barack Obama says Congress gave him insufficient time to examine environmental issues. TransCanada Keystone Pipeline LP can reapply, he added, if it reroutes the pipeline around Nebraska’s Ogallala Aquifer and Sand Hills area and addresses other concerns. In the meantime, the Administration insists, the project “would not serve the national interest.”

Alberta oilsands crucial to have-not Ontario future – by Greg Van Moorsel (Sudbury Star – January 20, 2012)

January 22, 2012

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

“Alberta government figures show oilsands investment over
the last decade topped $100 billion. Ontario’s only new
auto plant built over the same period, Toyota’s Woodstock
complex, checked in at $1.1 billion.” (Greg Van Moorsel)

An early investor in the Alberta oilsands, Ontario cashed out a generation ago. That said, Canada’s most populous province still stands to lose from the setback dealt the oilsands industry and the hottest economic province by U.S. President Barack Obama’s rejection of the proposed Alberta-to-Texas Keystone XL pipeline.

After the 1970s oil crisis, Queen’s Park bought a sizeable stake in a pioneering Athabasca oilsands venture.

That was before dwindling conventional oil supplies and surging prices made the capital-intensive oilsands the boomer it is now.

But while Queen’s Park sold out in the 1990s, its books then awash in red ink like they are now, Ontario still accrues huge benefits from the oilsands: Alberta jobs for its many unemployed workers, shots at manufacturing much of the needed equipment and, like all other “have-not” provinces, equalization payments that flow to it from an Alberta government now paying many of Canada’s net bills.

Major [mining] investments return to BC – by Gavin C. Dirom (Northern Miner – January 23-29, 2012)

January 22, 2012

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

The author is president and CEO of the Association for Mineral Exploration British Columbia (AME BC), which is celebrating its one-hundredth anniversary with special activities planned during AME BC’s twenty-ninth Roundup in Vancouver from Jan. 23–26, 2012. Visit www.amebc.ca for more information.

B.C. is on the cusp of regaining its rightful position as one of the best jurisdictions in the world to explore and develop mineral resources.

Driven by record-breaking expenditures in 2011, encouraging commodity prices and increasingly progressive government policy, mineral exploration and development in B.C. represents a multi-generational, socio-economic opportunity that can be measured in billions of dollars and thousands of jobs.

In 2011, an estimated $450 million to $500 million was spent on mineral exploration in B.C. This is higher than the $322 million recorded in 2010 and illustrates spending not seen since the eighties. One million metres of rock was drilled in search of rare mineral deposits for developing into viable mines to produce critical raw materials, such as copper, gold, coal and zinc.

Kinross Gold Could Be a Takeover Target – by Charles Mead, Liezel Hill and Rita Nazareth (Bloomberg.com – January 20, 2012)

January 22, 2012

http://www.bloomberg.com/

By paying too much for acquisitions in western Africa, Kinross Gold Corp. (K) is now turning itself into the cheapest gold-mining target in the world.

Kinross, Canada’s third-largest gold producer, fell the most in almost two decades after saying this week it will write down the value of its Tasiast mine in Mauritania. The company sold for 76 cents per dollar of net assets yesterday, versus the industry median of 2.5 times, according to data compiled by Bloomberg. Writing off the excess $4.6 billion it spent on Tasiast would still leave Kinross at a 50 percent discount to its competitors, the data show.

While Kinross bought the Mauritanian mine for almost three times what the gold deposit is worth, the company is facing rising labor and raw material costs that may delay production at some of its projects. After more than quadrupling revenue in the past five years as gold prices reached a record, Kinross may now attract interest from Newmont Mining Corp. or Polyus Gold International Ltd. (PLGL) as they try to boost capacity to meet demand, said Stifel Nicolaus & Co. On its own, analysts say Kinross is worth 50 percent more than its current price.