September 6, 2012 – Republic of Mining

A failed deal with Glencore means a lonely road to growth for Xstrata – by Clara Ferreira-Marques (Mineweb.com – September 6, 2012)

September 6, 2012

www.mineweb.com

With Glencore’s $34 billion takeover bid set to collapse on Friday, Xstrata boss Mick Davis will have to woo back disgruntled shareholders to push ahead a solitary growth plan

LONDON (Reuters) – With Glencore’s $34 billion takeover bid set to collapse on Friday, Xstrata boss Mick Davis will have to woo back disgruntled shareholders in the miner and push ahead alone with ambitious growth plans.

Chief Executive Davis aims to steer the fourth-largest diversified miner from its acquisition-fuelled first decade into a phase of organic, or self-generated, growth, which the miner hopes will boost volumes by 50 percent by the end of 2014 and cut average operating costs by a fifth.

The broad, bespectacled South African who has led Xstrata for the past decade has major hurdles ahead – unhappy minority shareholders demanding changes at the top and an even unhappier situation in Xstrata’s platinum investment Lonmin, the South African miner hit by a strike and soaring costs.

NEWS RELEASE: NORONT RELEASES POSITIVE FEASIBILITY STUDY FOR EAGLE’S NEST PROJECT

November 3, 2015September 6, 2012

Sep. 4, 2012

Toronto, Ontario, September 4, 2012. Noront Resources Ltd. (“Noront” or the “Company”) (TSX Venture: NOT) is pleased to announce the results of an updated National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant Feasibility Study (“FS”) for a stand alone nickel, copper, platinum group element (“Ni-Cu-PGE”) mine and mill complex exploiting the Company’s 100% owned Eagle’s Nest deposit (the “Project”), McFaulds Lake, James Bay Lowlands, Ontario. The results of the independent study, completed by Independent Consultants1 under the supervision of Micon International (“Micon”), confirms that Eagle’s Nest offers robust economics.

FEASIBILITY STUDY HIGHLIGHTS:

A Discounted Cash Flow (“DCF”) based on the Assumed Metal Prices2 indicates:
•an after tax Net Present Value at an 8% discount rate (“NPV(8%)”) of $543 million;
•an after tax IRR exceeding 28%;•an estimated initial capital investment of $609 million;
•an estimated life of mine sustaining capital cost of $160 million;
•estimated operating costs (including road access fees) of $97 per tonne or $2.34 per pound of nickel equivalent or -$0.31 per pound of nickel net by-product credits;
•an estimated mine life of 11 years; and
•a capital payback period of under 3 years based on a 100% equity project.

Reports of Australian mining boom’s death ‘exaggerated’-PM Gillard – by Dorothy Kosich (Mineweb.com – September 5, 2012)

September 6, 2012

www.mineweb.com

Australian Prime Minister Julia Gillard ventured into politically hostile territory at the Association of Mining and Exploration Companies to drum up support for her education program

RENO (MINEWEB) – Australian Prime Minister Julia Gillard’s insistence that the Australian mining boom was far from over, struck a discordant note among attendees at the Association of Mining and Exploration Companies convention Tuesday.

Last month, Gillard’s Resources Minister Martin Ferguson declared Australia’s mining boom over after the world’s largest mining company, BHP Billiton, delayed the expansion of the Olympic Dam expansion and announced it would not approve any major new projects before June 2013.

The same day Gillard delivered her talk, Fortescue Metals Group announced it would cut staff and reduce operating costs, and would revise its FY 2013 capex guidance from US$6.2 billion to $US4.6 billion. The company also said it would defer development of the Kings deposit within the Solomon Mining hub and the completion of a fourth berth at Herb Elliot Port until “iron ore prices return to more sustainable levels.”

Miners Retrench in Australia – by Rhiannon Hoyle (Wall Street Journal – September 5, 2012)

September 6, 2012

http://online.wsj.com/home-page?mod=WSJ_topnav_’home_main

SYDNEY—Australian mining companies are slashing spending as the country’s economic outlook dims.

The world’s fourth-largest producer of iron ore, Fortescue Metals Group Ltd., FMG.AU -4.81%said Tuesday it will slice operating costs by $300 million and save a further $1.6 billion by delaying the development of a large iron mine in Western Australia’s Pilbara region. The company will also cut several hundred jobs.

Rio Tinto RIO.AU +1.66%and BHP Billiton BHP.AU +0.93%are also planning cutbacks amid darkening economic outlooks around Asia, slumping prices for industrial commodities and rising production costs.

Mining companies in Australia are moving quickly to protect profits as the price prospects for major industrial commodities worsen—posing a risk for the resource-rich nation’s economy. Australia recovered quickly from the financial crisis in 2008 and grabbed a place among the world’s fastest-growing developed countries largely due to mining. That status is now at risk as companies such as BHP, Rio Tinto and Fortescue aggressively rein back their investments.

Glencore Bid Faces Its Moment of Truth – by Dana Cimilluca and John W. Miller (Wall Street Journal – September 6, 2012)

September 6, 2012

http://online.wsj.com/home-page?mod=WSJ_topnav_’home_main

The combatants in the imperiled tie-up between Glencore International GLEN.LN +1.23%PLC and Xstrata PLC could still salvage the $34 billion deal before a Friday shareholder vote, people close to the companies say, though recent attempts to break an impasse over price have been unsuccessful.

Passage of the deal rests in large part on the approval of one of Anglo-Swiss miner Xstrata’s largest shareholders, Qatar Holding LLC. Although both Glencore and Qatar Holding say they want to do the transaction, Glencore says it won’t overpay, while Qatar Holding says the current terms are lopsided in Glencore’s favor.

Xstrata shareholders vote Friday morning in Zug, Switzerland, to determine whether to combine with the world’s biggest commodities trader, which would create a company with a combined market capitalization of roughly $72 billion. The price squabble separating Glencore and Qatar Holding, Xstrata’s two biggest shareholders, could doom the deal to the same fate as the aborted merger of mining giants BHP Billiton BLT.LN +1.24%and Rio Tinto RIO.LN +1.95%four years ago.

Qatar Holding, a unit of the Middle Eastern country’s sovereign-wealth fund, leads a group of shareholders with a blocking stake.

PQ victory casts doubt with miners – by Peter Koven (National Post – September 6, 2012)

September 6, 2012

The National Post is Canada’s second largest national paper.

Quebec is regarded as one of the most attractive jurisdictions in the world for mining, if not the very best. But is that about to change? The Parti Québécois victory in Wednesday’s election has raised concerns that changes could be coming, both to Quebec’s mining-friendly tax regime and to Plan Nord, its $80-billion northern development strategy.

While such tweaks are possible, miners in Quebec said they are confident that the highly successful partnership between the province and the industry will continue.

“This is Quebec. In the grand scheme of things, it’s not a place of high political risk for the mining business,” said Matt Manson, chief executive of Stornoway Diamond Corp., which is developing the province’s first diamond mine in north-central Quebec.

On the campaign trail, PQ leader Pauline Marois talked about boosting mining taxes to help pay for increased social spending. She said she would introduce a minimum 5% royalty on the value of metal production, and impose a 30% super-profits tax on mining earnings above an unspecified level. Her party’s stance is that the province’s mineral wealth is being given away for too little.

Ottawa unveils new coal-fired plant emission rules – by Shawn McCarthy (Globe and Mail – September 6, 2012)

September 6, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA – The federal government has released final regulations for coal-fired power plants that eases the expected burden on utilities by allowing them to run their plants longer before having to replace them with lower-emission alternatives, and to average emission reductions among their plants.

The new regulations may force the closing of at least two coal-fired plants in Alberta by 2020 and prevent construction of one planned by Maxim Power Corp., unless the provincial government can reach an agreement with Ottawa to impose its own regulations while meeting overall federal targets.

Saskatchewan and Nova Scotia are both working with Ottawa to reach such a deal. In Saskatoon Thursday, Environment Minister Peter Kent unveiled the long-anticipated regulations which the government describes as being among the most stringent in the world, but are significantly weakened from what was first proposed two years ago.

Miners urge new rules, more transparency – by Shawn McCarthy (Globe and Mail – September 6, 2012)

September 6, 2012

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA – Canada’s mining industry is developing a plan for mandatory reporting of all resource company payments to government – both foreign and domestic – arguing that greater transparency is both a boon to investors and critical in gaining broader social acceptance for global resource industries.

The country’s two largest mining groups – the Mining Association of Canada and the Prospectors and Developers Association of Canada – have signed an agreement with two advocacy groups to develop a proposal for mandatory reporting rules that they hope will either be legislated or adopted by securities commissions across the country.

Junior miners, in particular, could find it challenging to comply with the new regulations, PDAC executive director Ross Gallinger said Wednesday. But the industry contends that the benefits of being transparent in their operations outweigh potential risks, he said.

The joint effort comes as the U.S. Securities and Exchange Commission is implementing regulations – mandated under Dodd-Frank Act – to require all resource companies listed on American stock exchanges to annually report all payments to governments on a project-by-project basis.

Enbridge likens Northern Gateway pipeline plan to nation-building – by Claudia Cattaneo (National Post – September 5, 2012)

September 6, 2012

The National Post is Canada’s second largest national paper.

It’s prime time for Enbridge Inc.’s Northern Gateway and the embattled pipeline company is switching the channel.

After years of controversy focused on the project’s risks to the environment, its impacts on First Nations and its uneven distribution of the benefits, Enbridge appealed to the greater good in hearings in Edmonton Tuesday. It was the company’s first opportunity to defend before regulators the $6-billion “national project” from Alberta to the British Columbia coast, and it likened it to the Canadian Pacific Railway, the St. Lawrence Seaway and the TransCanada Pipeline.

“All attracted great attention and debate, but when constructed, laid the foundation for significant benefits for Canadians,” John Carruthers, president of Northern Gateway, said to regulators. “Our project is no different.” In an interview ahead of the hearing, Mr. Carruthers said the project is important for the company, but even more important for Canada.

“It’s critical for Canada to be part of a growing world economy and get full value for our natural resources,” he said, referring to the deep discount affecting Canadian oils because there is insufficient pipeline space to move it to the United States, its sole export market. “That is the objective of the project.