November 5, 2012 – Republic of Mining

NEWS RELEASE: Equity financing and market cap decline by more than 40% for TSX-V mining sector: PwC

November 5, 2012

Juniors rethink growth strategy, while latest market activities hint at potential turnaround in 2013

Click here for: Junior Mine 2012: Must survive before you can thrive

TORONTO, Nov. 5, 2012 /CNW/ – With the Top 100 junior mines on the TSX Venture Exchange (TSX-V) facing decreases in debt and equity financing, as well as market capitalization, miners must either reduce spending substantially or turn to alternative forms of financing for growth, according to PwC’s latest Junior Mine report released today.

The market capitalization of 2012’s Top 100 decreased 43% compared to 2011’s Top 100. As well, the number of mining companies in the Top 100 with market capitalization of more than $200 million dropped to 13 – falling from 2011’s record high of 36 companies. Meanwhile, equity financing decreased by 41% to $1.6 billion compared to $2.7 billion raised by 2011’s Top 100 junior miners.

“In the last year, investors were cautious of the volatile market and not willing to invest. The macro-economic pull-back is driving investors to hold on to or cash-in their investments, leaving junior miners urgently looking for new sources of financing,” says John Gravelle, Mining Leader for the Americas, PwC. “While a dramatic turnaround is not expected anytime soon, recent market activities should give junior miners a resurgence of optimism for 2013.”

With the IPO market falling silent for most of 2012 – only four mining IPOs on the TSX-V were completed in Q3 2012, compared to 14 in Q3 2011—Ivanplats’ $300 million IPO however could signal the new beginning for mining executives looking to initiate IPOs that have been waiting in queue for some time now, continues Gravelle.

Two unions seek federal court muscle to oust foreign workers from B.C. mine – by Dene Moore (Vancouver Sun – November 5, 2012)

November 5, 2012

http://www.vancouversun.com/index.html

The Canadian Press – VANCOUVER – Two labour unions want a federal court to overturn temporary work permits issued to Chinese workers at a coal mine in northern British Columbia, arguing that there are unemployed Canadians who could fill the jobs.

Permits have been granted under the federal Temporary Foreign Worker Program to 200 Chinese workers to conduct exploration work at HD Mining International Ltd.’s Murray River mine near Tumbler Ridge, B.C.

The company has said it was not able to find workers in Canada with the specialized skills necessary. But the court action filed by the International Union of Operating Engineers Local 115 and the Construction and Specialized Workers Union Local 1611 maintains that is not the case.

“There is no evidence of a labour shortage nor is there an absence of suitable Canadian citizens or permanent residents for the jobs,” said the application.

It says HD Mining received 300 applications to work at the underground coal mine “despite the fact that HD Mining did not advertise widely and imposed unreasonable and unnecessary requirements on Canadian applicants.”

Glimmers of hope for junior miners after slow-moving investment nightmare – by Peter Koven (National Post – November 5, 2012)

November 5, 2012

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

The carnage in the junior mining world is every bit as bad as advertised, but there are a few glimmers of hope. That is the main message from a review of the sector released Monday by PricewaterhouseCoopers LLC (PwC). The study, conducted annually, chronicles the dramatic ups and downs of the top 100 companies on the TSX Venture Exchange.

Given the lack of financing available to most of these firms, it goes without saying that the past 18 months have been a slow-motion nightmare. According to PwC, the total market cap of 2012’s Top 100 plunged 43% compared with 2011 (as of June 30 in each case). Only 13 of them had market values above $200-million this year, compared with 36 a year ago.

As economic uncertainty increased last year, investors became more risk-averse and demand for junior mining equities evaporated. That made it extremely tough for these companies to stay active. Equity financing among the Top 100 dropped 41% to $1.6-billion year over year, and the smaller exploration plays barely raised anything.

Senior and mid-tier miners have focused on cash conservation and shown little interest in acquiring them. “The pure exploration companies are at a stage where they need to hunker down and make sure they don’t run out of cash before they turn around,” John Gravelle, PwC’s mining leader for the Americas, said in an interview.

Mining magnate emerges as major U. of Utah donor – by Brian Maffly (The Salt Lake Tribune – November 5, 2012)

November 5, 2012

http://www.sltrib.com/

Pierre Lassonde » After a career that included environmental and stockholder controversies, the Canadian gold guru is expanding entrepreneurship efforts at the U.

At his inauguration last month, new University of Utah president David Pershing highlighted gifts from the Huntsman and Noorda families, who have long-standing ties to the state. Other donor names familiar to Utahns — Eccles, Marriott, Sorenson, Skaggs and others — are emblazoned on buildings and programs throughout campus.

But it’s Canadian mining-magnate-turned-philanthropist Pierre Lassonde, far less known and with a more distant connection to Utah, who is now emerging as one of the U.’s most generous donors.

Pershing devoted the most literal “face time” to images of Lassonde during his inaugural address, hailing his “unbelievable commitment” to turning students into entrepreneurs. His latest gift will fund the proposed Lassonde Institute, which would provide housing for up to 400 students interested in adding entrepreneurship to their majors, whether or not they are focused on business.

After earning a master’s in business administration at the U. 30 years ago, Lassonde became an astute gold analyst and investor.

The invisible gold rush – by Sean Phipps (The McGill Daily – November 5, 2012)

November 5, 2012

http://www.mcgilldaily.com/

Sean Phipps is a U2 Latin American Studies and Environment student. He can be reached at sean.phipps@mail.mcgill.ca.

Canadian imperialism and the gold mining boom

As I write this the price of gold is $1,776.80 an ounce, the highest it’s ever been, up from $1,023.50 in 2008 and $282.40 in 1999. Global economic instability has fueled this dramatic spike, and along with it a massive increase in gold production, an expansion that some have termed “an invisible gold rush.”

In Canada we – or at least some of us – directly benefit from this expansion. 75 per cent of the world’s mining companies (in both production and exploration) are Canadian registered, and several of the industry’s biggest players such as Barrick, Goldcorp, and Kinross are Canadian. And, with a government increasingly working to reflect the needs and interests of the extractive industry, these companies have emerged as key dictators of our country’s economic and foreign policy.

As a country, we are increasingly tied to gold. It is with this in mind that I chose to look at the long and often brutal history of gold mining, the way in which we have viewed gold over time, and to help piece together our strange relationship with this mineral.

Why gold? What has led us to value it above all other substances? Looking at a sample in the display cases in the Redpath Museum, it is hard to deny its beauty. However, gold’s real power has always been symbolic, for gold is wealth itself.

Thunder Bay Power plant shocker – Thunder Bay Chronicle-Journal Editorial (November 4, 2012)

November 5, 2012

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

JUST when Northwestern Ontario had some wind in its sails — bam! — the penny-pinching province becalms mining-related momentum by suddenly cancelling the conversion of Thunder Bay’s electricity generating station from coal to gas. There are a whole raft of questions still to come, and there might well be good answers to them. But for the time being, this plan looks hair-brained.

First, it flies in the face of the province’s vaunted coal phase-out policy built on converting newer plants in order to keep the lights on in various regions. Converting Thunder Bay Generating Station to natural gas and Atikokan to biomass is a central plank in the clean-air platform. Atikokan is still proceeding but it will only produce 20 megawatts at the best of times.

Thunder Bay GS would produce 700 MW from gas. Removing that capacity from the grid would leave the Northwest destitute for electricity just when it needs a lot of it to power the new mining boom, area leaders said Friday at a news conference punctuated with expressions of dismay.

The energy minister cautions this is temporary — for now — while the Ontario Power Authority prepares a new plan for the North built around a doubling in capacity of the east-west tie line to 600 MW.

Vale partner says Guinea seeks to seize iron ore rights – by Richard Valdmanis, Clara Ferreira-Marques, and Saliou Samb (Reuters Canada – November 3, 2012)

November 5, 2012

http://ca.reuters.com/

DAKAR/LONDON (Reuters) – The mining arm of Israeli billionaire Beny Steinmetz’s business empire has accused the government of Guinea of seeking to “illegally seize” its assets through a probe into how it won rights to mine part of a major iron ore deposit.

Privately owned BSG Resources, which has been working in the West African country with Brazilian mining major Vale (VALE5.SA: Quote), confirmed it had received a letter from a government commission alleging improper behavior and graft in its winning of rights to develop blocks in the Simandou region.

The Financial Times reported on Saturday that a government committee backed by philanthropist George Soros had launched a corruption probe into the award process for the blocks in 2008 and sent the letter to BSG including a range of charges.

The blocks were stripped from Anglo-Australian miner Rio Tinto (RIO.AX: Quote) and the licenses passed to BSGR in 2008, under a previous administration. Simandou, in Guinea’s hilly and forested southeast, is estimated to hold what could be the world’s largest unexploited iron ore reserves.

“This is the fifth and most clumsy attempt by an already discredited Government of Guinea in an ongoing campaign to illegally seize BSGR’s assets,” BSGR said in a statement.

Is Indonesia China’s new mining investment hotspot? – by Jeff Hutton (Mineweb.com – October 23, 2012)

November 5, 2012

http://www.mineweb.com/

Indonesia’s upcoming ban on mineral exports is drawing a wave of Chinese investors but for some it may already be too late to jump on the bandwagon.

JAKARTA (AUSTRALIAN MINING) – Indonesia’s upcoming ban on mineral exports is drawing a wave of Chinese investors and equipment suppliers as local miners are forced to beef up ore processing capability before a 2014 deadline.

The wave may be one of the few bright spots for aspiring Chinese suppliers, many of whom are venturing out of their home markets for the first time, in bid to offset a construction and investment downturn in their home market.

One small example? Tonghua Jianxin Metalurgy Co. The company based in Jilin province, opened its first office outside of China in Jakarta this month, after sealing only its second overseas contract to design, build and commission a nickel ore smelter in July.

The company will build a smelter capable of processing 50 tons of nickel ore a day for Bukaka Forging Industries, whose specialty products include automotive parts and passenger air bridges at Indonesia’s airports.