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Day: June 28, 2013

The week that was in the Ring of Fire – by Wendy Parker (InSupportOfMining.com – June 28, 2013)

http://insupportofmining.wordpress.com/

Lots of active non-action in the Ring of Fire this week. Cliffs Natural Resources continued to walk back from its Ring of Fire adventure with an announcement that Dana Byrne, vice president responsible for government and public relations, will retire on July 1.

“Over the past three years, Mr. Byrne has been extensively involved with the company’s chromite project in the Ring of Fire located in Northern Ontario,” the company said in its announcement. “His work with the First Nations and familiarity with all aspects of the government’s interests in this project has and continues to be invaluable to Cliffs.”

Byrne will maintain his invaluable 34-year ties with the Ohio miner through a one-year consultancy.

His replacement is Raga Elim, who vacates his position as director – global government relations to take up the job of vice president – global corporate and government affairs, as well as responsibility for the company’s global communications and public affairs functions.

Elim, who has been with Cliffs but a couple of years, previously served as the head of Rio Tinto’s Washington, D.C. government affairs office. He has extensive experience with a variety of American governments and was “a speechwriter at the last four Presidential Election Conventions for one of the major political parties,” which suggests, we suppose, that he is well-connected in a vague but interesting way.

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Rudd: China Boom Over – by Anthony Fensom (The Diplomat – June 27, 2013)

http://thediplomat.com/

Australia’s second-time Prime Minister Kevin Rudd has wasted no time hammering a nail in the coffin of the China boom after ending the political career of his predecessor. Making his first press statement Wednesday night after successfully challenging Julia Gillard for the Labor Party leadership, the Mandarin-speaking Rudd said Australians must diversify away from the Middle Kingdom.

“The global economy is still experiencing the slowest of recoveries. The China resources boom is over…and when China represents such a large slice of Australia’s own economy, our jobs, and the opportunities for raising our living standards, the time has come for us to adjust to the new challenges,” he said.

“New challenges in productivity. New challenges also in the diversification of our economy. New opportunities for what we do with processed foods and agriculture, in the services sector, and also in manufacturing…..Looking at our global economic circumstances therefore, we have tough decisions ahead on the future of our economy.”

China overtook Japan as Australia’s top trading partner in late 2007 due to China’s seemingly insatiable appetite for Australia’s energy and mineral resources, including iron ore, coal and gold. Two-way trade amounted to A$125 billion in 2012, with Australia becoming China’s sixth-largest source of imports.

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Noront offloads interest in Quebec project, focuses on Ring of Fire – by Henry Lazenby (MiningWeekly.com – June 28, 2013)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Explorer Eagle Hill has consolidated its ownership of the prospective Windfall Lake project, in the Abitibi mining camp of northern Quebec, as project developer Noront Resources agreed to sell its 25% interest in the project for $5-million in cash and 25-million shares.

Noront said selling its interest, royalty interests and all other associated rights in the noncore asset provided it with an immediate cash infusion that would be put to use in developing the company’s flagship Eagle’s Nest project, in the chromite-rich Ring of Fire-region of northern Ontario, while the equity interest in Eagle Hill would allow it to participate in the upside potential of the Windfall Lake gold project.

Eagle Hill had also entered into a binding letter agreement with its strategic partner Southern Arc, under which Southern Arc Minerals had agreed to invest, together with Dundee Corporation, a total of $12-million in Eagle Hill to complete the Windfall Lake transaction and advance the project. Dundee had been a shareholder in Eagle Hill since February 2012, and currently owned an 18.8% interest in Eagle Hill.

Noront had previously agreed to sell its stake in the Windfall Lake project to gold producer Maudore Minerals. Completing of the transaction was still subject to obtaining shareholder approvals of Eagle Hill and Southern Arc to finance the agreement, for which Eagle Hill had already paid a non-refundable deposit of $615 000 and obtaining all required stock exchange and regulatory approvals.

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Duluth Minnesota mining project holds promise for northern suppliers – by Lindsay Kelly (Northern Ontario Business – June 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

The copper-nickel-PGM property being developed by Duluth Metals isn’t located in Northern Ontario. You can’t even find it in Canada. But a recent Sudbury appearance to SAMSSA Members by Duluth’s president and CEO, Vern Baker, attracted a packed house based on the potential it holds for northern supply and service companies.

Located in Northern Minnesota along the north shore of Lake Superior, Baker predicts the Twin Metals Minnesota (TMM) complex (a joint venture with Chile’s Antofagasta plc) will become one of the world’s major mining districts over the next five to 10 years because of the massive potential tonnages and the types of ore to be found there.

“We have a huge opportunity just in the quantity of metal that’s available,” said Baker, who puts TMM on the same scale as some of the largest copper mines in South America. “It’s got some very distinct similarities to Sudbury and some very distinct differences.”

Duluth’s January 2013 NI 43-101 resource report indicates 13.6 billion pounds of copper, 4.4 billion pounds of nickel, 5.6 million ounces of platinum, 12.7 million ounces of palladium, and 3.1 million ounces of gold. It infers another 11.9 billion pounds of copper, 4.1 billion pounds of nickel and 12.8 million ounces of total precious metals.

The company has spent $200 million on the project to date, and Baker estimates that could rise to between $1.5 billion and $2 billion.

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China Falling? Not So Fast – by Joshua Kurlantzick (Bloomberg News – June 28, 2013)

 http://www.businessweek.com/

Over the past month, global financial markets have become terrified by the prospect of a Chinese economic slowdown. Last week, the interbank lending rate in China jumped precipitously, suggesting that Chinese banks, which for years have been piling up debt lending to state-owned enterprises and building infrastructure, may now be facing a severe credit crunch. China’s money markets slowed to a near halt, China’s stock markets suffered whiplash, and many Western fund managers began lightening their China exposure.

To some, Chinese banks’ debt loads signal the arrival of an event doomsayers have been predicting for decades—not just a slowdown but a meltdown of China’s economy. That, of course, would be catastrophic for the international economy, since nearly every other country in Asia is dependent on trade with China—as are most Western multinationals.

But although international markets, the original kind of crowdsourcing, often deliver the right verdict, there’s good reason to bet they’ll be proven wrong this time. The Chinese economy, the second-largest on earth, is not going to melt down soon; in fact, it might still grow more strongly this year than most others in the world.

Almost since it began reforming in the 1970s, China’s economy has attracted skeptics. By only partially privatizing massive state companies over the past 20 years, the government has been criticized for creating enormous inefficiencies, building up more than 100 “national champion” companies in such industries as energy, telecommunications infrastructure, and automaking and using cheap credit from state banks to help these indigenous companies grow.

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Norilsk to Focus on Arctic Circle Mines as CEO Builds Team (2) – by Yuliya Fedorinova (Bloomberg News – June 28, 2013)

 http://www.businessweek.com/

OAO GMK Norilsk Nickel (GMKN), the largest nickel and palladium producer, plans to focus on developing its operations in northern Russia over international assets after installing a new chief executive officer and management team.

“We will be looking at opportunities to optimize our portfolio of assets, including our international operations, with a key strategic focus on the sustainable increase of the firm’s return on capital,” Norilsk Deputy CEO Pavel Fedorov, head of strategy and business development, said in an interview in Moscow. “Enhancing the efficiency and capitalization of our key Polar Division would be at the heart of the new strategy.”

The division has seven mines north of the Arctic Circle, producing nickel, copper, platinum, palladium, cobalt and gold above the 69th parallel. Plants processing ore from these mines achieve an extraction rate of 83 percent of nickel from each ton of ore after the first phase of enrichment, compared with 70 percent and below for Norilsk’s assets in Africa and Australia, according to its annual report.

Billionaire Vladimir Potanin replaced Vladimir Strzhalkovsky as CEO at the end of 2012 as part of a truce to end a conflict between Norilsk shareholders Interros and United Co. Rusal over how the company was run. In April, Potanin hired Fedorov, a former mergers-and-acquisitions banker, for the 12-member management board among nine newly appointed executives.

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World Gold Council releases new gold-mining cost metrics – by Martin Creamer (MiningWeekly.com – June 27, 2013)

http://www.miningweekly.com/page/americas-home

http://www.gold.org/

JOHANNESBURG (miningweekly.com) – The World Gold Council (WGC) on Thursday released two new methods of calculating and reporting gold-mining costs to improve clarity and provide greater investor understanding of the complete costs associated with the mining of gold.

The first method is an extension of the existing “cash cost” metrics and incorporates costs that are related to sustaining production, which the council refers to as the “all-in sustaining cost”.

The second method takes into account additional costs and reflects the varying costs of producing gold over the life cycle of a mine, which the WGC dubs the “all-in cost”.

WGC director Terry Heymann told Mining Weekly Online from London that the new metrics had been developed to help provide greater clarity and consistency to improve investor understanding.

WGC has worked closely with its member companies and beyond to develop the non-Generally Accepted Accounting Principles (GAAP) measures and expects them to be helpful to investors, governments, local communities and other stakeholders.

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Idle No More: Canada Escalates War on First Nations – by Winona LaDuke and Frank Jr. Molley (Indian Country: Today Media Network.com – June 26, 2013)

http://indiancountrytodaymedianetwork.com/ A weekly U.S. newsmagazine that is a national news source for Natives, American Indians, and Tribes in the U.S. and Alaska.

Mi’kmaq and Maliseet reserves in Atlantic Canada are the sites of a new major battle between First Nation activists and the Canadian government that represents the next stage of the Idle No More movement. The flash point came when the Conservative government threw down the gauntlet with what some call sign-or-starve consent agreements presented to First Nations right across the country.

Facing increasingly strong opposition to both its extractive industries and its federal policies, Prime Minister Stephen Harper’s government has adopted a hard-line strategy seemingly designed to eliminate First Nations’ negotiating power and rights. Harper’s cudgels are annual contribution agreements between the government and the First Nations that have new, questionable appendices that are forcing some of the poorest communities to take it or leave it, or worse, face third-party management, which would essentially mean having the Canadian government manage their finances and governmental affairs. At stake here is title over Indian lands and minerals, as well as a host of choices on the future direction of Canada.

The government seems to be focused on getting de facto termination of many constitutionally and treaty protected rights of First Nations. Its first thrust in this battle was this past fall’s Bill C-45, which gutted most of Canada’s environmental laws and was the spur for last year’s Idle No More movement.

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NEWS RELEASE: Superior Copper Corporate Update

TORONTO, ONTARIO–(Marketwired – June 27, 2013) – Superior Copper Corporation (TSX VENTURE:SPC) (“Superior Copper” or the “Company”) is providing the following information update to the shareholders of the Company.

The Company announces that it intends to complete a best efforts non-brokered private placement financing (the “Financing”) of up to $300,000 principal amount of convertible promissory notes (“Notes”).

The Notes are due two years from the date of closing of the Financing (the “Maturity Date”) and bear interest at a rate of 8.0% per annum, payable monthly. The holder is entitled to convert all or any portion of the unpaid principal amount of the Notes into units of Superior Copper (“Units”) at a price of $0.10 per Unit. In the event that the 20-day weighted average trading price of Superior Copper’s common shares (“Shares”) on the TSX Venture Exchange (the “TSXV”) is at least $0.25 at any time prior to the Maturity Date, Superior Copper is entitled to require the holder to convert all or any portion of the unpaid principal amount of the Notes into units of Superior Copper (“Units”) at a price of $0.10 per Unit.

Each Unit will be comprised of one Share and one Share purchase warrant (“Warrant”), with each Warrant being exercisable for one Share at an exercise price of $0.15 on or before the Maturity Date. Where the closing price of the Shares on the TSXV is at least $0.25 for a period of 20 consecutive trading days, the Company shall have the right to accelerate the expiry date of the Warrants by giving notice to the holders of Warrants that the Warrants will expire 30 days later.

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Excerpt: From Meteorite Impact to Constellation City: A Historical Geography of Greater Sudbury – by Oiva W. Saarinen

To order a copy of “From Meteorite Impact to Constellation City”, please click here: http://www.wlupress.wlu.ca/Catalog/saarinen-meteorite.shtml

Sudbury: A Union Town? (Part 4 of 5)

The Battle for Inco Begins

The District Two Convention held in Sudbury April 24–29, 1961, served as the scene of the first clash in the all-out battle for union supremacy. In contrast to the local’s meetings where it was the old guard leading the confrontation process, the new guard led by Gillis took this opportunity to harangue Chairman Solski and his supporters. Predictably, chaos resulted, and not a single resolution was passed. Since no progress had been achieved, the Gillis executive again did not remit the local’s dues to the National Office.

This move was supported by the majority of the local’s members, as shown by the third election victory of the Gillis slate on June 7, 1961. By this time, the new Local 598 leaders were exploring the option of seceding Local 598 from the National and International Union, and becoming a chartered local of the CLC.

When it became clear that the only way Local 598 could get into the CLC was by joining the Steelworkers, The Sudbury Star joined in the cause by printing a story under the headline, “Has Steel Begun Drive to Supplant Mine Mill?” Given the threat of losing Local 598’s buildings and finances, the National Office succeeded in acquiring a local injunction, allowing William Kennedy, its Secretary-Treasurer, to administer the local on the National’s behalf. On August 26, the Union Hall was taken over by Kennedy.

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It’s no fun being a gold miner CEO these days – by Lawrence Williams (Mineweb.com – June 28, 2013)

http://www.mineweb.com/

FUNCHAL, MADEIRA (MINEWEB) – Only just over a couple of years ago gold mining company CEOs could seemingly do no wrong. The gold price was soaring to record levels, stock prices were mostly strong, shareholders mostly seemed happy, and the major funds which provided much of the companies’ support were calling for more and more growth.

The bandwagon was rolling, and the serious underlying problems which were already surfacing, such as hugely escalating capital costs for new projects, and ever ongoing sharp rises in operating costs were largely being ignored as they were being more than covered by the seemingly ever-rising gold price. The gold bulls were predicting ongoing gold price escalation and those who were suggesting caution were being ignored or ridiculed.

Oh what fun it was being a gold mining company CEO. Money was no object. Smaller companies were being absorbed while mega projects, which would make the execs’ names forever were entered into. As an example of what was occurring, Barrick’s huge Pascua Lama mine straddling the Chile/Argentina borders was going to be brought on stream at a mere $1.5 billion to be spent over 20 years – almost peanuts when the companies, and gold prices, were riding so high.

But the writing was already on the wall – perhaps back in 2007 before the initial market crash brought on by the Lehman Brothers collapse.

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Excerpt from “An Insider’s Guide to the Mining Sector: An in-depth study of gold and mining shares”– by Michael Coulson

To order a copy of An Insider’s Guide to the Mining Sector, please click here: http://www.harriman-house.com/book/view/66/investing/michael-coulson/an-insiders-guide-to-the-mining-sector/

Investing in gold

Our main concern in this book is to steer investors through the mining share market, and the gold share sector has always offered an encouraging number of choices. However, investors in particular have in the past dabbled in physical gold whether by buying gold coins such as Krugerrands and Sovereigns, or gold in bar form, so a brief mention here is appropriate.

Physical gold

One of the characteristics of gold that makes it an investment vehicle is the fact that it is high value for low weight, as people fleeing revolution with only one (strong) suitcase have found to their advantage. It is also very easy to store as it is very dense, consequently its weight is compacted into a small dimension. So a 400oz bar measuring, in ‘old money’, around 7x3x3 inches, is worth $340,000 (at $850/oz). If you carried the same amount of wealth in the form of copper you would need to plan for a substantial lorry to carry the 50 tonnes or so – not much good if you’re in a hurry to catch the last plane out of Saigon, for example.

Gold broadly can be bought for physical delivery or for storage in a secure warehouse. There are a number of specialist gold and gold coin dealers who will take small orders, although the bullion banks are after wealthy customers only.

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OSC rips miners for poor technical disclosure – by Peter Koven (National Post – June 28, 2013)

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

The Ontario Securities Commission says it has found an “unacceptable level of compliance” with proper mining disclosure practices after completing a review of 50 technical reports released by Ontario-based companies.

The problems are widespread, according to the OSC. It said it found deficient reporting of mineral resource estimates, lack of information on community and social impact of mines, poor disclosure of costs, lack of economic analysis, poor disclosure of risks, and numerous other issues.

In total, the commission found that 80% of the reports it studied had some form of compliance error, and 40% of them had at least one serious problem.

The OSC suggested that issuers should expect requests for re-filings, additional disclosure, or “other staff action” if technical reports are not compliant. It is a hint that the regulator could initiate a broader crackdown on poor mining disclosure.

Technical disclosure became a very important issue in the mining industry following the Bre-X fraud in 1997.

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Mongolian president wins second term amid focus on mining curbs (Reuters India – June 27, 2013)

http://in.reuters.com/

ULAN BATOR – (Reuters) – Mongolia’s incumbent president, Tsakhia Elbegdorj, who wants more controls on foreign mining investments, has emerged as the winner of Wednesday’s polls with a narrow majority of votes cast, the country’s election commission said on Thursday.

Elbegdorj, 50, who has served as president since 2009, was the overwhelming favourite in the contest, played out amid worries about Mongolia’s faltering economy as well as the growing role of foreign mining firms.

The commission said Elbegdorj got 50.23 percent of the votes, beating a former wrestling champion, Bat-Erdene Badmaanyambuu of the Mongolian People’s Party, and health minister Udval Natsag, of the Mongolian People’s Revolutionary Party.

The lower-than-expected margin of victory could be traced to low turnout, said Julian Dierkes, an expert in Mongolian politics at the University of British Columbia, adding that participation was 10 percent lower than the last election.

“The consensus was that Elbegdorj was winning and I suspect that a lot of potential voters thought he was winning anyway, and didn’t vote,” said Dierkes, who is in Ulan Bator to monitor the election.

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Ontario gets two nuclear-energy options – by Shawn McCarthy (Globe and Mail – June 28, 2013)

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.

TORONTO — Two nuclear companies are submitting competing bids to sell Ontario two reactors as the province struggles to decide how best to provide cheap, clean, reliable power over the next 20 years.

Pittsburgh’s Westinghouse Electric Co. LLC and Mississauga-based Candu Energy Inc. are to provide their proposals Friday outlining their designs, prices and the economic benefits that would flow if they won a contract that would top $10-billion. Ontario Power Generation had set a June 30 deadline for the proposals.

Plagued by concerns about high capital costs and safety issues, the nuclear industry faces a tough challenge in persuading the Ontario government to invest in new reactors.

But proponents argue they can beat renewable power on reliability and price and natural gas on economic benefits to the province. They also point out that nuclear power plants emit no greenhouse gases.

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