BHP CEO defends iron ore strategy as best play in gloomy market – by Silvia Antonioli (Reuters U.S. – October 23, 2014)

http://www.reuters.com/

LONDON – (Reuters) – BHP Billiton’s chief executive said its strategy of high-volume iron ore production was the best way to profit in a gloomy market, defending a plan that has come under growing criticism for depressing prices.

Iron ore, the biggest earner for global miner BHP Billiton, has lost about 40 percent of its value this year, reaching five-year lows, as big increases in new supply from top three miners Vale, Rio Tinto and BHP have exceeded lackluster demand.

Analysts expect the price decline to continue in the next few years under the weight of extra supply.

BHP has said it intends to boost production at existing assets by 65 million tonnes to 290 million a year by June 2017 and plans to cut its production costs to overtake rival Rio Tinto as the cheapest iron ore supplier to China.

“The lowest-cost producer has a right to continue to produce at very high margins in a free market,” BHP Chief Executive Andrew Mackenzie told reporters after the company’s annual general meeting in London.

“We have always been of the view that the iron ore market is more likely to decline than rise, and therefore producing the maximum amount we can now is very sensible.”

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Coal Miners Fired in Appalachia Getting Hired in Wyoming – by Tim Loh (Bloomberg News – October 23, 2014)

http://www.bloomberg.com/

It’s boom times in Wyoming for embattled U.S. coal companies, where the mining industry is hiring workers while shedding them in Appalachia.

Alpha Natural Resources Inc. (ANR), the second-largest U.S. producer, hasn’t posted a profit in three years and is closing money-losing mines in West Virginia amid plans to increase production out West by as much as 30 percent.

Miner Steven King is going along for the ride. After losing his job last month at the company’s Black Castle operation, King, 42, is getting ready to move his family 1,500 miles (2,400 kilometers) to a state he’s never visited to work at an Alpha site in Wyoming.

With the U.S. coal industry in its worst decline in decades, companies including Alpha and Peabody Energy Corp. (BTU), the biggest producer, are pivoting toward pockets of future profit. No prospect is bigger than the Powder River Basin, a high, mineral-rich plain of yellow grass and sagebrush stretching from central Wyoming to southern Montana.

“It’s going to be running a good while in Wyoming, because of how much coal they put out,” said King, who expects to start work by next month. While he doesn’t know what he’ll be earning, a friend made the move a year ago and since then his base pay has increased to about $35 an hour from $25.

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The Importance of the Ring of Fire with Hon. Bob Rae

Published on Oct 23, 2014 The Ring of Fire could be the single greatest economic development opportunity for Ontario in a generation. Hon. Bob Rae speaks to its potential and the importance of accessing the undertapped pool of Aboriginal talent.

NEWS RELEASE: Balmoral Named Prospector of the Year in Quebec for Second Consecutive Year

(Vancouver, October 23, 2014) Balmoral Resources Ltd. (“Balmoral” or the “Company”) (TSX: BAR; OTCQX: BALMF) is pleased to announce that Balmoral’s exploration team has been recognized, for the second consecutive year, as the “Prospectors of the Year” in the Province of Quebec. The Company was recognized this year for the discovery of the Grasset Ni-Cu-PGE system, after winning the award in 2013 based on the Bug Lake and related gold discoveries on the Company’s nearby Martiniere Property. Balmoral is the first company to receive the award in two consecutive years, and only the second two time winner of the award. The award was presented last evening at the annual Association de L’Exploration Miniere du Quebec (“AEMQ”) awards ceremony in Montreal, Quebec.

The Grasset nickel-copper-platinum-palladium discovery is located in west-central Quebec, 55 kilometres west of Mattagami and 40 kilometres east of the Bug Lake/Martiniere Gold system. To date, the Company has intersected broad zones of Ni-Cu-PGE mineralization in two horizons, for up to 840 metres along strike. Results have been highlighted by intercepts of 45.28 metres grading 1.79% Ni, 0.19% Cu, 0.42 g/t Pt, 1.04 g/t Pd and 44.79 metres grading 1.53% Ni, 0.16% Cu, 0.37 g/t Pt and 0.86 g/t Pd. The Company recently announced a doubling of both the along strike and at depth extent of the recent Horizon 3 discovery (see NR14-22, Oct. 1, 2014). The Grasset Ni Zones occur at the southern end of a 16 kilometre long intrusive complex which is wholly controlled by the Company and is the focus of on-going exploration activities.

“Being presented with an award by one’s peers is the highest form of compliment and we thank the members of the AEMQ for bestowing this honour on us. I cannot describe how proud I am to represent a team that has been able to receive this award in consecutive years, and in 2 of its first 4 years of active exploration in the province” said Darin Wagner, President and CEO of Balmoral.

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An Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices: Eric Sprott Interview (The Gold Report – October 20, 2014)

http://www.theaureport.com/

Could an infectious disease kill the monster that has been choking gold and silver prices for more than a year? On the heels of a lively Sprott Precious Metals Roundtable discussion, The Gold Report caught up with investor Eric Sprott to ask how a tragedy in Africa could impact the price of precious metals and mining stocks. We also spoke to his Executive Vice President of Corporate Development John Ciampaglia about a new way to gain exposure to gold.

The Gold Report: Deutsche Bank warned in a recent note that the Ebola virus could impact commodity markets, including gold and cocoa, as it spreads to producing countries in West Africa, particularly Ghana and Mali. In a recent article titled “Ebola, The Tipping Point,” you mourned the unnecessary loss of life and predicted 5% less global production next year than this year. Could a lack of supply due to Ebola-related closures really cause the price of gold to rise?

Eric Sprott: There is already a shortage of gold and silver in the markets without a corresponding increase in the price. I wrote an open letter to the World Gold Council questioning its data on China. If you believe the Shanghai Gold Exchange data, China consumes more than 2,000 tons (2 Kt). In 2011, it consumed only about 1 Kt. In the last two years, China has bought an extra 1 Kt gold—25% of a 4 Kt market. If any country came in and bought 25% of the oil market, the wheat market or the orange juice market, the commodity price would not go down. Obviously, the physical gold market is not manifesting itself in the price changes.

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Vale Coming of Age as Nickel Heavyweight as Prices Sink – by Juan Pablo Spinetto (Bloomberg News – October 23, 2014)

http://www.bloomberg.com/

Vale SA (VALE5), whose $18 billion base-metal incursion was beset by a slew of delays and stoppages, is growing nickel output at the fastest pace in six years at a time of tumbling prices for the stainless steel ingredient.

The Rio de Janeiro-based company beat analysts’ estimates to post a 16 percent jump in nickel production in the third quarter, taking total output of the metal this year to 201,400 metric tons. That puts Vale, which plans to produce 289,000 tons of nickel in 2014, on track to challenge top producer OAO GMK Norilsk Nickel, which targets as much as 230,000 tons.

After winning a battle to take over Inco Ltd. in 2006, Vale is leaving behind a series of setbacks including strikes in Canada, plant faults in Brazil and an acid spill in New Caledonia. While its earnings outlook was boosted by nickel’s first-half rally, prices have plunged 24 percent from a Sept. 8 peak and are down about 50 percent since the Inco deal.

“It’s not the best timing in the world,” Marcel Kussaba, an equity analyst at Quantitas, which oversees 16.6 billion reais ($6.6 billion) including Vale shares, said from Porto Alegre, Brazil. “There is the feeling that Vale is starting to deliver when the environment is bad.”

Vale said in its third-quarter production report yesterday that nickel climbed to 72,100 tons, beating a 68,800-ton average forecast by nine analysts surveyed by Bloomberg, the unit’s best performance for a third quarter since 2008, despite a planned maintenance at its Thompson project in Canada.

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AFRICA INVESTMENT-S.Africa platinum town, wider economy still hurting from strike – by Zandi Shabalala (Reuters India – October 24, 2014)

http://in.reuters.com/

MARIKANA, South Africa, Oct 24 (Reuters) – Mamsi Ngobeni sat alongside the main road of the South African platinum belt town of Marikana, hunched over a table with a pile of onions, apples, loose cigarettes and tomatoes.

By just after noon she had sold about 20 rand ($1.8245) worth of goods, well down from what she said was her usual 1,000 rand take before a five-month strike against the world’s top platinum producers drained this gritty town of cash.

Although miners here have been back at work since June with higher wages and the strike-hit operations of Anglo American Platinum and Lonmin are back at full production, money is not gushing back into local businesses.

Africa’s most advanced economy is also struggling to shake off the shock of the strike, the longest in its history, and will only manage growth of 1.4 percent this year, down from the 2.7 percent predicted in February. Finance Minister Nhlanhla Nene cited “labour market disruptions” as a key reason for the revision.

In Marikana, where 34 striking miners were shot dead by police during a wildcat strike against Lonmin in 2012, the length of this year’s stoppage has left many miners cash-strapped despite wage hikes of up to 20 percent as they have to repay debt that piled up when they didn’t have a pay cheque.

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The limits of Ecuador’s shakedown statism – by Peter Foster (National Post – October 24, 2014)

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

Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez

The great eighteenth century lexicographer and wit Samuel Johnson described second marriage as the “triumph of hope over experience.” How then might one characterize the tendency of Canadian mining companies to return again and again to the altar of commerce with foreign government partners who recall Glenn Close in Fatal Attraction?

This week, Vancouver-based Lundin Group confirmed that a subsidiary would take over the Fruta del Norte prospect in Ecuador from Toronto-based Kinross Gold Corporation for US$240 million. Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez, the man who turned oil-rich Venezuela into a basket case.

Mr. Correa’s preferred mode of money-raising is the shakedown. The two most spectacular examples in recent years have been an attempt, via the “Yasuni Initiative,” to blackmail the rest of the world into putting up US$3.6 billion in return for Mr. Correa (italics) not (close italics) drilling for oil in an Amazonian nature reserve; then there is a beyond-fiction trumped-up court case against California-based Chevron Corp. seeking (at last count) US$9.5 billion for alleged damage to the rainforest.

Kinross took a massive flier by buying Fruta del Norte in 2008 for $1.2 billion when Ecuador had no clear mining policy. The company’s attempt to develop FDN turned out to be the proverbial marriage from hell.

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Zinc bull Michelmore puts the case – by Lawrence Williams (Mineweb.com – October 24, 2014)

http://www.mineweb.com/

MMG CEO Andrew Michelmore is very bullish on zinc, in part resulting from the impending closure of his company’s Century mine next year with nothing of comparable size to replace it.

LONDON (MINEWEB) – At the tail end of a very interesting East meets West seminar put together by Bloomberg in London during LME Week, Andrew Michelmore, the CEO of MMG (the Australian-based subsidiary of China’s Minmetals), talked about his company and in particular about the massive Las Bambas copper property it is building in the Peruvian Andes.

But perhaps his most interesting comments came in a Q&A session at the end with his remarks on the global zinc market.

Michelmore is bullish on copper, but VERY bullish on zinc, and he is in a good position to understand the market as MMG is the operator of the massive Century zinc mine in Australia which is due to cease production next year. Century will produces some 400 000 tonnes of zinc this year, around 7% of global mined supply and is reckoned to be the world’s second largest zinc mine after Hindustan Zinc’s Rampura Agucha in Rajasthan, India.

Century is due to run out of open pittable ore by the end of the current year, but can probably continue processing material until Q3 2015. Beyond that production will cease said Michelmore in an answer to a direct question on the Century closure schedule.

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How the Fruta del Norte project is another high-risk, high-reward gamble for Lundin Group – by Peter Koven (National Post – October 23, 2014)

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

If anyone was going to tackle the Fruta del Norte project, it would naturally be Lukas Lundin.

The Vancouver-based mining entrepreneur has never shied away from investing in the most politically challenging parts of the world. And by getting into countries including Argentina and the Democratic Republic of Congo ahead of the pack, the Lundin Group has taken hold of many world-class projects at low cost and made a fortune for its shareholders.

Fruta del Norte (FDN) fits the bill for Mr. Lundin perfectly. It is arguably the world’s best undeveloped gold deposit, with 6.8 million ounces of very high-grade reserves. It is also in Ecuador, a country that has been inhospitable for mining investment and has scared away the rest of the gold sector. As a result, the asset was available at a bargain-basement price.

“One of those things the Lundin family has done so well over so many years is [obtaining] great assets,” Ron Hochstein, chairman of Lundin shell company Fortress Minerals Corp., said in an interview. “And also having the ability to work with governments and with the population to see them through.”

Fortress announced late Tuesday it will buy FDN from Kinross Gold Corp. for US$240-million in cash and stock. Fortress will be renamed Lundin Gold Inc. and plans to use FDN as the foundation to build a significant gold producer.

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Glencore digging deeper for new Sudbury mines – by Jonathan Migneault (Sudbury Northern Life – Oct 23, 2014)

http://www.northernlife.ca/

If approved, Onaping Mine will go as deep as 2,700 metres (8,858 feet)

The future of Glencore’s nickel operations in Sudbury will require deeper mines to access previously untapped deposits, said Marc Boissonneault, the company’s vice-president of Sudbury nickel operations.

Boisonneault, who addressed the Greater Sudbury Chamber of Commerce Tuesday, said the mining giant is eyeing two potential Sudbury developments that would require mine shafts as deep as 2,700 metres.

The first project is Onaping Mine, a site that was discovered years ago, but contains ultra-deep deposits that could not be safely accessed until recently.

Glencore estimates the mine contains 15.7 million tonnes of nickel deposits at higher grades than average for the Sudbury Basin, and would require a capital expenditure of $547 million to develop.

The company is expected to complete a pre-feasibility study for the project later in the year, and will decide by the first or second quarter next year whether it would be worthwhile to mine the deep deposits. “Given our life of mine situation, we would like to get started on it soon,” Boissonneault said.

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The indigenous land rights ruling that could transform Canada – by Martin Lukacs (The Guardian – October 21, 2014)

http://www.theguardian.com/us

Indigenous rights offer a path to a radically more just and sustainable country – which is why the Canadian government is bent on eliminating them

The unrest is palpable. In First Nations across Canada, word is spreading of a historic court ruling recognizing Indigenous land rights. And the murmurs are turning to action: an eviction notice issued to a railway company in British Columbia; a park occupied in Vancouver; lawsuits launched against the Enbridge tar sands pipeline; a government deal reconsidered by Ontario Algonquins; and sovereignty declared by the Atikamekw in Quebec.

These First Nations have been emboldened by this summer’s Supreme Court of Canada William decision, which recognized the aboriginal title of the Tsilhqot’in nation to 1,750 sq km of their land in central British Columbia – not outright ownership, but the right to use and manage the land and to reap its economic benefits.

The ruling affects all “unceded” territory in Canada – those lands never signed away through a treaty or conquered by war. Which means that over an enormous land mass – most of British Columbia, large parts of Quebec and Atlantic Canada, and a number of other spots – a new legal landscape is emerging that offers the prospect of much more responsible land stewardship.

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The problem with America’s abandoned mines – by Rachael Bale (Centre for Investigative Reporting – October 21, 2014)

http://cironline.org/

A mine plans its death before its birth. The leftover waste from mines is so hazardous that mining companies must figure out what to do with it decades in advance, even before they start digging.

That’s how it works today, at least. But in 1981, when the United States government began requiring mines to have rehabilitation plans, many operators simply up and left instead. The government has identified about 46,000 abandoned mines on public lands alone. Some of them are top-priority Superfund sites.

But most haven’t even been mapped. By some estimates, there are as many as half a million abandoned mines in the U.S. These sites have the potential to contaminate water, pollute soil, kill wildlife and sicken humans, to say nothing of the risks of falling down a hidden mine shaft. (This is a legitimate concern in some areas – in California, the state employs teams that scour the state looking for abandoned mines and plugging them up. There was even a “Dirty Jobs” episode about these folks.)

Last month, heavy rains from Hurricane Odile caused two abandoned mines in Arizona to leak orange and brown sludge, threatening a waterway that runs into Patagonia Lake State Park. With thousands of abandoned mines dotting the American landscape, particularly in the West and Southwest, just how worried should we be?

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News Release: Goldeye Explorations Limited’s Weebigee Project: A High-Grade Gold Discovery in Ontario’s Sandy Lake Greenstone Belt – by Robin Luke Webster (The Ontario Prospector – Winter 2015)

http://www.ontarioprospectors.com/home/

Robin Luke Webster is the Vice President, Corporate Affairs and Community Relations, Goldeye Explorations Limited

In 1986, a former Inco Geophysicist, Blaine Webster, founded a private company to stake mineral exploration claims near Sandy Lake, 225km north of Red Lake, Ontario. At the time, he could hardly have imagined that it would take nearly 30 years to launch a comprehensive exploration and drilling program on the property. In the ensuing years, the company, Goldeye Explorations Limited, obtained a public listing, explored a number of other mineral properties, and made an exciting discovery at its Tyrrell project near Shining Tree, Ontario.

While Goldeye carried out limited exploration after initially staking its claims at Sandy Lake, the project was put on indefinite hold soon after due to opposition from nearby Sandy Lake First Nation (SLFN). Knowing the significant mineral potential of the Sandy Lake area, however, and the benefits that a discovery could bring for both Goldeye shareholders and the local community, Blaine maintained Goldeye’s interest in the claims and focused on building a positive and mutually beneficial relationship with the members of SLFN. When Goldeye sold the Tyrrell project to Temex Resources Corp. in 2012, its focus returned to Sandy Lake.

Guided by Ontario’s new mining act, Goldeye ramped up its ongoing efforts to advance the project and in 2013, after a process of extensive consultations and discussions, SLFN agreed to the terms of a comprehensive Exploration Agreement that made it possible for the long envisioned work program to commence.

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