February 10, 2015 – Republic of Mining

Renewable future for mine power shines bright – by Simon Rees (MiningWeekly.com – February 10, 2015)

February 10, 2015

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

TORONTO (miningweekly.com) – Renewable power is reliable, proven and continues to offer the mining industry an attractive means to obtain lower-cost energy at remote operations, Hatch director of renewable power Michel Carreau told an audience at a seminar hosted by the Canadian German Chamber of Industry and Commerce’s Competence Centre for Mining and Mineral Resources on Friday.

The mining and renewable energy sectors must continue engaging with each other to develop joint solutions, he added. “This is a meeting of two worlds that, until quite recently, hadn’t worked together.”

Before a mining company selects a renewable component – whether wind, solar or another option – it must consider the economic viability and rate of return against the estimated mine life. The longer a mine is operational, the greater benefits renewables can deliver.

“Levels are typically fixed. For example, 15 cents per kW an hour would be a good bargain across 25 years,” Carreau said. “And while fuel costs are lower right now, remember this is just a moment in time; it will go up [in price].”

The level of power penetration by a renewable component varies; most provide mine sites with between 10% and 20% of their energy when in use. The goal of both the industries is to push this to a much higher level over the next five to ten years.

Future starts to look bright for mining companies – by Martin Cash (Winnipeg Free Press – February 10, 2015)

February 10, 2015

http://www.winnipegfreepress.com/

THE ownership of two of the most promising mineral-exploration projects in the province continue to lay the groundwork for what they hope will eventually become producing mines.

Mega Precious Metals Inc. announced a 5,000-metre winter drill program at its Monument Bay gold and tungsten project, located about 60 kilometres northwest of Red Sucker Lake in northeastern Manitoba.

A company spokesperson said the exact capital investment in the program is not known but said this year’s drilling program is fully funded. The Thunder Bay-based company has about $4 million in its bank account.

The company has been laying the groundwork for a preliminary economic assessment of its gold deposit that currently sits at 2.1 million ounces measured and inferred.

Mega has a funding arrangement with Pacific Road Capital out of Australia. When milestones are met and both sides agree to the disbursements, the company could have as much as $40 million at its disposal. But with Mega’s current share price down at five cents, it’s likely too dilutive and not the right time for the next tranche from Pacific Road.

Farther west in northern Manitoba, Carlisle Goldfields is a little further along in the redevelopment of its gold mines near Lynn Lake, about 740 kilometres northwest of Winnipeg.

Rio Tinto to defy mining pain with big payout while rivals suffer – by Sonali Paul and Silvia Antonioli (Reuters U.S. – February 10, 2015)

February 10, 2015

http://www.reuters.com/

MELBOURNE/LONDON – (Reuters) – Rio Tinto is expected to star among the top five global miners with a return of billions of dollars to shareholders at its annual results, even as the firm is set to report its worst half-year profit since 2009.

It will likely be all downhill for investors in the megaminers after Rio Tinto reports on Feb. 12 as they are all tipped to report sharp slides in earnings, gutted by weaker prices for almost everything they produce.

Iron ore will be the biggest source of pain, even though it remains the most lucrative product for Brazil’s Vale, Rio Tinto and BHP Billiton, and investors’ main concern is how the big miners are going to shore up cash flow. The top three producers have wounded the industry by flooding the market with new supply, knocking iron ore prices down nearly 50 percent in 2014, a steeper slide than anyone anticipated.

While boosting output, Rio has bolstered its cash flows by slashing costs, cutting capital spending and reducing debt, putting it in the best position to return cash to shareholders. BHP took the same steps, but has been whacked by plunging oil prices.

“In our opinion Rio has significantly greater flexibility (than BHP) at this point in time to pursue short-term capital management initiatives,” said Ben Lyons, a portfolio manager at ATI Asset Management.

Zambia’s tax regime keeps lid on First Quantum spending plans – by Geoffrey York (Globe and Mail – February 9, 2015)

February 10, 2015

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.

CAPE TOWN — With no sign of compromise from Zambia on a controversial royalty tax regime, First Quantum Minerals Ltd. says it will prolong its suspension of more than $1-billion in mining investment plans in the African country.

The Vancouver-based company, whose investments in Zambia include a majority stake in Africa’s biggest copper mine, is among the Canadian miners that were heavily affected by Zambia’s decision to triple its open-pit mining royalty rate to 20 per cent from 6 per cent last month.

Some analysts had predicted that Zambia might roll back some of the royalty hike after its presidential election last month, but government leaders are giving no hint of a reversal so far.

“They’re sticking to their guns,” Matt Pascall, operations director for First Quantum, said in an interview on Monday. “All the latest statements by the minister of finance, and even the president, indicate no change.”

First Quantum had planned an expansion of its biggest Zambian asset, the Kansanshi copper mine, and a smelter, but those investments are now “still on hold,” Mr. Pascall said.

Mexican mining kidnap victims found safe – by Dorothy Kosich (Mineweb.com – February 10, 2015)

February 10, 2015

http://www.mineweb.com/

Although the Media Luna project kidnap victims have been recovered by Mexico authorities, analysts are still taking aim at Torex Gold Resources.

Torex Gold Resources (TSX:TXG) traded down Monday after news broke late Friday about the abduction of local community members near Torex’s Morelos mine project, located in the Guerrero state of Mexico, where 43 student teachers were reportedly kidnapped and allegedly burned to ashes in Cocula in southern Guerrero last year.

At least 12 people were reported kidnapped in Cocula Friday, according to the Associated Press. Initially there were conflicting reports concerning how many where taken and whether some of the victims worked for Media Luna, a subsidiary of Toronto’s Torex Gold Resources.

However, Bloomberg reported on Monday that Mexican security forces have freed 10 of the victims who had been abducted. Acting on information from Cocula residents, the Mexican army and federal police found 13 people spread out among three locations. At least two of the group allegedly helped carry out the kidnappings. One person was treated for gunshot wounds.

In a statement issued Friday, Torex Resources said only one of the 12 missing community members actually worked directly for the Media Luna gold project as a laborer, while three others work for contractors to the project.

IRS targets uranium producer Cameco as CRA tax dispute intensifies – by Peter Koven (National Post -February 9, 2015)

February 10, 2015

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

The U.S. Internal Revenue Service is demanding back taxes from Cameco Corp., adding to the miner’s ever-growing tax woes ahead of a crucial trial expected next year.

The IRS believes the revenue reported by Cameco’s Swiss subsidiary, Cameco Europe Ltd., is inadequate and that a portion should be taxed back in the U.S. at a much higher level. The claim is similar to the one made by the Canada Revenue Agency (CRA), which is trying to shift Cameco Europe’s revenue to Canada and apply a debilitating collection of back taxes and penalties.

Cameco insists it has done nothing wrong. But the Saskatoon-based miner said that if it loses the CRA dispute, the amount of back taxes and transfer-pricing penalties could amount to as much as $1.5-billion, with other penalties added on top. That would be a devastating blow to the company.

The IRS demand is much smaller, as it seeks to collect US$32-million from Cameco that it feels it was owed in 2009. It is also auditing tax returns from 2010 to 2012, and Cameco expects the U.S. agency to make similar claims for those years.

While the IRS demands are insignificant compared to those of the CRA, some experts think the IRS move against Cameco could bolster the CRA’s case. At the very least, it gives the company another sizable headache to deal with.

Alaska tribal groups push for study on B.C. mine safety (Canadian Press/CTV News – February 9, 2015)

February 10, 2015

http://www.ctvnews.ca/

KETCHIKAN, Alaska — A coalition of aboriginal tribes in southeast Alaska is calling for a Canada-U.S. commission to study the impacts of British Columbia’s mining industry on shared waters because of last summer’s collapse of a tailings-pond dam.

Some 14 tribes have formed the United Tribal Transboundary Mining Work Group to urge both governments to evaluate B.C. mining-safety practices through the International Joint Commission.

The call follows the release of an independent report in late January that blamed an inadequately designed dam for the Aug. 4, 2014 incident that saw 24 million cubic metres of silt and water flow into nearby lakes and rivers at the Mount Polley open-pit, gold-and-copper mine near Williams Lake, B.C.

“Alaskans, we’re not at all convinced that B.C. can do all this mining without harming us,” said Carrie James, the group’s co-chair. “Environmental safeguards in B.C., they’ve been weakened over the past decade.”

The group’s main concern is its $1-billion fishery, located downstream from several large-scale mining projects, James said. They want an investigation into any potential long-term effects on the fish and other wildlife located along the transboundary rivers.

Tahoe to Buy Rio Alto for $1.09 Billion to Add Peru Gold – by Simon Casey and Liezel Hill (Bloomberg News – February 9, 2015)

February 10, 2015

http://www.bloomberg.com/

(Bloomberg) — Tahoe Resources Inc. agreed to buy Rio Alto Mining Ltd. for about C$1.35 billion ($1.09 billion) to add the La Arena mine in Peru in the gold industry’s biggest takeover in almost 10 months.
The cash-and-stock offer is valued at C$4 a share, or 22 percent more than Vancouver-based Rio Alto’s Feb. 6 closing share price, both companies said Monday in a statement.

Unlike many other precious-metal miners struggling amid recent commodity-price declines, Tahoe has gained financial strength after its Escobal silver mine in Guatemala started commercial production in January. The Reno, Nevada-based company’s cash balance jumped more than eightfold in the first three quarters of 2014. It announced its first dividend payment in November.

The enlarged company will have no net debt and its market capitalization will appeal to a larger group of institutional investors, attract more coverage from analysts and improve share trading liquidity, Tahoe and Rio Alto said.

“The combination would arguably create an intermediate multi-mine producer with low production costs, a strong balance sheet with net cash, and with a genuine growth profile,” said Daniel Earle, a Toronto-based analyst at TD Securities Inc.

The supermaterial that could launch a revolution – by Joseph Hall (Toronto Star – February 7, 2015)

May 13, 2016February 10, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Graphene, a material that can be derived from the lead in an ordinary pencil, is on the cusp of transforming everything from touchscreens to tennis rackets.

In a lab off of a shaft-like corridor below the University of Toronto’s old Lassonde Mining Building, PhD student Changhong Cao is employing some strikingly humble equipment: Scotch Tape.

Surrounded by a nuclear microscope and high-powered computers, the mechanical engineer uses the Christmas wrapping staple to peel off the top layers from a square of graphite the size of a Scrabble tile.

That’s the same sort of carbon-based graphite at the centre of every ordinary pencil you’ve ever used. Then, repeatedly folding fresh segments of the tape over the captured graphite smudge, Cao peels off more and more of the carbon layers originally deposited on the sticky surface.

The resulting material — known as graphene — is the strongest on Earth and may now be on the cusp of transforming the world.

COLUMN-Nickel’s bull story; just a simple matter of timing? – by Andy Home (Reuters U.S. – February 10, 2015)

February 10, 2015

http://www.reuters.com/

Feb 10 (Reuters) – Good things, they say, come to those that wait. Just ask a nickel bull.

The nickel market went on a super-charged rally over the first half of last year, the benchmark London Metal Exchange (LME) three-month price racing up from below $15,000 per tonne to a May high of $21,625.

The trigger was the well-flagged but widely unexpected decision by the Indonesian government to ban the export of unprocessed minerals in January. At the stroke of a presidential pen, China’s massive nickel pig iron (NPI) sector lost its main source of feed.

Great expectations, however, were dashed by reality, specifically a compensatory surge in nickel ore supply from the Philippines.

The subsequent price collapse was as spectacular as the original rally. And here we are again, the London nickel market kicking its heels around the $15,000 level.

But the bull story hasn’t gone away. It has merely been postponed. Nickel is still metal analysts’ favoured upside pick over a two-year time horizon.

So, will this be nickel’s year (again)? Possibly, but there are many moving parts to this bull story and at its core lies one of the least transparent parts of the global industry.

Taliban boosting ties to organized crime: U.N. report [illegal mining] (Japan Times – February 10, 2015)

February 10, 2015

http://www.japantimes.co.jp/

WASHINGTON – In a worrying development for Afghanistan’s new leaders, Taliban militants are increasing their dealings with narcotics traffickers, illegal mining rings and kidnappers for ransom, a U.N. report said Monday.

“They are increasingly acting more like ‘godfathers’ than a ‘government in waiting,’ ” a report by the U.N. panel of experts on the Taliban said.

While the Taliban’s ties to drug traffickers dates back to the 1990s, the report also details the movement’s involvement in controlling natural resources, and thus depriving the central government of revenue.

Lapis lazuli mines in northeastern Badakhshan province are controlled by the Taliban who demand around $1 million annually from miners in exchange for being allowed to mine without fear of Taliban attacks, said the report.

In addition, the Taliban earn $240,000-$360,000 per year in extortion from truckers who carry the semiprecious stone away from the mines located in a predominantly Tajik-populated area.

The Taliban also pocket two-thirds of earnings from chromite mining in southeast Paktika province and an estimated $16 million annually from ruby mining in Jagdalak, east of Kabul, the report said.