Mining industry, hungry for deals and cash, meets in Toronto – by Susan Taylor and Nicole Mordant (Reuters Canada – March 1, 2015)

http://ca.reuters.com/

TORONTO (Reuters) – A four-year mining-industry downturn has left big gold producers hungry to buy reserves they haven’t had the money to find themselves, and impoverished small miners eager to cash out, setting up the ingredients for mergers and acquisitions revival in 2015.

Mining veterans say that scenario is likely to come into play at the industry’s largest annual event, the Prospectors and Developers Association of Canada convention in Toronto, March 1-4, where more than 20,000 participants are expected.

Many small explorers and developers, cash-strapped after years of austerity, may be looking to attract buyers at the convention.

Big gold miners, meanwhile, have been hit by weak commodity prices that have forced them to slash exploration budgets, slowing new discoveries, and contributing to a drop in in-the-ground reserves at the world’s five biggest bullion producers.

Their reserves, cumulatively, fell 11 percent to 317 million ounces in 2014, company data show. If reserves continue shrinking, production will eventually follow.

“The big mining companies still know they have to buy projects … If you don’t buy new assets you just watch your business decline,” said John Gravelle, global mining leader at consultancy PwC.

Read more

Canadian fed and Ontario govts unveil supports for mining industry – by Henry Lazenby (MiningWeekly.com -March 2, 2015)

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

TORONTO (miningweekly.com) – Several federal departments of the Canadian government, as well as the Ontario provincial government, unveiled new measures and investments on Sunday to increase support and drive growth in the country’s besieged mining industry.

In a speech to the Prospectors & Developers Association of Canada, Finance Minister Joe Oliver announced that government proposed to extend the 15% Mineral Exploration Tax Credit (METC) for investors in flow-through shares for a further year, until March 31, 2016. The credit was scheduled to expire on March 31, 2015.

The federal tax credit programme had been referred to as the “lifeblood” of junior mineral exploration – and its extension was expected to support the mineral exploration efforts of junior exploration companies, as it had done since its introduction in October 2000. During a challenging time for the global economy, in the struggle to secure capital, it had helped keep investment flowing.

“When we strengthen this industry, we create jobs, growth and long-term prosperity from coast to coast to coast. We are doing exactly that by cutting red tape, lowering taxes and expanding free trade across the globe,” Oliver stated.

Read more

Chilean Mining Minister Seeks to Reassure Miners on Water – by Alistair MacDonald (Wall Street Journal – March 1, 2015)

http://www.wsj.com/

The Chilean government is seeking to reassure mining companies that it has no intention of forcing miners to run their mines using a desalinated water supply, the country’s minister of mining said, in news that may come as a relief to a mining industry that has seen increased demands on it in developing markets.

In recent decades, Chile has built a reputation as being the most mining-friendly jurisdiction among developing economies. Lately, however, some miners and sector bankers say that while still a benchmark in the developing world, Chile isn’t as friendly a jurisdiction as it once was.

Aurora Williams said that while there has been some demands for miners to use desalinized water, in which seawater is stripped of its salt, her government doesn’t plan to force miners to use this water.

“This is not something that is being considered” by the government, she said in an interview with The Wall Street Journal.

Some miners, though, may have to use desalinized water, given the nature of Chile’s geography as a thin country bordering the sea. “It is what nature demands,” Ms. Williams said. Ms. Williams was speaking at the opening of the Prospectors & Developers Association of Canada’s annual conference in Toronto.

Read more

Ring of Fire road study needs wider lens, environmental group says – by Jody Porter (CBC News Thunder Bay – March 2, 2015)

http://www.cbc.ca/news/canada/thunder-bay

“No one is saying, ‘Holy cannolis, what are all the plans for the region for the next 20 – 30 years?'”

Government funding for a $785,000 study of a road to the Ring of Fire is a “welcome move” for the Canadian Parks and Wilderness Society, but the environmental group says more needs to be done to look at the region-wide impacts of the proposed mining development in northern Ontario.

The federal and provincial governments announced Sunday that they’ll jointly fund a study looking at a road that would connect the remote Webequie, Eabametoong, Nibinamik and Neskantaga First Nations to the provincial highway at Pickle Lake, Ont. about 500 kilometres northwest of Thunder Bay.

The environmental group hopes it acts as a “springboard” for further study and a comprehensive, region-wide development plan for the nickel and chromite deposits in northern Ontario’s James Bay lowlands.

“Once a road goes in, it has a whole cascade of effects,” said Anna Baggio, the Ontario planning director for the Canadian Parks and Wilderness Society’s Wildlands League. “There are alternatives in terms of where these roads could go and that needs to be looked at and fully costed and accounted for in a transparent way.”

Read more

Ottawa urges development of foreign-aid mining projects – by Kim Mackrael (Globe and Mail – March 2, 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.

Ottawa — Foreign-aid projects that involve Canadian mining companies and non-governmental organizations have shown enough promise that the idea should be refined and then scaled up, International Development Minister Christian Paradis says.

In an interview with The Globe and Mail on Saturday, Mr. Paradis said he is still waiting for detailed evaluations on several projects, launched in 2011, that saw Ottawa partner with mining companies and non-governmental organizations.

But he said he’s encouraged by what he’s heard so far and believes the positive aspects of the programming can be replicated. “I think we can take the best from [the projects],” Mr. Paradis said.

“We will just put aside what we don’t want or what is not effective, and then I think we will have the levers to go after [mining co-operation] on a broader scale.”

The Conservative government has made mining a prominent part of its foreign-aid strategy in recent years, including by launching new aid programs in mineral-rich countries and establishing an institute on global mining policy.

Read more

Investors hard to come by in mining industry downfall – by Rachelle Younglai (Globe and Mail – March 2, 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.

TORONTO — As the beleaguered mining sector suffers through another year of its deepening slump, the industry’s boom days are but a distant memory.

It’s an ugly time for the junior mining industry, as companies descend on Toronto for the annual Prospectors and Developers Association of Canada conference. Already starved for cash, small mining companies are facing their fourth consecutive year of declining commodity prices.

Since 2011, gold is down 30 per cent. Iron ore and metallurgical coal, both used to make steel, are about 70 per cent lower. Copper is down 40 per cent and nickel is off by 50 per cent. Shares of a slew of junior mining companies have crumbled to just a few pennies apiece.

The downturn has made it much harder to entice investors. Don Hoy, who discovered the large chromite deposit in Ontario’s Ring of Fire mineral belt, said investors’ attitude toward small mining companies has changed.

During the commodity boom several years ago, Mr. Hoy said “people did not want to miss the boat. They had to get involved.” But, “a lot of projects were far fetched,” he said.

“Now, investors are much more sophisticated.

Read more

Ottawa, Queen’s Park fund Ring of Fire road study – by Ian Ross (Northern Ontario Business – March 01, 2015)

http://www.northernlife.ca/

Will spend $732K in a First Nations-led initiative

First Nations in Ontario’s Far North are being empowered to have a say on a future road to reach the stranded chromite and nickel deposits in the Ring of Fire.

Four Aboriginal communities in the vicinity of the isolated mineral belt in the James Bay lowlands received more than $732,000 from the federal and provincial governments to conduct a Regional Community Service Corridor study.

In championing it as a First Nation-led initiative, federal Natural Resources Minister Greg Rickford and Ontario’s Northern Development and Mines Minister Michael Gravelle kicked off the opening of the Prospectors and Developers Association of Canada’s annual convention in Toronto on March 1 with the joint announcement.

The partnership involves the remote communities of Webequie, Eabametoong, Neskantaga and Nibinamik. The money will cover the costs of satellite imagery and GIS mapping of the terrain in the James Bay region, combined with an extensive consultation process with the area communities that is expected to take four to six months.

Read more

PDAC 2015: Optimism clashes with reality on day one of conference – by Peter Koven (National Post – March 2, 2015)

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

As the junior mining sector continues to scrape along the bottom, the world’s biggest mineral conference is the one place where they can always find some reason for hope.

The annual Prospectors and Developers Association of Canada (PDAC) conference kicked off in Toronto on Sunday. Not surprisingly, the mood on the conference floor was a little subdued as metal prices continue to slump, financing dollars remain scarce, and the S&P/TSX Venture Composite Index trades near an all-time low.

“Everybody here is hoping to weather the storm,” Aubrey Eveleigh, chief executive of graphite firm Zenyatta Ventures Ltd., said in an interview. “They’re waiting for a turnaround in the sector because we’ve seen it before. They’re hanging on with the little bit of money they have.” But even in a rough year, the PDAC conference can reliably attract around 25,000 people, and another big crowd is expected at this year’s show.

On day one, they got a big burst of optimism from the mining industry’s most famous promoter: Robert Friedland of Ivanhoe Mines Ltd. He kicked off a commodity outlook panel with his usual gusto, talking about the giant urbanization trend that continues to happen worldwide and predicting it will have very positive implications for metal prices.

Read more

Republicans need to make it clear that Keystone will help end U.S. dependence on Mideast oil – by Ted Morton (National Post – March 2, 2015)

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

What do American Sniper, Chris Kyle and the Keystone XL pipeline have in common? Most Americans would probably say “nothing.” Unless that changes soon, U.S. President Barack Obama and the Democratic minority in Congress will succeed in sustaining the veto over Keystone that Obama exercised last week.

If the Republicans want to win this battle, they have to change their message. The Keystone pipeline is not about creating more jobs over the next three years, but about saving more lives over the next three decades — lives of young Americans being sent to the Middle East to defend America’s security of supply of imported OPEC oil.

The recent collapse of oil prices and availability of cheap gasoline have made it easy for Americans to forget how dependent on Middle East/Arab oil the U.S. and its allies still are. Thanks to the shale revolution of the past decade, U.S. oil production has risen three-million barrels per day (b/d) to 8.5-million b/d. But American consumption of oil is still double this amount, so the Americans are still importing 7.6-million b/d. While more and more of this is now coming from Canada — over three-million b/d — most of it still comes from the Middle East.

U.S. shale oil is not going to change this. Contrary to what most Americans may assume, OPEC’s share of global oil production has actually risen since 1985 from 30% to 39%. And OPEC’s share of global production is projected to continue to increase to 49% by 2040.

Read more

Roads from riches in Ring of Fire – by Rick Millette (Timmins Daily Press – March 1, 2015)

http://www.timminspress.com/

Rick Millette is a Senior Executive Director/Ring of Fire at Northern Policy Institute.

What is the one thing that would make living in Ontario’s far North communities better? If you asked that question to seven people knowledgeable about the North, you might very well get seven different answers. Clean drinking water. Functional sewer systems. Quality education. Improved health services. Reliable electricity. Healthy food at affordable prices. Better housing.

To a large degree, this wish list stems from the fact that Ontario’s far North communities are accessible only by air for most of the year. These challenges rarely exist for communities with road access.

Astronomically high costs are attached to anyone or anything that has to fly to these places. If the weather cooperates, a winter ice road might provide a month or two of access in every year. There have been poor weather conditions in recent years attributed to global warming. If the pattern continues, winter road construction and use will be progressively problematic.

So what is the one thing that would make living in the far North better? Answer: a network of year-round roads. While there are correlations to improving the quality of life at all levels through road access, none illustrate the benefits more strongly or tangibly than food and fuel.

Read more

Juniors struggle in sea of red tape, fees and demographic losses – Benjamin Cox – by Simon Rees (MiningWeekly.com – February 27, 2015)

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

TORONTO (miningweekly.com) – As the industry prepares for the 2015 Prospectors and Developers Association of Canada’s conference, many have written off the past year as another annus horribilis – a horrible year filled with more impairments, fire sales, debt headaches and muted prices.

The junior sector has struggled most, with many falling by the wayside or clinging on by their fingernails. But some have bucked the trend and have advanced their projects with inventiveness and flexibility.

The situation is unlikely to change any time soon, Oreninc MD Benjamin Cox told an audience at the Canadian Institute of Mining’s Management and Economic Society, in Toronto, on Wednesday. “So are you thinking about how you’ll survive over the next two years?” he asked. “Because I can tell you it’s not going to get better for a little while yet.”

Critical for the juniors had been the ongoing dearth of finance and liquidity. The major cause of this was the preference among investors for oil and gas over mining when choosing the extractive industries.

Of the money that was moving towards mining, most was being fed into the seniors’ corporate restructuring, leaving the juniors waiting at the back of the line.

Read more