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Day: May 1, 2015

Sudbury Steelworkers ratify new contract with Vale (Sudbury Star – May 1, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

United Steelworkers locals 6500 and 6200, representing production and maintenance employees in Sudbury and Port Colborne, have voted to accept a new five-year contract, Vale announced Friday.

The new agreement takes effect on June 1. When the polls closed earlier today, 76.7% of members in Sudbury and 87% of members in Port Colborne had voted in favour of the new five-year deal.

“We are extremely pleased with the outcome,” Mitch Medina, Vale’s lead negotiator, said in a release. “A new five-year agreement, delivered a month before the old contract expires, points to a maturing in our labour relations. By the time the new contract expires in 2020 we will have enjoyed an unprecedented full decade of labour peace.”

The new five-year deal contains improvements in contract language, wages, benefits and pensions. USW Locals 6500 and 6200 represent 2,800 production and maintenance employees in Sudbury and Port Colborne.

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Vale ups stakes in iron ore war – by Stephen Bartholomeusz (The Australian – May 1, 2015)

http://www.theaustralian.com.au/

Of far greater consequence to Rio Tinto, BHP Billiton and Australia than Andrew Forrest’s complaints about their volume and cost-driven iron ore strategies is what the “other” major seaborne producer does in response to the crash in iron ore prices.

They might be encouraged by the commentary that accompanied Vale’s first-quarter results overnight.

The Brazilian group is the larger of the three major seaborne iron ore producers and is in the midst of an ambitious and expensive ($US17 billion) program to increase its production by 40 per cent, to almost 460 million tonnes a year from last year’s 327 million tonnes.

As with all the other producers, Vale is slashing costs to try to dampen the impact of the dive in iron ore prices and was able to proclaim that, for the first time in its history, cash costs were less than $US20 a tonne. A significant component of the $US13 a tonne reduction in cash costs was a 20 per cent, or $US4.50 a tonne, fall in freight costs.

Vale has traditionally been competitive with Rio (RIO) and BHP (BHP) in production costs and its ore is generally of higher quality. Its disadvantage has been distance from China and the impact that freight costs have had on its landed costs.

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Vale Delays Possible Base-Metal Division IPO – by Paul Kiernan (Wall Street Journal – April 30, 2015)

http://www.wsj.com/

Nickel prices have fallen sharply from when the base-metal IPO idea was hatched

RIO DE JANEIRO—Brazilian mining firm Vale SA said Thursday it has pushed back the timeline of a possible initial public offering of its base-metals division after an expected rebound in nickel prices failed to materialize.

Vale had said in December that it was considering selling between 30% and 40% of the division on Toronto’s stock exchange around August. On Thursday, Chief Executive Murilo Ferreira said his management team’s new goal is to be ready to present a recommendation to Vale’s board of directors by the end of this year so that Vale might have the option of carrying out the transaction in 2016.

When they hatched the idea for the nickel IPO, Vale executives were predicting nickel prices would rise to around $21,000 per metric ton. Thanks to higher prices and production ramp-ups at a number of new or troubled facilities, they estimated the base-metals division would generate cash flows of between $4 billion and $6 billion this year.

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Company announces amidst protests that Mount Polley mine could restart in months – by Dirk Meissner (Canadian Press/Brandon Sun – April 30, 2015)

http://www.brandonsun.com/

VICTORIA – The open-pit, gold-and-copper mine hit by a devastating tailings pond breach that caused an environmental disaster in central British Columbia could be operating safely and near full capacity within months, the company has announced.

Steve Robertson, vice-president of corporate affairs at Imperial Metals Corp., (TSE-Ill), said Wednesday that more than 50 per cent of Mount Polley’s 370 employees would be back at work if the Vancouver-based company is granted a permit to restart operations.

“If we get a permit approving the restart of the mine in June, it’s going to take a few weeks, but within a few weeks we would be able to be up and running,” he said. “What we’re proposing is a modified restart.”
Robertson said the startup phase would not be full speed.

He said 276 people were employed doing restoration in March, but those numbers are fluctuating.

Environmental and aboriginal groups say they will oppose any decision that allows Mount Polley, blamed for spilling 24-million cubic metres of silt and water into nearby lakes and rivers last August, to resume operations.

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Rio Signals Ready to Step Up on Dealmaking as Market Bottoms – by David Stringer (Bloomberg News – May 1, 2015)

http://www.bloomberg.com/

With the mining sector seen nearing the bottom of the cycle, Rio Tinto Group signaled to analysts it’s ready to resume mergers and acquisitions.

The company is prepared to look for a deal if it can secure the right asset at the correct valuation and win investor backing, Morgan Stanley said after an analysts’ meeting this week with Chief Financial Officer Chris Lynch.

An acquisition would be Rio’s first since 2012, according to data compiled by Bloomberg. As asset valuations get pushed lower, larger producers may be changing their attitude toward deals, according to Argo Investments Ltd.

“If they can buy tier-one assets at valuations that are closer to the bottom of the cycle, then that’s not a stupid thing to do,” said Jason Beddow, chief executive officer of Argo Investments, which manages about A$5 billion ($4 billion) in Australia and holds Rio shares.

The value of completed mining deals fell in 2014 to $51.3 billion, the lowest annual total in 10 years, according to data compiled by Bloomberg.

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Barrick Gold hires BlackRock fund manager to help with turnround – by James Wilson (Financial Times – May 1, 2015)

http://www.ft.com/intl/companies/mining

Barrick Gold, the world’s largest gold producer by output, is hiring one of the UK mining sector’s best known fund managers as part of executive chairman John Thornton’s push to improve the struggling company.

Catherine Raw is joining Barrick’s leadership team from BlackRock, the asset manager, where she was co-head of its largest mining fund and highly critical of the performance and strategy of most of the world’s largest gold miners. The sector needed “to start seeing some really painful decisions being made”, Ms Raw said in December.

Barrick has shaken up its top ranks since Mr Thornton, a former Goldman Sachs banker, took over as executive chairman last year from founder Peter Munk. The Canadian miner has come under fire from investors after three consecutive years of net losses driven largely by writedowns on misfiring projects and acquisitions.

Mr Thornton — who pledged to review Barrick’s management pay policy after it was rejected at an advisory vote at this week’s annual shareholder meeting — has repeatedly said the company needs to do a better job of allocating investment to projects.

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Church of England Dumps Coal as Fossil-Fuel Divestment Gains – by Thomas Biesheuvel (Bloomberg News – May 1, 2015)

http://www.bloomberg.com/

It appears coal mining isn’t God’s work. The Church of England will dump its holdings in coal and oil-sand producers and has ruled out backing companies with exposure to the most polluting fossil fuels, joining the movement that wants investors to help fight climate change.

The church’s investment arm said on Thursday that it will sell its 12 million-pound ($18.3 million) coal and tar sands investments. The church also vowed not to invest in any business that gets more than 10 percent of its revenue from the fuels, ruling out companies including Peabody Energy Corp. and Suncor Energy Inc.

The move by the church, created by Henry VIII’s split from the Roman Catholic Church in the 16th century and still headed by the Queen, is a victory for environmental activists seeking to stigmatize oil and coal companies in the way South Africa and tobacco companies have previously been targeted.

“Climate change is already a reality,” said the Reverend Richard Burridge, deputy chair of the church’s ethical investment advisory group. “The church has a moral responsibility to speak and act on both environmental stewardship and justice for the world’s poor who are most vulnerable to climate change.”

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Chile: Copper bottomed – by Henry Sanderson (Financial Times – April 27, 2015)

http://www.ft.com/intl/companies/mining

Facing higher costs and lower prices, copper producers are being asked to improve their environmental record

Black flags hang from the doors of the one-storey red brick houses in Caimanes, a village that lies in the hills north of Santiago on the course of the Pupio stream. The banners are the most obvious sign of a bitter environmental protest against a nearby dam, which holds waste from a copper mine — one of Chile’s largest — high up in the Andes.

Last November, a group of up to 150 villagers took matters in to their own hands and blocked access to the dam for 75 days, as the mine ground out copper — used in everything from smartphones to wiring on construction sites in China.

The campaigners felt confident: the previous month Chile’s Supreme Court had ruled that the London-listed mining company Antofagasta — majority owned by the Luksics, one of the country’s richest families — should either demolish the dam or come up with a plan to allow water to flow into the town.

“We deserve respect, it should not just be the mining company doing what it wants,” says Juan Olivares, vice-president of the committee for the defence of Caimanes, as he plans the group’s next move in the small green-painted room that serves as its headquarters.

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Goldcorp Inc shareholder’s back company on “say on pay” – by Peter Koven (National Post – May 1, 2015)

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

TORONTO – After shareholders approved Goldcorp Inc.’s “say on pay” resolution at its annual meeting on Thursday, chairman Ian Telfer fired off a zinger at the proxy advisory firm that recommended against it.

“The ‘Glass Lewis’ is half empty, not half full,” he quipped, referring to Glass Lewis & Co. “Because 90 per cent of shareholders ignored their advice.”

Glass Lewis also advised shareholders to vote against the executive compensation packages at Barrick Gold Corp. and Yamana Gold Inc. And in both cases, an overwhelming majority of investors rejected those plans at annual meetings this week.

But it appears the Glass Lewis recommendation on Goldcorp got little to no traction, as 89 per cent ofshareholder votes were in favour of the company’s compensation plan. Chief executive Chuck Jeannes told reporters after the meeting in Toronto that he was “thrilled” with the result, which is non-binding.

“I was disappointed in the Glass Lewis recommendation. I don’t think it made sense because it was based on a comparison of our financial results with companies outside our sector,” he said.

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COLUMN-Gold equities may be better bet than physical metal – by Clyde Russell (Reuters U.S. – May 1, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, May 1 (Reuters) – While the price of gold has meandered in a narrow range this year, gold equities have improved somewhat and an analysis of relative performance suggests they may have further to rally.

Spot gold ended Thursday’s trade at $1,183.85 an ounce, largely unchanged from $1,183.55 at the end of 2014, as the precious metal battles the competing influences of a firmer dollar and concerns over a Greek exit from the euro zone.

However, major gold miners have shown some improvement, with the S&P TSX Global Gold Index gaining 14 percent so far this year.

The Toronto Stock Exchange-based index groups together the world’s top gold producers, including No.1 Barrick Gold Corp , which is up 20.5 percent this year in U.S. dollar terms, and No.2 Newmont Mining Corp, which has gained 40 percent.

The No.3 producer, Johannesburg-listed AngloGold Ashanti , is up 32 percent since the start of the year in dollar terms. These are impressive gains for the top gold miners, especially given the steady price of the precious metal.

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Agnico digs deeper in Val d’Or – by Robert Gibbens (Montreal Gazette – May 1, 2015)

http://montrealgazette.com/

North America’s deepest gold mine, in northwestern Quebec, may soon get deeper. The LaRonde mine 56 kilometres west of Val d’Or, with a depth of 3.1 kilometres, could reach 3.7 kilometres in the latest development initiative by operator Agnico Eagle Ltd.

If the deep-level operation is successfully developed, the mine will have enough reserves to last an additional decade, to 2034, the company said.

Chief executive Sean Boyd, a 22-year Agnico veteran, has an engineering team working on the new 3.7-kilometre target level, seeking higher-grade ore and lower production costs to help LaRonde deal with bullion prices around the present $1,200 U.S. an ounce. Most of LaRonde’s ore now comes from the deeper levels.

Boyd told analysts Friday Agnico is working to extend LaRonde’s reserve base by targeting the 3.7-kilometre level and it has two drill holes under way. Drilling late last year added 444,000 ounces to LaRonde’s indicated reserves.

“We have a big exploration program underway this year in Canada and the LaRonde project is part of our long-term strategy,” he said.

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Rail idea in Ring of Fire gathering steam – by Len Gillis (Timmins Daily Press – April 30, 2015)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The City of Timmins this week gave its formal approval to the Mushkegowuk Council plan to create a new railway link from the James Bay coast to the Ring Of Fire mining development.

The issue was put forward in a resolution of support to be sent to the office of Premier Kathleen Wynne, to Northern Development and Mines Minister Michael Gravelle and to the Northeastern Ontario Municipal Association (NEOMA).

The support from Timmins is for an initiative first described in a Daily Press news story back in January when Mushkegowuk Grand Chief Lawrence Martin said there were plans in the works for Mushkegowuk to buy the Ontario Northland railway.

Martin revealed that a Toronto-based rail investment group, TGR Rail, had the funding in place if the province was ready to give the go-ahead for the purchase. Martin explained that a new rail line could be extended beyond the existing ONR line that runs from Cochrane to Moosonee.

The Timmins resolution said the creation of a new rail link would not only see new economic development and growth for First Nations, it would also put Timmins in a prime situation to serve Ring Of Fire mining companies. This would also create the possibility that ore from the huge mining region could be processed or refined in Timmins.

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History of the Carlin Trend (Elko Daily Free Press – May 1, 2015)

http://elkodaily.com/

CARLIN — On May 4, 1965, with little fanfare, Newmont poured its first bar of gold from the Carlin Mine. The pomp and circumstance of the official commissioning of the mine would have to wait a few more weeks. That first bar marked the start of one of the largest and longest-lived mining districts in the world.

In summer 1961, geologists John Livermore and Alan Coope arrived in Carlin to visit the Blue Star mine and the Gold Quarry prospect. Livermore had recently heard a talk by U.S. Geological Survey geologist Ralph Roberts about an area in northern Eureka County that had the potential for hosting gold deposits.

The type of deposit they were searching for was similar to Getchell, Gold Acres and Bootstrap, deposits in which the gold was dispersed as microscopic particles that could not be found using a gold pan. After visiting and examining the local deposits, Livermore and Coope began exploring an area approximately 2¾ miles south of Blue Star on Popovich Hill. They postulated that gold would be found in the limestone rocks below a regional fault known as the Roberts Mountains Thrust.

Drilling on the project began in 1962 and on the third hole intersected 100 feet of mineralization averaging 1.03 ounces of gold per ton, marking the discovery of what would become the Carlin Mine. Drilling to outline the orebody progressed quickly and by the end of 1963 had identified 11 million tons of ore averaging 0.300 ounces of gold per ton, a grade sufficient for mining when gold was selling for $35 per ounce. Construction of the mine and mill began in 1964.

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(Nevada Mining) Editorial: The Romance of Mining (Elko Daily Free Press – May 1, 2015)

http://elkodaily.com/

(This editorial from 50 years ago is being republished in honor of Newmont Mining Corp.’s celebration of 50 years on the Carlin Trend.)

Historically, Nevada has been a mining state. The great Comstock Lode, which helped to bring this state into the Union, Tonopah’s silver and Goldfield’s gold are part of the romantic heritage which has come down through the years. The great copper mines of Ely and Weed Heights have added to the lustre, to say nothing of the wealth of this state and the nation.

There have been numerous other finds in the state’s history leading to the building of mining towns, some passing into oblivion almost overnight. Mountain City, the great Rio Tinto copper mine, Pioche, Austin, Eureka and such other romantic names as Tuscarora, Cornucopia, the Divide near Tonopah, Gold Aces and many others have passed in review.

As Dr. John Hulse said in his recently written “The Nevada Adventure”, “Nevada was basically unwanted and unloved in those days (before mining). It was a barrier to a promised land, rather than an asset in itself. But this soon changed.”

Yes, it changed with Virginia City and the mining finds which followed throughout the state. James Finney, whose real name may have been James Fennimore, according to Dr. Hulse, was exploring the hills at the head of Gold Canyon in the winter of 1858-1859 when he found a mound, soon to be named Gold Hill.

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