28th November 2014

Ten things junior miners can do to survive the downturn – by David Poynton (Mining Markets Magazine – November 25, 2014)

http://www.miningmarkets.ca/

“The market turn for junior miners is just around the corner.”  Really? The problem is, that corner just kept moving ahead and three years into the downturn, we all still seem to be in very tough times. With gold now under US$1,200 an oz. and our seniors making drastic cost cuts, what is next? Where are those better days?

Our industry in general — and the junior mining sector specifically — has undergone a fundamental and permanent change. Regular routine financings where all you debated about was a penny here or there, or commission, are long gone. Reasonable M&A deals and fair pricing are difficult to find — if at all — those with money can demand very steep terms. I’m not sure the “good old days” will ever return.

So let’s face it head on. Companies need to accept the new reality in order to adapt and survive. It is time to face some harsh truths — cash is king and it is time to scrimp and save every dollar. Time for some tough decisions and reviews.

Three years into this downturn, investors might be surprised at how many companies have only done the window-dressing and, hoping that elusive turnaround will save them, not even attempted to cut to the bone.

Often, management and boards are unable or uncomfortable dealing with the tough questions — they are often as not human issues: who keeps a job and who doesn’t? Read the rest of this entry »

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27th November 2014

Barrick Gold considers asset sales – by James Wilson (Financial Times – November  27, 2014)

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

Barrick Gold is open to selling a wide range of assets as the world’s largest gold miner by output tries to cut its debts after a sharp fall in the gold price, according to one of its most senior executives.

However, co-president Kelvin Dushnisky said Barrick would not sell at any cost and made clear the miner was placing faith in a reshuffled management team and the productivity of its largest mines to try to ride out the storm engulfing the sector.

Gold miners across the world are eyeing more cost-cutting and restructuring after the price of the precious metal sank to four-year lows below $1,200 per ounce this month, leaving some companies haemorrhaging cash and investor support. Barrick’s share price has retreated to levels last seen two decades ago.

The gold price fall – from $1,900/oz in 2011 – has left many miners with lossmaking operations and sparked expectations of consolidation in the sector. This year Barrick and Newmont Mining, the second-largest producer, aborted advanced talks on a potential merger.

While many analysts have speculated that Barrick could return to talks with its US rival, Mr Dushnisky said discussions were “off the table”. He also accepted that Barrick would have little investor backing to try to acquire more mines from struggling rivals. Read the rest of this entry »

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27th November 2014

NEWS RELEASE: YUKON PROSPECTOR TURNED MUSHROOMS INTO GOLD [Shawn Ryan] – “60 Minutes,” SUNDAY ON CBS – by Sara Bibel (October 16th, 2014)

Shawn Ryan Parlayed a Mushroom Business Into a Gold Prospecting Bonanza

Shawn Ryan turned mushroom hunting into gold. In Canada’s Yukon Territory, the scene of a famous Gold Rush more than a hundred years ago, Bob Simon finds a man whose technique for finding mushrooms inspired him to create a method to find gold, making him one of the Yukon’s biggest gold prospectors. Ryan’s story will be broadcast on 60 Minutes, Sunday, Oct. 19 (7:00-8:00 PM, ET/PT) on the CBS Television Network.

Ryan has made millions as a mountain prospector while others, like their 1896 predecessors, look mainly in the rivers. Ryan looks for gold on Yukon slopes by taking soil samples and analyzing them to produce data he can use to find the likeliest places for gold. That process grew out of an analytical and very successful way he used to search the mountains for morels, mushrooms that high-end restaurants will pay dearly for. Read the rest of this entry »

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27th November 2014

Iron ore prices – Where’s the bottom? (Northern Miner Editorial – Novmeber 26, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

As the daylight hours shorten and winter chill takes hold of the iron ore mines and surrounding communities in the Labrador Trough, it’s as good a symbol as any of the deep freeze that is engulfing the global iron ore market, as spot prices continue to head south.

Back in October, Cliffs Natural Resources said it would permanently close its Wabush iron ore mine on the Labrador side of the Trough, after having laid off some 500 workers in February when it first idled the mine.

And now Cliffs says it has failed in its attempts to find investment partners for the US$1.2-billion expansion of its Bloom Lake iron ore mine on the Quebec side of the Trough — an expansion that the struggling major said was needed to make the Bloom Lake mine financially viable.

While Cliffs had been optimistic about finding such financial partners as recently as a month ago, layoff notices have been sent to some 400 workers at Bloom Lake ahead of the closure of the entire Bloom Lake complex, which will take affect in mid-December. Around 80 workers will be kept for care and maintenance.

Cliffs now states bluntly that it is pursuing its “exit options” for all its Eastern Canadian iron ore assets. Perhaps the biggest surprise in the announcement is the high price tag that Cliffs has put on closing shop and leaving Eastern Canada: up to US$700 million in the next five years. Read the rest of this entry »

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27th November 2014

Rio Invests $350 Million in Diamond Project After Walsh Backing – by David Stringer (Blomberg News – November 26, 2014)

http://www.bloomberg.com/

Rio Tinto Group (RIO), the world’s second biggest mining company, approved a $350 million project to expand a diamond mine in northwestern Canada, weeks after Chief Executive Officer Sam Walsh flagged an investment.

Construction of the A21 kimberlite pipe at the Diavik mine, 220 kilometers (140 miles) south of the Arctic Circle, will start next year, London-based Rio Tinto said today in a statement. Rio owns 60 percent of the mine, with Dominion Diamond Corp. (DDC) holding the remainder.

The investment comes after Walsh said in an interview this month that there were “seriously good” opportunities in diamonds, a unit that had been put up for sale by former CEO Tom Albanese. Demand globally will probably rise 4 percent to 4.5 percent this year with U.S. consumption increasing as much as 6 percent, according to De Beers, the biggest producer.

“I love diamonds,” Walsh said in an interview on Nov. 10 with Bloomberg Television in Beijing, when he flagged an expansion at its Canadian diamond operation. “I think it’s a seriously good business.”

Production from the pipe is expected to start from late 2018. The expansion will ensure output at Diavik continues at existing levels, Rio Tinto said. The mine’s current production plan has output continuing until 2023, it said. Read the rest of this entry »

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26th November 2014

Canadian investors outraged after being shut out of Paladin Energy’s $138-million rights offering – by Peter Koven (National Post – November 26, 2014)

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

TORONTO – A group of Canadian retail investors is outraged after they were shut out of a rights offering that is poised to crush the value of their investment.

Uranium miner Paladin Energy Ltd., which is based in Australia but also trades in Toronto, announced a A$144-million ($138-million) rights offering this week to bolster its balance sheet ahead of a US$300-million debt repayment due next year.

Under a rights offering, existing shareholders are given the opportunity to buy stock at a discounted price — 32% in this case — to maintain their overall stake in the company. But in the Paladin deal, the Canadian retail crowd is being deliberately excluded, meaning they can only watch as they get massively diluted.

“I think the whole principle here is outrageous,” John McNeil, the former chairman and chief executive of Sun Life Financial Inc., said in an interview. He owns Paladin shares, and like many other small investors, he is phoning the company to complain.

The central issue is inconsistencies between the Canadian and Australian regulatory regimes. Put simply, it is a lot easier and cheaper for Paladin to push this deal through in its home country than to offer it in Canada as well. Read the rest of this entry »

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25th November 2014

Canada’s unheard aboriginal narrative – by Lawrence Martin (Globe and Mail – November 25, 2014)

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.

Canada’s rank racism toward aboriginal peoples was institutionalized within the fundamentals of European philosophy and culture, says maverick thinker John Ralston Saul. Europeans insisted their principles were universal. “Of course they were universal. After all, they said they were.”

With their technological and cultural sophistication came a conviction of racial superiority. They were so superior, the writer adds, that they proceeded to massacre one another, as the aboriginals quizzically looked on, in one world war and then a second. A hundred million died in less than half a century.

More wars followed, along with more racist attitudes toward the destined losers. In more recent times, a more sympathetic attitude has been adopted toward indigenous peoples, but it still smacks of soft racism, according to Mr. Saul.

What’s missing, he robustly contends in his new book, The Comeback, is the realization that aboriginal peoples have been making a remarkable recovery and are now on the verge of taking a prominent place in this country. Read the rest of this entry »

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24th November 2014

Why are Canada’s resource boards behind the curve? – by Janet McFarland (Globe and Mail – November 24, 2014)

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.

When it comes to putting women on company boards, Canada has two solitudes: the resource sector and everyone else.

Despite years of high-profile pressure to bolster the representation of women on boards – including new diversity disclosure rules from regulators taking effect Dec. 31 – Canada’s resource companies remain far behind the curve. Women fill just 7.8 per cent of seats on the boards of energy companies in Canada and 11 per cent in mining and forestry firms.

In most other sectors – including financial services, utilities, telecommunications, health care and consumer staples – women now account for between 20 per cent and 25 per cent of corporate directors, a proportion that has been growing rapidly as companies respond to calls from regulators, shareholders and advocacy groups for greater diversity in senior roles.

Calgary-based corporate director Stella Thompson, a retired Petro-Canada executive, says the slow pace of improvement on board diversity in the energy sector is becoming an embarrassment for women in Alberta’s oil patch.

“There are lots of capable women to help with boards,” she says. “You don’t necessarily have to be the CEO of an oil company – you need a few of those, but you don’t need all of them.” Read the rest of this entry »

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24th November 2014

‘Canada Brand’ Harmed By Misbehaving Mining Companies, Feds Finally Realize – by Bruce Cheadle (Canadian Press/Huffington Post – November , 2014)

http://www.huffingtonpost.ca/business/

OTTAWA – It’s taken almost a decade of loud, often unwelcome advocacy, but the federal government appears to finally recognize that Canada’s international brand needs a little spit and polish.

In back-to-back addresses this week to a Mining Association of Canada luncheon, two federal cabinet ministers repeatedly stressed the critical importance of what they called the “Canada brand” — and how it is a key to grabbing new business in the mining sector.

“We as a government and Canadians broadly speaking expect our companies to do business in a way that reflects the highest ethical standards, that reflects the highest environmental standards, the highest level of corporate social responsibility, the highest level of transparency,” International Trade Minister Ed Fast told the gathering at an Ottawa hotel.

Fast recited a host of laudatory statistics: about 1,200 Canadian mining companies operate more than 8,000 properties in over 100 countries, with 35 per cent of global exploration budgets coming from Canada.

“Can we do things better? Of course, there’s always things we can improve,” Fast finally conceded. “But I’m absolutely confident that we have a very, very good story to tell.” Natural Resources Minister Greg Rickford had already warmed up the crowd by cautioning that “there can be no compromise” on environmental stewardship and social responsibility.

Read the rest of this entry »

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24th November 2014

THE LUNCH: For Kinross CEO, it’s ‘situation normal’ in Russia – by Eric Reguly (Globe and Mail – November 22, 2014)

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.

LONDON — When you buy a share in Canada’s Kinross Gold Corp., you are not just betting on gold prices; you are betting on the outcome of the great geopolitical standoff between the West and Vladimir Putin’s Russia, which may or many not evolve into a new Cold War.

So far, the bet has gone massively in Mr. Putin’s favour – Kinross shares are so low that they seem to be awarding virtually no value to Kinross’s two big, and profitable, gold mines in Russia’s far east. In 2010, Kinross was a $20 stock. Today, it trades at about $3.20 and has been as low as $2.27. But haven’t all gold companies been slaughtered along with the gold price?

Yes, but Toronto-based Kinross is in a submarine class all of its own and when its executives and shareholders are in a masochistic mood, they call up a few Goldcorp charts. Vancouver’s Goldcorp Inc. is of roughly equal size yet its market value is more than four times higher than Kinross’s ($18.5-billion versus $3.6-billion). Eldorado Gold Corp., whose production is less than a third of Kinross’s, is worth $5-billion. Ouch! Whip us again! Kinross’s problem can be summed up in one wretched word: Russia.

“We’re getting doubly hammered because of the gold price and the situation in Russia,” says Kinross CEO Paul Rollinson, who was in London this week trying to convince investors and brokers that the economic sanctions against Russia were not endangering Kinross’s mines. Read the rest of this entry »

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21st November 2014

How Canada Can Help Combat the ‘Resource Curse’ – by Lina Holguin (Huffington Post – November 20 , 2014)

http://www.huffingtonpost.ca/business/

Lina Holguin is a Policy Director at Oxfam Canada and Oxfam-Quebec.

Recently, Canada’s Parliament introduced the Extractive Sector Transparency Measures Act, which could have a huge impact on people around the world experiencing the “resource curse.”

More than 60 per cent of the world’s poorest people live in countries rich in natural resources — but they rarely share in the wealth. Too often, poor communities have no say in the extraction of resources from their land and receive little information about the scope of these projects, the revenues they generate, their timelines and potential impacts.

The legislation would increase transparency in the oil, gas and mining industry by requiring Canadian companies to disclose the payments they make to governments for the extraction of natural resources. The legislation, part of the omnibus bill introduced last month, is an important first step to helping citizens of resource-rich countries increase accountability and fight corruption.

The finalized legislation needs to align with global transparency standards already in place around the world, including in the European Union and the U.S., which require company by company, country by country, public, project-level disclosure. Publish What You Pay Canada, of which Oxfam is a member, has proposed amendments to the law that would bring it into line with these standards. At the moment, the act has critical gaps that must be filled to make it effective and to deter corruption. Read the rest of this entry »

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21st November 2014

Ring of Fire is ‘beyond the point of no return,’ mining company says – Bill Curry and Bertrand Marotte (Globe and Mail – November 20, 2014)

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 and MONTREAL – The Ring of Fire project is “beyond the point of no return” in spite of renewed government pledges to move ahead, says the CEO of the mining company that owns the rights to most of the resources in the remote Northern Ontario mineral deposit.

Cliffs Natural Resources Inc. CEO Lourenco Goncalves made headlines last month with his declaration that he had “zero hope” that the Ring of Fire would be developed in his lifetime.

In an interview with The Globe and Mail this week, Mr. Goncalves said recent pledges from the federal and Ontario governments to support the project with public infrastructure cash have not changed his assessment of the project’s viability.

“Last month I said it would not happen in the next 50 years. This month I will say it’s not going to happen in 49 years and 11 months,” he said. “We are beyond the point of no return.”

The Cleveland-based company bought three chromite deposits in 2010 for $350-million and has spent about $200-million on development. Since large chromite deposits were first discovered in 2008, estimates have pegged the mineral potential of the region at $60-billion. Read the rest of this entry »

posted in Aboriginal and Inuit Mining, Canada Mining, Canadian Media Resource Articles, Cliffs Natural Resources, Ontario Mining, Ontario's Ring of Fire Mineral Discovery | 0 Comments

21st November 2014

EXCLUSIVE-Foreign firms challenge Poland over access to mine concessions – by Adrian Krajewski and Anna Koper (Reuters India – November 21, 2014)

http://in.reuters.com/

WARSAW, Nov 21 (Reuters) – Two foreign-owned mining firms have challenged the Polish government over what they see as the unfair allocation of copper and potash extraction permits to state-controlled miner KGHM.

Poland’s environment ministry, which allocates concessions, denied it gave preferential treatment to KGHM over Canadian Miedzi Copper, which has filed a lawsuit, or British firm Darley Energy, which has submitted an appeal.

KGHM, Europe’s second-largest copper producer and an industrial champion for Poland, is 31.8-percent owned by the state. It said it did not limit competition.

Whatever the outcome, the row could rattle foreign investors at a time when Poland’s resource sector, struggling with low prices on the world market, badly needs investment.

The government is also anxious to bring investors into shale gas, which it hopes will reduce its reliance on imported Russian gas. But a number of firms have pulled out, citing difficult geology and unclear regulations. Read the rest of this entry »

posted in Canada Mining, Copper, Europe Mining, International Media Resource Articles, Mining Conflict | 0 Comments

21st November 2014

Cliffs Natural Resources retreats from Canadian ‘disaster’ – by Nicolas Van Praet (Globe and Mail – November 21, 2014)

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.

MONTREAL — The chief executive officer of mining giant Cliffs Natural Resources Inc. is taking aim at his predecessors for their decision to pump billions of dollars into Canada, saying every single investment it made here in recent years was a “disaster” that failed to produce any profit.

“I’m walking away from Canada big time – Canada for Cliffs has not been a good thing,” Lourenco Goncalves, the company’s chairman and CEO, said in an interview Thursday. “All these investments that the company made in Canada after the Wabush mine were a disaster.”

“I’m not the type of guy that’s too much of a Monday morning quarterback,” he said. “But these [decisions] are very clear. Misguided decisions all the way.”

Cleveland-based Cliffs, the biggest U.S. iron ore producer, has spent $6-billion (U.S.) in all on its Bloom Lake iron ore mine in northeastern Quebec over the past three years and “never made a penny” on the investment, Mr. Goncalves said. The company on Wednesday announced that it is “pursuing exit options” for its Eastern Canadian iron ore operations, evaluating its maximum exposure to close the Bloom Lake site at $700-million. The company will also close its mine in Wabush, Nfld., which had been in operation for more than 40 years. Read the rest of this entry »

posted in Canada Mining, Canadian Media Resource Articles, Cliffs Natural Resources, Iron Ore, Quebec Mining | 0 Comments

21st November 2014

There are many good reasons for takeover interest in Nevsun — and one really big downside – by Peter Koven (National Post – November 21, 2014)

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

Canadian miner Nevsun Resouces Ltd. has emerged as a potential takeover target, but any bidder is going to have to overcome a major deterrent: Eritrea.

The Vancouver-based miner revealed Thursday it recently received inquiries from “various parties” about a potential transaction. The announcement came after Bloomberg News reported that a Qatar-backed private equity fund called QKR Corp. is eyeing a US$1-billion bid for the company. Nevsun shares jumped 11%, giving the firm a market value of $942-million.

There are good reasons for the interest. Nevsun’s Bisha mine is extremely rich, with high-grade copper output that will transition into high-grade zinc output in a couple of years, when many analysts are forecasting shortages in the zinc market. The company has promising exploration ground in the area that could yield more mines. It also has close to US$400-million of cash, which means a takeover would largely pay for itself.

But the downside is that Bisha is in Eritrea, which is ruled by one of the world’s most repressive governments. The country is facing international sanctions, and Western governments may not look kindly at any company looking to do business there.

The Eritrean government has caused major problems for Nevsun. Read the rest of this entry »

posted in Africa Mining, Canada Mining, Canadian Media Resource Articles | 0 Comments

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