24th April 2014

Peter Munk to leave Barrick Gold having seen its highs and lows – by James Wilson (Financial Times – April 24, 2014)

http://www.ft.com/home/us

Peter Munk started Barrick Gold with $40m of his own money in 1982, knowing not much about mining.

Now 86, and after more than 30 years in the gold business, Mr Munk still talks about Barrick having been the entrepreneurial “young upstart” for much of its life – but it became a company worth $50bn, a Canadian national champion built by a Hungarian-born refugee and the largest producer of gold in history.

Yet the past two years have been tough on Mr Munk, Barrick and the rest of the gold industry, particularly 2013, when Barrick posted $11.5bn of writedowns, cut its dividend and had to raise $3bn in equity to try to cut its debt.

“I would not have chosen this particular year as my final one as chairman, but I don’t get to write the script,” a chastened Mr Munk wrote in the company’s annual report. Barrick is now worth about $21bn.

Mr Munk also acknowledged the damage wrought by Barrick’s acquisition of Equinox Minerals in 2011. The unexpected diversification into copper came at an inflated price, for cash, and sparked doubts last year over Barrick’s debt levels and liquidity. Read the rest of this entry »

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24th April 2014

Barrick invites Newmont to restart merger talks – by Rachelle Younglai (Globe and Mail – April 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.

Barrick Gold Corp. has formally asked Newmont Mining Corp. to resume merger talks after their negotiations hit an impasse late last week, according to a person familiar with the situation.

The North American-based gold miners had come close to agreeing on an all-stock deal, but their discussions broke down over which assets to spin out from the combined company, other sources have said.

The companies had aimed to make an announcement before their annual shareholder meetings this month. Colorado-based Newmont held its meeting in Delaware Wednesday morning, and Toronto-headquartered Barrick’s meeting is scheduled for April 30.

Barrick e-mailed the request to restart talks to Newmont, outlining the terms of their friendly proposal as well as issues that still must be resolved, according to the source familiar with what transpired. Read the rest of this entry »

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24th April 2014

China’s war on smog will put the reins on global coal demand – by Jeff Rubin (Globe and Mail – April 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.

China’s pollution epidemic has finally spurred the country’s leadership to declare a war on smog. It’s about time. Chinese citizens are angry about what’s going into their lungs, while a recent government report says pollution has left 16 per cent of the country’s land unfit for use.

Much of that pollution can be traced back to the billowing smoke stacks attached to China’s fleet of coal-fired power plants. If Beijing is indeed sincere about taking the fight to pollution, then these ageing plants will be on the front line. Global coal producers are already sitting up and taking notice.

China relies on coal for roughly three-quarters of its power generation. Its coal-fired power plants combust nearly as much coal as the rest of the world put together. Coal prices, for their part, are already tumbling in part due to a slowdown in China’s economic growth. Spot prices at Newcastle, Australia, the world’s largest thermal coal exporting terminal, have plunged from a monthly average high of $142 a tonne in January 2011 to $78 a tonne last month. Read the rest of this entry »

posted in Australia Mining and History, Canada Mining, Canadian Mining Hall of Fame, Coal | 0 Comments

24th April 2014

Editorial: Diamonds a lodestar in Canadian mining firmament – by John Cumming (Northern Miner – April 23, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists.  jcumming@northernminer.com

While much of the global mining industry has been limping along under sagging commodities prices and looming oversupply, one of the brightest spots has been the Canadian diamond-mining industry, which has weathered its wild, rocky youth and settled into its role as a reliable discoverer, developer and miner of top-quality diamonds.

It remains one of the most difficult, long-shot tasks in mining: finding and developing an economic diamond deposit. And it takes a special kind of investor to embrace diamond miners’ extreme risk–reward ratios and extra-long time horizons. But taking a look across Canada, we see all kinds of positive developments in the next generation of diamond companies and their assets.

This month Dominion Diamond — formerly Harry Winston Diamond — is heading into its second year as owner and operator of the prized Ekati open-pit and underground diamond mine in the Northwest Territories, picked up for US$553 million from BHP Billiton on April 10, 2013.

On a 100% basis, Ekati is home to 18.8 million carats in reserves in four pipes, plus an eye-popping 127 million carats in the measured and indicated category and 19 million carats in the inferred category, all in eight pipes. Read the rest of this entry »

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24th April 2014

Barrick’s Munk: Newmont Deal ’Always Made Sense’ (Bloomberg TV – April 23, 2014)


 

http://www.bloomberg.com/tv/

April 23 (Bloomberg) — Peter Munk, founder and chairman of Barrick Gold Corp., talks about a possible merger with Newmont Mining Corp., gold prices, and Barrick’s acquisition of Equinox Minerals Ltd. Munk speaks with Erik Schatzker on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)

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23rd April 2014

Ex-Goldman Banker Emerges as Barrick Gold Dealmaker – by Liezel Hill and Christopher Donville (Bloomberg News – April 22, 2014)

http://www.bloomberg.com/

A week before Barrick Gold Corp. (ABX) Chairman Peter Munk retires, his successor John Thornton is emerging as a dealmaker as the former Goldman Sachs Group Inc. banker pursues a bid to combine the two biggest gold miners.

Negotiations between Barrick and Newmont Mining Corp. broke off last week amid minor disagreements while leaving open the possibility that discussions could still resume, two people with knowledge of the matter said April 19.

The deal under discussion would have seen Thornton become executive chairman of the combined company while the chief executive officer would have been Gary Goldberg, who currently leads Newmont, the people said. Toronto-based Barrick’s CEO Jamie Sokalsky would have led a smaller gold producer spun off from the merged company, according to the people.

The proposed tie-up and its management reshuffle confirm Thronton’s elevation as Barrick’s most senior executive. The 60-year-old, who had no role in the mining industry until he joined the company’s board just over two years ago, is set to succeed Munk, Barrick’s 86-year-old founder, as chairman at the annual shareholders meeting next week. Leading a successful acquisition of Newmont (NEM), in what would be the biggest gold takeover, would set up Barrick to do further deals, including ones involving other commodities. Read the rest of this entry »

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23rd April 2014

[Barrick's] Munk touts ‘significant synergies’ in potential Newmont deal – by Rachelle Younglai (Globe and Mail – April 23, 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.

Barrick Gold Corp.’s founder and chairman Peter Munk said merging with rival Newmont Mining Corp. could result in “significant” cost savings, especially in Nevada where the two North American gold miners operate.

The world’s two largest gold producers had hoped to announce an all-stock merger deal before Newmont’s annual shareholder meeting in Delaware on Wednesday, but disagreed over which assets to spin off, sources have said. Although talks were halted late last week, the companies are still open to merging in an effort to cut costs amid the deep slump in gold prices, sources have said.

“Combining Barrick and Newmont could result in significant synergies and cost savings, particularly in Nevada, where our operations are literally next door to one another,” Mr. Munk said in an e-mailed statement.

Gold has lost more than a third of its value since peaking above $1,900 (U.S.) an ounce three years ago. The weaker precious metal price, now trading below $1,300 an ounce, has forced the gold industry to overhaul operations to preserve cash. Read the rest of this entry »

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23rd April 2014

Teck Resources Ltd to cut 600 jobs, warns current coal supply is ‘uneconomic’ – by Peter Koven (National Post – April 23, 2014)

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

TORONTO – Steelmaking coal producers have started to slash production in response to lower prices, but Teck Resources Ltd. is warning that a lot more supply needs to be cut by high-cost rivals to bring the market into balance.

“Prices are currently at their lowest level since 2007, and margins are at their lowest level in 10 years,” chief executive Don Lindsay said on a conference call Tuesday. “We continue to be surprised there remains so much uneconomic coal supply on the market.”

Vancouver-based Teck announced on Tuesday that it will cut roughly 600 jobs as it tries to reduce costs and adapt to lower commodity prices, particularly for coal. The company’s realized coal price in the first quarter was US$131 a tonne; by comparison, Teck sold its steelmaking (or coking) coal for an average of US$257 a tonne in 2011.

The market has gotten even worse in recent weeks. The benchmark price for the second quarter is just US$120 a tonne, while spot prices have flirted with US$100.

Prices are falling because of concerns about rising production, slowing growth in China and the fact the Chinese government is closing some the country’s dirtiest steel mills to reduce air pollution. Read the rest of this entry »

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

23rd April 2014

Editorial: Still plenty of appetite for M&A – (Northern Miner – April 21-27, 2014)

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

While private equity financing was the talk of the mining industry in the first quarter, heavy duty mergers and acquisitions are punching their way back to centre stage, as mining majors take advantage of depressed metals prices and share valuations to realign their businesses.

The brawling between Yamana Gold and Goldcorp over Osisko Mining and its prized Canadian Malartic gold mine in Quebec has just seen Agnico Eagle Mines jump over the boards and join the All-Canadian slugfest as third man in on Yamana’s side.

In a surprise move on April 16, Agnico teamed with Yamana to table a joint friendly, cash-and-share takeover bid worth $3.9 billion, or $8.15 per Osisko share, trumping Goldcorp’s recently revised hostile cash-and-share bid of $3.6 billion, or $7.34 per share. The offer is a 10% premium to Osisko’s share price on April 15.

As detailed on our front page, the deal would end with Osisko shareholders owning 14% of Yamana and 17% of Agnico, and would include an innovative spin-out of a cashed-up company with a portfolio of royalties, plus assets such as Osisko’s grassroots project in Mexico. Read the rest of this entry »

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

22nd April 2014

Goldcorp Inc abandoning hostile bid for Osisko – by Peter Koven (National Post – April 22, 2014)

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

Goldcorp Inc. has elected not to raise its hostile offer for Osisko Mining Corp., leaving the company to be acquired by Yamana Gold Inc. and Agnico Eagle Mines Ltd.

Vancouver-based Goldcorp announced on Monday afternoon that it will let its $3.6-billion hostile bid for Osisko expire on April 22 instead of raising it.

Goldcorp vowed all along that it would not overpay for Osisko, and most investors suspected it would not raise its offer for a second time. Goldcorp launched its first bid in January and increased it earlier this month.

“We stated from the beginning of this process that we would remain disciplined with respect to our offer to acquire Osisko, and our decision not to amend the offer is consistent with that commitment,” chief executive Chuck Jeannes said in a statement.

“We move forward with an outstanding portfolio of mines and projects, and our focus will remain on maximizing the value of our investments and generating strong returns for our shareholders.” Read the rest of this entry »

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22nd April 2014

Barrick Gold-Newmont Mining ripe for merger as conditions favour tie-up of world’s gold giants – by Peter Koven (National Post – April 22, 2014)

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

Barrick Gold Corp. and Newmont Mining Corp. have held merger talks numerous times in the past without getting a deal done. But conditions finally appear right to bring together the world’s two largest gold producers.

A rough gold market, along with new personalities on both sides of the negotiating table, have helped the two companies overcome their longstanding differences and put them on the cusp of a deal that analysts and investors have eagerly awaited for years.

Recent merger talks between the two sides broke down over a disagreement on what assets to put into a spin-off company, according to sources. However, the broad terms of the merger were largely agreed upon, with Toronto-based Barrick planning to buy Denver-based Newmont for close to US$13-billion in stock, representing a small 13% premium over its recent trading range.

The two gold miners hoped to announce the deal ahead of Newmont’s annual meeting on Wednesday, but that now appears unlikely. Newmont shares rose 6.4% on Monday. Barrick shares opened higher, but then declined as gold dropped and investors absorbed the merger news. They ended the day down 4%. Read the rest of this entry »

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22nd April 2014

Terence Corcoran: From Northern Gateway to Keystone, the undefinable ‘social licence’ movement is in control of jobs and growth – by Terence Corcoran (National Post – April 22, 2014)

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

The Northern Gateway and Keystone pipelines keep getting hammered, the result of what seems like universal adoption of a new free-market killing concept known as a “social licence to operate.” The idea is an outgrowth of the anti-corporate governance crusades and NGO activism of the last few decades. First came stakeholderism, then corporate social responsibility(CSR). At least with CSR corporations were seen to be in charge of their own affairs, taking it upon themselves to curb their carbon emissions and diversify their workforces, or whatever, as they saw fit.

Under social licence mandates, corporations must now negotiate directly with the people, in line with the old Communist maxim: “Everything belongs to the people.” The corporate sector fell for the idea, and now it is lost under what has become something of social licence to kill growth and jobs.

In a non-binding plebesite earlier this month, residents of Kitimat, B.C., appeared to reject Enbridge’s Northern Gateway gas pipeline and tanker port project. The 60-40 verdict was taken as a defeat for Enbridge, a sign that -–as the Vancouver Sun editorialized—the company “simply does not have the social licence necessary to proceed.” Read the rest of this entry »

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22nd April 2014

Barrick must check its hubris to achieve a smooth Newmont merger – by Boyd Erman (Globe and Mail – March 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.

Barrick Gold Corp. says its strategy is no longer about bigger, but about better. A successful merger with Newmont Mining Corp. has got to be about a bit of both.

Barrick is not talking yet, as no deal is done, but job one when a transaction is finalized will be to explain just how a combination with Newmont would square with Barrick’s new strategy.

Toronto-based Barrick has long sought to gain control of Newmont. Talks have gone on and off for more than decade as Barrick grew to become the world’s largest gold producer.

Newmont plus Barrick would create by a huge margin the world’s largest gold miner. There was a time when that would have been sufficient rationale for Barrick, but that is no longer good enough. Shareholders want returns and cash flow from their mines. They want profit from mining companies, not just growth. Read the rest of this entry »

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22nd April 2014

Ottawa to force energy companies to report payments made to native bands – by Shawn McCarthy (Globe and Mail – April 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.

OTTAWA — The federal government is proposing measures that would require mining and oil companies to report all payments made to native band councils and their corporations as part of Ottawa’s push for greater transparency among aboriginal governments.

Officials from Natural Resources Canada are consulting with industry, non-governmental organizations and aboriginal communities over plans to require mandatory reporting of all payments made by resource companies to foreign and domestic governments. Unlike similar regulations in the United States and Europe, the federal rules would include aboriginal governments and their corporations.

The demand for mandatory resource-revenue reporting comes amid a concerted effort by the Conservative government to increase financial disclosure from aboriginal communities to combat concerns over mismanagement and corruption. In a high-profile case last week, the Nishnawbe-Aski Police Service charged the former co-manager of the remote Attawapiskat Reserve in Northern Ontario – who is also the common-law spouse of chief Theresa Spence – with two counts of fraud and theft after the band council conducted its own investigation. Read the rest of this entry »

posted in Aboriginal and Inuit Mining, Canada Mining, Canadian Media Resource Articles | 0 Comments

22nd April 2014

From wasteland to parkland: Mining greens up – by Daina Lawrence (Globe and Mail – April 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.

Today, the aerial view of the historic Coniaurum gold mine, owned by Goldcorp Inc. since 2002, more closely resembles a putting green on a golf course than an old mine site. But it didn’t always look like this.

For decades it was a wasteland of discarded rock – leftovers from its previous life as an active mine since 1913, until a storm in 1961 caused a breach in the tailings dams and shut down operations for good.

Past practices did not call for any closure or clean up of these sites, so for more than 30 years the Timmins, Ont.-based mine site sat almost untouched. But through a mergers and acquisition deal, Goldcorp Inc. inherited the historic mine (along with almost 20 others) and in 2005 the company began its multimillion-dollar reclamation project. It took three years and between $10-million and $12-million to complete, but the current property now grows plant life and even acts as home to a colony of beehives that aid in Coniaurum’s revegetation.

“The goal, with this property in particular, is to bring us back as close as possible to the original vegetation that would have been there before mining,” says Marc Lauzier, manager of Goldcorp’s Timmins property. “We have to do what’s right and do a complete mining cycle, which ends when you can return the land to its original state,” he adds. Read the rest of this entry »

posted in Canada Mining, Canadian Media Resource Articles, Green Mining, Mining Environmental and Water Shortage Issues | 0 Comments

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