http://www.miningmarkets.ca/

Survival in indifferent market will depend on tapping alternative financing options

Newsletter writer and mining analyst John Kaiser sounds a little dejected as he describes the utterly bleak state of the mining industry today. “The phones are completely dead, nobody cares,” says the editor of Kaiser Research Online. “Companies can’t raise money, it’s like a complete dying sector.”

Kaiser made a now-famous prediction last year that around 500 juniors were bound for “extinction” because of an inability to raise capital, low share prices and negative sentiment on commodities.

As of mid-May, that number has grown: Of the roughly 1,800 publicly listed TSX and TSXV companies involved in mining or exploration and listed in the KRO database, 694 had less than $200,000 in working capital — basically the amount needed annually to maintain a listing. Kaiser adds that about 70% of all the companies in the KRO database are trading at below 20¢.

“It’s starting to feel like 1999, and we still had several more years to go after that,” Kaiser says of the last prolonged downturn in the industry. “That’s when the dot-com stuff was taking off and I remember subscribers mocking me for still talking about resource stocks, they were history — technology was the place to be.”

Read the rest of this entry »

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

In a bid to boost mine exploration, the federal government has extended the Mineral Exploration Tax Credit for another year as part of its Economic Action Plan 2013.

Joe Oliver, Canada’s Minister of Natural Resources, confirmed the announcement Thursday, while visiting a former mine site on the Podolsky property just north of Capreol.

“Mining workers and communities across Canada can count on our government’s support of this vital engine of economic growth,” Oliver said in a release. “That is why, in our latest federal budget, we extended the Mineral Exploration Tax Credit to continue to provide junior mining companies access to the venture capital they need to finance their exploration activities.”

Oliver’s announcement was not new; the federal government, as part of Economic Action Plan 2013, said it would extend the credit until March 31, 2014.

The 15% Mineral Exploration Tax Credit helps junior mineral exploration companies raise capital by providing an incentive to investors in flow-through shares issued to finance mineral exploration. Read the rest of this entry »

Natural Resources Canada

May 16, 2013 11:12 ET

SUDBURY, ONTARIO–(Marketwired – May 16, 2013) - The Honourable Joe Oliver, Canada’s Minister of Natural Resources, today highlighted the extension of the Mineral Exploration Tax Credit for an additional year under Economic Action Plan 2013 while visiting a former mine site on the Podolsky Property.

“Mining workers and communities across Canada can count on our Government’s support of this vital engine of economic growth,” said Minister Oliver. “That is why, in our latest federal budget, we extended the Mineral Exploration Tax Credit to continue to provide junior mining companies access to the venture capital they need to finance their exploration activities.”

With more than 200 active mines in Canada producing more than 60 different metals and minerals, the sector is a key economic driver in dozens of rural, remote and Aboriginal communities across the country.

“Mining continues to be a cornerstone of the Canadian economy, providing employment and benefits to communities across the country,” added Minister Oliver. “Mining is directly responsible for 330,000 Canadian jobs. These are first-rate jobs in a growing global industry.” Read the rest of this entry »

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.

Sometime in 1963, Lawrence Morley proposed an outlandish theory: That rocks on the ocean floor were imprinted with a record of the direction and intensity of the Earth’s magnetic field. Because the planet’s magnetic polarity reversed direction every half-million years or so, he believed that iron-rich rocks and ridges on the sea floor “remembered” field reversals by locking into place their magnetic properties at the time of formation. As on the Earth’s surface, rocks miles beneath the ocean told a story, he believed.

Dr. Morley based this highly speculative theory on ocean surveys that had shown alternating bands of normal and reverse magnetism in the ocean’s crust. The patterns were so distinct that undersea maps, in black and white to represent the two magnetic orientations, resembled zebra stripes. It was all very puzzling.

“I believe,” he wrote, despite the mystery, “that there still is a wealth of unexpected information magnetically frozen in the rocks of the ocean basin floors.”

He completed a paper on his conclusions, building on earlier theories on continental drift and the spreading out of the seafloor. It was rejected. The journal’s referee, in a snub now well-known in the scientific community, tartly noted that the idea may be interesting for “talk at cocktail parties, but it is not the sort of thing that ought to be published under serious scientific aegis.” Read the rest of this entry »

Russel Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication. 

I’m sure most of you have either read or heard by now that China has loaned Canada two of its Giant Panda bears and whether you’re familiar with this news or not, you’re now probably asking yourself; “What’s the relevance and why is it even being discussed in a mining magazine?”

Well let me explain. First of all, the loan of the bears for the next 10 years (five in Toronto, five in Calgary) is more than a way of China unloading the care and maintenance of two bamboo processors on us. There’s far more to it than that. In fact, feeding and cleaning up (they defecate up to 40 times a day) after the pair is just the start.

The Chinese expect and trust us (meaning Canada) to provide the bears with the right environment (and mood) for them to survive and hopefully, procreate while they’re here.

Even Prime Minister Stephan Harper is so excited by this possibility that he and his wife were at the airport to greet the bears like giddy expectant grandparents. He even signed the FedEx Bill of Lading, thus confirming the safe arrival of these animals. I wonder why the Prime Minister didn’t trust Canada Post to deliver the animals and chose a US-based carrier instead? Read the rest of this entry »

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

Aboriginal Canada wants in. For generations, natural-resource wealth and opportunity almost entirely bypassed Aboriginal communities. But now, empowered by court decisions, land-claims settlements, and rising Indigenous political power, Aboriginal people are determined to get a fair share from the development of natural resources on their territories.

For governments, developers and the country at large, significant adjustments are required if new partnerships and collaboration are going to become the hallmark of resource activity in Canada. The good news on this front is two-fold. First, First Nations, Métis and Inuit communities are ready to participate in collaborative activities. Second, Canada already has a significant number of examples of practical and effective partnerships with Aboriginal communities.

Aboriginal communities that are approached by resource companies typically are called upon to perform an exercise in socio-economic calculus. Negotiations focus on skills and job training for local residents, local hire provisions, opportunities for Aboriginally-controlled businesses, a defined role in environmental oversight and remediation, direct financial returns from resource sales, contributions to community projects and programs, and, increasingly, the possibility for equity ownership. The returns can be considerable, and can provide just compensation for developing resources on Aboriginal lands.

Aboriginal governments also have to determine if the proposed developers are trustworthy, and if regional and national governments will support the collaborations. Read the rest of this entry »

Organic growth, optimizing capital structure, strategic divestments top boardroom agenda

(Vancouver, 14 May 2013) Only 24% of global mining and metals companies are focused on M&A in the next six months, despite the fact that 57% of companies view the economy as improving — up from 21% in October, Ernst & Young’s eighth semi-annual Global Capital Confidence Barometer – Mining & Metals reveals.

“Confidence in the global economy is up but deals in the sector — and the appetite to do them — are down as weaker commodity prices, cost inflation and labour unrest take their toll,” says Bruce Sprague, Ernst & Young’s Canadian mining and metals leader. “These forces have driven companies to take drastic measures to reduce their operating costs, including staff reductions and mine closures.”

Total deal value fell 45% year-on-year to US$16.3b while deal volume fell 35% to 168 deals in the first quarter of 2013. But while deals may be off the boardroom agenda, growth is still top of mind for 44% of mining and metals companies, adds Sprague.

“Companies are looking at how they can achieve growth from a stronger operating base. They’re opting for lower-risk organic growth, optimizing capital allocation and strategic divestments rather than M&A,” explains Sprague. “For those where M&A is still a priority, expect to see smaller, bolt-on acquisitions.”

Ninety-one percent of deals in the latter half of the year are expected to be below US$500m, up from 74% in October 2012, as companies take care not to jeopardize balance sheet agility and credit ratings. Read the rest of this entry »

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.

Is it too early to pronounce the so-called commodity super-cycle over?

Just maybe. Two Canadian commodity indexes came out Monday, and they both suggest that raw materials are going through a modest stumble, not the huge blow up being forecast by the commodity doom and gloom crowd.

The indexes are from Toronto-Dominion Bank and Bank of Nova Scotia, whose top commodity analyst gave a relatively sanguine observation on the overall trend, despite April’s swoon for precious metals.

“Financial market concern over the outlook for commodity markets was overblown,” said Patricia Mohr, Scotiabank’s vice-president of economics.

A big worry for commodity bears is that China’s red-hot growth rate is slowing, but Ms. Mohr noted that while the Asian powerhouse’s first-quarter gross domestic product has slowed slightly, “actual demand for raw materials was robust in China. The double-digit growth of China’s passenger car market, up 20 per in [the first quarter], reinforces its importance as a driver of growth in worldwide auto demand and related commodities such as copper.” Read the rest of this entry »

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

Peter Eigen is founder and chair of the Advisory Council, Transparency International, founding chairman of the Extractive Industries Transparency Initiative, and a member of the Africa Progress Panel.

Across Africa, an extraordinary natural resources boom is underway. Energy and mineral extraction is driving economic growth on the continent. New exploration, new discoveries and no let-up in global demand mean Africa has a unique opportunity to deliver prosperity and opportunity for its citizens.

As you would expect from a country at the centre of the world’s mining industry, Canada is playing a major role. Eight of the countries where Canadian mining assets exceed $1-billion are in Africa. But this also places a special responsibility on Canada to ensure Africa benefits as well.

For while Africa’s economic growth at an average 5% per year for the past decade has been impressive, this success has not been translated into improvements in the lives of its citizens. African countries are not getting a fair share of the revenues from the mining activities within their borders. Weak African governance can mean the money which is paid is not used effectively to improve public services or create employment. Read the rest of this entry »

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

This is National Mining Week, from May 13 to 17. Did it sneak up on our readers? It certainly did on us … and it has been celebrated since 1996 to call attention to Canada’s international leadership and expertise in mining.

The Hon. Joe Oliver, Minister of Natural Resources Canada, kicked off the week by sounding the siren to open the Toronto Stock Exchange this morning.

Certainly Minister Oliver supports our industry: “We are committed to attracting investment, supporting innovations, opening new markets and improving the regulatory system for major mining projects. Mining continues to be a cornerstone of the Canadian economy, providing good jobs and benefits to communities across the country.”

But his rhetoric wandered into the political realm when he continued:

“Our government is committed to the continued prosperity of Canada’s mining sector. National Mining Week is an opportunity to highlight how realizing the potential of mining is essential to our government’s goal of jobs, growth and long term prosperity for Canadians.” Read the rest of this entry »

http://www.bloomberg.com/

Hedge funds increased bets on lower gold prices after investors pulled a record $20.8 billion from bullion funds this year while BlackRock Inc. (BLK), the world’s biggest money manager, said it’s still bullish.

Speculators held 67,374 so-called short contracts on May 7, 6.4 percent more than a week earlier, U.S. Commodity Futures Trading Commission data show. The net-long position dropped 10 percent to 49,260 futures and options. Net-bullish wagers across 18 U.S.-traded raw materials climbed 5.8 percent to 582,265, with gains for cocoa, cotton and hogs.

Gold is having its worst start to a year since 1982 after dropping 15 percent and sliding into a bear market in April. Holdings in exchange-traded funds backed by bullion tumbled to the lowest since July 2011 even as central banks print money on an unprecedented scale to boost growth. BlackRock’s President Robert Kapito said May 9 he would still buy the metal, echoing billionaire John Paulson, who’s sticking with a bullish view even after losing 27 percent in his Gold Fund last month.

“People have been told the world is going to end for five years, and it hasn’t, so they’re finally moving on,” said James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees $325 billion of assets. “So even when crisis flashes now, you don’t get the same upside, and then in good times, you get more downside, and that’s what you’re getting in gold as the Armageddon premium is coming out.” Read the rest of this entry »

http://www2.macleans.ca/?cid=navlogo

Resource prices have driven the Canadian economy for over a decade. Are the good times coming to an end?

For investors and producers alike, gold’s recent rout was as devastating as it was unexpected. The price plummeted by $200 an ounce over a two-day period last week, suffering its biggest single-day drop in 30 years. Though it eventually stabilized at around $1,400 an ounce, stocks of gold mines—many of them Canadian—continued to be hammered by investors for days afterward, with some reports suggesting that as many as 15 per cent of the world’s gold mining companies are now wallowing in red ink.

There are many theories as to what caused gold to fall so far, so fast. They range from rumours that Cyprus planned to sell off some of its reserves to pay for its bailout, to the easing of fears that central bankers are destroying currencies with their unprecedented stimulus measures. “People thought loose monetary policies lead to rampant inflation,” says Keith Head, a professor at the University of British Columbia’s Sauder School of Business. “But gold prices stayed high, even when the underlying theory was repudiated by actual evidence, and that’s a vulnerable situation to be in.”

The big question now is whether other commodity prices will follow suit. Though gold, which traded as high as $1,888 an ounce in 2011, is unique in many respects—it is valued mostly as a way to store wealth, as opposed to as an industrial input—prices of everything from aluminum to zinc have slumped over the past several years after hitting historic highs, creating fears of a broader crash. Read the rest of this entry »

National Mining Week celebrates the important role that mining plays in the lives of Canadians. It is hard to imagine a life without minerals and metals – we use them and rely on them every day.

This year’s theme, Our Mineral Resource Advantage: Working for Canadians, highlights the essential role that Natural Resources Canada (NRCan) plays in helping raise awareness of the important contributions mining makes to Canadian communities and the national economy. NRCan is the Government of Canada’s voice on mining and a world-class centre of knowledge and technologies (e.g., the Green Mining Initiative) in mining environment and processing.

Our mining industry has been a cornerstone of Canada’s economy for generations, shaping our national identity with benefits in all regions. Over the next 30 years, the world will need to extract more resources to meet the demands of the growing middle classes in emerging economies. Canada will continue to be a reliable global supplier of these resources, as it has in the past.

The numbers tell the story. Canada produces more than 60 minerals and metals and is one of the world’s leading exporters. We are the world’s number-one producer of potash. We rank in the top five in aluminum, cadmium, cobalt, diamonds, nickel, platinum group metals, sulphur, titanium concentrates, tungsten, and uranium.

This is a good time to celebrate Canada’s international leadership in mining. Did you know that: Read the rest of this entry »

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.

ROME — I think I have figured out Canadian gold mining executives. They assume that gold is not a mineral; it is a perishable commodity that will rot in the ground, like a potato, unless it is dug up immediately.

And not just immediately but in vast quantities. Canadian gold mining executives are obsessed with the concept of bigness. They want projects they can label “game changers,” ones capable of vaulting medium-sized firms into the big leagues, or thrust the biggies to the very top of the global heap. Bigness permeates their lives. They drive big cars, live in big houses. Some, like Barrick Gold Corp. boss Peter Munk, bob around the planet in the biggest of yachts.

The problem with bigness is that it translates into trouble when it’s extended to corporate development. Big projects are big gambles. They invariably come in far over budget, sometimes billions over budget, which gets shareholders rather annoyed. Big projects also attract lots of attention from environmental activists, politicians and aboriginal peoples. The result is expensive delays and bad publicity.

Canada’s gold mining sector is a mess, with share prices down by about half even though the gold price is down by only 20 per cent from its high of almost $1,800 (U.S.) an ounce last October. Executives are being tossed into the garbage like the remains of a steak lunch. Returns on equity are sinking into single-digit territory or, in Barrick’s case, turning negative. Problems at flagship projects are not going away – in some cases they’re intensifying – after years of fix-it efforts. Read the rest of this entry »

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.

Canadian junior miners on front lines as criminal gangs, demobilized paramilitaries and guerrilla groups mine gold outside the law

MEDELLIN, COLOMBIA — In Segovia, a prosperous Colombian town of 50,000 people in northeastern Antioquia, the shops are closed by 6:30 p.m. and the streets empty. Segovia is a boom town, one of the country’s richest gold production centres, but tension is in the air as criminal gangs, demobilized paramilitaries and guerrilla groups flock to the area to mine gold illegally.

In Colombia, gold is the new cocaine as outlaw groups increasingly move into mineral-rich parts of the country on their own terms to take advantage of the metal’s strong price.

“The relatively high price of gold, the fact that the final product is legal and its production sources cannot easily be traced, means that illegal groups can operate large, profitable operations without the risks involved in the drug trade,” said Daniel Linsker, vice-president of global services for Latin America, at Control Risks, an international business risk consulting firm.

It’s estimated that illegal mining accounts for most of Colombia’s gold production. Production was an estimated 66 tonnes in 2012, according to the country’s National Mining Agency. About 10 tonnes comes from legal mines and about 10 tonnes from scrap such as old jewellery, meaning more than 40 tonnes is produced illegally, estimates CIIGSA, one of Medellin’s gold refineries. Read the rest of this entry »