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Canada Mining

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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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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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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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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Creating an Economic Vision around mining – Norway has it right – by Tom Hoefer (Yellowknife Chamber of Commerce – April 30, 2015)

https://ykchamber.com/

http://www.miningnorth.com/

Tom Hoefer is the Executive Director of the NWT & Nunavut Chamber of Mines.

A month ago, I wrote an editorial piece for the News/North titled: Are we regulating mineral exploration out of the NWT? The piece raised concerns over the rapid decline in mineral exploration investment in the NWT, and its effects on the economy today and in future. Since mining relies in no small part on successful exploration, declining investment will affect the sustainability of our mining industry. But there is more to this story.

We must all care about this, for in a post devolution world we have the responsibility to manage our own affairs and to establish an economy capable of supporting us. The recent announcement that Canada will increase the NWT’s borrowing limits is the last piece signaling we are “grown up”. We have now started on our own economic journey, and we now carry the responsibility for our own future. No more blaming Ottawa.

In picking a path forward, we must look to what strengths we have, and what we are good at. That is mining. Our mining industry has proven itself through thick and thin to be the most significant private sector contributor to our economy for over 60 years. It has contributed major infrastructure including all of our hydropower plants, our railway, has helped drive highway construction and is a key contributor through tolls to the Deh Cho Bridge.

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Sherritt’s CEO optimistic about future nickel prices – Business Network News (The Street – April 29, 2015)

  http://www.bnn.ca/ David Pathe, Chief Executive Officer of Sherritt International, joins BNN’s “The Street” to discuss the mining industry, nickel, and relations with Cuba. He says that he sees a shift from excess nickel supply to surplus demand over the next several years, which will help the company’s bottom line. Despite lower production costs, Sherritt …

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Yamana CEO giving back special share units after say-on-pay vote – by Janet McFarland (Globe and Mail – April 30, 2015)

 

http://www.bnn.ca/

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.

Yamana Gold Corp. chief executive officer Peter Marrone is giving back special share units he was granted last June, saying he has heard the message sent by shareholders who voted against the company’s compensation plan in its annual say-on-pay vote.

Yamana reported Wednesday that it lost the say-on-pay vote at its annual meeting in Toronto, making it the third major major company to lose a compensation vote in the past week. Shareholders of Canadian Imperial Bank of Commerce and Barrick Gold Corp. also voted against compensation plans at both companies, complaining about special payments awarded to senior executives in both cases.

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Barrick’s new gold discovery – by Kip Keen (April 29, 2015)

http://www.mineweb.com/

Barrick looks to have found another multi-million ounce gold deposit.

In the hands of the world’s biggest gold miner, a decent, even pretty big, gold discovery doesn’t make a lot of waves. When you churn out 6 million ounces gold or so a year you don’t get a lot of recognition for the pre-resource stuff especially. Firstly, you can’t put a dollar figure or cash flow analysis to it that carries even a faint promise of being accurate given the vagaries of deposit development – including unclear tonnage and grade, metallurgical questions, infrastructure issues, potential people problems, and permitting, and so on.

The list goes on. And secondly, for a Barrick, with fairly deep gold reserves already, and yet also a high rate of reserve depletion, absolutely speaking, it’s both hard to impress the market and to keep up with reserve replacement even with new discoveries. You’re mostly measured by your best existing and operating mines, not potential greenshoots in the field. Fair enough.

But still. Gold discoveries, especially of multi-million ounce deposits, with early indications they may work as a mine, are pretty damn rare. So it’s hard not to at least give kudos when they’re made. Barrick deserves some this week. A couple days back Barrick reported first drilling results on its Alturas project in Chile. It’s clearly shaping up to be one of the larger gold discoveries in recent years.

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Streaming miners get the glitter without needing to own the gold – by Bryan Borzykowski (Canadian Business Magazine – April 29, 2015)

http://www.canadianbusiness.com/

Royalty streaming companies have survived the gold crash so far—and are set to get stronger

Unless you’re a risk-taking contrarian, you’re likely giving mining stocks a wide berth. The S&P/TSX Global Mining Index is down 30% since 2010, and there are no signs of a rebound. Surprisingly, one part of the mining industry has quietly outperformed not only the sector but the overall Canadian market.

Mining royalty “streaming” companies—firms that help finance new mines in exchange for a cut of what’s produced—have posted impressive returns amid the industry’s gloom. One of the best performers has been Franco-Nevada Corp. (TSX: FNV), which has seen its stock price climb 120% over the past five years. While gold has fallen 37% from its US$1,921-an-ounce peak on September 5, 2011, Franco-Nevada’s stock rose 36% over that time. “That’s pretty startling outperformance there,” says Ryan Crowther, a portfolio manager with Franklin Bissett Investment Management in Calgary.

Though these companies are exposed to commodity prices, they have little in common with actual miners. They don’t own or operate mines and usually have only a handful of employees, meaning they have little overhead and (usually) no debt. It’s these costs that can sink a mining company in a low commodity price environment.

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Commentary: The shifting liability landscape for Canadian miners abroad – by Young Park and Rick Moscone (Northern Miner – April 29, 2015)

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

Two recent lawsuits brought in British Columbia by foreign plaintiffs against two Canadian mining companies for alleged human rights abuses abroad have raised the stakes for mining projects in foreign jurisdictions.

On June 18, 2014, seven Guatemalan men sued Tahoe Resources Inc. alleging that private security forces hired by Tahoe’s Guatemalan subsidiary opened fire on them in San Rafael Los Flores. On Nov. 20, 2014, three Eritrean refugees sued Nevsun Resources Ltd. Alleging they were forced to work at a mine in Eritrea under threat of torture by Eritrea’s ruling party.

These lawsuits appear to be inspired by the decision of the Ontario Superior Court of Justice on July 22, 2013 in Choc v Hudbay Minerals Inc, the first case against a Canadian mining company over alleged human rights abuse abroad that was permitted to go to trial in Canada. In light of this recent litigation, it may be worthwhile for Canadian mining companies to revisit Hudbay, to understand how plaintiffs are now using Hudbay to frame their claims and to consider a risk management plan to mitigate the risks raised by Hudbay and the litigation it has spawned.

Three related actions were brought by thirteen Guatemalan Mayan Q’eqchi’ plaintiffs against Hudbay in Ontario for human rights abuses allegedly committed by private security forces working for Hudbay’s Guatemalan subsidiary, CGN.

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NEWS RELEASE: A RESILIENT AND PROSPEROUS NORTH REMAINS AN IMPORTANT DRIVER OF CANADA’S ECONOMY AND SOCIETY

Investments in Aboriginal youth, critical infrastructure, and governance are priorities

HIGHLIGHTS

• Resilient Northern communities strengthen Canada’s sovereignty, security, and economic prosperity.
• Upfront investments in critical infrastructure, population health and wellness, education, and the upgrading of essential skills will better enable Northerners to partake in economic development opportunities.
• Future planning for responsible growth in Canada’s North will require a more integrated approach to policy development between communities, industry, and governments at all levels.

Ottawa, April 29, 2015 – A new policy review from The Conference Board of Canada’s Centre for the North’s Building a Resilient and Prosperous North recommends three high-priority areas for decision makers to consider when planning for growth in Canada’s North: Investments in Aboriginal youth wellness, physical and telecommunications infrastructure, and good governance to steer growth.

“Building the resilience of Northern communities is vital to achieving national goals of sovereignty, security, and economic prosperity. The North is changing fast – politically, socially, and economically – and we should be promoting the economic potential without compromising the integrity of traditional ways of living,” said Anja Jeffrey, Director, Northern and Aboriginal Policy.

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Dazed and Confused in Deutschland – by Christopher Ecclestone (InvestorIntel.com – April 29, 2015)

http://investorintel.com/

In the balmy (barmy?) days before the global financial crisis in 2008, Germany was regarded as the Promised Land for Vancouver stock promoters. They had never seen anything like it… so many sheep to be fleeced and none of them up to date on the guiles and wiles of Vancouver’s best and brightest.

It was a happy hunting ground. Even better the various German exchanges went out of the way to make their lists open to all and sundry. Stocks that you couldn’t even find a ticker for in Canada, trading on some third sub-tier of Yellowknife Adventurers Exchange could get itself a listing in Berlin or Stuttgart by merely existing.

This not only gave an extra ticker to fill up embarrassing white spaces, between photos of the moose pasture, on the company website but also gave one status when one strutted the floor of the Munich Gold Show touting one’s vermiculite, granola or alfafa deposit. I have met executives who still sigh for the days when their registers frequently had 40% of the holders located on the Continent.

Sadly all good things had to come to the end and the severe fleecing the German sheep received at the hands of the promoters left their hides red raw and it was a long time in healing. Germany faded from view and most German-speaking investors forswore any involvement or interest in Canada besides the hockey scores at the Olympics.

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Barrick to revamp executives’ pay after shareholder backlash – by Lisa Wright (Toronto Star – April 29, 2015)

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

John Thornton told the company’s annual shareholder meeting that 75% of the votes were cast against compensation scheme.

Embattled Barrick Gold Corp. chairman John Thornton has promised to overhaul the miner’s controversial executive compensation system that hiked his pay by 35 per cent to $12.9 million (U.S.).

But at the annual meeting Tuesday, where shareholders voted overwhelmingly against executive salary increases, Thornton didn’t offer to hand any of it back, underscoring that he is personally tied to the future fortunes of the company since he bought half of his 1.4 million Barrick shares “with my own money.”

“We have heard you loud and clear,” he said, after early returns suggested 75 per cent of shareholders did not support the pay packages.

“We take that feedback and we will go back and reform our system – and specifically how it relates to me,” Thornton assured the investor audience at the Metro Toronto Convention Centre.

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Mongolia signals it will not pay US$100 million to Canadian uranium miner Khan Resources – by Terrence Edwards (Reuters/National Post – April 28, 2015)

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

The government of Mongolia signaled on Monday it will not abide by an international tribunal’s order to pay more than US$100 million to Canadian uranium explorer Khan Resources Inc., whose chairman died suddenly while in the country meeting with officials over repayment plans last week.

“The Mongolian government, in order to protect its own interests, will work for the invalidation of the arbitration award,” a statement by the justice minister, dated Monday, said.

The move comes just days after Jim Doak, Khan’s chairman and a well-known figure in Canada’s financial industry, died in Ulan Bator from reasons deemed to be natural causes on April 23, a day after talks between the two sides ended.

Grant Edey, Khan’s CEO, said in an e-mail that the meeting was short because the two sides “remained apart in their respective positions” and the company is confident the award will be upheld.

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