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Canada Mining

Allana Potash Corp agrees to $137-million takeover bid from Israel Chemicals – by Peter Koven (National Post – March 28, 2015)

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

Allana Potash Corp. agreed to a $137-million takeover bid from Israel Chemicals Ltd. because its chief executive said there was no other way to avoid massive dilution of shareholders.

Toronto-based Allana is in the same position as many other junior mining firms: it has a great project but no easy way to finance it in the current rough market conditions. The company’s Danakil project in Ethiopia is expected to cost US$642 million; by comparison, Allana had less than $8 million on its balance sheet at the end of January.

“Even if we could raise half of the money through debt, which is uncertain, we would still have to raise substantial amounts through equity,” Allana CEO Farhad Abasov said in an interview. “And that equity would come at a substantial discount to the current price.”

Allana did have options apart from an outright takeover. According to a source, the company was in negotiations to sell a large stake in itself to a state-owned Chinese construction firm that could finance the project. The source said the premium was very significant. But Mr. Abasov argued the Chinese option would be punitive for shareholders.

“It would be close to 100%, if not more, dilution for shareholders,” he said.

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Barrick Gold hires John Baird, Newt Gingrich – by Rachelle Younglai (Globe and Mail – March 27, 2015)

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 tapped former foreign affairs minister John Baird and former top U.S. lawmaker Newt Gingrich to serve on its advisory board, the company said in regulatory filings.

Mr. Baird and Mr. Gingrich, a former Republican speaker of the U.S. House of Representatives, will join other political heavyweights including former Canadian Prime Minister Brian Mulroney on the miner’s international advisory board.

The board meets once a year and gives advice to the world’s biggest gold producer, which has operations in the Americas, Africa and Australia.

“The role of the board is to provide advice on geopolitical and other strategic issues that affect our business,” a company spokesman said. “Both Mr. Baird and Mr. Gingrich bring with them excellent credentials and experience in this regard,” he said. Mr. Mulroney chairs the board, which also includes former U.S. and German defense officials and a former prime minister of Spain.

No compensation details for Mr. Baird and Mr. Gingrich were disclosed in the filings.

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Barrick Gold Mints 35 Partners as It Seeks Revitalization – by Liezell Hill (Bloomberg News – March 26, 2015)

http://www.bloomberg.com/

(Bloomberg) — Barrick Gold Corp. Executive Chairman John Thornton wants his executives to have skin in the game. To do that, he’s rolling out a Wall Street-style partnership to give them significant stakes in the world’s largest gold producer.

Barrick this month named its inaugural 35 partners, a group that includes mine managers as well as the most senior officers at its Toronto headquarters, according an internal memo obtained by Bloomberg.

Partners will receive long-term incentive-based pay in the form of restricted stock that can’t be sold until retirement or departure. The shares will comprise more than 50 percent of total compensation for the six most senior executives in the partnership if targets are met, and after five years all the partners will be required to hold stock worth multiples their base salaries, according to Andy Lloyd, a Barrick spokesman.

A partnership model is something more typically associated with financial services, according to Steve Chan, a consultant who advises on corporate pay. Its adoption by Thornton, a one-time senior banker at Goldman Sachs Group Inc., is indicative of his intentions to return Barrick to its entrepreneurial roots after becoming weighed down by debt amid falling gold prices.

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Creative destruction, eh! Why there’s no reason to fear the demise of Canadian companies – by Joe Martin (National Post – March 26, 2015)

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

Don’t worry about the demise of Canadian companies. Others will replace them and become world beaters in their fields

Some observers are concerned by the destructive nature of capitalism in Canada that has seen the demise of Nortel, the near demise of BlackBerry, and the flight of automakers to Mexico. The list goes on and on. Most educated observers are aware of the problems, fewer are aware of the creative processes that continue to breathe life into the Canadian economy.

A recent Economist article noted “A lack of larger firms means fewer jobs, and a less resilient economy.” So what has happened in the Canadian corporate sector in the past 30-plus years in terms of larger employers?

In 1980 the 10 largest non-financial corporate employers had nearly 650,000 employees. In 2013, the most recent year for which there is comparable data, the top 10 employers had over 1.1 million employees, an increase of 72% at a time when the Canadian population grew at a rate of 43%. Not all of these jobs are in Canada because Canadian businesses have become more globally oriented, but then not all the jobs were in Canada in 1980.

Eight of the 10 companies on the list in 2013 were nowhere near the top 33 years ago. Let us first look briefly at the two largest: Onex, a Canadian private equity (PE) firm and Walmart Canada, the Canadian subsidiary of the American retail colossus, and then at Magna and Alimentation Couche-Tard.

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Why Teck Resources should buy HudBay Minerals: Analyst (March 24, 2015)

http://www.bnn.ca/

– by Michael Chu, Producer, BNN

With rumblings in the market that Teck Resources Ltd. (TCKb.TO -2.33%) could be on the prowl for acquisitions–especially on the copper front–could HudBay Minerals Inc. (HBM.TO -0.95%) be square in the sights for the Vancouver-based base metals giant?

Analysts at National Bank Financial outline the perfect storm of events that could bring Teck and HudBay Minerals together.

“The combined company would provide; near-term growth, long-life diversified operations, and carry less financial risk. In our opinion, the possible combination of these two companies is intriguing and would result in an improved outlook for Teck Resources,” wrote Shane Nagle, metals and mining analyst at National Bank Financial in a note to clients.

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Nevsun Resources Ltd describes reported attack on Eritrea mine as ‘act of vandalism’ – by Claire Brownell and Peter Koven (National Post – March 24, 2015)

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

Nevsun Resources Ltd. is describing an attack on its Bisha mine in Eritrea as an “ act of vandalism,” an account that contrasts starkly with African media reports saying the mine was bombed by Ethiopan fighter jets.

In a statement released Sunday, Nevsun said vandals caused minor damage to the base of a tailings thickener at the mine during the night shift on Friday, releasing water into the plant area.

But the Ethiopian news site Tigrai Online said it had confirmed a report that the Ethiopian air force bombed the mine on Friday. Sudanese newspaper Al-Sahafa was the first to report that the attack was a military operation from Ethiopia.

“The Bisha gold mine which is about 150 km from the city of Asmara is on fire and a huge fire and smoke can be seen from far away,” the reports claimed.

But Haywood Securities analyst Stefan Ioannou said he believes Nevsun’s account over the online news report. He noted that the company’s shares opened just 3% lower than Friday’s closing price of $4.55 on the Toronto Stock Exchange, suggesting most investors weren’t taking reports of an air strike very seriously either.

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Zijin Mining Group to Acquire 9.9% Stake in Ivanhoe Mines – by Ben Dummett (Wall Street Journal – March 23, 2015)

http://www.wsj.com/

Chinese company could increase copper reserves through access to Ivanhoe’s projects in Congo

Chinese metals producer Zijin Mining Group Co. said Monday it would acquire almost a 10% stake in Ivanhoe Mines Ltd. for about 105 million Canadian dollars ($82 million), as part of a potentially bigger investment to help the Canadian mining company develop projects in the Democratic Republic of Congo and South Africa.

State-owned Zijin is a large gold, copper and zinc producer in China with additional mining interests in Australia, Russia, Tajikistan and Kyrgyzstan. The 9.9% stake in Ivanhoe Mines offers Zijin the opportunity to increase its copper reserves by giving the Chinese company access to Ivanhoe’s Kamoa and Kipushi projects in Congo’s southern province of Katanga. Ivanhoe is also majority owner of the Platreef platinum, palladium, nickel, copper and gold project in South Africa.

China’s voracious appetite for copper is behind moves to seek out additional reserves of the industrial metal to help feed the Asian giant’s economic growth. However, Congo’s political uncertainty makes investing in that country relatively risky, and in the past has deterred other mining companies from investing there.

“Ivanhoe and Zijin are in detailed, friendly discussions about the strategic co-development of our Kamoa copper discovery,” mining magnate Robert Friedland, Ivanhoe’s executive chairman, said in a statement.

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Empire Editorial: On the topic of transboundary mines, a response to Mr. Bill Bennett Posted (Juneau Empire – March 22, 2015)

http://juneauempire.com/

 The Tulsequah Chief Mine, located south of Juneau on the Taku River just across the Canadian border, has leached acid runoff into the Taku River since its closure in the 1950s.

Alaskans — Native tribes, commercial fishermen, local governments and ordinary residents — feel it is not at all respectful to leave a mine in ruin, leaching acid runoff. Nor do we feel this is in any way an example of “environmental protection.”

As B.C. forges ahead with 30 new mines to add to the existing 123 along the transboundary region, we’d like to see a firmer grip on reality and less public relations spin from our Canadian neighbors. We need actual compromise and solutions. (Juneau Empire Editorial-March 22, 2015)

It’s not often the Juneau Empire offers a rebuttal to an submitted column. Waging a back-and-forth war of words isn’t fair for the other party. We buy ink by the barrel and have dedicated staff to get the word out online as well.

However, we must respond to the Feb. 24 My Turn penned by Bill Bennett, the Minister of Mines for British Columbia.

Let us start off by addressing the first portion of Mr. Bennet’s piece when he states it was “unfortunate your editorial has seized upon the Mount Polley mine tailings storage facility failure to undermine the long tradition of respectful relations and co-operation between British Columbia and Alaska on mining development and environmental protection.”

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Yukon Zinc granted creditor protection after mine closure (CBC News North – March 19, 2015)

http://www.cbc.ca/news/canada/north

Yukon Conservation Society concerned about $3 million environmental security owed by Wolverine Mine

Yukon Zinc has been granted creditor protection by the Supreme Court of British Columbia, nearly three months after closing the Wolverine Mine, located north of Watson Lake.

The company owes more than $646 million to hundreds of creditors, but documents listed with PricewaterhouseCoopers Inc. show that most of the debt is owed to its parent company, JinDui Cheng Canada Resource Corporation Limited, which has a head office in Vancouver.

About $50 million is owed to businesses in and outside Yukon including Alkan Air, Air North, P.S. Sidhu Trucking, Northern Industrial Sales and Small’s Expediting Services. The Companies’ Creditors Arrangement Act, which Yukon Zinc is protected under, is a federal law that basically gives a company time to try to work out its financial difficulties with its creditors.

In this situation, Yukon Zinc says its creditors are required to continuing providing goods and services to the mine in accordance with existing agreements. Invoices after March 13 will be paid in full by the company, but invoices before that date “cannot be paid.”

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Bay Street loses millions on Silver Wheaton bought deal – by Tim Kiladze (Globe and Mail – March 19, 2015)

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.

The unsold shares from Silver Wheaton Corp.’s billion-dollar financing are finally sitting in the hands of investors, but getting them there required the underwriters to endure substantial losses.

Earlier this month, the company, which specializes in buying royalty streams from miners, launched an $800-million (U.S.) share offering, worth roughly $1-billion (Canadian), to help finance the acquisition of a gold stream from Vale SA. The money was raised by way of a bought deal, in which a company issues equity to a syndicate of underwriters who then re-sell the shares.

Investors have been more than willing to help fund asset purchases over the past few months by buying shares in bought deals, such as Fairfax Financial Holdings Ltd.’s $650-million offering that was tied to its $1.88-billion (U.S.) acquisition of Brit PLC. For this reason, Silver Wheaton’s underwriters hoped — perhaps justifiably — their deal would sell quickly, but it ran into trouble from the get-go.

As soon as word got out that the deal was struggling, investors backed away, and multiple sources said the deal was likely only one-third sold. To get rid of the remaining shares, the investment banks re-priced the remaining stock this week at a substantial discount to the original offer price.

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Mining critics barred from Canada – by Jason Warick (Saskatoon StarPhoenix – March 20, 2015)

http://www.leaderpost.com/index.html

A group of farmers critical of Canadian mining interests in their native Dominican Republic has been blocked from travelling to Saskatoon, Toronto and other cities. “It’s so preposterous,” said Irena Smith of St. Thomas More College at the University of Saskatchewan. The three farmers, representing La Federación de Campesinos Hacia el Progreso, were due to arrive in Toronto Wednesday and travel to Saskatoon on Saturday to speak at various events.

Smith, an organizer for the Saskatoon leg of the speaking tour, said the farmers planned to speak about their work forming co-operatives and implementing environmentally-friendly innovations such as shadegrown coffee.

The farmers also planned to speak critically about Canadian mining companies and their multi-billion dollar operations in that country. The cross-Canada speaking tour has been in the works for a year, Smith said.

The farmers went to the Canadian embassy in the Dominican capital of Santo Domingo this month, bringing letters of support from the University of Saskatchewan, the University of Toronto, the Canadian Catholic Organization for Development and Peace and its youth wing, Just Youth, as well as other groups.

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Latin American Bishops Petition Inter-American Commission On Human Rights To Hold Mining Companies Accountable For Economic And Environmental Harm

March 19, 2015 – WASHINGTON—The U.S. and Canadian governments must hold mining companies from their countries that operate in Latin America to laws and standards that protect indigenous communities and vulnerable groups, as well as local economies and the environment, said representatives of the bishops of Latin America in a hearing before the Inter-American Commission on Human Rights (IACHR), March 19. The hearing was held in response to a petition filed by the Consejo Episcopal Latinoamericano (CELAM) and other member institutions of the Pan-Amazonian Ecclesial Network, which represents bishops’ conferences, religious men and women and Catholic relief agencies throughout Latin America.

Archbishop Pedro Barreto of Peru and Bishop Alvaro Ramazzini of Guatemala represented CELAM, along with Father Peter Hughes and Enrique Pinilla of its Department of Justice and Solidarity. Bishop Donald Bolen, who heads the Peace and Justice Commission at the Canadian Conference of Catholic Bishops (CCCB), as well as Archbishop Timothy Broglio, archbishop for the Military Services, were present at the hearing to express support.

A petition provided an overview of the issues pertaining to extractives in a number of Latin American countries, outlining calamitous public health and environmental consequences of mining operations by U.S. and Canadian multinationals. The testimony at the hearing focused on six countries, Brazil ,Guatemala, Peru, Ecuador, Honduras and Mexico, and focused on key themes including violence and criminalization of human rights defenders and the need for a new model of sustainable development.

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NEWS RELEASE: Mining Revenues Significant to Nunavut and Northwest Territories

http://www.miningnorth.com/

Yellowknife, NT (March 19, 2015) The value of mining production has increased in the Northwest Territories and in Nunavut over the last year, according to Federal government statistics just released. Preliminary estimates for 2014 mineral production posted by Natural Resources Canada (NRCan) show that the total value of NWT mining production is $1.886 billion, up $227 million (14%) from $1,659 billion in 2014. Of this:

• Diamond production value is $1.794 billion, up $234 million or 15% from to $1.561 billion;
• Tungsten value was down approximately 2% to $84.71 million; and
• Copper value is down by 17% to $1.86 million.

In Nunavut, the total value of mining production was $642 million, up 2% from $629 million. Of this:

• Gold production value was $639 million, up 2% from $627 million in 2014; and
• Silver production value was up 8% to $2.6 million from $2.4 million last year.

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TMAC aims to revive mothballed western Nunavut gold mine project (Nunatsiaq News – March 19, 2015)

http://www.nunatsiaqonline.ca/

“The Doris North project is expected to change status from care and maintenance in 2015”

Two years after acquiring the Hope Bay gold mine project in western Nunavut from Newmont Mining Corp.,TMAC Resources Inc.says it plans to bring part of the mine complex out of mothballs in 2015.

TMAC owners said last September that they wanted to see their mine at Hope Bay, located 120 kilometres south of Cambridge Bay on the mainland, operating by 2020. On March 18, they told the Nunavut Impact Review Board that “the Doris North project is expected to change status from care and maintenance in 2015.”

That came in an update on a project certificate for the Doris North Mine, one of several sites on the TMAC property. This new timeline is considerably slower than the first envisioned by TMAC in 2013, which promoted an “aggressive timeline” to get the mine into production in 2015.

Now the plan is to build a mine that will be “multi-generational” — that is, with more gold resources and a longer lifespan than the earlier forecast period of 10 years.

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NEWS RELEASE: SNL Metals & Mining Releases March Monthly Industry Monitor

http://www.snl.com/Sectors/metalsmining/

Finds gloomy market conditions for the international mining industry

Halifax, Nova Scotia (March 18, 2015) Announced today, SNL Metals & Mining’s latest Monthly Industry Monitor reveals another set of depressing statistics. The first two months of the New Year have failed to dispelthe gloomy market conditions for the international mining industry.

SNL’s Pipeline Activity Index (PAI) has four constituents: the number of exploration announcements, initial resources, completed financings and positive development “milestones.” The PAI fell in February, for the fifth consecutive month, despite two of the constituent measurements showing a month-on-month improvement (see graph).

Although SNL’s metals price index had improved fractionally in January, it fell to 108 in February. Indeed, there were falls for all eight constituents of the index — cobalt, copper, gold, molybdenum, nickel, platinum, silver and zinc. While the industry’s aggregate market cap bucked this trend by increasing to US $1,350 billion at the end of the month, early indications for March suggest the industry’s value will resume its downward trajectory.

The number of distinct projects reporting drilling activity fell to 113 last month, compared with 160 projects in January. Gold-exploration activity accounted for 59% of the total, but after the encouraging increase the previous month there was a fall to 67 gold projects in February.

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