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 »

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.

As promised in the last provincial election, the Partie Québécoise has slapped new taxes on Quebec’s mining industry. Beginning in 2014 producers will pay either a royalty or a graduated tax on the company’s profit margin whichever is higher.

The royalty is set at 1% of the first $80-million-worth of production, and at 4% on amounts greater than that. It will apply to any mine regardless of profitability.

The graduated tax starts at 16% and rises to a top rate of 28%. This option claws back profits made at a given operation.

The new taxes are less than promised by the PQ during the election. They were scaled back from the $388-million target due to the recent softening of commodity prices. Nonetheless, the measures are expected to add between $73 million and $200 million to the provincial pocketbook each year.

The Quebec Mining Exploration Association (AEMQ) expressed disappointment at the new taxes. “The Quebec mining sector is already suffering from severe a financial crisis, and in the last few years, we have had to deal with significant mining taxes.

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.

Quebec’s reputation as one of the best places to explore for and mine minerals has taken a beating recently. From 2007 to 2010 the Fraser Instituteranked it as the best jurisdiction, but it slipped to fourth in 2011 to fifth in 2012.

There remain many resources yet to be discovered in the province, but the political climate is one reason Quebec is losing favour. First there was the re-election of a Parti Quebecois government in September 2012. That led to uncertainty that Plan Nord would be carried out as originally outlined.

Now comes word that the province is proposing a new tax regime. Two new levies are expected – a 5% tax on the gross value of annual production and a 30% royalty on “super-profits”. Quebec already jacked up its business tax rate in 2010 when it raised taxes on profits to 16% from 12%. High taxes are a major disincentive for any kind of business.

Both the Mining Association of Canada (Mining.ca) and the Association du miniere du Quebec (AMQ-inc.com) have been vocal in their opposition to new taxes in Quebec. As MAC rightly points out, global competition for mining investment is fierce. Investors will look elsewhere – to Europe, Latin America and Africa – where the prospect of making a reasonable profit exists. Without continued investment, Canada stands to lose significant royalties to government, well paying jobs in mining, and the many spinoff business opportunities a mine brings to a community. 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.

When BC Finance Minister Michael de Jong brought down the British Columbia budget on Feb. 19, there was a significant amount of good news. A balanced budget is hard to dislike. And some of the initiatives were praised by the Association for Mineral Exploration British Columbia.

The AME BC is particularly cheered by the government’s efforts to streamline the mineral exploration permitting process. Victoria is promising a 60-day turnaround for notice of work applications. An extra $7 million has been pledged to improve permitting. But there is more to be done.

Said AME BC president and CEO Gavin Dirom, “We encourage the government to further improve the permitting process and realize the benefits of online notice of work applications, improved First Nations consultation and multi-area, multi-year permitting.”

Dirom praised the budget for promising investment in education. Then he asked for “further investment in Aboriginal capacity building as well. The provincial government has shown leadership by … introducing new revenue sharing and reconciliation agreements with First Nations. We anticipate that with continued investment in mineral exploration and the opening of new mines, the stage will be set for renewed investment in Aboriginal capacity building and geoscience in future budgets.” 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.

OTTAWA – The Conference Board of Canada has taken a close look and said that mining employment and production in Canada’s north can almost double by the end of this decade. The Board sees Canada’s overall northern metal and non-metallic mineral output growing by 91% from 2011 to 2020, a compound annual growth rate of 7.5%. In contrast, the Canadian economy is forecast to grow by an average of just 2.2% annually over this period. The annual gross domestic product of mining in the north will reach $8.5 billion in 2020, up from $4.4 billion in 2011 (both figures in constant 2002 dollars).

That is a very rosy picture the Board has painted. But it is also the first to admit that the goal won’t be reached unless industry, government and communities address key issues including infrastructure, regulatory uncertainty, skills shortages and Aboriginal rights.

“Mining is the future economic driver of Canada’s North. To fully reap the benefits of this potential, we must find the right balance between risk and opportunity,” said Anja Jeffrey, director, Centre for the North. “For instance, governments need to be conscious of how changes to the regulatory environment can affect communities and industry. Strong efforts to ensure a favourable business climate can leave communities feeling vulnerable. Going too far in the opposite direction can act as a deterrent to investment. 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.

If something happens twice, does that the beginning of a trend? The “something” is governments allowing foreign workers to fill jobs at mining projects. With the blessing of Canada’s federal government, HD Mining is importing “temporary” Chinese workers for its Murray River coal project in British Columbia. Greenland has passed legislation that will allow the employment of Chinese workers in Greenland at the Isua iron ore project belonging to London Mining plc.

In Canada, the idea of Chinese workers arriving to fill jobs at a coal mine was first floated a few years ago. Then the plan fell below the radar until The Globe and Mail newspaper revived the story a week ago when it was learned that speaking Mandarin is a requirement for working at the Murray River project.

In Greenland, the new legislation paves the way for companies to employ foreign workers at lower wages than they would pay natives of Greenland. All political parties voted for the law, with the exception of the largest opposition party which abstained.

The situations in Canada and Greenland vary on one notable point: Canada has a skilled mining workforce, Greenland does not.

By virtue of our world class mineral industry, Canada has a knowledgeable, inventive and hardworking pool of labour from which to choose. 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.

Corporate Knights, a specialized media and investment research company based in Toronto, has released its first Canadian mining sustainability ranking. The researchers measured the performance of 52 Canadian miners against 12 sustainability indicators, ranging from energy and carbon productivity, to comparisons of CEO and worker pay, and leadership diversity.

Readers familiar with Barrick Gold (56%) will not be surprised to learn it is the highest ranking of the top 10 sustainable Canadian miners. Corporate Knights found it deserved to be first because of its “top-tier disclosure practices and strong across-the-board sustainability performance”. The company was also cited for its water productivity (a measure of revenue generated for every cubit metres of water used in operations) and pay equity (the spread between an organization’s top earning senior executive and a average employee).

Barrick’s score of 56% is only two points ahead of Teck Resources (54%), the second place finisher. Inmet Mining (49%), Goldcorp (45%) and Agnico-Eagle Mines (39%) round out the top half of the list.

The continuing high gold price gives producers of the yellow metal substantial amounts of cash with which to foster sustainability. The trend continues in the next five companies. Eldorado Gold (35%) ranks sixth, Kinross Gold ranks seventh (34%) and New Gold (33%) sit at eighth. 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.

Concern is mounting within the industry as the Quebec government mulls a ban on uranium exploration. This news is creating uncertainty in Quebec’s mining industry, particularly with respect to Strateco Resources’ Matoush project in the Otish Mountains roughly 200 km from Chibougamau and Mistissini.

Strateco has been working at Matoush since 2006, and says it is considered one of the highest grade uranium projects in the world. At Dec. 31, 2011, the deposit had an indicated resource of 453,000 tonnes grading 0.78% U3O8, containing 7.78 million lb of yellowcake. There is also an inferred resource of 2.04 million tonnes grading 0.43% U3O8 and containing 19.22 million lb of U3O8 using a cut-off grade of 0.10%.

Between 2008 and 2012, Strateco conducted rigorous studies into the impact of the Matoush project, which have been independently monitored and verified. Following these studies, the Canadian Nuclear Safety Commission (CNSC) approved an underground exploration program at Matoush earlier this month. The licence is valid until Oct. 31, 2017.

The alarm is being raised by the Quebec Mineral Exploration Association (AEQM). 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.

Mining companies appear to be having an easier time attracting investors recently – particularly if they have a gold or iron ore project. Both commodities have been hot, hot, hot the past year, and developers are prospering.

Labrador Iron Mines Holdings of Toronto has arranged at $30-million bought deal public equity financing. The company calls itself “Canada’s newest iron ore producer” having begun production at its James direct shipping ore iron mine earlier this year. Now LIM will issue 30 million common share at a price of $1.00 each. The deal is underwritten by Canaccord Genuity that is also entitled to an overallotment of 4.5 million shares. The net proceeds are to used for working capital and general corporate purposes.

Premier Gold Mines of Thunder Bay, ON, has arranged a $58.5 million deal consisting of a bought deal public offering and flow-through shares. The company has a number of active exploration projects in Ontario and Nevada. A syndicate of underwriters led by RBC Capital Markets has agreed to purchase 6.58 million common shares at $6.08 each plus 2.61 million flow-through shares at $7.08 each. The underwriters have been granted an overallotment option of 15%. Premier will use the net proceeds of the flow-through shares on its Canadian projects; the balance could be spent in the United States. 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.

Bob Katter, who is running for the job of premier in Australia’s Queensland state, said if he were premier he would set up programs to train 40,000 unskilled workers for mining jobs, and unemployed people who refused to retrain as miners would lose their benefits. He sounds as if he is trying to solve two problems at once: provide more skilled workers to an industry facing a dire shortage and cut down on unemployment payments.
 
The Canadian government is trying to re-jig our employment insurance program to encourage more people to accept jobs outside the area in which they reside. The message is, “Look in more places to find work or don’t collect benefits.” The feds haven’t gone as far as to say which industry job seekers have to work in, or where, and we can’t imagine that a strong-arm tactic such as that would be popular.
 
But is Katter onto something? How easy would it be to arbitrarily replace retiring workers with trainees? Both Australia and Canada are facing a shortage of skilled workers in their mineral industries. 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.

I know an engineer who says anything is possible if you throw enough money at it. The costs associated with the development of the Pebble copper-gold-molybdenum project in Alaska come to mind when thinking in this vein.
 
The Pebble Partnership, a joint venture of Vancouver’s Northern Dynasty Minerals and Anglo American plc  of London, UK, is shepherding the US$5-billion project toward production. The deposit is estimated to contain 80.6 billion lb of copper, 107.4 million oz of gold, and 5.6 billion lb of molybdenum.
 
Pebble is a deposit worth going after even if it takes and investment of $400 million and more to conduct work programs, research and comparative studies so far. Move than $100 million has been spent on environmental and socio-economic studies, resulting in a 27,000-page environmental baseline document.
 
This year’s budget is $107 million to be spent on engineering studies to complete a project description. 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.

Prime Minister Stephen Harper appeared to hit the right balance between environmental protection and mine development in the speech he delivered on April 14, 2012, at the Summit of the Americas in Cartagena, Colombia.
 
He highlighted the importance of Canada natural resource industries saying, “Mining alone is an important part of that, mining alone contributed $50 billion to GDP in 2011. We are already the world’s number-one potash producer, second for uranium, and a major global producer of most mineral and energy products.
 
“The mining industry in Canada is capital-intensive, high-tech and knowledge-based, and it produces well-paying jobs for more than 300,000 Canadians. constitutes more than a fifth of our exports and it has close to $200 billion dollars in assets throughout the world. As well, some 60% of the world’s exploration and mining companies are listed on the Toronto Stock Exchange.
 
“In other words, in Canada, we know this industry very well.” 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.

Like most CMJ readers, I get a shiver up my spine at the thought of bonanza gold grades. So it was with excitement I read that Toronto’s Queenston Mining (Queenston.ca) had intersected 42.4 g/t Au at its Upper Canada property in Kirkland Lake, ON. Better yet, that was the grade over 5.5 metres.
 
Not all the grades at Upper Canada were as high. There was also 22.9 g/t over 6.6 metres, 13.2 g/t over 5.5 metres, 4.47 g/t over 37.2 metres and 4.40 g/t over 26.2. These results came for diamond drilling in the Upper L zone as well as the H, M & Q zones. Queenston says the results expand both the underground and pit potential of a large gold system.
 
A few high grade drill intersections do not a gold mine make, but Queenston has already outlined 1.96 million tonnes averaging 2.38 g/t Au in the indicated resource (uncapped) and 5.38 million tonnes at 4.55 g/t Au in the inferred category (uncapped). Together the resource contains an estimated 937,000 oz of gold that will be recovered by both open pit and underground mining. 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.

Older CMJ readers will remember how the mining companies built remote projects in the middle of the last century. First they found and explored a deposit far from civilization. Next they made a development decision that included building a local town for the workforce. They moved their employees and their families into the town. When the ore ran out, the company moved on leaving the town with little or no economic basis for survival.
 
Thankfully, we now have better development model, one that does not abandon towns when mining ceases. Modern miners have invented what the Australians call FIFO, meaning fly-in/fly-out operations. We in Canada were pioneers in this practice. Workers are flown to the mine site for periods ranging from days to weeks. They are put up in modern accommodations, well fed, and given plenty of recreational opportunities. Then they fly out, returning to families and homes in usually in the south. Their families enjoy the amenities of city living including educational and employment opportunities. Such opportunities were lacking in small northern mining towns.
 
The FIFO model works well in developed countries, but it is not appropriate in undeveloped regions. Indigenous peoples in Africa and South America, for instance, do not want to leave their homes for extended periods or they wish to continue their traditional way of living. Canadian miners have again become leaders in the art of giving such people an economic or educational hand up without destroying their culture. 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.

Canadian Prime Minister Stephen Harper’s current trip to China is touted as an opportunity to create partnerships between the two countries. One positive outcome has just been revealed: Canaccord Financial of Toronto and a Chinese bank plan to establish a Canada-China Natural Resource Fund and give it an initial endowment of US$1 billion.

The fund intends to:

•Invest in both public and private natural resource and energy companies or projects in Canada;

•Promote interaction and sustainable development among Chinese, Canadian and other nature resources companies, and’

•Create opportunities for substantial returns on investment (be profitable) through the strategic and market-oriented allocation of the fund’s capital. Read the rest of this entry »