CMJ field editor Marilyn Scales writes: We opened a can of worms a week ago when we published Stan Sudol’s suggestion that Ontario consolidate the education of mining professionals in one school, namely Laurentian University in Sudbury. Readers were quick to weigh in on both sides. Forty-five people voted on the Hot Topic, and they were 60% against such a move.
 
Better yet, many took the time to write and tell us what they think.

On one hand, an anonymous reader thought Laurentian is the ideal place. “New ideas could develop in a new environment. It will be important to attract the best brains and teachers,” our reader wrote.

Bill Quesnel, president of Parts HeadQuarters in Burlington, ON, thought through the suggestion based on his life-long knowledge of the industry. He made these observations:
 
“Any move to make Sudbury the centre of mining education will have some major hurdles to overcome:

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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.

Australia will quadruple uranium production pushing itself ahead of Canada as the world’s largest producer. Australian state premier Mike Rann made this boast to a group of Indian journalists at the Citi Australia and new Zealand Investment conference earlier this month, according to a report in The Hindu of March 8, 2009.

The single project that would rocket Australian uranium production ahead of Canadian is the expansion of BHP Billiton’s Olympic Dam mine. The company is looking at the feasibility of expanding output from 4,300 t/y to 19,000 t/y. That would create a single mine that could produce 35% of the world’s current uranium needs.

The newspaper account did not specify whether all those tonnes per year were elemental uranium or uranium oxide. A quick peek at the BHP Billiton website confirmed that the annual output is tonnes of U3O8.

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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 article was originally published – April/2006

Another major Canadian player in New Caledonian nickel is Toronto’s Falconbridge Ltd. (soon to be swallowed by Inco Ltd.). Falconbridge and its 51% joint venture partner Société Minière du Sud Pacifique S.A. (SMSP), are developing the Koniambo Project in the northern part of the island for start up, perhaps as early as 2009.

Last month, Falconbridge and SMSP (which is owned primarily by the North Province) created an operating company, Koniambo Nickel S.A.S. under the leadership of president Brian Kenny. Koniambo Nickel will hold title to the Koniambo deposit. On March 1, the French minister of overseas territories François Baroin laid the ceremonial first stone for the Koniambo project.

The following day the Koniambo Nickel board met to approve this year’s work program. Preparing the earthworks and advancing the project engineering are the top priorities for 2006. Dredging of a port will begin early in 2007, and the main construction period will be 2008-09. Production will begin very late in 2009 or early in 2010.

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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 article was originally published – April/2006

New Caledonia, a French island territory 1,600 km off the northeast coast of Australia, is home to an estimated 25% of the world’s known nickel reserves. With rich laterite and saprolite deposits, it is no wonder this island nation is the scene of increased mining activity. A subsidiary of Paris-based Eramet currently owns five mines and a smelter scattered across the island. The other producer is Société Minière du Sud Pacifique S.A. It, too, has several mines supplying an Australian smelter.

The Goro Nickel Deposit, tucked away on the southern tip of New Caledonia, is one of the world’s largest undeveloped laterite deposits. But not for long. Construction of the mine, mineral processing plant, and extensive infrastructure is moving ahead quickly toward a start-up date of late 2007.

As of the end of February 2006, engineering is over 70% done, with about 1,600 workers on the site. Earthworks for the process plant were completed in March 2006, and will continue at the residue storage facility and on road realignment. The test mine extends to the saprolite horizon and exposed bedrock. The first of almost 2,000 skilled Filipino workers will soon arrive to start on construction.

The first berth of the port will be completed in time to receive the first module of the processing plant in May. The next milestone will be completion of the first half of the coal-fired power plant in September. The second berth of the port and the raw water pipeline will be finished in time for that event.

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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.

There is light at the end of the ramp. There have been several financings in the hundreds-of-million-dollar range since the beginning of the year, and that leaves me hoping the worst is over for the mining community.

In early February, Osisko Mining of Montreal closed a bought deal worth C$350 million. That money is earmarked for completion of the Malartic gold project in Quebec.

Then Kinross Gold of Toronto completed a US$415-million public equity offering. The money will be used to pay down debt incurred with recent acquisitions.

Uranium producer Cameco of Saskatoon completed a bought deal that raised C$460 million. The money will strengthen the company treasury as Cameco looks for opportunities in today’s economic environment.

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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.

Unless you are recently returned from a remote, primitive tropical island, you are inundated daily by doom and gloom reports, not only for the mining industry but for a broad range of banking, retail, real estate, automobile and more sectors.

“Dismal” is what the latest PricewaterhouseCoopers study calls last year for juniors.

The numbers tell a “sobering tale”, Ernst & Young said of the toll the global credit crisis is taking on the market capitalization of TSX-listed companies.

The Fraser Institute called the outlook “gloomy”, expecting at least 30% of exploration companies to fail.

“The mining industry, generally, is gripped by panic and the vast majority of firms are in lock-down mode,” says Jon Wylie, managing director of Proudfoot Consulting in Canada. “They have reacted to sharply lower commodity prices by scaling back and closing older, higher-cost mines.”

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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.

March 3, 2009, is another black day in the employment history of the mining industry in Sudbury, ON. That was the day Vale Inco announced it was cutting 261 local jobs as part of its worldwide restructuring that will result in 900 terminations. At its Thompson, MB, operations, the company let 24 non-union supervisors go.

“Unfortunately the tough decisions announced today are necessary in these exceptional times” said Tito Martins, Vale Inco CEO and president, said in a news release. “The declining nickel price and reduced demand for nickel make it clear that continuing to operate in our current fashion is simply not sustainable. The measures we’re announcing today are intended to address the immediate health of the business and help reshape the organization for a long-term, successful and sustainable future.”

The announcement comes three weeks after the second largest miner in the area, Xstrata Nickel, announced the layoff of 686 workers. The combined cutbacks are a huge blow to the Sudbury community.

To its credit, Vale Inco released background information about its employment practices in Sudbury and Thompson, MB, since it took over operations in October 2006. The figures are an attempt to put the cuts in perspective in several areas.

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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.

Teck Cominco incurred huge loans ($10 billion) at the worst possible time (October 2008) for the acquisition of Fording Coal. Hit with the double whammy of plummeting commodity prices and a huge debt load, management in Vancouver is digging in to ensure that the company not only survives, but prospers.

Teck told investors at the recent BMO Capital Markets that it will cut sustaining capital needs by $330 million and capital projects by $400 million this year from 2008 levels. It has slowed the development of the Fort Hills oil sands project and withdrawn from the Petaquilla copper project. Zinc production at the Trail metallurgical complex has been reduced by 20%, and the Pend Oreille zinc mine has been temporarily closed.

Teck is selling its 50% share in the Williams and David Bell gold mines at Hemlo, Ont., to Barrick Gold, its joint venture partner. The deal is worth $US65 million.

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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.

Big and small companies are still jockeying for position on the merger-go-round. Unfortunately, not everyone is completing the ride; some are being bucked off. It appears, however, that even in times of scarce financing, there are deals to be done for enterprising executives.

One of the highest profile mergers, that of HudBay Minerals and Lundin Mining, has been derailed. The two companies agreed to terminate their arrangement agreement on Feb. 23. The deal was stridently opposed by HudBay corporate investors who demanded the deal go to a shareholder vote. The Ontario Securities Commission agreed and overturned a previous approval without a vote made by the Toronto Stock Exchange. Although Lundin shareholders had already voted in favour of the merger, HudBay determined that it was unlikely its shareholders would approve the deal. HudBay currently holds a 19.9% interest in Lundin.

The deal between IamGold Corp. and Orezone Resources was complete on Feb 25, and Orezone Gold Corp began trading on the TSX. The acquisition gives IamGold a 16.6% interest in Orezone, including the four-million-ounce Essakane gold project in Burkina Faso. The project could reach full production at over 300,000 oz/year in late 2010. The deal give Orezone a C$20-million equity injection toward the US$350 million needed to develop the Essakane deposit.

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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.

Canada’s newest nickel producer is the Bucko Lake mine near Wabowden, MB. The mine, which belongs to Toronto’s Crowflight Minerals, shipped its first concentrate on Feb. 12, 2008, to Xstrata’s smelter Sudbury, ON.

The initial concentrate shipment weighed of 90.0 tonnes and contained 11.5 tonnes of nickel. Full commercial production is expected early in Q2 2009.

The Bucko Lake deposit was first investigated by Falconbridge, and a 340.0-metre-deep shaft was sunk in 1971-72. The mine is designed for longhole open stoping with sublevel access on 30.5-metres intervals. The intervals are connected via an internal decline. Backfill consists of cemented hydraulic material and development waste.

Underground mining began late last year in the first high-grade stope area on the 1,000 level (305 metres). Lower grade stopes on the 1,000 level are also being mined, and the high grade stope area on the 900 level (275 metres) is now being developed. The main ramp has been driven approximately 115 metres vertically from surface. Some ore development and crown pillar support activities will occur from the 450 level (135 metres), which should be reached late in the first quarter.

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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 Murray Pezim were around today, the larger-than-life character would approve of giving the award that bears his name to Bob Quartermain, president of Vancouver’s Silver Standard Resources. The two men met amidst the diamond drill rigs at the famous Hemlo gold find in the early 1980s. Pezim was overseeing the work of his company, International Corona Resources, and Quartermain was there on behalf of Teck. Interesting that the two companies later became partners in developing and operating the David Bell gold mine.

Quartermain is this year’s winner of the Murray Pezim Award, presented by the Association for Mineral Exploration British Columbia. It is given to an individual for “perseverance and success in financing mineral exploration.” With over 20 years at the helm of Silver Standard, Quartermain qualifies by the “perseverance” criteria.

As for financing, Quartermain excels at that, too.

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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.

What do Eric Sprott, Rob McEwen and Frank Guistra have in common? They have volunteered to be the prizes in a draw of people who donate to The Townships Project, a cause supported by the Women in Mining (WIM) networks in Vancouver and Toronto. Three winners whose names are drawn will have a one-on-one meeting with a mogul.

The Townships Project is a Canadian-based registered charity that supports microloans for South Africans (mainly women) to start up or expand their own sustainable business. A $50 loan can change a life by breaking the cycle of poverty. And because loan repayment is better than 95% the money keeps on working over and over again.

WIM aims to raise $250,000 for the Townships Project. The campaign got off to a great start when its Bedrock sponsor, Homeland Energy, donated $50,000. Corporate sponsors and individuals will be recognized for donations of $25,000 (gold), $10,000 (silver) and $2,500 (patron). Every donation brings the project closer to its goal, and small donations add up quickly. But hurry. The contest ends on March 1, and the winners will be announced at the Prospectors and Developers Association of Canada convention in Toronto on March 3, 2009.

Canada’s WIM network is 600 strong, half in Toronto and half in Vancouver. This is the group that raised $239,000 for breast cancer research in 2007. Support WIM. Go to www.Women-In-Mining.com to donate today.

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.

“Xstrata Nickel today [Feb. 9, 2009] announces plans to restructure its Sudbury operations in response to ongoing challenging market conditions.” With those words the Swiss mining giant axed 686 jobs in Sudbury, Ont., and touched off a firestorm of protest from residents and union leaders.

Some of the closures were expected. In November 2008, Xstrata said it would accelerate closure of the Craig and Thayer Lindsley mines that were near the end of their productive lifespans. Operations there ceased with this month’s announcement.

The Fraser mine complex will be placed on care-and-maintenance, and the Strathcona mill will run with two work shifts rather than four due to the reduction in feed tonnage. The smelter is expected to operate at a level similar to 2008 thanks to concentrates from the new Nickel Rim south mine and Xstrata Nickel Australasia. Concentrates from the Montcalm and Raglan mines, as well as third-party feed, will also be treated.

Not all the news is bad, just the loss of 686 jobs.

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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.

The global diamond industry is suffering the same economic downturn as the rest of the world. Consumers who may be out of work or watching their investments shrink are in no mood to buy luxury goods. The result is falling diamond prices as demand shrinks.

Diamond prices have been under pressure for over a year. One Canadian producer has already bit the dust. Tahera Diamond Corp. closed its Jericho mine in Nunavut and filed for protection under the Companies’ Creditors Arrangement Act in January 2008. Its assets are for sale.

Even the largest diamond producer is feeling the pinch. Word has reached us from Diamond World Magazine of Mumbai, India, that De Beers Canada plans to suspend operations at its Snap Lake mine in the Northwest Territories for a total of 10 weeks this year. This is on top of the 105 contract workers that were laid off in November 2008. Remaining employees will be asked to take vacations or accept salary adjustments to cover a six-week closure this summer and a further four-week closure at the end of this year.

De Beers January sales of rough diamonds to selected customers was at a 25-year low. The January 2008 sales garnered $650 million, but this year’s offering drew only an estimated $80 million to $150 million. The drop is a reflection of the depth of economic woes in the United States, where consumers purchase 50% of the world’s diamonds.

I’ll do my part to support the diamond industry. I’m saving towards the purchase of a Canadian diamond. Too bad the federal budget didn’t offer a tax credit for buying Canadian luxury goods.

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.

Canadians listened hopefully as federal Minister of Finance Jim Flaherty stood in his new, steel-toed shoes to deliver the Conservative’s budget on Jan. 27. It contained a wide range of spending proposals designed to kick-start the economy and tax breaks for lower income Canadians. But getting our economic engine back in high gear comes at a cost: a federal deficit that will be $34 billion this year and as much as $542 billion in fiscal 2012-13.

The chances of delivering a plan that would please everyone were slim. Both the NDP and Bloc Quebecois said they would not support the Conservative budget. Liberal leader Michael Ignatieff gave conditional approval if the Conservatives report quarterly on the budget’s implementation and cost.

Indirectly there is a glimmer of hope for the mineral industry. The Canadian government has set aside $200 billion for the financial markets in the hope of improving access to credit. That might benefit junior companies. The government also has plans to spend on infrastructure, retraining workers, and to simplify the approval process for new construction.

The budget contained one measure specifically aimed at the mineral industry. The most beneficial proposal is a one-year extension of the temporary 15% mineral exploration tax credit. This supports the flow-through share program to encourage individual investment in exploration. It has proven most helpful to junior companies that need to raise sums for property work. Moreover, funds raised through this program in 2010 may be spent until the end of 2011.

The federal government also announced last week that it is providing a $2.2 million non-repayable contribution toward building a northern mining transit centre in Val d’Or, Que. The project involves constructing a new $6.7-million building at the airport and creation of four full-time jobs. The aim is to meet the needs of mining companies that must airlift personnel and supplies to remote sites.

No matter how much the Canadian government spends, it cannot change the global metals markets in favour of our producers. The best corporate managers will use what budget provisions are available and hunker down into survival mode.