Republic of Mining

Why flow-through shares should be extended to spur innovation funding – by Richard Sutin (National Post – February 12, 2016)

February 12, 2016

http://business.financialpost.com/

For several years, participants in the technology sector have advocated extending the flow-through share program currently available to resource companies by making it available to the innovation sector. With the erosion of our manufacturing base and the commodity and energy downturn, the case for using flow-through shares to catalyze our underperforming innovation sector has become more compelling.

A recent paper by Vijay Jog, published by the University of Calgary’s School of Public Policy (and taken up in FP Comment in Kevin Libin’s column on February 9) found poor investment returns for flow-through investors between 2008–2012.

From that, the paper concludes that between the investor losses, the cost to government and the potential “crowding out” of investment in other sectors, flow-through shares do more harm than good and should be phased out.

Mine idea explored – by Carl Clutchey (Thunder Bay Chronicle-Journal – February 12, 2016)

February 12, 2016

http://www.chroniclejournal.com/

A large iron-ore deposit near Sioux Lookout that’s been known for decades is about to undergo a significant fine-tuning, possibly leading to an operating mine as early as four years from now.

Thunder Bay-based Rockex Mining Corp. said Thursday it’s on the cusp of securing $30 million from a New York investment firm to conduct a feasibility study and environment assessment on the property located about 100 kilometres northeast of Sioux Lookout.

The financing from Diversified Innovative Marketing Enterprises (DIME) is expected to be firmed up by April 11, said a Rockex news release.

If the Lake St. Joseph deposit is deemed to be economically viable, it could support an operation for 30 years, creating a combined total of 700 mine-site and processing plant jobs.

Canada sells off most of its gold reserves (CBC News Business – February 11, 2016)

February 12, 2016

http://www.cbc.ca/news/business/

Canada is selling off most of its remaining gold reserves, mainly by selling gold coins, figures from the Bank of Canada and Finance Department show.

The country held just $19 million US worth of gold as of last Monday. Through most of 2015, the country’s gold reserves stood at more than $100 million US.

Finance Department figures show that Canada sold 41,106 ounces of gold coins in December and another 32,860 ounces of gold coins in January.

That left Canada holding 21,929 ounces of gold in its reserves as of the end of January — a “negligible” amount, the Bank of Canada acknowledges — worth $24 million US.

Oil prices plunge below $27 a barrel – by Sunny Freeman (Toronto Star – February 12, 2016)

February 12, 2016

http://www.thestar.com/

Oil briefly touched a 12-year-low of $26.05 and investors fear it still has further to fall.

Oil prices crashed through $27 (U.S.) a barrel Thursday as investors fled the risky asset over fears that it still has further to fall.

Benchmark West Texas Intermediate dropped $1.24 to close at $26.21 (U.S.) a barrel. It briefly touched a 12-year-low of $26.05 (U.S.) before bouncing slightly after a Wall Street Journal report suggesting OPEC could agree to production cuts.

“Of course, they were just rumours and the fundamental political tension within OPEC perseveres,” Scotiabank economists wrote in a note.

Gold is back in vogue with investors, but the question is, does this rally have legs? – by Peter Koven (Financial Post – February 12, 2016)

February 12, 2016

http://business.financialpost.com/

Gold is back in vogue as investors seek out a safe haven amid growing global volatility. The question is whether this gold rally will have legs, or whether it will fizzle out like numerous others over the past few years.

The yellow metal is in the midst of a tremendous upward move, jumping 18 per cent since the start of 2016. The key gold futures contract rose by a whopping US$53.20 an ounce on Thursday alone, bringing it to US$1,247.80. Gold’s performance this year is the polar opposite of most other commodities, which are down sharply.

Gold’s surge comes as global equities tumbled into a bear market. On Thursday, stock indexes worldwide fell on fears over the health of the global economy and banking sector, with MSCI’s world stock index dropping to more than 20 per cent below its peak, while safe-haven 10-year Treasury yields hit their lowest since 2012.

Water management can help improve community relations – by Prinesha Naidoo (Mineweb.com – February 12, 2016) http://www.mineweb.com/

February 12, 2016

http://www.mineweb.com/

JOHANNESBURG – Responsible, sustainable water management in the mining sector stands to enhance companies relationships with communities as well as their balance sheets, said Dirk-Jan Koch, special envoy for natural resources from the Netherlands.

According to him, some $25bn of stalled investments exist in mining due to disputes with local communities. Given that 70% of operations of the six biggest mining firms in the world occur in water-stressed areas like South Africa, a way for companies to build good relationships with the communities in which they operate is by taking on water-related challenges.

“Water risks are corporate risks,” Koch said at a public lecture on the Dutch Water & Mining Platform at a public lecture at Wits University. The “co-creation” platform is based on the country’s extensive water management experience.

Gold stocks rocket as investors seek safe haven – by Frik Els (Mining.com – February 11, 2016)

February 12, 2016

http://www.mining.com/

On Thursday, the price of gold surged nearly $70 an ounce as turmoil on world financial markets and global economic fears sparked a return to safe-haven buying.

Futures contracts in New York with April delivery dates jumped 5.8% to a high of $1,263.90 an ounce in massive volumes of nearly three times usual volumes. That moved gold into a bull market with gains topping 20% from the near six-year low struck mid-December.

In early afternoon trade the metal pared some of the gains to trade at just under $1,250 an ounce, still its best level in year. The change in sentiment towards gold evident this year has seen a huge run-up in gold mining stocks and today’s big move saw investors pile into the sector once again.

Harte Gold – Sweet Smell of the Sugar Zone – by Christopher Ecclestone (InvestorIntel.com – February 11, 2016)

February 12, 2016

http://investorintel.com/

The trend towards small-scale mining (or as we are tending to call it “right-sized” mining) seems to be gaining traction. Bankers don’t like it because it means smaller financings and less fees and consultants absolutely hate it because it means less mindless-drilling, wheel-spinning and production of useless tomes of BFS and DFS drivel.

The group that does like it includes retail investors and us, while institutional investors find that, quite literally, they cannot get enough of these companies. We have highlighted Anaconda in the past for this strategy (to which it has added another property this week) and had favoured Minnova for proposing something similar (though it has seemingly lost track from production and gone into some continuous financing mode).

In the latter case it really takes some doing to make your previous five announcements, over four months, solely about financings.Then there is Harte Gold Corp. (TSX:HRT), which seems destined to shortly join the ranks of producers with its mine in Ontario. We shall do an overview here on the progress thus far.

Mick Davis’ X2 Said to Consider Bid for Anglo Mines in Brazil Cristiane Lucchesi, Juan Pablo Spinetto and Thomas Biesheuvel (Bloomberg News – February 10, 2016)

February 12, 2016

http://www.bloomberg.com/

X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, is among companies considering a bid for Anglo American Plc’s Brazilian niobium and phosphate mines, said two people with knowledge of the matter.

Anglo hired Goldman Sachs Group Inc. and Morgan Stanley to sell the assets as a package valued at $1 billion, and is expecting to receive bids next week, the people said, asking not to be identified because discussions are private.

Anglo American, X2, Goldman Sachs and Morgan Stanley declined to comment.

Gold Rockets To 12-Month High On Safe-Haven Demand Amid Spooked World Marketplace – by Jim Wyckoff (Kitco Gold – February 11, 2016)

February 11, 2016

http://www.kitco.com/news/

(Kitco News) – Strong safe-haven demand for gold sent the precious metal soaring to a 12-month high above $1,260.00 Thursday. Another big sell off in world stock markets sent investors and traders scrambling into the gold market. There are growing concerns about the collective health of the major world economies. Gold prices have risen around 15% the past six weeks. April Comex gold was last up $54.00 at $1,248.60 an ounce. March Comex silver was last up $0.523 at $15.81 an ounce.

There was keen worldwide investor and trader risk aversion Thursday as most world stock markets suffered sharp losses. Falling crude oil prices, worries about the European financial system and weak overall world economic growth prospects are combining to spook the world marketplace.

The Stoxx Europe 600 index was down nearly 4% Thursday. Hong Kong’s Hang Seng index was also down around 4% on the day. China and Japan markets were closed Thursday for holidays. The Japanese yen has soared against the U.S. dollar on safe-haven demand from market participants in the Asian region.

Despite sagging demand, officials see shiny future for copper – by Lauren Clark (Tucson Sentinel – February 11, 2016)

February 11, 2016

http://www.tucsonsentinel.com/

Cronkite News – WASHINGTON – It’s a rainy Monday morning at Potomac Metals, a scrap yard just outside of Washington, D.C., as a customer climbs into the bed of his pickup truck and starts sorting odd scraps of metal into piles.

As he sorts, a worker weighs the piles then hands over cash for the metal. But the copper that would have brought $3 per pound three years ago yields just $1 per pound on this day.

Copper is one of the pillars of Arizona’s economy, but steadily falling demand on world markets has depressed prices and caused ripples that are felt in the state and as far away as this East Coast scrap yard.

Rio Tinto ditches boom time payout policy as profit plunges – by Sonali Paul and James Regan (Reuters U.K. – February 11, 2016)

February 11, 2016

http://uk.reuters.com/

MELBOURNE/SYDNEY – Rio Tinto (RIO.AX) (RIO.L) scrapped its generous payout policy in the face of a bleak outlook for the global economy after it slumped to a net loss for 2015 and posted its worst underlying earnings in 11 years.

The dividend decision also gives the world No. 2 miner flexibility to pursue acquisitions in future, analysts said, and Chief Executive Sam Walsh acknowledged his team was keeping an eye out for top-tier assets, particularly in copper.

“Getting the balance right between growth and shareholder return is important to us,” Walsh said on a conference call with analysts. The payout policy change paves the way for arch rival BHP Billiton (BHP.AX)(BLT.L) to take a similar step later this month, as miners come under pressure to shore up cash to weather the worst downturn to hit the sector in nearly two decades.

NEWS RELEASE: Franco-Nevada Announces US$ 550 Million Bought Deal Financing

February 11, 2016

http://www.franco-nevada.com/

TORONTO, February 10, 2016 – Franco-Nevada Corporation (“Franco-Nevada” or the “Company”) (TSX: FNV; NYSE: FNV) is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets, RBC Capital Markets, and Scotiabank, pursuant to which they have agreed to purchase, on a bought deal basis, 11,500,000 common shares of Franco-Nevada at a price of US$47.85 per common share (the “Offering Price”), for aggregate gross proceeds to Franco-Nevada of approximately US$550 million (the “Offering”).

The underwriters will also have the option, exercisable in whole or in part, at any time for a period of 30 days following the closing of the Offering, to purchase up to an additional 1,725,000 common shares at the Offering Price to cover overallotments,if any. In the event that the option is exercised in its entirety, the aggregate gross proceeds of the Offering to Franco-Nevada will be approximately US$633 million.

Space Mining Is Going to Accelerate the Military Space Race – by John Knefel (Inverse.com – February 11, 2016)

February 11, 2016

https://www.inverse.com/

The U.S. military has tried for decades to put weapons in space. Russia and China are watching, and revving up.

Luxembourg made international news last week when the small European country announced its intentions to be a world leader in commercial asteroid mining. You know if Luxembourg is making big moves, the coming decades in outer space are going to be wild.

The expected boom in commercial space travel and resource extraction are going to be equal parts gold rush and space race, with all the potential for riches and conflict those entail.

For decades, the United States and Russia (including when it was part of the USSR) have tried to weaponize outer space. The Reagan-era “Star Wars” program to weaponize space became a symbol of a Pentagon completely untethered from reality or any meaningful budgetary constraints. But the first “space war” was Operation Desert Storm, when U.S. forces used GPS to rout Iraq’s army following the invasion of Kuwait.

AEM ups estimate for Nunavut’s Amaruq to 3.3 million ounces (Nunatsiaq News – February 11, 2016)

February 11, 2016

http://www.nunatsiaqonline.ca/

Agnico-Eagle Mines Ltd.‘s Amaruq deposit may now hold at least 3.3 million ounces of gold, an estimate that’s 67 per cent higher than last year’s, the company announced Feb. 10.

That means the Amaruq deposit, located about 50 kilometres from the company’s existing mine and mill at Meadowbank in the Kivalliq region of Nunavut, still holds the potential to serve as a satellite operation for Meadowbank after about 2019 or 2020.

“The company expects to ultimately develop Amaruq as a satellite operation to Meadowbank, with the potential to begin production in 2019,” Agnico Eagle said in its latest financial report..