Republic of Mining

De Beers halts exploration of diamond mine near Attawapiskat, Ont. (CBC News Sudbury – February 08, 2016)

February 8, 2016

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

Bulk sampling of mine extension may be pushed back as First Nation voices concerns

The De Beers diamond company has ceased exploration of the Tango extension near the Victor mine due to local pushback. The Victor mine is located in the James Bay lowlands of northern Ontario, and is the province’s only diamond mine.

DeBeers is hoping to extend mining operations into a nearby deposit called Tango, but first needs to determine it’s feasibility. The company said the exploration is required as the Victor mine enters its final years.

Tom Ormsby, a spokesman for De Beers Canada, said the company has halted its plan to take a bulk sample of the new mining grounds.

Dark clouds gather for South Africa’s miners – by James Wilson and Andrew England (Financial Times – February 7, 2016)

February 8, 2016

http://www.ft.com/

Johannesburg – It is one of the mining industry’s historic heartlands and is endowed with some of the world’s richest mineral deposits. But right now South Africa is a place where some of the largest miners in the world are reluctant to do business.

More than 600 job cuts announced last week by South32, the Australian mining company that was last year spun out of BHP Billiton, are the latest indication of how South Africa is bearing the brunt of the worst commodities downturn in more than a decade. In total, 32,000 mining jobs in the country, about 6 per cent of the industry workforce, are subject to formal consultations that could lead to redundancies.

This will provide a bleak backdrop on Monday to the start of the Mining Indaba, one of the world’s leading conferences for mining executives and investors. As well as South32’s redundancies at its South African manganese mines, Lonmin is cutting 6,000 jobs at its platinum shafts in the country.

New open pit mine in Timmins expected as Lake Shore Gold is merged with Tahoe Resources – by Alan S. Hale (Timmins Daily Press – February 8, 2016)

February 8, 2016

http://www.timminspress.com/

Lake Shore Gold will soon become part of Tahoe Resources. The mining companies announced on Monday that Tahoe intends to buy a 75% stake in Lake Shore by exchanging shares in that company for Tahoe shares.

This announcement comes after trading on Lake Shore Gold’s shares were halted on Friday. It appeared at the time that it was to halt market speculation after positive news from an ongoing exploration project, but it now seems it was in anticipation of announcing the merger.

Under the agreement announced on Monday, each common share of Lake Shore Gold will be exchanged for a 0.1467 share in Tahoe which, when the markets closed on Friday, was worth $1.71. This would mean Lake Shore Gold shareholders would make a 15 cent profit on every share they own.

Private-Equity Mining Deals Seen Rising in 2016 as Majors Sell – by Jesse Riseborough (Bloomberg News – February 8, 2016)

February 8, 2016

http://www.bloomberg.com/

The value of private-equity deals in the mining industry will rise this year from $3.2 billion in 2015 as top producers seeking to cut the fat amid a global commodity rout offload unwanted operations, according to U.K. law firm Berwin Leighton Paisner.

“The majors are looking to divest a lot more,” Alexander Keepin, head of mining at BLP, said in a phone interview. “There should be a point where the value expectations of the majors and the cash available from the private-equity groups means that there will be more transactions.”

The biggest miners have been battered by the slump in commodity prices that’s forced producers to scrap payouts to investors, sell shares to bolster cash reserves and dispose of lower-quality mines and smelters.

Value of U.S. metal mine production drops 15% – by Andrew Topf (Mining.com – February 7, 2016)

February 8, 2016

http://www.mining.com/

The USGS also says the States is now 100% dependent on other countries for 19 minerals

The United States earned less from its mines in 2015 and became more reliant on outside sources for critical metals, according to a new report from the U.S. Geological Survey (USGS).

The data comes from statistics gathered by the USGS on about 90 mineral commodities considered essential for the U.S. economy and national security.

Concerns have been raised for years that the United States is too dependent on other countries, namely China, for rare earth elements deemed essential for its aerospace and electronics industries, leading to suggestions that the U.S. create a strategic minerals reserve.

Arizona Mining shows upside at Taylor (Northern Miner – February 5, 2016)

February 8, 2016

http://www.northernminer.com/

VANCOUVER — When it comes to opportunities in the junior space that tick the prerequisite boxes for mineral development, there aren’t many that can match Arizona Mining (TSX: AZ) and its emerging Taylor zinc-lead-silver deposit roughly 80 km due southeast of Tucson.

The company features an accomplished management team and strong financial backing, and it completed a promising drill campaign last year that hints at the potential for a great mining opportunity driven by high grades and a clear permitting path.

Arizona is the brainchild of chairman — and well-known corporate finance figure — Richard Warke, who founded Augusta Resource and Ventana Gold. The company previously operated under the Wildcat Silver banner before shifting it’s identify in mid-2015 to signal a new focus on the Taylor discovery, which is part of the 140 sq. km Hermosa project.

Trading halted on Lake Shore Gold shares – by Len Gillis (Timmins Daily Press – February 5, 2016)

February 8, 2016

http://www.timminspress.com/

TIMMINS – There was so much excitement and market speculation about a Lake Shore Gold Timmins property that trading in company shares was halted on Friday and the company was asked by regulators to issue a public statement.

This follows the positive news that was released by the company on Thursday revealing the results of 13 drill holes for a high grade gold zone at the “Whitney Project” which describes the area located near the old Hallnor Mine property in Timmins.

The results are from the first surface exploration drilling done on the Whitney property since LSG became the new owners last fall. The Whitney property was a prospect that was owned and explored by Temex Resources Corp. Just last September, Temex shareholders approved a takeover deal by Lake Shore for all outstanding common shares.

Miner Tahoe Resources adds Ontario gold mines with Lake Shore buy (Reuters U.S. – February 8, 2016)

February 8, 2016

http://www.reuters.com/

Miner Tahoe Resources Inc (TAHO.N) (THO.TO) said it would buy Canada’s Lake Shore Gold Corp (LSG.TO) for about C$751 million ($540 million) to add low-cost gold mines in Ontario to its portfolio.

Precious metals miners have been clamping down on costs amid a sharp decline in the price of bullion that has weighed on exploration spending, capital to sustain operations and dividends.

Spot gold prices XAU= have fallen nearly 40 percent from its peak of $1,920.30 an ounce in September 2011. The deal comes after Goldcorp Inc (G.TO) sold its 25.6 percent stake in Tahoe for C$998.5 million last June.

Norway’s sovereign wealth fund asked miners to consider coal demergers – by Peter Ker (The Age – February 7, 2016)

February 8, 2016

http://www.theage.com.au/

Norway’s influential sovereign wealth fund asked mining companies in its investment sphere to consider spinning out their coal assets in 2015.

The fund, which is a top five shareholder in BHP Billiton, made the request just months before BHP spun out South32. The coal push was revealed in the fund’s 2015 annual report. It also shows the fund divested from 73 companies in 2015 for ethical and governance reasons.

The fund has made headlines in recent years for its increasingly strict stance against investing in fossil fuels. It took the stance further in 2015 by asking miners to consider divestments of their own.

It’s Existential for Anglo American as CEO Faces His Investors – by Thomas Biesheuvel, Andre Janse Van Vuuren and Jesse Riseborough (Bloomberg News – February 8, 2016)

February 8, 2016

http://www.bloomberg.com/

When Mark Cutifani took over running Anglo American Plc in April 2013, things were already going from bad to worse. Now, they’re existential.

While the Australian chief executive officer talked of “grim” markets, job losses and abandoning businesses for years, it’s turned into a question of survival as he tries to salvage a century-old company from the wreckage of over-expansion funded by billions of dollars of debt.

Anglo and Cutifani have faced criticism for moving too slowly on an overhaul that’s been derided by some as too vague and lacking the urgency required in the current “doomsday” environment. In his first public appearance since revealing the audacious turnaround plan in December, Cutifani, 57, told a conference in Cape Town on Monday that this year is looking like the “most challenging yet” for the industry.

Nickel downturn set to bring more pain – by Tess Ingram (Sydney Morning Herald – February 7, 2016)

February 8, 2016

http://www.smh.com.au/

The Kambalda Football Club is in crisis. For the first time since it formed in 1968, the future of the small but prominent club in the historic West Australian mining town is in jeopardy.

The downturn plaguing the nickel sector has forced many of the region’s mines to suspend operations, robbing the club of players for its senior teams.

President Cyril Poke said the club’s woes started last year when local nickel miner Mincor Resources, a long-time sponsor, began cutting jobs as the nickel price sank.

Mincor suspended production at its Mariner and Miitel mines at the end of January. The football club has called a “crisis meeting”.

[Pipelines] Will it be Paris or Calgary, Mr. Trudeau? – by Rex Murphy (National Post – February 8, 2016)

February 8, 2016

http://news.nationalpost.com/

What will it be, Paris or Calgary? That is the question.

Are the commitments made so energetically and with such a show of elan in Paris superior to the need to give support and relief to the oil industry in Calgary? Indeed, the commitments made in Paris run counter to the needs of Calgary (let Calgary here stand for all Alberta).

One cannot make huge pledges to reduce carbon emissions one week and wax all enthusiastic about giving federal support to pipelines intended to carry Alberta oil the next. The two agendas are simply not compatible.

Thus, the debate over pipelines is not about the pipelines themselves, as there is really only one question that a debate over pipelines has to answer: will they be safe?

France says will help nickel industry in New Caledonia (Reuters U.S. – February 6, 2016)

February 8, 2016

http://www.reuters.com/

PARIS – Feb 6 France committed on Saturday to support the nickel sector in the Pacific territory of New Caledonia which has been severely hit by a slump in prices amid a mounting supply glut.

The main nickel players on the island are Eramet in which France is the second shareholder, miner and commodity trader Glencore and Brazil’s Vale, the world’s leading iron ore producer.

“Measures will be taken soon to consolidate all the sectors of mining and metallurgy,” a summary of a meeting between Prime Minister Manuel Valls and local representatives said on Saturday, without giving further details.

National view: Slow permitting devastating US mining, manufacturing – by Kevin Kearns (Duluth News Tribune – February 7, 2016)

February 8, 2016

http://www.duluthnewstribune.com/

Kevin Kearns is president of the Washington, D.C.-based U.S. Business and Industry Council, a national business organization that advocates for U.S. manufacturers.

Imagine if significant gold deposits were found in northern Minnesota. That would be a boon for Minnesota mining, since gold is in great demand for use in such diverse products as smartphones and solar panels.

But what if it took 10 years for a mining firm to get the approvals needed to start extracting this gold? Imagine the disappointment in terms of lost job opportunities and lost tax revenue.

It’s not a far-fetched possibility, however, to expect a lengthy process before Minnesota could possibly enjoy any newfound gold wealth.

Debt risks mount as Canada’s base metal miners sink deep in the hole – by Peter Koven (Financial Post – February 6, 2016)

February 8, 2016

http://business.financialpost.com/

As one base metals mining executive after another took the stage last week at the TD Securities Mining Conference in Toronto, they knew almost everyone in the audience had the same question: What are you going to do about the balance sheet?

Right now, it’s the only topic that matters. The crash in copper, nickel and zinc prices, which began in 2011 but picked up steam in the past eight months, has torn into miners’ revenues and raised serious concerns about their ability to repay debt.

Canada’s biggest base metal miners assumed they would enjoy long-term metal prices far above current levels when they borrowed hundreds of millions (in some cases, billions) of dollars to build and acquire mines. Now the grim reality of the situation is taking hold, and companies need to take action to avoid disaster.