Republic of Mining

Gold Grade is King at Kirkland Lake – by Lawrie Williams (Lawrieongold.com – October 8, 2015)

October 8, 2015

In general gold mining and exploration juniors have been having a horrendous three or four years since the gold price started its decline from its peak at the end of Q3 2011, but high grade, profitable operations like Kirkland Lake Gold (TSX: KGI) have tended to buck the overall trend – and here it is indeed the gold grade which is the key.

In short, Kirkland Lake gold is one of the highest grade operating gold mines in Canada – or indeed in the world. And it is being very successful in maintaining mill grade at very close to reserve grade – achieved by current management under George Ogilvie, former CEO of Rambler Metals and Mining, in not chasing tonnage, but rather putting the emphasis on grades to the mill.

It is thus running well under mill throughput capacity of over 2,000 tonnes a day, but generating excellent returns as a result – and leaves it with scope for expansion from existing operations, let alone from the excellent exploration potential across its land holdings. LawrieOnGold interviewed Ogilvie yesterday in London and these are the impressions gained.

Nickel to rise above $20,000/tonne by 2017 – Alto Capital (Mineweb.com – October 8, 2015)

October 8, 2015

http://www.mineweb.com/

A longer-term perspective supports price appreciation.

A bullish outlook that will see nickel climb out of its current price slump and double in value to in excess of US$20,000 a tonne before March 2017, has been forecast today by market observer, Alto Capital.

Addressing the Paydirt 2015 Australian Nickel Conference in Perth today, Alto Capital research analyst, Mr Carey Smith, said that while the sector was under substantial cost and price pain, nonetheless the trend factors and outlook were far more substantial than they appeared.

“The nickel market has been dismal due to a recipe of stockpiles are up, production is up and demand is down,” Mr Smith said.

“However, going forward, stockpiled Indonesian high grade laterite nickel in China has all been consumed, China Nickel Pig Iron (NPI) production is in decline, global nickel supply is decreasing with only Independence Group’s Nova Bollinger project on the horizon and most producers/miners are losing money – so they will minimise their operations and/or get out of the game,” he said.

Obama’s ozone rules won’t prove to be platinum’s saviour – by Prinesha Naidoo (Mineweb.com – October 7, 2015)

October 7, 2015

http://www.mineweb.com/

The precious metal’s future remains in the hands of consumers.

JOHANNESBURG – The Obama administration’s move to decrease smog pollution in the United States (US) by tightening federal ozone standards is unlikely to have a material impact on the platinum market.

Citing “extensive scientific evidence” on the effects of ground-level ozone pollution or smog on public health and welfare, the country’s Environmental Protection Agency (EPA) has reduced the amount of ground-level ozone to 70 parts per billion (ppb) from the 75ppb limit set by the Bush administration in 2008.

Under the new rules, the EPA will give states until 2017 to collate air quality data and devise plans to meet the limits by 2025. However, some areas, depending on the severity of their smog pollution, will have until 2037 to meet the standards.

In anticipation of tighter ozone regulations, the non-profit International Precious Metals Institute (IPMI) ran a public policy advertisement in a Washington newspaper, stating “precious metals help turn dangerous ozone into harmless oxygen” and “platinum group metals provide the critical spark that makes catalytic converters work to reduce smog and harmful emissions.”

Gloom hangs over [Quebec] mining convention – by Robert Gibbens (Montreal Gazette – October 26, 2015)

October 7, 2015

http://montrealgazette.com/

Miners at the Quebec Mineral Exploration Association’s Xplor event in Montreal this week not only are battling the lowest metal prices in 11 years, cutting costs and scratching for capital, they’re coping with a more complicated permit process.

“It’s taking three years or more to complete federal and Quebec clearances, including environmental, sustainability, social requirements and benefits pacts with the native peoples,” said Guy Bourassa, chief executive of Nemaska Lithium Inc.

“It’s a huge and costly challenge for mine finders and developers since you don’t get financing until the permitting process is fully completed,” he said from Quebec City.

Nemaska’s $500-million Whabouchi hardrock lithium project in the James Bay area, 300 kilometres north of Chibougamau, has won full authorization.The ore will go by truck and rail to a new processing plant at Shawinigan and the resulting top-grade lithium carbonate will head for new-generation battery-makers.

“We’ve been lucky with rising lithium prices, contrary to gold, base metals, rare earths, iron ore and most other commodities, and now I’m negotiating the long-term financing needed for Whabouchi’s 2018 start-up,” he added.

Mining tycoon Lukas Lundin promotes Denison-Fission merger to skeptical retail shareholders – by Peter Koven (National Post – October 7, 2015)

October 7, 2015

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

TORONTO – Mining tycoon Lukas Lundin has joined an effort to convince Fission Uranium Corp.’s skeptical retail shareholders that they should approve a friendly merger with Denison Mines Corp.

The shareholder vote is scheduled for Oct. 14, and executives at both companies acknowledged on Tuesday they do not know which way Fission’s investors will go. The vast majority of the stock is held by retail shareholders, some of whom are loudly resisting the deal with Denison, one of Lundin’s companies.

As a result, Lundin himself is speaking with retail investors in Toronto this week to make the case for the $280-million, all-stock deal. For him, the argument is pretty simple.

“We’re trying to become the go-to name in the industry,” he said in an interview. “When uranium moves up again, we should move quite strongly because there’s nowhere else (for investors) to go. You have Cameco (Corp.) and Denison.”

Fission chief executive Dev Randhawa said he appreciates that retail investors would prefer a monster takeover offer from Cameco or Areva to this smaller deal with Denison. But he thinks they are ignoring one simple fact: there is no such deal out there.

Alberta oil and gas royalty review more about survival than more money – by Claudia Cattaneo (National Post – October 7, 2015)

October 7, 2015

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

Alberta’s oil and gas royalty review started off as an NDP campaign plan to squeeze more money out of the oil sector, but is morphing into an industry survival strategy as the oil shock and tax hikes continue to depress activity.

The evolution was in plain sight Monday evening, when review panel chairman Dave Mowat, president and CEO of ATB Financial, promised “a strategic look to set us up for success” as he faced a testy oilpatch crowd during a community engagement session in downtown Calgary, where many have lost their jobs.

From corporate directors to recent hires, geoscientists to consultants, hundreds responded to an invitation to share their views on royalties with the four-member panel, which is due to give its recommendations to Premier Rachel Notley’s government by December.

And they provided an earful. Many questioned the $3-million exercise during an already-tough oil price downturn. Some worried recommendations would be politicized to fit the NDP agenda. There were even calls for government incentives to give the sector a boost.

Among the feedback:

NEWS RELEASE: Canada’s Junior Miners must embrace unconventional strategies to survive continued economic challenges – PwC report

October 7, 2015

Bleak numbers lead miners on innovative paths to disrupt the downturn

TORONTO, Oct. 6, 2015 /CNW/ – The drying up of equity and debt markets coupled with new lows in cash reserves have pushed Canada’s junior mining industry on a further downward financial trend, according to PwC’s annual report on the TSX Venture’s top 100 junior mining companies. But the industry is looking to innovate and collaborate in an effort to move forward.

According to the 9th annual Junior mine report, Time for Change, the top 100 juniors raised $514 million in equity financing in 2015, down 25% from last year, while debt financing fell 27% to $278 million over the same period. Despite attempts to reduce spending, cash reserves are dwindling to new lows as the top 100’s on-hand cash dropped on average from $10 million to $7 million.

These numbers are paired with news that overall revenue is down 28% from 2014, a drop of nearly $195 million, balanced slightly by an 18% reduction in overall net losses. Market capitalization dropped significantly from $7.9 billion to $4.8 billion as of June, 2015.

“The challenges in the junior mining sector persist and the industry is really at a crossroads,” said Liam Fitzgerald, PwC’s Canadian Mining Leader.

Sudbury played key role in [Physics] Nobel prize – by Liam Casey (Canadian Press/Sudbury Star – October 7, 2015)

October 7, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

A professor emeritus at Queen’s University in Kingston, Ont. — the former director of the Sudbury Neutrino Observatory in northern Ontario — is a co-winner of the 2015 Nobel Prize in Physics for his work on tiny particles known as neutrinos.

Arthur McDonald was roused from sleep at about 5 a.m. on Tuesday by a phone call from the Nobel Prize committee telling him the news.

“I was a little surprised,” he said in a telephone interview from Kingston, laughing with joy. “I am overwhelmed, but excited.”

The first thing the 72-year-old did as a Nobel Prize winner was hug his wife. “Thank you,” he told her. McDonald and Japanese scientist Takaaki Kajita were cited for the discovery of neutrino oscillations and their contributions to experiments showing that neutrinos change identities.

“We were also able to determine that neutrinos do have a small mass and that’s something that wasn’t known before and it helps to place neutrinos in the laws of physics at a very fundamental level,” McDonald said.

Glencore Stock’s Roller-Coaster Ride Continues Amid Commodity-Price Concerns – by Alex MacDonald (Wall Street Journal – October 6, 2015)

October 6, 2015

http://www.wsj.com/

Chief Executive Ivan Glasenberg has been talking up prospects for copper prices

LONDON— Glencore PLC’s roller-coaster stock-market ride continued Tuesday, with the shares falling sharply after hefty gains the day before amid management’s efforts to assure investors that the commodities group remains financially robust.

Shares in the Swiss commodities trader and producer fell as much as 8.1% to an intraday low of 106.15 pence a share before paring the losses to a 1.8% drop. The stock is still the worst performer in the U.K.’s blue-chip FTSE 100 index, outpacing the FTSE 350 mining index’s 0.86% fall and the FTSE 100’s 0.1% decline.

Glencore’s shares have been pummeled by concerns that the world’s largest copper supplier and thermal coal exporter may struggle to safeguard its credit rating in light of its heavy debt burden, which is among the highest in the industry.

Investors are concerned about Glencore’s exposure, as a major commodities producer and trader, to slumping prices. Demand has fallen sharply given slower economic growth in China, the world’s largest consumer of many industrial raw materials, while global supplies remain plentiful.

South Africa: Latest Strike to Paralyse SA Mining Sector – by Savious Kwinika (All Africa.com – October 5, 2015)

October 6, 2015

http://allafrica.com/

Johannesburg — Mining is set to grind to a halt as 30 000 South African mine workers down their tools amid demands for a salary increment.

The workers, who are demanding salary increment of between 8,5 percent to 14 percent, have vowed not to resume work until their demands are met.

Mine workers at the Anglo Coal, Glencore, Exxaro Coal Mpumalanga, Kangra, Koornfontein, Delmas and Msobo Mine were on Sunday issued with the Commission for Conciliation, Mediation, and Arbitration (CCMA) certificate of non-resolution to the dispute, paving way for an industrial action.

“The conciliation came to an abrupt end this week when the parties could not reach an agreement over the R1000 for the lowest category and 14% for the artisans, miners and officials demand by the National Union of Mineworkers,” said NUM Chief Negotiator in the coal sector, Peter Bailey Bailey.

He said Anglo Coal and Glencore were offering the lowest paid workers an increment of 8,5 percent for the artisans. Miners and officials were offered 7 percent.

Glencore CEO bets on copper production cuts as shares surge – by Dmitry Zhdannikov and Olivia Kumwenda-Mtambo (Reuters U.S. – October 5, 2015)

October 6, 2015

http://www.reuters.com/

LONDON – Glencore Chief Executive Ivan Glasenberg said steep output cuts by copper miners will help lift prices in the next 18 months, in some of his first public comments since fears about commodities demand and the company’s debt battered the company’s shares.

Trader and miner Glencore’s stock jumped as much as 72 percent in illiquid trade in Hong Kong and as much as 20 percent in London, partly on prospects the company will sell some assets to cut debt.

The stock has recouped all of its losses from the past week, with several brokers saying a recent sell-off was overdone as the miner and trader had the ability to withstand the crunch on commodity prices.

The price of copper, Glencore’s largest earner, hit six-year lows below $5,000 a tonne in August due to a slowdown in China, one of the world’s biggest consumers of metals and other raw materials. It was around $5,180 on Monday.

“Supply will ultimately tighten… Fundamentals will prevail,” Glasenberg told the FT African Summit on Monday.

Manitoba-Nunavut hydro link is economically viable: study – by Sarah Rogers (Nunatsiaq News – October 6, 2015)

October 6, 2015

http://www.nunatsiaqonline.ca/

Report calls for next study on $904-million electrical power network

A new study commissioned by the Kivalliq Inuit Association says a project connecting Nunavut’s Kivalliq region to Manitoba’s electrical power grid is economically viable, environmentally beneficial, and should move forward without delay.

The estimated cost of the project, which would extend transmission lines north from Churchill, Man. up the western Hudson Bay coast, is about $904 million, says the new scoping study, prepared for the KIA by engineering firm BBA Inc. and released last month.

But the study suggests the project would pay for itself over its estimated 40-year lifetime, delivering projected savings of $40 million a year by replacing fossil fuels from dirty, expensive diesel generators with cleaner hydroelectric power.

The report, called Hydroelectric Power from Manitoba to the Kivalliq region of Nunavut, says extending the electric power grid “would generation great socioeconomic and environmental benefits for the population of the Kivalliq region and the development of the mineral industry.”

Pacific trade deal good for Sudbury, says Slade -by PRESS RELEASE (Sudbury Northern Life – October 05, 2015)

October 6, 2015

http://www.northernlife.ca/

“The Trans-Pacific Partnership agreement will benefit all of Canada but, we in Greater Sudbury with our strong resource and manufacturing sectors, will see many more doors opened for products and services produced here in Greater Sudbury with our new trading partners” says Fred Slade, Conservative Party of Canada candidate.

Canada’s Conservative Government has signed the Trans-Pacific Partnership (TPP) agreement that will protect and create Canadian jobs, and grow every sector of our economy by giving Canadian businesses access to some of the most dynamic markets in the world.

The TPP is a 12-nation market of almost 800-million consumers with GDP of $28 trillion — over 14 times the size of Canada’s economy. Canada will now be the only G7 nation with free trade access to all of the US and Americas, Europe, and Asia-Pacific continents, that’s over 60 per cent of the world’s economy.

Since 2006, our government has concluded Free Trade Agreements with 44 countries, compared to only five when we took office. “Canada’s mining industry has been a strong advocate for liberalized trade and investment flows for many years,” stated Pierre Gratton, Mining Association of Canada’s (MAC) President and CEO in a release today.

Commodity Collapse Has More to Go as Goldman to Citi See Losses – Luzi-Ann Javier (Bloomberg News – October 5, 2015)

October 6, 2015

http://www.bloomberg.com/

Even with commodities mired in the worst slump in a generation, Goldman Sachs Group Inc., Morgan Stanley and Citigroup Inc. are warning bulls that prices may stay lower for years.

Crude oil and copper are unlikely to rebound because of excess supplies, Goldman predicts, and Morgan Stanley forecasts that weaker currencies in producing countries will encourage robust output of raw materials sold for dollars, even during bear markets. Citigroup says the sluggish world economy makes it “hard to argue” that most prices have already bottomed.

The Bloomberg Commodity Index on Sept. 30 capped its worst quarterly loss since the depths of the recession in 2008. The economy in China, the biggest consumer of grains, energy and metals, is expanding at the slowest pace in two decades just as producers struggle to ease surpluses. Alcoa Inc., once a symbol of American industrial might, plans to split itself in two, while Chesapeake Energy Corp. cut its workforce by 15 percent. Caterpillar Inc. may shed 10,000 jobs as demand slows for mining and energy equipment.

“It would take a brave soul to wade in with both feet into commodities,” Brian Barish, who helps oversee about $12.5 billion at Denver-based Cambiar Investors LLC. “There is far more capacity coming on than there is demand physically. And the only way that you fix the problem is to basically shut capacity in, and you do that by starving commodity producers for capital.”

Government of the Northwest Territories’ (GNWT) proposal to alienate industry – by Gary Vivian (October 5, 2015)

October 6, 2015

http://www.nnsl.com/index.php

A Guest Editorial by Gary Vivian, President of Aurora Geosciences Ltd., in Northern News Services.

It’s said that the road to hell is paved with good intentions. The GNWT’s recent draft conservation plan has “good intentions” but it certainly will take us on a path to economic hell.

The plan – shared predominantly with conservation representatives, not the business community – is misguided, anachronistic and unnecessary. By simply circulating it for discussion, Environment Minister Michael Miltenberger has started that paving job to hell. If allowed to proceed, the plan will further damage our already wounded mining industry’s ability to create the high paying jobs, much needed business spending and royalties and taxes that are much needed by both aboriginal and public governments.

In this post-devolution world, we are expected to be more mature and able to take responsibility for our economic future. Taking such a misguided approach to conservation will alienate our number-one industry from land access and undermine the government’s own economic agenda.