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Year: 2012

Pierre Lassonde’s Keynote Address at the Denver Gold Forum (September 10, 2012)

Hosted each September in Colorado, the Denver Gold Forum (DGF) is the world’s most prestigious precious metal equities investment forum. The Denver Gold Forum showcases four-fifths of the world’s publicly traded gold and silver companies when measured by production and reserves.

For a video presentation of the speech, click here: http://www.gowebcasting.com/events/denver-gold-group/2012/09/10/keynote-address/play/stream/5084

Pierre Lassonde Speech

Thank you, Tim. It’s a great pleasure to be here. I’ve been coming to the Denver Gold Show for as long as it’s been around, so 20-some-4 years, I guess. And it’s always one of the preeminent forums for our industry.

So, I thought what I would do today is I’ve entitled my presentation “It Was the Best of Times, It Was the Worst of Times” and it has to do, really, with where we are in the industry. When you look at the last 30 years, if you want, this bull market in gold started in 1971; gold went from $35 to $800 in the 70’s.

You can see it took about seven years for the industry to respond, but then respond it did. Production then more than doubled over the following 20 years while the gold price kept going down for 20 years, interestingly enough. But we see the same pattern again. We’ve had seven years of downturn in the production, but then finally last year in 2011 we are back up now at the same level as we were back in 2000.

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More mineral riches from the smoky waters of Minnesota – by John Chadwick (International Mining – November 2012)

International Mining is a global technical magazine written for miners by miners. John Chadwick is the publisher. john@im-mining.com 

Ore riches that built America have much more to offer. Minnesota’s Iron Ranges to the west of Lake Superior – Vermilion, Mesabi and Cuyuna from the northeast of Duluth down to the south-southwest – have been the most important ore deposits in US history, and continue to be so, providing well over 90% of the iron ore the country needs. Just a few of the great historical landmarks include the establishment, in 1901, of the world’s first multi-billion dollar corporation, US Steel.

Before that, in May 1890, Edmund Longyear (founder of one of the companies that was to become, much later, Boart Longyear) brought the diamond drill to the Iron Ranges. This exploration tool was to be a key to unlocking the riches of the region.

There was also the Minnesota Mining and Manufacturing Co (3M) founded in 1902 at the Lake Superior town of Two Harbors. However its only connection with the Iron Ranges was location. The deposit was set up to mine for grinding-wheel abrasives proved to be of little value.

William Boeing made profits from the Mesabi Range and just a few other great names with Iron Ranges associations include Henry Bessemer, Frederick Weyerhaeuser, Andrew Carnegie, John D. Rockefeller, Kelsey D. Chase, and J.P. Morgan.

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No racism in mining firm’s actions with native band – by Peter Best (Opinion Letters) (Sudbury Star – November 24, 2012) Wednesday, November 14, 2012

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

Re: Miners racist, natives charge — Nov. 8.

This article was shockingly unfair and inaccurate towards Solid Gold Resources. Wahgoshig Chief Dave Babin says his band is taking a legal and principled position to defend their rights. That’s fine. But when Solid Gold takes a legal and principled position to defend their rights, he disgracefully accuses it of waging a “racist media campaign” against them, the better to shut down free speech on this important issue and avoid any critical inquiry of his and his band’s behaviour.

And Chief Babin’s assertion that the Ontario government is somehow supporting Solid Gold in this is false. The Ontario government allied itself with Wahgoshig in the original injunction proceeding, where it was Wahgoshig and the Ontario government on the one side, and little Solid Gold on the other (its shares are now trading at under three cents thanks to Wahgoshig and Ontario).

Solid Gold sought and was granted leave to appeal the injunction ruling. In its court filings, the Ontario government again supported Wahgoshig, arguing that it, and therefore its de facto delegatee, Solid Gold, had a duty to consult Wahgoshig, which Solid Gold failed to meet. Solid Gold argued, as was its right, that it didn’t have a duty to consult — that the 2004 Supreme Court judgment referred to in the article, (called Haida Nation), did not extend through the Crown to exploration companies like Solid Gold with already-existing rights under previously and validly staked claims.

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Neighbours feel pit decision less than golden – (Timmins Daily Press – November 13, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The location of the Hollinger pit continues to polarize opinions regarding Goldcorp’s mining project on the site.

With no assurance in place to protect potential property devaluation or damage over the next decade of mining on the site, nearby residents and business owners are still fuming over city council’s decision to green-light the project on Monday.

“I think there were methods that could have been put in place to allow everyone to benefit,” said Lorne Feldman, owner of Feldman Timber and the industrial development it’s located in, off Algonquin Blvd. E. Businesses in the development include Shoppers Drug Mart, A&W and the Timmins Family Health Team clinics.

“That could have provided the protections necessary to adjacent land owners, and also allow this very worthwhile project to move forward.”

Rick Dubeau of the Hollinger Project Community Advisory Committee (HPCAC) and Bill Hughes, owner of Senator Place apartments, have been raising concerns for the past few weeks in city council, most recently in presentations prior to Monday’s decision.

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BHP Billiton breaks its diamond engagement – by Pav Jordan (Globe and Mail – November 14, 2012)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

BHP Billiton Ltd. is out of the diamond business, fed up with prolonged dull prices for gemstones and few opportunities to improve profit margins.

The world’s largest diversified miner said on Tuesday it sold its controlling stake in Ekati, Canada’s first ever diamond mine, to diamond retailer Harry Winston Diamond Corp. for $500-million (U.S.), well below what analysts expected. Billiton’s diamond-marketing operations are also included in the sale.

The deal follows an 18-month lull in diamond prices that began after a darkening global economic outlook left speculators holding gems collected in anticipation of a stronger recovery after the 2008-09 financial crisis. Harry Winston itself, which owns a 40-per-cent stake in the Diavik mine near Ekati, saw average diamond prices drop 10 per cent in the latest fiscal quarter, when profit was cut in half. Rio Tinto PLC owns the remainder of Diavik, and has said it may also seek a buyer for its share in the mine.

More than just a sale, the Ekati transaction marks the end of an era for Canadian diamond mining, ushered in when BHP completed the mine in 1998 just as consumer backlash grew against so-called blood diamonds produced in war zones in Africa where much of the world’s diamond wealth originates.

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[International Energy Agency] Anti-markets drivel – by Peter Foster (National Post – November 14, 2012)

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

Predicted U.S. oil boom no threat to Canada

There is more for Canada to celebrate than bemoan in the U.S. oil boom highlighted by the International Energy Agency’s latest World Energy Outlook. The boom will provide a welcome boost to the economy of our most important trading partner. It will also provide benefits to our service industry. If there is any threat to Canadian exports to the U.S., it comes not from increased U.S. production but the policies of President Obama.

According to the IEA, U.S. oil output is set to surpass that of Saudi Arabia by the early 2020s. “[O]ne remarkable feature of the market, to which we draw attention this year,” declares the report, “is an energy transformation in the United States. Due to a combination of new technology, free markets and policy action, the United States is well on the way to becoming self-sufficient in energy, in net terms.” But it’s only remarkable if you don’t believe in free markets or human ingenuity. You won’t find the words “free market” anywhere else in this 690-page digital doorstop.

While U.S. oil production is projected to grow, the U.S. will continue to be a major oil importer. Canada, after all, is more than self-sufficient in oil but still imports, mainly to Eastern markets. The U.S. boom in North Dakota is certainly having an impact on Canadian export revenues, but that is because of a bottleneck at Cushing, Okla., which is being addressed by new pipelines to the Gulf Coast.

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Ontario continues to be a global mining leader and expects great things from the ‘Ring of Fire’ – by John Chadwick (International Mining – December 2012)

International Mining is a global technical magazine written for miners by miners. John Chadwick is the publisher. john@im-mining.com 

In November I wrote about one of America’s greatest mining states, Minnesota. This month I and my attention wander across the border to perhaps an even more important region in the global mining industry, Ontario.

In its far north is the Ring of Fire mining camp. At this early stage, Cliffs Natural Resources is looking at an operation there to treat 4.4 Mt/y of crude ore, expected to produce up to 2.3 Mt/y of chromite concentrate. Noront Resources is more into nickel-copper-PGMs – 1 Mt/y throughput producing approximately 150,000 t/y of high grade nickel-copper concentrate containing significant platinum and palladium.

KWG Resources, one of the first players in the area, has earned a 30% interest in the Big Daddy chromite deposit, which, at a 15% cutoff, has a Measured resource of 29.5 Mt, grading 29% Cr2O3. The Indicated resource is 7.9 Mt grading 26.7% Cr2O3, and there are 4.8 Mt Inferred, grading 25.0% Cr2O3. By comparison, Outokumpu’s Kemi mine in Finland has ore reserves of 41.1 Mt averaging 24.5% Cr2O3. The much higher grades of the Big Daddy compare favourably with those deposits whose ore is shipped directly to foundries with minimal processing. This potential is being investigated.

Ontario has 42 operating mines today and is the largest producer of non-fuel minerals in Canada (21% of the nation’s total non-fuel production, worth over C$10.7billion in 2011).

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Osisko buying Queenston Mining in all-stock deal – by Craig Wong (National Post – November 13, 2012)

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

Canadian Press – Osisko Mining Corp. signed an all-stock deal Monday valued at $550-million to buy Queenston Mining Inc. and its flagship Upper Beaver project in Ontario’s Kirkland Lake region.

Osisko president and chief executive Sean Roosen said work on the Upper Beaver project is coming to a critical stage in its development. “We feel this is the perfect time for us to bring our mine permitting and development teams into the project to back the plan and to make Upper Beaver a successful mine,” Mr. Roosen said on a call with analysts.

“We also have the ability to fund Upper Beaver development from internal cash flow so we don’t anticipate any further dilution as we evolve these projects.”

Queenston also owns several other gold properties in the Kirkland Lake gold camp area as well as interests in projects in Quebec, Manitoba and elsewhere in Ontario.

Queenston president and CEO Charles Page said the Upper Beaver project has the potential for four million ounces of gold. “Osisko’s proven development team can certainly maximize the potential of the Upper Beaver project,” he said.

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Correction: Given platinum’s problems, can Xstrata really justify a Lonmin takeover? – by Lawrence Williams (Mineweb.com – November 12, 2012)

http://www.mineweb.com/

Speculation that Xstrata will make another attempt to oust the Lonmin Board and take the company over remains rife in London, despite Lonmin’s rebuff of the Xstrata overtures. (Correction on Lonmin rights issue status)

LONDON (MINEWEB) – Despite an official rebuff by the Lonmin Board, Xstrata looks as though it may well be about to make a serious play to take over Lonmin and its South African platinum mines – although the timing could be better for the diversified miner with the Glencore merger vote coming up in just over a week’s time – just a day after Lonmin’s own proposed fundraising plan is due to be voted on.

Xstrata is a logical saviour for Lonmin, although the latter doesn’t seem to think so. It owns 24.6% of Lonmin already, has platinum, chrome and ferrochrome operations in the Bushveld Complex area – where 90% of the world’s platinum reserves are thought to lie and which accounts for 70% of annual global production – but is not a major platinum miner and could view picking up the remainder of Lonmin at a relatively cheap price as an attractive long term play.

It is sitting on a huge loss on its existing holding, but nevertheless probably sees Lonmin’s platinum reserves, resources and operations as a great long term asset, particularly at Lonmin’s current hugely depressed share price. But, perhaps importantly if it doesn’t take up its rights, a large proportion of the the Lonmin fundraising could remain with the underwriters – even though the rights issue price has been set at a substantial discount to make it more attractive to existing shareholders.

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Perhaps golfers should be thanking miners

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

As the last leaves fall from the trees and we head into winter, all golfers should perhaps take a little time to thank mining. Yes, before heading to the first tee, or when you are lining up your next putt, or storing your clubs for the winter think about what enables you to play this game. Without mining, there are no pars, birdies or bogeys.

We know mining provides us with the building blocks essential to society in the 21st century. Our modern communications, transportation, electrical, business, health care and educational systems could not exist without products from mining. But mining is also vital to recreation — fun.

Canada, on a per capita basis, has more golfers than any other country in the world. In Canada, approximately six million people play, or attempt to play, golf on a regular basis. In Ontario, there are 2.3 million golfers, more than any other province. Canadians will play 90 million rounds of golf this year and spend more than $1 billion in green fees alone. Add in clothing, equipment, carts, lessons and refreshments for rehydration and it is multi-billion dollar activity.

Golf is big business in Canada. There are about 2,500 golf courses in the country. Each facility has an average of 31 employees – at least on a seasonal basis. Average annual capital expenditures per course can be in the $250,000 range and operating budgets can be more than $500,000 at each course.

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[Timmins] Council approves [Goldcorp] pit plan – by Benjamin Aubé (Timmins Daily Press – November 12, 2012)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – City council unanimously approved the site plan agreement for the Hollinger Project on Monday, giving Goldcorp formal permission to proceed with the open pit mining operation that was first proposed back in 2007.

The decision did come after Bill Hughes, owner of the Senator Place apartments, and Rick Dubeau of the Hollinger Project Community Advisory Committee (HPCAC) expressed concerns they said are still being raised by the public.

Hughes, representing reportedly close to 250 people living at the Senator apartments and other locations within 300 metres of the pit, said that there are still many questions left unanswered about the project, despite the many reports and committees that have raised concerns.

“The plan of action should be to step back, consider what (HPCAC) has said, what I have said, what engineers have said, what environment lawyers have said,” expressed Hughes, when asked what he thought the proper course should be.

He asked, “Are we there or are we not there?”, expressing confusion as to whether any action was being taken despite the city’s comments that the public was being fully engaged in the process.

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Canada sees risk in U.S. oil boom – by Shawn McCarthy and Nathan Vanderklippe – (Globe and Mail – November 13, 2012)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA, CALGARY – The United States is on track to become the world’s biggest oil producer by the end of the decade, a stunning turn of fortune that threatens to stifle the growth prospects of Canada’s oil exporters.

America’s rising oil output is “nothing short of spectacular” and will exceed that of Saudi Arabia or Russia by 2020, the International Energy Agency said in a report that starkly illustrates why the Canadian industry – and the federal and Alberta governments – are determined to build pipelines that would serve Asian markets.

The U.S. currently imports about 10 million barrels per day of crude, and Canada accounts for nearly 30 per cent of that total. But oil companies are using new technologies to extract vast amounts of crude from the U.S. Midwest. The IEA forecasts the Americans will be producing 11.1 million barrels per day by 2020, up from 8.1 million last year.

At the same time, the IEA expects American demand for petroleum products to decline significantly. The double-edged forecast has the potential to cause upheaval in the oil patch in Western Canada, which drew $40-billion in investment last year and is a major driver of economic growth and jobs in the country.

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Canada must get its oil to emerging markets – by John Ibbitson (Globe and Mail – November 13, 2012)

Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA – Canada may be unique among nations: It possesses a scarce and valuable resource hugely in demand that it’s unable or unwilling to sell, putting the country’s economic future at risk.

This conclusion arises out of World Energy Outlook 2012, published Monday by the Paris-based International Energy Agency. The report projects a radically different energy future from the conventional assumptions that many Canadians still embrace.

“Energy developments in the United States are profound,” the report observes. Hydraulic fracturing and other unconventional forms of extraction, coupled with improving energy efficiency, will make the world’s largest economy also the world’s biggest oil producer by the end of the decade.

Within two decades, the U.S. will be virtually energy self-sufficient and a net oil exporter. The most reliable market for Canadian oil could soon become much less reliable. Even if President Barack Obama does approve the revised Keystone XL pipeline proposal next year, a continued American market for oil sands bitumen is uncertain.

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NEWS RELEASE: OSISKO ANNOUNCES FRIENDLY ACQUISITION OF QUEENSTON

November 12, 2012

MONTREAL, QC and TORONTO, ON – November 12, 2012. Osisko Mining Corporation (“Osisko”) (TSX:OSK) (FRANKFURT:EWX) and Queenston Mining Inc. (“Queenston”) (TSX:QMI) (OTCQX:QNMNF) are pleased to announce that they have entered into a definitive agreement (the “Agreement”) pursuant to which Osisko will acquire, by way of a court-approved plan of arrangement, all of the issued and outstanding common shares of Queenston. Queenston is a Canadian mineral exploration and development company with a primary focus on its holdings in the historic Kirkland Lake gold camp comprising 230km2 of prime exploration lands on trend with Osisko’s flagship Canadian Malartic mine.

Pursuant to the terms of the Agreement, Queenston shareholders will receive 0.611 of an Osisko share for each common share of Queenston held, implying an offer of C$6.00 per share based on Osisko’s closing price on the Toronto Stock Exchange (“TSX”) on November 9, 2012. The offer represents a 45% premium to Queenston’s 30-day volume-weighted average price (“VWAP”) for the period ending November 9, 2012.

The transaction values Queenston’s equity at approximately C$550 million on a fully diluted in-the-money basis and implies an enterprise value of approximately C$400 million. Pro forma the transaction, Queenston shareholders will own approximately 12% of Osisko (based on fully diluted in-the-money shares outstanding).

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Canada’s future is bright, to lead G7 in growth in next 50 years: OECD – by Julian Beltrame (Winnipeg Free Press – November 9, 2012)

http://www.winnipegfreepress.com/

“For Canada, it’s a fairly young population, fairly well-educated workforce
and you have all these natural resources that give you higher growth than
other countries,” said Matthias Rumpf, a spokesman with the organization.

The Canadian Press – OTTAWA – The 21st century may not exactly belong to Canada, but according to a major world economic body the country is going to do pretty well. In fact, the Paris-based Organization for Economic Co-operation and Development sees Canada among the world’s leading economic lights over the next 50 years.

In issuing its long-term view of how it expects world economies to unfold, the OECD says Canada will continue to lead the Group of Seven industrialized economies in average annual growth over the next half century.

And it will also be near the top on a per-capita basis — possibly a truer measure of success — with only Japan sneaking ahead.

The economic research organization, which represents most of the world’s biggest industrialized economies, predicts Canada’s real gross domestic product will average 2.2 per cent growth in the next half century.

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