2012 – Page 28 – Republic of Mining

Slow burn [Ring of Fire] – by Eavan Moore (CIM Magazine – November 2012)

November 10, 2012November 9, 2012

http://www.cim.org/en.aspx

Tight markets, limited infrastructure and challenging relationships test the resolve of those exploring the Ring of Fire

From a geological perspective, the Ring of Fire region contains a little something for everyone. Since De Beers’ 2002 discovery of a copper and zinc-rich volcanogenic massive sulphide deposit at Eagle One, explorers have uncovered chromite, nickel, gold, vanadium, iron and platinum group elements in and around the iconic crescent-shaped cluster of claims. But the extensive cash and patience required to operate in Ontario’s far north have turned junior exploration into a waiting game, as a few high-profile projects promise to open up inaccessible land to further development.

The region’s two heavyweights, Cliffs Natural Resources and Noront Resources, are each advancing a major project to the development stage. That does not lend itself to funder-friendly hype for explorers. “Where we are now in the cycle, there’s not as much flaming news coming out,” says Garry Clark, executive director of the Ontario Prospectors Association. And in a generally dry investment climate, he adds, even strong drill results do not seem to move markets.

Operating costs

Exploring in the Ring of Fire – 300 kilometres from the nearest road or rail – takes serious money. Michael Murphy, spokesperson for exploration junior White Pine Resources, sketches out the figures: “Diamond drilling costs are approximately $750 per metre for a small drilling program.

The quest for fire [Ring of Fire] – by D’arcy Jenish (CIM Magazine – November 2012)

November 9, 2012

http://www.cim.org/en.aspx

The rewards will be great for those intent on developing Ontario’s new mining district, but they will not come without plenty of hard work and more than a little patience

When Noront Resources made the first major discovery in the nascent mining region, dozens of junior exploration companies rushed into the formidable terrain of swamps, bogs, muskeg and mosquito-infested boreal forest to stake claims. Located near the shores of McFauld’s Lake, some 550 kilometres northeast of Thunder Bay, the region has yielded three major finds: the Black Thor and Big Daddy chromite deposits, and the nearby Eagle’s Nest nickel-copper-platinum-palladium resource.

Cliffs Natural Resources bought all of Black Thor and owns 70 per cent of Big Daddy. Together, those represent the first major chromite discoveries in North America, and current resource estimates indicate they may be large enough to support multi-generational mines. At the moment, Cliffs intends to develop Black Thor first, and is committed to investing $3.3 billion in that mine and a smelter located at Capreol, just outside Sudbury. Meanwhile, Noront is steadily developing its smaller Eagle’s Nest property close by. However, before either company ships a pound of metal to market, they have some difficult hurdles to clear.

Environmental assessments

Noront has been operating in the shadow of Cliffs, largely because its polymetallic deposits are not judged to be world-class scale, but Noront president and CEO Wes Hanson says the company aims to have an underground mine in production by late 2016 and hopes to be first to produce from the Ring of Fire.

First Nations level racist charges against mining association – by Staff (Northern Ontario Business – November 8, 2012)

November 9, 2012

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

A contentious presentation at a mining symposium has raised the ire of a First Nation group and community. Darryl Stretch, president and CEO of Solid Gold Resources, presented at the Ontario Exploration and Geoscience Symposium put on by the Ontario Prospectors Association (OPA) in Sudbury Nov. 6 and 7.

He has been fighting to resume exploration on his Lake Abitibi area property after an Ontario Superior Court upheld an injunction by nearby Wahgoshig First Nation to cease exploration early this year. The court also ruled that the company did not make an effort to consult with the community despite provincial requests to do so since 2009. Stretch is appealing the earlier court decision and the Divisional Court of Ontario will hear the appeal in January, 2013.

His presentation contained references to First Nations as “hostile third-party governments” and included a cartoon image of First Nation people. His main contention is that the duty to consult First Nations, in relation to exploration, lies with the Crown and not industry.

In response, Nishnawbe Aski Nation (NAN) Grand Chief Harvey Yesno, along with Wahgoshig First Nation Chief David Babin, is calling on the province to withdraw its support and public endorsement of “racist and radical” mining industry representatives, and named the OPA and another group called Mining United.

NEWS RELEASE: Batchewana First Nation wants apology from Ontario Prospector’s Association

November 9, 2012

November 08, 2012

Batchewana First Nation disappointed with Ontario Prospector’s Association

On November 1, 2012, Ontario introduced new rules and tools to the Mining Act to try and balance the interests of the mineral industry, Indigenous Peoples, and private land owners.

Changes in the act attempt to make Indigenous consultation a cornerstone of mineral exploration and mine closure activities.

The Batchewana First Nation is governed by their own law and policies, which include a consultation policy and detailed permitting process that has cultivated positive working relations with several proponents such as Superior Copper Corporation and BluEarth Renewables.

Batchewana First Nation’s Natural Resource department attended the Ontario Prospectors Association’s (OPA) Exploration and Geoscience Symposium on November 7, 2012 where these changes to the Mining Act came under fire.

Solid Gold Resources Corporation President and CEO, Darryl Stretch presented a slide show titled, Deathwatch of the Resource Industry, making claims that the Ontario Government has set mining back to the Stone Age.

Where have all the cowboys gone? PwC on junior mining – by Lawrence Williams (Mineweb.com – November 7, 2012)

November 8, 2012

http://www.mineweb.com/

“Hold on, don’t give up” is the advice from PwC for those junior explorers and miners who have the financial strength to survive the current downturn.

LONDON (MINEWEB) – 2012 has seen turmoil in the TSX-V junior mining market and for many North American juniors it’s now a “matter of life or death” according to the latest survey of the sector from PwC. The top 100 TSX-V juniors in 2012 have seen a 52% decrease in debt and equity financing compared with a year earlier, and their market capitalisation has declined 43%. It’s thus been a pretty torrid time for junior miners as their financing lifeblood dwindles away.

Investors too are deemed to be far more risk averse and wary of the volatile markets. They appear to be looking increasingly to get more out of their holdings with a bias towards dividend payers (virtually no juniors can provide this by their very nature – only one of the PwC Top 100 juniors pays a dividend) or to those who are coming up with creative ways to give increased exposure to high commodity prices.

And 2013 doesn’t look like it’s going to be much better with those with good assets being particularly prone to falling to bigger predators as cash reserves dwindle and even minimal finance remains virtually impossible to raise for some. Bought deals have fallen drastically – from 43% of all equity raised down to 29%.

Barrick now eclipsed by Goldcorp for title of largest market cap – by Peter Koven (National Post – November 6, 2012)

November 8, 2012

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

Barrick Gold Corp. is by far the world’s largest gold producer. It has the most mines and the most reserves. But it is no longer No. 1 where it matters most.

In recent days, Barrick has been eclipsed by Goldcorp Inc. for the title of largest market capitalization in the gold sector. It is an embarrassing development for Barrick, and comes shortly after the company went through a CEO change and reported massive cost escalation at its key growth project.

Goldcorp enjoys a premium valuation that Barrick can only dream of right now. Pawel Rajszel, an analyst at Veritas Investment Research, calculated that Goldcorp trades at 10.7 times forward cash flows, compared to 5.3 times for Barrick. Mackie Research Capital analyst Barry Allan has Goldcorp trading right at net asset value, while Barrick is at a 20% discount.

Their relative valuations prove that production is only a small part of the story when investors compare senior gold miners.

Barrick is aiming to churn out 7.3 to 7.8 million ounces of gold this year, more than triple Goldcorp’s guidance (2.35 to 2.45 million). However, Goldcorp has the better growth profile. While Barrick plans to have a production base of at least eight million ounces by 2015, Goldcorp hopes to reach 4.2 million ounces by 2016, nearly double the current level. And since Goldcorp has much less production, each mine that comes onstream has a greater impact on its earnings and cash flows.

Cliffs still fuzzy on chromite timeline – by Ian Ross (Sudbury Northern Life – November 7, 2012)

November 8, 2012

http://www.northernlife.ca/

Black Thor faces cost pressures, volatile markets, First Nations opposition

The timelines for Cliffs Natural Resources to develop a chromite mining project in the James Bay lowlands still remain somewhat murky.

Bill Boor, Cliffs’ senior vice-president of global ferroalloys, spoke to a Sudbury Chamber of Commerce lunchtime crowd Nov. 6 to outline progress on the massive $3.3-billion Black Thor mine and Capreol furnace project, and also to tamp down reports that the Ohio miner’s development timelines are slipping by one year.

Boor maintains that the company is still shooting for a late-2016 start-up for mining operations, despite earlier comments by his CEO, Joseph Carrabba, that cost pressures and volatile markets could push back the start-up of production to 2017.

BHP starts search for new CEO: report – by Pav Jordan (Globe and Mail – November 8, 2012)

November 8, 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.

Marius Kloppers, the energetic chief executive who led the failed charge by Australia’s BHP Billiton Ltd. to acquire Potash Corp. of Saskatchewan, may soon be a free agent.

The Financial Times said on Wednesday that BHP, the world’s largest diversified miner, has begun its search to replace Mr. Kloppers within the next two years, and the company did not deny the reports.

Succession planning for the CEO and senior management team is an on-going process and one of the most critical tasks of any board,” BHP said in an e-mailed statement, adding that it would not comment directly on the Financial Times story.

“BHP Billiton’s Board has always ensured that it has a well-integrated, continual succession process in place for our most senior executives.” Mr. Kloppers, who grew up in apartheid South Africa where he was conscripted into the army at the age of 18, became BHP’s CEO in late 2007, just as the first wave of the financial crisis was washing over global commodity markets.

Now 50, Mr. Kloppers has had a rough ride of it, failing in some key attempts to grow the already giant company through high profile acquisitions that ultimately fell through.

Wahgoshig First Nation – Ontario sending misguided message to First Nations – NNL Staff (NetNewsLedger.com – November 7, 2012)

November 8, 2012

http://www.netnewsledger.com/

SUDBURY – Mining News – Wahgoshig First Nation Chief David Babin with support from Nishnawbe Aski Nation (NAN) Grand Chief Harvey Yesno is calling on Ontario to withdraw its support and public endorsement of racist and radical industry representatives, particularly members of the Mining United group and the Ontario Prospectors Association.

“Representatives of this radical association of junior mining groups has waged a racist media campaign against the Wahgoshig First Nation, who are taking a legal and principled position to defend their Treaty and aboriginal rights, as well as ensuring that Ontario meets its obligations on ‘the duty to consult’ in good faith,” said Grand Chief Yesno. “The Province of Ontario and the Ministry of Northern Development and Mines continue to send a misguided message to First Nations by supporting this group.”

Mr. Darryl Stretch who represents Mining United, and Solid Gold Resources Corporation is presenting at the 2012 Ontario Exploration and Geoscience Symposium (OEGS) to be held in Sudbury, ON November 6 and 7 2012. The Ontario Exploration & Geoscience Symposium is coordinated by the Ontario Prospectors Association with workshops, a variety of technical presentations and exhibits.

Of concern to NAN is the continued support of Minister Rick Bartolucci for the Ontario Prospectors Association (OPA), who will have a full line up of MNDM staff alongside Mr. Darryl Stretch who is scheduled to present directly to the symposium delegates. Mr. Garry Clark, Executive Director of the OPA, member of the Minister of Mines Mining Act Advisory Committee and the Ontario Geological Survey Advisory Board has also stated publicly that Mining United may become a subcommittee of the OPA organization.

Ring of Fire rail plan adds new twist to old debate – by Shawn Bell (Wawatay News – November 7, 2012)

November 8, 2012

Northern Ontario’s First Nations Voice: http://wawataynews.ca/

Figuring out how to link the proposed Ring of Fire mines to market has been a long standing debate. Whether ore should travel east-west or north-south has been the primary discussion, with stakeholders across the spectrum weighing in on which way is best.

Through it all, the idea of using a railway instead of a road has been kept quietly on the backburner. Now a new coalition of unlikely partners is trying to bring the rail option to the forefront.

In what it calls a New Deal for northern Ontario, a group led by the James Bay Lowlands Ports and Trustee Corporation (JBLPTC) has proposed an ambitious, publically-owned transportation corridor that would tie the Ring of Fire to existing northern Ontario railway lines while taking over control of the Ontario Northern Transportation Company (ONTC) and continuing passenger rail services from James Bay to the south.

The plan is in its early stages. The JBLPTC still needs approval by the federal government under the Canada Marine Act to officially operate as a port. And even if it gets that federal approval, the organization needs Ontario to grant it control over the existing ONTC, while finding financial backing to build a new rail line from Nakina to the Ring of Fire.

But Roy Haines, CEO of the JBLPTC, is optimistic that the plan can not only get off the ground, but that it can succeed in spreading the benefits of the Ring of Fire across a wider group of stakeholders and keep the infrastructure publically-owned.

Critics say Liberals need to do more – by Star Staff (Sudbury Star – November 8, 2012)

November 8, 2012

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

The Liberal government needs to do more to get the so-called Ring of Fire back on track, Conservative’s Northern Development and Mines critic charged Wednesday.

Norm Miller, who is also the MPP for Parry Sound-Muskoka, said in a release he was disappointed Cliffs Natural Resources announced last week it would push back production at its Black Thor chromite mine to 2017.

Cliffs, a Cleveland-based company, had planned to begin production at Black Thor in Northwestern Ontario by 2015. The company also plans to build a smelter to process chromite, which is used to harden steel, in Capreol.

Miller said this and other Ring of Fire projects have the potential to create new jobs, but the provincial government has mishandled its development.

“Exploration work in the Ring of Fire has ground to a halt,” Miller said in a release. “You would think the Liberal government would be doing all they could to keep work going, especially with all the jobs and investment potential that are at stake as their $15-billion deficit hangs over the province and 600,000 Ontarians still find themselves out of work.

Exploration sector ‘still vibrant’ – by Heidi Ulrichsen (Sudbury Northern Life – November 7, 2012)

November 8, 2012

http://www.northernlife.ca/

Commodity price woes cause small activity dip

With the recent dip in commodity prices, exploration activity has fallen since last year, but not by much, according to the executive director of the Ontario Prospectors Association.

“In 2011, there was $1 billion for exploration and development spent in the province,” said Garry Clark. “This year they estimate it’s just over $900 million. We’ve gone down a bit, but it’s still very vibrant and employing a lot of people around the North.”

Members of the association gathered in Sudbury Nov. 6-7 for the Ontario Exploration and Geoscience Symposium, listening to speakers and browsing the booths at a trade fair at the Steelworkers Hall.

Vale’s former boss Agnelli eyes Guinea potential again – by Clara Ferreira-Marques (UK Reuters – November 7, 2012)

November 8, 2012

http://uk.reuters.com/

Nov 7 (Reuters) – A mining venture co-founded by the former boss of Vale, Roger Agnelli, is among suitors eyeing BHP Billiton’s slice of the Mount Nimba iron ore deposit in Guinea, sources familiar with the matter said.

Other suitors for BHP’s share of the joint venture that holds the Nimba mining concession include the world’s largest steelmaker ArcelorMittal, which has a mine just over the border in Liberia, the sources said.

A dealmaker by background, Agnelli is staging a return to West Africa with billionaire banker Andre Esteves. Two years ago, Agnelli led Brazilian miner Vale’s push into Guinea, controversially taking a stake in iron ore assets that included blocks of the Simandou deposit confiscated by the government from rival Rio Tinto.

Agnelli, 53, was ousted from Vale last year after a decade at the helm. Analysts said his plans for a multinational Vale, did not chime with the Brazilian government’s own, more nationalistic view.

He is returning to mining and Guinea through B&A Mineracao, a partnership between his venture AGN Participacoes and Esteves’ investment bank BTG Pactual Group, just after Vale’s new bosses shelved their major commitment in the country.

Miners racist, natives charge – by Sebastien Perth (Sudbury Star – November 8, 2012)

November 8, 2012

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

Mining companies looking to work on First Nations territory should be better educated about native rights to prevent some of the racist treatment First Nations leaders charge their members have had to endure.

Dave Babin, chief of the Wahgoshig First Nation north of Kirkland Lake, singled out one company, and its president in particular, for criticism during a press conference in Sudbury on Wednesday.

Solid Gold Corporation president Darryl Stretch faced an injunction in January to stop his company from drilling near Lake Abitibi, while he consulted with the Wahgoshig First Nation.

In a Globe and Mail interview published in March, Stretch said the First Nation wanted him to pay $100,000 for a study to see if his company’s drilling went over any burial grounds.

“It’s not my obligation to go find arrowheads for those people, period,” he told the Globe. “If they don’t like you, you don’t work. What kind of deal is that? Because I didn’t do it right, the way the Indians wanted me to? Because I didn’t give them money? Because I didn’t beg them for permission to go? It’s just ridiculous, the whole concept.”

First Nations level racist charges against mining association – by Northern Ontario Business staff (November 7, 2012)

November 8, 2012

Wahgoshig First Nation Chief David Babin and Nishnawbe Aski Nation (NAN) Grand Chief Harvey Yesno are calling on the province to withdraw its support of the Ontario Prospectors Association (OPA) and an industry fringe group for what they term a campaign of “racism” against First Nations.

“Representatives of this radical association of junior mining groups has waged a racist media campaign against the Wahgoshig First Nation, who are taking a legal and principled position to defend their treaty and aboriginal rights, as well as ensuring that Ontario meets its obligations on the duty to consult in good faith,” said Grand Chief Yesno in a Nov. 7 statement.

Babin and NAN were outraged by a presentation made by Darryl Stretch, president of Solid Gold Resources, at the Ontario Exploration and Geoscience Symposium in Sudbury on Nov.7. The annual event is hosted by the OPA and contains a significant provincial government presence.

Stretch is the midst of an ongoing, heated legal dispute with the Wahgoshig First Nation over an exploration drilling program at his Lake Abitibi gold play in northeastern Ontario.