Canada Mining – Page 217 – Republic of Mining

TMAC Resources Inc launches $105 million IPO – by Peter Koven (National Post – June 2, 2015)

June 2, 2015

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

TORONTO — Canada’s initial public offering craze is finally seeping into the mining sector, as TMAC Resources Inc. has launched the sector’s first significant IPO in many months.

The Toronto-based company, which is named after its well-known executive chairman Terry MacGibbon, is planning to raise $105 million, according to a preliminary prospectus filed with regulators. TMAC’s underwriters plan to sell 52.5 million shares at $2 each, with an option to sell up to 7.875 million additional shares if demand is strong enough. The stock will list on the Toronto Stock Exchange.

TMAC owns the Hope Bay project in Nunavut, a massive undeveloped gold deposit. U.S. gold giant Newmont Mining Corp. acquired the project for $1.5 billion in 2007, but was never able to put forward a good development plan and eventually wrote it down. That paved the way for TMAC, an upstart company, to acquire it in 2013.

Last month, TMAC completed a pre-feasibility study on Hope Bay that projected a capital cost for the project of $206 million. The study found that the mine would have a net present value of $626 million at a gold price of US$1,250 an ounce.

Canadian Extractive Sector Transparency Measures Act comes into force – by Henry Lazenby (MiningWeekly.com – June 1, 2015)

June 1, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Canada’s new rules governing extractive sector transparency came into effect on Monday, forcing all extractive companies subject to the Act to report payments including taxes, royalties, fees, and production entitlements of $100 000 or more to all levels of government in Canada and abroad.

Canada’s Natural Resources Minister and Minister for the Federal Development Initiative for Northern Ontario Greg Rickford on Monday said that the ‘Extractive Sector Transparency Measures Act’ (ESTMA) was a multilateral mandatory reporting initiative that would help to ensure that Canada’s resource industries continued to prosper and to provide the broad economic benefits that were fundamental to Canada’s success.

The ESTMA followed through on the federal government’s commitment with its G7 counterparts to improve transparency and accountability of payments made by the extractive industry to all levels of government.

The eurozone had already developed similar legislation, which the UK had adopted late last year, with transparency directives to follow soon. The directives required oil, gas, mining and logging companies to publicly disclose the payments they made to governments to extract natural resources.

Fortune Lost: The short, brutal and costly ride of China Investment Corp. in Canada – by Peter Koven and Claudia Cattaneo (National Post – May 29, 2015)

May 29, 2015

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

As May 19th, 2015 approached, China Investment Corp. was faced with a scenario that every pension or sovereign wealth fund dreads: whether to allow one of its key investments to live or die.

SouthGobi Resources Ltd. has become a sad story in Canada’s mining sector. The Vancouver-based company, which operates in Mongolia, is almost entirely out of cash. Its operations are deep in the red. Its CEO recently resigned. And a Mongolian court this year fined the company US$18.2 million in a very dubious tax-fraud case.

SouthGobi had a US$7.9 million interest payment coming due to China Investment Corp. (CIC) on the 19th that it was in no position to pay. State-owned CIC had two options, neither very attractive: call the loan and potentially force SouthGobi into creditor protection, or defer the payment and let the company stagger along for another couple of months trying to seek rescue funding. Not surprisingly, CIC chose the latter.

The mess at SouthGobi is just the latest misfortune among several significant bad calls CIC ended up making in its investments in Canada. Since beginning to stake major capital here six years ago, the corporation’s short experience in Canada is a story of lousy timing, costly miscalculations, and an investment strategy too vulnerable to the allure of speculative ventures talked up by sophisticated stock promoters — and not enough on conservative plays better able to withstand volatile commodity markets.

Editorial: Making the case for subsidizing Arctic work -Editorial (Northern Miner – May 28, 2015)

May 29, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Five industry groups focused on mining and mineral exploration in northern Canada have produced a timely report that quantifies the extra costs of carrying out work in Canada’s remote Arctic and sub-Arctic areas, and makes recommendations on how various levels of government can encourage mining activity in these places.

Called Levelling the playing field: Supporting mineral exploration and mining in remote and northern Canada, the report was produced by the Association of Consulting Engineering Companies Canada, the Mining Association of Canada, the Northwest Territories and Nunavut Chamber of Mines, the Prospectors & Developers Association of Canada and the Yukon Chamber of Mines.

They describe a “hefty cost premium” associated with working in remote and northern parts of Canada, and the challenges that industries in southern Canada don’t have to face: remoteness, severe weather, undeveloped infrastructure, and in many cases, sparse or no populations for hundreds of kilometres.

The main — and not particularly surprising — finding, backed up by empirical evidence, is that the “cost premium for both exploration and mining is directly linked to the transportation deficit” in remote and northern Canada, and that the “primary driver of cost variation was the distance of a project from the transportation infrastructure required to service the needs of the project.”

Nine Months After Polley Breach, Alaskans Seek Compensation Guarantee from BC – by Jordan Wong (TheTyee.ca – May 29, 2015)

May 29, 2015

http://thetyee.ca/

Proposed northern BC mines ‘source of great angst in Juneau.’

Earlier this month, Heather Hardcastle, a commercial fisherwoman from Juneau, Alaska met in Williams Lake, B.C. with members of the Tsilhqot’in First Nation. They shared a meal of wild Alaskan salmon that Hardcastle brought as a symbolic gesture: This fish was a reminder of all there was to lose.

After lunch, Hardcastle and her team of Alaska visitors boarded a helicopter and flew 25 minutes away to the site of the Mount Polley accident, the scene of a massive breach last August of its mine waste dam near the town of Likely, B.C.

The breach released millions of cubic metres of contaminated water into Quesnel Lake, which feeds into the Fraser River.

Nine months later, Jacinda Mack, a Xatsull woman from the Soda Creek reserve and one of many residents living near the path of the spill, invited the Alaskans to Williams Lake to see firsthand the main effect of that accident.

On the Fraser River, contamination from the mine breach threatened the run of Sockeye salmon that spawns in Quesnel Lake.

Can John Thornton save Barrick Gold? – by Racheelle Younglai (Globe and Mail/Report On Business Magazine – May 29, 2015)

May 29, 2015

The 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.

A floor of empty cubicles is what’s left of Barrick Gold Corp.’s boom years. A lone whiteboard leans against a chair, the last vestige of hundreds of people who worked at the miner’s Toronto headquarters when gold was hurtling toward $1,900 an ounce (all currency in U.S. dollars unless otherwise noted).

The world’s biggest gold producer—one of Canada’s few global champions and formerly the envy of the mining industry—is on a desperate mission to recapture its magic after years of dismal results, humiliating missteps and rock-bottom investor confidence. Its share price on the NYSE is not much higher than where it was two decades ago.

The three-year slump in bullion prices to around $1,200 an ounce has devastated the industry. Mines that used to be profitable are now bleeding cash. In these conditions, Barrick’s every blunder—an ill-timed foray into copper, an attempt to build a mountaintop mine in the Andes—is exposed on its balance sheet, particularly in one remarkable number: Debt stands at $13 billion.

The company is vowing to cut that figure by at least $3 billion by the end of this year, even if it has to sell an heirloom or two to get there. A slew of top-rank Barrick veterans are gone and the company’s charismatic founder, Peter Munk, retired as chairman in April, 2014.

Many Mines Put Up for Sale, but Buyers Are Scarce – by Scott Patterson and John W. Miller (Wall Street Journal – May 28, 2015)

May 28, 2015

http://www.wsj.com/

Drought of deals reflects low commodity prices, low quality of assets on the block

Miners across the world want to sell off their mines, but they have a problem: Almost no one wants to buy them.

Some veteran bankers in the mining industry say they are seeing the longest drought of deals in their careers. The rut is caused by a commodity price rout with little sign of recovery, low-quality assets on the block and a focus on shareholder returns—not acquisitions—from industry giants like BHP Billiton PLC and Rio Tinto PLC.

Deal volumes in 2014 fell 23% to 544 from the previous year, the lowest amount since 2003 and the fourth straight year of declines, according to Ernst & Young. Deals during the past decade peaked in 2010, when 1,123 were completed amid a China-fueled boom in prices. In the first quarter of 2015, the value of mergers and acquisitions in the mining industry globally fell 18% to $5.9 billion, from $7.2 billion a year ago, Ernst & Young said.

The paucity of mining deals, amid a broadly roaring M&A market, comes as prices for commodities such as iron ore, aluminum and copper are trading at near six-year lows. Other metals like nickel and zinc are being weighed down by lackluster demand.

Barrick investors welcome Chinese tie-up, debt reduction moves – by Nicole Mordant and Euan Rocha (Reuters U.S. – May 26, 2015)

May 28, 2015

http://www.reuters.com/

VANCOUVER/TORONTO – Barrick Gold Corp’s first step to long-promised partnerships with China, as well as progress in reaching an ambitious debt-cutting goal, are turning skeptical investors warmer toward the world’s biggest gold miner.

Barrick said on Tuesday it would sell a stake in its Porgera mine in Papua New Guinea mine to China’s Zijin Mining Group, and form a strategic partnership with Zijin. The moves marked an initial push in Executive Chairman John Thornton’s plan to forge closer ties with China, the world’s biggest producer and consumer of gold.

The former Goldman Sachs executive’s radical overhaul since taking Barrick’s reins a year ago, including eliminating the position of chief executive, had raised eyebrows among investors. Many also complained about his outsized signing bonus, lack of access, and most recently his 36 percent pay rise.

But a clearer strategy unveiled in February to slash Toronto-based Barrick’s mountain of debt, while seeking close links with China, looks to be winning approval.

NEWS RELEASE: Teck Responds to Steelmaking Coal Market Conditions

May 28, 2015

May 28, 2015 – Vancouver, B.C. – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) announced today it will be implementing temporary shutdowns in the third quarter at its six Canadian steelmaking coal operations in order to align production and inventories with changing coal market conditions.

Each of Teck’s steelmaking coal operations will be temporarily shut down for approximately three weeks in the quarter. Shutdowns will be staggered over the summer months among the operations. Teck will continue to meet all contracted and committed coal sales for its entire suite of products.

Third quarter production will be reduced by approximately 1.5 million tonnes (Mt) to 5.7 Mt, a reduction of 22% for the quarter, with expected sales in the range of 6.0 – 6.5 Mt. Annual coal production is now estimated at 25 – 26 Mt. Additional coal production adjustments will be considered over the course of 2015 as market conditions continue to evolve.

Guidance for unit operating and distribution costs for the year is unchanged. Capitalized stripping is expected to be about $65 million lower than original guidance reflecting lower coal production and reduced stripping costs this year due to lower diesel costs and productivity improvements since the start of the year.

Vale may sell potash assets in Saskatchewan – by Rachelle Younglai and Niall McGee (Globe and Mail – May 28, 2015)

May 28, 2015

The 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.

As Brazil’s Vale SA figures out what to do with its fertilizer business, the mining giant is thought to be testing the waters on a potential sale, according to people familiar with the matter.

In addition to potash mines in South America, the Brazilian mining company owns a big potash development project and slew of fertilizer concessions in Saskatchewan, the world’s biggest producer of potash – a crop nutrient.

“There has been a lot of chatter that Vale is possibly considering selling their fertilizer business. If you are preparing your assets for sale, you want to increase the value of your portfolio,” said Joel Jackson, an analyst with Bank of Montreal.

Vale, the world’s biggest iron ore supplier and a major producer of other metals, is under pressure to sell assets amid a nearly $20-billion (U.S.) expansion of its iron ore complex in Brazil. People familiar with the matter said it has been trying to gauge how much its fertilizer business could fetch.

Mining investment crucial amid downturn, industry warns – by Lisa Wright (Toronto Star – May 28, 2015)

May 28, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

‘Unlike the Maple Leafs, mining always bounces back,’ says Mining Association of Canada president

Mining is more resilient than the Toronto Maple Leafs, but Canada risks being shut out as a top global player as the commodity slump drags on, warns the president of the Mining Association of Canada. “It’s been tough,” Pierre Gratton told the Economic Club of Canada Wednesday.

He emphasized that the last six months have been “generally dismal” for miners and commodity prices, particularly iron ore and coal, and their near-term prospects aren’t great either, he said.

Mineral exploration financing was also “grim” in 2013 as global budgets to discover new projects dropped by 30 per cent, he noted, adding: “This decline is as worrisome as it is dramatic.”

And last year, after an eight-year reign as the top country for global exploration spending, Canada dropped to second place behind Australia.

Kidnappings highlight security risks for miners (Northern Miner – May 26, 2015)

May 27, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

In the first four months of this year alone, kidnapping incidents have touched Torex Gold Resources (TSX: TGX) and Goldcorp (TSX: G; NYSE: GG) in Mexico’s Guerrero state, and Pan African Minerals’ Tambao manganese mine in Burkina Faso.

The headlines have been alarming for mining companies and for investors, especially since many kidnapping incidents are unreported.

“For every incident that you see in the press, there are numerous that never make it to the light of day,” says Chris Arehart, global product manager for kidnap and ransom and crime insurance at Chubb Insurance Group.

Mining companies are uniquely exposed to kidnapping risks because they often operate in remote areas, in countries with low political stability, and attract attention by bringing in big equipment and hiring a lot of locals.

The risks vary from country to country and even from region to region within countries. But kidnappings are much more common in countries with low political stability, where law enforcement is corrupt, inept, ill-trained or underfunded, and where the judicial system may also be corrupt, and laws not as stringent.

Barrick Gold Corp, Ivanhoe Mines Ltd sell stakes to China’s Zijin in Papua New Guinea, Congo mines – by Peter Koven (National Post – May 26, 2015)

May 26, 2015

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

Canadian miners Barrick Gold Corp. and Ivanhoe Mines Ltd. have both struck deals with Chinese miner Zijin Mining Group Co., which is investing a total of US$710 million in their projects.

Zijin, one of China’s largest gold and copper producers, will buy half of Barrick’s 95 per cent stake in the Porgera gold mine in Papua New Guinea for US$298 million. And it will buy just under half of Ivanhoe’s 95 per cent stake in the Kamoa copper project in the Democratic Republic of Congo for US$412 million.

The two transactions are the direct result of work by John Thornton and Robert Freidland, the respective chairmen of Barrick and Ivanhoe. Both men have very deep business ties to Asia.

Thornton, who became Barrick’s chairman last year, has put a priority on forming partnerships with Chinese companies, and negotiations with Zijin have been going on for several months. There were also talks around Zijin becoming a partner on the failed Pascua-Lama project, though no agreement has been struck to date.

NEWS RELEASE: Barrick Announces Strategic Partnership with Zijin Mining Group

May 26, 2015

All amounts expressed in US dollars unless otherwise indicated.

TORONTO, May 26, 2015 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or “the company”) today announced that it has formed a strategic partnership with leading Chinese mining company Zijin Mining Group Co., Ltd (“Zijin”).

As a first step, Zijin will acquire 50 percent of Barrick (Niugini) Limited (“BNL”), the company which owns 95 percent of and manages the Porgera Joint Venture gold mine in Papua New Guinea. In addition, Barrick and Zijin have signed a long-term strategic cooperation agreement which outlines the intent of both companies to collaborate on future projects and joint investments, leveraging the strengths of each company.

“A twenty-first century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China. This is particularly true in our industry, where China has become both the largest producer and consumer of gold, and a major source of capital and expertise for the mines of the future,” said Barrick Chairman John L. Thornton. “Our partnership with Zijin is the first step in a long-term strategic relationship with one of China’s leading mining companies—a multi-faceted partnership that will provide significant opportunities to work together on an ongoing basis as we continue to create value for our respective owners.”

“A strategic partnership with Barrick is an excellent fit for Zijin and a powerful combination as we look to expand our business globally outside of China. Our companies have complementary expertise and experience and share a common vision for creating long-term value for our owners,” said Zijin Chairman Chen Jinghe.

UPDATE 2-Barrick sells Australian Cowal gold mine to Evolution for $550 mln – by Sam Forgione and Sonali Paul (Reuters U.S. – May 25, 2015)

May 25, 2015

http://www.reuters.com/

NEW YORK/MELBOURNE, May 25 (Reuters) – Barrick Gold , the world’s top gold producer, has agreed to sell its Cowal mine to Evolution Mining for $550 million in a deal that will turn Evolution into Australia’s second largest producer of the precious metal.

The deal gives Evolution a large, low-cost mine that will boost its output to around 800,000 ounces a year, around one-third the output of top Australian producer Newcrest Mining .

“This is a truly transformational acquisition for Evolution,” Executive Chairman Jake Klein said after the deal was announced on Monday. “This is the high quality asset we have been looking for to cornerstone our business.”

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

Analysts congratulated Evolution for snaring Cowal for well below the $650 million price tag it had been expected to fetch.