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Goldcorp, other gold miners’ first-quarter earnings show progress on cost cuts – by Peter Koven (National Post – May 2, 2014)

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

TORONTO – Gold miners promised investors they would cut operating costs, and recent earnings reports show they are doing just that. First quarter earnings from Goldcorp Inc., Agnico-Eagle Mines Ltd., New Gold Inc. and Barrick Gold Corp. demonstrate they are all making significant improvements on the cost front. And while there are further reductions to be made, investors and analysts have been pleased with what they’ve seen so far.

This earnings season is an instructive one for the gold sector, because the first quarter of 2013 was the last one before gold prices plummeted and companies began a frantic process of yanking costs out of their business. By comparing this year’s results to last year’s, investors get a good sense of how aggressively miners have acted.

On Thursday, mining giant Goldcorp Inc. reported all-in sustaining costs of US$840 an ounce for the first quarter. The result beat its own forecast and is a significant decline from US$1,134 an ounce in the same quarter a year ago (though that was an unusually bad result for the company).

“Goldcorp’s solid first quarter results underscore what we expect to be recurring themes in 2014: High quality production growth, excellent cost performance and strong progress toward completion of our three current growth projects [Cerro Negro, Eleonore and Cochenour],” chief executive Chuck Jeannes said on a conference call.

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[Saskatchewan] Mining exploration spending forecast to mirror ’13 – by Scott Larson (Regina Leader-Post – May 2, 2014)

 http://www.leaderpost.com/index.html

The amount of capital invested in mining exploration in Saskatchewan this year will mirror last year’s total of $236 million, says Gary Delaney, chief geologist with the province’s Ministry of the Economy.

“Most of the focus is between potash and uranium, but we will see a few million in gold and I suspect we might see a little more optimism in the diamond area,” said Delaney, who spoke at the fourth annual Saskatchewan Mining conference Thursday in Saskatoon.

The ministry conducts a survey to see how much was spent last year and what people are planning to spend this year (estimated at $234.6 million). That ranks Saskatchewan fourth in mining exploration expenditures in Canada.

Spending in 2014 will be split fairly evenly between juniors (who don’t have production) and major producers, he said. It has been a rough few years for junior miners trying to raise capital. Between 2012 and 2013, the amount of money junior companies were able to raise dropped by 50 per cent. “These are pretty rough times,” Delaney said.

Uranium There are bright spots, like the Patterson Lake South uranium discovery by Fission and Alpha Minerals in the Athabasca Basin. Companies with stakes in that area have been able to raise money.

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Editorial: Barrick-Newmont fling ends in acrimony – by John Cumming (Northern Miner – April 30, 2014)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists.  jcumming@northernminer.com

It’s gotta rank right up with the worst “first dates” in recent mining history: the proposed merger between gold titans Barrick Gold and Newmont Mining broke off a week after it was made public through media reports in April, and then things soured with a flurry of rival press releases pinning the blame on the other party for the breakdown.

Barrick and Newmont executives had gone so far as to negotiate a term sheet for a merger that was signed by both parties on April 8, after months of private negotiations. It’s a deal that hearkened back to 2005–2006 — the era of the growth for growth’s sake mega-merger — and would have been the biggest merger in the history of gold mining.

But by April 28, merger discussions were officially terminated. It didn’t stop there, however, with discreet silence or any deflecting “it’s not you, it’s me” sentiment: Barrick put out a press release and told reporters that it had wanted to finish the merger, but Newmont’s board had backtracked.

Newmont slipped that jab, came back hard with its own, by making public a private letter it had sent to Barrick’s board the week before.

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Goldcorp sees year of ‘significant growth’. No regrets on Osisko – by Dorothy Kosich (Mineweb.com – May 2, 2013)

http://www.mineweb.com/

Goldcorp reported increased gold production and lower all-in sustaining costs for the first quarter. More significant forecast growth is to come this year, says CEO Chuck Jeannes.

RENO (MINEWEB) – Goldcorp CEO Chuck Jeannes says in an interview with Reuters he doesn’t feel pressured to make another acquisition, after losing Osisko Mining to Yamana Gold and Agnico Eagle, but continues to believe “quality growth is the best way to add value to our shareholders.”

During a conference call with analysts Thursday, Jeannes said, “While I’m disappointed that we didn’t get to the finish line on the Osisko deal, I am absolutely convinced that we did the right thing in not increasing our offer to a level that will leave us unable to deliver appropriate returns for our shareholders.” “We have an outstanding portfolio of existing assets and we’ll continue to be disciplined in the way we seek to enhance the portfolio going forward,” he stressed.

Meanwhile, Jeannes told analysts, “We’re pleased to confirm this morning that we’re on track to meet our 2014 production guidance of between 2.95 million and 3.1 million ounces this year, which now excludes the forecast of the Marigold production [The Marigold joint venture has been sold to Silver Standard].

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Sherritt Tops Armoyan With Putin’s Help: Corporate Canada – by Christopher Donville (Bloomberg News – May 1, 2014)

http://www.bloomberg.com/

Nickel and energy producer Sherritt International Corp. (S) is poised to fend off an attack by activist shareholder George Armoyan, helped by the soaring price of the industrial metal.

Nickel has risen 32 percent this year, propelling Sherritt to top performer among its Canadian base-metal peers, as Armoyan has sought to convince investors to replace three of the Toronto-based mining company’s nine directors with himself and two others.

“I think for George, the worst thing that could have happened was nickel prices went up,” David Taylor, the Toronto-based chief investment officer of Taylor Asset Management Inc., said by telephone last week. “He would have had a much better chance if this stock was still hovering around three bucks.”

Sherritt, which closed today at C$4.68 in Toronto, has advanced 26 percent this year on an Indonesian ban on nickel-ore exports. The threat of wider economic sanctions on Russia for President Vladimir Putin’s annexation of Crimea and skepticism of his efforts to defuse tensions in eastern Ukraine also lifted the price of the stainless-steel ingredient. Nickel generated 50 percent of Sherritt’s first-quarter sales, the company said yesterday in its earnings statement.

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Nickel bolsters Vale’s bottom line – by Jeb Blount (Reuters/Sudbury Star – May 1, 2014)

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

Brazilian miner Vale SA said on Wednesday that first-quarter profit fell by nearly a fifth, a result in line with expectations, after the price of iron ore, its main product, fell sharply.

Net income fell 19% to $2.52 billion, compared with $3.11 billion in the same quarter of 2013, according to a securities filing. The result was near the $2.59 billion average estimate in a Reuters survey of 13 analysts and comes after a $6.54 billion fourth-quarter loss.

Vale Chief Executive Officer Murilo Ferreira has been working to slash costs and unload unprofitable businesses for more than a year as a slowdown in Chinese growth limits demand for iron ore and other metals. China, the world’s largest steel producer, is the biggest market for iron ore, the main ingredient in steel.

Vale is the world’s largest iron ore producer and a major miner of nickel, copper and fertilizers. In Sudbury, Vale is the city’s largest employer and runs mines, mills and a smelter. Nickel and copper are the main minerals produced in Sudbury.

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Peter Munk’s bittersweet goodbye to Barrick – by Rachelle Younglai (Globe and Mail – May 1, 2014)

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.

Peter Munk, a Hungarian refugee whose ambitions led him to build hotels in the South Pacific and create stereos for Frank Sinatra, said goodbye to Barrick Gold Corp., the company he founded three decades ago and turned into the world’s biggest gold producer.

The 86-year-old Canadian businessman stepped down as the company’s chairman on Wednesday, a bittersweet moment for Mr. Munk, who has described Barrick as his life and the one thing that keeps him up at night.

“You can take, maybe, Munk out of Barrick. You can’t take Barrick out of Munk,” he said at the company’s annual meeting of shareholders in Toronto.

Mr. Munk knew nothing about gold mining when he took a stake in a small mine near Wawa, Ont., in 1983. He spent the next 30 years buying out rivals and building Barrick into a gold giant.

He has been succeeded by former Goldman Sachs executive John Thornton, who he says shares his vision of transforming Barrick into a Canadian-based mining titan with production in all types of metals.

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Sherritt International swings to Q1 loss – by Henry Lazenby (MiningWeekly.com – April 30, 2014)

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

TORONTO (miningweekly.com) – Diversified Canadian miner Sherritt International on Wednesday reported a first-quarter net loss, as a charge at its new Ambatovy nickel mine, in Madagascar, and financing costs related to a weakening Canadian currency impacted results.

The Toronto-based miner, which specialises in mining and refining nickel from lateritic ores at its operations in Canada, Cuba, and Madagascar, reported a first-quarter loss of C$48.2-million, or C$0.16 a share, compared with earnings of C$23.1-million, or C$0.08 a share.

Earnings were affected by the impact of higher financing outlay related to foreign exchange losses as a result of the weakening Canadian dollar against the US greenback and by depreciation, depletion, and amortisation being recognised at Ambatovy for the first time following the commercial production declaration in January, which totalled C$27.5-million for Sherritt’s 40% share.

The Ambatovy Joint Venture (JV) is a vertically integrated nickel and cobalt mining, processing, refining and marketing JV between subsidiaries of Sherritt (40%), Sumitomo (27.5%), Korea Resources (27.5%), and SNC-Lavalin (5%).

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Peter Munk says he’s leaving Barrick Gold in good hands – by Lisa Wright (Toronto Star – May 1, 2014)

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.

Outgoing founder and chairman praises management team and new board chair amid tough times in the gold industry in emotional farewell at annual meeting.

Gone, but definitely not forgotten. That was the tone of Barrick Gold Corp.’s annual meeting in Toronto Wednesday, which marked the emotional farewell of outgoing chairman and founder Peter Munk, and the release of dismal first quarter financial results amid the lacklustre gold price.

The auditorium was filled with the requisite Bay St. suits and shareholders while the annual group of environmental protesters outside hoisted a 15-foot Munk puppet and waved signs like “Gold is a toxic asset” to mark the 86-year-old’s departure.

But it was really Munk’s show, in which he made a farewell speech that drew laughs, hugs, kisses and a standing ovation for his 30 years at the helm of the firm that began as a penny stock with one mine in Northern Ontario to the world’s largest gold miner.

“As much as we’d like to believe we are eternal, the reality hits home,” he said. “The time has come to hand it over.”

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Baffinland wins approval for scaled-down Nunavut iron mine (CBC News North – April 29, 2014)

http://www.cbc.ca/north/

Baffinland Iron Mines has won the go-ahead to proceed with a considerably scaled down version of its proposed iron mine on North Baffin Island.

In December of 2012, Baffinland was approved to move 18 million tonnes of iron ore each year, shipping it first by rail to the west coast of Baffin Island, then by ships that would travel year round through the ice-choked waters of Foxe Basin to markets in Europe.

Just weeks after winning approval for the plan, Baffinland changed it, proposing a phased approach that would move about 3.5 million tonnes of ore per year using an existing road and port on the eastern side of Baffin Island, and citing the poor economy as a reason for doing so.

To accommodate the change of the plans, the Nunavut Impact Review Board modified 44 of its initial 182 terms and conditions for the mine and added eight new ones.

In a letter to the Nunavut Impact Review Board today, Bernard Valcourt, minister of Aboriginal Affairs and Northern Development, accepted most of those changes, modifying nine and rejecting one.

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Gabriel may seek billions in arbitration over stalled Romanian mine – by Eric Reguly (Globe and Mail – April 30, 2014)

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.

The Toronto mining company whose 15-year effort to open Europe’s biggest gold project has gone nowhere is preparing an international arbitration case against the Romanian government that would seek billions of dollars in damages.

Gabriel Resources is making plans for the case, which probably would be heard in Vienna in the second half of the year, as it starts to wind down its activities in Romania’s Transylvania region to conserve cash. About 400 employees, or 80 per cent, of Gabriel’s Romanian subsidiary, Rosia Montana Gold Corp. (RMGC), have been suspended at three-quarters pay. The company has said it may fire them in May “if there is no progress in the advancement of the project.”

Gabriel, which is listed on the Toronto stock exchange but run from London, is not expecting a breakthrough any time soon. The Romanian parliament’s chamber of deputies is scheduled to vote on a bill that would give special legal status to the $1.5-billion (U.S.) project, allowing it to go ahead, on May 7.

But the company does not expect the vote to go in its favour, partly because public opposition to the mine and its cyanide-based extraction technology remains strong.

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Gold giants’ merger falls apart as Barrick-Newmont spat goes public – by Rachelle Younglai (Globe and Mail – April 29, 2014)

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 spat between Barrick Gold Corp. and Newmont Mining Corp. erupted into a public war of words, with the companies accusing each other of ruining their $13-billion (U.S.) merger.

Barrick said its American rival reneged on their deal and tried to change key provisions, including the location of the head office in Toronto. Newmont disagreed with Barrick’s version and faulted the Canadian company’s incoming chairman John Thornton for not being constructive.

Over the years, the world’s two largest gold producers have made several attempts to unite and cut expenses in Nevada, where they both own multiple mines. The slump in the gold industry fuelled their latest merger ambitions, with the companies identifying about $1-billion in cost savings.

But they ultimately could not overcome two decades of personality clashes and cultural differences, which exploded into the public domain on Monday and likely killed any future merger discussions.

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Peter Munk’s career comes to end as Newmont firestorm envelops Barrick – Peter Koven (National Post – April 29, 2014)

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

It wouldn’t be in Peter Munk’s nature to go out quietly. But no one expected this.

As Mr. Munk, 86, officially retires at Barrick Gold Corp.’s annual meeting on Wednesday, he does so in the midst of an appalling public feud between Barrick and Newmont Mining Corp., which went from eager merger partners to mortal enemies in a matter of days. It will take years to rebuild the bridges between these companies, if indeed that ever happens.

Mr. Munk was not closely involved in the Newmont negotiations — he left that to his hand-picked successor John Thornton. But he still found a way to stick himself in the middle of the dispute. In a detailed interview with the Financial Post last week, just as talks were collapsing, he ripped Newmont’s corporate culture and said the company is “not shareholder friendly.” Newmont was not amused.

Remarkably, that was one of the less incendiary things Mr. Munk said about his U.S. rival over a lengthy conversation that touched on many aspects of his career. He has always spoken his mind and never worried too much about what people think of it. But as his time in Canadian business comes to a close, he was even more candid, thought-provoking and entertaining than usual.

For example, if Newmont didn’t like the “not shareholder friendly” line, it certainly won’t appreciate his description of how Barrick found its flagship gold mine and became the dominant player in Nevada:

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Barrick needs a deal maker, not a deal breaker – by Boyd Erman (Globe and Mail – April 29, 2014)

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.

Barrick Gold Corp. co-chairman John Thornton has laid out a vision for creating a diversified miner – a vision that is going to be more difficult to realize after a nasty end to talks in his first major transaction.

Mr. Thornton has stated he wants Barrick to be a leader “in a range of minerals.” To do that, he is going to have to be a buyer, adding companies that produce other metals to complement Barrick’s output of gold and copper. So it’s all the more problematic that would-be merger partner Newmont Mining Corp. singled out Mr. Thornton as a particular obstacle to getting a deal done. Even if it’s not true (and it’s hard to know what is fact in any such situation), the statement is out there now and will be attached to Mr. Thornton’s name.

Negotiations break down all the time, between all types of companies. But rarely do supposedly secret talks spill into the public sphere quite so comprehensively as they have in the past week, as seemingly every detail of the talks between Barrick and Newmont landed in the press. Since the first reports that merger talks between the two had hit a snag, the premium, the timing, the consideration, the executive structure and other key terms all made their way to the press even though neither side ever publicly confirmed the negotiations.

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New calls for Canadian mining ombudsman so far unanswered – by Marion Warnica (CBC News Edmonton – April 28, 2014)

http://www.cbc.ca/edmonton/

Federal mining watchdog spot empty for seven months

A group of South American advocates wants Canada to appoint an ombudsman to regulate its mining activities outside its borders.

The group says the federal government, which has yet to release the results of its long-awaited review into its foreign mining policies, should be more involved in the monitoring and management of its foreign operations.

“A great deal of economic development that Canada enjoys, a lot of that results in human rights violations that we cannot tolerate,” said Archbishop Pedro Barreto, the president of the Solidarity and Justice Department in the Latin American Episcopal Council based in Huancayo, Peru.

Barreto spoke to CBC News as part of a larger investigation into water stress in Peru. He has joined a growing number of advocates and NGOs who want Canada to appoint a legislated mining ombudsman to oversee Canadian extraction activities around the world.

“The government of Canada is decisively supporting mining enterprises, without caring for lives or their social responsibility – and we are severely concerned about this,” said Barreto. Critics await improvements to failed complaints process

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