Canada Mining – Page 301 – Republic of Mining

Editorial: Canada-EU free trade deal shifts the mining landscape (Northern Miner – October 24, 2013)

October 24, 2013

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

Canada’s base-metal producers got a lift on Oct. 18 with the announcement of a preliminary free-trade agreement between Canada and the 28-member European Union that promises miners and metal producers a gradual elimination of tariffs on such big-ticket items as aluminum and iron ore, and a loosening of ownership and labour-mobility rules.

Canada’s Quebec-centred aluminum industry was perhaps most vocal with praise for what looks to be a big-business-friendly deal, with the Aluminum Association of Canada describing it as an “unprecedented growth opportunity” for the Canadian aluminum industry to “open the door to a large-scale market for Canadian aluminum production.”

The association says it’s likely the EU will eliminate tariffs on Canadian-produced aluminum, such as 7% on rods, 6% on billets, foundry and slabs, and 3% on remelt. Europe’s vast automobile-manufacturing market is particularly attractive to Canadian aluminum producers, who are competing with aluminum producers in the Middle East, where capacity has tripled in recent years.

Agnico delivers record gold production in third quarter – by Peter Koven (National Post – October 24, 2013)

October 24, 2013

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

TORONTO – Agnico Eagle Mines Ltd. kicked off the third-quarter gold earnings season with a strong result that sets a positive tone for the rest of the sector.

The Toronto-based miner’s adjusted earnings came in at US$60.5-million, or US35¢ a share, which was well above the highest analyst estimates. Agnico also boosted its full-year production guidance and announced deeper cost cuts.

The stock jumped more than 15% in early trading on Thursday. “We had some pretty solid production across the board,” chief executive Sean Boyd said in an interview, adding the company has said for months that the second half of 2013 would be stronger than the first half.

The results show gold companies can thrive in a weaker gold price environment, a major concern for investors over the past several months. Agnico’s gold production in the quarter reached a record 315,828 ounces, driven by a strong result from the Meadowbank mine in Nunavut, which opened in 2010. That mine performed poorly in its first couple of years of operation, but has turned a corner.

Caterpillar hit by mining sector’s woes – by Rachelle Younglai (Globe and Mail – October 24, 2013)

October 24, 2013

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 mining industry’s woes are spreading with Caterpillar Inc. becoming the latest casualty of weak metal prices.

The company, often viewed as an economic bellwether, on Wednesday slashed its sales forecast and reported a profit shortfall this quarter because of less demand for its giant tractors and equipment used to move large pieces of earth.

“This is an unfortunate consequence of what is going on at the top of the food chain,” said Blake Langill, mining leader with Ernst & Young LLP.

A combination of lower metal prices and high costs has forced the largest mining companies such as Barrick Gold Corp. to suspend projects and sell expensive mines in order to survive.

Sprott open letter challenges WGC/GFMS gold demand figures – by Lawrence Williams (Mineweb.com – October 23, 2013)

October 24, 2013

http://www.mineweb.com/

Eric Sprott, challenges the most generally accepted data on gold supply/demand and feels that analyst reliance on this severely impacts their predictions and thus the gold price itself.

LONDON (MINEWEB) – Strong precious metals advocate, Eric Sprott, thinks there is something haywire in the gold supply/demand statistics published regularly by the World Gold Council and relying on data compiled for it by Thomson Reuters GFMS. In Sprott’s view, and this is accompanied by his own research figures, the GFMS data is flawed – yet it tends to be the industry standard taken as the definitive position by gold follower around the globe.

In this context, Sprott has written an ‘Open Letter’ to the World Gold Council, putting forward his company’s own take on the real position in the gold supply/demand equation and draws the conclusion that global gold demand exceeds available new supply by a substantial margin. To read the ‘Open Letter’ in full click here.

Indeed Sprott’s analysis of the position echoes, and expands on, some of the conclusions drawn by Mineweb in some recent articles – not least in terms of the gold flows to Asian and Middle Eastern nations in general, and to China and India in particular.

Pretium shares sink as geologists declare ‘no valid gold’ at B.C. project – by Peter Koven (National Post – October 23, 2013)

October 23, 2013

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

The controversy around Pretium Resources Inc. is escalating after the miner revealed that a highly-respected team of geologists declared its entire resource to be invalid.

The judgment came from Strathcona Mineral Services Ltd., the Toronto firm that famously declared Bre-X to be a scam. Pretium shares plunged 28% to $3.45 on Tuesday as investors absorbed the news.

There is plenty of gold in Pretium’s “Valley of the Kings” discovery in British Columbia, but disagreement persists over how it should be measured. Strathcona, which was hired by Pretium to oversee a bulk sample program for the deposit, resigned two weeks ago because it disagreed with the company’s chosen methodology and found fault with its resource.

Strathcona President Graham Farquharson criticized Pretium management on Tuesday, saying his firm informed Pretium about its concerns several times and they were not immediately disclosed.

Landmark Canada/EU trade agreement could have major implications for miners – by Kip Keen (Mineweb.com – October 23, 2013)

October 23, 2013

http://www.mineweb.com/

If mining doesn’t seem to factor large in CETA, there are still major implications for the sector when the investor protection elements are considered.

HALIFAX, NS (MINEWEB) – A major trade agreement between Canada and Europe could provide significant protection from expropriation, among other things, to Canadian companies investing in Europe and vice versa.

Probably the most significant development in the Comprehensive Economic and Trade Agreement (CETA) for miners on both sides of the Atlantic is the inclusion of an investor-state provision that, in practice, ensures foreign companies a process to recoup damages in cases of expropriation or instances where political process is grossly discriminatory against a foreign company.

“From what we know this is a remarkable agreement,” said Riyaz Dattu, a lawyer with the firm Osler, Hoskin & Harcourt who specializes in international trade law. “It’s going to be like what we already have with the United States and Mexico under NAFTA (North American Free Trade Agreement), but it is broader in the sense that it covers all the European Union countries.

NEWS RELEASE: Canadian Federal Government Approves Gahcho Kué Diamond Mine Development

November 3, 2015October 22, 2013

YELLOWKNIFE, TORONTO and NEW YORK, Oct. 22, 2013 /CNW/ – De Beers Canada and Mountain Province Diamonds (TSX: MPV, NYSE MKT: MDM) are pleased to announce that the Minister of Aboriginal Affairs and Northern Development Canada, the Hon. Bernard Valcourt, has today approved the development of the Gahcho Kué diamond mine as recommended by the Mackenzie Valley Environmental Impact Review Board.

Tony Guthrie, Chief Executive Officer for De Beers Canada, commented: “The Minister’s approval confirms that the plans for the development and operation of the Gahcho Kué diamond mine meet the highest standards. The new diamond mine will benefit the economy and residents of the Northwest Territories and enhance Canada’s position as a premier diamond producer.”

Federal government approval allows the Mackenzie Valley Land and Water Board to commence processing of the applications for the Land Use Permit and Water License required to construct and operate the Gahcho Kué mine.

Patrick Evans, Mountain Province President and CEO, added: “Gahcho Kué has gone through the most comprehensive environmental review of any mining project in the Northwest Territories.

Expect weak earnings from miners – and a glimmer of hope – by Rachelle Younglai (Globe and Mail – October 21, 2013)

October 22, 2013

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.

Canadian miners will report another set of lousy results for the third quarter, but there may be some light among the wreckage as companies take drastic steps to slash costs to stay alive in a lower commodity-price world.

For more than a year, miners have been in turmoil, trying to operate amid the downturn in metal prices. The country’s three largest gold companies, Barrick Gold Corp., Kinross Gold Corp. and Goldcorp Inc., have recorded billions of dollars in writedowns. Other producers have stopped developing projects and cut jobs and dividends.

The bad news is not expected to stop when companies start reporting their quarterly results this week. Potash Corp. of Saskatchewan Inc. warned it will earn less because its customers are waiting for the price of the fertilizer to drop further before making their purchases. Other miners, including the world’s biggest gold producer, Barrick, could write down more assets as they try to mitigate the drop in metal prices and high cost of fuel, analysts say.

And if metal prices do not lift during the final quarter of the year, miners will be forced to write off some of their reserves because it will be too expensive to dig resources out of the ground.

Why analysts are suddenly bullish on Canadian stocks – by John Shmuel (National Post – October 22, 2013)

October 22, 2013

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

Call it the Great White Bull if you want, but analysts are increasingly optimistic that Canadian stocks are where investors should be putting their money.

Sentiment for the beleaguered S&P/TSX Composite Index, which in 2012 was one of the worst performing in the world, has been steadily turning this year. Canadian stock bulls last week received a big boost in confidence as the index moved above 13,000 for the first time since July 2011. It closed Monday up 50.53 points or 0.38% at 13,186.53.

“The decisive move above the 13,000 level is putting the index on the expedited route toward 14,000 and higher,” said Ron Meisels, technical analyst and founder of Phases & Cycles in Montreal.

The TSX has even managed to edge the S&P 500 in the past three months, with a 3.9% return versus the latter’s 3.1%. It’s an encouraging sign for Canadian stock investors who have become accustomed to seeing U.S. stocks post much better returns.

Canada to push for resource development at helm of Arctic Council – by Josh Wingrove (Globe and Mail – October 21, 2013)

October 21, 2013

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.

OTTAWA — After a Throne Speech that pledged a focus on the North, Environment Minister and Nunavut MP Leona Aglukkaq is Yukon-bound to kick off Canada’s term at the helm of the international Arctic Council. She’ll use it to push for expanded resource development and more indigenous involvement in research on subjects such as climate change.

Representatives of the world’s eight Arctic countries are gathering in Whitehorse, beginning Monday, as Canada’s two-year term begins with a focus on development, safe shipping and sustainable communities, and with plans to create a circumpolar business forum.

“Our overarching theme for Canada’s chairmanship is development for the people of the North,” Ms. Aglukkaq told The Globe and Mail. “My meeting with them is to launch that, to talk about the priorities, the importance of working together moving forward,” she added.

Research and environmental protection of the North are pillars of the council’s mandate, and the meeting comes after Ms. Aglukkaq this month said there’s “debate” about the effects of climate change, a subject not mentioned in Wednesday’s Throne Speech.

30%-50% of junior miners not expected to survive – BCSC report – by Dorothy Kosich (Mineweb.com – October 21, 2013)

October 21, 2013

http://www.mineweb.com/

“Retail and institutional markets have virtually disappeared for the financing of junior mining companies,” a senior mining executive recently told a B.C. Securities Commission survey.

RENO (MINEWEB) – A report recently released by the British Columbia Securities Commission found some senior mining executives feel the market is at its lowest and should slowly start to recover in one to two years. However, other executives felt the market has yet to hit its lowest point and don’t expect conditions to significantly improve for another three to five years.

Of the in-depth interviews conducted with 15 mining executives, the participants agreed that there “will be an eventual exodus of mining companies and exploration endeavors,” said the report, BC Junior Mining at the Crossroads: Executive Management’s Perspective, which was authored by KPMG and commissioned by the B.C. Securities Commission.

“Between 30% and 50% of junior are not expected to survive,” said one participant in the interviews. “30% is fine, and perhaps required, but 50% is not.”

Canadian miners should learn from Gabriel’s missteps – by Eric Reguly (Globe and Mail – October 19, 2013)

October 21, 2013

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.

ROME — After almost two decades of false starts and a running battle with some of the savviest environmental groups on the planet, it’s make-or-break time for Europe’s biggest and most politically sensitive gold project. In early November, the Romanian government will, like a Roman emperor at a gladiator fight, give the thumbs up or thumbs down to Gabriel Resources Ltd.’s $1.4-billion (U.S.) Rosia Montana mine in Dracula’s legendary homeland, Transylvania.

The vote could go either way, though the share price says the odds are against the Toronto-listed company. Gabriel’s stock collapsed early last month, falling from $1.47 (Canadian) to as low as 41 cents, when Romanian Prime Minister Victor Ponta said parliament would likely reject a draft mining law that would allow the project to go ahead. (It’s now at 93 cents.) Gabriel’s response was to threaten the government with a $4-billion (U.S.) lawsuit if the law were to die. That threat still stands. Rosia Montana’s future lies in the hands of lawmakers and lawyers, not engineers and financiers.

Gabriel says a lot about what’s right and what’s wrong with Canadian gold miners, which dominate the industry. About half of the top names are Canadian, among them Barrick, Goldcorp, Yamana, Kinross and Eldorado. They are big risk takers, superb at engineering and financing and occasionally capable of impressive value creation.

Thinning crowd of junior miners provides both opportunity and risk – by Henry Lazenby (MiningWeekly.com – October 18, 2013)

October 18, 2013

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

Investing in minerals-focused junior companies is not for everyone, and is often left to highly sophisticated investors and speculators; however, some investors include juniors in their portfolios for the sake of diversification.

While some investors favour precious metals, as they tend to have more utility, there is a wide range of juniors involved in searching, staking, proving up and even developing projects in every mineral category, but the road from discovery to mine is fraught with dangers for companies and investors alike.

Being on the small side, these companies could offer greater growth potential but this also comes at greater risk. With gold’s plunge this year, some wary investors have steered clear, while others see huge opportunity.

Few junior gold miners have delivered strong performances over the past year, but their depressed prices could represent more attractive entry points for interested investors, albeit at extreme risk, owing to many of these being in dangerous penny-stock territory – below $5 apiece.

Gold stocks – particularly those of juniors – have been undervalued for longer than many investors thought possible. But, as in all things, most believe that the undervaluation cycle will eventually have to be broken.

Baffinland CEO says no to shipping ore through Northwest Passage – by Paul Waldie (Globe and Mail – October 16, 2013)

October 18, 2013

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.

BRUSSELS — The head of a Canadian mining company developing a massive mineral deposit within the Arctic Circle said the Northwest Passage won’t work as a viable shipping route to Europe and Asia.

Baffinland Iron Mines Corp., which is owned by steel giant ArcelorMittal and private equity firm Iron Ore Holdings LP, is building one of the largest iron ore mines in the world on Baffin Island in Nunavut. The $750-million Mary River mine is on track to open in 2015 and the ore will be shipped to Europe.

“In my opinion the Northwest Passage is not a transit route of any significance,” Tom Paddon, Baffinland’s chief executive, told the Arctic Futures 2013 conference in Brussels on Thursday.

Mr. Paddon said one problem is the Northwest Passage’s depth, which prevents it from becoming a major trade route. Many commodities such as iron ore and coal are shipped on bulk carriers that need a depth of up to 19 metres, also known as “capesize” vessels. Much of the Northwest Passage is only 15 metres deep.