Sherritt CEO: Not Enough Transparency on Nickel Supply and Demand From China (Bloomberg TV Canada – February 11, 2016)

http://bloombergtv.ca/ Canadian nickel miner Sherritt International’s President and CEO, David Pathe, joins Bloomberg TV Canada’s Pamela Ritchie to discuss the dramatic plunge in the stainless steel making commodity and what a significant role supply and demand from China plays in the market.

Why flow-through shares should be extended to spur innovation funding – by Richard Sutin (National Post – February 12, 2016)

http://business.financialpost.com/

For several years, participants in the technology sector have advocated extending the flow-through share program currently available to resource companies by making it available to the innovation sector. With the erosion of our manufacturing base and the commodity and energy downturn, the case for using flow-through shares to catalyze our underperforming innovation sector has become more compelling.

A recent paper by Vijay Jog, published by the University of Calgary’s School of Public Policy (and taken up in FP Comment in Kevin Libin’s column on February 9) found poor investment returns for flow-through investors between 2008–2012.

From that, the paper concludes that between the investor losses, the cost to government and the potential “crowding out” of investment in other sectors, flow-through shares do more harm than good and should be phased out.

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Canada sells off most of its gold reserves (CBC News Business – February 11, 2016)

http://www.cbc.ca/news/business/

Canada is selling off most of its remaining gold reserves, mainly by selling gold coins, figures from the Bank of Canada and Finance Department show.

The country held just $19 million US worth of gold as of last Monday. Through most of 2015, the country’s gold reserves stood at more than $100 million US.

Finance Department figures show that Canada sold 41,106 ounces of gold coins in December and another 32,860 ounces of gold coins in January.

That left Canada holding 21,929 ounces of gold in its reserves as of the end of January — a “negligible” amount, the Bank of Canada acknowledges — worth $24 million US.

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Oil prices plunge below $27 a barrel – by Sunny Freeman (Toronto Star – February 12, 2016)

http://www.thestar.com/

Oil briefly touched a 12-year-low of $26.05 and investors fear it still has further to fall.

Oil prices crashed through $27 (U.S.) a barrel Thursday as investors fled the risky asset over fears that it still has further to fall.

Benchmark West Texas Intermediate dropped $1.24 to close at $26.21 (U.S.) a barrel. It briefly touched a 12-year-low of $26.05 (U.S.) before bouncing slightly after a Wall Street Journal report suggesting OPEC could agree to production cuts.

“Of course, they were just rumours and the fundamental political tension within OPEC perseveres,” Scotiabank economists wrote in a note.

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Gold is back in vogue with investors, but the question is, does this rally have legs? – by Peter Koven (Financial Post – February 12, 2016)

http://business.financialpost.com/

Gold is back in vogue as investors seek out a safe haven amid growing global volatility. The question is whether this gold rally will have legs, or whether it will fizzle out like numerous others over the past few years.

The yellow metal is in the midst of a tremendous upward move, jumping 18 per cent since the start of 2016. The key gold futures contract rose by a whopping US$53.20 an ounce on Thursday alone, bringing it to US$1,247.80. Gold’s performance this year is the polar opposite of most other commodities, which are down sharply.

Gold’s surge comes as global equities tumbled into a bear market. On Thursday, stock indexes worldwide fell on fears over the health of the global economy and banking sector, with MSCI’s world stock index dropping to more than 20 per cent below its peak, while safe-haven 10-year Treasury yields hit their lowest since 2012.

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Gold stocks rocket as investors seek safe haven – by Frik Els (Mining.com – February 11, 2016)

http://www.mining.com/

On Thursday, the price of gold surged nearly $70 an ounce as turmoil on world financial markets and global economic fears sparked a return to safe-haven buying.

Futures contracts in New York with April delivery dates jumped 5.8% to a high of $1,263.90 an ounce in massive volumes of nearly three times usual volumes. That moved gold into a bull market with gains topping 20% from the near six-year low struck mid-December.

In early afternoon trade the metal pared some of the gains to trade at just under $1,250 an ounce, still its best level in year. The change in sentiment towards gold evident this year has seen a huge run-up in gold mining stocks and today’s big move saw investors pile into the sector once again.

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Harte Gold – Sweet Smell of the Sugar Zone – by Christopher Ecclestone (InvestorIntel.com – February 11, 2016)

http://investorintel.com/

The trend towards small-scale mining (or as we are tending to call it “right-sized” mining) seems to be gaining traction. Bankers don’t like it because it means smaller financings and less fees and consultants absolutely hate it because it means less mindless-drilling, wheel-spinning and production of useless tomes of BFS and DFS drivel.

The group that does like it includes retail investors and us, while institutional investors find that, quite literally, they cannot get enough of these companies. We have highlighted Anaconda in the past for this strategy (to which it has added another property this week) and had favoured Minnova for proposing something similar (though it has seemingly lost track from production and gone into some continuous financing mode).

In the latter case it really takes some doing to make your previous five announcements, over four months, solely about financings.Then there is Harte Gold Corp. (TSX:HRT), which seems destined to shortly join the ranks of producers with its mine in Ontario. We shall do an overview here on the progress thus far.

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Gold Rockets To 12-Month High On Safe-Haven Demand Amid Spooked World Marketplace – by Jim Wyckoff (Kitco Gold – February 11, 2016)

http://www.kitco.com/news/

(Kitco News) – Strong safe-haven demand for gold sent the precious metal soaring to a 12-month high above $1,260.00 Thursday. Another big sell off in world stock markets sent investors and traders scrambling into the gold market. There are growing concerns about the collective health of the major world economies. Gold prices have risen around 15% the past six weeks. April Comex gold was last up $54.00 at $1,248.60 an ounce. March Comex silver was last up $0.523 at $15.81 an ounce.

There was keen worldwide investor and trader risk aversion Thursday as most world stock markets suffered sharp losses. Falling crude oil prices, worries about the European financial system and weak overall world economic growth prospects are combining to spook the world marketplace.

The Stoxx Europe 600 index was down nearly 4% Thursday. Hong Kong’s Hang Seng index was also down around 4% on the day. China and Japan markets were closed Thursday for holidays. The Japanese yen has soared against the U.S. dollar on safe-haven demand from market participants in the Asian region.

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Kinross reports smaller loss as gold’s ‘defensive appeal’ rises – by Ian McGugan (Globe and Mail – February 11, 2016)

http://www.theglobeandmail.com/

IAN MCGUGAN – As stock markets around the world have swooned, the shares of Canadian gold producers have headed steadily upward.

The strength of that move will be tested this week as major producers begin to unveil financial results.

Kinross Gold Corp. kicked things off on Wednesday, reporting a loss of $841.9-million (U.S.) or 73 cents a share, for the fourth quarter. That compared with a loss of $1.47-billion or $1.29 in the same quarter a year earlier.

The loss included a non-cash impairment charge of $430.2-million related to property, plant and equipment, and a writedown of inventory and other assets of $235-million.

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Teck Resources Ltd ekes out adjusted Q4 profit despite plunging metal prices – by Peter Koven (Financial Post – February 11, 2016)

http://business.financialpost.com/

Teck Resources Ltd. eked out an adjusted project of $16 million in the fourth quarter of 2015 despite plunging prices for its products.

The miner’s adjusted profit worked out to three cents a share. The very fact that Teck was in the black surprised many sell-side analysts – on average, they expected a loss of one cent.

Nonetheless, the results highlight the fact that Vancouver-based Teck is dealing with an incredibly challenging environment. Prices for copper, steelmaking coal and zinc have all nosedived amid concerns about growth in China, and Teck had to slash costs dramatically over the last few years to keep its business competitive.

Teck’s overall net loss in the quarter of $469 million as it recorded writedowns due to falling metal prices.

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Get out of the sandbox and start building Canada – by Susanne DiCocco (National Post – February 11, 2016)

http://news.nationalpost.com/

Montreal Mayor Denis Coderre’s opposition to the Energy East pipeline sparked a political firestorm and ignited long-simmering regional divisions. Reactions have included everything from the perceived unfairness of equalization, to questioning the very nature of our union.

This regional polarization comes at a time when the country needs to pull together. Canada needs someone who can get beyond piecemeal regional grievances and get to work on implementing a national vision.

For example, the fact that the accountability and responsibility for approving this pipeline (and any other) is a federal jurisdiction, seems to have become irrelevant, given the number of mayors and provincial premiers who have gotten involved in the process.

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First Nations must be partners in resource development – by Doug Cuthand (Saskatoon StarPhoenix – February 6, 2016)

http://thestarphoenix.com/

Under new rules for development of energy projects First Nations must be involved in the discussions on a nation-to-nation basis. The Supreme Court also has mandated that governments have a duty to consult with First Nations on resource projects within traditional aboriginal territory.

Business fears this will constitute a veto, and that First Nations will doom future resource development. We get the same knee-jerk reaction from the business community and right-wing commentators each time our jurisdiction or treaty and aboriginal rights are recognized.

Currently, the federal or provincial governments can deny any environmentally risky resource project, in effect giving them a veto. What’s wrong with allowing First Nations governments the same right?

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[Canada] Why equalization no longer works – by Joe Oliver (Financial Post – February 10, 2016)

http://business.financialpost.com/

“Opposition to resource development, unrelated to legitimate environmental
concerns, is a self-indulgence we cannot afford in a period of slow growth,
large deficits and escalating health-care costs. The public may not be
fully aware of the financial and social implications of its choices.
A reduction in equalization payments would be a wake-up call.” (Joe Oliver)

Equalization is about to loom large in federal-provincial relations and will make the prime minister’s promise to meet with his provincial counterparts increasingly uncomfortable.

The significant regional restructuring of economic fortunes, resulting from the precipitous decline in resource-based revenue, will reallocate billions of dollars in transfer payments — some from previously “have not” to “have” provinces.

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Our energy economy should be celebrated, not shunned – by Jim Prentice (Globe and Mail – February 9, 2016)

http://www.theglobeandmail.com/

Jim Prentice lives in Calgary and is a Global Fellow at the Wilson Center’s Canada Institute in Washington. His book Canada, Energy and the Environment will be published by Harper Collins.

It is encouraging to see some early signs that Canada’s new governments understand that export pipelines are vital to Canada’s economic future.

Canada is one of the world’s largest exporters of crude oil. We produce four million barrels of oil a day and export three million barrels of it. We are also the world’s fourth-largest exporter of natural gas.

Sadly, we are not a global presence when it comes to our energy resources. Canadian governments play checkers, while others play chess.

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As politicians gloat about climate ‘leadership,’ Saudi Arabia’s oil is dumped in Canada – by Claudia Cattaneo (Financial Post – February 10, 2016)

http://business.financialpost.com/

“Where is the political outrage over oil imports from rogue nations with
inferior environmental records and deplorable behaviours toward women,
dissidents and minorities? Where are the beefed up regulatory reviews
of Saudi Arabia’s climate change impacts, or their dumping practices?”

As federal and provincial politicians pat themselves on the back for their climate change ‘leadership,’ and pipeline opponents gloat about stalling construction of new Canadian pipelines, tanker-loads of foreign oil are delivered regularly to Eastern Canadian refineries, including increasing volumes from Saudi Arabia.

That’s right. Saudia Arabia, the oil-rich kingdom that is waging a brutal price war to shore up its market share and devastating Canada’s oil and gas sector in the process, dumped an average of 84,017 barrels a day of its cheap oil in New Brunswick’s Irving Oil Ltd. refinery in 2015, according to data compiled by the National Energy Board (NEB). That’s up from 63,046 b/d on average in 2012.

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