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Canadian Media Resource Articles

For cash-strapped miners, ‘streaming’ companies offer a lifeline – by Ian McGugan (Globe and Mail – November 5, 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.

It’s prime time for the companies that specialize in providing money to cash-strapped miners.

These businesses offer funds today in exchange for metals tomorrow. With most commodities trading far below their boom-era highs of four years ago, the cash-for-production swap has become a vital elixir for mining companies struggling to cope with debt hangovers from happier days.

So-called “streaming” companies, such as Silver Wheaton Corp., Franco-Nevada Corp. and Royal Gold Inc., have signed a flurry of deals in recent months with many of the world’s largest miners.

The details vary but the common pattern is that the streaming company pays cash to the miner now in exchange for the rights to buy future streams of metals at prices well below market levels.

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These 10 mines will set the copper price for the next decade – by Vince Peckham (Mining.com – November 3, 2015)

http://www.mining.com/

Chile’s state-owned copper giant Codelco’s announcement today of another round of layoffs is just the latest sign of an industry under stress. Copper has recovered from six-year lows struck late August on the back of supply cuts by major producers but at around $2.30 a pound or $5,000 per tonne on Tuesday there isn’t much breathing room for producers.

The latest estimates by the Lisbon-based International Copper Study Group paint a very different picture from the previous forecast made in April. The market is now expected to be broadly in balance this year and to fall into a deficit of 130,000 tonnes in 2016. This compares with April’s forecasts of surpluses of 364,000 and 228,000 tonnes respectively.

According to ICSG World mine production, after adjusting for expected disruptions, is expected to increase by around 1.2% in 2015 to 18.8 million tonnes. 2014 recorded similar growth rates. The expected market shortfall in 2016 will be against a backdrop of higher mine output of around 4% expected next year.

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Silver Wheaton pays Glencore for silver rights at Peru mine – by Ian McGugan (Globe and Mail – November 3, 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.

Silver Wheaton Corp. of Vancouver is paying $900-million (U.S.) to embattled Glencore PLC in exchange for rights to some of the future silver production from a Peruvian mine.

The deal highlights the increasing willingness of major miners to swap tomorrow’s production in exchange for cash today.

Companies like Silver Wheaton provide upfront payments to miners in return for the rights to buy “streams” of their future output at below-market prices. Streaming companies have found ample opportunities in recent years as metals prices have slumped and commodity producers have encountered problems in raising money from traditional sources.

The deal will come as welcome news to Glencore investors, who have seen shares of the commodity trader lose more than half their value this year.

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Groups call for ‘clear, enforceable’ mine waste-dam laws – by Gordon Hoekstra (Vancouver Sun – November 3, 2015)

http://www.vancouversun.com/

Environmental coalition calls on B.C. government to phase out industry self-regulation

The B.C. government should phase out industry self-regulation to ensure dams that hold back waste and water at mines are safe and sustainable, says a joint submission by environmental groups.

The Fair Mining Collaborative, Mining Watch Canada and Northern Confluence (an arm of the International Boreal Conservation Campaign) are also calling for the province’s review of mining rules to be broadened by examining all laws that regulate mining, including the Mines Act, Environmental Management Act and Water Act, not just the Health, Safety and Reclamation Code for Mines.

Their submission is the first look at the type of changes that are being called for by outside groups as the B.C. government responds to Imperial Metals’ Mount Polley catastrophic tailings dam collapse last year and recommendations from an expert geotechnical engineering panel it commissioned.

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America has built the equivalent of 10 Keystone pipelines since 2010 — and nobody said anything – by Yadullah Hussain (National Post – November 4, 2015)

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

While TransCanada Corp. has been cooling its heels on its Keystone XL proposal for the past six years, the oil pipeline business has been booming in the United States.

Crude oil pipeline mileage rose 9.1 per cent last year alone to reach 66,649 miles, according to data from the Washington, D.C.-based Association of Oil Pipe Lines (AOPL) set to be released soon.

Between 2009 and 2013, more than 8,000 miles of oil transmission pipelines have been built in the past five years in the U.S., AOPL spokesperson John Stoody said, compared to the 875 miles TransCanada wants to lay in the states of Montana, South Dakota and Nebraska for its 830,000-bpd project. By last year, the U.S. had built 12,000 miles of pipe since 2010.

“That’s the point we make,” Stoody said. “While people have been debating Keystone in the U.S. we have actually built the equivalent of 10 Keystones. And no one’s complained or said anything.”

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Top ‘Ring of Fire’ miner threatens to halt project unless Ontario, First Nations make progress – by Peter Koven (National Post – November 4, 2015)

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

TORONTO — The dominant company in Ontario’s “Ring of Fire” mineral belt is threatening to suspend its work, sources say, putting a big question mark over future development plans in the region.

Noront Resources Ltd. has warned both the Ontario government and First Nations communities in recent days that it will stop working unless it can demonstrate some tangible progress to investors, according to sources.

The company and its key lender, Resource Capital Funds, are increasingly frustrated with a lack of movement on government infrastructure commitments, First Nations agreements and other matters. The longer these issues drag on, the harder it will be for Noront to raise new capital.

The company is expected to halt spending on its Eagle’s Nest project in the Ring of Fire by the end of the year if it does not see any progress. In that scenario, Toronto-based Noront would lay off most of its workers and go down to a skeleton staff.

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Rubicon Minerals shares plunge on Phoenix gold project suspension – by Peter Koven (National Post – November 4, 2015)

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

The meltdown at Rubicon Minerals Corp. highlights the risk of building a gold mine without getting to know the deposit as well as possible.

The Toronto-based miner’s shares plunged as much as 68 per cent on Tuesday after it halted underground development of the Phoenix gold project. Rubicon said it needs to do further work to understand the deposit in order to mine it most effectively.

“We believe there is considerable room for improvement in the development of the Phoenix gold project,” interim chief executive Michael Winship said on a conference call. He added that it is a complex, narrow-vein deposit that is more difficult to mine than surface drilling suggested. The company is now studying a mix of possible mining methods.

The stock closed down 55 per cent at 26 cents Tuesday. The problem, experts said, is that Rubicon may have identified these problems much sooner if it hadn’t moved so quickly.

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Chile’s Codelco lays off over 4,000 workers – by Cecilia Jamasmie (Mining.com – November 3, 2015)

http://www.mining.com/

Codelco’s chief executive Nelson Pizarro is following through with his promise of cutting costs “to the bone” as the Chile-owned miner announced it has cut almost 3,900 jobs, including contractors, in response to low prices and weak demand.

Until now, the world’s top copper producer had only disclosed the layoff of about 400 employees, mostly staff members in top positions.

The fresh and massive cuts bring the number of layoffs to over 4,000, making of Codelco the mining company that has let go the highest amount of workers in Chile since metal prices began their decline over a year ago.

According to Pizarro, the “painful, but necessary” move has not affected production, local newspaper El Mercurio reports (in Spanish). “What’s more, the company’s output has grown 5.5% during the last year, and costs have dropped by about 11%,” he told the paper.

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Liberal stimulus plan a chance to reinvigorate Canadian steel industry – by Bill Missen (Globe and Mail – November 3, 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.

Bill Missen is former senior vice-president at Stelco Canada.

Even before it is formally installed, the newly elected Liberal government faces the pressure of high expectations – especially when it comes to infrastructure spending. It’s a platform promise with the potential to provide much-needed economic stimulus by doubling the public works budget to $125-billion over the next decade.

By implementing this spending plan, the new government has an exceptional opportunity to extend a lifeline to Canada’s struggling steel industry. But it is an opportunity that could easily be squandered.

Before the first dime of public money is spent, a strong made-in-Canada supply policy needs to be firmly in place. Without that, new jobs will not be created and existing ones will not be preserved.

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Ontario is playing politics with power – again – by Margaret Wente (Globe and Mail – November 3, 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.

Do you understand your electricity bill? Me neither. All I know is that it keeps going up. There was a rate increase in May, and Ontarians got another one this week.

The provincial government made it sound like nothing. An increase of only 3.4 per cent, on average. Four bucks and change a month! A latte at Starbucks costs more. But this isn’t the truth, of course. The truth is that residential electricity rates have gone up a whopping 12.6 per cent since last winter, says Tom Adams, an independent energy consultant who is an expert on energy politics in Ontario.

The average Ontario household is paying about a third more for power than in 2010. On Jan. 1, bills will go up again when the government cancels the 10-per-cent rebate that it cheerily calls the “clean energy benefit.” There will also be a new tax to subsidize low-income users. Suck it up, people. There is no end in sight.

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Why privatizing Hydro One is proving politically costly – by Martin Regg Cohn (Toronto Star – November 1, 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.

Hydro One sell-off not a risk not worth taking — mostly because of the public policy peril, not financial risk.

As Hydro One is slowly sold off, it won’t be so much missed as misunderstood. And misrepresented.

Misunderstood, because most people living in the Greater Toronto Area have never dealt directly with Hydro One and might reasonably wonder what, if anything, its sale has to do with rising electricity bills. (Answers below.)

Misrepresented, because a political fight over the sell-off of this provincially owned utility is obscured by predictable government contortions and opposition distortions. (Miscalculations below.)

Hydro One is back in the news thanks to the foresight of Ontario’s New Democrats.

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Struggling junior miners hope Liberals extend exploration tax credit – by Peter Koven (National Post -November 2, 2015)

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

Canada’s junior mining sector is waiting with bated breath to see if Justin Trudeau’s incoming Liberal government will maintain a tax credit that has helped companies raise billions for exploration.

Miners argue that the 15-per-cent Mineral Exploration Tax Credit (METC) is an invaluable tool that encourages companies to work in Canada and helps keep the sector active during commodity downturns, including the current one. But there are detractors in the academic community who say it is just another inefficient benefit that favours one industry over another.

During the federal election campaign, the Liberals were the one major party that did not form a strong position on the METC, which is set to expire in March. The Conservatives said they would extend the credit for three years, and increase it to 25 per cent for remote projects, like Northern Ontario’s “Ring of Fire.” The NDP mused about making the METC permanent.

Rod Thomas, president of the Prospectors & Developers Association of Canada (PDAC), said he is optimistic the Liberals will continue with it. “I think they recognize it is vital to the industry,” he said in an interview.

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Blame mining companies, not China, for resource value wipeout – by Eric Reguly (Globe and Mail – October 31, 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.

ROME — American senator Everett Dirksen wasn’t talking about the commodities industry when he reputedly said “a billion here, a billion there, pretty soon you’re talking real money.” Were he alive today, he could have. Great gobs of real money are being vaporized by mining and oil and gas companies. The slowdown in China, conveniently, is taking much of the blame. It shouldn’t.

Episodes of woe are recorded almost every day. Shares of Royal Dutch Shell, one of the world’s biggest oil companies, slumped again this week after it took an $8.2-billion (U.S.) hit on weak oil prices and decisions to scrap a Canadian oil sands project and retreat from Alaska.

Glencore, the world’s top commodities trader, has fallen by two-thirds this year alone. The Swiss company, which acquired Viterra and Falconbridge in Canada, is now busy shrinking its asset base and debt. On Friday, Chevron announced it would cut as many as 7,000 jobs – up to 11 per cent of its work force.

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