Small miners search for capital as private-equity mining deals slip – by Rachelle Younglai (Globe and Mail – March 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.

Private-equity interest in mining companies has waned, leaving a handful of players to pick through the debris.

For two years, private equity was all the rage as the mining industry got hit hard by the plummeting commodity prices. Traditional private-equity firms were looking for distressed assets. Bankers and others tried to establish private-equity shops.

But today, many of the big funds have not made mining investments and others have simply given up.

“They thought they could be passive financial investors, raise some capital, put it in some companies. But it is very difficult to find something where you can actually make money,” said Isser Elishis, chief investment officer with Waterton Global Resource Management.

Globally, private-equity mining deals have slipped. Last year, the private pools of capital were involved in 66 deals worth $5-billion, compared with 83 transactions worth $6.7-billion in 2010, according to data compiled by Thomson Reuters.

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Greece revokes Eldorado Gold Corp’s authorization for Skouries mining project – by Peter Koven (National Post – March 3, 2015)

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

Greece’s leftist government has taken steps to block Eldorado Gold Corp.’s key mine in the region, prompting a furious response from the Canadian miner and its employees while leaving the project’s future in question.

Investors have been watching Eldorado with concern ever since the far-left Syriza government was elected in late January. Just a few days after the election, Greece’s new energy minister Panagiotis Lafazanis said the government is ”absolutely against” to the Skouries mine, which is currently under construction. “We will examine our next moves on it,” he warned at the time.

So it was no surprise on Monday when Eldorado announced the government revoked a permit required for the Skouries processing plant. What was surprising was Eldorado’s angry public response, which was uncharacteristic of the company.

“The recent decision of the Ministry of Energy — if not reversed in a timely manner — may force Eldorado to reconsider its investment plans for Greece,” chief executive Paul Wright said in a statement. Eldorado also said the move has “no legal basis.”

The government’s decision prompted an even angrier response from union workers at the project.

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A fickle exploration ranking [Fraser Institute Mining Survey] – by Kip Keen (Mineweb.com – March 2, 2015)

http://www.mineweb.com/

The oddities that come in ranking the world’s best places to explore. Strange things happen when you ask exploration company management a hypothetical question about the juiciest regions for discovery.

Every year the Fraser Institute sends out a questionnaire to mining types. Most of them are exploration management (as self-reported.) This year it sent out a little over 4,000 questionnaires and it got back responses from just over 10% of that score.

One of the topics the Fraser Institute addresses, among many, is a question of fantasy. To paraphrase: Based on what you’re familiar with, what areas hold awesome potential for discovery assuming there are no impediments to exploration, like nasty dictators, pushy anti-miners and prohibitive regulation.

The idea, the Fraser Institute says, is to poll what its respondents think are the best regions in terms of raw exploration potential.

It gets weird in two ways. It seems the potential of the world’s rocks, to the survey’s respondents, changes very rapidly, as year to year the best of rankings bounce erratically. And each year the ranking makes for odd juxtaposition.

Let’s take this year’s survey. It doesn’t start out too controversially. Yukon tops it. Alaska comes next. Nevada thereafter.

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Mining sector “in worst bear market in decades” – by Lisa Wright (Toronto Star – March 3, 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.

Crowdfunding one solution, prospectors’ conference told

Junior miners must seek new ways to find investors — including crowdfunding — if they want to survive the current industry slump, analysts told a prospectors’ convention.

A turnaround in metals prices isn’t expected until about 2017, but “that’s an eternity for the juniors,” warned longtime analyst and industry observer John Kaiser on Monday at the Prospectors and Developers Association conference in Toronto.

“We are now in the worst bear market in decades,” noted Kaiser, who is based in San Francisco and has covered the topsy-turvy sector since 1983.

He said the ongoing bear market has been dismissed as a cyclical downturn that will eventually reverse, as it always has. For instance the five-year downturn in the mining industry after the Bre-X gold salting scandal in 1997 was followed by a ‘super cycle’ of 13 years of sky-high metals prices and record share prices.

“While true for majors (big mining companies) whose fortunes hinge on the commodity cycle, it may not be true for juniors,” he said.

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Mining industry, hungry for deals and cash, meets in Toronto – by Susan Taylor and Nicole Mordant (Reuters Canada – March 1, 2015)

http://ca.reuters.com/

TORONTO (Reuters) – A four-year mining-industry downturn has left big gold producers hungry to buy reserves they haven’t had the money to find themselves, and impoverished small miners eager to cash out, setting up the ingredients for mergers and acquisitions revival in 2015.

Mining veterans say that scenario is likely to come into play at the industry’s largest annual event, the Prospectors and Developers Association of Canada convention in Toronto, March 1-4, where more than 20,000 participants are expected.

Many small explorers and developers, cash-strapped after years of austerity, may be looking to attract buyers at the convention.

Big gold miners, meanwhile, have been hit by weak commodity prices that have forced them to slash exploration budgets, slowing new discoveries, and contributing to a drop in in-the-ground reserves at the world’s five biggest bullion producers.

Their reserves, cumulatively, fell 11 percent to 317 million ounces in 2014, company data show. If reserves continue shrinking, production will eventually follow.

“The big mining companies still know they have to buy projects … If you don’t buy new assets you just watch your business decline,” said John Gravelle, global mining leader at consultancy PwC.

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Canadian fed and Ontario govts unveil supports for mining industry – by Henry Lazenby (MiningWeekly.com -March 2, 2015)

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

TORONTO (miningweekly.com) – Several federal departments of the Canadian government, as well as the Ontario provincial government, unveiled new measures and investments on Sunday to increase support and drive growth in the country’s besieged mining industry.

In a speech to the Prospectors & Developers Association of Canada, Finance Minister Joe Oliver announced that government proposed to extend the 15% Mineral Exploration Tax Credit (METC) for investors in flow-through shares for a further year, until March 31, 2016. The credit was scheduled to expire on March 31, 2015.

The federal tax credit programme had been referred to as the “lifeblood” of junior mineral exploration – and its extension was expected to support the mineral exploration efforts of junior exploration companies, as it had done since its introduction in October 2000. During a challenging time for the global economy, in the struggle to secure capital, it had helped keep investment flowing.

“When we strengthen this industry, we create jobs, growth and long-term prosperity from coast to coast to coast. We are doing exactly that by cutting red tape, lowering taxes and expanding free trade across the globe,” Oliver stated.

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Ring of Fire road study needs wider lens, environmental group says – by Jody Porter (CBC News Thunder Bay – March 2, 2015)

http://www.cbc.ca/news/canada/thunder-bay

“No one is saying, ‘Holy cannolis, what are all the plans for the region for the next 20 – 30 years?'”

Government funding for a $785,000 study of a road to the Ring of Fire is a “welcome move” for the Canadian Parks and Wilderness Society, but the environmental group says more needs to be done to look at the region-wide impacts of the proposed mining development in northern Ontario.

The federal and provincial governments announced Sunday that they’ll jointly fund a study looking at a road that would connect the remote Webequie, Eabametoong, Nibinamik and Neskantaga First Nations to the provincial highway at Pickle Lake, Ont. about 500 kilometres northwest of Thunder Bay.

The environmental group hopes it acts as a “springboard” for further study and a comprehensive, region-wide development plan for the nickel and chromite deposits in northern Ontario’s James Bay lowlands.

“Once a road goes in, it has a whole cascade of effects,” said Anna Baggio, the Ontario planning director for the Canadian Parks and Wilderness Society’s Wildlands League. “There are alternatives in terms of where these roads could go and that needs to be looked at and fully costed and accounted for in a transparent way.”

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Ottawa urges development of foreign-aid mining projects – by Kim Mackrael (Globe and Mail – March 2, 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.

Ottawa — Foreign-aid projects that involve Canadian mining companies and non-governmental organizations have shown enough promise that the idea should be refined and then scaled up, International Development Minister Christian Paradis says.

In an interview with The Globe and Mail on Saturday, Mr. Paradis said he is still waiting for detailed evaluations on several projects, launched in 2011, that saw Ottawa partner with mining companies and non-governmental organizations.

But he said he’s encouraged by what he’s heard so far and believes the positive aspects of the programming can be replicated. “I think we can take the best from [the projects],” Mr. Paradis said.

“We will just put aside what we don’t want or what is not effective, and then I think we will have the levers to go after [mining co-operation] on a broader scale.”

The Conservative government has made mining a prominent part of its foreign-aid strategy in recent years, including by launching new aid programs in mineral-rich countries and establishing an institute on global mining policy.

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Investors hard to come by in mining industry downfall – by Rachelle Younglai (Globe and Mail – March 2, 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.

TORONTO — As the beleaguered mining sector suffers through another year of its deepening slump, the industry’s boom days are but a distant memory.

It’s an ugly time for the junior mining industry, as companies descend on Toronto for the annual Prospectors and Developers Association of Canada conference. Already starved for cash, small mining companies are facing their fourth consecutive year of declining commodity prices.

Since 2011, gold is down 30 per cent. Iron ore and metallurgical coal, both used to make steel, are about 70 per cent lower. Copper is down 40 per cent and nickel is off by 50 per cent. Shares of a slew of junior mining companies have crumbled to just a few pennies apiece.

The downturn has made it much harder to entice investors. Don Hoy, who discovered the large chromite deposit in Ontario’s Ring of Fire mineral belt, said investors’ attitude toward small mining companies has changed.

During the commodity boom several years ago, Mr. Hoy said “people did not want to miss the boat. They had to get involved.” But, “a lot of projects were far fetched,” he said.

“Now, investors are much more sophisticated.

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PDAC 2015: Optimism clashes with reality on day one of conference – by Peter Koven (National Post – March 2, 2015)

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

As the junior mining sector continues to scrape along the bottom, the world’s biggest mineral conference is the one place where they can always find some reason for hope.

The annual Prospectors and Developers Association of Canada (PDAC) conference kicked off in Toronto on Sunday. Not surprisingly, the mood on the conference floor was a little subdued as metal prices continue to slump, financing dollars remain scarce, and the S&P/TSX Venture Composite Index trades near an all-time low.

“Everybody here is hoping to weather the storm,” Aubrey Eveleigh, chief executive of graphite firm Zenyatta Ventures Ltd., said in an interview. “They’re waiting for a turnaround in the sector because we’ve seen it before. They’re hanging on with the little bit of money they have.” But even in a rough year, the PDAC conference can reliably attract around 25,000 people, and another big crowd is expected at this year’s show.

On day one, they got a big burst of optimism from the mining industry’s most famous promoter: Robert Friedland of Ivanhoe Mines Ltd. He kicked off a commodity outlook panel with his usual gusto, talking about the giant urbanization trend that continues to happen worldwide and predicting it will have very positive implications for metal prices.

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Republicans need to make it clear that Keystone will help end U.S. dependence on Mideast oil – by Ted Morton (National Post – March 2, 2015)

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

What do American Sniper, Chris Kyle and the Keystone XL pipeline have in common? Most Americans would probably say “nothing.” Unless that changes soon, U.S. President Barack Obama and the Democratic minority in Congress will succeed in sustaining the veto over Keystone that Obama exercised last week.

If the Republicans want to win this battle, they have to change their message. The Keystone pipeline is not about creating more jobs over the next three years, but about saving more lives over the next three decades — lives of young Americans being sent to the Middle East to defend America’s security of supply of imported OPEC oil.

The recent collapse of oil prices and availability of cheap gasoline have made it easy for Americans to forget how dependent on Middle East/Arab oil the U.S. and its allies still are. Thanks to the shale revolution of the past decade, U.S. oil production has risen three-million barrels per day (b/d) to 8.5-million b/d. But American consumption of oil is still double this amount, so the Americans are still importing 7.6-million b/d. While more and more of this is now coming from Canada — over three-million b/d — most of it still comes from the Middle East.

U.S. shale oil is not going to change this. Contrary to what most Americans may assume, OPEC’s share of global oil production has actually risen since 1985 from 30% to 39%. And OPEC’s share of global production is projected to continue to increase to 49% by 2040.

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Miners descend on Toronto amid brutal market downturn – by Lisa Wright (Toronto Star – March 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.

“This is certainly a trying year for the mining sector and many feel attendance at
the convention will be lower than last year,” says industry observer and mining blogger
Stan Sudol. “Financing is hard to come by, but if you have a good project you will find
the money,” says Sudol, of republicofmining.com (Toronto Star – March 1,2015)

Metal prices are at rock bottom levels, but that won’t stop 25,000 miners from four days of networking at the annual prospectors’ convention

Thousands of miners and investors are flocking to Toronto this week for the world’s largest annual prospectors’ convention, amid a severe downturn in all things metallic.

The frigid temperatures that Toronto has struggled with lately are nothing compared to the deep freeze the mining industry has endured over the last couple of years, analysts say. Everything from gold and platinum to copper and zinc continue to take a beating on metals markets, and small-cap junior exploration companies are desperately seeking financing to stay in the bush.

Even giants such as Canada’s Barrick Gold Corp. and Goldcorp Inc. have suffered record losses, slashed budgets and taken massive write-downs on problematic projects — mainly because it’s not economic to build and operate mines with rock-bottom metal prices.

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PDAC: How payment transparency helps gain a social licence to operate (Canadian Mining Journal – February 26, 2015)

 http://www.canadianminingjournal.com/

Corporate social responsibility is front-and-centre at this year’s Prospectors and Developers of Canada meeting. One not to be missed session about the ideas that will shape the future of CSR will be held Monday, March 2 from 3:30 to 5:00 pm in Room 717 of the Metro Toronto Convention Centre.

CMJ had an opportunity to talk with one of the presenters, O Trade founder Monica Ospina, about the importance of transparency in payment and its role in obtaining a social licence to operate.

CMJ: What does “transparency in payments” mean for the extractive industry?

MO: It means the open disclosure of all payments made to the government by the extractive industry on a project-by-project basis. The purpose is to inform people about payments of royalties and taxes by the industry and about the amounts received by their government.

A shift towards transparency in payments would also accompany legislative changes concerning the distribution of royalties. Specifically, governments would make clear how royalties and taxes could be distributed at the federal or national, regional and municipality levels. Such practices can be seen, for example, in Mexico, Colombia and Peru, where legislation has reshaped the way income is distributed and how democracy works at the grassroots level.

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Probe’s David Palmer our Mining Person of the Year – by Trish Saywell (Northern Miner – February 25, 2015)

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

When the discovery of a new gold patch rocks the mining world, it is a wondrous thing. When the discovery is made in an underexplored area with no previously known precious metal deposits it’s even more exciting, and when the discovery stems, in part, from a simple good deed, it becomes extraordinary.

The tale of how David Palmer discovered the Borden Lake gold deposit and earned the prestigious Bill Dennis Award and title to The Northern Miner’s Mining Person of the Year for 2014 begins in 2003, about four years after he graduated from McGill University with a PhD in economic geology.

The geologist, whose PhD thesis focused on ore-forming hydrothermal fluids associated with carbonatites, was working for a junior, when a prospector he didn’t know by the name of Bob de Carle, pitched a nickel property called Sunday Lake, north of Thunder Bay.

The property didn’t fit the company’s model, so it passed. But Palmer thought it still held promise. His view was that the material just hadn’t been presented in the right way, which masked some of what he felt were its most interesting features. So he offered to spend some personal time reworking the geological data to improve the odds that de Carle — a geophysicist by training — could find success the next time he shopped it around.

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Getting to Yes has never been tougher – by Jeffrey Simpson (Globe and Mail – February 27, 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.

Mines and forest projects can face the same procedural snakes and ladders.
In Northern Ontario, the so-called Ring of Fire chromite deposits will be
tied up for years and years in environment reviews and aboriginal demands.
Already, the major U.S. company interested in developing the deposits has
walked away. Who could blame it? (Jeffrey Simpson – Globe and Mail)

Forget for a moment U.S. President Barack Obama’s doubts about the Keystone XL pipeline. Whether the President decides for or against the project shouldn’t deflect Canadians from asking within their own borders: How do we get to Yes?

Getting to Yes is becoming harder all the time. Fossil-fuel developments, pipelines, mines, dams, hydro-electric transmission lines and wind turbines are frequently contested, delayed or blocked.

Even when they’re approved, the process for getting to Yes can take so long that projects lose their economic rationale, as with the now-abandoned Mackenzie Valley gas pipeline, which shuddered to a halt after 10 years of review because the gas market had changed. Or, projects are postponed or killed because they face tough competition from overseas suppliers where approvals are not so protracted. Proposed liquefied natural gas projects in British Columbia face this very risk.

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